Bafna Pharmaceuticals Ltd Directors Report.

To

The Shareholders

Your Directors have pleasure in presenting the Twenty Third Annual Report of your Company together with Audited Accounts for the Financial Year ended 31s* March, 2018.

Financial Performance

The summarized Audited Financial Results for the year ended 31st March, 2018 along with comparative figures for the previous year is as under:

(Rs. In lakhs)

Particulars

Standalone

Consolidated

31st March, 2018 31st March, 2017 31st March, 2018 31st March, 2017
Total Income 7843.51 6610.17 7850.15 6610.17
Total Expenditure 9271.08 8540.71 9321.82 8646.44
Profit /(loss) before exceptional items and tax (1427.56) (1930.54) (1471.66) (2036.27)
Exceptional items - - - -
Profit /(loss) before tax (1427.56) (1930.54) (1471.66) (2036.27)
Tax expenses (Deferred) 217.52 83.52 219.27 (90.30)
Profit / (loss) after tax (1645.09) (1847.02) (1690.93) (1945.97)

Consolidated Operating Results

The consolidated sales and operating income increased to Rs. 78.50 Cr from Rs.66.10 Cr in the previous year. The consolidated net loss for the year 2018was Rs. 16.91 Cr as against FY 2017 of Rs.19.46 Cr.

Standalone Operating Results

The sales and operating income increased to Rs.78.44 Cr from Rs. 66.10 Cr in the previous year. The operating Loss for the year under review is Rs.14.28 Cr as against Rs.19.31 Cr in the previous year. The loss after tax for the year under review is Rs.16.45 Cr as against Rs.18.47 Cr in the previous year. The company is in growth/expansion mode requiring further investment; your company is therefore evaluating various options to raise additional funds for which shareholders approval may be sought as and when things are finalized.

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, 2018 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.

During the year under review the Board of the Subsidiary Company (Bafna Lifestyle Remedies Limited) sold the Fixed assets of the Subsidiary Company and the sale proceeds was used to settle the dues owing to the Holding Company viz Bafna Pharmaceuticals Limited (BAFNA). The Company was holding 1,43,00,000 shares viz 62.31% in the subsidiary Company M/s. Bafna Lifestyle Remedies Limited.

Sale of Investment

During the year under review pursuant to Share Subscription Cum Shareholders Agreement ("SSSA") dated July 21, 2014 entered amongst the M/s. Bafna Pharmaceuticals Limited ("Bafna" or "the Company" ), M/s. Strides Shasun Limited (formerly Strides Arcolab Ltd) ("Strides Shasun"), M/s. Strides Healthcare Private Limited (formerly Strides Actives Private Limited) and others, the Company was holding 11,26,666 (Eleven Lakh Twenty-Six Thousand Six Hundred and Sixty-Six) fully paid-up equity shares of face value of Rs. 10/- (Rupees Ten Only) each of Strides Healthcare Private Limited ("Strides Healthcare"), representing 26% of its total issued and paid-up capital (hereinafter referred to as Bafna Shares).

The SSSA, as amended from time to time, enabled Bafna to pledge Bafna Shares in order to avail new loan for its business ("Bafna Loan"), which shall be not exceeding Rs. 40 Crores. Further, the SSSA also provided that, in the event, notice of default is received from the lender of Bafna Loan and the default is not cured by Bafna within the prescribed period, then Strides Shasun shall have a call option on such Bafna Shares ("Bafna Default of Loan Call Option") by paying to the lender and clearing the pledge.

In furtherance to the SSSA, the Company has pledged Bafna Shares as a collateral security with Aditya Birla Finance Limited ("ABFL") and has obtained a sanctioned limit of loan amounting to Rs. 40 Crores for the purpose of its business operation. The amount of outstanding loan was Rs. 38 Crores ("Outstanding Loan") as on 22nd November 2017. The Company has committed a default and since the same was not cured within the prescribed time, Strides Shasun was proposing to exercise the Bafna Default of Loan Call Option in accordance with the SSSA. Pursuant to the payment of the Outstanding Loan amount by Strides Shasun to ABFL, the Company shall not have any claim or receivables towards consideration for the transfer of Bafna Shares.

Pursuant to the said SSSA the Company has transferred 26% equity stake i.e 11,26,666 (Eleven Lakh Twenty-Six Thousand Six Hundred and Sixty-Six) equity shares of face value Rs. 10/- (Rupees Ten only) each in Strides Healthcare Private Limited to Strides Shasun Limited for a total cash consideration of Rs. 46.93 Crores and the proceeds has been used to settle Long Term Loan from M/.s ADITYA BIRLA FINANCE LIMITED to the extent of Rs. 39.43 Crs together with Interest and also other current liabilities.

Material/significant changes in subsidiary:

The Comapanys subsidiary Company M/s. Bafna Lifestyle Remedies Limited (BLRL) was manufacturing Raricap tablets for strides shasun. During one audit strides shasun disqualified the facility and hence there were no operations in the subsidiary 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 000)
Particulars 31st March, 2018 31st March, 2017
Authorized Capital 400,000.00 400,000.00
Issued, Subscribed & Paid up Capital 236,563.35 186,563.35

Your Company, pursuant to 62 (1) (c) read with Section 42 of Companies Act, 2013 and Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, had passed Special resolution by way of postal ballot on 08.02.2017 for issue of 50,00,000 (Fifty Lakh only) Warrants carrying an option /entitlement to subscribe to Equity shares of Rs.10/- each at a premium of Rs.22/-each. Subsequently, the entire preferential issue of 50,00,000 Warrants were allotted.

The Board has been authorised to issue and allot equity shares as may be required upon conversion of 50,00,000 share Warrants issued by the Warrant Allotment Committee on 08th Jan 2017. Further, after receipt of entire money towards the share warrants on 12th Feb 2018 the Board has allotted the shares. The Company has applied for getting listing approval from BSE Ltd and National Stock Exchange of India Limited.

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;

Due to establishment of National Company Law Tribunal (NCLT) and enactment of Insolvency and Bankruptcy Code, 2016, the above mentioned petitions hied before the Honble High Court of Madras were transferred to Honble NCLT, Chennai Bench and were numbered as TCP/96/IB/CB/2017 and TCP/456/IB/2017 respectively. The said case has been closed as per mutual consent and understanding and petition has been withdrawn.

ARIES an Operational Creditor has hied under Section 9 of the Insolvency and Bankruptcy Code 2016 a Petition with The National Company Law Tribunal, 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 declare moratorium and appoint Interim Resolution Professional (IRP).

Encore Healthcare Limited an Operational Creditor has hied under Section 9 of the Insolvency and Bankruptcy Code 2016 a Petition with The National Company Law Tribunal, Chennai which has been admitted as CP/648/IB/2017 against the Company. The said case stand disposed off by the order of The National Company Law Tribunal, Divisional Bench, Chennai dated 20th July 2018 and ordered Encore Healthcare Limited to hie its claim with the Interim Resolution Professional (IRP).

Calyx chemicals & pharmaceuticals Ltd an Operational Creditor has hied under Section 9 of the Insolvency and Bankruptcy Code 2016 a Petition with The National Company Law Tribunal, Chennai which has been admitted as CP/940/IB/2018 against the Company. The total amount of debt is Rs.21,11,706/-. Application stands disposed off vide order of The National Company Law Tribunal, Chennai dated 09th August 2018.

Dalas Biotech Limited an Operational Creditor has hied under Section 9 of the Insolvency and Bankruptcy Code 2016 a Petition with The National Company Law Tribunal, Chennai which has been admitted as CP/805/IB/2018 against the Company. The said case stand disposed off by the order of The National Company Law Tribunal, Chennai dated 25th July 2018 and ordered Dalas Biotech Limited to hie its claim with the Interim Resolution Professional (IRP).

Natural Capsules Ltd an Operational Creditor has hied under Section 9 of the Insolvency and Bankruptcy Code 2016 a Petition with The National Company Law Tribunal, Chennai which has been admitted as CP/222/IB/2018 against the Company The said case stand disposed off by the order of The National Company Law Tribunal, Bench, Chennai dated 27th July 2018 and ordered Natural Capsules Ltd to hie its claim with the Interim Resolution Professional (IRP).

Brenntag Ingredients (India) Private Limited an Operational Creditor has hied under Section 9 of the Insolvency and Bankruptcy Code 2016 a Petition with The National Company Law Tribunal, Chennai which has been admitted as CP/632/ IB/2018 against the Company. The said case stand disposed off by the order of The National Company Law Tribunal, Bench, Chennai dated 31st July 2018 and ordered Brenntag Ingredients (India) Private Limited to hie its claim with the Interim Resolution Professional (IRP).

Further, a criminal case was hied 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.

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.

Pursuant to Section 149, 152 and other applicable provisions of the Companies Act, 2013 read with Rules thereon, Shri V. Rajamani & Shri Sunil Bafna were appointed as Independent Directors for five consecutive years in the Nineteenth AGM held on 10.09.2014 upto 09.09.2019. Shri V. Rajamani & Shri Sunil Bafna terms getting expired on 09.09.2019 and they will be re-appointed for second terms of five years as Independent Director and the matter has been disclosed in the annual general meeting notice. The Independent Directors have furnished necessary declarations as required under Companies Act, 2013.

Directors Liable to Retire by Rotation

Mrs. Sabitha K, being non independent directors, are liable to retire by rotation intermsof Section 152 of the Companies Act, 2013 and being eligible offered herselffor 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, Shri. Bafna Mahaveer Chand, being a Managing Director is a Key Managerial Personnel ofthe Company.

During the year under review, Smt. Sapna Jain resigned from the post of Company Secretary with 08.08.2017 and subsequently Smt. Nirmala N was appointed as the Company Secretary on with effect from 10.11.2017. Smt. Nirmala N resigned from the post of Company Secretary with effect from 31.05.2018 and subsequently Shri Jitendra Kumar Pal was appointed as Company Secretary of the Company with effect from 01.06.2018. Shri. Sridhar was appointed as Chief Financial Officer on 27.05.2017.

Auditors

In compliance with the mandatory rotation of Auditors as per Companies Act, 2013, the Audit Committee and the Board of Directors in their respective meetings recommended the appointment of M/s. R. Sathyanarayanan & Co, Chartered Accountants, Chennai (FRN: 003656S) as statutory auditors of the Company, for a period of 5 years from the conclusion of this AGM until the conclusion of 27th Annual General Meeting, in place of the retiring Statutory Auditors M/s. Abhay Jain & Co., Chartered Accountants, Chennai.

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. Accordingly, the appointment of M/s. R. Sathyanarayanan & Co, Chartered Accountants., Chartered Accountants, Chennai, as the Statutory Auditors ofthe Company, is being proposed asanOrdinaryResolution.

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 to the qualifications made in Auditors report:

Qualification Reply
a. Certain Balances of Debtors, Creditors and Deposits with Corporate bodies are subject to confirmation. The Company has sent confirmation letters to all the debtors, creditors and other corporate bodies but could not get the confirmation on time. However 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 for supply of materials and others remain unconfirmed.
Stautory dues The Company is under going financial constraints due to which some statutory dues are pending. However the Company is taking sincere efforts to resolve the issue.
Re-appointment and remuneration of Managing Director and Whole time Director for the year ended 31st March 2018, except for obtaining approval from the Financial Institutions as prescribed under Schedule V of the Companies Act, 2013. The Committee of Creditors constituted under the insolvency and Bankruptcy Code, 2016, in their meeting held on 04th September 2018 had given their consent for payment of remuneration to Managing Director and Whole-Time Director of the Company.

Cost Audit

The Board of Directors of the Company appointed M/s Thanigaimani & Associates, Cost Accountants (FRN No.101899) as the Cost Auditor of the Company for audit of cost accounts relating to formulations for the year ended 31s* March 2018. The Cost Audit Report & Cost Audit Compliance Report for the year ended 31s* March, 2018 shall be submitted to the Central Government in due course.

As per Section 148 read with Companies (Audit and Audit) Rules, 2014 and other applicable provisions if any of the Companies Act, 2013, the Board of Directors of the Company has appointed M/s Thanigaimani & Associates, Cost Accountants as Cost Auditor of the Company for the year ended 31s* March, 2019. The remuneration proposed to be paid to the Cost Auditors, subject to the ratification by the members at the ensuing Annual General Meeting, would be Rs. 45,000/- (Rupees Forty Five Thousand Only) plus applicable taxes and out of pocket expenses.

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 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 throughout the financial year or part thereof, 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 7the 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 up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member maywrite 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, 2018 was 258 as against 230 during FY 2016-17, a net increase of 28 employees.

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, Asst General Manager - Chairperson
(ii) Smt. Shunmugasundari, HR Executive - Member
(iii) Smt.K.Ashitha,HRExecutive - 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, 2018.

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 Section 188:

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 workforce 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 2017-18

In terms of Section 204 of the Companies Act, 2013, the rules made thereunder & 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 2017-18atthe Board Meeting held on 28.07.2017.

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 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:

QUALIFICATION MANAGEMENTS EXPLANATION
The Company had not appointed Chief Financial Officer (CFO) within a period of Six months from the date of such vacancy as required under Section 203(4) of Companies Act, 2013 upto 27.05.2017. The Board of Directors wish to state that the Chief Financial Officer has been appointed on 27/05/2017.
The Company has not hied Form MGT-14 for the resolutions passed in the meeting of Board of Directors for Approval of Financial Statements for the financial year ended 31.03.2017 and for appointment of Secretarial Auditor, as prescribed under Section 117 read with Section 179 of the Companies Act, 2013. The Company has inadvertently omitted tofile the Form MGT-14s. The Company is taking utmost care to regularizethe Companys compliance reporting mechanism. The Board assuresthat the Company will hie all necessary returns.
The Company has not disclosed the Voting Results of the Annual General Meeting held on 30th September, 2017 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. TheCompany is taking utmost care to regularizethe Companys compliance reporting mechanism. The Board assuresthat the Company will report all the disclosures within the time prescribed.
The Company has not disclosed the Outcome of the Board Meeting held on 08.08.2017 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. TheCompany is taking utmost care to regularizethe Companys compliance reporting mechanism. The Board assuresthat the Company will report all the disclosures within the time prescribed.
During the year, the Company did not disclose to the stock exchanges about the Insolvency Petitions hied against the Company by the creditors and the status of the litigation with impact, as required under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has inadvertently omitted todisclose the material events. The Company istaking utmost care to regularize theCompanys compliance reporting mechanism. The Board assuresthat the Com pany will disclose all materialevents in future.
The Company has complied with provisions of the Companies Act, 2013 for the re-appointment of Managing Director and Whole Time Director of the Company, except for obtaining approval from the Financial Institutions as prescribed under Schedule V of the Companies Act, 2013 The Committee of Creditors constituted under the insolvency and Bankruptcy Code, 2016, in their meeting held on 04th Sep 2018 had given their consent for payment of remuneration to Managing Director and Whole-Time Director of the Company.

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, (as revised with effect from 1.10.2014). The Board has accepted all the recommendations of the audit committee made during the year

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". There was no change in the members of the 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.

Stakeholders Relationship Committee

In terms of Section 178 of the Companies Act, 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 9 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 ended 31s* March, 2018 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

Acknowledgement and Appreciation

Your Directors would like to thank Companys Bankers - SBI, EXIM, 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)

Place: Chennai Paras Bafna Bafna Mahaveer Chand
Date: 05.09.2018 (DIN: 01933663) (DIN:01458211)
Whole Time Director Chairman & Managing Director