To

The Members,


Neha International Limited

We have audited the attached Balance Sheet of NEHA INTERNATIONAL LIMITED as at
30th June, 2012, the Statement of 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 Company's management.Our
responsibility is to express an opinion on these financial statements based on our audit.

1. 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 misstatements. 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.

2. As required by the companies (Auditor's Report) Order, 2003 and the Companies
(Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in
terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 & 5 of the said order.

3. Further to our comments in the Annexure referred to in paragraph (2) 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 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 such books of the company.

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

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow
Statement dealt with this report subject to standards specified in Para 3(e) below
complies with the accounting standards referred to in Section 211(3C) of the
CompaniesAct,1956.

(e) The Company has not made a Provision of Gratuity and other retirement benefits as
per the actuarial valuation referred in the Accounting Standard 15 "Accounting for
Retirement Benefits in the financial Statement of Employers". The effect on current
Year profit was not ascertained.

(f) On the basis of written representations received from the Directors and taken on
record by the Board of Directors, in our opinion, none of the director is disqualified
from being appointed as a director under section 274(1)(g) of the CompaniesAct,1956.

4. 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
other notes thereon, give the information required by the Companies Act, 1956 in the
manner so required and give a true and fair view subject to our qualifications given in
para 3(e)

i) in the case of the Balance Sheet, of the state of affairs of the company as at 30th
June, 2012.

ii) in the case of the Profit and Loss Account, of profit of the Company for the year
ended on the date.

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on
that date.


  

    

    
For MATHESH & RAMANA
  
  

    

    
Chartered Accountants
  
  

    

    
Firm. Reg. No. 002020S
  
  

    

    
Sd/-
  
  

    
Place : Hyderabad 
    
B.V. RAMANA REDDY
  
  

    
Dated : 05/12/2012
    
M. No.026967, PARTNER
  



ANNEXURE TO THE AUDITORS' REPORT

(This is the Annexure to in our Report of even date)

1. The company has maintained proper records showing full particulars including
quantitative details and the situation of Fixed Assets. All the assets have not been
physically verified by the management during the Year, but there is a regular programme of
verification which in our opinion is reasonable having regard to the size of the Company
and nature of its business. We have been informed that no material discrepancies were
noticed on such physical verification. Substantial part of fixed assets has been disposed
during the Year,however there is no affect on its going concern.

2. The stock of inventory has been physically verified by the management during the
Year at reasonable intervals. In our opinion,the procedure of the physical verification of
inventory followed by the management is reasonable and adequate in relation to the size of
the company and the nature of its business.The company is maintaining proper stock records
of inventory.The discrepancies noticed on verification between physical stock and the book
records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms
or other parties covered under the register maintained under section 301 of the
CompaniesAct,1956.

(b) The Company has taken interest free loan from one party covered under the register
maintained under section 301 of the CompaniesAct,1956.The amount involved during the Year
was Rs. 761.26 lakhs and the Year-end balance of loans from such parties was Rs. 83.93
lakhs.

As per the information and explanation given to us, we are of the opinion that the rate
of Interest and other terms & conditions on which such loans were taken are not
prima-facie prejudicial to the Interest of the Company and the same is in regular in
repayment.

4. In our opinion and according to the information and explanations given to us, there
are adequate internal control procedures 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. During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal controls.

5. (a) According to information and explanation given to us, the particulars of
contracts or arrangements that need to be entered in the register maintained under section
301 of the Companies Act 1956 is updated in the register.

(b) As per the information and explanation provided to us, there are no transactions
made in pursuance of contracts or arrangements entered in the register maintained under
section 301 of the Companies Act and exceeding the value of rupees five lakhs in respect
of any party during the Year.

6. As informed, the Company has not accepted any deposits from the public during the
Year.

7. The Company has formal Internal Audit System and the Company's Internal Control
Procedures together with the internal checks conducted by the management staff during the
Year can be considered as an adequate system commensurate with the size and nature of
business.

8. As informed the maintenance of cost records has not been prescribed by the Central
Government under section 209(1)(d) of the CompaniesAct,1956 for the activities of the
Company.

9. (a) The Company is regular in depositing undisputed statutory dues including tax
deducted at source, employees Provident Fund and other statutory dues with appropriate
authorities and there is no amount outstanding for a period of more than 6 months.

(b) According to the information and explanation given to us, there are no dues of
sales tax, income tax and other taxes and duties that have not been deposited on account
of any dispute.

10. The Company does not have accumulated losses exceeding fifty percent of its net
worth at the end of the Year and has neither incurred any cash losses during the Year
covered by our audit nor in the immediately preceding Financial Year.

11. As per the information and explanation provided to us the Company has not defaulted
in repayment of dues to Banks.

12. As per information and explanation provided to us, the Company has not granted
loans and advances on the basis of security by way of pledge of shares,debentures and
other Investment.

13. The Company is not a Chit Fund,Nidhi or Mutual Benefit Fund/Society.

14. The Company is not dealing or trading in shares,securities,debentures and other
investments.

15. The Company has not given any guarantee for loans taken by others, from Banks or
Financial Institutions of the Company.

16. To the best of our knowledge and belief and according to the information and
explanation given to us, term loans availed by the company during the year were prima
facie applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and on an overall
examination of the balance sheet of the company, we report that no funds raised on
short-term basis have been used for long-term investment..

18. There were no debentures issued by the Company.

19. During the year the company has raised money through GDR issue and warrants. The
funds raised through the issues were prima facie applied for the purpose for which the
funds were raised.

20. According to the information and explanations given to us, no fraud on or by the
company has been noticed or reported during the course of our audit.


  

    

    
For MATHESH & RAMANA
  
  

    

    
Chartered Accountants
  
  

    

    
Firm. Reg. No. 002020S
  
  

    

    
Sd/-
  
  

    
Place : Hyderabad
    
B.V.RAMANA REDDY
  
  

    
Dated : 05/12/2012
    
M. No.026967, PARTNER