Your Directors have pleasure in presenting the 22nd Annual Report togetherwith the Audited Financial Statements and Auditors' report thereon for the year ended 31stMarch 2016.
The operating results of the Company for the year ended on 31st March 2016are briefly indicated below:
(Rs. in Lac)
|PARTICULARS ||MARCH 31 2016 ||MARCH 31 2015 |
|Profit Before Depreciation and Taxation ||3327.16 ||2209.72 |
|Less : Depreciations Amortisation ||321.44 ||293.01 |
|Less : Provision For Taxation - Current/F.B.T ||631.22 ||385.25 |
|Less : Deferred Tax ||199.88 ||54.15 |
|Profit after Taxation ||2174.62 ||1477.30 |
|Add: Balance brought forward ||5121.88 ||3950.01 |
|Profit available for appropriation ||7296.50 ||5427.31 |
|APPROPRIATION || || |
|1. Proposed Dividend ||163.11 ||163.11 |
|2. Dividend Tax ||33.21 ||33.85 |
|3. General Reserve ||50.00 ||50.00 |
|4. Reduction in Carrying Value of Fixed Assets as per Schedule II of Companies Act 2013. ||0.00 ||58.48 |
|Net Balance carried to Balance Sheet ||7050.18 ||5121.87 |
STATE OF COMPANY'S AFFAIRS/OPERATIONS
During the year under review your company has performed well and earned total revenueof ' 31710.19 Lac (Previous year ' 22859.79 Lac). The net profit has increased to '2174.62 Lac from ' 1477.30 Lac of previous year representing a growth rate of 47.20%during the financial year 2015-16. Further details are given in Management Discussions andAnalysis Report which forms part of Annual Report.
TRANSFER TO RESERVES
The Company has transferred a sum of ' 50.00 Lac to General Reserve in the current year(previous year ' 50.00 Lac).
Considering the Company's performance the Board of Directors of the Company haverecommended dividend of ' 1.00 (@10%) per equity share of face value of ' 10/- each of theCompany for the year ended on 31st March 2016 (Previous year ' 1/- per equityShare @10%). The final dividend is subject to the approval of the Shareholders.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
1. Retirement of Directors:
In accordance with the provisions of Section 152 of the Companies Act 2013 and theRules framed there under Shri Kishor M. Shah (DIN:02769085) Director and Shri Munjal M.Patel (DIN:02319308) Whole Time Director of the Company retire by rotation at theforthcoming Annual General Meeting and being eligible offer themselves forre-appointment. Your Directors recommend the passing of the proposed resolutions.
During the year under review Shri Bhavik P. Parikh (Membership No. A40719) has beenappointed as a Whole Time Company Secretary of the Company.
2. Independent Directors
The Independent Directors of the Company have given the declaration to the Company thatthey meet the criteria of independence as provided in of Section 149(6) of the CompaniesAct 2013 and the Regulation 16(1)(B) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
3. Board Evaluation
As per the provisions of the Companies Act 2013 the formal annual evaluation wascarried out for the Board's own performance its committee & Individual directors onthe basis of attendance contribution and various criteria as recommended by theNomination and Remuneration Committee of the Company.
The Board has also evaluated the composition of Board its committees experience andexpertise performance of specific duties and obligations governance issues etc. TheDirectors expressed their satisfaction with the evaluation process.
The performance of each of the non-independent directors (including the chairperson)was also evaluated by the Independent Directors at their separate meeting.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy on Directors' Appointment and Remuneration is mentioned in the CorporateGovernance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the Act and based on therepresentations received from the management the directors hereby confirm to the best oftheir knowledge that:
i. In the preparation of annual accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures.
ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the Profitof the Company for that period.
iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
iv. they have prepared the annual financial statements ongoing concern basis.
v. proper internal financial controls are in place in the Company and that suchinternal financial controls are adequate and are operating effectively and
vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Board of Directors during the year 2015-2016 met 9 times on (1) 16thApril 2015 (2) 18th May 2015 (3) 30th May 2015 (4) 7thJuly 2015 (5) 13th July 2015 (6) 4th August 2015 (7) 5thNovember 2015 (8) 10th December 2015 and (9) 11th February 2016in respect of which meetings proper notices were given and the proceedings were properlyrecorded and signed in the Minutes Book maintained for the purpose.
INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Company has adopted internal control system considering the nature of its businessand the size and complexity of operations. The Board has adopted the policies andprocedures for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial disclosures etc. Systems and proceduresare periodically reviewed to keep pace with the growing size and complexity of yourcompany's operations.
The internal auditor assesses opportunities for improvement of business processessystems and controls to provide recommendations which can add value to the organization.
MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes or commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company to which the financialstatements relate i.e. 31st March 2016 and the date of the Board's Report.
The Company has not accepted deposits within the meaning of Section 73 of the CompaniesAct 2013 and the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION186 OF THE COMPANIES ACT2013
The particulars of loan given investment made and guarantee and security given by theCompany (if any) during the financial year under review and governed by the provisions ofSection 186 of the Companies Act 2013 have been furnished in the Notes to the Financialstatements. The details of the Loans given during the year under review falling underSection 186 of the Companies Act 2013 is also given in "Annexure- VII" whichforms part of this report.
The Company has two subsidiaries namely M/s. Zullinc Healthcare LLP (Converted fromZullinc Healthcare Limited to Zullinc healthcare LLP) (WOS) and M/s. Lincoln ParenteralLimited. There are no associate companies within the meaning of Section 2(6) of theCompanies Act 2013 ("Act"). Further there has been no material change in thenature of business of the subsidiaries.
M/s. Lincoln Parenterals Limited is mainly engaged in the activity of manufacturing andtrading of Pharmaceutical products and M/s. Zullinc Healthcare LLP (Converted from ZullincHealthcare Limited to Zullinc healthcare LLP) is engaged in trading of Pharmaceuticalproducts.
Performance and financial position of the subsidiary companies is given in"Annexure-I".
The Company has taken adequate insurance to cover its assets.
The Equity Shares of the Company are listed on the BSE Limited (BSE) with Scrip CodeNo. 531633 NSE Limited (NSE) with SYMBOL "LINCOLN" (w.e.f. 17thDecember 2015) and on The Ahmedabad Stock Exchange Limited (ASE) with Company Code No.32428. The Company confirms that the annual listing fees to BSE Limited and NSE Limitedfor the financial year 2016-17 have been paid.
RISK MANAGEMENT POLICY
The Company has formulated Risk Management Policy in order to monitor the risks and toaddress/mitigate those risks associated with the Company.
The risk management process is designed to safeguard the organisation from variousrisks through adequate and timely action. It is designed to anticipate evaluate andmitigate risks in order to minimise its impact on the business. The risk managementframework of the Company is appropriate compared to the size of the Company and theenvironment under which the Company operates.
At present in the opinion of the Board there is no identification of Risk element thatmay threaten the existence of the Company.
RELATED PARTY TRANSACTIONS
During the year under review all transactions entered into with related parties asdefined under the Act and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015/Clause 49 of Listing Agreement during the financial year were in theordinary course of business and on an arm's length basis.
There were no material related party transactions entered into by the Company duringthe year under review hence reporting in Form - AOC -2 is not applicable to the Company.
The policy on Related Party Transactions is also disclosed on the Website of theCompany www.lincolnpharma.com .
CORPORATE SOCIAL RESPONSIBILITY
In accordance with Section 135 of the Companies Act 2013 and Rules framed there underthe Company has constituted a Corporate Social Responsibility Committee of Directors. Thedetails of composition of Corporate Social Responsibility Committee CSR policy and CSRspending by the Company have been provided in "Annexure-II" to this report asrequired under the Companies (Corporate Social Responsibility Policy) Rules 2014.
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee orientation programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
Pursuant to provisions of Section 177(9) of the Companies Act 2013 read with Rule 7 ofThe Companies (Meetings of Board and its Powers) Rules 2014 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015/Clause 49 of Listing Agreementthe Company has established a Vigil Mechanism/Whistle Blower Policy for DirectorsEmployees or business associates for reporting the unethical behavior malpracticeswrongful conduct frauds violations of the Company's code etc. to the Chairman of theAudit Committee The Policy also provides for adequate safeguard against victimization ofthe Direcotors'/Employees who avail the said mechanism.
The Vigil Mechanism/Whistle Blower Policy of the Company has been uploaded on thewebsite i.e. www.lincolnpharma.com
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
Details pertaining to remuneration and other details as required under Section 197 (12)of the Companies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is attached as "Annexure-VI" to this report.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and Rules framed there under either to the Company or to the CentralGovernment.
1. COST AUDITOR
Pursuant to provisions of section 148 (3) and other applicable provisions if any ofthe Companies Act 2013 and the Companies (Audit & Auditors) Rules 2014 M/s. KiranJ. Mehta & Co. Cost Accountants Ahmedabad have been appointed to conduct cost auditfor the year ending on 31st March 2017.
2. STATUTORY AUDITORS
Pursuant to the provisions of section 139 142 and other applicable provisions if anyof the Companies Act 2013 and The Companies (Audit and Auditors) Rules 2014 includingany Statutory modification(s) or re-enactment(s) thereof for the time being in force M/s.J. T. Shah & Co. Chartered Accountants (Firm Reg. No. 109616W) Ahmedabad statutoryAuditors of the Company retires at the forthcoming Annual General Meeting and beingeligible offers themselves for re-appointment from the conclusion of this Annual GeneralMeeting till the conclusion of the next Annual General Meeting.
Your Board recommends their appointment as the statutory Auditors of the Company forthe financial year 2016-17.
There were no qualifications reservations or adverse remarks in the Audit Report ofM/s. J. T. Shah & Co. which required the comments of the management under Section 134of the Companies Act 2013.
3. SECRETARIAL AUDITOR
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 hasappointed M/s. Rahul Agarwal & Associates Practising Company Secretaries toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed herewith as "Annexure-III".
EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSEREMARK OR DISCLAIMER MADE BY AUDITORS
With regard to the observation in the Secretarial Audit Report the Management is inprocess of appointing Chief Financial Officer.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3)(m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as"Annexure-IV"
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return in Form MGT - 9 as required under Section 92 (3) of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 forms part of this Report as "Annexure-V".
CORPORATE GOVERNANCE REPORT MANAGEMENT DISCUSSION & ANALYSIS
The Report on Corporate Governance and Management Discussion and Analysis Report formsthe part of the Annual Report along with the required Certificate from the PracticingCompany Secretary regarding compliance on Corporate Governance.
The Company has in place an Audit Committee in terms of requirements of the CompaniesAct 2013 and the rules framed there under. The details relating to the Audit Committeeare given in the Corporate Governance Report which is forming part of this report.
SIGNIFICANT OR MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS
As on the date of this report there were no material significant order passed by theregulators or courts or tribunals impacting the going concern of the Company.
The Board acknowledges with thanks the overall support extended by the shareholdersemployees suppliers customers and other stakeholders.
| ||For and on behalf of the Board |
| ||For Lincoln Pharmaceuticals Limited |
|Place: Ahmedabad ||M. G. Patel ||H. I. Patel |
|Date : 30th May 2016 ||(Managing Director) ||(Whole-Time Director) |
| ||(DIN: 00104706) ||(DIN: 00104834) |
ANNEXURE T TO DIRECTOR'S REPORT
FORM AOC - 1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement of subsidiaries
Part "A": Subsidiaries
(Amount in Rs.)
|Name of the subsidiary ||Zullinc Healthcare LLP* (wholly owned subsidiary) ||Lincoln Parenteral Limited (subsidiary company) |
|Reporting period for the subsidiary concerned if different from the holding company's reporting period ||1st April 2015 to 31st March 2016 ||1st April 2015 to 31st March 2016 |
|Reporting currency and Exchange rate as on the last date of therelevant Financial year in the case of foreign subsidiaries ||INR ||INR |
|Share Capital ||500000 ||100000000 |
|Reserves and Surplus ||7510180 ||19724399 |
|Total Assets ||12619098 ||608284274 |
|Total Liabilities (Excluding Share Capital & Reserves and Surplus) ||4608918 ||488559876 |
|Investments (Other than subsidiary) ||15000 ||22400 |
|Turnover (Including Other Income) ||0 ||1115508473 |
|Profit Before Taxation ||-630 ||30083719 |
|Provision for Taxation ||0 ||9548037 |
|Profit After Taxation ||-630 ||20535682 |
|Proposed Dividend ||Nil ||Nil |
|% of shareholding ||100% ||98.58% |
1. There is no subsidiary which is yet to commence operations.
2. There is no subsidiary which has been liquidated or sold during the year.
The amounts given in the table above are from the annual accounts made for therespective financial year end for each of the company. * During the year under reviewZullinc Healthcare Limited was converted into Zullinc Healthcare LLP.
Part "B": Associates and Joint Venture - Not Applicable
|As per our report of even date || || |
For and on behalf of the Board of Directors of
|For J.T. Shah & Co. || || |
Lincoln Pharmaceuticals Limited
|Chartered Accountants || || || |
|(FR No. 109616W) || ||M.G.Patel ||(Managing Director) |
|(J.T.SHAH) || ||R.G.Patel ||(Jt. Managing Director) |
|Partner || || || |
|(M.No.3983) ||Bhavik P. Parikh ||H.I. Patel ||(Whole Time Director) |
|Date : 30-05-2016 ||(Company Secretary) || |
Date : 30-05-2016
|Place : Ahmedabad || || |
Place : Ahmedabad