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Lincoln Pharmaceuticals Ltd.
|BSE: 531633||Sector: Health care|
|NSE: LINCOLN||ISIN Code: INE405C01035|
|BSE 10:35 | 09 Apr||136.00||
|NSE 10:34 | 09 Apr||135.95||
|Mkt Cap.(Rs cr)||272|
|Mkt Cap.(Rs cr)||272.00|
Lincoln Pharmaceuticals Ltd. (LINCOLN) - Auditors Report
Company auditors report
The Members of
Lincoln Pharmaceuticals Limited Report on the Audit of the StandaloneFinancial Statements
1. We have audited the standalone financial statements of alsLimited Pharmaceutic Lincoln ("the Company") which comprise the BalanceSheet as at 31st March 2019 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 thefinancial statements including a summary of the significant accounting policies and otherexplanatory information.
2. In our opinion and to the best of our information and accordingto the explanations given to us the aforesaid Standalone financial statements give theinformation required by the Companies Act 2013 (the Act') in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards (Ind AS')specified under Section 133 of the Act of the state of affairs of the Company as at 31stMarch 2019 and its profit total comprehensive income its cash flows and the changes inequity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards onAuditing specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis 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 statements ofthe current period. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
5. Key audit matter identified in our audit is on recoverabilityassessment of trade receivables as follows:
Information other than the Standalone Financial Statements andAuditors' Report thereon
6. The Company's Board of Directors is responsible for theother information. The other information comprises the information included in the AnnualReport but does not include the standalone financial statements and our auditor'sreport thereon.
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 financial statements or our knowledge obtained in the audit orotherwise 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 thematters stated in Section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting 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 irregularities;detecting frauds and other 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 financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting 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 StandaloneFinancial Statements
10. Our objectives are to obtain reasonable assurance about whetherthe financial statements as a whole are free from material misstatement whether due tofraud 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 financial statements. 11.As part of an audit in accordance with SAs we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis of opinion. The risk of not detecting a material misstatement resultingfrom fraud is higher than for our resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under section 143(3)(i) of the Actwe are also responsible for expressing our opinion on whether the company has adequateinternal financial control system in place and the operating effectiveness of suchcontrols.
Evaluate the appropriateness of policies used and thereasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion.
Our conclusions are based on the audit evidence obtained up tothe date of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
12. We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit.
13. We also provide those charged with governance with a statementthat we 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 withgovernance we determine those matters that were of most significance in the audit of thefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so 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 2019 taken on record by the Board of disqualified Directorsnone of the directors as on 31st March 2019 from being appointed as a director in termsof Section164(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 theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in the standalone financial statements- Refer Note -44 to the 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;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT
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's name.
2. In respect of Inventories:
As per the information and explanations given to us inventories werephysically verified during the year by the management at reasonable intervals. No materialdiscrepancy was noticed on such physical verification.
3. In respect of Loans 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 thegrant of such loans are in our opinion prima facie not prejudicial to the interest ofthe company. b) The schedule for repayment of principle has been stipulated and there wereno principle amounts due for repayment during the year. Further there was no stipulationin respect of interest on said loans hence question of regular payment of interest doesnot 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 Companies Act2013 in respect of loans investments guarantees and security during the year underconsideration.
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 2013 and the rules framed thereunder are not applicable to the Company. Therefore clause 3(v) of Companies(Auditor's Report) Order 2016 is not applicable.
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 and largeregular in depositing with appropriate authorities undisputed statutory dues includingprovident fund employees' state insurance income tax Value added tax CentralSales Tax Goods and Service Tax service tax duty of customs duty of excise cess andany other statutory dues with the appropriate authorities applicable to it. According tothe information and explanations given to us no undisputed amounts payable in respect ofstatutory dues were outstanding as at 31st March 2019 for a period of more than sixmonths from the date they became payable.
b) According to the records of the Company the dues of income taxservice tax duty of customs duty of excise value added tax central sales tax or cesswhich have not been deposited on account of disputes and the forum where the dispute ispending are as under:
8. Based on our audit procedure and according to the informationand explanation given to us we are of the opinion that the Company has not defaulted inrepayment of dues to Banks or Government. The Company has no debenture holder borrowingduring 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 thecourse of our audit.
11. In our opinion and according to the information andexplanations given to us the Company had paid managerial remuneration which is inaccordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V of The Companies Act 2013.
12. In our opinion and according to the information andexplanations given to us the provisions of special statute applicable to chit funds andnidhi / mutual benefit funds / societies are not applicable to the Company. Hence clause3(xii) of the Company's (Auditor's Report) Order 2016 is not applicable.
13. In our opinion and according to the information andexplanations given to us the transactions entered by the Company with related parties arein compliance with the provisions of section 177 and 188 of the Companies Act 2013 anddetails thereof are properly disclosed in the financial statements as required by theapplicable accounting standard.
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 3(xiv) of the Company's (Auditor's Report) Order 2016 isnot applicable.
15. The Company had not entered in to any non-cash transactionswith the directors or persons connected with him during the year hence section 192 of theCompanies Act 2013 is not Applicable hence clause 3(xv) of Company's(Auditor's Report) Order 2016 is not applicable.
16. As the Company is not required to register under section 45-IAof Reserve Bank of India Act 1934 hence clause 3(xvi) of Company's (Auditor'sReport) Order 2016 is not applicable.
ANNEXURE "B" TO INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 16(f) of "Report on Other Legal andRegulatory Requirements" of our Report of even date to the Members of
Lincoln Pharmaceuticals Limited for the year ended 31st March2019.
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the
We have audited the internal financial controls over financialreporting of als Limited Pharmaceutic Lincoln as of 31st March 2019 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 safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 financial statements whether due to fraud 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 internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal control over financialreporting includes those policies and procedures that (1)Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention acquisition or timely detection of unauthorized use or disposition of thecompany's assets that could have a material effect on the 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.
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 March 2019 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.