1.  We have audited the attached Balance Sheet of Max India Limited
 (''the Company'') as at March 31, 2011 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 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 (Auditor''s Report) Order, 2003 (as
 amended) issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
 in the Annexure a statement on the matters specified in paragraphs 4
 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 i. We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii. In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 iii. The balance sheet, profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books of account;
 
 iv. In our opinion, the balance sheet, profit and loss account and cash
 flow statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956.
 
 v. On the basis of the written representations received from the
 directors, as on March 31, 2011, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956.
 
 vi. In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India;
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 b) in the case of the Profit and Loss Account, of the loss for the year
 ended on that date; and
 
 c) 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 OUR REPORT OF EVEN DATE MAX
 INDIA LIMITED (''THE COMPANY'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) There was no disposal of a substantial part of fixed assets during
 the year.
 
 (ii) (a) The inventory has been physically verified by the management
 during the year. In our opinion, the frequency of verification is
 reasonable. Inventories lying with outside parties have been confirmed
 by them as at the year end.
 
 (b) 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) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956. Accordingly, the
 provisions of clause 4(iii) (a) to (d) of the Order are not applicable
 to the Company and hence not commented upon.
 
 (e) According to information and explanations given to us, the Company
 has not taken any loans, secured or unsecured, from companies, firms or
 other parties covered in the register maintained under section 301 of
 the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)
 (e) to (g) of the Order are not applicable to the Company and hence not
 commented upon.
 
 (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, for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness or continuing failure to correct any major weakness in
 the internal control system of the company in respect of these areas.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Companies Act, 1956 that
 need to be entered into the register maintained under section 301 have
 been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs have been entered
 into during the financial year at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public.
 
 (vii) In our opinion, the Company has an internal audit
 systemcommensurate with the size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of section 209 of the Companies Act, 1956 for
 the products of the Company.
 
 (ix) (a) The Company is generally regular in depositing with
 appropriate authorities undisputed statutory dues including provident
 fund, investor education and protection fund, employees'' state
 insurance, income-tax, sales-tax, wealth-tax, service tax, customs
 duty, excise duty, cess and other material statutory dues applicable to
 it.
 
 Further, since the Central Government has till date not prescribed the
 manner and the amount of cess payable under section 441 A of the
 Companies Act, 1956, we are not in a position to comment upon the
 regularity or otherwise of the company in depositing the same.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, income-tax, wealth-tax, service tax,
 sales-tax, customs duty, excise duty, cess and other material statutory
 dues were outstanding, at the year end, for a period of more than six
 months from the date they became payable.
 
 (c) According to the records of the Company, there are no dues
 outstanding of income-tax, sales tax, wealth-tax, service tax, custom
 duty, excise duty and cess on account of any dispute, other than the
 following:
 
 Name of the  Nature of the Dues     Amount  Period to  Forum where
 Statute                            (Rs.in 
                                     lacs)   which  the dispute is 
                                                        pending
                                             amount
                                             relates
 
 Central 
 Excise       Excise duty demand 
              on valuation of 
              goods                  149.77  1997-98    CESTAT, New Delhi
 Act, 1944    cleared for captive 
              consumption.                     to
                                             2008-09
 
 Central 
 Excise       Reversal of Cenvat 
              credit on various    1,527.54  1999-00    Commissioner,
 Act, 1944    grounds.                          to      Chandigarh
                                             2010-11
 
 Finance Act, Service tax demands 
              on various matters     113.82  2001-02    Commissioner,
 1994 
 (Service                                       to      (Appeals)
 Tax)                                        2008-09
 
 Finance Act, Service tax demands 
              on various matters       5.93  2005-06    Joint
                                                        Commissioner
 1994 
 (Service Tax)
 
 Finance Act, Service tax demands 
              on various matters     202.11  1997-98    CESTAT, New Delhi
 1994 
 (Service                                      to
 Tax)                                        2000-01
 
 Income 
 Tax Act,     Income tax d em ands 
              on vario us            259.80  2002-03    Income Tax
 1961         disallowances                    to       Appellate 
                                                        Tribunal,
                                             2007-08    Amritsar
 
 Income 
 Tax Act,   Income tax dem and on 
            erstwhile subsidiary   24,927.76  1999-00   High Court
 1961       Max Telecom Ventures 
            Limited.
 
 (x) The Company has no accumulated losses at the end of the financial
 year. The Company has incurred cash losses in the current year. In the
 immediately preceding financial year, the Company had not incurred cash
 losses.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution, bank or debenture holders.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
 are not applicable to the Company.
 
 (xiv) In respect of dealing/ trading in shares, securities, debentures
 and other investments, in our opinion and according to the information
 and explanations given to us, proper records have been maintained of
 the transactions and contracts and timely entries have been made
 therein. The shares, securities, debentures and other investments have
 been held by the Company, in its own name.
 
 (xv) According to the information and explanations given to us, the
 Company has given guarantee for loans taken by others from banks and
 financial institutions, the terms and conditions whereof, in our
 opinion, are not prima facie prejudicial to the interest of the
 Company.
 
 (xvi) Based on information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short-term basis have been used for long-term
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 (xix) The Company has unsecured debentures outstanding during the year,
 on which no security or charge is required to be created.
 
 (xx) The company has not raised any money by public issue during the
 year.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the year.
 
 
                                              For S.R. BATLIBOI & CO.
 
                                   Firm registration number: 301003E
 
                                               Chartered Accountants
 
                                                     per MANOJ GUPTA
 
                                                             Partner
 
                                               Membership No.: 83906
 
 
 Gurgaon
 
 May 26, 2011