1.  We have audited the attached Balance Sheet of SATYAM COMPUTER
 SERVICES LIMITED (the Company) as at March 31, 2011, the Proft and
 Loss Account and the Cash Flow Statement of the Company for the year
 ended on that date, both annexed thereto.
 
 Managements Responsibility for the Financial Statements
 
 2.  These fnancial statements are the responsibility of the Companys
 Management. Our responsibility is to express an opinion on these
 fnancial statements based on our audit.
 
 Auditors Responsibility
 
 3.  Subject to the matters discussed in this report, 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 fnancial statements are
 free of material misstatements. An audit includes examining, on a test
 basis, evidence supporting the amounts and the disclosures in the
 fnancial statements. An audit also includes assessing the accounting
 principles used and the signifcant estimates made by the Management, as
 well as evaluating the overall fnancial statement presentation. We
 believe that our audit provides a reasonable basis for our opinion.
 
 Companies (Auditors Report) Order, 2003 (CARO)
 
 4.  As required by the Companies (Auditors Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956 (the Act) we give in the Annexure a statement on
 the matters specifed in paragraphs 4 and 5 of the said Order,
 
 which is subject to the matters discussed in this report.
 
 Basis for Opinion
 
 5.  As stated in Note 3 of Schedule 18:
 
 a.  In respect of the fnancial irregularities relating to prior years,
 various regulators initiated their investigations and legal
 proceedings, which are ongoing.
 
 b.  The forensic accountants had expressed certain reservations and
 limitations in their investigation process.
 
 c.  The Management is of the view that since matters relating to
 several of the fnancial irregularities are sub judice and various
 investigations / proceedings are ongoing, any further adjustments /
 disclosures to the fnancial statements, if required, would be made in
 the fnancial statements of the Company as and when the outcome of the
 above uncertainties is known and the consequential adjustments /
 disclosures are identifed.
 
 In view of the above, we are unable to comment on the adjustments /
 disclosures which may become necessary as a result of further fndings
 of the ongoing investigations / proceedings and the consequential
 impact, if any, on these fnancial statements.
 
 6.  As stated in Note 3.2(ii) of Schedule 18, the Company had, based on
 the forensic investigation, accounted for the differences aggregating Rs.
 11,394 Million (net debit) as at March 31, 2009 under Unexplained
 Differences Suspense Account (Net) (Refer Schedule 12) due to
 non-availability of complete information. These net debit amounts
 aggregating Rs. 11,394 Million had been fully provided for on grounds of
 prudence in the fnancial statements for the year ended March 31, 2009.
 
 In the absence of complete / required information, we are unable to
 comment on the accounting treatment / disclosure of the aforesaid
 unexplained amounts accounted under Unexplained Differences Suspense
 Account (Net) in these fnancial statements.
 
 7.  As stated in Note 5.1 of Schedule 18, the alleged advances
 amounting to Rs. 12,304 Million (net) relating to prior years has been
 presented separately under ‘Amounts Pending Investigation Suspense
 Account (Net) in the Balance Sheet. The details of these claims and
 the related developments are more fully described in the said Note.
 
 The Management has represented that since the matter is sub judice and
 the investigations by various Government agencies are in progress, the
 Management, at this point of time is not in a position to predict the
 ultimate outcome of the legal proceedings.
 
 In view of the above, we are unable to determine whether any
 adjustments / disclosures will be required in respect of the aforesaid
 alleged advances amounting to Rs. 12,304 Million (net) and in respect of
 the non-accounting of any damages/ compensation / interest in these
 fnancial statements.
 
 8.  As stated in Note 5.3 of Schedule 18, a trustee of two trusts that
 are assignees of the claims of twenty investors who had invested in the
 Companys ADS and common stock fled a lawsuit in the Court in United
 States of America in the previous year. This lawsuit is more fully
 described in the said Note. Based on the legal advice obtained by the
 Company, the Company is contesting the above lawsuit.
 
 Since the matter is sub judice, the outcome of which is not
 determinable at this stage, we are unable to comment on the
 consequential impact, if any, on these fnancial statements.
 
 9.  Attention is invited to the following matters:
 
 a.  As stated in Note 8.2 of Schedule 18, certain reconciliations
 between the sub-systems / sub-ledgers and the general ledger could not
 be performed completely due to non-availability of the required
 information. The Company has identifed certain amounts carried forward
 from prior years aggregating Rs. 36 Million (net debit) as at March 31,
 2011, comprising of Rs. 494 Million (gross debits) and Rs. 458 Million
 (gross credits) appearing in the general ledger, for which complete
 details are not available.Hence, these amounts have been accounted
 under Unexplained Differences Suspense Account (Net) under Schedule
 12 and the Management has retained the provision made in prior years
 for the unexplained net debit amount of Rs. 36 Million as at March 31,
 2011 on grounds of prudence.  Further, there are certain differences in
 data between the inter-connected sub-systems, ultimately interfaced to
 the general ledger, for which complete details are not available. The
 aforesaid differences continue to exist and the reconciliations are in
 progress as at March 31, 2011 also.
 
 In the absence of the required information, we are unable to determine
 the additional impact, if any, of such unexplained amounts /
 differences on these fnancial statements.
 
 b.  Responses were not received in 144 number of cases out of our total
 sample of 484 number of requests sent out for confrmations of balances
 / other details in respect of parties refected under Sundry Debtors,
 Current Liabilities, etc, as at the year end. Further confrmations sent
 in 2 number of cases were returned undelivered. Refer Note 8.3 of
 Schedule 18.
 
 Had all the confrmations been received and reconciled, there may have
 been additional adjustments required to these fnancial statements,
 which are not determinable at this stage.
 
 10.  As stated in Note 13.3 of Schedule 18, the Company has not
 maintained proper records of its inventories during the year, though
 the required adjustments to account for the closing balance of
 inventory in the books of account were made based on the available
 information with the Management as at the year end.
 
 11.  The Management has evaluated and accounted for certain
 transactions / made the relevant disclosures based on and to the extent
 of the information available with the Company in respect of the
 following matters described in the Notes of Schedule 18:
 
 a.  Adjustment of unapplied receipts against Sundry Debtors,
 classifcation of Sundry Debtors and provisioning for doubtful debts as
 stated in Note 13.1.
 
 b.  Accounting for contracts under the percentage of completion method,
 unbilled revenue and unearned revenue as stated in Note 13.2.
 
 c.  Accounting for multiple deliverable elements, hardware equipments
 and other items etc, as stated in Note 13.3.
 
 d.  Accounting for reimbursements / recoveries from customers as stated
 in Note 13.5.
 
 In the absence of the required information, we are unable to determine
 the additional impact, if any, of the above matters on these fnancial
 statements.
 
 12.  As stated in Note 5.5 (vi) of Schedule 18, the Company is carrying
 a total amount of Rs. 3,803 Million (net of payments) as at March 31,
 2011 towards provision for taxation which was made primarily on the
 basis of the past fnancial statements. Considering the effects of
 fnancial irregularities, status of disputed tax demands, appeals /
 claims pending before the various authorities, the consequent
 uncertainties regarding the outcome of these matters and the signifcant
 uncertainties in determining the tax liability, the Company has been
 professionally advised that it is not appropriate to make adjustments
 to the balance of tax provision outstanding as at March 31, 2011.
 
 In view of the above, we are unable to comment on the adequacy or
 otherwise of the provision for taxation carried in these fnancial
 statements.
 
 13.  Without qualifying our opinion, we invite attention to the
 following Notes of Schedule 18 relating to various claims and
 contingencies:
 
 a.  Note 5.2 regarding the settlement amount of Rs. 3,274 Million
 (equivalent to USD 70 Million) deposited into the escrow account
 payable to Upaid Systems Limited.
 
 b.  Notes 5.5 to 5.7 regarding the various demands / disputes raised by
 the direct and indirect tax authorities in respect of the past years
 both in India as well as overseas jurisdictions.
 
 As stated in Note 5.12 of Schedule 18, the provision for contingencies
 as at March 31, 2011, in the opinion of the Management, is adequate to
 cover any probable losses in respect of the above litigations and
 claims.
 
 14.  Without qualifying our opinion, we invite attention to the
 following Notes of Schedule 18 relating to certain regulatory
 non-compliances / breaches:
 
 a.  Note 7.1 regarding various non-compliances with the provisions of
 the Act and certain non-compliances with the guidelines issued by the
 Securities Exchange Board of India with respect to allotment of stock
 options to the employees.
 
 b.  Note 7.2 regarding certain non-compliances with the provisions of
 the Foreign Exchange Management Act, 1999.
 
 c.  Note 7.3 regarding certain non-compliances with the provisions of
 the Income Tax Act, 1961.
 
 d.  Note 7.4 regarding delay in fling of tax returns in overseas
 jurisdictions.
 
 The Management has represented that:
 
 (i) the various non-compliances and breaches by the Company of the
 statutory requirements which have been noticed / observed, duly
 considering the fndings of the forensic investigation / other ongoing
 regulatory investigations have been summarised in the aforesaid Notes.
 
 (ii) the Company in respect of certain matters as stated above has
 applied to the Honourable Company Law Board for condonation and is
 proposing to make an application to the other appropriate authorities,
 where applicable, for condoning the remaining non-compliances and
 breaches relatable to the Company.
 
 (iii) the possible impact of these non-compliances and breaches in the
 event the Companys condonation requests, where applicable, are not
 granted has not been determined or recognised in these fnancial
 statements.
 
 15.  Without qualifying our opinion, we invite attention to the
 following Notes of Schedule 18 relating to certain accounting and other
 matters:
 
 a.  Note 8.1 regarding the Managements identifcation of several
 defciencies in the Companys internal control over fnancial reporting
 as at March 31, 2011 along with certain remediation action taken.
 
 b.  Note 8.4 regarding various risks and uncertainties relevant to the
 Companys fnancial condition as identifed by the Management.
 
 16.  Without qualifying our opinion, we invite attention to Note 15 of
 Schedule 18, relating to the Settlement Agreement in respect of the
 Class Action lawsuits which is subject to the fnal approval of the
 Court upon which the Settlement shall become effective pursuant to its
 terms and in exchange for the settlement consideration the Lead
 Plaintiffs and the members of the Class who do not opt-out of the
 Class, would release, among other things, their claims against the
 Company.
 
 Opinion
 
 17.  Further to our comments in the Annexure referred to in paragraph 4
 above and paragraphs 13, 14, 15 and16 above and subject to our comments
 in paragraphs 5 to 12 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 it appears from our examination of
 those books;
 
 c.  the Balance Sheet, the Proft 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 Proft and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Act;
 
 e.  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
 notes thereon, give the information required by the Act in the manner
 so required and, subject to the consequential effects of our comments
 in paragraphs 5 to 12 above which are not quantifable, 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 Proft and Loss Account, of the loss of the
 Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash fows of the
 Company for the year ended on that date.
 
 Reporting Requirements relating to Section 274(1)(g)
 
 18.  On the basis of written representations received from directors as
 on March 31, 2011,where applicable,and taken on record by the Board of
 Directors, none of the directors is disqualifed as on March 31, 2011
 from being appointed as a director in terms of Section 274 (1) (g) of
 the Companies Act, 1956.
 
 Annexure to the Auditors Report
 (Referred to in paragraph 4 of our report of even date)
 
 i.  Having regard to the nature of the Companys business / activities
 / result / transactions, etc., clauses (viii), (xii), (xiii), (xiv),
 (xv), (xix) and (xx) of CARO are not applicable.
 
 ii.  In respect of its fxed assets:
 
 a.  The Company has maintained records of fxed assets showing
 particulars, including quantitative details and situation of the fxed
 assets situated within India except that quantitative details, asset
 description, etc., in respect of some of the fxed assets, need to be
 updated in the Fixed Assets Register. According to the information and
 explanations given to us, in respect of the fxed assets situated at the
 overseas branches of the Company, the Company has not maintained
 complete records showing the quantitative details and situation of the
 fxed assets.
 
 b.  Some of the fxed assets were physically verifed during the year by
 the Management in accordance with a programme of verifcation, which in
 our opinion, provides for physical verifcation of all the fxed assets
 at reasonable intervals. According to the information and explanations
 given to us, no material discrepancies were noticed on such
 verifcation.
 
 c.  The fxed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fxed assets of the Company and
 such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 iii. As explained in Note 13.3 of Schedule 18, the Company has not
 considered hardware equipment and other items which form part of its
 integrated solution relating to its customer service contracts as
 inventories requiring maintenance of records with quantitative and
 other details of such items and periodical physical verifcation.
 Consequently the requirements of clause (ii) of the Order have not been
 complied with by the Company. Refer to paragraph 10 of the Auditors
 Report also.
 
 iv. The Company has neither granted nor taken any loan, secured or
 unsecured, to / from companies, frms or other parties listed in the
 Register maintained under Section 301 of the Act.
 
 v. In our opinion and according to the information and explanations
 given to us, the Company did not have an adequate internal control
 system commensurate with the size of the Company and the nature of its
 business with regard to purchases of inventory and fxed assets and the
 sale of goods and services. During the course of our audit, we have
 observed that there is a continuing failure to correct several major
 weaknesses in such internal control system. Refer to paragraph 15(a) of
 the Auditors Report also.
 
 vi. According to the information and explanations given to us, the
 Company has not entered into any contract or arrangement with other
 parties, which needs to be entered in the Register maintained under
 Section 301 of the Act.
 
 vii.  According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 
 viii. In our opinion, the internal audit system and the functions
 carried out during the year by a frm of Chartered Accountants appointed
 by the Management have generally been commensurate with the size of the
 Company and nature of its business.
 
 ix.  According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) Whilst the Company has been generally regular in depositing
 undisputed dues relating to Provident Fund, Investor Education and
 Protection Fund, Wealth Tax and other material statutory dues
 applicable to it with the appropriate authorities, there were delays in
 depositing undisputed dues in respect of Employees State Insurance,
 Tax Deducted at Source, Sales Tax / VAT, Works Contract Tax and Service
 Tax.
 
 (b) There were no undisputed amounts payable in respect of Provident
 Fund, Investor Education and Protection Fund, Employees State
 Insurance, Wealth Tax, Sales Tax / VAT, Service Tax, Cess and other
 material statutory dues in arrears as at March 31, 2011 for a period of
 more than six months from the date they became payable. As regards
 Income Tax, we are unable to comment on the dues in arrears as at March
 31, 2011 for a period of more than six months from the date they became
 payable in view of the matters described under paragraph 12 of the
 Auditors Report.
 
 (c) Details of dues of Income Tax, Sales Tax, Service Tax, and Cess
 which have not been deposited as on March 31, 2011 on account of
 disputes are given below:
 
 Statute        Nature of 
                Dues          Forum where Dispute   Amount 
                                                    involved  Period to
                                                              which the
                                   is pending    (Rs. in Million) amount 
                                                               relates
 
 Income Tax 
 Act, 1961      Income Tax   Income Tax Appellate     2,562    2007-08
                                   Tribunal
 
 Income Tax 
 Act, 1961      Income Tax   Income Tax Appellate       812    2006-07
                                   Tribunal
 
 Income Tax 
 Act, 1961      Income Tax     Commissioner of        1,441    2004-06
                              Income Tax Appeals
 
 Income Tax 
 Act, 1961      Income Tax   Income Tax Appellate     1,349    2002-04
                                   Tribunal
 
 Income Tax 
 Act,1961       Income Tax     Commissioner of            8    2001-02
                             Income Tax (Appeals)
 
 Revenue and 
 Taxation Code, New York 
                State Income   New York State            93    2005-07
 USA                Tax       Department of Taxation
                                 and Finance
 
 Revenue and 
 Taxation Code, California 
                State Income       Franchise Tax         54    2003-05
 USA                 Tax        Board,California
 
 Revenue and 
 Taxation Code, Pennsylvania 
                   State          Commonwealth            3   1998-2005
 USA             Income Tax     of Pennsylvania-
                               Department of Revenue
 
 Andhra Pradesh 
 VAT Act,         Sales Tax     High Court of Andhra     52    2007-09
 2005 / CST Act, 
 1956             (including 
                    penalty)          Pradesh
 
 Finance Act, 
 1994             Service Tax     Central Excise and    202    2004-05 
                                                            to 2008-09
               (including penalty) Service Tax Appellate
                                         Tribunal
 
 x. The accumulated losses of the Company at the end of the fnancial
 year are in excess of ffty percent of its net worth. Since, as stated
 in paragraph 17 (e) of the Auditors Report, the consequential effects
 of our comments in paragraphs 5 to 12 of the Auditors Report are not
 quantifable, we are unable to comment on the cash losses in the current
 fnancial year. Further, we are also unable to comment on the cash
 losses in the immediately preceding fnancial year since the
 consequential effects of our comments in the previous years Auditors
 Report were not quantifable.
 
 xi. In our opinion and according to the explanations given to us, the
 Company has not defaulted in the repayment of dues to banks. The
 Company does not have any dues to fnancial institutions and has not
 issued any debentures.
 
 xii. In our opinion and according to the information and explanations
 given to us, term loans have been applied for the purposes for which
 they were obtained, other than temporary deployment pending
 application.
 
 xiii. In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, funds
 raised on short-term basis have not been used during the year for
 long-term investment.
 
 xiv. 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.
 
 xv. To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year. Refer to
 paragraph 5 of the Auditors Report also.
 
 
 
                                          For DELOITTE HASKINS & SELLS
 
                                                 Chartered Accountants
 
                                              (Registration No.008072S)
 
                                                            P.R.Ramesh
 
                                                               Partner
 
                                                  (Membership No.70928)
 HYDERABAD, May 23, 2011