Piramal Life Sciences

As at          As at
                                          March 31,2009 March 31, 2008
                                         Rs. in Million Rs. in Million
 1.  (a) Estimated Amount of
     outstanding contracts / Capital 
     Commitment                                2.7            NIL 
 (b) Contingent Liability                      NIL            NIL
 
 2.  The accumulated loss of the Company as at March 31, 2009 is Rs.
 2025.6 million as against Net Worth (Share Capital and Reserves) of Rs.
 1836.6 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 studios will bo
 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 is in process of arranging long term
 finance to meet its requirement. Accordingly, no adjustment is required
 to be made to the assets of the Company.
 
 3. The Company is engaged in development of 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. During the course of the studies, if it is observed
 that the studies are not proceeding as per expectations, the same are
 discontinued and the amount classified under Capital Work in Progress
 is charged off to Profit and Loss Account and accordingly, Rs.32.5
 million has been written off during the year.
 
 Currently major developments programs are in phase I/II studies. In
 Oncology, P276 is in phase II study, Diabetes, P17.16 -05 and Metabolic
 Disorder, P1201 -07 are in phase I and Inflammation, NPS 31807 is in
 phase II study. 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.
 
 4.  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, Employees State Insurance Fund 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, Superannuation and Employees State Insurance Fund, as per the
 scheme of demerger, it continues paying its contribution to approved
 Trust of Piramal Healthcare Limited.
 
 5.  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.
 
 6.  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
 
 - Nandini Piramal Investments Private Limited
 - Savoy Finance & Investments Private Limited
 - The Swastik Safe Deposit & Investment Limited
 - PHL Holdings Private Limited (Formerly known as NPIL Holdings
   Private Limited)
 
 B.  Olhcr related parlies where common control exists
 
 - Piramal Glass Limited
 - Piramal Enterprises Limited
 - Alpex International Limited
 - Piramal Healthcare Limited (formerly known as Nicholas Piramal India
   Limited)
 
 PHL Fininvest Private Limited (formerly known as NPIL Fininvest
 Private Limited)
 
 C.  Directors, Key Management Personnel and their relatives 
 
 - Mr. Ajay G. Piramal
 - Dr. (Mrs.) Swati A. Piramal
 - Mr. Anand Piramal
 - Ms. Nandini Piramal
 - Mr. N. Santhanam
 - Dr. Somesh Sharma
 - Mr. Rajesh Laddha
 
 #Relative of Mr. Ajay G. Piramal & Dr. Swati A. Piramal
 
 There are no transactions with the above related parties during the
 year.
 
 7. 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.
 
 8.  There are no derivative / forward contracts outstanding as on
 March 31, 2009.
 
 9.  The Company became a Public Limited Company effective from October
 10, 2007 and got listed at Bombay Stock Exchange and National Slock
 Exchange on May 29, 2008.
 
 10.  There are no amounts due and outstanding to be credited to
 Investor Education Protection Fund.
 
 11.  The figures for the year ended March 31, 2008 have been regrouped,
 wherever necessary.