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Mercator Ltd.

BSE: 526235 Sector: Infrastructure
NSE: MERCATOR ISIN Code: INE934B01028
BSE 15:13 | 11 Dec 11.95 0.30
(2.58%)
OPEN

11.60

HIGH

12.23

LOW

11.43

NSE 15:04 | 11 Dec 11.95 0.30
(2.58%)
OPEN

11.50

HIGH

12.20

LOW

11.35

OPEN 11.60
PREVIOUS CLOSE 11.65
VOLUME 88687
52-Week high 47.00
52-Week low 9.55
P/E
Mkt Cap.(Rs cr) 361
Buy Price 11.95
Buy Qty 451.00
Sell Price 11.98
Sell Qty 973.00
OPEN 11.60
CLOSE 11.65
VOLUME 88687
52-Week high 47.00
52-Week low 9.55
P/E
Mkt Cap.(Rs cr) 361
Buy Price 11.95
Buy Qty 451.00
Sell Price 11.98
Sell Qty 973.00

Mercator Ltd. (MERCATOR) - Auditors Report

Company auditors report

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 of MERCATORLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance (including other comprehensive income) 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 Standard ) Rules 2015 (as amended) under Section 133 of theAct. 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 Standalone IndAS 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 Standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act andthe Rules made thereunder including the accounting and auditing standards and matterswhich are required to be included in the audit report under the provisions of the Act andthe Rules made thereunder.

We conducted our audit of the Standalone Ind AS financial Statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Standalone IndAS financial statements are free 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 auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and 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 the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial 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.

Opinion

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 March 31 2018 its loss (including other comprehensive income) its cashflows and the changes in equity for the year ended on that date.

Other matter

The audited standalone financial statements for the year ended March 31 2017 wascarried out and reported by erstwhile auditors vide their unmodified audit report datedMay 30 2017 whose report has been furnished to us by the management and which has beenrelied upon by us for the purpose of reporting previous year numbers and our audit of thestandalone financial statements.

Our opinion is not modified in respect of this matter.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2016; issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act ("theOrder") and on the basis of examination of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure 'A' statement on the matters specified in the paragraph 3 and 4 ofthe Order.

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 (including other comprehensiveincome) the cash flow statement and the Statement of Changes in Equity dealt with bythis report are in agreement with the books of account;

d) In our opinion the aforesaid Standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.

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'

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 (as amended)in our opinion and to the best of our information and according to the explanations givento us:

i. the Company has disclosed the impact of pending litigation as at March 31 2018 onits financial position in its Standalone Ind AS financial statements.

ii. the Company has long-term contracts including derivative contracts as at March 312018 for which based on the discussions and explanations provided by the management therewere no material foreseeable losses.

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The diclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from November 8 2016 to December 30 2016which are not relevant to these financial statements. Hence reporting under this clauseis not applicable.

For Singhi & Co.

Chartered Accountants

Firm Registration No. 302049E

Nikhii Singhi

Place: Mumbai

Partner

Date: May 28 2018

Membership No. 061567

Annexure A to the Independent Auditor's Report

Annexure A referred to in paragraph 1 of the Independent Auditors Report of even dateto the members of Mercator Limited (the "Company") in the Standalone Ind ASfinancial statements as of and for the year ended March 31 2018 under the heading"Report on other legal and regulatory requirements".

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) These fixed assets have been physically verified by the management at thereasonable intervals. The discrepancies noticed on the physical verification of fixedassets as compared to fixed asset register were not material and have been adjusted inbooks of accounts.

(c) According to the information and explanations given to us and on the basis of theexamination of the records of the company the title deeds of the immovable propertiesincluded in fixed assets are held in the name of the Company.

ii. As per the information and explanations given to us the inventories (excludinginventories in transit) have been physically verified by the management at reasonableintervals during the year and no material discrepancies has been noticed on suchverification.

iii. The Company has granted loans secured or unsecured to Body Corporate covered inthe register maintained 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 loanshad been granted to the bodies corporate listed in the register maintained u/s 189 of theAct were not prima facie prejudicial to the interest of the Company.

b. According to the information and explanations given to us in case of the loansgranted to the bodies corporate listed in register maintained u/s 189 of the Act theseloans are repayable on demand which have not been recalled and hence there has been noinstance of default of the borrowers in the payment of principal and interest.

c. There are no overdue amounts in respect of the loans granted to a body corporatelisted in the register maintained u/s 189 of the Act.

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 Companies Act2013 with respect to Loans and Advances made guarantee given and investments made.

v. The Company has not accepted any deposit from the public within the meaning ofsection 73 to 76 of the Act and Rules framed thereunder to the extent notified.

vi. In our opinion and according to the information and explanations given to us theCentral Government has not prescribed the maintenance of Cost Records by the company u/s148 (1) of the Companies Act 2013.

vii. (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax sales tax service taxgoods and service tax duty of customs and any other statutory dues with the appropriateauthorities though there has been certain minor delays in few cases and there are noundisputed statutory dues outstanding as at March 31 2018 as per the books of accountsfor a period of more than six months from the date they become payable;

(b) According to the information and explanations given to us the dues of Sales TaxIncome Tax Duty of Customs Duty of Excise Service Tax and Cess which have not beendeposited on account of any dispute and the forum where the dispute is pending as on March31 2018 are as under:

Name of the Statute Nature of Dues Amount (Rs in crore) Period to which the amount relates Forum where the disputes are pending
Service Tax under Finance Act 1994 Income Tax Service Tax Income Tax 65.24 2006-07 to 2015-16 Commissioner of Service Tax Mumbai
0.09 AY 2003 - 04 Commissioner of Income Tax (Appeals)
0.12 AY 2007 - 08 ITAT
2.99 AY 2008 - 09 ITAT
64.90 AY 2009 - 10 ITAT
1.28 AY 2010 - 11 ITAT
4.25 AY 2011 - 12 ITAT
9.52 AY 2012 - 13 ITAT
5.53 AY 2013 - 14 Commissioner
0.01 AY 2014 - 15 of Income Tax
(Appeals)

viii. According to the records of the Company examined by us and the information andexplanations provided to us the Company has not defaulted in repayment of loans orborrowings to any Financial Institutions or Banks or dues to debenture holders as at theBalance Sheet date. The Company does not have any loans or borrowing from the Governmentas at the balance sheet date.

ix. In our opinion and according to the information and explanations given to us themoney raised by way of term loans have been applied for the purpose for which they wereobtained. The company has not raised any money by way of initial public offer or furtherpublic offer including debt instruments during the year.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practice in India andaccording to the information and explanations given to us we have neither come across anyinstances of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during year nor have been informed of any such case by the Management.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

xii. The company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable toit accordingly the provisions of clause 3(xii) of the Order are not applicable.

xiii. Based on our audit procedures and as per the information and explanations givenby the management all transactions with related parties are in compliance with sections177 and 188 of the Act where applicable and the details of such related partytransactions have been disclosed in the Standalone Ind AS financial statements as requiredby the applicable accounting standards.

xiv. The Company has raised Rs 145.41 crore through Qualified Institutions Placement("QIP") by allotting 32567262 Equity Shares at a price of Rs 44.65 per share.The QIP placement is in compliance with section 42 of the Companies Act 2013. Accordingto the information and explanation provided to us and on the basis of the documentsexamined by us the amounts so raised have been used for the purpose specified.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into noncashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable tothe Company.

For Singhi & Co.

Chartered Accountants

Firm Registration No. 302049E

Nikhii Singhi

Place: Mumbai Partner

Date: May 28 2018

Membership No. 061567

Annexure B to the Independent Auditor's 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 over financial reporting of MERCATORLIMITED ("the Company") as of March 31 2018 in conjunction with our audit ofthe Standalone Ind AS financial statements of the Company for the year ended on that date.

Management's responsibility for internal financial controls

TThe 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Act.

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 issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 Standalone Ind AS financial statements whether due to fraudor 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 Standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone Ind AS financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the Standalone Ind AS 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 312018 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 Singhi & Co.

Chartered Accountants

Firm Registration No. 302049E

Nikhii Singhi

Place: Mumbai

Partner

Date: May 28 2018

Membership No. 061567