1.  We have audited the attached Balance Sheet of Zee Learn Limited
 (the Company) as at March 31, 2011, and also the Profit and Loss
 account and the Cash Flow statement for the period from the date of
 incorporation i.e. January 4, 2010 to March 31, 2011, 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 opinion, attention is drawn to:
 
 (a) Note 2 in Schedule 17B regarding demerger of Education business
 undertaking to the Company as at April 1, 2010 as per the Composite
 Scheme of Amalgamation and Arrangement u/s 391 to 394 approved by the
 Honorable High Court at Bombay and effect thereof is given in these
 financial statements and resultant surplus of Rs 5,090.54 lacs is taken
 to General Reserve.
 
 (b) Note 11 in Schedule 17B regarding Managerial Remuneration for the
 period is subject to approval of Central Government.
 
 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
 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
 17, 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 for the
 period from the date of incorporation i.e. January 4, 2010 to March 31,
 2011; and
 
 iii) In the case of the Cash Flow Statement, of the cash flows for the
 period from the date of incorporation i.e. January 4, 2010 to March 31,
 2011.
 
 Annexure referred to in Paragraph (3) of Auditors report to the
 members of Zee Learn Limited on the accounts for the period 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) The Company has a regular program of physical verification of its
 fixed assets by which all fixed assets are verified in a phased manner
 over a period of three years except assets lying with third parties. In
 our opinion, this periodicity of the 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 period, there was no disposal of substantial part of
 fixed assets.
 
 2.  (a) The inventory has been physically verified by the management at
 reasonable intervals during the period.
 
 (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. The discrepancies noticed on verification between physical
 stocks and the book records were not material and have been properly
 dealt with in the books of accounts.
 
 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. We have not observed any continuing failure
 to correct major weaknesses in internal controls system of the Company.
 
 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 in pursuance of Section 301 of the Act.
 
 6.  According to the information and explanations given to us, the
 Company has not accepted any deposits from the public during the
 period.
 
 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, VAT, 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 and non deposit of dues (since paid) of Employees
 State Insurance Scheme due to pending registration with requisite
 authorities. 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 became payable.
 
 (b) According to the records of the Company, the dues outstanding of
 Sales Tax and VAT on account of dispute are as follows:
 
 Name of the 
 Statute        Nature of the   Amount  Period to which 
                                        the                Forum
                                                           where
                                                           dispute is
                     dues      (Rs in 
                                lacs)   amount relate*     pending
 
 
 Maharashtra
 Value Added      Sales Tax     74.64   FY 2005-2006      Deputy 
                                                          Commissioner 
                                                          of 
 Tax Act, 2002                  46.55                     Sales Tax 
                                                          (Appeals)
 
 Central Sales 
 Tax Act          Sales Tax      1.56   FY 2003-2004      Deputy 
                                                          Commissioner
                                                          of
                                 4.30   FY 2004-2005      Sales Tax 
                                                          (Appeals)
 
                                49.95   FY 2005-2006
 
 Bombay Sales 
 Tax Act          Sales Tax      3.07   FY 2002-2003      Deputy 
                                                          Commissioner 
                                                          of
                                 3.66   FY 2003-2004      Sales Tax 
                                                          (Appeals)
                                 6.66   FY 2004-2005
 
 
 *pursuant to the Composite Scheme of Arrangement as referred in Note 2
 of Schedule 17B.
 
 10.  The Company has been registered for a period of not more than five
 years. Hence, the requirement of Clause (x) of paragraph 4 of the said
 order is not applicable.
 
 11.  The Company has not defaulted in repayment of dues to banks,
 financial institutions and debenture holders.
 
 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.  According to the information and explanations given to us, the
 Company has not given any guarantees for loan taken by others from bank
 or financial institution.
 
 16.  The Company has not raised any term loan during the period.
 
 17.  On the basis of review of utilization of funds which is based on
 an overall examination of the Balance Sheet of the Company and related
 information as made available to us, we report that short-term funds to
 the extent of Rs 864.92 lacs have been used for long term investments.
 
 18.  The Company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the period.
 
 19.  The Company has not issued any secured debentures during the
 period. However pursuant to the Composite Scheme of Arrangement, the
 Company has been vested liability of secured debentures issued by ETC
 Networks Limited. Further, the Company has created adequate securities
 in respect of secured debentures except assignment of lease deed for
 which extension has been granted by the debenture holders.
 
 20.  The Company has not raised any money by public issue during the
 period.
 
 21.  On the basis of our examination and according to the information
 and explanations given to us, no fraud on or by the Company has been
 noticed or reported during the period.
 
 
 For MGB & Co.  
 Chartered Accountants 
 Registration No. 101169W
 
 Sanjay Kothari
 Partner
 Membership No. 48215
 
 Mumbai, 20 May, 2011