1.  We have audited the attached balance sheet of Prime Focus Limited
 (''the Company'') as at March 31, 2011 and also the related profit and
 loss account and the cash flow statement for the year ended March 31,
 2011 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 by the Companies (Auditor''s 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 enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  As more fully described in Note 19 to Schedule 16 to the financial
 statements, the Company has not revalued the FCCB of $ 55 million at
 the exchange rate prevailing as at March 31, 2011, March 31, 2010,
 March 31, 2009 and March 31, 2008, which in our opinion is not in
 accordance with Accounting Standard 11 The Effects of Changes in
 Foreign Exchange Rates and has also not provided for the premium
 payable on redemption of these FCCB.  Had the Company revalued the
 FCCB''s as at March 31, 2011, the profit for the year ended March 31,
 2011 and the reserves as at that date would have been lower by Rs.
 13.48 million and Rs. 278.54 million respectively and Foreign Currency
 Monetary Item Translation Difference account would have been Rs. 13.48
 million. Further, had the Company provided for the premium on
 redemption, the securities premium as at March 31, 2011 would have been
 lower by Rs. 598.16 million. Consequent to the above, the FCCB balance
 at March 31, 2011 would have been higher by Rs. 890.18 million. This
 had caused the previous auditors to qualify their audit opinion on the
 financial statements relating to preceding year.
 
 5.  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. Subject to our comment in paragraph 4 above, 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, I 1956;
 
 vi. In our opinion and to the best of our information and according to
 the explanations given to us, and subject to our comments in paragraph
 4 above, 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 profit for the
 year ended March 31, 2011; and
 
 c.  in the case of cash flow statement, of the cash flows for year
 ended March 31, 2011.
 
 ANNEXURE REFERRED TO IN PARAGRAPH [3] OF OUR REPORT OF EVEN DATE
 Re: Prime Focus Limited
 
 i. (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) We have been informed that all the fixed assets have not been
 physically verified by the management during the year. however, there
 is a regular programme of verification. For the assets physically
 verified by the management during the year, the Company is in process
 of reconciling the assets physically verified with the books of
 account.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 ii. The Company does not have any inventory. Accordingly, the
 provisions of clause 4(ii) (b) and (c) of the Companies (Auditor''s
 Report) Order, 2003 (as amended) (CARO'') are not applicable to the
 Company.
 
 iii. As informed, the Company has neither granted nor taken any loans,
 secured or unsecured to/from companies, firms or other parties covered
 in the register maintained under section 301 of the Companies Act, 1956
 (''the Act'').  Accordingly, clauses 4(iii) (b), (c), (d), (f) and (g) of
 CARO are not applicable to the Company.
 
 iv. In our opinion and according to the information and explanations
 given to us, we have been explained that major purchase of fixed assets
 is of specialized equipments, for which comparative quotes cannot be
 obtained in all the case, considering the above, we believe that 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. During the course of our audit, no significant weakness has
 been noticed in the internal control system in respect of these areas.
 However, the internal control system for the sale of film related
 services is inadequate since the Company does not have formal
 documentation with customers in few cases, which is an industry issue
 per management. In our opinion this is a continuing failure to correct
 major weakness in the internal control system.
 
 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 Act that needs to be
 entered into the register maintained under section 301 have been so
 entered.
 
 (b) In respect of transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs entered into during
 the financial year, because of the unique and specialized nature of the
 items involved and absence of any comparable prices, we are unable to
 comment whether the transactions were made at prevailing market prices
 at the relevant time.
 
 vi.  The Company has not accepted any deposits from the public.
 
 vii. The Company has an internal audit system, the scope and coverage
 of which, in our opinion requires to be enlarged to be commensurate
 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 Act for the services of
 the Company.
 
 ix. (a) undisputed statutory dues including provident fund, investor
 education and protection fund, or employees'' state insurance,
 income-tax, sales-tax, wealth-tax, service tax customs duty, cess have
 generally been regularly deposited with the appropriate authorities
 though there has been slight delay in a few cases. The provisions
 relating to excise duty are not applicable to the Company.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441A 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, employees'' state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, cess and other
 undisputed statutory dues were outstanding, at the year end, for a
 period of more than six months from the date they became payable. The
 provisions relating to excise duty are not applicable to the Company.
 
 (c) According to the books of accounts of the Company, there are no
 dues outstanding of income-tax, sales-tax, wealth-tax, service tax,
 customs duty and cess on account of any dispute. The provisions
 relating to excise duty are not applicable to the Company.
 
 x.  The Company has no accumulated losses at the end of the financial
 year and it has also not incurred cash losses in i the current and
 immediately preceding financial year.
 
 xi. As per the information and explanations given to us 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 CARO are not applicable to the Company.
 
 xiv. In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the CARO are not applicable to the
 Company.
 
 xv. According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 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 broad 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 Act.
 
 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 money by public issues during the year,
 except for issue of shares through Qualified Institutional Placement to
 Qualified Institutional Buyers.
 
 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 course of our audit.
 
 For MZS & Associates
 
 Chartered Accountants
 
 Firm Registration No: 106400w
 
 Abuali Darukhanawala
 
 Partner (M. No. 108053)
 
 Place: Mumbai
 
 Date : June 20, 2011