Sobhagya Mercantile Ltd.
|BSE: 512014||Sector: Financials|
|NSE: N.A.||ISIN Code: INE754D01018|
|BSE 00:00 | 12 May||Sobhagya Mercantile Ltd|
|NSE 05:30 | 01 Jan||Sobhagya Mercantile Ltd|
|BSE: 512014||Sector: Financials|
|NSE: N.A.||ISIN Code: INE754D01018|
|BSE 00:00 | 12 May||Sobhagya Mercantile Ltd|
|NSE 05:30 | 01 Jan||Sobhagya Mercantile Ltd|
TO THE MEMBERS OF
SOBHAYGYA MERCANTILE LIMITED
Report on the Audit of Standalone Financial Statements
We have audited the accompanying Ind AS financial statements of Sobhaygya MercantileLimited ("the Company") which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 (hereinafter referred to as "the Act") in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs (financial position) of the Companyas at March 31 2019 and loss (financial performance) and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
We have determined that there are no key audit matters to be communicated in ourreport.
The Company's Board of Directors are responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statement or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report the fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian accounting Standards (Ind AS) specified under section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Sub-section (11) of Section 143 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wegive in the Annexure-A a statement on the matters specified in paragraphs 3 and 4 of theOrder 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 bestof 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 theCompany so far as appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;
d) In our opinion the aforesaid Ind As Financial Statement comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 Companies (Indian Accounting Standard) Rules 2015 as amended.
e) On the basis of written representations received from the directors as on March 312019 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) ofthe Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure-B.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to uswe report that:
i) The Company does not have any pending litigations which would impact its financialposition other than those mentioned in notes to accounts.
ii) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii) There were no amounts which were required to be transferred to the InvestorsEducation and Protection Fund by the Company.
ANNEXURE-A TO INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 1 under the Report on Other Legal andRegulatory Requirements' our report to the members of SOBHAYGYA MERCANTILE LIMITED(the Company') for the year ended on March 31 2019. We report that:-
i. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The assets have been physically verified by the Management at the end of the year.In our opinion the frequency of verification is adequate and no material discrepancieswere noticed on such verification.
c) The title deeds of immovable property are held in the name of the company.
ii. The nature of business does not require it to have any inventory hence provisionsof Clause 3(ii) of the aforesaid order are not applicable to the company.
iii. According to information and explanations given to us The Company has not grantedany loans secured or unsecured to Companies firms Limited Liability Partnerships orother parties covered in the register maintained under section 189 of the Act henceclause (iii) of the said order is not applicable to company.
iv. The Company has not granted any loans or made any investments or provided anyguarantee or security to the parties covered under Section 185 and 186 and henceprovisions of Clause 3(iv) of the aforesaid Order are not applicable to the Company.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public within the meaning of Sections 73 7475 and 76 of the Act and the Rules framed there under to the extent notified.
vi. In our opinion and according to the information and explanations given to usmaintenance of cost records under sub-section (1) of the Section 148 of the Companies Act2013 has not been prescribed by the government.
vii. a) According to the information and explanation given to us and as per the recordsof the Company the Company is generally regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax sales tax service tax Goods and Service Tax duty of customsduty of excise value added tax cess and other statutory dues applicable to it. Noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax sales tax Goods and Service Tax wealth tax duty of customs duty of excisevalue added tax or cess and other statutory dues were outstanding as at 31-03-2019 for aperiod of more than six months from the date they became payable.
b) According to the records of the Company and information and explanations given to usno dues of income tax sales tax service tax duty of customs duty of excise valueadded tax Goods and Service Tax or cess that have not been deposited on account of anydisputes.
viii. According to the information and explanation given to us and as per the recordsof the Company the Company has not taken any loans or borrowings from financialinstitution bank Government or Debenture holders. Hence provisions of clause (viii) arenot applicable to the Company.
ix. The Company has not raised any money by way of initial public offer further publicoffer (including debt instruments) and term loans and hence provisions of Clause 3(ix) ofthe aforesaid Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.
xi. The company has not paid/provided any managerial remuneration in the current yearand hence provisions of Clause 3(xi) of the aforesaid order are not applicable to thecompany.
xii. The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable tothe Company and hence provisions of Clause 3(xii) of the aforesaid Order are notapplicable to the Company.
xiii. Based on our audit procedures and according to the information and explanationsgiven to us by the management transactions with the related parties are in compliancewith Sections 177 and 188 of the Act wherever applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and henceprovisions of Clause 3(xiv) of the aforesaid Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors orthe persons connected with him and hence provisions of Clause 3(xv) of the aforesaid Orderare not applicable to the Company.
xvi. The Company is not required to be registered under Section 45IA of the ReserveBank of India Act 1934.
ANNEXURE-B TO INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 2(f) under the Report on Other Legal andRegulatory Requirements' our report to the members of SOBHAGYA MERCANTILE LIMITED(the Company') for the year ended on March 31 2019.
Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Act
We have audited internal financial controls over financial reporting of SOBHAGYAMERCANTILE LIMITED ("the Company") as of March 31 2019 in conjunction with ouraudit of the financial statements of the Company for the year then 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 control statedin Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India (ICAI). These responsibilities includesdesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of businessincluding adherence to Company's policies the safeguarding of the assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
Our responsibility is to express an opinion on Company's internal financial controlsover financial reporting based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Reporting (theGuidance Note') and the Standards on Auditing deemed to be prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of internal financial controls and both issued by the ICAI.Those Standards and Guidance note require that we comply with ethical requirements andplan and perform audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedure to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal controls based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks 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 toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide a reasonable assurance regarding the reliability of financial reporting andpreparation of financial statements for external purpose 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 accurately andfairly reflect the transactions and dispositions of the assets of the Company;
2. Provide reasonable assurance that the transactions are recorded as necessary topermit preparation of financial statements in accordance with the generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance 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 not be detected.Also projections of any evaluation of the internal financial control over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material aspects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.