Bafna Pharmaceuticals Ltd
Directors Reports
To
The Shareholders,
Your directors' have pleasure in presenting the Twenty Eighth Annual Report of
your Company together with Audited Accounts for the Financial Year ended 31st March, 2023.
Financial Performance
The summarized Audited Financial Results for the year ended 31st March, 2023 along
with comparative figures for the Previous year is as under:
(Rs.in Lakhs)
|
Particulars
|
Financial Highlights
|
|
31st March 2023
|
31st March 2022
|
| Revenue from operations |
11,534.99 |
8,514.03 |
| Other Income |
327.27 |
169.80 |
| Total Income |
11,862.26 |
8,683.83 |
| Expenses |
|
| Operating Expenditure |
9,963.43 |
7,317.84 |
| EBITDA |
1,898.83 |
1,365.99 |
| Depreciation and Amortization Expenses |
533.44 |
549.33 |
| Earnings before interest and taxes |
1,365.39 |
816.66 |
| Interest expenses |
203.76 |
79.38 |
| Profit before taxes |
1,161.63 |
737.28 |
| Less Exceptional Items |
- |
215.65 |
| Less OCI |
-15.31 |
2.40 |
| Net profit before taxes |
1,176.94 |
521.63 |
| Tax expenses (Current and Deferred Tax) |
27.83 |
- |
| Net profit for the year |
1,149.11 |
521.63 |
Operating Results
Your Company's Total Income during the year under review i.e.,
year 2022-23 was INR 11,862.26. Lakhs as compared to the previous year 2021-22, Rs.
8,683.83 Lakhs. Profit before Tax after other comprehensive income for the year 2022-23
was Rs. 1176.94 lakhs as against Rs.521.63 in the previous year. Profit after Tax for the
year 2022-23 stood at Rs. 1,149.11 Lakhs stood at Rs. 521.63 Lakhs as against in the
previous year.
Change in Capital Structure
(Rs. In Lakhs)
|
Particulars
|
31st March, 2023
|
31st March, 2022
|
| Authorized Capital |
4,000.00
|
4,000.00
|
| Issued, Subscribed & Paid-up Capital |
2,365.63
|
2,365.63
|
During the year under review the Issued, Subscribed and Paid-up capital has remained
the same.
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
in view of the accumulated losses.
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.
Change in the nature of business
Your Company is engaged in the 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 is in the process of framing 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 implemented and evaluated the internal financial
controls which provide a reasonable assurance in respect of providing financial and
operational information, complying with applicable statutes and policies, safeguarding of
assets, prevention and detection of frauds, accuracy and completeness of accounting
records. The Company has appointed internal auditors with a dedicated internal audit team.
The internal audit reports were reviewed periodically by the Audit Committee & the
Board. Further, the Board annually reviews the effectiveness of the Company's
internal control system.
Directors
The Composition of Board and number of meetings attended by them are given in the
corporate governance report.
Directors Liable to Retire by Rotation
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- Chief Executive Officer,
Mr. M. Sridhar- Chief Financial Officer
Mrs. Roopa Ravikumar – Company Secretary (appointed on March 22, 2022 and resigned
on August 11, 2022) Mr. Vishnu Vasudeva Kuppa – Company Secretary – appointed on
April 07, 2023.
Declaration by Independent Directors
The Company has received necessary declaration from each
independent director under Section 149(7) of the Companies Act, 2013, that he/ she meets
the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and
Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Auditors
As per the provisions of the Companies Act, 2013, M/s. Brahmayya
& Co, Chartered Accountants, Chennai (FRN:000511S), were appointed as Statutory
Auditors of the Company for a period of five years at the 27th annual general meeting held
for the financial year 2021- 2022 till the conclusion of 32nd annual general meeting.
The Notes on financial statements referred to in the Auditors' Report are
self-explanatory and do not call for any further
comments.
Auditors' Report:
The Report of Auditors and Notes forming part of the Accounts are attached along
with the Annual Report.
Cost Audit
The Board has appointed M/s N. Sivashankaran & Co, Cost
Accountants (Registration No: 100662) as the Cost Auditor of the Company to conduct audit
of cost records made and maintained by the Company for financial year 2023 – 2024 at
a remuneration as fixed by the Board subject to approval of members of the Company.
Listing
The Company's shares are listed at
- BSE Limited (BSE) with Scrip Code No.532989 and
- National Stock Exchange of India Limited with Scrip symbol BAFNAPH.
Particulars of Employees
- The ratio of the remuneration of each director to the median employee's
remuneration for the financial year and such other details as prescribed are as given
below:
|
Name
|
Ratio
|
|
Hemalatha Shanmugam
|
5:1
|
- The percentage increase in remuneration of each Director, Chief Financial officer,
Company Secretary in the financial year
| Ms. Hemalatha Shanmugam |
Nil
|
| Mr. Mahaveer Chand Bafna |
Nil
|
| Mr. Sridhar .M |
Nil
|
| Mrs. Roopa Ravikumar |
Nil
|
- The percentage increase in the median remuneration of employees in the financial year:
26%
Information as per Section 197 (12) of the Act read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
provided in ‘Annexure – A' to this Report. Further, the information
pertaining to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of
employees is available for inspection at the Registered office of the Company during
business hours and pursuant to the second proviso to Section 136(1) of
the Act, the Report and the accounts are being sent to the members excluding this. Any
shareholder interested in obtaining a copy of the same may write to the Company Secretary/
Compliance Officer either at the Registered/Corporate Office address or by email to
cs@bafnapharma.com
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 the corporate office and strongly believe that the workers will
continue to work towards achieving a profitable and productive Company.
The number of employees as on 31st March 2023 was 588, as against 495
as on 31st March 2022.
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 Board's 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.
The committee placed a 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 2023.
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.
Related Party Transactions
All Related Party Transactions that were entered into during the
Financial Year under review were on an arm's length basis, and in the ordinary course
of business and are in compliance with the applicable provisions of the Act and the
Listing Regulations.
All Related Party Transactions are placed before the Audit Committee
for prior approval. Prior omnibus approval of the Audit Committee is obtained for the
transactions which are repetitive in nature or when the need for these transactions cannot
be foreseen in advance.
There are no material related party transactions which are not in
ordinary course of business or which are not on arm's length basis and hence there is
no information to be provided as required under Section 134(3) (h) of the Act read with
Rule 8(2) of the Companies (Accounts) Rules, 2014.
The Company has adopted a Policy for dealing with Related Party
Transactions which has been uploaded on the Company's website. The web-link as
required under SEBI Listing Regulation, 2015 is as under:
http://bafnapharma.com/qualitypolicies.html
Corporate Social Responsibility
Provision with respect to Corporate Social Responsibility under
Section 135 of the Companies Act, 2013 will be applicable from this year onwards since the
Company's Net Profit is more than Rs.5 Crores. The Company is taking necessary steps
to comply with the provisions of CSR. The Company has formed a CSR Committee with effect
from 25th June 2021. The Composition of the Committee is as follows:
|
Sl No
|
Name
|
Designation
|
| 1 |
R. Chitra |
Chairperson of Committee |
|
2.
|
S. Hemalatha |
Member |
| 3 |
Atul Sachdeva (Resigned on January 13, 2023) |
Member |
| 4 |
Babulal Kamlesh Kumar (April 07, 2023) |
Member |
Secretarial Audit for the FY 2022-23
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
a 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 2022-2023 at the Board Meeting held
on 10.02.2022.
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 Director's Report.
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, 2023, the Audit
Committee consist 3 directors as on March 31, 2023, all the three directors are
Non-executive Independent Directors. However, the Committee consist 1 non-executive
non-independent director up to January 13, 2023,
The terms of reference of the Audit Committee includes matters
specified in section 177 of the Companies Act 2013, and Regulation 18 of SEBI (Listing
Obligations and Disclosure requirements) Regulations, 2015.
The Audit Committee consists of the following: -
Mr. P K Sundaresan- Chairman Mr. B. Kamlesh Kumar – Member
Mr. Atul S- Member (Resigned on January 13, 2023)
Ms. R Chitra – Member (appointed from August 11, 2022)
Nomination & Remuneration Committee
In terms of Section 178 of the Companies Act, 2013 & other
applicable provisions, if any, and as per the Regulation 19 of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, as on 31st March, 2023 the
"Nomination & Remuneration Committee" comprises of 3 Directors out of which
two are Non-Executive Independent Directors and other one is Non- Executive & Non-
Independent. 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 consists of the following:-
Mr. B. Kamlesh Kumar – Chairman Mr. P.K. Sundaresan- Member Mrs. Akila C Raju
– Member
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.
The Stakeholders Relationship Committee consists of the following: - Ms. R Chitra
– Chairperson
Ms. S Hemalatha – Member
Mr. Atul Sachdeva – Member (Resigned on January 13, 2023) Ms. Akila C. Raju –
Member (with effect from April 07, 2023)
COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR
DISCLOSURES:
The Board reply for the Secretarial Auditor observations:
Sl.
No. |
Secretarial Auditor Observations
|
Board's Reply
|
| 01 |
The Composition of the Board
of Directors of the Company is not in compliance with the Regulation 17(1)(c ) of SEBI
(LODR) Regulations, 2015, with effect from 14.01.2023. |
Appointment of a person on the
Board requires cautious decision, as such, the process of appointment took more time to
fill the position, your Board of Director have appointed Three new Directors on the Board
on June 26,
2023. |
Sl.
No. |
Secretarial Auditor Observations
|
Board's Reply
|
| 02 |
The Company did not have a
Company Secretary cum Compliance Officer as required under Section 203 of the Companies
Act, 2013, and Regulation 6 of SEBI (LODR) Regulations, 2015, during the period from
12.08.2022, to 31.03.2023. |
The Management has put all
its effort to fill the post in- time, however, offer letter for the post was issued to
four qualified professionals: Ms. Pragyan Shree on September 01, 2022, Mr. Poornasandar on
November 25, 2022, Mr. Aditya Srivastava on January 25, 2023 and Mr. Akshay Saxena on
February 07, 2023, the First Three incumbents after receiving the Offer Letter did not
accept the job citing personal reasons, and Mr. Akshay Saxena who accepted to Join on
February 07, 2023, could not joined us as he had
met with a fatal accident and recovery will take long time. |
| 03 |
The Composition of
Stakeholder Relationship Committee did not comprise of requisite number of Directors, as
prescribed under Regulation 20(2A) of SEBI (LODR) Regulations, 2015, during the period
from 14.01.2023, to 31.03.2023. |
Mr. Atul Sachdeva,
Non-executive Director of the Company was also member of the Stakeholder Relationship
Committee. Mr. Atul had resigned from his position as Director of the Company with effect
from 14.01.2023, as such, his membership in the said committee was also vacated, your
Board of Directors has filled the vacancy on April 07, 2023, by nominating Ms. Akhila C
Raju as member
of the Committee. |
| 04 |
No Stakeholders Relationship
Committee meeting was held during the year under review as prescribed under Regulation
20(3A) of SEBI
(LODR) Regulations, 2015. |
As no complaints or grievances
were registered by the stakeholders during the FY 2022-23, as such, the SRC meeting was
not held. |
| 05 |
The Company has belatedly
filed the statement of investors compliant, with the National Stock Exchange, for the
quarter ended September 30, 2022, as prescribed under Regulation 13(3) of
SEBI (LODR) Regulations, 2015. |
Due to connectivity issues,
the form Investors Complaint was filed in time with the National Stock Exchange of India
Limited. |
| 06 |
The Company did not comply
with the Minimum Public Shareholding requirements as prescribed under Regulation 38 of
SEBI (LODR) Regulations, 2015, read with Rule 19(2) and Rule 19A of Securities Contract
(Regulation) Rules, 1957, from 01.04.2022, to 19.09.2022, and 21.10.2022,
to 24.02.2023. |
The Company has already
complied with the requirement of Regulation 38 of Minimum Public Shareholding requirements
as prescribed under Regulation 38 of SEBI (LODR) Regulations, 2015, read with Rule 19(2)
and Rule 19A of Securities Contract (Regulation) Rules, 1957. |
| 07 |
The Company did not maintain
Structured Digital Data base as prescribed under Regulation 3(5) and 3(6) of SEBI (PIT)
Regulations, 2015, up to
quarter ended on 30.09.2022. |
The Board has implemented Structured Digital
Database with effect from October 01, 2022, |
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:
As per the requirements of Section 92(3) of the Act and Rules
framed thereunder, the extract of the Annual Return for FY 2022-2023 is uploaded on the
website of the Company and the same is available at https://bafnapharma.com
Number of Board Meetings:
The Board of Directors met 4 times during the year under review and the gap between
2 meetings did not exceed 120
days.
Transfer to Investor Education and Protection Fund (IEPF)
As required under Section 124 of the Act, 2137 equity shares, in
respect of which dividend has not been claimed by the members for seven consecutive years
or more was transferred by the Company to the Investor Education and Protection Fund
Authority (IEPF).
Shareholders may claim their unclaimed dividend by applying in the
prescribed Form No. IEPF-5. This Form can be downloaded from the website of the IEPF
Authority at http://www.iepf.gov.in/IEPF/corporates.html .
Directors Responsibility Statement
Your directors wish to inform that the Audited Accounts containing
Financial Statements for the financial year ended 31st March, 2023, 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 transactions carried out during the
year and reasonably present your Company's financial conditions and result of
operations. Your directors further confirm that in preparation of the Annual Accounts
- The applicable Indian 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.
Reporting of Frauds
There was no instance of fraud during the year under review, which
required the Statutory Auditors to report to the Audit Committee and / or to the Board as
required under Section 143(12) of the Act and the rules made thereunder.
Green Initiatives
In commitment to keep in line with the Green Initiatives and going
beyond it, electronic copy of the Notice of 28th Annual General Meeting of the Company
including the Annual Report for FY 2022- 2023 are being sent to all Members whose e-mail
addresses are registered with the Company / Depository Participant(s).
Acknowledgement and Appreciation
Your directors would like to thank Company' and 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.
For BAFNA PHARMACEUTICALS LIMITED
On behalf of the Board of Directors
Sd/-
Place: Chennai S. Hemalatha
Date: 11-08-2023 Chairperson & Executive Director
DIN:02714329