Lykis Ltd

Dear Members,

The Board of Directors is pleased to present the Company's 40th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2024.

1. FINANCIAL HIGHLIGHTS:

(Rs In Lakhs)

2. COMPANY'S PERFORMANCE

During the year ended 31st March 2024, Operational Revenue including other income on Standalone basis was Rs. 37465.95 Lakhs and Profit / (Loss) Before Tax was Rs. 49.70 Lakhs v/s Rs. 1366.99 Lakhs in previous year while Net Profit / (Loss) for the financial year ended March 31,2024 was Rs. 68.20 Lakhs v/s Rs. 987.09 Lakhs in previous year.

On a consolidated basis the operational revenue including other income was Rs. 40774.05 Lakhs and Profit/ (Loss) Before Tax was Rs. 369.69 Lakhs v/s Rs. 1953.43 Lakhs last year. The Net Profit / (Loss) for the financial year ended March 31,2024 was Rs. 388.04 Lakhs v/s Rs. 1573.28 Lakhs in previous year.

Your Company has taken several remedial steps to meet the challenges viz. measures in saving cost at all front of operations, optimize use of available resources etc.

A detailed analysis on the operations of the Company during the year under review and outlook for the current year is included in the Management Discussion and Analysis Report forming an integral part of this Annual Report.

3. SHARE CAPITAL

The Authorised Share Capital of the Company is Rs. 20,00,00,000/- (Rupees Twenty Crores only). The paid up Equity Share Capital of the Company is Rs. 19,37,51,550/- divided into 19375155 Equity Shares of Rs. 10/- each.

During the year under review, the Company has neither issued shares with differential voting rights nor granted any stock options or sweat equity. As on 31 March, 2024, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

4. DIVIDEND

Your Directors have not recommended dividend for the financial year ended March 31, 2024.

5. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company have been prepared in accordance with section 129(3) of the Companies Act, 2013 and applicable Indian Accounting Standards, which have been reviewed by the Audit Committee and Board of Directors of the Company. Further, a statement containing the salient features of the financial statement of the Subsidiary in the prescribed format AOC1 is annexed to the Annual Report.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of its subsidiary are available on the Company's website www.lykis.com. These documents will also be available for inspection during the business hours on every working day at the Registered Office till the date of the Annual General Meeting of the Company.

The Consolidated net profit/loss of the Company amounted to Rs. 388.04 Lakhs for the financial year ended 31st March, 2024 as compared to Rs. 1573.28 Lakhs for the previous financial year ended 31 March, 2023.

In accordance with the provisions of the Companies Act, 2013 (the Act) and applicable provisions of Indian Accounting Standards on Consolidated Financial Statements, your Directors also provide the Audited Consolidated Financial Statements in the Annual Report.

6. RESERVES

There is no amount proposed to be transferred to the General Reserve during the year under review.

7. SUBSIDIARY AND ASSOCIATES ENTITIES:

As on March 31,2024, your Company has two Subsidiary Company and two Associate Companies, details whereof as under:

> SUBSIDIARY ENTITIES

Lykis Marketing Pvt. Ltd. is the wholly owned subsidiary of Lykis Limited. The Company has main focus on FMCG product, commission agent and Marketing services.

Lykis Exports LLC is the wholly owned subsidiary of Lykis Limited. The Company has the main business of export of FMCG, ENA & Industrial Products.

In accordance with the provision of section 136 of the Companies Act, 2013, the annual report are placed on the company's website i.e. www.lykis.com.

> ASSOCIATE ENTITIES

Lykis Packaging Private Limited and Lykis Biscuits Pvt. Ltd. are the Associate Companies of Lykis Ltd.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiary and associate company in Form AOC-1 is attached as Annexure A to this report.

8. BOARD OF DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act, 2013 ('the Act'), and the Company's Articles of Association, Mr. Shafeen Charania retires by rotation and being eligible has offered himself for re-appointment.

Pursuant Section 149(4) of the Companies Act, 2013 on recommendation of the Nomination and Remuneration Committee and the Board, the Members of the Company at it 37th AGM re-appointed Mr. Rajendra Singhvi and Mr. Rajesh Nambiar as Non-Executive Independent Directors on the Board of the Company with effect from conclusion of 37th AGM till the conclusion of 42nd Annual General Meeting.

The Members of the Company appointed Mr. Kairav Anil Trivedi as Non-Executive Independent Director and Mr. Shafeen Charania, Non-Executive Director of the Company by passing Ordinary Resolution through Postal Ballot dated February 20, 2021. Mrs. Mangala Prabhu was appointed as Non-Executive Independent Director in Board Meeting dated May 18, 2023 for a period of five years.

The necessary resolutions for the appointment /re-appointment of the above mentioned director and their brief profile have been included in the notice convening the ensuing Annual General Meeting. The brief resume of the Director seeking appointment / re-appointment at the ensuing Annual General Meeting, in pursuance of Regulation 36(3) of SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015 is annexed to the Annual General Meeting Notice.

All the directors of the company have confirmed that they satisfy the fit and proper criteria as prescribed under the applicable regulations and that they are not disqualified from being appointed as directors in terms of section 164(2) of the Companies Act, 2013.

9. INDEPENDENT DIRECTORS

Mr. Kairav Trivedi, Mr. Rajendra Singh Singhvi, Mrs. Mangala Prabhu and Mr. Rajesh Nambiar are Independent Directors of the Company. The Company has received declaration of Independence from all the Independent Directors as required under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence under Section 149(6) of the Companies Act, 2013 read with Regulation 16(1) (b) of SEBI (LODR) Regulations, 2015. In the opinion of the Board, the Independent Directors fulfil the said conditions of Independence. The Independent Directors have also confirmed that they have complied with the Company's Code of Business Conduct & Ethics. In terms of requirements of the Listing Regulations, the Board has identified core skills, expertise and competencies of the Directors in the context of the Company's business for effective functioning, which are detailed in the Corporate Governance Report.

The Ministry of Corporate Affairs ('MCA') vide Notification No. G.S.R. 804(E) dated October 22, 2019 and effective from December 01,2019 has introduced the provision relating to inclusion of names of Independent Directors in the Data Bank maintained by Indian Institute of Corporate Affairs ('IICA'). All Independent Directors of your Company are registered with IICA. In the opinion of the Board, Independent Directors possess the requisite integrity, experience, expertise, proficiency and qualifications.

10. BOARD EVALUATION

The Board of Directors have carried out an annual evaluation of its own performance, Board Committee and individual Directors pursuant to provision of the Act and the corporate governance requirement as prescribed by the Securities and Exchange Board of India (Listing Obligation & Disclosure Requirement) Regulation, 2015.The performance of the board was evaluated by the board after taking inputs from all the Directors on the basis of criteria such as the Board Composition and structure, effectiveness of board process, information and functioning, etc. as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

A structured questionnaire was prepared after taking into consideration various aspects of Board's functioning like composition of the Board and its Committees, Board culture, performance of specific duties and obligations keeping in view applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The evaluation process includes various aspects to determine the performance of Directors of the Company. The basis for this evaluation include fulfillment of independence criteria, qualifications, knowledge, level of engagement and contribution, skills and experience in the respective fields, honesty, integrity, ethical behavior and leadership, independence of judgment, attendance at the meetings, understanding the business, regulatory, competitive and social environment, understanding strategic issues and challenges etc. The Board of Directors expressed their satisfaction over the evaluation process.

In a separate meeting of Independent directors which was held on March 13, 2024, performance of non-independent and the board as whole was evaluated, taking into account the views of executive directors and non-executive directors. Performance evaluation of Independent director was done by the entire board, excluding the independent director being evaluated.

11. DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Board, to the best of their knowledge, hereby confirmed that:

i. In the preparation of Annual Accounts and Financial Statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. They have selected such accounting policies and applied them consistently and made judgment 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.

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. They have prepared annual accounts on a going concern basis.

v. They have laid down internal financial control to be followed by the company and that such internal financial control are adequate and were operating effectively.

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

12. MEETINGS OF BOARD OF DIRECTORS

The Board met 4 (Four) times during the year. The details about the board meeting and the attendance of the directors are provided in Corporate Governance Report.

13. BOARD COMMITTEES

Details of all the following Committees constituted by the Board along with their composition, terms of references and meetings held during the year are provided in the Report on Corporate Governance which forms part of this Report.

1. Audit Committee

2. Stakeholder Relationship Committee

3. Nomination & Remuneration Committee

4. Corporate Social Responsibility Committee

14. BOARD DIVERSITY

The Board recognizes the importance of a diverse composition and has adopted a "Board Diversity Policy" which sets out the approach to diversity. The Board Diversity Policy of the Company is available at https://lykis.com/ investor.

15. KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, the Company has Four Key Managerial Personnel viz. Mr. Nadir Dhrolia, Managing Director, Ms. Darshana Sawant as Company Secretary & Compliance Officer, Mr. Shrigopal Kandoi as Chief Financial Officer of the Company and Mr. Sachin Bhatnagar as Chief Executive Officer. Mr.Sachin Bhatnagar, Chief Executive officer resigned with effect from June 06, 2024.

16. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the Annual Return of the Company for the Financial Year ended 31 March, 2024 in Form MGT-7 is uploaded on the website of the Company and can be accessed at https://lykis. com/investor.

17. AUDITORS STATUTORY AUDITOR

The Company had appointed M/s Singrodia & Associates, Chartered Accountant (Firm Registration No. W100280) as Statutory Auditor of the Company for term of five consecutive years from the conclusion 37th Annual General Meeting till the conclusion of 42nd Annual General Meeting of the Company. The Company has also received a consent from M/s Singrodia & Associates (Firm Registration No. W100280) to act as a Statutory Auditor of your Company for the period of five years. There are no qualification, reservation or adverse remark or disclaimer made in the audit report for the financial year 2023-24.

INTERNAL AUDITORS

The Board at its meeting held on May 18, 2023 had appointed M/s KTPS & Co., Chartered Accountants (Firm Registration No. 134942W) for a period of one year i.e. from April 01, 2023 till March 31,2024.

SECRETARIAL AUDITORS

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and Regulation 24(A) of the SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015, the Company had appointed M/s. Nishant Bajaj & Associates., as Secretarial Auditor of the Company for the financial year 2023-2024.

The Secretarial audit report for the financial year ended March 31, 2024 is annexed to this Report as Annexure B which is self-explanatory.

18. INDUSTRIAL RELATIONS

The industrial relations remained cordial during the year under review.

19. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards on meetings of Board of Directors and on General Meeting issued by the Institute of Company Secretaries of India in terms of Section 118 (10) of the Companies Act, 2013.

20. NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors (by way of sitting fees and commission), Key Managerial Personnel, Senior Management and other employees. The policy also provides the criteria for determining qualifications, positive attributes and Independence of Director and criteria for appointment of Key Managerial Personnel / Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the candidates. The details of this policy are available on the website of the Company https://lykis.com/investor.

21. INTERNAL FINANCIAL CONTROL

The Company has put in place adequate policies and procedures to ensure that system of Internal Financial Control is commensurate with the size and nature of the Company's business. The evaluation of these internal financial controls were done through internal audit process, established within the Company and through appointing professional firm to carry out such tests by way of systematic internal audit program. Based on the review of the reported evaluations, the directors confirms that the financial statement for the year ended March 31, 2024, are in accordance with the applicable accounting standards.

22. RISK MANAGEMENT

The Company has established a robust Risk Management system to identify & assess the key risks and ensure smooth and efficient operations of the business. Your company is well aware of these risks and challenges and has put in place mechanism to ensure that they are managed and mitigate with adequate timely actions. The audit committee reviews business risk area covering operational, financial, strategic and regulatory risks.

23. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

There is no unclaimed dividend lying in terms of section 125(2) of the Companies Act, 2013 and accordingly the provisions of said section do not apply.

24. RELATED PARTY TRANSACTIONS

All contracts, arrangements/ transactions entered into during the year by the company with Related Parties were in ordinary course of business and on an arm's length basis. During the year under review, the company had not entered into any contract / arrangement/ transactions with related parties which could be considered as material. The particulars of contracts or arrangements referred to in section 188 (1) of the Companies Act, 2013 with related parties and as mentioned in form AOC-2 is attached as "Annexure C".

25. PARTICULARS OF EMPLOYEE

During the year under review, your Company has not employed any person who was in receipt of remuneration in excess of the limits specified under Section 197 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details required as per Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure D".

However pursuant to provision of section 136(1) of the Act, this report is being sent to the shareholders excluding the information required as per Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in obtaining the said information, may write to the Company

Secretary at the Registered Office/ Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

26. HUMAN RESOURCES

Your Company considers Great Brand and Great People as its biggest asset. The Company is continued to organize various inbound and outbound training programs, recreation and team building activities to enhance employee skills and motivation. Company also conducted various workshops and events for grooming and upgrading vocational skills of the talent pool in order to meet future talent requirements.

27. DEPOSITS

The Company has not accepted any deposits from public during the financial year under review.

28. CORPORATE SOCIAL RESPONSIBILITY

In accordance with section 135 of the Companies Act, 2013, the provisions related to Corporate Social Responsibility (CSR) is are applicable to the company during the year under review. The details of CSR expenditure are mentioned in "Annexure E".

29. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

The Company has not given loan to any subsidiary company during the year. The company has not given any loan and advances in the nature of loans or stood guarantee, or provided security to any other entity during the year.

30. PREVENTION OF SEXUAL HARASSMENT POLICY

Considering gender equality, the Company has zero tolerance for sexual harassment at workplace. The Company has an Anti-Sexual Harassment Policy in line with the requirement of the Sexual Harassment of woman at workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaint receive regarding sexual harassment. In Financial Year 2023-24, there were no complaints were received from any of the employee.

i. Number of Complaints filed during the financial year - NIL

ii. Number of complaints disposed of during the financial year - NIL

iii. Number of complaints pending as on end of the financial year - NIL

31. WHISTLE BLOWER/ VIGIL MECHANISM

The Company has established a Vigil Mechanism and adopted a whistle blower policy for its Directors and employees, to report concern about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The mechanism provides adequate safeguards against victimization of persons who use this mechanism. During the financial year 2023-24, no cases under this mechanism were reported to the Company and /or to any of its Subsidiaries / Associates. Policy on whistle blower is available at https://www.lykis. com/investors.

32. CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 forms an integral part of this report. A certificate from Mr. Nishant Bajaj, Practicing Company Secretary regarding compliance on conditions of corporate governance as stipulated in the Listing Regulations is also appended to the report on Corporate Governance.

33. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligation & Disclosure Requirement) Regulation, 2015 is presented in a separate section forming part of the Annual Report.

A. Conservation of Energy:

The Company has initiated to take adequate measures for conservation of energy. The Company shall explore alternative source of energy as and when the necessity arises.

B. Technology Absorption:

The Company continues to use the latest technologies for improving the productivity and quality of its services and products.

C. Foreign Exchange Earnings and Outgo:

(Rs in Lakhs)

35. MATERIAL CHANGES AND COMMITMENTS

The Company had received a confirmation vide Certificate of Registration of Regional Director order for Change of State dated November 03, 2023 for change of Registered Office from West Bengal to Mumbai. There were no other 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 the financial statements relates and the date of the Report.

36. POSTAL BALLOT

During the year, the Company has not passed any resolution through Postal Ballot.

37. SIGNIFICANT AND MATERIAL CHANGES / ORDERS PASSED BY THE REGULATORS OR COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.

38. ACKNOWLEDGMENT

Your Directors place on record their deep appreciation to all employees for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain in industry. The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, distributors, retailers, business partners and others associated with it as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be your Company's endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests.

Your Directors also take this opportunity to thank all Shareholders, Business Partners, Government and Regulatory Authorities and Stock Exchanges, for their continued support.