Dabur India Ltd

To the Members of Dabur India Limited,

We have audited the attached Balance Sheet of Dabur India Limited (‘theCompany’) as at 31^st March, 2011 and its Profit & Loss Account and theCash Flow Statement for the year ended on that date annexed thereto. These financialstatements are the responsibility of the company’s management. Our responsibility isto express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. These standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes, examining on a test basis, evidence supporting the amounts and disclosuresin the financial statement. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as, evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion. i. As required by the Companies (Auditors’ Report) Order 2003, asamended, issued by the Central Government in terms of section 227 (4A) of the CompaniesAct, 1956, and on the basis of such checks of the books and records of ‘thecompany’ as we considered appropriate and according to the information andexplanations given to us, we enclose herewith in the annexure a statement of the matterspecified therein. ii. We have obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purpose of audit. iii. In ouropinion, proper books of account, as required by law have been kept by the Company so faras appears from our examination of books of account.

iv. The Balance Sheet and Profit and Loss Account dealt with by this report are inagreement with the books of account. v. Balance Sheet and Profit & Loss Account havebeen prepared in due compliances of Accounting Standards referred to in sub section (3C)of section 211 of Companies Act, 1956. vi. On the basis of written representationsreceived from the directors as on 31^st March, 2011 and taken on record by theBoard of Directors, we report that none of the directors of ‘the company’ isdisqualified for the office of the director within the meaning of section 274 (1) (g) ofthe Companies Act, 1956. vii. In our opinion and according to the information andexplanations given to us, the said accounts read in conjunction with Schedules A to O andread with other notes appearing in Schedule "P" give the information required bythe Companies Act, 1956, in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India. a) In the case ofBalance Sheet, of the State of Affairs of ‘the company’ as at 31^stMarch, 2011, and, b) In the case of Profit and Loss Account, of the Profit for the yearended on that date; and c) In the case of cash flow statement, of the cash flows for theyear ended on that date.

Annexure to the Auditors’ Report as referred to in Para I of the said Report ofeven date.

1. a. ‘The Company’ has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets. b. The fixed assets havebeen physically verified by the management at reasonable intervals. As informed, nomaterial discrepancies between book records and the physical inventories have been noticedon such verification. c. Fixed assets disposed of during the year were not material enoughto affect the going concern identity of the company.

2. a. The inventories have been physically verified at reasonable intervals during theyear by the management. b. The procedures of physical verification of inventories followedby the management are reasonable and adequate in relation to the size of the company andthe nature of its business. c. On the basis of our examination of the records ofinventory, we are of the opinion that ‘the company’ is maintaining properrecords of inventory. The discrepancies noticed on verification between the physicalstocks and book records were not material and have been properly dealt with in the booksof accounts.

3. ‘The company’ has neither granted nor taken any loans, secured orunsecured to/from companies, firms, or other parties covered in the register maintainedunder section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us thereis an adequate internal control system commensurate with the size of ‘thecompany’ and the nature of its business for purchase of inventory and fixed assetsand on the sale of goods. During the course of our audit no major weakness has beennoticed in the internal controls. We have not observed any failure on the part of thecompany to correct major weakness in internal control system.

5. a. Based on audit procedures applied by us and according to the information andexplanations provided by the management, we are of the opinion that contracts orarrangements referred to in section 301 of the Act have been entered in the registermaintained under that section. b. In our opinion and according to the information andexplanations given to us, the transactions made in pursuance of such contracts orarrangements have been made at prices which appear reasonable as per information availablewith ‘ the company’.

6. ‘The Company’ has not accepted any deposits from the public.

7. In our opinion ‘the company’ has an internal audit system commensuratewith it’s size and nature of its business.

8. On the basis of records produced we are of the opinion that prima facie cost recordsand accounts prescribed by the Central Government under section 209 (1) (d) of theCompanies Act, 1956 in respect of products of ‘the company’ covered under therules under said section have been maintained. However we are neither required to carryout nor have carried out any detailed examination of such accounts and records.

9. a. According to information and explanations given to us, ‘the company’ isregular in depositing with appropriate authorities undisputed statutory dues includingprovident fund, investor education and protection fund, employees state insurance, incometax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and otherstatutory dues to the extent applicable to it. According to the information andexplanations given to us, no undisputed amounts payable in respect of the aforesaid dueswere outstanding as at 31^st March, 2011 for a period of more than six monthsfrom the date of becoming payable. b. There is no disputed due on account of wealth taxand cess. Dues on account of Sales Tax/ Income Tax/ Excise Duty /Service tax disputed bythe company and not being paid, vis--vis forums where such disputes are pending arementioned below:

10. ‘The Company’ does not have accumulated losses at the end of thefinancial year. ‘The Company’ has not incurred cash losses in the financial yearand in the immediately preceding financial year.

11. Based on our audit procedures and as per the information and explanations given bythe management, we are of the opinion that ‘the company’ has not defaulted inrepayment of dues to any financial institution, bank or debenture holder.

12. ‘The company’ has not granted any loan or advance on the basis ofsecurity by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanations given to us,‘the Company’ is not a Chit Fund/ Nidhi/ Mutual Benefit Fund/ Society.Accordingly, paragraph 4 (xiii) of the order is not applicable.

14. Based on our examination of the records and evaluations of the related internalcontrols, we are of the opinion that proper records have been maintained of thetransactions and contracts relating to shares, securities, debentures and otherinvestments dealt in by ‘the company’ and timely entries have been made in therecords. We also report that ‘the company’ has held the shares, securities,debentures and other investments in its own name except for those pending transfer inCompany’s name.

15. ‘The company’ has given guarantees for loans taken by others from banksor financial institutions. The terms and conditions there-of are not prima facieprejudicial to the interest of the company.

16. The term loans taken by ‘the company’ have been applied for the purposefor which they were raised. 17. No short term fund has been applied for long term purpose.

18. ‘The company’ has made preferential allotment of shares under their ESOPScheme to the parties covered in the register maintained under section 301 of theCompanies Act, 1956 during the year. The price at which these shares were issued are notprima-facie prejudicial to the interest of the company.

19. ‘The Company’ has not issued any secured debentures during the year. 20.‘The Company’ has not raised any fund through public issue during the year.

21. Based on information and explanations furnished by the management, which have beenrelied upon by us, there were no frauds on or by ‘the company’ noticed orreported during the year.