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
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
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
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
8. We have been informed that, the Company was not required to
maintain cost records under section 209 (1) (d) of the Companies Act,
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
13. The provision of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
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
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
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
For R. Daliya & Assocites
R. S. Daliya