Mahindra Satyam

1.  We have audited the attached Balance Sheet of Satyam Computer
 Services Limited (the Company), as at March 31, 2008, and the related
 Profit and Loss Account and Cash Flow Statement for the year ended on
 that date annexed thereto, which we have signed under reference to this
 report.  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, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of Section 227 of The Companies Act, 1956 of India (the Act) 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 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, 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, as on March 31, 2008 and taken on record by the Board of
 Directors, none of the directors is disqualified as on March 31, 2008
 from being appointed as a director in terms of clause (g) of sub-
 section (1) of section 274 of the Act;
 
 (f) In 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 and attached thereto give in the prescribed
 manner the information required by the Act 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, 2008;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to the Auditors Report
 
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Satyam Computer Services Limited on the financial statements
 as at and for the year ended March 31, 2008]
 
 1.  (a) The company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets are physically verified by the management
 according to a phased programme designed to cover all the items over a
 period of three years, which in our opinion, is reasonable having
 regard to the size of the company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the company during the year.
 
 2.  The company has not granted/taken any loans, secured or unsecured,
 to/from companies, firms or other parties covered in the register
 maintained under Section 301 of the Act.
 
 3.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 do not exist for obtaining comparative quotations, there is an adequate
 internal control system commensurate with the size of the company and
 the nature of its business for the purchase of fixed assets and for the
 sale of services. The activities of the company do not involve purchase
 of inventory and sale of goods. Further, on the basis of our
 examination of the books and records of the company, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system.
 
 4.  According to the information and explanations given to us, there
 have been no contracts or arrangements referred to in Section 301 of
 the Act during the year to be entered in the register required to be
 maintained under that section.  Accordingly, commenting on transactions
 made in pursuance of such contracts or arrangements does not arise.
 
 5.  The company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 6.  In our opinion, the company has an internal audit system
 commensurate with its size and nature of its business.
 
 7.  (a) According to the information and explanations given to us and
 the records of the company examined by us, in our opinion, the company
 is generally regular in depositing the undisputed statutory dues
 including provident fund, investor education and protection fund,
 employees state insurance, income-tax, sales- tax, wealth tax, service
 tax, customs duty and other material statutory dues as applicable with
 the appropriate authorities. According to the information and
 explanations given to us and the records of the company examined by us,
 excise duty and cess are not applicable to the company for the current
 year.
 
 (b) According to the information and explanations given to us and the
 records of the company examined by us, the particulars of dues of
 Income Tax as at March 31, 2008 which have not been deposited on
 account of dispute, are as follows: 
 
 According to the information and explanations given to us and the
 records of the company examined by us, there are no dues of Sales Tax,
 wealth tax, service tax, customs duty which have not been deposited on
 account of any dispute. According to the information and explanations
 given to us and the records of the company examined by us, excise duty
 and cess are not applicable to the company for the current year.
 
 Name of the statute     Nature of dues              Amount (Rs.)
 
 Income Tax              Tax and Interest on         13,35,05,579
 Act, 1961               disallowance of loss
                         in one of the STPs
                         and disallowance of
                         excess claim U/s
                         Section 10A.
 
 Period to which the          Forum where the dispute is
 amount relates               pending
 
 2002-03                      The
                              Commissioner
                              of Income Tax
                             (Appeals)-I,
                              Hyderabad
 
 8.  The company has no accumulated losses as at March 31, 2008 and it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 9.  According to the records of the company examined by us and the
 information and explanation given to us, the company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 10.  The company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 11.  In our opinion, the company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 12.  In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 company, for loans taken by others from banks or financial institutions
 during the year, are not prejudicial to the interest of the company
 
 13.  The company has not obtained any term loans.
 
 14.  On the basis of an overall examination of the balance sheet of the
 company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 15.  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.
 
 16.  The company has not raised any money by public issues during the
 year.
 
 17.  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
 fraud on or by the company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 18.  The other clauses (ii), (iii) (b), (iii) (c), (iii) (d), (iii)
 (f), (iii) (g), (viii), (xiii), and (xix) of paragraph 4 of the
 Companies (Auditors Report) Order 2003, as amended by the Companies
 (Auditors Report) (Amendment) Order, 2004 are not applicable in the
 case of the company for the current year, since in our opinion there is
 no matter which arises to be reported in the aforesaid order.
 
                                                       Srinivas Talluri
                                                                Partner
                                                   Membership No. 29864
                                                   for and on behalf of
 Place : Hyderabad                                     Price Waterhouse
 Date  : April 21, 2008                           Chartered Accountants