A.  Nature of Operations
 
 Panacea Biotec Limited is one of the India''s leading research based
 health management companies engaged in the business of research,
 development, manufacture and marketing of branded Pharmaceutical
 Formulations and Vaccines. The Company has products for various
 segments, which include pain management, diabetes management,organ
 transplantation and pediatric vaccines.
 
 1.  Contingent Liabilities (to the extent not provided for)
 
                                                    (Rs.in million)
 
 S.No.  Particulars                             As at          As at
 
                                        March 31,2011  March 31,2010
 
 I.  Disputed demands/ show-cause 
 notices under:-
 
 a) IncomeTaxcases                                1.8           0.8
 
 b) Customs Duty cases                            4.0           4.0
 
 c) Central Excise Duty cases                     6.6           6.6
 
 d) Service Tax                                   8.3           2.7 
 
 Total                                           20.7          14.1
 
 II.  Uncalled liability on partly paid shares of NewRise Healthcare
 Private Limited 42.3 115.6 (Formerly known as Umkal Medical Institute
 Pvt.Ltd.) (Refer Schedule VI - Investments)
 
 III.  Demand from Maharashtra State Electricity Distribution Company
 Limited (Refer note (e) below) I 8.1 8.1
 
 IV.  Labour cases (in view of large number of cases, it is
 impracticable to disclose each of them) 1.2 2.0
 
 V.  Premium on Redemption of''USS 50 Million Zero Coupon Convertible
 Bonds due 2011''(Refer - 565.0 note 3 below)
 
 Notes:
 
 a) In respect of Income Tax demand, the Assessing Officer disallowed
 certain expenses in respect of A. Y. 2007-08 and A.Y. 2008-09 which
 were computed in accordance with the provisions of IncomeTax Act, 1961.
 The matter is pending with Hon''ble IncomeTax Appellate Tribunal.The
 Company believes that it has merit in its case, hence no provision is
 required.
 
 b) In respect of Custom Duty demand, the Assessing Officer levied
 Custom Duty on certain exempted items imported by the company. The
 Company has deposited the entire amount of demand under protest and the
 matter is pending before Hon''ble Customs, Excise and Service Tax
 Appellate Tribunal. The Company believes that it has merit in its case,
 hence no provision is required.
 
 c) In respect of Central Excise Duty demand, the Assessing Officer
 levied Excise Duty on common inputs used in manufacture of exempted and
 taxable products.The Company has deposited the entire amount of demand
 under protest and the matter is pending before Hon''ble Customs, Excise
 and Service Tax Appellate Tribunal.The Company believes that it has
 merit in its case, hence no provision is required.
 
 d) In respect of service tax demand, the Assessing Officer levied
 Service Tax on foreign services rendered & delivered outside India by
 the Company & certain other services on which there was no liability to
 pay Service Tax.The Company believes that it has merit in its case,
 hence no provision is required.
 
 e) Maharashtra State Electricity Distribution Company Ltd. served a
 demand notice to the company on account of wrong tariff rates for the
 activities at R&D Center, Navi Mumbai.The Company has taken legal
 opinion which is in favour of the Company & hence no provision is
 considered necessary in this regard.
 
 f) Liability on account of guarantees given to Government authorities
 for various purposes is considered remote. Hence,those have not been
 disclosed.
 
 3.  Foreign Currency Convertible Bonds
 
 US$ 50 Million Zero Coupon Convertible Bonds due 2011 amounting to
 US$ 36.8 million were pending for redemption or conversion (at the
 option of bondholders) as on March 31, 2010.  Since these bonds were
 not converted, repurchased or cancelled during the current year, the
 Company has redeemed these bonds at a price equal to 142.80% of the
 outstanding principal amount on the maturity date i.e. February
 14,2011.The premium on redemption of these bonds amounting to Rs.713.0
 million and withholding tax thereon amounting to Rs.84.2 million have
 been adjusted against the Securities Premium Account.
 
 The conversion price of''US$ 50 Million Zero Coupon Convertible Bonds
 due 2011'' (FCCBs) was pre-determined at Rs.357.57 per Share.This rate
 was used to determine dilutive Equity Shares of the previous financial
 year.
 
 b) Computation of net profit in accordance with Section 198 read with
 section 349 of the Companies Act, 1956 (the Act) and maximum amount
 permissible for managerial remuneration.
 
 2.  Related Party Disclosures 
 
 A.  Names of Related Parties
 
 Names of related parties where control exists irrespective of whether
 transactions have occurred or not
 
 (a) JointVentures - Chiron Panacea Vaccines Private Limited
 
 - Cambridge Biostability Limited
 
 (b) Subsidiaries - Best On Health Limited (BOH) (Wholly-owned
 subsidiary (WOS))
 
 - RadicuraS Co.Limited (Indirect WOS through BOH),
 
 - Panacea Hospitality Services Pvt. Ltd. (Indirect WOS through BOH)
 
 - Panacea Educational Institute Pvt. Ltd. (Indirect WOS through BOH)
 
 - Sunanda Steel Company Ltd. (Indirect WOS through BOH)
 
 - Nirmala Organic Farms & Resorts Pvt. Ltd (Indirect WOS through BOH)
 w.e.f. February 23,2011
 
 - Best On Health Foods Limited (Indirect WOS through BOH) w.e.f.
 December 6,2010
 
 - Rees Investments Ltd. (Rees) (Guernsey):WOS
 
 - Kelisia Holdings Ltd. (Cyprus): Indirect WOS through Rees
 
 - Kelisia Investment Holding AG (KIH) (Switzerland): Indirect WOS
 through Kelisia Holdings Ltd.
 
 - Panacea Biotec (International) SA (PBS) (Switzerland) (Indirect WOS
 through KIH)
 
 - Panacea Biotec GmbH (Germany) (Indirect WOS through PBS)
 
 - Panacea Biotec (Europe) AG, (Switzerland): Indirect WOS through PBS
 
 - Panacea Biotec FZE, (UAE): WOS
 
 - Panacea Biotec Germany GmbH (Germany) (Indirect WOS through PBS)
 w.e.f. August 12, 2010
 
 - Panacea Biotec Inc.(USA):WOS
 
 - NewRise Healthcare Private Limited (Formerly known as Umkal Medical
 Institute Pvt. Ltd.): Subsidiary
 
 (c) Associates - PanEra Biotec Private Limited
 
 - Lakshmi & Manager Holdings Ltd. (LMH)
 
 - Best General Insurance Company Ltd. (Indirect Associate (subsidiary
 of LMH))
 
 (d) Key Management -
 
 Mr. Soshil Kumar Jain - Chairman and Whole-time Director
 
 Personnel - Mr.Ravinder Jain - Managing Director
 
 - Dr. Rajesh Jain - Joint Managing Director
 
 - Mr.SandeepJain - Joint Managing Director
 
 - Mr.SumitJain - Whole-time Director
 
 (f) Relatives of Key Management personnel having transactions with the
 Company: 
 
 Mr. Ashwani Jain, Son-in-law of Mr. Soshil Kumar Jain
 
 Mr. Shagun Jain, Son-in-law of Mr. Ravinder Jain
 
 Mrs. Radhika Jain, Daughter of Mr. Ravinder Jain
 
 Mrs. Shilpy Jain, Wife of Mr. Sumit Jain
 
 Mr. Ankesh Jain, Son of Dr. Rajesh Jain
 
 (g) Enterprises over which person(s) having control or significant
 influence over the Company / Key management personnel(s),along with
 their relatives, are able to exercise significant influence:
 
 i) Neophar Alipro Ltd.;
 
 ii) All India S. L.Jain Charitable Foundation;
 
 iii) First Lucre Partnership Co.*;
 
 iv) Second Lucre Partnership Co.*;
 
 v) Radhika Associates;
 
 vi) Sumit Nipun& Co.;
 
 vii) Rattan Sons;
 
 viii)Tahir&Co.;
 
 ix) Best On Health Foods Ltd.;
 
 x) Soshil Kumar Jain (HUF)*;
 
 xi) Ravinder Jain (HUF)*;
 
 xii) Rajesh Jain (HUF)*;
 
 xiii) SandeepJain (HUF)*.
 
 *These enterprises are also holding Shares in the Company.
 
 3.  Segment Information
 
 Business Segments:
 
 Panacea Biotec Limited is one of the India''s leading research based
 companies engaged in the business of research, development, manufacture
 and marketing of Vaccines and Branded Pharmaceutical Formulations.The
 Company has products for various segments, which include pediatric
 vaccines, pain management,diabetes management and organ
 transplantation.
 
 4.  Leases
 
 i.  For assets given under Operating Lease agreements:
 
 a) The Company has leased out the assets situated at Lalru, Punjab on
 operating lease to its Associate, PanEra Biotec Private Limited.
 
 ii.  For assets taken on Lease
 
 a) The Company has taken various residential, office and godown
 premises under operating lease agreements.These are generally not
 non-cancelable and are renewable by mutual consent on mutually agreed
 terms.There is no sublease payments expected to be received under
 non-cancellable subleases at the balance sheet date and no restrictions
 is imposed by lease arrangements.
 
 b) Lease payments for the year are Rs. 72.4 million (Previous year Rs.
 70.3 million).
 
 d) The Company has purchased software licenses on finance lease.The
 lease term is for 3 years after which the legal title is passed on to
 the lessee.There is no escalation clause in the lease agreement.There
 are no restrictions imposed by lease arrangements.
 
 d) During the financial year 2009-10, Company''s erstwhile Joint Venture
 Cambridge Biostability Limited (CBL) had initiated steps to place it
 into creditors''voluntary liquidation. Due to the financial position of
 erstwhile Joint Venture company, the Company has considered its
 investment and loan given to it doubtful for recovery. Accordingly
 provision created in earlier years for the said amount is continued in
 the current year.
 
 5.  Additional information as required under Para 3 & 4 of Part II of
 Schedule VI of the Companies Act, 1956.
 
 A.  Particulars of Licensed Capacity, Installed Capacity & Production
 a) Licensed Capacity per annum
 
 Recombinant Bulk Vaccines - 18 million doses Others - Not Applicable
 
 6. The Company has a defined benefit gratuity plan. Every employee who
 has completed five years or more of service gets a gratuity on
 departure at 15 days salary (last drawn salary) for each completed year
 of service subject to maximum of Rs.1 million (except in case of
 Managing/ Joint Managing/Whole time Directors).The scheme is funded
 with an insurance company in the form of a qualifying insurance policy.
 
 The following tables summarize the components of net benefit expense
 recognized in the Profit & Loss Account and the funded status and
 amounts recognized in the Balance Sheet for the respective plans.
 
 7.  The Company has incurred expenditure on Pre-Clinical Development
 studies amounting to Rs.67.2 million during the year (Previous year Rs.
 32.1 million). This expenditure relates to studies carried out by
 Clinical Research Organization (CRO) towards obtaining registration of
 Company''s products outside India primarily in US or Europe. The
 expenditure incurred has been capitalized and carried in Capital Work
 in Progress. Management believes that it is in the nature of
 development expenditure and meets the capitalization criteria set out
 in Accounting Standard 26 on Intangible Assets notified by the
 Companies Accounting Standard Rules, 2006 due to the following reasons:
 
 The expenditure is not towards basic research and therefore no new
 chemical entity comes into being. This expenditure relates to the
 developmental work performed through external agencies (CROs). Safety
 profile of the basic molecule is well established in several countries
 in Europe and in India and the products are being marketed successfully
 in several countries under different brand names.
 
 There is no experience to suggest that the studies conducted by CROs on
 behalf of the Company would lead to or make it difficult for the
 Company to obtain regulatory approvals in US and/or Europe.
 
 The management believes that these products would be commercially
 viable and there is no reason to believe that there is any uncertainty
 that may lead to not securing registration for the products from
 regulatory authorities outside India primarily in US or Europe.
 
 8.  In accordance with Accounting Standard 9 on ''Revenue Recognition''
 notified by the Companies Accounting Standard Rules, 2006, Excise Duty
 on turnover amounting to Rs.3.6 million (Previous year Rs.8.0 million)
 has been reduced from turnover in Profit & Loss Account.
 
 9.  The Company had exercised the option as per the Companies
 (Accounting Standard) Amendment Rules, 2009 in the financial year
 2008-09. As per the option, exchange differences related to long term
 foreign currency monetary items so far as they relate to the
 acquisition of depreciable capital assets are capitalized and
 depreciated the same over the useful life of the assets. In other
 cases, have transferred to Foreign Currency Monetary Item Translation
 Difference Account and amortized over the balance period of such long
 term assets/liabilities but not beyond accounting period ending on or
 before 31st March 2011.The unamortized balance in this account is Nil
 (Previous year Rs. 16.8 million (liability)).
 
 10.The Company has appointed independent consultants for conducting a
 Transfer Pricing study to determine whether the transactions with
 associated enterprises were undertaken at Arm''s length basis The
 management confirms that all international transactions with associated
 enterprises are undertaken at negotiated contracted prices on usual
 commercial terms. Further there has been no change in the terms of such
 international transactions till March 31,2011.
 
 11.  In the financial year 2009-10, the Company had received a capital
 subsidy of Rs.3.0 million under the Central Investment Subsidy Scheme,
 2003 based on investment in plant & machinery as its manufacturing unit
 at Baddi, in the state of Himachal Pradesh which is in the nature of
 promoters'' contribution. As per the scheme, the Company has to maintain
 such investment for a minimum period of five years. This has been
 treated as capital reserve in books of account.
 
 12.  Owing to recoveries,during the financial year 2009-10, the Company
 had written back the provision for bad and doubtful advances of Rs.
 135.5 million created during earlier years on account of old
 recoverable from PanEra Biotec Pvt. Ltd., an associate company.The same
 had been shown as other income during the year 2009-10.
 
 13.  The President of India acting through Department of Biotechnology,
 Ministry of Science & Technology, and Government of India under
 Biotechnology Industrial Partnership Programme (BIPP) granted a loan
 for conducting the research Sdevelopment activities amounting to Rs.100
 million for H1N1 project. The first loan disbursement of Rs.30 million
 was received in the financial year 2009-10 and second disbursement of
 Rs.48.3 million has been received in the current financial year.
 Repayment of the loan shall be in 10 equal half-yearly installments and
 repayment would commence one year after the completion of the said
 project.
 
 14.  During the current financial year, the Company has carried out buy
 back of 5,592,000 equity shares of face value of Re. 1 each at an
 average price of Rs. 196.39 per share,from the open markets through
 Stock Exchanges. The Company has accordingly transferred Rs. 5.5
 million to Capital Redemption Reserve from Securities Premium Account
 and also utilized an amount of Rs. 1,092.8 million from Securities
 Premium Account towards the premium paid on the buyback of equity
 shares. Consequent to the buy back the proposed dividend and Dividend
 Distribution Tax thereon pertaining to the financial year 2009-10
 amounting to Rs. 1.1 million and Rs.0.2 million respectively have been
 written back during the current financial year.
 
 The shares so bought back have been considered to determine weighted
 average number of equity shares for the purpose of computing basic &
 diluted EPS.
 
 15.  During the year, the Company has initiated the process of
 Liquidation of one of its wholly owned subsidiary viz. Panacea Biotec
 Inc.  (incorporated in the United States of America) as it is not
 currently operational. Accordingly, provision of Rs.2.4 million for
 permanent diminution in the value of Investments in Panacea Biotec Inc.
 has been made during the year.
 
 16.  0.0 under Rs. in million represents amount less than Rs. 50,000
 and 0.0 under units represents units less than 50,000.
 
 17.  Previous year''s figures have been rearranged and reclassified
 wherever necessary to make them comparable with the current year''s
 figures.