Bafna Pharmaceuticals Ltd Directors Report.

To

The Shareholders,

Your Directors have pleasure in presenting the Twenty Fifth Annual Report of your Company together with Audited Accounts for the Financial Year ended 31st March,2020.

Financial Performance

The summarized Audited Financial Results for the year ended 31st March, 2020 along with comparative figures for the previous year is as under:

(Rs.in Lakhs)

Particular Standalone Consolidated
31st March 2020 31st March 2019 31st March 2020 31st March 2019
Total Income 4272.78 4401.25 4272.78 4401.25
Total Expenditure 4460.58 6224.22 4461.11 6230.53
Profit /(loss) before exceptional items and tax (187.80) (1822.97) (188.34) (1829.28)
Tax expenses (Deferred Tax) - 150.07 - 106.74
Profit/ (Loss) for the period (187.80) (1973.04) (188.34) (1936.02)
Profit of Non controlling Interest/ Minority interest - (28.69) (52.01)
Exceptional items (2332.56) - (2255.91) 100.99
Total Comprehensive Income for the year (2520.36) (1973.04) (2472.93) (1887.05)

Standalone Operating Results

The sales and operating income was Rs.4,272.78 Lakhs in comparison to Rs.4,401.25 Lakhs in the previous year. The Loss for the year under review is 2520.36 Lakhs as against Rs.1,973.04 Lakhs for the previous year.

Consolidated Operating Results

The consolidated revenue from operation was Rs. 4,272.78 Lakhs in comparison to Rs.4,401.25 Lakhs of the previous year. The consolidated net loss for the year 2020 was Rs.2,472.93 Lakhs as against FY 2019 of Rs.1,887.05 Lakhs.

Subsidiary Company & Consolidated Financial Results

The consolidated financial results comprise of M/s. Bafna Pharmaceuticals Limited and its subsidiary M/s. Bafna Lifestyles Remedies Limited. Consolidated Financial Statements for the year ended 31st March, 2020 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 Companies Act, 2013. The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

Material/Signifi cant changes in subsidiary:

The Comapanys subsidiary Company M/s.Bafna Lifestyles Remedies Limited (BLRL) was manufacturing Raricap tablets for Strides Shasun Pharma Ltd. During one of the Audits, Strides Shasun disqualified the facility and hence there are no operation since September 2016 in the subsidiary company.

Since, there is a diminution in the value of investment made in the subsidiary, the value is considered as NIL and hence the same has been written off in the books of the parent Company i.e Bafna Pharmaceuticals Limited at the Board meeting held on 13th February 2020. As per Indian Accounting Standard IND AS-110, the financial result of Subsidiary Company has to be consolidated with parent company as long as it controls/ hold the shares in the subsidiary Company. The consol-

Company is in the process of striking of name of subsidiary I dated financial Company.

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,2020 31st March,2019
Authorized Capital 4000.00 4000.00
Issued, Subscribed & Paid up Capital 236.56* 2365.63

*Pursuant to the Resolution Plan approved by the Honble National Company Law Tribunal, Chennai Bench vide its Order dated 01st February 2019 the fully paid up Equity Shares is reduced to 10% in the following manner:-

Paid-up Equity Share Capital Structure Pre and Post reduction

Pre-Reduction Post Reduction
2,36,56,335 equity shares of Rs.10/- each aggregating to Rs.23,65,63,350/- 23,65,634 equity shares of Rs. 10/- each aggregating to Rs.2,36,56,340/-

*Post reduction of Capital, the Company had applied for listing permission with NSE and BSE. The Company has received listing approval 2365634 equity shares of Rs.10/- each from NSE and BSE.

Allotment

The Board at its meeting held on 13.02.2020, wherein Mr. Bafna Mahaveer Chand had explained in detail that the Investors mentioned in the Resolution Plan had backed out due to personal reasons and Mr. Bafna had to identify another new

Investor. To Implement the Approved Resolution plan, the Resolution applicant identified M/s.CVR ENTERPRISES LLP, as New Investor, invested Rs. 48.33 Crs to successfully M/s. SRJR Lifesciences LLP an affiliate of CVR Enterprises LLP, as Cheque on 30.03.2020 and the same could be deposited on 30.05.2020 owing to lock down due to COVID 19.

The Implementation and Monitoring Committee, appointed by Committee of Creditors , comprising of the Supervisor earlier who was Resolution Professional, Two Representatives of Financial Creditors and two from the Corporate Debtor had made payments to the Operational creditors, Financial Creditors, CIRP Cost, Employee dues and other legal and professional fees as part of the Resolution plan approved by the Honble NCLT, Chennai Bench. The Implementation and Monitoring Committee after settling the claims of Operational Creditors, Financial Creditors, CIRP Cost, Employee dues and other legal and professional fees as per NCLT, Chennai order. As per resolution Plan approved by NCLT Chennai order which was also upheld by NCLAT Delhi and Supreme Court

The Resolution Applicant shall be liable to make the payment towards only the liabilities assumed in the Resolution Plan and only for the specifically accepted amount as per the Proposed Resolution Plan. No crytalised or Contingent Liabilities as on the Resolution Plan approval date shall be payable which has not been specifically accepted and provided for in the proposed resolution Plan . All payment proposed against deemed assumed Liabilities, Contigent Liablibieties , disputed Liabilities and Such liabilities shall be considered as full and Final amount payable towards such liabilities . No further claims or litigation shall be admissible against the Corporate debtor or Resolution Applicant for any such Liabilities stated herein . No liabilities shall be admissible which has not specifically been assumed under the resultion plan .

Further any liability crystallizing out of the contingent liabilities or disputed legal cases of the Company 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 corporate insolvency resolution process which does not find a place in the Resolution Plan, shall be deemed to have lapsed on the approval of the plan; and the Company shall be deemed to have been duly discharged from all legal liability arising from such antecedent claims Hence no fresh claims shall be entertained by the company in future and all outstanding liabilities shall deemed to be extinguished . The same was notified on the Companys website by The Implementation and Monitoring Committee.

Implementation of Resolution Plan

Please refer to the Order dated 01st February, 2019 passed by the Honble National Company Law Tribunal ("NCLT"), Chennai Bench ("NCLT Order") under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 ("Code") approving the Resolution Plan ( the "Approved Resolution Plan").

Please also refer to the subsequent order(s) passed by National Company Law Appellate Tribunal, ("NCLAT"), New Delhi vide its Order dated 04th July 2019 and later by the Supreme Court of India vide its Order dated 15th July 2019 (Civil Appeal No.: 5344/ 2019).

As per the Code the Approved Resolution Plan is binding on the Company, its employees, Members, Creditors, Guarantors and other stake holders involved in the Resolution Plan including the Resolution Applicant.

In this regard the claims filed by the financial creditor/operational creditor and other creditors under the Code was verified and accepted by the Interim Resolution Professional ("IRP") and Resolution Professional ("RP")("Claim").Pursuant to the Approved Resolution Plan, the sums so paid are towards the full and final settlement of the dues/ claims as aforesaid. No Further claims under the code shall be entertained if no claims had been filed either with IRP/RP. Refer Newspaper publication dated19/07/2018 requesting creditors for filling the Claim .

Further, as per IBC Code and NCLT, Chennai order and subsequent order(s) passed by National Company Law Appellate Tribunal, ("NCLAT"), New Delhi vide its Order dated 04th July 2019 and later by the Supreme Court of India vide its Order dated

15th July 2019 (Civil Appeal No.: 5344/ 2019) there are no debt or payment is due or outstanding, as of date hereof, from the Company to any Vendors / Financial institutions /Persons , and that no other contingent liability or guarantee or letter of support or other security interest exist as of day to anybodys favor (or for anybodys benefit) from the Company and all obligations there under shall be deemed to have been extinguished, as per the approved Resolution Plan.

Further any liability crystallizing out of the contingent liabilities or disputed legal cases of the Company 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 corporate insolvency resolution process which does not find a place in Resolution Plan, shall be deemed to have lapsed on the approval of the plan; and the Company shall be deemed to have been duly discharged from all legal liability arising from such antecedent claims

The Total amount Rs. 55.35 Crs as per resolution Plan was fully received and therefore the shares shall be allotted to M/S. SRJR Life sciences LLP. The Company is taking necessary steps to allot the shares as soon as possible and list the same in Stock Exchanges, but the delay is due to the present Covid 19 situation in the Country . Hence the Board at their meeting held on 25.06.2020 decided to disclose the amount under the head Share application money pending allotment.

Fixed Deposits

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

Dividend

The Board 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 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. and material orders passed by the Regulators or Courts or Tribunals impacting the going Detailsofsignificant concern status and companys operations in future; Impact of CoVID 19

The outbreak of COVID 19 pandemic across the globe and India has contributed to a significant decline and volatility in the global and Indian financial markets and slowdown in the economic activities. On March 11, 2020, the World Health Organization declared the Novel Corona Virus (COVID-19) as a pandemic. Besides the toll that this outbreak had on human life, it has also disrupted the social, economic and finance structure of the entire world. In India, from March 25, 2020 to May 31, 2020 the central government declared a national lockdown, restricting the movement of the entire population of the country as a preventive measure against the spread of COVID-19. The Tamil Nadu Government has further declared lockdown upto July 31st 2020.

The extent to which the COVID 19 pandemic will impact the Companys future results will depend on developments, which are highly uncertain, including among other thing, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government mandated or elected by the Company. The company will continue to closely monitor any material changes to future economic conditions.

Although there are uncertainties due to the pandemic and reversal of the positive momentum gained in the last quarter of FY2020, the inherent resilience of the business model position the Company well to navigate the challenges ahead and gain market share.

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.

Mrs. Sabitha K (DIN: 02643259) was appointed as Whole-Time Women Director w.e.f 27.03.2015 for a period of five years which was confirmed by shareholders at the 21st Annual General Meeting held on 28 th September 2016. Considering her vast and rich experience the Board of Directors at its meeting held on 13.02.2020, based on the recommendation of Nomination & Remuneration committee and subject to approval of Members, re-appointed Sabitha K (DIN: 02643259) as Whole Time Directorofthecompanyforaperiodofthreeyearswitheffectfrom 27.03.2020 and ratify remuneration with effect from 01.04.2019. The Board recommends her re-appointment of Mrs. Sabitha K as a Whole-Time Director of the Company.

Mr. Palamadai Krishnan Sundaresan (DIN:06954189) was appointed as Additional Non-executive Independent Director with effect from 25.06.2020. The Board recommends his appointment as an Independent Director of the Company period of 5 years with effect from the date of appointment.

Further, Mr. Babulal Kamlesh Kumar was re-appointed as an Non-Executive Independent Director of the Company with effect from February 08, 2019 pursuant to the provisions of section 161(1) of the Companies Act, 2013 and Articles of Association of the company by the Board of Directors and confirmed by the Members of the Company, by way of Ordinary Resolution, instead of Special Resolution at the 24th Annual General Meeting held on 27th June 2019. Therefore, the Board of Directors recommend the Special Resolution for confirmation / approval / ratification of the appointment of Mr. Babulal Kamesh Kumar at this annual general meeting

Mr. V. Rajamani (DIN: 00052868), Non-executive Independent Director resigned from the Board with effect from 25.06.2020. The Board wishes to place on record the valuable services rendered by Mr. V. Rajamani during his tenure as Director.

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

Directors Liable to Retire by Rotation

Mr. Mahaveer Chand 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 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 ChandBafna-Managing Director, Mr.M. Sridhar-Chief Financial Officer

Mr. Jitendra Kumar Pal- Company Secretary

Auditors

As per the provisions of the Companies Act, 2013M/s. R. Sathyanarayanan & Co, Chartered Accountants, Chennai (FRN003656S),were appointed as Statutory Auditors of the Company 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.

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.

Auditors Report:

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

Comments on Auditors Report:

Reply tothequalifications report: madein Auditors

Qualification Reply
a. Quantification and valuation of Work in, progress (WIP) is computed on estimated basis by the Management, and not on as per methodologies prescribed as per IND AS 2. Inventory costing system in the production units have to be streamlined. Due to migration from normal accounting package to SAP system the Company has not valued inventories WIP on the basis of IND AS2 principle. However since SAP is fully functional for and from the financial year 2020-21, the inventory valuation would be streamlined to comply with the standard and the impact would be quantified appropriately.
b. The Company has not followed or complied with the Impairment principles prescribed as per IND AS 109 in respect of write off and write back of financial assets Pursuant to the approval of the Resolution Plan by the NCLT,Chennai, Wherein the Resolution Applicant – Mr. Bafna Mahaveer Chand had Appealed for Certain Write offs and Write backs of assets and Liabilities (based on business prudence and Judgement). In accordance with the same, the Company has written off and written back certain assets and Liabilities and net effect of the same is shown under the Head ‘ Exceptional Items".

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 BAFNAPH.

Particulars of Employees

a) Details of employees, employed throughout 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 Rules 5(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 there to, 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, 2020 was 264 as against 258 during FY2018-19.

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. Hemalatha S, - Chairman
(ii) Smt. Geetha S, - Member
(iii) Smt. .Ashitha K - 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,2020.

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

During the year under review, no Loans advanced or investments were made during the year. Particulars of contracts or arrangements with Related parties referred to in Sub-Section (1) of Section 188:

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

Corporate Social Responsibility

Corporate Social Responsibility as 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 2019-20

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 Auditor 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 2019-20 at the Board Meeting held on 13.02.2020.

As required under section 204(1) of the Companies Act, 2013 the Company has obtained as secretarial audit report. The copy of the Secretarial Audit report in MR-3 is attached as an annexure to the Directors Report.

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

S.No QUALIFICATION MANAGEMENTS EXPLANATION
1 The Company has re-appointed Mr. Babulal Kamlesh Kumar as an Independent Non- Executive Director for a second term with effect from 08.02.2019, by way passing of Ordinary Resolution, at its 24th Annual General Meeting held on 27th June 2019, instead of passing Special Resolution as prescribed under Section 149 (10) of the Companies Act, 2013 and Regulation 25 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; By inadvertence Ordinary Resolution passed instead of Special Resolution at the 24th Annual General Meeting held on 27th June 2019. The ordinary resolution was approved by 99% of the members who voted in favor of the resolution. As per Section 114 of Companies Act 2013 a resolution will be called as Special Resolution if the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting. The Company has taken adequate steps to ensure due compliance.
2 The Company has belatedly filed the issued under Regulation 40(9) Certificate of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the Half year ended 31st March, 2019 with the BSE Limited. The delay caused in filing the Certificate under Regulation 40(9) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the BSE Limited was due to inadvertence. The Company has taken adequate steps to ensure the timely compliance of the filings with the Stock Exchange and other Statutory Auhtorities.

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 Renga subramaniam, 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, as on 31st March, 2020 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 consists of the following :-

Mr. V Rajamani- Chairman

Mr. Sunil Bafna- Member (Till 10.08.2019)

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 effectfrom 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 Companies Act, 2013 & other applicable provisions, ifany, 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 Exchanges 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 5 times during the year under re view 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 ended 31stMarch,2020 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 end of the financial year and of the loss of the Company for that period;

Proper and sufficientcare has been taken for the maintenance 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.

Acknowledgement and Appreciation

Your Directors would like to thank Company would 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.

ANNEXURE TO THE DIRECTORS REPORT

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

FORM - A

Disclosure of particulars with respect to Conservation of Energy

A. Conservation of Energy

Power & Fuel Consumption

SI No Particulars 2020 2019
1. Purchased:
Units(Lakhs) Units 28.25 Lakhs Units 21.98 Lakhs
Total Amount (Rs. In lakhs) Rate Rs. 217.72 Lakhs Rs. 204.81 Lakhs
/ Unit (Rs.) Rs. 7.71 Rs. 9.32
2. Own Generation
Through Diesel Generator
Units (KSH) in lakhs) Units 1.52 Lakhs Units 1.23 Lakhs
Unit per Lt. of Diesel Unit 2 Per Litre Unit 2 Per Litre
Rs. 33.72 Per Unit Rs. 36.59 Per Unit
Cost/Unit (Rs.)

The company is conscious of its responsibility to conserve the energy and has taken measures in relation to conservation of energy and technology absorption. No additional investments have been made during the year.

B. Consumption per Unit of Production:

In view of number of products with different sizes, shapes & other parameters, being manufactured by the company, it is not practicable to give information on consumption of fuel per unit of production.

FORM B

DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION I. RESEARCH AND DEVELOPMENT (R&D)

(a) Specific areas in which R&D is carried out by your company

R&D is a process intended to create new or improved technology that can provide a competitive advantage to our business. Also focusing on process development for improving operational efficiency. During the year the company has received prestigious DSIR (Department of Science and Industrial Research) certification for our R & D centre. DSIR is a department under the Ministry of Science and Technology,

Government of India.

- Product Development and report of new formulations.

- Stability studies of new formulations as per ICH guidelines

- Technology Transfer and Process validation of new formulations

- Technology Transfer and Analytical method validation of new formulations

- Dossier preparation for regulatory approval

- Registration of Products in various countries with respective regulatory requirements

- Trouble shooting in existing Products

- Filed patents of Chewable Raricap tablets

- Bioavailability studies to confirm therapeutic efficacy

(b) Benefits

- these give us a unique selling point (USP) & then patents can be acquired for these products

- R&D is able to build business advantage over its competitors by bringing innovative products

- Improving Quality of existing drug products in the market to deserve a good market output

- Attracting more customers and scope for new business

(c) Future plan of action

- To enhance the quality and efficacy in all our medical formulations

- To achieve and maintain consistency in quality

- Upgrading of new process and product technology to improve product stability and efficacy

- To upgrade green technology for process and manufacturing operations

- Product development for new customers, Product registration for regulated and emerging markets

- Technology transfer and stability studies

(d) Expenditure on R&D

(Rs. in Lakhs)

Particulars as at 31.03.2020 as at 31.03.2019
Capital Expenditure 5.99 -
Recurring/Revenue 100.95 75.27
Total 106.94 75.27

II. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION a) Efforts in brief, made towards technology absorption, adaptation and innovation:

With latest technology, its development & up-gradation enable us to provide technically superior, process efficient and International standards product.

The company has its own R&D centres which have been developing and improving process for manufacture of Delayed release tablets, Sustained Release Tablets, Orally Disintegrating Tablets, Liquid orals, Syrups, Suspensions & Dry Syrup formulations.

- The R & D centre 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 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.

- The R&D centre also absorbed and adopted innovative techniques of Multi-layer Coating technology which is subjected to 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.

- Participating and Collaboration with scientific conferences and research institutions for the development and further research of new drug formulations and novel technologies

- Procuring scientific journals and standard pharmacopoeia editions for the R & D library upgrade.

- Collaborations with institutions in providing research related guidance and facilities to intern scholars.

above efforts: b) Benefits

- Control of drug therapy is achieved

- Drug administration can be made convenient

- The safety margin of high potency drug can be increased

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

- Less fluctuating blood plasma concentrations

- Bioavailability enhancement of poorly soluble drugs

- Targeting drug delivery at most absorbing sites to improve bioavailability

- Reduction of adverse effects due to avoidance of dose dumping

- Rapid onset of action can be achieved

- Taste masking of bitter oral liquid drug formulations

c) Details of technology imported during the last 5 years

No technology has been imported during the past five years.

FORM C

(a) Activities relating to exports, initiative taken to increase exports, developments of new export markets for products and services and export plans.

In this context, I would like to inform you that during FY 2020, your company got registrations for 22 products in the following countries

(i) 1 in Nepal

(ii) 1 in Nigeria

(iii) 11 in Philppines

(iv) 5 in Srilanka

(v) 2 in Tanzania

(vi) 2 in

Ukraine. As on date we have over 186 Product registrations and 219 Product applications is pending for approval across the globe

(b) Foreign Exchange earned and used

Name of Currency FC (In lakhs) INR (In lakhs)
USD 22.32 1,559.86
GBP 9.35 833.07
AUD 2.21 103.38
Total 33.88 2,496.31

Foreign Exchange Outgo

Name of Currency FC (In lakhs) INR (In lakhs)
USD 1.68 119.79
GBP 1.11 101.06
EURO 0.18 14.15
Total 2.96 234.99

A Declaration From Independent Directors on Annual Basis

B Details of Subsidiary in Form AOC -1

C. Secretarial Audit Report

D. Extract of Annual Return in MGT 9

E. AOC 2

A. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has obtained declaration from Independent Directors on annual basis to comply the conditions as laid down SEBI (Listing Obligations and Disclosure Requirement) Regulation, 2015, read with Sec 149 of the Companies Act, 2013 and Schedule IV of the Companies Act, 2013.

B. Form AOC -1

STATEMENT CONTAINING SALIENT FEATURES OF FINANCIAL STATEMENT OF THE SUBSIDIARIES / ASSOCIATE COMPANIES / JOINT VENTURES

FORM AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with Rule 5 of Companies (Accounts) Rules, 2014) PART A : SUBSIDIARIES ( IN 000)

S No. : 1
Name of the subsidiary : Bafna Life Styles Remedies Limited
Reporting period for the Subsidiary concerned, : 31st March 2020
If different from the holding companys reporting period ( Same as holding Company )
Reporting currency and Exchange rate as on the last date : of the relevant Financial year in the case of foreign subsidiaries. NA

(Rs.in Lakhs)

31.03.2020 31.03.2019
Share capital 229.50 229.50
Reserves & Surplus (208.08) (284.20)
Total assets 21.59 22.67
Total Liabilities 21.59 22.67
Investments - -
Turnover - -
Profit/ (Loss) before taxation (0.53) (6.32)
Deferred tax - (43.33)
Exceptional items 76.65 100.99
Comprehensive Income for the period 76.12 138.01
Proposed Dividend NIL NIL
% of shareholding 62.31
Names of subsidiaries which are yet to commence operations NIL NIL
Names of subsidiaries which have been liquidated or sold during the year NIL NIL