As at         As at
                                  March 31, 2011     March 31, 2010
                                  Rs. in Million     Rs. in Million
 
 (a) Estimated Amount of outstanding 
 contracts / Capital Commitment        33.1                7.0
 
 (b) Contingent Liability w.r.t 
 Income Tax                             1.2                NIL
 
 3.  The accumulated loss of the Company as at March 31, 2011 is Rs.
 4753.3 million as against Net Worth (Share Capital and Reserves) of Rs.
 1861.6 million. Although the Net worth of Company is fully eroded,
 Management has prepared financial statements on going concern basis
 based on various finance options, future projections approved by the
 Company and its future cash flow from development of molecules, some of
 which are in Phase I/II studies. Considering the success of Phase I/II
 studies, the Company is of the opinion that the studies may be
 completed successfully. The Company has the product development option
 whereby it can sell it at development stage or engage a partner for
 further development. The Company is also considering other options,
 strategic funding, partnership / outsourcing of development of
 molecules.  Also, the Company has been able to secure funding /
 corporate guarantee for its requirements from Piramal Healthcare
 Limited, its associate company for the next 12 months. Accordingly, no
 adjustment is required to be made to the assets of the Company.
 
 4.  The Company is engaged in development of novel molecules. After
 successful pre clinical studies, the Company makes application to
 requisite regulatory authorities for conducting Phase I studies. The
 Company enters into agreement with different Clinical Research
 Organisations (CRO) for conducting Phase I studies on human volunteers.
 The expenses related to Phase I studies are relating to design and
 testing of a new or improved materials, products or processes and
 payments made to CROs. These expenses are recognized as an intangible
 asset and are carried forward under Capital Work in Progress until the
 completion of the project as it is expected that such assets will
 generate future economic benefits.
 
 Currently major developments programs are in Phase I/II studies. In
 Oncology, P276 is in Phase II study and P1446 is in Phase I, In
 Diabetes and Metabolic Disorder, P1736 -05 is in Phase II, P2202 is in
 Phase I and P1201 -07 is in Phase I and Inflammation, NPS 31807 has
 completed Phase II study, Psoriasis - Tinefcon (topical) is in Phase
 II. During the year company has received from M/s Eli Lilly initial
 milestone payment of USD 3 Million (Rs. 132.9 Millions) against
 development of P2202. The Company has the product development option
 whereby it can sell / transfer it at development stage or engage a
 partner for further development. For certain studies, on development,
 the Company will be entitled for milestone payments. Development
 expenses which are incurred after approval for conducting Phase I study
 are included in Capital work in Progress.
 
 5.  There is no virtual certainty supported by convincing evidence that
 future taxable income will be available. Accordingly no Deferred Tax
 Asset and Deferred Tax Liability has been created.
 
 6.  There are no derivative / forward contracts outstanding as on March
 31, 2011.
 
 7.  Employee Benefits :
 
 The disclosures required as per the revised AS -15 are as under:
 
 Brief description of the Plans:
 
 The Company has various schemes for long term benefits such as
 Provident Fund, Superannuation, Gratuity, Leave Encashment and Long
 Term Service Award. In case of funded schemes, the funds are
 administered through trustees. The Company has made necessary
 application to Income Tax Authorities for approval of Provident fund
 and Superannuation trust. The Companys defined contribution plans are
 Provident Fund, Superannuation and Employees Pension Scheme (under the
 provisions of the Employees Provident Funds and Miscellaneous
 Provisions Act, 1952). The Company has no further obligation beyond
 making the contributions. The Companys defined benefit plans include
 Gratuity, Leave Encashment and Long Term Service Award. The Guidance on
 implementing Accounting Standard (AS -15) (Revised 2005) Employee
 Benefits issued by the Accounting Standards Board (ASB) states that
 provident fund set up by employers which require interest shortfall to
 be met by the employers needs to be treated as defined benefit plan.
 However, as at the year end no shortfall remains unprovided for. As
 advised by an independent actuary, it is not practical or feasible to
 actuarially value the liability considering that the rate of interest
 as notified by the Government can vary annually.  Further the pattern
 of investment for investible funds is as prescribed by the Government.
 Accordingly other related disclosures in respect of provident fund have
 not been made. Since the company has not yet got its own approved Trust
 for Provident Fund and Superannuation as per the scheme of demerger, it
 continues paying its contribution to approved Trust of Piramal
 Healthcare Limited.
 
 J.  Expected employers contribution for the next year is Rs. 3.5
 Million for Gratuity.
 
 K.  The liability for Leave Encashment (Non - Funded) as at year-end is
 Rs. 21.3 Million (Previous year Rs. 15.8 Million).
 
 The expected rate of return on plan assets is based on market
 expectations at the beginning of the year. The rate of return on
 long-term government bonds is taken as reference for this purpose.
 
 There is no change in accounting estimates due to applicability of
 AS-15 (Revised) as the parameters considered in the FY 2010-11 are same
 as the one considered in FY 2009-10 apart from assumptions used for
 Principal Actuarial.
 
 8.  The Company is mainly engaged in Pharmaceutical Research and
 Development business which is considered the Primary reportable
 business segment as per AS -17 Segment Reporting issued by Institute
 of Chartered Accountants of India.
 
 9.  Related Party Disclosures, as required by Accounting Standard -18
 Related Parties Disclosures issued by the Institute of Chartered
 Accountants of India are given below:
 
 A.  Controlling Companies
 
 The Ajay G. Piramal Foundation* Paramount Pharma Private Limited*
 
 - Piramal International Private Limited*
 
 The Swastik Safe Deposit & Investments Limited* PHL Holdings Private
 Limited*
 
 B.  Other related parties where common control exists
 
 Piramal Glass Limited*
 
 - Piramal Enterprises Limited
 
 - Piramal Realty Private Limited (formerly known as Alpex International
 Limited)* Piramal Healthcare Limited
 
 C.  Key Management Personnel Ajay G. Piramal* Swati A. Piramal* Nandini
 Piramal #* Anand Piramal#* - N. Santhanam* Dr. Somesh Sharma
 
 # Relative of Mr.Ajay G. Piramal and Dr.Swati A. Piramal
 
 * There are no transactions with the above related parties during the
 year.
 
 13.  There are no Micro, Small and Medium Enterprises, as defined in
 the Micro, Small, Medium Enterprises Development Act, 2006, to whom the
 Company owes dues on account of principal amount together with interest
 and accordingly no additional disclosures have been made.
 
 The above information regarding Micro, Small and Medium Enterprises has
 been determined to the extent such parties have been identified on the
 basis of information available with the Company. This has been relied
 upon by the auditors.
 
 14.  The Companys significant leasing arrangements are mainly in
 respect of residential / office premises and motor vehicles.  The
 aggregate lease rentals payable on these leasing arrangements are
 charged as rent under Other Expenses in Sch.16.
 
 18.  Employees Stock Option Schemes
 
 Pursuant to approval of Shareholders in Annual General Meeting dated
 August 22, 2008 and Board of Directors in their meeting dated May 9,
 2008, the Employee Stock Option Scheme, 2008 has been formed.
 
 At Board Meeting held on July 14, 2009, 254,513 options each has been
 granted for financial year 2008-2009 and 2009-2010 at Exercise Price of
 Rs. 10. Vesting period of one year has been completed. However the said
 options have not been exercised as on Balance Sheet date, as it can be
 exercised within a period of five years from the date of vesting.
 
 The shares against exercise of these Options would be issued out of the
 new shares proposed to be allotted by the Company in respect of which,
 in principle approval has been received from Bombay Stock Exchange and
 National Stock Exchange of India.
 
 19. There are no amounts due and outstanding to be credited to Investor
 Education Protection Fund.
 
 20. The figures for the year ended March 31, 2010 have been regrouped,
 wherever necessary.
 
 Signatures to Schedule 1 to 18 which form an integral part of the
 Financial Statements