TO THE MEMBERS OF MERCATOR LIMITED
Report on the Standalone Indian Accounting Standards (Ind-AS) Financial Statements
We have audited the accompanying standalone Ind-AS financial statements ofMERCATORLIMITED (the Company) which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
The Companys 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 Ind AS financial Statements that give a true and fair view of thefinancial position financial performance (including other comprehensive income)and cashflows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified in theCompanies
(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing 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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on 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.
We conducted our audit in accordance with the Standards on
Auditing specified under section 143(10) of the Act
Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the Ind-AS financial statements arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind-AS financial statements. The procedures selecteddepend on the auditors judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments; the auditor considers internal financial control relevant to theCompanys preparation of the standalone Ind-AS financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompanys Directors as well as evaluating the overall presentation of the standaloneInd-AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind-AS financial statements
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind-AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its loss (including other comprehensive income) andits cash flows and the changes in equity for the year ended on that date.
The financial information of the Company for the year ended March 31 2016 and thetransition date opening balance sheet as at April 1 2015 included in these standalonefinancial statements are based on the previously issued statutory financial statementsfor the years ended March 31 2016 and
March 31 2015 prepared in accordance with the Companies (Accounting Standards) Rules2006 (as amended) which were audited by us on which we expressed an unmodified opiniondated May 27 2016 and May 29 2015 respectively.
. The adjustments to those financial statements for the differences in accountingprinciples adopted by the Company on transition to Ind-AS have been audited by us.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 (theOrder) issued by the Central Government . of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the mattersspecified in paragraphs 3 and 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 Sheetthe Statement of Profit and Loss (including other comprehensive information) the CashFlow Statement and the Statement of Changes in Equity dealt with by this report are inagreement with the books 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.
(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 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 Auditors 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. TheCompany has disclosed the impact of pending litigations as at March 31 2017 on itsfinancial position in its standalone Ind-AS financial statements Refer Note 3.2 to thestandalone Ind-AS financial statements; ii. The Company has made provision as at March 312017 as required under the applicable law or accounting standards for materialforeseeable losses if any on long-term contracts including derivative contracts; iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 31
2017. iv. The Company has provided requisite disclosures in the standalone financialstatements as to holding as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to December 30 2016 required as per MCA Notification No. g.S.R.307(E) and Notification No. G.S.R. 308(E) dated 30th March 2017 on the basis ofinformation available with the Company. Based on audit procedures and relying onmanagements representation we report that disclosures are in accordance with thebooks of accounts maintained by the Company and as produced to us by the Management. ReferNote 3.19.
For C N K & Associates LLP
Firms Registration No. 101961W/W-100036
Membership No. 37391
Dated: May 30 2017
Annexure A to the Independent Auditors Report
(Referred to in paragraph 1 under Report on other Legal and Regulatoryrequirements in the Independent by the management Auditors
Report of even date to the members of Mercator Limited (the Company) on thestandalone financial statements for the verification; year ended March 31 2017.) i. (a)The company is maintaining proper records showing full particulars including quantitativedetails and situation of fixed assets;
(b) These fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such verification;
(c) On the basis of our examination of the records of the Company the title deeds ofimmovable properties are held in the name of the Company; ii. As explained to us theinventory has been physically reasonable intervals verified and no material discrepancieswere noticed on such
iii. The Company has granted loans to bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 (the Act);
(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the Company
(b) In the case of the loans granted to the bodies corporate listed in the registermaintained under section 189 of the Act the borrowers have been regular in the payment ofthe principal and interest as stipulated.
(c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act.
iv. On the basis of records produced before us and verified by us and on the basis ofinformation and explanation provided to us the loans granted by the company are incompliance with the provisions of sections 185 and 186 of the Companies Act 2013;
v. The company has not accepted any deposits during the year to which the directives ofRBI or the provisions of sections 73 to 76 or any other relevant provisions of the
Companies Act 2013 and the rules made thereunder are applicable; vi. As informed tous the Central Government has not prescribed the maintenance of Cost records by thecompany under section 148 (1) of the Act.; vii. (a) The company is regular in depositingundisputed statutory dues including provident fund employees state insuranceincome-tax sales-tax service tax duty of customs and any other statutory dues with theappropriate authorities and there are no undisputed statutory dues outstanding as at 31st
March 2017 for a period of more than six months from the date they become payable; (b)According to the information and explanations given to us the disputed statutory dues notdeposited on account of disputed matters pending before appropriate authorities are asunder:
|Name of the Statute ||Nature of the dues ||Amount (Rs in lakhs) ||Year/s to which the amount relates ||Forum where dispute is pending |
|Service Tax under Finance Tax ||Service ||6396.73 ||2006-07 to 2014-15 ||Commissioner of Service tax |
|Act 1994 || || || ||Mumbai |
|Income Tax ||Income Tax ||1357.15 ||2010-11 ||Commissioner of Income |
| || ||170.69 ||2009-10 ||tax(Appeals) |
| || ||72.46 ||2002-03 || |
| || ||545.83 ||2006-07 || |
| || ||2077.35 ||2007-08 ||Income Tax |
| || || || ||Appellate |
| || ||7426.10 ||2008-09 ||Tribunal |
viii. Based on our audit procedures and as per the information and explanations givenby the management we are of the opinion that the Company has not defaulted in repaymentof loans or borrowing to a financial institution bank Government or dues to debentureholders;
ix. Based on our audit procedures and according to information and explanations givento us the company has not raised money by way of initial public offer or further publicoffer including debt instruments during the year. In our opinion and according to theinformation and explanations given to us term loans were applied for the purpose forwhich the loans were obtained;
x. During the course of our examination of the books of account and records of thecompany carried out in accordance with generally accepted auditing practices in
India and according to the information and explanations given to us we have neithercome across any incidence of fraud on or by the company noticed or reported during theyear nor have we been informed of any such case by the management;
xi. The managerial remuneration paid by the company is in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V of the CompaniesAct 2013;
xii. The company is not a Nidhi Company and hence clause
(xii) is not applicable;
xiii. Based on our audit procedures and as per the information and explanations givenby the management all transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the financial statements as required by the applicable accounting standards;
xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly paid convertible debentures during the year under review;
xv. Based on our audit procedures and as per the information and explanations given bythe management the company has not entered into any non-cash transactions with thedirectors or persons connected with him;
xvi. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For C N K & Associates LLP
Firms Registration No. 101961W/W-100036
Membership No. 37391
Dated: May 30 2017