1.  We have audited the attached Balance Sheet of Piramal Life Sciences
 Limited (the Company) as at March 31, 2011, and the related Profit
 and Loss Account and Cash Flow Statement for the year ended on that
 date annexed thereto, which we have signed under reference to this
 report. 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, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the Order) 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 Order.
 
 4.  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 it appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) 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 Act;
 
 (e) On the basis of written representations received from the directors
 as on March 31, 2011 and taken on record by the Board of Directors,
 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 Act.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required by the Act, 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 loss for the year
 ended on that date; and
 
 (iii) in the case of the 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 Piramal Life Sciences
 Limited on the financial statements for the year ended March 31, 2011
 
 1.  (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed
 assets.
 
 (b) The fixed assets are physically verified by the Management
 according to a phased programme designed to cover all the items over a
 period of three years which, in our opinion, is reasonable having
 regard to the size of the Company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the Management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the Company during the year.
 
 2.  (a) The inventory (excluding stocks with third parties) has been
 physically verified by the Management during the year.
 
 In respect of inventory lying with third parties, these have
 substantially been confirmed by them. In our opinion, the frequency of
 verification is reasonable.
 
 (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) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  (a) 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 Act. Accordingly, clauses (iii)b to (iii)d of
 paragraph 4 of the order are not applicable to the Company for the
 current year.
 
 (b) The Company has taken unsecured loans, from one company covered in
 the register maintained under Section 301 of the Act. The maximum
 amount involved during the year and the year-end balance of such loans
 aggregates to Rs. 34700 lakhs and Rs. 34700 lakhs respectively.
 
 (c) In our opinion, the rate of interest and other terms and conditions
 of such loan are not prima facie prejudicial to the interest of the
 Company.
 
 (d) In respect of the aforesaid loans, the Company is regular in
 repaying the principal amounts as stipulated and is also regular in
 payment of interest, where applicable.
 
 4.  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 goods and services.
 Further, on the basis of our examination of the books and records of
 the Company, and according to the information and explanations given to
 us, we have neither come across nor have been informed of any
 continuing failure to correct major weaknesses in the aforesaid
 internal control system.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees Five Lakhs in respect of
 any party during the year have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 6.  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.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  The Central Government of India has not prescribed the maintenance
 of cost records under clause (d) of sub-section (1) of Section 209 of
 the Act for any of the products of the Company.
 
 9. (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing the 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
 as applicable with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of sales-tax,
 wealth-tax, service-tax, customs duty, excise duty and cess which have
 not been deposited on account of any dispute.
 
 The particulars of dues of Income Tax as at March 31, 2011 which have
 not been deposited on account of a dispute are as follows:
 
 Name of the 
 statute       Name of the dues   Amount    Period to 
                                            which the   From where the
                                 (Rs. Lakhs)amount
                                            relates  dispute is pending
 
 Income-tax 
 Act, 1961     TDS Demand on       11.99    2008-2009     CIT(Appeals)
                                                          40(a) (ia) 
                                                          disallowance
 
 10.  The Company has accumulated losses as at March 31, 2011 and it has
 incurred cash losses in the financial year ended on that date and in
 the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion and 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 during the year.
 
 16.  In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, we report that the Company has used funds of
 Rs. 35,625 lakhs raised on short-term basis for long-term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  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 Price Waterhouse & Co.
 
 Firm Registration Number: 007567S
 Chartered Accountants
 
 Partha Ghosh
 
 Partner
 
 Membership Number F-55913
 
 Mumbai, Dated: April 29, 2011