NIIT

1.  We have audited the attached Balance Sheet of NIIT Limited, as at
 March 31, 2009, and the related Profit and Loss Account and Cash Flow
 Statement for the year ended on that date annexed thereto, which we
 have signed under reference to this report. These financial statements
 are the responsibility of the Companys man- agement. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Stand- ards 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 support- ing 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 by the Companies (Auditors Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of Section 227 of The Companies Act, 1 956 of India (the Act) and
 on the basis of such checks of the books and records of the company as
 we considered appropriate and according to the information and
 explanations given to us, we further report that:
 
 (i) (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.  .
 
 (b) The fixed assets are physically verified by the management
 according to a phased programme designed
 
 to cover all the items over a period of two years, which in our
 opinion, is reasonable having regard to the size of the company and the
 nature of its assets. Pursuant to the programme, a portion of the fixed
 assets has been physically verified by the management during the year
 and no material discrepancies between the book records and the physical
 inventory have been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 (ii) (a) The inventory has been physically verified by the management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 (iii) (a) The Company has granted unsecured loans, to four subsidiaries
 covered in the register maintained under Section 301 of the Act. The
 maximum amount involved during the year and the year-end balance of
 such loans aggregates to Rs. 4,836 lacs and Rs. 4,668 lacs
 respectively.  In our opinion, the rate of interest and other terms and
 conditions of such loans.are not prima facie prejudicial to the
 interest of the Company.
 
 In respect of the aforesaid loans, the parties are repaying the
 principal amounts as stipulated and are also regular in payment of
 interest, where applicable.
 
 In respect of the aforesaid loans, there is no overdue amount more than
 Rupees One Lac.
 
 (b) The Company has taken unsecured loans, from one wholly owned
 subsidiary covered in the register maintained under Section 301 of the
 Act. The maximum amount involved during the year and the year-end
 balance of such loan are Rs. 2,410 lacs and Rs. 1,1 72 lacs
 respectively.  In our opinion, the rate of interest and other terms and
 conditions of such loans are not prima facie prejudicial to the
 interest of the company.
 
 In respect of the aforesaid loans, the Company is regular in repaying
 the principal amounts as stipulated and is also regular in payment of
 interest, where applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, having regard to
 
 the explanation that certain items purchased are of special nature for
 which suitable alternative sources do not exist for obtaining
 comparative 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 inventory, fixed assets and for the sale
 of goods and services. Further, on the basis of our examination of the
 books and records of the company, and according to the information and
 explanations given to us, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 (v) (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In respect of certain transactions of the value of Rs. 16,602 lacs
 with subsidiaries and Rs. 540.1 1 lacs with other companies, the
 management has informed us that the transactions dealt are of a special
 nature and therefore comparable prices are not available. In our
 opinion and according to the information and explanations given to us,
 the transactions made in pursuance of such contracts or arrangements
 and exceeding the value of Rupees Five Lacs in respect of any party
 during the year, have been made at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA or any other relevant provisions
 of the Act and the rules framed there under.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) The Central Government of India has not prescribed the
 maintenance of cost records under clause (d) of sub-section (1) of
 Section 209 of the Act for any of the products of the Company.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the company examined by us, in our opinion, the Company
 is generally regular in depositing the undisputed statutory dues
 including provident fund, investor education and protection fund,
 employees state insurance, income- tax, sales-tax, wealth tax, service
 tax, cess and other material statutory dues as applicable with the
 appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income-tax, sales-tax, wealth tax, service tax, customs duty, excise
 duty and cess as at March 31, 2009 which have not been deposited on
 account of a dispute, are as follows -
 
 Name of the statute Nature of dues Amount (Rs. Lacs) Period to which
 the amount relates Forum where the dispute is pending
 
 Andhra Pradesh General Sales Tax Act, 1957 Demand for works contract
 tax 746.02 2001-2008 High Court of Andhra Pradesh
 
 Finance Act, 1 994 Service Tax 209.78 2004-2005 Customs, Excise and
 Service Tax Appellate Tribunal
 
 (x) The Company has no accumulated losses as at March 31, 2009 and it
 has not incurred any cash
 
 losses in the financial year ended on that date or in the immediately
 preceding financial year.
 
 (xi) According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund/societies are not applicable to the
 Company.
 
 (xiv) In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 (xv) During the year, the Company has provided a Letter of Credit of
 Rs. 1,526 lacs (USD 3 million) and a security of Rs 1 00 lacs to banks
 for loan availed by its subsidiaries. As these are for loans availed by
 its subsidiaries, these are not considered prejudicial to the interest
 of the Company.
 
 (xvi) In our opinion, and according to the information and explanations
 given to us, , on an overall basis, the term loans have been applied
 for the purposes for which they were obtained.
 
 (xvii) On the basis of an overall examination of the balance sheet of
 the Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have 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 during the year.
 
 (xix) The Company is in the process of creating charge on its assets in
 respect of certain debentures arriourrtmg to Rs. 5,000 Lacs issued and
 outstanding cri Ihe yeaT-end.tRefer Note 5^ on Schedule 20 of the
 financial statements annexed).
 
 (xx) The Company has not raised any money by public issues during the
 year.
 
 (xxi) 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.
 
 4.  Further to our comments in paragraph 3 above, we report that:
 
 (a) 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 appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) 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 Act;
 
 (e) On the basis of written representations received from the
 directors, as on March 31, 2009 and taken on record by the Board of
 Directors, none of the directors is disqualified as on March 31, 2009
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act and, give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2009; (ii) in the case of the Profit and Loss
 Account, of the profit for the year ended on that date; and (iii) in
 the case of the Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 H. Singh
 Partner
 Membership Number F-86994
 
 For and on behalf of
 Price Waterhouse
 Chartered Accountants