Mar 31, 2018
Report on Standalone Financial Statements
We have audited the accompanying standalone financial statements of MERCANTILE VENTURES LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
the Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
this responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the order issued under section 143(11) of the Act.
We conducted our audit of the standalone financial statements 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 perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, the changes in equity 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, based on our audit we report that:
a) we have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books.
c) the Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) on the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) with respect to the other matters to be included in the Auditorâs Report in accordance 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 given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) order, 2016 (âthe orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order
ANNEXURE âAâ TO INDEPENDENT AUDITORSâ REPORT
(Referred to in paragraph 1(f) under âReport on other Legal and Regulatory Requirementsâ section of our report to the Members of Mercantile Ventures Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Mercantile Ventures Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies 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 and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report to the Members of Mercantile Ventures Limited of even date)
i. In respect of the Companyâs fixed assets:
(a) the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a program of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) the title deeds of immovable properties are held in the name of the company.
ii. Since the company is a Service company there is no stock of Raw Material.
iii. (a) the Company has not granted loans to the parties covered in the register maintained under section 189 of the Companies act of 2013.
(b) In the light of (a) we do not comment on the interest or other conditions or security of loans.
(c) In the light of (a) we do not comment on the Payment of principal or interest.
iv. In respect of loans, investments, guarantees and security, the company has complied with the provisions of section 185 and 186 of companies Act, 2013.
v. the Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company.
vi. The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. thus reporting under clause 3(vi) of the order is not applicable to the Company.
vii. According to the information and explanations given to us, in respect of statutory dues:
(a) the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income tax, Sales tax, Service tax, Goods and Service tax, Value Added tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) According to the records of the Company and according to the information and explanations given to us, there are no dues of Income tax and Service tax except as mentioned below
S.No |
Assessment Year |
Demand Amount (Rs in Lakhs) |
Status |
1 |
In CIT Appeals AY 2013-14 |
47.86 |
Appeal filed by the company was ruled in favour of the company with NIL demand and the department had filed appeal with the ITAT against the order of CIT (Appeals). |
2 |
In CIT Appeals AY 2015-16 |
44.25 |
Pending before CIT Appeals, 20% tax demand amounting to Rs. 8.86 Lakhs has been paid so far. |
viii. The company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.
ix. the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause 3 (ix) of the Order is not applicable to the Company.
x. We had not noticed any fraud by the company or any fraud on the Company by its officers or employees to be reported during the year.
xi. According to the records of the company provided to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the order is not applicable to the Company.
xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.
xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under 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 us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For DPV & Associates
Chartered Accountants
F.R.No.0011688S
CA Vaira Mutthu K
Place : Chennai M.No. 218791
Date : 18 May, 2018 Partner
Mar 31, 2017
INDEPENDENT AUDITORSâ REPORT
To
The Members of M/s.Mercantile Ventures Limited Report on Standalone Financial Statements
We have audited the accompanying Financial Statements of Mercantile Ventures Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2017, and the Statement of Profit and Loss for the year ended on that date along with the Cash Flow statement annexed thereto, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Companies Act 2013. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India by the Institute Of Chartered Accountants Of India:
a) in the case of the Balance Sheet, of the state of affairs of the Company for the year ended as at March 31, 2017;
b) in the case of the Profit and Loss Account, of the Loss for the year ended on that date; and
c) In the case of the cash flow statement, of the cash flows for the year ended on the date
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor''s Report) Order, 2015 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure âA statement on the matters specified in paragraphs 3 and 4 of the 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 best of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law relating to preparation of the standalone financial statements have been kept by the Company so far as appears from our examination of those books.
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account maintained for the purpose of these standalone financial statements.
d) In our opinion, aforesaid standalone financial statements comply with the Accounting Standards referred to in Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) With respect to the adequacy of the financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure B''. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company''s financial controls over financial reporting.
f) On the basis of written representations received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2017 from being appointed as a director in terms of Section (2) of section 164 of the Companies Act, 2013.
g) With respect to the other matters to be included in the Independent Auditor''s Report in accordance with the Rule 11 of the company (Audit and Auditors) Rule, 2014, in our opinion and 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 financial position in its financial statements vide Note No: 28 in the notes to accounts.
ii. The company doesn''t require any provision in its financial statements, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and protection fund by the company.
iv. The company has provided requisite disclosures in the financial statements as to holdings as well as dealings in specified Bank Notes during the period from 8th November 2016 to 30th December 2016. Based on the audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management (Refer Note No: 27)
(Referred to in paragraph 1 under the heading of âReport on other Legal and Regulatory Requirementsâ of our Report of even date) As required by the Companies (Auditor''s Report) Order, 2016 issued by the Central Government in terms of section 143 (11) of the Companies Act, 2013 and on the basis of such checks of the books and records of the Company, as we considered appropriate and according to the information and explanations given to us during the course of the audit, we report that,
1. a) The Company is maintaining proper records showing full particulars, including quantitative details and situations of fixed assets.
b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.
c) The title deeds of immovable properties are held in the name of the company.
2. Since the company is a service company there is no stock of raw material
3. a) The Company has not granted loans to the parties covered in the register maintained under section 189 of the
Companies act of 2013.
b) In the light of (a) we do not comment on the interest or other conditions or security of loans.
c) In the light of (a) we do not comment on the payment of principal or interest.
4. In respect of loans, investments, guarantees and security, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013.
5. The company has not accepted any deposits in the current year and hence the provision of sections 73 to 76 does not apply.
6. The Central Government has not prescribed for the Company maintenance of the Cost Records under subsection (1) of section 148 of the Act.
7. a) According to the records of the Company, the company is regular in depositing undisputed statutory dues relating to Income Tax, and Service Tax and other statutory dues applicable to it with the appropriate authorities.
b) According to the records of the Company and according to the information and explanations given to us, there are no dues of Income tax and Service Tax except as mentioned below:
S No |
Case No |
Amount (Rs in Lakhs) |
Status |
1 |
In CIT Appeals A.Y - 2013-14 |
47.86 |
Pending before CIT Appeals,15% tax demand amounting to Rs.7.20 Lakhs has been paid so far. |
8. The company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.
9. According to the records of the company and the information and explanation given to us, the company has not availed any new term loan during the year and hence we have no comments to offer on the utilization of term loan.
10. We had not noticed any fraud by the company or any fraud on the Company by its officers or employees to be reported during the year.
11. According to the records of the company provided to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
12. The company is not a nidhi company and hence question of compliances relating to nidhi company does not apply to the company.
13. In our opinion the company has complied with the provisions of sections 177 and 188 of Companies Act 2013 for all transactions with the related parties and the details have been disclosed in the financial statements as required by the applicable accounting standards.
14. The company has not made any preferential allotment or private placement of shares of fully or partly convertible debenture during the year.
15. According to information and explanations furnished to us, the company has not entered in to any non - cash transactions with directors or persons connected with them.
16. The company is not required to be registered under sec 45-IA of the Reserve Bank of India Act, 1934.
(Referred to in paragraph (e) under âReport on Other Legal and Regulatory Requirements'' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of MERCANTILE VENTURES LIMITED (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act, 2013 (âThe Actâ).
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies 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 and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management, override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.
For DPV & Associates
Chartered Accountants
F.R.No.0011688S
CA Vaira Mutthu K
Place : Chennai M.NO. 218791
Date : 18 May 2017 Partner
Mar 31, 2016
Report on Financial Statements
We have audited the accompanying Financial Statements of Mercantile Ventures Limited (âthe Companyâ), which comprises the Balance Sheet for the year ended as at March 31, 2016, and the Statement of Profit and Loss for the year ended on that date along with the Cash Flow statement annexed thereto, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Companies Act 2013. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
Opinion
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India by The Institute of Chartered Accountants of India:
a) in the case of the Balance Sheet, of the state of affairs of the Company for the year ended as at March 31, 2016;
b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
c) In the case of the cash flow statement, of the cash flows for the year ended on the date
Report on Other Legal and Regulatory Requirements:-
1. As required by the Companies (Auditor''s Report) Order, 2015 (âthe Orderâ) issued by the Central Government of India in terms of sub-section 11 of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the Balance Sheet complies with the Accounting Standards referred to in Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) The Company has adequate internal financial control system in place and operative effectiveness of such control.
f) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2016, from being appointed as a director in terms of sub-section 2 of section 164 of the Companies Act, 2013
Annexure to Independent Auditorsâ Report
(Referred to in paragraph 1 under the heading of âReport on other Legal and Regulatory Requirementsâ of our Report of even date)
As required by the Companies (Auditor''s Report) Order, 2016 issued by the Central Government in terms of section 143 (11) of the Companies Act, 2013 and on the basis of such checks of the books and records of the Company, as we considered appropriate and according to the information and explanations given to us during the course of the audit, we report that,
1. a) The Company is maintaining proper records showing full particulars, including quantitative details and situations of fixed assets.
b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.
c) The title deeds of immovable properties are held in the name of the company.
2. Since the Company is a service company there is no stock of raw material
3. a) The Company has not given or taken loans from the parties covered in the register maintained under section 189 of the Companies act, 2013.
b) In the light of (a) we do not comment on the interest or other conditions or security of loans.
c) In the light of (a) we do not comment on the payment of principal or interest.
4. In respect of loans, investments, guarantees and security the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013.
5. The Company has not accepted any deposits in the current year hence the provision of sections 73 to 76 does not apply.
6. The Central Government has not prescribed for the Company maintenance of the Cost Records under subsection 1 of section 148 of the Act.
7. a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues relating to Income Tax, and Service Tax and other statutory dues applicable to it with the appropriate authorities.
b) According to the records of the Company and according to the information and explanations given to us, there are no dues of Income tax and Service Tax.
8. The Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.
9. According to the records of the Company and the information and explanation given to us, the term loan was applied for the purpose for which it was obtained.
10. We had not noticed any fraud by the Company or any fraud on the Company by its officers or employees to be reported during the year.
11. According to the records of the Company provided to us managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. The Company is not a nidhi company hence question of compliances relating to nidhi company does not apply to the Company.
13. I n our opinion the Company has complied with the provisions of sections 177 and 188 of Companies Act 2013 for all transactions with the related parties and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debenture during the year.
15. According to information and explanations furnished to us the Company has not entered in to any non - cash transactions with directors or persons connected with him.
16. The Company is not required to be registered under sec 45-IA of the Reserve Bank of India Act, 1934.
For DPV & Associates
Chartered Accountants
FRN 011688S
CA Vaira Mutthu K
Place : Chennai M.NO. 218791
Date : 26-May-2016 PARTNER
Mar 31, 2015
We have audited the accompanying Standalone Financial Statements of
Mercantile Ventures Limited ("the CompanyÂ), which comprises the
Balance Sheet as at March 31, 2015, and the Statement of Profit and
Loss, the Cash Flow statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in Section 133 of the Companies
Act, 2013 ("the ActÂ). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these Standalone
financial statements based on our audit. We conducted our audit in
accordance with the Standards on Auditing specified under section
143(10) of the Companies Act, 2013. Those Standards require that we
comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
Opinion
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India.
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c) in the case of the cash flow statement, of the cash flows for the
year ended on the date
Report on Other Legal and Regulatory Requirements:-
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
OrderÂ) issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards referred to in Section 133 of the
Companies Act, 2013, read with Rule 7 of the Companies (Accounts)
Rules, 2014.
e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2015, from being
appointed as a director in terms of Section (2) of section 164 of the
Companies Act, 2013.
Annexure to Independent Auditors' Report
(Referred to in paragraph 1 under the heading of "Report on other Legal
and Regulatory Requirements of our Report of even date)
As required by the Companies (Auditor's Report) Order, 2015 issued by
the Central Government in terms of section 143 (11) of the Companies
Act, 2013 and on the basis of such checks of the books and records of
the Company, as we considered appropriate and according to the
information and explanations given to us during the course of the
audit, we report that,
1. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situations
of fixed assets.
b) The fixed assets have been physically verified by the management at
reasonable intervals and no material discrepancies were noticed on such
verification.
2. a) Since the company is a service company there is no stock of raw
material
b) In light of our comments in sub para (a) above this question is not
applicable to the company
c) In light of our comments in sub para (a) above this question is not
applicable to the company
3. a) The Company has not given or taken loans from the parties
covered in the register Maintained under section 189
of the Companies act of 2013.
b) In the light of (a) we do not comment on the interest or other
conditions or security of loans.
c) In the light of (a) we do not comment on the payment of principal or
interest.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems and
procedures, which are commensurate with the size of the Company, and
the nature of its business, for the purchase of assets and for the sale
of services. There are no major weaknesses in internal control.
5. The Company has not accepted any deposits from the public.
Therefore the provisions of section 73 to Section 76 of the Companies
Act, 2013 and rules framed there under are not applicable.
6. The Central Government has not prescribed for the Company
maintenance of the Cost Records under subsection (1) of section 148 of
the Act.
7. a) According to the records of the Company, the company is regular
in depositing undisputed statutory dues relating
to Income Tax, and Service Tax and other statutory dues applicable to
it with the appropriate authorities.
b) According to the records of the Company and according to the
information and explanations given to us, there are no dues of Income
tax and Service Tax.
c) The company is not required to transfer any amount to investor
education and protection fund as per the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under.
8. The Company does not have any accumulated losses at the end of the
financial year (Previous year accumulated loss - Rs. 70.43 Lakhs) and
has not incurred cash losses in the financial year and in the
immediately preceding financial year.
9. According to the records of the company, the Company has borrowed
from a Financial Institution during the year. There has, however, been
no default in repayment of dues to the Financial Institution.
10. The company has not given guarantee for loans taken by others from
Bank or financial institution.
11. Term Loan was applied for the purpose for which they were
obtained.
12. According to information and explanations furnished to us no fraud
on or by the company has been noticed or reported during the year.
For DPV & Associates.,
Chartered Accountants
FRN011688S
CA Vaira Mutthu K
Place : Chennai M.No. 218791
Date : 18 May 2015 Partner
Mar 31, 2014
We have audited the accompanying financial statements of Mercantile
Ventures Limited (previously named as MCC Finance Limited) ("the
Company"), which comprise the Balance Sheet as at March 31,2014, and
the Statement of Profit and Loss and Cash Flow Statement for the year
then ended, and a summary of significant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
The Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub- section (3C) of section
211 of the Companies Act, 1956 ("the Act") read with the General
Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act, 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
Attention of the members is drawn to the following:- Basis of Qualified
Opinion:-
The other non-current assets detailed in Note 12 includes the following
relating to the NBFC business carried on by the Company prior to the
appointment of Official Liquidator (since permanently stayed) :-
a. Lease Parties Balances - Rs. Nil (Rs.476.20 Lakhs)
b. Hire Purchase dues - Rs. Nil (Rs.2,639.41 Lakhs)
c. Advances to Associate Investment Companies - Rs.4,332.34 Lakhs
(Rs.5,910.52 Lakhs)
d. Other advances - Rs.9,212.46 Lakhs (Rs.10,738.35 Lakhs)
A comprehensive review of all the receivables relating to the old NBFC
business was conducted to determine the quantum of possible realisation
from these accounts, with the available records and documents. The
company has written off a sum of Rs.6,118.62 lakhs to the profit and
loss account and a corresponding reduction from other non-current
assets during the year.
Qualified Opinion
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Companies Act in the manner so required and give a true
and fair view in conformity with the accounting principles generally
accepted in India and subject to Note 12:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the 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, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books subject to the Note no.12
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account subject to Note no.12
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956 read with the
General Circular 15/2013 dated 13 September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013
subject to Note no.12
e) on the basis of written representations received from the directors
as on March 31,2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure to Independent Auditors'' Report
(Referred to in paragraph 1 under the heading of "Report on other Legal
and Regulatory Requirements" of our Report of even date)
In terms of the information and explanation given to us and the books
and records examined by us in the normal course of audit
and to the best of our knowledge and belief, we state as under:
1. a) The company has maintained records showing full particulars
including quantitative details and situation of Fixed Assets.
b) We are informed that the Management at reasonable intervals has
physically verified the Fixed Assets of the Company and that no
material discrepancies were noticed on such verification.
c) No substantial part of fixed assets has been disposed off during the
year other than that specified in Note 20 to the financial statements.
However this does not affect the going concern assumption.
2. The company does not hold movable stock and question of physical
verification and procedures does not arise
3. The Company has not granted any loans to parties covered in the
register maintained under section 301 of the companies Act, 1956 during
the year. Hence the repayment of interest and principal is not
applicable. In respect of balances recoverable relating to the NBFC
business carried on by the Company prior to appointment of Official
Liquidator, the same are classified under Other Non Current Assets. A
comprehensive review of the balances in Non-Current Assets relating to
old NBFC business was made by the management. The balances considered
irrecoverable amounting to Rs. 6118.62 lakhs have been written off as
detailed in note 20.2 to the accounts.
4. In our opinion and according to the information and explanations
given to us there are adequate internal control procedures commensurate
with the size of the company and the nature of its business with regard
to purchase of assets and with regard to the sale of Investments. No
instances of continuing failure to correct major weaknesses in Internal
Control were noticed.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:-
In our opinion and according to the information and explanations given
to us, there were no transactions during the current year with the
parties listed in the register required to be maintained under Section
301 of the Companies Act, 1956.
6. The company has not accepted any deposits from the public. The
provisions of sections 58 A & 58 AA of the companies Act, 1956, and the
Rules framed there under is not applicable.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. The central government has not prescribed the maintenance of cost
records u/s.209 (1) (d) of the Companies Act, 1956 to the company.
9. According to the records of the Company, the company is regular in
depositing statutory dues relating to Income tax, service tax and other
material statutory dues with the appropriate authorities. According to
the information and explanation given to us disputed Income Tax
amounting to Rs.428.12 Lakhs is outstanding as at 31st March, 2014 out
of which company had paid Rs.233.62 lakhs under protest. For the
balance amount the company has made an appeal with the CIT (appeals)
which is pending disposal.
10. The Company has accumulated losses of Rs.70.43 lakhs at the end of
the financial year (Previous year - Accumulated loss of Rs.329.55
Lakhs). The Company has not incurred cash losses in the financial year
under report (Previous year - Cash loss of Rs.115.89 lakhs).
11. The Company has not defaulted in repayment of dues to Banks during
the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund / nidhi / mutual benefit fund /
society
14. The company is not dealing in or trading in Shares, Securities,
Debentures & other investments.
15. The Company has not given any guarantee for loans taken by others
from Bank or financial institutions.
16. The company has not obtained any term loans during the year.
17. As per the records of the company, no funds were raised on short
term basis and used for long term investment and vice versa.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956 during the current year.
19. The Company has not issued any debentures, so creation of
securities in respect of debentures does not arise.
20. The Company has not raised any money by public issues during the
period covered by our audit report.
21. According to the information and explanations furnished to us, no
material fraud on or by the Company has been noticed or reported during
the year.
For DPV & Associates
Chartered Accountants
F.R.No.011688S
CA Desikan G
Place: Chennai M.No.219101
Date: May 28 2014 Partner
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