Television Eighteen

1.  We have audited the attached Balance Sheet of Television Eighteen
 India Limited, (the Company) as at 31 March, 2008, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date, both annexed thereto.  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 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 misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the finan- cial statements. An audit also includes
 assessing the account- ing principles used and significant estimates
 made by manage- ment, as well as evaluating the overall financial
 statement pre- sentation. We believe that our audit provides a
 reasonable basis for our opinion.
 
 3.  As required by the Companies (Auditoros Report) Order, 2003 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 in para- graph
 3 above, we report that:
 
 a.  we have obtained all the information and explanations which to the
 best of our knowledge and belief were neces- sary 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, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agree- ment with the books
 of account;
 
 d.  in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section 3C of the Section 211
 of the Companies Act, 1956;
 
 e.  on the basis of written representations received from the
 directors, as on 31 March, 2008, and taken on record by the Board of
 Directors, we report that none of the direc- tors is disqualified as on
 31 March, 2008 from being appointed as a director in terms of clause
 (g) of sub- section (1) of section 274 of the Companies Act, 1956.
 
 f.  in our opinion and to the best of our information and according to
 the explanations given to us, the said ac- counts, together with the
 notes thereon, give the informa- tion 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 31 March, 2008;
 
 ii.  in the case of the Profit and Loss Account, of the profit of the
 Company 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.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 i. a. The Company has maintained proper records showing full par-
 ticulars, including quantitative details other than for situation of
 some of its fixed assets
 
 b. According to the information and explanations given to us. the
 Company has a regular programme of physical verification of its fixed
 assets by which fixed assets are verified by the management in a phased
 manner over a period of three years.  In accordance with this
 programme, certain fixed assets were verified during the year and no
 material discrepancies were noticed on such verification. In our
 opinion, this periodicity of physical verification is reasonable having
 regard to the size of the Company and the nature of its assets.
 
 c.  Fixed assets disposed off during the year were not substantial, and
 therefore, do not affect the going concern assumption.
 
 ii. a. As explained to us all inventories have been physically verified
 during the year at reasonable intervals by the management.
 
 b.  In our opinion and according to the information and explana- tions
 given to us, 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.  In our opinion and according to the information and explana- tions
 given to us, the Company has maintained proper records of inventory and
 no material discrepancies were noticed on physical verification.
 
 iii. a. The Company has granted unsecured loans to 4 companies listed
 in the register maintained under Section 301 of the Companies Act.
 1956. The year end balances of these loans aggregate to Rs. 53,895.633
 and the maximum amount out- standing during the year was Rs.
 108,577,537.
 
 b.  The rate of interest charged on these loans is prima facie not
 prejudicial to the interest of the Company.
 
 c.  The terms of repayment of loan have not been specified. We are,
 therefore, unable to comment on whether the repayment of principal and
 interest is regular or for any overdue amounts.
 
 d. According to the information and explanations given to us, the other
 terms and conditions of the loans given by the Company are prima facie
 not prejudicial to the interest of the Company.
 
 e. The Company has not taken any loans, secured or unsecured from
 parties listed in the register maintained under Section 301 of the
 Companies Act. 1956.
 
 iv.  In our opinion, and according to the information and explana-
 tions given to us, having regard to the explanation that some of the
 fixed assets purchased, goods sold and services rendered are of a
 special nature and suitable alternative sources do not exist for
 obtaining comparable quotations, there is an ad- equate 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. We have not observed any major weakness
 in the internal control system during the course of the audit.
 
 v. a. To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of opinion that the
 particulars of contracts or arrangements referred to in section 301 of
 the Companies Act, 1956 have been entered in the register required to
 be maintained under that section; and b. As explained to us,
 comparative prices were not available for transactions pertaining to
 purchase of services and sale of goods and services since these
 transactions were of a special nature. Other than for these
 transactions, for which we are unable to comment on the reasonableness
 of prices, transac- tions made in excess of Rs. 5 lacs for individual
 parties in pursuance of such contracts or arrangements have been made
 at prices which are reasonable.  Attention is also invited to Note 24
 of Schedule 16 wherein it is indicated that the Company has entered
 into transactions of income and expenditure aggregating to Rs.
 4,692,956 and Rs.  6,953,037 respectively with companies listed in the
 register maintained under section 301 of the Companies Act 1956 for
 which Cental Government approval in accordance with the requirements of
 Section 297 of the Companies Act 1956 is yet to be obtained.
 
 vi. In respect of deposits accepted from the public, according to the
 information and explanations givens to us, the directives issued by the
 Reserve Bank of India and the provisions of sections 58A and 58AA,
 other relevant provisions of the Com- panies Act, 1956 and the rules
 framed there under, where applicable, have been complied with.
 
 vii. In our opinion the Company has an adequate internal audit system
 commensurate with the size and nature of its busi- ness.
 
 viii. According to the information and explanations given to us, 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 Company.
 
 ix. According to the records of the Company examined by us and
 according to the information and explanations given to us:
 
 a. The Company has been generally regular in depositing its un-
 disputed 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 within the pre- scribed time with the appropriate
 authorities during the year.  There are no undisputed amounts payable
 in respect of Provi- dent 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 which have
 remained outstanding as at 31 March, 2008 for a period of more than six
 months from the date they became payable.
 
 We are informed that the companys operations did not give rise to any
 Excise Duty.
 
 b.  Dues of income tax that have not been deposited on account of
 disputes are as follows:
 
 Nature of Dues             Nature of 
                            dispute
 
 Income Tax                 Transfer
 Act 1961                   Pricing
 
 Income Tax                 Transfer
 Act 1961                   Pricing
 
 Income Tax                 Transfer
 Act 1961                   Pricing
 
 
 Amount     Period to    Forum where
 (Rs. in    which the    the dispute is
 millions)  amount       pending
            relates
 
 18,545     2001-02      Commissioner
                         of Income Tax
                        (Appeals)
 
 51,614     2002-03      Commissioner
                         of Income Tax
                        (Appeals)
 
 13,022,289 2003-04      Commissioner
                         of Income Tax
                        (Appeals)
 
 There are no dues in respect of Wealth Tax, Sales Tax, Customs Duty,
 Service Tax and Cess which have not been deposited on account of any
 dispute.
 
 x.  The Company does not have any accumulated losses and has not
 incurred any cash losses during the current and in the immediately
 preceding financial year.
 
 xi.  According to the information and explanations given to us and the
 records of the Company examined by us, the Com- pany has not defaulted
 in the repayment of dues to banks, financial institutions and debenture
 holders.
 
 xii.  According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 the way of pledge of shares, debentures and other securities.
 Accordingly, the provisions of clause 4(xii) of the Order are not
 applicable to the Company.
 
 xiii.  In our opinion and according to the information and explana-
 tions given to us, the Company is not a chit fund or a nidhi/ mutual
 benefit fund/society. Accordingly, provisions of clause 4(xiii) of the
 Order are not applicable to the Company.
 
 xiv. According to the information and explanations given to us the
 Company is not dealing or trading in shares, securities and debentures
 and other investments. Accordingly, the provisions of clause 4(xiv) of
 the Order are not applicable to the Company.
 
 xv.  According to the information and explanations given to us and the
 records of the Company examined by us. the Com- pany has given
 guarantees for loans taken by others from banks or financial
 institutions. The terms and conditions of such guarantees are prima
 facie not prejudicial to the inter- est of the company.
 
 xvi.  According to the information and explanations given to us and the
 records of the Company examined by us term loans obtained by the
 Company have been applied for the purpose for which these were obtained
 
 xvii. According to the information and explanations given to us, and on
 an overall examination of the balance sheet of the Company, funds
 raised on short term basis have prima facie, not been utilised for long
 term investment.
 
 xviii. The Company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act 1956.
 
 xix. The Company has created adequate security or charge in respect of
 the Zero coupon secured partly convertible de- bentures issued by the
 Company.
 
 xx.  The Company has not raised any money by way of public issue during
 the year. As set out in Note 19 of Schedule 16, the management has
 disclosed the end use of money raised by way of public issue during the
 previous year and the same has been verified by us.
 
 xxi. According to the information and explanations given to us and to
 the best of our knowledge and belief, no fraud on or by the Company has
 been noticed or reported during the course of our Audit.
 
 
                                 For DELOITTE HASKINS & SELLS
                                 Chartered Accountants
 
                                 ALKACHADHA
 
 New Delhi                       Partner
 29 July, 2008                  (Membership No. 93474)