Lyka Labs Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Lyka Labs Limited (the “Company”), which comprise the Balance Sheet as at 31st March, 2026, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and notes to the financial statements, including a summary of material accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2026, and its loss, total comprehensive income (comprising of loss and other comprehensive income), its cash flows and changes in equity for the year ended on that date.
Basis of Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw your attention to Note 15.5 to the standalone financial statements in respect of the Scheme of Amalgamation (the “Scheme”) between the Company and its subsidiary, namely Lyka Exports Limited (“T ransferor Company”), from the appointed date of April 1,2022, as approved by National Company Law Tribunal vide its order dated March 16, 2026. The Company has accounted for the amalgamation in accordance with Appendix C of Ind AS 103 - Business Combinations relating to business combinations under common control. Accordingly, the Company has given effect to the Scheme from the beginning of the preceding period presented, i.e., April 1,2024, and the comparative figures for the year ended March 31,2025 have been restated. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
|
We have determined the matter described below to be the key audit matter to be communicated in our report
|
|
Key audit Matter
|
How the matter was addressed in our audit
|
|
Business Combination under Common Control -Merger Accounting of Lyka Export Limited Refer to Note 15.5 to the Standalone Financial Statements - “Business combination under common control”.
Pursuant to the National Company Law Tribunal (NCLT) Order dated March 16 2026, subsidiary of the Company viz. Lyka Exports limited (“Transferor Company”) has been merged with the Company (“Transferee Company”) under the approved Scheme of Amalgamation.
The Company has accounted for the business combination using the pooling of interest method in accordance with Appendix C of Ind AS 103 -Business Combination (the ‘Standard’).
The carrying value of the assets and liabilities of the subsidiaries as at April 1, 2024 (being the beginning of the previous period presented), as appearing in the consolidated financial statements of the Company before the merger have been incorporated in the books with merger adjustments, as applicable.
The Company are to be allotted 4,62,711 fully paid-up equity shares of the Company to the eligible shareholders of the erstwhile subsidiary Lyka Exports Limited in accordance with the Scheme.
The Company has recognised Capital Reserve (debit balance) of Rs. 14.32 Lakhs directly in “Other Equity”.
Considering the magnitude and complex accounting involved, the aforesaid business combination treatment in standalone financial statements has been considered to be a key audit matter.
|
Our audit procedures included the following:
Ý Obtained and read the Scheme of Amalgamation approved by the NCLT.
Ý Assessed whether the transaction qualified as a business combination under common control and evaluated the accounting treatment adopted by the Company with reference to the requirements of Appendix C to Ind AS 103.
Ý Verified the carrying values of assets and liabilities of the transferor company incorporated in the books of the Company with the underlying records and consolidated financial statements.
Ý Examined the merger accounting adjustments recorded by the management, including elimination and regrouping adjustments, wherever applicable.
Ý Verified the accounting and computation relating to issue of 4,62,711 equity shares to the eligible shareholders pursuant to the Scheme. And verified the disclosure of the same under other equity as Shares pending issuance persuant to merger, as the allotment of these shares are pending as on reporting date.
Ý Tested the computation and recognition of capital reserve (debit balance) amounting to Rs.14.32 Lakhs recognised under Other Equity.
Ý Assessed the adequacy and appropriateness of disclosures made in the standalone financial statements in accordance with the applicable requirements of Ind AS and the approved Scheme of Amalgamation
Based on the above work performed, the management’s
accounting for the merger of Lyka Exports Ltd with the
Company is in accordance with the Appendix C of Ind-AS
103 Business Combination.
|
|
Assessment of Impairment of Investment made in and Loans given to the subsidiary company
Management is required to review regularly whether there are any indicators of impairment of such investments/ loans by reference to the requirements under Ind AS and perform its impairment assessment by comparing the carrying value of these investments made/ loans given to their recoverable amount to determine whether impairment needs to be recognized.
The determination of the recoverable amount from subsidiary company involves management estimates and judgment which may affect the outcome.
|
Our audit procedures included the following:
Ý We tested the effectiveness of controls over the impairment assessment process of investments made in and loans given to subsidiary.
Ý Our substantive testing procedures included evaluation of the appropriateness of management's assessment of whether any indicators of impairment existed.
Ý We assessed whether the erosion in net worth, declining revenues, and current financial position of the subsidiary have been adequately considered by management as impairment indicators while arriving at the recoverable amount of investments and recoverability of loans.
|
|
So, there is an inherent risk in the valuation of investment/ recoverability of loans, due to the use of estimates and judgements mentioned above and accordingly, the assessment of impairment of investment/ loans in subsidiary company has been determined as a key audit matter.
|
Ý We have tested the reasonableness of key assumptions, including revenue and profit where continued erosion in subsidiary performance raises significant uncertainty over recoverability.
Ý Evaluated management’s assessment of recoverability of loans granted to its subsidiary company, and whether adequate provisions have been recognized.
|
|
Inventory Valuation
As at 31 March 2026, the carrying value of the inventories is ^ 1362.96 Lakhs
The Company manufactures and sells pharmaceutical products which carry shelf life. Accordingly, significant judgement is involved in the valuation of inventories. Management is required to assess the appropriate net realisable value of nearexpiry raw materials and finished pharmaceutical products. Such assessment involves estimation and judgement relating to expected future sales, product demand, expiry patterns, and inventory liquidation plans.
Due to the Significance of the inventory balance to the standalone financial statements of the company and the level of judgments and estimates required, we identified the valuation of inventories as a key audit matter.
Refer Note 2.8 and Note 9 to the standalone financial statements.
|
Our audit procedures included the following:
Ý We attended stock counts at plant to identify whether any inventory was obsolete,
Ý We assessed the basis for the inventory valuation, the consistency in policy and the rationale in its application,
Ý We tested the accuracy of the ageing of inventories based on system generated reports.
Ý We reviewed the testing done for net realizable value of inventories and future plans for consumptions;
Ý We tested the arithmetical accuracy of valuation files; and
Ý We have assessed the adequacy of disclosure in the Standalone Financial Statements.
|
Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the Standalone Financial Statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Other Matter
In accordance with the Scheme referred to in Note 15.5 to the standalone financial statements, the figures for the year ended March 31, 2025 have been restated to include the financial information of the Transferor Company which reflects total assets of Rs.481.88 Lakhs as at March 31,2025, net assets of Rs.437.39 Lakhs as at March 31,2025, total revenue of Rs.41.65 Lakhs total net loss of Rs. 30.91 Lakhs and total comprehensive income of Rs. (30.84) Lakhs for the year ended March 31,2025 and cash flow (net) of Rs. (1.81) Lakhs for the period from April 01, 2024 to March 31,2025. The said financial information of the Transferor Companies have been audited by us, vide report dated 23rd May 2025.
Our opinion is not modified in respect of above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.
A. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid financial statements have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account maintained for the purpose of preparation of the financial statements.
d. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on 31st March, 2026 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2026 from being appointed as a director in terms of Section 164 (2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls with reference to Standalone Financial Statements.
g. In With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of under Section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.
h. With respect to the other matters to be included in the Auditor’s Report in accordance with
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of
our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31st March, 2026 on its financial position in its financial statements - Refer Note 38 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, as
disclosed in note no. 52(v) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in note no. 52(vi) to the standalone financial statements, no funds have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) contain any material misstatement.
iv. The Company has neither declared nor paid any dividend during the year.
v. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account, which have the feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software system. Further, during the course of our audit, we did not come across any instance of the audit trail feature being tampered with and the audit trail has been preserved by the Company as per statutory requirements for record retention.
For D. Kothary & Co
Chartered Accountants Firm Regn No. 105335W
Mehul N. Patel
(Partner)
Place: Mumbai Membership No. 132650
Date: May 25, 2026 UDIN: 26132650RCCOIZ7652
|