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 2023, and the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and Statement of Cash Flows for the year ended on that date and notes to the Financial Statements including a summary of significant accounting policies and other explanatory information.
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 the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2023, its profit (including other comprehensive income), 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 Auditors 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:
imposed on the Company. The Company had subsequently met the MPS criteria and is in the process of obtaining waiver of the penalties levied.
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 2023. 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 |
Auditors Response |
Property Plant and Equipment |
Our audit approach include: |
Peculiarity and technical complexities of Property, Plant and Equipment used in the operations and different IT systems used for maintaining Fixed Asset Register (FAR) requires more attention to ensure reasonably accurateness and completeness of financial reporting in respect of Property, Plant and Equipment. Further, due to technical complexities, the management is required to assess and make estimates/judgements about capitalization, estimated useful life, impairment etc. which may have material impact on the Financial Statements. | • Review of the technical evaluation report of the independent agency |
• Evaluating the competence and objectivity of the expert | |
• We assessed the Companys process regarding maintenance of records, Valuation and accounting of transactions relating to Property, Plant and Equipment as per Ind AS 16. | |
• We have evaluated the design of internal controls relating to recording and valuation of Property, Plant and Equipment. | |
• We have carried out substantive audit procedures at financial and assertion level to verify the capitalization of asset as Property, Plantand Equipment. | |
• We have verified the maintenance of records and accounting of transactions regarding capital work in progress by carrying out substantive audit procedures at financial and assertion level. | |
• We have reviewed management judgement pertaining to estimation of useful life and depreciation of the Property, Plant and Equipment in accordance with Schedule II of the Act. |
Key Audit Matters |
Auditors Response |
Litigations, Claims, Provisions and |
Our audit approach include: |
Contingent Liabilities |
• Assessed the appropriateness of the Companys accounting policies, including those relating to provision and contingent liability by comparing with the applicable Indian Accounting Standards; |
As disclosed in Note 33 detailing contingent liability and provision for contingencies, the Company is involved in litigations concerning direct tax, indirect tax and other matters that are pending with various statutory authorities. | • Assessed the Companys process for identification of the pending litigations and completeness for financial reporting and also for monitoring of significant developments in relation to such pending litigations; |
Whether a liability is recognized or disclosed as a contingent liability in the Financial Statements is inherently judgemental and dependent on a number of significant assumptions and assessments. | • Engaged subject matter specialists to gain an understanding of the current status of litigations and monitored changes in the disputes, if any, through discussions with the management and by reading external advice received by the Company, where relevant, to establish that the provisions had been appropriately recognized or disclosed as required; |
The amounts involved are potentially significant the amount, if any, to be recognized or disclosed in the Financial Statements, is inherently subjective. | • Assessed the Companys assumptions and estimates in respect of litigations, including the liabilities or provisions recognized or contingent liabilities disclosed in the Financial Statements. This involved assessing the probability of an unfavorable outcome of a given proceeding and the reliability of estimates of related amounts; |
• Obtained details of completed tax assessments and demands for the year ended 31st March 2023 from the management. | |
• We involved our internal experts to review the managements underlying assumptions in estimating the tax provision and the possible outcome of the disputes. | |
• Assessed the managements conclusions through understanding precedents set in similar cases; and considering the appropriateness of the Companys description of the disclosures related to litigations and whether these adequately presented in the Financial Statements. |
Key Audit Matters |
Auditors Response |
Inventories |
Our audit approach include: |
Inventories are also the critical component of Financial Statements. Correctness, completeness and valuation are critical for reflecting true and fair financial results of operations. | |
• We assessed the Companys process regarding Maintenance of records, Valuation and accounting of transactions relating to inventories as per the Ind AS 2. | |
• We have evaluated the design of Internal Controls relating to recording and valuation of inventories. | |
• We have carried out substantive audit procedures at financial and assertion level to verify the allocation of overheads to inventories. | |
• We have verified the compliance with the standard norms relating to production as framed and timely updated by the management. |
Other Information
The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Companys Annual Report, but does not include the Financial Statements, and our auditors report thereon. The other information is expected to be made available to us after the date of auditors 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 Companys 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, including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 management is responsible for assessing the Companys 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 Companys financial reporting process.
Auditors 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 auditors 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:
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.
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 2023 and are therefore the key audit matters. We describe these matters in our auditors 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.
Other Matters
The financial statements for the year ended 31st March 2022 were audited by other auditor, who have issued unmodified report vide report dated 26th May 2022. This report has been furnished to us by the Management, which has been relied upon by us for the purpose of audit of this financial statement
Our opinion is not modified in this respect.
Report on Other Legal and Regulatory Requirements
appears from our examination of those books.
by the Company.
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: Gurgaon Lokesh Vasedevan
Date: 27th May 2023 Partner
Membership No: 222320 UDIN: 23222320BGYUWT5397
Annexure ‘A to the Independent Auditors Report
The "Annexure A" referred to in clause 1 of "Report on Other Legal and Regulatory Requirements" paragraph of the Independent Auditors Report of even date to the members of Bafna Pharmaceuticals Limited on the Financial Statements as on and for the year ended 31st March 2023.
(B) The Company has maintained proper records showing full particulars of intangible assets under development.
(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 not in agreement with the books of account of the Company as follows:
(? in lakhs)
Name of the Bank |
Quarter |
Particulars of Security Provided |
Amount as per books of accounts |
Amount as reported in Quarterly return |
Variance |
ICICI Bank |
June-22 | Inventory | 1,911.01 | 1,867.52 | 43.39 |
Books Debts | 2,261.58 | 2,238.15 | 23.43 | ||
Sundry Creditors | 1,180.62 | 1,355.75 | 175.14 | ||
Sept-22 | Inventory | 2,157.86 | 1,862.81 | 295.05 | |
Books Debts | 2,103.29 | 2,465.66 | (362.37) | ||
Sundry Creditors | 1,654.88 | 1,712.03 | 57.15 | ||
Dec-22 | Inventory | 2,794.39 | 2,208.14 | 586.25 | |
Books Debts | 3,731.70 | 3,755.47 | (23.77) | ||
Sundry Creditors | 3,192.46 | 2,739.16 | (453.30) | ||
Mar-23 | Inventory | 2,221.96 | 1,905.76 | 316.20 | |
Books Debts | 4,102.75 | 4,144.73 | (41.98) | ||
Sundry Creditors | 2,755.77 | 2732.70 | (23.07) |
(? in lakhs)
Particulars |
Amount |
Aggregate amount of Staff Advances provided
during the year ended 31st March 2023 |
22.27 |
Balance outstanding as at balance sheet date 31st March 2023 | 6.40 |
(? in lakhs)
Name of the Statute |
Nature of Dues |
Amount | Period to which amount relates |
SEBI Regulations | Penalties levied by BSE Limited.* | 3.01 | Sept-2020 |
SEBI Regulations | Penalties levied by BSE Limited.* | 1.30 | Mar-2022 |
SEBI Regulations | Penalties levied by BSE Limited.* | 5.37 | Jun-2022 |
SEBI Regulations | Penalties levied by BSE Limited.* | 4.78 | Sept-2022 |
SEBI Regulations | Penalties levied by National Stock Exchange of India Limited.* | 3.01 | Sept-2020 |
SEBI Regulations | Penalties levied by National Stock Exchange of India Limited.* | 1.30 | Mar- 2022 |
SEBI Regulations | Penalties levied by National Stock Exchange of India Limited.* | 5.37 | Jun-2022 |
SEBI Regulations | Penalties levied by National Stock Exchange of India Limited.* | 4.78 | Sept-2022 |
Income Tax Act 1961 | Tax Deducted at Source** | 0.00*** | FY 2007-2008 |
Income Tax Act 1961 | Tax Deducted at Source** | 1.00 | FY 2008-2009 |
Income Tax Act 1961 | Tax Deducted at Source** | 0.37 | FY 2009-2010 |
Name of the Statute |
Nature of Dues |
Amount | Period to which amount relates |
Income Tax Act 1961 | Tax Deducted at Source** | 2.41 | FY 2010-2011 |
Income Tax Act 1961 | Tax Deducted at Source** | 0.19 | FY 2011-2012 |
Income Tax Act 1961 | Tax Deducted at Source** | 0.82 | FY 2012-2013 |
Income Tax Act 1961 | Tax Deducted at Source** | 2.46 | FY 2013-2014 |
Income Tax Act 1961 | Tax Deducted at Source** | 2.88 | FY 2014-2015 |
Income Tax Act 1961 | Tax Deducted at Source** | 8.26 | FY 2015-2016 |
Income Tax Act 1961 | Tax Deducted at Source** | 6.31 | FY 2016-2017 |
Income Tax Act 1961 | Tax Deducted at Source** | 6.01 | FY 2017-2018 |
Income Tax Act 1961 | Tax Deducted at Source** | 4.78 | FY 2018-2019 |
Income Tax Act 1961 | Tax Deducted at Source** | 3.73 | FY 2019-2020 |
Income Tax Act 1961 | Tax Deducted at Source** | 1.05 | FY 2020-2021 |
Income Tax Act 1961 | Tax Deducted at Source** | 0.68 | FY 2021-2022 |
Income Tax Act 1961 | Tax Deducted at Source** | 0.30 | FY 2022-2023 |
* 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.
** In respect of Tax Deducted at Source, the amount were due during various reporting periods and are still
outstanding.
***Amount is less than one thousand.
(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 2023 which have not been deposited on account of any dispute are as under:
(? in lakhs)
Nature of Statute |
Nature of Dues |
Forum where dispute is pending |
Period to which amount relates |
Amount |
Income Tax Act 1961 | Income Tax | Honourable High Court of Madras | AY 2015-16 | 342.19 |
Finance Act 1994 | Service Tax | Honourable High Court of Madras | Various Period from FY 2014-15 to June 2018 |
22.32 |
Goods and Service Tax Act | Sales Tax | Honourable High Court of Madras | FY 2016 - 17 | 25.26 |
Foreign Trade (Development and regulation Act 1992 | Penalty Under Foreign Trade (Development & Regulation Act, 1992 |
Honourable High Court of Madras | Various Period for Advance Authorization obtained in October, 2004 | 20.00 |
Provident Fund Act 1952 | Provident Fund | Honourable High Court of Madras | FY 2016-2018 | 33.67 |
(? in lakhs)
Particulars |
Amount |
Outstanding at the beginning of the year | 201.67 |
Repaid during the year | 51.00 |
Outstanding at the end of the year | 150.67 |
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 loan has not been demanded for repayment in full during the relevant financial year. (Refer Note 13 to the Financial Statements)
1934. Therefore, the provision of clause (xvi) (a) of the paragraph 3 of the Order is not applicable to the
Company.
(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 is no requirement of spending towards Corporate Social Responsibility ("CSR") and 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: Gurgaon Lokesh Vasedevan
Date: 27th May 2023 Partner
Membership No: 222320 UDIN: 23222320BGYUWT5397
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements section of our report
to the Members of Bafna Pharmaceuticals Limited of even date)
Report on the Internal Financial Controls with reference to Financials 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 31st March 2023 in conjunction with our audit of the Financial Statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls with reference to Financial Statements
The Companys 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 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 Companys 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.
Auditors Responsibility for Internal Financial Controls with reference to Financial Statements
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing issued by the 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 over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditors 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 Companys internal financial controls over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companys internal financial controls over financial reporting 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 Companys internal financial controls over financial reporting 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 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 Companys 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 over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting 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, the Company has, in all material respects, an adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2023, based on the criteria for internal financial controls over financial reporting established by the Company considering the essential components of internal controls stated in the Guidance Note issued by the ICAI.
For Brahmayya & Co Chartered Accountants Firm Regn No: 000511S
Sd/-
Place: Gurgaon Lokesh Vasedevan
Date: 27th May 2023 Partner
Membership No: 222320 UDIN: 23222320BGYUWT5397
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.