INDEPENDENT AUDITORS REPORT To the Members of Lyka Labs Limited Report on the
Financial Statements Opinion
We have audited the accompanying financial statements of Lyka Labs Limited
("the Company"), which comprise the Balance Sheet as at 31st March, 2023, the
Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow
Statement, the Statement of Changes in Equity for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other
explanatory information
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Companies Act, 2013 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March, 2023, and its loss, total comprehensive income,
its cash flows and changes in equity for the year ended on that date.
Basis of Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards 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 together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act, 2013 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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. 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.
There are no key audit matters to be disclosed.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual report, but does not include
the standalone Ind AS financial statements and our auditors report thereon.
Our opinion on the standalone Ind AS 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 standalone Ind AS financial statements, our
responsibility is to read the other information and, in doing so, consider whether such
other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management and Those Charged with Governance for the Standalone
Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone financial statements that give a true and fair view of the financial
position, financial performance including other comprehensive income, cash and changes in
equity of the Company in accordance with the accounting principles generally accepted in
India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of
the Act read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding of 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.
Those Board of Directors are 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:
• 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.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• 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.
• 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.
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 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.
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.
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.
(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.
(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this
report are in agreement with the books of account maintained for the purpose of
preparation of the financial statements.
(d) In our opinion, the aforesaid standalone financial statements comply with the
Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st
March, 2023 taken on record by the Board of Directors, none of the directors are
disqualified as on 31st March, 2023 from being appointed as a director in terms of Section
164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B"; and
(g) In our opinion, the managerial remuneration for the year ended 31st March, 2023 has
been paid / provided by the Company to its directors in accordance with the provisions of
section 197 read with Schedule V to the Act.
(h) 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, in our opinion
and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31st March, 2023
on its financial position in its financial statements Refer Note 36 to the financial
statements.
ii. The Company has made provisions, as required under the applicable Law or accounting
standards, for material foreseeable losses, if any on long-term contracts including
derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring of amounts required to be transferred to
the Investor Education and Protection Fund by the Company during the year ended 31st
March, 2023.
iv. (a) The management has represented that, to the best of its knowledge and belief,
as disclosed in note no. 50(v) to the standalone financial statements, no funds 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 or entity, including
foreign entities ("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;
(b) The management has represented that, to the best of its knowledge and belief, as
disclosed in note no. 50(vi) to the Standalone financial statements, no funds 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;
(c) Based on such 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 (a) and (b) contain any material misstatement. v. The
dividend has not been declared or paid during the year by the Company.
|
For D. Kothary & Co |
|
Chartered Accountants |
|
Firm Regn No. 105335W |
|
Mehul N. Patel |
|
(Partner) |
| Place: Mumbai |
Membership No. 132650 |
| Date: 23rd May, 2023 |
UDIN: 23132650BGPYAZ2343 |
Annexure A to Independent Auditors Report
(Referred to in Paragraph 1 under the heading of "Report on Other Legal and
Regulatory Requirements" of our report of even date)
i. In respect of its Property, plant & Equipment:
a) (A) The Company has maintained proper records showing full particulars including
quantitative details and situation of Property, Plant & Equipment on the basis of
available information;
(B) The company has maintained proper records showing full particulars of intangible
assets;
b) As explained to us, all the property, plant & equipment have been physically
verified by the management in a phased periodical manner, which in our opinion is
reasonable, having regard to the size of the Company and nature of its assets. No material
discrepancies were noticed on such physical verification;
c) According to the documents provided to us, we report that, the title deeds,
comprising all the immovable properties of land and buildings, are held in the name of the
Company as at the balance sheet date;
d) According to the information and explanations given to us the Company has not
revalued its Property, Plant and Equipment (including Right-of-use assets) or intangible
assets during the year;
e) There are no proceedings initiated and are pending against the company for holding
any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
rules made thereunder;
ii. In respect of its inventories:
a) In our opinion and according to the information and explanations given to us,
physical verification of inventory has been conducted at reasonable intervals by the
management and coverage and procedure of such verification is appropriate and no material
discrepancies were noticed.
b) In our opinion and according to the information and explanations given to us, the
Company has not been sanctioned working capital limits, in excess of five crore rupees,
during any point of time of the year, in aggregate, from banks or financial institutions
on the basis of security of current assets. iii. In respect of loans and advances,
guarantee or security provided:
a) In our opinion and according to the information and explanations given to us, the
company has provided loans or provided advances in the nature of loans, or stood
guarantee, or provided security to any other entity
(A) The aggregate amount during the year is Rs. 662.35 lakhs, and balance outstanding
at the balance sheet date with respect to such loans or advances and guarantees or
security to subsidiaries is Rs. 554.00 lakhs;
b) The investments made, guarantees provided, security given and the terms and
conditions of the grant of all loans and advances in the nature of loans and guarantees
provided during the year are not prejudicial to the companys interest;
c) In respect of loans granted or advances in the nature of loans provided by the
Company, the schedule of repayment of principal and payment of interest has been
stipulated and the repayments of principal amounts and receipts of interest are regular as
per stipulation.
d) According to information and explanations given to us and based on the audit
procedures performed, in respect of loans granted and advances in the nature of loans
provided by the Company, there is no overdue amount remaining outstanding as at the
balance sheet date.
e) No loan or advance in the nature of loan granted which has fallen due during the
year, has been renewed or extended or fresh loans granted to settle the overdues of
existing loans given to the same parties;
f) According to information and explanations given to us and based on the audit
procedures performed, the Company has not granted any loans or advances in the nature of
loans either repayable on demand or without specifying any terms or period of repayment
during the year. Hence, reporting under clause (iii)(f) is not applicable. iv. In our
opinion and according to the information and explanations given to us, the Company has
complied with the provisions of section 185 and 186 of the Act, with respect to the loans
granted, investments made and guarantees and securities provided. v. According to the
information and explanations given to us, the Company had received National Company Law
Tribunal (NCLT) order dated 22nd January, 2016, granting extension of time for repayment
of Fixed Deposits. During the year, the Company has repaid deposits that were claimed and
as regards the balance Rs. 34.23 Lakhs, the same shall be paid as and when claimed. (Refer
note no. 37) vi. The maintenance of cost records has been specified by the Central
Government under Section 148(1) of the Companies Act, 2013 for manufacturing Bulk Drugs
and Formulations. We have broadly reviewed the books of account maintained by the Company
pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by
the Central Government for maintenance of cost records under Section 148(1) of the
Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records
have been made and maintained by the Company. We have, however, not made a detailed
examination of the cost records with a view to determine whether they are accurate or
complete. vii. In respect of statutory dues:
a) Undisputed statutory dues, including Goods and Service tax, Provident Fund,
Employees State Insurance, Income-tax, Sales Tax, Service Tax, duty of Custom, duty of
Excise, Value Added Tax, cess and other material statutory dues applicable to the Company
have been regularly deposited by it with the appropriate authorities in all cases during
the year.
There were no undisputed amounts payable in respect of Goods and Service tax, Provident
Fund, Employees State Insurance, Income-tax, Sales Tax, Service Tax, duty of Custom, duty
of Excise, Value Added Tax, cess and other material statutory dues in arrears as at 31st
March, 2023 for a period of more than six months from the date they became payable.
b) Details of statutory dues referred to in sub-clause (a) above which have not been
deposited as on 31st March, 2023 on account of disputes are given below:
| Sr. No. |
Nature of Dues |
Amount (Rs. In Lakhs) |
Period to which the amount relates |
Name of the forum |
| 1 |
Demand under Drugs Price control Order |
1061.96 |
Demands raised in 1987,1990 and 1995 |
Gujarat High Court |
| 2 |
Excise Duty |
83.75 |
1995 to February 2000 |
Commissioner Of Central Excise & Service Tax |
| 3 |
Maharashtra Value Added Tax |
369.38 |
2014-2015 |
Joint Commissioner of Sales Tax (Appeal) |
| 4 |
Central Sales Tax |
22.24 |
2014-2015 |
Joint Commissioner of Sales Tax (Appeal) |
| 5 |
Gujarat Sales Tax |
39.63 |
2002-2003 |
Commissioner Of Sales Tax (Appeals) |
| 6 |
Income Tax |
150.00 |
AY 2004-2005 |
Commissioner of Income Tax (Appeals) |
|
|
80.85 |
AY 2010-2011 |
Commissioner of Income Tax (Appeals) |
|
|
155.40 |
AY 2011-2012 |
Commissioner of Income Tax (Appeals) |
|
|
61.78 |
AY 2014-2015 |
Commissioner of Income Tax (Appeals) |
|
|
0.42 |
AY 2018-2019 |
Commissioner of Income Tax (Appeals) |
viii. There are no transactions which are not recorded in the books of account have
been surrendered or disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961 (43 of 1961).
ix. (a) Based on our audit procedures and as per the information and explanations given
by management, the Company has not defaulted in repayment of dues to any lender. The
Company had repaid the Debenture as per the Order of NCLT dated 22nd May, 2017 and 13.00
lakh is outstanding as on 31st March, 2023 due to cheques returned undelivered /
unclaimed. (Refer Note no. 38)
(b) The Company has not declared willful defaulter by any bank or financial institution
or government or any government authority.
(c) The Company has not taken any term loan during the year and there are no unutilised
term loans at the beginning of the year and hence, reporting under clause
(ix)(c) of the Order is not applicable.
(d) On an overall examination of the financial statements of the Company, funds raised
on short-term basis have, prima facie, not been used during the year for long term
purposes by the Company.
(e) The company has not taken any funds from any entity or person on account of or to
meet the obligations of its subsidiaries.
(f) The company has not raised loans during the year on the pledge of securities held
in its subsidiaries.
x. (a) The Company did not raise any money by way of initial public offer or further
public offer (including debt instruments) and term loans during the year. Accordingly,
paragraph 3 (x) of the Order is not applicable.
(b) The Company has made preferential allotment of equity shares and equity warrants
during the year, the requirements of section 42 and section 62 of the Companies Act, 2013
have been complied with and the funds raised have been used for the purposes for which the
funds were obtained.
xi. (a) To the best of our knowledge, no material fraud by the Company or on the
Company by its officers or employees has been noticed or reported during the course of our
audit.
(b) To the best of our knowledge, no report under Sub-section (12) of Section 143 of
the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies
(Audit and Auditors) Rules,
2014 with the Central Government, during the year and up to the date of this report.
(c) As represented to us by the Management, there were no whistle blower complaints
received by the Company during the year and up to the date of this report. xii. The
Company is not a nidhi company. Accordingly, paragraph
3(xii) of the Order is not applicable. xiii. In our opinion, the Company is in
compliance with Section 177 and 188 of the Companies Act, where applicable, for all
transactions with the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the applicable accounting
standards.
xiv. (a) In our opinion, the Company has an internal audit system commensurate with the
size and nature of its business.
(b) We have considered the internal audit reports issued to the Company during the year
and covering the period upto 31st March 2023.
xv. In our opinion during the year the Company has not entered into non-cash
transactions with any of its directors or directors of its holding company, subsidiary
company or persons connected with such directors and hence provisions of Section 192 of
the Companies Act, 2013 are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act 1934.
xvii. The company has not incurred cash losses in the financial year covered by our
audit and in the immediately preceding financial year.
xviii. There has not been any resignation of the statutory auditors during the year.
xix. On the basis of the financial ratios, ageing and expected dates of realisation of
financial assets payment of financial liabilities, other information accompanying the
financial statements, our knowledge 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 indicating 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. The
provisions of section 135 are not applicable to the Company. Accordingly, paragraph 3(xx)
of the Order is not applicable.
|
For D. Kothary & Co |
|
Chartered Accountants |
|
Firm Regn No. 105335W |
|
Mehul N. Patel |
|
(Partner) |
| Place: Mumbai |
Membership No. 132650 |
| Date: 23rd May, 2023 |
UDIN: 23132650BGPYAZ2343 |
Annexure - B to the Auditors Report To the Members of Lyka Labs Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reportingof Lyka Labs
Limited ("the Company") as of 31st March 2023 in conjunction with our audit
of the standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management 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
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
Companies Act, 2013.
Auditors Responsibility
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 on Audit of Internal Financial Controls over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed
to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of
India. 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 system over financial reporting and their operating
effectiveness. Our audit of internal financial over financial reporting included obtaining
an understanding of internal financial controls over financial 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 judgment, 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 over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for purposes in accordance with generally accepted
accounting principles. A companys internal financial control over financial reporting
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 Over Financial Reporting
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 over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting 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, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as 31st March 2023, 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 issued by the Institute of Chartered
Accountants of India.
|
For D. Kothary & Co |
|
Chartered Accountants |
|
Firm Regn No. 105335W |
|
Mehul N. Patel |
|
(Partner) |
| Place: Mumbai |
Membership No. 132650 |
| Date: 23rd May, 2023 |
UDIN: 23132650BGPYAZ2343 |
+91-9892691696
