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Avon Mercantile Ltd.

BSE: 512265 Sector: Financials
NSE: N.A. ISIN Code: INE471D01019
BSE 05:30 | 01 Jan Avon Mercantile Ltd
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Avon Mercantile Ltd. (AVONMERCANTILE) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

AVON MERCANTILE LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of AVON MERCANTILE LIMITED{"the Company") which comprise the Balance Sheet as at March 31 2018 and theStatement of Proft and Loss and the Cash Flows Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe Accounting Standards prescribed under section 133 of the Act as applicable and otheraccounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2018 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

(i) 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.

(ii) 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.

(iii) the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(iv) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act as applicable.

(v) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164 (2) of the Act.

(vi) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".

(vii) 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 does not have any pending litigations which would impact its financialposition;

(ii) The company did not have any long-term contracts including derivative contractsfor which 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.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

3. As required by Non- Banking Financial Companies Auditor's Report (Reserve Bank)Directions 2016 ("Directions") we give in "Annexure C" a separatereport on the matters specified in the said Directions.

For Goel Garg & Co.

Chartered Accountants

Firm's Registration Number 000397N

Sd/-

Ashok Kumar Agarwal

Partner

Membership No. 084600

Place of Signature: Delhi

Date: 30th May 2018

Annexure A to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof AVON MERCANTILE LIMITED ("the Company") as of March 31 2018 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting 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 the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financial controls withreference to financial statements of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements was established and maintainedand 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 with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls With reference to financial statements

A company's internal financial control with reference to financial statements is aprocess 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 financial control withreference to financial statements includes those policies and procedures that (1) pertainto the of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a effect on the financial statements.

Limitations of Internal Financial Controls With reference to financial statements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2018 basedon the internal control with reference to financial statements 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 Goel Garg & Co.

Chartered Accountants

Firm's Registration Number 000397N

Sd/-

Ashok Kumar Agarwal Partner

Membership No. 084600

Place of Signature: Delhi

Date: 30th May 2018

Annexure B to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of AVON

MERCANTILE LIMITED ("The Company") on the financial statements for the yearended 31st March 2018 we report that:

(i) In respect of the Company's Property Plant and Equipment:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) The Company has a program of verification to cover all the items of Property Plantand Equipment in a phased manner which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program certainProperty Plant and Equipment were physically verified by the management during the year.According to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) As per books of accounts verified by us and according to the information andexplanations given by the management the company does not have immovable properties and assuch the sub clause is not applicable.

(ii) The company is not carrying on any manufacturing or trading activity. Thereforeclause 3(ii) of the Order is not applicable to the company.

(iii) As per the information and explanations given to us and certified by themanagement and verified from the books of account the company has not granted any loanssecured or unsecured to companies firms limited liability partnerships or other partiescovered in the register maintained in pursuance of Section 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto grant of loans making investments and providing guarantees and securities asapplicable. The company being a non banking financial company nothing contain in section186 except sub section (1) shall apply.

(v) The Company does not have any deposits as at March 31 2018 and therefore theprovisions of the clause 3 (v) of the Order are not applicable to the Company.

(vi) To the best of our knowledge and as per information and explanations given to usby the management the central government has not prescribed maintenance of cost recordsunder section 148(1) of the Companies Act 2013.

(vii) According to the information and explanations given to us in respect ofstatutory

a) 'The Company is regular in depositing undisputed statutory dues including IncomeTax Service Tax Goods and Service Tax and other material statutory dues applicable to itwith the appropriate authorities. We are informed that the provisions of Provident FundEmployees' State Insurance Sales Tax Value Added Tax Customs Duty Excise Duty and Cessare not applicable to the company.

(b) According to information and explanations given to us there are no dues of incometax Service Tax and Goods and Service Tax which have not been deposited with theappropriate authorities on account of any dispute.

(viii) The Company does not have any term loan from Bank Institutions or Debentureholders. Therefore clause 3(viii) of the Order is not applicable to the company.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments). Further based on our audit procedures and according tothe information and explanations given to us we are of the opinion that money raised bythe company by way of term loan has been applied for the purpose for which it was raised.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) ofthe Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

(xvi) The company is registered under section 45-IA of the Reserve Bank of India Act1934.

For Goel Garg & Co.

Chartered Accountants

Firm's Registration Number 000397N

Sd/-

Ashok Kumar Agarwal Partner

Membership No. 084600

Place of Signature: Delhi

Date: 30th May 2018

Annexure C to the Auditor's Report

a. The company is engaged in the business of Non-Banking Financial institution. Thecompany being a Non-Banking Finance Company has obtained a certificate of registrationfrom the Reserve Bank of India to carry on such business. Further the company is entitledto continue to hold such certificate of registration in terms of its asset & incomepattern as on 31st March 2018.

b. The board of Directors of the Company has passed a resolution for the non-acceptanceof any public deposits.

c. The company has not accepted any public deposits during the year ended 31st March2018.

d. The company has complied with the prudential norms relating to income recognitionaccounting standards assets classification and provisioning for bad and doubtful debts asapplicable to it in terms of Non- Banking Financial (Non- Deposit Accepting or Holding)Companies Prudential Norms (Reserve Bank) Directions2007 amended upto date.

For Goel Garg & Co.

Chartered Accountants

Firm's Registration Number 000397N

Sd/-

Ashok Kumar Agarwal Partner

Membership No. 084600

Place of Signature: Delhi

Date: 30th May 2018