To
The Members of
Sera Investments & Finance India Limited
(Formerly known as Kapashi Commercial Limited)
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of Sera Investments &
Finance India Limited ("the Company") which comprise the Balance Sheet as at
March 31,2023 and the Statement of Profit and Loss (including the Other Comprehensive
Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year
then ended, and notes to the financial statements, including a summary of significant
accounting policies and other explanatory information(hereinafter referred to as
the"financial statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the
Companies Act, 2013(the"Act") in the manner so required and give a true and fair
view in conformity with the Indian Accounting Standards ("Ind AS") prescribed
under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended, and other accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31,2023, the loss and total comprehensive
income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on
Auditing ("SA"s) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditors
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics issued by the Institute
of Chartered Accountants of India ("ICAI") together with the ethical
requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the Rules made there under, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the ICAIs Code of
Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to
provide a basis for our audit opinion on the financial statement.
Other information
The Companys Management and Board of Directors are responsible for the other
information.The other information comprises the information included in the Management
Discussion and Analysis, Boards Report including Annexures to Boards Report, Business
Responsibility Report, Corporate Governance and Shareholders Information, but does not
include the financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained during the
course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that if there is a material
misstatement of this other information, we are required to communicate the matter to those
charged with governance and take necessary actions, as applicable under the relevant laws
and regulations.
Managements and Board of Directors Responsibilities for the Financial Statements
The Companys Management and Board of Directors are responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 with respect to the preparation of these
financial statements that give a true and fair view of the state of affairs, profit/loss
and other comprehensive income, changes in equity and cash flows of the Company in
accordance with the Ind AS and other accounting principles generally accepted in
India.This responsibility also includes maintenanceof adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management and Board of Directors is responsible
for assessing the Companys ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Companys financial reporting
process.
Auditors Responsibility for Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in
order to design 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 has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the Management and Board of
Directors.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 ("the Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give
in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the
Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, based on our audit we report that:
(a) We have sought and obtained all the information and explanations which to the best
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 by the
Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive
income), the Statement of Changes in Equity and the Cash Flows dealt with by this report
are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting
Standards specified under Section 133 of the Act.
(e) On the basis of written representations received from the directors of the Company
as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2023 from being appointed as a director in terms of Section
164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to
financial statements of the Company and the operating effectiveness of such controls,
refer to our separate Report in "Annexure B". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal financial
controls over financial reporting
(B) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies(Audit and Auditors) Rules, 2014, as amended in
our opinion and 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 financial
position in its financial statements.
ii. The Company did not have any long term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
iv. (1) The management has represented that, to the best of its knowledge and belief,
no funds have been advanced or loaned
or invested (either from borrowed funds or share premium or any other sources or kind
of funds) by the Company to or in any other persons or entities, including foreign
entities ("Intermediaries"), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall:
• directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company
• provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries.
(2) The management has represented, that, to the best of its knowledge and belief, no
funds have been received by the Company from any persons or entities, including foreign
entities ("Funding Parties"), with the understanding, whether recorded in
writing or otherwise, that the Company shall:
• directly or indirectly, lend or invest in other persons or entities identified
in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the
Funding Party or
• provide any guarantee, security or the like from or on behalf of the Ultimate
Beneficiaries; and
(3) Based on such audit procedures as considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under subclause (d) (i) and (d) (ii) contain any material mis-statement.
v. The company has not declared or paid any dividend during the year, hence there is no
noncompliance with Section 123 of the Act.
(C) With respect to the matter to be included in the Auditors Report under Section
197(16) of the Act
In our opinion and according to the information and explanations given to us, the
remuneration paid by the Company to its directors during the current year is in accordance
with the provisions of Section 197 of the Act. The remuneration paid to any director is
not in excess of the limit laid down under Section 197 of the Act. The Ministry of
Corporate Affairs has not prescribed other details under Section 197(16) of the Act which
are required to be commented upon by us.
ANNEXUREATO THE INDEPENDENT AUDITORS REPORT
With reference to the"Annexure A" referred to in the Independent Auditors
Report to the members of the Company on the Ind AS Financial statements for the year ended
31st March, 2023, we report the following:
(Referred to in paragraph 1 under the heading of "Report on Other Legal and
Regulatory Requirements" of our report of even date.)
i. a. (i) The Company has maintained proper records showing full particulars, including
quantitative details and situation of Property,
Plant and Equipment.
(ii) According to the information and explanation given to us, the company does not has
any intangible assets.
b. According to the information and explanations given to us, company does not have any
Property, Plant and Equipment. Accordingly, reporting under clause (i)(b) is not
applicable to the Company.
c. According to the information and explanations given to us, company does not have any
Property, Plant and Equipment. Accordingly, reporting under clause (i)(c) is not
applicable to the Company.
d. The Company has not revalued any of its property, plant and equipment (including
Right of Use assets) and intangible assets during the year.
e. In our opinion according to the information and explanations given to us, there are
no proceedings initiated or are pending against the company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made
thereunder.
ii. a. The Companys business does not involve inventories and, accordingly, the
requirements under clause (ii) (a) of the Order are not
applicable to the Company and hence not commented upon.
b. According to the information and explanations given to us, at any point of time of
the year, the Company has not been sanctioned any working capital facility from banks or
financial institutions on the basis of security of current assets, and hence reporting
under clause (ii)(b) of the Order is not applicable.
iii. (a) Since the Companys principal business is to give loans. Accordingly, the
provisions of clause iii of the order is not applicable to it.
(b) As per the information and explanation made to us the Company has not made any
investments in, provided any guarantee or security or granted any loans or advances in the
nature of loans and guarantees during the year that are prejudicial to the companys
interest and hence, reporting under clause (iii)(b) of the order is not applicable.
(c) As per the information and explanation made to us, the Company has not granted any
loans or advances in the nature of loans during the year and hence reporting under clause
3(iii)(c) of the order is not applicable
(d) As per the information and explanation made to us, the Company has not granted any
loans or advances in the nature of loans during the year, hence reporting under clause
3(iii)(d) of the order is not applicable.
(e) The Company is a NBFC and hence reporting under clause (iii)(e) of the order is not
applicable.
(f) According to the information and explanations given to us and on the basis of our
examination of the records, the Company has not granted any loans or advances in the
nature of loans either repayable on demand or without specifying any terms or period of
repayment during the year. Hence, reporting under clause (iii)(f) is not applicable.
iv. In our opinion and according to the information and explanations given to us,
during the current financial year, the company has not given/madeany loan, investment,
guarantee and security and accordingly provisions of section 185 and 186 of the Act are
not applicable.
v. In our opinion and according to the information and explanations given to us, the
Company being a non-banking financial company registered with the Reserve Bank of India,
the provisions of sections 73 to 76 or any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits
accepted are not applicable to the Company. We are informed by the Management that no
order has been passed by the Company Law Board, National Company Law Tribunal or Reserve
Bank of India or any Court or any other Tribunal on the Company in respect of the
aforesaid deposits.
vi. The Company is not required to maintain cost records under sub-section (1) of
section 148 of Companies Act, 2013. Therefore, the provisions of clause vi of the Order
are not applicable to the Company.
vii. a. In our opinion and according to the information and explanations given to us,
the company is generally regular in depositing
undisputed statutory dues of provident fund, employee state insurance, tax deducted at
source and GST. We were informed that operation of the Company did not give rise to duty
of customs, duty of excise, value added tax, cess.
b. According to the information and explanation given to us, there is no due on account
of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax
which have not been deposited on account of dispute.
viii. According to the information and explanations given to us, there were no
transactions relating to previously unrecorded income that were surrendered or disclosed
as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the
year.
ix. a. As per the information and explanation given to us, the Company has not
defaulted in repayment of loans or borrowing to banks
and financial institutions during the year
b. The Company has not been declared wilful defaulter by any bank or financial
institution or government or any government authority.
c. In our opinion and according to the information and explanations given to us, the
company has utilized the money obtained byway of term loans during the year for the
purpose for which they were obtained.
d. According to the information and explanations given to us and on an overall
examination of the balance sheet of the company, we report that no funds raised on short
term basis have been used for long term investment by the company.
e. According to the information and explanations given to us and on an overall
examination of the balance sheet of the company, we report that the company has not taken
funds from any entity or person on account of or to meet the obligations of its
subsidiaries, associates or joint ventures.
f. In our opinion and according to the information and explanations given to us, during
the year the company has not raised loans on the pledge of securities held in its
subsidiaries, joint ventures or associate companies.
x. a. The Company has not raised monies by way of initial public offer or further
public offer (including debt instruments) or term loans.
Therefore, reporting under paragraph 3(x) of the Order is not applicable.
b. According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year.
xi. a. To the best of our knowledge and according to the information and explanations
given to us, no material fraud by the Company and
no material fraud on the Company has been noticed or reported during the year.
b. To the best of our knowledge and according to the information and explanations given
to us, no report under sub-section (12) of section 143 of the Companies Act has been filed
in Form ADT-4as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014
with the Central Government, during the year and upto the date of this report.
c. To the best of our knowledge and according to the information and explanations given
to us, Section 177(9) of Companies Act, 2013 is not applicable to company and as per
representation received from management there are no whistleblower complaints received
during the year. Therefore, reporting under paragraph 3(xi)(c) of the Order is not
applicable.
xii. According to the information and explanations given to us, the Company is not a
IMid hi Company. Therefore, reporting under paragraph (xii) of the Order is not
applicable.
xiii. According to the information and explanations given to us, based on our
examination of the records of the Company and approval has been obtained from audit
committee and Board of Directors, transactions with the related parties are in compliance
with sections 177 and 188 of the Act where applicable and details of such transactions
have been disclosed in the financial statements as required by the applicable Indian
accounting standards.
xiv. a. In our opinion the Company has an adequate internal audit system commensurate
with the size and the nature of its business.
b. According to the information and explanations given to us, Company has not appointed
internal auditors. Therefore, clause xiv of the order is not applicable.
xv. According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of
the Order is not applicable.
xvi. According to the information and explanations given to us, the Company is
registered under section 45-IA of the Reserve Bank of India Act, 1934.
xvii. The Company has incurred cash losses during the financial year covered by our
audit and the immediately preceding financial year amounting to Rs. 107.22 Crore and Rs.
32.73 lakhs respectively.
xviii. There has been no resignation of the statutory auditors of the Company during
the year.
xix. According to the information and explanations given to us and on the basis of the
financial ratios, ageing and expected dates of realization of financial assets and payment
of financial liabilities, other information accompanying the financial statements and our
knowledge of the Board of Directors and Management plans and based on our examination of
the evidence supporting the assumptions, nothing has come to our attention, which causes
us to believe that any material uncertainty exists as on the date of the audit report
indicating that Company is not capable of meeting its liabilities existing at the date of
balance sheet as and when they fall due within a period of one year from the balance sheet
date. We, however, state that this is not an assurance as to the future viability of the
Company. We further state that our reporting is based on the facts up to the date of the
audit report and we neither give any guarantee nor any assurance that all liabilities
falling due within a period of one year from the balance sheet date, will get discharged
by the Company as and when they fall due.
xx. According to the information and explanations given to us, the Company is not
required to spend forCSRas per 135(5) of companies Act, 2013 Hence, reporting under clause
3(xx) of the Order is not applicable.
Eni* Achit N Qhah 3Ifn
ANNEXURE BTO INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(A)(f)] under the heading of "Report on Other Legal and
Regulatory Requirements" of our report of even date.)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act") Opinion
We have audited the Internal Financial Controls over financial reporting of Sera
Investments & Finance India Limited ("the Company") as of March 31,2023
in conjunction with our audit of the Ind AS financial statements of the Company for the
year ended on that date.
In our opinion, to the best of our information and according to the explanations given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31,2023, based on the internal control
over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the Institute of Chartered Accountants of
India.
Managements and Board of Directors Responsibility for Internal Financial Controls
The Companys management and Board of Directors are responsible for establishing and
maintaining Internal Financial Controls based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India. These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to companys policies, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the "Guidance Note") and the Standards on Auditing prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal
financial controls, both applicable to an audit of Internal Financial Controls and, both
issued by the Institute of Chartered Accountants of India. Those Standards and the
Guidance Note require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether adequate internal financial controls
over financial reporting was established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Ourauditof internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks 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 to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys 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 financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
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