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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
NSE 05:30 | 01 Jan Avon Mercantile Ltd

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 31st March 2017the statement of profit and loss and the cash flow statement for the year then ended and asummary of 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 principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 31stMarch 2017 its profits and its cash flows for the year ended on that date.

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 of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in the paragraph 3and 4 of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act we report 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 and the cash flow statementdealt with by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid financial statements comply with the AccountingStandards 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 the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) with respect to the adequate internal financial controls over financial reportingof the company and the operating effectiveness of such controls refer to our separateReport in "Annexure 2" to this report; 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 does not have any pending litigations which would impact its financialposition.

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.

iv) the company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the company and as produced to us by the management (refer note no. 23).

For GUPTA GARG & AGRAWAL CHARTERED ACCOUNTANTS FRN 505762C

(B.B.GUPTA)

PARTNER M. No. 012399

Place: Delhi Date : 25/05/2017

ANNEXURE "1" RFERRED TO IN PARAGRAPH OF OUR REPORT OF EVEN DATE The commentsare in seriatim of the order

(i) (a) The Company is maintaining proper records of its Fixed Assets showing fullparticulars

including quantitative details and situation thereof.

(b) As per the information given by the management the physical verification of fixedassets was carried out at the end of the financial year. No discrepancy on suchverification noticed by the management and reported to us.

(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 does not have any inventory; as such the clause is not applicable.

(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 2013as such there are no comments on sub clauses a) b) and c).

(iv) In our opinion and according to the information and explanations given to us theprovisions of Section 185 and 186 of the Companies Act 2013 have been complied.

(v) The Company has not accepted any deposits from the public and as such the clause isnot applicable.

(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) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance fundincome-tax sales-tax service tax customs duty excise duty value added tax cess andother material statutory dues applicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance fund income-taxsales-tax service tax duty of customs duty of excise value added tax cess and othermaterial statutory dues were outstanding at the period end for a period of more than sixmonths from the date they became payable.

(b) According to information and explanations given to us there are no dues of incometax sales tax service tax duty of customs duty of excise value added tax and cesswhich have not been deposited with the appropriate authorities on account of any dispute.

(viii) The Company does not have any term loan from Bank Institutions or Debentureholders and as such clause is not applicable.

(ix) As per the information and explanations given to us by the management the companyhas not raised any money way of initial public offer / further public offer / debtinstruments and term loans hence; there are no comments in this regard.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the company and no material fraud on the company has been noticedand reported during the year.

(xi) As per the information and explanations given to us by the management the companyhas paid/provided managerial remuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V of the Act.

(xii) The clause is not applicable as the company is not a ‘Nidhi Company'.

(xiii) Based on our audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given to us by the management the transactions entered with the relatedparties are in compliance with Section 177 and 188 of Companies Act 2013 whereverapplicable and the details have been disclosed in the notes to the financial statementsas required by the applicable Accounting Standards.

(xiv) As per the information and explanations given to us and on an overall examinationof the balance sheet the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under reviewand as such there are no comments in this regard.

(xv) As per the information and explanations given by the management the Company hasnot entered into any non-cash transactions with directors or persons connected with him.

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

For GUPTA GARG & AGRAWAL CHARTERED ACCOUNTANTS FRN 505762C

(B.B. GUPTA)

PARTNER M. No. 012399

Place: Delhi Date: 25/05/2017

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF AVON MERCANTILE LIMITED

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

We have audited the internal financial controls over financial reporting of AvonMercantile Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the financial statements of the Company for 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 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

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 as specified under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgement 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 internal financial controls system overfinancial 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 authorisations ofmanagement and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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.

Opinion

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 2017 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 GUPTA GARG & AGRAWAL CHARTERED ACCOUNTANTS FRN 505762C

(B.B. GUPTA)

PARTNER M. No. 012399

Place: Delhi Date: 25/05/2017