To the Members of
Lyka Labs Limited
Report on the Standalone Financial Statements
We have audited the accompanying financial statements ofLyka Labs Limited ("theCompany") (includes the Statement of Companys branch at Ankleshwar audited byother auditors and relied upon by us after making such changes as are considerednecessary for incorporation) which comprise the Balance Sheet as at 31st March 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement the Statement of Changes in Equity for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2021 and its loss total comprehensive income its cash flowsand 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) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditors Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing 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 management and Board of Directors are responsible for the OtherInformation. The Other Information comprises the information included in theCompanys annual report but does not include the financial statements and ourauditors report thereon.
Our opinion on the financial statements does not cover the Other Information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe Other Information and in doing so consider whether the Other Information ismaterially in consistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this Other Information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
The Companys Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements the Board of Directors is responsible forassessing the Companys ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companysfinancial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions doubt on the Companys ability to continue asa going concern. If we conclude that may cast significant that a material uncertaintyexists we are required to draw attention in our auditors report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditors report. However future events or conditions may cause the Company tocease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
The accompanying Statement includes the audited financial statement and other financialinformation in respect of one branch at Ankleshwar whose financial result include totalassets of Rs 6938.47 lakhs as at March 31 2021 total revenues of Rs. 4973.01 lakhstotal net profit/(loss) before tax of Rs. 1138.82 lakhs total comprehensive income/(loss)of Rs. 1138.82 lakhs for the year ended on that date as considered in the Statement.These financial statement and other financial information have been audited by otherauditor whose reports have been furnished to us by the management. Accordingly ouropinion in so far as it relates to the affairs of branch is based solely on the report ofother auditor.
Our opinion above on the financial statements and our report on other legal andregulatory requirements below are not modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure A" a statement on thematters 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 bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branch not visited byus.
(c) The reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by branch auditor have been sent to us and have been properlydealt with by us in preparing this report.
(d) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account and with the returns received from thebranch not visited by us.
(e) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(f) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors aredisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.
(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and
(h) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the pending litigations which has impact on its financialposition in its financial statements Refer Note 36 to the standalone financial statements.
ii. The Company has made provisions as required under the applicable Law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring of amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2021.
| ||For D. Kothary & Co |
| ||Chartered Accountants |
| ||Firm Regn No. 105335W |
| ||Mehul N. Patel |
| ||(Partner) |
|Place: Mumbai ||Membership No. 132650 |
|Date: 02nd June 2021. ||UDIN: 21132650AAAAET1170 |
Annexure A to Independent Auditors Report
(Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date) i. In respect of its Propertyplant & Equipment:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant & equipment on the basis ofavailable information.
b) As explained to us all the property plant & equipment have been physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such verification physical .
c) According to the information and explanations given to us the title deeds ofimmovable properties including leasehold land as disclosed in Note 3 on property plantand equipment to the Financial Statements are held in the name of the Company.
ii. In respect of its inventories:
a) In our opinion and according to the information and explanations given to usphysical verification of inventory has been conducted at reasonable intervals by themanagement and no material discrepancies were noticed.
iii. According to the information and explanations given to us the Company has grantedunsecured loans to one body corporate covered in the register maintained under section189 of the Companies Act 2013 in respect of which :
a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Companys interest.
b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.
c) There is no overdue amount remaining outstanding as at the year-end.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
v. According to the information and explanations given to us the Company had receivedNational Company Law Tribunal (NCLT) order dated 22nd January 2016 granting extension oftime for repayment of Fixed Deposits. During the year the Company has repaid depositsthat were claimed and as regards the balance Rs. 42.40 Lakhs the same shall be paid asand when claimed. Refer note no. 37
vi. We have broadly reviewed the Cost records maintained by the Company which have beenspecified by the Central Government under sub-section (1) of section 148 of the CompaniesAct in respect of the manufacture of Bulk Drugs and Formulations to which the said rulesare made applicable and are of the opinion that prima-facie the prescribed accounts andrecords have been made and maintained. We have however not made a detailed examinationof the records with a view to determine whether they are accurate or complete.
vii. According to the information and explanations given to us in respect of statutorydues:
a) Undisputed statutory dues in respect of sales tax service tax withholding taxesprovident fund and employees state insurance cess as applicable and any otherstatutory dues have been generally regularly deposited with the appropriate authorities.There were no undisputed amounts payable in respect of Income-tax Custom Duty GST Cessand other material statutory dues in arrears as at 31st March 2021 for aperiod of more than six months from the date they became payable.
b) Following statutory dues have not been deposited on account of disputes pending withvarious forums.
|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 19871990 and 1995 ||Gujarat High Court |
|2 Purchase Tax ||16.00 ||1991-1996 ||Maharashtra Sales Tax Appellant Tribunal |
|3 Excise Duty ||11.22 ||2006-2007 ||Commissioner Of Central Excise & Service Tax |
| ||60.15 ||2008-2013 ||Customs Excise and Service Tax Appellant Tribunal |
| ||83.75 ||1995 to February 2000 ||Commissioner Of Central Excise & Service Tax |
|4 Bombay Sales Tax ||61.86 ||1998-1999 ||Sales Tax Appellant Tribunal |
|5 Maharashtra Value Added Tax ||38.89 ||2005-2006 ||Deputy Commissioner of sales tax |
| ||34.14 ||2007-2008 ||Deputy Commissioner of sales tax |
| ||369.38 ||2014-2015 ||Joint Commissioner of Sales Tax (Appeal) |
| ||110.34 ||2015-2016 ||Dy. Commissioner of Sales Tax |
|6 Central Sales Tax ||17.95 ||1998-1999 ||Sales Tax Appellant Tribunal |
| ||91.58 ||2005-2006 ||Deputy Commissioner of sales tax |
| ||5.92 ||2006-2007 ||Sales Tax officer Nodal |
| ||59.45 ||2007-2008 ||Deputy Commissioner of sales tax |
| ||38.12 ||2011-2012 ||Joint commissioner of Sales Tax (Appeal) |
| ||22.24 ||2014-2015 ||Joint Commissioner of Sales Tax (Appeal) |
| ||37.45 ||2015-2016 ||Deputy Commissioner of sales tax |
|7 Gujarat Sales Tax ||39.64 ||2002-2003 ||Commissioner Of Sales Tax (Appeals) |
|8 Income Tax ||44.63 ||AY 2002-2003 ||Commissioner of Income Tax (Appeals) |
| ||150.00 ||AY 2004-2005 ||Commissioner of Income Tax (Appeals) |
| ||80.85 ||AY 2010-2011 ||Income Tax Appellate Tribunal |
| ||155.40 ||AY 2011-2012 ||Income Tax Appellate Tribunal |
| ||61.77 ||AY 2014-2015 ||Income Tax Appellate Tribunal |
(*net of amounts paid under protest)
viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of dues to anyfinancial institution or bank. The Company had repaid the Debenture as per the Order ofNCLT dated 22nd May 2017 and 13 lakh is outstanding as on 31st March 2021 dueto cheques returned undelivered / unclaimed. Refer Note no. 38.
ix. According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3 (ix) of the Order isnot applicable.
x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
xi. The Company has paid/provided for managerial remuneration in the books of accountsin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.
xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For D. Kothary & Co |
| ||Chartered Accountants |
| ||Firm Regn No. 105335W |
| ||Mehul N. Patel |
| ||(Partner) |
|Place: Mumbai ||Membership No. 132650 |
|Date: 2nd June 2021. ||UDIN: 21132650AAAAET1170 |
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 Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial Lyka Labs Limited reportingof("the Company") as of 31 March 2021 in conjunction with our audit of thestandalone 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial assurance regarding thereliability of financial reporting purposes in accordance with generally acceptedaccounting principles. A companys internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the companys assets that could havea 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover at 31 March 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For D. Kothary & Co
Firm Regn No. 105335W
Mehul N. Patel
Membership No. 132650
Date: 02nd June 2021.