To,
The Members of Avon Mercantile Limited
Report on the Audit of the Ind AS financial statements Opinion
We have audited the Ind AS financial statements of Avon Mercantile Limited ("the
Company"), which comprise the Balance Sheet as at 31st March, 2023, the statement of
Profit and Loss and Statement of cash flow for the year ended and notes to the Ind AS
financial statements, including a summary of significant accounting policies and other
explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Ind AS financial statements give the information required by
the Companies Act, 2013 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, 2023, and its losses, and its cash flows for the
year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditors Responsibilities for the Audit of the Ind
AS financial statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India (ICAI) together with the ethical requirements that are relevant to our audit of the
Ind AS financial statements under the provision of the Companies Act, 2013 and the rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the ICAIs code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the Ind AS financial statements.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most
significance in our audit of the Ind AS financial statements of the current period. These
matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion on these matters. We have no key audit matters to be
communicated in our report.
| S. No. |
Key Audit Matter |
Auditors Response |
| 1 |
NA |
NA |
Other Information - Board of Directors Report
A. The Companys Board of Directors is responsible for the preparation and presentation
of its Board Report which comprises various information required under section 134(3) of
the Companies Act 2013 but does not include the Ind AS financial statements and our
auditors report thereon.
Our opinion on the Ind AS financial statements does not cover the other information and
we do not express any form of assurance/conclusion thereon.
AVON MERCANTILE LIMITED
B. In connection with our audit of the financial statements, our responsibility is to
read the other information and in doing so, consider whether the other information is
materially inconsistent with the Ind AS financial statements or our knowledge obtained
during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement in this other information; we are required to report that fact. We have
nothing to report in this regard.
Managements Responsibility for the Ind AS financial statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these Ind AS 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. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
of 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 Ind AS financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
In preparing the Ind AS financial statements, the Board of Directors is responsible for
assessing the Companys ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Companys financial reporting
process.
Auditors responsibilities for the Audit of the Ind AS financial statements
Our objectives are to obtain reasonable assurance about whether the Ind AS financial
statements as a whole are free from material misstatements, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances but not for the purpose
of expressing our opinion on whether the Company has adequate internal Financial control
systems in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management
AVON MERCANTILE LIMITED
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the Ind AS financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the Ind AS financial
statements, including the disclosures, and whether the Ind AS financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
Materiality is the magnitude of misstatements in the Ind AS financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the Ind AS financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning the scope of our
audit work and in evaluating the results of our work; and (ii) to evaluate the effect of
any identified misstatements in the Ind AS financial statements.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the Annexure 11 a statement on the matters specified in
the paragraph 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 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 and the cash flow statement
dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid Ind AS financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014;
(e) on the basis of the written representations received from the directors as on 31st
March, 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2023 from being appointed as a director in terms
of Section 164 (2) of the Act;
(f) With respect to the adequate internal financial controls over financial reporting
of the Company and the operating effectiveness of such controls, refer to our separate
Report in "Annexure 2" to this report; and
(g) with respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us:
AVON MERCANTILE LIMITED
i) i) the company does not have any pending litigations which would impact its
financial position.
ii) ii) the company did not have any long-term contracts including derivative contracts
for which there were any material foreseeable losses.
iii) there were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the company.
iv) (i) The management has represented that, to the best of its knowledge and belief,
other than as disclosed in the notes to the accounts, no funds have been advanced or
loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the company to or in any other person(s) or entity(ies), including
foreign entities ("Intermediaries"), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of
the company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
ii) The management has represented, that, to the best of its knowledge and belief,
other than as disclosed in the notes to the accounts, no funds have been received by the
company from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
company shall, whether, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and
(iii) Based on audit procedures which we considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) contain any material misstatement.
(iv) The company has neither declared nor paid any dividend during the year.
(h) With respect to the matter to be included in the Auditors Report under Section
197(16) of the Act, in our opinion and according to the information and explanations given
to us, no remuneration was paid by the Company to its directors during the year.
For GUPTA GARG & AGRAWAL
CHARTERED ACCOUNTANTS
Firm Registration No. 505762C
Sd/-
AVON MERCANTILE LIMITED
RE: Avon Mercantile Limited
ANNEXURE "1 REFERRED TO IN PARAGRAPH OF OUR REPORT OF EVEN DATE
The comments are in seriatim of the order:
(i) (a) (A) The Company is maintaining proper records showing full particulars
including
quantitative details and situation of Property Plant & Equipment.
(B) The company does not have intangible assets; hence the clause is not applicable
(b) As per the information given by the management, the physical verification of
Property Plant & Equipment was carried out at the end of the financial year. No
discrepancy on such verification noticed by the management and reported to us.
(c) As per books of accounts verified by us and according to the information and
explanations given by the management the company does not have immovable properties and as
such the sub clause is not applicable.
(d) The company has not revalued its Property Plant & Equipment during the year
under consideration
(e) No proceedings have been initiated or are pending against the company as at
31.03.2023 for holding any benami property under the Benami Transaction (Prohibition) Act
1988 (as amended in 2016) and rules made there under.
(ii) (a) The Company does not have inventory; as such the clause is not applicable.
(b) During the year under consideration, the company has not been sanctioned working
capital limits in excess of Rs. 5 crore, in aggregate, at any points of times during the
year, from banks or financial institutions on the basis of security of current assets; as
such the clause is not applicable.
(iii) During the year the company has made investments in a company and granted
unsecured
loans to companies and other entities, during the year, in respect of which:
(a) The companys principal business is to give loans and hence reporting under clause
3(iii)
(a) of the order is not applicable:-
(b) In our opinion, the investments made and the terms and conditions of the grant of
loans, during the year are, prima facie, not prejudicial to the Companys interest.
(c) In respect of loan granted by the Company, the schedule of repayment of the
principal and payment of interest has been stipulated and receipts of the principal amount
and the interest are generally regular.
(d) According to the information and explanation given to us, no amount is overdue in
these respect.
(e) Reporting under clause 3(iii) (e) of the order is not applicable.
(f) The Company has not granted any loans or advances in the nature of loans either
repayable on demand or without specifying any terms or period of repayment during the
year. Hence, reporting under clause 3(iii)(f) is not applicable.
(iv) According to the information and explanation given to us, the company has complied
with requirements of section 185 and 186 in respect of loans, investments, guarantees or
security made by it during the year under audit. The Company being a non-banking financial
company, nothing contains in section 186, except sub section (1), is applicable to it.
(v) The Company has not accepted any deposits from the public and as such the clause is
not applicable.
AVON MERCANTILE LIMITED
(vi) To the best of our knowledge and as per information and explanations given to us
by the management, the central government has not prescribed maintenance of cost records
under section 148(1) of the Companies Act, 2013.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed
statutory dues such as goods and services tax, provident fund, employees state insurance,
income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess
and other applicable statutory dues. According to information and explanations given to
us, no undisputed statutory dues payable was in arrears as at March 31, 2023, for a period
of more than six months from the date they became payable;
(b) There are no dues in respect of Goods and Services Tax, provident fund, employees
state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax, cess and any other statutory dues that have not been deposited with the
appropriate authorities on account of any dispute;
(viii) During the year under consideration, the company has neither surrendered any non
recorded
transaction nor disclosed as income in tax assessment under the Income Tax Act.
(ix) (a) In our opinion, the company has not defaulted in repayment of loans or other
borrowings or in the payment of interest thereon to any lender during the year;
(b) Company is not declared willful defaulter by any bank or financial institution or
other lender;
(c) On an overall examination of the financial statements of the company, term loans
were applied for the purpose for which the loans were obtained;
(d) On an overall examination of the financial statements of the company, funds raised
on short term basis have, prima facie, not been utilized during the year for long term
purposes by the company;
(e) On an overall examination of the financial statements of the company, the company
has not taken any funds from any entity or person on account of or to meet the obligations
of its subsidiaries, associates or joint ventures;
(f) The company does not have any subsidiaries, joint ventures or associate companies
Accordingly, and hence reporting under paragraph 3(ix)(f) of the Order is not applicable
to the Company;
(a) As per the information and explanations given to us by the management, the Company
has not raised any money by way of initial public offer / further public offer / debt
instruments and term loans hence; there are no comments in this regard.
(b) During the year under consideration, the company has not made any preferential
allotment or private placement or convertible debenture and as such the clause is not
applicable.
(a) To the best of our knowledge and according to the information and explanations
given to us, no fraud by the company and no material fraud on the company has been noticed
and reported during the year.
(b) No report Under sub section (12) of section 143 of the Companies Act has been filed
by the auditors under rule 13 of Companies (Audit and Auditors) Rule-2014 and as such the
clause is not applicable.
(c) During the year under consideration, no whistle-blower complaint has been received
and as such the question of its consideration by the auditors does not arises
AVON MERCANTILE LIMITED
(xii) The company is not a Nidhi Company and as such the sub clauses (a) (b) (c) are
not applicable;
(xiii) The transactions with related parties are in compliance with sections 177 and
188 on the Companies Act 2013 and full disclosure has been made in financial statement;
(xiv) (a) In our opinion the Company has an adequate internal audit system commensurate
with the size and the nature of its business.
(b) We have considered, the internal audit reports for the year under audit, issued to
the Company during the year and till date, in determining the nature, timing and extent of
our audit procedures.
(xv) As per the information and explanations given by the management, the Company has
not entered into any non-cash transactions with directors or persons connected with them
and hence provisions of section 192 of the Act are not applicable to the Company;
(xvi) (a) The company is duly registered under section 45-1A of the Reserve Bank of
India Act, 1934. Reporting under clause 3(xiv) (b) of the order is not applicable.
(b) The Company is not a Core Investment Company (CIC) as defined in the regulations
made by the Reserve Bank of India.
(c ) In our opinion, there is no core investment company within the Group (as defined
in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly
reporting under clause 3 (xvi) (d) of the order is not applicable.
(xvii) During the year under consideration, the company has incurred net cash losses of
Rs. 28623.70 thousand as compared to Rs. 3674.76 thousand in the immediately preceding
financial year.
(xviii) There has been no resignation of the statutory auditors during the year,
however there is rotation of auditors during the year. Accordingly, reporting under
paragraph 3(xviii) of the Order is not applicable to the Company;
(xix) According to the information and explanations given to us and on the basis of the
financial ratios, ageingand expected dates of realization of financial assets and payment
of financial liabilities, other information accompanying the Ind AS financial statements,
our knowledgeof the Board of Directors and management plans and based on our examination
of the evidence supporting theassumptions, nothing has come to our attention, which causes
us to believe that any material uncertainty exists as on the date of the audit report that
Company is not capable of meeting its liabilities existing at the date of balance sheet as
and when they fall due within a period ofone year from the balance sheet date. We,
however, statethat this is not an assurance as to the future viability of theCompany. We
further state that our reporting is based onthe facts up to the date of the audit report
and we neithergive any guarantee nor any assurance that all liabilities falling due within
a period of one year from the balance sheet date, will get discharged by the Company as
and when they fall due; and
(xx) Section 135 of the Companies Act 2013 is not applicable to company. Accordingly,
reporting under paragraph 3(xx) (a) and (xx) (b) of the Order is not applicable.
For GUPTA GARG & AGRAWAL
CHARTERED ACCOUNTANTS
Firm Registration No. 505762C
AVON MERCANTILE LIMITED
ANNEXURE 2 TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE END AS FINANCIAL
STATEMENTS OF AVON MERCANTILE LIMITED
Report on the Internal Financial Controls under Clause (f) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
To the members of Avon Mercantile Limited
We have audited the internal financial controls over financial reporting of Avon
Mercantile Limited ("the Company") as of March 31, 2023 in conjunction with our
audit of the Ind AS financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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. 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 the Companys 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.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys 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 "Guidance Note") and the Standards on Auditing as specified under Section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal
financial controls, both applicable to an audit of Internal Financial Controls and, both
issued by the Institute of Chartered Accountants of India. 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 auditors judgement, including the assessment of the risks of
material misstatement of the Ind AS 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 internal financial controls system over
financial reporting.
AVON MERCANTILE LIMITED
Meaning of Internal Financial Controls Over Financial Reporting
A Companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of Ind AS financial statements for external purposes in accordance with
generally accepted accounting principles. A Companys 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
Companys 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 controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2023, 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.
For GUPTA GARG & AGRAWAL
CHARTERED ACCOUNTANTS Firm Registration No. 505762C
Sd/-
(AMIT KUMAR JAIN)
PARTNER
Membership No. 509349 UDIN : 23 509349BGYJTK43 73
Place: Delhi Date: 30.05.2023
+91-9892691696
