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Auditor Report of Zee Entertainment Enterprises Ltd.

Mar 31, 2016

1. We have audited the accompanying Standalone Financial Statements of Zee Entertainment Enterprises Limited ("the Company"), which comprise the Balance Sheet as at 31 March, 2016, 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

2. MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE 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 and presentation of these standalone 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 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

3. AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone 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. 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 standalone financial statements,

4. OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31 March, 2016 and its profit and its cash flows for the year ended on that date

5. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by the Companies (Auditor''s Report) Order, 2016 issued by the Central Government of India in terms of Section 143(11) of the Act (hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the "Annexure A", a Statement on the matters specified in paragraphs 3 and 4 of the Order,

II. 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 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;

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"; 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 and Note 27 to the financial statements

ii. The Company did not have any long-term contracts including derivative contracts having any material foreseeable losses; and

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

Annexure referred to in Paragraph 5(l) under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Zee Entertainment Enterprises Limited on the standalone financial statements for the year ended 31 March 2016, we report that:

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

(b) The fixed assets, except Integrated Receiver Decoders (IRD) boxes lying with third parties, have been physically verified by the management during the year, as per the phased program designed to cover all the fixed asssets over a period, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of account

(c) According to the information and explanations given to us and on the basis of our examination of records, the title deeds of immovable properties are held in the name of the Company,

ii. The inventory has been physically verified (copyrights of media content verified with reference to title documents/agreements) by the management at reasonable intervals during the year. As explained to us, no discrepancies were noticed on physical verification as compared to book records

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans/guarantees given and investments made

v. The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act.

vi. The Central Government of India has not prescribed the maintenance of cost records under Section 148(1) of the Act for any of the services rendered by the Company,

vii. According to the records of the Company, examined by us and information and explanations given to us:

a) Undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise value added tax, cess and others as applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March, 2016 for a period of more than six months from the date they became payable

b) There are no amounts on account of sales tax, duty of customs, duty of excise and value added tax which are yet to be deposited on account of any dispute. The disputed dues of service tax and income tax which have not been deposited are as under:

Period to which the Name of the Statute Nature of the Dues Amount (Rs,/million) amount relate

The Central Excise Act, 1944 Service Tax 314 F.Y. 2006-2007

148 F.Y. 2007-2008

F.Y. 2011-2012

F.Y. 2012-2013

Tax Deducted at Source

The Income Tax Act, 1961 228 F.Y. 2007-2008 (including interest) 65 F.Y. 2010-2011

1 F.Y. 2011-2012

10 F.Y. 2012-2013

15 F.Y. 2013-2014

income Tax (,426,630)" F.Y 1995-1996

18 F.Y. 2004-2005

5 F.Y. 2009-2010

1,476 F.Y. 2010-2011

3* F.Y. 2008-2009

45* F.Y. 2009-2010

763 F.Y. 2011-2012

Income Tax-Penalty 173 F.Y. 2007-2008

Name of the Statute Forum where dispute is pending

TCentral Excise he Customs, Central Excise and Act,1944 Service Tax Appellate Tribunal

Additional Commissioner of Service Tax, Mumbai

The Income Tax Commissioner of Income Tax (Appeals) Act,1961

High Court

Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

Dispute Resolution Panel Commissioner of Income Tax (Appeals)

A represents absolute amount

''pertains to erstwhile ETC Networks Limited, merged with the Company

viii. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions or banks. The Company does not have any loans from Government and has not issued any debentures during the year

ix. In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans raised during the year have been applied for the purposes for which they were raised,

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have been informed of any such case by the Management,

xi. According to the records of the Company examined by us, and information and explanations given to us, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act,

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company and the Nidhi Rules, 2014 are not applicable to it.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards,

xiv. According to the records of the Company examined by us, and information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year,

xv. According to the records of the Company examined by us, and information and explanations given to us, the Company has not entered into non-cash transactions with directors or persons connected with him

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For MGB & Co. LLP

Chartered Accountants

Firm Registration Number 101169W/W-100035

Hitendra Bhandari

Partner

Membership Number 107832 Mumbai, 10 May 2016


Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Zee Entertainment Enterprises Limited ("the Company"), which comprise the Balance Sheet as at 31 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 Standalone Financial Statements

2. 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 standalone 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 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

3. Our responsibility is to express an opinion on these standalone 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 suffcient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

4. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31 March 2015, and its Profit and its cash flows for the year ended on that date.

Emphasis of Matters

5. We draw attention to Note 43 of the financial statements regarding Scheme of Arrangement for demerger of Media Business Undertaking of Diligent Media Corporation Limited and vesting with the Company w.e.f. 31 March 2014, approved by the Hon''ble High Court during the year, hence given effect in these financial statements.

Our opinion is not modifed in respect of this matter.

Report on other Legal and Regulatory requirements

6. As required by the ''Companies (Auditor''s Report) Order, 2015'' issued by the Central Government of India in terms of Section 143(11) of the Act (hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a Statement on the matters specified in paragraphs 3 and 4 of the Order.

7. 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 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;

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

f) 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 Notes 26 and 27 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

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

Annexure referred to in Paragraph 6 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Zee Entertainment Enterprises Limited on the standalone financial statements for the year ended 31 March 2015

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

(b) All the fxed assets, except Integrated Receiver Decoders (IRD) boxes lying with third parties, have been physically verifed by the management during the year. In our opinion, this periodicity of physical verifcation is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed on such verifcation, which are not material, have been properly dealt with in the books of account.

(ii) (a) The inventory has been physically verifed (copyrights of media content verifed with reference to title documents/agreements) by the management at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verifcation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory. As explained to us, no discrepancies were noticed on physical verifcation as compared to the book records.

(iii) The Company has not granted any loan, secured or unsecured, to companies, frms or other parties covered in the register maintained under Section 189 of the Act.

(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 with regard to purchase of inventory, fxed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the aforesaid areas.

(v) The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the rules framed thereunder to the extent notifed.

(vi) The Central Government of India has not prescribed the maintenance of cost records under Section 148 (1) of the Act for any of the activities of the Company.

(vii) According to the records of the Company, examined by us and information and explanations given to us:

(a) 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 others as applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2015 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues of service tax and income tax which are not deposited on account of any dispute are as under:

Amount Name of the Statute Nature of the Dues (Rs./million)

The Central Excise Act, 1944 Service Tax 1 312

2

148

0 (Rs. 176,706)^

43

5

The Income Tax Act, 1961 Tax Deducted at Source (including 262 interest)

69

1

10

15

Income Tax 0

(Rs.426,630)^

18

5

293

3*

45*

3,085



Name of the Statute Period to which thed Forum where dispute is pending amount relate

The Central Excise Act, 1944 F.Y. 2004-2005 Customs, Central Excise and Service Tax Appellate Tribunal

F.Y. 2006-2007

F.Y. 2006-2007

F.Y. 2007-2008

F.Y. 2006-2007 F.Y. 2007- 2008

F.Y. 2011-2012 Commissioner of Central Excise (Appeals) F.Y. 2012-2013

F.Y. 2011-2012 Additional Commissioner of Service Tax, Mumbai F.Y. 2012-2013

The Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

F.Y. 2007-2008

F.Y. 2010-2011 F.Y. 2011-2012 F.Y. 2012-2013 F.Y. 2013-2014

F.Y. 1995-1996 High Court

F.Y. 2004-2005 High Court

F.Y. 2009-2010 Income Tax Appellate Tribunal

F.Y. 2007-2008 Commissioner of Income Tax (Appeals)

F.Y. 2008-2009 Commissioner of Income Tax (Appeals)

F.Y. 2009-2010 Commissioner of Income Tax (Appeals)

F.Y. 2010-2011 Dispute Resolution Panel

^ represents absolute amount

*pertains to erstwhile ETC Networks Limited, merged with the Company.

(c) The Company has transferred required amount to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and the rules framed thereunder within time.

(viii) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses during the current financial year or in the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to banks and financial institutions during the year. The Company has not issued any debentures during the year.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by subsidiaries and others from banks are prima facie not prejudicial to the interests of the Company.

(xi) The Company has raised term loans during the year which have been applied for the purpose for which they were raised.

(xii) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co. LLP

Chartered Accountants

Firm Registration Number 101169W/W-100035

Hitendra Bhandari

Partner

Membership Number 107832

Mumbai, 21 May 2015


Mar 31, 2014

We have audited the accompanying financial statements of Zee Entertainment Enterprises Limited ("the Company") which comprise the Balance Sheet as at 31 March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date 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") read with the General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India. 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 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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 said 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 31 March, 2014;

b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows of the Company 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 ("the 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 Order.

2. As required by Section 227(3) of the Act, 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 purpose 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 Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the 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 read with the General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

(v) On the basis of written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as at 31 March, 2014, from being appointed as a director in terms of Section 274(1 )(g) of the Act.

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

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

b) All the fixed assets, except Integrated Receiver Decoders (IRD) boxes lying with third parties, have been physically verified by the management during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of account.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. a) The inventory has been physically verified (copyrights of television content verified with reference to title documents/agreements) by the management at reasonable intervals during the year.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion, the Company has maintained proper records of inventory. As explained to us, no discrepancies were noticed on physical verification as compared to the book records.

3. a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

b) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system in respect of the aforesaid areas.

5. According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register maintained in pursuance to Section 301 of the Act.

6. The Company has not accepted any deposits from the public during the year.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. According to the records of the Company examined by us and information and explanations given to us:

a) Undisputed Statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues outstanding as at 31 March, 2014 for a period of more than six months from the date they became payable.

b) According to the records of the Company, the dues of service tax, income tax and wealth tax which are not deposited on account of any dispute are as under:

Amount Period to which Name of the Statute Nature of the Dues (Rs./million) the amount relate

The Central Excise Act, 1944 Service Tax 1 F.Y. 2004-2005 312 F.Y. 2006-2007 148 F.Y. 2007-2008 2 F.Y. 2006-2007 0 F.Y. 2006-2007, (Rs.176,706) F.Y. 2007-2008

The Income Tax Act, 1961 Tax Deducted at 69 F.Y. 2010-2011 Source 1 F.Y. 2011-2012 10 F.Y. 2012-2013

Income Tax 0 F.Y. 1995-1996 (Rs.426,630) 18 F.Y. 2004-2005 124 F.Y. 2005-2006 6 F.Y. 2006-2007 242 F.Y. 2008-2009 3* F.Y. 2008-2009 453 F.Y. 2009-2010 45* F.Y. 2009-2010

The Wealth Tax Act, 1957 Wealth Tax 0 F.Y. 2004-2005 (Rs.427,020) 0 F.Y. 2005-2006 (Rs.385,733)

Name of the Statue Forum where dispute is pending

The Central Excise Act,1944 Commissioner of Service Tax Commissioner of Service Tax Commissioner of Service Tax Commissioner of Central Excise (Appeals) Customs Excise and Service Tax Appellate Tribunal

The Income Tax Act, 1961 Commissioner of Income Tax (Appeals) Commissioner of Income Tax(Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) High Court Income Tax Appellate Tribunal Income Tax Appellate Tribunal Income Tax Appellate Tribunal Commissioner of Income Tax (Appeals) Dispute Resolution Panel

The Wealth Tax Act,1957 Commissioner of Income Tax (Appeals) Income Tax Appellate Tribunal Income Tax Appellate Tribunal

- represents absolute amount

* pertains to erstwhile ETC Networks Limited, merged with the Company.

10. The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks and financial institutions during the year.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society.

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

15. In our opinion, and according to the information and explanation given to us, the terms and conditions of guarantees given by the Company for loans taken by subsidiaries and others from banks are prima-facie not prejudicial to the interests of the Company.

16. The Company has raised term loans during the year which have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that short term funds have not been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

19. The Company has not issued any secured debentures during the year.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co.

Chartered Accountants

Firm Registration Number 101169W

Hitendra Bhandari

Partner

Membership Number 107832

Mumbai,

21 May, 2014


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

1. We have audited the accompanying financial statements of Zee Entertainment Enterprises Limited ("the Company") which comprise the Balance Sheet as at 31 March, 2013, 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

2. 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

3. 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.

4. 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.

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

OPINION

6. I n our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon, 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) I n the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2013;

b) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the 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 Order.

8. As required by Section 227(3) of the Act, 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 purpose 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 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 comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; and

(v) On the basis of written representation received from the directors as at 31 March, 2013 and taken on record by the Board of Directors, none of the directors is disqualified as at 31 March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE REFERRED TO IN PARAGRAPH (7) UNDER THE HEADING OF "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

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

(b) All the fixed assets, except Integrated Receiver Decoders (IRD) boxes lying with third parties, have been physically verified by the management during the year. In our opinion, the periodicity of verification is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of account.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2) (a) The inventory has been physically verified (copyrights of programs and film rights verified with reference to title documents/agreements) by the management at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory. As explained to us, no discrepancies were noticed on physical verification as compared to the book records.

3) (a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system in respect of the aforesaid areas.

5) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register maintained in pursuance to Section 301 of the Act.

6) The Company has not accepted any deposits from the public during the year.

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

8) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) According to the records of the Company examined by us and information and explanations given to us:

(a) Undisputed Statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues outstanding as at 31 March, 2013 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues of service tax, income tax and wealth tax which are not deposited on account of any dispute are as under:

Name of the Statute Nature of the Dues Amount (Rs. /million)

The Central Excise Act, 1944 Service Tax 1

312

148

2

0

(Rs. 176,706)^

The Income Tax Act, 1961 Tax Deducted at Source 119 (including interest)

Income Tax 88

1,440

3*

45*

The Wealth Tax Act, 1957 Wealth Tax 0

(Rs. 427,020)^

0

(Rs. 385,733)^

Name of the Statute Period to which Forum where dispute is pending the amount relate

The Central Excise Act, 1944 F.Y. 2004-2005 Commissioner of Service Tax

F.Y. 2006-2007 Commissioner of Service Tax

F.Y. 2007-2008 Commissioner of Service Tax

F.Y. 2006-2007 Commissioner of Central Excise (Appeals)

F.Y. 2006-2007, Customs Excise and Service Tax Appellate F.Y. 2007- 2008 Tribunal

The Income Tax Act, 1961 F.Y. 2010-2011 Commissioner of Income Tax (Appeals)

F.Y. 2005-2006 Income Tax Appellate Tribunal

F.Y. 2008-2009 Dispute Resolution Panel

F.Y. 2008-2009 Commissioner of Income Tax (Appeals)

F.Y. 2009-2010 Commissioner of Income Tax (Appeals)

The Wealth Tax Act 195 F.Y. 2004-2005 Income Tax Appellate Tribunal

F.Y. 2005-2006 Income Tax Appellate Tribunal

A represents absolute amount

*pertains to erstwhile ETC Networks Limited, merged with the Company.

10) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11) The Company has not defaulted in repayment of dues to banks and financial institutions during the year.

12) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not a chit fund or a nidhi / mutual benefit fund / society.

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

15) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by Subsidiaries and others from banks is prima facie not prejudicial to the interests of the Company.

16) The Company has raised term loans during the year which have been applied for the purpose for which they were raised.

17) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that short term funds have not been used for long term investments.

18) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

19) The Company has not issued any secured debentures during the year.

20) The Company has not raised any money by public issue during the year.

21) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co.

Chartered Accountants

Firm Registration Number 101169W

Hitendra Bhandari

Partner

Membership Number 107832

Place: Mumbai

Date: 22 May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Zee Entertainment Enterprises Limited ("the Company") as at 31 March, 2012, the statement of profit and Loss and the cash Flow statement of the company 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 (auditors' Report) order, 2003 (the 'order') issued by the central Government of india in terms of section 227(4A) of the companies act, 1956 ("the act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the annexure referred to in paragraph (3) above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, 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, the statement of profit and Loss and the cash FIow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance sheet, the statement of profit and Loss and the cash Flow statement dealt with by this report comply with the accounting standards referred to in section 211 (3c) of the Act;

(e) on the basis of written representations received from the directors, as at 31 march, 2012 and taken on record by the Board, we report that none of the Director is disqualified as at 31 march, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act;

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together the notes thereon, 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:

i) in the case of the Balance sheet, of the state of affairs of the company as at 31 march, 2012;

ii) in the case of the statement of profit and Loss, of the profit of the company for the year ended on that date; and

iii) in the case of the cash FIow statement, of the cash flows of the company for the year ended on that date.

Annexure referred to in Paragraph (3) of Auditors' Report to the members of Zee Entertainment Enterprises Limited on the accounts for the year ended 31 March, 2012

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

(b) All the fixed assets, except assets lying with third parties, have been physically verified by the management during the year. in our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) During the year, there was no disposal of substantial part of fixed assets.

2) (a) the inventory has been physically verified (copyrights of programs and film/movie rights verified with reference to title documents/agreements) by the management at reasonable intervals during the year.

(b) in our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) in our opinion, the company has maintained proper records of inventory. As explained to us, there were no discrepancies noticed on physical verification as compared to the book records.

3) (a) the company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Act.

(b) the company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act.

4) 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 with regard to purchases of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system in respect of the aforesaid areas.

5) according to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register maintained in pursuance to section 301 of the Act.

6) the company has not accepted any deposits from the public during the year.

7) in our opinion, the company has an internal audit system commensurate with the size and nature of its business.

8) We have broadly reviewed the cost records maintained by the company pursuant to the companies (cost Accounting Records) Rules, 2011 prescribed by the central Government under section 209 (1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) According to the records of the company examined by us and information and explanations given to us:

(a) undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with the appropriate authorities. there are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at 31 March, 2012 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues of service tax, income tax and wealth tax which are not deposited on account of any dispute are as under:

Name of the statute Nature of the Dues Amount period to which the Forum where (Rs/ million) amount relate dispute is pending 1 F.Y.2004-2005

312 F.Y.2006-2007 Commissioner of Service Tax

148 F.Y.2007-2008

The Central Excise Act, 1944 Service Tax 2 F.Y.2006-2007 Commissioner of Central Excise (Appeals)

0 F.Y.2006-2007, Customs Excise and (Rs 176,706)* F.Y.2007-2008 Service Tax Appellate Tribunal

Tax Deducted at Source 932 F.Y.2005-2006 to (including interest) F.Y.2009-2010

The income Tax Act, 1961 90 F.Y.2005-2006 Commissioner of income Tax 434 F.Y.2007-2008 income Tax (Appeals)

3 F.Y.2008-2009

1 F.Y.2004-2005

The Wealth Tax Act, 1957 Wealth Tax Commissioner of 0 F.Y.2005-2006 income Tax (Appeals) (Rs 488,416)*

* represents absolute amount

10) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year or in the immediately preceding financial year.

11) The Company has not defaulted in repayment of dues to banks and financial institutions during the year.

12) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not chit fund or a nidhi / mutual benefit fund / society.

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

15) in our opinion, the terms and conditions of guarantees given by the Company for loans taken by subsidiaries and others are prima-facie not prejudicial to the interests of the Company.

16) The Company has not raised any term loan during the year.

17) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that funds raised on short term basis have not been used for long term investments.

18) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

19) The Company has not issued any secured debentures during the year.

20) The Company has not raised any money by public issue during the year.

21) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co

Chartered Accountants

Firm Registration Number 101169W

Hitendra Bhandari

partner

Membership Number 107832

Mumbai, 21 May, 2012


Mar 31, 2011

1. We have audited the attached Balance sheet of Zee entertainment enterprises Limited ("the Company") as at March 31, 2011, the profit and Loss account and also the Cash Flow statement of the Company 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 (the Order) issued by the Central Government of India in terms of section 227(4a) of the Companies act, 1956 ("the act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Without qualifying our report, we draw our attention to:

(a) note 3(a) in schedule 18 regarding amalgamation of foreign subsidiaries viz. Zes holdings Limited and Zee Multimedia Worldwide Limited (BVI) with the Company w.e.f. February 1, 2011 as per the scheme of amalgamation u/s 391 to 394 and other applicable provisions, approved by the honble high Court at Mumbai and effect thereof is given in these financial statement as per pooling of interest method as per as 14 and resultant difference of Rs. / Thousand 2,076,357 is adjusted against General reserve.

(b) note 3(C) in schedule 18 regarding demerger of education business undertaking to Zee Learn Limited as at april 1, 2010 as per the Composite scheme of amalgamation and arrangement u/s 391 to 394, approved by the honble high Court at Mumbai and in pursuance thereof, assets and liabilities of the demerged undertaking are transferred and the resultant difference of Rs. / Thousand 631,293 is adjusted against General reserve.

5. Further to our comments in the annexure referred to in paragraph (3) above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, 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, the profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance sheet, the profit and Loss account and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in section 211 (3C) of the act;

(e) On the basis of written representations received from the directors, as at March 31, 2011 and taken on record by the Board, we report that none of the directors is disqualified as at March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together the significant accounting policies and notes to accounts as per schedule 18, 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:

i) In the case of the Balance sheet, of the state of affairs of the Company as at March 31, 2011;

ii) In the case of the profit and Loss account, of the profit of the Company for the year ended on that date; and

iii) In the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

Annexure referred to in Paragraph (3) of Auditors Report to the members of Zee Entertainment Enterprises Limited on the accounts for the year ended March 31, 2011

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

(b) all the fixed assets, except assets lying with third parties, have been physically verified by the management during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. as informed, no material discrepancies were noticed on such verification.

(c) during the year, there was no disposal of substantial part of fixed assets.

2) (a) The inventory has been physically verified (copyrights of programs and movie rights verified with reference to title documents/agreements) by the management at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory and no discrepancies were noticed on physical verification as compared to the book records.

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

(b) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the act.

4) 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 with regard to purchases of inventory, fixed assets and sale of goods and services. during the course of our audit, no major weaknesses were noticed in the internal control system in respect of the aforesaid areas.

5) according to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register maintained in pursuance to section 301 of the act.

6) The Company has not accepted any deposits from the public during the year.

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

8) We are informed that the Central Government has not prescribed the maintenance of cost accounting records under section 209 (1) (d) of the act in respect of the Companys activities.

9) according to the records of the Company examined by us and information and explanations given to us:

(a) Undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with appropriate authorities except delay in few cases. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at March 31, 2011 for a period of more than six months from the date they became payable.

(b) according to the records of the Company, the dues of service tax and income tax, which are not deposited on account of any dispute are as under:

(Rs./Thousand)

Name of the Statute Nature of the Dues Amount (Rs./ Thousand)

The Central Excise Act, 1944 Service Tax 241

312,239

148,240

44

177

Income Tax Tax Deducted at Source 982,067 (including interest)

Income Tax 649,758

Name of the Statue Period to which the Forum where dispute is amount relate pending

The Central Excise Act, 1944 F.Y. 2003-2004 Commissioner of service Tax

F.Y. 2006-2007

F.Y. 2008-2009

F.Y. 2006-2007 to Commissioner of Central F.Y. 2008-2009 excise (appeals)

F.Y. 2006-2007, Commissioner of F.Y. 2007- 2008 Central excise (appeals)

Income Tax F.Y. 2005-2006 to Commissioner of Income Tax F.Y. 2009-2010 (appeals)

F.Y. 2006-2007 Commissioner of Income Tax (appeals)

10) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11) The Company has not defaulted in repayment of dues to banks, financial institutions and debenture holders during the year.

12) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not chit fund or a nidhi / mutual benefit fund / society.

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

15) In our opinion, the terms and conditions of guarantees given by the Company for loans taken by subsidiaries and others are prima-facie not prejudicial to the interests of the Company.

16) The Company has not raised any term loan during the year.

17) according to information and explanations given to us and on an overall examination of the Balance sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investments.

18) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the act.

19) The Company has not issued any secured debentures during the year. however, pursuant to the Composite scheme of arrangement, the Company had been vested the liability of secured debentures issued by erstwhile eTC networks Limited which is transferred on april 1, 2010 to Zee Learn Limited on demerger.

20) The Company has not raised any money by public issue during the year.

21) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co

Chartered accountants

Firm registration no- 101169W

Hitendra Bhandari

Partner

Membership no. 107832

Mumbai, June 23, 2011

 
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