1.  We have audited the attached Balance Sheet of Fortis Malar
 Hospitals Limited (''the Company'') as at March 31, 2012 and also the
 statement of 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 Company''s 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 (Auditor''s Report) Order, 2003 (as
 amended) (''the Order'') 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 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, statement of 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, statement of 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; and
 
 v.  On the basis of the written representations received from the
 directors, as on March 31, 2012 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2012 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, 2012;
 
 b) in the case of the statement of profit and loss account, of the
 profit for the year ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 (I) a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) Fixed assets have been physically verified by the management during
 the year and no material discrepancies were identified on such
 verification.
 
 c) There was no disposal of substantial portion 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) The Company has granted loan to one Company covered in the
 register maintained under section 301 of the Companies Act, 1956. The
 maximum amount involved during the year was Rs. 658 million and the
 year-end balance of loan granted to such party was Rs. 658 million.
 
 b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 c) In respect of loan granted, no repayment of loan and payment of
 interest was due during the year.
 
 d) There is no overdue amount of loan granted to companies, firms or
 other parties listed in the register maintained under section 301 of
 the Companies Act, 1956.
 
 e) According to information and explanations given to us, 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 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, fixed assets and for sale of services and sale
 of goods.  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) In respect of transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees five lakhs entered into
 during the financial year, because of the unique and specialized nature
 of the items involved and absence of any comparable prices, we are
 unable to comment whether the transactions were made at 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) To the best of our knowledge and as explained, 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) a) The Company is regular in depositing with appropriate
 authorities 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 applicable to it.
 Statutory dues pertaining to wealth tax and excise duty are not
 applicable to the Company.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employees''
 state insurance, income-tax, service tax, sales-tax, customs 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 information and explanations given to us, there are
 no dues of income tax, sales- tax, service tax, customs duty and cess
 which have not been deposited on account of any dispute.
 
 (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 banks. The Company
 has not availed any loans from financial institutions or issued any
 debentures during the year.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced before 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 Order 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 Order 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
 banks or financial institutions.
 
 (xvi) Based on the 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 did not have any outstanding debentures during the
 year.
 
 (xx) The Company has not raised any monies through public issues 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 year.
 
                                                   For S R B C & CO
 
                                              Chartered Accountants
 
                                   Firm''s Registration No.324982E
 
                                             per S Balasubrahmanyam
 
 Place : Chennai                                            Partner
 
 Date : May 14, 2012                          Membership No. 053315