Dish TV

1.  We have audited the attached Balance Sheet of Dish TV India Limited
 (the Company) as at March 31, 2009 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 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”), 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 reference to Note 24
 regarding preparation of these financial statements on going concern
 basis.
 
 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 accounts as required by law have
 been kept by the Company, so far as appears from our examination of
 those books;
 
 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;
 
 d) 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 Act;
 
 e) On the basis of written representations received from the directors,
 and taken on record by the Board, we report that none of the director
 is disqualified as at March 31, 2009 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 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 March 31, 2009;
 
 ii) In the case of the Profit and Loss Account, of the Loss of the
 Company for the year ended on that date; and
 
 iii) In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of Auditors’ Report to the members
 of Dish TV India Limited on the accounts for the year ended March 31,
 2009.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of its fixed
 assets.
 
 (b) According to the information and explanations given to us, the
 fixed assets, other than consumer premises equipments (CPE) installed
 at the customer premises and CPE under Capital Work in Progress which
 is major part of the fixed assets, have been physically verified by the
 management as per the phased program of verification and no material
 discrepancies were noticed on such verification. In our opinion the
 frequency of such verification is reasonable having regard to the size
 of the Company and nature of its assets.
 
 (c) During the year, there was no disposal of substantial part of fixed
 assets.
 
 (ii) (a) The inventory has been physically verified by the management
 at the end of the year. In our opinion, the frequency of such
 verification is reasonable.
 
 (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 the
 inventory and no discrepancy were noticed on physical verification as
 compared to book records.
 
 (iii) (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) According to the information and explanations given to us, the
 Company has taken an unsecured loan from a company covered in the
 register maintained under Section 301 of the Act. The maximum balance
 during the year was Rs. 2,316.31 lacs and the year end balance of such
 loan is Rs Nil.
 
 (c) The rate of interest and other terms and conditions of such loan
 are prima facie not prejudicial to the interests of the Company.
 
 (d) There is no overdue amount of the loan taken at the year end.
 
 (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 with regard
 to purchase 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.
 
 (v) (a) Based on the audit procedures applied by us and according to
 the information and explanations given to us, the transactions made in
 pursuance of contracts or arrangements, that need to be entered in the
 register maintained under Section 301 of the Act have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transaction made in pursuance of contracts or
 arrangements entered into the register maintained under Section 301 of
 the Act and exceeding the value of Rupees five lacs in respect of each
 party during the year, have been made at prices which appear reasonable
 having regard to the prevailing prices at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Section 58A and 58AA of the Act and the rules framed
 there under.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) We are informed that the Central Government has not prescribed
 maintenance of cost records under Section 209 (1) (d) of the Act in
 respect of the Company’s activities.
 
 (ix) According to the records of the Company examined by us and
 information and explanations given to us:
 
 (a) The Company has been generally regular in depositing, except delay
 in few cases, its statutory dues including Provident Fund, Investor
 Education and Protection Fund, Employees State Insurance, Income Tax,
 Sales Tax/ VAT, Wealth Tax, Custom Duty, Excise Duty, Service Tax,
 Entertainment Tax, Cess and others as applicable.  There are no
 undisputed amounts payable in respect of the aforesaid dues which have
 been remained outstanding as at March 31, 2009 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 dues of Income Tax Sales Tax/VAT, Custom Duty, Wealth Tax,
 Excise Duty and Cess which have not been deposited on account of any
 dispute except the following:
 
 Name of   Nature of   Amount       Period to        Forum statue 
 Statue      dues     (Rs. in       which per-       where lacs)
                                     tain            dispute is 
                                                     pending
 
 Uttar    Entertain-   919.95        2003           Allahabad
 Pradesh   ment Tax                - 2004            High Court
 Entertain-                       to 2006
 ment &                            - 2007
 Betting Tax
 Act, 1979_
 Central   Sales Tax    36.16   2005-2006           Additional
 Sales Tax                                            Commis-
 Act,1956                                             sioner,
 Delhi     
 A P VAT      VAT      286.09   May,2006           The Appel-
 Act, 2005 (including           to Febru-          late Deputy
           penalty and            ary,2008            Commis-
           interest)                                 sioner (CT)
                                                    Hyderabad
 
 (x) The accumulated losses of the Company are more than fifty percent
 of its net worth at the end of the financial year.  Further, the
 Company has incurred cash losses during the current financial year as
 well as in the immediately preceding financial year.
 
 (xi) On the basis of our examination and according to the information
 and explanations given to us, the Company has not defaulted in
 repayment of dues to banks/financial institutions except delays in
 payment to banks as under:
 
 Nature of Dues               Amount          Period of 
                           involved            Default
                           (Rs. in lacs)       (In days)
 
 Loan principal (including 3,923.05            1-10
 devolvement of Letter 
 of Credit)                1,642.84           11-20
                           1,355.65           21-25
                           2,043.30             44
 Interest on loans         1,361.24           1-10
                             848.78          11-20
                             350.13          21-28
                             143.17             74
                               0.52             87
 
 (xii) According to the information and explanations given to us, the
 Company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xiii) The Company is not chit fund or a nidhi / mutual benefit fund/
 society.
 
 (xiv) The Company has not dealt in or traded in shares, securities,
 debentures and other investments.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantees for loan taken by others from
 banks and financial institutions.
 
 (xvi) According to the information and explanations given to us and
 based on overall examination of records, in our opinion, term loan
 availed by the Company has been applied for the purpose for which loan
 was raised except Rs. 17,327.12 lakhs which is temporarily deployed in
 the business.
 
 (xvii) On the basis of overall examination of Balance Sheet and the
 Cash Flow Statement of the Company and related information as made
 available to us, we report that funds raised on short term basis have
 not been used for long term investments.
 
 (xviii) 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 during the year.
 
 (xix) The Company has not issued any secured debentures during the
 year.
 
 (xx) We have verified the end use of money raised by way of Rights
 issue as disclosed in Note 35.2 to the financial statements.
 
 (xxi) Based on the audit procedures and according to the information
 and explanation given to us, we report that no fraud on or by the
 Company has been noticed or reported during the year.
 
 L.K. Shrishrimal
 Membership No. 72664 Partner
 
 For and on behalf of
 MGB & Co.
 Chartered Accountants
 
 Place : Noida
 Dated : June 18, 2009