1.  We have audited the attached Balance Sheet of ORG Informatics
 Limited (the Company) as at March 31, 2011, the Profit and Loss
 Account and also 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 (as
 amended) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
 in the Annexure, a statement on the matters specified in paragraphs 4
 and 5 of the said Order.
 
 4.  The financial statements have been prepared on going concern basis,
 despite significant losses suffered during the year, substantial
 contingent liabilities not provided for (Refer Note Nos. 1(a), (b),
 (c), (d)), legal cases filed by some of the suppliers against the
 Company and its officials under section 138 of the Negotiable
 Instruments Act, 1881 (Refer Note No. 2(a)), restriction imposed on a
 major customer by court, on vendor''s request, from making any payment
 to the Company (Refer Note No 2(c)), causing severe cash crunch, which
 had in turn resulted in defaults in payment of statutory liabilities /
 non compliance of statutory requirements/ loss of key management
 personnel / staff and considerable scaling down of operations. The
 Company''s ability to continue as a going concern is dependent upon
 satisfactory resolution of the above matters besides steps being taken
 by management to provide / arrange for significant additional funds.
 
 5.  Attention is invited to the following:
 
 i. We are unable to opine on the adequacy of provision of TRs 161,700
 for permanent fall in the value of investments amounting to TRs 695,202
 in absence of convincing evidence;
 
 i. We are unable to opine on the reliability of non moving stock of
 Stores and Spares of TRs 50,286 not provided by the management for
 reasons stated in Note No. 7.
 
 iii. We are unable to opine on recoverability / reliability of old
 outstanding of Sundry Debtors aggregating to TRs 2,337,024 (including
 TRs 4,968 due from Subsidiary) which may not be recoverable and which
 are not appropriately evidenced with correspondence statement of
 accounts, unconfirmed, unreconciled and against which no material
 recoveries have been made till date of completion of audit. No
 provision has been made for such receivables as the management
 considers them as good for recovery.
 
 iv. We are unable to opine on the bank balance for which Bank Balance
 confirmations are not available to the tune of TRs 9,565.
 
 v. We are unable to opine on recoverability / reliability of old
 outstanding in respect of (a) advances of TRs.  20,319 given to other
 company (b) TRs 28,080 advance given to Vendors and (c) TRs 6,593
 receivable in respect of Tender Deposit given which are not
 appropriately evidenced with correspondence statement of accounts,
 unconfirmed, unreconciled and against which no material recoveries have
 been made till date of completion of audit. No provision has been made
 for such receivables as the management considers them as good for
 recovery.
 
 vi. In the absence of detailed workings, convincing evidence and legal
 consultants'' opinion on the availability of TRs 28,455 in respect of
 CENVAT credit for set off in the future, we are unable to comment on
 the appropriateness of carry forward of the CENVAT recoverable.
 
 vii. In respect of guarantee of TRs 25,000 invoked by MPSEDC during the
 year, the management has claimed that the amount is good of recovery
 since the matter was subjudice and now the company is being Judgment
 creditor, the management''s claim remains to be substantiated by the
 Order passed by the Court of appropriate jurisdiction. The Company has
 made the claim of said amount with the MPSEDC for wrongful invocation
 of the guarantee. We are unable to opine on the recoverability or
 otherwise of the amount shown under Loans and Advances.
 
 viii. We are unable to opine on collectability of dues in respect of
 revenue booked in respect of MTNL contract from BEL to the tune of TRs.
 132,069 which are dependent on achievement of certain milestones.
 
 ix. In respect of Managerial Remuneration paid during the year to
 Managing and Whole time Director of TRs. 7,696, (Previous year TRs.
 6,015), Shareholders'' approval was taken in Annual General Meeting held
 on 29-12-2009 and 30.9.2010. However, No approval from Central
 Government is obtained for reason stated in Note No 20.
 
 x.  No Provision has been made for :
 
 a.  Impairment loss of Fixed Assets for reasons stated in Note No. 10.
 
 b.  Loans and advances of TRs. 625,403 due from Subsidiary Companies
 and Associate Company for the reasons stated in Note No. 9 (b).
 
 c.  Invocation of bank guarantees given in respect of various projects
 undertaken by the Company to the extent of TRs 251,708 and
 consequential penalties subsequent to the close of the year.
 
 d.  Interest and commission of TRs 64,145, payable, in terms of
 agreements, to the vendors (shown as contingent liability).
 
 e.  Bank and Other Charges of TRs 19,470 paid to one of the vendor
 (shown as contingent liability).
 
 f.  Implementation, service / warranty charges aggregating to TRs
 30,582 (shown as contingent liability).
 
 g.  Liquidated Damages / penalty payable to customers for delays in
 performance / non compliance of some of the contractual Terms and
 conditions aggregating to TRs 448,736 (shown as contingent liability).
 
 h.  Interest and Penal charges on bank loans aggregating to TRs.
 102,840 for the reasons stated in Note No. 6 (shown as Contingent
 liability)
 
 i.  Penalty and other charges which may be imposed by (a) the various
 Statuary/Regulatory Authorities on account of non compliance of the
 provisions of the various statutes including non payment of statutory
 dues and filing of periodic returns.
 
 (b) the Court, with respect to the cases filed by the parties against
 Company''s officials (including some past officials) under sections 138
 and 143 of the Negotiable Instruments Act, 1881, on account of dishonor
 of post dated cheques issued to them.
 
 Due to uncertainty involved, the impact of the above on the profit for
 the year is presently unascertainable.
 
 6.  Further to our comments in the Annexure referred to in paragraph 3
 and subject to our comments in paragraphs 4 and 5 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, profit and loss account and cash flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) 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, except to the extent referred to hereunder:
 
 a.  The Company has not determined the provision required for slow
 moving / non moving inventory for the purpose of arriving at the Value
 to be scaled down in terms of Accounting Standard 2 – Inventories;
 
 b.  The Company has not appropriately determined and provided for fall
 in value of long term investments in subsidiary / associate companies,
 in terms of Accounting Standard – 13 – Investments; and
 
 c.  The Company has not adequately determined impairment in assets
 during the year, in terms of Accounting Standard - 28 – Impairment of
 Assets.
 
 (v) On the basis of written representations received from directors as
 on March 31, 2011 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on March 31, 2011
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Companies Act, 1956;
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with
 accounting policies and notes thereon give the information required by
 the Companies Act, 1956, in the manner so required;
 
 7.  Subject to our remarks mentioned in paras 4 and 5 above, the impact
 on the financial results for the year is unascertainable and our
 comments contained in annexure referred to in Paragraph 3 above, in our
 opinion and to the best of our information and according to the
 explanations given to us, the said accounts read together with the
 notes thereon give the information required by the Companies Act, 1956,
 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, 2011;
 
 (b) in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 (c) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 Re: ORG Informatics Limited
 
 1.  In respect of its fixed assets:
 
 a) The Company has generally maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) Fixed assets held by the Company was not subjected to physical
 verification. In the absence of verification and reconciliation we are
 unable to state whether there are any discrepancies.
 
 c) Though the Company has disposed off considerable portion of its
 fixed assets, from areas wherein it had stopped operation due to
 closure of office, as cost saving measure during the year, its ability
 to continue as a going concern, we are informed by the management, is
 not affected by such disposals.
 
 2.  In respect of its inventories:
 
 a) As explained to us, during the year none of the inventories
 comprising of Projects in progress, stores and spares, trade goods etc.
 have been subjected to physical verification at any time during the
 year by the management.
 
 b) In the absence of physical verification indicated herein above,
 there is no question of adequacy or otherwise of the procedures.
 
 c) In our opinion and according to the information and explanations
 given to us, the Company is maintaining proper records of its
 inventories. However during the year since the inventories owned by the
 Company had not been physically verified by the management, we are
 unable to state whether or not there are any discrepancies.
 
 3.  In respect of loans, secured or unsecured, granted by the Company
 to companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956, according to the
 information and explanations given to us:
 
 a) The Company had granted interest bearing loan to a subsidiary by
 converting the share application money into loan vide agreement dated
 30th Oct. 2008 and interest free loans to other subsidiaries besides
 amounts advanced to one company covered in the register maintained
 under Section 301 of the Companies Act, 1956. As at the year-end, the
 outstanding balance of such loan granted to this company is TRs. 11,295
 and the maximum amount involved during the year was TRs. 12,436.
 
 b) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the interest free loans
 referred to above, keeping in view significant interest claimed by
 suppliers for credits provided, bankers and other parties, appear prima
 facie prejudicial to the interest of the Company.
 
 c) The loans granted are repayable on demand. As informed, the Company
 has not demanded repayment of the loans during the year and thus there
 is no default on the part of the parties to whom the amount is lent.
 
 d) The Company has, in the earlier years, taken interest bearing (and
 interest free) loan from a Party covered in the register maintained
 under Section 301 of the Companies Act,1956 and the outstanding balance
 of such loan aggregated to TRs 33,567 (including accrued interest) and
 the maximum amount involved during the year was TRs 33,656.
 
 e) The rate of interest and other terms and conditions of such loan is,
 in our opinion, prima facie not prejudicial to the interest of the
 Company.
 
 f) The loan is repayable on demand and the same has not been demanded.
 
 4.  In our opinion and according to the information and explanations
 given to us and our evaluation of the prevailing internal control
 structure and its operation disclosed weakness in internal control
 systems. The said control structure in operation can not be stated to
 be commensurate with the size of the Company and the nature of its
 business with regard to the purchase of traded goods / inventory, fixed
 assets and with regard to the sale of goods and rendering of services.
 
 5.  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
 have been entered in the register required to be maintained under the
 said section.
 
 b) According to the information and explanations given to us, where
 each of such transactions, other than interest bearing and interest
 free loans granted (Referred to in Para 3(b), (c) and (d) above), 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 that in
 respect of sale of services, no comparison of prices could be made
 since similar services are not being rendered to any other party by the
 Company.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from public
 within the meaning of Section 58A and 58AA or any other relevant
 provisions of the Companies Act, 1956 and the Companies (Acceptance of
 Deposits) Rules, 1975 with regard to the deposits accepted from the
 public.
 
 7.  There is no Internal Audit System in the Company during the year
 under review and hence we are unable to comment on this aspect.
 
 8.  As informed to us, the Central Government has not prescribed
 maintenance of cost records under clause (d) of sub-section (1) of
 Section 209 of the Companies Act, 1956.
 
 9.  According to the information and explanations given to us and as
 revealed by the books of accounts maintained by the Company, except for
 the following statutory dues, the Company has been generally regular in
 depositing undisputed statutory dues, including Provident Fund,
 Employees State Insurance, Income tax, Sales Tax, Service Tax and other
 statutory dues with the appropriate authorities during the year:
 
 Particulars                        Balance at             Period
                                     31.3.11               from
                                    Amount (TRs.)          which due
 
 Contribution to PF                     2,403             July ''10
 
 Staff Professional Tax                   209              Oct ''10
 
 Contribution to ESI                      145             July ''10
 
 Maharashtra CST                          254              Aug ''10
 
 Delhi CST                                107              Oct ''10
 
 Karnataka VAT                             45              Mar ''10
 
 UP Sales Tax                              19              Dec'' 08
 
 Service Tax                           16,650              Apr'' 08
 
 Education Cess Payable                   902               Apr''08
 
 Secondary Higher Education Cess          409              Apr'' 08
 
 
 During the year, the management has confirmed that there were no dues
 payable in respect of Investor Education and Protection Fund, Wealth
 Tax, Custom Duty, Excise Duty, Cess and other material statutory dues.
 
 In the case of Cess, the central government has till date not
 prescribed the amount of Cess payable under section 441A of the
 Companies Act, 1956.
 
 The details of disputed demands which have not been deposited during
 the year as under:
 
 Nature of    Nature of        Amount     Period to     Forum where
 Statue       the dues         (TRs.)     which the     dispute is
                                          amount        pending
                                          relates
 
 Income Tax   Penalty          9,555       2002-03      ITAT
 Act, 1961                     9,866       2003-04      CIT(Appeal)
                               1,874       2004-05      CIT(Appeal)
 
 
              Income Tax      1,0942       2004-05      CIT(Appeal)
                              21,083       2005-06      CIT(Appeal)
                              15,396       2006-07      CIT(Appeal)
                              15,996       2007-08      CIT(Appeal)
 
 Sales        Sales Tax       37,057       2008-09      Appellate
 Tax Act                                                Tribunal
 
 
 Note: In respect of Income Tax demands, the Company has deposited TRs
 20,000 on ad-hoc basis.
 
 10.  In our opinion and according to information and explanations given
 to us, the accumulated losses of the Company at the end of the
 financial year are more than fifty percent of its net worth and the
 Company has not incurred cash losses in current financial year but the
 Company had incurred cash losses in the immediately preceding financial
 year.
 
 11.  In our opinion and according to the information and explanations
 given to us, the Company has defaulted in repayment of dues to the
 banks. The period and the amount of defaults excluding interest and
 penal charges are as under:
 
 Description                Period of                Amount TRs.
 of Loan                    default                   involved
 
 BOI – Cash Credit         Account is NPA              29,222
 
                           Since March 2008
 BOI – BG Invoked          October 2008                 7,800
 
 PNB – Cash Credit         Account is NPA             113,372
                           Since June 2010
 
 PNB – BG Invoked          Account is NPA              58,000
                           Since June 2010
 
 CB – Cash Credit          Account is NPA              91,386
                           Since Feb 2010
 
 CB – WCTL                 Account is NPA               8,549
                           Since Feb 2010
 
 CB – BG Invoked           Account is NPA               5,243
                           Since Feb 2010
 
 SCB – Cash Credit         Account is NPA              81,862
                           Since March 2010
 
 Barclay – WCL             January 2009                95,863
 
 BOB – CC / WCTL/          Account is NPA             141,053
 
 BG Invoked                Since Feb 2010
 
 12.  According to the information and explanations given to us and
 based on the documents and records produced before us, the Company has
 not granted loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 13.  In our opinion, the Company is not a chit fund or a nidhi mutual
 benefit fund / society.
 
 14.  According to the information and explanations given to us, the
 Company is not dealing in shares, securities and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the Company has, other than guarantees given to a bank on
 behalf of subsidiary Company, not given any guarantees for loans taken
 by others from banks and financial institutions. The terms and
 conditions whereof are not prejudicial to the interest of the Company
 except for the guarantees which are invoked by the banks.
 
 16.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no term loans, except vehicle
 loans which are repayable in installments, and their application is as
 agreed were availed by the Company during the financial year, hence
 there is no question of any misapplication.
 
 17.  According to the information and explanations given to us, funds
 raised by the Company on short term basis have, prima facie, not been
 used during the year for long term investment.
 
 18.  According to the information and explanation given to us and as
 evidenced by the books and records, the Company has not issued any
 bonds / debentures during the year and hence there is no question of
 creating any security during the year.
 
 19.  The Company has not, according to the information and explanation
 given to us, raised any funds from public during the year hence the
 question of verification of end use does not arise.
 
 20.  According to the information and explanations given to us, the
 Company has not made during the year, any preferential allotment of
 shares to parties and companies covered in the Register maintained
 under Section 301 of the Companies Act, 1956.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 For Sorab S. Engineer & Co.  
 
 Firm Registration No. 110417W 
 
 Chartered Accountants
 
 CA. Chokshi Shreyas B.
 
 Partner
 
 Membership No. 100892
 
 Vadodara
 
 October 5, 2011