S I Capital & Financial Services Ltd.
|BSE: 530907||Sector: Financials|
|NSE: N.A.||ISIN Code: INE417F01017|
|BSE 00:00 | 24 Oct||S I Capital & Financial Services Ltd|
|NSE 05:30 | 01 Jan||S I Capital & Financial Services Ltd|
|BSE: 530907||Sector: Financials|
|NSE: N.A.||ISIN Code: INE417F01017|
|BSE 00:00 | 24 Oct||S I Capital & Financial Services Ltd|
|NSE 05:30 | 01 Jan||S I Capital & Financial Services Ltd|
To the Members of
SJ. CAPITAL & FINANCIAL SERVICES LIMITED Report on the Audit of StandaloneFinancial Statements Opinion
We have audited the accompanying standalone financial statements of S.I. CAPITAL& FINANCIAL SERVICES LIMITED (the company) which comprise the Balance Sheet as at31st March 2022 the Statement of Profit and Loss (Including OtherComprehensive Income) Statement of changes in equity and Statement of Cash Flow for theyear ended and notes to financial statement including a summary of significant accountingpolicies and other explanatory information (herein referred to as "standalonefinancial statements").
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 as amended (the "Act") in the manner so required andgive a true and fair view in conformity with the Indian accounting standards prescribedunder section 133 of the Act read with the companies(Indian Accounting standards) Rules2015as amended ("Ind AS")and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2022 the lossand total comprehensive income change in equity and its cash flow for the year ended onthat date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditors Responsibilities for the Audit ofthe standalone financial statements section of our report. We tire independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof standalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for 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 and in forming our opinion thereon and we do not provide a separate opinionon these matters.
l.Provision for Expected Credit Losses (ECL) on Loans
Management estimates impairment provision using Expected Credit loss model for the loanexposure. Measurement of loan impairment involves application of significant judgement bythe management. The most significant judgements are:
Timely identification and classification of the impaired loans and
Determination of probability of defaults (PD) and estimation of loss given defaults(LGD) based on the value of collaterals and relevant factors.
The estimation of Expected Credit Loss (ECL) on financial instruments involvessignificant judgements and estimates. Following are points with increased level of auditfocus: Classification of assets to stage 1 2 or 3 using criteria in accordance with IndAS 109 which also include considering the impact of recent RBIs Covid-19 regulatorycirculars; Accounting interpretations modelling assumptions and data used to build andrun the models; Measurement of individual borrowers provisions including Covid-19impact assessment of multiple economic scenarios.
Inputs and Judgements used in determination of management overlay at various assetstages considering the current uncertain economic environment arising out of the COVTD 19Pandemic and
The disclosures made in the financial statements for ECL especially in relation tojudgements and estimates by the Management in determination of the ECL. Refer note 41 tothe standalone financial statements.
Principle Audit Procedures:
We evaluated the design and operating effectiveness of controls across the processesrelevant to ECL. These controls among others included controls over the allocation ofassets into stages including managements monitoring of stage effectiveness modelmonitoring including the need for post model adjustments model validation creditmonitoring individual/collective provisions and production of journal entries anddisclosures. We tested the completeness of loans included in the Expected Credit Losscalculations as of 31 March 2022. We tested assets in stage 1 2 and 3 on sample basis toverify that they were allocated to the appropriate stage. For samples of exposure wctested the appropriateness of determining Exposure at Default (EAD) PD and LGD. Weperformed an overall assessment of the ECL provision levels at each stage includingmanagements assessment on Covid-19 impact to determine if they were reasonableconsidering the Companys portfolio risk profile credit risk management practicesand the macroeconomic environment We assessed the adequacy and appropriate
We assessed the adequacy and appropriateness of disclosures in compliance with the IndAS 107 in relation to ECL especially in relation to judgements used in estimation of ECLprovision.
Information other than the financial statements and auditors report thereon
The Companys Board of Directors arc responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the standalone financial statements and our auditors' report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Managements Responsibility for the standalone Financial Statements
The Companys 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 standalone financial statements that give a true and fair view of the financialposition and financial performance including other comprehensive income cash flows andchanges in equity of the company in accordance with Ind AS and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements 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 of each entity to continue as a going concern disclosingas applicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to Liquidate the company or to ceaseoperations or has no realistic alternative but to do so.
The board of directors is also responsible for overseeing the Companys financialreporting process.
Auditors 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 arc considered material if individually or in theaggregate they could reasonably be expected
to influence the economic decisions of users taken on the basis of these standalonefinancial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate financial control with reference to standalone financialstatements in place and the operating effectiveness of the such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt oncompany's ability to continue as going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditors' report to the relateddisclosures in the standalone financial statements or if such disclosures are inadequateto modify our opinion. Our conclusions arc based on the audit evidence obtained up to thedate of our auditors report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of die standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies 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 statementsfor the financial year ended March 312022 and are therefore the key audit matters. Wedescribe these matters in our auditors report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1) As required by Companies (Auditors Report) Order 2020 issued by the Government ofIndia in terms of sub-section 11 of section 143 of the Companies Act 2013 we give in theAnnexure- "A" a statement on the matters specified in the paragraphs 3 and 4 ofthe order.
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 the companyso far as it appears from our examination of those books.
c) The Balance Sheet The Statement of Profit and Loss including other comprehensiveincome Statement of changes in Equity and Statement of cash flow dealt with by thisreport are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standard) Rules 2015 as amended including the companies (Indian AccountingStandards) amendment rules 2019.
e) On the basis of written representations received from the directors as on March 312022 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the company in reference to the financial statements and the operatingeffectiveness of such controls refer our separate report in "Annexure- B"
g) With respect to the other matters to be included in the Auditors Report inaccordance with the requirements of section 197(16) of the Act as amended. In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditors 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) The company has disclosed the impact of pending litigations on its financialposition in its financials.
ii) The company did not have any long-term contract including derivative contracts forwhich there were any material foreseeable losses.
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.
iv) The management has represented that to the best of its knowledge and beliefother than as disclosed in the notes to the accounts
(a) no funds have been advanced or loaned or invested (either from borrowed funds orshare premium or any other sources or kind of funds) by the company to or in any otherperson(s) or entity(ies) including foreign entities Intermediaries with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identifiedin any manner whatsoever by or on behalf of the company Ultimate Beneficiariesor provide any guarantee security or the like on behalf of the UltimateBeneficiaries; and
(b) no funds have been received by the company from any person(s) or entity(ies)including foreign entities Funding Parties with the understanding whetherrecorded in writing or otherwise that the company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party Ultimate Beneficiaries or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries.
(c) Based on audit procedures carried out by us that we have considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.
(d) The company has not declared or paid any dividends during the year and accordinglyreporting on the compliance with section 123 of the companies Act2013 is notapplicable for the FY 2021-22.
"Annexure A" to the Independent Auditors Report
Annexure referred to in Independent Auditors Report to the members of the companyon the standalone financial statements for the year ended 3111 March 2022.
1) (a) The Company has maintained proper records showing full particulars includingquantitative
details and situation of Property Plant and Equipment & Intangible assets.
(b) According to the information and explanation given to me all the fixed assets werephysically verified during the year by the Management in accordance with a regular programof verification which in my opinion provides for physical verification of the fixedassets at reasonable intervals. According to the information and explanation given to meno material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (other than property where thecompany is the lessee and the lease agreements are duly executed in favour of the lessee)disclosed in the financial statements are held in the name of the company.
(d) The company has not revalued its Property Plant and Equipment (including Right ofUse assets) or intangible assets or both during the year.
(e) According to the information and explanation given to me no such proceedings havebeen initiated or are pending against the company for holding any benami property underthe Benami Transactions (Prohibition) Act 1988 (45 of 1988) and rules made thereunder.
2) The Company is a Non-Banking Financial Company (NBFC) and is in thebusiness providing financial services and does not have any inventories. Accordingly theClause 3(ii) of the Order not applicable to the Company.
3) As explained to us the company has not made investments in nor provided anyguarantee or security or granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company.
4) In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofloans granted investments made and guarantees given as applicable.
5) According to the information and explanation given to us the Company has notaccepted any deposits from the public. Hence directives issued by the Reserve Bank ofIndia and the provisions of section 73 to 76 or any other relevant sections of theCompanies Act and rules framed thereunder are not applicable.
6) According to the information and explanation given to us the Central Government hasnot prescribed the maintenance of cost records under sub-section (1) of the Section 148 ofthe Act for any of the products or services of the company.
7) (a) The Company has generally been regular in depositing undisputed statutory duesincluding
Provident Fund Income Tax Goods and Service Tax and other material statutory duesapplicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund Income TaxGoods and Service Tax and other material statutory dues in arrears as at March 31 2022for a period of more than six months from the date they became payable.
8) According to the information and explanation given to us the company does not haveany such transactions that are not recorded in the books of accounts that have beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 (43 of 1961).
9) According to the information and explanation given to us the Company has notavailed any loans
or borrowings from financial institution bank or Government. Hence the clauseregarding default in repayment of loans and borrowings is not applicable.
10) The Company has not raised money by way of initial public offer or further publicoffer (including debt instrument) or term loans during the year.
11) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order is not applicable to the Company
13) In our opinion and according to the information and explanations given to us theCompany is compliance with Section 177 and 188 of the Act where applicable for alltransactions with related parties and the details of the related party transactions havebeen disclosed in the financial statements as required by the applicable Indian AccountingStandard.
14) a) The company has an internal audit system commensurate with the size and natureof its business.
b) The reports of the Internal Auditors for the period under audit were consideredduring the audit.
15) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order is not applicable to the Company and hence not commented upon.
16) a). The Company is registered under Section 45-IA of the Reserve Bank of India Act1934.
b) . The Company is registered as Non-Deposit Accepting Non-Banking Financial Companyfrom the Reserve Bank of India as per the Reserve Bank of India Act 1934
c) . The company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India therefore the provisions of clause 3 (xvi)(c) of theOrder is not applicable to the Company.
17) Based upon the audit procedures performed and the information and explanationsgiven by the management The company has incurred a cash loss of Rs 9.17 and 36.17 (Rs. inlakhs) in the financial year and in the immediately preceding financial year respectively.
18) No such resignation of statutory auditor took place during the previous year.Therefore the provisions of clause 3 (xviii) of the Order is not applicable to theCompany
19) On the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements our auditors knowledge of the Board of Directors andmanagement plans we are of the opinion that no material uncertainty exists as on the dateof the audit report that company is capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date.
20) (a) Based upon the audit procedures performed and the information and explanationsgiven by the management in respect of other than ongoing projects the Company has nottransferred unspent amount to a Fund specified in Schedule VII to the Companies Act withina period of six months of the expiry of the financial year in compliance with secondproviso to sub-scction (5) of section
135 of the said Act.
(b) No such remaining unspent amount under sub-section (5) of section 135 of theCompanies Act pursuant to any ongoing project has been transferred to special account incompliance with the provision of sub-section (6) of section 135 of the said Act.
21) In our opinion consolidated financial statement is not applicable for the company.Therefore the provisions of clause 3 (xxi) of the Order is not applicable to the Company.
"Annexure B" to the Independent Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Si Capital& Financial Services Limited ("the Company") as of March 31 2022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued 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 the companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys 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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures 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 control based on the assessed risk. The proceduresselected depend on the auditors judgement including the assessment of the risks ofmaterial 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 Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompanys 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 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 controls 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 maintained in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.