UTV Software Communications

1.  We have audited the attached Balance Sheet of UTV Software
 Communications Limited, as at March 31, 2009, and the related Profit
 and Loss Account and Cash Flow Statement for the year ended on that
 date annexed thereto, which we have signed under reference to this
 report. 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 the 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,
 (together the ‘Order’) 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 give 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 paragraph 3
 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 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, 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 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 Act;
 
 (e) On the basis of written representations received from the
 directors, as on March 31, 2009 and taken on record by the Board of
 Directors, none of the directors are disqualified as on March 31, 2009
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act 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, 2009;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 annexure to auditors report
 
 [referred to in paragraph 3 of the auditors’ report of even date to the
 members of utV Software communications limited on the financial
 statements for the year ended March 31, 2009]
 
 1.  a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b) The fixed assets of the company have been physically verified by the
 management during the year and no material discrepancies between the
 book records and the physical inventory have been noticed. In our
 opinion, the frequency of verification is reasonable.
 
 c) In our opinion, the Company has disposed of a substantial part of
 fixed assets during the year. On the basis of our examination of the
 books and records of the Company, and according to the information and
 explanations given to us, in our opinion, the disposal of the said part
 of fixed assets has not affected the going concern status of the
 Company.
 
 2.  a) The inventory of tapes and films has been physically verified by
 the management during the year. In our opinion, the frequency of
 verification is reasonable.
 
 b) In our opinion, the procedures of physical verification of inventory
 of tapes and films followed by the management are reasonable and
 adequate in relation to the size of the Company and the nature of its
 business.
 
 c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. No
 discrepancies were noticed on physical verification of inventory as
 compared to book records.
 
 3.  a) The Company has granted unsecured loans, to one Company covered
 in the register maintained under Section 301 of the Act. The maximum
 amount involved during the year and the year-end balance of such loans
 aggregates to Rs.2,610.41 million and Rs. Nil respectively.
 
 b) In our opinion, the rate of interest and other terms and conditions
 of such loans are not prima facie prejudicial to the interest of the
 Company.
 
 c) In respect of the aforesaid loans, the parties are repaying the
 principal amounts as stipulated and are also regular in payment of
 interest, where applicable.
 
 d) In respect of the aforesaid loans granted, there is no overdue
 amount more than Rupees One Lakh.
 
 e) 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 Act. Accordingly, clauses (iii)(f) and
 (iii)(g) of paragraph 4 of the Order are not applicable to the Company.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 do not exist for obtaining comparative quotations, 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, fixed assets
 and for the sale of goods and services. Further, on the basis of our
 examination of the books and records of the Company, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system.
 
 5.  a) In our opinion and according to the information and explanations
 given to us, the particulars of contracts or arrangements referred to
 in Section 301 of the Act have been entered in the register required to
 be maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees Five Lakhs in respect of
 any party during the year have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  The Central Government of India has not prescribed the maintenance
 of cost records under clause (d) of sub-section (1) of Section 209 of
 the Act for any of the products of the Company.
 
 9. a) According to the information and explanations given to us and the
 records of the Company examined by us, in our opinion, the Company is
 generally regular in depositing undisputed statutory dues including
 Provident Fund, Investor Education and Protection Fund, Employees’
 State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax,
 Customs Duty, Excise Duty, Cess and other material statutory dues as
 applicable, with the appropriate authorities except dues in respect of
 Sales Tax. The extent of the arrears of statutory dues outstanding as
 at March 31, 2009, for a period of more than six months from the date
 they became payable, in respect of Sales Tax are as follows-
 
 Name of the statute                 Nature of dues         Amount
 
 (Rs. in Million)
 
 Maharashtra Value Added 
 Tax Act, 2002                       Sales Tax               68.04
 
 Period to which        Due date               Date of
 the amount                                    Payment
 relates
 
 April 2005 to        April 2005 to             -
 
 March 2009           March 2009
 
 b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of Income Tax,
 Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess
 which have not been deposited on account of any dispute.
 
 10.  The Company has no accumulated losses as at March 31, 2009 and it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank as at the
 Balance Sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company, for loans taken by others from banks or financial institutions
 during the year, are not prejudicial to the interest of the Company.
 
 16.  In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 17.  On the basis of an overall examination of the Balance Sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures.
 
 20.  The Company has not raised any money by public issue during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 material fraud on or by the Company, noticed or reported during the
 year, nor have we been informed of such case by the management.
 
                                        Partha Ghosh
                                        Partner
 
                                        Membership No. F-55913
 
                                        For and on behalf of
 Place : Mumbai                         price Waterhouse & co.
 
 Date : July 10, 2009                   chartered Accountants