1.  We have audited the attached Balance Sheet of Aurobindo Pharma
 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 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 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 (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.  Without qualifying our opinion, we draw attention to Note 6(d) of
 Schedule 23 to the financial statements with regard to non-provision of
 premium payable on 139,200 Zero Coupon Foreign Currency Convertible
 Bonds of USD 1,000 each issued by the Company. Management is of the
 view that the liability to pay premium on redemption is contingent and
 the ultimate outcome of the matter cannot be presently determined.
 Accordingly, no provision for the above liability that may result in
 future has been made in the accompanying financial statements.
 
 5.  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 the 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: Aurobindo Pharma Limited (the Company)
 
 i. a. The Company has maintained proper records showing fuLL
 particulars, including quantitative details and situation of fixed
 assets.
 
 b.  All fixed assets have not been physically verified by the
 management during the year but there is a regular program of
 verification which, in our opinion, 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.  There was no substantial disposal 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.
 
 e. 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) (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 and
 services. 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.
 
 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 our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs have been entered
 into during the financial year at prices which are reasonable having
 regard to the 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. We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(l)(d) of the Companies
 Act, 1956, and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained.
 
 ix. a. Undisputed statutory dues including provident fund, investor
 education and protection fund, employees state insurance, income-tax,
 sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
 other material statutory dues have generally been regularly deposited
 with the appropriate authorities though there has been a slight delay
 in depositing of tax deducted at source in few cases.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under Section 441A 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, excise duty, cess and
 other undisputed statutory dues were outstanding, at the year end, for
 a period of more than six months from the date they became payable.
 
 c.  According to the records of the Company, there are no dues
 outstanding of income-tax, sales-tax, wealth-tax, service tax, customs
 duty, excise duty and cess on account of any dispute, other than
 service tax, customs duty and excise duty which are follows:
 
 Name of the 
 statute        Nature of dues       Amount   Period to 
                                               which the   Forum where 
                                                            dispute is
                                        Rs.       amount 
                                                relates 
                                                pending
 
 Central 
 Excise and     Excise Duty      52,136,641     2007-08,  The Assistant
                                                          Commissioner
 Customs Act,               
 1944                                           2008-09, 
                                                2009-10    Appeals, 
                                                           Hyderabad
 
                Excise Duty      18,604,080     2006-07, 
                                                2007-08,   CESTAT, 
                                                           Bangalore
                                                2008-09
 
               Customs Duty      42,621,459*    2002-03, 
                                                2003-04,   CESTAT, 
                                                           Chennai
               and Penalty                      2004-05, 
                                                2005-06
 
               Interest             439,770     2007-08    Joint 
                                                           Commissioner 
                                                           of
                                                           Central  
                                                           Excise
 
               Interest           5,680,233     2004-05, 
                                                2005-06,   Commissioner 
                                                           of Central
 
                                                2006-07, 
                                                2007-08    Excise 
                                                2008-09
 
              Interest              131,555     2009-10    Assistant 
                                                           Commissioner 
                                                           of
                                                           Central Excise
 
              Excise duty         2,526,389     2005-06, 
                                                2006-07,   Additional 
                                                           Commissioner 
                                                           of
                                                2007-08, 
                                                2008-09,   Central 
                                                           Excise, 
                                                           Hyderabad 
                                                2009-10, 
                                                2010-11
 
 Finance 
 Act, 1994    Service Tax           525,000     2005-06    CESTAT, 
                                                           Bangalore
 
              Service Tax            64,685     2006-07    CESTAT,    
                                                           Bangalore
 
              Service Tax         1,524,348     2006-07    CESTAT,    
                                                           Chennai
 
 *Stay granted
 
 x. The Company has no accumulated losses at the end of the financial
 year 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, bank or debenture holders.
 
 xii. According to the information and explanations given to us and
 based on the documents and records produced to 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 (Auditors 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 (Auditors Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 xv. According to the information and explanations given to us, the
 Company has not given any guarantee 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 has unsecured debentures (Foreign Currency Convertible
 Bonds) outstanding during the year on which no security or charge is
 required to be created.
 
 xx. The Company has not raised any money by way of public issue 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 course of our audit.
 
 For S.R. BATLIBOI & ASSOCIATES 
 
 Firm Registration Number: 101049W
 Chartered Accountants
 
 per VIKAS KUMAR PANSARI
 
 Partner
 
 Membership No. 93649
 
 Hyderabad, May 9, 2011.