1.  We have audited the attached Balance Sheet of SUN PHARMACEUTICAL
 INDUSTRIES LIMITED (“the Company”) as at 31st March, 2011, the Profit
 and Loss Account and the Cash Flow Statement of the Company for the
 year ended on that date, both 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 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 the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the 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 (Auditor''s Report) Order, 2003 (CARO)
 issued by the Central Government of India in terms of Section 227 (4A)
 of the Companies Act, 1956, 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 Annexure referred to in 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 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 it appears from our examination of
 those books;
 
 (iii) the Balance Sheet, the Profit and Loss Account 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 Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (v) 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 of the
 Company for the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5.  On the basis of 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 Section 274(1)(g)
 of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 (Referred to in paragraph 3 of our report of even date)
 
 (i) Having regard to the nature of the Company''s
 business/activities/result clauses vi, xiii, xiv, xvi, xviii, xix and
 xx of CARO are not applicable.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, no material discrepancies were noticed on such
 verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories (excluding inventories lying
 with third parties) were physically verified during the year by the
 Management at reasonable intervals. In respect of inventories lying
 with third parties, these have substantially been confirmed by them.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining 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 purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to in Section
 301 that needed to be entered into the Register maintained under the
 said Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs. 5 lakhs in respect
 of any party, the transactions have been made at prices which are prima
 facie reasonable having regard to the prevailing market prices at the
 relevant time, except in respect of certain purchases for which
 comparable quotations are not available and in respect of which we are
 unable to comment.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by firms of Chartered Accountants appointed by the Management
 have been commensurate with the size of the Company and the 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 in respect of manufacture of formulation and bulk drug
 products and are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained. We have, however,
 not made a detailed examination of the records with a view to
 determining whether they are accurate or complete.  To the best of our
 knowledge and according to the information and explanations given to
 us, the Central Government has not prescribed the maintenance of cost
 records for any other products of the Company.
 
 (ix) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Income-tax,
 Sales Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and
 other material statutory dues in arrears as at 31st March, 2011 for a
 period of more than six months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Custom Duty
 and Excise Duty, which have not been deposited as at 31st March, 2011
 on account of disputes, are given below:
 
 Statute      Nature of Dues Forum where Period to which the  Amount
                                                              involved
                             dispute is
                             pending      amount relates      (Rs. In
                                                                Million)
 
 The Central  Excise Duty,   Assistant / 
                             Deputy /     2002-03, 2004-05,
                                          2005-06,               31.6
 
 Excise Act,  Interest and
              Penalty        Joint 
                             Commissioner 2006-07, 2007-08,
                                          2008-09,
 1944                                     2009-10
 
                             Tribunal     1997-98, 1998-99, 
                                          1999-00,              259.5
                                          2000-01, 2002-03, 
                                          2003-04, 2004-05, 
                                          2005-06, 2006-07,
                                          2007-08, 2008-09
 
                             High Court   1998-99, 2001-02, 
                                          2006-07,                1.6
                                          2007-08
 
 Customs Act, Custom Duty,   Settlement 
                             Commission   2000-01                11.5
 1962         Penalty and 
              Interest
 
 Sales Tax 
 Act          Sales Tax, 
              Interest and   Assistant / 
                             Deputy /
                             Joint        1994-95, 1998-99, 
                                          1999-00,                4.7
 (Various 
 States)      Penalty        Commissioner 2000-01, 2002-03
 
                             Tribunal     1998-99, 2001-02, 
                                          2002-03,                2.9
                                          2003-04, 2004-05
 
                             High Court   1981-82 to 1985-86, 
                                          2003-04                14.5
 
 Income Tax   Income tax and Tribunal     1996-97, 2002-03        0.9
 Act, 1961    Interest
 
                             Commissioner 1997-98                 8.4
 
 Wealth Tax   Wealth tax     Commissioner 2003-04, 2004-05,
                                          2008-09                 0.2
 Act, 1957
 
 Employee 
 State        Contribution
              and            Appellate 
                             authority    1987 to 1992            0.2
 Insurance    Interest
 Act, 1948
 
 Drugs        Drug Price
              Equilisation   Drug Prices 
                             Liability 
                             Review       1981-1987              14.0
 (Price 
 Control)     Account 
              liability and  Committee
 Order, 1979  interest
 
 There were no unpaid disputed dues in respect of service tax and cess
 during the year.
 
 (x) The Company does not have any accumulated losses as at the end of
 the year. The Company has not incurred cash losses in the financial
 year 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 the repayment of dues to
 banks. The Company does not have any dues to financial institutions and
 has not issued any debentures.
 
 (xii) In our opinion, the Company has maintained adequate records where
 it has granted loans and advances on the basis of security by way of
 pledge of shares. The Company has not granted any loans and advances on
 the basis of security by way of pledge of debentures and other
 securities.
 
 (xiii) 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 and financial
 institutions, are not prima facie prejudicial to the interests of the
 Company.
 
 (xiv) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet of the
 Company, we report that the funds raised on short-term basis have,
 prima facie, not been used during the year for long-term investment.
 
 (xv) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
 
                                        For DELOITTE HASKINS & SELLS
 
                                               Chartered Accountants
 
                                           (Registration No. 117366W)
 
                                                Rajesh K Hiranandani
 
                                                             Partner
 
 MUMBAI, 28th May, 2011                        (Membership No. 36920)