Mr. Kedrowski, Please forward this amended letter to the TARO board and TARO Special Committee.

Additional shareholders wanted to participate in this communication. Thank you TARO Shareholders

Dear Members of the TARO Board, TARO Special Committee,

We are retail shareholders of TARO. We have the following very serious concerns regarding the proposed merger of TARO with SUN and TAROs 08/31 filing ("merger agreement"). We continue to believe TAROs fair value using market multiples of its comparable peers is around $120 as we originally stated in our 05/20 letter. In that same letter dated 05/20, we articulated the actions that needed to be taken so TARO trades at fair value and closer to the market multiples of its market peers like Perrigo. That letter is linked here. To date, none of those actions that would have resulted in TARO to trade at fair value have been taken. 05/20 TARO Shareholders Letter to the Taro Board-> http://www.scribd.com/doc/95697207/Tarominorityshareholderspetitiont oSpecialCommitteeandBoard-05202012 The merger agreement filing on 08/31 raises extremely serious concerns regarding the procedures undertaken to approve this merger agreement. Upon the boards response we as Shareholders will determine the next steps. Please electronically send your response to taro-minority-shareholders@googlegroups.com to the below questions or make Regulation Fair-Disclosure filing by 10/10. The concerns and questions are enumerated below: 1. Did the TARO board review and consider the Average LTM EBIDTA multiples that the recent acquisition of peer generic companies happened at? -> Medicis at about 13 times LTM EBIDTA ->Actavis at 14.8 times LTM EBIDTA -> Fougera at 8.8 times LTM EBIDTA* -> The Median valuation multiple was 14 times Ebitda in eight other recent pharmaceuticals takeovers.

TARO at 15 times Q2 annualized EBIDTA would be valued approximately at $120 per share. The current offer of $39.5 translates to approximately 5 times 2012 EBIDTA of approximately 300-320m. The Q2 2012 EBIDTA was 79m.

* Fougera was a private company with little public detail known on its margin, balance sheet and growth.

** Industry analysts are expecting improved TARO performance in Q3. 2. TARO assisted by Citi relied on the Discounted Cash Flow (DCF) approach in valuating TARO. Why did the board not consider "LTM EBIDTA Multiple" approach? Majority of the precedent transactions including TARO peer acquisitions (Actavis, Medicis, etc) used the "LTM EBIDTA Multiple" valuation approach. The DCF approach is based on sales and EBIDTA estimates for the next 5 years. These estimates and the assumptions behind the estimates are based on, are inherently inaccurate and highly untenable. In addition, these estimates are indicated to be sourced from TARO's management. With TARO management being accountable to the TARO board and its future employment prospects depending on TARO board members, which is full of members from the prospective acquirer SUN, isnt there a conflict of interest? Wouldn't that be reason enough to shun DCF approach? Even if TARO were relying on the DCF approach, shouldn't TARO source these sales estimates and importantly the assumptions behind those estimates from multiple industry analysts that are independent? 3. From 2008 to 2011, TARO's year-on-year EBIDTA growth rate was ~50% and year-on-year Sales growth rate was ~15%. How could TARO's management possibly arrive at the low-ball sales estimates for 2013-2016? The filing says "The financial forecast was presented by Taro management to Citi as of June 14, 2012." No details are provided on the assumptions made to arrive at these sales estimate which seem unbelievably low considering TARO's historical sales and growth rate. Were the 2 NDAs pending FDA approval as well as several ANDAs pending approval factored in to these estimates? Did the "Management case"(the low-ball sales and EBIDTA estimates) have to be vetted with the TARO board for their acceptance before it was sent to Citi? TARO's new chairman Kal Sundaram (ex-SUN CEO) and SUN founder Mr. Shangvi have stated "TARO's opportunistic drug pricing can not be maintained". This appears to be the speculative basis on which the 2013-2017 estimates are based. Did TARO consult independent industry analysts when coming up with these estimates and the assumptions behind them?

4. Why is there a significant step-up in R&D expense from 2011 to 2012? This is a 60% year-on-year increase in R&D Spend. The step-up is also significant from 2010 base. This has a big impact on EBIDTA and valuation of TARO shares. The timing of this step-up is questionable. 5. Why is there absolutely NO mention of any financial estimates of synergy savings in the Merger agreement? Why is there no consideration for premium? Some highly anticipated synergies are general SG&A synergies(combined company can have one sales force, one Legal representation, one Auditor, one Human resources department, one Investor Relations department, etc) opening up of new markets(India, etc) for TARO's products where SUN already has a presence, potential transfer of TARO manufacturing to low cost India and other R&D synergies. When Valeant purchased 2 other dermatology companies in late 2011 it quickly realized $110m in synergy savings in 1st quarter 2012. Valeant is expecting 225m in synergy savings in the first 6 months of after acquiring Medicis. The Medicis acquisition by Valeant was announced in September. We remind you again to read our letter date "05/20" that highlighted how unique and valuable the TARO asset would be for any Pharma company and especially an Indian Pharma company. TARO is in a limited competition and higher barrier-toentry generic business.* Taro has a 50% market share in its top 18 products(see IsZo capital letter dated 05/11). Past generic M&A transactions were at an average of 14.8 times EBIDTA TARO's competitor Perrigo trades at 16 times ttm EBIDTA. Taro's 3 year sales and EBIDTA growth, operating margin, balance sheet and leverage ratio are all superior to Perrigo. The valuation of parent Sun's and relative contribution of TARO's to Sun's EBIDTA, would easily value TARO in excess of $100. SUNs generic business is a commoditized business with Several Indian Pharma competitors unlike TAROs business with no competition from ANY Indian Pharma. *None of the big Indian generic pharma companies that are significant players in the US generics market, have any meaningful presence in the dermatology and topical market due to the lack of technology. With the

acquisition of Taro, Sun Pharma would likely end up to be the only Indian company armed with the technology and manufacturing know-how for dermatology/topical from Taro, with the ability to leverage tremendous cost arbitrage opportunities in manufacturing and R&D from India. Inevitably, this will throw up margin expansion and market-share opportunities for Sun Pharma in the dermatology/topical space both for existing as well as for new products. 6. It has been publicly said by SUN pharma billionaire founder Mr. Shangvi that TARO is overvalued when it was trading around $39. Why wouldn't TARO board open the company for a formal auction process and other consider strategic alternatives? Why did the Special Committee not consider strategic alternatives? A lot of TARO shareholders believe Perrigo, Valeant or another Indian Pharma would bid for TARO at 15 times LTM EBIDTA ($120 per share). This would have been a win-win-win situation for ALL 3 parties involved: SUN pharma would get $120 per share(SUN's founder has publicly said at $39 TARO is overvalued), TARO's minority shareholders and for a Strategic Acquirer. 7. The Special Committee was evaluating $24.5 offer when during the same period the TARO shares traded hands for many months around $40. Which committee that is expressly set up to maximize the value for ALL shareholders would do this ? As another institutional shareholder correctly pointed, merely going through the motions of creating Special committee will NOT relieve you from the "fairness test" and absolve the board from its fiduciary duties towards its shareholders. We, like Iszo Capital stated in its 09/20 letter , have the same concerns on the proposed voting procedures and its inability to identify interested party from being counted as minority vote. Please let us know how you plan to resolve these concerns. 8. As pointed out by ISZO capital, in its letter on 09/20, Citis conflict of interest should bar them from being considered independent financial advisor. If Citi is going to be paid $5.7 million ONLY upon consummation of merger, how can be Citi considered independent? 9. Finally, please be reminded that we are determined to take this fight to the next level, if the company does not respond timely to these serious concerns raised by TARO shareholders.

The following TARO shareholders have approved this letter be sent to the TARO Board Your First Name and Last Name Zvi Landau John Ithak Gil Leonardo Mosca Mattis Ezren Benzion Geifman Ofhir Gil Alexander Kaplun Michael Sirr Ronen Ariely Larry Tooker Valery Libenzon Valerie davis Pasi Havia John Moy Degem William Folsom Since when are you holding Taro shares after 2010 after 2010 Private before 2006 before 2006 2008-2010 2006-2009 2006-2009 before 2006 after 2010 before 2006 before 2006 Private after 2010 Private after 2010

Total TARO Holdings Represented by the Requesting Shareholders

FY 2010-11A and FY 2012-2016E

~96,000 Shares
2013E 2014E 2015E 2016E

$mm (1)(2) 2010A Income Statement Net sales 392.5 (145. COGS 0 ) (103. SG&A 2 ) R&D (36.4 ) Impairment (2.6 ) EBITDA (3) 105.3 Depreciatio n& amortizatio n (18.8 )

2011A

2012E

505.7 498.2 573.6 535.4 514.3 491.6 (162. (165. (162. (159. (158. (161. 1 ) 8 ) 1 ) 6 ) 4 ) 8 ) (89.2 ) (87.5 ) (88.0 ) (30.9 ) (53.0 ) (53.5 ) (0.8 ) --222.7 231.8 267.3 (88.6 ) (51.4 ) -214.7 (89.6 ) (49.2 ) -194.4 (92.0 ) (49.8 ) -194.5

(18.7 ) (20.0 ) (20.0 ) (22.0 ) (22.0 ) (22.0 )

Operating income Foreign exchange

86.5 (5.3

204.0 ) 6.9

247.3 (0.2

211.8 ) --

192.7

172.4

172.5