1.  We have audited the attached Balance Sheet of Nirma Limited, as at
 30th September, 2012, and the Statement of Profit and Loss and Cash
 Flow statement for the period from 1st April,2011 to 30th September,
 2012 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 34 of Notes forming part of the Financials Statements
 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 was 7th March,
 2007. Three parties have filed 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 appear from our examination of the books.
 
 c) 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.
 
 d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash Flow statement dealt with by this report are in compliance 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 30th September, 2012 and taken on record by the Board
 of Directors, we report that none of the directors is disqualified as
 on 30th September, 2012 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 read together with the
 Significant Accounting Policies and 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.
 
 (i) In the case of Balance Sheet, of the state of affairs of the
 Company as at 30th September, 2012,
 
 (ii) In the case of the Statement of Profit and Loss, of the Loss for
 the period ended on that date and,
 
 (iii) In the case of Cash Flow Statement, of the cash flow for the
 period ended on that date.
 
 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 period 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 period 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 confirmation 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, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956 :
 
 (a) During the period, the company has given loan to One Entity
 amounting to Rs 18.32 crores. The maximum amount involved during the
 period was 18.32 crores and the period end balance of such loan given
 was Rs 18.32 crores.
 
 (b) In Our Opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions of the
 loans given by the Company, are not prima facie prejudicial to the
 interest of the company,
 
 (c) The principal amounts are repayable on demand and there is no
 repayment schedule. The interest is payable on demand.
 
 (d) In respect of the said loans and interest thereon, there are no
 overdue amounts.
 
 (e) During the period, the company has taken unsecured loan from two
 parties amounting to Rs.  534.82 crores. The maximum amount involved
 during the period was Rs. 146.06 crores and the period-end balance of
 such loan taken was Rs.141.16 crores. Further during the period,
 company has also taken unsecured loan from one company amounting to Rs
 213.33 crores. The maximum amount involved during the period was Rs.
 75.00 crores and the period-end balance was Rs.48.60 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 adequate 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 explanation
 given to us, the transaction made in pursuance of contracts /
 arrangements entered in the register maintained under section 301 of
 the companies Act, 1956 and exceeding the value of Rs. 500,000 in
 respect of each party during the period have been made at prices which
 appear reasonable as per information available with the company.
 
 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, Wealth Tax, Excise Duty, service tax
 and any other statutory dues applicable to it and no undisputed amounts
 payable were outstanding as at 30th September, 2012 for a period of
 more than six months from the date they became payable except Excise
 Duty, Land Rent, Employee State Insurance, Custom Duty, Water Charges
 and cess on Lime Stone amounting to Rs 0.18 crore, Rs. 0.75 crore, Rs
 4.03 crores , Rs. 22.17 crores, Rs.  14.68 crores and Rs. 0.01 crore
 respectively. There is no due in respect of Investor Education and
 Protection Fund.
 
 (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.
 
 SR                       NATURE OF     FORUM WHERE 
                                        DISPUTE IS             UNPAID 
                                                               AMOUNT
     NAME OF THE 
     STATUTE 
 NO                       THE DUES      PENDING               (Rs. In 
                                                               Crores)
 
 1.  Income Tax 
     Act, 1961            Income Tax    Assessing Officer        5.86
 
                                        Commissioner Of 
                                        Income Tax (Appeals)   189.18
 
                                        I.T.A. Tribunal         51.98
 
 2.  Central Excise 
     Act, 1944            Excise Duty 
                          and           Tribunal                 1.88
 
                          Service Tax   Commissioner of 
                                        Excise (Appeals)         0.09
 
                                        High Court               0.19
 
 3.  Central Sales 
     Tax Act and          Central 
                          Sales Tax     High Court               0.49 
     Sales Tax Act of 
     various              and Sales
                          Tax           Tribunal                 4.12
     States 
                                        Appellate Board          0.96
 
                                        Commissioner             0.03
 
                                        Joint Commissioner      31.02 
 
                                        Deputy Commissioner      0.45
 
 4.  Wealth Tax 
     Act, 1957            Wealth Tax    Assessing Officer   Rs. 5,440
 
 5.  Customs Duty
     Act, 1962            Customs Duty  High Court               2.11
 
                                        Tribunal                 0.34
 
                                        Commissioner             2.57
 
 6.  The Bombay 
     Stamp Act, 1958      Stamp Duty    High Court               3.17
 
 In the absence of information as mentioned in Note No. 35 of Notes
 forming part of financial statements in this Para pertaining to earlier
 period and out standing as on 30th September, 2012 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
 Period. The Company has not incurred cash losses during the Period
 covered by the audit and in the immediately preceding period.
 
 11.  Based on our audit procedures and on the information and
 explanations given to us 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 not granted loan on the basis
 of security by way of pledge of share.
 
 13.  The Company is not a chit or nidhi or mutual benefit 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 and
 deed of undertaking given by the Company, for various term loans taken
 by wholly owned 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 period,
 no Short term funds have been utilized for long term investments.
 
 18.  During the period, 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 unsecured debentures outstanding during the
 period, on which no security or charge is required to be created.
 
 20.  The Company has not raised any money by public issue during the
 period.
 
 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 period.
 
                                             For Hemanshu Shah & Co.  
 
                                              Chartered Accountants 
 
                                      Firm Registration No. 122439W
 
 Place : Ahmedabad                                       H. C. Shah
 
 Date : February 13, 2013                                Proprietor
 
                                               Membership No. 36441