1.  We have audited the attached balance sheet of Jyothy Laboratories
 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 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) 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, 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 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:
 Jyothy Laboratories 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 programme 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 disposal of a substantial part of fixed assets during
 the year
 
 ii) a) The inventory has been physically verified by the management
 during the year. In our opinion, the frequency of verification is
 reasonable. Inventories lying with outside parties have been confirmed
 by them as at year end.
 
 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.
 Discrepancies noticed on physical verification of inventories were not
 material, and have been properly dealt with in the books of account.
 
 iii) a) The Company has granted unsecured loan and advance to a
 subsidiary company covered in the register maintained under section 301
 of the Companies Act, 1956. The maximum amount involved during the year
 was Rs.2,965.25 lacs and the year- end balance of loan granted to the
 party was Rs.2,871.70 lacs.
 
 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) The loans granted along with interest are re-payable on demand. As
 informed, the Company has not demanded repayment of any such loan or
 interest during the year, thus, there has been no default on the part
 of the parties to whom the money has been lent.
 
 d) There is no overdue amount of loan granted to the subsidiary company
 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, provisions of clause 4(iii) (e)
 and (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.
 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 Companies Act, 1956 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(1)(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) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident 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. There are no amounts due in respect of investor
 education and protection fund.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441 A 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 material 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 of
 income-tax, wealth tax, customs duty, employees'' state insurance, and
 cess which have not been deposited on account of any dispute. According
 to the records of the Company, the dues outstanding of sales-tax,
 service tax, excise duty, provident fund and cess on account of any
 dispute, are as follows:
 
 Amount Rs. in Lacs
 
 Name of the 
 statute 
 (Nature of
  dues)                  Forum where the dispute is pending
 
                Period to 
                which       Commissionerate  Appelate   High Court Total 
                                                                   Amount 
                the
                amount                      Authorities 
                relates                     & Tribunal
 
 Sales Tax 
 (Tax/ 
 Penalty
 /Interest)   2001-02 to         24             -           -         24
 
              2002-03
 
              2003-04 to         72             -           -         72
              2004-05
 
              2005-06           213             -          44        257
 
              2006-07 to        544             -         355        899
              2009-10
 
              2010-11            49             -         148        197
 
 The Central 
 Excise Act,
 1944 (Tax/
 Penalty)     1999-00 to         -             12          -          12
              2000-01
 
              2004-05 to         6              8          -          14
              2005-06
 
              2006-07            1              -          -           1
 
              2009-10 to       110              -          -         110
              2010-11
 
 Employee 
 State 
 Insurance 
 (Tax/
 Penalty)     2002-08           10              -          -          10
 
 Provident 
 Fund (Tax)   1997-98          0.5              -          -         0.5
 
              2007-08            5              -          -           5
 
 Service 
 Tax (Tax)    2005-06           13              -          -          13
 
              2007-08            3              -          -           3
 
              2008-09 to        64              -          -          64
              2010-11
 
 Others       2003-04            -              -          4           4
 
 Total                    1,114.50             20        551    1,685.50
 
 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 or bank. The Company has not issued any
 debentures.
 
 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 Companies (Auditor''s 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. However, during
 the year, the Company has temporarily invested surplus funds in units
 of mutual fund and debentures. In our opinion and according to the
 information and explanations given to us, proper records have been
 maintained of the transactions and contracts and timely entries have
 been made therein. The investments have been held by the Company, in
 its own name.
 
 xv) According to the information and explanations given to us, the
 Company has given guarantee for loans taken by others from bank or
 financial institutions, the terms and conditions whereof in our opinion
 are not prima-facie prejudicial to the interest of the Company.
 
 xvi) The Company did not have any term loans outstanding during the
 year.
 
 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 money 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. Batliboi & Associates
 
 Firm Registration Number: 101049W
 
 Chartered Accountants
 
 per Vikram Mehta
 
 Partner
 
 Membership No.: 41870
 
 Mumbai
 
 Date: May 30, 2011