1) We have audited the attached Balance Sheet of Bartronics India
 Limited (the Company) as at 31st March, 2011, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date, both annexed thereto in which are incorporated the
 Returns from an overseas branch audited by other auditors. These
 fnancial statements are the responsibility of the Company''s Management.
 Our responsibility is to express an opinion on these fnancial
 statements based on our audit.
 
 2) We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 fnancial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the fnancial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall fnancial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3) Without qualifying our opinion, we invite attention to Note 25 of
 Schedule 20 forming part of the fnancial statements regarding the
 uncertainties relating to MCD - Aapke Dwar Project.
 
 4) We invite attention to:
 
 a) Note 9 of Schedule 20 forming part of the fnancial statements
 regarding Sundry Debtors balance aggregating to Rs.36,577.76 Lakhs and
 in respect of which no provision has been made for reasons stated
 therein. We are unable to form an opinion on the extent to which the
 debts may prove irrecoverable.
 
 b) Note 11 of Schedule 20 regarding slow moving software inventory
 aggregating to Rs.314.13 Lakhs. We are unable to form an opinion on the
 appropriateness of the carrying cost of such items of inventory
 
 5) As required by the Companies (Auditor''s Report) Order, 2003 (CARO)
 issued by the Central Government of India in terms of Section 227 (4A)
 of the Companies Act, 1956, we enclose in the Annexure a statement on
 the matters specifed in paragraphs 4 and 5 of the said Order.
 
 6) Further to our comments in paragraph 3 and the Annexure referred to
 in paragraph 5 above, we report as follows:
 
 a.  Subject to paragraph 4 above, 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;
 
 b.  in our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books and proper returns adequate for the purposes of our audit
 have been received from the overseas branch audited by other auditors.
 
 c.  the report on the accounts of the overseas branch audited by other
 auditors has been forwarded to us and have been dealt with by us in
 preparing this report;
 
 d.  the Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account
 and the audited Branch Return;
 
 e.  in our opinion the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-Section (3C) of Section 211 of the
 Companies Act, 1956;
 
 f.  in our opinion and to the best of our information and according to
 the explanations given to us, the
 
 said accounts give the information required by the Companies Act, 1956,
 in the manner so required, and subject to the effect of adjustments
 that may be required in respect of matters referred to in paragraph 4
 above, the effect of which we have not been able to determine, 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 31st March, 2011;
 
 (b) in the case of the Profit and Loss Account, of the Profit of the
 Company for the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash fows of the
 Company for the year ended on that date.
 
 7) On the basis of written representations received from the Directors
 as on 31st March, 2011 taken on record by the Board of Directors, we
 report that none of the Directors is disqualifed as on 31st March, 2011
 from being appointed as a director in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 Annexure to the Auditors'' Report
 (Referred to in paragraph 5 of our report of even date)
 
 i) Having regard to the nature of the Company''s business/activities
 clauses 4 (v), (viii), (x), (xii), (xiii), (xiv),
 (xv), (xviii), (xix) and (xx) of CARO are not applicable.
 
 ii) In respect of its fixed assets:
 
 (a) The Company is in the process of re-constructing its fixed assets
 register with a view towards refecting full particulars including
 quantitative details and situation of fixed assets.
 
 (b) Some of the fixed assets were physically verifed during the year by
 the management in accordance with a program of verifcation, which in
 our opinion, provides for physical verifcation of all fixed assets at
 reasonable intervals. In respect of assets at third parties locations,
 confirmations have been received.  In view of the fact that the fixed
 assets register is in the process of reconstruction, management has
 informed that discrepancies, if any, arising between the assets verifed
 and the book records would be dealt with in the period in which such
 re-construction of the register is completed.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute substantial part of the fixed assets of the Company and
 such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventories:
 
 (a) As explained to us, the inventories were physically verifed during
 the year by the management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verifcation of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verifcation.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured to / from companies, frms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, internal control procedures with regard to purchase of
 inventory and fixed assets and for the sale of goods need to be
 strengthened so as to be commensurate with the current size of the
 Company and the nature of its business. Except for the above, we have
 not observed any other continuing failure to correct major weaknesses
 in internal controls.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs.5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time except in respect of certain purchases for
 which comparable quotations are not available and in respect of which
 we are unable to comment.
 
 (vii) In our opinion the internal audit functions carried out during
 the year by a frm of Chartered Accountants appointed by the management
 have been generally commensurate with the size of the Company and the
 nature of its business.
 
 (viii) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) Except for delays in deposit of dues relating to provident fund,
 employees state insurance, income- tax, wealth tax, value added tax,
 fringe benefit tax and service tax, the Company has generally been
 regular in deposit of excise duty, custom duty cess and other material
 statutory dues applicable to it with the appropriate authorities.
 
 (b) The statutory dues in arrears as at 31st March 2011 for a period of
 more than six months from the date they became payable are as follows:
 
 Name of   Nature of the  Rs. in    Period to which              Date of
                                                     Due Date
 the
 Statute        Dues      Lakhs.    the amount 
                                    relates                      Payment
 
                           3.25       2000-01          Various 
                                                       Dates
 
                         111.69       2007-08          March 31, 
                                                       2008
 
 Income-    Income Tax   334.59       2008-09          March 31, 
                                                       2009 
 Tax Act,
 
                         848.41       2009-10          March 31, 
                                                       2010 
 1961                    515.33       2010-11          September 
                                                       15, 2010     Not 
                                                                    paid
 
            Fringe 
            benefit Tax   768.76       2007-08          March 31, 
                                                       2008
                           3.42       2003-04          Various 
                                                       Dates 
 
 The 
 Finance    Service Tax    5.50       2004-05          Various 
                                                       Dates 
 Act, 1994                 0.84       2005-06          Various 
                                                       Dates
 
 (c) Details of dues of Income-tax which have not been deposited as on
 31 March, 2011 on account of disputes are given below:
 
 Name of the    Nature of   Financial Years 
                            to which          Rs. in      Forum where
 statute        the Dues    the matter 
                            pertains          Lakhs       dispute is 
                                                          pending
 
 Income-Tax     Income Tax   2005-2006        89.67      Commissioner of
 Act, 1961                
                             2006-2007       199.52      Income Tax- 
                                                         Appeals
 
 (ix) In our opinion and according to the information and explanations
 given to us, the Company has defaulted in repayment of dues to fnancial
 institution and banks as follows :
 
                        Maximum 
                        amount of       Maximum 
                                        period       Subsequent 
 Lender                 default 
                        ( Rs in 
                         lakhs)         of default
                                        ( days)      Payment
 
 Andhra Bank
 
 Principal                152.78            78         Paid
 
 Interest                  60.09            58
 
 Bank of India
 
 Principal                330.00           109         Paid
 
 Interest                  55.69            69
 
 Bank of Baroda
 
 Principal                137.50            87         Paid
 
 Interest                  32.65            60
 
 HSBC
 
 Principal                   —               —         Paid
 
 Interest                  12.42            69
 
 Indian Bank
 
 Principal                 91.67            94         Paid
 
 Interest                  20.03            70
 
 Punjab National Bank
 
 Principal               5000.00           138         Paid
 
 Interest                  60.74            79
 
 LIC
 
 Principal                142.86            78         Not Paid
 
 Interest                  33.12           164         Paid
 
 (x) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purpose for which
 they were obtained, other than temporary deployment pending
 application.
 
 (xi) In our opinion and according to the information and explanations
 given to us, and on an overall examination of the Balance Sheet, we
 report that funds raised on short term basis have not been used during
 the year for long term investment.
 
 (xii) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no fraud on the
 Company has been noticed or reported during the year.
 
 Notes:
 
 1) The Cash Flow Statement is prepared in accordance with the Indirect
 Method as set out in Accounting Standard - 3 on Cash Flow Statements
 notifed in Section 211(3C) of the Companies Act, 1956.
 
 2) Cash and Cash Equivalents include Rs 223.25 lakhs (31.03.2010: Rs.
 466.24 lakhs ) Deposits lodged with Banks against guarantees/ letter of
 credit issued.
 
 3) Previous year''s figures have been regrouped/ rearranged/reclassified
 wherever necessary to conform with those of the current year.
 
 4) Figures in bracket represents cash outfow.
 
 5) Schedules 19 and 20 form an integral part of the Cash Flow
 statement.
 
                                           For Deloitte Haskins & Sells
 
                                                  Chartered Accountants 
 
                                             (Registration No. 008072S)
 
                                                         C R Rajagopal
 
                                                               Partner
                                                   Membership No:23418
 
 Hyderabad, 25 August, 2011