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Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Lyka Labs Ltd.

Mar 31, 2025

Your Directors are pleased to present the Forty-Sixth Annual Report, together with the Audited Financial Statements for the financial year ended 31st March, 2025.

FINANCIAL RESULTS

Standalone (Rs. in Lakhs)
Particulars	For the financial year ended 31st March 2025	For the financial year ended 31st March 2024
Total Revenue	13,704.09	10,804.35
Profit / (Loss) before Exceptional items	1,147.47	(87.74)
Exceptional Items	0.00	5.51
Profit/(Loss) before tax	1,147.47	(93.25)
Less: Tax Expenses	324.75	133.65
Profit/(Loss) after tax	822.72	(226.89)
Add: Other Comprehensive Income	18.22	6. 17
Profit/(Loss) for the year	840.94	(220.72)
Consolidated (Rs. in Lakhs)
Particulars	For the financial year ended 31st March 2025	For the financial year ended31st March 2024
Total Revenue	14,072.71	11,264.93
Profit / (Loss) before Exceptional items	1,112.49	(52.32)
Exceptional Items	-	41.06
Profit/(Loss) before tax	1,112.49	(93.38)
Less: Tax Expenses	319.17	168.67
Profit/(Loss) after tax	793.32	(262.05)
Add: Other Comprehensive Income	18.08	10.54
Profit/(Loss) for the year	811.40	(251.51)

DIVIDEND

The Board of Directors does not recommend any dividend for the financial year ended on 31st March 2025. TRANSFER TO RESERVES

The Board of Directors of your Company have not transferred any amount to the reserves for the financial year under review.

OPERATIONS

During the year under review, the total consolidated revenue earned by the Company was Rs. 14,072.71 Lakhs as against total revenue of Rs.11,264.93 Lakhs in the previous financial year. The Company has reported consolidated net Profit of Rs.811.40 Lakhs as against net loss of Rs.251.51 Lakhs of the previous financial year ended on 31st March 2024.

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.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

The Company has two Subsidiaries, i.e. Lyka BDR International Limited and Lyka Exports Limited. There are no Associate nor joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 (the Act).

During the year, the Board of Directors reviewed the affairs of the Subsidiaries Company. In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries are set out in the prescribed Form No. AOC-1, which forms part of the Annual Report.

To comply with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the SEBI Listing Regulations), the Board of Directors of the Company has approved and adopted a Policy for determination of Material Subsidiary and Governance of Subsidiaries. None of the subsidiaries were a material subsidiary of the Company in terms of the said Policy. The said policy is available on the Companyâs website at www.lykalabs.com.

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

Â¦ lnjectables: Lyophilised Injection, Liquid Injections & Dry Powder Injections

Â¦ Topical Preparation: Ointment /Creams and Lotions.

Companyâs Core competencies

Â¦ Lyophilisation - Formulations/Bulk Sterile APis

Â¦ New Product Development including Novel Drug Delivery Systems FUTURE OUTLOOK

The Company continues to pursue growth by expanding into new international markets through collaborations with reputed partners and introducing new products in existing markets. It also aims to strengthen its domestic presence by building a robust marketing and distribution network within India.

To cater to rising global demand, the Company is upgrading and expanding its lyophilisation capacity by 50%, with the project expected to be completed in financial year 2026. This enhancement will support the Companyâs entry into regulated markets such as Europe and the UK. Simultaneously, the Company is laying the ground work for its branded business in both veterinary and human critical care segments.

Additionally, the Company has ventured into Gynaecology and Assisted Reproductive Technology (ART) through its new division, FertiNova. This division will focus on advanced IVF solutions and womenâs health therapies, targeting a strong market presence over the next three years through innovation and strategic partnerships.

REGISTRATIONS

During the year under review, the Company has submitted 29 new applications for registration of its products. It has received registration of 11 products and the renewal of 26 products. The registration for 16 products is expected in the upcoming financial year.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of the business of the Company.

MATERIAL CHANGES AFFECTING THE COMPANY

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year of the Company and date of this report.

SHARE CAPITAL

During the year under review, there was no change in the Authorized Share Capital the Company. As on 31st March, 2025, the Authorized Share Capital stood at Rs 4,800 Lakhs, comprising Rs 4,800 Lakhs equity shares of Rs 10 each.

However, the Company allotted 26,00,000 equity shares of 10 each to lpca Laboratories Limited, an entity forming part of the Promoter Group, upon conversion of 26,00,000 warrants into equity shares. Consequently, the Issued, Subscribed, and Paid-up Equity Share Capital increased from Rs 3,309 Lakhs (comprising 330.90 Lakhs equity shares of Rs 10 each) to Rs 3,569 Lakhs (comprising 356.90 Lakhs equity shares of Rs10 each)

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits from the public and as such, no amount of principal or interest in deposits was outstanding as on the balance sheet date.

LOANS, GUARANTEES AND INVESTMENTS

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Director

Mr. Prashant Godha, Non- Executive Director, retires by rotation in compliance with Section 152 of the Act, at the ensuing 46^th Annual General Meeting (the AGM) of the Company and being eligible, offers himself for reappointment. The Board of Directors are also of the opinion that Mr. Prashant Godha fulfills all the conditions as mentioned in the Act.

The Board of Directors of the Company at its meeting held on 26th May, 2025 based on the recommendation of Nomination and Remuneration Committee has recommended to re- appointment of Mr. Yogesh B Shah, Chief Financial Officer of the Company as a Whole- time Director for a period of three years with effect from the conclusion of Forty-Sixth Annual General Meeting till the conclusion of Forty -Ninth and appointment of Mrs. Archana S Yadav as an Additional Director of the Company in the category of Independent Director with effect from 26th May, 2025 under Section 161 (1) of the Act, for a period of five (5) consecutive years with effect from 26th May, 2025 upto 25th May, 2030 (both days inclusive), not liable to retire by rotation.

The resolutions seeking Memberâs approval for the re-appointment and appointment forms part of the Notice. The details of the Director being recommended for appointment and re-appointment are contained in the accompanying Notice of the AGM.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI the Listing Regulations and that they are not disqualified to become directors under the Act. In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs (âIICAâ).

The Board of Directors is of the opinion that all the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.

Key Managerial Personnel

The following persons are the Key Managerial Personnel (KMP) of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:

i. Mr. Kunal Gandhi, Managing Director & CEO;

ii. Mr. Yogesh B Shah, Whole -time Director & CFO,

iii. Mr. Kishor Shah Company Secretary ( upto 18th September, 2024)

iv. Mr. Shekhar R Singh (w.e.f. 12th November, 2024)

The Board had placed on record its appreciation for the services rendered by Mr. Kishore Shah during his tenure as a KMP of the Company.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board Committee and Individual Director, pursuant to the provisions of the Act and the Listing Regulations, a structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boardâs functioning composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Director was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

BOARD AND COMMITTEE MEETINGS

During the year under review, Six Board meetings were held. The details of the composition of the Board and its Committees and number of meetings held and attendance of Directors at such meetings are provided in the Corporate Governance Report, which forms part of this Report.

INDEPENDENT DIRECTORSâ MEETING

In terms of Schedule IV of the Act and Regulation 25 of the SEBI Listing Regulations, Independent Directors of the Company are required to hold at least one meeting in a financial year without the attendance of NonIndependent Directors and Members of management.

During the year under review, Independent Directors met separately on 4th February, 2025, inter- alia, for:

Â¦ Evalution performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

Â¦ Evaluation performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors.

Â¦ Evalution of the quality, content and time line of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

NOMINATION AND REMUNERATION POLICY

The Board has framed a policy for selection and appointments for Directors, Senior Management and their remuneration. The details of this Policy are given in the Corporate Governance Report which forms part of this Report. The Nomination and Remuneration Policy is also available on the Companyâs website on https://www.lykalabs.com/nomination-and-remuneration-policy.pdf

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company has practice of conducting familiarization programme for Independent Directors of the Company. The details of the said programme are given in the Corporate Governance Report which forms part of this Report.

PARTICULARS OF EMPLOYEES

During the year, there was no employee in receipt of remuneration as prescribed in the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The prescribed particulars of Employees as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure I and form part of this Report.

Further, as per second proviso to Section 136(1) of the Act read with Rule 5 of the aforesaid Rules, the Boardâs Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees as required under Rule 5(2) of the aforesaid Rules. Any member interested in obtaining a copy of the said statement may write to the Company at companysecretary@lykalabs.com up to the date of AGM.

AUDITORS AND AUDITORâS REPORT

i. STATUTORY AUDITORS

Messer D Kothary & Co. Chartered Accountants, Mumbai (ICAI Firm Registration No. 105335W) were appointed as the Statutory Auditors of the Company in the 45th General Meeting held on 9th August, 2024 for the second term of five consecutive i.e. from the conclusion of the 45th Annual General Meeting till the conclusion of 50th Annual General Meeting to be held for the financial year 2028-2029.

The Statutory Auditors have submitted their Independent Auditors Report on the Financial Statements of the Company for the year ended 31st March, 2025 and they have given an unmodified opinion(s) report on the Financial Statements for the year under review.

There were no qualifications, reservations or adverse remarks or disclaimer made by the Auditors in their report. No frauds have been reported by the Auditors under Section 143(12) of the Act.

ii. COST AUDITORS

The Board of Directors of the Company, based on the recommendation made by the Audit Committee, appointed Messrs Rajaram Madhav Walavalakar & Co., Cost Accountants (Firm Registration No. 003584), as the Cost Auditors of the Company for the financial year 2024-25 at a remuneration of Rs 1,60,000/-plus applicable taxes and reimbursement of out-of-pocket expenses at actuals. Messrs Rajaram Madhav Walavalakar & Co, being eligible, consented to act as the Cost Auditors of the Company for the financial year 2024-25. Messrs Rajaram Madhav Walavalakar & Co. were appointed in place of Messrs Sarvottam Rege & Associates.

In terms of the provisions of Section 148(3) of the Act read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the Members of the Company.

The resolution seeking Memberâs approval for ratification for the remuneration payable to the Cost Auditor for financial year 2024 -25 and financial year 2025 -26 forms part of the accompanying Notice of the AGM.

The Company has filed the Cost Audit Report for the financial year ended 31st March 2023 submitted by Messrs Sarvottam Rege & Associates, Cost Auditor on 3rd September, 2024.

iii. SECRETARIAL AUDITOR

Pursuant to the amended provisions of Regulation 24A of the SEBI Listing Regulations and Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Audit Committee and the Board of Directors have approved and recommended the appointment of Messrs Kaushal Doshi & Associates, Practicing Company Secretary, a proprietorship firm led by Mr. Kaushal Doshi (FCS No.: 10609; COP No.: 13143) as Secretarial Auditor of the Company to hold office for a first term of five consecutive years commencing from the finanacial year 2025-26 to the financial year 2029-30.

The resolution seeking Memberâs approval for the appointment Messrs Kaushal Doshi & Associates, Practicing Company Secretary as Secretarial Auditors of the Company, forms part of the Notice. The details of Messrs Kaushal Doshi & Associates being recommended for an appointment are contained in the accompanying Notice of the AGM.

Messrs Kaushal Doshi & Associates have given their consent to act as Secretarial Auditors of the Company and confirmed that their aforesaid appointment (if made) would be within the prescribed limits under the Act & Rules made thereunder and the SEBI Listing Regulations. They have also confirmed that they are not disqualified to be appointed as Secretarial Auditors in terms of provisions of the Act & Rules made thereunder and the SEBI Listing Regulations.

A Secretarial Audit was conducted during the year in accordance with provisions of Section 204 of the Act. The Secretarial Auditorâs Report is attached as Annexure II, which forms part of this Report. The Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

During the year under review, the Statutory Auditors, Cost Auditors and the Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act read with Rule 13(1) of the Companies (Audit and Auditors) Rules, 2014, details of which needs to be mentioned in this Report.

SECRETARIAL STANDARDS

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34 of the SEBI Listing Regulations is attached, which forms part of this Report.

CORPORATE GOVERNANCE

The Company has complied with the mandatory provisions of Corporate Governance requirements as stipulated under the SEBI Listing Regulations. A separate report on Corporate Governance along with the requisite Auditorâs Certificate is annexed, which forms part of this Report.

DIRECTORâS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, and the SEBI Listing Regulations, on the basis of information placed before them, the Directors state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. appropriate accounting policies have been selected and applied consistently, and the judgments and estimates that have been made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2025 and the profit of the Company for the said period;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. there is a proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an armâs length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations. There were no transactions during the year which would require to be reported in Form No. AOC-2. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large during the year that would have required Members approval under the Listing Regulations.

The policy on Related Party Transactions as approved by the Board is available on the Companyâs website on https://www.lykalabs.com/related-party-transactions-policy.pdf

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a Vigil Mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The detail of the Policy is explained in the Corporate Governance Report and is also available on the Companyâs website on https://www.lykalabs.com/whistle- blower-policy.pdf

In terms of Section 92(3) of the Act, copy of the Annual Return of the Company is available on the website of the Company. The web link of the same is www.lykalabs.com.

STOCK EXCHANGE

The Companyâs equity shares are listed on BSE Limited and National Stock Exchange of India Limited. The Annual Listing Fees for the year 2025-2026 have been paid to both Exchanges.

PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this report as Annexure-II.

(Rs. in Lakhs)
Foreign Exchange Transactions	2024-2025	2023-2024
Foreign Exchange Earnings	3,405.32	3,687.65
Foreign Exchange Outgo	839.25	323.17

CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of Section 135(1) of the Act, the requirement to undertake Corporate Social Responsibility (CSR) activities applies to companies that, during the immediately preceding financial year ( i.e. as on 31st March, 2024 for the year under review), have a net worth of Rs 500/- Crore or more, or turnover 1,000 or more, or a net profit Rs 5 Crore or more.

In the case of the Company, none of these criteria were met as on 31st March, 2024. Accordingly, the Company is not required to constitute a CSR Committee or incur any expenditure towards CSR activities for the financial year 2024-25.

However, as a measure of good corporate governance, the Company continues to retain the CSR Committee already in place. The details of the Committee and its terms of reference are provided in the Corporate Governance Report, which forms part of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the financial year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Companyâs operations in future.

However, the Scheme of Amalgamation between Lyka Exports Limited and the Company was initially filed with the Honâble National Company Law Tribunal (NCLT), Ahmedabad Bench, on 8th August, 2022. Pursuant to the Tribunalâs order dated 24th September, 2024, the applicant companies submitted a fresh application on 25th October, 2024.

Subsequently, by an order dated 23rd January, 2025, the Honâble NCLT directed the applicant companies to convene meetings of their Equity Shareholders and Creditors. These meetings were duly held on 4th March, 2025, and the Scheme was approved by the requisite majority.

A petition seeking final approval of the Scheme was filed on 12th March, 2025. By its order dated 26th March, 2025, the Tribunal fixed the final hearing on 15th May, 2025, and directed the applicant companies to serve notices of the hearing to the concerned Statutory Authorities. Accordingly, the petitioner companies served the notices on 9th April, 2025, and filed the Affidavit of Service in respect thereof on 17th April, 2025.

Further, the Honâble Tribunal has now rescheduled the final hearing to 12th June, 2025.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is part of this Report.

RISK ASSESSMENT AND MANAGEMENT

Risk management policy has been developed and implemented. The Board is kept informed of the risk mitigation measures being taken through risk mitigation report/operation report. There are no current risks which threaten the existence of the Company.

DISCLOSURE UNDER THE PREVENTION OF SEXUAL HARRASSMENT ACT, 2013

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and has duly constituted an Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

During the year under review, there was no complaint reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

MATERIAL CHANGES AFFECTING THE COMPANY

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which these financial statements relate and the date of this Report.

APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (THE CODE )

During the year under review, the Company has not made or received any application under the Insolvency and Bankruptcy Code and there is no proceeding pending under the said Code.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the year under review, the Company has not undergone any one-time settlement and therefore, the disclosure in this regard in not applicable.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the assistance and support extended by all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors and Members of the Company. The Directors express their appreciation for the dedicated and sincere services rendered by the employees of the Company.

Mar 31, 2024

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

('' in Lakhs)
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 ('' in Lakhs)
Particulars	For the financial year ended 31st March 2024	For the financial year ended31st March 2023
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.

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 Companyâs 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.

Companyâs 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 armâs 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. DIRECTORSâ 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 Companyâs 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 âStock Exchangesâ) 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 Honâble NCLT, Ahmedabad (the âNCLTâ) 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 COMPANYâS 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 Companyâs 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 Companyâs Bankers, Customers, Shareholders and loyal and committed Employees for their unstinted support.

Mar 31, 2018

To,

The Members,

Lyka Labs Limited

The Directors are pleased to present their Thirty Ninth Annual Report along with Audited Financial Statements of the Company for the Financial Year ended 31st March, 2018.

1. FINANCIAL RESULTS

[Rs. in Lakhs]

Particulars	For the Year ended 31.03.2018	For the Year ended 31.03.2017
Total revenue	4438.30	8634.57
Profit/(loss) before Interest, provision for depreciation & Taxes and Write offs	137.51	2347.25
Less: Interest	775.94	1654.06
Operational Loss/Profit before Depreciation	(638.43)	693.18
Less: Depreciation	(630.89)	(552.55)
Exceptional Items (Net)	147.12	(196.32)
Less: Tax Expenses	38.26	37.05
Less: Other Comprehensive Income	(29.71)	(5.55)
Loss for the year	(1113.65)	(24.18)

2. DIVIDEND

Due to loss during the year, no dividend was declared for the financial year ended 31st March 2018.

3. RESERVE

No amount is transferred to Reserves.

4. OPERATIONS

During the year under review, the total revenue earned by the Company was Rs. 4438.30 lakhs as against total revenue of Rs. 8634.57 lakhs of previous year ended 31st March, 2017. The Company has reported Net Loss of Rs. 1113.65 lakhs for the year ended 31st March, 2018 as against net loss of Rs. 24.18 lakhs for per previous year ended 31st March, 2017.

The Companyâs current Financial situation has arisen, due to repayment of FDâs and Debentures in compliance with the changes in the Companies Act, 2013. As a result there has been significant outgo of funds resulting in Financial crunch impacting the sales and performance of the Company.

Due to fire in Lypholized Plant at Ankleshwar, the Company had to undergo huge loss and loss of Business which in turn impacted the performance of the Company. In the meanwhile, competition from new domestic manufacturing had an impact on Company margin.

The Company manufactures its products & export through its subsidiary Lyka BDR International Limited (LBDR) whose performance for its last year has been on the lower side, mainly due to currency crisis in buying countries as well as more countries are encouraging domestic production. The unsatisfactory performance of LBDR has inturn affected the sales of Lyka Labs Limited. Moreover, to meet with the requirement of developed market, company has suspended production of cepholosporins at its Ankleshwar plant, causing loss of revenue/production. This will be made up in the coming years.

5. Key features

a. The Company is engaged in discovery, manufacturing and marketing of formulations on P to P basis and of itâs own.

b. The Manufacturing activities are carried out with principles and practices of highest standards in production and testing of formulations.

c. The Products of various categories including cosmeceuticals, external preparations, dry powder injections, liquid and lyophilized injectable preparations are being produced in manufacturing facilities.

d. The Production of lyophilized injections including lyophilized bulk with outstanding output has been one of the important key features of the company.

6. Future Outlook

a. With overall growth of lyophilized product market, demand for lyophilized injectables are expected to increase. Company proposes to enhance and improve itâs existing infrastructure in order to cater increased requirement.

b. The Company plans to set up new world class manufacturing facility for injectable. After completion, this facility intends to cater to Europe/US markets.

c. The Company plans to initiate further international GMP approvals from Phillipines, Ukraine and EU for its current manufacturing facility. With these GMP approvals, company looks forward to expand itâs global business.

d. The Company has converted itâs cephalosporin production line into dry powder injection production line after systematic decontamination. This will enable to produce more injections of general category by achieving higher capability of production with technical ease in coming years.

e. The Company proposes to go for more emphasis on injectable research leading to development of new stable formulations. This shall be catering to future requirements.

f. The Company tends to increase business volume by entering into new business relationship with large and medium scale pharmaceutical companies in segment of cosmeceuticals, dermatology and injectables.

7. DIRECTORS

A. BOARD DIVERSITY

The Company recognize and embrace the importance of a diverse board in its success. Diverse Board comprising of professionals from various fields helps in guiding the Company from time to time.

B. BOARD MEETINGS

During the year, Eight Board Meetings were held. The details of which are given in the Corporate Governance Report.

C. POLICY ON APPOINTMENT AND REMUNERATION POLICY

The Company has appropriate mix of Executive, Non-Executive and Independent Directors. As on 31st March, 2018, the Board consist of 5 Directors, one is Executive/Managing Director, one is NonExecutive Director and three are Independent Directors.

D. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each of 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.

E. RETIREMENT BY ROTATION

Smt. Nehal N Gandhi retire by rotation at the ensuing Annual General Meeting and being eligible offers herself for reappointment. The Board recommends her re-appointment as a Director for approval of members.

F. INDEPENDENT DIRECTORS FAMILIARIZATION PROGRAMME

The Company has framed policy on familiarization programme. The Independent Directors are familiarized with companyâs operation. They are provided with financial and other information in the Board Meeting. They are also appraised about their role and function. This will help them to effectively discharge their responsibilities. Independent Directors have visited our factory/plant located at Ankleshwar, Gujarat and they were also familiarised with production operations of the Company.

G. EVALUATION OF BOARD, COMMITTEES AND DIRECTORS

The Board has carried out performance evaluation of its own, the Committee and of the Directors pursuant to the provisions of the Act and applicable provisions of Listing Regulations, 2015.

The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of factors which includes Active Participation, Financial Literacy, contribution by a Director, positive Inputs, effective deployment of knowledge and expertise, integrity and maintenance of confidentiality and independence of behaviour and judgement.

In the meeting of Independent Directors, performance of Non-Independent Directors, Performance of Board and Performance of the Chairman was evaluated.

H. COMMITTEE OF BOARD

Currently, the Board has five Committees namely, Audit Committee, Nomination and Remuneration Committee, Stakeholder Committee, Share Transfer Committee and Risk Management Committee. A detailed note on composition of the Board and its committee is provided in the Corporate Governance Report which forms part of the Board Report.

I. CHANGES IN THE BOARD AND KMP

During the year under review, Shri. Vinod Shanbhag, Independent director on the Board has resigned with effect from 7th December, 2017.

Subsequent to closing of Financial Year:

1. Smt. Neha Thakore is appointed as Additional Independent Director (DIN No: 00893957) w.e.f 5th April, 2018.

2. Shri. Piyush G Hindia, Company Secretary and Compliance Officer has retired after closing hours of 5th April, 2018.

3. Shri. D. J. Darji is appointed as Company Secretary and Compliance Officer w.e.f 6th April, 2018.

8 AUDITORS

A. STATUTORY AUDITORS

M/s. Mehta Chokshi & Shah, Chartered Accountants (Firm Registration No. 106201W), were appointed as Statutory Auditors of the Company in 38th AGM to hold office till the conclusion of the 43rd Annual General Meeting.

In terms of the first proviso to Section 139 (1) of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting (AGM). Accordingly, the appointment of M/s. Mehta Chokshi & Shah, as Statutory Auditors of the Company, is placed for ratification of the shareholders at the AGM. The Company has received a certificate from the auditors to the effect that they fulfill the eligibility criteria of the provisions of Section 141 of the Companies Act, 2013. The Audit Committee has recommended their appointment for ratification.

B. BRANCH AUDITORS

M/s. M.I. Shah & Co., Chartered Accountants (Firm Registration No. 119025W), were appointed as Branch Auditor of the Company in 38th AGM to hold office till the conclusion of the 43rd Annual General Meeting.

In terms of the first proviso to Section 139 (1) of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting (AGM). Accordingly, the appointment of M/s. M.I. Shah & Co, as Branch Auditors of the Company, is placed for ratification of the shareholders at the AGM. The Company has received a certificate from the auditors to the effect that they fulfill the eligibility criteria of the provisions of Section 141 of the Companies Act, 2013. The Audit Committee has recommended their appointment for ratification.

C. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules 2014, as amended from time to time, the cost audit records maintained by the Company are required to be audited by cost accountant. The Company has appointed M/s. Kirit Mehta & Associates, Cost Accountant (Firm Registration No.000048) to audit the cost records of the Company for the financial year 2018-19. The remuneration payable to them is required to be ratified by the Shareholders at the ensuing Annual General Meeting and accordingly, a resolution seeking ratification has been included as Item No. 6 of the Notice convening the Annual General Meeting.

D. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s Kaushal Doshi & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as âAnnexure Aâ.

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

The Company has outstanding Term Loan and Working Capital Credit Facilities aggregating Rs. 73.43 crores plus interest with Dena Bank. The Company has approached to Bank for compromise settlement of Accounts. The Bank has considered and granted âIn Principle approvalâ for compromise settlement of our accounts.

11. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATION OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORT

AUDITORâS QUALIFICATION:

(i) Note no. 1 of the auditorâs report for the quarter and year ended 31st March, 2018 regarding reversal of interest on term loan from two banks provided for the period from April 2017 to September 2017 amounting to Rs 469.92 Lakhs and non-provision of interest on term loan from said two banks for the period from October 2017 to March 2018 amounting to Rs 471.64 Lakhs, aggregating to Rs 941.56 Lakhs.

Further, the Company has reversed Interest expenses for earlier years for the period from February 2016 to March 2017 amounting to Rs 344.35 Lakhs. There is non-provision for penal interest on term loan from two banks and working capital limit from one bank amounting to Rs 80.04 Lakhs. These nonprovisions/reversal of provision for interest is not in compliance with Ind AS 109 Financial Instruments.

Accordingly loss for the year is understated by Rs. 1365.95 Lakhs.

(ii) Inventories include slow/non-moving raw material and packing materials procured during the earlier years amounting to 174.06 lakhs as on 31st March 2018, which are valued at cost. This is not in accordance with Ind AS 2 inventories, which requires such inventories to be valued at lower cost or net realizable value. Accordingly we are unable to quantify the impact of reduction in profit for the quarter ended 31st March, 2018 and increase in the loss for the year.

MANAGEMENT EXPLANATIONS:

(i) As our account with some of the Banks have been classified as NPA, we have on going discussion with Banks for OTS / Restructuring and accordingly Company has not provided interest in the current quarter as well as written back the interest provided in earlier quarters. The Company has approached to Bank for compromise settlement of Accounts. The Bank has considered and granted âIn Principle approvalâ for compromise settlement of our accounts.

(ii) As regards to slow/non moving materials Company is taking necessary steps to utilize/realize the same.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached to this report and marked as âAnnexure Bâ.

13. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has formulated a policy on Risk Management and constituted Risk Management Committee.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans and guarantees given by the Company during the year under review and details of Investment made under Section 186 of the Companies Act, 2013 are given in the notes to the Balance Sheet.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The Related Party Transactions effected during the financial year were on Armâs length basis and in the ordinary course of business. Omnibus approval of Audit Committee is obtained as per RPT Policy. The Related Party transactions effected during the financial year are disclosed in the notes to the Financial Statement.

The particulars of Contracts or Arrangements made with related parties pursuant to Section 188 is attached to this report as per âAnnexure Câ.

The Company has obtained approval from the shareholders for the financial limit of the related party transactions that was entered into, during the year under review. The Company has formulated a policy for dealing with âMaterial Related Partyâ transaction and âRelated Partyâ transactions.

15 COMPANYâS POLICY

The highest ethical standards are followed by the Company in business transactions. The SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, mandated the formulation of certain policies for all listed Companies. The Company has framed various policies such as Nomination and Remuneration Policy, Policy on materiality subsidiaries and related matters, Policy on Materiality of events, Related Party Transactions Policy, Risk Management Policy, Whistle Blower Policy, Insider Trading code etc which are displayed on the companyâs Website i.e. www.lykalabs.com.

16 ANNUALRETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished as per âAnnexure Dâ and attached to this Report. A Detailed Annual Return after filing with ROC, will be available on our website i.e. www.lykalabs.com.

17 DIRECTORSâ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its responsibility statement:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a 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 that 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; and

(e) the directors, in case of a listed company had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) that the Directors had devised proper systems to ensure compliance with the provisons of all applicable laws were in place and were adequate and operating effectively.

18 SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has three subsidiaries namely Lyka BDR International Limited, Lyka Exports Limited and Lyka Healthcare Limited. The details of their performance are as under:

LYKA BDR INTERNATIONAL LIMITED (LBDR)

Lyka Labs Ltd is holding 65.22% of the Issued capital of Lyka BDR International Limited. During the year, the Company has reported EBDITA of Rs. 301.08 Lakhs and Net Loss after Tax is (Rs. 292.13 Lakhs) as against in previous year EBDITA of (Rs. 146.81 Lakhs) and Net Loss after Tax is (Rs. 501.33 Lakhs)

LYKA EXPORTS LIMITED (LEL)

Lyka Labs Ltd is holding 72.80% of Issued capital of Lyka Exports Limited. During the year, the Company has reported EBDITA of Rs. 17.03 Lakhs and Profit after Tax is Rs. 2.64 Lakhs as against in previous year EBDITA of (Rs. 5.13 Lakhs) and Net Loss after Tax is (Rs. 16.15 Lakhs), which was due to progress in the Business of Generic Pharmaceutical products meant for human consumption on PAN India basis.

LYKA HEALTHCARE LIMITED (LHL) - WHOLLY OWNED SUBSIDIARY

Lyka Labs Ltd is holding 100% of Issued capital of Lyka Healthcare Limited. During the year under review, the Company has reported EBDITA of (Rs. 151.77 Lakhs) and Net Loss after Tax is (Rs. 317.20 Lakhs) as against in previous year EBDITA of (Rs. 188.70 Lakhs) and Net Loss after Tax is (Rs. 330.63 Lakhs).

Performance and financial position of each of the subsidiaries for the year ended 31st March, 2018 attached in âAnnexure Eâ and forms part of this report.

19. DISCLOSURE OF CSR:

CSR is not applicable to the Company.

20. SHARE CAPITAL

During the year under review:

1. The Company has allotted 6100000 Equity Shares to Non-Promoters on preferential basis. Subsequent to allotment of 6100000 Shares, the paid up capital of the Company is increased to Rs. 28,14,00,000.

2. The Company has also allotted 550000 convertible equity warrants to one of the promoters on preferential basis.

21. SCHEME OF MERGER (BY ABSORPTION)

The Board of Directors at their meeting held on 29th May, 2017 had approved the Scheme of Merger of Lyka Healthcare Limited, Wholly Owned Subsidiary (âthe transferorâ) with Lyka Labs Limited, Holding Company (âthe Transfereeâ) and their respective shareholders (The Scheme of Amalgmation).

The Scheme was approved by Equity Shareholders, Preference Shareholder and Unsecured Creditors at their respective meetings held on 27th March, 2018. The meeting of Secured Creditors could not be proceeded with due to lack of quorum.

The Companyâs management is taking necessary steps to implement merger.

22. DEPOSITS

During the year under review, the Company has not accepted any deposits under Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

As of March, 2018, the company has unclaimed fixed deposits of Rs. 49,52,000/-.

23. DEBENTURES

As per Order dated 22nd May, 2017 passed by National Company Law Tribunal (NCLT), Ahmedabad, the

Company was required to make first payment of debentures of Rs. 3.85 Crores due upto 31st March, 2015 by 30th July, 2017, second payment of debentures of Rs. 2.13 crores due in between 1st April, 2015 to 31st July, 2015 by 31st December, 2017 and third payment of debentures of Rs. 1.39 crores due in between 1st August, 2015 to 30th April, 2016 by 30th March, 2018 aggregating outstanding debentures of Rs. 7.37 crores. The Company has made the payment as per NCLT order.

As of 31st March, 2018, the Company has unclaimed debentures of Rs. 12,00,000/24.

STATUS OF BANK LIABILITY

Bank of Maharashtra:

1. Due to unforeseen circumstances, as a result the Company has defaulted in making repayment of installment of term loan since June 2016 and Interest payment since February, 2016 to Bank of Maharashtra.

2. The Company has received a Notice from Bank for repayment of their outstanding dues of Rs.14 crores including interest. The Company has replied to the Notice.

3. Further, Bank of Maharashtra has taken symbolic possession of the Companyâs premises at 101 Shiv Shakti Industrial Estate, Andheri Kurla Road, Andheri East, Mumbai, (Andheri office). The Company had applied for Compromise Settlement which is pending for approval.

4. Till date Bank of Maharashtra has invoked 160000 equity shares which were pledged by promoter as a collateral security for giving Loan to the Company.

5. The Company has filed a securitisation application in Debt Recovery Tribunal, in order to restrict the Bank from taking any further action.

Dena Bank:

1. The payment of principal amount and interest to Dena Bank has become overdue. The Company has received a Notice from Dena Bank for repayment of their outstanding Term Loan and Working Capital Credit Facilities aggregating Rs. 73.43 crores plus interest.

2. Subsequently, the Company has received In Principle approval from Dena Bank for compromise of our accounts. The Company is in process of compliance of Terms & Conditions of In Principle approval of Compromise Settlement.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNAL.

During the year under review, the Company has received Order from National Company Law Tribunal (NCLT) Ahmedabad dated 22nd May, 2017, granting extension of time for repayment of Debentures as follows:

Sr. No.	Outstanding Debentures due	Amount (Rs.)	Payable by
1	Upto 31st March, 2015	38,500,000	30th July, 2017
2	From 1st April, 2015 to 31st July, 2015	21,300,000	31st December, 2017
3	From 1st August, 2015 to 30th April, 2016	13,900,000	30th March, 2018
	Total	73,700,000

The Company has complied with NCLT order.

26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION AND 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. No Complaints has been received by the Committee during the year under review.

27. PARTICULARS OF EMPLOYEES PURSUANT TO RULE 5(2) 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 Act, and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been annexed to this report as âAnnexure Fâ.

The information required pursuant to Section 197 (12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the Limits set out in the said rules, if any which includes names of top 10 employees in terms of remuneration drawn forms part of this Report. However, as per the provision of Section 136(1) of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the said Statement i.e. the information on employees particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining a copy of such statement may write to the Company Secretary at the Companyâs Administrative Office at Mumbai.

28. CORPORATE GOVERNANCE

A Report on Corporate Governance along with certificate from Practising Company Secretary confirming the Compliance of the condition of Corporate Governance as stipulated in the Listing regulations is annexed in âAnnexure Gâ and forms an integral part of this Annual report.

29. MANAGEMENT DISCUSSION ANALYSIS REPORT

Management Discussion and Analysis Report is attached in âAnnexure Hâ.

30. ACKNOWLDEGEMENTS

Your 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 Companyâs Bankers, Customers, Shareholders, Fixed Deposit Holders and loyal & committed Employees for their unstinted support.

By Order of the Board

Place: Mumbai N. I. Gandhi

Date: 13th August, 2018 Chairman & Managing Director

(DIN: 00021530)

Mar 31, 2016

The Directors are pleased to present their Thirty Seventh Annual Report along with the Audited Financial Statements of the Company for the Financial Period of nine months ended 31^st March, 2016.

1. FINANCIAL RESULTS

Rs. in Lacs

Particulars	For the Period Ended 31.03.2016 (9 Months)	For the Year Ended 30.06.2015 (12 Months)
Total revenue	6851.07	9219.16
Profit before Interest, provision for depreciation, taxes and write offs	1917.85	2003.79
Less: Interest	(1144.35)	(1834.72)
Operational Profit/(Loss) before Depreciation	773.50	169.06
Less: Depreciation	(264.02)	(383.26)
Exceptional Items (Net)	60.23	363.47
Less: Prior year Expenses	(87.69)	(12.60)
Profit/(Loss) for the year	482.02	136.67

2. DIVIDEND

No Dividend was declared for the financial period ended 31st March, 2016 as the Company wants to plough back the profit for its working capital requirements.

3. PERFORMANCE

During the year under review, the total revenue earned by the Company was Rs.6851.07 lacs for the period of nine months as against total revenue of Rs.9219.16 Lacs of the previous financial year of twelve months and Rs.7311.77 Lacs for the period of nine months on an average annualized basis. The Company has earned Net Profit of Rs.482.02 lacs as against net profit of Rs.136.67 lacs of previous financial year.

There are no material changes and commitment after the end of Financial year which has impact on the financial of the Company. The Company continues to operate only in one segment i.e. pharmaceuticals and there is no change and commitment affecting the financial position of the Company.

KEY FEATURES

I. The Company has successfully set up new cosmetic block as an additional facility to its Ankleshwar manufacturing operation which has the capacity and competency to manufacture the superior quality of cosmeceutical products which meets international quality standards.

II. The dermatological products manufactured by the Company remain the primary segment which is inclusive of Steroids, Anti-Fungal, Acne Management, Emollients etc. The Growth of this segment is driven by aesthetic Cosmeceuticals comprising of:

a. Hair Care - Anti Dandruff, Vitalizer& Alopecia.

b. Skin Car - Anti-Wrinkle, Derma Fillers, Complexion, Moisturizers and Emollients

c. Nutrition Supplements.

III. Having the core competency and innovations brought about in Cosmeceuticals, many renowned companies have shown interest in the manufacture of selected cosmeceutical formulations for their launch in the premium cosmetic segment and Lyka with its expertise has been able to commercialize the same. The tie ups with renowned Companies are under progress. It is expected that these companies will launch an entire range of Cosmeceuticals portfolio with Lyka under P to P arrangement.

IV. The company is offering âMoisturizing cream'' to some of the leading pharma companies in India and these products are well accepted in the market.

V. The lyopholized products manufactured at Ankleshwar factory are doing well. The company entered into API Business by offering its wide range of Sterile APIs. The company had already obtained leadership positions in few of the segments. However, there are several new entrants in this segment.

FUTURE OUTLOOK

I. Lyka has a technical expertise in Lyophilized products with all the latest machineries and devices which enable it to give the product in one of the purest form. Considering the growing demand for lyopholized products, the Company has planned expansion of its manufacturing facilities at its Ankleshwar factory.Apart from injections, Lyka is planning to supply sterile API (Active Pharmaceutical Ingredients) using its artifact Lyophilization facility.

II. In the coming years, Company is also set to introduce 50 innovative dermatological formulations which are in its pipeline of development for both the domestic as well as oversea markets. This will create a new market dynamic in the pharmaceutical and healthcare industry.

III. Considering the growing trends in exports market, Lyka intends to explore the new avenues of entering into exports with innovative formulations in Cosmeceuticals particularly in hair care, skin lightening, anti-wrinkle and anti-ageing which would further enhance the overall presence of Lyka in overseas market.

IV. Considering the requirements of main stream dermatology & cosmeceuticals, various formulations are being developed at the Research and Development center of Lyka Labs in the segment of dermatology and cosmeceuticals which will self-proclaim the innovations & advancement through its initiative.

V. In the coming years, the Company intends, develop, manufacture and market of its own branded products.

4. SHARE CAPITAL

During the year under review, 460000 Equity Shares were allotted on preferential basis to promoter group under Series I on conversion of equal number warrants on 2^ndNovember, 2015. Consequently, the issued & paid up equity share capital of the Company increased to Rs.22.04 Crores.

The Promoter Group has made an application to SEBI for seeking exemption from making an open offer for subscribing additional 1040000 shares on preferential basis under series II. The exemption was not considered favorably by SEBI.As a result, the funds which promoters have agreed to bring into the Company by subscribing the additional shares to meet the requirement of fund could not materialize.

5. MERGER

The merger of Subsidiaries viz Lyka Healthcare Limited and Lyka Exports Limited is considered with Lyka Labs Limited w.e.f 1st April, 2016.The merger will be cost advantageous and also help to expand the business of Lyka Labs in Marketing of Anesthesia, Dermatology & Cosmetology range of Products.

6. DIRECTORS

A. BOARD DIVERSITY

The Board of the Company consist of diverse members who have expertise in various field which will leverage difference in thoughts, perspective, Knowledge, skill which will help the Company to retain competitive advantage.

B. BOARD MEETING

During the year, 10 Board Meetings were held, the details of which are given in the Corporate Governance Report.

C. POLICY ON APPOINTMENT AND REMUNERATION

The Company has appropriate mix of Executive and Independent Directors to maintain the independence of the Board. As on 31^st March, 2016, the Board consist of six members of which, one is Managing Director, one is Non-Executive Woman Director and four are Independent Directors

D. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each of Independent Directors under Section 149(7) of Companies Act, 2013, that they meet the criteria laid down under Section 149(6) of the Companies Act, 2013.

E. RETIREMENT BY ROTATION

Smt. Nehal N Gandhi retire by rotation as Director at the ensuing Annual General Meeting and being eligible offer herself for reappointment. Board recommends her re-appointment as Director at the ensuing Annual General Meeting.

F. APPOINTMENT OF DIRECTORS DURING THE FINANCIAL YEAR

The appointment of Shri. Yatin N Shah, Shri. Atit N Shukla and Shri. Ajit S Bagadia are regularized as Independent Directors at the 36^th Annual General Meeting held on 30^th December, 2016 for the period of three years.

G. INDEPENDENT DIRECTORS FAMILIARIZATION PROGRAMME

The Independent Directors are familiarized with company''s objectives, Financial performance and various policies adopted by the Company. They have also visited to the Company''s plant Located at Ankleshwar and appraised about its operations. They are also appraised about their roles and responsibilities. The Company has framed the policy on familiarization programme.

H. EVALUATION OF BOARD AND DIRECTORS

Pursuant to the provision of the Act and Listing Regulations, the Board had carried out performance evaluation of its own and of the Independent Directors

I. COMMITTEE OF BOARD

7. AUDITORS

A. STATUTORY AUDITOR

The Company''s Statutory Auditor, M/s. M.A Parikh & Co., Chartered Accountants (Firm Registration No. 107556W), hold office till the conclusion of ensuing Annual General Meeting and are eligible for re-appointment. They have given their consent to act as Auditor of the Company, if appointed at the ensuing Annual General Meeting. They confirmed that their appointment is in accordance with provisions of sections 139 and 141 of Companies Act, 2013. The Audit Committee has recommended their re-appointment.

B. SECRETARIAL AUDITOR

Pursuant to the provision of section 204 of the Companies Act, 2013 and Rules made thereunder, the Board has appointed M/s V. Sundaram & Co, Practicing Company secretaries as Secretarial Auditor of the Company for the financial year 2016-17. The Secretarial Audit Report for financial year 2015-16 is attached to the Directors Report as Annexure A.

C. COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 and rules made there under, the Board has appointed M/s. Kirit Mehta & Associates, Cost Accountant (Firm Registration No.000048) on the recommendation of the Audit Committee for the financial year 2016-17.

D. BRANCH AUDITOR

Company''s Branch Auditor, M/s. Thacker Butala Desai, Chartered Accountants, hold office till the conclusion of ensuing Annual General Meeting and are eligible for re-appointment as Branch Auditor. They confirmed that they are meeting the eligibility criteria as provided in section 139 & 141 of Companies Act, 2013.

8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

9. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has formulated a policy on Risk Management and constituted a Risk Management Committee.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review.

The Company has given counter guarantee to Clearwater Capital Partners India Pvt Ltd who has assigned all receivables due from Lyka BDR International Limited, a subsidiary to Futuristic Solutions Ltd for a total amount of Rs.25 crores. (The outstanding amount of the loan covered under this guarantee is Rs.1.25 crores Inclusive of interest as of 31^st March, 2016).

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The Related Party Transactions entered during the financial year are in the ordinary course of Business. The Company has obtained approval from shareholders by passing special resolution approving the financial limit of the Related party transactions entered during the financial year under review. The Company has formulated a policy for dealing with âMaterial Related Party Transactions'' and âRelated Party Transactions''. The particulars of Contracts or Arrangements made with related parties pursuant to Section 188 is attached to the Directors Report as Annexure C.

12. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS

A AUDITORS OBSERVATIONS:

The Statutory Auditor at point no.4.2 of notes to their Auditors report qualified that the direct expenditure and allocable indirect expenditures incurred in respect of ânew product development and applied researchâ aggregating to Rs.1313.88 lacs including finance cost of Rs.220.87 lacs is carried forward under capital work in progress-intangibles.

B MANAGEMENT EXPLANATION:

Lyka has a separate R & D centre at Mumbai which is approved by the Department of Science and Technology, Government of India. It has well equipped laboratories with state of the art equipment to explore development of a wide range of formulations.

Like other pharma companies, Lyka Labs also conduct clinical trails, toxicity studies, stability studies in a phased manner and detailed documentation required for obtaining Regulatory approval is compiled. The period involved could be as much as 8-10 years and result in substantial development costs.

The benefit of such substantial development costs by way of new product development would accrue over a period of time and therefore such development costs are capitalized as and when regulatory approvals are obtained and commercial operations commence of the respective products or charged to Statement of Profit and Loss in the year in which development is abandoned.

During the year, the Company has capitalized Rs.33.22 lacs as âSelf-Generated Intangible Assetsâ upon successful development of respective products and there is no charge to Statement of Profit and Loss as there are no products, development of which is abandoned. There is no impact of this qualification on profit & loss account.

13. COMPANYâS POLICY

The Company has formulated various policies as per SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015,which are available on Company''s Website i.e. www.lykalabs.com.

14. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is attached to the Directors Report as Annexure D.

15. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility statement as under:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(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 directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has three subsidiaries namely Lyka BDR International Limited, Lyka Exports Limited and Lyka Healthcare Limited. The details of their performance is as under:

LYKA BDR INTERNATIONAL LIMITED (LBDR)

During the year under review, the total revenue earned by LBDR was Rs.67.06 Crore as against total revenue of Rs.66.74 Crore of previous year. It has reported Net Profit of Rs.45.58 Lakhs as against net loss of Rs.40.72 Lakhs of previous financial year.

Main assets of LBDR are its registration rights in various overseas market. Currently LBDR is having 349 registrations. During the year, 158 applications are submitted to Health Authority in 27 countries for fresh / renewal registration against which 42 fresh /renewal registration have been received. LBDR is expecting several new registrations in Sudan, Peru, Myanmar,Cameroon, Kenya, Saudi Arabia in financial year 2016 -17. LBDR performed well in existing territories such as Sudan, Congo, Russia, Chile and other African Countries.

FUTURE OUTLOOK

LBDR is likely to file about 100 new dossiers mainly in semi regulated markets. The Registrations received recently during the year are likely to help LBDR to generate new businesses. LBDR is focusing on emerging markets like Peru, Sudan, Russia, Philippines etc. where it expects new business in the coming year. LBDR will endeavor to improve its product mix to achieve better realization.

LYKA HEALTHCARE LIMITED (LHL)

Lyka Labs Ltd. hived off its domestic marketing division to Lyka Healthcare Ltd, a Wholly Owned Subsidiary in June 2013. It is engaged in ethical marketing and promotion of healthcare medicines.

Operational revenue of Lyka Healthcare Limited have grown from Rs.76.87 lakhs in 2013 (one month''s operations) to Rs.1,414.86 lakhs in 2016 at CAGR of 164% in the Last 3 years.

LHL is marketing ethically promoted pharmaceutical brands. The main therapeutic areas are gastroenterological, anti-infectives, Cosmo nutraceuticals, anesthesia and critical care. The Company is also into trading of pharmaceutical products.

FUTURE OUTLOOK

LHL is mainly focusing on gastroenterological, anti-infectives, cosmonutraceuticals, anesthesia and critical care which has better potentiality of generating revenue and profitability

LYKA EXPORTS LTD(LEL).

OPERATIONS

During the year under review, the total revenue was Rs.1263.78 Lacs as compared to total revenue of Rs.2425.37 Lacs of the previous year. During the year, Lyka Exports has sold its Animal Healthcare Division to Alivira Animal Healthcare Limited.

FUTURE OUTLOOK

Lyka Exports is focusing on branded generic pharmaceutical products. The Company is exploring to launch OTC range products through retail outlet.

Performance and financial position of each of the subsidiaries for the year ended 31^st March, 2015 is attached to the Directors Report as Annexure E.

17. DEPOSITS

The Company has neither accepted nor renewed any fixed deposits during the year under review. The details of the outstanding fixed deposits are as under:

Sr. No.	Particulars	Amount in Rs.
1	Amount accepted during the year	Nil
2	Amount remained unpaid or unclaimed as at the end of the year	6,91,52,000
3	whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved
(i)	at the beginning of the year	1974 10,85,86,000
(ii)	maximum during the year	1974 10,85,86,000
(iii)	at the end of the year	974 7,40,34,791

As per the order of Company Law Board, western region Bench, dated 22^nd January, 2016, the Company has paid the deposits matured and claimed up to 31^st December, 2015.

18. DEBENTURES

The Company has made an application to CLB on 31^st March, 2015 for seeking extension of time for repayment of Debentures which is pending for hearing. The Company has outstanding debentures of Rs.8.63 Crores as of 31^st March, 2016.

19. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Audit Committee consists of the following members

a) Shri.Ajit S. Bagadia : Chairman (Independent Director)

b) Shri. N. I. Gandhi : Member (Managing Director)

c) Shri. Vinod S. Shanbhag : Member (Independent Director)

d) Shri. Yatin N. Shah : Member (Independent Director)

e) Shri. Atit N. Shukla : Member (Independent Director)

The Company has framed Whistle Blower Policy. Under Vigil mechanism, the affected employees and Directors can directly access to the Chairman of the Audit Committee for adequate safeguard against victimization.

20. DISCLOSURE OF CORPORATE SOCIAL RESPONSIBILITY(CSR)

Corporate Social Responsibility is not applicable to the Company.

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS.

The Company has received order from Company Law Board, Western Region Bench granting extension of time for repayment of Fixed Deposits due and claimed up to 31^st December, 2015 on or before 30^th June, 2016 and to repay the fixed deposits due and claimed from 1^st January, 2016 to 30^th September, 2016 on or before 31^st March, 2017.

The Company has complied first part of the order and made the payment to those deposit holders whose fixed deposit matured and claimed upto31^st December, 2015.

22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION AND 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. No Complaints has been received by the Committee during the year under review.

23. RELATED PARTY TRANSACTIONS

The Company has obtained approval from the shareholders by passing a special resolution approving the financial limit of the related party transactions for the financial year 2015-16. The Company has formulated a policy for dealing with âMaterial Related Party'' Transactions and âRelated Party'' Transactions.

24. DISCLOSURE FOR RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEEâS REMUNERATION AND OTHER DETAILS AS PER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

1) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary of the Company and ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2015-16:

Name	% Increase in the remuneration	Ratio of the remuneration of each Directors/to median remuneration of the employees
Shri Narendra Ishwarlal Gandhi	Nil	33.81%

No Increase in the remuneration of Chief Financial Officer and Company Secretary.

2) The Percentage increase in the median remuneration of employees in the financial year: 1.79%

3) The number of permanent employees on the rolls of the Company: 210

4) Explanation on the relationship between average increase in remuneration and the Companyâs performance:

The Increase in remuneration is considered based on the performance of the Company and available liquidity.

5) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average Percentage Increase made in the salaries of Employees other than the managerial personnel in the last financial year i.e. 2015-16 was 1.03%.

6) The key parameters for variable component of remuneration availed by the directors are as follow: NA

7) It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and other Employees is as per the Remuneration Policy of the Company: Not as per policy.

25. PARTICULARS OF EMPLOYEES PURSUANT TO RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

During the year under review, there were no employees who are in receipt of remuneration aggregating to Rs.One crore and two Lakhs or more for the year or Rs.Eight Lakh and fifty thousand for part thereof.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is attached to the Directors Report as Annexure F.

27. CORPORATE GOVERNANCE

Report on Corporate Governance is annexed and forms an integral part of this Annual Report. Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in the Listing regulations is attached to the Directors Report as Annexure G.

28. ACKNOWLDEGEMENTS

Your 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 Company''s Bankers, Customers, Shareholders, Fixed Deposit Holders and loyal & committed Employees for their unstinted support.

By order of the Board

N. I. GANDHI

Place: Mumbai Chairman & Managing Director

Date: 12^th August, 2016 (DIN: 00021530)

Jun 30, 2015

The Directors are pleased to present their Thirty Sixth Annual Report and the Audited Accounts of the Company for the Financial Year ended 30th June, 2015.

1. FINANCIAL RESULTS

Rs, in Lacs

Particulars For the Year For the Period Ended 30.06.2015 Ended 30.06.2014 (12 Months) (15 Months)

Total revenue 9219.16 9139.71

Profit before Interest, provision for depreciation,

taxes and write offs 2003.79 73.70

Less: Interest (1834.72) (2194.98)

Operational Profit/(Loss) before Depreciation 169.06 (2121.28)

Less: Depreciation (383.26) (543.04)

Exceptional Items (Net) 363.47 (1154.50)

Less: Prior period Expenses (12.60) (365.51)

Profit on Slump Sale - 3457.16

Profit/(Loss) for the year 136.67 (727.18)

2. DIVIDEND

No Dividend was declared for the financial year ended 30th June, 2015 as the Company wants to plough back the profit for its working capital requirements.

3. OPERATIONS

During the year under review, the total revenue earned by the Company was Rs, 9219.16 lacs as against total revenue of previous year of Rs, 7311.77 lacs on an annualized basis, an increase by 26%. The Company has reported Net Profit of Rs, 136.67 lacs as against net loss of Rs, 727.18 lacs of previous financial year.

The lypholized products manufactured at Ankleshwar factory are well in demand and subsequent to sale of Tarapur Plant, the Company is focusing on expansion of Lypholization Plant by installing two new Lypholizers purchased from Italy. This will enhance the manufacturing capacity of Lypholization plant and cater the demand of the products.

Lyka's Derma Products are well accepted by some of the leading pharma companies in India. Some of these products have already become market's leading brands in its moisturizing segment. Company has launched Cosmetological products for 'skin care' and 'hair care' segment. Dermatological products are growing very rapidly and has liquid margins. Company has tied up marketing arrangements for these products with renowned Companies. This segment will contribute significantly to the total revenue and profitability of the Company in the coming years.

Company's P2P Business is facing acute competition from the Companies located in Tax Free Zones as they are enjoying benefits in Excise and Sales Tax, as a result the margin on this products are always under pressure affecting profitability of the Company.

4. FUTURE OUTLOOK

Lyka has the technical expertise in Lyophilized products with all the latest machineries and equipments which enables it to give superior quality product.

Lyka offers its Dermatology products to various Indian companies on the multi branding model. Lyka has a product range of 35 formulations with more than 80 formulation in its pipeline. Several formulations are registered in African and South East Asian Markets also.

Lyka masters the art of development of 'Novel drug delivery system' in both topical preparation & lyophilized products. The innovations brought about by us in the topical formulation are the best amongst its class and offers an edge of benefits over other formulation of same class, this includes revolutionary development in creams, ointments, lotions, gels & foams.

Lyka shall expand base in existing markets by entering into 'Distribution agreements' for new emerging and Non Â Regulated markets. The products are under the process of registrations and new agreements have been initiated. Commercialization of the said will commence by end of Financial Year 2016. The focus markets will be South East Asia, Russia, CIS, Africa and Latin America.

The Company's subsidiary namely Lyka BDR International Ltd have registration rights in various overseas markets. Currently, they have 401 registrations. During the year, 41 fresh registrations/renewals have been received by them. About 150 fresh registrations/ dossiers/ applications are submitted to the Health Authorities mainly in Asia and African markets of which approximately 50 registrations are expected to be received in Philippines, Myanmar, Kenya, Congo, Vietnam, Thailand and other various countries in the financial year 2015 Â 2016, thereby increasing their intrinsic value.

Company's another subsidiary viz Lyka Exports Limited has reorganized its activities and in pursuance of this, it has sold its Animal Healthcare Business.

Company's wholly owned subsidiary, Lyka Healthcare Limited is in process of development of new therapy areas like Gastro, Intestinal, Anesthesia & Dermatological in the current year. Brand differentials will be added with Improved & increased coverage. Brand mix improvement is the key aspect in the coming year.

In the coming years, substantial growth of Lyka Healthcare Limited, a subsidiary is expected which would further improve consolidated sales and profitability of the Company.

5. MATERIAL CHANGES AND COMMITMENT AFTER THE END OF THE FINANCIAL YEAR

The Company had issued 230000 Equity Shares of Rs, 10/- each at a premium of Rs, 18/- on a Preferential basis to each of N. I. Gandhi (HUF) and Enai Trading & Investment Pvt. Ltd of Promoter Group on exercising their option to convert Warrants into Equity Shares. As a result, the Promoters holding had increased from existing 23.30% to 24.90% of the Issued Equity Capital of the Company.

The Promoters have applied to Securities Exchange Board of India (SEBI) for seeking exemption for issue of 1040000 Warrants under Series II to them so that funds would come into the operation of the Company and liquidity would improve. Necessary submissions have been made to SEBI, outcome is awaited.

M/s. Lyka Exports Limited, a material Subsidiary of the Company had sold their Animal Healthcare Division to M/s. Alivira Animal Health Limited, a subsidiary of M/s. Sequent Scientific Limited. This had helped the Company to recover its outstanding dues of about Rs, 10 crores from Lyka Exports Limited and improved its liquidity.

6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure A and is attached to this report.

7. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has formulated a policy on Risk Management and constituted a Risk Management Committee. The objective and scope of the Committee is to oversee the Risk Management Policy of the Company, review the various risks and define the framework for identifying, assessing and monitoring the risk.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE

COMPANIES ACT, 2013

There were no loans or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review.

The Company has given counter guarantee to Clearwater Capital Partners India Pvt Ltd who vide Deed of Assignment dated 24th September, 2014 assigned all receivables due from Lyka BDR International Limited, a subsidiary of Lyka Labs Ltd to Futuristic Solutions Ltd for a total amount of Rs, 25 crores. (The outstanding amount of the loan covered under this guarantee is Rs, 3,02,71,581 as on 30th June, 2015) and Rs, 2,91,30,222 as on 30th September, 2015.

The Company has given a guarantee to Kapol Co-operative Bank Ltd for loan facility of Rs, 4,35,00,000 given to Lyka Exports Ltd, a subsidiary. (The outstanding amount of the loan covered under this guarantee is Rs, 4,23,20,000 as on 30th June, 2015) which have since been paid on 30th September, 2015.

9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The particulars of Contracts or Arrangements made with related parties made pursuant to Section 188 is furnished in Annexure B and is attached to this report.

10. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

A AUDITORS OBSERVATIONS:

1. Auditors pointed out Non-Compliance of the provisions of section 74 of the Companies Act, 2013 to the extent of non repayment of overdue Fixed Deposits mentioned at Note No. 28 to the Financial Statement.

2. Secretarial Auditor has also mentioned in their report regarding Non-Compliance of the provisions of section 74 of the Companies Act, 2013 by nonpayment of overdue Fixed Deposits. They also stated that the Company has not been regular in depositing statutory dues.

B MANAGEMENT EXPLANATION:

1. Due to fire in lyophilization plant at Ankleshwar Factory, the operation of the plant was suspended for about 4 months which resulted into substantial loss of Production and sales affecting the liquidity of the Company thereby impacted the performance of the Company.

2. The Company was regular in making payment of Fixed Deposit and interest thereon up to 31st March, 2014. Subsequent to introduction of the new Companies Act, 2013 w.e.f 1st April, 2014 the Company was not eligible to accept/renew the Fixed Deposits as a result; the Company's cash flow was under pressure.

The above factors delayed the payment of Fixed Deposits and Interest thereon. However, the Company has paid Fixed Deposits of Rs, 7.62 Crores during April, 2014 to 31st October, 2015 leaving overdue deposit of Rs, 3.25 Crores appx as of this date.

The Company has also preferred an application under Section 74(2) of the Companies Act, 2013 for seeking extension of time for repayment of Fixed Deposit and Interest thereon before CLB Bench, Western Region. The hearing of an Application is pending.

The Company is giving priority for making repayment of fixed deposits to senior citizens and small investors and also regularizing the interest payment. The Company is also in process of arranging funds to regularize the payment of outstanding deposits.

The Company has already paid undisputed statutory dues up to 31st October, 2015.

11. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Board on recommendation of the Nomination and Remuneration Committee has adopted the policy for selection, appointment and remuneration of Directors, KMP and Senior Management. The policy is available on Company's website www.lykalabs.com

12. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure C and attached to this Report.

13. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

There were Nine Board meetings conducted during the financial year under review. The Information has been furnished in the Corporate Governance Report.

14. ANNUAL EVALUATION OF PERFORMANCE OF DIRECTORS, COMMITTEE AND BOARD

The performance evaluation of Independent Directors were done.The Board is of the view that the Independent Directors who were on the Board during the year under report have contributed through the process of Board and Committee Meetings of which they are members in effective manner as per expertise of their field. The suggestions made by them are well accepted. The overall contributions made by Directors on the Board are satisfactory.

15. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility statement:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a 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 that period;

(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 directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has three subsidiaries namely Lyka BDR International Limited, Lyka Exports Limited and Lyka Healthcare Limited. The details of their financial performance is as under:

LYKA BDR INTERNATIONAL LIMITED (LBDR)

Lyka Labs is holding 65.22% of the Issued Capital of Lyka BDR International Limited. It has achieved a total revenue of Rs, 6673.72 lacs during the financial year ended on 31st March, 2015 as against Rs, 5046.65 lacs of the previous year thus recording a growth by 32% in the turnover. The Cash Profit for the financial year ended on 31st March, 2015, was Rs, 488.55 lacs and after considering depreciation of Rs, 304.88 lacs, exceptional expenses /write-off of Rs, 81.39 lacs and provision for tax of Rs, 56.21 lacs, the Company reported loss of Rs, 40.72 lacs.

LYKA EXPORTS LIMITED (LEL)

Lyka Labs is holding 72.80% of Issued Capital of Lyka Exports Limited. It has achieved total revenue of Rs, 1857.60 lacs as against Rs, 1211.91 lacs of previous year. The Company has reported a loss of Rs, 25.30 lacs due to increase in purchasing cost of materials and employee cost. As a measure of reorganization, Lyka Exports Limited has sold its Animal Healthcare business for an amount of Rs, 33.40 crores with an additional earn out of Rs, 8 crores based on the performance up to 31st March, 2016.

LYKA HEALTHCARE LIMITED (LHL)

Lyka Labs is holding 100% of Issued Capital of Lyka Healthcare Limited. Lyka Healthcare in its first year of Incorporation after getting separated from Lyka Labs Limited reported an Annual Turnover of Rs, 1259.80 Lacs during the financial year ending 31st March, 2015. This Company will further consolidate in the area of critical care and gastroenterology. Furthermore, newer therapy areas of dermatology and anesthesia as divisions will be launched with an expansion in current field operation and newer therapy areas. This Company is expected to be a revenue driving subsidiary. After providing for finance cost of Rs, 8.73 lacs and depreciation of Rs, 348.61 lacs, the Company has reported a loss of Rs, 6.55 crores for financial year ended 31st March, 2015,being its 1st year of operation as a wholly owned subsidiary.

Performance and financial position of each of the subsidiaries for the year ended 31st March, 2015 is attached in Annexure D and forms part of this report.

17. DEPOSITS

The Company has neither accepted nor renewed any fixed deposits during the year under review. The details of the outstanding fixed deposits are as under:

Sr. No. Particulars Amount in Rs,

1 Amount accepted during the year Nil

2 Amount remained unpaid or unclaimed as at the end of the year 10,85,86,000

3 whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved

(i) at the beginning of the year Nil

(ii) maximum during the year No. 2454

12,97,01,000

(iii) at the end of the year No. 1974

10,85,86,000

- The Company has filed a petition with the Company Law Board Bench, Western Region for seeking extension of time for repayment of Fixed Deposits and Interest thereon.

- The Company is giving priority for payment to small depositors, senior citizens and needy depositors and expects to pay all the outstanding deposits by end of the current financial year.

18. DIRECTORS

In accordance with the provision of Section 152(6) of the Companies Act, 2013, Smt. Nehal N. Gandhi, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment.

Shri. Sandeep P. Parikh, an Independent Director has resigned as a Director w.e.f 11th March, 2014 due to his pre-occupations. Shri. Vinodkant A. Sanghani, an Independent Director has resigned as a Director w.e.f 7th April, 2014 on account of health ground. The Board records appreciation of their services rendered by them.

The Board of Directors have appointed Shri. Yatin N. Shah as an additional director on 24th April, 2015. Shri. Atit N. Shukla and Shri. Ajit S. Bagadia have been appointed as Additional Directors on 11th August, 2015 to hold the said office till the date of the Annual General Meeting. The above Directors are meeting the criteria of Independence, as mentioned in Section 149(6) of the Companies Act, 2013. The Board recommends their appointment as Independent Directors of the Company at the 36th Annual General Meeting for the period of three years.

19. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their declarations to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

20. AUDITORS

M/s. M.A Parikh & Co., Chartered Accountants, who were appointed as Statutory Auditors of the Company and M/s. Thacker Butala Desai, Chartered Accountants who were appointed as Branch Auditors of the Company retires at the 36th Annual General Meeting. Your Company has received their eligibility certificates for reappointment pursuant to provisions of Section 139 and 141 of the Companies, Act 2013 read with Companies (Audit and Auditors) Rules, 2014.

21. COST AUDITOR

M/s. Kirit Mehta & Associates, Cost Accountant have been appointed as Cost Auditor by the Board on the recommendation of the Audit Committee to conduct Cost Audit of Cost Records of Pharmaceutical products of the Company for the financial year 2015-16.

22. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Audit Committee consists of the following members

(a) Shri Vinod S. Shanbhag

(b) Shri Yatin N. Shah

(c) Shri Narendra I. Gandhi Gandhi

The above composition of the Audit Committee consists of Independent Directors viz., Shri. Vinod S. Shanbhag and Shri. Yatin N. Shah, who form the majority.

The Company has established a vigil mechanism who oversees the genuine concerns expressed by the employees and other Directors. The Company has provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of the employees.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS. There are no significant, material orders passed by the courts during the year under report.

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

The Company is complying with the Provisions of Prevention and Prohibition and Redressal Act, 2013 and constituted a committee to redress the grievances of women employees.

25. RELATED PARTY TRANSACTIONS

The Company has obtained approval from the shareholders by passing a special resolution approving the financial limit of all the related party transactions that was entered into, during the year under review. The Company has formulated a policy for dealing with 'Material Related Party' transaction and 'Related Party' transactions.

26. SECRETARIAL AUDIT REPORT

As required under section 204 of the Companies Act, 2013 Secretarial Audit Report of the Company prepared by M/s V. Sundaram & Co. is attached as Annexure E.

27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report is attached as Annexure F.

28. DISCLOSURE FOR RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEES REMUNERATION AND OTHER DETAILS AS PER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

1. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary of the Company and ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15:

Name % Increase in the remuneration Ratio of the remuneration of

each Directors/to median remuneration of the employees

Shri Narendra Ishwarlal Gandhi 12.39% 1:43

No increase in the remuneration of Chief Financial Officer and Company Secretary.

2. The Percentage increase in the median remuneration of employees of the financial year: 2.35%

3. The number of permanent employees on the rolls of the Company: 182

4. Explanation on the relationship between average increase in remuneration and the Company's performance.

The Increase in remuneration is considered based on the performance of the Company and available liquidity.

5. Comparison of the remuneration of the Key Managerial Personnel against performance of the Company.

Remuneration of KMP against turnover of the Company is 0.74%

6. Variation in the market capitalization of the Company.

Variation in the market capitalization of the Company is Rs, 96,39,78,600.

7 Price Earnings Ratio: 109.48

8. Percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the public offer.

The Company came out with initial public offer (IPO) in the year 1985 at price of Rs, 10/- per share. The market price of the share as on 30th June, 2015 was Rs, 63.48/- on BSE and Rs, 63.50/- on National Stock Exchange of India Limited. Increase in percentage is 635%.

9. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

There is increase in the salaries of employees other than the senior managerial personnel in the financial year 2014-15 and hence comparison is not possible.

10. The key parameters for variable component of remuneration availed by the directors are as follow.

The Managing Director is paid remuneration of Rs, 42 lacs p.a. as per Schedule V of the Companies Act, 2013 as the Company has loss/inadequate profit. The other Directors are paid sitting fees for attending Board Meeting.

11. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year.

Not Applicable.

12. It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and other Employees is as per the Remuneration Policy of the Company.

Not as per policy.

29. PARTICULARS OF EMPLOYEES PURSUANT TO RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

Name Narendra Ishwarlal Gandhi

Destination Chairman & Managing Director

Nature of Employment Contractual

Qualification & Experience B.com, DBM

Worked as Jt Managing Director for about 15 years and working as Managing Director since April,1994

Date of Commencement of Employment Reappointed as Managing Director

w.e.f 1st April, 2014

Age 65 Years

Remuneration Rs, 86,63,832/- includes leave encashment

Last Employment held by the employee

before joining the Company N.A.

Percentage of Equity Shares held by the Employee 4.79%

Relative of Employee in the Company Smt. Nehal N. Gandhi - Director is a wife of Shri Narendra I. Gandhi

Mr. Kunal N. Gandhi - Vice President & Business Development is a son of Shri Narendra I. Gandhi

30. CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges, a separate report on Corporate Governance along with the Certificate from the Auditor regarding compliance of the said conditions is given as per Annexure G.

31. ACKNOWLDEGEMENTS

Your 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 Company's Bankers, Customers, Shareholders, Fixed Deposit Holders and loyal & committed Employees for their unstinted support.

By order of the Board

N. I. GANDHI Place: Mumbai Chairman and Managing Director

Date: 28th November, 2015 (DIN: 00021530)

Jun 30, 2014

Dear Members,

The Directors have pleasure in presenting Thirty Fifth Annual Report and the Audited Accounts of the Company for the Financial Period of Fifteen Months ended 30th June, 2014.

The Financial Results are as under :

FINANCIAL RESULTS

Particulars 2013 - 2014 2012 - 2013 15 months 12 months (Rs. in lacs) (Rs. in lacs )

Total Revenue 9139.71 9845.07

Profit before interest, Provision for Depreciation, Taxes and Write offs. 73.70 1536.98

Less : Interest (2194.98) (1511.92)

Operational Profit /(Loss) before Depreciation (2121.28) 25.06

Less : Depreciation (543.04) (329.90)

Exceptional Items Â Â

Less: Bad Debts written off (838.25) Â

Less : Loss due to fire (299.57) Â

Less: Loss on Sale of Fixed Assets (16.69) Â

Less: Prior period Expenses (365.51) Â

Add : Excess Provision written back Â 62.21

Less : Extra Ordinary Item Â Â

Less : Amortization of expenses for restructuring of Loan Â (37.46)

Add : Profit on Slump Sale 3457.16 Â

Profit/(Loss) for the year/ period (722.18) (280.10)

In compliance with SEBI directives, the Company has restated its Annual Accounts for the Financial Year 2012-2013, as a result, loss has increased by Rs. 365.51 lacs which were stated as prior period expenses in Financial Year 2013-2014.

OPERATIONS

During the period under review, the Total Revenue earned by the Company was Rs. 9139.71 Lakhs and on an annualized basis was Rs. 7311.77 Lakhs as against Total Revenue of Rs. 9845.07 Lakhs of previous year. The Company has reported a loss of Rs. 722.18 Lakhs which was mainly on account of:

i. Lower capacity utilization of factory at Tarapur, as a result, contribution was not adequate enough to cover the fixed cost of the Company which resulted into operational losses.

ii. Due to Fire in Company''s Lypholisation Plant at Ankleshwar in October, 2013, there was damage to Plant & Machineries and Stores, Raw Materials & Packing Materials which are estimated at about Rs. 4 Crores and the Company had to suspend its manufacturing operations for about 4 months which further resulted into Loss of production and Sales of the Company.

iii. Acute Competition in P2P Business affected sales margin.

The lyophilized products of Ankleshwar Factory are well accepted in the market and Company has therefore planned expansion of its capacity to cater to regulatory markets.

The Company''s Factory at Tarapur was closed for nearly two years for modernization to meet requirements of WHO, GMP and regulated market like EU GMP certification. The plant has commissioned production during March 2013. Due to pending approvals / Licenses from relevant Authorities, it was operating at very low capacity. Further, manufacturing the products for Domestic Market is not viable since it is not possible to compete with factories located in Tax Free Zones, hence the Company has to depend on Exports of finished formulations, which is possible only after the products are registered with Registering Authorities of respective countries which would take substantial time between 12 months to 24 months.

Thus contribution from manufacturing facility at Tarapur was not adequate enough to cover the operating cost of running the plant and therefore in the interest of the Company, the manufacturing facilities at Tarapur, Maharashtra was sold for Rs. 38.61 Crores in the Current Financial Year. A very large amount of the sales realization was utilized to pay the debts of the Bank as per the terms of their sanction. The sale of this factory would consequently result in saving of operating fixed costs in the current Financial Year.

The Performance of Domestic Marketing Division of Ethical Products is encouraging. It has introduced a wide range of anti-infective, anesthetics, anti-ulcerants and steroid in parenteral dosage forms and has more then 50 products which are being sold across 12 states in India. With a view to achieve expansion and growth of Domestic Marketing Division of Ethical Products independently, the Company during the year has promoted a new wholly owned Subsidiary Company viz. Lyka Healthcare Limited and sold its Domestic Marketing Division of Ethical Products by way of Slump Sale to Lyka Healthcare Limited, a wholly owned Subsidiary of the Company.

Sale of P2P business has dropped due to acute market competition from Tax Free Zones and margins are always under pressure. The Company is focusing Dermatological products and Lyophilized product range and have marketing tie up with several renowned Pharma Companies which would help to regain the lost revenue and profitability in the coming years.

The Company is continuously putting its efforts to find a potential buyer in international markets for tie up of Technical Know How arrangements.

SUBSIDIARIES

During the Financial Year 2013-14,Company''s Subsidiary Lyka BDR International Ltd (LBDR) has reported total income of Rs. 5047 lacs and focusing on increase in volume of exports, change in product mix and concentration on high contribution products, better marketing strategies, new product registrations and cost controls, etc.

During the year, nearly 51 fresh registrations/renewals have been received by LBDR and approximately 150 registrations/ dossiers are submitted to the Health Authorities of various countries, thereby increasing the intrinsic value of the Company of which approximately 100 registrations are expected to be received in the Financial Year 2014 - 2015

The main assets of LBDR are its registration rights in various markets. In the coming years, the LBDR is likely to file about 100 new dossiers mainly in rest of the world markets. Recent Registrations received are likely to help the LBDR to generate new businesses in the more remunerative products.

LBDR is now focusing on emerging markets like Nigeria, Iran, Indonesia and Brazil where it expects new business in the coming years. It will endeavor to improve its product mix to achieve better realizations.

With enhanced number of registrations, the company plans to achieve turnover of Rs. 70 crores in Financial Year 2014-15 with improved bottom line and accordingly the Consolidated Financials of the Company would improve.

During the year under review, the Company has floated a Wholly Owned Subsidiary Company namely Lyka Healthcare Limited to provide independent opportunities to focus, develop and expand Domestic Marketing of Ethical Products.

Lyka Exports Limited is engaged in marketing veterinary products and considering the future growth and prospects of Lyka Exports Limited, the Company has appropriated part of the amount due from Lyka Exports Limited towards additional shares issued by Lyka Exports Ltd. As a result, Company''s stake in Lyka Exports Limited has increased from existing 48% to 73% and Lyka Exports has become a Subsidiary of your Company during the year under review.

The Financial Statements of Company''s subsidiaries are consolidated with the Financial Statements of the Company and form part of this Report.

As required under provisions of Section 212 of the Companies Act, 1956, a statement related to its subsidiaries is attached to this report. The Company is not attaching the Balance Sheet and Profit & Loss Account of its Subsidiaries to its Annual Report. However, if any, requisition made by Shareholder, the Company shall provide hard copy of Annual Accounts and related information of its Subsidiaries and shall keep available hard copy of Annual Accounts of subsidiaries for inspection by shareholders at its Corporate Office during business hours.

FUTURE OUTLOOK

i. The Company is in process of introducing Cosmetic Products in ''Skin Care'' and ''Hair Care'' Segment and will launch these products in the market in the near future. The negotiations are going on with big Pharma Companies for commercialization of these products.

ii. To cope up with the increase in demand of Lyophilized Products, the Company has planned to expand capacity of its Lyophilized Plant at Ankleshwar Factory for which the Company has already purchased two Lyophilizers to cater the requirements of Regulated Markets. On completion of the expansion, revenue and profitability of the Company would improve.

iii. Upgradation of raw material stores, packing material stores and packing departments at Ankleshwar factory have been planned which would facilitate better use of space and would also meet Regulatory requirements of local and international customers.

iv. Opportunities are being explored for sale/transfer of Technical KnowHow to International Companies.

v. In the coming years, Lyka BDR International Limited (LBDR) a subsidiary is likely to file about 100 new dossiers mainly in semi regulated / unregulated markets. These new Registrations would increase the revenue and profitability of the LBDR which would in turn increase the consolidated revenue and profitability in the coming years.

vi. In the coming years, substantial growth of Lyka Exports Limited and Lyka Healthcare Limited - Subsidiaries are expected which would further improve Consolidated Sales and Profitability of the Company.

DEPOSITS

As at 31st March, 2014, the Company had fixed Deposits of Rs. 17.23 Cr and unclaimed matured Fixed Deposits of Rs. 64.99 lakhs. Since, the Company is not meeting the criteria as mentioned under the provisions of The Companies (Acceptance of Deposits) Rules, 2014, the Company is unable to accept fresh deposits and also renew its existing deposits which resulted into acute cash crunch. The Company has filed an Application with the Company Law Board Bench, Western Region, Mumbai for seeking an extension of time for repayment of Fixed Deposits and Interest thereon.

DIRECTORS

Smt. N. N.Gandhi (DIN : 00021530) Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offered herself for reappointment. The Board recommends her reappointment.

The appointment of Shri. S. Parikh (DIN : 00022365), Shri. V. S. Shanbhag (DIN : 00555709), as Independent Directors are considered for a term of 5 (five) years and appointment of Dr. D. B. Parikh (DIN : 00368820) and Shri. V. A. Sanghani (DIN : 00967316) as Independent Directors are considered for a term of 1 (one) year in the ensuing Annual General Meeting.

DIRECTORS RESPONSBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed except where otherwise stated in Auditors Report and Notes to Accounts.

ii. The Directors have selected accounting policies and applied them consistently. The Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2014 and of the loss of the Company for the period ended on that date.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

PERSONNEL

The relations between the Management and the employees have been generally cordial.

OTHER INFORMATION

a. As required under Provisions of Sexual Harassment for Women at work place (Prevention, Prohibition and Redressal) Act, 2013, the Company has constituted a Committee to redress the grievances of Women employees.

b. There are no employees who are covered under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended till date.

c. As required by the Companies (Disclosure of Particulars in the report of Board of Directors) rules, 1988, information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure "A" of this Report.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

As required under the Listing Agreement with the Stock Exchange, the Management discussion and analysis report on the operations of the Company is given in Annexure "B" of this Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a Report on Corporate Governance along with the certificate from the Auditors of the Company regarding compliance of the said conditions is given as per Annexure "C" of this Report.

AUDITORS

M/s. M. A. Parikh & Co. Chartered Accountants, retire as Statutory Auditors (Firm Registration No.107556W) of the Company and M/s.Thakorebhai Shirish Desai & Butala, Chartered Accountants (Firm Registration No.110864W) Branch Auditors retire at the ensuing Annual General Meeting, and they have confirmed their eligibility for reappointment u/s.139 read with Section 141 of the Companies Act, 2013. The Board recommends their reappointment.

AUDITORS OBSERVATIONS

Auditors in their report have observed the following

1. In respect of Non Compliance :

Note No. 38 relating to Capital Work in Progress of Intangible assets aggregating to Rs. 9,72,57,847/-.

MANAGEMENT EXPLANATION:

Research and Development works on New Drug Delivery System which is one of the important activity of the Company. We are continuously required to develop new formulations and offer to our P2P partners for marketing.

Company is recognizing "Intangible Capital Work In Progress" when it is probable that the future economic benefits that are attributable to the assets will flow for the enterprise and the cost of the assets can be measured reliably.

Upon completion of product development, the related expenditures incurred shall be recognized as intangible assets, This is the normal practice of accounting intangibles followed by Company.

ACKNOWLEDGEMENTS

Your 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 Company''s Bankers, Customers, Shareholders, Fixed Deposit Holders and loyal and committed employees for their unstinted support.

By Order of the Board

Place: Mumbai N. I. Gandhi Dated: 13th November, 2014 Chairman & Managing Director (DIN : 00021530)

Mar 31, 2012

To, The Member of Lyka Labs Limited.

The Directors have pleasure in presenting Thirty Third Annual Report and the Audited Accounts of the Company.

The financial year ending of the Company has been extended by six months from 30th September, 2011 to 31st March, 2012. The Annual Accounts are therefore prepared for a period of 18 months from 1st October, 2010 to 31st March, 2012. The financial Results are as under:

FINANCIAL RESULTS

Particulars 2010 - 2012 2009 - 2010 18 months 12 months (Rs.in Lacs) (Rs.in Lacs)

Total Operating Income 13981.17 11869.92

Profit before Interest, Provision for Depreciation, Taxes and Write offs. 2229.91 1764.69

Less : Interest 2255.52 1112.12

Operational Profit / (loss) before Depreciation (25.61) 652.57

Less : Depreciation 545.89 339.59

Less: Provision for taxation Ã 0.22

Add/(less) Foreign Currency monetary translation difference Accounts Ã (138.24)

Add/(Less) Provision for taxation of earlier periods Ã 6.48

Net Profit/(Loss) (571.50) 181.00

Add : Balance brought forward (2718.64) (2899.64)

Balance carried to Balance Sheet (3290.14) (2718.64)

OPERATIONS

During the period under review, the earning before interest, tax, and depreciation of the company was Rs. 2230 Lacs and on an annualized basis was Rs. 1487 Lacs as against Rs. 1765 Lacs of the previous Year. The Company had operational loss of Rs. 26 Lacs and on an annualized basis, the operational loss was Rs. 17 Lacs as against operating profit of Rs. 653 Lacs of previous year which was mainly due to suspension of operations at Tarapur factory for modernization/upgradation of plant and increase in finance cost as well as sealing of our Ankleshwar plant for a short period.

The Company has received demand notice from the Government for payment of about Rs. 20 Crores, including interest, under provisions of Drug Price Equalization Account (DPEA) of DPCO 1979. The main demand pertains to a product, which in the opinion of the Company and the Legal Experts was not covered under the provisions of DPCO 1979. As per legal opinion, the Company has a good case and the likelihood of success outweighs the possibility of the matter being rejected on merits. The demand was challenged by the Company by filing application in the Hon'ble Gujarat High Court at Ahmedabad. However, to pressurize the Company to make the payment, the Government, through the Mamlatdar, Ankleshwar, sealed the factory at Ankleshwar from 25th June, 2011 to 18th July, 2011. As per the interim order passed by the Hon' ble Gujarat High Court, the Company deposited Rs. 10 Crores with the Government and the factory was desealed. Due to sealing of the factory, and consequential regulatory issues, the production and sales of the Company and its working Capital was very adversely impacted resulting into unexpected heavy losses.

The Company's Lyophilized products have been receiving encouraging response from major Pharma Companies. The Company has planned expansion of its Lyophilization facility at Ankleshwar factory for increased manufacturing capacity and modernization/ upgradation of its manufacturing facility at Tarapur.The Company's present Lyophilization facility at Ankleshwar is WHO GMP compliant which is approved by renowned Pharma Companies as well as several overseas Regulatory Authorities.

The prospects of lyophilized products, both formulations and Bulk Drugs, in domestic and International Markets are promising. These products form the backbone of the sales from Company's Ankleshwar plant. Company's manufacturing activities for marketing by renowned Pharmaceutical Companies is generating reasonable revenue for the Company.

The sales of Critical Care Injectable Products of the Company have started picking up and the overall performance of this segment of activities is improving. The production at Tarapur factory has been suspended for modernization/ upgradation of the plant which is expected to start before close of the calendar year 2012. Due to suspension of operations at Tarapur Factory, the overall sales and profitability of the Company was adversely affected.

During the period under report, the Company in consultation with IDBI capital Market services Ltd had undertaken Corporate Restructuring Programme and sold some of its unproductive assets, the realization of which was utilized towards reduction of outstanding of the Banks. In pursuant to the said Restructuring Programme, the Company's Banker, Dena Bank has also restructured the existing credit facilities of the Company and has sanctioned additional credit facilities to the Company for its expansion/modernization and additional working capital requirements.

During the period under review, the Company has entered into the Technical Know - How cum Royalty Agreements, for manufacture of High Tech products to the Companies based in Turkey and Indonesia. Your Company is amongst first few Companies in India to export the Technical Know - How and similar arrangements are under discussion in other countries.

During the period under report, the Company has received permission for eight new products from Drug Regulatory Authorities and has applied for five more new products.

PATENTS

During the period under report, the Company has filed three Patent applications at Indian Patent office. One PCT Application was filed under the patent Co operation Treaty and one PCT application was filed in National Phase in the countries viz Japan, Europe and China.

RECOGNITION

1. IDMA Patent Appreciation Award 2010-11 in the category of API Awarded on 6th January, 2012 by IDMA.

2. CERTIFICATE OF APPRECIATION Patent Award for the year 2010-11, in recognition of commendable contribution to R & D in formulation sector awarded by "Pharmexcil" Pharmaceuticals and Export Promotion Council, set up by Govt. of India awarded on 30th September, 2011.

3. The IDMA Patent Appreciation Award 2009-2010 in the category of Formulation for three Indian Patents and one Sri Lanka Patent awarded on 7th January, 2011 by IDMA.

FUTURE OUTLOOK

In view of the proposed expansion of capacity of Lyophilized facility at Ankleshwar, the Company will be able to meet increased demand of Lyophilized products both from domestic and international markets. Upon completion of modernization of plant at Tarapur, the Company will be able to service fresh export orders, through its Subsidiary Lyka BDR International Limited. Recently, the Company has introduced the critical care products, which is well accepted in the market. The Company is also exploring further opportunities to export technology to overseas Companies. The Company's plant is also approved by Regulating Authorities of Uganda, Nigeria, and Kenya which will pave the way for further increase of its export business, through its subsidiary in these countries. In the coming year, the Company is planning to file new patents which will increase the intangible value of the Company.

The Company's subsidiary LYKA BDR INTERNATIONAL LTD (LBDR) has further added 63 products in various countries and has filed nearly 200 new dossiers for registrations in various markets. LBDR is focusing on the non regulated/semi regulated markets for increasing its business which include Philippines, Myanmar and other countries. During the first quarter, the Company has shown reasonable growth in its turnover & financial performance.

Based on the current scenario, the Company's prospects are promising and encouraging and the Company is well poised for its improved performance.

DEBENTURES

During the period under report, the Company has issued Secured Redeemable Non-Convertible Debentures of Rs. 9.82 Cr on private placement basis.

DEPOSITS

As at 31st March, 2012, the total Fixed Deposits stands at Rs. 25.04 Cr. The Deposit aggregating Rs. 22.92 lacs were matured but remained unclaimed.

SUBSIDIARY

As per AS 21 issued by the Institute of Chartered Accountants of India, the financial statements of the Company are consolidated with the financial statements of its subsidiary viz Lyka BDR International Ltd (LBDR) and reported in this Annual Report.

As required under section 212 of the Companies Act, 1956, a statement related to its subsidiary viz Lyka BDR International Ltd (LBDR) is attached to this report. Under Provisions of Section 212(8) of the Companies Act, 1956, the Company is not attaching Balance sheet and Profit & Loss Account of its Subsidiary viz Lyka BDR International Ltd (LBDR) to its Annual report. However, the Company shall make available annual accounts of LBDR and related detailed information to the shareholders of the Company seeking such information at any point of time and shall keep for inspection by any shareholder in the Corporate Office of the Company and hard copy of annual accounts of LBDR shall be provided to any shareholder on demand.

DIRECTORS

The term of Shri V.S.Taksali as Executive Director ended on 31st July, 2011, he also resigned as Director of the Company w.e.f 1st August, 2011. Shri S.S. Upadhyaya expired on 8th November, 2011. Shri R.A.S. Iyer resigned as Director of the Company w.e.f 14th August, 2012. The Board appreciates the services rendered by Shri V.S.Taksali, late Shri S.S Upadhyaya and Shri R.A.S. Iyer to the Company. Shri V.S. Shanbhag has been appointed as an Additional Director on the Board on 29th March, 2012. The Board recommends his appointment as a Director of the Company at the ensuing Annual General Meeting.

Shri S. Parikh and Dr. D. B. Parikh retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. The Board recommends their reappointment.

DIRECTORS RESPONSBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed except where otherwise stated in Auditors Report and Notes to Accounts.

ii. The Directors have selected accounting policies and applied them consistently, except where otherwise stated in the notes to the Accounts. The Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the loss of the Company for the period ended on that date.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

PERSONNEL

The relations between the Management and the employees have been generally cordial.

OTHER INFORMATION

There are no employees covered under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended till date.

As required by the Companies (Disclosure of Particulars in the report of Board of Directors) rules, 1988, information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure 'A' of this Report.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

As required under the Listing Agreement with the Stock Exchange, the Management discussion and analysis report on the operations of the Company is given in Annexure 'B' of this Report

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a Report on Corporate Governance along with the certificate from the Auditors of the Company is given as per Annexure 'C' of this Report.

AUDITORS

M/s. M. A. Parikh & Co. Chartered Accountants, retire as the Auditors of the Company at the ensuing Annual General Meeting, and, being eligible, offer themselves for re-appointment.

As required under Section 224(1B) of the Companies Act, 1956, the Company has obtained a confirmation from them that their re-appointment, if made, would be within the limits prescribed in the said section. The Board recommends their re-appointment.

The appointment of Branch Auditors to audit the accounts of the Company's manufacturing facilities at Ankleshwar and Tarapur is proposed at Item no. 6 of the Notice.

COST AUDITORS

As required under provisions of Section 233-B of the Companies Act, 1956, M/s.Kirit Mehta & Associates, Cost Accountants were appointed as Cost Auditors to conduct cost audit in respect of Bulk Drugs and Formulations being manufactured at Ankleshwar factory and formulations being manufactured at Tarapur Factory for the year 2012-2013.The necessary approval of Central Govt. has been obtained.

AUDTIORS' REPORT

The Auditors in their Report at Para 3(A) and 3(B) have stated that in respect of certain matters as mentioned therein they are unable to express their opinion in this regard. In reply, following may be noted;

3 A (i) The unsecured loans and advances as referred to in the said para have been given by the Company in the normal course of its business and are good for recovery. The management of the Company is taking necessary steps in the ensuing year to recover/adjust the said loans.

(ii) The diminution in value of investment as referred to in Note 9 in the opinion of the management is not required to be provided as the said investments in Lyka BDR International Limited and Lyka Exports Limited have been made from the perspective of long term business synergies and potential and the said investments have inherent higher intrinsic values than their cost of acquisition.

(iii) The expenditure as referred to in Note No.10 has been incurred on trial runs, clinical trials, toxicity studies, product development and research and patent etc., the benefits of which would accrue in the subsequent years and therefore has been held as Intangible Capital Work in Progress. Upon completion of the said work, the same shall be recognized as Intangible, viz technical know how or patent/trade marks as the case may be.

3B In the earlier year, the management took the view that certain extraordinary items relating to the past years could be legitimately written off against the "net present replacement value" of the tangible assets represented by Revaluation Reserve without affecting the earlier years profits.

During the year, the Company sold certain revalued assets and realized profit representing difference between the sale proceeds and the book values thereof. The management is of the view that since profit on sale of revalued assets is the "actual profit" realized and the remaining assets belonging to the Company have significantly higher "present replacement values" the Company could legitimately credit the same as the Profit on Sale of Assets.

The liability to Sales Tax stated at item No. (ix) (b) in Annexure to Auditors report has arisen on account of non receipt of various forms, which would be collected and produced at the time of Business Audit by the department at which point, the actual tax liability would be determined and paid, if any.

The Company has received demand notice from the Government for payment of about Rs. 20 Crores, including interest, under provisions of Drug Price Equalization Account (DPEA) of DPCO 1979. The main demand pertains to a product, which in the opinion of the Company and the Legal Experts was not covered under the provisions of DPCO 1979. As per legal opinion, the Company has a good case and the likelihood of success outweighs the possibility of the matter being rejected on merits. The demand was challenged by the Company by filing application in the Hon'ble Gujarat High Court at Ahmedabad. As per the interim order passed by the Hon'ble Gujarat High Court, the Company deposited Rs 10 Crores with the Government. In view of this, the demand made under DPCO is considered as contingent liability.

ACKNOWLEDGEMENTS

Your 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 Company's Bankers, Customers, Shareholders, Fixed Deposit Holders and loyal and committed employees for their unstinted support.

By Order of the Board

Place: Mumbai N. I. Gandhi

Dated: 31st August, 2012 Chairman & Managing Director

Sep 30, 2010

The Directors have pleasure in presenting Thirty Second Annual Report and the Audited Accounts of the Company. The Financial Results are as under:

FINANCIAL RESULTS

2009-10 2008-09 12 months 18 months (Rs. in lacs) (Rs. in lacs)

Total Operating Income 11869.92 15207.55

Profit before interest, Provision for Depreciation, Taxes and Write offs. 1764.69 1320.10

Less: Interest 1112.12 1445.04

Operational Profit / (loss) before Depreciation 652.57 (124.94)

Less: Depreciation 339.59 369.29

Less: Provision for taxation 0.22 13.22

Add/(Less): Foreign Currency monetary translation difference Accounts (138.24) 276.48

Add/(Less): Provision for taxation of earlier years 6.48 (269.66)

Less: Prior year interest on OTS -- 143.78

Net Profit/(Loss) 181.00 (644.41)

Add: Balance brought forward (2899.64) (2255.23)

Balance carried to Balance Sheet (2718.64) (2899.64)

OPERATIONS

During the year under review, the total operating income of the Company was Rs.11870 Lacs as against Rs.10139 Lacs of the previous year on an annualized basis. The net profit after tax was Rs.181 Lacs as against loss of Rs.644 Lacs of previous period.

Subsequent to upgradation of Lyophilization facilities at Ankleshwar factory, the capacity utilization has significantly improved. Companys lyophilized products have been receiving encouraging response from major Pharma Companies. To cope up with the increase in demand, the company has planned enhancement of capacity of its Lyophilization plant by installation of two more lyophilizers at its Ankleshwar factory.

The Company has also undertaken modernization of its Tarapur factory to comply with revised W.H.O. GMP guidelines. This will, in turn, enable the Company to obtain fresh registrations to export its products, manufactured at Tarapur factory, through its subsidiary viz. Lyka BDR International Ltd.

The Companys Principal to Principal (P to P) arrangements with major Pharma Companies are progressing steadily and the Companys business in this segment has been growing continuously.

In view of the increase in the demand of its Sterile Bulk Drugs, the Company has initiated steps to increase its manufacturing capacity of Sterile Bulk Drugs. The Companys business of Contract Manufacturing and Marketing and sale of its critical care injectables is on the rise. The Company expects continued growth from these areas of activities in coming years.

PATENTS

Companys R&D centre continued to develop formulations of new Drug entities, novel drug delivery systems and new products for its P to P markets. During the year under report, the Company has filed applications for 13 new patents with Indian Patent office and filed 1 International PCT application. The Company has already received till date approval for 13 patents from Indian Patent office and obtained process patent from European patent Office for Rabeprazole lyophilized injection which has been validated in 25 European countries.

RECOGNITION

The Company was awarded SILVER PATENT AWARD by the Department of Pharmaceuticals, Ministry of Chemical & Fertilizers, Government of India and Pharmaceutical Export Promotion Council for the year 2009-2010 in recognition of commendable contribution in Formulation Patents Category and the Company was also awarded IDMA PATENT APPRECIATION AWARD for the year 2009-2010 in the category of formulations.

FUTURE OUTLOOK

The Company has planned expansion of its Lyophilisation Capacity and modernization of Sterile Area of its existing facility at Ankleshwar factory. This will enable the Company to meet the increased demand of its Lyophilized Formulations and Sterile Bulk Drugs. The expansion of capacity will have the positive impact on the sales and profitability of the Company. The Company has also started manufacturing Liposomal Lyophilized Products and future of these high-tech products is very promising. The Company has also undertaken modernization of its factory at Tarapur which will be completed shortly and this will further increase sales and profitability of the Company in the coming years.

The Company has received approval for 6 new products from the Drug Regulatory Authorities and few more products are in pipeline for approval. By now, the Company has received approval for more than 60 new products and has been leveraging upon the same to generic sales on P to P basis.

The Company has also initiated exploring International Markets for its sterile APIs and expects to generate considerable revenue from International Markets.

The Company is considering to float a wholly owned new subsidiary Company in the current year, which will undertake marketing of wide range of formulations, in various dosage forms, across therapeutic categories.

The Companys Subsidiary LYKA BDR INTERNATIONAL LIMITED (LBDR) has successfully added 74 more registrations to its base of 518 registrations and has planned for about 200 more registrations in the emerging markets, thereby increasing the value of its intangible assets. LBDR is focusing more on the growth of its existing markets such as Sri Lanka, Congo, Sudan, Kenya, Peru etc. and is also exploring new markets like Franco Phonic African Countries, Nigeria and Uganda. It is concentrating more on sale of Lyophilized Products including various PENAMs. The modernization of Tarapur Plant will help the Company to boost its Sale to LBDR, as it will be able to market and sell High Value Tablets and Capsules Internationally. This will provide necessary stimulus to the growth of LBDR. This in turn will contribute to the sales growth and profitability of the Company in coming years.

DEPOSITS

During the year under review, the Company has mobilized Fixed Deposits of about Rs.978 lacs. As at 30th September, 2010, matured and unclaimed Fixed Deposits amounted to Rs.36 lacs out of which the deposits aggregating to Rs.21 lacs have been renewed / paid and deposits aggregating to Rs.15 lacs have still remained unclaimed as of 31s December, 2010.

DEBENTURES

The Company has issued during February, 2011 13.5% Secured Non Redeemable Convertible Debentures, aggregating to Rs. 245 lacs, on a private placement basis.

SUBSIDIARY

As per Accounting Standard AS-21 issued by ICAI, the consolidated financial statements are reported in the Annual Report.

As required under section 212 of the Companies Act, 1956, a statement related to its subsidiary viz. Lyka BDR International Ltd (LBDR) is attached to this Report. Annual Accounts together with Directors Report & Auditors Report of LBDR is reported separately in the Annual Report.

DIRECTORS

Shri. S.S. Satyamurthy resigned as Director w.e.f. 10lh November, 2010. The Board places on record its appreciation for the valuable services rendered, guidance and advice given by him to the Company.

Smt. N. N. Gandhi, Shri V. A. Sanghani and Shri. V.S.Taksali retires by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. The Board recommends their re-appointment.

DIRECTORS RESPONSBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

i. in the preparation of the Annual Accounts, the applicable accounting standards have been followed except where otherwise stated in Auditors Report and Notes to Accounts.

ii. the Directors have selected accounting policies and applied them consistently, except where otherwise stated in the notes to the Accounts. The Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th September, 2010 and of the profit of the Company for the year ended on that date.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. the annual accounts have been prepared on a going concern basis.

PERSONNEL

The relations between the Management and the employees have been generally cordial.

The Company closed down its Distribution Department at Bhiwandi after arriving at a settlement with the employees of the Distribution Department.

OTHER INFORMATION

None of the employees are covered under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended till date.

As required by the Companies (Disclosure of Particulars in the report of Board of Directors) rules, 1988, information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure A to this Report.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

As required under the Listing Agreement with the stock exchange, the Management discussion and analysis report on the operations of the Company is given in Annexure B to this Report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, a Report on Corporate Governance along with the certificate from the Auditors of the Company regarding compliance of the said conditions is given as per Annexure C to this Report.

AUDITORS

M/s. M. A. Parikh & Co. Chartered Accountants, retire as the Auditors of the Company at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

As required under section 224(1 B) of the Companies Act, 1956, the Company has obtained from them a confirmation to the effect that their re-appointment, if made, would be in conformity with the limits prescribed in the said section. The Board recommends their reappointment.

The appointment of Branch Auditors to audit the accounts of the Companys manufacturing facilities at Ankleshwar and Tarapur is proposed at Item no. 6 of the Notice.

COST AUDITORS

As required under provisions of Section 233-B of the Companies Act, 1956, M/s.Kirit Mehta & Associates, Cost Accountants were appointed as Cost Auditors to conduct cost audit in respect of Sterile Bulk Drugs and Formulations being manufactured at Ankleshwar factory and formulations being manufactured at Tarapur Factory for the year 2010-2011 The necessary approval of the Central Government has been obtained.

AUDITORS REPORT

The Auditors in their Report at Para 3(A) and 3(B) have stated that they are unable to express their opinion with regard to:

3 A (i) At Note No. 10 of Notes to Accounts, the expenditure incurred on trial runs, clinical trials, toxicity studies, product development and patent etc. The benefits for which would accrue in the subsequent years which would be of enduring nature. Accordingly, the management wishes to recognize the said expenditures as capital expenditure.

(ii) At Note No. 9 of Notes to Accounts, Management has not provided diminution in value of investments, keeping in view, the long term business synergies and potential based on its intrinsic value of business.

(iii) At Note No. 7(iii) and (iv) of Notes to Accounts, advances given to Subsidiary and Associate Company, are in the normal course of business and good for recovery.

3 B At Note No.6 (B)(i) of Notes to Accounts, the Management is of the view that such extraordinary items relating to the past years could legitimately be written off against the "net present replacement value" of the tangible assets represented by Revaluation Reserve without affecting the current years profits.

The liability to Sales Tax stated at item No(ix) in Annexure to Auditors Report has arisen on account of non receipt of various forms, which would be collectedand produced at the time of Business Audit by the department at which point, the actual tax liability would be determined and paid, if any.

ACKNOWLEDGEMENTS

Your 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, Fixed Deposit Holders and loyal and committed employees for their unstinted support.

By Order of the Board of Directors

Place: Mumbai N. I. Gandhi

Dated: 25th March, 2011 Chairman & Managing Director

Sep 30, 2009

The Directors have pleasure in presenting Thirty first Annual Report and the Audited Accounts of the Company. The financial year ending of the Company has been extended by six months from 31st March, 2009 to 30th September, 2009. The Annual Accounts are therefore prepared for a period of 18 months from 1st April, 2008 to 30th September, 2009 The Financial Results are as under:

FINANCIAL RESULTS

2008-09 2007-08 18 months 12 months (Rs.in lacs) (Rs. in lacs)

Total Operating Income 15207.55 9330.70

Profit before interest, Provision for Depreciation, Taxes and Write offs. 1320.10 1183.39

Less : Interest 1445.04 714.14

Operational Profit / (loss) before Depreciation (124.94) 469.25

Less: Depreciation 369.29 128.69

Less: Provision for taxation 13.22 33.10

Add: Foreign Currency monetary translation difference Accounts 276.48 -- Less: Provision for taxation of earlier years 269.66 --

Less: Prior year interest on OTS 143.78 --

ProfiV(Loss) for the period (644.41) 307.46

Add: Bad Debts recovered - 111.44

Add: Balance brought forward (2255.23) (2562.68)

Less: Transfer to Revaluation Reserve - 111.44

Balance carried to Balance Sheet (2899.64) (2255.23)

OPERATIONS

During the period under review, the total operating income of the Company is Rs. 15208 Lacs, which on an annualized basis, is Rs. 10139 lacs against Rs 9331 lacs of the previous year. During the year, Companys Lyophilization facility was upgraded as well as its manufacturing capacity was increased suitably. This necessitated shut down of the plant for nearly 6 months thereby adversely affecting the growth of the Company during the period under review.

The Companys lyophilized products have been receiving continuous encouraging response from major Pharma Companies. Companys contract manufacturing activities also continued to generate reasonable revenue for the Company. The Company has also started manufacturing and marketing of sterile APIs (Bulk Drugs) in the domestic market and the initial response has been quite encouraging. Companys manufacturing and marketing of injectables has also been showing encouraging results in domestic market.

The Company continued to develop new formulations during the period under review. The Companys R&D Department developed several new formulations including new dosage forms, new drug delivery systems as well as new fixed dose combinations. During the period under review, the Company was granted 10 patents and filed applications for 12 more patents. Thus, till date the Company has filed applications for 49 patents and has been granted 13 patents. The Company received permission for 18 new products during the period under review, from the Drug Regulatory Authorities. By now the company has received approval for more than 60 new products and applications for few more new products are already filed with Drug Regulatory Authorities.

The Company was awarded IDMA INDIAN PATENT APPRECIATION AWARD 2008-2009 for its patent for Stable Pharmaceutical preparation of substituted Benzimidazole.

FUTURE OUTLOOK

The prospects of lyophilized products, both formulations and Bulk Drugs, are promising. The Company has entered into manufacturing and/or sales agreement with many major Pharma Companies for this range of products. The Company has applied for registration of few of these products in several countries abroad. This segment of activity is expected to contribute substantially to the Sales growth of the Company in coming years.

The company has initiated exploring international markets for its sterile APIs and expects to generate considerable revenue through sale of APIs in international markets.

With the expansion of its marketing team and supply chain network, the Company is expected to grow its business of injectables substantially.

The Companys subsidiary LYKA BDR INTERNATIONAL LTD (LBDR) has registered about 543 products in various countries, which are emerging markets. Presently, about 200 more products are under registration. LBDR has also launched its products in Venezuela, Peru, Costa Rica, Ukraine and Philippines and is also in the process of validating few of its products in U.K. This will provide necessary stimulus to the growth of LBDR, which in turn, will contribute to the sales growth and profitability of the Company in the coming years.

SHARE CAPITAL

During the period under review, 6,50,000 warrants issued on preferential basis to the promoters in the year 2006. were converted into equity shares at an exercise price of Rs 41.50 each. As result, the paid up equity capital as at 30th September, 2009 stands at Rs 2158 lacs.

DEPOSITS

During the period under review, the Company has mobilized Fixed Deposits of about Rs. 7 Crores. As at 30lh September, 2009, matured and unclaimed Fixed Deposits amounted to Rs 21.11 lacs, out of which the deposits aggregating to Rs.6 lacs have been renewed / paid and deposits aggregating to Rs.15.11 lacs have still remained unclaimed as of 31s1 December, 2009.

SUBSIDIARY

During the period under review, the Company has purchased further 37,00,000 Equity Shares of Rs. 10 each of LYKA BDR INTERNATIONAL LTD (LBDR). As a result, the investment of the Company in the Capital of LBDR has increased to 65.22% and LBDR has become subsidiary w.e.f 4th May, 2009.

A statement under Section 212 of the Companies Act, 1956 relating to LBDR, a subsidiary is attached to this Report.

DIRECTORS

The Board regrets to inform the sad demise of Shri.V. C. Sanghavi, former Director of our Company on 10th September, 2008. Shri. D. G. Shah resigned as Director w.e.f 21st April, 2009. The Board places on record its appreciation for the valuable services rendered and guidance and advice given by both these Directors to the Company.

Shri. N. I. Gandhi has been reappointed as Managing Director of the Company for a period of 5 (five) years w.e.f 1st April, 2009. Shri. V. S. Taksali has been reappointed as Executive Director for a period of 2 (Two) years w.e.f 1st August, 2009. The Company has made applications to the Central Government for obtaining their approval for the above reappointments.

Shri. S. Parikh, Dr. D. B. Parikh and Smt. S.V. Satyamurthy retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for reappointment. The Board recommends their reappointment.

DIRECTORS RESPONSBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

i. in the preparation of the Annual Accounts, the applicable accounting standards have been followed except where otherwise stated in Auditors Report and Notes to Accounts.

ii. the Directors have selected accounting policies and applied them consistently, except where otherwise stated in the notes to the Accounts. The Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30,h September, 2009 and of the loss of the Company for the period ended on that date.

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. the annual accounts have been prepared on a going concern basis.

PERSONNEL

The relations between the Management and the employees have been generally cordial.

OTHER INFORMATION

There are no employees who are covered under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended till date.

As required by the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure A to this Report

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

As required under the Listing Agreement with the stock exchange, the Management discussion and analysis report on the operations of the Company is given in Annexure B to this Report

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, a Report on Corporate Governance along with the certificate from the Auditors of the Company regarding compliance of the said conditions is given as per Annexure C to this Report.

AUDITORS

M/s, M. A. Parikh & Co. Chartered Accountants, retire as the Auditors of the Company at the ensuing Annual General Meeting, and, being eligible, offer themselves for re-appointment.

As required under section 224(1 B) of the Companies Act, 1956, the Company has obtained from them a confirmation to the effect that their re-appointment, if made, would be in conformity with the limits prescribed in the said section. The Board recommends their reappointment.

The appointment of Branch Auditors to audit the accounts of the Companys manufacturing facilities at Ankleshwar and Tarapur is proposed at Item no. 6 of the Notice.

COST AUDITORS

As required under provisions of Section 233-B of the Companies Act, 1956, M/s.Kirit Mehta & Associates, Cost Accountants were appointed as Cost Auditors to conduct cost audit in respect of Bulk Drugs and Formulations being manufactured at Ankleshwar factory and formulations being manufactured at Tarapore Factory for the year 2009-2010.The necessary approval of the Central Government has been obtained.

AUDTIORS REPORT

Your Directors refer to the observations made by the Auditors in their report and state that:

Note No.9 (ii) : The Sundry Debtors considered doubtful of Rs.1,01,74,965/- have not been provided, since the management is pursuing for its recovery.

Note No.11 : It is an industrial practice to defer R&D expenses of Rs.4,61,32,009/-, the benefits of which will accrue in the future years as explained in the note.

Note No. 13 : Regarding slow / non-moving inventories of Rs. 1,22,70,023/- as explained in the Note have not been provided for.

ACKNOWLEDGEMENTS

Your 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, Fixed Deposit Holders and loyal and committed employees for their unstinted support.

By Order of the Board of Directors

Place: Mumbai N. I. Gandhi

Dated: 23rd February, 2010 Chairman & Managing Director

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