BAFNA PHARMACEUTICALS LIMITED

29th ANNUAL REPORT

FINANCIAL YEAR 2023-24
 CONTENTS

Company Snapshot .......................................................................................................................................................................5

Key Message from Chief Executive Officer ..........................................................................................................................6

Notice .................................................................................................................................................................................................7

Director’s Report ............................................................................................................................................................................21

Annexure to Director’s Report ..................................................................................................................................................31

Report on Corporate Governance ...........................................................................................................................................40

Management Discussion and Analysis ..................................................................................................................................56

Financial Statements as at 31st March, 2024 ......................................................................................................................63

Auditor’s Report ..................................................................................................................................................................... 64

Balance Sheet .......................................................................................................................................................................... 79

Statement of Profit & Loss ................................................................................................................................................. 81

Cash Flow Statement ............................................................................................................................................................ 82

Notes .......................................................................................................................................................................................... 85

Cautionary Statement
Statements in this Report, including those relating to Management Discussion and Analysis describing the Company’s objectives,
projections, estimates and expectations may be ‘forward looking statements’ within the meaning of applicable securities laws
and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence
the Company’s performance include economic developments within & outside the country, demand and supply conditions in the
industry, changes in input prices, changes in Government regulations, tax laws and other factors such as litigation and industrial
relations. Bafna Pharma undertakes no obligation to publicly revise any forward looking statements to reflect future / likely
events or circumstances.
COMPANY SNAPSHOT
Name of Company : Bafna Pharmaceuticals Limited
CIN : L24294TN1995PLC030698
Incorporation : 1995
Initial Public Offering : 2008
Listing : (i) BSE & (ii) NSE

Registered Office
Bafna Towers
New No. 68, Old No.299,
Thambu Chetty Street
Chennai – 600001

Share Transfer Agents Auditors

Cameo Corporate Services Limited BRAHMAYYA & CO.,
No.1, Club House Road Chartered Accountants, Chennai
Chennai – 600002

Factories Internal Auditors

(i) No.13, S.V. Koil Street K.S. Rao & Co.,
Madhavaram, Chennai – 600060
Chartered Accountants,
(ii) 147, Madhavaram Redhills High Road Chennai
Grantlyon, Redhills
Chennai – 600052

Board of Directors KEY MANAGERIAL PERSONNEL:

Ms. S. Hemalatha
Whole-Time Director Bafna Mahaveer Chand
Chief Executive Officer
Mr. Vinayak Dinesh Dendukuri
Whole-Time Director (Quality) Melagiri Sridhar
Chief Financial Officer
Ms. Akila C Raju
Non-Executive Non-Independent Director Mohanachandran A (Appointed on May 29, 2024)
Company Secretary
Mr. Upendar Mekala Reddy
Non-Executive Non-Independent Director Audit Committee
Mr. P K Sundaresan
Mr. P K Sundaresan
Non- Executive Independent Director Ms. R. Chitra
Mr. Upendar Mekala Reddy (From November 02, 2023)
Ms. R. Chitra
Mr. B. Kamlesh Kumar (Upto September 09, 2023)
Non- Executive Independent Director
Mr. Krishna Yeachuri
Nomination and Remuneration Committee
Non-Executive Independent Director Mr. Krishna Yeachuri (From November 02, 2023)
Mr. P K Sundaresan
Mr. B. Kamlesh Kumar
Ms. Akila C Raju
Non-Executive Independent Director
Mr. B. Kamlesh Kumar (Upto September 09, 2023)
(Resigned on September 09, 2023)
Stakeholders Relationship Committee
Ms. R. Chitra
Ms. S. Hemalatha
Ms. Akila C Raju (From April 07, 2023)

BAFNA PHARMA - ANNUAL REPORT 2023-24 5

 KEY MESSAGE FROM CHIEF EXECUTIVE OFFICER

Dear Esteemed Stakeholders,

As we continue to navigate the dynamic landscape of the pharmaceutical industry, I want to
express my sincere gratitude for your trust and support in our mission health for all . We are
in an exciting period, filled with both challenges and opportunities that drive us to innovate,
adapt, and deliver life-enhancing solutions.
Achievements and Progress
In the financial year 2023-24, our total revenue from operations grew by 32.18% to Rs. 15,246.57
Lakhs, up from Rs. 11,534.99 Lakhs in the previous year. In the past year, we have made significant
strides in formulation development, ensuring our products not only meet regulatory standards
but also exceed expectations in quality, efficacy, and safety. Our unwavering commitment to
excellence has led to the successful development of several new formulations, expanding our
product portfolio across all spectrum.
We have also bolstered our R&D capabilities and state-of-the-art QC laboratory, investing in advanced technologies that
enhance our ability to deliver innovative and accessible pharmaceutical solutions. These efforts are crucial in a competitive
market and ensuring new launches.
Commitment to Sustainability and Compliance
As we grow, we remain deeply committed to sustainability reducing our environmental footprint, ensuring ethical
practices across our supply chain, and fostering a workplace culture that prioritizes health, safety, and diversity. Regulatory
compliance remains central to our operations. We recognize the importance of adhering to global standards and have
consistently implemented stringent quality control measures to ensure that every product meets the highest standards.
Looking Ahead
Looking ahead, India's growth is expected to stay strong, with the economy projected to grow over 7% in FY 2024-25,
supported by improving macroeconomic conditions and rising private consumption and capital expenditure. The Indian
pharmaceutical market is expected to grow at about 10% per annum in the medium term led by several socioeconomic
factors. The future holds immense potential for growth, and we are focused on capitalizing on emerging opportunities in
personalized medicine, biologics, and advanced drug delivery systems.
With a focus on both domestic and international markets and several new products in the pipeline, the Company is
well-positioned to build on the strong operational competencies developed over recent years. We are fully committed
to driving the Company toward a higher growth trajectory and are actively exploring opportunities to achieve this goal.
Gratitude
Our success is a shared achievement, built on the dedication and expertise of our employees, the trust of our customers,
and the continued support of our shareholders. Together, we will continue to drive innovation and deliver value to all our
stakeholders.
In closing, on behalf of our Board of Directors, I extend my heartfelt gratitude to each of you. Your commitment and
collaboration are the pillars of our progress. We remain confident in our ability to thrive in this ever-evolving industry, and
we are excited about the journey ahead.
Thank you for your continued trust and partnership.

Best Regards

Sd/-
Bafna Mahaveer Chand
Chief Executive Officer

6 BAFNA PHARMA - ANNUAL REPORT 2023-24

 NOTICE
NOTICE IS HERE BY GIVEN THAT THE 29TH ANNUAL GENERAL MEETING OF THE MEMBERS OF BAFNA
PHARMACEUTICALS LIMITED WILL BE HELD ON WEDNESDAY, THE 25TH DAY OF SEPTEMBER 2024, AT 10.30 AM
(IST) THROUGH VIDEO CONFERENCING (“VC”)/ OTHER AUDIO-VISUAL MEANS (“OAVM”) TO TRANSACT THE
FOLLOWING BUSINESS:

ORDINARY BUSINESS:
ITEM NO. 1:
Adoption of Financial Statements:
To receive, consider and adopt the Audited Financial Statements of the Company for the financial year ended March 31,
2024, together with the Reports of the Board of Directors’ and Auditor’s thereon.

ITEM NO. 2:
Re-appointment of a Director:
To appoint a Director in the place of Mr. Upendar Mekala Reddy (DIN: 08898174), who retires by rotation in terms of
Section 152 of the Companies Act, 2013 and, being eligible, seeks re-appointment.

SPECIAL BUSINESS:

ITEM NO. 3:
Re-appointment of Ms. Shanmugam Hemalatha (DIN: 02714329), as Whole-Time Director of the Company
To consider and if though fit, to pass the following Resolutions, as an Ordinary Resolution:
RESOLVED THAT in accordance with the provisions of section 196, 197 and 203 read with Schedule V and other applicable
provisions, if any, of the Companies Act, 2013, and Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (including any amendment(s),
modification(s), variation(s) or re-enactment(s) thereof) and based on the recommendation of Nomination & Remuneration
Committee, the consent of the members be and is accorded to approve, ratify and confirm the re-appointment of
Ms. S Hemalatha (DIN: 02714329) as the Whole-time Director of the Company for a period of 5 (Five) years w.e.f September
10, 2023, not liable to retire by rotation, on the following terms and conditions:
a) Remuneration: Rs.1,60,718/- per month (inclusive of Allowances) with such annual increments/increases
as may be decided by the Nomination and Remuneration Committee from time to time, subject to limits
specified in Schedule V of the Companies Act, 2013.
b) Allowances & Perquisites: House Rent allowance, Medical allowance, Leave Encashment, Conveyance
Allowance, Special allowance etc., will be provided in accordance with the rules of the Company.
c) Contribution to Funds: Contribution to Provident Fund and Annuity Fund as per the rules of the Company.
Company’s contribution to provident fund and superannuation fund to the extent they are singly or put
together are not taxable under the Income-tax Act and Leave with full pay as per the rules of the Company
with encashment of un-availed leave being allowed, will not be included in the computation of the ceiling on
perquisites.
RESOLVED FURTHER THAT the Board of Directors of the Company (including any Committee thereof) be and is hereby
authorised to alter and vary the terms and conditions of the appointment and/or revise the remuneration payable to Ms.
S Hemalatha, based on the recommendation of the Nomination and Remuneration Committee, in such manner as may be
permitted in accordance with the applicable provisions and Schedule V of the Companies Act, 2013.

RESOLVED FURTHER THAT in the event of there being inadequacy or absence of profits in any financial year, during the
currency of tenure of Ms. S Hemalatha as the Whole-Time Director, she will be paid remuneration in terms of Section II
of Part II of Schedule V to the Companies Act, 2013 including any re-enactments thereof or such other limit as may be
prescribed by the government from time to time as minimum remuneration.”

BAFNA PHARMA - ANNUAL REPORT 2023-24 7

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to do all acts, deeds, matters and things as
may be deemed necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in this regard
and to sign and execute all necessary documents, applications, returns and writings as may be necessary, in order to give
effect to the above resolution.”

Item No. 4- Sale / Disposal of Manufacturing Unit:

To consider and if though fit, to pass the following Resolutions, as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 180(1)(a) and all other applicable provisions, if any, of the
Companies Act, 2013 (“Act”) read with rules made thereunder (including any statutory modifications or re-enactment
thereof for the time being in force and as may be enacted from time to time), the provisions of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) and the
Memorandum and Articles of Association of the Company and subject to such other approvals, consents, permissions and
sanctions as may be necessary, the consent of the members be and is hereby accorded to the Board of Directors of the
Company (hereinafter referred to as the “Board”, which term shall include any Committee constituted by the Board or any
person(s) authorized by the Board to exercise the powers conferred on the Board by this Resolution) to sell and transfer
or otherwise dispose-off the manufacturing unit No. 13, S.V. Koil Street, Madhavaram, Chennai-600 060, Tamil Nadu,
India (“Undertaking”) together with all assets, including building, plant and machinery, employees, contracts, licences,
permits, rights, consents and all other assets in relation to the Undertaking, on an “as is where is” basis or in any other
manner as the Board may deem fit in the interest of the Company, to M/s. Navron Pharma Private Limited (“Buyer”) for a
consideration of Rs.1,45,13,260/- (Rupees One Crore Forty Five Lakhs Thirteen Thousand Two Hundred and Sixty Only) and
on such terms and conditions as may be deemed fit by the Board.

RESOLVED FURTHER THAT Ms. S Hemalatha, Whole Time Director (DIN: 02714329) and Mr. Bafna Mahaveer Chand, Chief
Executive Officer be and are hereby severally authorised and empowered to finalise and execute necessary documents
including but not limited to definitive Agreements, deeds of assignment / conveyance and other ancillary documents, with
effect from such date and in such manner as is decided by the Board to do all such other acts, deeds, matters and things
as they may deem necessary and/or expedient to give effect to the above Resolution including without limitation, to settle
any questions, difficulties or doubts that may arise in this regard as they may in their absolute discretion deem fit.”

Item No. 5- Ratification of Remuneration of Cost Auditors:

To consider and if though fit, to pass the following Resolution, as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act,
2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s)
thereof for the time being in force), the remuneration of Rs.75,000/- (Rupees Seventy Five Thousand Only) excluding
applicable taxes, reimbursement of out- of-pocket expenses payable to M/s. M/s N Sivashankaran & Co., Cost Accountants
(ICMAI FRN. 100662), who, based on the recommendation of Audit Committee, who have been appointed as the Cost
Auditors of the Company by the Board of Directors, to conduct audit of the cost records of the Company for the financial
year ended 2024-25, be and is hereby ratified.

RESOLVED FURTHER THAT the Board of Directors of the Company (including its Committee thereof), be and is hereby
authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

By Order of the Board of Directors

For Bafna Pharmaceuticals Limited
SD/-
Place: Chennai A Mohanachandran
Date: 13-08-2024 Company Secretary

8 BAFNA PHARMA - ANNUAL REPORT 2023-24

NOTES:
1. In accordance with the General Circular No. 14/2020 dated April 08, 2020, General Circular No. 17/2020 dated
April 13, 2020, General Circular No. 20/2020 dated May 05, 2020 and subsequent circulars issued in this
regard, the latest being General Circular No. 09/2023 dated September 25, 2023, by the Ministry of Corporate
Affairs (MCA) (hereinafter collectively referred to as “MCA circulars”) and the Securities and Exchange Board of
India ('SEBI'), vide its Circular(s) dated May 12, 2020, January 15, 2021, May 13, 2022, January 5, 2023, October
6, 2023, and October 7, 2023 ('SEBI Circulars'), and other applicable circulars issued in this regard from time
to time, Companies are allowed to hold Annual General Meeting (AGM) through Video Conference (VC)/
Other Audio Visual Means (OAVM) (“VC”), without the physical presence of Members at a common venue. In
compliance with the applicable provisions of the Companies Act, 2013, SEBI Listing Regulations, MCA Circulars
and SEBI Circulars, the 29th AGM of the Company will be held through VC/OAVM on Wednesday, September
25, 2024 at 10:30 a.m. (IST). The proceedings of the AGM will be deemed to be conducted at the Registered
Office of the Company situated at Bafna Towers, No.299, Thambu Chetty Street, Chennai - 600001, Tamil Nadu,
India. The Company has engaged Central Depository Services (India) Limited (CDSL) for facilitating voting
through electronic means i.e., remote e-voting and voting at the AGM.

2. In terms of Section 102 of the Companies Act, 2013 and Secretarial Standard on General Meetings (SS-2), the
explanatory statements setting out the material facts in respect of special business to be transacted at the
AGM is annexed and forms part of this Notice.

3. The register of members and share transfer books of the Company will remain closed from Thursday,
September 19, 2024 to Wednesday, September 25, 2024 (both days inclusive).

4. Pursuant to the provisions of the Act, a member entitled to attend and vote at the AGM is entitled to appoint a
proxy, to attend and vote on his/her behalf, and such proxy need not be a member of the Company. Since the
AGM is being held in accordance with the Circulars through VC, the facility for appointment of proxies by the
Members will not be available and hence the Route map, Proxy Form and Attendance Slip are not annexed to
this Notice. In case of joint holders attending/participating in the Meeting, only such joint holder who is higher
in the order of names will be entitled to vote, provided the votes are not already cast by remote e-Voting by
the first holder.

5. The attendance of the Members attending the AGM through VC will be counted for the purpose of reckoning
the quorum under Section 103 of the Companies Act, 2013.

6. The Members can join the AGM in the VC/ OAVM mode 30 minutes before and after the scheduled time
of the commencement of the Meeting by following the procedure mentioned in the Notice. The facility of
participation at the AGM through VC/ OAVM will be made available to at least 1000 members on first come
first served basis. This will not include large Shareholders (Shareholders holding 2% or more shareholding),
Promoters, Institutional Investors, Directors, Key Managerial Personnel, the Chairpersons of the Audit
Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, Auditors
etc. who are allowed to attend the AGM without restriction on account of first come first served basis.

7. Corporate members intending to send their authorized representatives to attend the AGM through VC /
OAVM on its behalf and to vote through remote e-voting are requested to send to the Company a certified
copy of the board resolution authorizing their representative to the email address of the Company i.e., cs@
bafnapharma.com.

8. Members holding shares in physical form are requested to notify immediately any change in their address
or bank mandates to the Company/ Registrar & Share Transfer Agents quoting their Folio Number and Bank
Account details along with self-attested documentary proofs. Members holding shares in the electronic form
may update such details with their respective Depository Participants.

BAFNA PHARMA - ANNUAL REPORT 2023-24 9

9. The cut-off date for the purpose of determining eligibility of members for voting in connection with the 29th
AGM has been fixed as Wednesday, September 18, 2024.

10. In accordance with the aforementioned MCA & SEBI Circulars, Notice of the AGM along with the Annual
Report 2023-24 are being sent only through electronic mode to those Members whose email address are
registered with the Company/ RTA/Depositories. Members may note that the Notice and Annual Report 2023-
24 will also be available on the Company’s website www.bafnapharma.com website of the Stock Exchanges
i.e., BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com,
respectively and on the website of CDSL www.evotingindia.com.

11. Shareholders may claim their unclaimed dividend by applying in the prescribed Form No. IEPF-5. This Form
can be downloaded from the website of the IEPF Authority at http://www.iepf.gov.in/IEPF/corporates.html .

12. Pursuant to Regulation 36 of the SEBI (LODR) and Secretarial Standard on General Meeting (SS-2), additional
information/particulars, in respect of the directors seeking appointment/ re-appointment, as the case may be,
at the AGM are furnished in the explanatory statement and annexure forming part of this Notice. The directors
have furnished requisite consents / declarations for their appointment / re-appointment as required under the
Companies Act, 2013.

13. All documents referred to in this Notice, the Register of Directors and Key Managerial Personnel and their
shareholdings maintained under Section 170 of the Companies Act, 2013 and the Register of Contracts or
Arrangements in which the Directors are interested maintained under Section 189 of the Act, will be available in
electronic form for inspection by the Members during the AGM. Members seeking to inspect such documents
can send an email to [email protected].

14. The Members desirous of obtaining information, if any, with regard to the audited annual accounts of the
Company for the financial year 2023-24 or on any other matters relating to this AGM are requested to write
to the Company at e-mail IDs; [email protected] or [email protected] at least 7 days before the
date fixed for the AGM, so that the information required could be kept ready.

15. The Board has appointed Mr. Balu Sridhar (CP No.3550), Partner, M/s. A.K Jain & Associates, Company
Secretaries, Chennai, as the Scrutinizer for ensuring e-Voting in a fair and transparent manner. The Scrutinizer
will submit his report to the Chairperson of the Company (‘the Chairman’) or to any other person authorized by
the Chairperson (who shall countersign the same) after the completion of the scrutiny of the e-Voting (votes
cast during the AGM and votes cast through remote e-Voting), within 2 working days from the conclusion
of the AGM. The result declared along with the Scrutinizer’s report shall be communicated to the stock
exchanges, CDSL and RTA. The same will also be displayed on the Company’s website www.bafnapharma.
com and on the website of CDSL www.evotingindia.com. The Company has availed the services of CDSL for
arrangement of the AGM on VC to enable the Members to participate in the meeting in terms of the MCA
Circulars cited above. Also, the Company has provided a facility to the members to exercise their rights to vote
electronically through electronic voting service facility provided by CDSL.

16. Voting through electronic means (e-Voting): Pursuant to provisions of Section 108 of the Companies Act,
2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014 substituted by the
Companies (Management and Administration) Amendment Rules, 2015 read with Regulation 44 of the SEBI
(LODR) Regulations, 2015, the Company has provided a facility to the Members to exercise their right to
vote electronically through electronic voting (e-Voting) service facility provided/made available by the Central
Depository Services Limited (CDSL). The facility for voting through electronic voting system will also be made
available during the Annual General Meeting (AGM) and the Members who have not already cast their votes
by remote e-Voting shall be able to exercise their right to vote during said AGM through e-Voting. Members
who have cast their votes by remote e-Voting prior to the AGM may attend the AGM on VC but shall not be
allowed to vote again. The instructions for e-Voting are annexed to the Notice.

10 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Since the AGM is being conducted through VC the said resolutions will not be voted on show of hands during
the AGM in terms of Section 107 of the Companies Act, 2013. The manner of voting remotely, by Members
holding shares in dematerialized mode, physical mode and for Members who have not registered their email
addresses, is provided in the instructions for e-Voting as below: The instructions for remote e-Voting and
joining AGM areas under:

The remote e-Voting period commences on Sunday, September 22, 2024 (9:00 a.m. IST) and ends on
Thursday, September 24, 2024 (5:00 p.m. IST). During this period, Members holding shares either in physical
form or in dematerialized form, as on Wednesday, September 18, 2024 i.e. cut-off date, may cast their vote
electronically. The remote e-Voting module shall be disabled by CDSL for voting thereafter. The voting rights
of Members shall be in proportion to their shares in the paid-up equity share capital of the Company as on
the cut-off date. ii. Process and manner for remote e-Voting are explained herein below: Step 1: Access to
CDSL e-Voting system Step 2: Cast your vote electronically and join virtual meeting on CDSL e-Voting system.
Step 3: Access to CDSL e-Voting system are mentioned below:

Pursuant to SEBI circular no. SEBI/HO/CFD/CMD/ CIR/P/2020/242 dated December 9, 2020 on e-Voting facility
provided by Listed Companies, individual shareholders holding securities in DEMAT mode are allowed to vote
through their DEMAT account maintained with depositories and depository participants. Shareholders are
advised to update their mobile number and e-mail ID with their DPs in order to access e-Voting facility.

THE INSTRUCTIONS OF SHAREHOLDERS FOR E-VOTING AND JOINING VIRTUAL MEETINGS ARE AS UNDER:

Step 1 : Access through Depositories CDSL/NSDL e-Voting system in case of individual shareholders holding shares in
demat mode.

Step 2 : Access through CDSL e-Voting system in case of shareholders holding shares in physical mode and non-individual
shareholders in demat mode.

i). The voting period begins on Sunday, September 22, 2024 (9:00 a.m. IST) and ends on Tuesday, September
24, 2024 (5:00 p.m. IST). During this period shareholders of the Company, holding shares either in physical
form or in dematerialized form, as on the cut-off date of Wednesday, September 18, 2024 may cast their
vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

ii). Shareholders who have already voted prior to the meeting date would not be entitled to vote at the meeting
venue.

iii). Pursuant to SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2020/242 dated 09.12.2020, under Regulation
44 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, listed entities are required to provide remote e-voting facility to its shareholders, in respect of all
shareholders’ resolutions. However, it has been observed that the participation by the public non-institutional
shareholders/retail shareholders is at a negligible level.

Currently, there are multiple e-voting service providers (ESPs) providing e-voting facility to listed entities in
India. This necessitates registration on various ESPs and maintenance of multiple user IDs and passwords by
the shareholders.

In order to increase the efficiency of the voting process, pursuant to a public consultation, it has been decided
to enable e-voting to all the demat account holders, by way of a single login credential, through their
demat accounts/ websites of Depositories/ Depository Participants. Demat account holders would be
able to cast their vote without having to register again with the ESPs, thereby, not only facilitating seamless
authentication but also enhancing ease and convenience of participating in e-voting process.

BAFNA PHARMA - ANNUAL REPORT 2023-24 11

 Step 3: Access through Depositories CDSL/NSDL e-Voting system in case of individual shareholders holding
shares in demat mode.

(iv) In terms of SEBI circular no. SEBI/HO/CFD/CMD/CIR/P/2020/242 dated December 9, 2020 on e-Voting facility
provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote
through their demat account maintained with Depositories and Depository Participants. Shareholders are advised
to update their mobile number and email Id in their demat accounts in order to access e-Voting facility.

Pursuant to abovesaid SEBI Circular, Login method for e-Voting and joining virtual meetings for Individual
shareholders holding securities in Demat mode CDSL/NSDL is given below:

Type of
Login Method
shareholders
Individual 1) Users who have opted for CDSL Easi / Easiest facility, can login through their existing
Shareholders user id and password. Option will be made available to reach e-Voting page without
holding securities any further authentication. The users to login to Easi / Easiest are requested to visit cdsl
in Demat mode website www.cdslindia.com and click on login icon & New System Myeasi Tab.
with CDSL
Depository 2) After successful login the Easi / Easiest user will be able to see the e-Voting option for
eligible companies where the evoting is in progress as per the information provided by
company. On clicking the evoting option, the user will be able to see e-Voting page of
the e-Voting service provider for casting your vote during the remote e-Voting period
or joining virtual meeting & voting during the meeting. Additionally, there is also links
provided to access the system of all e-Voting Service Providers, so that the user can
visit the e-Voting service providers’ website directly.

3) If the user is not registered for Easi/Easiest, option to register is available at cdsl
website www.cdslindia.com and click on login & New System Myeasi Tab and then click
on registration option.

4) Alternatively, the user can directly access e-Voting page by providing Demat Account
Number and PAN No. from a e-Voting link available on www.cdslindia.com home page.
The system will authenticate the user by sending OTP on registered Mobile & Email as
recorded in the Demat Account. After successful authentication, user will be able to see
the e-Voting option where the evoting is in progress and also able to directly access
the system of all e-Voting Service Providers.
Individual 1) If you are already registered for NSDL IDeAS facility, please visit the e-Services
Shareholders website of NSDL. Open web browser by typing the following URL: https://eservices.
holding securities nsdl.com either on a Personal Computer or on a mobile. Once the home page of
in demat mode e-Services is launched, click on the “Beneficial Owner” icon under “Login” which is
with NSDL available under ‘IDeAS’ section. A new screen will open. You will have to enter your
Depository User ID and Password. After successful authentication, you will be able to see e-Voting
services. Click on “Access to e-Voting” under e-Voting services and you will be able to
see e-Voting page. Click on company name or e-Voting service provider name and you
will be re-directed to e-Voting service provider website for casting your vote during the
remote e-Voting period or joining virtual meeting & voting during the meeting.

12 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Type of
Login Method
shareholders
2) If the user is not registered for IDeAS e-Services, option to register is available
at https://eservices.nsdl.com Select “Register Online for IDeAS Portal” or click at
https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.jsp

3) Visit the e-Voting website of NSDL. Open web browser by typing the following URL:
https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. Once the
home page of e-Voting system is launched, click on the icon “Login” which is available
under ‘Shareholder/Member’ section. A new screen will open. You will have to enter
your User ID (i.e. your sixteen digit demat account number hold with NSDL), Password/
OTP and a Verification Code as shown on the screen. After successful authentication,
you will be redirected to NSDL Depository site wherein you can see e-Voting page.
Click on company name or e-Voting service provider name and you will be redirected
to e-Voting service provider website for casting your vote during the remote e-Voting
period or joining virtual meeting & voting during the meeting
Individual You can also login using the login credentials of your demat account through your
Shareholders Depository Participant registered with NSDL/CDSL for e-Voting facility. After Successful
(holding securities login, you will be able to see e-Voting option. Once you click on e-Voting option, you will
in demat mode) be redirected to NSDL/CDSL Depository site after successful authentication, wherein you
login through can see e-Voting feature. Click on company name or e-Voting service provider name and
their Depository you will be redirected to e-Voting service provider website for casting your vote during the
Participants (DP) remote e-Voting period or joining virtual meeting & voting during the meeting.

Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and
Forget Password option available at above mentioned website.

Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to
login through Depository i.e. CDSL and NSDL

Login type Helpdesk details

Individual Shareholders holding securities in Demat Members facing any technical issue in login can contact
mode with CDSL CDSL helpdesk by sending a request at
[email protected] or contact at
toll free no. 1800 22 55 33

Individual Shareholders holding securities in Demat Members facing any technical issue in login can
mode with NSDL contact NSDL helpdesk by sending a request at
[email protected] or call at toll free no.: 1800 1020 990
and 1800 22 44 30

Step 2 : Access through CDSL e-Voting system in case of shareholders holding shares in physical mode and
non-individual shareholders in demat mode.

(v) Login method for e-Voting and joining virtual meetings for Physical shareholders and shareholders other than
individual holding in Demat form.

1) The shareholders should log on to the e-voting website www.evotingindia.com.

BAFNA PHARMA - ANNUAL REPORT 2023-24 13

 2) Click on “Shareholders” module.

3) Now enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Shareholders holding shares in Physical Form should enter Folio Number registered with the Company.

4) Next enter the Image Verification as displayed and Click on Login.

5) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier
e-voting of any company, then your existing password is to be used.

6) If you are a first-time user follow the steps given below:

For Physical shareholders and other than individual shareholders holding shares
in Demat.
PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable
for both demat shareholders as well as physical shareholders)

• Shareholders who have not updated their PAN with the Company/Depository
Participant are requested to use the sequence number sent by Company/RTA or
contact Company/RTA.
Dividend Bank Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded
Details in your demat account or in the company records in order to login.

OR Date of • If both the details are not recorded with the depository or company, please enter
Birth (DOB) the member id / folio number in the Dividend Bank details field.

(vi) After entering these details appropriately, click on “SUBMIT” tab.

(vii) Shareholders holding shares in physical form will then directly reach the Company selection screen. However,
shareholders holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to
mandatorily enter their login password in the new password field. Kindly note that this password is to be also used
by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided
that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password
with any other person and take utmost care to keep your password confidential.

(viii) For shareholders holding shares in physical form, the details can be used only for e-voting on the resolutions
contained in this Notice.

(ix) ix). Click on the EVSN for the relevant “Bafna Pharmaceuticals Limited” on which you choose to vote.

(x) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for
voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option
NO implies that you dissent to the Resolution.

(xi) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xii) After selecting the resolution, you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed.

14 BAFNA PHARMA - ANNUAL REPORT 2023-24

 If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify
your vote.

(xiii) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xiv) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting page.

(xv) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code
and click on Forgot Password & enter the details as prompted by the system.

(xvi) There is also an optional provision to upload BR/POA if any uploaded, which will be made available to scrutinizer for
verification.

(xvii) Additional Facility for Non – Individual Shareholders and Custodians –For Remote Voting only.

a) Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodians are required to log on
to www.evotingindia.com and register themselves in the “Corporates” module.

b) A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to
[email protected].

c) After receiving the login details a Compliance User should be created using the admin login and password.
The Compliance User would be able to link the account(s) for which they wish to vote on.

d) The list of accounts linked in the login will be mapped automatically & can be delink in case of any wrong
mapping.

e) It is Mandatory that, a scanned copy of the Board Resolution and Power of Attorney (POA) which they have
issued in favor of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to
verify the same.

f) Alternatively Non Individual shareholders are required mandatory to send the relevant Board Resolution/
Authority letter etc. together with attested specimen signature of the duly authorized signatory who are
authorized to vote, to the Scrutinizer and to the Company at the email address viz; [email protected], if
they have voted from individual tab & not uploaded same in the CDSL e-voting system for the scrutinizer to
verify the same

INSTRUCTIONS FOR SHAREHOLDERS ATTENDING THE AGM/EGM THROUGH VC/OAVM & E-VOTING DURING
MEETING ARE AS UNDER:

1. The procedure for attending meeting & e-Voting on the day of the AGM/ EGM is same as the instructions mentioned
above for e-voting.

2. The link for VC/OAVM to attend meeting will be available where the EVSN of Company will be displayed after
successful login as per the instructions mentioned above for e-voting.

3. Shareholders who have voted through Remote e-Voting will be eligible to attend the meeting. However, they will
not be eligible to vote at the AGM/EGM.

4. Shareholders are encouraged to join the Meeting through Laptops / IPads for better experience.

5. Further shareholders will be required to allow Camera and use Internet with a good speed to avoid any disturbance
during the meeting.

BAFNA PHARMA - ANNUAL REPORT 2023-24 15

6. Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via
Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network. It is therefore
recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.

7. Shareholders who would like to express their views/ask questions during the meeting may register themselves as
a speaker by sending their request in advance at least 7 days prior to meeting mentioning their name, demat
account number/folio number, email id, mobile number at [email protected]. The shareholders who do not
wish to speak during the AGM but have queries may send their queries in advance 7 days prior to meeting
mentioning their name, demat account number/folio number, email id, mobile number at [email protected].
These queries will be replied to by the company suitably by email.

8. Those shareholders who have registered themselves as a speaker will only be allowed to express their views/ask
questions during the meeting.

9. Only those shareholders, who are present in the AGM/EGM through VC/OAVM facility and have not casted their
vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to
vote through e-Voting system available during the EGM/AGM.

10. If any Votes are cast by the shareholders through the e-voting available during the EGM/AGM and if the same
shareholders have not participated in the meeting through VC/OAVM facility, then the votes cast by such
shareholders may be considered invalid as the facility of e-voting during the meeting is available only to the
shareholders attending the meeting.

PROCESS FOR THOSE SHAREHOLDERS WHOSE EMAIL/MOBILE NO. ARE NOT REGISTERED WITH THE COMPANY/
DEPOSITORIES.

1. For Physical shareholders- please provide necessary details like Folio No., Name of shareholder, scanned copy of
the share certificate (front and back), PAN (self attested scanned copy of PAN card), AADHAR (self attested scanned
copy of Aadhar Card) by email to Company/RTA email id.

2. For Demat shareholders -, Please update your email id & mobile no. with your respective Depository Participant
(DP)

3. For Individual Demat shareholders – Please update your email id & mobile no. with your respective Depository
Participant (DP) which is mandatory while e-Voting & joining virtual meetings through Depository.

If you have any queries or issues regarding attending AGM & e-Voting from the CDSL e-Voting System, you can
write an email to [email protected] or contact at toll free no. 1800 22 55 33

All grievances connected with the facility for voting by electronic means may be addressed to Mr. Rakesh Dalvi, Sr.
Manager, (CDSL, ) Central Depository Services (India) Limited, A Wing, 25th Floor, Marathon Futurex, Mafatlal Mill
Compounds, N M Joshi Marg, Lower Parel (East), Mumbai - 400013 or send an email to helpdesk.evoting@cdslindia.
com or call toll free no. 1800 22 55 33.

16 BAFNA PHARMA - ANNUAL REPORT 2023-24

Explanatory Statement Pursuant to Section 102(1) of the Companies Act, 2013:
The following Statements sets out all material facts relating to Item Nos. 3 to 5 as mentioned in the accompanying Notice.

Item No.3:-

The Board of Directors of the Company at the meeting held on August 11, 2023, on the recommendation of the Nomination
and Remuneration Committee and subject to the approval of the Members of the Company, approved the re-appointment
of Ms. S Hemalatha as Whole Time Director of the Company, for a period of five years, with effect from September 10,
2023, on such remuneration as set out in the resolution. Ms. S Hemalatha has consented to be re-appointed as Whole
Time Director and shall not be liable to retire by rotation.

Ms. S Hemalatha, a Commerce graduate with C.S. (Inter) and ICWA (Inter) qualifications, with over two decades of
experience in the pharmaceutical industry. As a Whole-Time Director, she oversees commercial operations and plays a key
role in strategic planning and financial oversight. She has been instrumental in driving the company’s growth and success.
The Nomination and Remuneration Committee of the Board has fixed the remuneration payable to of Ms. S Hemalatha
taking into account her qualification, experience, past performance and past remuneration.

Ms. S Hemalatha satisfies all the conditions set out in Part I of Schedule V to the Companies Act, 2013 (the “Act”), as also
conditions set out under Section 196 of the Act for being eligible for her reappointment. She is not disqualified from being
appointed as Director in terms of Section 164 of the Act.

Considering the rich experience of Ms. S Hemalatha, the Nomination & Remuneration Committee along with the Board
recommends her re-appointment as the Whole-Time Director of the Company.

Additional information in respect of Ms. S Hemalatha, pursuant to Regulation 36 of the Listing Regulations and the
Secretarial Standard on General Meetings (SS-2) and her brief profile, is given at Annexure to this Notice.

The Board of Directors recommends the resolution in relation to the re-appointment of Ms. S Hemalatha, as Whole Time
Director of the Company as set out in Item No. 3, for approval of the Members by way of an Ordinary Resolution.

Except Ms. S Hemalatha being an appointee, none of the Directors, Key Managerial Personnel of the Company and/ or their
relatives are concerned or interested, in any way, in the proposed resolutions except to the extent of their shareholding,
if any, in the Company.

Item No.4:-
In accordance with the provisions of Section 180(1)(a) of the Companies Act, 2013 (the "Act"), any sale, lease, or other
disposal of the whole or substantially the whole of the Company's undertaking requires the approval of the members by
way of a special resolution. For the purposes of Section 180(1)(a) of the Act, an undertaking is defined as an asset in which
the investment of the Company exceeds 20% of its net worth as per the audited balance sheet of the preceding financial
year or an undertaking that generates 20% of the total income of the Company during the previous financial year.

The Company proposes to sell and transfer its manufacturing unit located at No. 13, S.V. Koil Street, Madhavaram,
Chennai-600 060, Tamil Nadu, India (the "Undertaking"), along with all related assets including buildings, plant and
machinery, employees, contracts, licenses, permits, rights, consents, and all other assets associated with the Undertaking,
on an "as is where is" basis. After assessing the commercial viability of operating the Undertaking and considering its
insignificance to the overall business of the Company, the Board has decided that selling the unit is in the best interest of
all stakeholders.

It is pertinent to note that the aforesaid Undertaking does not meet the thresholds defined under Section 180(1)(a) of the
Act, as the Company's investment in the Undertaking does not exceed 20% of its net worth, nor does the Undertaking
generate 20% of the Company's total income. However, as a matter of prudence, the Board has decided to seek the
approval of the members by way of a special resolution under Section 180(1)(a) of the Act.

The Board of Directors, at its meeting held on 13th August 2024, approved the sale and transfer of the Manufacturing Unit
situated at No. 13, S.V. Koil Street, Madhavaram, Chennai-600 060, Tamil Nadu, India, to Navron Pharma Private Limited,

BAFNA PHARMA - ANNUAL REPORT 2023-24 17

Chennai, together with its assets, for the consideration specified in Item No. 04 of the Notice.

The Board is of the opinion that the proposed special resolution is in the best interest of the Company and, therefore,
recommends the approval of the members.

None of the Directors, Key Managerial Personnel of the Company and/ or their relatives are concerned or interested, in any
way, in the proposed resolutions except to the extent of their shareholding, if any, in the Company.

Item No.5:-

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (the Rules),
the Company is required to appoint a Cost Auditor to audit the cost records of the Company. The Board at its meeting
held on May 29, 2024, based on the recommendation of the Audit Committee, has approved the appointment of M/s. N
Sivashankaran & Co., Cost Accountants (ICMAI FRN. 100662), as the Cost Auditor of the Company for the F.Y 2024-2025
at a remuneration of Rs.75,000/- (Rupees Seventy-Five Thousand only) plus applicable taxes.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors)
Rules, 2014, the remuneration payable to the Cost Auditors, as recommended by the Audit Committee and approved by
the Board, is required to be ratified by the Members of the Company.

Therefore, the consent of the Members is sought for passing an Ordinary Resolution as set out at Item No.5 of the
Notice for ratification of the remuneration payable to the Cost Auditor of the Company for the F.Y 2024-2025. The Board
recommends the Resolution set forth in Item No.5 for the approval of the Members.

None of the Directors, Key Managerial Personnel of the Company and/ or their relatives are concerned or interested, in any
way, in the proposed resolutions, except to the extent of their shareholding, if any, in the Company.

18 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Annexure to the Notice
Details of Directors seeking re-appointment at the 29th Annual General Meeting Pursuant to Regulation 36(3) of
the SEBI Listing Regulations and Secretarial Standard–2 on General Meetings

Name of the Director Mr. Upendar Mekala Reddy Ms. S Hemalatha

Director Identification 08898174 02714329

Number (DIN)
Date of Birth & Age December 10, 1981 April 19, 1975

42 Years 49 Years
Nationality Indian Indian
Date of first June 26, 2023. September 10, 2020
appointment on

the Board
Qualification Master of Business Administration (Finance) from Commerce graduate with. C.S. (Inter),
Indian Institute of Management, Kozhikode, ICWA (Inter) Qualifications.
Bachelor of Technology in Computer Science
Engineering from JNTU, Hyderabad & FRM
Certification from Global Association of Risk
Professionals.
Brief Resume & nature Mr. Upendar Mekala Reddy has over 15 years Ms. S Hemalatha has more than
of expertise in specific of experience spanning project and structured two decades of experience in the
functional areas finance, fund raising, Mergers and Acquisitions pharmaceutical industry. She oversees
and Investment Banking. He has executed commercial operations and plays a key
transactions across sectors including Power role in strategic planning and financial
(Renewable & Non-renewable), Pharmaceuticals,
oversight. Throughout her career, she
Roads, Manufacturing, Cement, Real estate, Ports,
has accumulated extensive experience
etc.
in various roles within the company.
Prior to iLabs Group, Upendar was working as
Vice President with Edelweiss Financial Services
handling the wholesale and structured lending
business. He also worked as Assistant Vice
President with IL&FS Financial Services and Senior
Manager with L&T Infrastructure Finance in the
Project Finance Team.
Terms and conditions Mr. Upendar Mekala Reddy is re-appointed as Ms. S Hemalatha, is re-appointed as
of appointment & Non-Executive, Non-Independent Director, liable Whole-Time Director of the Company,
Remuneration sought to retire by rotation. for a period of Five (5) Years with effect
to be paid. from September 10, 2023 to September
He is entitled to receive sitting fees for attending
09, 2028, not liable to retire by rotation.
meetings of the Board and committees thereof.
The detailed terms and conditions,
including remuneration, is provided as
part of the resolution.

BAFNA PHARMA - ANNUAL REPORT 2023-24 19

No. of meetings of the Three (3) Board Meetings during F.Y 2023-2024. Six (6) Board Meetings during F.Y 2023-
Board attended during 2024.
the year
Last drawn Sitting fee paid during FY 2023-2024: Rs.55,000/- Rs.1,42,718/- per month
remuneration

Membership / Member of the Audit Committee of the Company. Member of the Stakeholders &
Chairmanship of Relationship Committee and Corporate
Committees Social Responsibility Committee of the
Company.
of the Board of the
Company
Directorship / Nil Nil
Membership of the
Committees in other
listed companies as on
March 31, 2024
Relationship with Nil Nil
other

Directors / Manager /
other KMP

Number of Equity Nil 1,199

Shares held in the
Company as on March
31, 2024

20 BAFNA PHARMA - ANNUAL REPORT 2023-24

 DIRECTOR’S REPORT

To

The Shareholders,
Your directors’ have pleasure in presenting the Twenty Ninth (29th) Annual Report of your Company together with Audited
Accounts for the Financial Year ended 31st March, 2024.

1. Financial Performance
The summarized Audited Financial Results for the year ended 31st March, 2024 along with comparative figures for the
Previous year is as under:
(Rs.in Lakhs)

Financial Highlights
Particulars
31st March 2024 31st March 2023
Revenue from operations 15,246.57 11,534.99
Other Income 352.24 327.27
Total Income 15,598.81 11,862.26
Expenses
Operating Expenditure 14,135.45 9,963.43
EBITDA 1,463.36 1,898.83
Depreciation and Amortization Expenses 499.54 533.44
Earnings before interest and taxes 963.82 1,365.39
Interest expenses 229.03 203.76
Profit before taxes 734.79 1,161.63
Less: Exceptional Items - -
Less: OCI -3.65 -15.31
Net profit before taxes 738.44 1,176.94
Tax expenses - 27.83
Net profit for the year 738.44 1,149.11

2. Operating Results
Your Company’s Total Income during the financial year under review i.e., year 2023-24 is Rs.15,598.81 Lakhs as compared
to the previous year 2022-23, Rs.11,862.26 Lakhs. Profit before Tax after other comprehensive income for the year 2023-
24 is Rs. 738.44 Lakhs as against Rs.1,176.94 Lakhs in the previous year. Profit after Tax for the year 2023-24 stands at Rs.
738.44 Lakhs as against Rs. 1,149.11 Lakhs in the previous year.

3. Dividend
The Board has not declared any dividend for the Financial Year 2023-2024.

4. Reserves
The Company has not transferred any amount to the general reserves during the year under review.

5. Capital Structure
The Paid-up Equity Share Capital as on March 31, 2024 was Rs.2,365.63 Lakhs. During the year under review the Issued,

BAFNA PHARMA - ANNUAL REPORT 2023-24 21

Subscribed and Paid-up capital has remained the same. The Company has not issued any shares with differential voting
rights nor granted stock options nor sweat equity.

6. Deposits
The Company has not accepted / invited any deposits from the public in terms of Section 73 of the Companies Act, 2013.

7. Change in the nature of business

The Company is engaged in the manufacture of pharmaceutical products. There is no change in the nature of business
during the year under review.

8. Material changes and commitments affecting the financial position of the Company
There have been no material changes and commitments between the end of the financial year 2023-24 and the date of
this report, adversely affecting the financial position of the Company.

9. Subsidiaries, Associate and Joint Venture Companies

The Company does not have any subsidiary, associate or joint venture.

10. Loans, Guarantee and Investment under Section 186 of Companies Act, 2013
During the year under review, your Company has not advanced any loan, given any guarantee and made any investment
under Section 186 of the Companies Act, 2013.

11. Board of Directors and Key Managerial Personnel

I. Composition
The composition of the Board of Directors and its Committees, viz., Audit Committee, Nomination and Remuneration
Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee are constituted in
accordance with Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (SEBI LODR). The details of Composition of the Board, its Committees, meetings and an overview of the role,
terms of reference are provided in the Corporate Governance Report annexed to this Report.

The following changes took place in the composition of Board of Directors:

a) Appointment of Directors:
i. Pursuant to recommendation of the Nomination and Remuneration Committee, the Board had, on
June 26, 2023 approved the appointment of Mr. Krishna Yeachuri (DIN: 00066898) as an Additional
Director in the capacity of Non-Executive, Independent Director of the Company, for a period of 5
years, with effect from June 26, 2023 to June 24, 2028, subject to approval of the shareholders of the
Company.
ii. Pursuant to recommendation of the Nomination and Remuneration Committee, the Board had,
on June 26, 2023 approved the appointment of Mr. Upendar Mekala Reddy (DIN: 08898174) as an
Additional Director in the capacity of Non-Executive, Non-Independent Director of the Company,
subject to approval of the shareholders of the Company.
iii. Pursuant to recommendation of the Nomination and Remuneration Committee, the Board had, on
June 26, 2023 approved the appointment of Mr. Vinayak Dinesh Dendukuri (DIN: 07601309) as an
Additional Director in the capacity of Whole-Time Director of the Company, for a period of 5 years, with
effect from June 26, 2023 to June 24, 2028, subject to approval of the shareholders of the Company.
The aforesaid appointments were approved by the shareholders of the Company vide resolutions
passed in the 28th Annual General Meeting of the Company held on September 22, 2023.

22 BAFNA PHARMA - ANNUAL REPORT 2023-24

 b) Resignation of Directors:
Mr. Babulal Kamlesh Kumar (DIN: 01218959), resigned as Independent Director of the Company with effect
from September 09, 2023. The Board placed on record its appreciation for the guidance rendered by him
during his tenure as Director of the Company.
There were no other changes in the composition of the Board of Directors during the year under review.

II. Retirement by Rotation

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company,
Mr. Upendar Mekala Reddy (DIN: 08898174), Director retires by rotation at the ensuing 29th Annual General
Meeting (AGM) of the Company and being eligible, offers himself for re-appointment. Your Board recommends his
re-appointment as Director of the Company.

III. Re-appointment of Director:

The Board of Directors, on recommendation of the Nomination and Remuneration Committee, in its meeting held
on August 11, 2023 considered and approved the re-appointment of Ms. S Hemalatha (DIN: 02714329) as Whole-
Time Director of the Company for a period of 5(five) years with effect from September 10, 2023. The proposal for
re-appointment of Ms. S Hemalatha as a Whole Time Director is included in the notice convening the 29th AGM.
Your Board recommends the re-appointment of Ms. S Hemalatha as a Whole-Time Director of the Company.
The brief resume of the Directors seeking reappointment and other information are enclosed in the Notice convening
29th AGM. The Board of Directors are of the opinion that the Directors proposed for appointment / re-appointment
at the ensuing 29th AGM of the Company possess integrity, necessary expertise, relevant experience and the
Corporate Governance report annexed to this report contains necessary disclosures regarding the Director(s).
IV. Number of Board Meetings:
The Board of Directors met Six (6) times during the year under review and the gap between 2 meetings did not
exceed 120 days. The details of the Board & Committee Meetings and the attendance of the Directors are provided
in the Report on Corporate Governance.

V. Declaration by Independent Directors & Adherence to Company’s Code of Conduct:

The Company has received necessary declaration from each independent director under Section 149(7) of the
Companies Act, 2013, that he/ she meets the criteria of independence laid down in Section 149(6) of the Companies
Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All
Independent Directors have affirmed compliance to the code of conduct for independent directors as prescribed in
Schedule IV to the Companies Act, 2013 and the Company's Code of Conduct for Directors and Senior Management
Personnel.
In the opinion of the Board, the Independent Directors, fulfill the conditions of independence specified in Section
149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The terms and conditions of appointment of
Independent Directors have been disclosed in the website of the company at www.bafnapharma.com.

VI. Board Evaluation:

The annual evaluation of the performance of the Board, functioning of its committees, and individual Directors
was carried out based on the evaluation criteria prescribed by the Nomination and Remuneration Committee and
the SEBI (LODR) Regulations, 2015. The performance review of Non-Independent Directors were carried out by the
Independent Directors in their separate meeting held during the year.

BAFNA PHARMA - ANNUAL REPORT 2023-24 23

VII. Committees Of the Board:

The Board has constituted following committees:

i). Audit Committee;
ii). Nomination and Remuneration Committee;
iii). Stakeholders' Relationship Committee;
iv). Corporate Social Responsibility Committee.

i). Audit Committee

In terms of Section 177 of the Companies Act, 2013, and other applicable provisions if any, and as per the
Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has
constituted Qualified and Independent Audit Committee. The Audit Committee comprises of the following
Members as on March 31, 2024:
a) Mr. P K Sundaresan – Chairman
b) Ms. R Chitra – Member
c) Mr. Upendar Mekala Reddy* – Member
d) Mr. B. Kamlesh Kumar** – Member
*Appointed w.e.f November 02, 2023
** Ceased w.e.f September 09, 2023

The terms of reference of the Audit Committee includes matters specified in section 177 of the Companies
Act 2013, and Regulation 18 of SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015. All
the recommendations made by the Audit Committee during the year were accepted by the Board of Directors
of the Company.

The details of the Audit Committee along with its composition, number of meetings, attendance and terms
of reference are provided in the Corporate Governance Report, which forms part of this report.

ii). Nomination & Remuneration Committee

In terms of Section 178 of the Companies Act, 2013 & other applicable provisions, if any, and as per the
Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company
has constituted Nomination & Remuneration Committee. The Nomination & Remuneration Committee
comprises of the following Members as on March 31, 2024:
a) Mr. Krishna Yeachuri* – Chairman
b) Mr. P K Sundaresan – Member
c) Mrs. Akila C Raju – Member
d) Mr. B. Kamlesh Kumar** – Chairman
*Appointed w.e.f November 02, 2023

** Ceased w.e.f September 09, 2023

The Committee consists of only Non-Executive Directors as its members. The details of the Nomination &
Remuneration Committee along with its composition, number of meetings, attendance and terms of reference are
provided in the Corporate Governance Report, which forms part of this report.

24 BAFNA PHARMA - ANNUAL REPORT 2023-24

 iii). Stakeholders Relationship Committee
In terms of Section 178 of the Companies Act, 2013 & other applicable provisions, if any, and as per the
Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has
constituted Stakeholders Relationship Committee. The Stakeholders Relationship Committee comprises of
the following Members as on March 31, 2024:

a) Mrs. R Chitra – Chairperson

b) Ms. S Hemalatha – Member
c) Mrs. Akila C Raju* – Member
*Appointed w.e.f April 07, 2023

The details of the Stakeholders Relationship Committee along with its composition, number of meetings,
attendance and terms of reference are provided in the Corporate Governance Report, which forms part of this
report.

VIII. Details of KMP:

The following are the Key Managerial Personnel of the Company in accordance with the provisions of Section
2(51) read with Section 203 of the Act:

a) Mr. Mahaveer Chand Bafna – Chief Executive Officer

b) Mr. Melagiri Sridhar – Chief Financial Officer
c) Mr. A. Mohanachandran – Company Secretary

Mr. Vishnu Vasudeva Kuppa, ceased to be the Company Secretary & Compliance Officer of the Company
w.e.f. April 23, 2024. Mr. A. Mohanachandran was appointed as the Company Secretary & Compliance Officer
of the Company w.e.f May 29, 2024.

13. Auditors

a) Statutory Auditor
As per the provisions of Section 139 of the Companies Act, 2013, M/s. Brahmayya & Co, Chartered Accountants,
Chennai (ICAI FRN:000511S), were appointed as Statutory Auditors of the Company, for a period of five (5) years
from the conclusion of the 27th Annual General Meeting till the conclusion of 32nd Annual General Meeting of the
Company.

Auditors’ Report:
The Auditors’ Report on the financial statements of the Company for the financial year ended 31 March 2024 is
enclosed with the financial statements, which forms part of this Annual Report.

The report is unmodified i.e. it does not contain any qualification, reservation, adverse remark or disclaimer. The
remarks in the Auditors Report and Notes on financial statement referred to in the Auditor’s Report are self-
explanatory and do not call for any further comments. Also there has been no instance of fraud reported by the
statutory auditors for the financial year under review.

b) Internal Auditor
Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014,
the Board, on recommendation of the Audit Committee, has appointed M/s. K S Rao & Co, Chartered Accountants
(ICAI FRN. 003109S) as internal auditors of the Company for the financial year 2024-2025.

BAFNA PHARMA - ANNUAL REPORT 2023-24 25

c) Cost Auditor & Maintenance of Cost Records
Pursuant to section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014,
the Board of Directors, on recommendation of Audit Committee, appointed M/s. N. Sivashankaran & Co, Cost
Accountants (ICMAI Registration No: 100662) as the Cost Auditor of the Company, to conduct audit of cost records
maintained by the Company for financial year 2024 – 2025 at a remuneration of Rs.75,000/- (Rupees Seventy Five
Thousand Only) excluding applicable taxes, reimbursement of out- of-pocket expenses. In terms of Section 148(3)
of the Companies Act, 2013 the remuneration payable to the Cost Auditors, as fixed by the Board, is required to
be ratified by the members and the resolution for the ratification of Cost Auditors Remuneration is provided under
Item No.5 of the Notice convening the 29th Annual General Meeting.

The Company maintains all such accounts and records as specified by the Central Government under section 148
(1) of the Companies Act, 2013.

d) Secretarial Auditor & Secretarial Auditor Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. A.K. Jain &
Associates, Company Secretaries in Practice, Chennai, as the Secretarial Auditors of the Company for the FY 2023-
2024.

The Secretarial Audit Report in Form MR-3 is annexed as Annexure-C to this Report.

Reply to the Qualifications made in the Secretarial Audit Report:

The Board’s reply for the qualifications, observations made by the Secretarial Auditor in Secretarial Audit Report for
F.Y 2023-2024 is provided hereunder:

Secretarial Auditor Qualifications /

Sl. No. Board’s Reply
Observations
01 The Board of Directors of the Company did The Board appointed three Directors during the meeting
not comprise of minimum of six directors as held on 26.06.2023, thereby increasing the total number
required under Regulation 17(1)(c) of SEBI (LODR) of Directors to eight.
Regulations, 2015 until 26.06.2023.
02 The Company did not have a Company Secretary The Board of Directors has appointed Mr. Vishnu Vasudeva
cum Compliance Officer as required u/s 203 of Kuppa as the Company Secretary of the Company w.e.f.
the Companies Act, 2013, and Regulation 6 of 07.04.2023, thereby complying with Regulation 6 of SEBI
SEBI (LODR) Regulations, 2015 during the period (LODR) Regulations, 2015.
commencing from 01.04.2023 to 07.04.2023.

03 The Company has submitted the Disclosure The delay in the submission of the Disclosure of Related
of Related Party Transactions, with the Stock Party Transactions was caused by technical issues
Exchanges, for the half year ended 31.03.2023 as encountered during the filing of the XBRL instance with
prescribed under Regulation 23(9) of SEBI (LODR) the Stock Exchanges. The Company has since remitted a
Regulations, 2015, with a delay of 2 days. fine of Rs. 11,800/- each to BSE and NSE for the delay.

26 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Secretarial Auditor Qualifications /
Sl. No. Board’s Reply
Observations
04 The Company did not comply with the Minimum During the year, the Company and its promoters
Public Shareholding requirements as prescribed made earnest efforts to achieve the Minimum Public
under Regulation 38 of the SEBI (Listing Shareholding requirement. On September 06, 2023, M/s.
Obligations and Disclosure Requirements) SRJR Life Sciences LLP, a promoter of the Company, made
Regulations, 2015, read with Rule 19(2) and Rule an Offer for Sale of 35,48,143 Equity Shares, representing
19A of the Securities Contracts (Regulation) 15% of the total paid-up capital, through the Stock
Rules, 1957. Exchange mechanism. However, the offer was subscribed
to the extent of 1,57,248 Equity Shares by non-retail
investors on September 07, 2023, and 1,41,418 Equity
Shares by retail investors on September 08, 2023.

The Company will ensure that the Minimum Public

Shareholding requirement is achieved in the coming year.
05 The Company has not yet obtained approval The Company is in the process of obtaining the necessary
of Shareholders for re-appointment of Ms. approval from the Shareholders for the reappointment of
S Hemalatha as Whole-Time Director of the Ms. S. Hemalatha as Whole Time Director. As of the date
Company as required under Section 196 of the of this report, the required forms have been filed with the
Companies Act, 2013 and Regulation 17(1C) of Registrar of Companies regarding her reappointment.
SEBI (LODR) Regulations, 2015. The Company
Since Ms. S. Hemalatha is also an Employee-Director and
has not filed e-Form MGT-14 for registration
continues in her employment, the Company was of the
of resolution passed by the Board of Directors
view that additional disclosure was not required and has
on 11.08.2023 & e-Form MR-1 with the
been unintentionally omitted due to inadvertence.
Registrar of Companies, Chennai with respect to
reappointment of Ms. S Hemalatha as Whole Time
Director of the Company. Further, the Company
has not made necessary disclosure as required
under Regulation 30 read with Schedule III of SEBI
(LODR) Regulation, 2015 for re-appointment of
Ms. S Hemalatha approved in the Board Meeting
held on 11.08.2023.
06 The Company has not spent the requisite The Company has transferred the unspent CSR amount
amount as prescribed under Section 135(5) of to the Funds specified in Schedule VII of Companies Act,
the Companies Act, 2013 towards Corporate 2013 within the prescribed time. The details are disclosed
Social Responsibility activities and has not in the Report on Corporate Social Responsibility Activities.
transferred the remaining unspent amount to
a special account namely Unspent Corporate
Social Responsibility Account as prescribed under
Section 135(6) of the Companies Act, 2013.

14. Annual Return:

The copy of the Annual Return (Form MGT-7) for F.Y 2023-2024 is made available in the website of the Company at the
weblink www.bafnapharma.com

15. Related Party Transactions

All Related Party Transactions that were entered into during the Financial Year under review were on an arm’s length
basis, and in the ordinary course of business and were in accordance with the Company’s Policy on RPT. There are no
materially significant related party transactions made by the Company with Related parties which requires approval of the
shareholders / which may have potential conflict with the interest of the Company at large.

BAFNA PHARMA - ANNUAL REPORT 2023-24 27

All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval
of the Audit Committee is obtained on a yearly basis for the transactions which are repetitive in nature. A statement giving
details of the transactions entered into with the related parties, pursuant to the omnibus approval so granted, is placed
before the Audit Committee and the Board of Directors for their approval, ratification on a quarterly basis.
During the year, the Company had not entered into any material related party transactions which are not in ordinary
course of business or which are not on arm’s length basis and hence there is no information to be provided as required
under Section 134(3) (h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014. Necessary disclosure as
required by the Indian Accounting Standards (IND AS 24) has been made in the notes to the Financial Statements.
The Company has adopted a Policy for dealing with Related Party Transactions which has been uploaded on the Company’s
website under the web-link www.bafnapharma.com.

16. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and outgo
The Company is conscious of its responsibility to conserve the energy and has taken measures in relation to conservation
of energy and technology absorption. The prescribed particulars on conservation of energy, technology absorption and
foreign exchange earnings and outgo as required under Section 134(3) of the Companies Act, 2013 read with Rule 8 of the
Companies (Accounts) Rules, 2014 are furnished in Annexure-A to this Report.

17. Corporate Social Responsibility

The Company satisfies the criteria as prescribed in section 135 of the Companies Act, 2013 for applicability of Corporate
Social Responsibility (CSR) provisions. The Company has adopted a Corporate Social Responsibility (CSR) Policy outlining
various CSR activities to be undertaken by the Company, in accordance with Schedule VII to the Companies Act, 2013. The
said policy is made available on the Company's website at the following link www.bafnapharma.com. The Report on CSR
Activities is annexed as Annexure-B to this Report.

18. Particulars of Directors, Key Managerial Personnel and Employees

The Company is continuously focusing on retaining the appropriate talent and increasingly systematizing the HR
processes. We have excellent industrial relations across all facilities including the corporate office and strongly believe that
the workers will continue to work towards achieving a profitable and productive Company.

The information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is provided in Annexure – D to this Report. Further, the information pertaining to
Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to
the names and other particulars of employees is available for inspection at the Registered office of the Company during
business hours and pursuant to provisions of Section 136(1) of the Act, the Report and the accounts are being sent to the
members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/
Compliance Officer either at the Registered/Corporate Office address or by email to [email protected].

19. Corporate Governance

The detailed report on Corporate Governance and Certificate from a Practicing Company Secretary regarding compliance
with requirements of Corporate Governance are annexed as Annexure-E to this Report.

20. Management Discussion and Analysis Report

Pursuant to Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, a detailed review of the business
operations, performance, future outlook, major events occurred during the year as well as state of company’s affairs
is given in the Management Discussion and Analysis Report, which is annexed as Annexure-F to this Report. Certain
Statements in the report may be forward-looking. Many factors may affect the actual results, which could be different from
what the Directors envisage in terms of future performance & outlook.

28 BAFNA PHARMA - ANNUAL REPORT 2023-24

21. Risk Management:
Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive
and efficient manner. Your Company periodically assesses risks in the internal and external environment, along with the
cost of treating risks and incorporates risk treatment plans in the strategy, business and operational plans.

22. Adequacy of Internal Financial Controls with reference to the Financial Statements:
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The
Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance
with operating systems, accounting procedures and policies of the Company. The internal audit reports were reviewed
periodically by the Audit Committee & the Board. Further, the Board annually reviews the effectiveness of the Company’s
internal control system.

23. Directors Responsibility Statement

In terms of Section 134(3)(c) read with section 134(5) of the Companies Act, 2013, the Directors, to the best of their
knowledge and belief, based on the information and explanations obtained by them, confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed and there
were no material departures;

b) Appropriate accounting policies had been selected and applied them consistently and made judgments and
estimates that were 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 the year under review;

c) Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the Company, preventing and detecting fraud
and other irregularities;

d) The financial statements for the financial year had been prepared on a ‘going concern basis;

e) The internal financial controls had been laid down, to be followed by the Company and such internal financial
controls were adequate and were operating effectively; and

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

24. Significant and material orders passed by the Regulators/ Courts:

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern
status of your Company and its future operations.

25. Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by Institute of Company Secretaries of India
(ICSI) as per section 118(10) of the Companies Act, 2013.

26. Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2005, as amended from time to time,
the code of conduct for prevention of insider trading and the code for corporate disclosures are in force. The Company has
adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors
and designated persons of the Company, as per SEBI (Prohibition of Insider Trading) Regulations, 2015.

BAFNA PHARMA - ANNUAL REPORT 2023-24 29

27. Disclosure Under Sexual Harassment Of Women At The Work Place (Prevention, Prohibition And Redressal)
Act, 2013
The Company has a zero tolerance towards sexual harassment. The Company has adopted a policy on prevention of sexual
harassment of women at work place and put in place proper dissemination mechanism across the Company. The Company
has conducted awareness programs for its employees under the said Act.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial
year 2023-24, the Company has not received any complaint.

28. Vigil Mechanism / Whistle Blower Policy

The Board of Directors adopted the Whistle-Blower Policy in accordance with Section 177(9) of the Act, and Regulation 22
of the SEBI (LODR) Regulations, 2015. The policy provides adequate safeguard against victimization and for direct access
to the Chairman of the Audit Committee for the employees and state their complaints / grievances. The Whistle Blower
Policy is uploaded on the Company’s website www.bafnapharma.com.

29. Disclosure under the Insolvency and Bankruptcy Code, 2016:

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

30. Disclosure regarding Valuation under One Time Settlement:

Not Applicable.

31. Acknowledgement and Appreciation

The Board takes this opportunity to thank all shareholders, business partners, financial institutions, banks, distributors,
suppliers, customers, government and regulatory authorities, etc., for their co-operation and support extended to the
Company. The Directors also wish to express their gratitude to the Shareholders for the confidence and faith that they
continued to repose in the Company. The Directors place on record their appreciation of the consistent and dedicated
services of the employees at all levels who have immensely contributed to the performance of the Company during the
year under review.

On behalf of the Board of Directors

For BAFNA PHARMACEUTICALS LIMITED

SD/- SD/-
S. Hemalatha Vinayak Dinesh Dendukuri
Whole-Time Director Whole-Time Director
DIN:02714329 DIN: 07601309
Date: 13-08-2024 Place: Chennai Place: Hyderabad

30 BAFNA PHARMA - ANNUAL REPORT 2023-24

 ANNEXURE TO THE BOARDS’ REPORT

“Annexure-A”

Conservation of Energy, Technology Absorption,

Foreign Exchange Earnings and Outgo for the Financial Year 2023-2024

(Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014)

A. Conservation of Energy

i). Steps taken or impact on conservation of energy

The Company is making continuous efforts on an ongoing basis to conserve energy. Efforts to conserve
energy continued during the year through timely preventive maintenance and inspection of Plant and
Machinery, minimizing leakages and energy waste.

ii). Steps taken for Utilising alternate source of energy

The Company is exploring the possibilities for using green, clean and renewable energy for reduced
environmental impact and increased sustainability.

iii). Capital investment in energy conservation equipment

The Company has not made any capital investment in energy conservation equipment.

B. Technology Absorption

i). Efforts made towards technology absorption:

With latest technology, its development & up-gradation enable us to provide technically superior, process
efficient and international standards product. The Company has full-fledged R&D Center, which are
continuously engaged in R&D activities with respect to new product development and process improvement/
excellence.

a) The R&D center has been upgraded and adopted various methods of drug particle coating with a
gastro-resistant polymers of various genre to improve drug safety and efficacy and technology is
absorbed into process scale up of branded generics with innovative methodologies involving
combination with taste masking technology (with Ion-Exchange resins)-for producing efficacious
generics with highly taste masked bitter drugs.

b) The R&D canter also absorbed and adopted innovative techniques of Multi-layer Coating technology
which is subjected scale-up levels to produce stable and effective dosage forms-especially applicable
for drug products that are pH sensitive and for intestinal release and gastric resistance.

ii). Benefits derived like product improvement, cost reduction, product development or import
substitution

a) Control of drug therapy is achieved

b) Drug administration can be made convenient

c) The safety margin of high potency drug can be increased

d) Drugs with shorter half-life can be given in less frequent dose with better compliance

BAFNA PHARMA - ANNUAL REPORT 2023-24 31

 e) Less fluctuating blood plasma concentrations

f) Bioavailability enhancement of poorly soluble drugs

g) Targeting drug delivery at most absorbing sites to improve bioavailability

h) Reduction of adverse effects due to avoidance of dose dumping

i) Rapid onset of action can be achieved

j) Taste masking of bitter oral liquid drug formulations

iii). Details of Imported Technology (during the last 3 years reckoned from the beginning of the FY 2023-
24) - Nil

iv). Research and Development expenditure incurred

(Rs. In Lakhs)
Particulars 2023-2024 2022-2023
Capital Expenditure -- --
Recurring Expenditure 153.62 152.12

C. Foreign Exchange Earnings and Outgo

(Rs. In Lakhs)
Particulars 2023-2024 2022-2023
Foreign Exchange Earnings 10,307.23 8,850.87
Foreign Exchange Outgo 1,207.84 906.12

On behalf of the Board of Directors

For BAFNA PHARMACEUTICALS LIMITED

SD/- SD/-
S. Hemalatha Vinayak Dinesh Dendukuri
Whole-Time Director Whole-Time Director
DIN:02714329 DIN: 07601309
Date: 13-08-2024 Place: Chennai Place: Hyderabad

32 BAFNA PHARMA - ANNUAL REPORT 2023-24

 ANNEXURE TO THE BOARDS’ REPORT
“Annexure-B”

Annual Report on CSR Activities for The Financial Year 2023-24

(Pursuant to Section 134(3) of the Companies Act, 2013 read with the Companies (
Corporate Social Responsibility) Rules, 2014)

1. Brief Outline on CSR Policy of the Company:

The CSR policy of the Company focuses on implementing impactful and sustainable CSR initiatives in the areas of healthcare,
education, reducing inequalities, promotion of sports, environmental sustainability and community development and
other areas prescribed under schedule VII of the Companies Act, 2013. As a part of its CSR initiatives, the Company’s vision
is to be a socially responsible organization committed to sustainable development and improving the quality of life in the
communities where we operate.

2. Composition of CSR Committee:

The CSR Committee of the Company comprises of the following Directors:

Sl. No Name of Director Designation / Nature of Directorship

1 Mrs. R Chitra Chairperson –Independent Director
2 Mrs. Akila C Raju Member – Non-Executive Director
3 Ms. S Hemalatha Member – Whole-Time Director

As per Section 135(9) of the Companies Act, 2013, the Company is not required to constitute CSR Committee since the
amount to be spent by the Company towards CSR activities does not exceed Rs. 50 Lakhs and the functions of such
committee provided shall be discharged by the Board of Directors of such Company. Therefore, the CSR Committee of the
Company did not meet during the year under review and the Board of Directors of the Company discharged the functions
of the CSR Committee.

3. Provide the web-link where Composition of SCSR committee, CSR Policy and CSR projects approved by the
Board are disclosed on the website of the company : www. bafnapharma.com.

4. Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014, if : Not Applicable.

5. Details of Prescribed CSR Expenses Amount (In Rs)

(a) Average Net Profit of the Company as per Section 135(5) Rs. 7,85,37,145/-
(b) Two percent of average Net Profit of the Company as per Section 135(5) Rs. 15,70,743/-
(c) Surplus arising out of the CSR projects or programmes or activities of the previous --
financial years
(d) Amount required to be set off for the financial year, if any --
(e) Total CSR Obligation for the financial year [(b)+(c)-(d)] Rs. 15,70,743/

BAFNA PHARMA - ANNUAL REPORT 2023-24 33

 6. Details of CSR Expenses Incurred Amount (In Rs)
(a) Amount spent on CSR Project (both Ongoing project and other than Ongoing project Rs. 3,00,190/-
(b) Amount spent in Administrative Overheads --
(c) Amount spent on Impact Assessment, if applicable --
(d) Total amount spent for the Financial Year [(a)+(b)+(c)] Rs. 3,00,190/-

7. CSR amount spent or unspent for the financial year:

Amount unspent (in Rs.)

Total Amount
Total Amount transferred to Amount transferred to any fund specified under
Spent for the
Unspent CSR account as per Schedule VII as per second
Financial year
section 135(6) proviso to section 135(5)
(in Rs.)
Date of Name of the
Amount Amount Date of Transfer
Transfer fund
Prime Minister
National Relief 6,70,553 05.08.2024
3,00,190 -- -- Fund
Clean Ganga
6,00,000 05.08.2024
Fund

8. Excess amount for set off, if any: Nil

9. Details of Unspent CSR amount for the preceding three financial years: Nil

10. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount
spent in the Financial Year: Nil

11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section
135(5) - The Company could not spend the prescribed CSR Amount, before March 31, 2024, due to delay in project
identification. However, the Company has transferred the Unspent CSR Amount to the Funds specified in Schedule VII of
the Companies Act, 2013..

On behalf of the Board of Directors

For BAFNA PHARMACEUTICALS LIMITED

SD/- SD/-
S. Hemalatha Vinayak Dinesh Dendukuri
Whole-Time Director Whole-Time Director
DIN:02714329 DIN: 07601309
Date: 13-08-2024 Place: Chennai Place: Hyderabad

34 BAFNA PHARMA - ANNUAL REPORT 2023-24

 ANNEXURE TO THE BOARDS’ REPORT
“Annexure-C”

Form No. MR-3

SECRETARIAL AUDIT REPORT

For The Financial Year Ended 31.03.2024

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the
Companies (Appointment and Remuneration Personnel) Rules, 2014]

To
The Members,
BAFNA PHARMACEUTICALS LIMITED
299, THAMBU CHETTY STREET,
Chennai – 600001

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good
corporate practices by M/s. BAFNA PHARMACEUTICALS LIMITED (CIN: L24294TN1995PLC030698) (hereinafter called
as “The Company”). The Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating
the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records
maintained by the company and also the information provided by the Company, its officers, agents and authorized
representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the
audit period covering the financial year ended on 31.03.2024, complied with the statutory provisions listed here under and
also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and
subject to the reporting made hereinafter:

We have examined the books, papers, minutes books, forms and returns filed and other records maintained by the
Company for the financial year ended on 31.03.2024 according to the provisions of:

i) The Companies Act, 2013 (the Act) and the rules made thereunder;

ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

iv) (iv)The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992
(‘SEBI Act’):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act and dealing with client;

d) The Securities and Exchange Board of India (Depositories and Participants) Regulations,2018;

e) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015.

We report that, the following Regulations and Guidelines were not applicable to the Company during the audit period:-

BAFNA PHARMA - ANNUAL REPORT 2023-24 35

 a) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
b) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations,2021;
c) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021;
d) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; and
e) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018.

We further report that, the Company has no Foreign Direct Investment, Overseas Direct Investment and External
Commercial Borrowing.

We further report that, having regard to the compliance system prevailing in the Company and based on the written
representations received from the officials/executives of the Company, we state that there are adequate systems and
processes commensurate with the size and operations of the company to monitor and ensure compliance of the following
laws applicable specifically to the Company;
(a) The Factories Act, 1962 as amended from time to time.
(b) Drug and Cosmetics Act, 1940 and Rules made thereunder.
(c) Drugs Price Control Order, 2013 and notifications made thereunder.
(d) The Water (Prevention and Control of Pollution) Act, 1974.
(e) The Air (Prevention and Control of Pollution) Act, 1981.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreement entered into by the Company with BSE Limited (BSE) and National Stock Exchange
Limited (NSE) as per SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

During the period under review the Company has complied with the above provisions of the Act, Rules, Regulations,
Guidelines, Standards, etc. except for the following:

a) The Board of Directors of the Company did not comprise of minimum of six directors as required under
Regulation 17(1)(c) of SEBI (LODR) Regulations, 2015 until 26.06.2023.

b) The Company did not have a Company Secretary cum Compliance Officer as required u/s 203 of the Companies
Act, 2013, and Regulation 6 of SEBI (LODR) Regulations, 2015 during the period commencing from 01.04.2023
to 07.04.2023.

c) The Company has submitted the Disclosure of Related Party Transactions, with the Stock Exchanges, for the half
year ended 31.03.2023 as prescribed under Regulation 23(9) of SEBI (LODR) Regulations, 2015, with a delay of
2 days.

d) The Company did not comply with the Minimum Public Shareholding requirements as prescribed under
Regulation 38 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Rule
19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957.

e) The Company has not yet obtained approval of Shareholders for re-appointment of Ms. Shanmugam Hemalatha
as Whole-Time Director of the Company as required under Section 196 of the Companies Act, 2013 and
Regulation 17(1C) of SEBI (LODR) Regulations, 2015. The Company has not filed e-Form MGT-14 for registration
of resolution passed by the Board of Directors on 11.08.2023 & e-Form MR-1 with the Registrar of
Companies, Chennai with respect to reappointment of Ms. Shanmugam Hemalatha as Whole Time Director of
the Company. Further, the Company has not made necessary disclosure as required under Regulation 30 read
with Schedule III of SEBI (LODR) Regulation, 2015 for re-appointment of Ms. Shanmugam Hemalatha approved
in the Board Meeting held on 11.08.2023.

f) The Company has not spent the requisite amount as prescribed under Section 135(5) of the Companies Act,

36 BAFNA PHARMA - ANNUAL REPORT 2023-24

 2013 towards Corporate Social Responsibility activities and has not transferred the remaining unspent amount
to a special account namely Unspent Corporate Social Responsibility Account as prescribed under Section 135(6)
of the Companies Act, 2013.

We further report that:

a) The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-
Executive Directors and Independent Directors. The changes in the composition of the Board of Directors
that took place during the period under review were carried out in compliance with the provisions of the
Act.

b) Adequate notice is given to all the directors to schedule the Board Meetings, agenda and detailed notes on
agenda were sent at least seven days in advance or as the case may be, and a system exists for seeking and
obtaining further information and clarifications on the agenda items before the meeting and for meaningful
participation at the meeting.

c) All the decisions at Board meetings and Committee Meetings are carried out unanimously as recorded in the
minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.

d) There are adequate systems and processes in the company commensurate with the size and operations of
the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the year under review, SRJR LIFESCIENCES LLP, the Promoter has made an Offer for Sale of
35,48,143 Equity Shares representing 15% of total Paid-up capital of the Company, on September 06, 2023, through Stock
Exchange Mechanism in accordance with “Comprehensive Guidelines on Offer for Sale of Shares by Promoters through the
Stock Exchange Mechanism” issued by SEBI vide Circular No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 dated January 10,
2023 read with Revised Operational Guidelines for Offer for Sale issued by BSE & NSE dated January 27, 2023 and January
31, 2023 respectively, in order to comply with Minimum Public Shareholding requirements as mandated under Rule 19(2)
(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 read with Regulation 38 of SEBI (LODR) Regulations,
2015. Accordingly, SRJR LIFESCIENCES LLP disposed 1,57,248 Equity Shares of the Company to non- retail investors on
September 07,2023 and 1,41,418 equity shares to retail investors on September 08, 2023

We further report that the applicable financial laws, such as the Direct and Indirect Tax Laws, have not been reviewed under
our audit as the same falls under the review of statutory audit by other designated professionals.

We further report that during the audit period, there were no instances of:
i) Public / Right / Preferential Issue of Shares / Sweat Equity Shares.
ii) Redemption / Buy-back of Securities.
iii) Foreign technical collaborations.
iv) Merger / Amalgamation / Reconstruction.

This report is to be read with our letter of even dated which is annexed as 'Annexure-A' and form an integral part of this
report.

For A.K.JAIN & ASSOCIATES

Company Secretaries

Place: Chennai Sd/-

Date: 29.05.2024 BALU SRIDHAR
Partner
M.No. F5869
C.P. No. 3550
UDIN: F005869F000490474

BAFNA PHARMA - ANNUAL REPORT 2023-24 37

 Annexure A

To,
The Members,
BAFNA PHARMACEUTICALS LIMITED
299, THAMBU CHETTY STREET,
Chennai – 600 001

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial Records is the responsibility of the management of the Company. Our responsibility is
to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that
correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide
a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the
Company.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and
regulations and happening of events, etc.

5. The compliances of the provisions of Corporate and other applicable laws, rules, regulations, standards is the
responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor the efficacy or
effectiveness with which the management has conducted the affairs of the Company.

For A.K.JAIN & ASSOCIATES

Company Secretaries

Place: Chennai

Date: 29.05.2023 Sd/-

BALU SRIDHAR
Partner
M.No. F5869
C.P. No. 3550
UDIN: F005869F000490474

38 BAFNA PHARMA - ANNUAL REPORT 2023-24

 ANNEXURE TO THE BOARDS’ REPORT
“Annexure-D”

PARTICULARS OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

(Disclosure as per Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014)

1. Ratio of Remuneration paid to Directors and Key Managerial Personnel:

Ratio of remuneration
% of Increase
of each Director to
Name of Director, Key / (Decrease) in
Designation median remuneration
Managerial Personnel Remuneration during
of employees during F.Y
F.Y 2023-24
2023-24
Ms. S Hemalatha Whole-Time Director 14% 6.30:1
Mr. Vinayak Dinesh Dendukuri Whole-Time Director Nil 8.46:1
Mr. Bafna Mahaveer Chand Chief Executive Officer 100% 22.99:1
Mr. Melagiri Sridhar Chief Financial Officer 14% 4.98:1
Mr. Vishnu Vasudeva Kuppa Company Secretary Nil 3.68:1

Notes:

a) None of the Non-Executive Directors, including Independent Directors, receive any remuneration from the
Company except sitting fees for attending meeting of the Board & Committee(s) thereof. Hence, the ratio
of remuneration and percentage increase for Non-Executive Directors have not been considered.

b) Mr. Vinayak Dinesh Dendukuri, was appointed as Whole-Time Director of the Company with effect from
June 26, 2023.

2. Percentage increase in the median remuneration of employees in the financial year : Approx 6%

3. Number of Permanent Employees on the rolls of the Company as on March 31, 2024: 363 Employees

4. Average percentile increase already made in the salaries of employees other than the managerial personnel in the
last financial year (FY 2023-2024) and its comparison with the percentile increase in the managerial remuneration
and justification thereof: The average percentile increase was 8% in 2023-2024 for employees other than the
managerial personnel.

5. It is hereby affirmed that the remuneration paid is in accordance with the remuneration policy of the Company

On behalf of the Board of Directors

For BAFNA PHARMACEUTICALS LIMITED

SD/- SD/-
S. Hemalatha Vinayak Dinesh Dendukuri
Whole-Time Director Whole-Time Director
DIN:02714329 DIN: 07601309
Date: 13-08-2024 Place: Chennai Place: Hyderabad

BAFNA PHARMA - ANNUAL REPORT 2023-24 39

 REPORT ON CORPORATE GOVERNANCE
(Pursuant to Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015)

“Annexure-E”

1. COMPANY’S PHILOSOPHY
Your Company believes in professionalism of management, transparency and sound business ethics. It emphasizes the
need for full transparency and accountability and conducting its business in a highly professional and ethical manner,
thereby enhancing trust and confidence of all its stakeholders and encouraging their wide participation.

Effective corporate governance practices constitute the strong foundation on which successful commercial enterprises are
built to last. The Company has always been committed to the principles of good Corporate Governance. The Company’s
philosophy on corporate governance oversees business strategies and ensures fiscal accountability, ethical corporate
behavior and fairness to all stakeholders.

The Company is generally in compliance with the applicable provisions of Corporate Governance as stipulated under
Regulation 17 to 27 read with Schedule V and Regulation 46 of SEBI (LODR) Regulations, 2015 (“SEBI Listing Regulations”),
as applicable, with regard to corporate governance.

A report on compliance with Corporate Governance principles as prescribed under the SEBI Listing Regulations is given
below:

2. BOARD OF DIRECTORS

Composition, Attendance and Meetings

ii). The Company has an optimum combination of Executive and Non-Executive Directors on its Board. As on March 31,
2024, the Board comprises of Seven (7) Directors, including Two (2) Whole Time Directors, Two (2) Non-Executive
Directors and Three (3) Independent Directors. The composition of the Board, as at the end of F.Y 2023-24, is in
conformity with Regulation 17 of the SEBI Listing Regulations read with Section 149 of the Act. The profiles of
Directors are available at Company’s website.

ii) . To the best of our knowledge and information furnished to the Board, total Directorships held by the Directors
are within the limits prescribed under Section 165 of the Companies Act, 2013 (Act) read with Regulation 17A of
SEBI LODR. None of the Independent Directors serves as an Independent Director in more than seven (7) listed
companies and not more than three (3) listed companies, in case he is a whole-time-Director in a listed company.
Similarly, none of the Directors on the Board is a member of more than ten (10) Committees or Chairperson of more
than five (5) Committees across all listed and unlisted public companies in which he / she is a Director in terms of
Regulation 26 of SEBI LODR. The Directors notify the Company about change in their Directorship(s) / Committee
position(s) as and when they take place.

iii). During the FY 2023-24, the Board met six (6) times on April 07, 2023; May 27, 2023; June 26, 2023; August 11, 2023;
November 09, 2023 and February 12, 2024. The requisite quorum was present throughout the meetings.

iv). The composition, nature of directorship, number of meetings attended and their directorship in other public
companies of the Board of Directors as on March 31, 2024 are as under:

40 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Number of
Number of
Attendance Committee
Number Directorship
at the last positions held Directorship
of board in other public
Name of Director Category AGM held on in other public in other
meeting companies
September companies listed entity
attended
22, 2023
Chairman Member Chairman Member

Ms. Shanmugam Whole-Time 6 Yes -- -- -- -- --

Hemalatha Director
(DIN:02714329)

Mr. Vinayak Dinesh Whole-Time 2 No -- -- -- -- --

Dendukuri * Director
(DIN: 07601309)

Mrs. Akila C Raju Non- 6 No -- -- -- -- --

(DIN: 07590312) Executive
Director

Mr. Upendar Non- 3 Yes -- 1 -- -- --

Mekala Reddy * Executive
(DIN: 08898174) Director

Mrs. R. Chitra Chairperson 6 Yes -- -- -- -- --

(DIN:07749125) &
Independent
Director
Mr. P K Sundaresan Independent 5 Yes -- -- -- -- --
(DIN: 06954189) Director

Mr. Krishna Yeachuri Independent 2 Yes -- 1 -- 1 1

* Director
(DIN: 00066898)

B. Kamlesh Kumar Independent 4 NA -- -- -- -- --

** Director
(DIN:01218959)

Notes:

a. Excludes Directorships held on the Boards of Private Companies, Section 8 Companies, Debt-Listed Companies and
Companies incorporated outside India.

b. Membership in Audit Committee and Stakeholder Relationship Committee of other public companies are only
considered as per Regulation 26 of SEBI LODR and membership includes the positions held as chairperson of the
Committe

BAFNA PHARMA - ANNUAL REPORT 2023-24 41

c. *Mr. Krishna Yeachuri, Mr. Upendar Mekala Reddy and Mr. Vinayak Dinesh Dendukuri were appointed as Independent
Director, Non-Executive Director and Whole Time Director, respectively with effect from June 26, 2023.

d. **Mr. B. Kamalesh Kumar, Independent Director, resigned with effect from September 09, 2023.

v). During the financial year under review, Mr. B Kamalesh Kumar (DIN: 01218959) resigned from the Directorship of
the Company w.e.f September 09, 2023. He has confirmed in the resignation letter that there are no other material
reasons other than those provided therein i.e due to personal reasons.

vi). None of the Directors is related to any other Directors of the Company as on March 31, 2024.

vii). The Company placed before the Board the Annual Plans and Budget, Capital Budget, Performance of the Company,
Unaudited Quarterly Financial Results, Audited Annual Financial Results and various other information/ details,
as specified under Part A of Schedule II of the SEBI (LODR) Regulations, 2015, from time to time. The Board also
periodically reviews the compliance reports of all laws applicable to the Company.

viii). As on March 31, 2024, none of the Non-Executive Directors hold any Shares in the Company.

ix). Independent Directors: In accordance with Schedule IV of the Companies Act, 2013 and Regulation 25(3) of the
SEBI (LODR) Regulations, 2015, a separate meeting of Independent Directors of the Company, was held on March
13, 2024 for reviewing the performance of Non-Independent Directors, the Board as a whole, the Chairperson of the
Company as well as for assessing the quality, quantity and timeliness of flow of information between the Company
management and the Board.

x). In the opinion of the Board, the Independent Directors, fulfill the conditions of independence specified in Section
149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

xi). The familiarization program on the nature of the industry, the business model of the Company, roles, rights and
responsibilities of Independent Directors, etc., are conducted to the Independent Directors of the Company, at the
time of induction. The details of the familiarization program are disclosed in the website of the Company at the
weblink www.bafnapharma.com. Further, at the time of appointment of an Independent Director, the Company
issues a formal letter of appointment outlining his/her role, functions, duties and responsibilities as a Director. The
terms and conditions of the appointment of Independent Director are also available on Company's website www.
bafnapharma.com.

xii). Chart/ Matrix setting out the skills/expertise/competence of the board of directors:
The Board comprises of qualified members who bring in the required skills, competence and expertise that allow
them to make effective contributions to the Board and Committees. The Board has identified the following skills /
expertise with the individual Board Members with reference to the Company’s business and Industry.

Name of the Director Skills / Expertise / Competencies

Industry & Technology, Business Administration & Strategy,
Ms. S Hemalatha
Sales, Marketing, Regulatory Compliance, Finance, Legal
Industry & Technology, Business Administration & Strategy,
Mr. Vinayak Dinesh Dendukuri
Sales, Marketing.
Business Administration & Strategy, Finance, Legal, Corporate
Mrs. Akila C Raju
Governance.
Industry & Technology, Business Administration & Strategy, Cor-
Mr. Upendar Mekala Reddy
porate Governance.
Mr. P K Sundaresan Finance, Corporate Laws / Legal, Corporate Governance

42 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Name of the Director Skills / Expertise / Competencies
Mrs. R Chitra Finance, Human resource Corporate Governance.
Industry & Technology, Business Administration & Strategy, Fi-
Mr. Krishna Yeachuri
nance, Legal, Corporate Governance.

3. COMMITTEES OF THE BOARD

i). Audit Committee

a) Composition, Attendance and Meetings:

The Audit Committee of the Company is constituted in accordance with the Section 177 of the Companies
Act, 2013 and Regulation 18 of the SEBI (LODR) Regulations, 2015. The Committee comprises of Three (3)
Directors consisting of Two (2) Independent Director and One (1) Non-Executive Director.

During the year under review, the Committee met Four (4) times on May 27, 2023; August 10, 2023;
November 09, 2023 and February 12, 2024 and the requisite quorum was present throughout the meetings.
The Composition of the Audit Committee and details of its members attendance as on March 31, 2024 are as
below:

No. Of Meetings
Name of the Director Category
Attended
Mr. P K Sundaresan Chairman, Independent Director 4
Mrs. R Chitra Member, Independent Director 4
Mr. Upendar Mekala Reddy* Member, Non-Executive Director 2
Mr. B Kamlesh Kumar** Member, Non-Executive Director 2

* Appointed as Member w.e.f November 02, 2023.

** Ceased as Member w.e.f September 09, 2023.

All the members of the Audit Committee are financially literate and possess accounting and related financial management
expertise. The Statutory Auditors, Internal Auditors and Chief Financial Officer attended the meetings, by invitation,
whenever necessary. The Company Secretary of the Company acts as the Secretary to the Committee. The Chairman of the
Audit Committee was present at the last AGM of the Company held on September 22, 2023.

All the recommendations of the Audit Committee during the year, were considered and accepted by the Board.

b) Terms of Reference:

The terms of reference and powers of the Audit Committee are those prescribed under Section 177 of the
Companies Act, 2013 and Regulation 18 read with Part C of Schedule II of the SEBI (LODR) Regulations, 2015.
The brief terms of reference of the Audit Committee of the Company, inter alia include:

i. Recommendation for appointment, remuneration and terms of appointment of auditors of the Company.

ii. Review and monitor the Auditor's independence and performance and effectiveness of audit process.

iii. Review with the Management the quarterly Financial Statements and the annual Financial Statements and the
Auditor's Report thereon, before submission to the Board for approval, with particular reference to:

BAFNA PHARMA - ANNUAL REPORT 2023-24 43

 a) matters required to be included in the Director's responsibility statement to be included in the board's
report in terms of Clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013.

b) disclosure of any related party transactions.

c) modified opinion(s) in the draft audit report.

iv. Approval or any subsequent modification of transactions of the Company with related parties.

v. Scrutiny of inter-corporate loans and investments.

vi. Valuation of undertakings or assets of the Company, wherever it is necessary.

vii. Evaluation of internal financial controls and risk management systems.

viii. Monitoring the end use of funds raised through public offers and related matters.

ix. To review the functioning of the whistle blower mechanism.

ii). Nomination & Remuneration Committee:

a) Composition, Attendance and Meetings:

The Nomination & Remuneration Committee of the Company is constituted in accordance with the Section
178 of the Companies Act, 2013 and Regulation 19 of the SEBI (LODR) Regulations, 2015. The Committee
comprises of Three (3) Directors consisting of Two (2) Independent Director and One (1) Non-Executive
Director.

During the year under review, the Committee met One (1) time on June 26, 2023 and the requisite quorum
was present throughout the meetings. The Composition of the Nomination & Remuneration Committee and
details of its members attendance as on March 31, 2024 are as below:

No. Of Meetings
Name of the Director Category
Attended
Mr. Krishna Yeachuri* Chairman, Independent Director --
Mr. P K Sundaresan Member, Independent Director 1
Mrs. Akila C Raju Member, Non-Executive Director 1
Chairman, Non-Executive
Mr. B Kamlesh Kumar** 1
Director
* Appointed as Chairman w.e.f November 02, 2023.
** Ceased as Chairman w.e.f September 09, 2023.

b) Terms of Reference:
The terms of reference and powers of the Nomination & Remuneration Committee are those prescribed
under Section 178 of the Companies Act, 2013 and Regulation 19 read with Part D of Schedule II of the SEBI
(LODR) Regulations, 2015. The brief terms of reference of the Nomination & Remuneration Committee of the
Company, inter alia include:

i). Formulation of the criteria for determining qualifications, positive attributes and independence of a
Director and recommend to the Board a policy, relating to the remuneration of the Directors, Key
Managerial Personnel and other employees;

44 BAFNA PHARMA - ANNUAL REPORT 2023-24

 ii). For every appointment of an independent Director, the Nomination and Remuneration Committee
shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such
evaluation, prepare a description of the role and capabilities required of an Independent Director.
The person recommended to the Board for appointment as an Independent Director shall have the
capabilities identified in such description.

iii). Formulation of criteria for evaluation of Independent Directors and the Board;

iv). Devising a policy on Board diversity;

v) .Identifying persons who are qualified to become Directors and who may be appointed in Senior
Management in accordance with the criteria laid down and recommend to the Board their appointment
and removal.

vi). Whether to extend or continue the term of appointment of the Independent Director, on the basis of
the report of performance evaluation of Independent Directors.

vii). Recommend to the Board all remuneration, in whatever form, payable to Senior Management.

c) Remuneration Policy
The policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior
Management Personnel (SMP) is available is available on the website of the Company www.bafnapharma.
com.

d) Remuneration to Non-Executive Directors:

The Non-Executive Directors are paid sitting fees for attending meetings of the Board and Committee(s)
thereof. Apart from receiving the sitting fees, the Non-Executive Directors did not have any pecuniary
relationship or transactions with the Company during the year.

The details of remuneration including sitting fees paid to the Non-Executive Directors for the year ended
March 31, 2024 are as follows:

Name Sitting fees

Mr. P K Sundaresan Rs. 1.21 Lakhs
Mrs. R. Chitra Rs. 1.10 Lakhs
Mr. Krishna Yeachuri
Rs. 0.22 Lakhs
(Appointed w.ef. June 26, 2023)
Mrs. Akila C Raju Rs. 0.88 Lakhs
Mr. Upendar Mekala Reddy
Rs. 0.55 Lakhs
(Appointed w.ef. June 26, 2023)
B. Kamlesh Kumar
Rs. 0.88 Lakhs
(Ceased w.e.f September 09, 2023)

e) Remuneration Paid to Executive Directors

The Remuneration paid to Executive Directors for the year ended 31st March 2024 is as follows:

Name of Director Remuneration

Ms. S Hemalatha Rs. 17.79 Lakhs
Mr. Vinayak Dinesh Dendukuri Rs. 22.07 Lakhs
(Appointed w.ef. June 26, 2023)

BAFNA PHARMA - ANNUAL REPORT 2023-24 45

 f) Performance Evaluation Criteria for Independent Directors:
The performance evaluation criteria for independent directors is determined by the Nomination and
Remuneration Committee. An indicative list of factors on which evaluation was carried out includes
participation and contribution by a director, commitment, effective deployment of knowledge and expertise,
integrity and maintenance of confidentiality and independence of behavior and judgement.

iii). Stakeholders Relationship Committee:

a) Composition, Attendance and Meetings:

The Stakeholders Relationship Committee of the Company is constituted in accordance with the Section 178 of the
Companies Act, 2013 and Regulation 20 of the SEBI (LODR) Regulations, 2015. The Committee comprises of Three
(3) Directors consisting of One (1) Independent Director, One (1) Non-Executive Director and One (1) Whole-Time
Director.

During the year under review, the Committee met One (1) time on March 13, 2024 and the requisite quorum was
present throughout the meetings. The Company Secretary is the compliance officer of the Company and acts as the
Secretary to the Committee.

The Composition of the Stakeholders Relationship Committee and details of its members attendance as on March
31, 2024 are as below:

Name of the Director Category No. Of Meetings Attended

Mrs. R Chitra Chairperson, Independent Director 1
Mrs. Akila C Raju* Member, Non-Executive Director 1
Ms. Shanmugam Hemalatha Member, Executive Director 1

* Appointed as Member w.e.f April 07, 2023.

b) Terms of Reference:
The functioning and terms of reference of the Committee are as prescribed and in due compliance with the
Regulation 20 of SEBI (LODR) Regulations, 2015 as well as Section 178 of the Companies Act, 2013. The Stakeholders
Relationship Committee looks into the redressal of shareholder and investor grievances, issue of duplicate/
consolidated share certificates, remat / demat of shares and review of cases for refusal of transfer/transmission and
reference to statutory and regulatory authorities.

c) Name & Designation of Compliance Officer:

Name Mr. A. Mohanachandran

Designation Company Secretary & Compliance Officer
Address Bafna Pharmaceuticals Limited
No.299, Thambu Chetty Street,
Chennai-600001
Contact 044-42677555
E-Mail [email protected]

46 BAFNA PHARMA - ANNUAL REPORT 2023-24

e) Details of investor complaints received and redressed during financial year 2023 - 2024 are as follows:

No. of Complaints No. of complaints re- No. of complaints re- No. of complaints pend-
pending as on April 01, ceived during the year solved to the satisfaction ing as on March 31, 2024
2023 2023-24 of Shareholders during
the year 2023-24
0 0 0 0

iv). Corporate Social Responsibility Committee:

The CSR policy of the Company focuses on implementing impactful and sustainable CSR initiatives in the areas
of healthcare, education, reducing inequalities, promotion of sports, environmental sustainability and community
development and other areas prescribed under schedule VII of the Companies Act, 2013. The CSR projects and
activities undertaken by the Company are in line with the CSR Policy and recommendations of the Board / CSR
Committee which are in accordance with the areas or subjects specified under the Companies Act, 2013, as amended
from time to time.

Sl. No Name of Director Designation / Nature of Directorship

1 Mrs. R Chitra Chairperson –Independent Director
2 Mrs. Akila C Raju Member – Non-Executive Director
3 Ms. S Hemalatha Member – Whole-Time Director

As per Section 135(9) of the Companies Act, 2013, the Company is not required to constitute CSR Committee since
the amount to be spent by the Company towards CSR activities does not exceed Rs. 50 Lakhs and the functions
of such committee provided shall be discharged by the Board of Directors of such Company. Therefore, the CSR
Committee of the Company did not meet during the year under review and the Board of Directors of the Company
discharged the functions of the CSR Committee.

4. GENERAL BODY MEETINGS

i). Annual General Meeting

The Details of last three Annual General Meetings (AGMs) are as under:

Financial Date Time Venue Any special resolution

Year was passed
2020-2021 August 14, 2021 11:00 am Video Conferenc- No
ing and other Audio
Visual Means (VC/
OAVM)
2021-2022 July 28, 2022 11:00 am Video Conferenc- No
ing and other Audio
Visual Means (VC/
OAVM)
2022-2023 September 22, 10.25 am Video Conferenc- Yes *
2023 ing and other Audio
Visual Means (VC/
OAVM)

* Appointment of Mr. Krishna Yeachuri (DIN: 00066898) as a Non-executive Independent Director of the Company.

BAFNA PHARMA - ANNUAL REPORT 2023-24 47

ii). Postal Ballot & Extra-Ordinary General Meeting

No resolution was passed either through Postal Ballot or Extra-Ordinary General Meeting during the Financial Year
2023-24. There are no special resolution proposed to be passed through Postal Ballot.

5. MEANS OF COMMUNICATION

The Board believes that effective communication of information is an essential component of corporate
governance. The Company regularly interacts with shareholders through multiple channels of communication
such as results announcement, annual report, media releases, Company’s website and specific communications to
Stock Exchanges, in which the Company’s shares are listed.

The Quarterly Unaudited Financial Results and the Annual Audited Financial Results of the Company, in the
prescribed format, are taken on record by the Board and are submitted to the Stock Exchanges. The financial
results of the Company are generally published in “Business Standard” (English) & “Makkal Kural” (Tamil).

The Quarterly & Annual Financial Results are posted in the website of the Company at and also on the website of
the BSE Limited and National Stock Exchange of India Limited.

6. GENERAL SHAREHOLDERS’ INFORMATION

i). Annual General Meeting

Date September 25, 2024

Day Wednesday

Time 10.30 A.M

Mode Through Video Conferencing (VC) and Other Audio Visual Means (OAVM)

ii). Financial Calendar

Financial Year April 01, 2024 – March 31, 2025

Un-audited financial results for the 1st
By August, 14 2024
quarter
Un-audited financial results for the 2nd
By November, 14 2024
quarter
Un-audited financial results for the 3rd
By February, 14 2025
quarter
Audited Financial Results By May 30, 2025

The above schedule is only tentative in nature and may undergo changes due to change in circumstances

iii). Dividend Payment Date : The Board of Directors of the Company has not recommended any dividend for the
financial year 2023-24.

iv). Date of book closure/ Record date: Thursday, September 19, 2024 to Wednesday, September 25, 2024 (both days
inclusive)

48 BAFNA PHARMA - ANNUAL REPORT 2023-24

v). Listing on stock exchanges:

Stock Exchanges Stock Code

National Stock Exchange of India Limited (NSE) BAFNAPH
Exchange Plaza, C-1, Block G, Bandra Kurla Complex Bandra (East),
Mumbai 400 051
BSE Limited (BSE) 532989
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai - 400 001

Your Company has paid the Listing Fees for the financial year 2024-25.

vi) .Market price data

The equity shares of the Company are listed on National Stock Exchange of India Ltd. and BSE Ltd., The share price
data as quoted on the NSE and BSE along with the movement in the respective stock index during the last financial
year viz., April 1, 2023 – March 31, 2024 is given below

BSE NSE
BSE Sensex NSE Nifty
Month (Share Price in Rs.) (Share Price in Rs.)
High Low High Low High Low High Low
April, 2023 94.29 80.27 61,209.46 58,793.08 91.00 78.15 18,089.15 17,312.75
May, 2023 108.55 80.00 63,036.12 61,002.17 107.60 80.00 18,662.45 18,042.40
June, 2023 125.55 107.7 64,768.58 62,359.14 124.45 106.75 19,201.70 18,464.55
July, 2023 102.35 97.25 67,619.17 64,836.16 101.45 87.90 19,991.85 19,234.40
August, 2023 116.45 86.38 66,658.12 64,723.63 119.00 86.50 19,795.60 19,223.65
September, 2023 99.40 85.30 67,927.23 64,818.37 97.40 83.55 20,222.45 19,255.70
October, 2023 97.00 79.75 66,592.16 63,092.98 96.65 79.90 19,849.75 18,837.85
November, 2023 90.99 79.79 67,069.89 63,550.46 91.40 79.60 20,158.70 18,973.70
December, 2023 104.23 88.00 72,484.34 67,149.07 104.25 87.80 21,801.45 20,183.70
January, 2024 107.22 92.50 73,427.59 70,001.60 107.80 92.00 22,124.15 21,137.20
February, 2024 106.00 86.05 73,413.93 70,809.84 101.80 86.00 22,297.50 21,530.20
March, 2024 92.15 76.50 74,245.17 71,674.42 91.10 75.90 22,526.60 21,710.20

vii). Registrars and Transfer Agents

Cameo Corporate Services Ltd
Subramanian Building,
No.1, Club House Road, Chennai -600 002
Telephone: 044-4002 0700
Online Investor Portal – https://wisdom.cameoindia.com
Website: www.cameoindia.com

BAFNA PHARMA - ANNUAL REPORT 2023-24 49

viii). Share transfer system
Pursuant to the amendment to the Listing Regulations effective from April 1, 2019, except in case of transmission
or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities
are held in dematerialized form with a depository. Members holding shares in physical form are therefore requested
to convert their holdings to dematerialized mode. Transfers of Share in Demat form are affected through the
depositories with no involvement of the Company.

ix). Distribution of equity shareholding as on March 31, 2024:

Share holding Shareholders Shareholding

Shares Number % of Total Shares % of Total
Upto 500 7138 93.26 4,17,703 1.77
501 – 1000 226 2.96 1,75,100 0.74
1001 – 2000 135 1.76 1,97,325 0.84
2001 – 3000 59 0.77 1,43,250 0.60
3001 – 4000 24 0.31 84,590 0.36
4001 – 5000 12 0.16 55,509 0.23
5001 – 10000 23 0.30 1,72,153 0.73
10001 & above 37 0.48 2,24,10,705 94.73
Total 7,654 100.00 2,36,56,335 100.00

x). Dematerialization of shares and Liquidity:

The Company has entered into the necessary agreements with National Securities Depository Limited and Central
Depositories Services (India) Limited for dematerialisation of the shares held by the Shareholders. As of March 31,
2024, about 99.97% of the shareholdings have been dematerialised.

Under the Depository System, the International Securities Identification Number (ISIN) allotted to the Company’s
shares is INE878I01022. A comparative table of physical and demat holdings as on March 31, 2024 is given below:

Particulars No. Of Shares No. of Shareholders % of Shares

Electronic Form 2,36,49,295 7,637 99.97
Physical Form 7,040 17 0.03
Total 2,36,56,335 7,654 100.00

A reconciliation of share capital, audited by Practicing Company Secretary (PCS) is submitted to the Stock Exchanges
on a quarterly basis in terms of regulation 76 of SEBI (Depositories and Participants) Regulations, 2018.

xi). Outstanding GDRs / ADRs / Warrants or any convertible instruments, conversion date and likely impact on
equity:
The Company has not issued any GDRs/ADRs. As of March 31, 2024, the Company does not have any outstanding
convertible instruments, which are likely to have an impact on the equity of the Company.

xii). Transfer of unclaimed / unpaid amounts to the Investor Education and Protection Fund:
During the year under review, the Company has not transferred any unclaimed/unpaid amounts to the Investor
Education and Protection Fund.

50 BAFNA PHARMA - ANNUAL REPORT 2023-24

xiii). Credit Rating obtained by the Company
The Company obtained credit rating for the Working Capital Facilities availed from banks, by ICRA, as detailed below

Facilities Amount Rating

Long Term (F / NF) Rs.38.90 Crores [ICRA] BB+
Short Term (F / NF) Rs.1.10 Crores [ICRA] A4+

xiv). Plant Location

The Company has two manufacturing facilities situated at:
a) No.147, Madhavaram, Redhills, High Road, Grantlyon village, Redhills, Chennai-600052 and

b) No.13, S. V. Koil Street, Madhavram, Chennai-600060.

xv). Address for Correspondence:

Bafna Pharmaceuticals Limited
Old No. 299, New No.68, Thambu Chetty Street, Chennai-600001
Email ID: [email protected]
Website: www.bafnapharma.com

7. OTHER DISCLOSURES
i) There are no material related party transactions during the year under review that have conflict with the
interest of the Company. Transactions entered into with related parties during FY 2023 - 2024 were in the
ordinary course of business and at arms’ length basis. All routine and periodic transactions with related
parties were covered in the omnibus approval of the Audit Committee. The policy on dealing with Related
Party Transactions is posted on the Company’s website www.bafnapharma.com.

ii). During the year under review, the Company did not comply with Minimum Public shareholding as per the
provisions of Regulation 38 of SEBI (LODR) Regulations, 2015. The BSE Limited and National Stock Exchange
of India Ltd have imposed penalties for non-compliance of aforesaid Regulation, however, the Company has
applied for waiver of penalty application before the designated stock exchange and the Order is awaited.

iii). The Board of Directors adopted the Whistle-Blower Policy in accordance with Section 177(9) of the Act, and
Regulation 22 of the SEBI (LODR) Regulations, 2015. We hereby confirm that no person has been denied
access to the Chairman of the Audit Committee.

iv). The Board of Directors has laid down a code of conduct for all Board members & Senior Management of the
Company. All the Directors & Senior Management have affirmed their compliance with the code of conduct.
A declaration to this effect signed by Ms. S Hemalatha, Whole Time Director, to this effect is annexed to this
report on Corporate Governance.

v). The Company is generally in compliance with the mandatory requirements of Regulation 17 to 27 and
Regulation 46 of SEBI (LODR) Regulations, 2015.

v)i. The Company does not have any material listed / unlisted subsidiary as defined in Regulation 24 of the SEBI
LODR. Hence, the Company is not required to frame a policy for determining material subsidiary.

vii). The Company does not have any significant exposure in commodities directly and does not carry out any
commodity hedging activities.

BAFNA PHARMA - ANNUAL REPORT 2023-24 51

 viii). During the year under review, the Company has not raised any funds through preferential allotment or
qualified institutions placement and hence, the disclosure on utilization of funds is not applicable. There are
no convertible instruments issued or outstanding.

ix). In terms of Section 178 of the Companies Act, 2013, rules made there under & other applicable provisions, if
any, the Board of Directors has approved Succession Plan for Board & Senior Management.

x). The Company has obtained a certificate from M/s. A.K Jain & Associates, Company Secretaries, Chennai,
stating that none of the Directors on the Board of the Company, as on March 31, 2024, have been debarred
or disqualified from being appointed or continuing as Director of the companies by the Board / Ministry
of Corporate Affairs or any such statutory authority. The Certificate obtained is annexed to this Report on
Corporate Governance.

xi). Pursuant to Regulation 17(8) of the SEBI (LODR) Regulations, 2015, the CEO and CFO of the Company have
certified to the Board on the integrity of the financial results / statements, effectiveness of internal controls
and significant changes in internal control / accounting policies, for the year under review. The Certificate
issued by the CEO and CFO is annexed to this Report.

xii). The Board of Directors of the Company has considered and accepted all the recommendation(s) made by
Committee(s) to the Board.

xiii). The total fees for all services paid by the listed entity, to M/s. Brahmayya & Co, Chartered Accountants,
Chennai, the Statutory Auditor of the Company is provided hereunder:

Particulars of Service Amount (Rs. In Lakhs)

Services as statutory auditors (including quarterly audits) 8.00

xiv). The disclosure in relation to Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 is provided in the Board’s Report.

xv). During the year under review, the Company has not provided any loans and advances in the nature of loans
to firms/companies in which directors are interested.

xvi). The Company has not entered into any agreement which are to be disclosed under clause 5A of paragraph
A of Part A of Schedule III of SEBI (LODR) Regulations, 2015, which have an impact on the management or
control of the listed entity or create any liability on the listed entity during the FY 2023-24.

On behalf of the Board of Directors

For BAFNA PHARMACEUTICALS LIMITED

SD/- SD/-
S. Hemalatha Vinayak Dinesh Dendukuri
Whole-Time Director Whole-Time Director
DIN:02714329 DIN: 07601309
Date: 13-08-2024 Place: Chennai Place: Hyderabad

52 BAFNA PHARMA - ANNUAL REPORT 2023-24

 CERTIFICATE OF COMPLIANCE WITH CODE OF CONDUCT
I, S Hemalatha, Whole Time Director (DIN: 02714329), do hereby certify and confirm that the Company has
obtained affirmation from all the members of the Board and Senior Management, their compliance with Code
of Conduct for Directors and Senior Management in respect of financial year 2023-2024.

On behalf of the Board of Directors

For BAFNA PHARMACEUTICALS LIMITED

SD/-
Place: Chennai S. Hemalatha
Date: 29-05-2024 . Whole-Time Director
DIN:02714329

CEO AND CFO CERTIFICATION

(Pursuant to Regulation 17(8) of SEBI (LODR) Regulations, 2015)

We, (1) Mahaveer Chand Bafna, Chief Executive Officer and (2) Melagiri Sridhar, Chief Financial Officer, of the Com-
pany, to the best of our knowledge and belief hereby certify that:

a) We have reviewed Financial Statements and cash flow statement for the year ended March 31, 024, that to the
best of our knowledge and belief:
i) These statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading; and
ii) These statements together present a true and fair view of the Company’s affairs and are in compliance
with existing accounting standards, applicable laws and regulations.

b) There are to the best of our knowledge and belief, no transactions entered into by the Company during the
year, which are fraudulent, illegal or violative of the Company’s code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financials reporting and that
we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial
reporting, deficiencies in the design or operation of such internal controls, if any, of which we are aware, have
been disclosed to the auditors and the Audit Committee and steps have been taken or propose to be taken
to rectify these deficiencies.

d) We have indicated to the Auditors and Audit Committee:

i) significant changes in internal control over financial reporting during the year;
ii) significant changes in accounting policies during the year and that the same have been disclosed in the
notes to the financial statements; and
iii) instances of significant fraud of which they have become aware and the involvement therein, if any, of
the management or an employee having a significant role in the listed entity’s internal control system
over financial reporting.
For BAFNA PHARMACEUTICALS LIMITED

SD/- SD/-
Place: Chennai Mahaveer Chand Bafna Melagiri Sridhar
Date: 29-05-2024 Chief Executive Officer Chief Financial Officer

BAFNA PHARMA - ANNUAL REPORT 2023-24 53

 CERTIFICATE OF NON DISQUALIFICATION
[Pursuant to Regulation 34(3) of Securities Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015]

To,
The Members of
BAFNA PHARMACEUTICALS LIMITED
No. 299, Thambu Chetty Street,
Chennai – 600001

In pursuance of Regulation 34 (3) read with sub-clause (i) of Clause 10 of Part C of Schedule V of the Securities and
Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) in respect
of M/s. BAFNA PHARMACEUTICALS LIMITED (CIN: L24294TN1995PLC030698), having registered office at No.299,
Thambu Chetty Street, Chennai – 600001, We hereby certify that:

On the basis of the written Representations and Declarations received from the Directors of the Company and taken
on record by the Board of Directors of the Company, as on March 31, 2024, none of the directors on the Board of
the Company have been debarred or disqualified from being appointed or continuing as Director of companies by the
Securities Exchange Board Of India, Ministry of Corporate Affairs or any such statutory authorities.

For A.K.JAIN & ASSOCIATES

Company Secretaries

Place: Chennai
Date: 29.05.2024 SD/-
BALU SRIDHAR
Partner
M.No.F5869
C.P.No.3550
UDIN: F005869F0004905

54 BAFNA PHARMA - ANNUAL REPORT 2023-24

 CERTIFICATE ON CORPORATE GOVERNANCE

To
The Members of
BAFNA PHARMACEUTICALS LIMITED

We have examined the compliance of the conditions of Corporate Governance by Bafna Pharmaceuticals Limited (‘the
Company’) for the year ended on March 31, 2024, as stipulated in the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

The compliance of the conditions of Corporate Governance is the responsibility of the management of the Company.
Our examination was limited to the review of procedures and implementation thereof, as adopted by the Company for
ensuring compliance with conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the
financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and the representations
made by the Directors and the Management, we certify that the Company has generally complied with the conditions
of corporate governance as stipulated in the SEBI Listing Regulations, except for Regulation 17(1C) of the SEBI Listing
Regulations, for the year ended on 31st March 2024.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency
or effectiveness with which the management has conducted the affairs of the Company.

For A. K. JAIN & ASSOCIATES

Company Secretaries

SD/-
BALU SRIDHAR
Partner
M.No.F5869
Place: Chennai C.P.No.3550
Date: 29.05.2024 UDIN: F005869F000490595

BAFNA PHARMA - ANNUAL REPORT 2023-24 55

 MANAGEMENT DISCUSSION AND ANALYSIS
"Annexure - F"

GLOBAL ECONOMY OVERVIEW & OUTLOOK:

In 2023, the global economy showed signs of stabilization, driven by a swiftly recovering U.S. economy and resilient
large emerging markets. The reduced risk of a global recession was supported by favorable factors such as robust labor
markets, increased household consumption, and the strength of emerging economies. The strength of the U.S. economy
is bolstering global output, despite challenges from lingering high inflation, weak demand in China and Europe, and the
impacts of two regional conflicts. There was a significant contraction in both manufacturing activity and international
trade due to sluggish global demand, largely influenced by tighter credit conditions that weighed on housing markets,
investments, and overall economic activity. Despite these challenges, concerted policy tightening efforts led to a steady
decline in global inflation from its multi-decade peak in 2022.

Global economic activity is expected to improve in the second half of 2024 after stagnating in the first half of the year. The
IMF forecasts global real GDP growth of 3.2% for both 2024 and 2025, matching the growth rate of 2023. Additionally, the
IMF projects that global median headline inflation will decrease to 2.8% by the end of 2024, down from 4% the previous
year, and further decline to 2.4% in 2025. This moderation in global inflation is expected to be driven by tighter monetary
policies and lower commodity prices.

INDIAN ECONOMIC OVERVIEW:

The Indian economy has made significant strides in recent years, surpassing the U.K. to become the world’s fifth-largest
economy. As one of the fastest-growing major economies globally, India achieved a real GDP growth of 8.2% in FY 2023-
24, marking the third consecutive year of strong growth. This expansion was driven by stable consumption demand and
steadily improving investment demand. The local economy demonstrated remarkable resilience despite tighter monetary
policies and global challenges. Additionally, factors such as a demographic dividend, improved financial access, and
investment in physical and digital infrastructure have contributed to this resilience. Rising disposable income levels have
led to increased private consumption and spending, helping to shield the economy from global fluctuations. Inflation
continued to decline, allowing policymakers to maintain stable interest rates. Traditionally, economic growth in India
has been concentrated in specific regions, but this is changing as growth becomes more geographically distributed. The
government has implemented a strategic focus on tier 2 and 3 cities, prioritizing infrastructure development and industrial
initiatives in these smaller centers. This focus is fostering job creation and attracting businesses, serving as a potent
catalyst for the economic development of these localities.

Looking ahead, India’s growth is expected to remain strong, supported by improving macroeconomic factors and robust
internal financial stability. The economy is projected to grow by more than 7% in FY 2024-25, with private consumption
expected to accelerate and private capital expenditure likely to increase sustainably. Currently among the top five
economies globally, India is expected to become the third-largest economy in the world within the next three years, with
a projected GDP of $5 trillion.

GLOBAL PHARMA INDUSTRY OVERVIEW

In 2023, the global pharmaceutical industry experienced significant changes in medicine usage and spending growth
across different regions, laying the groundwork for robust expansion in the coming years. Despite downward revisions in
vaccination and COVID-related therapeutic spending due to reduced usage, the industry demonstrated strong resilience
and adaptability by embracing novel therapies and increasing overall medicine usage. Consequently, global medicine use
and spending have surpassed pre-pandemic growth rates and are expected to continue significantly above those trends
through 2028. The pharmaceutical sector will continue to play a substantial role in the global economy, contributing
significantly to GDP.

56 BAFNA PHARMA - ANNUAL REPORT 2023-24

In terms of medicine volume, global usage plateaued in 2023 but is projected to grow at an average annual rate of
2.3% through 2028. Growth is expected to be driven by China, India, and other Asian markets, with Latin America also
experiencing rapid expansion. In contrast, North America, Western Europe, and Japan are expected to see slower growth
due to their already high per capita usage levels. The global medicine market is set to continue its growth trajectory over
the next five years, fueled by increased spending in regions such as the US, Europe, and key emerging markets. This growth
will be driven by newly introduced branded products, higher uptake of original medicines, and the adoption of novel
therapies. According to a recent IQVIA report on medicine usage, the global medicine market is projected to grow by over
$600 billion, reaching approximately $2.3 trillion by 2028, indicating a compounded annual growth rate (CAGR) of 5%-8%.
The availability of innovative therapeutics in developed markets, balanced by losses of exclusivity and the lower costs of
generics and biosimilars, will drive this growth.

INDIAN PHARMACEUTICAL SECTOR OVERVIEW

The Indian pharmaceutical industry is the third largest in the world by volume. Domestic formulations constitute 50% of
the Indian pharmaceutical market. India is a major exporter, serving over 200 countries. It is the largest supplier of generic
medicines, producing about 60,000 different generic brands across 60 therapeutic categories, and accounting for 20% of
the global supply of generics.

India meets over 50% of Africa’s demand for generics, 40% of the generic demand in the US, and 25% of all medicines in
the UK. Additionally, India supplies 60% of the global vaccine demand and is a leading provider of DPT, BCG, and measles
vaccines. Notably, 70% of the WHO’s vaccines are sourced from India. The country is also the third largest producer of
Active Pharmaceutical Ingredients (APIs), holding an 8% share of the global API market. India manufactures over 500
different APIs and contributes 57% of the APIs on the WHO's prequalified list. Indian pharmaceutical companies have a
substantial presence in the prescription markets of the US and EU, and India hosts the largest number of FDA-approved
plants outside the US.

Valued at $50 billion in 2024, the Indian pharmaceutical industry is projected to grow at a CAGR of over 10%, reaching
$130 billion by 2030 and $450 billion by 2047. India is among the top 12 global biotechnology destinations and the third
largest in the Asia-Pacific region, holding 3-5% of the global biotechnology market. In 2022, India’s bioeconomy was
valued at $137 billion, with an aim to reach $300 billion by 2030.

The domestic industry’s growth is driven by a rising population with increasing incomes, a greater need for preventive
healthcare due to changing demographics, increased awareness of chronic diseases, and a prevalence of lifestyle illnesses.
India is well-positioned to meet this demand with its strong domestic manufacturing base, skilled workforce, and
government initiatives promoting access to medicines. According to an analysis by CRISIL, the domestic pharmaceutical
sector is expected to grow by 8-10% in sales in the financial year 2023-24.

Government of India’s support and attractive incentives, such as the Production Linked Incentive (PLI) scheme, are pivotal
in bolstering the pharmaceutical industry. Additionally, a scheme with a capital outlay of Rs 5,000 crore has been approved
by the government to boost R&D in the pharma and medtech sectors, creating a favorable business environment.

OPPORTUNITIES & THREATS:

Indian pharmaceutical companies face a dynamic landscape with several opportunities and threats that could impact
their growth and market positioning. The Indian market has certain unique characteristics. The Indian healthcare sector is
expanding, driven by an increasing population, rising income levels, and greater health awareness. This growth presents
opportunities for pharmaceutical companies to cater to a larger domestic market.

BAFNA PHARMA - ANNUAL REPORT 2023-24 57

Opportunities
a) Emerging Markets:
• International Expansion: Emerging markets in Asia, Africa, and Latin America offer substantial growth potential
due to increasing healthcare access and demand for affordable medicines.
• Export Opportunities: India is a global leader in the production of generic drugs, providing a significant
export opportunity. As patents expire on branded drugs, Indian companies can capitalize on the demand for
affordable generics in international markets, particularly in the U.S. and Europe.
b) Expanding Domestic Market:
• Growing Population and Income Levels: The expanding population and rising income levels in India present
a significant opportunity for pharmaceutical companies to cater to an increasing demand for healthcare
products.
• Health Awareness: Greater health awareness is driving the demand for preventive and therapeutic healthcare
products, creating a robust market for pharmaceuticals.
c) Government Support:
• Increased Healthcare Spending: The Indian government has gradually increased healthcare spending and
expanded the private hospital sector, benefiting the pharmaceutical industry.
• FDI and PLI Schemes: Government initiatives such as allowing 100% Foreign Direct Investment (FDI) in health
and medical services and Production Linked Incentive (PLI) schemes are bolstering the industry.
• Health Expenditure Plans: The government plans to increase health expenditure to 2.25% of GDP by 2025,
further boosting the pharmaceutical sector.
d) Macroeconomic Factors:
• Socio-Economic Factors: Increasing sales of generic medicines, heightened health awareness, increasing
affluence, changing lifestyles, continued growth in chronic therapies, and greater penetration in rural markets
contribute to the growth of the Indian pharmaceutical market.
• Spending Growth: India is expected to break into the top 10 countries in terms of spending on medicines,
with spending projected to grow at about 10% annually over the next five years.
e) CRAMS Segment:
• Outsourcing Services: Contract Research and Manufacturing Services (CRAMS) is one of the fastest-growing
segments in the pharmaceutical and biotechnology industry. The pharmaceutical market increasingly uses
outsourcing services from contract research organizations (CROs) and contract manufacturing organizations
(CMOs).

Threats
a) Regulatory Challenges:
• Stringent Requirements: Stringent regulatory requirements, both domestically and internationally, pose
challenges, including delays in drug approvals and compliance costs.
• Price Controls: Intense price pressure in global regulated markets, the emergence of new local players affecting
branded generic prices, and increased regulatory intervention in price fixation for domestic formulations
threaten the industry's margins.
b) Supply Chain Disruptions:
• Geopolitical Crises: Ongoing geopolitical crises have led to supply chain disruptions and rising costs of raw

58 BAFNA PHARMA - ANNUAL REPORT 2023-24

 materials. Disruptions in worldwide supply chains and logistical hurdles impede the timely acquisition of raw
materials and the distribution of finished products.
• Regulatory Scrutiny: Stringent regulatory measures and increased scrutiny of the pharmaceutical supply chain
introduce complexities, resulting in delays in production and approval processes.
c) Market Competition:
• Price Pressure: The high level of competition in the generic drug market leads to intense price pressure,
affecting profit margins.
• Local Players: The emergence of new local players can drive down prices for branded generics, posing a threat
to established companies.
d) Production Challenges:
• Facility Approvals: Delays in the approval of manufacturing facilities by regulatory authorities can hinder
production timelines and market entry.
• Production Capacity: The challenges related to supply chain disruptions and regulatory complexities impact
production capacity, necessitating resilience and adaptability.
Balancing these opportunities and threats is crucial for Indian pharmaceutical companies as they navigate the
evolving landscape of the global pharmaceutical industry.

COMPANY OVERVIEW
Bafna Pharmaceuticals Limited is engaged in the manufacturing of pharmaceutical formulations. The company's
manufacturing facility is accredited by EU GMP, UK MHRA, and TGA Australia for Non-Betalactum solid oral dosage forms.
Bafna Pharmaceuticals is known for providing consistent and unmatched service, supplying high-end pharmaceutical
formulations to regulated and emerging markets. Additionally, the company has established itself as a competent player
in the Contract Research and Manufacturing Services (CRAMS) industry.
The Company's primary focus is to expand revenue from registered products globally while continuing to apply for
registrations to generate new opportunities. Bafna Pharmaceuticals exports its products to the Europe, the United
Kingdom, Australia, Sri Lanka, Africa, and Commonwealth countries.

OPERATIONAL AND FINANCIAL PERFORMANCE:

During the financial year 2023-24, the total revenue from operations was Rs.15,246.57 Lakhs as compared to Rs.11,534.99
Lakhs during the previous financial year 2022-23. Thereby registering a growth of 32.18% over the previous year. The
Export Turnover of the Company for the financial year 2023-24 was Rs.9,419.81 Lakhs, registering a growth of 6.43% over
the pervious year. Further, the Domestic Turnover of the Company for the financial year increased to Rs.5,673.92 Lakhs
thereby recording an increase of 122.12% as compared to the previous year.

The EBIDTA for the financial year 2023-24 was Rs. 1,463.36 Lakhs for the year ended as against Rs. 1,898.83 Lakhs for the
corresponding previous period, recording decrease of 22.93%. The Profit After Tax was Rs. 734.79 Lakhs for the year ended
31st March, 2024, as against Rs. 1,133.80 Lakhs for the corresponding previous period, a decline of 35.19%.

BAFNA PHARMA - ANNUAL REPORT 2023-24 59

KEY FINANCIAL RATIOS

% of Explanation for
Ratios F.Y 2023-24 F.Y 2022-23
Variance Variance
Profitability Ratio
Increase in Borrowings
Operating Profit
4.82% 10.07% (52.18%) owing to increase in
Margin
operations
Increase in Borrowings
Net Profit Margin 4.82% 9.83% (50.96%) owing to increase in
operations
Increase in Borrowings
Return on Net Worth 9.14% 15.43% (40.80%) owing to increase in
operations
Increase in Borrowings
EBITDA Margin 9.60% 16.46% (41.95%) owing to increase in
operations
Efficiency Ratios

Debt Equity Ratio 0.30 Time 0.31 Time 3.23%

Current Ratio 1.75 Time 1.88 Time 6.91%

Inventory turnover
5.88 Times 5.43 Times 8.30%
ratio
Debtors Turnover
3.52 Times 4.12 Times 14.56%
ratio
Interest Coverage
6.38 Times 9.32 Times 31.74% Increase In operations
Ratio

OUTLOOK:

As detailed above, the outlook for the Indian pharmaceutical market is positive. The company is making continuous efforts
to improve the quality of its products to secure more orders at competitive rates. Due to bulk orders and bargaining
power, the company can quote better rates while maintaining high quality and productivity of the traded products. Barring
unforeseen circumstances, the company is confident of achieving better results in the current year.

The outlook for the company is positive, considering its product mix, market conditions, and the expected increase in
demand for its products. The company is focused on operating with the highest Environment, Health, and Safety standards
while improving efficiencies, reducing unit costs, and ensuring business stability.

RISKS AND CONCERNS

The impending threats arising from geopolitical tensions, stock market volatility, growing concerns about rising commodity
and energy prices, inflationary impacts, and potential interest rate hikes to reduce liquidity are likely to pose significant
challenges going forward.

Additionally, significant volatility in the forex market, especially for emerging market currencies, may adversely impact the
reported growth of these markets, even if they are recording growth in local currency terms. The regulatory environment
across the globe is becoming increasingly stringent, making entry into new geographies more challenging.

60 BAFNA PHARMA - ANNUAL REPORT 2023-24

INTERNAL CONTROL SYSTEMS & ADEQUACY

The Company has adequate internal control system suitable to its size and nature of business. Internal controls are
implemented to safeguard its assets, to keep constant check on cost structure, to provide adequate financial and
accounting controls and implement accounting standards. The system incorporates continuous monitoring, reporting,
checks and balances, purchase policies, authorization and delegation procedures and audit etc. Internal controls are
adequately supported by Internal Audit and periodic review by the management.

The Internal Audit is undertaken by an Independent Auditor M/s K S Rao & Co., Chartered Accountant firm, Chennai, The
Audit Committee and the Board meets periodically to review with the internal auditor, statutory auditors and management
the adequacy/scope of internal audit function, significant findings and follow up there on and findings of any abnormal
nature. The system is improved and modified continuously to meet with changes in business condition, statutory and
accounting requirements.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT

Human resources continue to be one of the critical assets of the organization. The Company firmly believes that its people
are its most valued resource and that their efficiency plays a key role in achieving defined goals and building a competitive
work environment. We continue to take proactive steps to hire, retain talent and ensure continuity of business through
talent acquisition, talent management and succession planning initiatives. Employee relations continued to be cordial and
harmonious across all levels of the Company. The number of employees as on March 31, 2024 is 618.

CAUTIONARY STATEMENT
The information and opinions expressed in this report may contain certain forward-looking statements, which the
management believes are true to the best of its knowledge at the time of its preparation. Actual results may differ
materially from those either expressed or implied in this report.

On behalf of the Board of Directors

For BAFNA PHARMACEUTICALS LIMITED

SD/- SD/-
S. Hemalatha Vinayak Dinesh Dendukuri
Whole-Time Director Whole-Time Director
DIN:02714329 DIN: 07601309
Date: 13-08-2024 Place: Chennai Place: Hyderabad

BAFNA PHARMA - ANNUAL REPORT 2023-24 61

 This Page Intentionally Left Blank

62 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Financial Statements

BAFNA PHARMA - ANNUAL REPORT 2023-24 63

 INDEPENDENT AUDITOR'S REPORT
To

The Members
Bafna Pharmaceuticals Limited

Report on the Audit of the Financial Statements

Opinion
We have audited the accompanying Financial Statements of Bafna Pharmaceuticals Limited (“the Company”), which comprise
the Balance Sheet as at 31st March 2024, the Statement of Profit and Loss (including other comprehensive income), the
Statement of Changes in Equity and the Statement of Cash Flows for the year ended then date and notes to the Financial
Statements including a summary of material accounting policies and other explanatory information (hereinafter referred to as
“the Financial Statements”)

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial
Statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and
give a true and fair view in conformity with accounting principles generally accepted in India including the Indian Accounting
Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended (“Ind AS”), of the state of affairs of the Company as at 31st March 2024, its profit (including other comprehensive
income), it changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing ("SAs") specified under
Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants
of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the Financial Statements under the
provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion on the Financial Statements.

Emphasis of Matters

Attention is invited to:

a. the non-receipt of the foreign currency receivables as on 31st March 2024 aggregating to ₹ 174 Lakhs (31st March
2023: ₹ 203 Lakhs) which are outstanding beyond the stipulated time period permitted under the RBI Master Direction
on Export of Goods and Services vide FED Master Direction No. 16/2015-16 dated 1st January, 2016 (as amended),
issued by the Reserve Bank of India (“RBI”). The management of the Company is in the process of obtaining approval
towards extension of time limits for realization or write off of the balances. Pending such confirmation, no adjustment is
envisaged in the books of accounts as on 31st March 2024.

b. the adjustment of Income Tax Refund pertaining to previous assessment years amounting to ₹ 45.17 Lakhs. The Income
Tax Department has issued the refund order on various dates for respective assessment years; however, such refunds
have been adjusted against the outstanding demands through Centralized Processing Centre (“CPC”). As represented by

64 BAFNA PHARMA - ANNUAL REPORT 2023-24

 the management, the Company has filed a writ petition with the Honourable Madras High Court against the adjustment
of refund issued with the outstanding demand.

c. Note 33 (B) to the Financial Statement regarding the non-compliance with various statutory compliances under Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Securities
Contracts (Regulations) Rules, 1957, as amended with respect to the Minimum Public Shareholding, appointment of
Compliance Officer and submission of certain prescribed information to the Stock Exchanges during the previous
reporting periods. The Company has received the communication from BSE Limited and National Stock Exchange of
India Limited in respect to such non-compliance and appropriate provision has been accounted in the books of accounts
as on reporting date. However, the management is pursuing with the Stock Exchanges for waiver of such penalties.

Our opinion is not modified in respect of the above matters.

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of the most significance in our audit of the
Financial Statements of the financial year ended 31st March 2024. These matters were addressed in the context of our audit of
the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. We have determined the following matters as Key Audit Matters to be communicated in our report:

Key Audit Matters Auditor’s Response

Litigations, Claims, Provisions and Our audit approach include:
Contingent Liabilities • Assessed the appropriates of the Company’s accounting policies, including
those relating to provision and contingent liability by comparing with the
As disclosed in Note 33 detailing
applicable Indian Accounting Standards;
contingent liability and provision
for contingencies, the Company is • Assessed the Company process for identification of the pending litigations
involved in litigations concerning and completeness for financial reporting and also for monitoring of significant
direct tax, indirect tax and other developments in relation to such pending litigations;
matters that are pending with various • Engaged subject matter specialists to gain an understanding of the current
statutory authorities. status of litigations and monitored changes in the disputes, if any, through
discussions with the management and by reading external advice received
Whether a liability is recognized or by the Company, where relevant, to establish that the provisions had been
disclosed as a contingent liability in appropriately recognized or disclosed as required;
the Financial Statements is inherently
• Assessed the Company’s assumptions and estimates in respect of litigations,
judgmental and dependent on a
including the liabilities or provisions recognized or contingent liabilities
number of significant assumptions
disclosed in the Financial Statements. This involved assessing the probability of
and assessments.
an unfavorable outcome of a given proceeding and the reliability of estimates
The amounts involved are potentially of related amounts;
significant and determining the • Obtained details of completed tax assessments and demands.
amount, if any, to be recognized or • We involved our internal experts to review the management’s underlying
disclosed in the Financial Statements, assumptions in estimating the tax provision and the possible outcome of the
is inherently subjective. disputes.
• Assessed the management’s conclusions through understanding precedents
set in similar cases; and considering the appropriateness of the Company’s
description of the disclosures related to litigations and whether these
adequately presented in the Financial Statements.

BAFNA PHARMA - ANNUAL REPORT 2023-24 65

 Key Audit Matters Auditor’s Response
Inventories Our audit approach include:
Inventories are also the critical
• We assessed the Company’s process regarding Maintenance of records,
component of Financial Statement.
Valuation and accounting of transactions relating to Inventory as per the
Correctness, completeness and
IND AS - 2.
valuation are critical for reflecting
true and fair financial results of • We have evaluated the design of Internal Controls relating to recording and
operations. valuation of Inventory.
• We have carried out substantive audit procedures at financial and assertion
level to verify the allocation of overheads to Inventory.
• We have verified the compliance with the standard norms relating to
production as framed and timely updated by the management.

Other Information
The Company’s Board of Directors is responsible for the preparation of other information. The other information comprises the
information included in the Company’s Annual Report, but does not include the Financial Statements, and our auditor’s report
thereon. The other information is expected to be made available to us after the date of auditor’s report. Thus, our report does
not deal with matters mentioned under other information in Annual Report.

Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial
Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.

Management Responsibilities for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation
of these Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive
income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in
India, including the Ind AS specified under section 133 of the Act.. This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error.

In preparing the Financial Statements, the Board of Directors is responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

66 BAFNA PHARMA - ANNUAL REPORT 2023-24

Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:

a. Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

b. Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion
on whether the Company has adequate internal financial controls with reference to Financial Statements in place and the
operating effectiveness of such controls.

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the management.

d. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a
going concern.

e. Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and
whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair
presentation.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) Planning the scope of our audit work and in evaluating the results of our
work; and (ii) to evaluate the effect of any identified misstatements in the Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.

BAFNA PHARMA - ANNUAL REPORT 2023-24 67

From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the Financial Statements of the financial year ended 31st March 2024 and are therefore the Key
Audit Matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2020 (“the Order”), issued by the Central Government of India in
terms of sub section (11) of Section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit of the aforesaid Financial Statements.
b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid Financial
Statements have been kept by the Company so far as it appears from our examination of those books, except
for the matters stated in the paragraph 3(f) below on reporting under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014, as amended.
c. The balance sheet, the statement of profit and loss (including other comprehensive income), statement of changes
in equity and the statement of cash flows dealt with by this report are in agreement with the books of account.
d. In our opinion, the aforesaid Financial Statements comply with the Ind AS specified under Section 133 of the Act
read with Companies (Indian Accounting Standard) Rules, 2015 as amended.
e. On the basis of the written representations received from the directors as on March 31, 2024 taken on record
by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a
director in terms of Section 164(2) of the Act.
f. The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in
the paragraph 2(a) above on reporting under Section 143(3)(b) of the Act and paragraph 3(f) below on reporting
under Rule 11(g) of the Companies (Audit and Auditors) Rules,2014, as amended.
g. With respect to the adequacy of the internal financial controls with reference to Financial Statements of the
Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B” to this
report.

3. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014 as amended, in our opinion and to the best of our information and according to the
explanations given to us:
a. The Company has disclosed the impact of pending litigations on its financial position in its Financial Statements.
Refer Note No. 33 to the Financial Statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses.
c. There are no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company.

68 BAFNA PHARMA - ANNUAL REPORT 2023-24

 d. (i) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been advanced or loaned or invested (either from
borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any
other person(s) or entity(ies), including foreign entity (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries:
(ii) The Management has represented, that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been received by the Company from any person or
entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations under sub-clause (i)
and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The Company has not declared, paid interim dividend during the year or proposed final dividend for the year.
f. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended, for maintaining books of account using
accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with
effect from 1st April 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules,
2014, as amended, is applicable for the financial year ended 31st March 2024.
Based on our examination which included test checks and information given to us, the Company has used
accounting software for maintaining its books of account, which does not have a feature of recording audit trail
(edit log) facility, and the same did not operate throughout the year for all relevant transactions recorded in the
respective software.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended, is applicable from 1st April, 2023
reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended, on preservation of
audit trail as per statutory requirements for record retention is not applicable for the financial year ended 31st
March 2024.
4. With respect to the other matters to be included in the Auditor’s Report in accordance with requirement of section
197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the
Company to its director during the year is in accordance with the provision of section 197 of the Act. The remuneration paid to
directors is not in excess of the limit laid down under section 197(16) which are required to be commented upon by us.

For Brahmayya & Co

Chartered Accountants
Firm Regn No: 000511S

Sd/-
Place: Coonoor Lokesh Vasedevan
Date: 29th May 2024 Partner
Membership No: 222320
UDIN: 24222320BKETWK2887

BAFNA PHARMA - ANNUAL REPORT 2023-24 69

 Annexure A to the Independent Auditor’s Report
The “Annexure A” referred to in clause 1 of “Report on Other Legal and Regulatory Requirements” paragraph of the
Independent Auditor’s Report of even date to the members of Bafna Pharmaceuticals Limited ("the Company") on the
Financial Statements as on and for the year ended 31st March 2024.

i) a) (A) The Company has maintained proper records showing full particulars, including quantitative details
and situation of property, plant and equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets under
development.

b) We are informed that a test of physical verification of Property Plant and Equipment was carried out by
the management at a reasonable interval and no material discrepancies were noticed on such verification.
In our opinion, the frequency of verification of these assets is reasonable having regards to the size of the
Company and nature of its assets.

c) The title deeds of immovable properties (other than immovable properties where the Company is the
lessee and the lease agreements are duly executed in favour of the Company) as disclosed in the Financial
Statements are held in the name of the Company.

d) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
the Company has not revalued any of its property, plant and equipment and intangible assets under
development during the year ended 31st March 2024.

e) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
there are no proceedings initiated or are pending against the Company for holding any benami property
under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

ii) (a) The management has conducted physical verification of inventory at the reasonable interval during the year
and no discrepancies were noticed on verification between the physical stocks and the book records that
were 10% or more in the aggregate for each class of inventory.

b) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from
banks on the basis of security of current assets. In our opinion, the quarterly returns/ statements filed by the
Company with such banks are in agreement with the books of account of the Company except as follows:

70 BAFNA PHARMA - ANNUAL REPORT 2023-24

 (₹ in lakhs)
Amount as
Name of Particulars of Security Amount as per reported in
Quarter Variance
the Bank Provided books of accounts Quarterly
return
Inventory 2,568.68 2,002.72 565.96
June-23 Books Debts 4,591.09 4,340.73 250.36
Sundry Creditors 2,855.20 2,714.10 141.10
Inventory 2,936.27 2,265.01 671.26
Sept-23 Books Debts 3,982.86 4,051.20 (68.34)
Sundry Creditors 3,018.53 2,900.69 117.84
ICICI Bank
Inventory 3,150.81 2,603.42 547.39
Dec-23 Books Debts 3,382.34 3,423.83 (41.49)
Sundry Creditors 2,753.99 2,751.42 2.57
Inventory 2,964.18 2,264.78 699.40
Mar-24 Books Debts 4,539.48 4,632.34 (92.86)
Sundry Creditors 3,542.23 2,989.77 552.46

iii) (a) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
the Company has provided staff advances during the year as follows:
(₹ in lakhs)

Particulars Amount
Aggregate amount of provided during the year ended 31st March 2024
Loans and Advances to Employees 27.38
Balance outstanding as at balance sheet date 31st March 2024 8.18

(b) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
in our opinion the terms and conditions of the grant of loans and advances to employees during the year
are, prima facie, not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with generally accepted auditing practices in India, in
our opinion, the Company has given staff advances to its employees during the year as per the Company’s
policy and receipts are generally regular.

(d) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with generally accepted auditing practices in India, there
is no overdue amount.

(e) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with generally accepted auditing practices in India, there
are no loan and staff advances granted that has fallen due during the year, which has been renewed or
extended or fresh loans granted to settle the overdue of existing loans given to same parties.

BAFNA PHARMA - ANNUAL REPORT 2023-24 71

 (f) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
the Company has not granted any loans or staff advances during the year which are either repayable on
demand or without specifying any terms or period of repayment.

iv) According to the information and explanations given to us and on the basis of our examination of the records
of the Company carried out in accordance with the generally accepted auditing practices in India, the Company
has not given any loans, or provided any guarantee or security as specified under Section 185 of the Companies
Act, 2013 and the Company has not provided any guarantee or security as specified under Section 186 of the
Companies Act, 2013.

iv. According to the information and explanations given to us and on the basis of our examination of the records
of the Company carried out in accordance with the generally accepted auditing practices in India, the Company
has not given any loans, or provided any guarantee or security as specified under Section 185 of the Companies
Act, 2013 and the Company has not provided any guarantee or security as specified under Section 186 of the
Companies Act, 2013.

v. According to the information and explanations given to us, and based on our examination of the records of the
Company carried out in accordance with the generally accepted auditing practices in India, the Company has
not accepted any deposits from the public and no order has been passed by Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any court or any other tribunal. Therefore the provisions of
clause (v) of paragraph 3 of the order are not applicable to the Company.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the
Central Government for the maintenance of cost records under Section 148 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been made and maintained. We have not, however made a
detailed examination of the same.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the records
of the Company carried out in accordance with generally accepted auditing practices in India, in our opinion,
the Company is generally regular in depositing the undisputed statutory dues including Provident Fund,
Employee’s State Insurance, Income Tax, Service Tax, Excise Duty, Value Added Tax, Goods and Service Tax,
Duty of Customs, Cess, and Other Statutory Dues with the appropriate authorities. There are no outstanding
undisputed statutory dues on the last day of financial year concerned for a period of more than 6 month from
the date they become payable except as follows:

(₹ in lakhs)

Period to which
Name of the Statute Nature of Dues Amount
amount relates
SEBI Regulations Penalties levied by BSE Limited* 3.01 Sep-20
SEBI Regulations Penalties levied by BSE Limited* 1.30 Mar-22
SEBI Regulations Penalties levied by BSE Limited* 5.37 Jun-22
SEBI Regulations Penalties levied by BSE Limited* 4.78 Sep-22
SEBI Regulations Penalties levied by BSE Limited* 5.43 Dec-22
SEBI Regulations Penalties levied by BSE Limited* 3.19 Mar-23
SEBI Regulations Penalties levied by BSE Limited* 0.58 Mar-23
SEBI Regulations Penalties levied by BSE Limited* 1.30 Sep-23
SEBI Regulations Penalties levied by National Stock 3.01 Sep-20
Exchange of India Limited.*

72 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Period to which
Name of the Statute Nature of Dues Amount
amount relates
SEBI Regulations Penalties levied by National Stock 1.30 Mar-22
Exchange of India Limited.*
SEBI Regulations Penalties levied by National Stock 5.37 Jun-22
Exchange of India Limited.*
SEBI Regulations Penalties levied by National Stock 4.78 Sep-22
Exchange of India Limited.*
SEBI Regulations Penalties levied by National Stock 5.43 Dec-22
Exchange of India Limited.*
SEBI Regulations Penalties levied by National Stock 3.19 Mar-23
Exchange of India Limited.*
SEBI Regulations Penalties levied by National Stock 0.14 Jun-23
Exchange of India Limited.*
SEBI Regulations Penalties levied by National Stock 2.48 Sep-23
Exchange of India Limited.*
Income Tax Act, 1961 Tax Deducted at Source** 6.01 FY 2017-18
Income Tax Act, 1961 Tax Deducted at Source** 1.00 FY 2008-09
Income Tax Act, 1961 Tax Deducted at Source** 4.78 FY 2018-19
Income Tax Act, 1961 Tax Deducted at Source** 0.37 FY 2009-10
Income Tax Act, 1961 Tax Deducted at Source** 3.73 FY 2019-20
Income Tax Act, 1961 Tax Deducted at Source** 0.00*** FY 2007-08
Income Tax Act, 1961 Tax Deducted at Source** 2.46 FY 2013-14
Income Tax Act, 1961 Tax Deducted at Source** 2.88 FY 2014-15
Income Tax Act, 1961 Tax Deducted at Source** 8.26 FY 2015-16
Income Tax Act, 1961 Tax Deducted at Source** 6.31 FY 2016-17
Income Tax Act, 1961 Tax Deducted at Source** 0.82 FY 2012-13
Income Tax Act, 1961 Tax Deducted at Source** 0.19 FY 2011-12
Income Tax Act, 1961 Tax Deducted at Source** 2.41 FY 2010-11
Income Tax Act, 1961 Tax Deducted at Source** 1.05 FY 2020-21
Income Tax Act, 1961 Tax Deducted at Source** 0.68 FY 2021-22
Income Tax Act, 1961 Tax Deducted at Source** 0.59 FY 2022-23
Income Tax Act, 1961 Tax Deducted at Source** 0.18 FY 2023-24

*According to the information and explanations given to us, the Company has made suitable representation
seeking waiver of penalties imposed by BSE Limited and National Stock Exchange of India Limited. Refer
Note No. 33(b) to the Financial Statements

**In respect of Tax Deducted at Source, the amounts were due during various reporting periods and are still
outstanding.

***Amount is less then INR One Thousand.

BAFNA PHARMA - ANNUAL REPORT 2023-24 73

 (b) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with generally accepted auditing practices in India, the
particulars of dues of Income Tax or Sales Tax or Service Tax or Excise Duty or Value Added Tax or Goods and
Services Tax or Cess or Stamp Duty as at 31st March 2024 which have not been deposited on account of any
dispute are as under:
(₹ in lakhs)

Nature of Period to which Forum where dispute

Name of the Statute Amount
Dues amount relates is pending
Honourable High Court
Income Tax Act 1961 Income Tax* 342.19 AY 15-16
of Madras
Various Period from FY Honourable High Court
Finance Act 1994 Service Tax* 22.32
2014-15 to June 2018 of Madras
Goods and Service Honourable High Court
Sales Tax* 25.26 FY 2016 - 17
Tax Act of Madras
Penalty Under
Various Period for
Foreign Trade Foreign Trade
Advance Authorization Honourable High Court
(Development and (Development 20.00
obtained in October, of Madras
regulation Act 1992 & Regulation
2004
Act, 1992*
Provident Fund Act Provident Honourable High Court
33.67 FY 2016-2018
1952 Fund* of Madras
Goods and Service Goods and Honurable Goods and
235.47 2017-18 to 2020-21
Tax Act Service Tax Service Tax (Appeals)
* In respect to the demands raised, amounts were due during the various reporting periods prior to the
approval of the Resolution Plan by the Honourable National Company Law Tribunal. As represented by
the management, the Company has filed the writ petitions with the Honourable High Court of Madras for
quashing all demands pursuant to the approval of the Resolution Plan. Refer Note No. 33 (c) to the financial
statements.

viii) According to the information and explanations given to us, and on the basis of our examination of the records of
the Company carried out in accordance with the generally accepted auditing practices in India, the Company has
not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the
tax assessments under the Income Tax Act, 1961 as income during the year.

ix) a) According to the information and explanations give to us and on the basis of our examination of the records
of the Company, carried out in accordance with the generally accepted auditing practices in India, the
Company has not defaulted in repayment of loans or other borrowings or in the payment of interest
thereon to any lender during the year. However, with respect to interest free loan availed from KMP in
previous financial years, the terms and conditions for repayment of principal has not been stipulated and
accordingly we are unable to comment on the default in repayment of such loans.
(₹ in lakhs)
Particulars Amount
Outstanding at the beginning of the year 150.67
Repaid during the year 0.60
Outstanding at the end of the year 150.07

b) According to the information and explanations given to us, and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
the Company has not been declared wilful defaulter by any bank or financial institution or government or
any government authority or any lenders. Therefore the provisions of clause 3(ix)(b) of paragraph 3 of the
order is not applicable to the Company.

74 BAFNA PHARMA - ANNUAL REPORT 2023-24

 c) According to the information and explanations given to us and based on our examination of the records of
the Company, term loans were applied for the purpose for which they were obtained during the year.
d) According to the information and explanations given to us and on the basis of our examination of the
records of the Company, carried out in accordance with the generally accepted auditing practices in India,
in our opinion, funds raised on short-term basis have, prima facie, not been used during the year for long-
term purposes by the Company.
e) According to the information and explanations given to us us and on the basis of our examination of the
records of the Company carried out in accordance with the generally accepted auditing practices in India,
the Company does not have subsidiaries, joint ventures, associate companies. Therefore, the provisions of
clause (ix)(e) of paragraph 3 of the order are not applicable to the Company.
f) According to the information and explanations given to us and on the basis of our examination of records
of the Company, carried out in accordance with the generally accepted auditing practices in India, in our
opinion, the Company does not have subsidiaries, joint ventures, associate companies. Therefore, the
provisions of clause (ix)(f) of paragraph 3 of the Order are not applicable to the Company.

x) a) According to the information and explanations given to us and on the basis of our examination of
the records of the Company carried out in accordance with generally accepted auditing practices
in India, the Company has not raised any money by way of initial public offer or further public offer
(including debt instruments) during the year.
b) According to the information and explanations given to us and on the basis of our examination of the
records of the Company carried out in accordance with generally accepted auditing practices in India,
the Company has not made any preferential allotment or private placement of shares or fully or partly
convertible debentures during the year. Therefore, the provisions of clause (x)(b) of paragraph 3 of the
Order are not applicable to the Company.

xi) a) According to the information and explanation given to us and on the basis of our examination of records
of the Company, carried out in accordance with the generally accepted auditing practices in India, we have
neither come across any instance of fraud by the Company or on the Company, noticed or reported during
the year, nor we have been informed of any such cases by the management during the course of our audit.
b) No report under Section 143 (12) of the Act has been filed by the auditors in Form ADT-4 as prescribed
under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.
c) According to the information and explanations given to us provided by the management of the Company,
the Company has not received any whistle blower complaints during the year. Therefore, the provisions of
clause (xi)(c) of paragraph 3 of the Order are not applicable to the Company.

xii) In our opinion and according to the information and explanations given to us and on the basis of our examination
of records of the Company, carried out in accordance with the generally accepted auditing practices in India, the
Company is not a Nidhi Company. Therefore, the provisions of clause (xii)(a), (xii)(b) and (xii)(c) of the paragraph 3
of the Order are not applicable to the Company.

xiii) According to the information and explanations given to us and based on our examination of the records of the
Company carried out in accordance with the generally accepted auditing practices in India, transactions with the
related parties are in compliance with sections 177 and 188 of the Companies Act where applicable and details of
such transactions have been disclosed in the Financial Statements as required by the applicable Ind AS.

xiv) a) According to the information and explanations given to us and based on our examination of the
records of the Company, carried out in accordance with the generally accepted auditing practices in India,
the Company has an internal audit system that commensurate with the size and nature of its business.
b) We have considered the internal audit reports of the Company for the year under audit, issued to Company.

xv) According to the information and explanations given to us and on the basis of our examination of the records of

BAFNA PHARMA - ANNUAL REPORT 2023-24 75

 the Company, carried out in accordance with the generally accepted auditing practices in India, the Company has
not entered into non-cash transactions with directors or persons connected with them. Therefore, the provision of
clause (xv) of the paragraph 3 of the Order is not applicable to the Company.

xvi) a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act,
1934. Therefore, the provisions of clause (xvi) (a) of the paragraph 3 of the Order are not applicable to the
Company.
b) The Company has not conducted non-banking financial/housing finance activities during the year. Therefore,
the provisions of clause (xvi)(b) of the paragraph 3 of the Order are not applicable to the Company.
c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve
Bank of India. Therefore, the provisions of clause (xvi)(c) of the paragraph 3 of Order are not applicable to
the Company.
d) According to the information and explanations provided to us during the course of audit, the Group does
not have any CIC. Therefore, the provisions of clause (xiv)(d) of the paragraph 3 of the Order are not
applicable to the Company.

xvii) The Company has not incurred cash losses in the current and in the immediately preceding financial year.

xviii) There has been no resignation of the statutory auditors during the year. Therefore, the provisions of clause (xviii)
of paragraph 3 of the Order is not applicable to the Company.

xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing
and expected dates of realization of financial assets and payment of financial liabilities, other information
accompanying the Financial Statements, our knowledge of the Board of Directors and management plans and
based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which
causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not
capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of
one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of
the Company. We further state that our reporting is based on the facts up to the date of the audit report and we
neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the
balance sheet date, will get discharged by the Company as and when they fall due.

xx) (a) According to the information and explanations given to us and on the basis of our examination of the
records of the Company, carried out in accordance with the generally accepted auditing practices in India,
the Company has not transferred the amount of INR 12.70 Lakhs remaining unspent in respect of other than
ongoing projects, to a fund specified in Schedule VII to the Companies Act, 2013 till the date of our report.
However, the time period for such transfer i.e. six months of the expiry of the financial year as permitted under
the second proviso to sub section (5) of the section 135 of the Act, has not elapsed till the date of our report.
b) According to the information and explanations given to us and on the basis of our examination
of the records of the Company carried out in accordance with the generally accepted auditing
practices in India, there are no ongoing projects as at balance sheet date, therefore, the Company
does not have any amount remaining unspent under Section 135(6) of the Act. Therefore, the
provision of clause (xx) (b) of the paragraph 3 of the Order is not applicable to the Company.
For Brahmayya & Co
Chartered Accountants
Firm Regn No: 000511S
Sd/-
Place: Coonoor Lokesh Vasedevan
Date: 29th May 2024 Partner
Membership No: 222320
UDIN: 24222320BKETWK2887

76 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Annexure B to the Independent Auditor’s Report
(Referred to in paragraph 2(g) under ‘Report on Other Legal and Regulatory Requirements’ section of our report
to the Members of Bafna Pharmaceuticals Limited on the Financial Statements as of and for the year ended
31st March 2024.)

Report on the Internal Financial Controls with reference to Financial Statements under Clause (i) of sub-section 3 of
Section 143 of the Companies Act, 2013 (the “Act”)
We have audited the internal financial controls with reference to Financial Statements of Bafna Pharmaceuticals Limited (the
“Company”) as of March 31, 2024 in conjunction with our audit of the Financial Statements of the Company for the year ended
on that date.

Management’s Responsibility for Internal Financial Controls with reference to Financial Statements
The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on the
internal control over financial reporting criteria established by the Company considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“Guidance Note”)
issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation
and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Act.

Auditor’s Responsibility for Internal Financial Controls with reference to Financial Statements
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on
our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and
deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls,
both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance
Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and maintained and if such controls
operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with
reference to Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to
Financial Statements included obtaining an understanding of internal financial controls with reference to Financial Statements,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the Financial Statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control with reference to Financial Statements is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in
accordance with generally accepted accounting principles. A Company's internal financial control with reference to Financial
Statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with

BAFNA PHARMA - ANNUAL REPORT 2023-24 77

authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorised acquisition, use, or disposition of the Company's assets that could have a material effect on
the Financial Statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion
or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls with reference to Financial Statements to future periods are
subject to the risk that the internal financial control with reference to Financial Statements may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material
respects, an adequate internal financial controls with reference to Financial Statements and such internal financial controls with
reference to Financial Statements were operating effectively as at March 31, 2024, based on the criteria for internal financial
control with reference to Financial Statements established by the Company considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For Brahmayya & Co

Chartered Accountants
Firm Regn No: 000511S

Sd/-
Place: Coonoor Lokesh Vasedevan
Date: 29th May 2024 Partner
Membership No: 222320
UDIN: 24222320BKETWK2887

78 BAFNA PHARMA - ANNUAL REPORT 2023-24

 BALANCE SHEET AS AT 31ST MARCH, 2024
(` in Lakhs)
Note As at As at
Particulars No 31st March, 2024 31st March, 2023
A ASSETS
1 Non-Current Assets
(a) Property, Plant and Equipment 3 4,021.14 4,022.97
(b) Capital Work - in Progress 4 1,049.58 -
(c) Intangiable Assets Under Development 5 177.00 150.00
(d) Financial Assets
i) Other Financial Assets 6 73.45 54.18
Total Non Current Assets 5,321.17 4,227.15
2 Current Assets
(a) Inventories 7 2,964.18 2,221.96
(b) Financial Assets
(i) Trade receivables 8 4,539.48 4,114.85
(ii) Loans 9 8.18 5.41
(iii) Cash and cash equivalents 10 139.60 780.94
(vii) Other financial assets 6 70.17 0.06
Total Financial Asset 4,757.43 4,901.26
(c) Current Tax Assets (Net) 11 64.81 47.47
(d) Other Current Assets 12 1,660.57 1,560.48
Total Current Assets 9,446.99 8,731.17
Total Assets 14,768.16 12,958.32
II EQUITY AND LIABILITIES
A EQUITY
(a) Equity Share Capital 13 2,365.63 2,365.63
(b) Other Equity 5,718.27 4,979.83
Total Equity 8,083.90 7,345.46
B LIABILITIES
(1) Non Current Liabilities
(a) Financial Liabilities
(i) Borrowings 14 1,075.32 843.33
Total Financial Liabilities 1,075.32 843.33
(b) Government Grant 15 161.47 121.90
(c) Provisions 16 39.17 -
Total Non Current Liabilities 1,275.96 965.23

BAFNA PHARMA - ANNUAL REPORT 2023-24 79

Balance Sheet as at 31st March, 2024 - (Contd.) (` in Lakhs)

Note As at As at
Particulars No 31st March, 2024 31st March, 2023
(2) Current Liabilities
(a) Financial Liabilities
(i) Borrowings 17 1,363.61 1,449.06
(ii) Trade payables 18
a. total outstanding dues of Micro and Small
1,304.46 806.33
Enterprises
b. total outstanding dues of Other than Micro
2,237.77 2039.74
and Small Enterprises
(iii) Other financial liabilities 19 183.37 67.71
Total Financial Liabilities 5,089.21 4,362.84
(b) Other current liabilities 20 182.72 149.41
(c) Provisions 16 126.49 125.50
(d) Government Grant 15 9.88 9.88
Total Current Liabilities 5,408.30 4,647.63
Total Equity and Liabilities 14,768.16 12,958.32

Summary of Significant Accounting Policies 1-2

The accompanying notes form an integral part of the Financial Statements

In Terms of our Report of even date For and on Behalf of the Board
Bafna Pharmaceuticals Limited
For Brahmayya & Co.
Chartered Accountants Sd/- Sd/- Sd/-
S HEMALATHA VINAYAK DINESH DENDUKURI BAFNA MAHAVEER CHAND
Firm Regn No. 000511S
[Whole-Time Director] [Whole-Time Director] [Chief Executive Officer]
[DIN : 02714329]
Sd/- [DIN: 07601309]
Lokesh Vasudevan
Sd/- Sd/-
(Partner)
MELAGIRI SRIDHAR MOHANACHANDRAN A
M.No. 222320
[Chief Financial Officer] [Company Secretary]
M.No. 65827
Place : Coonoor Place : Chennai
Date : 29th May 2024 Date : 29th May 2024

80 BAFNA PHARMA - ANNUAL REPORT 2023-24

 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2024
(` in Lakhs)

For the Year For the Year

Note
Ended 31st Ended 31st
No
March, 2024 March, 2023
I Revenue from Operations 21 15,246.57 11,534.99
II Other Income 22 352.24 327.27
III Total Income (I + II) 15,598.81 11,862.26
IV EXPENSES
Cost of Material Consumed 23 7,901.24 5,957.04
Purchase of Stock in Trade 24 1,256.91 640.54
Manufacturing Expenses 25 2,017.75 1,352.89
Changes in Inventories of Work-in-Progress and Finished Goods 26 (485.18) (291.07)
Employee benefits expenses 27 1,902.74 1,586.59
Finance cost 28 229.03 203.76
Depreciation and Amortization expense 29 499.54 533.44
Other expenses 30 1,541.99 717.44
Total Expenses (IV) 14,864.02 10,700.63
V Profit / (Loss) before Exceptional Items and Tax (III - IV) 734.79 1,161.63
VI Exceptional Items - -
VII Profit / (Loss) before Tax (V - VI) 734.79 1,161.63
VIII Tax Expense
Relating to previous periods - 27.83
Total Tax Expense (VIII) - 27.83
XIII Profit / (Loss) for the Period (IX + XII) 734.79 1,133.80
XIV Other Comprehensive Income
A (i) Items that will not be reclassified to profit and loss 3.65 15.31
XV Total Comprehensive Income for the period (XIII + XIV) 738.44 1,149.11
VIII Earnings Per Equity Share
Basic (`) 31 3.11 4.79
Diluted (`) 3.11 4.79

Summary of Significant Accounting Policies 1-2

The accompanying notes form an integral part of the Financial Statements
In Terms of our Report of even date For and on Behalf of the Board
Bafna Pharmaceuticals Limited
For Brahmayya & Co.
Chartered Accountants Sd/- Sd/- Sd/-
S HEMALATHA VINAYAK DINESH DENDUKURI BAFNA MAHAVEER CHAND
Firm Regn No. 000511S
[Whole-Time Director] [Whole-Time Director] [Chief Executive Officer]
[DIN : 02714329]
Sd/- [DIN: 07601309]
Lokesh Vasudevan
Sd/- Sd/-
(Partner)
MELAGIRI SRIDHAR MOHANACHANDRAN A
M.No. 222320
[Chief Financial Officer] [Company Secretary]
M.No. 65827
Place : Coonoor Place : Chennai
Date : 29th May 2024 Date : 29th May 2024

BAFNA PHARMA - ANNUAL REPORT 2023-24 81

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST MARCH, 2024
(` in Lakhs)
For the Year For the Year
Particulars Ended 31st March, Ended 31st March,
2024 2023
A. CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES
Profit / (Loss) before Tax 734.79 1,161.63
Adjustments for:
Depreciation and Amortization 499.54 533.44
(Profit)/Loss on Sale of Property Plant and Equipment (6.57) (19.64)
Provision for Expected Credit Loss 52.51 36.86
Provision on Recoverability of Non Financial Assets (Net) - 40.41
Bad Debts and Irrecoverable Balances Written Off 7.47 30.44
Interest Income (12.53) (2.97)
Government Grant (10.44) (9.88)
Interest Expenses 229.03 179.75
Cash Generated Before Working Capital Changes 1,493.80 1,950.04
Movement In Working Capital
Increase / (Decrease) in Trade Payables 696.19 1,605.58
Increase / (Decrease) in Provisions 43.81 (77.84)
Increase / (Decrease) in Other Financial Liabilities 117.70 19.60
Increase / (Decrease) in Other Liabilities 33.30 25.19
(Increase) / Decrease in Trade Receivables (484.60) (2,704.19)
(Increase) / Decrease in Inventories (742.31) (193.91)
(Increase) / Decrease in Loans (2.77) 4.26
(Increase) / Decrease in Other Financial Assets (89.19) (52.68)
(Increase) / Decrease in Other Assets (100.08) (68.03)
Cash Generated From Operations 965.85 508.02
(Direct Taxes Paid)/Refund Received (Net) (17.37) (12.77)
Net Cash Flow From / (Used in) Operating Activities 948.48 495.25

B. CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES

Purchase of Property Plant and Equipment including Capital Work in
(1,557.82) (671.87)
Progress
Proceeds from Sale of Property Plant and Equipments 17.11 19.64
Receipt of Government Grants 50.00 50.00
Intangible Assets Under Development (27.00) (150.00)
Interest Income Received 12.35 2.91
Net Cash Flow From / (Used in) Investing Activities (1,505.36) (749.32)

C. CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES

Proceeds/ (Repayment) of Long Term Borrowings 146.54 1,186.45
Interest Paid (231.08) (168.74)
Net Cash Flow From / (Used in) Financing Activities (84.54) 1,017.71

82 BAFNA PHARMA - ANNUAL REPORT 2023-24

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST MARCH, 2024- (Contd.) (` in Lakhs)

For the Year For the Year

Particulars Ended 31st March, Ended 31st March,
2024 2023
Net Increase / (Decrease) in Cash and Cash Equivalents
(641.42) (763.64)
(A+B+C)
Cash and Cash Equivalents at the beginning of the year 781.02 17.30
Cash and Cash Equivalents at the end of the year 139.60 780.94

Components of Cash and Cash Equivalents

Cash and cheques on Hand 0.61 0.40
Balances with Banks
-On Current Accounts 5.89 12.55
-On EEFC Accounts 4.75 653.30
Cheques, Drafts on hand 128.35 114.69
Cash and cash Equivalent (as per Note 10) 139.60 780.94
Changes in Liabilities arising from Financing Activities including both changes arising from cash flow and non
cash flow :
As at 31st As at 31st
March, 2024 March, 2023
Long Term Borrowings 1,075.32 843.33
Short Term Borrowings 1,363.61 1,449.06
Interest accrued but not due on Borrowings 8.96 11.01
Total 2,447.89 2,303.40
D Total Movement 144.49
E Non Cash Changes
Interest Charged (229.03)
Changes in Financing Cash Flow (84.54)
The cash flow statement has been prepared under the indirect method as set out in Indian Accounting Standard
- 7 (Ind AS 7) Statement of Cash Flows

In Terms of our Report of even date For and on Behalf of the Board
Bafna Pharmaceuticals Limited
For Brahmayya & Co.
Chartered Accountants Sd/- Sd/- Sd/-
S HEMALATHA VINAYAK DINESH DENDUKURI BAFNA MAHAVEER CHAND
Firm Regn No. 000511S
[Whole-Time Director] [Whole-Time Director] [Chief Executive Officer]
[DIN : 02714329]
Sd/- [DIN: 07601309]
Lokesh Vasudevan
Sd/- Sd/-
(Partner)
MELAGIRI SRIDHAR MOHANACHANDRAN A
M.No. 222320
[Chief Financial Officer] [Company Secretary]
M.No. 65827
Place : Coonoor Place : Chennai
Date : 29th May 2024 Date : 29th May 2024

BAFNA PHARMA - ANNUAL REPORT 2023-24 83

 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST MARCH, 2024

A. Equity Share Capital

No of
Particulars Amount
Shares
Balance as at 1st April, 2022 236.56 2,365.63
Changes in Equity Share Capital During 2022-23 - -
Balance as at 31st March, 2023 236.56 2,365.63
Changes in Equity Share Capital During 2023-4 - -
Balance as at 31st March, 2024 236.56 2,365.63

B. Other Equity
Reserves and Surplus

Particulars Securities
Capital General Retained
Premium Total
Reserve Reserve earnings
Account
Balance as at 01st April 2022 2,698.14 7,537.65 192.35 (6,597.40) 3,830.74
Government Grants - - - - -
Changes in accounting policy/prior - - - - -
period errors
Current year profit - - - 1,133.77 1,133.77
Total Comprehensive Income after tax - - - 15.31 15.31
Balance as at 31st March 2023 2,698.14 7,537.65 192.35 (5,448.31) 4,979.82
Changes in accounting policy/prior - - - - -
period errors
Restated balance at the beginning of - - - - -
the reporting period
Current year profit - - - 734.79 734.79
Other Comprehensive Income after tax - - - 3.63 3.63
for the Period
Balance as at 31st March 2024 2,698.14 7,537.65 192.35 (4,709.90) 5,718.24

In Terms of our Report of even date For and on Behalf of the Board
Bafna Pharmaceuticals Limited
For Brahmayya & Co.
Chartered Accountants Sd/- Sd/- Sd/-
S HEMALATHA VINAYAK DINESH DENDUKURI BAFNA MAHAVEER CHAND
Firm Regn No. 000511S
[Whole-Time Director] [Whole-Time Director] [Chief Executive Officer]
[DIN : 02714329]
Sd/- [DIN: 07601309]
Lokesh Vasudevan
Sd/- Sd/-
(Partner)
MELAGIRI SRIDHAR MOHANACHANDRAN A
M.No. 222320
[Chief Financial Officer] [Company Secretary]
M.No. 65827
Place : Coonoor Place : Chennai
Date : 29th May 2024 Date : 29th May 2024

84 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended
31st March, 2024

1. Corporate Information
BAFNA PHARMACEUTICALS LIMITED (‘Bafna pharma’ or ‘the Company’) is a Public Limited Company domiciled
and incorporated in India, having its registered office at New No. 68 Old No. 299, Thambu Chetty Street, Chennai
– 60001. The Company’s shares are listed and traded on BSE Limited and National Stock Exchange of India Limited.
The Company is engaged in the business of Manufacturing of finished pharmaceutical formulations. These Financial
Statements were authorized for issue by the Company’s Board of Directors on 29th May 2024.

2.1. Basis of Preparation

These notes provide the list of the material accounting policies adopted in the preparation of these financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Compliance with Ind AS

The financial statements of the Company have been prepared in accordance with the Indian Accounting
Standards (“Ind AS”) as notified under section 133 of the Companies Act, 2013 ("the Act") read with prescribed
rules therein. The Company has uniformly applied the accounting policies during the periods presented.

b) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:
• Certain financial assets and liabilities (including derivative instruments) and contingent consideration
that are measured at fair value or amortized cost;

• Assets held for sale – measured at lower of carrying amount and fair value less cost to sell;

• Defined benefit plans – plan assets measured at fair value; and

• Share-based payments – measured at fair value of options at the grant date.

c) Current / Non – Current Classification

Any asset or liability is satisfied as current if it satisfies any of the following conditions:

• Asset / Liability is expected to be realised / settled in the Company’s normal operating cycle

• Asset is intended for sale or consumption

• Asset / Liability is held primarily for the purpose of trading

• Asset is a cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting date

• In case of a Liability, the Company does not have an unconditional right to defer settlement of the
liability for at least twelve months after the reporting date

For the purpose of this classification, the Company has ascertained its normal operating cycle as twelve
months, which is based on the nature of business and time between acquisition of assets and their
realisation in cash and cash equivalents.

Deferred Tax Assets and Liabilities are classified as non current.

BAFNA PHARMA - ANNUAL REPORT 2023-24 85

2.2. Use of Material Accounting Estimates and Judgements
Estimates, assumptions concerning the future and judgements are made in the preparation of the financial
statements. They affect the application of the Company’s accounting policies, reporting amounts of assets, liabilities,
income and expense and disclosures made. Although these estimates are based on management’s best knowledge
of current events and actions, actual result may differ from those estimates.

The critical accounting estimates and assumptions used and areas involving a high degree of judgements are
described below:

A. Use of estimation and assumption

In the process of applying the Company’s accounting policies, management had made the following
estimation and assumptions that have the significant effect on the amounts recognized in the financial
statements. The estimates and assumptions used in accompanying financial statements are based upon
management’s evaluation of the relevant facts and circumstances as on the date of the financial statements,
reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current
and future periods.

a) Property, Plant and Equipment & Intangible Assets

Key estimates related to long-lived assets (property, plant and equipment and intangible assets)
include useful lives, recoverability of carrying values and the existence of any retirement obligations.
As a result of future decisions, such estimates could be significantly modified. The useful lives as
mentioned in Note 2.3 (A) and Note 2.3 (B) is applied as per Schedule II of Companies Act, 2013 and
estimated based upon our historical experience, technical estimation and industry information. These
estimates include an assumption regarding periodic maintenance and an appropriate level of annual
capital expenditures to maintain the assets.

b) Employee Benefits - Measurement of Defined Benefit Obligation (DBO)

Management assesses post-employment and other employee benefit obligations using the projected
unit credit method based on actuarial assumptions which represent management’s best estimates
of the variables (such as standard rates of inflation, medical cost trends, mortality, discount rate
and anticipation of future salary increases) that will determine the ultimate cost of providing post-
employment and other employee benefits. Variation in these assumptions may significantly impact the
DBO amount and the annual defined benefit expenses.

c) Income Taxes
The Company recognizes tax liabilities based upon self-assessment as per the tax laws. When the
final tax outcome of these matters is different from the amounts that were initially recognized,
such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.

B. Critical judgements made in applying accounting policies

a) Revenue
The Company recognizes revenue from contracts with customers based on a five-step model as per Ind
AS 115 (Refer Note 2.3 (R)) which involves judgements such as identification of distinct performance
obligation involves judgement to determine the deliverables and the ability of the customer to benefit
independently from such deliverables. The management exercises judgement in determining whether

86 BAFNA PHARMA - ANNUAL REPORT 2023-24

 the performance obligation is satisfied at a point in time or over a period of time It considers indicators
such as how customer consumes benefits as services are rendered or who controls the asset as it is
being created or existence of enforceable right to payment for performance to date and alternate use
of such product or service, transfer of significant risks and rewards to the customer, acceptance of
delivery by the customer, etc.

b) Recognition of Deferred Tax Assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability
of the future taxable income against which the deferred tax assets can be utilized. In addition, significant
judgement is required in assessing the impact of any legal or economic limits or uncertainties in
various tax jurisdictions.

c) Evaluation of Indicators for Impairment of Assets

The evaluation of applicability of indicators of impairment of assets requires assessment of several
external and internal factors which could result in deterioration of recoverable amount of the assets.

d) Expected Credit Losses

Expected credit losses of the Company are based on an evaluation of the collectability of receivables. A
considerable amount of judgment is required in assessing the ultimate realization of these receivables,
including their current credit worthiness, past collection history of each customer and ongoing dealings
with them. If the financial conditions of the counterparties with which the Company contracted were
to deteriorate, resulting in an impairment of their ability to make payments, additional expected credit
loss may be required.

e) Useful Life of Depreciable/Amortizable Assets

Management reviews its estimate of the useful lives of depreciable/amortizable assets at each reporting
date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical
and economic obsolescence that may change the utility of certain software, customer relationships, IT
equipment and other plant and equipment.

f) Fair Value Measurements

Management applies valuation techniques to determine the fair value of financial instruments (where
active market quotes are not available) and non-financial assets. This involves developing estimates
and assumptions consistent with how market participants would price the instrument. Management
uses the best information available. Estimated fair values may vary from the actual prices that would
be achieved in an arm’s length transaction at the reporting date.

g) Provisions
At each reporting date basis the management judgement, changes in facts and legal aspects, the
Company assess the requirement of the provisions. However, the actual future outcome may be
different from this judgement.

h) Leases
The Company determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any
periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The
Company has several lease contracts that include extension and termination options. The Company
applies judgement in evaluating whether it is reasonably certain or not to exercise the option to renew

BAFNA PHARMA - ANNUAL REPORT 2023-24 87

 or terminate the lease. That considers all relevant factors that create an economic incentive for it to
exercise either the renewal or termination. After the commencement date, the Company reassesses the
lease term if there is a significant event or change in circumstances that is within its control and affects
its ability to exercise or not to exercise the option to renew or to terminate.

C. Recent pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards or
amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from
time to time. For the year ended 31st March 2024, MCA has not notified any new standards or amendments
to the existing standards applicable to the Company.

2.3 Material Accounting Policies

A Property, Plant and Equipment and Depreciation

Initial Recognition
All items of property, plant and equipment are initially measured at cost. The cost of an item of plant and
equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated
with the item will flow to the Company and the cost of the item can be measured reliably.

Cost includes its purchase price (after deducting trade discounts and rebates), import duties & non-refundable
purchase taxes, any costs directly attributable to bringing the asset to the location & condition necessary for
it to be capable of operating in the manner intended by management, borrowing costs on qualifying assets
and asset retirement costs. When parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of property, plant and equipment.

The activities necessary to prepare an asset for its intended use or sale extend to more than just physical
construction of the asset. It may also include technical (DPR, environmental, planning, Land acquisition and
geological study) and administrative work such as obtaining approvals before the commencement of physical
construction.

The cost of replacing a part of an item of property, plant and equipment is capitalized if it is probable that
the future economic benefits of the part will flow to the Company and that its cost can be measured reliably.
The carrying amount of the replaced part is derecognized.

Costs of day to day repairs and maintenance costs are recognized into the statement of profit and loss
account as incurred.

Subsequent measurement
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation
and any accumulated impairment losses.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.

The residual values, estimated useful lives and depreciation method are reviewed at each financial year-end,
and adjusted prospectively, if appropriate.

88 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Depreciation
Depreciation is provided on Straight Line Method, as per the provisions of Schedule II of the Companies Act,
2013 or based on useful life estimated on the technical assessment. Asset class wise useful lives are as under:

Type of Assets Useful Life

Building 30 Years
Plant and Machinery 15 Years
Furniture and Fixtures 10 Years
Office Equipments 5 - 10 Years
Vehicles 8 Years
Laboratory Equipments 10 Years
Computers 3 Years

In respect of additions / deletions to the fixed assets / depreciation is charged from the date the asset is ready
to use / up to the date of deletion.

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted for on a prospective basis.

De-recognition
An item of plant and equipment is derecognized upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on de recognition of the asset is recognized in the
Statement of Profit and Loss in the year the asset is derecognized.

Capital Work in Progress and Capital Advances

Cost of asset not ready for intended use and assets under installation or under construction as at the Balance
Sheet date are shown as Capital Work in Progress. Advances given towards acquisition of property, plant and
equipment outstanding at each Balance Sheet date are disclosed as Other Non-Current Asset in accordance
with Schedule III to the Companies Act, 2013.

B Intangible Assets & Amortization

Initial Recognition
Intangible assets acquired separately are initially measured at cost. Intangible assets are recognized if, it is
probable that the future economic benefits that are attributable to the asset will flow to the Company and
the cost of the asset can be measured reliably.

Software for internal use, which is primarily acquired from third-party vendors including consultancy charges
for implementing the software, is capitalized. Subsequent costs associated with maintaining such software
are recognized as expense as incurred. The capitalized costs are amortized over a period of the estimated
useful life of the software.

Cost of separately acquired intangible asset includes its purchase price (after deducting trade discounts and
rebates), import duties & non-refundable purchase taxes, any costs directly attributable to preparing the
asset for its intended use.

Intangible assets acquired in a business combination are recognized at fair value at the acquisition date.
Subsequently, intangible assets are carried at cost less any accumulated amortization and accumulated
impairment losses, if any.

BAFNA PHARMA - ANNUAL REPORT 2023-24 89

 Subsequent measurement and amortization
Intangible assets are stated at cost of acquisition less accumulated amortization and accumulated impairment
losses, if any. Subsequent expenditure related to an item of intangible assets are added to its book value
only if they increase the future benefits from the existing asset beyond its previously assessed standard of
performance.

The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.

The residual values, estimated useful lives and amortization method are reviewed at each financial year-end,
and adjusted prospectively, if appropriate.

The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are
amortized on a straight-line basis over the period of their estimated useful lives.

The amortization expense is recognized in the statement of profit and loss unless such expenditure forms
part of carrying value of another asset.

Indefinite-life intangible assets comprises of those assets for which there is no foreseeable limit to the period
over which they are expected to generate net cash inflows. These are considered to have an indefinite life,
given the strength and durability of the Company and the level of marketing support.

For indefinite life intangible assets, the assessment of indefinite life is reviewed annually to determine whether
it continues, if not, it is impaired or changed prospectively based on revised estimates.

De-recognition
An item of Intangible Assets is derecognized upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on de recognition of the asset is recognized in the
the Statement of Profit and Loss in the year the asset is derecognized.

C Inventories
Inventories consisting of raw materials, consumables, stores and spares, work in progress and finished goods
are measured at the lower of cost and net realizable value. The cost of all categories of inventories is based
on the weighted average method.

Cost of raw materials, consumables, stores and spares includes cost of purchases and other costs incurred in
bringing the inventories to its present location and condition.

Cost of work-in-progress and finished goods comprises direct material, direct labour and an appropriate
proportion of variable and fixed overhead expenditure. Net realizable value is the estimated selling price in
the ordinary course of business, less the estimated costs of completion and costs necessary to make the sale.

The factors that the Company considers in determining the allowance for slow moving, obsolete and other
non-saleable inventory include estimated shelf life, planned product discontinuances, price changes, ageing
of inventory and introduction of competitive new products, to the extent each of these factors impact
the Company’s business and markets. The Company considers all these factors and adjusts the inventory
provision to reflect its actual experience on a periodic basis.

D Impairment of Non – Financial Assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount.
Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and
is written down to its recoverable amount.

90 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or group of assets, in which case, the recoverable amount is determined for the cash-generating
unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the
statement of Profit and Loss, except for properties previously revalued with the revaluation surplus taken
to Other Comprehensive Income (“OCI”). For such properties, the impairment is recognized in OCI up to the
amount of any previous revaluation surplus.

After impairment, depreciation or amortization is provided on the revised carrying amount of the asset over
its remaining useful life.

The impairment assessment for all assets is made at each reporting date to determine whether there is an
indication that previously recognized impairment losses no longer exist or have decreased. If such indication
exists, the Company estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment
loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such
reversal is recognized in the statement of profit or loss.

E Financial Assets
Financial assets comprise of investments in equity and debt securities, mutual funds, loans, trade receivables,
cash and cash equivalents and other financial assets.

Initial recognition
All financial assets except investments in subsidiaries, associates and jointly controlled entities are recognized
initially at fair value. However, trade receivables that do not contain a significant financing component are
measured at transaction price. Purchases or sales of financial asset that require delivery of assets within a time
frame established by regulation or convention in the market place (regular way trades) are recognized on the
trade date, i.e., the date that the Company commits to purchase or sell the assets.

Subsequent Measurement
a) Financial assets measured at amortized cost:
Financial assets held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding
are measured at amortized cost using effective interest rate (EIR) method. The EIR amortization is
recognized as finance income in the Statement of Profit and Loss.

The Company while applying above criteria has classified the following at amortized cost:
a. Loans
b. Trade Receivable
c. Cash and Cash Equivalents
d. Other Financial Assets

BAFNA PHARMA - ANNUAL REPORT 2023-24 91

 b) Financial assets at fair value through other comprehensive income (FVTOCI):
Financial assets held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows, selling the financial assets and the contractual terms of the financial
assets give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding are measured at FVTOCI. Fair Value movements in financial
assets at FVTOCI are recognized in other comprehensive income. Equity instruments held for trading
are classified at fair value through profit or loss (FVTPL). For other equity instruments the Company
classifies the same either at FVTOCI or FVTPL on instrument to instrument basis. The classification is
made on initial recognition and is irrevocable. Fair value changes on equity investments at FVTOCI,
excluding dividends are recognized in other comprehensive income (OCI).

c) Financial assets at fair value through profit or loss (FVTPL)

Financial asset are measured at fair value through profit or loss if it does not meet the criteria for
classification as measured at amortized cost or at fair value through other comprehensive income. All
fair value changes are recognized in the statement of profit and loss.

d) Investment in subsidiaries, joint ventures & associates are carried at cost in the Financial Statements.
However, a provision for diminution in value is made to recognize a decline other than temporary in
value of the investments.

Impairment
Financial assets are tested for impairment based on the expected credit losses in accordance with Ind AS 109
on the following financial assets:

a) Trade Receivables
An impairment analysis is performed at each reporting date. The expected credit losses over life
time of the asset are estimated by adopting the simplified approach using a provision matrix on
its portfolio of trade receivables. which is based on historical loss rates reflecting current condition
and forecasts of future economic conditions. In this approach assets are grouped on the basis of
similar credit characteristics such as customer segment, past due status and other factors which are
relevant to estimate the expected cash loss from these assets. As a practical expedient, the Company
uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of the
trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical
observed default rates are updated and changes in the forward-looking estimates are analysed.

b) Other Financial Assets

Other Financial Assets are tested for impairment based on significant change in credit risk since initial
recognition and impairment is measured based on probability of default over the life time when there
is significant increase in credit risk.

De-recognition
A financial asset is de recognized only when:

• The Company has transferred the rights to receive cash flows from the financial asset, or

• The contractual right to receive cash flows from financial asset is expired, or

92 BAFNA PHARMA - ANNUAL REPORT 2023-24

 • Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset and transferred substantially all risks and rewards of
ownership of the financial asset, in such cases the financial asset is derecognized. Where the entity has
neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the
financial asset, the financial asset is also derecognized if the Company has not retained control of the
financial asset.

F Cash and Cash Equivalents

Cash and cash equivalents comprises cash at bank (including deposits with banks with original maturity of
three months or less) and cash in hand and short-term investments with an original maturity of three months
or less. Deposits with banks are subsequently measured at amortized cost and short term investments are
measured at fair value through statement of profit & loss account.

G Non-current Assets held for sale

Non-current assets or disposal groups comprising of assets and liabilities are classified as ‘held for sale’ when
all the following criteria are met:

(i) decision has been made to sell,

(ii) the assets are available for immediate sale in its present condition,

(iii) the assets are being actively marketed and

(iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.

Subsequently, such non-current assets and disposal groups classified as ‘held for sale’ are measured at the
lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are no longer
depreciated or amortized.

H Share Capital
Equity Shares are classified as equity.

I Financial Liabilities

Initial Recognition
Financial liabilities are recognized when, and only when, the Company becomes a party to the contractual
provisions of the financial instrument. The Company determines the classification of its financial liabilities
at initial recognition. All financial liabilities are recognized initially at fair value plus any directly attributable
transaction costs, such as loan processing fees and issue expenses.

Subsequent Measurement - at amortized cost

After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective
interest rate (EIR) method. Gains and losses are recognized in the Statement of Profit and Loss when the
liabilities are de recognized, and through the amortization process.

BAFNA PHARMA - ANNUAL REPORT 2023-24 93

 De-recognition
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or
expired. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or modification
is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference
in the respective carrying amounts is recognized in the Statement of Profit and Loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a
net basis, to realize the assets and settle the liabilities simultaneously.

J Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost
of the respective asset. Capitalisation of borrowing cost is suspended in the period during which the active
development is delayed due to other than temporary interruption. All other borrowing costs are expensed in
the period they occur. Borrowing costs consist of interest, exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the interest cost and other costs that an
entity incurs in connection with the borrowing of funds.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalization.

K Employee benefits
Employee benefits are charged to the Statement of Profit and Loss for the year.

Retirement benefits in the form of Provident Fund are defined contribution scheme and such contributions
are recognized, when the contributions to the respective funds are due. There are no other obligation other
than the contribution payable to the respective funds.

Gratuity liability is defined benefit obligation and is provided for on the basis of actuarial valuation on
projected unit credit method made at the end of each financial year. Re measurement in case of defined
benefit plans gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognized in the period in which they occur, directly in other comprehensive income and they are included
in the statement of changes in equity.

Compensated absences are provided for on the basis of actuarial valuation on projected unit credit method
made at the end of each financial year. Re-measurements as a result of experience adjustments and changes
in actuarial assumptions are recognized in statement of profit or loss.

The amount of Non-current and Current portions of employee benefits is classified as per the actuarial
valuation at the end of each financial year.

L Income Taxes
Income tax expense is comprised of current and deferred taxes. Current and deferred tax is recognized in net
income except to the extent that it relates to a business combination, or items recognized directly in equity
or in other comprehensive income. Current income tax relating to items recognized outside profit and loss is
recognized outside profit and loss (either in other comprehensive income or in equity). Current income taxes
for the current period, including any adjustments to tax payable in respect of previous years, are recognized

94 BAFNA PHARMA - ANNUAL REPORT 2023-24

 and measured at the amount expected to be recovered from or payable to the taxation authorities based on
the tax rates that are enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and liabilities are recognized for temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax base using the tax rates
that are expected to apply in the period in which the deferred tax asset or liability is expected to settle, based
on the laws that have been enacted or substantively enacted by the end of reporting period.

Deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from
the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable income nor the accounting income. Deferred tax assets are generally recognized
for all deductible temporary differences to the extent that it is probable that taxable income will be available
against which they can be utilized. Deferred tax assets are reviewed at each reporting date and reduced
accordingly to the extent that it is no longer probable that they can be utilized.

Deferred tax assets and liabilities are offset when there is legally enforceable right of offset current tax
assets and liabilities when the deferred tax balances relate to the same taxation authority. Current tax asset
and liabilities are offset where the entity has legally enforceable right to offset and intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously. Deferred Tax relating to items
recognized outside profit or loss is recognized outside profit and loss (either in other comprehensive income
or in equity).

M Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a period of time in exchange for consideration.

Company as a lessee
The Company assesses whether a contract is or contains a lease, at inception of a contract. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has substantially all of the economic benefits from use of the asset through the period
of the lease, and

(iii) the Company has the right to direct the use of the asset
At date of commencement of leases, the Company recognizes a right of use asset (ROU) and a
corresponding lease liability for all the lease arrangements, except for those with a term of twelve
month or less (short term leases) and leases of low value assets. For these leases, the Company
recognizes lease payments as an operating expense on straight line basis over the lease term.

Initial Measurement
ROU assets are initially measured at cost that comprises of the initial amount of lease liability adjusted for
any lease payments made at or prior to the date of commencement, initial direct costs and lease incentives
(if any).

Lease Liability is initially measured at the present value of future lease payments that are not paid at that
date. The lease payments shall be discounted using the interest rate implicit in the lease or, if not readily
determinable, incremental borrowing rate.

BAFNA PHARMA - ANNUAL REPORT 2023-24 95

 Subsequent Measurement
ROU assets are subsequently measured at cost less accumulated depreciation and impairment loss, if any.
ROU is depreciated from the date of commencement on a straight line basis over the shorter of lease term
or useful life of the underlying asset.

Lease Liability is subsequently measured by increasing the carrying amount to reflect interest and reducing
the carrying amount to reflect the lease payments made.

The carrying amount of lease liability is remeasured to reflect any reassessment or lease modification such
as change in lease term.

ROU asset and lease liability are separately presented in the balance sheet and lease payments have been
classified as financing cash flows.

Company as a lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the
Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are
classified as operating leases. Lease income from operating leases is recognized in statement of profit and
loss on a straight line basis over the lease term unless the receipts are structured to increase in line with
expected general inflation to compensate for the expected inflationary cost increases.

N Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are measured at the present value of management’s best estimate
of the expenditure required to settle the present obligation at the end of the reporting period.

Provisions are reviewed and adjusted, when required, to reflect the current best estimate at the end of each
reporting period.

The Company recognizes decommissioning provisions in the period in which a legal or constructive obligation
is incurred. A corresponding decommissioning cost is added to the carrying amount of the associated
property, plant and equipment, and it is depreciated over the estimated useful life of the asset.

O Contingent Liabilities
Contingent liability is disclosed in case of:
• A present obligation arising from past events, when it is not probable that an outflow of resources will
be required to settle the obligation;

• A present obligation arising from past events, when no reliable estimate is possible;

• A possible obligation arising from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the Company where the
probability of outflow of resources is not remote.

P Contingent Assets
Contingent assets are not recognized but disclosed in the financial statements when an inflow of economic
benefits is probable. Contingent assets are assessed continually and, if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income are recognised in the period in which the change
occurs.

96 BAFNA PHARMA - ANNUAL REPORT 2023-24

 Q Fair Value Measurements
Company follows the hierarchy mentioned underneath for determining fair values of its financial instruments:

• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (prices) or indirectly (derived from prices); and

• Level 3 – Inputs for the asset or liability that are not based on observable market data.

The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting dates. A market is regarded as active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent
actual and regularly occurring market transactions on an arm’s length basis. The fair value for these
instruments is determined using Level 1 inputs.

The fair value of financial instruments that are not traded in an active market (for example, over the counter
derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of
observable market data where it is available and rely as little as possible on entity specific estimates. If all
significant inputs required to fair value an instrument are observable, the instrument is fair valued using level
2 inputs.

If one or more of the significant inputs is not based on observable market data, the instrument is fair valued
using Level 3 inputs. Specific valuation techniques used to value financial instruments include:

• Quoted market prices or dealer quotes for similar instruments

• The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows
based on observable yield curves

• The fair value of forward foreign exchange contracts is determined using forward exchange rates at the
reporting dates, with the resulting value discounted back to present value

• Other techniques, such as discounted cash flow analysis, are used to determine fair value for the
remaining financial instruments.

R Revenue Recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred
to the customer at an amount that reflects the consideration to which the Company expects to be entitled in
exchange for those goods or services.

The Company recognizes revenue from contracts with customers based on a five-step model, such as to,
identifying the contracts with a customer, identifying the performance obligations in the contract, determine
the transaction price, allocate the transaction price to the performance obligations in the contract and
recognize revenue when (or as) the entity satisfies a performance obligation at a point in time or over time.

The Company satisfies a performance obligation and recognizes revenue over time, if one of the following
criteria is met:

• The customer simultaneously receives and consumes the benefits provided by the Company
performance as the Company performs; or

BAFNA PHARMA - ANNUAL REPORT 2023-24 97

 • The Company’s performance creates or enhances an asset that the customer controls as the asset is
created or enhanced; or

• The Company’s performance does not create an asset with an alternative use to the Company and the
entity has an enforceable right to payment for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue is recognized at the
point in time at which the performance obligation is satisfied.

S Other Income

Interest Income
For all debt instruments measured either at amortized cost or at fair value through other comprehensive
income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter
period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a
financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows
by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call
and similar options) but does not consider the expected credit losses. Interest income is included in finance
income in the statement of profit and loss.

Interest income on fixed deposits is recognized on a time proportion basis taking into account the amount
outstanding and the applicable interest rate.

Dividend income
Dividend income is recognized at the time when right to receive the payment is established, which is generally
when the shareholders approve the dividend.

T Foreign currency transactions

Functional and presentation Currency

The Financial statements are presented in Indian Rupee (₹) which is also the functional and presentation
currency of the Company.

Transactions and Balances

Transactions in foreign currencies are translated to the functional currency at exchange rates in effect on
transaction date. At each reporting date, monetary assets and liabilities denominated in foreign currencies
are translated at the exchange rate in effect at the date of financial statement.

The translation for other non-monetary assets and liabilities are not updated from historical exchange rates
unless they are carried at fair value.

U Government Grants
Government grants are recognized where there is reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as
income on a systematic basis over the periods that the related costs, for which it is intended to compensate,
are expensed. When the grant relates to an asset, it is recognized as income in equal amounts over the
expected useful life of the related asset.

98 BAFNA PHARMA - ANNUAL REPORT 2023-24

 V Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to owners of the Company by
the weighted average number of equity shares outstanding during the financial year, adjusted for bonus
elements in equity shares issued during the year and excluding treasury shares.

Diluted earnings per share adjust the figures used in the determination of basic earnings per share to
take into account, the after income tax effect of interest and other financing costs associated with dilutive
potential equity shares and the weighted average number of additional equity shares that would have been
outstanding assuming the conversion of all dilutive potential equity shares.

W Segment Reporting
Operating segments are identified and reported in a manner consistent with the internal financial reporting
provided to the chief operating decision makers, responsible for allocating resources and assessing
performance of the operating segments.

X Events after reporting date:

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end
of the reporting period, the impact of such events is adjusted within the Financial Statements. Non Adjusting
events after the Balance Sheet date which are material size or nature are disclosed separately in the Financial
Statements.

BAFNA PHARMA - ANNUAL REPORT 2023-24 99

 Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024
(Amounts are in ₹ Lakhs unless specified)

100
3. PROPERTY PLANT AND EQUIPMENT

Freehold Plant and Furniture Laboratory Electrical Office TOTAL

Buildings Vehicles Computers
Land Equipment and Fixtures Equipments Installations Equipment ASSETS

Gross Block

As at 1st April, 2022 19.32 2,457.08 4,525.28 185.15 972.37 339.12 43.74 42.53 209.25 8,793.84

Additions - 50.68 489.87 - 101.67 - 8.97 7.64 13.02 671.85

Disposals - - - - - - - -

st
As at 31 March, 2023 19.32 2,507.76 5,015.15 185.15 1,074.04 339.12 52.71 50.17 222.29 9,465.69

Additions - 7.38 387.83 15.67 67.56 6.09 - 13.25 10.47 508.25

Disposals - - 15.47 - 1.04 0.47 8.28 - - 25.26

As at 31st March, 2024 19.32 2,515.14 5,387.51 200.82 1,140.56 344.74 44.43 63.42 232.76 9,948.68

Depreciation

As at 1st April, 2022 - 959.62 2,392.34 182.85 797.06 322.23 19.26 33.83 202.09 4,909.28

Charged For the Period - 153.78 344.20 0.23 24.48 - 3.45 2.25 5.04 533.43

On Disposals - - - - - - - - - -

st
As at 31 March, 2023 - 1,113.40 2,736.54 183.08 821.54 322.23 22.71 36.08 207.13 5,442.71

Charged For the Period - 82.96 362.87 1.10 36.55 0.18 3.20 3.67 9.02 499.55

On Disposals - - 12.75 - 0.99 0.45 0.53 - - 14.72

As at 31st March, 2024 - 1,196.36 3,086.66 184.18 857.10 321.96 25.38 39.75 216.15 5,927.54

Net Block

As at 31st March, 2023 19.32 1,394.36 2,278.61 2.07 252.50 16.89 30.00 14.09 15.14 4,022.98

BAFNA PHARMA - ANNUAL REPORT 2023-24

As at 31st March, 2024 19.32 1,318.78 2,300.85 16.64 283.46 22.78 19.05 23.67 16.59 4,021.14
Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

As at As at
4 Capital Work in Progress
31st March, 2024 31st March, 2023
Capital Work in Progress* 1,049.58 -
1,049.58 -

Aging of Capital Work in Progress as at 31st March 2024

Less than 1 Year 1-2 Years 2-3 Year More than 3 Years Total
Projects in progress 1,049.58 - - - 1,049.58
1,049.58 - - - 1,049.58

Aging of Capital Work in Progress as at 31st March 2023

Less than 1 Year 1-2 Years 2-3 Year More than 3 Years Total
Projects in progress - - - - -
- - - - -

*Construction of Advanced Quality Control Laboratory.

As at As at
5 Intangible assets under development
31st March, 2024 31st March, 2023
Intangible assets under development 177.00 150.00
177.00 150.00
Aging of Intangible assets under development as at 31st March 2024
Less than 1 Year 1-2 Years 2-3 Year More than 3 Years Total
Intangible assets
27.00 150.00 - - 177.00
under development
27.00 150.00 - - 177.00

Aging of Intangible assets under development as at 31st March 2023

Less than 1 Year 1-2 Years 2-3 Year More than 3 Years Total
Intangible assets
under development 150.00 - - - 150.00
150.00 150.00

The Company has incurred certain identified expenditures towards procourment of certain market authorisations,
which would be used to expand its product base and enable significant economic benefits. This expenditure
would be capitalised, when it is probable that the future economic benefits will flow to the Company.

BAFNA PHARMA - ANNUAL REPORT 2023-24 101

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

6 Other Financial Assets

Non Current Current

As at As at As at As at
31st March, 31st March, 31st March, 31st March,
2024 2023 2024 2023
Security Deposits with Government Departments 66.70 46.67 - -

Security Deposits with Related Parties 6.75 6.75 - -

Security Deposits with Landlords & Others - 0.76 - -

Accured Interest - - 0.24 0.06

Bank Balances - - 69.93 -

73.45 54.18 70.17 0.06

As at As at
7 Inventories
31st March, 2024 31st March, 2023
(At lower of cost and net realisable value unless otherwise stated)
Raw Materials 1,466.99 1,291.38
Consumables, Stores and Spares 277.78 196.35
Work-in-Progress 912.92 514.78
Finished Goods 306.49 219.45
Less: Provision for Inventories - -
Total 2,964.18 2,221.96

As at As at
8 Trade Receivables
31st March, 2024 31st March, 2023
Unsecured
Considered Good 4,628.85 4,151.71
4,628.85 4,151.71
Less: Provision for Expected Credit Losses 89.37 36.86
4,539.48 4,114.85

102 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

Ageing for Trade Receivables as at 31st March 2024 is as follows:-

Outstanding for following periods from Due date of Payment
More
Less than 6 6 months - 1-2
2-3 years than 3 Total
months 1 year years
years
(i) Undisputed Trade receivables – 4,276.57 179.38 88.10 71.50 13.30 4,628.85
considered good
(ii) Undisputed Trade Receivables - - - - - -
– which have significant
increase in credit risk
(iii) Undisputed Trade Receivables - - - - - -
– credit impaired
(iv) Disputed Trade Receivables– - - - - - -
considered good
(v) Disputed Trade Receivables – - - - - - -
which have significant increase
in credit risk
(vi) Disputed Trade Receivables – - - - - - -
credit impaired
4,276.57 179.38 88.10 71.50 13.30 4,628.85
Less: Provision for Expected Credit Losses 89.37
4,539.48

Ageing for Trade Receivables as at 31st March 2023 is as follows:-

Outstanding for following periods from Due date of Payment

Less than 6 6 months - 1-2 More than
2-3 years Total
months 1 year years 3 years
(i) Undisputed Trade receivables – 3,680.00 453.00 5.41 - 13.30 4,151.71
considered good
(ii) Undisputed Trade Receivables - - - - - -
– which have significant
increase in credit risk
(iii) Undisputed Trade Receivables - - - - - -
– credit impaired
(iv) Disputed Trade Receivables– - - - - - -
considered good
(v) Disputed Trade Receivables – - - - - - -
which have significant increase
in credit risk
(vi) Disputed Trade Receivables – - - - - - -
credit impaired
3,680.00 453.00 5.41 - 13.30 4,151.71

Less: Provision for Expected Credit Losses 36.86

4,114.85

BAFNA PHARMA - ANNUAL REPORT 2023-24 103

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

As at As at
9 Loans
31st March, 2024 31st March, 2023
Unsecured, Considered Good 8.18 5.41

Loans and Advances to Employees

Total Loans 8.18 5.41

As at As at
10 Cash and Cash Equivalents
31st March, 2024 31st March, 2023
Cash on Hand 0.61 0.40

Balances with Banks

-Current Accounts 5.89 12.55

-EEFC Accounts 4.75 653.30

-Deposit Accounts Less than 3 Months 128.35 114.69

139.60 780.94

As at As at
11 Current Tax Assets (Net)
31st March, 2024 31st March, 2023
Advance Tax (Net of Provision for Tax) 64.81 47.47

64.81 47.47

As at As at
12 Other Current Assets
31st March, 2024 31st March, 2023
Advances other than Capital Advances

Advances for services / goods 75.83 96.30

Prepaid Expense 46.12 37.29

Taxes Paid Under Protest 10.28

GST Receivables 1,528.34 1,467.30

Less: Provision for GST Receivables - (40.41)

1,660.57 1,560.48

104 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

13 Equity Share Capital As at As at

31st March, 2024 31st March, 2023
Authorised

400 Lakhs (31st March, 2023: 400 Lakhs) Equity Shares of ₹ 10 each 4,000.00 4,000.00

4,000.00 4,000.00

Issued, Subscribed and Paid Up

Equity Shares

236.56 Lakhs (31st March, 2023: 236.56 Lakhs) Equity Shares of 2,365.63 2,365.63
₹10 each, Fully Paid Up

Total Equity Share Capital 2,365.63 2,365.63

13.1 Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

As at 31st As at 31st As at 31st As at 31st

March, 2024 March, 2024 March, 2023 March, 2023
No. Lakhs ₹ No. Lakhs ₹
Equity Shares of ₹ 10 Each, Fully paid up

At the Beginning 236.56 2,365.63 236.56 2,365.63

Issued during the period - - - -

At the end 236.56 2,365.63 236.56 2,365.63

13.2 Terms / Rights attached to Equity Shares (eg. Dividend rights, Voting Rights)

The Company has only one class of equity shares having a par value of ₹10 Per share. Each Holder of equity
shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares
will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in the
proportion to the number of equity shares held by the shareholders.

13.3 Shares held by Holding Company

As at As at As at As at
31st March, 31st March, 31st March, 31st March,
2024 2024 2023 2023

Equity Shares of ₹ 10 each fully No. Lakhs ₹ No. Lakhs ₹

paid up Held By

SRJR Life Sciences LLP, Holding Company 207.85 2,078.53 211.88 2,118.82

BAFNA PHARMA - ANNUAL REPORT 2023-24 105

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

13.4 Details of Shareholder holding more than 5% shares of the Company:

As at 31st As at 31st As at 31st As at 31st

March, 2024 March, 2024 March, 2023 March, 2023
Equity Shares of ₹ 10 each held By No. Lakhs % Holding No. Lakhs % Holding
SRJR Life Sciences LLP, Holding Company 207.85 87.86% 211.88 89.57%

The above information is as per register of share holders / members.

13.5 Disclosure of Shareholding of Promoters

Shares held by promoters at the end of the year

No. of shares % of total % Change
Equity Shares of ₹ 10 Each, Fully paid up (In Lakhs) shares

P Paras Bafna 0.50 0.21% -

Naveenbafna M 0.42 0.18% -
Bafna Mahaveer Chand 0.06 0.03% 0.01%
Sasikala Bafna. 0.02 0.01% -
Paras Bafna* - 0.00% -
SRJR Lifesciences LLP 207.85 87.86% -1.71%
Amri Bai Bafna 0.02 0.01% -
Total No. of Shares. 208.87 88.31% -1.70%

* less than 100 Shares

14 Borrowings
Non Current Current
As at 31 st
As at 31 st
As at 31 st
As at 31st
March, 2024 March, 2023 March, 2024 March, 2023

Rupee Loans and Advances

Secured
From Banks 925.25 692.66 362.49 258.12
925.25 692.66 362.49 258.12

From Related Parties

Un-secured
From KMPs 150.07 150.67 - -

150.07 150.67 - -
1,075.32 843.33 362.49 258.12
Amount disclosed under the head
“Short Term Borrowings” (Note 17) (362.49) (258.12)
Total 1,075.32 843.33 - -

106 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

Terms of the Borrowings

The Company has availed the Working Capital Loan, Cash Credit Facility and Term Loan from ICICI Bank Limited.
The Company has availed Car Loan from Kotak Mahindra Bank. Working Capital Loans and are repayable in 48
and 60 equated monthly instalments. The loan carries interest rate of Repo Rate+Spread. The loans from ICICI
Bank are secured by Current Assets, Movable Fixed Assets and Immovable Fixed Assets of the Company. These
loans are also guaranteed by the CVR Enterprise LLP and SRJR Lifesciences LLP (promoters of the Company). Car
Loan is secured by hypothecation of the respective vehicles.

Loan received from related party is repayable after completion of one year from the end of the financial year at
the option of the related party .

There is no default as on the balance sheet date in the repayment of borrowings and interest thereon.

The Company is generally regular in registering and filling of satisfaction of charges with ROC within the statutory
period. However during the year ended 31st March, 2024, the Company has belated filed charge form for
creation/ modification of charge against the loan obtained from ICICI Bank as on 31st March, 2024 .

The quarterly returns or statements of current assets filed by the Company with the banks or financial institutions
are not in agreement with the books of accounts tabulated as follows:

Amount as
Particulars Amount as
Name of reported in
Quarter of Security per books of Variance Remarks
the Bank Quarterly
Provided accounts
return
Inventory 2,568.68 2,002.72 565.96
June-23 Books Debts 4,591.09 4,340.73 250.36 The relevant
Sundry Creditors 2,855.20 2,714.10 141.10 statements
have been
Inventory 2,936.27 2,265.01 671.26 provided
Sept-23 Books Debts 3,982.86 4,051.20 (68.34) pending
reconciliation
Sundry Creditors 3,018.53 2,900.69 117.84 and book
ICICI Bank
Inventory 3,150.81 2,603.42 547.39 closure for the
corresponding
Dec-23 Books Debts 3,382.34 3,423.83 (41.49) periods due to
Sundry Creditors 2,753.99 2,751.42 2.57 the valuation
finished goods
Inventory 2,964.18 2,264.78 699.40 and work in
Mar-24 Books Debts 4,539.48 4,632.34 (92.86) progress.

Sundry Creditors 3,542.23 2,989.77 552.46

BAFNA PHARMA - ANNUAL REPORT 2023-24 107

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

15 Government Grants Non Current Current

As at As at As at As at
31st March, 31st March, 31st March, 31st March,
2024 2023 2024 2023
Government Grants 161.47 121.90 9.88 9.88
Total 161.47 121.90 9.88 9.88

As at As at As at As at
16 Provisions 31st March, 2024 31st March, 2023 31st March, 2024 31st March, 2023
Provision for Leave Encashment 39.17 - 12.61 -
Provision for Bonus - - 65.86 62.59
Provision for Gratuity - - 48.02 62.91
Total 39.17 - 126.49 125.50

As at As at
17 Short Term Borrowings
31st March, 2024 31st March, 2023
Current maturities of Long Term Borrowings 362.49 258.12
Cash Credits 1,001.12 1,190.94
Total 1,363.61 1,449.06

As at As at
18 Trade Payable
31st March, 2024 31st March, 2023
Trade Payables (including acceptances)
(a) total outstanding dues of micro enterprises and small enterprises 1,304.46 806.33
(b) total outstanding dues of creditors other than micro enterprises
2,237.77 2,039.74
and small enterprises
3,542.23 2,846.07

Aging for Trade Payables as at 31st March 2024

Particulars Outstanding for following Periods from Due Date of Payment

Less than 1 1-2 Years 2-3 Years More than 3 Total
Year Years
MSME 1,304.46 - - - 1304.46
Others 1,867.75 - 355.06 14.96 2,237.77
Disputed Dues- MSME - - - - -
Disputed Dues- Other Than MSME - - - - -
3,172.21 - 355.06 14.96 3,542.23

108 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

Aging for Trade Payables as at 31st March 2023

Particulars Outstanding for following Periods from Due Date of Payment

Less than 1 1-2 Years 2-3 Years More than 3 Total
Year Years
MSME 805.51 0.82 - - 806.33
Others 1,685.93 68.96 81.20 203.65 2,039.74
Disputed Dues- MSME - - - - -
Disputed Dues- Other Than MSME - - - - -
2,491.44 69.78 81.20 203.65 2,846.07

As at As at
19 Other Financial Liabilities
31st March, 2024 31st March, 2023
Interest accrued but not due on borrowings 8.96 11.01
Other Payables 174.41 56.70
183.37 67.71

As at As at
20 Other Current Liabilities
31st March, 2024 31st March, 2023
Salaries and other benefits Payable 129.92 123.58
Advance from Customers 16.26 4.00
Taxes Payable (Other than Income Tax) 21.58 8.12
Employee Contributions Payable 14.96 13.71
Total 182.72 149.41

For the Year For the Year

21 Revenue from Operations Ended Ended
31st March, 2024 31st March, 2023
Domestic Sales
Domestic Sales 5,673.92 2,554.45

Export Sales 9,419.81 8,850.88

Analytical Income 152.84 129.66
15,246.57 11,534.99

BAFNA PHARMA - ANNUAL REPORT 2023-24 109

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

For the Year For the Year

22 Other Income Ended Ended
31st March, 2024 31st March, 2023
Interest Income
-From Bank 10.13 2.97
-From Others 2.40 1.48
Gain/(Loss) on Foreign Exchange Difference (Net) 167.18 147.74
Rent 1.07 0.83
Freight Income 23.20 128.40
Sale of MEIS Script 9.70 0.82
Claim Received from Insurance - 15.29
Profit on Sale of Assets 6.57 19.64
Deferred Income-Government Grants 10.44 9.88
Management Consultancy Fees 87.33
Misc. Income 34.22 0.22
352.24 327.27

For the Year For the Year

23 Cost of Materials Consumed Ended Ended
31st March, 2024 31st March, 2023
Consumption of Raw Material, Chemicals and Packing Materials 7,901.24 5,957.04
7,901.24 5,957.04

For the Year For the Year

24 Purchase of Traded Goods Ended Ended
31st March, 2024 31st March, 2023
Purchases - Trading Materials 1,256.91 640.54
1,256.91 640.54

For the Year For the Year

25 Manufacturing Expenses Ended Ended
31st March, 2024 31st March, 2023
Manufacturing Expenses 364.63 234.83
Consumables 129.34 57.84
Analytical Expenses 108.80 44.83
Repairs and Maintenance -
-Machinery Maintenance 244.63 149.79
-Lab Equipment Maintenance 43.41 36.56
-Factory Maintenance 60.33 124.55
-Others 214.88 65.05
Chemical Expenses 105.60 69.16
Security Charges 21.32 20.00
Power and Fuel 669.15 527.01
Freight Charges 55.66 23.27
2,017.75 1,352.89

110 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

For the Year For the Year

26 Change in Inventories of Work in Progress and Finished Goods Ended Ended
31st March, 2024 31st March, 2023
Opening Stock:
-Work-in-Progress 514.78 118.79
-Finished Goods 219.45 324.37
734.23 443.16
Closing Stock:
-Work-in-Progress 912.92 514.78
-Finished Goods 306.49 219.45
1,219.41 734.23
(Increase)/ Decrease in Closing Stock (485.18) (291.07)

For the Year For the Year

27 Employee benefits expenses Ended Ended
31st March, 2024 31st March, 2023
Salaries, allowances and benefits to employees 1,728.33 1.414.29

Contribution to Provident Fund and Other Funds 116.81 113.43

Staff Welfare Expense 57.60 58.87

Total 1,902.74 1,586.59

For the Year For the Year

28 Finance cost Ended Ended
31st March, 2024 31st March, 2023
Interest 193.75 179.75
Other Borrowing Cost (Upfront Fees, Commitment Charges etc.) 35.28 24.01
Total 229.03 203.76

For the Year For the Year

29 Depreciation and Amortization Expense Ended Ended
31st March, 2024 31st March, 2023
Depreciation on PPE 499.54 533.44
Total 499.54 533.44

BAFNA PHARMA - ANNUAL REPORT 2023-24 111

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

For the Year For the Year

30 Other Expenses Ended Ended
31st March, 2024 31st March, 2023
Rent 20.99 20.53
Rates and taxes 103.27 10.43
Liquidated Damages 1.64 -
Repairs and Maintenance:
-Computer Software 24.46 29.05
-Others 9.86 12.70
Packing Expenses 0.56 0.36
Freight and Transportation 220.01 154.64
Insurance 31.79 17.12
Research and Registration Expenses 26.65 72.12
Donations 21.83 1.12
Business Promotion and Advertisement 47.18 36.64
Directors sitting fee 4.84 3.85
Electricity charges 3.90 3.69
Marketing and selling expenses 12.92 19.61
Postage and Courier 4.76 4.26
Printing and Stationery 23.99 19.85
Legal and Professional Fees 828.82 108.94
Remuneration to auditors (As Auditor):
-Audit Fee 8.00 8.00
-Reimbursement of expenses to Auditors 0.56 0.70
Provision for Expected Credit Loss 52.51 36.86
Provision for Other Assets - 40.41
Travelling and conveyance 57.54 53.04
Bad Debts written off 7.47 30.44
Communication expenses 6.15 9.01
Miscellaneous expenses 22.29 24.07
Total 1,541.99 717.44

112 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

For the Year For the Year

31 Earning Per Share (EPS) Ended Ended
31st March, 2024 31st March, 2023
Total Operations for the year
Net Profit / (Loss) after Taxation for Basic EPS 734.79 1,133.80
Net Profit/(Loss) for calculation of Basic EPS (A) 734.79 1,133.80

Net Profit as above 734.79 1,133.80

Add : Dividends on convertible preference shares & tax thereon - -
Add : Interest on bonds/Debentures/Loan convertible into equity shares
- -
(Net of tax)
Net Profit/(Loss) for calculation of Diluted EPS (B) 734.79 1,133.80

Weighted average number of Equity Shares for Basic (C) 236.56 236.56

Weighted average number of Equity Shares for Diluted EPS (D) 236.56 236.56

Basic EPS

Basic EPS (A) / (C) 3.11 4.79

Diluted EPS (B) / (D) 3.11 4.79

Diluted Earnings Per Share, when anti dilutive is restricted to Basic Earnings Per Share

32 Employee Benefits
The Company has a defined benefit gratuity plan, which is regulated as per the provisions of Payment of Gratuity
Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount
of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed
proportionately for 15 days salary multiplied for the number of years of service. The scheme is funded by the
Company. The liability for the same is recognized on the basis of actuarial valuation.
For the Year For the Year
Ended Ended
31st March, 2024 31st March, 2023
Net Employee benefit expense recognized in the employee cost in statement of profit & loss account
Current service cost 34.93 27.10

Interest cost on benefit obligation 4.66 10.77

Sub Total 39.59 37.87

BAFNA PHARMA - ANNUAL REPORT 2023-24 113

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

Recognised in Other Comprehensive Income

Net actuarial (gain)/loss recognized in the year

i. Actuarial (Gains)/Losses on Obligation For the Period 4.35 (7.58)

ii. Return on Plan Assets, Excluding Interest Income (8.00) (7.73)

Sub Total (3.65) (15.31)

Net benefit expense 35.94 22.56

As at As at
Balance Sheet
31st March, 2024 31st March, 2023

Benefit asset / liability

Present value of defined benefit obligation (340.95) (290.07)

Fair value of plan assets 292.93 227.16

Funded Status (Surplus/ (Deficit)) (48.02) (62.91)

Assets / (Liability) recognized in the balance sheet (48.02) (62.91)

Change in the present value of the defined benefit obligation

Opening defined benefit obligation 290.07 276.99

Benefits paid (9.90) (25.55)

Expenses Recognised in Statement of Profit and Loss Account

Current service cost 34.93 27.10

Interest cost on benefit obligation 21.49 19.11

Recognised in Other Comprehensive Income

Actuarial (gain)/loss on obligation 4.35 (7.58)

Closing defined benefit obligation 340.94 290.07

Change in the fair value of plan assets

Opening fair value of plan assets 227.16 120.93

Interest Income 16.83 8.34

Contributions by employer 50.83 100.85

Assets Transferred In/Acquisitions - 14.86

Return on Plan Assets (8.01) 7.73

Benefits paid (9.90) (25.55)

Closing fair value of plan assets 292.93 227.16

114 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

Investment details of the plan assets

Insurance fund 278.02 221.65

Cash And Cash Equivalents 14.91 5.52

Special Deposits - -

Assumptions

Discount Rate (%) 7.41 7.41

Attrition Rate (%) 10.00 10.00

Expected rate of salary increase (%) 8.00 8.00

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.

Amounts of Defined benefit plan for the Current and Two Previous Year are as follows

Present value of Surplus / Experience Experience

Defined benefit (deficit) adjustments on adjustments on
obligation plan assets plan liabilities
31st March, 2024 (340.95) (48.02) (8.00) 4.35

31st March, 2023 (290.07) (62.91) (7.73) (7.58)

31st March, 2022 (276.99) (156.06) (1.38) 3.78

Sensitivity analysis of the defined benefit obligation

1% Increase 1% Decrease

Particulars 31st March 31st March 31st March 31st March

2024 2023 2024 2023
Impact of the change in discount rate (16.58) (14.79) 18.66 16.64
Impact of the change in salary increase 17.59 15.70 (16.11) (14.28)
Impact of the change in rate of Employee Turnover (1.40) (0.99) 1.50 1.06

Note : Sensitivity due to mortality and withdrawals are not material and hence impact of change not calculated.

BAFNA PHARMA - ANNUAL REPORT 2023-24 115

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

Defined Contribution Plans

In respect of the defined contribution plan (Provident fund), an amount of ₹ 70.66 Lakhs (31st March 2023:
₹ 64.44 Lakhs) has been recognized as expenditure in the Statement of Profit and Loss.

In respect of the State Plans (Employee State Insurance), an amount of ₹ 6.29 Lakhs (31st March 2023 :
₹ 7.05 Lakhs) has been recognized as expenditure in the Statement of Profit and Loss.

During the year the Company has provided Bonus and incentive of ₹ 118.54 Lakhs (31st March 2023:
₹ 87.96 Lakhs) as expenditure in the Statement of Profit & Loss.

As at As at
33 Contingent Liabilities and Pending Litigations
31st March, 2024 31st March, 2023
A Contingent Liabilities

a. Letter of Credit and Bank Guarantees 833.66 322.48

b. Bonds executed in favour of Customs Authorities for the purchase of

200.00 200.00
materials and capital goods without payment of duty.

As at As at
B Claims Not Acknowledged as Debt
31st March, 2024 31st March, 2023
Income Tax Act 1961 - Tax Deducted at Source 41.73 41.25

BSE Limited - 20.64

National Stock Exchange Limited - 20.04

The Company has received communications from BSE Limited and National Stock Exchange of India Limited
regarding the non-compliance with respect to certain regulations including Minimum Public Shareholding
(“MPS”) requirements specified in Rule 19 (2) and Rule 19A of the Securities Contracts (Regulations) Rules,
1957, as amended and Regulation 38 of the Listing Obligations and Disclosure Requirements Regulations of
Securities Exchange Board of India ("SEBI") ("Listing Regulations"). The Company has created a provision of ₹
88.39 Lakhs towards penalties and also the Company has requested waiver for such penalties. Based on the
internal assessment and communication with the BSE Limited and National Stock Exchange of India Limited, the
management is confident of obtaining waiver from such penalties.

As at As at
C Pending Litigations
31st March, 2024 31st March, 2023
i. Provident Fund* 33.67 33.67

ii. Sales tax* 25.26 25.26

iii. Service tax* 22.31 22.31

iv. DGFT* 20.00 20.00

v. Income Tax* 342.19 342.19

vi. Goods & Service Tax** 235.47 -

116 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)
*The amounts referred herein above corresponds to the claims made by the relevant statutory authorities
pertaining to pre - Corporate Insolvency Resolution Process ("CIRP") period. By virtue of Honourable NCLT order
approving the resolution plan, the relevant claims stands extinguished. The Company has also filed writ petitions
before the Honourable High Court of Madras requesting the demand to be quashed.
* The Income Tax Refund amounting to ₹ 45.17 Lakhs has been adjusted against the previous years demand
by the Income Tax Department. The Company has filed the writ petition in Honourable High Court of Madras
against such demands which has been issued by the Centralized Processing Centre (“CPC”). The management of
the Company is of the view that post completion of CIRP, no such demands is payable by the Company. Based
on the writ petition filed by the Company, the management is confident of obtaining a favourable outcome in
this regard.
**The Company has received the demand of ₹ 265.42 Lakhs including penalties for the period FY 2017-18 to FY
2020-21against which a liability of ₹ 29.95 Lakhs has been paid by the Company. The Company has disputed
235.47 lakhs and filed the appeal with CGST Appeals. Based on the management assessment, the Company is of
the opinion that said demand will be set aside and there will be no liability.

34 Segment Reporting

The Company is engaged in the business of manufacturing and trading of pharmaceuticals products. The Chief
Operating Decision Maker monitors the operating results of its business for the purpose of making decisions
about resource allocation and performance. Manufacturing and trading of pharmaceuticals products is considered
as only segment.

35. Related Party disclosures

a) Name of Related parties and description of relationship

Name of the Related Parties Designation Close Family Members

SRJR Lifesciences LLP Holding Company
S. Hemalatha Whole Time Director
P K Sundaresan Independent & Non Executive Director
B. Kamlesh Kumar Independent & Non Executive Director
(upto 09th September, 2023)
R. Chitra Chairperson, Independent & Non Executive Director
Akila C Raju Non Executive Director
Atul Sachdeva Non Executive Director (upto13th January 2023)
Upendar Mekala Reddy Non Executive Director
(with effect from 26th June 2023)
Krishna Yeachuri Independent & Non Executive Director
(with effect from 26th June 2023)
Vinayak Dinesh Dendukuri Whole Time Director (with effect from 26th June 2023)
Bafna Mahaveer Chand Chief Executive Officer Sasikala Bafna- Wife
Navin Bafna- Son
Ruchika Saraf-
Daughter-in-Law
M. Sridhar Chief Financial Officer
Jitendra Kumar Pal Company Secretary - Upto 23rd March 2022
Roopa Ravikumar Company Secretary -
From 22nd March 2022 to 11th August 2022
Vishnu V Kuppa Company Secretary (with effect from 7th April 2023 till
23rd April 2024)

BAFNA PHARMA - ANNUAL REPORT 2023-24 117

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)
Enterprises owned or significantly influenced by key management personnel or their relatives (either individually
or with others)
Bhansilal & Co (HUF)
Saffolco Pharmachem LLP
SMN Pharma Private Limited

b) Transactions During the Year with Related Parties

(₹ in lakhs)
For the Year Ended For the Year Ended
Name of the Related Parties Nature of Transactions
31st March 2024 31st March 2023
Bafna Mahaveer Chand Remuneration 75.18 36.00
Navin Bafna Remuneration 25.20 24.00
S. Hemalatha Remuneration 17.79 14.97
S. Hemalatha Salary Advance (1.08) 1.08
Vinayak Dinesh Dendukuri Remuneration 22.07 -
Vinayak Dinesh Dendukuri Salary Advance 0.58 -
M. Sridhar Remuneration 13.73 11.87
M. Sridhar Salary Advance 2.75 0.84
Roopa Ravikumar Remuneration - 3.85
Vishnu V Kuppa Remuneration 9.59 -
Sasikala Bafna Rent 17.70 17.70
Bafna Mahaveer Chand Loan Repaid/ (Taken) 0.60 50.00
Bafna Mahaveer Chand Salary Advance - 1.00
P K Sundaresan Sitting Fees 1.21 1.21
B. Kamlesh Kumar Sitting Fees 0.88 1.21
R. Chitra Sitting Fees 1.10 0.77
Krishna Yechuri Sitting Fees 0.22 -
Akila C Raju Sitting Fees 0.88 0.44
Atul Sachdeva Sitting Fees - 0.22
Upendar Mekala Reddy Sitting Fees 0.55 -
Bhansilal & co Rent 0.12 0.12
Saffolco Pharmachem LLP Advance given against Services - 19.50
SMN Pharma Private Limited Advance given against Services - 15.95
Ruchika Saraf Advance given against Services - 20.00
Saffolco Pharmachem LLP Refund of Advance given - (19.50)
against Services
SMN Pharma Private Limited Refund of Advance given - (15.95)
against Services
Ruchika Saraf Refund of Advance given - (20.00)
against Services

118 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

c) Year End Balances (₹ in lakhs)

As at 31 March
st
As at 31st March
Name of the Related Parties Nature of Transactions
2024 2023
Bafna Mahaveer Chand Loan Payable 150.06 150.67
S. Hemalatha Salary Advance Receivable - 1.08
M. Sridhar Salary Advance Receivable 2.00 0.84

36 Capital Management
The objective of the Company’s capital management structure is to ensure sufficient liquidity to support
its business, to ensure the Company’s ability to continue as a going concern and provide adequate return to
shareholders.
The Company monitors capital and the long term cash flow requirements including externally imposed capital
requirements of the business on the basis of the carrying amount of equity less cash and cash equivalents as
presented on the face
Management assesses the Company’s capital requirements in order to maintain an efficient overall financing
structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s
various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of
changes in economic conditions and the risk characteristics of the underlying assets.
(₹ in lakhs)
Particulars As at 31 March 2024
st
As at 31 March 2023
st

Net Debts (Net of Cash and Cash Equivalents) (A) 2,299.33 1,511.45
Total Equity (B) 8,083.87 7,345.46
Net Debt to Equity Ratio (Times) (C )=(A)/(B) 0.28 0.21

37 Financial Risk Management Objectives and Policies

Financial Risk Management Framework

Company's principal financial liabilities comprise of borrowings, trade payables and Other financial liabilities.
The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal
financial assets include Trade receivables, loans, cash and bank balances and other financial assets.
Risk Exposures and Responses
The Company is exposed to market risk, credit risk and liquidity risk. The Board of Directors reviews policies for
managing each of these risks, which are summarised below.

i) Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in
the price of a financial instrument. The value of a financial instrument may change as a result of changes in the
interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that
affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments
including investments and deposits, foreign currency receivables, payables and borrowing.

BAFNA PHARMA - ANNUAL REPORT 2023-24 119

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates
relates primarily to the Company’s short term borrowing with floating interest rates. The Company constantly
monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile
and financing cost. The Company`s exposure to interest rate risk relates primarily to interest bearing financial
liabilities. Interest rate risk is managed by the Company on an on-going basis with the primary objective of
limiting the extent to which interest expense could be affected by an adverse movement in interest rates.
There are no hedging instruments to mitigate this risk.

Sensitivity Analysis
An increase/decrease of 100 basis points in interest rate at the end of the reporting period for the variable financial
instruments would (decrease)/increase before taxation for the year by the amounts shown below. This analysis
assumes all other variables remain constant.

Profit / (Loss) before taxation

For the Year Ended For the Year Ended
31st March, 2024 31st March, 2023
Financial Liabilities - Borrowings
+1% (100 basis points) 17.09 2.13
-1% (100 basis points) (17.09) (2.13)

Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate
because of changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from
transactions i.e. import and export of materials, recognised assets and liabilities denominated in a currency that
is not the Company's functional currency. The Company’s foreign currency risks are identified, measured and
managed at periodic intervals in accordance with the Company’s policies.

Company's Total Forex currency exposures*

As at 31st March, 2024
Exchange Amount in Foreign Currency Amount (₹ in
Currency
Rate (in Lakhs) Lakhs)
Trade Receivables USD 82.25 9.21 757.82
Trade Receivables AUD 53.85 8.38 451.31
Trade Receivables GBP 104.65 7.17 750.68
Advance from Customers EUR 89.35 (0.45) (40.53)

120 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

As at 31st March, 2023

Exchange Amount in Foreign Currency Amount (₹ in
Currency
Rate (in Lakhs) Lakhs)
Trade Payables USD 81.95 3.83 313.95
Trade Receivables USD 81.95 12.52 1,025.78
Trade Receivables AUD 53.70 18.00 966.80
Trade Receivables GBP 98.30 7.74 761.25
Advance from Customers EUR 86.20 (0.45) (39.10)
* Total Foreign currency exposure as on 31st March 2024 and 31st March 2023 is unhedged.

Sensitivity
If foreign currency rates had moved as illustrated in the table below, with all other variables held constant,
currency fluctuations on unhedged foreign currency denominated financial instruments, pre- tax profit would
have been affected as follows:

Profit/(Loss) before tax

For the Year Ended For the Year Ended
31st March 2024 31st March 2023
USD sensitivity
INR/USD- increase by 5% 37.89 35.59
INR/USD- decrease by 5% (37.89) (35.59)
AUD sensitivity
INR/AUD- increase by 5% 22.57 48.34
INR/AUD- decrease by 5% (22.57) (48.34)
GBP sensitivity
INR/GBP- increase by 5% 37.53 38.06
INR/GBP- decrease by 5% (37.53) (38.06)
EUR sensitivity
INR/EUR- increase by 5% (2.03) (1.96)
INR/EUR- decrease by 5% 2.03 1.96

Commodity Risk
Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases of
Active Pharmaceutical Ingredients and other direct materials, whose prices are exposed to risk of fluctuation
over short period of time. The prices of the Company’s raw materials generally fluctuate in line with commodity
cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business
are generally more volatile. Cost of raw materials form the largest portion of the Company’s cost of revenues.
Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies.
As of 31st March, 2024, the Company had not entered into any material derivative contracts to hedge exposure to
fluctuations in commodity prices.

BAFNA PHARMA - ANNUAL REPORT 2023-24 121

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)
ii. Credit risk
Credit risk is the risk of financial loss to the Company if the customer or that counterparty to the financial
instrument fails to meet its contractual obligations and arises principally from the Company's receivables from
customers, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and
continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the
normal course of business.

Credit risk management

The finance function of the Company assesses and manages credit risk based on internal credit rating system.
Internal credit rating is performed for each class of financial instruments with different characteristics. The
Company assesses the credit risk for each class of financial assets based on the assumptions, inputs and factors
specific to the class of financial assets.

The risk parameters are same for all financial assets for all periods presented. The Company considers the probability
of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an
on-going basis throughout each reporting period. In general, it is presumed that credit risk has significantly
increased since initial recognition if the payments are more than 30 days past due . A default on a financial asset
is when the counterparty fails to make contractual payments when they fall due. This definition of default is
determined by considering the business environment in which entity operates and other macro-economic factors.

Trade Receivables: The Company has exposure to credit risk from trade receivables on sale of medicines. The
Company has used expected credit loss (ECL) model for assessing the impairment loss. For the purpose, the
Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into
account external and internal risk factors and historical data of credit losses from various customers. The Company
ensures concentration of credit does not significantly impair the financial assets since the customers to whom
the exposure of credit is taken are well established and reputed industries engaged in their respective field of
business. The creditworthiness of customers to which the Company grants credit in the normal course of the
business is monitored regularly. The Company provides for expected credit loss under simplified approach

Trade Other Financial

Particulars Loans
Receivables Assets
Loss allowance as on 1st April, 2022 - -
Add / (less)
Modification of contractual cash-flows that did not result in - - -
de-recognition
Write-offs - - -
Recoveries - - -
Impairment - - -
Expected Credit Loss - 36.86 -
Loss allowance on 31st March, 2023 - 36.86 -
Add / (less)
Modification of contractual cash-flows that did not result in - - -
de-recognition
Write-offs - - -
Recoveries - - -
Impairment - - -
Expected Credit Loss - 52.51 -
Loss allowance on 31st March, 2024 - 89.37 -

122 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)
iii. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due.
The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses
or risk to the Company’s reputation. Prudent liquidity risk management implies maintaining sufficient cash and
marketable securities and the availability of funding through an adequate amount of committed credit facilities
to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by
maintaining availability under committed facilities. The Company’s treasury team is responsible for liquidity, funding
as well as settlement management. In addition, processes and policies related to such risks are overseen by senior
management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of
expected cash flows.

Less than 1 More than 3

Particulars 1-2 year 2-3 year Total
year years
31st March, 2024
Borrowings 1,363.61 353.02 296.67 275.56 2,288.86
Borrowings from Related Parties - 150.07 - - 150.07
Trade Payables & Other Financial 3,725.63 - - - 3,725.63
Liabilities
Total 5,089.24 404.17 221.90 216.67 5,931.97

31st March, 2023

Borrowings 1,449.05 254.10 221.90 216.67 2,141.72
Borrowings from Related Parties - 150.67 - - 150.67
Trade Payables & Other Financial 2,913.78 - - - 2,913.78
Liabilities
Total 4,295.13 404.77 221.90 216.67 5,138.46

BAFNA PHARMA - ANNUAL REPORT 2023-24 123

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

c. Financial instruments by category

For amortised cost instruments, carrying value represents the best estimate of fair value.

As at 31st March, 2024

FVTPL FVOCI Amortised

Cost

Financial assets

Trade receivables - - 4,539.48

Loans - - 8.18

Cash and cash equivalents - - 139.60

Other Financial Assets - - 143.62

Total - - 4,830.88

Financial liabilities

Borrowings - - 2,438.93

Trade payables - - 3,542.23

Other Financial Liabilities - - 183.37

Total - - 6,164.53

As at 31st March, 2023

FVTPL FVOCI Amortised

Cost
Financial assets

Trade receivables - - 4,114.85

Loans - - 5.41

Cash and cash equivalents - - 780.94

Other Financial Assets - - 54.24

Total - - 4,955.44

Financial liabilities

Borrowings - - 2,292.39

Trade payables - - 2,846.07

Other Financial Liabilities - - 67.71

Total - - 5,206.17

124 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)
38 Fair value measurements

(i) Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the financial statement are grouped into
three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant
inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (prices) or indirectly (derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data.

(ii) Assets and Liabilities which are measured at Amortised Cost for which Fair Values are Disclosed

As at 31st March, 2024 Level 1 Level 2 Level 3 Total

Financial Assets
Other Financial Assets-Non Current - - 73.45 73.45
Other Financial Assets-Current - - 70.17 70.17
Trade Receivables - - 4,539.48 4,539.48
Loans - - 8.18 8.18
Cash and Cash Equivalents - - 139.60 139.60
Total Financial Assets - - 4,830.88 4,830.88

Financial Liabilities
Borrowings- Non Current - - 1,075.32 1,075.32
Borrowings-Current - - 1,363.61 1,363.61
Trade Payables - - 3,542.23 3,542.23
Other Financial Liabilities - - 183.37 183.37
Total Financial Liabilities - - 6,164.53 6,164.53

As at 31st March, 2023 Level 1 Level 2 Level 3 Total

Financial Assets
Other Financial Assets-Non Current - - 54.18 54.18
Other Financial Assets-Current - - 0.06 0.06
Trade Receivables - - 4,114.85 4,114.85
Loans - - 5.41 5.41
Cash and Cash Equivalents - - 780.94 780.94
Total Financial Assets - - 4,955.44 4,955.44

BAFNA PHARMA - ANNUAL REPORT 2023-24 125

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

Financial Liabilities
Borrowings- Non Current - - 843.33 843.33
Borrowings-Current - - 1,449.06 1,449.06
Trade Payables - - 2,846.07 2,846.07
Other Financial Liabilities - - 67.71 67.71
Total Financial Liabilities - - 5,206.17 5,206.17

Valuation Process and Technique Used to Determine Fair Value

Specific valuation techniques used to value financial instruments include:

(a) The use of quoted market prices or dealer quotes for similar instruments

(b) The fair value of the remaining financial instruments is determined based on the following methods:

i. Net assets value method

ii. Valuation of investment in unquoted equity shares has been made using the Discounted cash-
flow method and Net assets value method, as deemed fit by the Company’s management.

Risk adjustments specific to the counterparties (including assumptions about credit default rates)
are derived from credit risk grading determined by the Company’s internal credit risk management
group.

126 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2023 (Contd.)
(Amounts are in ₹ Lakhs unless specified)
39 Analytical Ratios
As at 31st As at 31st
% Reasons for
Ratio Numerator Denominator March March
Variance Variance
2024 2023
Current Ratio (in Total Current Assets Total Current 1.75 1.88 (7.02%)
times) Liabilities
Debt- Equity Ratio Debt consists of Total equity 0.30 0.31 (3.33%)
(in times) borrowings and lease
liabilities
Debt service Earning for Debt Debt service = 0.95 1.19 (19.65%)
coverage ratio (in Service = Net Profit Interest and
times) after taxes + Non- lease payments
cash operating + Principal
expenses (Dep and repayments
Amortization) +
Interest + Other non-
cash adjustments
(loss on sale of Fixed
Assets)
Return on equity Profit for the year less Average total 9.52% 16.75% (43.12%) Due to
ratio (in %)` Preference dividend equity Increase in
(if any) Operations
Inventory Sales Average 5.88 5.43 8.32%
Turnover Ratio Inventory
Trade receivables Revenue from Average trade 3.52 4.12 (14.58%)
turnover ratio (in operations receivables
times)
Trade payables Cost of rendering Average trade 3.50 3.89 (10.08%)
turnover ratio (in of Services + Other payables
times) expenses
Net capital Revenue from Average 3.75 3.31 13.43%
turnover ratio (in operations Working
times) capital (i.e.
Total current
assets less
Total current
liabilities)
Net profit ratio Profit for the year Total Income 4.71% 9.56% (50.72%) Due to
(in %) Increase in
Operations

BAFNA PHARMA - ANNUAL REPORT 2023-24 127

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2023 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

As at 31st As at 31st
% Reasons for
Ratio Numerator Denominator March March
Variance Variance
2024 2023
Return on capital Profit before tax + Capital 9.18% 15.38% (40.29%) Due to
employed (in %) finance costs -interest employed = Increase in
income Net worth + Operations
Borrowings +
Lease liabilities
+ Deferred
tax liabilities
- Current
Investment -
Cash and Cash
Equivalents
- Other Bank
Balances
Return on Net Profit after taxes Average 5.30% 10.32% (48.64%) Due to
investment (in %) Total Assets Increase in
= Average Operations
of Opening
Total Assets
and Closing
Total Assets
excluding
revaluation
impact

40 Leases
Company as lessee
The Company has entered into certain cancellable lease agreements mainly for office premises, land
and infrastructure facilities’ which are renewable on mutual agreement with the parties. At the date of
commencement of the lease, the Company recognises a right of use asset and a corresponding lease
liability for all lease arrangements in which it is a lessee, except for short-term leases and low value leases.
The Company applies the “short term lease” & “low value leases” recognition exemptions for these leases.
Rent Expenses recorded for Short term and Low value lease was ₹ 20.99 Lakhs (31st March 2023: 20.53 Lakhs).
41 Income Tax
The Company has opted for the new tax regime U/s 115BAA of the Income Tax Act from Financial Year ended 31st
March, 2023. The Company has carried forward losses and unabsorbed depreciation of earlier years. Therefore, the
Company has not accounted any Income Tax on the profits earned during the year.

128 BAFNA PHARMA - ANNUAL REPORT 2023-24

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

42 Deferred Tax
Deferred Tax assets arise on account of carried forward losses and unabsorbed tax depreciation. As a prudent
measure DTA is not recognised since it is not probable that future taxable profits will be available against which
carried forward losses and unabsorbed tax depreciation can be utilised.

43 Corporate Social Responsibility (CSR)

(a) As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the company.
The areas for CSR activities are Promoting education, preventive healthcare, special education and
employment enhancing vocation skills, rural /nationally recognised/ Paralympic and Olympic sports, and
Rural Development. The funds were primarily allocated to a corpus and utilized throughout the year on
those activities which are specified in Schedule VII of the Companies Act, 2013.
(b) Details of Corporate Social Responsibility (CSR) Expenditure:
₹ in Lakhs

Particulars 31st March 2024 31st March 2023

Amount Required to be Spent as per Section 135 of the Act 15.71 -
Amount Spent During the Year 2023-24 3.00 -
Shortfall at the end of the year 12.71 -
Reason for shortfall Other than on NA
going projects

The Company is in the process of transferring the unspent amount to the specidied funds and as on signing
date of financial statements, the time period for such transfer i.e. six months of the expiry of the financial year as
permitted under the second proviso to sub section (5) of the section 135 of the Act, has not elapsed.

44 Disclosures of the transactions with Struck Off Companies

The Company did not have any material transactions with companies struck off under Section 248 of the Companies
Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.

45 Additional Regulatory Information Required by Schedule III to the Companies Act, 2013
(i) The Company does not have any Benami property held in its name. No proceedings have been initiated
on or are pending against the Company for holding benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or
government or any government authority.

(iii) The Company does not hold any investments and hence provisions for compliance with the number of
layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number
of Layers) Rules, 2017 (as amended) are not applicable.

(iv) Utilisation of borrowed funds and share premium

A The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

BAFNA PHARMA - ANNUAL REPORT 2023-24 129

Notes and other explanatory information to Financial Statements for the year ended 31st March, 2024 (Contd.)
(Amounts are in ₹ Lakhs unless specified)

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

B The Company has not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company
shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(v) The Company does not have any undisclosed income which is not recorded in the books of account that
has been surrendered or disclosed as income during the year (previous year) in the tax assessments under
the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act,
1961)

(vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(vii) No Scheme of Arrangements have been approved by the Competent Authority in terms of Sections 230 to
237 of the Act, during the year.

46 The Company's major business is with Foreign Customers. The Company has foreign currency receivables as on
31st March, 2024 of ₹ 174 Lakhs (31st March 2023: ₹ 203 Lakhs) which are outstanding beyond the stipulated
time period permitted under the RBI Master Direction on Export of Goods and Services vide FED Master Direction
No. 16/2015-16 dated 1st January, 2016 (as amended), issued by the Reserve Bank of India (RBI) as of 31st March,
2024. The management of the Company is in the process of obtaining approval for extension of time limits
for realization and also in process of receiving the payment and in regular discussion with the Customers. The
management of the Company is confident of obtaining the approval for time extension and recovery of the
amount within such extended time period.

130 BAFNA PHARMA - ANNUAL REPORT 2023-24

 47 Disclosures required under Section 22 of MSMED Act 2006 under the Chapter on Delayed Payments to Micro,
Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for
more than 45 days as at 31st March 2024. These information as required to be disclosed under Micro, Small and
Medium Enterprises Development Act, 2006 has been determined to the to the extent such parties have been
identified on the information available with the Company.

48 Previous year figures have been regrouped/reclassified where ever necessary, to conform to those of the current
year.

49 As allowed under Schedule III of the Companies Act, 2013, Financial Statements are prepared in lakhs and rounded
off to two decimals. The amounts / numbers below one thousands are appearing as zero.

In Terms of our Report of even date For and on Behalf of the Board
Bafna Pharmaceuticals Limited
For Brahmayya & Co.
Chartered Accountants Sd/- Sd/- Sd/-
S HEMALATHA VINAYAK DINESH DENDUKURI BAFNA MAHAVEER CHAND
Firm Regn No. 000511S
[Whole-Time Director] [Whole-Time Director] [Chief Executive Officer]
[DIN : 02714329]
Sd/- [DIN: 07601309]
Lokesh Vasudevan
Sd/- Sd/-
(Partner)
MELAGIRI SRIDHAR MOHANACHANDRAN A
M.No. 222320
[Chief Financial Officer] [Company Secretary]
M.No. 65827
Place : Coonoor Place : Chennai
Date : 29th May 2024 Date : 29th May 2024

BAFNA PHARMA - ANNUAL REPORT 2023-24 131