We take pleasure in presenting the Annual Report and Audited Accounts
 for the Year ended 31st March 2011 being 4th Annual Report after the
 Companys shares were listed on 29th May, 2008.
 
 PERFORMANCE HIGHLIGHTS :
 
                                                    (Rs. in Million)
 
 Year ended March 31                  2011      2010        Growth
 
 Income
 
 Sales and Services                   158.1     47.4        233.5%
 
 Other Income                           0.9     14.7        (93.9%) 
 
 Expenditure
 
 Total Operating Expenses           1,090.0  1,071.8          1.7%
 
 (Loss) Before Interest, Depreciation 
 and Tax                             (931.0)(1,009.7)         7.8%
 
 Less: Interest Paid (Net)            385.5    249.0           --
 
 (Loss) Before Depreciation and Tax (1,316.5) (1,258.7)      (4.6)
 
 Less: Depreciation                   113.3    106.2          6.7%
 
 (Loss) Before Tax                 (1,429.8) (1,364.9)       (4.8) 
 
 Less: Provision for Taxation
 
 Deferred Tax                           --     (67.0)          --
 
 (Loss) For the Year               (1,429.8)(1,297.9)       (10.2)
 
 (Loss) Balance brought forward 
 from previous year                (3,323.5)(2,025.6)          --
 
 Net (Loss)                        (4,753.3)(3,323.5)       (43.0)
 
 Balance carried to Balance Sheet  (4,753.3)(3,323.5)          --
 
 Earning/(Loss) Per Share (Basic/
 Diluted) (Rs.) (Face value of Rs.
 10/-each)                            (56.2)   (51.0)          --
 
 DIVIDEND:
 
 In view of the losses incurred by the Company, the Directors do not
 recommend any dividend for the Financial Year ended 31st March 2011.
 
 OPERATIONS REVIEW:
 
 During the year, PLSL received initial milestone payment for P2202 from
 Eil Lilly of Rs. 132.9 million; as a result sales for the year grew by
 233.5% to Rs. 158.1 million. PLSL incurred Operating expenditure of Rs.
 1,090.0 million as compared to Rs. 1,071.8 million in FY2010. Net
 capital expenditure was Rs. 68.9 million in FY2011 where as Rs. 99.8
 million in FY2010.
 
 AUDITORS OBSERVATIONS:
 
 The observations by the auditors at para no.10 of Annexure to the
 Auditors Report are appropriately dealt with in note no.3 of Schedule
 18 Notes to Financial Statements.
 
 RESEARCH & DEVELOPMENT:
 
 Details about our Research & Development (R&D) programme can be found
 in our Management Discussion and Analysis (MDA) section.
 
 INDUSTRY OUTLOOK:
 
 The global pharmaceutical industry is going through a transformation at
 every stage of drug development. Patent expiries of blockbuster drugs
 in recent years, challenge by generic drug manufacturers and
 diminishing success in new drug approvals along with high drug
 development costs have raised a question on the flow of innovative
 drugs for future. In recent years, more stringent regulatory
 environment has created new and challenging hurdles for a new drug to
 enter the market.
 
 These factors have forced the drug companies to consider alternate
 strategies. Companies are mending ways by shifting from fully
 integrated pharmaceutical company model towards a network model of
 fully integrated pharmaceutical network. The approach is to engage all
 major stakeholders in the drug development process, melding core
 competencies of each component to leverage capabilities, enhance
 efficiency and improve output. This is evidenced by growing number of
 partnerships and alliances in the pharmaceutical industry. The recent
 trend in world economy has changed the focus of pharmaceutical
 companies towards eastern countries like India which has necessary
 infrastructure, skills and expertise.
 
 INTERNAL CONTROL SYSTEM:
 
 The Company has a sound internal control system, which ensures that all
 assets are protected against loss from unauthorized use and all
 transactions are recorded and reported correctly. The internal control
 systems are further supplemented by internal audit carried out by an
 independent firm of Chartered Accountants and periodical review by
 management. The Audit Committee of the Board addresses issues raised by
 both, the Internal Auditors and Statutory Auditors.
 
 PROPOSED DE-MERGER OF THE COMPANYS NCE RESEARCH UNIT INTO PHL
 
 Your Directors have approved the scheme for De-merger of the NCE
 Research Unit of the Company into Piramal Healthcare Limited (PHL)
 (De-merger Scheme). Under the proposed De-merger scheme, each
 shareholder of the Company will be entitled to one fully paid up equity
 share of Rs. 2/- of PHL for every four equity shares of Rs. 10/- each
 held in the Company. All assets and Liabilities of the NCE Research
 Unit will be transferred to PHL at book value. The Scheme also
 contemplates utilizing the share premium account to adjust the debit
 balance in the Profit & Loss account to the extent feasible.
 
 The De-merger Scheme is subject to the consent of requisite majority of
 shareholders and creditors of the Company and of PHL.  The De-merger
 Scheme is also subject to the sanction of the High Court of Judicature
 at Bombay and all other regulatory approvals as may be necessary for
 the implementation of the De-merger Scheme.
 
 HUMAN RESOURCES:
 
 Our people are the most important asset at Piramal Life Sciences
 Limited (PLSL). We value their talent, integrity and dedication.  PLSL
 has been highly successful in attracting scientists trained abroad with
 significant drug development experience in big pharmaceutical and
 biotech companies. Dr. Somesh Sharma leads the team and has over 35
 years experience in academia, biotech, and pharmaceutical industry, in
 the US. Similarly, critical departments such as Medicinal Chemistry,
 Pharmacology, Analytical Sciences, Clinical, Process Research,
 Translational Research and more are led by scientists with decades of
 drug development experience in multi-national corporations. Over 15% of
 our scientists have been trained abroad and have global experience. As
 on 31st March 2011, we had 362 employees focused on drug discovery and
 development. The company continues to focus on its core values of
 Knowledge, Action and Care and these are reflected in the action and
 behavior of our employees.
 
 Human Resources Highlights
 
 Strengthening The Development Departments:
 
 In our quest to develop a strong clinical pipeline, the emphasis has
 been towards strengthening the development departments like Clinical,
 Toxicology, Translational Research. We have brought in expertise in the
 areas of clinical and translational activities, to further strengthen
 our inhouse capabilities.
 
 Developing Campus Relationship And Structured Training Programs:
 
 In order to nurture home-bred scientific talent, whocould be potential
 future employees, PLSL has developed a relationship with several
 scientific institutes of repute in India. The scientific student
 community vies for a training opportunity at PLSL. The best talent is
 picked up for available training/employment opportunities. PLSL has
 also been providing training to students from several renowned
 international universities of repute, who apply and wish to train at
 our world class R&D facility.
 
 Collaborative Projects Under Public-Private Partnership:
 
 PLSL is involved in projects along with government bodies such as
 Department of Biotechnology (DBT), Government of India. Many young
 scientists are receiving scientific and project management training and
 experience through this initiative.
 
 Opportunities For Development Including Further Studies:
 
 People Development is an important agenda for the organization.
 Employees wishing to pursue further studies in related fields/
 discipline are encouraged to do so. PLSL has tied up with Mumbai
 University and Vellore Institute of Technology and offers in- house
 Ph.D programs. To improve knowledge and skills, employees are sponsored
 for international conferences and seminars.  Employees are also
 encouraged to present their work in scientific conferences and publish
 their work in peer reviewed journals.
 
 Awards and Recognition:
 
 The Company has initiated a formal Reward and Recognition program.
 Teams or individuals with exceptional contribution are felicitated by
 means of cash award and certificates.
 
 Any shareholder interested in obtaining a copy of the statement of
 particulars of employees referred to in section 217(2A) of the
 Companies Act 1956, may write to the Company Secretary at the
 registered office of the Company. The statement is also available for
 inspection by the members on any working day (except Saturday) upto one
 day prior to the date of the meeting at the registered office of the
 Company between 10.00 a.m. to 5.00 p.m.
 
 Stock Options disclosures pursuant to the applicable requirements of
 the Securities and Exchange Board of India (Employee Stock Option
 Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given
 in the Annexure to the Report. The Company has received a certificate
 from the Companys Auditors that the Piramal Life Sciences
 Limited-Employee Stock Options Scheme has been implemented in
 accordance with the said Guidelines and the resolution passed by the
 shareholders. The Certificate would be placed at the Annual General
 Meeting for inspection by members.
 
 DIRECTORS RESPONSIBILITY STATEMENT:
 
 As required under section 217(2AA) of the Companies Act, 1956 we hereby
 state:
 
 a) that in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures, if any;
 
 b) that the Directors have selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as at 31 March 2011 and its loss for the year
 ended on that date;
 
 c) that the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act, for safeguarding the assets of the Company and
 forpreventing and detecting fraud and other irregularities.
 
 d) that the Directors have prepared the annual accounts on a going
 concern basis.
 
 GROUP:
 
 As per the intimations from the Promoters, the names of the Promoters
 and the entities comprising group as defined in the Monopolies and
 Restrictive Trade Practices Act,1969 (MRTP) are given for the purpose
 of SEBI (Substantial Acquisitions of Shares and Takeovers) Regulations,
 1997 in the Annexure to this Report.
 
 DIRECTORS:
 
 Prof. Goverdhan Mehta and Sir Ravinder Maini retire by rotation at the
 ensuing Annual General Meeting and are eligible for re- appointment
 which the Board recommends.
 
 Dr. Somesh Sharma was appointed as Managing Director for a period of 2
 years with effect from 9th May, 2010, subject to requisite approvals
 from Central Government which has been received vide its letter dated
 12th May, 2011.
 
 CORPORATE GOVERNANCE:
 
 The Company has complied with the applicable provisions of Corporate
 Governance under Clause 49 of the Listing Agreement with the Stock
 Exchanges. A separate report on Corporate Governance compliance is
 included as a part of the Annual Report alongwith the Certificate from
 Mr. N.L. Bhatia, Practicing Company Secretary.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION :
 
 Particulars required under Section 217 (1) (e) of the Companies Act,
 1956 read with Rule 2 of the Companies (Disclosure of Particulars in
 the Report of Board of Directors) Rules, 1988 are given in the Annexure
 to this Report.
 
 AUDITORS:
 
 Shareholders are requested to appoint the Auditors. Messrs. Price
 Waterhouse & Co., Mumbai retire as Auditors of the Company at the
 ensuing Annual General Meeting and are eligible for reappointment.
 
 ACKNOWLEDGEMENTS:
 
 We take this opportunity to thank the employees for their dedicated
 service and contribution to the Company. We also thank our bankers,
 business associates and shareholders for their support towards conduct
 of operations of the Company.
 
 By Order of the Board
 
 Ajay G. Piramal
 
 Chairman
 
 Mumbai: 21st June, 2011