To the Members of
LYNX MACHINERY AND COMMERCIALS LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of LYNX MACHINERY AND COMMERCIALSLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss (Including Other Comprehensive Income) the Statement ofChanges in Equity and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas the "standalone financial statements".
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report 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 Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind-AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and the loss and total comprehensive loss changes in equity and its cash flows for theyear ended on that date.
Basis for Qualified Opinion
(a) The Company's trade receivables aggregating to Rs 2445169 are old and underlitigation. The said amount includes Rs 2134761 receivable from a trade debtor inrespect of which reference is invited to Note No 21. Since the Hon'ble City Civil &Sessions Court Greater Mumbai has ordered the company to pay Rs 2938735 to the saidparty (plus interest from date of filing of suit) recovery of the said sum of Rs2134761 from the same party is doubtful in our opinion more so because the debt is nowbarred by limitation. Hence in our opinion provision for doubtful debts needs to bemaintained against the said Trade Receivable of Rs 2134761. Thus Trade Receivables andOther Equity are overstated by Rs 2134761 and loss and comprehensive loss for the yearare understated by the same amount.
(b) The company's investment in unquoted equity shares have been stated at cost insteadof 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 evidencein support of their respective cost to be an appropriate estimate of their fair value.Consequently we are unable to determine whether and to what extent any adjustments tothese amounts were necessary.
We conducted our audit in accordance with Standards on Auditing (SAs). Ourresponsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Companies Act 2013and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained 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 mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matter described below to be thekey 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 significantjudgment to determine the possible outcome of these disputes. Refer Note No 21 and 22.
Principal Audit Procedures
Obtained details of dispute and litigation for the year ended 31.03.2020 from themanagement. We involved our internal experts to challenge the management's underlyingassumptions 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 section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the Ind AS and other accounting principles generally accepted in Indiaincluding the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one 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 todesign 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 whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of sub-section (11) of Section 143 of the Actwe give in the "Annexure A" a statement on the matters specified in theparagraphs 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 ofthe matters described in the Basis for Qualified Opinion paragraph we report to theextent applicable that:
(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany 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 Flowsand the Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account;
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act read with relevantrules issued there under subject to non-compliance with Ind-AS 109 as detailed in Basisfor Qualified Opinion paragraph;
(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its Ind-AS financial statements - Refer Note No 6 21 and 22 to the Ind-ASfinancial statements;
II. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses
III. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company
LYNX MACHINERY AND COMMERCIALS LIMITED Statement on matters specified in paragraphs 3& 4 of the Companies (Auditor's Report) Order 2016 ("the order") issued bythe Central Government in terms of sub section (11) of section 143 of the Companies Act2013. for the year ended 31st March 2020
(i) (a) The Company is maintaining proper records to show full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at reasonableintervals during the year and no material discrepancies were noticed on suchverification.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) As the company did not hold any inventory during the year clause (ii) of para 3of the order is not applicable.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore clause (iii) of para 3 of the order isnot applicable.
(iv) In respect of loans investments guarantees and security made or provided by thecompany during the year the provisions of sections 185 and 186 of the Companies Act 2013have been complied with.
(v) In accordance with information and explanations given to us the company has notaccepted any deposits during the year and hence directives issued by the Reserve bank ofIndia and provisions of section 73 to 76 and other applicable provisions of the CompaniesAct 2013 and rules framed there under are not applicable. No order in this regard inrespect of the company has been passed by the Company Law Board or Reserve Bank of Indiaor 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 costrecords 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 duesincluding Provident Fund Employees' State Insurance Income-tax Sales-tax Wealth taxservice tax duty of customs duty of excise Value added tax cess and any otherstatutory dues so far as applicable to the Company with the appropriate authorities andthe company has no outstanding statutory dues as at the last day of the financial yearconcerned for a period of more than six months from the date they became payable.
(b) The Company has no disputed statutory dues on account of Income-tax Sales-taxWealth tax service tax duty of customs duty of excise or value added tax or cess.
(viii) In accordance with the information and explanations given to us the company hadno dues of any financial institution bank Government or debenture holder during theyear.
(ix) No moneys have been raised by way of initial public offer or further public offer(including debt instruments) and term loans by the company during the year. Thereforeclause (ix) of para 3 of the order is not applicable.
(x) In accordance with our audit as per generally accepted auditing practices and theinformation and explanation given to us no fraud by or on the Company by its officers orits employees has been noticed or reported during the year nor have we been informed ofany such case by the management.
(xi) No managerial remuneration has been paid or provided by the company during theyear. Therefore clause (xi) of para 3 of the order is not applicable.
(xii) The company is not a Nidhi Company as defined in section 406(1) of the CompaniesAct 2013. Therefore clause (xii) of para 3 of the order is not applicable.
(xiii) All transactions with the related parties are in compliance with sections 177and 188 of Companies Act 2013 where applicable and the details have been disclosed in theInd-AS Financial Statements etc as required by the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeclause (xiv) of para 3 of the order is not applicable.
(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him and therefore compliance of the provisions of section 192 ofCompanies Act 2013 is not applicable.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 as the financial assets are less than 50% of the company's totalassets as at the end of the year under audit.
LYNX MACHINERY AND COMMERCIALS LIMITED Report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act. 2013 ("theAct") for the year ended 31st March 2020
We have audited the internal financial controls over financial reporting of LynxMachinery And Commercials Limited ("the Company") as of March 31 2020 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls considering the essential components of internal financial controls asper section 134(5)(e) of the Act and as stated in the applicable Standards of Auditingissued by the Institute of Chartered Accountants of India (ICAI'). 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 Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance 168 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial 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 or timely detection of unauthorized acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||FOR A. PATWARI & CO. |
| ||Chartered Accountants |
| ||Firm Registration No. 326300E |
|70 Diamond Harbour Road ||ARVIND PATWARI |
|Kolkata - 700 023 ||Proprietor |
|The 30th day of July 2020 ||Membership No. 065505 |
| ||UDIN 20065505AAAACB7876 |