1.  We have audited the attached Balance Sheet of Sahara One Media and
 Entertainment 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 profit 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
 Re: Sahara One Media and Entertainment Limited (''the Company'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets have been physically verified by the management during
 the year and no material discrepancies were identified on such
 verification.
 
 (c) There was no disposal of a substantial part of fixed assets during
 the year.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (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.  (b) 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.
 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. The Company
 has not sold any services during the year.
 
 (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 need 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) In our opinion, the Company has an internal audit system
 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 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, cess and other material statutory dues applicable to it. 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 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, employees'' state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs 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. The
 provisions relating to excise duty are not applicable to the Company.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, customs duty and cess on account of any dispute, are as
 follows:
 
 Name of the 
 statute       Nature of dues     Amount 
                                 (Rs''000)  Period to 
                                           which the   Forum where 
                                                       dispute is
                                           amount 
                                           relates     pending
 
 Income-tax 
 Act, 1961     Income tax          1,555  2002-2003 to Commissioner of
                                          2007-2008    Income-tax 
                                                       (Appeals)
 
 Income-tax 
 Act, 1961     Tax Deducted at    65,303  2007-2008 to Commissioner of
               Source                     2009-2010    Income-tax 
                                                       (Appeals)
 
 Income-tax 
 Act, 1961     Tax Deducted at       952  2005-2006    High Court
               Source
 
 Income-tax 
 Act, 1961     Income tax         16,411  2000-2001 
                                             and       Income Tax 
                                                       Appellate
                                          2001 -2002   Tribunal
 
 Customs 
 Act, 1962     Customs Duty          410  2008-2009    Income Tax 
                                                       Appellate
                                                       Tribunal
 
 According to the information and explanation given to us, there are no
 dues of sales-tax, wealth tax and service tax which have not been
 deposited on account of any dispute. The provisions relating to excise
 duty are not applicable to the Company.
 
 (x) The Company''s accumulated losses at the end of the financial year
 are less than fifty per cent of its net worth and it has not incurred
 cash losses in the current and immediately preceding financial year.
 
 (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 or banks. The Company has not issued any debentures.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced before 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 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 Companies (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) The Company has given a guarantee amounting to Rs 525,000,000 in
 respect of loans taken by Sahara Sanchar Limited from a bank in respect
 of which it has not charged any commission nor was any adequate
 explanation provided to us of the benefit to the Company for giving
 such guarantee. There are no other guarantees given by the Company 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 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 did not have any outstanding debentures during the
 year.
 
 (xx) The Company has not raised any money from public issues 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 & ASSOCIATES
 
 Firm Registration Number-101049W
 
 Chartered Accountants
 
 per Govind Ahuja
 
 Partner
 
 Membership No.: 48966
 
 Place : Mumbai
 
 Date : May 27, 2011.