We have audited the attached Balance Sheet of Sobhagya Mercantile
 Limited as at 31st March, 2012 and related Profit & Loss Account and
 Cash Flow Statement for the year ended on that date annexed thereto
 which we have signed under reference to this report. These financial
 statements are the responsibility of the management of the Company. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 We conducted our audit in accordance with Auditing Standards generally
 accepted in India.  Those Standards require that we plan and perform
 the audit to obtain reasonable assurance about whether the financial
 statements are free of material misstatement. An audit includes
 examining, on test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion and report that
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Central Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956, and on the basis of such checks of the books and
 records as we considered appropriate, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 order to the extent applicable to the company.
 
 2.  Further to our comments in the statement referred to in paragraphs
 1 above, we state 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, Profit & Loss Account and Cash Flow Statement
 referred to in this report are in agreement with the books of account.
 
 d) In our opinion, the Balance Sheet, Profit and Loss account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in Sub-section (3C) of Section 211 of the
 Companies Act, 1956.
 
 e) On the basis of written representations received from directors of
 the Company, and taken on record by the Board of Directors, we report
 that none of the directors is disqualified as on 31st March, 2012 from
 being appointed as a director in terms of clause (g) of sub-section (1)
 of section 274 of the Companies Act, 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements read
 together with significant Policies and other notes thereon give the
 information required by the Companies Act, 1956 in the manner so
 required and present a true and fair view in conformity accounting
 principles generally accepted in India:
 
 i) In the case of the Balance Sheet of the state of affairs of the
 Company for the year ended on 31st March, 2012;
 
 ii) In the case of the Profit & Loss Account of the Loss of the Company
 for the year ended on that date; and
 
 iii) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE
 
 1.  The Company has maintained adequate records to show full
 particulars including quantitative details and situation of fixed
 assets. According to the explanations given to us the fixed assets of
 the company have been verified by the Management during the year and no
 significant discrepancies between the book records and physical
 verification have been noticed. No Fixed Assets have been disposed off 
 during the year.
 
 2.  The Company did not have inventory at any point of time during the
 year.
 
 3.  The Company has not granted or taken any loan, secured or
 unsecured, to or from Companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956 except
 interest free unsecured loans amounting to Rs. 95,000/- taken from Mr.
 Kumaar Bagrodia, terms & conditions of which are not prejudicial to the
 interest of the company. Maximum balance outstanding at any time during
 the year was Rs. 2,00,800/-. As informed to us, there is no company
 under the same management as defined under section 370(1B) of the
 Companies Act, 1956.
 
 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 nature of the business
 for the purchase of Fixed Assets. In our opinion, and according to the
 information & explanations given to us, there was no continuing failure
 to correct major weakness in internal control.
 
 5.  In our opinion and according to the information and explanations
 given to us, there were no transactions which needed to be entered into
 a register in pursuance of section 301 of the Companies Act, 1956.
 
 6.  In our opinion and according to the information and explanations
 given to us, the company has not accepted any deposits from the public
 within the meaning of the provisions of sections 58A and 58AA of the
 Companies Act, 1956 and the Rules framed there under.
 
 7.  We have been informed that as the Company''s internal control
 procedures ensure reasonable checking of its financial and other
 records, the Company has not yet started a formal internal Audit
 department.
 
 8.  We have been informed that, the Company was not required to
 maintain cost records under section 209 (1) (d) of the Companies Act,
 1956,
 
 9.  a) There are no undisputed amounts payable in respect of Income
 Tax, Wealth Tax, Custom Duty, Excise Duty and Investor Protection Fund
 as at 31st March, 2012 which are outstanding for period of more than
 six months from date they became payable
 
 b) There are no dues in respect of Income Tax, Wealth Tax, Custom Duty,
 Excise Duty and any other Statutory dues which have not been deposited
 on account of any dispute.
 
 10.  The Company''s accumulated losses at the end of the financial year
 do not exceed 50% of its net worth. However cash loss was reported in
 the previous year.
 
 11.  The company did not have any outstanding debentures or outstanding
 loans from any financial institution or bank during the year.
 
 12.  During the year, the Company has not granted any loans or advances
 on the basis of security by way of pledge of shares, debentures and
 other securities.
 
 13.  The provision of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/societies are not applicable to the
 company.
 
 14.  The Company has maintained proper records in respect of
 transactions and contracts related to dealings in Shares, Securities,
 Debentures and other investments. As explained to us, timely entries
 have been made therein. Shares and Debentures have been held by the
 Company in its own name except for certain shares which are lodged for
 transfer.
 
 15.  In our opinion and according to the information and explanations
 given to us, the company has not given guarantee for loans taken by
 others from banks or financial institutions.
 
 16.  The company has no term loan outstanding at any point of time
 during the year.
 
 17.  On the basis of an overall examination of the Balance Sheet of the
 company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  The company has not made any preferential allotment of share to
 parties and companies covered in the Register maintained under section
 301 of the Act at any point of time during the year.
 
 19.  The. company has no outstanding debentures at any point of time
 during the year, hence creation of security does not arise.
 
 20.  The company has not raised any money by public issue during the
 year.
 
 21.  During the course of our examination of the books and records of
 the company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanation given to us, we have neither come across any instance of
 fraud on or by the company, nor have been informed of any such case by
 the management.
 
 
 
                                            For R. Daliya & Assocites
                                                Chartered Accountants
 
                                                         R. S. Daliya
                                                           Proprietor
                                                         FRN: 102060W
                                                      PAN: AEGPD4954A
 
 Place: Mumbai
 Dated: 30.05.2012