Palsoft Infosystems Ltd Auditor Reports

To the Members of Palsoft Infosystems Limited Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of PALSOFT INFOSYSTEMS LIMITED ("the Company"), which comprise the Balance sheet as at March 31 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing (Sas), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditors Responsibilities for theAudit of the Standalone Ind AS 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the IndAS financial statements.

Emphasis of Matters

We draw attention to the following matter in the Notes to the financial statements: a. The company has incurred employee cost of Rs. 23,59,200 during current year (previous year Rs. 22,02,600) for the development of software, however, management is not expecting future economic benefit against such cost. The same has been written off during the year. Refer Note no. 2.17 in Notes to the Balance Sheet.

b. The Financial Statements indicate that the Company has accumulated losses of Rs. 45,998,097 and its net worth has been fully eroded, the Company has incurred a loss of Rs. 34,207 (including other comprehensive income) and cumulative net cash loss of Rs. 29,98,915 has been carried forward and the Companys current liabilities exceed by Rs.12,498,956 over its current assets as at the date of Balance Sheet. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the companys ability to continue as a going concern. However, the financial statements of the company have been prepared on going concern basis.

c. The Company has pending statutory liability of sales tax demand of Rs. 25,62,228 persisting for a long time as referred in Note no. 2.13 to Financial Statements. The liability of interest and penalty thereupon is not ascertainable.

Our Opinion is not modified in respect of these matters.

KeyAudit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying IndAS financial statements.

Key Audit Matters	How our audit addressed the key audit matter
The company has raised GST invoice for sale of Software services to related party during the year. The company is not regularly earning revenue from Software services.	As the company is not regularly earning revenue from software services, its principal business, we consider it to be a reportable Key Audit Matter.
	The management has supplied details of services rendered, scope of work and man- days devoted for development of software. Based on information supplied by management, we have tried to independently evaluate the consideration the company is entitled to receive on arms length basis. While ranking of an invoice does not ensure continuity of the business and going concern status, based upon expression of interest of the management to conti nue the operations and carry on the business and review of the invoice, details of the devotion of time by the companys personnel, their competence and on -going employment of employees on pay roll, the company displays capability of delivering the software services in future also. Please refer to the disclosure made by the company in note no 2.15.

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report 2018-19, but does not include the Ind AS financial statements and our auditors report thereon. Our opinion on the Ind AS 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 Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Standalone IndAS Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance includingother comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with[the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of 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 the 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 IndAS financial statements that give a true and fair view and are free from material misstatement,whether due to fraud or error.

In preparing the Ind AS financial statements, management is responsible for assessing the Companys ability to continueas 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. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone IndAS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 IndAS 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 Ind AS 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 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 management.

• 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 Ind AS financial statements, including the disclosures, and whether the Ind AS 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 Ind AS financial statements for the financial year ended March 31, 2019 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, 2016("the order") issued by the Central Government of India in terms of Sub-Section (11) of Section143 of the Act, we give in the Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we reportthat:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief werenecessary for the purposes of our audit.

(b) In our opinion, proper books of accounts as required by Law have been kept by the Company so far as it appears fromour examination of those books;

(c) TheBalanceSheet, the Statement of Profit and Lossincluding the Statement of other comprehensive income, the Cash Flow Statement and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid IND AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board Directors, none of the directors is disqualified as on 31st March, 2019 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 over financial reporting of the Company with reference to these Ind AS financial statements and the operating effectiveness of such controls, refer to our separate report in "Annexure B";

(g) 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, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations on its financial position in its IND AS financial statements. However, no details are made available to us regarding reasons for non-paymentof sales tax/ VAT demand of Rs. 25.62 lacs (Refer Note no. 2.13 to Balance Sheet) and sales tax demand paid under dispute for Rs. 5 lacs (Refer Note no. 2.7 to Balance Sheet).The company has not determined the liability towards interest and penalty which may occur in future.

b) The Company did not have any long- term contracts including derivative contracts for which there were any material foreseeable losses.

c) There are no amounts, which are required to be transferred, to the Investor Education and Protection Fund by the Company.

(h) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, no managerial remuneration has been paid by the Company to its directors during the year.

	FOR H.S. DARDA& CO.
	CHARTERED ACCOUNTANTS
	FRN: 000889C
	Sd/-
	RAJNEESH SINGHVI
Place:Jaipur	PARTNER
Date: May 13, 2019	M. No. 073506

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT

Annexure referred to in our Independent Auditors Report to the members of the PALSOFT INFOSYSTEMS LIMITED on the financial statements for the year ended 31st March 2019.

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

All the assets have been impaired due to obsolescence and wear and tear and accordingly, impairment loss had been accounted for in earlier years.

(b) The company has a regular system of physical verification of its fixed assets. However, as the assets have been impaired, so the physical verification of such assets is not required.

(c) The company does not have any immovable property. Thus paragraph 3(i) (c) of the Order is not applicable.

(ii) There was no inventory at the year-end. Thus, paragraph3(ii) of the Order is not applicable.

(iii) The company has not granted any loans, secured or unsecured to any companies, firms, limited liability partnership or other parties covered in register maintained under Section189 of the Companies Act, 2013 during the current financial year. In respect of advances given in earlier years to the related parties and others, necessary provisions for non-recovery of the loans and advances had been created.

(a) The terms and conditions of the grant of such loans are not prejudicial to the companys interest.

(b) There has been no recovery during the year towards principal and interest in most of the cases, except one concern, the provision whereof for Rs. 2,966,098 has been written back upon actual recovery.

(c) An amount of Rs. 11,283,413 is due from the parties covered in register maintained under Section 189 of the Companies Act, 2013.

Provision has been created in the accounts for the same amount.

(iv) In our opinion and according to the information and explanations given to us, the company has not granted any loans or given any guarantee and security covered under section 185 and 186 of the Companies Act, 2013 during the year. Thus, the clause 3(iv) of the Order is not applicable.

(v) The company has not accepted deposits from the p u b l i c w i t h i n t h e m e a n i n g o f Sections73to76oftheCompanies Act, 2013 and the rules made there under. Thus, clause (v) of the Order is not applicable.

(vi) Having regard to the nature of the Companys operation, clause (vi) of Order is not applicable relating to maintenance of cost records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company , amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, income tax and any other statutory dues have been regularly deposited during the year by the Company with the appropriate authorities except in case of Sales Tax and Surcharge on Sales Tax amounting to Rs. 25,62,228.

(b) According to theinformationand explanations given to us regarding reason for non-payment of such dues, there are no dues of income tax or sales tax orwealth tax or service tax or duty of custom or duty of excise or value added tax or cess which have not been deposited on account of anydispute except as reported in Financial Statements.Further, the company has paid Rs. 5 lacs and disclosed it as Sales Tax demand under dispute (Refer to Note no. 2.7).

No further details are made available to us and accordingly we are not able to assess the quantum of any unpaid disputed dues in this regard.

(viii) In our opinion and according to the informationandexplanationsgiventous, the company has not taken any loans or borrowings from a financial institution, bank, Government or dues to debenture holders. Thus, paragraph 3(viii) of the order is not applicable.

(ix) The company has not raised any money by way of initial public offer or further public offer during the year. Thus, clause 3(ix) of the order is not applicable to the company.

(x) According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the Company and in accordance with generally accepted auditing practices in India, we have been informed that no case of fraud has been committed by the Company or on the Company by its officers and employees during the year.

(xi) The company has not paid any managerial remuneration; accordingly this clause is not applicable.

(xii) The provisions of clause 3(xii) of the Order for Nidhi Company are not applicable to the company.

(xiii) According to the information and explanation given to us and based on examination of our records of the Company, the Company has complied with the provisions of Section 177 and 188 of the Companies, 2013 with respect to thetransactions with the related parties, wherever applicable.

Details of the transactions with the related parties have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, provisions of clause 3(xiv) of the Order are not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with the directors or persons connected with him as covered under section 192 of the CompaniesAct, 2013.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India

Act, 1934. Accordingly, provision of clause 3(xvi) of the Order is not applicable to the Company.

	FOR H.S. DARDA& CO.
	CHARTERED ACCOUNTANTS
	FRN: 000889C
	Sd/-
	RAJNEESH SINGHVI
Place:Jaipur	PARTNER
Date: May 13, 2019	M. No. 073506

ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT

We have audited the internal financial controls over financial reporting of Palsoft Infosystems Limited ("the Company") as of 31 March 2019in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is 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 (‘ICAI). 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 CompaniesAct, 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, issued by ICAI and deemed to be 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. Our audit of 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 With Reference to these Standalone Financial Statements

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.

Opinion

In our opinion, considering nature of business of simple activity, size of operation, lesser complexity of the transactions, the Company has, in all material respects, an adequate internal financial controls system over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at 31 March 2019, 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 CharteredAccountants of India.

	FOR H.S. DARDA& CO.
	CHARTERED ACCOUNTANTS
	FRN: 000889C
	Sd/-
	RAJNEESH SINGHVI
Place:Jaipur	PARTNER
Date: May 13, 2019	M. No. 073506