Bafna Pharmaceuticals Ltd Directors Report.

To

The Shareholders

Your Directors have pleasure in presenting the Twenty Fourth Annual Report of your Company together with Audited Accounts for the Financial Year ended 31st March, 2019.

Financial Performance

The summarized Audited Financial Results for the year ended 31stMarch,2019 along with comparative figures for the previous year is as under: (Rs. in Lakhs)

Particulars Standalone consolidated
31st March 2019 31st March 2018 31st March 2019 31st March 2018
Total Income 4401.25 7843.51 4401.25 7850.15
Total Expenditure 6224.22 9271.08 6230.53 9321.82
Profit /(loss) before exceptional items and tax (1822.97) (1427.56) (1829.28) (1471.66)
Tax expenses (Deferred Tax) 150.07 217.52 106.74 219.27
Profit/ (Loss) for the period (1973.04) (1645.09) (1936.02) (1690.93)
Profit of Non controlling Interest/ Minority interes - - (52.01) 17.28
Exceptional items - - 100.99 -
Total Comprehensive Income for the year (1973.04) (1645.09) (1887.05) (1673.65)

Consolidated Operating Results

The consolidated revenue from operation was Rs. 4401.26 lakhs in comparison to Rs.7850.15 Lakhs of the previous year. The consolidated net loss for the year 2019 was Rs. 1887.05 Lakhs as against FY 2018 of Rs.1673.65 Lakhs.

Standalone Operating Results

The sales and operating income was Rs.4401.25 in comparison to Rs7843.51 Lakhs in the previous year. The operating Loss for the year under review is Rs.1973.04 Lakhs as against Rs.1645.09 Lakhs for the previous year.

Our FY19 revenues has increased by 46% from Rs.29.70 Crs to Rs.43.35 Crs on sale of Manufactured goods which mainly due to the increase in the UK and emerging market. We have recorded steady growth in all other markets except the Emerging Markets

Subsidiary Company & Consolidated Financial Results

The consolidated financial results comprise of M/s. Bafna Pharmaceuticals Limited and its subsidiary M/s. Bafna Life styles Remedies Limited. Consolidated Financial Statements for the year ended 31stMarch,2019 forms part of the Annual Report.

As required under the SEBI (Listing Obligations and Disclosure Requirement) Regulation,2015, the consolidated financial statements of the Company and its subsidiary are attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under Section 133 of the CompaniesAct,2013.The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

Material/significant changes in subsidiary:

Until four years back, the Companys subsidiary Company M/s. Bafna Lifestyle Remedies Limited (BLRL) was manufacturing Raricap tablets for strides shasun. The company had to close down operations owing to certain technical audit issues raised by them, and since then, the company has not been a going concern. As a process of initiating the closure process, during the year, all items of PPE (Fixed assets) have been disposed off, and outstanding balance of loan with Holding company has been written back.

A statement pursuant to Section 129 of the Companies Act, 2013, relating to subsidiary companies is attached and forms part of the report.

Change in Capital Structure

(Rs. In Lakhs)

Particulars 31st March, 2019 31st March,2018
Authorized Capital 4000.00 4000.00
Issued, Subscribed & Paid up Capital 2365.63 2365.63

There is no change in share capital structure during the period.

Fixed Deposits

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

Dividend

Due to losses, the Company has not declared any dividend for the Financial Year.

Reserves

The Company has not transferred any amount to the general reserves during the year.

Material changes and commitments affecting the financial position of the Company:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future;

ARIES an Operational Creditor has filed under Section 9 of The Insolvency and Bankruptcy Code 2016 a Petition with The National Company Law Tribunal (NCLT), Single Bench, Chennai which has been admitted as CP/682/IB/2017 against the Company. The National Company Law Tribunal, Single Bench, Chennai has passed an order on 16th July 2018 for initiation of Corporate Insolvency Resolution Process (CIRP) against the Company and declared moratorium and appointed Mr. Gopalsamy Ganesh Babu as an Interim Resolution Professional (IRP). IRP Constituted Committee of Creditors (COC) and subsequently Mr. Radhakrishnan Dharmarajan was appointed as Resolution Professional (RP).

Information Memorandum was presented to COC members after obtaining non disclosure agreement.

UK MHRA audit was expected to happen by January 2019.COC in various meeting dealt on getting through the audit . since UK MHRA islifeline for the Company , Company presented 12A withdrawn Plan which did not garner requisite voting from COC.

Accordingly, Mr. Mahaveer Chand Bafna (Resolution Applicant) who is also the promoter and is not prohibited u/s. 29(A) of the IBC 2016 submitted resolution plan which was approved by the COC.

The resolution Plan , approved by COC was submitted to the Honorable NCLT, Chennai for approval. Honourable NCLT, Chennai had approved the resolution plan vide its order dated 01st February 2019 and copy of the said order was received by the company of 04th Febuary 2019The same was intimated to the Stock exchanges on 05th February 2019

The salient features of Resolution Plan.:-Payments as per resolution plan: Financial creditors-

70% of admitted claims of all financial creditors i.e SBI, IDBI, DCB, DBS,BOC will be payable. Total claims admitted Rs.49.23 Crs (payment proposed Rs.34.46 Crs.)

Operational Creditors- proposes to side an amount of Rs. 6.53 Crs towards operational Creditors. The Operational Creditors shall be paid 100% of the Net Claims amount subject to a maximum aggregate pay- out of Rs 6.53 Crs. In case, Net claim amount exceeds aggregate of Rs 6.53. Crs , the operational creditors shall be paid such Rs.6.53 Crs on pro-rata basis of the net claim amount.

The company had also Allowed window period of 30 days from the date of approval (01 st Feb 2019) of the Plan by the Honorable NCLT, Chennai till 04th March 2019 for the operational creditors to file their claims ESI and PF dues- Rs.1.94Crs Workmen dues- Rs.0.24 Crs Employees dues- Rs.0.32 Crs Statutory liabilities- Rs.0.13 Crs Other liabilities- Rs.0.01 Crs Contigent liabilities- Rs. NIL

For the purpose of resolution plan, the liability arising out of the said case, if any, is being considered as deemed crystallised as on the Resolution Plan approval date. Hence the Resolution Applicant is not disputing the above liabilities any further and instead considering them as deemed crystalised and admitted. Simultaneously, the Resolution Applicant is proposing to pay NIL value against all the contigent liabilities and legal cases pending against the Company.

Further any liability crystalising out of the contigent liabilities or disputed legal cases of the Corporate Debtor or any other unknown or unclaimed liability pertaining to a transaction or incident dating to a period prior to the Insolvency Commencement date or during the CIRP which does not find a place in the approved Resolution Plan, shall be deemed to have lapsed on the approval of the plan; and the Corporate Debtor shall be deemed to have been duly discharged from all legal liability arising from such antecedent claims.

The approved Resolution Plan also covers the writing off Slow Moving Inventories, and Debtors , any Recovery from such current assets shall be written back in the year of Recovery. Any Long pending dues from suppliers of the earlier years which could not be recovered in cash or kind shall also be written off, any Recovery from such current assets shall be written back in the year of Recovery.

Equity shareholders- the capital of existing equity shareholders shall be reduced to 10% of the current holding i.e 2.36 crores shall be reduced to 0.236 crores.

Investment in working capital- The additional need based working capital of Rs.10 Crores shall be invested in the Corporate Debtor for revival of the organization.

Investment in fixed assets- The Resolution Applicant and his investors shall invest in Capex which shall amount to Rs.3.5 Crores in year 1.

Management and control of business- the Management of Corporate Debtor shall vest in the re-constituted Board of Directors and Resolution Applicant and his investors shall jointly appoint the Directors on the Board.

Resolution Plan will be monitored by monitoring committee.

A monitoring committee was set up vide Meeting on 13.02.2019, wherein Radhakrishnan Dharmarajan (RP), S David (SBI representative), Nagabhusanam (IDBI representative), Sridhar and Hema (Corporate debtor representatives) were appointed as the members of Monitoring Committee A second monitoring committee was conducted on 07.03.2019 and the matter of M/.s Saravana Global Holdings who filed an appeal in the NCLAT Delhi, was discussed and Committee appraised COC members about the same.The matter was discussed and committee was advised for further course of action .

A third monitoring committee was held on 04.04.2019 and discussed on the updates on the appeal and committee advised COC to be represented and file their Written submissions through the Lead Bank M/s. STATE BANK OF INDIA.

The Resolution Applicant Mr. Bafna Mahaveer Chand also informed that the MHRA Audit is scheduled on 13.05.2019 . As time again discussed in various COC Meetings during the CIRP process of Bafna, where in the COC members discussed and deliberated at length regarding the importance of MHRA audit which is paramount and value enhancement for the company. Any failure on MHRA accreditation, the value of the company will be eroded and may not be kept as a going concern. The members of the COC had deferred the publication of expressions of interest citing, criticality of MHRA accreditation as one of the major reasons and the fact that any delay in MHRA accreditation would impact the going concern and viability of the company and this was also one of the key agenda in the First COC minutes (dated 10.8.2018) . To keep the company as Going Concern and to conduct the UK-MHRA audit successfully , upon the request from the Monitoring Committee, the resolution applicant came forward to arrange an unsecured loan ,whch would help to complete the MHRA audit in time, and to enhance value of the assets of the company to all the stake holders Appeal with NCLAT

Aggrieved by the Order of NCLT, Chennai Saravana Global Holdings Limited and P Shobha (minority shareholders) filed an appeal to National Company Law Appellate Tribunal, New Delhi (NCLAT). NCLAT vide its order dated 28th February 2019 has passed the following Order.:-Until further order the monitoring committee will not handover the possession of corporate debtor to the Resolution Applicant if not yet handed over. In case the possession of the corporate debtor has been handed over the resolution applicant will maintain the status quo and will not alienate, transfer or create third party encumbrance of movable or immovable property of the corporate debtor. The concerned person will ensure that the company remains a going concern. The case was posted to further hearing on 02nd April 2019 The case was posted to further hearing on various dated namely 25th April 2019, 02nd May 2019 and 07th May 2019 , the Honourable NCLAT instructed the resposdents to file their written submission not more than 3 pages and the judgement was reserved on 09th May 2019 by NCLAT. Conclusion In view of the pending proceedings against implementation of approved Resolution Plan . No Revision in the Financial statement is considered . However, the financial statement will be restated based on the outcome of the order to be passed by Honorable NCLAT , Delhi as per the plan approved by Honorable NCLT, Chennai .

Hence, The process of Assessment of fair values of assets and liabilities detailed in the Resolution Plan and restatement thereof in the accounts is being deferred to be carried out in the ensuing Financial Year on account of the above mentioned happenings which had begun during the reporting period and has continued beyond the year end upto the date of Board meeting when the accounts got approved.

Further, a criminal case was filed by M/s. Abhilash Chemicals Private Limited against all the Directors of the Company under Section 138 of the Negotiable Instruments Act for dishonor of cheque.

Further, a criminal case was filed by M/s. Aarti Industries Limited against all the Directors of the Company under Section 138 of the Negotiable Instruments Act for dishonor of cheque.

The above cases are pending before respective court/tribunal. Your Board of Directors of the Company are taking necessary steps to resolve the pending litigations.

Change in the nature of business

Your Company is engaged in manufacture of pharmaceutical products. There is no change in the nature of business during the year compared to previous year.

Risk Management Policy:

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Adequacy of Internal Financial Controls with reference to the Financial Statements:

The company has adequate internal financial controls such as defining authority to authorize financial transactions, Internal Audit and review of financial statement mechanism in vogue.

Directors

The Composition of Board and number of meetings attended by them are given in the corporate governance report. Mr. R.Dwarakanathan, Non-executive Independent Director was resigned from the Board with effect from 21st August 2018. The Board wishes to place on record the valuable services rendered by Mr. R.Dwarakanathan during his tenure.

Mr. Babulal Kamlesh Kumar, was appointed as Non-executive Independent Director on 08th February 2019 for a period of five years. The Board recommends his appointment as Non-executive Independent Director.

The Independent Directors have furnished necessary declarations as required under Companies Act, 2013.

Directors Liable to Retire by Rotation

Mr. Paras Bafna ,being non independent director is liable to retire by rotation in terms of Section 152 of the Companies Act, 2013 and being eligible offered himself for re-appointment.

The brief resume of the Directors seeking appointment/ reappointment and other information have been detailed in the Notice. Your Board recommends the above appointments/reappointment of Directors in the best interest of the Company.

Details of KMP:

According to section 203 of the Companies Act,2013, the following are the Key Managerial Personnel of the Company Mr. Mahaveer Chand Bafna- Managing Director Mr. M. Sridhar- Chief Financial Officer Mr. Jitendra Kumar Pal- Company Secretary

Auditors

As per the provisions of the Act, R. Sathyanarayanan & Co, Chartered Accountants, Chennai (FRN003656S), Statutory Auditors of the Company was appointed for a period of five years at the annual general meeting held on 2017 till the conclusion of 27th annual general meeting. The requirement for the annual ratification of auditors appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 07, 2018.

They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does contain some qualification, reservation, adverse remark or disclaimer for which reply has been given in Directors Report.

M/s. R. Sathyanarayanan & Co, Chartered Accountants have given their consent for appointment and also confirmed that their appointment would be within the prescribed limits under Section 141 of the Companies Act, 2013.

AuditorsReport:

The report of Auditors and notes forming part of the Accounts are attached along with the Annual Report.

Comments on AuditorsReport:

Reply to the qualiications made in Auditors report:

Qualification Reply
Major Components of Current Assets – Receivables outstanding for over one year, Long outstanding Advances to suppliers besides Stock of spares and Stores, which have all not been tested for recovery/impairment as per IND AS 36, consequently not restated at fair values in accordance IND AS 113 and not provisioned in the accounts. In view of the pending proceedings against implementation of approved Resolution Plan . No Revision in the Financial statement is considered . However, the financial statement will be restated based on the outcome of the order to be passed by Honorable NCLAT , Delhi as per the plan approved by Honorable NCLT, Chennai.
Major Components of Current Liabilities – Sundry creditors whose balances are yet to be confi rmed, hence not restated at fair values in accordance with IND AS 113. The process of restructuring of fair values of assets and liabilities detailed in the Resolution Plan and restatement thereof in the accounts is being deferred to be carried out in the ensuing Financial Year on account of the pending proceedings Before NCLAT, Delhi.
a) Certain Balances of Debtors , Creditors, and deposits with Corporate Bodies are subject to Con firmation. The Company has sent confirmation letters to the debtors, creditors and other corporate bodiesbut could not get the confirmation on time.Hooever all the efforts has been taken to obtain the same. These dues are pending for Long Time.
b) Closing balances pertaining to advances given to suppliers of materials and others some of them remain unconfirmed.
Statutory Dues The company is undergoing Financial Constraints due to which some statutory Dues are pending . However the company is taking sincere efforts to resolve the issue.
The maintenance of Stocks of Stores and spares requires to be assessed in respect of usefulness and value carried in the books of accounts. During the course of our audit, we observed certain instances of non-deduction of TDS on eligible payments made during the year. The company is taking adequate steps to ascertain the usefulness and based on the recommendations of the Management , will be decided for write off or sold The company will ensure that this has been taken utmost care from the current Financial Year.

Cost Audit

Cost Audit specified under Section 148 of the Companies Act, 2013 does not apply to the Company since the turnover of the Company is less than the limit prescribed.

Listing

The Companys shares are listed at(i)BSE Limited(BSE) with Scrip Code No.532989 and at(ii) National Stock Exchange of India Limited with Scrip symbol BAFNAPHARM;

Particulars of Employees a) Details of employees, employed through out the financial year was in receipt of remuneration for that financial year, in the aggregate, was not less than Rs.1.02 Crores. -Nil-b) Details of employees, employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than Rs. Eight Lakhs and Fifty Thousand per month -Nil -c) Details of employees ,if employed through out the financial year or part there of, was in receipt of remuneration in that year which, in the aggregate,or as the case may be, at a rate which ,in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company. - Nil -The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules,2014 in respect of employees of the Company and Rules5(2)of The Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014, with respect to the statement showing the names of the top ten employees in terms of remuneration drawn, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company upto the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

Foreign Exchange Earnings and Outgo

The particulars in respect of Foreign Exchange Earnings and Outgo as required under Section 134) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules 2014, are given as in Annexure to this report.

Human Resource, Industrial Relations, Environment, Occupational Health and Safety

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

The number of employees as on 31st March,2019 was 258 as against 258 during FY 2017-18..

Conservation of Energy, Technology Absorption & Research and Development (R &D)

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 particulars in respect to conservation of energy, Technology Absorption & Research and Development were given in the annexure to the Boards Report.

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.

Corporate Governance

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with the Stock Exchanges, are enclosed elsewhere in the Annual Report and forms part of this report.

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Board of Directors has approved policy as per the said Act. and an Internal Complaints Committee was constituted, with following members:

(i) Smt. S. Hemalatha, (General Manager - Operation) - Chairperson
(ii) Smt. S. Geetha (Manager Accounts) - Member
(iii) Smt. K. Ashitha (Admin-in-charge) - Member

The committee placed certificate before the Board of Directors on the status of compliance of the Act. As per the certificate provided by the said committee no complaints were received during the year & that there are no complaints pending as on 31st March, 2019.

Particulars of Loans ,Guarantee and Investment under Section 186 of Companies Act,2013:

During the year under review, the investments made ,the loans advanced, guarantees given and securities provided are within the limits prescribed under Section 186 of the Companies Act,2013. Refer Notes to accounts for the above particulars.

Particulars of contracts or arrangements with Related parties referred to in Sub-Section(1)of Section188:

The transactions entered into by the Company with the related parties were in the ordinary course of business and at arms length basis. The particulars of transactions are mentioned in Form AOC 2 and is annexed to this report.

Corporate Social Responsibility

Corporate Social Responsibility prescribed under the provisions of Sec 135 of the Companies Act, 2013 is not applicable to the Company, But however Company is committed to improve the quality of life of the work force and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stake holders and society.

Secretarial Audit for the FY 2018-19

In terms of Section 204 of the Companies Act, 2013, the rules made there under & other applicable provisions, if any, the company is required to appoint Secretarial Audit or to carry out secretarial Audit of the Company. Your Board of Directors has appointed M/s. A.K. Jain & Associates, Practicing Company Secretaries, Chennai for purpose of Secretarial Audit for the FY 2018-19 at the Board Meeting held on 08.02.2019.

As required under section 204(1) of the Companies Act,2013 the Company has obtained a secretarial audit report. The copy of the Secretarial Audit report in MR3 is attached as an annexure to the Directors Report.

The qualiications made by the Secretarial Auditor and the explanation to the observations are as follows:

QUALIFICATION MANAGEMENTS EXPLANATION
a) The Company has not disclosed the Voting Results of the Annual General Meeting held on 29th September, 2018 within the time prescribed under Regulation 44 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The delay in reporting was due to inadvertence and unintentional. The Company is taking utmost care to regularize the Companys compliance reporting mechanism. The Board assures that the Company will report all the disclosures within the time prescribed.
b) The Company has issued and allotted 50,00,000 equity shares of Rs.10/- each on conversion of warrants on preferential basis on 12.02.2018 which are yet to be listed on Stock Exchanges under Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. The delay in listing is due to some clarification required by the Stock Exchanges. The Company has got listing and trading approval for 50,00,000 shares allotted on preferential basis on 20th May 2019.
c) The composition of board of directors of the company is not in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the quarter ended September 2018 and December 2018. The Company was in Corporate Insolvency Resolution Process with effect from 16th July 2018, under IBC, 2016. One of the Independent Director R. Dwarkanathan, resigned due to personal reasons. The management has appointed a director in his place and regularized.
d) The composition of the nomination and remuneration committee of the company is not in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the quarter ended September 2018 and December 2018. The Company was in Corporate Insolvency Resolution Process with effect from 16th July 2018, under IBC, 2016. One of the Independent Director R. Dwarkanathan, resigned due to personal reasons. The management has appointed a director in his place and regularized.
e) The Company has received notice from BSE and NSE levying SOP Fines under Regulation 108 of SEBI (Issue of capital and disclosure requirements) Regulations, 2009 amounting to Rs.17,92,014/- and Rs. 18,62,814/- respectively for delay in submission of complete listing application for allotment of 50,00,000 equity shares of Rs.10/- each on conversion of warrants on preferential basis with the Stock Exchanges i.e. NSE and BSE. The delay in listing is due to some clarification required by the Stock Exchanges. However the Company has paid the necessary Fines to both the exchanges. The Company has also got listing and trading approval for 50,00,000 shares allotted on preferential basis on 20th May 2019.

Appointment of M/s.Soleti Associates., Chartered Accountant, Chennai as Internal Auditors & approved their Scope, Functions, Periodicity & Methodology

In terms of Section 138 of the Companies Act,2013 & other applicable provisions, if any, Board of Directors at the Board Meeting held on 28.05.2018 has appointed Mr.CA Rengasubramaniam,Partner of M/s.Soleti Associates, Chartered Accountants, Chennai as Internal Auditors and further approved their Scope, Functions, and Periodicity & Methodology

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 Audit committee comprises of 4 Directors out of which 3 are Non-Executive Independent Directors. The terms of reference of 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.

The Audit Committee was re-constituted with effect from 08th February 2019 and its composition is as follows:-Mr. V Rajamani- Chairman Mr. Sunil Bafna- Member Mr. Babulal Kamlesh Kumar – Member Mr. Paras Bafna- Member

Nomination & Remuneration Committee

In terms of Section 178 of the Companies Act, 2013 & other applicable provisions, if any, Board of Directors at the Board Meeting held on 30.05.2014 has renamed the existing"Remuneration Committee"of the Board of Directors as"Nomination &Remuneration Committee". The Policy of Nomination & Remuneration Committee was detailed in the corporate governance report. The constitution, terms and references and other details are elaborated in the Corporate Governance report annexed with this report.

The Nomination and Remuneration Committee was re-constituted with effect from 08th February 2019 and its composition is as follows:-Mr. Sunil Bafna- Chairman Mr. V Rajamani- Member Mr. Babulal Kamlesh Kumar – Member

Stakeholders Relationship Committee

In terms of Section 178 of the CompaniesAct,2013 & other applicable provisions, if any, Board of Directors at their meeting held on 30.05.2014 renamed the existing "Investor Grievance & Share Transfer Committee" as "Stakeholders Relationship Committee". The constitution, terms and references and other details are elaborated in the Corporate Governance report annexed with this report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report ,as required under the Listing Agreement with the Stock Exchange is enclosed in the Annual Report and forms part of 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.

Extract of Annual Return:

The details forming part of the extract of the Annual Return in form MGT-9 is annexed along with the Directors Report.

Number of Board Meetings:

The Board of Directors met 6 times during the year under review and the gap between 2 meetings did not exceed 120 days.

Directors Responsibility Statement

Your Directors wish to inform that the Audited Accounts contains Financial Statements for the financial year ended31st March,2019 are in full conformity with the requirements of the Companies Act,2013.They believe that the Financial Statements reflect fairly the form and substance of transaction carried out during the year and reasonably present your Companys financial conditions and result of operations.

Your Directors further confirm that in preparation of the Annual Accounts

• The applicable accounting standards had been followed and wherever required, proper explanations relating to material departures have been given;

• The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent 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 loss of the Company for that period;

• Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• The Accounts have been prepared on a "going concern basis.

• The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

• The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Green Initiatives

Electronic copies of the Annual Report 2018-19 and the Notice of the 24th AGM are sent to all members whose email addresses are registered with the Company / depository partificipants. For members who have not registered their email addresses, physical copies are sent in the permitted mode.

Acknowledgement and Appreciation

Your Directors would like to thank Companys Bankers - SBI, DBS, DCB, BOC& IDBI for their continued support and they would also like to express their gratitude for the co-operation and assistance extended to the Company by its Customers, Suppliers, Technical Consultants, Contractors, Government and Local Authorities, etc. The Directors also wish to thank all its Shareholders for their unstinted support. The Directors would like to sincerely thank and 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 period under review.

On behalf of the Board of Directors
For BAFNA PHARMACEUTICALS LIMITED
(CIN L24294TN1995PLC030698)
Sd/- Sd/-
Paras Bafna Bafna Mahaveer Chand
Place: Chennai (DIN: 01933663) (DIN: 01458211)
Date: 27.05.2019 Whole Time Director Chairman & Managing Director