1.  We have audited the attached Balances Sheet of the Nirma Limited,
 as at 31st March, 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 (Auditor''s Report) Order, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 Section 227 of the Companies Act, 1956, we annex hereto a statement on
 the matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Refer note no 7 of Notes to Accounts in Schedule 19 regarding the
 scheme of Demerged undertaking.  The Company has taken over Demerged
 undertaking of Core Healthcare Ltd. (CHL) under the composite scheme of
 Arrangement sanctioned by the Hon''ble High Court of Gujarat by order
 dated 1st March, 2007.  The appointed date for this purpose was 1st
 December, 2004 and the effective date is 7th March, 2007. Three parties
 have fled appeal against this order before the Division Bench of
 Hon''ble High Court of Gujarat and their appeal, which has been
 admitted, is pending. The Company has given effect to the above scheme
 subject to the decision in appeal before the Hon''ble High Court.
 
 5.  Further to our comments in the Annexure referred to in paragraph
 (3) & (4) 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, the Company has kept proper books of account, as
 required by law, so far as appears from our examination of the 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
 Companies Act, 1956.
 
 e) On the basis of the written representations received from the
 directors, as on 31st March, 2011 and taken on record by the Board of
 Directors, we report that none of the directors of the Company are
 disqualified as on 31st March, 2011 from being appointed as a director,
 in terms of clause (g) of sub- section (1) of Section 274 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 give
 a true and fair view in conformity with the accounting principles
 generally accepted in India.
 
 (i) In the case of Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 (ii) In the case of profit and Loss Account, of the profit for the year
 ended on that date; and
 
 (iii) In the case of Cash Flow Statement, of the cash fow for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT
 Referred to paragraph (3) thereof
 
 1.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed assets
 on the basis of available information.
 
 (b) As explained to us, the fixed assets have been physically verified
 by the management during the year in phased periodical manner, which in
 our opinion, is reasonable, having regard to the size of the Company
 and nature of its assets. To the best of our knowledge, no material
 discrepancies have been noticed on verification.
 
 (c) In our opinion, the Company has not disposed of substantial part of
 fixed assets during the year and the going concern status of Company is
 not affected.
 
 2.  (a) The inventories other than that of with third parties have been
 physically verified by the management at reasonable intervals. There is
 a process of obtaining confrmation in respect of inventory with the
 third parties.
 
 (b) In our opinion and according to the information and explanations
 given to us the procedures for physical verification 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, the Company has maintained proper records of
 inventories. The discrepancies between the physical stocks and the book
 stocks are not material and have been properly dealt with in the books
 of account.
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 Company to and from companies, frms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956 :
 
 (a) The Company has not given loans to any party or company covered
 under Section 301 of the Companies Act, 1956 during the year.
 Accordingly para 4 (iii) (b) to para 4 (iii) (d) of the order are not
 applicable.
 
 (e) During the year, the Company has taken loan from three parties
 amounting to Rs. 215.02 crores. The maximum amount involved during the
 year was Rs. 227.12 crores and the year-end balance of such loan taken
 was Rs.82.80 crores. Further during the year, Company has also taken
 unsecured loan from one company amounting to Rs.46.55 crores. The
 maximum amount involved during the year was Rs.52.65 crores and the
 year-end balance was Rs.3.59 crores.
 
 (f) In our opinion and according to information and explanations given
 to us, the rate of interest, wherever applicable and other terms and
 condition are not prima facie prejudicial to the interest of the
 Company.
 
 (g) The principal amounts are repayable on demand and there is no
 repayment schedule. The interest is payable on demand.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an internal control system commensurate with the
 size of the Company and the nature of its business with regard to
 purchase of inventories, fixed assets and also for the sale of goods &
 services. During the course of our audit, no major weaknesses have been
 noticed in the internal control system.
 
 5.  In respect of transactions covered under Section 301 of the
 Companies Act, 1956:
 
 (a) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements, that needed to be entered into the register maintained
 under Section 301 of the Companies Act, 1956 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, there are no transactions in pursuance of contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 aggregating during the year to Rs.5,00,000/-
 (Rupees Five Lacs only) or more in respect of any party.
 
 6.  According to the information and explanations given to us, the
 Company has not accepted any deposits from the public. Therefore, the
 provisions of Clause (vi) of paragraph 4 of the Order are not
 applicable to the Company.
 
 7.  The Company has a system of internal audit, which in our opinion,
 is commensurate with the size of the Company and nature of its
 business.
 
 8.  The Central Government has prescribed the maintenance of cost
 records under section 209(1)d of the Companies Act, 1956 in respect of
 certain manufacturing activities of the Company. We have broadly
 reviewed the accounts and records of the Company in this connection and
 are of the opinion, that prima facie, the prescribed accounts and
 records have been made and maintained. We have not, however, made the
 detailed examination of the same.
 
 9.  (a) According to the records, information and explanations provided
 to us, the Company is generally regular in depositing with appropriate
 authorities undisputed amount of provident fund, employees'' state
 insurance, income-tax, sales-tax, service tax and any other statutory
 dues applicable to it and no undisputed amounts payable were
 outstanding as at 31st March, 2011 for a period of more than six months
 from the date they became payable.
 
 (b) Following are the details of disputed Income Tax, Wealth Tax, Sales
 Tax, Excise Duty, Custom Duty and Stamp Duty that have not been paid to
 the concerned authorities.
 
                                                                 UNPAID 
 SR.                       NATURE OF       FORUM WHERE DISPUTE 
                                           IS
    NAME OF THE STATUTE                                          AMOUNT
                           THE DUES        PENDING
 NO.                                                            (Rs. In
                                                                  Crores)
 
 1. Income Tax Act, 1961   Income Tax      Commissioner Of 
                                           Income Tax (Appeals)   451.49
 
                                           Assessing Officer        0.52
 
 2. Central Excise Act, 
    1944                   Excise Duty and Tribunal                 1.23
                           Service Tax
 
                                           Commissioner of 
                                           Excise (Appeals)         0.01
 
                                           High Court               0.19
 
 3. Central Sales Tax 
    Act and                Central Sales 
                           Tax             High Court               0.48
    Sales Tax Act of 
    various states         and Sales Tax
                                           Tribunal                 4.00
 
                                           Appellate Board          0.52
 
                                           Commissioner             0.59
 
                                           Joint Commissioner      30.45
 
                                           Deputy Commissioner      0.28
 
 4. Wealth Tax Act, 1957   Wealth Tax      Assessing Officer   Rs. 5,440
 
 5. Customs Duty Act, 1962 Customs Duty    High Court               0.64
 
                                           Supreme Court*          20.00
 
                                           Tribunal                 0.20
 
 6. The Bombay Stamp 
    Act, 1958              Stamp Duty      High Court               3.17
 
 *Stay granted by Hon''ble Supreme Court.
 
 In the absence of information as mentioned in Note 8 of Schedule 19 of
 the accounts information in this Para pertaining to earlier period and
 out standing as on 31st March, 2011 in respect of Demerged undertaking
 of CHL received by the company are not adequately disclosed.
 
 10.  The Company does not have accumulated losses at the end of the
 financial year. The Company has not incurred cash losses during the
 financial year covered by the audit and in the immediately preceding
 financial year.
 
 11.  Based on our audit procedures and on the information and
 explanations given by the management, the Company has not defaulted in
 repayment of the dues to any bank.
 
 12.  Based on our examination and according to the information and
 explanations given to us, the Company has granted loan on the basis of
 security by way of pledge of share. We are of the opinion that adequate
 documentation and records are maintained in this regard.
 
 13.  The Company is not a chit or nidhi or mutual beneft fund/society
 and clause (xiii) of the order is not applicable.
 
 14.  The Company has maintained proper records of the transaction and
 contracts in respect of dealing or trading in shares, securities,
 debentures and other investments and timely entries have been made
 therein. All shares, securities, debentures and other investments have
 been held by the Company in its own name.
 
 15.  In our opinion and according to the information and explanations
 given to us, the terms and conditions of the corporate guarantee given
 by the Company, for various term loans taken by wholly owned foreign
 subsidiaries, are not prejudicial to the interest of the Company.
 
 16.  In our opinion and according to the information and explanations
 given to us, term loans have been applied for the purpose for which
 they were raised.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Financial Statements of the Company and
 after placing reliance on the reasonable assumptions made by the
 Company for classification of long term and short term usages of funds,
 we are of the opinion that prima facie as at the close of the year, no
 Short term funds have been utilized for long term investments.
 
 18.  During the year, 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.
 
 19.  The Company has issued short term privately placed secured
 debentures. The said debentures have been repaid before the time
 permissible for creating the security. Hence there is no need to create
 the security.
 
 20.  The Company has not raised any money by public issue during the
 year.
 
 21.  Based upon the audit procedures performed and information and
 explanations given to us, we report that no fraud on or by the Company
 has been noticed or reported during the year.
 
 
                                               For Hemanshu Shah & Co.
 
                                                Chartered Accountants
 
                                        Firm Registration No. 122439W
 
 Place : Ahmedabad                                         H. C. Shah
 
 Date   : May 30, 2011                                     Proprietor
 
                                                 Membership No. 36441