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Visesh Infotecnics Ltd.

BSE: 532411 Sector: IT
NSE: VISESHINFO ISIN Code: INE861A01058
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VOLUME 10023452
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OPEN 0.83
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VOLUME 10023452
52-Week high 1.37
52-Week low 0.19
P/E
Mkt Cap.(Rs cr) 317
Buy Price 0.83
Buy Qty 968399.00
Sell Price 0.84
Sell Qty 77605.00

Visesh Infotecnics Ltd. (VISESHINFO) - Auditors Report

Company auditors report

June 30 2021

To

The Members of MPS Infotecnics Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of MPSInfotecnics Limited ("MPS" or "the Company") which comprise theBalance Sheet as at 31st March 2021 the Statement of Profit & Loss (includingOther Comprehensive Income) the Statement of Changes in Equity and the Cash FlowStatement for the year then ended and a summary of the Significant Accounting Policiesand other explanatory information (hereinafter referred to as Standalone FinancialStatements).

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matters described in the "Basis forQualified Opinion" section below the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ("the Act") in themanner so required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2021 the Loss and total comprehensive income changes in equity and its cashflows for the year ended on that date.

Basis for Qualified Opinion

Attention is invited to the following key matter observations in the said financialstatements:

I. In case of the following items shown as intangible Assets / inventory no provisionfor impairment of assets has been made in accordance with accounting policies E and F(Schedule to the accounts) and applying Ind AS 36

(a) Intangible Assets under development (Capital work-in-progress) - Rs. 56.44 Crores(Software development)

(b) Software rights - Rs. 19.49 crores (c) Opening Stock (Source Codes) - Rs. 62.21Crores

In the absence of valuation reports of above assets the extent of impairment and itsimpact on profit and loss account reserves and surplus is not ascertained.

II. Investment in subsidiaries Rs. 61.75 Crores - There are no operations in theseoverseas subsidiaries and no audit of accounts has been done and no updated informationhas been received. No provision has been made for the shortfall in value of the investmentin accordance with accounting policies G and I (Schedule to the accounts) applying Ind AS36.

III. The Company has shown in the balance sheet bank balances in Banco Efisa (LisbonPortugal) amounting to Rs. 347892163 (USD 8883210.75) which the bank has adjusted andthe matter is in the court of law. Consequently the bank balances shown in balance sheetare overstated by Rs. 347892163/- The above bank balance relates to FY 2008-09 which istreated as a current asset. No provision has been made for the possible loss on account ofabove.

IV. Other non-current assets include other loans and advances of Rs. 223.23 Cr. whichare considered to be good for recovery. However as the terms and conditions regardingthese loans have not been provided to us we are unable to ascertain and comment on theextent of realisability of this asset.

V. The Company had increased its Authorized Capital from Rs. 52.45 Crores to Rs. 377.50crores during the period from FY-2010-11 to FY 2012-13 ROC fees of Rs. 6.34 crorestowards the above stands payable under the head "Other Current Liabilities"

MPS has filed Special Leave Petition in the Supreme Court in April 2019 and the same ispending adjudication by the Hon’ble Apex Court.

VI. Income Tax for the Assessment year 2013-14 amounting to Rs. 20.80 lacs and interestthereon is still payable although provided for.

VII. Company has not provided expected credit loss on outstanding debtors as requiredunder Ind AS 109. We are not able to provide the financial impact due to non provision ofexpected credit loss.

Our opinion is modified in respect of above matters.

We also draw your attention to Note. No. 28 to the standalone financial statement whichdescribes the uncertainties and the impact of COVID 19 pandemic on the Company’soperations and results as assessed by the management. Our opinion is not modified inrespect of this matter..

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs).

Our responsibilities under those Standards are further described in the Auditor’sResponsibilities for the Audit of 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 made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI’s Code ofEthics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified 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.

In addition to the matters described in the Basis for Qualified Opinion sectionabove we have determined the matters described below to be the key audit matters to becommunicated in our report.

1. Evaluation of uncertain tax positions:

The Company has material uncertain direct and indirect tax positions including mattersunder dispute which involves significant judgment to determine the possible outcome ofthese disputes. Refer Note 22 under the head "Contingent Liabilities" inthe Standalone Financial Statements.

Auditor’s Response.

We obtained from the Company’s management details of the status as of 31 March2021 concerning tax assessments and demands for current as well as past years. We assessedthe management’s underlying assumptions in estimating the tax provision and thepossible outcome of the disputes to evaluate whether any change was required tomanagement’s position on these uncertainties.

2. Company’s business model

MPS’s existing business model has been impacted by the uncertainty due to its highdependence on Telecommunication segment which has shown a significant decline due to verytough competition from online operators and other service providers such as VodafoneIdea Jio and others who have been providing similar services. This has resulted in lossesleading to difficulty in bank financing and increasing dependence on loans from others.The Company hopes to recover and recover losses and make profits as soon as the pandemicis over and the economic activities resumes globally.

(a) The company has considered sundry debtors of Rs.1188.08 Lacs due for more than sixmonths as good. However in the opinion of auditors there should be a regular process ofidentification and making provision for bad and doubtful debts. Such a process has notbeen followed. We therefore are unable to comment on the extent of un-provided bad anddoubtful debts and their impact on loss and reserves.

(b) There is a delay in payment of Annual Listing Fees to the stock exchanges where theshares of the Company are listed. In term of circular bearing no. LIST/COMP/OPS/ 16/2019-2020 dated June 11 2019 and Notice bearing no. 20190903-37 dated September 3 2019;action(s) is initiated against the company.

(c) SEBI had investigated the GDR issue of the Company and SEBI in exercise of thepowers conferred upon me under Sections 11(1) 11(4) and 11B of the SEBI Act 1992 readwith Section 19 of the SEBI Act 1992 interalia had directed the company to continue topursue the measures to bring back the outstanding amount of $ 8.90 million into its bankaccount in India and then the Directors and present Directors to ensure compliance of thedirections issued by SEBI by furnish a certificate from a peer reviewed CharteredAccountant of ICAI certifying the compliance of the said directions.

The SEBI has further restrained the company from accessing the securities market andfurther prohibited the company from buying selling or dealing in securities directly orindirectly in any manner what so ever or being associated with the securities market inany manner whatsoever till compliance with the above directions and thereafter for anadditional period of years from the date of bringing back the money.

The orders passed by SEBI has also restrained the then directors of the company fromaccessing the securities market and further prohibited from buying selling or otherwisedealing in securities including units of mutual funds directly or indirectly or beingassociated with the securities market in any manner whatsoever for a period of 5 yearsfrom the date of this order and during the period of restraint the existing holding ofsecurities including units of mutual funds of these Directors shall also remain frozen.

Further SEBI vide its order dated 27.11.2020 has imposed a penalty of Rs. 10.00 croreson the Company. The Company is in the process of filling an appeal before the Hon’bleSecurities Appellate Tribunal (SAT).

The Company is also in receipt of recovery certificate from SEBI and consequent thereonthe SEBI has freezed the bank accounts of the company.

(d) Default in payment of working capital dues

The cash-credit account of the company with Allahabad Bank was declared as NPA by theBank; against the one-time settlement with the Bank for Rs. 2.81 cr the overdue arrearsas on 31 Mar 2021 is Rs. 3.07 Cr. Provision for interest at the contracted rates have beenmade in the books of accounts though have not been paid.

(e) The Company has defaulted in payment to loan from Phoenix ARC Pvt. Ltd. (Bookbalance as on 31.03.2021 is Rs. 2.81 Crores).

(f) The Company has not disclosed information relating to amount payable to micro smallenterprises and small enterprises as required by Schedule III of the Companies Act 2013.

(g) Balances of trade receivables trade payables other loans and advances advance tosuppliers bank balances and liabilities are subject to confirmation.

Information Other than the Standalone Financial Statements and Auditor’s ReportThereon

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 Report Board’s Report including Annexures to Board’sReport Business Responsibility Report Corporate Governance and Shareholder’sInformation but does not include the standalone financial statements and ourauditor’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 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 totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for

? safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities

? selection and application of appropriate accounting policies ? making judgments andestimates that are reasonable and prudent

? and design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement 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 asapplicable 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 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 assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken 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 standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

? Obtain an understanding of internal financial controls relevant to the audit in orderto 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 reasonableness ofaccounting 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 theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

? Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 financial statements may be influenced.

We consider quantitative materiality and qualitative factors in ;

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

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 matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure 1" a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge 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 relevant 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 Rule 7 of the Companies (Accounts)Rules 2014.

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 please refer toour separate Report in "Annexure 2".

Our report expresses an unmodified opinion on the adequacy and operating effectivenessof the Company’s internal financial controls over financial 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 :

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

ii. There are no long term contracts including derivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Nemani Garg Agarwal & Co.

Chartered Accountants

Firm Reg. No.010192N

Sd/-

SK Nemani

Partner

Membership no. 037222

Place : New Delhi

Date : 30th June 2021

Annexure 1

(Referred to in paragraph 1 under "Report on other Legal and Regulatoryrequirements" section in our Report of even date)

I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of fixed asset has been physically verifiedby the management during the year and no material discrepancies between the books recordsand physical fixed assets have been noticed.

(c) The company has no immovable properties.

II) The inventories excluding material in transit have been physically verified duringthe year by the management. In our opinion the frequency of such verification isreasonable.

III) During the year under review the Company has not granted any loans secured orunsecured to the companies firms Limited Liability Partnerships or other partiescovered in the Register maintained under Section 189 of the Act. Accordingly theprovisions of clause 3 (iii) (a) to (f) of the order are not applicable to the company.

IV) In 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 Act 2013in respect of loans investments guarantees and security.

V) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposits) Rules 2015 withregard to the deposits accepted from the public are not applicable.

VI) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Companies Act 2013. Therefore the provisions of this clause do notapply.

VII) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees’ StateInsurance Income Tax Sales Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at 31st March 2021 for a period of more thansix months from the date on when they become payable except for the following:

According to the information and explanations given to us there are Income Tax duesaggregating to Rs. 9.98 cr. which has not been deposited as at 31st March 2021as under:

Income Tax Demand raised by the Department FY 2005-06 Rs. 0.12 Cr Appeal filed against said Assessment Order with CIT (Appeal)-III Bangalore vide Appeal No. 193/08- 09 Dated 29.01.2009 which is still pending.
Income Tax Demand raised by the Department FY 2007-08 Rs. 4.38 Cr Order has been passed in favour of the company However the department has filed an appeal before the Hon’ble Delhi High Court
Income Tax Demand raised by the Department FY 2008-09 Rs. 2.75 Cr. Order has been passed in favour of the company however the department has filed an appeal before the Hon’ble Delhi High Court
Income Tax Demand raised by the Department FY 2009-10 Rs. 2.73 Cr. Order has been passed in favour of the company however the department has filed an appeal before the Hon’ble Delhi High Court

VIII) (a) In our opinion and according to the information and explanations given to usthe company has defaulted in repayment of dues to Allahabad Bank and Pheonix ARC Pvt. Ltd.the details of which are as under:

Nature of borrowing Name of lender Amt. not paid on due date Whether Principal or interest
Cash Credit Allahabad Bank Rs. 307.89 Lacs Principal & Interest
Term Loans Phoenix ARC Pvt. Ltd. Rs. 281.36 Lacs Principal & Interest

IX) Based upon the audit procedures performed and the information and explanation givenby the management the company has not raised moneys during the year by way of initialpublic offer or further public offer including debt instruments and term loans.Accordingly the provisions of clause 3 (ix) of the Order are not applicable to thecompany and hence not commented upon.

X) Based upon the audit procedures performed and the information and explanation givenby 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.

XI) Based upon the audit procedures performed and the information and explanation givenby the management no managerial remuneration has been paid or provided; accordingly theprovisions of section 197 read with Schedule V to the Companies Act are not applicable.

XII) The Company is not a Nidhi Company. Therefore the provisions of clause 4 (xii) ofthe Order are not applicable to the Company

XIII) In our opinion transactions with related parties are in compliance with section177 and 188 of the Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standard.

XIV) Based upon the audit procedures performed and the information and explanationgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provision of clause 3 (xiv) of the Order are not applicable tothe company.

XV) Based upon the audit procedures performed and the information and explanation givenby the management the company has not entered into any non-cash transactions withdirectors or persons connected with them. Accordingly the provision of clause 3 (xv) ofthe Order are not applicable to the company and hence not commented upon.

XVI) In our opinion the company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934 and accordingly provisions of clause 3 (xvi) ofthe Order are not applicable to the company and hence not commented upon.

For Nemani Garg Agarwal & Co.

Chartered Accountants

Firm Reg. No.010192N

Sd/-

SK Nemani

Partner

Membership no. 037222

Place: New Delhi

Date: 30th June 2021

Annexure 2

(Referred to in paragraph 1(f) under "Report on Other Legal and RegulatoryRequirements" section of our report of even date)

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 MPSInfotecnics Ltd. ("the Company") as of 31 March 2021 in conjunction with ouraudit of the stand-alone financial statements of the Company for the year ended on thatdate.

Management’s Responsibility for Internal Financial Controls

The Company’s Board of Directors 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 including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit 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.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 auditor’s 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 controlssystem over 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 financial reporting includes those policiesand 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2021 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.

For Nemani Garg Agarwal & Co.

Chartered Accountants

Firm Reg. No. 010192N

Sd/-

SK Nemani

Partner

Membership no. 037222

Place: New Delhi

Date: 30/06/2021

*The Company has not disclosed information relating to outstanding balances of microsmall enterprises and small enterprises as required by Schedule III of the Companies Act2013.

Annexure 2

(Referred to in paragraph 1(f) under "Report on Other Legal and RegulatoryRequirements" section of our report of even date)

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 MPSInfotecnics Ltd. ("the Company") as of 31 March 2021 in conjunction with ouraudit of the stand-alone financial statements of the Company for the year ended on thatdate.

Management’s Responsibility for Internal Financial Controls

The Company’s Board of Directors 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 including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit 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.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 auditor’s 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 controlssystem over 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 financial reporting includes those policiesand 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2021 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.

For Nemani Garg Agarwal & Co.

Chartered Accountants

Firm Reg. No. 010192N

SD/-

SK Nemani

Partner

Membership no. 037222

Place: New Delhi

Date: 30/06/2021

MPS Infotecnics Limited

CIN: L30007DL1989PLC31190

703 Arunachal Building 19 Barakhamba Road Connaught Place New Delhi-110001

.