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SIS Ltd.

BSE: 540673 Sector: Others
NSE: SIS ISIN Code: INE285J01028
BSE 00:00 | 19 Oct 486.10 -9.90
(-2.00%)
OPEN

494.60

HIGH

497.40

LOW

478.40

NSE 00:00 | 19 Oct 486.50 -9.35
(-1.89%)
OPEN

498.85

HIGH

498.85

LOW

477.95

OPEN 494.60
PREVIOUS CLOSE 496.00
VOLUME 26283
52-Week high 534.85
52-Week low 348.00
P/E 67.23
Mkt Cap.(Rs cr) 7,139
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 494.60
CLOSE 496.00
VOLUME 26283
52-Week high 534.85
52-Week low 348.00
P/E 67.23
Mkt Cap.(Rs cr) 7,139
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SIS Ltd. (SIS) - Auditors Report

Company auditors report

BASIS FOR OPINION

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

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 the matters described below to bethe key audit matters to be communicated in our report.

To the Members of

SIS Limited (formerly known as 'Security and Intelligence Services (India) Limited')

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the accompanying standalone financial statements of SIS Limited(formerly known as 'Security and Intelligence Services (India) Limited') ("theCompany") which comprise the Balance Sheet as at March 31 2021 Statement of Profitand Loss (including Other Comprehensive Income) Statement of Changes in Equity andStatement of Cash Flows for the year ended on that date and notes to the financialstatements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the standalone financialstatements").

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 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 its profit totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Key Audit Matter Accuracy of recognition measurement presentation & disclosures of revenue Auditing standards require us to make a rebuttable presumption that the fraud risk from revenue is a significant risk. A significant proportion of the Company's revenue is derived from contracts with Auditor's Response How our audit addressed the Key audit matter Our audit is based on the evaluation of internal control environment and on the other analytical procedures including system-based analysis of certain balance sheet and statement of profit and loss items of the Company.
customer and consist of rendering of services. Revenue is measured at the fair value of consideration received or receivable. Revenue is recognized when the control is transferred to the customer and when the Company has completed its performance obligations under the contracts. Revenue is recognized in a manner that depicts the transfer of goods and services to customers at an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. We have also tested the operating effectiveness of the key controls over the contract process including contract monitoring billings and approvals and IT controls over certain systems used to generate the information. The basis for the evaluation of internal control has been Company's internal control framework for financial reporting. The testing of controls and amounts has been performed on a sample basis.
Further the contractual terms also underpin the measurement and recognition of revenue and profit. We have completed the following audit procedures:
The Company is therefore required to make operational and financial assumptions. Judgements include: • Obtained a sample of contracts to confirm that revenue had been appropriately recognized.
• Interpretation of complex contract terms; • Allocation of revenue to performance conditions; and • Combining of obligations where the services are related. • Tested a sample of accrued unbilled income balance with supporting documentation which includes attendance records customer acceptance reviewing customer correspondence where necessary and ensuring cut-off had been appropriately applied.
The nature of the Services provided by the Company also gives rise to significant amount of variable work which is recorded as accrued unbilled income with corresponding profit recognition. Accrued unbilled income as on March 31 2021 aggregated to INR 1951.52 million. Based on our audit no significant observations have been noted which have resulted in reporting to the audit committee. Our overall conclusion is that there are in all material respects proper processes in place to recognize the correct billed and unbilled revenue in the financial statement.
Key Audit Matter Uncertain tax positions and deferred tax assets Auditor's Response How our audit addressed the Key audit matter
The Company operates in a complex tax environment and is subject to a range of tax risks during the normal course of business. Where the amount of tax payable is uncertain the Company establishes provisions based on management's judgment of the probable amount of the future liability. The company has material certain tax positions including matters under disputes which involves significant judgement to determine the possible outcome of these disputes. Obtained details of completed tax assessments and demands during the year ended March 31 2021 from management. We have checked management's underlying assumptions in estimating the tax provision and the possible outcome of any disputes. Additionally we considered the effect of additional information in respect of uncertain tax positions as at April 12020 to evaluate whether any change was required to management's position on these uncertainties.
In addition the Company has recognized INR 809.77 million of deferred tax assets at March 312021. The recognition of deferred tax assets involves judgment by management regarding the likelihood of the realization of these assets. The expectation that these assets will be realized is dependent on a number of factors including whether there will be sufficient taxable profits in future periods to support utilization of these assets. In respect of creation of deferred tax assets we have evaluated management's assessment of certain tax benefits under the Income Tax Act 1961 which constitute a significant part of deferred tax assets. In respect of the recoverability of deferred tax assets we considered completed tax assessments and also evaluated management's assessment of how these assets will be realized and whether there will be sufficient taxable profits in future periods to support their recognition. We evaluated the Company's future profitability forecast and the process by which they were prepared. Based on our procedures future profitability forecasts supported the recoverability of the deferred tax assets recognized.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's 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 during the course of our 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.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profits totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand 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 standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting 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 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of 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 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.

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 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 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 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 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 the 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 the Ind ASspecified under section 133 of the Act read with relevant rules issued thereunder.

e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 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 and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

• The Company has disclosed the impact of pending litigations on its financialposition in the notes to the financial statements;

• The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses;

• There were no amount to be transferred by the Company to the Investor Educationand Protection Fund.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Saxena & Saxena

Chartered Accountants (Firm's Registration. No. 006103N)

CA Dilip Kumar

(Partner)

Membership No. 082118 UDIN: 21082118AAAALK8729

Place: New Delhi

Date: April 28 2021

Annexure "A" to the Independent Auditors' Report

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of SIS Limited (formerly known as'Security and Intelligence Services (India) Limited') as of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

OPINION

We have audited the internal financial controls over financial reporting of SIS Limited(formerly known as 'Security and Intelligence Services (India) Limited') ("theCompany") as of March 31 2021 in conjunction with our audit of the Standalone Ind ASfinancial 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 givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the 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 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 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 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 accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made 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.

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.

For Saxena & Saxena

Chartered Accountants (Firm's Registration. No. 006103N)

CA Dilip Kumar

(Partner)

Membership No. 082118 UDIN: 21082118AAAALK8729

Place: New Delhi

Date: April 28 2021

Annexure 'B' to the Independent Auditor's Report

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of SIS Limited (formerly known as 'Security andintelligence Services (India) Limited') of even date)

1. a) The Company has maintained proper records

showing full particulars including quantitative details and situation of fixed assets.

b) The fixed assets have been physically verified by the management at reasonableintervals. As informed the discrepancies noticed on physical verification of fixed assetsas compared to book records were not material and have been properly dealt with in thebooks of account.

c) With respect to immovable properties of land and buildings according to theinformation and explanations given to us and the records examined by us and based on theexamination of the registered sale deed / transfer deed / conveyance deed / court ordersapproving schemes of arrangements/ amalgamations provided to us we report that the titledeeds of such immovable properties are held in the name of the Company as at the balancesheet date.

2. a) As explained to us inventories have been physically verified by the managementat regular intervals during the year.

b) The discrepancies noticed on physical verification of inventory as compared to bookrecords were not material and have been properly dealt with in the books of account.

3. a) The Company has given unsecured loans to companies listed in the Registermaintained under Section 189 of the Companies Act 2013.

b) In our opinion the rate of interest and other terms and conditions of the grant ofsuch loans are not prima facie prejudicial to the Company's interest.

c) I n our opinion and according to the information and explanations given to us theschedule of repayment of principal and payment of interest has been stipulated andrepayments or receipts of principal amounts and interest have been regular as perstipulations.

d) There are no overdue amounts in respect of such loans.

4. I n our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities where applicable.

5. The Company has not accepted any deposits from the public during the year.Accordingly paragraph 3(v) of the order is not applicable to the Company.

6. The Central Government of India has not prescribed the maintenance of cost recordsunder section 148(1) of the Act for any of the services rendered by the Company.Accordingly paragraph 3(vi) of the order is not applicable to the Company.

7. a) Statutory dues including provident fund employees' state insurance income taxgoods and service tax professional tax custom duty cess and other statutory duesapplicable to the Company have generally been regularly deposited with the appropriateauthorities.

b) There were no outstanding statutory dues as at March 31 2021 for a period of morethan six months from the date they became payable.

c) Details of dues of Income-tax and Service Tax which have not been deposited as onMarch 31 2021 on account of disputes are given below:

Name of statute Nature of dues Amount (in INR million) Period to which the amount relates Forum where dispute is pending
Finance Act 1994 Service tax 0.18 2011-2012 Appellate Authority - upto Commissioners level (at Madurai)
Finance Act 1994 Service tax 1.55 2011-2012 Appellate Authority - upto Comm. appeal level (Commissioner Appeal allowed however sent back to commissioner)
Finance Act 1994 Service tax 0.19 2014-2016 Appelate Authority- upto commissioner level
Finance Act 1994 Service tax 67.89 2014-17 Appelate Authority- upto Pr. Commissioner Livel
Finance Act 1994 Service tax 32.49 2015-16 Appelate Authority- upto Pr. Commissioner Livel

8. I n our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to financial institutions banksGovernment or debenture holders.

9. a) The Company has raised term loans during the year and the same have been appliedfor the purposes for which they were raised.

b) During the current year the company has not raised moneys by way of initial publicoffer or further public offer.

10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

11. In our opinion and according to the information and explanation given to us and onthe basis of our examination of the records of the Company the Company has paid/providedfor managerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.

12. I n our opinion and according to the information and explanations given to us theCompany is not a nidhi company and therefore paragraph 3 (xii) of the Order is notapplicable.

13. In our opinion and according to the information and explanation given to us and onthe basis of our examination of the records of the Company transactions with relatedparties are in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable and the details have been disclosed in the Standalone Ind AS financialstatements as required by the applicable Indian accounting standards.

14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and therefore paragraph(xiv) of the Order is not applicable to the Company.

15. In our opinion and according to the information and explanation given to us and onthe basis of our examination of the records of the Company the Company has not enteredinto any non-cash transactions with directors or persons connected with them during theyear and therefore paragraph 3 (xv) of the Order is not applicable.

16. The Company is not required to be registered under Section 45 IA of the ReserveBank of India (RBI) Act 1934.

For Saxena & Saxena

Chartered Accountants (Firm's Registration. No. 006103N)

CA Dilip Kumar

(Partner)

Membership No. 082118 UDIN: 21082118AAAALK8729

Place: New Delhi

Date: April 28 2021

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