1.  We have audited the attached Balance Sheet of 3i Infotech Limited
 (the Company) as at March 31, 2012 and also the Statement of
 Profit and Loss and the Cash Flow Statement for the year ended on that
 date annexed thereto. These financial statements are the responsibility
 of the Company''s management. Our responsibility is to express an
 opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors'' Report) order, 2003, issued
 by the Central Government of India in terms of sub-section (4A) of
 Section 227 of the Companies Act, 1956 (hereinafter referred to as
 the Act), we annex hereto a statement on the matters specified in
 paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss
 and the Cash Flow Statement dealt with by this report comply with the
 Accounting Standards prescribed by Companies (Accounting Standards)
 Rules, 2006, to the extent applicable;
 
 v) On the basis of the written representations received from the
 directors, as on March 31, 2012, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2012 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Act;
 
 vi) Without qualifying attention is drawn to the following :
 
 (a) note no. 2.21(D) regarding the financial statements of the Company
 having been prepared on a going concern basis, the appropriateness of
 which is interalia dependent on successful implementation of the scheme
 approved by the Corporate Debt Restructuring Cell as also that in the
 opinion of the management, no impairment provision is considered
 necessary.
 
 (b) note no. 2.21(D) regarding Exceptional write off of Trade
 Receivables and reversal of Unbilled Revenues of Rs75.40 crores and
 disclosed as exceptional items.
 
 (c) note no. 2.21(D) regarding carrying amount of Rs27.23 crores for
 Payment Solution Software Product to be adapted for application in
 different geographies which in the opinion of the management will be
 localized in due course of time and commercially exploited thereafter.
 
 vii) Attention is also invited to note no. 2.8.2 in respect of Net
 Deferred Tax Assets recognized in the earlier years of Rs103.66 crores
 being carried forward in the Balance Sheet and expected to reverse in
 foreseeable future, on the basis of order book on hand and the
 Restructuring Scheme approved by the CDR Cell. However, we are unable
 to express an opinion as to when and to what extent the aforesaid net
 deferred tax asset would reverse in the near future
 
 viii) Based on our audit and to the best of our information and
 according to the explanations given to us, the said financial
 statements read together with para (vi) and subject to what is stated
 in para(vii) above, the impact whereof on the loss for the year ended
 on March 31, 2012 and reserves and assets as at that date is presently
 not ascertainable and accompanying Notes give the information
 required by the Act, in the manner so required and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India;
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 b) in the case of the Statement of Profit and Loss, of the loss of the
 Company for the year ended on that date; and
 
 c) in the case of Cash Flow Statement, of the cash flows of the Company
 for the year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
 FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2012 OF 3I
 INFOTECH LIMITED
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The Company in accordance to a phased programme was during the year
 required to physically verify Furniture & Fixtures, Office equipment,
 Plant and equipment and Computers etc.However only computers/IT Assets
 have been verified. Accordingly, in our opinion, the frequency and the
 phased programme of physical verification needs to be improved. The
 discrepancies noticed on such verification have been dealt with in the
 books of account.
 
 (c) During the year, the Company has not sold/disposed off substantial
 portion of its fixed assets.
 
 (ii) The Company is a service company, primarily rendering information
 technology services. Accordingly, it does not hold any physical
 inventories. Hence, paragraph 4(ii) of the Order, is not applicable.
 
 (iii) As informed, the Company has not granted/taken any loans, secured
 or unsecured to/from companies, firms or other parties covered in the
 register maintained under Section 301 of the Act.
 
 (iv) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased and sale of services are of special nature and suitable
 alternative sources do not exist for obtaining comparable quotations,
 there is an adequate internal control system commensurate with the size
 of the Company and the nature of its business for the purchase of
 inventories and fixed assets and for the sale of goods and services.
 During the course of our audit, no major weakness has been noticed in
 the internal control system.
 
 (v) According to the information and explanations provided by the
 management, we are of the opinion that there are no contracts or
 arrangements that need to be entered into the register required to be
 maintained under Section 301 of the Act.
 
 (vi) The Company has not accepted any public deposits within the
 meaning of Section 58A and 58AA or any other relevant provisions of the
 Act and rules framed thereunder.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of Section 209 of the Act for the services
 rendered by the Company.  Accordingly, paragraph 4(viii) of the Order
 is not applicable.
 
 (ix) (a) The Company during the year, as explained in note no. 2.21 has
 been facing liquidity stress due to which there were delays in payment
 of various statutory dues such as Provident fund, income tax and
 service tax. However, as at the close of the year, there were no
 arrears outstanding for a period of more than six months from the date
 they become payable except in respect of Professional Tax of Rs0.13
 crores.
 
 (b) According to the information and explanation given to us, there are
 no dues of Income tax, Sales Tax Wealth tax, Service Tax, Custom Duty,
 Excise Duty and Cess which have not been deposited on account of any
 dispute except following :
 
 Name of 
 Statute     Nature of      Period to which
                            amount              Amount    Forum where
                                                          dispute is
             Demand         Relates            (Rs in     pending
                                                crore)
 
 Income 
 Tax Act,    Income Tax     Assessment Year 
                            1999-00,              3.19    Income Tax
                                                          Appellate 
 1961                       2000-01,2001-02,
                            2006-                         Tribunal
                            07,2007-08
 
 Income 
 Tax Act,    Income Tax     Assessment Year 
                            2003-04,              2.76    Commissioner
                                                          of Income 
 1961                       2004-05,2005-06               Tax (Appeals)
 
 Finance 
 Act,1994    Service Tax    2004-05, 2005-06,
                            2006-               175.55    Assistany
                                                          Commissioner of
                            07,2007-08 , 
                            2008-09,2009-                 Service Tax
                            10 & 2010-11
 
 Andhra 
 Pradesh     Value Added 
             Tax            2007-08, 2008-09,
                            2009-10,              0.28    Deputy
                                                          Commissioner 
 VAT Act, 
 2005                       2010-11, 2011-12             (Commercial Tax),
                                                          Hyderabad
 
 Karnataka 
 VAT         Value Added 
             Tax            2006-07, 2007-08
                            & 2008-               0.12    Assistant
                                                          Commissioner 
 Act, 2003                  09                           (Commercial
                                                          Tax),
                                                          Bangalore
 
 Bombay 
 Sales       Value Added 
             Tax            2004-05               0.69    Deputy 
                                                          Commissioner of
 Tax Act,
 1959                                                     Sales Tax, 
                                                         (Assessment),
                                                          Thane
 
 Central 
 Sales       Central
             Sales tax      2007-08, 2008-09,
                            2009-10,              0.14    Commissioner 
                                                          Tax Officer,
 Tax, 1956                  2010-11                       Hyderabad
 
 Central 
 Sales       Central 
             Sales tax      2006-07,2007-08, 
                            2008-09               0.17    Assistant
                                                          Commissioner 
 Tax, 1956                                               (Commercial 
                                                          Tax), Audit,
                                                          Bangalore
 
 Central 
 Sales Tax   Central 
             Sales tax      2004-05              *0.00    Deputy 
                                                          Commissioner
                                                          of
 (Bombay) 
 Rules,                                                   Sales Tax,
                                                         (Assessment),
 1957                                                     Thane
 
 *0.00 crores denotes figures less than Rs50,000
 
 (x) The Company''s accumulated losses at the end of the financial year
 do not exceed 50% of its networth.  However,it has incurred cash losses
 in the current year under review but it did not incurr cash losses in
 the immediately preceding financial year.
 
 (xi) There have been defaults in repayment of dues to the banks during
 the year, which have been subsequently either rescheduled by way of
 Corporate debt restructuring package (CDR) except certain overdues of
 Rs108.84 crores, including interest of Rs7.21 crores (defaults for the
 period upto six months) to certain banks who did not opt for CDR
 scheme. The management, as explained, is negotiating with these banks
 and confident of an amicable restructuring/settlement.
 
 (xii) In our opinion and according to the information and explanations
 given to us, and based on the documents and records produced to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Order are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Order are not applicable to the
 Company.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantees for loans taken by others from banks and financial
 institutions, are not, prima facie prejudicial to the interest of the
 Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the term loans were applied for the purposes for which
 they were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the Balance sheet and Cash Flow Statement of
 the Company, in our opinion, the funds raised on short term basis have,
 prima facie, not been used for long term investment.
 
 (xviii)The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act.
 
 (xix) The Company has not issued any debentures during the year or in
 the recent past.
 
 (xx) The Company has not raised any money by public issues during the
 year or in the recent past.
 
 (xxi) During the course of our examination of the books of account and
 records of the Company carried out in accordance with the generally
 accepted auditing practices in India, we have neither come across any
 instance of fraud on or by the Company, noticed or reported during the
 year nor have been informed of such case by the management.
 
 For R.G.N. Price & Co.          For Lodha & Co.
 
 Chartered Accountants           Chartered Accountants
 
 Firm Registration No: 002785S   Firm Registration No: 301051E
 
 Mahesh Krishnan                 R.P. Baradiya
 
 Partner                         Partner
 
 Membership No. 206520           Membership No. 44101
 
 Place: Mumbai                   Place: Mumbai
 
 Date: May 16, 2012              Date: May 16, 2012