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Sonal Mercantile Ltd.

BSE: 538943 Sector: Financials
NSE: N.A. ISIN Code: INE321M01017
BSE 05:30 | 01 Jan Sonal Mercantile Ltd
NSE 05:30 | 01 Jan Sonal Mercantile Ltd

Sonal Mercantile Ltd. (SONALMERCANTILE) - Auditors Report

Company auditors report

To

The Shareholders of

SONAL MERCANTILE LIMITED

Report on Financial Statements

We have audited the accompanying financial statements of

SONAL MERCANTILE LIMITED which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application ofappropriateaccounting policies; making judgments and estimates that are reasonable andprudent; and designimplementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to thepreparation and presentation of the financialstatements that give a true and fair view and are free frommaterial misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing an opinionon whether the Company has in place the adequate internal financial control system overfinancial reporting and the operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and the explanations given to us thefinancial statementsgive the information required by the Act in the manner so required andgive a true and fair view in conformity with accounting principles generally accepted inIndia:

i. In case of the Balance Sheet of the state of affairs of the company as at31st March 2017;

ii. In case of Statement of Profit and Loss of the profit for the year ended onthat date; and

iii. In case of Cash Flow Statement of the cash flows for the year ended onthat date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (the Order) asamended issued by the Central Government of India in terms of sub- section (11) ofSection 143 of the Act we give in the Annexure- A a statement on the matters specifiedin paragraphs 3 and 4 of the said Order.

2. The Company is a Non- Banking Financial Company not accepting public depositand holding certificate of registration no. B-14.02393 dated 19/02/2002 from Reserve Bankof India has been issued to the Company. a. The Board of Directors of the companyhas passed a resolution for the non-acceptance of any public deposits.

b. The company has not accepted any public deposits during the relevant year.

c. The company has complied with the prudential norms relating to incomerecognition accounting standards assets classification and provisioning for bad anddoubtful debts as applicable to it.

3. 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 thebest 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 bythe 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 FlowStatement dealt with by this Report are in agreement with the books of account.

d. In our opinion the aforesaid financial statements comply with the AccountingStandards 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 on31st March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

f. The observation of financial transactions does not reveal any matter whichhas any adverse effect on the functioning of the Company. g. With respect toadequacy of internal financial controls over financial reporting of the Company and theoperating effectiveness of such controls refer to our separate Report in Annexure- B.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: i) TheCompany does not have any pending litigations in its financial statements;

ii) The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses. However company doesnot enter intoany long-term contracts including derivative during the specified period;

iii) The Company is not required to transfer any amount to the Investor Education andProtection Fund.

Signed for the purpose of identification

FOR V.N. PUROHIT & CO.
Chartered Accountants
Firm Regn. No. 304040E
O. P. Pareek
Partner
Membership No. 014238
New Delhi the 30thday of May 2017

ANNEXURE- A TO THE AUDITOR'S REPORT

The Annexure referred to in Paragraph 1 under the heading of "Report on otherLegal and Regulatory Requirements" of our report of even date to the members of SonalMercantile Limited (the Company) for the year ended on 31st March 2017. (i) a) Asper information and explanation given to us the Company is maintaining proper recordsshowing full disclosures of the fixed assets; (b) As per information and explanation givento us physical verification of fixed assets has been conducted once in a year by themanagement and no material discrepancies were noticed during the course of verification;(c) According to information and explanation given to us the company does not hold anyimmovable property during the period dealt with by this report;

(ii) As per information and explanation given to us verification of inventoryhas been conducted once in a year by the management and no material discrepancies werenoticed during the course of verification. (iii) According to information andexplanations given to us the Company has not granted unsecured loans to parties coveredin register maintained under section 189 of the Companies Act 2013 and hence provisionsof this sub- clause are not applicable;

(iv) According to information and explanations given to us the Company havecomplied the provisions of section 185 and 186 of the Companies Act 2013 in respect ofloans investments guarantees and security so given by the Company. (v) Accordingto information and explanations given to us the Company has not accepted public depositsand the provision of section 73 to 76 or other relevant provisions of the Companies Act2013 and rules framed thereunder are not applicable to the Company;

(vi) According to information and explanations given to us the Company is notliable to maintain cost records as prescribed under section 148(1) of the Companies Act2013;

(vii) (a) According to information and explanations given to usthe company isgenerally regular in depositing undisputed statutory dues including income-tax and anyother applicable statutory dues to the appropriate authorities and there are nooutstanding statutory dues as on the last day of the financial year concerned for a periodof more than six months from the date they became payable; (b) According to informationand explanations given to us there are no outstanding statutory dues on the part ofCompany which is not deposited on account of dispute.

(viii) According to information and explanations given to us the company hasnot obtained any loans and borrowings from any financial institution bank government ordues to debenture holders and hence question of default of repayment does not arise; (ix)According to information and explanations given to us the Company has not raised moneyby way of initial public offer or further public offer. The Company has not taken any termloans from any bank or financial institution;

(x) According to information and explanations given to us there is no noticedor unreported fraud on or by the Company during the year under audit; (xi) Accordingto information and explanations given to us the Company has not paid managerialremuneration in accordance with applicable provisions of the Companies Act 2013;

(xii) As per information the Company is not a Nidhi Company hence provisionsof sub- clause (xii) of the Paragraph 3 of the Order are not applicable;

(xiii) According to information and explanations given to usall transactionswith the related parties are in compliance with sections 177 and 188 of Companies Act2013 wherever applicable and the details have been disclosed in the financial statementsetc. as required by the applicable accounting standards;

(xiv) According to information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review.

(xv) According to information and explanations given to us the Company has notentered into non- cash transactions with directors or persons connected with him; (xvi)According to information and explanations given to us the Company is a Non- BankingFinancial Company duly registered under Section 45-1A of the Reserve Bank of India Act1934;

Signed for the purpose of identification

FOR V.N. PUROHIT & CO. Chartered Accountants

Firm Regn. No. 304040E

O.P. Pareek

Partner

Membership No. 014238

New Delhi the 30thday of May 2017

ANNEXURE- B TO THE AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub- section (3) ofSection 143 of the Companies Act 2013

We have audited the internal financial controls over financial reporting of SONALMERCANTILE LIMITED (the Company) as on 31st March 2017 in conjunction with our audit ofthe financial statements of the Company for the year ended on that date.

Management's Responsibility for the Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note on Audit of Internal Financial Control over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of fraud and errors the accuracy andcompleteness of accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the Guidance Note) and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialaspects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial control system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidences we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that: -

(1) Pertain to the maintenance of records that in reasonable detail accuratelyand fairly reflect the transactions and dispositions of the assets of the Company;

(2) Provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and the receipt and expenditures of the Company are being only inaccordance with authorisations of management and directors of the Company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and could not bedetected. Also projections of any evaluation of the internal financial control overfinancial reporting to future periods are subject to the risk that the internal financialcontrols over financial reporting may became inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion In our opinion the Company has in all material aspects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on"the internal financial controls over financial reporting criteria considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India".

FOR V.N. PUROHIT & CO.
Chartered Accountants
Firm Regn. No. 304040E
O.P. Pareek
Partner
Membership No. 014238
New Delhi the 30thday of May 2017