Net 4 India

1.  We have audited the attached Balance Sheet of M/s. NET 4 INDIA
 LTD. as at March 31,2008, the Profit and Loss Account and also the
 Cash Flow Statement for the year ended on that date, annexed thereto.
 These financial statements are the responsibility of the 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 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, as
 amended by the Companies {Auditors Report) (Amendment) Order,2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of section 227 of the Companies Act, 1956, we enclose in the Annexure
 a statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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 and Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) In our opinion, the Balance Sheet and 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;
 
 (v) On the basis of written representations received from the
 Directors, as on March 31,2008 and taken on record by the Board of
 Directors, we report that none of the Directors of the Company is
 disqualified as on March 31,2008 from being appointed as a Director in
 terms of clause (g) of sub-section (1) of section 274 of the Companies
 Act, 1956;
 
 (vi) 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, 2008; and
 
 (b) In the case of the Profit and Loss Account, of the profit for the
 year ended on that date.
 
 (c) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS
 
 1.  The Company has maintained proper records showing full
 particulars, including quantitative details and 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 the nature of its assets. No material discrepancies were
 noticed on such verification.
 
 In our opinion, a substantial part of fixed assets have not been
 disposed off during the year.
 
 2.  As explained to us, inventory at ait locations have been
 physically verified by the management at regular Intervals during the
 year and at the year-end. In our opinion, the frequency of
 verification is reasonable having regard to the size of the Company
 and the nature of its business.
 
 In our opinion and according to the information and explanation given
 to us, 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.
 
 The company is maintaining proper records of inventory. No material
 discrepancies have been noticed by the management on verification
 between the physical stocks and the book records.
 
 In our opinion, the valuation of stocks is fair and proper in
 accordance with the normally accepted accounting principles and is on
 the same basis as in the preceding year.
 
 3.  The Company has taken interest free unsecured loan from director
 listed in the register maintained under section 301 of the Companies
 Act, 1956, (maximum amount Rs. 295 lakhs)the terms and conditions of
 which are prima facie not prejudicial to the interests of the Company.
 
 The Company has given an interest free unsecured loan to a party
 listed in the register maintained under Section 301 of the Companies
 Act, 1956, (maximum amount Rs. 5.14 lakhs) the terms and conditions of
 which are prima facie not prejudicial to the interests of the Company.
 
 In our opinion and according to the information and explanations given
 to us, there is no overdue amount of loans granted by the Company to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 The company has given interest free advances in the nature of loans to
 the employees, of the company, the repayment in respect of which is
 regular and as stipulated, where such stipulations exist.
 
 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 for the purchase of finished goods, fixed assets and for the
 sale of goods. During the course of our audit, no major weakness has
 been noticed in the internal controls system in respect of these
 areas.
 
 5. In our opinion, and according to the information and explanations
 given to us, the transactions that need to be entered in the register
 in pursuance of section 301 of the Act have been entered, and the
 transactions have been made at prices which are reasonable with regard
 to the prevailing market prices at the relevant time.
 
 6. The Company has not accepted any deposits from the public and
 consequently, the directives issued by the Reserve Bank of India, the
 provisions of Sections 58A and 58AA of the Companies Act, 1956 and the
 rules framed thereunder are not applicable.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  The Central Government has not prescribed maintenance of Cost
 records under section 209(1) (d) of the Companies Act, 1956 in respect
 to the company.
 
 9. According to the information and explanations given to us, and on
 the basis of our examination of the books of account, the Company has
 generally been regular in depositing with appropriate authorities
 undisputed statutory dues including Provident Fund, Income Tax, Wealth
 tax, Sales-tax, Customs duty, Investor Education and Protection Fund
 and any other material statutory dues applicable to it. Interest has
 been deposited wherever applicable.
 
 According to the information and explanations given to us, no
 undisputed dues payable in respect of Provident Fund, Investor
 Education and Protection Fund, Income tax, Wealth tax, Sales tax,
 Customs duty, Cess and other material statutory dues were outstanding
 at March 31,2008 for a period of more than six months from the date
 they become payable.
 
 According to the information and explanations given to us, there are
 no dues in respect of Sales tax, Income tax, Wealth tax, Customs duty
 and Cess which have not been deposited with the appropriate
 authorities on account of any dispute.
 
 10.  The Company does not have any accumulated losses at the end of
 the financial year and has not incurred cash losses in the financial
 year and in the financial year immediately preceding such financial
 year. Accordingly, clause 4(x) of the order is not applicable.
 
 11.  In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to any
 bank or financial institution. The Company has not issued any
 debentures.
 
 12 The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 Accordingly, clause 4(xii) of the order is not applicable.
 
 13.  The Company is not a chit fund, mutual benefit fund or a society.
 Accordingly, clause 4(xiii) of the order is not applicable.
 
 14.  According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures
 and other investments. Accordingly, clause 4(xiv) of the order is not
 applicable.
 
 15 In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantee for loans taken by others from banks or financial
 institutions are not prima- facie prejudicial to the interests of the
 Company.
 
 16.  In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 17 According to the Cash Flow Statement and records examined by us and
 according to the information and explanations given to us, on overall
 basis, funds raised on short term basis have not been used during the
 year for long term investment and vice versa.
 
 18. The Company has not made any preferential allotment to parties and
 companies covered in the register maintained under section 301 of the
 Act. Accordingly, clause 4(xviii) of the order is not applicable.
 
 19.  The Company has not issued any debentures. Accordingly, clause
 4{xix) of the order is not applicable.
 
 20.  The Company has not raised any money by public issues during the
 year. Accordingly, clause 4(xx) of the order is not applicable.
 
 21.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the
 Company was noticed or reported during the year.
 
                                             For Sandy Associates
                                            Chartered Accountants
 
                                                       sd/-
                                                  Saradsep Gupta
 Place: New Delhi                                     Proprietor 
 Date : May 13, 2008                        Membership No: 86069