1.  We have audited the attached Balance Sheet of Network18 Media &
 Investments Limited (''the Company'') as at March 31,2011 and the Profit
 & Loss Account for the year ended on that date and the Cash Flow
 Statement for the year ended on that date both annexed hereto . 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 check 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 the 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,issued
 by the Company Law Board in terms of Section 227(4A) of the Companies
 Act,1956, we annex hereto a statement on the matters specified in
 paragraph 4 of the said Order, to the extent applicable to the company.
 
 4.  Attention is drawn to:
 
 (i) Note 13(a) of Schedule 15 to the financial statements regarding
 payment of remuneration to the Managing Director in excess of the
 limits prescribed under Schedule XIII of the Companies Act,1956 . The
 Central Government has partially approved the Company''s application for
 payment of the remuneration and the Company has filed an application
 for reconsideration of the matter.
 
 (ii) Notes 7(e) ,7(f) and 8 of Schedule 15 to the financial statements
 regarding the non provision for other than temporary impairment in the
 value of Investments of Rs. 2,612.36 millions and non recoverability of
 advances of Rs 1276 million. We are unable to comment on the
 adjustments and impact, if any, on the financial statements in respect
 of the above matters .
 
 5.  Without qualifying our opinion attention is drawn to,
 
 a) Note 1(f ) of Schedule 15 to the financial statements wherein it is
 stated that no effect has been given in these financial statements of
 the Scheme of restructuring referred to in that note.
 
 b) Note 1(e) of Schedule 15 to the financial
 
 statements referring to operational losses incurred by the company and
 the company''s plans in that regard.
 
 6.  Further to our comments in the annexure referred to in Paragraph 4
 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 our audit.
 
 b.  in our opinion, proper books of account have been kept as required
 by law , so far as appears from our examination of the 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 & Loss Account and Cash
 Flow Statement dealt with by this report are in compliance with the
 Accounting Standards referred to in sub section 3(c) of Section 211 of
 the Companies Act,1956.
 
 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
 Para 5 above and the significant accounting policies and notes thereon
 and subject to our comments in Para 4 above ,give the information as
 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:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011, and
 
 ii) in the case of the Profit and Loss account,of the loss 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
 
 7.  On the basis of 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
 that date from being appointed as a Director in terms of clause (g) of
 sub-section (1) of Section 274 of the Companies Act,1956.
 
 Annexure
 
 Annexure referred to in Para 3 of our Report of even date, to the
 members of Network18 Media & Investments Limited
 
 As required by the Companies (Auditor''s Report) Order, 2003 on the
 basis of such checks as we considered appropriate, and, according to
 the information and explanations given to us, we report that :- 1.  The
 company has maintained proper records
 
 showing full particulars including quantitative details
 
 and situation of fixed assets.
 
 2.  The fixed assets have been physically verified by the management
 during the period and no material discrepancies were noticed.
 
 3.  A substantial part of fixed assets have not been disposed off
 during the year.
 
 4.  All inventories have been physically verified by the management at
 reasonable intervals.
 
 5.  The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the company and its business.
 
 6.  The company has maintained proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 7.  The company had granted an unsecured loan of Rs 552.50 millions to
 an entity covered in the Register maintained under Section 301 of the
 Act at a rate of interest lower than market. The said loan has been
 repaid as on March 31, 2011.
 
 8.  The company has not taken any loans, from a company listed in the
 Register maintained under Section 301 of the Act.
 
 9.  There is an internal control procedure commensurate with the size
 of the company and the nature of its business for the purchase of Fixed
 Assets and inventory and for the sale of services. During the course of
 our audit, we have not observed any continuing failure to correct
 weaknesses in the internal control system.
 
 10.  The particulars of all contract or arrangements referred to in
 Section 301 of the Act, have been entered in the Register required to
 be maintained under that section . Transactions made in pursuance of
 such arrangements have been made at prices which are, prima facie,
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 11.  In respect of deposits accepted during the year from the public,
 the directives issued by the Reserve Bank of India and the provisions
 of Section 58A and 58AA, other relevant provisions of the Companies
 Act,1956 and the rules framed thereunder, where applicable, have been
 complied with. According to the information and explanations given to
 us, no order has been passed by the Company Law Board, or the National
 Company Law Tribunal or the Reserve Bank of India or any other
 tribunal,
 
 12.  The company has an internal audit system commensurate with its
 size and the nature of its business.
 
 13.  Maintenance of cost records has not been prescribed by the Central
 Government under Section 209(1) (d)
 
 of the Companies Act,1956, for any of the products of the Company.
 
 14.  The company has been generally been regular in depositing
 undisputed statutory dues on account of Income tax, Provident Fund,
 Service Tax and Employees State Insurance dues. The company''s current
 operations do not require it to deposit any amounts towards Investor
 Education and Protection Fund, Sales Taxes, Customs Duty, Excise and
 such cess(s).There are no undisputed sums payable towards Income tax,
 Wealth tax, Provident Fund, Service Tax and Employees State Insurance
 dues, which were outstanding at the year end for a period of more than
 six months from the date they became payable.
 
 15.  The company''s losses as at March 31,2011 do not exceed 50% of its
 Net Worth. The company has incurred cash losses in the year under
 review and in the immediately preceding financial year.
 
 16.  The company has not defaulted in repayment of dues to a financial
 institution or bank or debenture holders.
 
 17.  No loans / advances have been granted on the basis of security of
 pledge of shares, debentures and other securities.
 
 18.  The company''s activities do not require compliance with any
 special statute applicable to chit fund companies.
 
 19.  In respect of dealings or trading in shares and securities the
 company has maintained proper records of the transactions and contracts
 and timely entries have been made . All shares / securities have been
 held by the company in its own name.
 
 20. The company has given guarantees for loans taken
 
 by others from Financial Institutions / Banks, the terms of which are
 prima facie, not prejudicial to the company''s interest.
 
 21. Term Loans were applied for the purpose they were
 
 obtained.
 
 22.  Short term loans have not been used for or Long term investments.
 
 23. The company has made a preferential allotment Equity
 
 Shares to a party listed in the Register maintained u/s 301 of the
 Companies Act and the terms of the same are not prejudicial to the
 interests of the company.
 
 24.  The company has not issued any debentures and therefore no
 security was required to be created.
 
 25.  The management has disclosed the end use of money raised through
 rights issue and the same has been verified.
 
 26.  No fraud on or by the company has been noticed or reported during
 the year.
 
                                         For G S Ahuja & Associates
                                              Chartered Accountants
                                       Firm registration no. N 8999
 
                                                          G S Ahuja
                                                         Proprietor 
                                               Membership No. 87732 
 Noida, 
 May 30, 2011