Dear Shareholders,
 
 Warm greetings to you all.
 
 We are pleased to report that FY2011 was another year of
 accomplishments for Piramal Life Sciences Limited (PLSL). Committed to
 the Groups values - knowledge, action and care, we reaffirmed our
 efforts towards reducing the burden of disease. The year marked a
 steady movement towards our goal of being the first Company from India
 to discover, develop and launch a new drug globally.
 
 The environment for drug discovery and development globally has been
 challenging. Faced with decreasing new drug approvals and increasing
 R&D spend, most large pharma companies are acquiring R&D assets from
 smaller, nimble R&D companies. This transformation of the
 pharmaceutical industry has given rise to new business opportunities in
 drug discovery for India. In the last few years there has been a growth
 in the number of pre-clinical research collaborations. Indian companies
 have transitioned effectively from providing a cost and speed based
 value proposition with regards to clinical trials into more value added
 areas.  From fee for service models, firms have gone into risk sharing
 and partnership models. R&D companies in India are out-licensing their
 molecules at much later stages of clinical trials and are even looking
 at taking drugs all through to market.
 
 Since being demerged from Piramal Healthcare Limited (PHL) as an
 independent Company in 2007, PLSL has made significant progress. The
 pipeline of R&D programs has increased from nine to twenty four with
 nine additional programs moving to Phase I/II clinical trials and two
 additional programs moving to Phase II clinical trials.
 
 The development projects of this pipeline would need strong financial
 support going forward, given increasing spend on clinical trials.
 Hence, the Board of PLSL has approved the scheme of de-merger of the
 NCE Research Unit of PLSL into PHL. Under the proposed de-merger
 scheme, all assets and liabilities of the NCE division will be
 transferred to PHL.  Each shareholder of PLSL will be entitled to one
 fully paid up equity share of Rs. 2 each of PHL for every four equity
 shares of Rs. 10 each held in PLSL.
 
 During the year, we commenced Phase II study in Netherlands and India
 for PI 736, a Diabetes molecule. We have received Rs. 132.9 million as
 the first milestone payment on completion of Phase I trial of P2202 in
 Canada, for our collaborative research program with Eli Lilly.  Now, a
 Phase II study has been initiated in Canada for P2202. We have also
 completed a Phase I study of P1201, another drug being developed with
 Eli Lilly for Diabetes/Metabolic Disorders. Overall, we have made
 steady progress across different programs in our pipeline.
 
 We wish to express our gratitude to our employees who embody the spirit
 of PLSL and to you, our stockholders, for your ongoing support.  >
 
 Warm regards,
 
 Ajay G. Piramal
 
 Chairman
 
 Date : 21st June, 2011