BACFO PHARMACEUTICALS (INDIA) LIMITED

CIN: U74899DL1994PLC062272
E – 27, AKC HOUSE, DEFENCE COLONY
NEW DELHI – 110024, Ph No - 01141888000
EMAIL ID [email protected]

BOARD’S REPORT WITH RESPECT TO CONSOLIDATED FINANCIAL STATEMENTS

To, The Members,

BACFO Pharmaceuticals (India) Limited

The Board of Directors (the “Board”) are pleased to present before you the 2 nd Consolidated Annual
Report of BACFO Pharmaceuticals (India) Limited (” the Company”) together with the Audited
Consolidated Financial Statements and Independent Auditors’ Report of the Holding Company on the
Accompanying Consolidated Financial Statements for the year ended March 31, 2023.
.

1) FINANCIAL RESULTS/ HIGHLIGHTS

(Amount in INR)
Particulars Consolidated Statement of Profit & Loss

31.03.2023 31.03.2022

Net Total Income 63,84,84,684 40,93,44,139

Less: Operating and Admin. 56,01,33,265 36,96,17,804

Expenses

Less: Finance Cost 1,10,85,438 34,74,844

Profit before depreciation and Taxes 6,72,67,000 3,62,51,491

Less: depreciation and amortization 1,11,11,080 51,57,900

Profit before taxes (PBT) 5,61,54,902 3,10,93,592

Less: Taxes (including deferred tax) 1,56,86,699 64,66,247

Profit after taxes (PAT) 4,04,68,203 2,46,27,344

Add: Share of Associate (net of (17,08,110) (1,14,936)

tax)

Net Profit for the Year 387,60,093 245,12,408

2) RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE HOLDING COMPANY:

During the financial year ended March 31, 2023, the Consolidated total income is Rs. 63,84,84,684/-
as against the Consolidated total income for the previous year which was Rs. 40,93,44,139/-. The total

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 income of the Holding Company has increased significantly in comparison to the previous year. The
Group is focusing more on reducing its cost of operations and optimum utilization of its resources. The
Director’s of Holding Company are continuously looking for avenues for future growth of the Group.

3) DIVIDEND:

The Directors of Holding Company feel that it is prudent to plough back the profits for future growth
of the Holding Company and do not recommend any dividend for the year ended March 31, 2023.

4) SHARE CAPITAL:

As at March 31, 2023, the authorized share capital of the Company(Parent/Holding Company) was
Rs.4,00,00,000/-(Rupees Four Crore only) divided into 40,00,000 (Fourty Lakh) equity shares of Rs.
10/- (Rupees Ten only) each.

As at March 31, 2023, the paid-up share capital of the Holding Company stood at Rs.2,60,95,040/-
(Rupees Two Crore Sixty Lakh Ninety-Five Thousand and Forty only) consisting of 26,09,504
(Twenty-Six Lakh Nineteen Thousand Five Hundred and Four Only) equity shares of Rs.10/- (Rupees
Ten only) each. The Holding company has issued sweat equity shares (2,90,000 fully paid up equity
shares) by obtaining consent on board of directors on 13-02-2023 & sweat equity shares were allotted
on 10-03-2023 wide board resolution dated 10-03-2023 during the current financial year.

5) ISSUE OF SWEAT EQUITY SHARES TO EXISTING SHAREHOLDERS BY HOLDING

COMPNAY

Pursuant to section 54 of the Companies Act, 2013 and Rule 8 of Companies (Share Capital and
Debentures) Rules 2014 and other applicable provisions, if any, of the Companies Act, 2013,
Board of Directors of Holding Compnay have proposed an issue of Sweat Equity Shares to the
Director of the Holding company as specified below.

S.No. Name of Director No of Sweat Equity Shares

1. Mr. Akhil Chauhan 96,667

2. Mr. Achal Chauhan 96,667

3. Mr Arun Chauhan 96,666

In terms of the resolutions of Board of Directors of holding company passed on February 13th,
2023, the holding Company has agreed to grant/ issue 2,90,000 equity shares (in total) as sweat
equity shares towards their contribution, making available rights in the nature (intellectual property
rights or value additions, by whatever name called) for non-cash consideration.
 Information as required under Rule 8 of the Companies (Share Capital and Debentures)
Rules, 2014:

The Objects of the Issue Sweat Equity Shares Issue to the Directors of
holding company
The date of the Board meeting at which the 13th February 2023
proposal for issue of sweat equity shares was
approved;
The class of shares under which sweat Equity Shares
equity shares are intended to be issued
The total number of shares to be issued as 2,90,000 (Two Lac Ninty Thousand) in Total
sweat equity
The class or classes of directors or Sweat equity shares are being proposed to be
employees to whom such equity shares are issued to Mr. Akhil Chauhan, Executive
to be issued: Director, Mr. Achal Chauhan, Director of the
holding company and Mr. Arun Chauhan
Director of the holding company.

The principal terms and conditions on Price has been arrived on the basis of valuation
which sweat equity shares are to be issued, report issued by a Registered Valuer, i.e. M/s
including K.S. Agarwal & Associates. The terms and
basis of valuation conditions are as under:
a) Equity shares shall be under a lock-in-period
of 3 years from the date of allotment.
b) The Sweat equity shares are being proposed
to be issued for a non-cash consideration.
Valuation based on DCF as per report
obtained.

The time period of association of such Mr. Akhil Chauhan joined the Board of the
person with the company Company w.e.f. 28/12/2006.

Mr. Achal Chauhan joined the Board of the

Company w.e.f. 07/03/2013

Mr. Arun Chauhan joined the Board of the

Company w.e.f. 21/10/1994

The names of the directors or employees to Sweat equity of 96,667 shares are being
whom the sweat equity shares will be issued proposed for issue to Mr. Akhil Chauhan,
and their relationship with the promoter Executive Director of the company, sweat
or/and Key Managerial Personnel equity of 96,667 shares to Mr. Achal Chauhan,
executive director of the Company and Sweat
equity of 96,666 shares to Mr. Arun Chauhan,
director of the Company. They are the
subscribers to the MOA/AOA and have
conceptualized and strategized the inception of
the company.

The price at which the sweat equity shares Sweat equity shares are being proposed for
are proposed to be issued issue at Rs. 10.73 per share basis the fair
market value obtained from Registered Valuer.
 The ceiling on managerial remuneration, if There will not be any breach on ceiling of
any, be breached by issuance of such sweat managerial remuneration. Further requisite
equity and how it is proposed to be dealt approvals shall be obtained in this regard if
with any.
A statement to the effect that the company The Board guarantees that it will confirm to the
shall conform to the applicable accounting applicable accounting standards.
standards.
Diluted Earnings Per Share pursuant to the Based on latest audited Financial Statements:
issue of sweat equity shares, calculated in Diluted EPS Rs.10.62/-
accordance with the applicable accounting
standards.
Justification of the Issue The issue of sweat equity shares are made for
providing know how and making available
rights in the nature of intellectual rights or
value additions, by whatever name called

6) RESERVES

The holding Company has not carried any amount to any Reserves during the period under review.

7) BUSINESS:

The Parent Company is engaged in the business manufacturing of Ayurvedic and Herbal Medicines
and Products and the Associate Company is engaged in business of providing research facilities to
educational institutes.

There is no change in the business of the holding Company and Associate company during the
financial year.

8) SUBSIDIARY AND ASSOCAIATE COMPANIES

The Holding company does not have any Subsidiary Company. However, during the financial year
2021-2022, the Holding Company has acquired 7,00,000 (Seven Lakh Shares) of M/s Bacfo & Krauter
Holdings Private Limited on 04th January 2022 which constitute 41.18% of Total Equity Share Capital
of the Company at year end. Thus the M/s Bacfo & Krauter Holdings Private Limited as become an
Associate Company of the Company and Consolidated Financial Statements have been prepared in
accordance with the applicable laws and regulations.

9) PUBLIC DEPOSITS

During the year under review, the holding Company has not accepted any deposit under Chapter V of
the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, as amended
up to date.

10) PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE & GUARANTEES GIVEN

Particulars of loans given, investments made & guarantees given along with the purpose are provided
in the Consolidated financial statement (Please refer to Note 12 to Note 17 the Consolidated financial
statement).
11) MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments affecting the financial position of the holding
Company, which have occurred between the end of the financial year and the date of the report

12) DIRECTORS

The Composition of the Board of Director of Holding Company during the financial year is as under:

Sl. Name of the Director of Designation Change in Date of

No. Holding Company designation, if change in
any designation ,
if any

1 Arun Kumar Chauhan Managing No NA

(DIN: 00241128) Director
2 Akhil Chauhan Director No NA
(DIN: 01447201)
3 Achal Kumar Chauhan Director No NA
(DIN :05356488)
4 Rajesh Puri (DIN: 00355335) Director No NA

13) BOARD MEETINGS OF HOLDING COMPANY

During the year ended 31 March, 2023, the Board of Directors of Holding company met on
24.05.2022, 19.07.2022, 23.09.2022, 07.11.2022, 13.02.2023 and 10.03.2023. The maximum gap
between any two meetings was not more than one hundred and twenty days.

One meeting of the Board of Directors of Holding company is held in each quarter. Additional
meetings of the Board are convened as may be necessary for proper management of the business
operations of the Company.

Number of meetings attended by each Director of the Holding Company during the financial year:

Name of the Designation No. of Board No. of Board Last AGM

Director meetings held meetings attendance
attended
Arun Kumar Chauhan Managing 6 6 YES
Director
Akhil Chauhan Director 6 6 YES

Achal Kr. Chauhan Director 6 6 YES

Rajesh Puri Director 6 6 YES

14) IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Board of Directors of Holding Company has developed and adopted a Risk Management Policy.
This policy identifies all perceived risks which might impact the operations and on a more serious
 level also threaten the existence of the Holding Company. Risks are assessed department wise such as
financial risks, information technology related risks legal, risks, accounting fraud etc.

The Holding Company is taking appropriate measures to achieve prudent balance between risk and
reward in both ongoing and new business activities.

15) DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH

REFERENCE TO THE CONSOLIDATED FINANCIAL STATEMENTS.

The Board of Holding Company has adopted the policies and procedures for ensuring the orderly and
efficient conduct of its business, including adherence to the Holding Company's 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 Consolidated financial
disclosures. It ensures that all financial and other records are reliable for preparing Consolidated
financial statements, other data and for maintaining accountability of assets.

16) AUDITORS

M/s Alok Mittal & Associates, Chartered Accountants, were appointed by the Shareholders at the
Annual General Meeting of the Holding Company held on 27th September, 2019, for a period of 5
consecutive years i.e. until the conclusion of this Annual General Meeting of the Holding Company.
They have confirmed their eligibility to the effect that their re-appointment, if made would be within
the prescribed limits under the Act and that they are not disqualified for re-appointment.

The ratification of their appointment, pursuant to Section 139 of the Companies Act, 2013, is not
required, in terms of Notification No. S.O. 1833(E) dated May 7, 2018, issued by the Ministry of
Corporate Affairs and accordingly, the item has not been included in the Ordinary Business of the
AGM Notice forming part of this Annual Report.

The Notes on Consolidated financial statement referred to in the Auditors’ Report are self-explanatory
and do not call for any further comments. The Auditors’ Report does not contain any qualification,
reservation or adverse remark. During the year under review, the Statutory Auditors have not reported
any incident related to fraud to the Audit Committee or the Board of Holding Company under section
142 (12) of the Act.

17) EXPLANATION ON QUALIFICATION IN THE AUDIT REPORT

No qualifications are given by the Auditors in their report

18) PARTICULARS OF EMPLOYEES

There was no employee who was in receipt of remuneration in aggregate of not less than the sum as
specified pursuant to section 197 of the Companies Act, 2013 read with rule 5(2) & 5(3) of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.

19) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNINGS AND OUTGO
Information under Section 134(3) (m) of the Companies Act, 2013, read with rule 8(3) of the
Companies (Accounts) Rules, 2014 is given below:
 A. Conservation of Energy
i. Steps taken or impact on conservation of energy:-

Significant measures are taken to reduce energy consumption by using energy-efficient computers and
by the purchase of energy efficient equipment. The Holding Company constantly evaluates new
technologies and invests to make its infrastructure more energy efficient.

Currently The Holding Company uses LED lights, CFL fittings and electronic ballasts to reduce the
power consumption of fluorescent tubes. Air conditioners with energy efficient screw compressors for
central air conditioning and air conditioners with split air conditioning for localized areas are used.

ii. The steps taken by the Holding Company for utilizing alternate sources of energy- NA

iii. Capital investment on energy conservation equipment – NA

20) TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

i. Efforts in brief made towards technology absorption

As technologies change rapidly, The Holding Company recognizes the need to invest in new
emerging technologies to leverage them for improving productivity, quality and reach to new
customers. It is essential to have a technology infrastructure that is at par with the best in the world.
The Holding Company thus follows a practice of upgrading computing equipment on an ongoing
basis and investing in additional links with adequate bandwidth to connect to clients across the
globe.

ii. Expenditure incurred on Research and Development by Holding Company.

The Holding company’s R&D unit is recognized by DSIR, Ministry of Science & Technology,
Government of India. Expenditure on R&D for the year ended March 31, 2023 was
Rs.75,82,614/- (previous year Rs. 62,85,542/-).

21) FOREIGN EXCHANGE EARNINGS AND OUTGO

Sr. No. Particulars Year Ended March 31, Year Ended March
2023 31, 2022

1. Expenditure in foreign 50,43,000 28,53,229

Currency

2. Earning in Foreign Currency 11,65,37,000 8,16,60,848

22) CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

The Holding company is not falling under any of the criteria(s) as provided under Section 135 of the
Companies Act, 2013 and Rules made there under, for the purpose of undertaking CSR Activity.

23) RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm’s length
basis and were in the ordinary course of business. There are no materially significant related party
 transactions was entered into by the Holding Company with Promoters, Directors, Key Managerial
Personnel or other designated persons which may have a potential conflict with the interest of the
Holding Company at large. However, all the related party transactions have been duly disclosed and
presented in Note No. 26 to the Consolidated Financial Statements.

24) SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant material orders passed before the Regulators/Courts which would impact the
going concern status of the Holding Company and its future operations.

25) DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provision of Section 134(3) (c) of the Companies Act, 2013, the Board of
Directors of Holding Company affirms that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2023, the
applicable accounting standards had been followed along with proper explanation relating to
material departures;
b) Such accounting policies have been selected and applied consistently and judgments and
estimates have been made that are reasonable and prudent so as to give a true and fair view of
the state of affairs of the Holding Company as at March 31, 2023 and of the profit of the
Holding Company for the year ended on that date.
c) that proper and sufficient care has been taken for the maintenance of adequate accounting
records in accordance with the provision of the Companies Act, 2013 for safeguarding the
assets of the Holding Company and for preventing and detecting fraud and other irregularities.
d) that the accounts for the year ended March 31, 2023 have been prepared on a going concern
basis.
e) that systems to ensure compliance with the provisions of all applicable laws were in place and
such systems were adequate and operating effectively.

26) DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Holding Company is committed to provide a protective environment at workplace for all its
women employees. The Holding Company has in place a ‘Discrimination Free Workplace and Sexual
Harassment Policy’ in line with the requirements of The Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal) Act, 2013. There is an Internal Complaints
Committee (ICC) which is responsible for redressal of complaints related to sexual harassment. All
employees (permanent, temporary contractual, casual trainees/apprentices) are covered under the
extant policy.

27) COST RECORD

Provisions of maintenance of cost record are not applicable to the Holding Company as required under
the Act.
28) APPRECIATION/ACKNOWLEDGEMENTS

The Directors of Holding company also wish to place on record their deep appreciation to employees
at all levels for their hard work, solidarity, cooperation and support, as they are instrumental in the
Holding Company scaling new heights, year after year.

By Order of Board of Director of Holding Company

For Bacfo Pharmaceuticals (India) Limited
CIN- U74899DL1994PLC062272

Place: New Delhi

Date: 30/08/2023