a) We have audited the attached Balance Sheet of Ranbaxy Laboratories
 Limited (''the Company'') as at 31 December 2012, the Statement of Proft
 and Loss and the Cash Flow Statement (collectively referred to as
 ''fnancial statements'') of the Company for the year ended on that date,
 annexed thereto. These fnancial statements are the responsibility of
 the Company''s management. Our responsibility is to express an opinion
 on these fnancial statements based on our audit.
 
 b) 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
 fnancial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the fnancial statements. An audit also includes
 assessing the accounting principles used and signifcant estimates made
 by management, as well as evaluating the overall fnancial statements
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 c) As required by the Companies (Auditor''s Report) Order, 2003 (''the
 Order'') issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of the Companies Act, 1956, (''the
 Act''), we enclose in the Annexure, a statement on the matters specifed
 in paragraphs 4 and 5 of the said Order.
 
 d) 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, the Statement of Proft and Loss and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (iv) in our opinion, the Balance Sheet, the Statement of Proft and Loss
 and the 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, to the extent applicable;
 
 (v) on the basis of written representations received from the directors
 of the Company as at 31 December 2012, and taken on record by the Board
 of Directors, we report that none of the directors is disqualifed as at
 31 December 2012 from being appointed as a Director in terms of clause
 (g) of sub-section (1) of Section 274 of the Act;
 
 e) Without qualifying our opinion, we draw attention to note 37 of the
 fnancial statements, wherein it has been stated that on the basis of a
 legal advice, the Company is of the view that the appointment of and
 payment of remuneration to Mr. Arun Sawhney, CEO and Managing Director
 for the full year ended 31 December 2011 is in accordance with the
 conditions stipulated under Notifcation no. GSR 534(E) dated 14 July
 2011 read with the clarifcation dated 16 August 2012 issued by the
 Ministry of Corporate Affairs.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said fnancial statements give the
 information required by the Act, in the manner so required and gives 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 the affairs of the
 Company as at 31 December 2012;
 
 ii) in the case of the Statement of Proft and Loss, of the loss of the
 Company for the year ended on that date; and
 
 iii) in the case of the Cash Flow Statement, of the cash fows of the
 Company for the year ended on that date.
 
 Annexure to the Auditors'' Report
 
 (Referred to in our report of even date)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of its fxed
 assets.
 
 (b) The Company has a regular programme of physical verifcation of its
 fxed assets through which all fxed assets are verifed, in a phased
 manner, over a period of three years. In our opinion, this periodicity
 of physical verifcation is reasonable having regard to the size of the
 Company and the nature of its assets. As informed to us, no material
 discrepancies were noticed on such verifcation as carried out under the
 above programme during the current year.
 
 (c) Fixed assets disposed off during the year were not substantial, and
 therefore, do not affect the going concern assumption.
 
 (ii) (a) The inventories, except goods-in-transit, have been physically
 verifed by the management during the year. In our opinion, the
 frequency of such verifcation is reasonable.
 
 (b) In our opinion, the procedures of physical verifcation of
 inventories 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 inventories. As
 informed to us, the discrepancies observed on verifcation between the
 physical stocks and the book records were not material.
 
 (iii) The Company has neither granted nor taken any loans, secured or
 unsecured, to or from companies, frms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956 (''the
 Act'').
 
 (iv) In our opinion, and according to the information and explanations
 given to us, and having regard to the explanation that purchase of
 certain items of inventories and fxed assets are for the Company''s
 specialised requirements, and similarly, certain goods sold are for the
 specialised requirements of the buyers and suitable alternative sources
 are not available to obtain comparable quotations, there is an adequate
 internal control system commensurate with the size of the Company and
 the nature of its business with regard to purchase of inventories and
 fxed assets, and for the sale of goods and services. In our opinion,
 and according to the information and explanations given to us, we have
 not observed any major weakness during the course of audit.
 
 (v) In our opinion, and according to the information and explanations
 given to us, there are no contracts and arrangements, the particulars
 of which need to be entered into the register maintained under section
 301 of the Act.
 
 (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 prescribed by the Central Government for
 maintenance of cost records under section 209(1)(d) of the Act, in
 respect of its products and are of the opinion that prima facie, the
 prescribed accounts and records have been made and maintained. However,
 we have not carried out a detailed examination of the records with a
 view to determine whether these are accurate or complete.
 
 (ix) (a) According to the information and explanations given to us, and
 on the basis of our examination of the records of the Company, amounts
 deducted / accrued in the books of account in respect of 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 and other material
 statutory dues have generally been regularly deposited during the year
 by the Company with the appropriate authorities.
 
 According to the information and explanations given to us and on the
 basis of our examination of the records of the Company, no undisputed
 amounts payable in respect of Provident Fund, Investor Education and
 Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material
 statutory dues were in arrears as at 31 December 2012 for a period of
 more than six months from the date those became payable.
 
 (b) According to the information and explanations given to us, there
 are no dues of Income Tax, Wealth Tax and Customs Duty which have not
 been deposited with the appropriate authorities on account of any
 dispute. According to the information and explanations given to us, the
 following dues of Excise Duty, Value Added Tax, Service Tax and Sales
 Tax have not been deposited by the Company on account of disputes:
 
 Name of the 
 Statute       Nature of      Amount     Periods to   Forum where the
                                                      dispute is
               dues          (Rs. in     which the    pending
                              millions)  amount 
                                         relates to
 
 Central 
 Excise 
 Act, 1944     Excise Duty       18.97   2001-02,     Customs, Excise and
                                                      Service Tax 
                                                      Appellate
                                         2004 and 
                                         2005,        Tribunal (CESTAT),
                                                      Delhi 
                                         2007 and 
                                         2008, 2006 
                                         to 2011
 
 Central 
 Excise 
 Act, 1944     Excise Duty        1.95   2004 to 2007 CESTAT, Mumbai
 
 Central 
 Excise 
 Act, 1944     Excise Duty        6.77   2005 to 2008 Commissioner
                                                     (Appeals),Chandigarh
   
 Bihar Value 
 Added Tax     Value Added Tax   10.47   2005-06      Commercial Tax
                                                      Authority, Patna
 Act, 2005
 
 Madhya 
 Pradesh Value Value Added Tax    0.14   2008-09      Additional
                                                      Commissioner of
                                                      Commercial
 Added Tax, 
 2010                                                 Tax, Indore
 
 Uttar Pradesh 
 Sales Tax     Sales Tax          1.21   2008-09      Member Tribunal,
                                                      Commercial Tax,
 Act, 1948                                            Lucknow
 
 The Odisha
 Entry Tax 
 Act,          Sales Tax          0.34   April 
                                         2005 to      Odisha Sales Tax
                                                      Tribunal
 1999                                    January 
                                         2007
 
 Andhra 
 Pradesh 
 General       Sales Tax          1.16   2004-05      Sales tax Appellate
                                                      Tribunal
 Sales Tax 
 Act, 1957
 
 The Rajasthan
 Value         Value Added Tax    0.45   2008-09      Deputy Commissioner
                                                      Appeals Commercial
 Added Tax 
 Act, 2003                                            Taxes, Jaipur
 
 Delhi Value 
 Added Tax     Value Added Tax    0.10   2007-08      Joint Commissioner
                                                      Trade and Tax
 Act, 2004                                            Department, Delhi
 
 Madhya 
 Pradesh Value Entry Tax          5.42   2009-10      Additional
                                                      Commissioner,Indore
 Added Tax 
 Act, 2002
 
 Madhya 
 Pradesh Value Value Added Tax    0.31   2011         The Appellate 
                                                      Authority
 Added Tax 
 Act, 2002                                            Madhya Pradesh 
                                                      Commercial Tax, 
                                                      Ujjain
 
 (x) The accumulated losses of the Company at the end of the year are
 not less than ffty percent of its net worth (without adjusting
 accumulated losses). As explained to us, these are primarily due to
 provision created for settlement with the Department of Justice (DOJ)
 of the United States of America for resolution of potential civil and
 criminal a legations by the DOJ (refer to note 8 of the fnancial
 statements). The Company has not incurred cash losses in the current
 fnancial year though it had incurred cash losses in the immediately
 preceding fnancial 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 its
 bankers, debenture holders and fnancial institutions.
 
 (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 and according to the information and explanations
 given to us, the Company is not a chit fund or a nidhi/ mutual beneft
 fund / society.
 
 (xiv) According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has issued
 letters of comfort and given guarantees for loans taken from banks by
 subsidiaries and an associate company respectively, are not prejudicial
 to the interests of the Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, except for term loans lying unutilised as at year end, the
 term loans taken by the Company have been applied for the purpose for
 which these were raised.
 
 (xvii) According to the information and explanations given to us, the
 provision created for settlement with the DOJ amounting to Rs. 26,480
 milion (refer to note 8 of the fnancial statements) by the Company in
 the previous accounting year have resulted in long-term funds being
 lower by Rs. 5,558.22 mi lion compared to long-term assets as at 31
 December 2012. Accordingly, on an overa l examination of the Balance
 Sheet of the Company as at 31 December 2012, it appears that short term
 funds of Rs. 5,558.22 mi lion have been used for long-term purposes. As
 represented to us by the management, the shortfa l is temporary in
 nature and action is being taken to have long term funds within a short
 period of the amount being actua ly paid.
 
 (xviii) The Company has not made any preferential allotment of shares
 during the year to parties and companies/ frms/ parties covered in the
 register maintained under section 301 of the Act.
 
 (xix) According to the information and explanations given to us, the
 Company has created a security or charge in respect of debentures
 issued during the year.
 
 (xx) The Company has not raised any money by public issues during the
 year.
 
 (xxi) According to the information and explanations given to us, no
 signifcant fraud on or by the Company has been noticed or reported
 during the course of our audit.
 
                                For B S R & Co.
 
                                Chartered Accountants
 
                                Registration No. 101248W
 
                                Vikram Aggarwal
 
 Place : Gurgaon                Partner
 
 Dated : 26 February 2013       Membership No. 089826