1.  We have audited the attached Balance Sheet of PIDILITE INDUSTRIES
 LIMITED (the Company) as at 31st March 2011 and the Profit and Loss
 account and also 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 the 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 by the Companies (Auditors Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of Section 227 of The Companies Act, 1956 of India (the Act) and on
 the basis of such checks of the books and records of the Company as we
 considered appropriate and according to the information and
 explanations given to us, we give 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 paragraph 3 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 purpose 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, 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 31st March 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March 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 31st March 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 to Auditors Report
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Pidilite Industries Limited on the financial statements for
 the year ended 31st March 2011]
 
 i. (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All the 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) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 ii.  (a) The management has physically verified the stocks of stores,
 spares, raw materials, packing materials and finished goods. In our
 opinion, the frequency of verification is reasonable. In respect of
 inventories lying with third parties, these have been substantially
 confirmed by them.
 
 (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 carried
 out at the end of the year.
 
 iii.  (a) As informed, 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 and
 hence clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Companies
 (Auditors Report) Order, 2003 (as amended) are not applicable to the
 Company.
 
 (b) As informed, 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 and.
 hence clauses 4(iii)(f) and 4(iii)(g) of the Companies (Auditors
 Report) Order, 2003 (as amended) are not applicable to the Company.
 
 iv.  In our opinion and according to the information and explanations
 given to us, there exists an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of inventory, fixed assets and with
 regard to the sale of goods and services. During the course of our
 audit, we have not observed any continuing failure to correct major
 weaknesses in interna! control system of the Company.
 
 v.  (a) According to the information and explanations given to us, 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 within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 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 in respect of production of Synthetic Resins where, pursuant to
 the Rules made by the Central Government of India, the maintenance of
 cost records has been prescribed under clause (d) of sub-section (1) of
 Section 209 of the Act and we 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,
 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.
 
 (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, the dues outstanding of
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty and cess on account of any dispute, are as follows:
 
                                   Period to which the 
 Name of the 
 Statute      Nature of dues                            Forum where 
                                                        dispute is 
 
                             Amount                     pending
                             (Rs in 
                            million)   amount relates
 
 Sales Tax Act Sales tax in 
               various states  508.96   for various years Deputy Commis
                                                          sioner of sales 
                                                          tax
 Sales Tax Act  Sales tax in 
                various states  30.01   for various years Sales tax 
                                                          Tribunal
 
 Sales Tax Act  Sales tax in 
                various states   3.77   for various years  High Court
 
 Central Excise 
 Act            Excise duty in 
                various states   1.88   For Various years  CESTAT
 
 Income Tax Act Tax Deducted at 
                Source           2.65   A.Y. 2008-09       Commissioner
                                                           (Appeals)
 
 x.  The Company has neither accumulated losses as at 31st March 2011
 nor has it incurred any cash losses either in the financial year under
 audit and in the immediately preceding financial year.
 
 xi.  In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to a
 financial institution, bank or debenture holders.
 
 xii.  The Company has not granted any 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.  In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company, for loans taken by others from banks or financial institutions
 during the year, are not prejudicial to the interest of the Company.
 
 xvi. In our opinion, the term loans have been applied for the purpose
 for which the loans were raised.
 
 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 preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 xix. According to the information and explanations given to us, the
 Company has not issued debentures during the year.
 
 xx.  The Company has not raised any money by public issue during the
 year.
 
 xxi. During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                                  For HARIBHAKTI & CO
 
                                                Chartered Accountants
 
                                                      FRN No. 103523W
 
 
                                                          HETAN DESAI
 
                                                              Partner
 
                                                 Membership No. 17000
 
                                                        Place; Mumbai 
 
                                                  Date: 19th May 2011