1.  We have audited the attached Balance sheet of Zee entertainment
 enterprises Limited (the Company) as at March 31, 2011, the profit
 and Loss account and also the Cash Flow statement of the Company for
 the year ended on that date, 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 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 (auditors report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of section
 227(4a) of the Companies act, 1956 (the act), and on the basis of
 such checks as we considered appropriate and according to the
 information and explanations given to us, we annex hereto a statement
 on the matters specified in paragraph 4 and 5 of the said Order.
 
 4.  Without qualifying our report, we draw our attention to:
 
 (a) note 3(a) in schedule 18 regarding amalgamation of foreign
 subsidiaries viz. Zes holdings Limited and Zee Multimedia Worldwide
 Limited (BVI) with the Company w.e.f. February 1, 2011 as per the
 scheme of amalgamation u/s 391 to 394 and other applicable provisions,
 approved by the honble high Court at Mumbai and effect thereof is
 given in these financial statement as per pooling of interest method as
 per as 14 and resultant difference of Rs. / Thousand 2,076,357 is
 adjusted against General reserve.
 
 (b) note 3(C) in schedule 18 regarding demerger of education business
 undertaking to Zee Learn Limited as at april 1, 2010 as per the
 Composite scheme of amalgamation and arrangement u/s 391 to 394,
 approved by the honble high Court at Mumbai and in pursuance thereof,
 assets and liabilities of the demerged undertaking are transferred and
 the resultant difference of Rs. / Thousand 631,293 is adjusted against
 General reserve.
 
 5.  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, the profit and Loss account and the Cash Flow
 statement dealt with by this report are in agreement 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 section 211 (3C) of the act;
 
 (e) On the basis of written representations received from the
 directors, as at March 31, 2011 and taken on record by the Board, we
 report that none of the directors is disqualified as at March 31, 2011
 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 accounts read together the
 significant accounting policies and notes to accounts as per schedule
 18, give the information required by the act, 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;
 
 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 referred to in Paragraph (3) of Auditors Report to the
 members of Zee Entertainment Enterprises Limited on the accounts for
 the year ended March 31, 2011
 
 1) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of its fixed
 assets.
 
 (b) all the fixed assets, except assets lying with third parties, have
 been physically verified by the management during the year. In our
 opinion, this periodicity of physical verification is reasonable having
 regard to the size of the Company and the nature of its assets. as
 informed, no material discrepancies were noticed on such verification.
 
 (c) during the year, there was no disposal of substantial part of fixed
 assets.
 
 2) (a) The inventory has been physically verified (copyrights of
 programs and movie rights verified with reference to title
 documents/agreements) by the management at reasonable intervals during
 the year.
 
 (b) In our opinion, 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, the Company has maintained proper records of
 inventory and no discrepancies were noticed on physical verification as
 compared to the book records.
 
 3) (a) The Company has not granted any loan, secured or unsecured, to
 companies, firms or other parties covered in the register maintained
 under section 301 of the act.
 
 (b) The Company has not taken any loan, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under section 301 of the act.
 
 4) In our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventory, fixed assets and sale of goods and services.
 during the course of our audit, no major weaknesses were noticed in the
 internal control system in respect of the aforesaid areas.
 
 5) according to the information and explanations given to us, there are
 no contracts or arrangements the particulars of which are required to
 be entered into the register maintained in pursuance to section 301 of
 the act.
 
 6) The Company has not accepted any deposits from the public during the
 year.
 
 7) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8) We are informed that the Central Government has not prescribed the
 maintenance of cost accounting records under section 209 (1) (d) of the
 act in respect of the Companys activities.
 
 9) according to the records of the Company examined by us and
 information and explanations given to us:
 
 (a) Undisputed statutory dues including provident fund, investor
 education and protection fund, income tax, sales tax, wealth tax,
 service tax, custom duty, excise duty, cess and others as applicable
 have generally been regularly deposited with appropriate authorities
 except delay in few cases. There are no undisputed amounts payable in
 respect of the aforesaid dues which have remained outstanding as at
 March 31, 2011 for a period of more than six months from the date they
 became payable.
 
 (b) according to the records of the Company, the dues of service tax
 and income tax, which are not deposited on account of any dispute are
 as under:
 
                                                        (Rs./Thousand)
 
 Name of 
 the Statute           Nature of the Dues          Amount (Rs./ Thousand)
 
 The Central Excise 
 Act, 1944                Service Tax                     241
 
                                                      312,239
 
                                                      148,240
 
                                                           44
 
                                                          177
 
 Income Tax          Tax Deducted at Source           982,067
                      (including interest)
 
                          Income Tax                  649,758
 
 
 Name of the Statue      Period to which the       Forum where dispute is
                         amount relate                     pending
 
 The Central Excise Act, 
 1944                     F.Y. 2003-2004      Commissioner of service Tax
 
                          F.Y. 2006-2007
 
                          F.Y. 2008-2009
 
                          F.Y. 2006-2007 to   Commissioner of Central
                          F.Y. 2008-2009      excise (appeals)
 
                          F.Y. 2006-2007,     Commissioner of
                          F.Y. 2007- 2008     Central excise (appeals)
 
 Income Tax               F.Y. 2005-2006 to   Commissioner of Income Tax
                          F.Y. 2009-2010      (appeals)
 
                          F.Y. 2006-2007      Commissioner of Income Tax
                                               (appeals)
 
 10) The Company does not have accumulated losses at the end of the
 financial year and has not incurred cash losses in the current
 financial year and in the immediately preceding financial year.
 
 11) The Company has not defaulted in repayment of dues to banks,
 financial institutions and debenture holders during the year.
 
 12) The Company has not granted any loans or advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13) The Company is not chit fund or a nidhi / mutual benefit fund /
 society.
 
 14) The Company is not dealing in or trading in shares, securities,
 debentures and other investments.
 
 15) In our opinion, the terms and conditions of guarantees given by the
 Company for loans taken by subsidiaries and others are prima-facie not
 prejudicial to the interests of the Company.
 
 16) The Company has not raised any term loan during the year.
 
 17) according to information and explanations given to us and on an
 overall examination of the Balance sheet of the Company, we are of the
 opinion that the funds raised on short term basis have not been used
 for long term investments.
 
 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.
 
 19) The Company has not issued any secured debentures during the year.
 however, pursuant to the Composite scheme of arrangement, the Company
 had been vested the liability of secured debentures issued by erstwhile
 eTC networks Limited which is transferred on april 1, 2010 to Zee Learn
 Limited on demerger.
 
 20) The Company has not raised any money by public issue during the
 year.
 
 21) Based on the audit procedures performed and according to the
 information and explanations given to us, we report that no fraud on or
 by the Company has been noticed or reported during the year.
 
 For MGB & Co
 
 Chartered accountants
 
 Firm registration no- 101169W
 
 Hitendra Bhandari
 
 Partner
 
 Membership no. 107832
 
 Mumbai, June 23, 2011