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Auditor Report of Nile Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of NILE LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1) . As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Sub-section (11) of Section-143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2) As required by Section 143 (3) of the Act, we report that:

(a) we have sought and 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.

(c) the Company had no branch offices during the year under audit.

(d) the balance sheet, the statement of profit and loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(e) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(f) on the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(g) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note. 26.8 to the financial statements.

ii) The Company has no long-term contracts including derivative contracts on which provision is required to be made under the applicable law or accounting standards for any material foreseeable losses.

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT DATED 15.05.2015 ISSUED TO THE MEMBERS OF NILE LIMITED

Statement on the matters specified in Paragraphs 3 and 4 of the Companies (Auditor's Report) Order, 2015

i. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The company's fixed assets have been physically verified by the management at reasonable intervals as per a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

ii. (a) The inventory has been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

(b) The procedures of 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) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book stocks.

iii. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained U/s.189 of the Act. Hence, our comments on clauses (iii) (a) and (b) of paragraph 3 of the order are Nil.

iv. 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, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company nor have we been informed of any such continuing failures.

v. In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 and other applicable provisions of the Act and the Rules framed thereunder with regard to the deposits accepted. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal against this company in any matter relating to the deposits accepted by the company.

vi. We have broadly reviewed the cost records maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost records U/s.148(1) of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not conducted any audit of the same.

vii. (a) The company is regular in depositing undisputed statutory dues including Provident Fund, employees' state insurance, income tax, Sales- Tax, Wealth-Tax, Service Tax, Duty of Customs, Duty of Excise, Value added tax, Cess and other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts in respect of Provident Fund, employees' state insurance, income tax, Sales-Tax, Wealth-Tax, Service Tax, Duty of Customs, Duty of Excise, Value added tax, Cess and other material statutory dues were in arrears as at 31/3/2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no material dues of Income Tax, Sales Tax, Wealth Tax, Service tax, Duty of Customs, Duty of Excise, Value Added tax and Cess which have not been deposited on account of any dispute.

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules thereunder has been transferred to such fund within time.

viii. The company does not have any accumulated losses as at the end of the financial year under audit and it has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank. The company has not issued debentures.

x. During the period covered under our audit, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xi. According to the information and explanations given to us and as per the books of account audited by us, during the period covered under our audit, the company has not availed any term loans.

xii. According to the information and explanations given to us, during the year covered under our audit, no material fraud on or by the company has been noticed or reported to us.

For J V S L & ASSOCIATES

Chartered Accountants (Firm Regn No. 15002S)

Sd/- J. VENKATESWARLU Place : Hyderabad Partner Date : 15-05-2015 ICAI Ms. No. 022481


Mar 31, 2014

We have audited the accompanying financial statements of NILE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing (SAs or Standards) issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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, 2014;

b) in the case of the Statement of Profit and Loss, 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.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("CAROV3 or Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by section 227(3) of the Act, 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 purpose 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, 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 comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company. Accordingly, no provision for the same has been made in the books of account for the year under audit.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT DATED 26.04.2014

ISSUED TO THE MEMBERS OF NILE LIMITED

Statement on the matters specified in Paragraphs 4 and 5 of the Companies (Auditor''s Report) Order, 2003

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The company''s fixed assets have been physically verified by the management at reasonable intervals as per a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The company has not disposed off any fixed assets during the year. Hence, the going concern status of the Company is not affected.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of 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) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book stocks.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained U/s.301 of the Act. Hence, our comments for clauses (iii)(b), (iii) (c) and (iii)(d) of paragraph 4 of the CARO''03 in respect of loans granted are Nil.

(b) The Company had taken unsecured loans / fixed deposits from 6 persons/entities covered in the register maintained U/s.301 of the Act. The maximum amount involved during the year in these transactions was Rs. 1499.49 lakhs (Prev. year Rs. 717.39 lakhs) and the year-end balance of loans / deposits taken from such parties, including the loans accepted in earlier years and continued in the current year, was Rs. 1378.99 lakhs (Prev. year Rs. 805.19 lakhs).

In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties listed in the register maintained U/s. 301 of the Act, are not, prima facie, prejudicial to the interest of the company.

(c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(d) There are no over due amount of loans taken from the parties listed in the register maintained U/s. 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company nor have we been informed of any such continuing failures.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered in the register maintained U/s.301 of the Act, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained U/s. 301 of the Act and exceeding the value of Rs. 5.00 lakhs 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) In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA and other relevant provisions of the Act and the Rules framed thereunder with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal against this company in any matter relating to the deposits accepted by the company.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost records U/s.209(1)(d) of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not conducted any audit of the same.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise-Duty and other material statutory dues applicable to it.

Further, since the Central Government has till date not prescribed the amount of Cess payable U/s.441A of the Act, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth-Tax, Service Tax, Customs Duty and Excise Duty were in arrears, as at 31-03-2014 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, the following are the details of statutory dues which have not been deposited on account of dispute:

Sl. Name of Period to Total Total amount No statute which the amount of disputed amount of dues relates disputed (Rs. in lakhs) dues (Rs. in lakhs)

i) GHMC Act Property tax F.Y. 2011-12 11.7

ii) AP VAT Value Added F.Y. 2008-09 3.68 Act, 2005 Tax F.Y. 2009-10 61.37 F.Y. 2010-11 71.30 F.Y. 2011-12 F.Y. 104.06 2012-13 25.27 Total 265.68

Sl. Name of Forum where Remarks No statute dispute is pending i) GHMC Act High Court of A.P. As per the interim orders of the court, an amount of Rs. 2.34 lakhs was paid.

ii) AP VAT Appellate Deputy As per the stay orders, 50% Act, 2005 Commissioner of the demands aggregating (CT), Hyderabad to Rs. 132.84 lakhs were paid. (Rural)

(x) The company has no accumulated losses as at the end of the financial year under audit and it has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank. The company has not issued debentures.

(xii) Based on our examination of documents and records and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, paragraph 4(xii) of the CARO, 2003 is not applicable to this Company.

(xiii) In our opinion and according to the information and explanations given to us, the provisions of special statue applicable to chit fund companies are not applicable to this company and the company is not a nidhi/mutual benefit fund/society. Therefore, provisions of paragraph 4(xiii) of the CARO, 2003 are not applicable to this Company.

(xiv) In our opinion, and as per the information and explanations given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. In respect of the long-term investments made in the equity shares of a company, proper records have been maintained and timely entries have been made therein and the shares have been held by the company in its own name.

(xv) During the period covered under our audit, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Hence, provisions of Paragraph 4 (xv) of the CARO, 2003 are not applicable to this Company.

(xvi) According to the information and explanations given to us and as per the books of account audited by us, during the period covered under our audit, the company has not availed any term loans. Hence, provisions of Paragraph 4 (xvi) of the CARO, 2003 are not applicable to this Company.

(xvii) According to the information and explanations given to us and on an over all examination of the balance sheet of the company, during the period covered under audit, no funds raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us and based on the accounts audited by us, during the period covered under our audit, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained U/s. 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered under our audit, the Company has not issued any debentures. Hence, creation of security or charge for the same is not applicable.

(xx) According to the information and explanations furnished to us, during the period covered under our audit, the Company has not raised any money by public issues. Hence, provisions of Paragraph 4(xx) of the CARO, 2003 are not applicable to this company.

(xxi) According to the information and explanations given to us and based on the books of account audited by us, during the year covered under our audit, no fraud on or by the company has been noticed or reported to us.

for SARATHY & BALU Chartered Accountants (Firm Regn No.003621S)

T. MAHIPAL REDDY Place : Hyderabad Partner Date : 26th April, 2014 ICAI Ms.No.227616


Mar 31, 2013

We have audited the accompanying financial statements of NILE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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, 2013;

b) in the case of the Statement of Profit and Loss, 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.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors Report) Order, 2003 ("the CARO03") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the mat- ters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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 purpose 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, 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 comply with the Accounting Standards referred to in subsec- tion (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a dir- ector in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) As per the information and explanations furnished to us, the companys fixed assets have been physically verified by the management at reasonable intervals as per a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets and no material discrepancies were noticed on such verification.

(c) As per the information and explanations given to us and as per the books of account audited by us, though the Companys fixed assets of Glass Lining Division were disposed off during the year, in our view, it has not affected the going concern status of the Company.

(ii) (a) As per the information and explanations furnished to us, the inventory has been physically verified by the management during the year at reasonable intervals. In our opinion, the frequency of verification is reasonable and adequate.

(b) In our opinion, the procedures of 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) Based on the examination of records produced for our verification, we are of the opinion that the Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book stocks.

(iii) (a) As per the information and explanations furnished to us and as per the books of account audited by us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained U/s.301 of the Companies Act, 1956. Hence, clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the CARO03 are not applicable to this company.

(b) During the year under audit, the Company had taken unsecured loans/ fixed deposits from 3 persons/entities covered in the register maintained U/s.301 of the Companies Act, 1956. The maximum amount involved during the year in these transactions is Rs.717.39 lacs (Prev. year Rs.696.20 lacs) and the year-end balance (including the loans accepted in earlier years and continued in the current year) is Rs.805.19 lacs (Prev. year Rs.604.42 lacs).

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties listed in the register maintained U/s. 301 of the Act, are not, prima facie, prejudicial to the interest of the company.

(d) In our opinion and as per the information and explanations given to us, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company nor have we been informed of any such continuing failures.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered in the register maintained U/s.301 of the Act, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained U/s. 301 of the Act and exceeding the value of Rs.5.00 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) In our opinion and according to the information and explanations given to us, with regard to the deposits accepted from the public, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA and other relevant provisions of the Act and the Rules framed there under. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal against this company in any matter relating to the deposits accepted by the company.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost records U/s.209(1)(d) of the Companies Act, 1956 and are of the opin- ion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not conducted any audit of the same.

(ix) According to the information and explanations furnished to us and as per the records of the company:- a) the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales- Tax, Wealth-Tax, Service Tax, Custom Duty, Excise-Duty and other material statutory dues applicable to it. As the Govt. has not notified the date for levying Cess payable U/s.441A of the Act, the company has not made any provision/paid the said Cess. Hence, our comments on the regularity or otherwise of the payment of the Cess are Nil.

b) there are no undisputed arrears of statutory dues as at 31/3/2013 which are outstanding for a period of more than six months from the date they became payable.

c) Statutory dues viz., Income Tax, Sales Tax, Wealth-Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of dispute are as under:

Total amount Period to Sl. Name of Nature of of disputed which the No statute dues dues amount (Rs. in lacs) relates

i) GHMC Property 11.70 F.Y. Act tax 2011-12

ii) AP VAT Value 136.34 F.Y. Act, 2005 Added 2008-09 to Tax 2010-11

Name Forum where dispute is Remarks pending

GHMC High Court of Paid Rs.2.34 lacs as A.P. per the interim orders of the court.

AP VAT Appellate Paid Rs.68.17 lacs Deputy as per the stay Commissioner granted by the (CT), appellate authority. Hyderabad (Rural)

(x) The company has no accumulated losses as at the end of the financial year under audit and it has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank. The company has not issued debentures.

(xii) Based on our examination of documents and records and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, paragraph 4(xii) of the CARO, 2003 is not applicable to this Company.

(xiii) In our opinion and according to the information and explanations given to us, the provisions of special statue applicable to chit fund companies are not applicable to this company and the company is not a nidhi/mutual benefit fund/society. Therefore, provisions of paragraph 4(xiii) of the CARO, 2003 are not applicable to this Company.

(xiv) In our opinion, and as per the information and explanations given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. In respect of the long-term investments made in the equity shares of another company, proper records have been maintained and timely entries have been made therein and the shares have been held by the company in its own name.

(xv) According to the information and explanations given to us, during the period covered under our audit, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Hence, provisions of Paragraph 4 (xv) of the CARO, 2003 are not applicable to this Company

(xvi) According to the information and explanations given to us and as per the books of account audited by us, during the period covered under our audit, the company has not availed any term loans. Hence, provisions of Paragraph 4 (xvi) of the CARO, 2003 are not applicable to this Company.

(xvii) According to the information and explanations given to us and on an over all examination of the balance sheet of the company, during the period covered under audit, no funds raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us and based on the accounts audited by us, during the period covered under our audit, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained U/s.301 of the Act.

(xix) According to the information and explanations given to us, during the period covered under our audit, the Company has not issued any debentures. Hence, creation of security or charge for the same is not applicable.

(xx) According to the information and explanations furnished to us, during the period covered under our audit, the Company has not raised any money by public issues. Hence, provisions of Paragraph 4(xx) of the CARO, 2003 are not applicable to this company.

(xxi) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year covered under our audit, no fraud on or by the company has been noticed or reported to us.

for SARATHY & BALU

Chartered Accountants

(Firm Regn No.003621S)

Place: Hyderabad

Date : 11-05-2013 Sd/-

VENKATESWARLU

Partner

ICAI Ms.No.022481


Mar 31, 2012

1. We have audited the attached balance sheet of NILE LIMITED ("the company") as at 31st March 2012, the statement of profit and loss 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 the 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 ("the CARO, 2003") issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956 ("the Act"), as amended from time to time, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

4. Further to our comments in the Annexure referred to 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, statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the balance sheet, statement of profit and loss 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, to the extent applicable.

(v) 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:

a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2012;

b) in the case of the statement of Profit and Loss, 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.

5. On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as at 31st March 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

6. As the Central Government has not yet notified the date for levy and collection of Cess U/s.441A of the Companies Act, 1956, the company was not required to make any provision / payment of the said Cess for the year under report. Hence, our comments on the regularity or otherwise of the company in this regard are Nil.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) As per the information and explanations furnished to us, the company's fixed assets have been physically verified by the management at reasonable intervals as per a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets and no material discrepancies were noticed on such verification.

(c) As per the information and explanations given to us and as per the books of account audited by us, the Company's fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

(ii) (a) As per the information and explanations furnished to us, the inventory has been physically verified by the management during the year at reasonable intervals. In our opinion, the frequency of verification is reasonable and adequate.

(b) In our opinion, the procedures of 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) Based on the examination of records produced for our verification, we are of the opinion that the Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book stocks.

(iii) (a) As per the information and explanations furnished to us and as per the books of account audited by us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Hence, clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the CAR0'03 are not applicable to this company.

(b) During the year under audit, the Company had taken unsecured loans/fixed deposits from

6 persons/entities covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in these transactions was Rs. 1,036.98 lakhs (Prev. year Rs. 837.39 lakhs) and the year-end balance of loans taken from these parties (including the loans accepted in earlier years and continued in the current year) was Rs. 590.00 lakhs (Prev. year Rs. 577.00 lakhs).

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties listed in the register maintained under Section 301 of the Act, are not, prima facie, prejudicial to the interest of the company.

(d) In our opinion and as per the information and explanations given to us, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company nor have we been informed of any such continuing failures.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered in the register maintained under Sec.301 of the Act, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rs. 5.00 lakhs 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) In our opinion and according to the information and explanations given to us, with regard to the deposits accepted from the public, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA and other relevant provisions of the Act and the Rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal against this company in any matter relating to the deposits accepted by the company.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii)According to the information and explanations given to us, the Central Government has prescribed maintenance of cost records U/s.209(1)(d) of the Act, for the Lead and Wind Power Divisions of the company. We have broadly reviewed the said records maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) According to the information and explanations furnished to us and as per the records of the company:-

a) the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales-Tax, Wealth- Tax, Service Tax, Custom Duty, Excise-Duty and other material statutory dues applicable to it. As the Govt. has not yet notified the date for levying Cess payable U/s.441A of the Act, we are of the view that the company is not required to make any provision/pay the said Cess. Hence, our comments on the regularity or otherwise of the payment of the Cess are Nil.

b) there are no undisputed arrears of statutory dues as at 31/3/2012 which are outstanding for a period of more than six months from the date they became payable.

c) Statutory dues viz., Income Tax, Sales Tax, Wealth-Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of dispute are as under:

Sl. Name of Nature of Amount No. Statute Dues (Rs. in lakhs)

i) Finance Act, Service Tax 3.20 1994

ii) GHMC Act Property 10.93 Tax

Name of Statute Period to which Forum where Remarks the Amount Dispute is Relates Pending

Finance Act, January, 2005 CESTAT, Entire amount was 1994 to Bangalore paid under October, 2007 protest on 01.07.2012.

GHMC Act 2011-12 High Court of Paid Rs. 1,56,882/- A.P. as per the interim orders of the Hon'ble Court on 03.05.2012.

(x) The company has no accumulated losses as at the end of the financial year under audit and it has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us the Company has not defaulted in repayment of dues to any financial institution or bank. The company has not issued debentures.

(xii) Based on our examination of documents and records and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, maintenance of adequate documents and records for such loans and advances is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the provisions of special statue applicable to chit fund companies are not applicable to this company and the company is not a nidhi/mutual benefit fund/ society. Therefore, provisions of paragraph 4(xiii) of the CARO, 2003 are not applicable to this Company.

(xiv) In our opinion, and as per the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of Paragraph 4 (xiv) of the CARO, 2003 are not applicable to this Company.

(xv) According to the information and explanations given to us, during the period covered under our audit, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) In our opinion, the term loans availed during the year under audit have been applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an over all examination of the balance sheet of the company, during the period covered under audit, no funds raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, during the period covered under our audit, 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.

(xix) According to the information and explanations given to us, during the period covered under our audit, the Company has not issued any debentures. Hence, creation of security or charge for the same is not applicable.

(xx) According to the information and explanations furnished to us, during the period covered under our audit, the Company has not raised any money by public issues. Therefore, provisions of Paragraph 4(xx) of the CARO, 2003 are not applicable to this company.

(xxi) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year covered under our audit, no fraud on or by the company has been noticed or reported to us.

for SARATHY & BALU

Chartered Accountants

(Firm Regn No.3621S)

J. VENKATESWARLU

Place: Hyderabad Partner

Date : 21-07-2012 ICAI Ms. No.022481


Mar 31, 2011

1. We have audited the attached balance sheet of NILE LIMITED ("the company") as at 31st March 2011, and also the profi t and loss account and the cash fl ow statement for the year ended on that date annexed thereto. These fi nancial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by management, as well as evaluating the overall fi nancial 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 ("the CARO, 2003") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, as amended from time to time, we enclose in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order to the extent applicable to this Company.

4. Further to our comments in the Annexure referred to 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(iii) The Balance Sheet, Profi t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profi t 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, to the extent applicable.

(v) 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:

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 Profi t and Loss Account, of the profi t for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date.

5. On the basis of written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualifi ed as at 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.

6. As the Central Government has not yet notifi ed the date for levy and collection of Cess U/s.441A of the Companies Act, 1956, the company has not made provision/paid the said Cess for the year under report and hence our comments on the regularity or otherwise of the company in this regard are nil.

Annexure to the Auditors' Report dated 23rd April, 2011

[The annexure referred to in the Auditors' Report to the Members of NILE Limited ("the company") for the year ended 31st March, 2011]

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fi xed assets.

(b) As per the information and explanations furnished to us, the company's fi xed assets have been physically verifi ed by the management at reasonable intervals as per a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets and no material discrepancies were noticed on such verifi cation.

(c) As per the information and explanations given to us and as per the books of account audited by us, the Company's fi xed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

(ii) (a) As per the information and explanations furnished to us, the inventory has been physically verifi ed by the management during the year at reasonable intervals. In our opinion, the frequency of verifi cation is reasonable and adequate.

(b) In our opinion, the procedures of 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) Based on the examination of records produced for our verifi cation, we are of the opinion that the Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verifi cation between the physical stocks and the book stocks.

(iii) (a) As per the information and explanations furnished to us and as per the books of account audited by us, the Company has not granted any loans, secured or unsecured to companies, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Hence, clauses (iii)

(b), (iii)(c) and (iii)(d) of paragraph 4 of the CARO'03 are not applicable to this company.

(b) During the period under audit, the Company had taken unsecured loans and fi xed deposits from 9 persons covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in these transactions was Rs. 837.39 lakhs and the year-end balance of loans taken from all such parties, including the loans accepted in earlier years and continued in the current year, was Rs. 588.20 lakhs.

(c) In our opinion, the rate of interest and other terms and conditions on which the above unsecured loans have been taken from the parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(d) In our opinion and as per the information and explanations given to us, the company is regular in repaying the principal amounts as stipulated and has been regular in payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchases of inventory and fi xed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company nor have we been informed of any such continuing failures.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under Sec.301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rs. 5.00 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) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal against this company in any matter relating to the public deposits.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Central Government has prescribed maintenance of cost records U/s.209(1)(d) of the Companies Act, 1956 for the Lead Unit and Wind Power Division of the company and we have broadly reviewed the said records maintained by the company and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(ix) According to the information and explanations furnished to us and as per the records of the company:- a) the company is 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, Custom Duty, Excise-Duty and other statutory dues as applicable to it with the appropriate authorities. As the Govt. has not yet notifi ed the date for levying Cess U/s.441A of the Act, the company is not liable to pay the said Cess and hence our comments on the regularity or otherwise of the payment in this regard are Nil.

b) there are no undisputed arrears of statutory dues as at 31/3/2011 which are outstanding for

a period of more than six months from the date they became payable.

c) there are no dues of Income Tax, Sales Tax, Wealth-Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute.

d) The company has deposited under protest the disputed income tax demand of Rs. 42.23 lacs in full and preferred appeal against the same. Pending disposal of appeal, the same is not provided for in the books.

(x) The company has no accumulated losses as at the end of the fi nancial year under audit and it has not incurred cash losses during the fi nancial year covered by our audit and immediately preceding Financial Year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any fi nancial institution or bank. The company has not issued debentures.

(xii) Based on our examination of documents and records and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, maintenance of adequate documents and records for such loans and advances is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not chit a fund or a nidhi/mutual benefi t fund/society. Therefore, provisions of paragraph 4(xiii) of the CARO, 2003 are not applicable to this Company.

(xiv) In our opinion, and as per the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of Paragraph 4 (xiv) of the CARO, 2003 are not applicable to this Company.

(xv) According to the information and explanations given to us, during the period covered under audit, the Company has not given any guarantee for loans taken by others from bank or fi nancial institutions.

(xvi) In our opinion, the term loans availed during the year under audit have been applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an over all examination of the balance sheet of the company during the period covered under audit, no funds raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, during the period covered under our audit, 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.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures and hence creation of security or charge for the same is not applicable.

(xx) According to the information and explanations furnished to us, during the period covered under audit, the Company has not raised any money by public issues. Therefore, provisions of Paragraph 4(xx) of the CARO, 2003 are not applicable to this company.

(xxi) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year under audit, no fraud on or by the company has been noticed or reported to us.

for SARATHY & BALU

Chartered Accountants

(Firm Regn No.3621S)

Place : Hyderabad J. VENKATESWARLU

Date : 23-04-2011 Partner

ICAI Ms. No.022481




Mar 31, 2010

1. We have audited the attached balance sheet of NILE LIMITED ("the Company") as at 31st March 2010, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. 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 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 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, as amended from time to time, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to this Company.

4. Further to our comments in the Annexure referred to 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 it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(iii) The Balance Sheet, Profit and Loss Account and the 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, to the extent applicable.

(v) 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:

a) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2010;

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.

5. On the basis of written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as at 31st March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

6. As the Central Government has not notified the date for levy and collection of Cess U/s.441A of the Companies Act, 1956, the company has not made provision/paid the said Cess for the year under report and hence our comments on the regularity or otherwise of the company in this regard are nil.

Annexure to the Auditors Report dated 08/05/2010

[The annexure referred to in the Auditors Report to the Members of NILE Limited ("the company") for the year ended 31st March, 2010]

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) As per the information and explanations furnished to us, the companys fixed assets have been physically verified by the management at reasonable intervals as per a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets and no material discrepancies were noticed on such verification.

(c) As per the information and explanations given to us and as per the books of account audited by us, the Companys fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

(ii) (a) As per the information and explanations furnished to us, the inventory has been physically verified by the management during the year at reasonable intervals. In our opinion, the frequency of verification is reasonable and adequate.

(b) In our opinion, the procedures of 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) Based on the examination of records produced for our verification, we are of the opinion that the Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book stocks.

(iii) (a) As per the information and explanations furnished to us and as per the books of account audited by us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Hence, clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the CARO03 are not applicable to this company.

(b) During the period under audit, the Company had taken unsecured loans and fixed deposits from 7 persons covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in these transactions was Rs.449.28 lakhs and the year-end balance of loans taken from all such parties, including the loans accepted in earlier years and continued in the current year, was Rs.228.00 lakhs.

(c) In our opinion, the rate of interest and other terms and conditions on which the above unsecured loans have been taken from the parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(d) In our opinion and as per the information and explanations given to us, the company is regular in repaying the principal amounts as stipulated and has been regular in payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company nor have we been informed of any such continuing failures.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under Sec.301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rs.5.00 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) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal against this company in any matter relating to the public deposits.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Central Government has prescribed maintenance of cost records U/ s.209(1)(d) of the Companies Act, 1956 for the Lead Unit and Wind Power Division of the company and we have broadly reviewed the said records maintained by the company and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(ix) According to the information and explanations furnished to us and as per the records of the company:- a) the company is regular in depositing the undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise-Duty and other statutory dues as applicable to it with the appropriate authorities. As the Govt. has not yet notified the date for levying Cess U/s.441A of the Act, the company is not liable to pay the said Cess and hence our comments on the regularity or otherwise of the payment in this regard are nil.

b) the company is not required to transfer any amount to the investor education and protection fund during the year under audit.

c) there are no undisputed arrears of statutory dues as at 31/3/2010 which are outstanding for a period of more than six months from the date they became payable.

d) there are no dues of Income Tax, Sales Tax, Wealth-Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute.

(x) The company has no accumulated losses as at the end of the financial year and it has not incurred cash losses during the financial year covered by our audit. It has incurred cash losses in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank. The company has not issued debentures.

(xii) Based on our examination of documents and records and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, maintenance of adequate documents and records for such loans and advances is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, provisions of paragraph 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to this Company.

(xiv) In our opinion, and as per the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of Paragraph 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to this Company.

(xv) According to the information and explanations given to us, during the period covered under audit, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) In our opinion, the term loans availed during the year under audit have been applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an over all examination of the balance sheet of the company during the period covered under audit, no funds raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, during the period covered under our audit, 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.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures and hence creation of security or charge for the same is not applicable.

(xx) According to the information and explanations furnished to us, during the period covered under audit, the Company has not raised any money by public issues. Therefore, provisions of Paragraph 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to this company.

(xxi) a) We have been informed by the Companys management and also noticed that during the period under audit, while importing raw materials, one of the suppliers has committed a fraud on the company to the tune of Rs.49.20 lacs and the same has been charged off to the Profit & Loss Account.

b) According to the information and explanations given to us and on the basis of our examination of the books of account, during the period under audit, no fraud by the Company has been noticed or reported.

for SARATHY & BALU

Chartered Accountants

(Firm Regn No.3621S)

Place: Hyderabad J. VENKATESWARLU

Date: 08-05-2010 Partner

ICAI Ms. No.022481

 
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