Lincoln Pharma. Director Discussions


To,

The Shareholders,

Your Directors have pleasure in presenting the 29th (Twenty Ninth) Annual Report together with the Audited Financial Statements of the Lincoln Pharmaceuticals Limited ("the Company" or "LPL") for the year ended March 31, 2023. In compliance with the applicable provisions of Companies Act, 2013, (including any statutory modification(s) or re-enactment(s) thereof, for time being in force) ("the Act") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), this report covers the financial results and other developments during the financial year ended March 31, 2023, in respect of the Company.

1. FInAnCIAL AnD oPERATIonAL HIGHLIGHTs:

The Standalone & Consolidated financial performance of the company for the financial year ended March 31, 2023 are summarised below:( Rs. In Lakhs)

standalone Basis

Consolidated Basis

Particulars

For the year Ended March 31, 2023 For the year Ended March 31, 2022 For the year Ended March 31, 2023 For the year Ended March 31, 2022
Revenue from Operations 51,030.88 47,207.89 51,030.88 47,212.33
Other income 2,248.35 999.77 2,247.29 999.77
Total Income 53,279.23 48,207.66 53,278.17 48,212.10
Profit before Depreciation, 11,165.03 10,546.78 11,167.60 10,547.83
Finance Costs and Taxation
Less: Depreciation (916.61) (808.79) (916.61) (808.78)
Less: Finance Cost (202.89) (145.09) (203.01) (145.12)
Profit before Taxation 10,045.53 9,592.90 10,047.98 9,593.93
Less: Tax Expenses (2,755.59) (2,657.41) (2,758.05) (2,658.43)
Profit after Tax 7,289.94 6,935.49 7,289.93 6,935.50
Other Comprehensive Income (29.78) 13.00 (29.78) 13.00

Total comprehensive income for the year

7,260.16 6,948.49 7,260.15 6,948.50

2. sTATE oF CoMPAnys AFFAIRs / oPERATIons:

The Highlights of the companys performance (standalone) for the year ended March 31, 2023 are as under:

The Company reports 8.10% rise in the revenue from operations of Rs. 51,030.88 Lakhs (Domestic Rs. 21,720.35 Lakhs and Exports

Rs. 29,310.53 Lakhs) as against Rs. 47,207.89 Lakhs (Domestic Rs. 20,431.00 Lakhs and Exports Rs. 26,776.89 Lakhs) in the previous year. EBITDA for the year was Rs. 11,165.03 Lakhs (increase 5.9%) as against Rs. 10,546.78 Lakhs in the previous year. The profit after tax has increased to Rs. 7,289.94 Lakhs on a standalone basis as against profit after tax of Rs. 6,935.49 Lakhs in previous year representing growth rate of 5.1% during the financial year ended March 31, 2023. EPS for the year was Rs. 36.40 (increase 5.1%) per share as compared to Rs. 34.63 in the previous year. Detailed working on operation of the Company is provided in the management discussion and analysis report as forms part of this.

We have been able to achieve yet another year of decent business growth and profitability. The company has been able to conduct its operations with agility and resilience. Sustained by signs of improved demand outlook in future and operational efficiencies achieved as a result of modernization and investment in cost-effective equipment, the outlook of the business is encouraging.

3. ConsoLIDATED FInAnCIAL sTATEMEnTs:

In accordance with the provisions of the section 133 of the Act and the SEBI Listing Regulations read with IND AS – 110 – consolidated financial statement, the consolidated audited financial statement for the financial year ended March 31, 2023 forms part of this annual report.

4. CREDIT RATInG:

The ratings given by CRISIL for long term bank loan facilities and short term bank loan facilities of the Company are ‘CRISIL A/Stable and CRISIL A1 respectively. There was no revision in the said ratings during the year under review.

5. DIVIDEnD:

Your company has an incessant dividend payment history and considering the financial performance of the Company, the Board of Directors on May 25, 2023 has recommended a dividend of Rs. 1.50/- (Rupees one and fifty paise only) per equity share on 2,00,29,728 equity shares of face value of Rs. 10/- each (i.e. 15%) for the financial year ended March 31, 2023 [Previous Year Rs. 1.50 (Rupees one and fifty paise only) per equity share (i.e. 15%)]. Dividend is subject to approval of members at the ensuing annual general meeting ("AGM"). The said dividend is in line with the Dividend Distribution Policy of the Company. In view of the changes made under the Income-Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of Dividend after deduction of tax at source, as may be applicable.

6. DIVIDEnD DIsTRIBuTIon PoLICy:

In terms of Regulation 43A of the SEBI Listing Regulations, the Board of the Company has adopted a Dividend Distribution Policy, which can be accessed on the Company web link: https://www.lincolnpharma.com/Investor/ Disclosures%20under%20Regulation%2046%20of%20 the%20LODR/8.%20Dividend%20Distribution%20Policy. pdf?_t=1676643338.

7. TRAnsFER To REsERVEs:

During the year under review, your company has transferred a sum of Rs. 50.00 Lakhs to the general reserve out of the amount available for appropriation for the financial year ended March 31, 2023 (Previous Year transferred a sum of

Rs. 50.00 Lakhs was transferred to general reserve).

8. TRAnsFER oF unCLAIMED DIVIDEnD To THE InVEsToR EDuCATIon AnD PRoTECTIon FunD (IEPF):

In accordance with the provisions of sections 124 and 125 of the Act and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), and relevant circulars and amendments thereto, the amount of dividends of the company which remain unpaid or unclaimed for a period consecutive seven years from the date of transfer to the unpaid dividend account shall be transferred by the company to the Investor Education and Protection Fund ("IEPF"), constituted by the Central Government.

In terms of the foregoing provisions of the Act, the company will transfer outstanding unpaid or unclaimed dividend and corresponding shares for the financial year 2015-2016 to the IEPF authorities during the year under review.

9. TRAnsFER oF sHAREs To IEPF:

Pursuant to the provisions of IEPF Rules, all equity shares in respect of which dividend has been unpaid / unclaimed since last seven consecutive years shall be transferred by the Company to the designated demat account of the IEPF Authority within a period of thirty days of such shares becoming due to be transferred.

The Company has sent reminders to all such shareholders who have not claimed their dividends. Members who have not en-cashed dividend for the FY 2015-16 or any subsequent dividend declared by the Company, are advised to write to the Company Secretary of the Company immediately.

Any shareholder whose dividend/shares are transferred to IEPF can claim the shares by making an online application in Form IEPF-5 (available on www.iepf.gov.in).

10. sHARE CAPITAL sTRuCTuRE:

During the year under review, there has been no change in the authorised share capital of the Company. The authorised share capital of the Company as on 31 March, 2023 stood at Rs. 20,02,97,280 divided into 2,00,29,728 equity share of

Rs. 10/- each.

During the year under review, the Company has neither issued shares with differential voting rights nor sweat equity shares.

11. DIRECToRs AnD KEy MAnAGERIAL PERsonnEL:

I. Retire by Rotation of Director:

In accordance with the provisions of Section 152 of the Act and the rules framed there under, Mr. Rajanikant Gulabdas Patel, Non-Executive Director and Mr. Hashmukh I. Patel, Whole Time Director of the Company retire by rotation at the ensuing AGM and they being eligible offer themselves for re-appointment. The Board recommends their reappointment.

Necessary resolutions have been proposed in notice convening ensuing AGM for approval of shareholders. The brief profile of the Directors appointing / reappointing has been detailed in the Notice convening the AGM of the Company. Your Directors recommend all appointment / rotation / re-appointment of Directors mentioned in the notice.

II. Appointment / Re-appointment of Director:

During the year under review, the appointment of Mr. Anand A. Patel (DIN:00103316) was approved by the Members in the Annual General Meeting of the Company held on September 30,2022 for a period of three years. He was appointed as a Whole Time Director in the Board Meeting held on August 09, 2022.

In accordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 the resolution proposing to continue Mr Mahendrabhai Gulabdas Patel (DIN: 00104706) as a Managing Director on his attaining the age of 70 years is set out in the Notice convening the Annual General Meeting. The Board recommends to continue to avail his services in the interest of the Company and accordingly recommends the passing of the proposed resolution.

The Shareholders at the Annual General Meeting held on September 30, 2022 have approved the:

1. Re-appointment of Mr. Saurin J. Parikh (DIN: 02136530) as Independent Director of the Company for a further term of five years w.e.f. 27.03.2023

2. Re-appointment of Mr. Mahendra G. Patel (DIN: 00104706) as a Managing Director of the Company for a period of 3 years w.e.f. 01.10.2022

3. Re-appointment of Mr. Hashmukh I. Patel (DIN: 00104834) as a Whole Time Director of the Company for a period of 3 years w.e.f. 01.10.2022

4. Re-appointment of Mr. Ashish R. Patel (DIN: 01309017) as a Whole Time Director of the Company for a period of 3 years w.e.f. 15.11.2022

5. Re-appointment of Munjal M. Patel (DIN: 02319308) as a Whole Time Director of the Company for a period of 3 years w.e.f. 15.11.2022.

III. Resignation/Cessation of Director:

During the year under the review, Mr. Arvindbhai Gulabdas Patel (DIN:00104885), resigned vide letter dated August 09, 2022 as a Director of the company due to personal reasons. The Board expresses thier appreciation to Mr. Arvindbhai Gulabdas Patel for the valuable guidance and services rendered by him during his tenure as a Director of the Company. During the financial year, Mr. Ishwarlal A. Patel (DIN:00217324), Non-Executive Independent Director of the Company has ceased from the position of director of the Company on December 04, 2022 due to his untimely and unexpected demise.

The Board places on record its appreciation for the invaluable contribution and guidance provided by Mr. Ishwarlal A. Patel at the Board/Committee meetings and to the senior management of the Company during his long association as a Non-Executive Independent Director of the Company.

After the closure of the year under review, Mr. Anand A. Patel (DIN:00103316) resigned from the post of directorship of the company due to other commitments and personal reasons w.e.f. closing of business hours on 25th May, 2023. The Board expresses its appreciation valuable guidance and services rendered by him during his tenure as a Director of the Company.

IV. Key Managerial Personnel:

During the year under review, Mr. Niren A. Desai (ICSI Membership Number: A60285), stepped down from the position of Company Secretary and Compliance Officer of the Company with effect from July 19, 2022 to grab alternate career opportunities. The Board of Directors has appointed Ms. Trusha Shah (Membership Number: A59416) as a Company Secretary & Compliance Officer of the Company w.e.f. November 10, 2022 who is a Key Managerial Personnel as per Section 203 of the Act. Apart from the said change, there is no other change in the Key Managerial personnel of the Company during the year under review.

Pursuant to the provisions of Section 203 of the Act, the KMPs of the Company as on March 31, 2023, are:

1. Mr. Mahendra G. Patel, Managing Director

2. Mr. Darshit A. Shah, Chief Financial Officer

3. Ms. Trusha Shah, Company Secretary & Compliance Officer

4. DECLARATIon GIVEn By InDEPEnDEnT DIRECToRs:

The Company has received the necessary declarations from all the independent directors of the Company in accordance with Section 149 (7) of the Act and Regulation 16 (1) (b) and 25 (8) of the SEBI Listing Regulations confirming that they meet the criteria of independence prescribed under the Act and the SEBI Listing Regulations. All the Independent Directors have also confirmed that in terms of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, they have registered themselves with the Independent Directors database as prescribed under the Act. Further, in terms Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, out of three Independent Directors of the Company as on March 31, 2023, one Independent Director has passed the Online Proficiency Self-Assessment Test conducted by Indian Institute of Corporate Affairs (IICA) and two Independent Directors were exempted from appearing for Online Proficiency Self-Assessment Test as required by IICA.

In the opinion of the board, there has been no change in the circumstances which may affect their status as independent directors and the board is satisfied of the integrity, expertise and experience (including proficiency in terms of Section 150 (1) of the Act and applicable rules thereunder) to all independent directors on the board.

5. PERFoRMAnCE EVALuATIon oF THE BoARD As WHoLE, CoMMITTEE AnD InDIVIDuAL DIRECToRs:

Pursuant to the provisions of the Act, and the SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of the Directors individually. Feedback was sought by way of a structured questionnaire covering various aspects of the boards functioning such as adequacy of the composition of the board and its committees, board culture, execution and performance of specific duties, obligations and governance and the evaluation was carried out based on responses received from the directors. The evaluation is performed by the board, nomination and remuneration committee and independent directors with specific focus on the performance and effective functioning of the Board and individual directors. In line with SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004, dated January 5, 2017, the Company adopted the criteria recommended by the SEBI. The performance evaluation of the chairman and non-independent directors was also carried out by the independent directors. The performance of the directors, the board as a whole and committee of the board were found to be satisfactory. During the year under review, the performance evaluation of the Board, Committees and Directors was conducted based on the criteria, framework and questionnaires approved by the Nomination and Remuneration Committee and the Board. The details of the performance evaluation exercise conducted by the Company are set out in the Corporate Governance Report.

6. CHAnGE(s) In THE nATuRE oF BusInEss:

There was no change in the nature of business of the Company during the FY ended March 31, 2023.

7. PoLICy on DIRECToRs APPoInTMEnT AnD REMunERATIon:

In terms of the requirements under the Act and SEBI Listing Regulations, the Company has in place a Nomination & Remuneration Policy, inter-alia, detailing the directors appointment, remuneration, criteria for determining qualifications, attributes, independence of a director and other matters. The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is as per the Nomination & Remuneration Policy of your Company. The said Nomination & Remuneration Policy which can be accessed on the Company web link: https://www. lincolnpharma.com/Investor/Disclosures%20under%20 Regulation%2046%20of%20the%20LODR/13.%20 Nomination%20and%20Remuneration%20Policy.pdf?_ t=1676711629.

8. DIRECToRs REsPonsIBILITy sTATEMEnT:

In accordance with the provisions of Section 134(5) (c) of the Act and based on the information provided by the management, the Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; 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 a true and fair view of the state of affairs of the Company at the end of the financial year on March 31, 2023 and of the profit of the Company for the year under review; c) the directors have taken proper and sufficient care 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; d) the annual accounts have been prepared 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.

9. nuMBER oF MEETInGs oF THE BoARD:

During the FY 2022-2023, 6 (six) meetings of the Board of Directors of the Company were held and the details of Board and Committee meetings held are provided in the Report on Corporate Governance, which forms part of this report.

10. sECRETARIAL sTAnDARDs:

The Company has followed the applicable secretarial standards issued by the Institute of Company Secretaries of India (ICSI).

11. InTERnAL FInAnCIAL ConTRoL AnD ITs ADEQuACy:

The internal control framework is intended to ensure proper safeguarding of assets, maintaining proper accounting records and providing reliable financial information and other data. This system is accompanied by internal audit, reviews by the management and documented policies, guidelines and procedures. The Company has a well-defined organizational structure, authority levels, internal rules and guidelines for conducting business transactions. The Company intends to undertake additional measures as necessary in line with its intent to adhere to procedures, guidelines and regulations as applicable in a transparent manner. The internal audit department of the Company carries out the internal audit of the Company operations and reports its finding to the audit committee.

In this process, the internal audit also evaluates the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness through periodic reporting. The internal audit is carried out as per risk based internal audit plan which is reviewed by the audit committee of the Company. The committee periodically reviews the findings and suggestions for improvement and is apprised of the implementation status in respect of the actionable items.

12. MATERIAL CHAnGEs AnD CoMMITMEnTs, IF Any, AFFECTInG THE FInAnCIAL PosITIon oF THE CoMPAny:

There are no material changes and commitments affecting the financial position of the Company which occurred between the financial year ended March 31, 2023 to which the financial statements relates and the date of signing of this report.

13. DEPosITs:

The Company has not accepted any deposits from the public in terms of Section 73 and 74 and Chapter V of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

14. PARTICuLARs oF LoAns, GuARAnTEEs oR InVEsTMEnTs:

Pursuant to provision of the Section 186 of the Act, Company have not given any guarantee or provided any security during the year under review. The details of loans and investment have been disclosed in notes to the financial statements.

15. suBsIDIARy / JoInT VEnTuREs / AssoCIATE CoMPAnIEs:

The Company has only one subsidiary as on March 31, 2023. There are no associates or joint venture companies within the meaning of Section 2(6) of the Act. There has been no material change in the nature of the business of the subsidiaries.

Pursuant to the provisions of Section 129 (3) of the Act, the statement containing salient features of the financial statements and performance of subsidiary and its contribution to the overall performance of the Company during the period is attached with the audited financial statements in form AOC-1 forms part of this directors report (Annexure – 1). The audited financial statements of subsidiary has also been placed on the website of the Company at www.lincolnpharma.com. During the year under review, no companies became or ceased to be the subsidiary, joint ventures or associate companies of the company.

16. InsuRAnCE:

The Company has taken adequate insurance to cover the risks to its directors, senior key managerial personnel, employees, property (land and buildings), plant, equipment and other assets.

17. RIsK MAnAGEMEnT PoLICy:

The Company has built a comprehensive risk management framework that seeks to identify all kinds of anticipated risks associated with the business and to take remedial actions to minimize any kind of adverse impact on the Company. The Company understands that risk evaluation and risk mitigation is an ongoing process within the organization and is fully committed to identify and mitigate the risks in the business. The identification of risks by Internal Audit Department is done at strategic, business and operational levels and the risk management process of the Company focuses mainly on five elements, viz. (i) Risk Identification (ii) Risk Assessment (iii) Risk Monitoring (iv) Risk Mitigation; (v) Risk Reporting.

The Company has a risk management policy consistent with the provisions of the Act and the SEBI Listing Regulations. The committee is responsible for assisting the board in understanding existing risks and reviewing the mitigation and elimination plans for those. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The audit committee is also looking after the area of financial risks and controls. The said policy and constitution of the committee is available on the website of Company and can be accessed at company web link: https://www. lincolnpharma.com/Investor/Other%20Policies/5.%20 Risk%20Management%20Policy.pdf?_t=1691127263.

18. RELATED PARTy TRAnsACTIons:

All related party transactions are entered into only after receiving prior approval from the Audit Committee. Omnibus approvals are obtained each year for transactions which are repetitive in nature. A statement of all related party transactions entered into is placed before the Audit Committee and Board of Directors for its review on a quarterly basis, specifying the nature, value and terms of the transaction.

During the year under review, the Company has entered into transactions with related parties as defined under Section 2(76) of the Act read with Companies (Specification of Definitions Details) Rules, 2014, SEBI Listing Regulations and applicable accounting standards, which were in the ordinary course of business and on arms length basis and in accordance with the policy on related party transactions of the Company. During the year, there was no material transaction with any related parties as per the related party transactions policy of the Company and/or any other related party transaction entered into by the Company that requires disclosure in Form AOC-2, hence, disclosure in Form AOC-2 is not applicable to the Company.

The disclosures pertaining to related party transactions as per the applicable Accounting Standards form part of the notes to the financial statements provided in this Annual Report.

In terms of Regulation 23 (9) of the SEBI Listing Regulations, the Company have submitted related party transaction within prescribed time limit with the stock exchange(s) for the each half year. The policy on related party transactions is placed on the Companys website at https://www. lincolnpharma.com/Investor/Disclosures%20under%20 Regulation%2046%20of%20the%20LODR/6.%20 Policy%20on%20Related%20Party%20Transactions.pdf

19. CoRPoRATE soCIAL REsPonsIBILITy (CsR):

The Company has adopted a CSR Policy incompliance with the provisions of the act inter alia to give directions and assistance to the Board for leading the CSR initiatives of the Company. The Committee formulates and reviews the Annual Action Plan and also monitors the progress of the CSR activities. The Company has spent Rs.153 Lakhs towards the CSR projects for the Financial Year 2022-23.

The Company believes in undertaking business in a way that will lead to overall development of all stakeholders and society. The projects have been continuously monitored by the Board on a quarterly basis.

In accordance with Section 135 of the Act and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 the report on CSR activities along with its annexure as forms part of this directors report (Annexure – 2).

20. HuMAn REsouRCEs MAnAGEMEnT:

Lincoln has consistently focused on providing its employees a work environment that promotes diversity and inclusion, free of any discrimination. It has a robust employee engagement policy that helps it develop and retain a highly motivated team.

Your Company continued to build sustenance around various aspects of employee work life as well as organic ways of enhancing its image as an employer of choice.

21. VIGIL MECHAnIsM / WHIsTLE BLoWER PoLICy:

Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(10) of the Companies Act, 2013 ("Act") and Regulations 22 of the Listing Regulations your Company has adopted a Vigil Mechanism Framework ("Framework"), under which the Whistle Blower Investigation Committee ("the Committee") has been set up. The objective of the Framework is to establish a redressal forum, which addresses all concerns raised on questionable practices and through which the Directors and employees can raise actual or suspected violations. The said policy is available on the website of the Company and can be accessed at https://www.lincolnpharma. com/Investor/Disclosures%20under%20Regulation%20 46%20of%20the%20LODR/5.%20Details%20of%20 establishment%20of%20Whistle%20Blower%20Policy.pdf

22. DIsCLosuRE unDER sEXuAL HARAssMEnT oF WoMEn AT WoRKPLACE (PREVEnTIon, PRoHIBITIon AnD REDREssAL) ACT, 2013:

The Company is committed to provide a safe and secure working environment for all employees and create ambience in which all employees can work together without any apprehension of sexual harassment. In accordance with the requirements of the sexual harassment of women at workplace (prevention, prohibition & redressal) Act, 2013 ("POSH Act") and Rules made thereunder, the Company has formulated and implemented a policy which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace. During the year under review, the Company has not received any complaint under the policy. Appropriate reporting mechanisms are in place for ensuring protection against Sexual Harassment and the right to work with dignity.

23. PARTICuLARs oF EMPLoyEEs:

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as forms part of this directors report (Annexure – 3).The information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, including amendment thereto, is provided in the Annexure forming part of the Report. In terms of the second proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining the same may write to the Company Secretary at the registered office of the Company.

24. AuDIToRs AnD AuDIToRs REPoRT: A. sTATuToRy AuDIToRs:

M/s. Samir M. Shah & Associates, Chartered Accountants (Firm Registration No.: 122377W) have been appointed as the Statutory Auditors of the Company for a term of five years until the conclusion of 33rd Annual General Meeting of the Company. The Auditors fulfil the eligibility and qualification norms as prescribed under the Act, the Chartered Accountants Act, 1949 and rules and regulations issued thereunder. In addition, the auditors hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI), a prerequisite for issuing quarterly Limited Review reports.

The Auditors Report on the standalone and consolidated financial statements of the Company for the year ended 31st March, 2023 forms part of this Annual Report and there are no qualifications, reservations, adverse remarks or disclaimer made by the statutory auditors in their report.

B. CosT AuDIToR:

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to maintain cost records for few of its products and accordingly, such accounts are made and records have been maintained by the Company.

The board of directors on the recommendation of the audit committee, appointed Messrs Kiran J. Mehta

& Co., cost accountants (Firm Registration Number 000025), as the cost auditors of the Company to audit the cost records for the financial year ended on March 31, 2024 as per Section 148 of the Act. Messrs Kiran J. Mehta & Co., cost accountants have confirmed that their appointment is within the limits of Section 141 (3) (g) of the Act and have also certified that they are free from any disqualifications specified under Section 141 (3) and proviso to Section 148 (3) read with Section 141 (4) of the Act.

As per the provisions of the Act, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to Messrs Kiran J. Mehta & Co., cost auditors forms part of the notice convening the AGM.

Relevant cost audit report for the year 2021-22 was submitted to the Central Government within stipulated time and was free from any qualification or adverse remarks.

C. sECRETARIAL AuDIToR:

As required by Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Messrs Vishwas Sharma & Associates, Practicing Company Secretaries (Certificate of Practice Number: 16942) to conduct Secretarial Audit for the Financial Year 2022-23. The Report of the Secretarial Audit in Form MR – 3 for the financial year ended on March 31, 2023, is annexed to this Report (Annexure – 4).

CoMMEnT oF BoARD on sECRETARIAL AuDIToRs oBsERVATIons:

With respect to the observations of the Secretarial Auditors: Non Compliance under Regulation 17 of SEBI (LODR) Regulations, 2015 arose without any malafide intention and on account of Company taking fraction into nearest integer as against Stock Exchange taking nearest higher integer in respect requirement of minimum Independent director on the board being 1/3rd of total strength.The Company has further remitted the fine on 23.05.2023 to NSE and BSE Limited and intimate to the both exchanges regarding payment confirmation. And from 26th May, 2023 the composition of the Board is in compliance with Regulation 17(1) of SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015.

a) AnnuAL sECRETARIAL CoMPLIAnCE REPoRT:

Pursuant to SEBI Circular CIR/CFD/CMD1/27/2019 dated February 08, 2019, Company has undertaken an audit for the financial year ended March 31, 2023 for all applicable SEBI Regulations and circulars / guidelines issued thereunder. The annual secretarial compliance report issued by Messrs Vishwas Sharma & Associates, Practicing Company Secretaries have been submitted to the stock exchanges within prescribed time limit.

25. REPoRTInG oF FRAuDs By AuDIToRs:

During the year under review, the statutory auditors, cost auditors and secretarial auditor 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.

26. MAInTEnAnCE oF CosT RECoRDs sPECIFIED By THE CEnTRAL GoVERnMEnT unDER sECTIon 148 oF THE ACT:

Pursuant to Section 148 (1) of the Act, read with the Companies (Cost Records and Audit) (Amendment) Rules, 2014, the cost audit records maintained by the Company in respect of drug and pharmaceuticals products of the Company are required to be audited by a cost accountant. The audit report of the cost accountant of the Company for the financial year ended March 31, 2023 will be submitted to the relevant authority in due course.

27. THE DETAILs oF APPLICATIon MADE oR Any PRoCEEDInG PEnDInG unDER THE InsoLVEnCy AnD BAnKRuPTCy CoDE, 2016:

During the financial year ended on March 31, 2023, there is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) against the Company.

28. THE 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 the review, there was no One Time Settlement of loan taken from Banks or any financial Institutions. Hence, the difference in valuation does not arise.

29. BusInEss REsPonsIBILITy AnD susTAInABILITy REPoRT:

Pursuant to the Regulation 34 (2) (f) of the SEBI Listing Regulations, the initiatives taken by the Company from an environmental, social and governance perspective, are provided in the Business Responsibility and Sustainability Report which is forms part of this directors report

(Annexure – 5).

30. 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 Act read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 forms a part of this Report which as forms part of this directors report (Annexure – 6).

31. PRoHIBITIon oF InsIDER TRADInG:

In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended ("SEBI PIT Regulations"), the Company has adopted the revised "Code of Conduct to Regulate, Monitor and Report Trading by Insiders" ("the Code"). The Code is applicable to promoters, all directors, designated persons and connected persons and their immediate relatives, who are expected to have access to unpublished price sensitive information relating to the Company. The Company has also formulated a ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) in compliance with the PIT Regulations. The aforesaid codes are available on the website of the Company and can be accessed at https://www. lincolnpharma.com/Investor/Other%20Policies/6.%20 Policy%20on%20Code%20of%20Practices%20and%20

Procedures%20for%20Fair%20Disclosure%20of%20 Unpublished%20Price%20Sensitive%20Information.pdf?_ t=1691566912

32. AnnuAL RETuRn:

Pursuant to provision of Section 92 (3) read with Section 134 (3) (a) of the Act, the annual return as on March 31, 2023 is available on the website of the Company at https://www. lincolnpharma.com/Investor/Disclosures%20under%20 Regulation%2046%20of%20the%20LODR/23.%20 MGT-7%20Annual%20Return/Final-MGT-7-of-Lincoln-Pharma-for-the-FY-2022-23.pdf?_t=1693568197

33. MAnAGEMEnT DIsCussIon & AnALysIs REPoRT:

A separate section on Management Discussion and Analysis Report ("MD&A") forms part of this report as required under Regulation 34 (2) of SEBI Listing Regulations.

34. CoRPoRATE GoVERnAnCE REPoRT:

The Company has a rich legacy of ethical governance practices and committed to implement sound corporate governance practices with a view to bring about transparency in its operations and maximize shareholder value. A separate section on corporate governance along with a certificate from the practicing company secretary regarding compliance with the conditions of corporate governance as stipulated under Schedule V of the SEBI Listing Regulations as forms part of this directors report

(Annexure –7). 35. AuDIT CoMMITTEE:

The details pertaining to the composition of the audit committee are given in the report on corporate governance forming part of this Report. Further, all the recommendations made by the audit committee were accepted by the Board.

36. sIGnIFICAnT oR MATERIAL oRDER PAssED By THE REGuLAToRs oR CouRTs:

There are no significant and material orders passed during the year by the regulators or courts or tribunals impacting the going concern status and operations of the Company in future.

37. CAuTIonARy sTATEMEnT:

The annual report including those which relate to the directors report, management discussion and analysis report may contain certain statements on the Companys intent expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statement. Some of the factors that could affect the Companys performance could be the demand and supply for Companys product and services, changes in government regulations, tax laws, forex volatility etc.

38. ACKnoWLEDGEMEnTs:

The Board of Directors acknowledges and places on record their sincere appreciation of all stakeholders, customers, vendors, banks, Central and State Governments, and all other business partners, for their continued co-operation and for the excellent support received from them.

The Board also wishes to place on record its appreciation to the esteemed investors for showing their confidence and faith in the management of the Company.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.