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Lincoln Pharmaceuticals Ltd.

BSE: 531633 Sector: Health care
NSE: LINCOLN ISIN Code: INE405C01035
BSE 13:02 | 16 Aug 290.75 1.40
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292.40

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NSE 12:49 | 16 Aug 291.40
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292.00

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OPEN 292.40
PREVIOUS CLOSE 289.35
VOLUME 4490
52-Week high 414.75
52-Week low 255.00
P/E 8.74
Mkt Cap.(Rs cr) 582
Buy Price 291.15
Buy Qty 4.00
Sell Price 292.50
Sell Qty 3.00
OPEN 292.40
CLOSE 289.35
VOLUME 4490
52-Week high 414.75
52-Week low 255.00
P/E 8.74
Mkt Cap.(Rs cr) 582
Buy Price 291.15
Buy Qty 4.00
Sell Price 292.50
Sell Qty 3.00

Lincoln Pharmaceuticals Ltd. (LINCOLN) - Auditors Report

Company auditors report

To

The Members of

Lincoln Pharmaceuticals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the Standalone Financial Statements of LincolnPharmaceuticals Limited ("the Company") which comprise the Balance Sheet as at31st March 2021 and the Statement of Profit and Loss the Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thestandalone financial statements including a summary of the significant accountingpolicies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the 'Act') in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India including Indian Accounting Standards ('Ind AS') specified under Section 133 ofthe Act of the state of affairs of the Company as at 31st March 2021 and itsprofit total comprehensive income its cash flows and the changes in equity for the yearended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the Standalonefinancial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Companies Act 2013 and theRules there under and we have fulfilled our ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statementsof the current period.

These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

5. Key audit matter identified in our audit is on recoverabilityassessment of trade receivables as follows:

Key audit matter How our audit addressed the key audit matter
Measurement of Expected Credit Loss on Trade Receivables
Trade receivables amount to Rs. 10223.44 Lakhs after providing for an impairment based on expected credit loss method of Rs. 170.39 Lakhs. The measurement of expected credit loss is based on provision matrix that identifies receivables on number of days remaining outstanding and empirical data on recoverability The management's estimations for impairment based on expected credit loss method our audit procedures included the following:
. This Provision matrix requires to be updated regularly based on the circumstantial evidences which may result in significant variation in measurement from one period to other. • Obtained a list of receivables
• We analysed the aging of receivables;
• Identified any receivables with financial difficulty through discussion with management;
• We obtained receivables balance confirmations on a sample basis;
• Tested subsequent settlement of receivables after the balance sheet date on a sample basis;
• In respect of receivables overdue for a period of 90 days or more we assessed the recoverability through inquiry with management and by obtaining sufficient corroborative evidence to support the conclusions.

Information other than the Standalone financial statements

and Auditors' Report thereon.

6. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the standalone financial statements and our auditor's reportthereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the Annual Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and as may be legally advised.

Responsibilities of Management and Those Charged with Governance forthe Standalone financial statements

7. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate implementation andmaintenance of accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

8. In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibilities for the Audit of the Standalone financialstatements

10. Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

11. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis of opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for our resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial control system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

12. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

13. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

14. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

15. As required by the Companies (Auditor's Report) Order2016("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

16. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the CashFlow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS Specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directorsnone of the directors is disqualified as on 31st March 2021 from beingappointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in the standalone financial statements- Refer Note-44 of financialstatement;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts;

(J. J. Shah)
Partner
Place: Ahmedabad [M. No. 045669]
Date: 25/05/2021 UDIN: 21045669AAAACR1620

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For J.T. Shah & Co. Chartered Accountants [Firm Regd. No.109616W]

Referred to in paragraph 15 of "Report on Other Legal andRegulatory Requirements" of our Report of even date to the Members of LincolnPharmaceuticals Limited for the year ended 31st March 2021.

1. In respect of Fixed Assets :

(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Fixed Assets on the basis of availableinformation.

(b) As per the information and explanations given to us the managementat reasonable intervals during the year in accordance with a programme of physicalverification physically verified the fixed assets and no material discrepancies werenoticed on such verification as compared to the available records.

(c) As explained to us the title deeds of all the immovable propertiesare held in the name of the company.

2. In respect of its Inventories :

(a) The inventory has been physically verified during the year by themanagement. In our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business.

(c) On the basis of our examination of the records of inventory we areof opinion that the Company is maintaining proper records of inventory. The discrepanciesnoticed on verification between the physical stocks and books records were not material.

3. In respect of Loans and Advances granted during the year:

The Company has granted unsecured loans to party covered in theRegister maintained under section 189 of the Companies Act 2013. The details in respectof clause (iii) (a) to (c) of the Order are as under:-

(a) The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the interest of the company.

(b) The schedule for repayment of principle has been stipulated andthere were no principle amounts due for repayment during the year. Further there was nostipulation in respect of interest on said loans hence question of regular payment ofinterest does not arise.

(c) There is no overdue amount of loans granted to parties covered inthe Register maintained under section 189 of the Companies Act 2013.

4. Loans Investments and guarantees:

In our opinion and according to information and explanations given tous the Company has complied with provisions of Section 185 and 186 of the CompaniesAct2013 in respect of loans investments guarantees and security during the year underconsideration. Therefore clauses (iv) of companies (Auditor's Report) Order 2016 is notapplicable to the company.

5. Acceptance of Deposits:

During the year the company has not accepted any deposits and hencethe directives issued by the Reserve Bank of India and the provisions of sections 73 to 76or any other relevant provisions of the Companies Act and the rules framed there under arenot applicable to the company. Therefore clauses (v) of companies (Auditor's Report)Order 2016 is not applicable to the company.

6. Cost Records:

Pursuant to the rules made by the central government of India theCompany is required to maintain cost records as specified under section 148(1) of the Act.

We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. However we havenot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.

7. In respect of Statutory Dues :

(a) According to the records of the Company the Company is by andlarge regular in depositing with appropriate authorities undisputed statutory duesincluding provident fund employees' state insurance income tax value added tax wealthtax service tax duty of customs duty of excise goods and service tax cess and anyother statutory dues with the appropriate authorities applicable to it except there hasbeen delay in payment of Professional Tax for certain cases. According to the informationand explanations given to us no undisputed amounts payable in respect statutory dues wereoutstanding as at 31st March 2021 for a period of more than six months fromthe date they became payable.

(b) According to the records of the company there are no dues ofprovident fund employees' state insurance income tax value added tax wealth taxservice tax duty of customs duty of excise value added tax goods and service tax cessand any other statutory dues with the appropriate authorities which have not beendeposited on account of dispute except as under:-

Name of the Statute Nature of the Dues Financial Year Amount Rs. in lakhs Forum where dispute is pending
Income Tax Act1961 Income Demand & due Interest thereon 2016-17 30.19 Commissioner of Income Tax (Appeals)

8. Based on our audit procedure and according to the information andexplanation given to us we are of the opinion that during the year the Company has notdefaulted in repayment of dues to a Financial Institutions or Banks. The Company has nodebenture holder borrowing during the year.

9. According to the information and explanations given to us thecompany had not raised any money by way of public issue during the year. According to theinformation and explanations given to us and on an overall examination of the balancesheet of the company in our opinion the term loans taken during the year were appliedfor the purpose for which they were obtained.

10. Based upon the audit procedures performed and information andexplanations given by the management we report that no fraud by the Company or any fraudon the company by it's officer or employees has been noticed or reported during the courseof our audit.

11. In our opinion and according to the information and explanationsgiven to us the company had paid managerial remuneration which is in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V of TheCompanies Act 2013.

12. In our opinion and according to the information and explanationsgiven to us the provisions of special statute applicable to chit funds and nidhi / mutualbenefit funds / societies are not applicable to the company. Hence clause (xii) of theCompany's (Auditor's Report) Order 2016 is not applicable to the company.

13. In our opinion and according to the information and explanationsgiven to us the transactions entered by the company with related parties are incompliance with the provisions of section 177 and 188 of The Companies Act 2013 anddetails thereof are properly disclosed in the standalone financial statements.

14. The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Hence clause (xiv) of the Company's (Auditor's Report) Order 2016 is notapplicable.

15. The company had not entered in to any non-cash transactions withthe directors or persons connected with him during the year and hence clause (xv) ofCompany's (Auditor's Report) Order 2016 is not applicable to the company.

16. According to the information and explanation given to us thecompany is not required to registered under section 45-IA of Reserve Bank of India Act1934 hence clause (xvi) of Company's (Auditor's Report) Order 2016 is not applicable tothe company.

For J.T. Shah & Co.

Chartered Accountants [Firm Regd. No. 109616W]

(J. J. Shah)
Partner
Place: Ahmedabad [M. No. 045669]
Date: 25/05/2021 UDIN: 21045669AAAACR1620

Referred to in paragraph 16(f) of "Report on Other Legal andRegulatory Requirements" of our Report of even date to the Members of LincolnPharmaceuticals Limited for the year ended 31st March 2021.

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Lincoln Pharmaceuticals Limited as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March2021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For J.T. Shah & Co.
Chartered Accountants [Firm Regd. No. 109616W]
(J. J. Shah)
Partner
Place: Ahmedabad [M. No. 045669]
Date: 25/05/2021 UDIN: 21045669AAAACR1620

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