We have audited the standalone financial statements of LYNX MACHINERY AND
COMMERCIALS LIMITED (“the Company”), which comprise the Balance Sheet as at
March 31, 2024, 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, 2024, 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
The Company’s 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 Hon'ble 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.
We conducted our audit in accordance with Standards on Auditing (SAs). Our
responsibilities under those standards are further described in the Auditor’s
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 ICAI’s 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 31.03.2024 from the
management. We involved our internal experts to challenge the management’s
underlying assumptions in estimating the possible outcome of the disputes.
Management's Responsibility for the Standalone Financial Statements
The Company’s 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
Company’s 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 Company’s financial
reporting process.
Auditor's 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 auditor’s 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 management’s 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
Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s 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 auditor’s 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 (Auditor's 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. A. 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, except for the
matters stated in the paragraph 2B(VI) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.;
(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;
(e) On the basis of the written representations received from the directors as on 31st
March, 2024 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2024 from being appointed as a director in terms of
Section 164 (2) of the Act;
(f) The modifications relating to the maintenance of accounts and other matters
connected therewith are as stated in the paragraph 2A(b) above on reporting under
Section 143(3)(b) of the Act and paragraph 2B(VI) below on reporting under Rule 11(g)
of the Companies (Audit and Auditors) Rules, 2014.
(g) 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
B. With respect to the other matters to be included in the Auditor’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 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 it’s 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 it’s 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.
VI. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules,
2014 is applicable from 1 April 2023. Based on our examination which included
test checks, except for the instances mentioned below, the Company has used
accounting softwares for maintaining its books of account, which have a
feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the respective
software:
The feature of recording audit trail (edit log) facility was not enabled at the
application layer of the accounting software relating to revenue, trade
receivables, general ledger etc for the entire year in respect of the
company’s Kolkata branch.
Further, for the periods where audit trail (edit log) facility was enabled and
operated throughout the year for the accounting software, we did not come
across any instance of the audit trail feature being tampered with.
FOR A. PATWARI & CO.
Chartered Accountants
Firm Registration No. 326300E
70, Diamond Harbour Road,
Kolkata - 700 023
The 30th day of May, 2024
UDIN : 24065505BKFTRO3185
ARVIND PATWARI
Proprietor
Membership No. 065505
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