Bafna Pharmaceuticals Ltd Auditor Reports

To

The Members

Bafna Pharmaceuticals Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Financial Statements of Bafna Pharmaceuticals Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2024, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended then date and notes to the Financial Statements including a summary of material accounting policies and other explanatory information (hereinafter referred to as "the Financial Statements")

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial Statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India including the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS"), of the state of affairs of the Company as at 31st March 2024, its profit (including other comprehensive income), it changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing ("SAs") specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Financial Statements.

Emphasis of Matters

Attention is invited to:

a. the non-receipt of the foreign currency receivables as on 31st March 2024 aggregating to ? 174 Lakhs (31st March 2023: ? 203 Lakhs) which are outstanding beyond the stipulated time period permitted under the RBI Master Direction on Export of Goods and Services vide FED Master Direction No. 16/2015-16 dated 1st January, 2016 (as amended), issued by the Reserve Bank of India ("RBI"). The management of the Company is in the process of obtaining approval towards extension of time limits for realization or write off of the balances. Pending such confirmation, no adjustment is envisaged in the books of accounts as on 31st March 2024.

b. the adjustment of Income Tax Refund pertaining to previous assessment years amounting to ? 45.17 Lakhs. The Income Tax Department has issued the refund order on various dates for respective assessment years; however, such refunds have been adjusted against the outstanding demands through Centralized Processing Centre ("CPC"). As represented by the management, the Company has filed a writ petition with the Honourable Madras High Court against the adjustment of refund issued with the outstanding demand.

c. Note 33 (B) to the Financial Statement regarding the non-compliance with various statutory compliances under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Securities Contracts (Regulations) Rules, 1957, as amended with respect to the Minimum Public Shareholding, appointment of Compliance Officer and submission of certain prescribed information to the Stock Exchanges during the previous reporting periods. The Company has received the communication from BSE Limited and National Stock Exchange of India Limited in respect to such non-compliance and appropriate provision has been accounted in the books of accounts as on reporting date. However, the management is pursuing with the Stock Exchanges for waiver of such penalties.

Our opinion is not modified in respect of the above matters.

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of the most significance in our audit of the Financial Statements of the financial year ended 31st March 2024. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the following matters as Key Audit Matters to be communicated in our report:

Key Audit Matters	Auditors Response
Litigations, Claims, Provisions and Contingent Liabilities	Our audit approach include:
As disclosed in Note 33 detailing contingent liability and provision for contingencies, the Company is involved in litigations concerning direct tax, indirect tax and other matters that are pending with various statutory authorities.	• Assessed the appropriates of the Companys accounting policies, including those relating to provision and contingent liability by comparing with the applicable Indian Accounting Standards;
Whether a liability is recognized or disclosed as a contingent liability in the Financial Statements is inherently judgmental and dependent on a number of significant assumptions and assessments.	• Assessed the Company process for identification of the pending litigations and completeness for financial reporting and also for monitoring of significant developments in relation to such pending litigations;
The amounts involved are potentially significant and determining the amount, if any, to be recognized or disclosed in the Financial Statements, is inherently subjective.	• Engaged subject matter specialists to gain an understanding of the current status of litigations and monitored changes in the disputes, if any, through discussions with the management and by reading external advice received by the Company, where relevant, to establish that the provisions had been appropriately recognized or disclosed as required;
	• Assessed the Companys assumptions and estimates in respect of litigations, including the liabilities or provisions recognized or contingent liabilities disclosed in the Financial Statements. This involved assessing the probability of an unfavorable outcome of a given proceeding and the reliability of estimates of related amounts;
	• Obtained details of completed tax assessments and demands.
	• We involved our internal experts to review the managements underlying assumptions in estimating the tax provision and the possible outcome of the disputes.
	• Assessed the managements conclusions through understanding precedents set in similar cases; and considering the appropriateness of the Companys description of the disclosures related to litigations and whether these adequately presented in the Financial Statements.
Inventories	Our audit approach include:
Inventories are also the critical component of Financial Statement. Correctness, completeness and valuation are critical for reflecting true and fair financial results of operations.	• We assessed the Companys process regarding Maintenance of records, Valuation and accounting of transactions relating to Inventory as per the IND AS - 2.
	• We have evaluated the design of Internal Controls relating to recording and valuation of Inventory.
	• We have carried out substantive audit procedures at financial and assertion level to verify the allocation of overheads to Inventory.
	• We have verified the compliance with the standard norms relating to production as framed and timely updated by the management.

Other Information

The Companys Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the Companys Annual Report, but does not include the Financial Statements, and our auditors report thereon. The other information is expected to be made available to us after the date of auditors report. Thus, our report does not deal with matters mentioned under other information in Annual Report.

Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Management Responsibilities for the Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act.. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, the Board of Directors is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

b. Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3X0 of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Financial Statements in place and the operating effectiveness of such controls.

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

d. Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e. Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) Planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Financial Statements of the financial year ended 31st March 2024 and are therefore the Key Audit Matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order 2020 ("the Order"), issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid Financial Statements.

b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid Financial Statements have been kept by the Company so far as it appears from our examination of those books, except for the matters stated in the paragraph 3(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended.

c. The balance sheet, the statement of profit and loss (including other comprehensive income), statement of changes in equity and the statement of cash flows dealt with by this report are in agreement with the books of account.

d. In our opinion, the aforesaid Financial Statements comply with the Ind AS specified under Section 133 of the Act read with Companies (Indian Accounting Standard) Rules, 2015 as amended.

e. On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act.

f. The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(a) above on reporting under Section 143(3)(b) of the Act and paragraph 3(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules,2014, as amended.

g. With respect to the adequacy of the internal financial controls with reference to Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report.

3. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as amended, in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations on its financial position in its Financial Statements. Refer Note No. 33 to the Financial Statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c. There are no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d. (i) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries:

(ii) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.

e. The Company has not declared, paid interim dividend during the year or proposed final dividend for the year.

f. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended, for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from 1st April 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014, as amended, is applicable for the financial year ended 31st March 2024.

Based on our examination which included test checks and information given to us, the Company has used accounting software for maintaining its books of account, which does not have a feature of recording audit trail (edit log) facility, and the same did not operate throughout the year for all relevant transactions recorded in the respective software.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended, is applicable from 1st April, 2023 reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended, on preservation of audit trail as per statutory requirements for record retention is not applicable for the financial year ended 31st March 2024.

4. With respect to the other matters to be included in the Auditors Report in accordance with requirement of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its director during the year is in accordance with the provision of section 197 of the Act. The remuneration paid to directors is not in excess of the limit laid down under section 197(16) which are required to be commented upon by us.

Annexure A to the Independent Auditors Report

The "Annexure A" referred to in clause 1 of "Report on Other Legal and Regulatory Requirements" paragraph of the Independent Auditors Report of even date to the members of Bafna Pharmaceuticals Limited ("the Company") on the Financial Statements as on and for the year ended 31^st March 2024.

i) a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets under development.

b) We are informed that a test of physical verification of Property Plant and Equipment was carried out by the management at a reasonable interval and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of these assets is reasonable having regards to the size of the Company and nature of its assets.

c) The title deeds of immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) as disclosed in the Financial Statements are held in the name of the Company.

d) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has not revalued any of its property, plant and equipment and intangible assets under development during the year ended 31st March 2024.

e) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, there are no proceedings initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

ii) (a) The management has conducted physical verification of inventory at the reasonable interval during the year and no discrepancies were noticed on verification between the physical stocks and the book records that were 10% or more in the aggregate for each class of inventory.

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. In our opinion, the quarterly returns/ statements filed by the Company with such banks are in agreement with the books of account of the Company except as follows:

(Rs in lakhs)

Name of the Bank	Quarter	Particulars of Security Provided	Amount as per books of accounts	Amount as reported in Quarterly return	Variance
ICICI Bank	June-23	Inventory	2,568.68	2,002.72	565.96
		Books Debts	4,591.09	4,340.73	250.36
		Sundry Creditors	2,855.20	2,714.10	141.10
	Sept-23	Inventory	2,936.27	2,265.01	671.26
		Books Debts	3,982.86	4,051.20	(68.34)
		Sundry Creditors	3,018.53	2,900.69	117.84
	Dec-23	Inventory	3,150.81	2,603.42	547.39
		Books Debts	3,382.34	3,423.83	(41.49)
		Sundry Creditors	2,753.99	2,751.42	2.57
	Mar-24	Inventory	2,964.18	2,264.78	699.40
		Books Debts	4,539.48	4,632.34	(92.86)
		Sundry Creditors	3,542.23	2,989.77	552.46

iii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has provided staff advances during the year as follows:

(Rs in lakhs)

Particulars	Amount
Aggregate amount of provided during the year ended 31st March 2024
Loans and Advances to Employees	27.38
Balance outstanding as at balance sheet date 31st March 2024	8.18

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, in our opinion the terms and conditions of the grant of loans and advances to employees during the year are, prima facie, not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with generally accepted auditing practices in India, in our opinion, the Company has given staff advances to its employees during the year as per the Companys policy and receipts are generally regular.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with generally accepted auditing practices in India, there is no overdue amount.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with generally accepted auditing practices in India, there are no loan and staff advances granted that has fallen due during the year, which has been renewed or extended or fresh loans granted to settle the overdue of existing loans given to same parties.

(f) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has not granted any loans or staff advances during the year which are either repayable on demand or without specifying any terms or period of repayment.

iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has not given any loans, or provided any guarantee or security as specified under Section 185 of the Companies Act, 2013 and the Company has not provided any guarantee or security as specified under Section 186 of the Companies Act, 2013.

iv. According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has not given any loans, or provided any guarantee or security as specified under Section 185 of the Companies Act, 2013 and the Company has not provided any guarantee or security as specified under Section 186 of the Companies Act, 2013.

v. According to the information and explanations given to us, and based on our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has not accepted any deposits from the public and no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal. Therefore the provisions of clause (v) of paragraph 3 of the order are not applicable to the Company.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however made a detailed examination of the same.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with generally accepted auditing practices in India, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Excise Duty, Value Added Tax, Goods and Service Tax, Duty of Customs, Cess, and Other Statutory Dues with the appropriate authorities. There are no outstanding undisputed statutory dues on the last day of financial year concerned for a period of more than 6 month from the date they become payable except as follows:

(Rs in lakhs)

Name of the Statute	Nature of Dues	Amount	Period to which amount relates
SEBI Regulations	Penalties levied by BSE Limited*	3.01	Sep-20
SEBI Regulations	Penalties levied by BSE Limited*	1.30	Mar-22
SEBI Regulations	Penalties levied by BSE Limited*	5.37	Jun-22
SEBI Regulations	Penalties levied by BSE Limited*	4.78	Sep-22
SEBI Regulations	Penalties levied by BSE Limited*	5.43	Dec-22
SEBI Regulations	Penalties levied by BSE Limited*	3.19	Mar-23
SEBI Regulations	Penalties levied by BSE Limited*	0.58	Mar-23
SEBI Regulations	Penalties levied by BSE Limited*	1.30	Sep-23
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	3.01	Sep-20
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	1.30	Mar-22
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	5.37	Jun-22
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	4.78	Sep-22
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	5.43	Dec-22
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	3.19	Mar-23
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	0.14	Jun-23
SEBI Regulations	Penalties levied by National Stock Exchange of India Limited.*	2.48	Sep-23
Income Tax Act, 1961	Tax Deducted at Source**	6.01	FY 2017-18
Income Tax Act, 1961	Tax Deducted at Source**	1.00	FY 2008-09
Income Tax Act, 1961	Tax Deducted at Source**	4.78	FY 2018-19
Income Tax Act, 1961	Tax Deducted at Source**	0.37	FY 2009-10
Income Tax Act, 1961	Tax Deducted at Source**	3.73	FY 2019-20
Income Tax Act, 1961	Tax Deducted at Source**	0.00***	FY 2007-08
Income Tax Act, 1961	Tax Deducted at Source**	2.46	FY 2013-14
Income Tax Act, 1961	Tax Deducted at Source**	2.88	FY 2014-15
Income Tax Act, 1961	Tax Deducted at Source**	8.26	FY 2015-16
Income Tax Act, 1961	Tax Deducted at Source**	6.31	FY 2016-17
Income Tax Act, 1961	Tax Deducted at Source**	0.82	FY 2012-13
Income Tax Act, 1961	Tax Deducted at Source**	0.19	FY 2011-12
Income Tax Act, 1961	Tax Deducted at Source**	2.41	FY 2010-11
Income Tax Act, 1961	Tax Deducted at Source**	1.05	FY 2020-21
Income Tax Act, 1961	Tax Deducted at Source**	0.68	FY 2021-22
Income Tax Act, 1961	Tax Deducted at Source**	0.59	FY 2022-23
Income Tax Act, 1961	Tax Deducted at Source**	0.18	FY 2023-24

*According to the information and explanations given to us, the Company has made suitable representation seeking waiver of penalties imposed by BSE Limited and National Stock Exchange of India Limited. Refer Note No. 33(b) to the Financial Statements

**In respect of Tax Deducted at Source, the amounts were due during various reporting periods and are still outstanding.

***Amount is less then INR One Thousand.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with generally accepted auditing practices in India, the particulars of dues of Income Tax or Sales Tax or Service Tax or Excise Duty or Value Added Tax or Goods and Services Tax or Cess or Stamp Duty as at 31st March 2024 which have not been deposited on account of any dispute are as under:

(Rs in lakhs)

Name of the Statute	Nature of Dues	Amount	Period to which amount relates	Forum where dispute is pending
Income Tax Act 1961	Income Tax*	342.19	AY 15-16	Honourable High Court of Madras
Finance Act 1994	Service Tax*	22.32	Various Period from FY 2014-15 to June 2018	Honourable High Court of Madras
Goods and Service Tax Act	Sales Tax*	25.26	FY 2016 - 17	Honourable High Court of Madras
Foreign Trade (Development and regulation Act 1992	Penalty Under Foreign Trade (Development & Regulation Act, 1992*	20.00	Various Period for Advance Authorization obtained in October, 2004	Honourable High Court of Madras
Provident Fund Act 1952	Provident Fund*	33.67	FY 2016-2018	Honourable High Court of Madras
Goods and Service Tax Act	Goods and Service Tax	235.47	2017-18 to 2020-21	Honurable Goods and Service Tax (Appeals)

* In respect to the demands raised, amounts were due during the various reporting periods prior to the approval of the Resolution Plan by the Honourable National Company Law Tribunal. As represented by the management, the Company has filed the writ petitions with the Honourable High Court of Madras for quashing all demands pursuant to the approval of the Resolution Plan. Refer Note No. 33 (c) to the financial statements.

viii) According to the information and explanations given to us, and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

ix) a) According to the information and explanations give to us and on the basis of our examination of the records

of the Company, carried out in accordance with the generally accepted auditing practices in India, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year. However, with respect to interest free loan availed from KMP in previous financial years, the terms and conditions for repayment of principal has not been stipulated and accordingly we are unable to comment on the default in repayment of such loans.

(Rs in lakhs)

Particulars	Amount
Outstanding at the beginning of the year	150.67
Repaid during the year	0.60
Outstanding at the end of the year	150.07

b) According to the information and explanations given to us, and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority or any lenders. Therefore the provisions of clause 3(ix)(b) of paragraph 3 of the order is not applicable to the Company.

c) According to the information and explanations given to us and based on our examination of the records of the Company, term loans were applied for the purpose for which they were obtained during the year.

d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, carried out in accordance with the generally accepted auditing practices in India, in our opinion, funds raised on short-term basis have, prima facie, not been used during the year for long- term purposes by the Company.

e) According to the information and explanations given to us us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company does not have subsidiaries, joint ventures, associate companies. Therefore, the provisions of clause (ix)(e) of paragraph 3 of the order are not applicable to the Company.

f) According to the information and explanations given to us and on the basis of our examination of records of the Company, carried out in accordance with the generally accepted auditing practices in India, in our opinion, the Company does not have subsidiaries, joint ventures, associate companies. Therefore, the provisions of clause (ix)(f) of paragraph 3 of the Order are not applicable to the Company.

x) a) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with generally accepted auditing practices in India, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with generally accepted auditing practices in India, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, the provisions of clause (x)(b) of paragraph 3 of the Order are not applicable to the Company.

xi) a) According to the information and explanation given to us and on the basis of our examination of records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud by the Company or on the Company, noticed or reported during the year, nor we have been informed of any such cases by the management during the course of our audit.

b) No report under Section 143 (12) of the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

c) According to the information and explanations given to us provided by the management of the Company, the Company has not received any whistle blower complaints during the year. Therefore, the provisions of clause (xi)(c) of paragraph 3 of the Order are not applicable to the Company.

xii) In our opinion and according to the information and explanations given to us and on the basis of our examination of records of the Company, carried out in accordance with the generally accepted auditing practices in India, the Company is not a Nidhi Company. Therefore, the provisions of clause (xii)(a), (xii)(b) and (xii)(c) of the paragraph 3 of the Order are not applicable to the Company.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act where applicable and details of such transactions have been disclosed in the Financial Statements as required by the applicable Ind AS.

xiv) a) According to the information and explanations given to us and based on our examination of the records of the Company, carried out in accordance with the generally accepted auditing practices in India, the Company has an internal audit system that commensurate with the size and nature of its business.

b) We have considered the internal audit reports of the Company for the year under audit, issued to Company.

xv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, carried out in accordance with the generally accepted auditing practices in India, the Company has not entered into non-cash transactions with directors or persons connected with them. Therefore, the provision of clause (xv) of the paragraph 3 of the Order is not applicable to the Company.

xvi) a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Therefore, the provisions of clause (xvi) (a) of the paragraph 3 of the Order are not applicable to the Company.

b) The Company has not conducted non-banking financial/housing finance activities during the year. Therefore, the provisions of clause (xvi)(b) of the paragraph 3 of the Order are not applicable to the Company.

c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Therefore, the provisions of clause (xvi)(c) of the paragraph 3 of Order are not applicable to the Company.

d) According to the information and explanations provided to us during the course of audit, the Group does not have any CIC. Therefore, the provisions of clause (xiv)(d) of the paragraph 3 of the Order are not applicable to the Company.

xvii) The Company has not incurred cash losses in the current and in the immediately preceding financial year.

xviii) There has been no resignation of the statutory auditors during the year. Therefore, the provisions of clause

(xviii) of paragraph 3 of the Order is not applicable to the Company.

xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the Financial Statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, carried out in accordance with the generally accepted auditing practices in India, the Company has not transferred the amount of INR 12.70 Lakhs remaining unspent in respect of other than ongoing projects, to a fund specified in Schedule VII to the Companies Act, 2013 till the date of our report. However, the time period for such transfer i.e. six months of the expiry of the financial year as permitted under the second proviso to sub section (5) of the section 135 of the Act, has not elapsed till the date of our report.

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company carried out in accordance with the generally accepted auditing practices in India, there are no ongoing projects as at balance sheet date, therefore, the Company does not have any amount remaining unspent under Section 135(6) of the Act. Therefore, the provision of clause (xx) (b) of the paragraph 3 of the Order is not applicable to the Company.

Annexure B to the Independent Auditors Report

(Referred to in paragraph 2(g) under Report on Other Legal and Regulatory Requirements section of our report to the Members of Bafna Pharmaceuticals Limited on the Financial Statements as of and for the year ended 31st March 2024.)

Report on the Internal Financial Controls with reference to Financial Statements under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")

We have audited the internal financial controls with reference to Financial Statements of Bafna Pharmaceuticals Limited (the "Company") as of March 31, 2024 in conjunction with our audit of the Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls with reference to Financial Statements

The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("Guidance Note") issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility for Internal Financial Controls with reference to Financial Statements

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Financial Statements included obtaining an understanding of internal financial controls with reference to Financial Statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Companys internal financial control with reference to Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control with reference to Financial Statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to Financial Statements to future periods are subject to the risk that the internal financial control with reference to Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls with reference to Financial Statements and such internal financial controls with reference to Financial Statements were operating effectively as at March 31, 2024, based on the criteria for internal financial control with reference to Financial Statements established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

	For Brahmayya & Co
	Chartered Accountants
	Firm Regn No: 000511S
	Sd/-
	Lokesh Vasedevan
	Partner
Place: Coonoor	Membership No: 222320
Date: 29th May 2024	UDIN: 24222320BKETWK2887