Lyka Labs Ltd Directors Report

The Members,

Lyka Labs Limited

The Directors are pleased to present the Forty Fifth Annual Report together with Audited Financial Statements of Lyka Labs Limited for the financial year ended on 31st March 2024.

1. FINANCIAL RESULTS: Standalone

Particulars	For the financial year ended 31st March 2024	For the financial year ended 31st March 2023
Total Revenue	10804.35	8404.42
Profit / (Loss) before Exceptional items	(87.74)	(603.43)
Exceptional Items	5.51	717.41
Profit/(Loss) before tax	(93.25)	(1320.84)
Less: Tax Expenses	133.65	(7.82)
Profit/(Loss) after tax	(226.89)	(1328.66)
Add: Other Comprehensive Income	6.17	(6.28)
Profit/(Loss) for the year	(220.72)	(1334.94)

Consolidated

Total Revenue	11264.93	9647.38
Profit / (Loss) before Exceptional items	(52.32)	(577.67)
Exceptional Items	41.06	739.44
Profit/(Loss) before tax	(93.38)	(1317.11)
Less: Tax Expenses	168.67	(1.87)
Profit/(Loss) after tax	(262.05)	(1315.24)
Add: Other Comprehensive Income	10.54	(0.54)
Profit/(Loss) for the year	(251.51)	(1315.78)

2. DIVIDEND:

The Board of Directors does not recommend any dividend for the financial year ended on 31st March

2024.

3. RESERVE:

The Company has not transferred any amount to reserve for the financial year ended on 31st March 2024.

4. OPERATIONS:

During the year under review, the total revenue earned by the Company was Rs.10804.35 Lakhs as against total revenue of Rs.8404.42 Lakhs in the previous financial year. The Company has reported net loss of Rs.220.72 Lakhs as against net loss of Rs.1334.94 Lakhs of the previous financial year ended on

31st March 2023.

During the financial year under report, the Company has invested in building brands in the domestic human and veterinary business. The export business did not meet expectations, as international Government tenders had exhausted their budgets. Certain markets also experienced foreign exchange fluctuations and political uncertainty due to which the purchases were delayed.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the financial year 2023-24 is as annexed hereto.

6. KEY FEATURES:

The Company continues to maintain high quality GMP/GLP standards in manufacturing and testing of its pharmaceutical products.

The Company manufactures pharmaceutical products such as Dry Powder, Liquid, Lyophilised Injections and External Preparations for several International Markets and the Domestic Market.

The Companys R&D is engaged in development of new formulations and has successfully developed several products in the following categories:

1. Injectables: Lyophilised Injection, Liquid Injections & Dry Powder Injections

2. Topical Preparation: Ointment /Creams and Lotions.

Companys Core competencies:

1. Lyophilisation Formulations/Bulk Sterile APIs

2. New Product Development including Novel Drug Delivery Systems

7. FUTURE OUTLOOK:

The Company is constantly exploring possibilities of entering into new international markets with reputed partners and is also introducing new products in existing markets and focus on building its own marketing / distribution business within India.

The Company embarked on upgrading and adding additional capacity to meet the increase in global demand for lyophilised products. The project is likely to be completed in FY 2025 with a 50% enhancement in capacity for Lyophilisation. This modernization will lead the Company into regulated markets such as Europe, UK etc.. The Company is also creating its foundation for the branded business both in the veterinary and human critical care.

8. REGISTRATIONS:

During the financial year 2023 24, the Company has submitted 36 new applications for registration of its products. It has received registration of 5 products and renewal of 19 products. The registration for 31 products are expected in the coming year.

9. ALLOTMENT OF EQUITY SHARES TO IPCA LABORATORIES LIMITED:

During the year under review, the Company has allotted and issued 24,00,000 equity shares of Rs. 10/- each to Ipca Laboratories Limited, an entity forming part of the Promoter Group of the Company, upon conversion of 24,00,000 Warrants into Equity Shares.

Further, the Company has also allotted and issued remaining 26,00,000 equity shares of Rs. 10/- each in the month of April 2024 to Ipca Laboratories Limited, an entity forming part of the Promoter Group of the Company, upon conversion of 26,00,000 Warrants into Equity Shares.

10. STATEMENT OF DEVIATION(S) AND VARIATION(S), IF ANY:

During the year under review, the Company has issued and allotted shares on the preferential basis on 18th April 2023. A statement of usage of the proceeds of the preferential issue pursuant to Regulation

32 (3) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015; was placed in the respective Audit Committee. The Committee noted that there was no deviation(s)/variation (s), in the statements submitted during the financial year ended on 31st March 2024.

11. NUMBER OF MEETINGS OF BOARD OF DIRECTORS:

The Board met six times during the financial year on 18th April 2023, 23rd May 2023, 2nd August 2023, 2nd November 2023, 16th January 2024 and 8th February 2024. The detailed information is provided in the Corporate Governance Report, which is annexed hereto.

12. CHANGES IN THE DIRECTORS:

Mr. Yogesh Shah, Executive Director & CFO of the Company, reappointed as the Executive Director w.e.f. 12th February 2023 till the conclusion of 46th Annual General Meeting of the Company, through postal ballot process by the shareholders.

The Second term of Mr. Sandeep Parikh as an Independent director was completed on 25th September 2023.

Mr. Neeraj Golas was appointed as director by the Board of Directors w.e.f. 16th January 2024 and approved his appointment as an Independent Director for the period of 3 years through postal ballot process by the shareholders.

Mr. Kunal Gandhi, Managing Director & CEO of the Company, re-appointed as the Managing Director for the period of 5 years w.e.f. 12th February 2024, through postal ballot process by the shareholders. Mr. Shashil Mendonsa retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment.

13. CHANGES IN KEY MANAGERIAL PERSONNELS:

There was no change in the Key Managerial Personnel during the financial year under the report.

14. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declaration from Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligation and Disclosure Requirement), Regulations 2015.

15. PERFORMANCE EVALUATION:

Pursuant to the provisions of Section 134 (2) (p) of the Companies Act, 2013 and under Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; the Board of Directors has undertaken an annual evaluation of its own performance, performance of its various Committees and individual Directors.

16. COMMITTEES OF BOARD:

The Board has four Committees namely, Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee and Corporate Social Responsibility Committee. The detailed information is provided in the Corporate Governance Report, which is annexed hereto.

17. STATUTORY AUDITORS:

The present term of M/s. D Kothary & Co., Chartered Accountants, Mumbai, as Statutory Auditors of the Company is completing on conclusion of the 45th Annual General Meeting of the Company.

The Board appointed M/s. D. Kothary & Co.,, Chartered Accountants, as Statutory Auditors of the Company for the next five years from the conclusion of the 45th Annual General Meeting till the 50th Annual General Meeting of the Company; subject to the approval of the Shareholders.

18. COST AUDITORS:

The Company has appointed M/s. Sarvottam Rege & Associates, Cost Accountants (Registration No.

104190) to audit the cost records of the Company for the financial year 2023-24. The Company has maintained the cost accounts and cost records as specified by the Central Government under Sub-section

(1) of Section 148 of the Companies Act 2013.

19. SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Kaushal Doshi & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report is annexed hereto.

20. MATERIAL CHANGES AND COMMITMENT AFTER THE END OF THE FINANCIAL YEAR WHICH HAVE IMPACT ON FINANCIAL POSITION:

There is no material change and commitment after the end of the financial year till the date of this report which have impact on financial position.

21. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATION OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORT ON FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2024:

The Statutory Auditors has not made any qualifications, reservation or adverse remarks or disclaimers in their report on the Financial Statement for the financial year 2023 24.

22. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to particulars as prescribed under sub-section (3)(m) of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed hereto as Annexure A.

23. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The details of loans, guarantee and investment, if any made under Section 186 of the Companies Act,

2013 are provided in the financial statements attached to this report.

24. WHISTLE BLOWER POLICY / VIGIL MECHANISM:

The Company has adopted Whistle Blower Policy/Vigil Mechanism. The details of establishment of such mechanism are disclosed on the website of the Company at www.lykalabs.com.

25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

The Related Party Transactions effected during the financial year are on arms length basis and in the ordinary course of business. Approval of the Audit Committee is obtained for Related Party Transactions.

The Related Party transactions effected during the financial year are disclosed in the notes to the Financial

Statement.

The particulars of contracts or arrangements with related parties referred to in Section 188 of the Companies Act, 2013, is annexed hereto as Annexure B.

26. ANNUAL RETURN:

The Annual Return pursuant to the provision of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, will be available on the website of the Company at www. lykalabs.com.

27. CORPORATE GOVERNANCE:

A Report on Corporate Governance along with certificate from Practicing Company Secretary confirming the Compliance of the condition of Corporate Governance as stipulated in the SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015, is annexed and forms an integral part of this Annual report.

28. DEPOSITS:

The Company has not accepted deposits from public falling within the ambit of Section 73 of the Companies

Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the financial year under review.

29. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the Board hereby submits its responsibility statement: a. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the financial year; c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. The Directors had prepared the annual accounts on a going concern basis; e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f. The Company has proper system to ensure compliance with the provisions of all applicable laws were in place and that such system was adequate and operating effectively.

30. SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES:

The Company has two subsidiaries i.e. Lyka BDR International Limited and Lyka Exports Limited. The

Audit Committee and the Board of Directors reviews the financial statements. The minutes of the subsidiary

Companies are placed before the Board of Directors.

The Company has in accordance with the Listing Regulations adopted the policy for determining material subsidiaries. The said policy is available on the Companys website at www.lykalabs.com.

In terms of proviso to sub section (3) of Section 129 of the Companies Act, 2013, the salient features of the financial statement of the subsidiaries are set out in the prescribed Form AOC-1, which is annexed hereto as Annexure C.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the

Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company at www.lykalabs.com. Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www.lykalabs.com .

31. CORPORATE SOCIAL RESPONSIBILTY (CSR):

The committee has framed Corporate Social Responsibility Policy, which is placed on the website of the Company at www.lykalabs.com

Pursuant to Section 135 of the Companies Act, 2013, a Company is required to spend in every financial year at least 2% of the average net profit of the Company made during the three immediately preceding financial years. The Company does not require to spend any amount towards CSR activities in the financial year 2023-24.

32. MERGER OF LYKA EXPORTS LIMITED WITH THE COMPNAY:

On 8th August 2022 the Scheme of Amalgamation was filed to the BSE Limited and the National Stock

Exchange Limited (the ‘Stock Exchanges) for merger of the Lyka Exports Limited, its subsidiary with the Company.

Based on the Observation Letters issued by the Stock Exchanges dated 2nd August 2023; the Company has made an application to the Honble NCLT, Ahmedabad (the ‘NCLT) and further to its instruction hold the meetings of the Shareholders and the Creditors on 20th February 2024 and submitted the proceedings of these meetings to the NCLT. The NCLT had hearings on 18th April 2024, 6th June 2024 and next hearing is on 18th July 2024,

33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

There are no significant or material orders passed by any regulator, tribunal or court that would impact the going concern status of the Company and its future operations.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company is complying with the Provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. A committee has been set up to redress complaints received regarding Sexual harassments. One complaint was received by the committee during the year under review, which was immediately addressed by the committee.

35. INTERNAL FINANCIAL CONTROL:

The Company maintains a system of internal control, including suitable monitoring procedures in various functional areas. The system is reviewed from time to time to update the same with changing requirement.

Internal Audit of Companys financial accounts and related records is conducted by M/s. Bansi Khandelwal

& Co., Chartered Accountants.

36. PARTICULARS OF EMPLOYEES PURSUANT TO RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

Disclosure with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure D.

37. SECRETARIAL STANDARDS:

The Company has complied with the Secretarial Standards on the meetings of Board of Directors (SS 1) and Secretarial Standards on the General Meetings (SS- 2), as issued and amended by the Institute of Company Secretaries of India.

38. GREEN INITIATIVE:

The Ministry of Corporate Affairs had taken the Green Initiative in Report of Corporate Governance by allowing paperless compliances by Companies through electronic mode.

The Company supports the Green Initiative and appeals to its Members, who are yet to register the Email addresses that they should take necessary steps for registering the same and contribute towards Green Initiative.

39. ACKNOWLEDGEMENT:

The Directors place on record their appreciation of the continued assistance, co-operation and support received from various Ministries of the Government of India, Government of Maharashtra, Government of Gujarat, the Companys Bankers, Customers, Shareholders and loyal and committed Employees for their unstinted support.

For and on behalf of the Board

Lyka Labs Limited

Babulal Jain

Chairman

DIN: 00016573

Mumbai; 21st May 2024.