To the Members of
LYNX MACHINERY AND COMMERCIALS LIMITED
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the standalone financial statements of LYNX MACHINERY AND
COMMERCIALS LIMITED ("the Company"), which comprise the Balance Sheet as at
March 31, 2023, the Statement of Profit and Loss (Including Other Comprehensive Income),
the Statement of Changes in Equity, and the Cash Flow Statement for the year then ended,
and a summary of significant accounting policies and other explanatory information
(hereinafter referred to as the "standalone financial statements".
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion section of our report, the aforesaid standalone financial statements give the
information required by the Companies Act, 2013 ("the Act"), in the manner so
required and give a true and fair view in conformity with the Indian Accounting Standards
prescribed under section 133 of the Act, read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, ("Ind-AS") and other accounting principles
generally accepted in India, of the state of affairs of the Company as at March 31, 2023,
and the loss and total comprehensive loss, changes in equity and its cash flows for the
year ended on that date.
Basis for Qualified Opinion
(a) The Companys trade receivables aggregating to Rs 2,445,169 are old and under
litigation. The said amount includes Rs 2,134,761 receivable from a trade debtor, in
respect of which reference is invited to Note No 22. Since the Honble City Civil &
Sessions Court, Greater Mumbai, has ordered the company to pay Rs 29,38,735 to the said
party (plus interest from date of filing of suit), recovery of the said sum of Rs
2,134,761 from the same party is doubtful in our opinion, more so because the debt is now
barred by limitation. Hence, in our opinion, provision for doubtful debts needs to be
maintained against the said Trade Receivable of Rs 2,134,761. Thus Trade Receivables and
Other Equity are overstated by Rs 2,134,761 and loss and comprehensive loss for the year
are understated by the same amount.
(b) The companys investment in unquoted equity shares have been stated at cost instead
of their fair value, which is not in accordance with Indian Accounting Standard (Ind-AS)
109 Financial Instruments. We were unable to obtain sufficient appropriate audit evidence
in support of their respective cost to be an appropriate estimate of their fair value.
Further, in respect of the companys investment in quoted equity shares, necessary
adjustments have not been made for changes in their fair value as at the year end when
compared to their respective fair value as at the end of the previous year. This is also
not in accordance with the said Ind-AS 109.
Consequently, we are unable to determine whether and to what extent any adjustments to
these amounts were necessary.
We conducted our audit in accordance with Standards on Auditing (SAs). Our
responsibilities under those standards are further described in the Auditors
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the ethical requirements that are relevant
to our audit of the financial statements under the provisions of the Companies Act, 2013,
and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Key Audit Matter
Key Audit Matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements of the current period.
These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the matter described below to be the
key audit matter to be communicated in our report.
KAM 1 Evaluation of claims against the company
The company has material uncertain matters under dispute which involved significant
judgment to determine the possible outcome of these disputes. Refer Note No 22 and 23.
Auditors Response
Principal Audit Procedures
Obtained details of dispute and litigation for the year ended 31.03.2023 from the
management. We involved our internal experts to challenge the managements underlying
assumptions in estimating the possible outcome of the disputes.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone financial statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash flows of the Company in
accordance with the Ind AS and other accounting principles generally accepted in India,
including the accounting Standards specified under section 133 of the Act. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statement that give
a true and fair view and are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Obtain an
understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the
Companies Act, 2013, we are also responsible for expressing our opinion on whether the
company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 ("the Order")
issued by the Central Government in terms of sub-section (11) of Section 143 of the Act,
we give in the "Annexure A", a statement on the matters specified in the
paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, and subject to the possible effects of
the matters described in the Basis for Qualified Opinion paragraph, we report to the
extent applicable that:
(a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flows
and the Statement of Changes in Equity dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with
the Indian Accounting Standards specified under Section 133 of the Act read with relevant
rules issued there under, subject to non-compliance with Ind-AS 109 as detailed in Basis
for Qualified Opinion paragraph;
(e) On the basis of the written representations received from the directors as on 31st
March, 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2023 from being appointed as a director in terms of Section
164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditors 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 the explanations given to us:
I. The Company has disclosed the impact of pending litigations on its financial
position in its Ind-AS financial statements Refer Note No 6, 22 and 23 to the Ind-AS
financial statements; II. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable losses; III. There were
no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company;
IV. (a) The management has represented that, to the best of its knowledge and belief,
no funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the company to or in any other person or
entity, including foreign entity
("Intermediaries"), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries; (b) The management has represented, that, to
the best of its knowledge and belief, no funds have been received by the company from any
person or entity), including foreign entity ("Funding Parties"), with the
understanding, whether recorded in writing or otherwise, that the company shall, whether,
directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries; and (c) Based on the audit procedures that have been considered
reasonable and appropriate in the circumstances, nothing has come to our notice that has
caused us to believe that the representations under sub-clause (i) and (ii)of Rule 11(e)
as provided under (a) and (b) above, contain any material misstatement. V. The company has
not declared or paid any dividend, and hence clause (f) of the aforesaid Rule 11 is not
applicable.
"Annexure-A"
LYNX MACHINERY AND COMMERCIALS LIMITED
Statement on matters specified in paragraphs 3 & 4 of the Companies (Auditors
Report) Order 2020 ("the order"), issued by the Central Government in terms of
sub section (11) of section 143 of the Companies Act 2013, for the year ended 31st March,
2023
(i) In respect of its Property, Plant & Equipment:
(a) (A) The Company has maintained proper records showing full particulars, including
quantitative details and situation of the Property, Plant & Equipment.
(B) The Company has no Intangible Assets.
(b) The Property, Plant & Equipment were physically verified during the year by the
Management in accordance with a regular programme of verification which, in our opinion,
provides for physical verification of all the Property, Plant & Equipment at
reasonable intervals. According to the information and explanations given to us, no
discrepancies noticed on physical verification of Property, Plant & Equipment as
compared to book records.
(c) The company does not hold any immovable property at the end of the financial year.
In respect of property where the Company is the lessee, the lease agreements are duly
executed in favour of the lessee, except as stated in Note No. 25.
(d) The Company has not revalued any of its Property, Plant and Equipment (including
Right of Use assets) or intangible assets or both during the year.
(e) No proceedings have been initiated or are pending against the company for holding
any Benami property under the "Benami Transactions (Prohibition) Act, 1988 and Rules
made there under.
(ii) (a) The company did not hold any inventory during the year.
(b) The Company has not been sanctioned any working capital limits in excess of Rs. 5
crores, in aggregate, from banks or financial institutions on the basis of security of
current assets at any time during the year.
(iii) The company has not made any fresh investments in, provided any guarantee or
security or granted any loans or advances in the nature of loans, secured or unsecured to
companies, firms, Limited Liability Partnerships or any other parties during the year
(iv) In respect of loans, investments, guarantees and security made or provided by the
company, the provisions of sections 185 and 186 of the Companies Act 2013 have been
complied with.
(v) In accordance with information and explanations given to us, the company has not
accepted any deposits during the year and hence directives issued by the Reserve bank of
India and provisions of section 73 to 76 and other applicable provisions of the Companies
Act 2013, and rules framed there under are not applicable. No order in this regard, in
respect of the company, has been passed by the Company Law Board or Reserve Bank of India
or National Company Law Tribunal or any other court or any other tribunal.
(vi) As explained to us the Central Government has not prescribed maintenance of cost
records for the Company under subsection (1) of section 148 of the Companies Act 2013.
(vii) (a) The Company is regular in depositing of all undisputed statutory dues
including Goods & Service Tax, Provident Fund, Employees State Insurance, Income-tax,
Sales-tax, Wealth tax, service tax, duty of customs, duty of excise, Value added tax, cess
and any other statutory dues, so far as applicable to the Company, with the appropriate
authorities and the company has no outstanding statutory dues as at the last day of the
financial year concerned for a period of more than six months from the date they became
payable.
(b) The Company has no statutory dues of the nature referred to above, which has not
been deposited on account of any dispute.
(viii) There were no such transactions which were not recorded in the books of account
of the company that have been surrendered or disclosed as income during the year in the
tax assessments under the Income Tax Act, 1961.
(ix) (a) The company has not defaulted in repayment of loans or other borrowings or in
the payment of interest thereon to any lender.
(b) The company has not been declared as a wilful defaulter by any bank or financial
institution or other lender;
(c) The company has not obtained any term loan during the year.
(d) Funds raised on short term basis have not been utilised for long term purposes (e)
The company does not have any subsidiary, associates or joint ventures, hence sub-clause
(e) and (f) are not applicable.
(x) (a) The company has not raised any moneys by way of initial public offer or further
public offer (including debt instruments) during the year.
(b) The Company has not made any preferential allotment or private placement of shares
or convertible debentures (fully, partially or optionally convertible) during the year
(xi) (a) To the best of our knowledge and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the Company has been noticed
or reported during the year. (b)No report under sub-Section (12) of Section 143 of the
Companies Act has been filed by the auditors during the year
(c) There were no whistle-blower complaints, received during the year by the Company,
to be considered by the auditors.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the
CARO 2020 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the
Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where
applicable, for all transactions with the related parties and the details of related party
transactions have been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) a) The company has an internal audit system commensurate with the size and nature
of its business
(b) The reports of the Internal Audit for the period under audit have been considered
by us in the process of our audit of the financial statements.
(xv) In our opinion and according to the information and explanations given to us,
during the year the Company has not entered into any non-cash transactions with its
directors or directors of its holding or persons connected with them and hence provisions
of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934, and therefore sub clauses (b),(c) & (d) of clause (xvi) of
the Order are not applicable.
(xvii) The Company has incurred cash losses of Rs 52,69,040 in the current Financial
Year, and Rs 10,87,605 in the immediately preceding Financial year.
(xviii) There has been no resignation of the statutory auditors during the year.
(xix) On the basis of the financial ratios, ageing and expected dates of realization of
financial assets and payment of financial liabilities, other information accompanying the
financial statements of the company, our knowledge of the Board of Directors and
management plans, we are of the opinion that no material uncertainty exists as on the date
of the audit report that the company is capable of meeting its liabilities existing at the
date of balance sheet as and when they fall due within a period of one year from the
balance sheet date.
(xx) Provisions of section 135 relating to Corporate Social Responsibility are not
applicable to the company.
(xxi) The company is not required to prepare Consolidated Financial Statements and
therefore provisions of clause (xxi) of the Order are not applicable.
"Annexure-B"
LYNX MACHINERY AND COMMERCIALS LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act") for the year ended 31st March 2023
We have audited the internal financial controls over financial reporting of Lynx
Machinery And Commercials Limited ("the Company") as of March 31, 2023 in
conjunction with our audit of the standalone Ind AS financial statements of the Company
for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls considering the essential components of internal financial controls as
per section 134(5)(e) of the Act and as stated in the applicable Standards of Auditing
issued by the Institute of Chartered Accountants of India (‘ICAI). These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to companys policies, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed
to be prescribed under section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidance 168 Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2023, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
| FOR A. PATWARI & CO. |
| Chartered Accountants |
| Firm Registration No. 326300E |
| 70, Diamond Harbour Road, |
| Kolkata 700 023 |
| The 30th day of May, 2023 |
| UDIN : 23065505BGVHHK5638 |
| ARVIND PATWARI |
| Proprietor |
| Membership No. 065505 |
+91-9892691696
