Infronics Systems Addresses ₹12.05 Crore Demand and Going Concern Issues in Q1 Results

Infronics Systems Limited , a technology company based in Hyderabad, has approved its unaudited financial results for the quarter ended June 30, amidst auditor qualifications on two significant issues. The company's board meeting, held on August 14, addressed these concerns while affirming its commitment to future growth.

Auditor Qualifications

The auditor's limited review report highlighted two key issues:

1. Demand Notice from Mudunuru Limited: A demand notice for ₹12.05 crore has been received from Mudunuru Limited. This amount comprises ₹8.60 crore in principal and ₹3.45 crore in interest, related to alleged pro-forma invoices raised between March 2023 and April 2025.

2. Going Concern Uncertainty: The auditor expressed material uncertainty about the company's status as a going concern.

Management's Response

Infronics Systems' management has provided detailed responses to these qualifications:

Demand Notice

• The company has categorically denied any liability regarding the ₹12.05 crore demand from Mudunuru Limited.
• After internal evaluation, management concluded that the claim is invalid.
• In accordance with Ind AS 37, no provision has been recognized in the financial statements.
• The matter has been disclosed as a contingent liability.

Going Concern Issue

• Management acknowledged that a previous key engagement concluded in the last financial year, changing the nature of revenue inflows.
• The company is currently focusing on ongoing technological product development initiatives.
• These initiatives are expected to contribute to future business prospects.
• The Q1 results have been prepared on a going-concern basis.

Board Meeting Details

• The board meeting was held on August 14, at the company's registered office in Hyderabad.
• The meeting commenced at 6:00 PM IST and concluded at 7:30 PM IST.
• The Un-Audited Financial Results for Q1 were approved along with the Auditor's Limited Review Report.

Trading Window

Investors should note that the trading window for Infronics Systems' shares remains closed. It will reopen 48 hours after the publication of the Q1 unaudited financial results.

Management's Outlook

Despite the challenges highlighted in the auditor's report, Infronics Systems' management remains optimistic about its future prospects. The company is betting on its ongoing technological product development initiatives to drive future growth and address the concerns raised about its going concern status.

Investors and stakeholders are advised to monitor further announcements from the company for updates on its financial position and strategic initiatives.