1.  We have audited the attached Balance Sheet of TORRENT
 PHARMACEUTICALS 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 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 fi
 nancial statements are free of material misstatements. 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 signifi cant
 estimates made by the Management, as well as evaluating the overall fi
 nancial statement presentation. We believe that our audit provides a
 reasonable basis for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specifi ed 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 as follows:
 
 (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, the profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) 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;
 
 (e) 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 (ii) in the case of the profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (iii) 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 the written representations received from the
 Directors as on 31st March, 2011 taken on record by the Board of
 Directors, none of the Directors is disqualifi ed 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 Companys business/activities,
 clauses (x), (xiii) and (xiv) 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 the fixed assets.
 
 (b) The fixed assets were physically verifi ed over a period of three
 years by the Management in accordance with a regular programme of
 verifi cation which, in our opinion, provides for physical verifi
 cation of all the fixed assets at reasonable intervals. According to
 the information and explanations given to us, discrepancies noticed on
 such verifi cation have been properly dealt with in the books of
 account.
 
 (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 were physically verifi ed
 during the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verifi cation 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
 verifi cation.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, fi rms 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 weaknesses 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 in the Register maintained under the said
 Section have been so entered.
 
 (b) Transactions during the year exceeding the value of Rupees Five
 lacs in respect of any party have been made at prices which are
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 (vii) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA and other relevant provisions of the Companies Act, 1956
 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
 the deposits accepted from the public. According to the information and
 explanations given to us, no order has been passed by the Company Law
 Board or the National Company Law Tribunal or the Reserve Bank of India
 or any Court or any other Tribunal.
 
 (viii) In our opinion, the internal audit functions carried out during
 the year by fi rm of Chartered Accountants appointed by the management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 (ix) 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 for the Companys products to which the said rules are made
 applicable 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.
 
 (x) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has been generally 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,
 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/VAT, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and Employees State Insurance
 which have not been deposited as on 31st March, 2011 on account of
 disputes are given below:
 
                                                      Period to 
                                                       which    Amount
                   Nature of    Forum where Dispute is
 Statute                                                 the 
                                                        amount involved
                     Dues           pending
                                                       relates (Rs. in 
                                                                 lacs)
 
 The West Bengal  Demand of Tax  Taxation Tribunal, 
                                  West Bengal           2004-05   9.98
 Sales Tax 
 Act,1994
 
 West Bengal Value 
 Added Tax                        Additional 
                                  Commissioner of
                  Demand of Tax                         2005-06   5.21
 Act, 2003                        Sales Tax, 
                                  West Bengal
 
                                  Additional 
                                  Commissioner of 
 Central Sales 
 Tax Act,1956     Demand of Tax                         2005-06   0.72
 Sales Tax,                       West Bengal
 
 Uttar Pradesh 
 Trade Tax Act,                   Joint Commissioner
                  Demand of Tax                         2005-06   2.03
 1948                             Commercial Tax, 
                                  Uttar Pradesh
 
                                  Joint Commissioner of 
 Gujarat Value 
 Added Tax,       Demand of Tax   Commercial Tax 
                                 (Appeal),              2006-07  43.91
 2003                             Ahmedabad
 
                  Input Service   CESTAT                2006-07   0.69
                  Credit
 
                                  Commissioner 
                                  (Appeals-             2005-06 
                                                          and
                  Demand of Duty                                  0.70
                                  Ankleshwar)           2006-07
 
                                  Commissioner of 
                                  Central 
                  Cenvat Credit                         2006-07  11.47
                                  excise, Ahmedabad-III
 
                  Demand of Duty  CESTAT                2005-06   2.71
                  and penalty
 Central Excise 
 Act,1944         Demand of       Dy. Commissioner of 
                                  Central               2001-02 
                                                          and     3.02 
                  Interest        Excise-Kalol          2002-03
 
                  Demand of                             2005-06 
                                                          and 
                                  CESTAT                          0.50
                  penalty                               2006-07
 
                                  Assistant 
                                  Commissioner of       2008-09 
                                                          and
                  Demand of Duty                                  8.28
                                  Central Excise-Kalol  2009-10
 
                  Demand of Duty  CESTAT                2009-10  12.92
                  and penalty
 
                  Service Tax     Commissioner (Appeals) 2001-02  6.09
 
                  Demand of Duty                        2004-05 
                                                          and
                                  Commissioner (Appeals)          6.21
 
 Finance Act, 1994 and penalty                          2005-06
 
                  Demand of       Joint Commissioner of 
                                  Central               2008-09  18.01
                  Penalty         Excise
 
                  E.S.I                                 1993-94 
                                                           to
 E.S.I Act, 1948                  Gujarat High Court            390.98
                  Contribution                          2010-11
 
                  Demand of Tax   Assessment Offlcer-TDS 2007-08 15.92
                  and interest    Range, Ahmedabad
 
                                  Commissioner of 
                                  Income Tax 
 Income Tax Act, 
 1961             Demand of Tax                          2004-05  0.15
                                 (Appeals)
 
                  Demand of       Commissioner of 
                                  Income Tax             2005-06 39.59
                  Penalty        (Appeals)
 
 (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 and financial institutions. The Company has not issued any
 debentures.
 
 (xii) In our opinion, 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 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, the term loans have been applied for the purposes for
 which they were obtained, other than temporary deployment pending
 application.
 
 (xv) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that funds raised on short-term basis have not been used during
 the year for long- term investment.
 
 (xvi) According to the information and explanations given to us, 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.
 
 (xvii) The Company has not issued any debenture during the year.
 
 (xviii) The Company has not raised money by public issue during the
 year.
 
 (xix) To the best of our knowledge and according to the information and
 explanations given to us, no fraud on or by the Company has been
 noticed or reported during the year.
 
 
 
                                         For DELOITTE HASKINS & SELLS
 
                                                Chartered Accountants
 
                                            (Registration No. 117365W)
 
                                                       Gaurav J. Shah
 
 Ahmedabad                                                    Partner
 
 28th May, 2011                                  Membership No. 35701