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Notes to Accounts of Piramal Enterprises Ltd.

Mar 31, 2016

1. GENERAL INFORMATION

Piramal Enterprises Limited (the ''Company*) is engaged in the business of Pharmaceuticals including Research and Development, Financial Services and Information Management through its subsidiaries. The Company has manufacturing plants in India and sells in Domestic as well as International markets through its overseas subsidiaries and other distribution channels. The Company is a public limited company and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

2. The Scheme of Amalgamation ("the Scheme") of Oxygen Bio Research Private Limited ("02H"), Piramal Pharmaceutical Development Services Private Limited ("PPDSPL") and PHL Capital Private Limited ("PHL Capital") (collectively referred to as "transferor companies") with the Company, under Sections 391 to 394 of the Companies Act, 1956 was sanctioned by the Hon''ble High Courts of Gujarat and Bombay on November 11, 2014 and November 28,2014 respectively. The Scheme became effective on December 12,2014 and December 27,2014 upon filing of the said orders with the Registrar of Companies, Gujarat and Maharashtra respectively.

Consequently, all the assets and liabilities of transferor companies were transferred to and vested in the Company with effect from April 01,2014 ("the Appointed Date").

The amalgamation was accounted for under the "pooling of interest" method referred to in Accounting Standard 14 - Accounting for Amalgamation, as prescribed by the Scheme.

Accordingly, all the assets, liabilities and other reserves of transferor companies as on April 01,2014 were aggregated with those of the Company at their respective book values. As prescribed by the Scheme no consideration was paid as the transferor Companies were wholly owned step down subsidiaries of the Company. Accordingly, the resultant difference amounting to Rs. 2,339.14 Crores was credited to capital reserve account during the previous year.

3 EMPLOYEE BENEFITS:

Brief description of the Plans:

The Company has various schemes for long-term benefits such as Provident Fund, Superannuation, Gratuity, Leave Encashment, Pension and Long-term Service Award. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through trustees. The Company''s defined contribution plans are Provident Fund (in case of certain employees), 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 to such plans. The Company''s defined benefit plans include Provident Fund (in case of certain employees), Gratuity, Leave Encashment and Long-term Service Award.

4. The Company has with effect from October 1,2015 reclassified the foreign currency loans given to certain foreign subsidiaries as long term loans forming part of the Company''s net investment in an non-integral foreign operation. Accordingly, the Company has accounted for the exchange gain on revaluation of these loans amounting to Rs. 32.08 Crores (Previous year NIL) in Foreign Exchange Translation Reserve during the year.

5. Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures.

1. List of related parties

A. Controlling Companies

The Ajay G. Piramal Foundation

Piramal Healthcare Limited-Senior Employee Option Schemed

Piramal Enterprises Limited-Trustees of Piramal Enterprises Executive Trusty

Piramal Life Sciences Limited - Senior Employees Stock Option Trust

The Sri Krishna Trust through its Trustees, Mr.Ajay Piramal and Dr.(Mrs.)Swati A. Piramal (Previously held through its Corporate Trustees, Piramal Management Services Private Limited)

There are no transactions during the year.

B. Subsidiary Companies/ Step down subsidiaries /Jointly Controlled Entities/ Associates and its intermediates Located in India

Allergan India Private Limited (Allergan)

Convergence Chemicals Private Limited (Convergence)

Novus Cloud Solutions Private Limited (q.(Upto April 1, 2015)

Zebra Management Services Private Limited (J), (w.e.f. April 1, 2015)

PEL Finhold Private Limited

PEL Asset Resurgence Advisory Private Limited (w.e.f. February 22, 2016)

Piramal Asset Reconstruction Private Limited (w.e.f. January 29, 2016)

Piramal Consumer Products Private Limited (w.e.f. March 23, 2016)

PHL Fininvest Private Limited (PHL Fininvest)

Piramal Finance Private Limited (formerly known as PHL Finance Private Limited (PHL Finance)) (Piramal Finance)

Piramal Foundation for Educational Leadership (PFEL)

Piramal Fund Management Private Limited (formerly known as Indiareit Fund Advisors Private Limited) (Piramal Fund)

Piramal Healthcare Foundation

Piramal Investment Advisory Services Private Limited (PIASPL)

Piramal Swasthya Management and Research Institute (formerly known as "Health Management and Research Institute") (PSMRI)

Piramal Systems & Technologies Private Limited (Piramal Systems)

Piramal Udgam Data Management Solutions (Udgam)

Shrilekha Financial Services (Partnership firm) (Shrilekha)

Shriram Capital Limited (Shriram Capital)

Shriram Transport Finance Company Limited (w.e.f.July 21, 2015) (Shriram Transport)

Shriram City Union Finance Limited (w.e.f.July 21, 2015) (Shriram City Union)

Shriram Life Insurance Company Limited (w.e.f.July 21, 2015) (Shriram Life)

Shriram General Insurance Company Limited (w.e.f.July 21, 2015)

Shriram Credit Company Limited (w.e.f.July 21, 2015) ft

Bharat Re-insurance Brokers Private Limited (w.e.f.July 21, 2015)

Shriram Overseas Investment Private Limited (w.e.f.July 21, 2015)

Shriram Investments Holdings Limited (w.e.f.July 21, 2015)

Located Outside India

Activate Networks Inc. ##

Bluebird Aero Systems Limited

Coldstream Laboratories Inc**

Decision Resources Group Asia Limited ##

Decision Resources Group UK Limited ##

Decision Resources Inc. (formerly Decision Resources LLC) **

Decision Resources International Inc. ##

DR/ Decision Resources LLC##

DR/MRG Holdings LLC##ft

DRG Analytics & Insights Private Limited (w.e.f. May 11, 2015) ##

DRG Holdco Inc (w.e.f. August 26, 2015) (DRG Holdco) **

DRG UK Holdco Limited ##

Healthcare Business Insights LLC (w.e.f. May 14, 2015) ##

Indiareit Investment Management Company*

Millennium Research Group ##

PEL-DRG Dutch Holdco BV (w.e.f. March 7, 2016)

Piramal Asset Management Private Limited (formerly known as ''INDIAREIT Asset Management Private Limited'') #

Piramal Critical Care Deutschland GmbH **

Piramal Dutch Holdings N.V. (Dutch Holdings)

Piramal Dutch IM Holdco BV (w.e.f. March 7, 2016)

Piramal Imaging GmbH *

Piramal Imaging SA*

Piramal IPP Holdings LLC (w.e.f. November 6, 2015) **

Piramal Technologies SA $

Piramal Critical Care Inc (PCCI) **

Piramal Critical Care Italia, SPA*

Piramal Critical Care Limited (formerly known as Piramal Life Sciences (UK) Limited) ** ft

Piramal Healthcare (Canada) Limited (Piramal Healthcare, Canada) **

Piramal Healthcare Inc. **

Piramal Healthcare Pension Trustees Limited **

Piramal Healthcare UK Limited (Piramal Healthcare UK) **

Piramal Holdings (Suisse) SA (Piramal Holdings)

Piramal Imaging Limited (formerly known as Oxygen Healthcare Limited) (Imaging UK) *

Piramal International

Piramal Pharma Inc**

Sigmatic Limited ##

Held through Shrilekha

Held through Shriram Capital

* Held through Piramal Holdings (Suisse) SA

** Held through Piramal Dutch Holdings N.V.

# Held through Piramal Fund Management Private Limited

$ Held through Piramal Systems & Technologies Private Limited

## Held through Decision Resources Inc

(^.Thereare no transactions during the year with the above companies.

C. Other related parties where common control exists

Aasan Developers and Constructions Private Limited (Demerged from Piramal Estates) (Aasan Developers)

Gopikrishna Piramal Memorial Hospital (GPMH)

Piramal Corporate Services Limited (PCSL)

Piramal Estates Private Limited (Piramal Estates)

Piramal Glass Limited (PGL)

Piramal Phytocare Limited (formerly known as Piramal Life Sciences Limited (PPL))

Piramal Realty Private Limited

Piramal Water Private Limited

Piramal Forging Private Limited (Piramal Forging)

Piramal Security Private Limited (Piramal Security)

Piramal Hospitality Private Limited (Piramal Hospitality)

Topzone Mercantile Company LLP (Topzone)

D. Key Management Personnel and their relatives

Mr. Ajay G. Piramal

Dr. (Mrs.) Swati A. Piramal

Ms. Nandini Piramal

Mr. Vijay Shah

Mr. Peter De Young [husband of Ms. Nandini Piramal]

6. The Company has advanced loans to its subsidiary companies. The disclosures pursuant to Regulation 34(3) read with para A of Schedule V to SEBI Listing Regulations, 2015: Amounts outstanding as at the year-end were:

7. The Company''s significant operating lease arrangements are mainly in respect of residential / office premises and computers. The aggregate lease rentals payable on these leasing arrangements are charged as rent under "Other Expenses" in Note 30.

These lease arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms. The Company has placed a refundable deposit of Rs. 32.01 Crores (Previous Year Rs. 27.41 Crores) in respect of these leasing arrangements. Future lease rentals payable in respect of non-cancellable operating leases have been mentioned below:

8. The Company conducts research and development to find new sustainable chemical routes for pharmaceutical and herbal products. The Company is undertaking development activities for Oral Solids and Sterile Injectables, apart from other Active Pharmaceutical Ingredients. The Company has research and development centres in Mumbai, Ennore and Ahmedabad.

9. During the year, the Company identified a fraud committed by an employee in one of its divisions. The Company initiated an internal investigation in the matter. Based on the results of the investigation, it was concluded that the employee had misrepresented to various customers and raised forged invoices and credit notes to the extent of Rs. 3.18 Crores. The Company has filed a criminal complaint with appropriate authorities and will pursue the matter further. The Company has taken appropriate measures and has further strengthened internal processes and controls to prevent such cases.

10. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Mar 31, 2014

1. GENERAL INFORMATION

Piramal Enterprises Limited (the ''Company'') is engaged in Pharmaceutical business including its Research and Development, Financial Services and Information Management business through its subsidiaries. The Company has manufacturing plants in India and sells in Domestic as well as International markets through various distribution channels. The Company is a public limited company and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

2.1 Rights, preferences and restrictions attached to shares

Equity Shares:

The Company has one class of equity shares having a par value of Rs. 21- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3.1 As per Section 117C of the Companies Act, 1956 the Company has not created Debenture Redemption Reserve during the year for Redeemable Non Convertible Debentures in the absence of profit.

C An erstwhile Contractor had made a claim before arbitration panel for Rs.7.85 Crores on Canere Actives and Fine Chemicals Private Limited (Canere) prior to its amalgamation with the Company, for unsettled dues for erection and commissioning of a manufacturing facility during the year 1999-2000. Canere has filed a counter claim of Rs.38.26 Crores on the Contractor for submitting inflated bills for work not done and for special and indirect damages caused due to negligence of the Contractor. The Arbitration panel has awarded net claim in favour of contractor resulting in total claim against Canere amounting to Rs. 3.00 Crores (including interest). The Company has gone into the appeal against said order in Civil Court. The Company has provided for the said liability, anticipating the event of Civil Judge upholding the orders passed by the Tribunal.

4. Employee Benefits :

Brief description of the Plans:

The Company has various schemes for long term benefits such as Provident Fund, Superannuation, Gratuity, Leave Encashment, Pension and Long Term Service Award. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through trustees. The Company''s defined contribution plans are Provident Fund (in case of certain employees), 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 Company''s defined benefit plans include Provident fund (in case of certain employees), Gratuity, Pension, Leave Encashment and Long Term Service Award.

J. Expected employer''s contribution for the next year is Rs. 4.17 Crores (Previous Year Rs. 3.18 Crores) for Gratuity and Pension.

K. The liability for Leave Encashment (Non - Funded) as at year end is Rs. 18.03 crores (Previous year Rs. 19.48 Crores) (Refer Note 8 and 11).

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.

5. In accordance with Accounting Standard-17 ''Segment Reporting'', segment information has been given in the consolidated financial statements of Piramal Enterprises Limited, and therefore, no separate disclosure on segment information is given in these financial statements.

6. Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures.

1. List of related parties

A. Controlling Companies

The Swastik Safe Deposits and Investments Limited (upto August 6, 2013)*

The Ajay G. Piramal Foundation

PHL Holdings Private Limited (upto July 2, 2013)* (Refer Note 34)

Piramal Healthcare Limited - Senior Employee Option Scheme*

Piramal Enterprises Limited - Trustees of Piramal Enterprises Executive Trust*

Piramal Life Sciences Limited - Senior Employees Stock Option Trust *

Piramal Management Services Private Limited (Corporate Trustee of The Sri Krishna Trust)(w.e.f June 20,2013)*

*There are no transactions during the year.

B. Subsidiary Companies / Step down subsidiaries / Controlled Entities /Associates

- Located in India

PHL Fininvest Private Limited (PHL Fininvest)

Piramal Pharmaceutical Development Services Private Limited (PPDSPL) #

Oxygen Bioresearch Private Limited # @

PHL Capital Private Limited (PHL Capital) #

Piramal Finance Private Limited (formerly known as PHL Finance Private Limited (PHL Finance))*

PHL Infrastructure Finance Company Private Limited (PHL Infra)

Piramal Fund Management Private Limited (formerly known as Indiareit Fund Advisors Private Limited) # @

Piramal Systems & Technologies Private Limited (Piramal Systems)

Piramal Investment Advisory Services Private Limited (w.e.f June 13, 2013) # @

Piramal Udgam Data Management Solutions (w.e.f March 19, 2014) (Udgam)

Piramal Foundation for Education Leadership (w.e.f March 19, 2014) (PFEL)

Health Management and Research Institute (HMRI)

- Located Outside India

Piramal International @

Piramal Holdings (Suisse) SA (Piramal Holdings)

Piramal Pharma Inc**

Piramal Healthcare Inc. **

Piramal Investment Holdings (Canada) Inc.* @

(Upto August 31, 2013 - merged with Piramal Healthcare (Canada) Limited)

Piramal Life Sciences (UK) Limited * @

Piramal Healthcare UK Limited (Piramal Healthcare UK) *

Piramal Healthcare Pension Trustees Limited * @

Piramal Healthcare (Canada) Limited (Piramal Healthcare, Canada) *

Piramal Imaging Limited (formerly known as Oxygen Healthcare Limited)* @

Piramal Critical Care Italia, SPA*

Piramal Critical Care Inc (PCCI) **

Minrad EU ** @

Indiareit Investment Management Company # @

Piramal Technologies SA $ @

Piramal Imaging SA*

Piramal Imaging GmbH * @

Piramal Dutch Holdings N.V. @

Piramal Critical Care Deutschland GmbH * @

Piramal Resources Inc. (upto December 18, 2013 being the date of dissolution) @

DRI Holdco lnc**@

(Upto June 19, 2013 - merged with Decision Resources Inc.)

AMR/Arlington Medical Resources LLC $$ ## @

Arlington Medical International Inc $$ ## @

Biotrends Research Group LLC $$ ## @

Decision Resources Inc ** @

Decision Resources LLC(DRL) (Upto June 17,2013) ##

Decision Resources International Inc. ## @

Decision Resources Group UK Limited ## @

DR/ Decision Resources LLC ## @

DR/MRG Holdings LLC ## @

DRG UK Holdco Limited ## @

Fingertip Formulary LLC $$ ## @

Healthleaders LLC $$ ## @

Manhattan Research LLC $$ ## @

Pharmastrat LLC $$ ## @

Millennium Research Group Inc. ## @

Sigmatic Limited ## @

Decision Resources Group Asia Limited ## @

INDIAREIT Asset Management Private Limited (w.e.f August 26, 2013) # @

Bluebird Aero Systems Limited $ @

* Held through Piramal Holdings (Suisse) SA ** Held through Piramal Dutch Holdings N.V.

# Held through PHL Infrastructure Finance Company Private Limited $ Held through Piramal Systems & Technologies Private Limited ## Held through Decision Resources Inc

$$ Upto December 30, 2013 - Merged with Decision Resources Inc. @ There are no transactions during the year with the above Companies.

Note - Piramal Foundation for Education Leadership and Piramal Udgam Data Management Solutions are registered under section 25 of the Companies Act, 1956 and are limited by guarantee and not by shares. Piramal Enterprises Limited and its nominees are the members of these Companies.

Health Management & Research Institute is a society. The majority of the members of its governing body comprises nominees of Piramal Enterprises Limited

C. Other related parties where common control exists Piramal Glass Limited (PGL)

Piramal Phytocare Limited (formerly known as Piramal Life Sciences Limited (PPL))

Piramal Corporate Services Limited (PCSL)

Piramal Estates Private Limited (Piramal Estates)

Piramal Realty Private Limited *

India Venture Advisors Private Limited (India Venture)*

Allergan India Private Limited (Allergan)

* There are no transactions during the year.

D. Investing parties with whom the Company is a JV Partner Allergan Pharmaceuticals (Ireland) Ltd. Inc. (Allergan Ireland) Allergan Inc. (Holding Company of JV partner)*

* There are no transactions during the year.

E. Key Management Personnel and their relatives Mr. Ajay G. Piramal

Dr. (Mrs.) SwatiA. Piramal

Ms. Nandini Piramal

Mr. Vijay Shah

Mr. Peter De Young [husband of Ms. Nandini Piramal]

8 The Company''s significant leasing arrangements are mainly in respect of residential / office premises, computers and motor vehicles. The aggregate lease rentals payable on these leasing arrangements are charged as rent under "Other Expenses" in Note 30.

These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms. The Company has placed a refundable deposit of Rs. 27.17 Crores (Previous Year Rs. 24.79 Crores) in respect of these leasing arrangements. Future lease rentals payable in respect of motor vehicles, office premises and computers on lease:

9 As a globally integrated healthcare Company, Piramal Enterprises is committed to original drug discovery to fight diseases, and aspire to provide novel, affordable drugs in India and across the world. The Drug Discovery and Development Unit of the Company focuses on the discovery and development of innovative small molecule medicines that matter to patients in the therapy areas of Oncology and Metabolic Disorders. The Company''s state-of-the-art Research Centre in Mumbai has comprehensive capabilities spanning target identification all the way through clinical development.

The unit has made significant progress, with an R&D pipeline having several molecules in different phases of development. After successful pre-clinical studies, the Company makes application to requisite regulatory authorities for conducting phase I/II/III studies. Currently major development programs are in phase I/I I studies. In Oncology, P276, P1446, P7170 and PL225B are in phase I/II studies. In Diabetes and Metabolic Disorder, P1736, P11187 and P7435 are in Phase I/I I studies.

10 During the year, the Company has received Rs. 2,665.83 Crores (Previous Year Rs. 925 Crores) through discounting of receivables. Finance charges on the same amounting to Rs. 178.32 Crores (Previous YearRs.48.94Crores) has been disclosed under "Finance Cost".

11 In view of the inadequacy of profits for the year ended March 31, 2013, Managerial remuneration paid to the Executive Directors amounting to Rs. 11.69 crores required approval from the Central Government which was received during the current year and this amount has been charged to the Statement of Profit and Loss during the year. During the Current year, the Company had applied for approval from the Central Government for the payment of remuneration to the Executive Directors w.e.f. April 1, 2013, against which the Central Government had approved remuneration of Rs. 1.48 crores to each Executive Director. The Company has filed applications to the Central Government for review of the said approvals and pending approval of the Central Government for the remuneration paid and in light of the inadequacy of profits in the current year, an amount of Rs. 9.03 crores paid is considered as an advance to Directors (held in trust).

12 The Company assesses all investments in Debentures, Term loans and Inter-corporate Deposits given for their recoverability and accordingly, makes provisions on these Assets of Financial Services Segment in respect of likely non-performing assets, as considered necessary. As a matter of prudence, the Company has provided for such assets based on past experience, emerging trends and estimates. This Provision has been separately disclosed as a Provision on Assets of Financial Services under Note 30 - Other Expenses.

13. Subsequent to the year-end :

a) the Company has divested its entire equity stake, comprising of 45,425,328 shares, in Vodafone India Limited to Prime Metals Limited, an indirect subsidiary of Vodafone Group Pic, for a total consideration of Rs. 8,900.00 Crores;

b) the Company has acquired an effective 20% equity stake in Shriram Capital Limited, a financial services company, for an aggregate consideration of Rs. 2,014.20 Crores; and

c) the Company has agreed to acquire 9.99% of the post-diluted equity share capital of Shriram City Union Finance Limited, by way of subscription to fresh shares pursuant to a preferential allotment, for an aggregate consideration of Rs. 790.00 Crores.

14 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure. The figures for the previous year are not comparable with that of the current year on account of merger of PHL Holdings Private Limited during the year (Refer Note 34).


Mar 31, 2013

1. GENERAL INFORMATION

Piramal Enterprises Limited (the ''Company'') is engaged in pharmaceutical business including its research and development. The Company has diversified into Financial Services and Information Management business through its subsidaries. The Company has manufacturing plants in India and sells in Domestic as well as International markets through various distribution channels. The Company is a public limited company and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

2. An erstwhile Contractor had made a claim before arbitration panel for Rs. 7.85 Crores on Canere Actives and Fine Chemicals Private Limited (Canere) prior to its amalgamation for unsettled dues for erection and commissioning of a manufacturing facility during the year 1999-2000. Canere has filed a counter claim of Rs. 38.26 Crores on the Contractor for submitting inflated bills for work not done and for special and indirect damages caused due to negligence of the Contractor. The Arbitration panel has awarded net claim in favour of contractor resulting in total claim against Canere amounting to Rs. 3.00 Crores (including interest). The Company has gone into the appeal against said order in Civil Court. The Company has provided for the said liability, anticipating the event of Civil Judge upholding the orders passed by the Tribunal.

3. Income Tax

In view of the tax / book losses under Income Tax, the Company has not provided for Income Tax/MAT. However, Current Tax includes Prior Period Tax on account of additional provision made on long term capital gain on sale of Domestic formulation business and for certain matters in disputes with Income Tax Department pertaining to earlier years.

4. The Board of Directors of the Company approved the Scheme of Amalgamation and Arrangement between PHL Holdings Private Limited (''PHPL'') and Piramal Enterprises Limited and their respective shareholders and creditors with effect from Appointed Date - January 01, 2013.

The said scheme has been approved by shareholders of both the Companies. Pursuant to the schemer-existing equity shares held by PHPL in the Company will stand cancelled and equivalent number of equity shares will be issued by the Company to the shareholders of PHPL as consideration. All costs arising out of or incurred in connection with and implementing this Scheme shall be borne by PHPL and / or its shareholders and no costs shall be borne by the Company. Further, there would not be any impact of the above scheme on the financial position of the Company.

The Scheme is currently pending for sanction with the Hon''ble Bombay High Court.

5, Employee Benefits :

Brief description of the Plans:

The Company has various schemes for long term benefits such as Provident Fund, Superannuation, Gratuity, Leave Encashment, Pension and Long Term Service Award. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through trustees. The Company''s defined contribution plans are 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 Company''s defined benefit plans include Provident fund, Gratuity, Pension, Leave Encashment and Long Term Service Award.

6. In accordance with Accounting Standard-17 ''Segment Reporting'', segment information has been given in the consolidate financial statements of Piramal Enterprises Limited, and therefore, no separate disclosure on segment information is give in these financial statements.

7. Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures prescribed by th Companies (Accounting Standards) Rules, 2006 (as amended).

1. List of related parties

A. Controlling Companies

The Swastik Safe Deposits and Investments Limited *

The Ajay G. Piramal Foundation*

Paramount Pharma Private Limited* (upto October 30, 2012)

BMK Laboratories Private Limited (upto October 30, 2012)

Cavaal Fininvest Private Limited* (upto October 30, 2012)

PHL Holdings Private Limited (formerly Known as Piramal International Private Limited)

Piramal Healthcare Limited - Senior Employee Option Scheme*

Piramal Enterprises Limited - Trustees of Piramal Enterprises Executive Trust*

Piramal Life Sciences Limited - Senior Employees Stock Option Trust *

*There are no transactions during the year.

B. Subsidiary Companies/ Step down subsidiaries

- Located in India

PHL Fininvest Private Limited (PHL Fininvest)

Piramal Pharmaceutical Development Services Private Limited (PPDSPL)

Oxygen Bioresearch Private Limited #

PHL Capital Private Limited (PHL Capital)

PHL Finance Private Limited (PHL Finance) $

PHL Infrastructure Finance Company Private Limited (PHL Infra) $

Indiareit Fund Advisors Private Limited $ @

Piramal Systems & Technologies Private Limited (Piramal Systems)

- Located Outside India

Piramal International @

Piramal Holdings (Suisse) SA (Piramal Holdings) ''

Piramal Pharma Inc (Formerly known as NPIL Pharma Inc, USA )*

Piramal Healthcare Inc.

Piramal Investment Holdings (Canada) Inc.*

Piramal Life Sciences (UK) Limited * @

Piramal Healthcare UK Limited (Piramal Healthcare UK) *

Piramal Healthcare Pension Trustees Limited * @

Piramal Healthcare (France) Limited * @ (upto August 7, 2012)

Piramal Healthcare (Canada) Limited (Piramal Healthcare, Canada) *

Oxygen Healthcare Limited, UK (Oxygen Healthcare) *

Piramal Critical Care Italia, SPA* @

Piramal Critical Care Inc (PCCI) **

Minrad EU **@

Indiareit Investment Management Company, Mauritius $ @

Piramal Technologies SA ## @

Piramal Imaging SA * @

Piramal Imaging GmbH * @ (formerly known as "Piramal Molecular Imaging Development GmbH") Piramal Dutch Holdings N.V. (w.e.f October 17, 2012) @

Piramal Critical Care Deutschland GmbH (w.e.f April 16, 2012) *

Piramal Resources Inc. (w.e.f. May 22, 2012) **@

DRI Holdco Inc (w.e.f. June 7, 2012) **@

AMR/Arlington Medical Resources LLC (w.e.f. June 7, 2012) **@

Arlington Medical International Inc (w.e.f. June 7, 2012) **@

Biotrends Research Group LLC (w.e.f. June 7, 2012) **@

Decision Resources Inc (w.e.f. June 7, 2012) ** @

Decision Resources LLC (w.e.f. June 7, 2012) (DRL) **

Decision Resources International Inc. (w.e.f. June 7, 2012) **@

Decision Resources Group UK Limited (w.e.f. November 21, 2012) **@

DR/ Decision Resources LLC (w.e.f. June 7, 2012) **@

DR/MRG Holdings LLC (w.e.f. June 7, 2012) **@

DRG UK Holdco Limited (w.e.f. November 21, 2012) **@

Fingertip Formulary LLC (w.e.f. June 7, 2012) **@

Healthleaders LLC (w.e.f. June 7, 2012) **@

Manhattan Research LLC (w.e.f. June 7, 2012) **@

Pharmastrat LLC (w.e.f. June 7, 2012) **@

Millenium Research Group (w.e.f. June 7, 2012) **@

Sigmatic Limited (w.e.f. December 03, 2012) **@

* Held through Piramal Holdings (Suisse) SA

** Held through Piramal Healthcare Inc.

# Held through Piramal Pharmaceutical Development Services Private Limited.

$ Held through PHL Capital Private Limited.

## Held through Piramal Systems and Technologies Private Limited.

@ There are no transactions during the year with the above Companies.

C. Other related parties where common control exists *

Piramal Glass Limited (PGL)

Piramal Life Sciences Limited (PLSL)

Piramal Corporate Services Private Limited (formerly known as "Piramal Enterprises Limited") (PCSPL) Piramal Estates Private Limited (formerly known as Piramal Realty Limited) (Piramal Estates)

India Venture Advisors Private Limited* (India Venture)

Allergan India Private Limited (Allergan)

Piramal Foundation for Educational Leadership (PFEL)

Health Management and Research Institute (HMRI)

* There are no transactions during the year.

D. Investing parties with whom the Company is a JV Partner Allergan Inc.*

* There are no transactions during the year with the above company.

E. Key Management Personnel and their relatives Mr. Ajay G. Piramal

Dr. (Mrs.) Swati A. Piramal Ms. Nandini Piramal Mr. Vijay Shah

Mr. Peter De Young [husband of Ms. Nandini Piramal]

8. The Company''s significant leasing arrangements are mainly in respect of residential / office premises, computers and motor vehicles. The aggregate lease rentals payable on these leasing arrangements are charged as rent under "Other Expenses" in Note 31.

These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms. The Company has placed a refundable deposit of Rs. 19.43 Crores (Previous Year Rs. 13.36 Crores) in respect of these leasing arrangements. Future lease rentals payable in respect of motor vehicles, office premises and computers on lease:

9. During the year, the Company has received Rs. 925.00 Crores (Previous Year Rs. 1,854.44 Crores) through discounting of receivables. Finance charges on the same amounting to Rs. 48.94 Crores (Previous Year Rs. 111.74 Crores) has been disclosed under "Finance Cost".

10. In view of inadequacy of profits for the year ended March 31, 2013, managerial remuneration paid to Directors amounting to Rs. 11.69 Crores requires approval from Central Government which is being sought. Pending above, the amount paid is considered as an advance to Directors (held in trust).

11. As a globally integrated healthcare Company, Piramal Enterprises is committed to original drug discovery to fight diseases, and aspire to provide novel, affordable drugs in India and across the world. The Drug Discovery and Development Unit of Piramal Enterprises had set up a state-of-the-art research centre in Goregaon, Mumbai in 2004 and embarked upon an ambitious programme to discover and develop new chemical entities (NCEs) in select therapeutic areas, including Cancer, Inflammation, Diabetes / Metabolic Disorders and Infectious Diseases. The Company has leveraged India''s bio-diversity and vast pool of knowledge in traditional medicine to source new drug leads, and pursued dedicated medicinal chemistry efforts to discover NCEs to treat unmet medical needs. The Company is also taking herbal medication to the world by applying modern science and clinical validation techniques while preserving the holistic properties of natural medicine.

The Drug Discovery and Development Unit of Piramal Enterprises has made significant progress, with an R&D pipeline having several molecules in different phases of development. After successful pre-clinical studies, the Company makes application to requisite regulatory authorities for conducting phase I/I I/I 11 studies. Currently major development programs are in phase I/ll studies. In Oncology, P1446 and P276 are in phase I/ll study. In Diabetes and Metabolic Disorder, P1736 and P2202 are in Phase II study.

12. The figures for the year ended March 31, 2012 have been regrouped, wherever necessary.


Mar 31, 2012

1. GENERAL INFORMATION

Piramal Healthcare Limited (the 'Company') is engaged mainly in pharmaceutical business including its research and development. Recently the Company has diversified into financial services business by investing through subsidiaries in Real Estate Investment Trust and other Non Banking Finance Companies. The Company has manufacturing plants in India and sells in Domestic as well as International market through independent retailers and through clearing & forwarding agent. The Company is a public limited company and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

2. The scheme of demerger of New Chemical Entity (NCE) of Piramal Life Sciences Limited (PLSL) into the Company on a going concern basis was sanctioned by the Hon'ble High Court of Bombay on November 25, 2011. The said scheme became effective on December 14, 2011 (the Effective Date), with an appointed date with effect from April 01, 2011.

2.1 Pursuant to the said scheme, the Company has issued one Equity Share of Rs 2/- each of the Company for four equity shares of Rs 10/- each held in PLSL, thereby allotting 53,52,585 Equity Shares to the shareholders of PLSL amounting to Rs 1.07 Crores. The shares were issued to shareholders on December 30, 2011 being a record date.

2.2 PLSL has carried on the business and activities relating to R&D NCE Unit in trust from the Appointed Date to the Effective Date. It has incurred revenue expenditure of Rs 137.62 Crores and spent an amount of Rs 15.49 Crores on Assets (net of liabilities) from the Appointed Date to the Effective Date. These amounts have been adjusted against the amounts receivable from PLSL to the extent of Rs 155.20 Crores. Balance amount of Rs 2.09 Crores has been received by the Company from PLSL in March 2012.

2.3 As a globally integrated healthcare company, Piramal Healthcare is committed to original drug discovery to fight diseases, and aspire to provide novel, affordable drugs in India and across the world. The Drug Discovery and Development Unit of Piramal Healthcare has set up a state-of-the-art research centre in Goregaon, Mumbai in 2004 and embarked upon an ambitious programme to discover and develop new chemical entities (NCEs) in select therapeutic areas, including Cancer, Inflammation, Diabetes / Metabolic Disorders and Infectious Diseases. The company has leveraged India's bio-diversity and vast pool of knowledge in traditional medicine to source new drug leads, and pursued dedicated medicinal chemistry efforts to discover NCEs to treat unmet medical needs. The Company is also taking herbal medication to the world by applying modern science and clinical validation techniques while preserving the holistic properties of natural medicine.

The Drug Discovery and Development unit of Piramal Healthcare has made significant progress, with an R&D pipeline having several molecules in different phases of development including one molecule in phase IV.

After successful pre-clinical studies, the company makes application to requisite regulatory authorities for conducting phase I/II/III studies. The company enters into agreement with different Clinical Research Organisations (CROs) for conducting Phase I and Phase II/III 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 Intangible assets under development until the completion of the project as it is expected that such assets will generate future economic benefits.

Currently major development programs are in phase I/II studies. In Oncology, P1446 and P276 are in phase I/II study. In Diabetes and Metabolic Disorder, P1736-05 and P2202 are in Phase II study. In Inflammation, Tinefcon has completed Phase II study, Tinefcon - Psoriasis is in Phase IV studies. In infectious disease, PP9706642 is in phase II studies. 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.

3.1 Rights, preferences and restrictions attached to shares Equity Shares:

The company has one class of equity shares having a par value of Rs 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3.2 The Company had decided to buyback 41,802,629 equity shares during the financial year 2010-11 of which 4,10,97,100 equity shares were bought back through tender offer during the financial year 2010-11 aggregating amount of Rs 2,465.83 Crores, by utilizing Securities Premium Account and General Reserve to the extent of Rs 143.33 Crores and Rs 2,314.28 Crores respectively. Capital Redemption Reserve has been created out of General Reserve for Rs 8.22 Crores being the nominal value of shares bought back in terms of Section 77AA of the Companies Act, 1956. In compliance with the Foreign Exchange Management Act, 1999, buyback of 7,05,529 equity shares belonging to one overseas corporate body was then kept in abeyance pending Reserve Bank of India (RBI) approval.

During the year, on receipt of approval from RBI the Company has bought back the remaining 7,05,529 equity shares for an aggregate amount of Rs 42.33 Crores, by utilizing General Reserve of Rs 42.19 Crores. Capital Redemption Reserve has been created out of General Reserve for Rs 0.14 Crores being the nominal value of shares bought back in compliance with Section 77AA of the Companies Act, 1956.

4.1 As per Section 117C of the Companies Act, 1956 the Company has created Debenture Redemption Reserve during the year for Secured Redeemable Non Convertible Debentures issued in earlier year.

(a) Notes on Secured Loans

1. The Non-Convertible Debentures are secured on the movable properties of the Company (excluding working capital goods) and on the immovable properties of the Company situated at Gujarat, Mahad, Pithampur, Digwal and Bangalore.

2. Satisfaction of charges in respect of certain repaid loans are still awaited.

5. CONTINGENT LIABILITIES AND COMMITMENTS

A Contingent liabilities

1 Claims against the company not acknowledged as debt:

Demand dated June 5, 1984 the Government 0.61 0.61 has asked for payment to the credit of the Drugs Prices Equalization Account, the difference between the common sale price and the retention price on production of Vitamin 'A'Palmitate (Oily Form) from January 28, 1981 to March 31, 1985 not accepted by the Company. The Company has been legally advised that the demand is untenable.

2 Guarantees issued to Government authorities 1,089.36 966.83 and limited companies including guarantees issued on behalf of subsidiaries and performance guarantees.

3 Others

i. Appeals filed in respect of disputed demands:

Income Tax

- where the Company is in appeal 420.71 213.25

- where the Department is in appeal 171.08 178.93

Sales Tax 14.37 12.87

Central / State Excise 11.05 13.10

Labour Matters 0.29 0.24 Stamp Duty 4.05 4.05

Legal Cases 7.07 7.07

ii. Bills Discounted 24.00 21.70

iii. Unexpired Letters of Credit 13.21 9.02 Note: Future cash outflows in respect of 1

and 3(i) above are determinable only on receipt of judgements/decisions pending with various forums/authorities.

B Commitments

a. Estimated amount of contracts remaining 11.57 14.51 to be executed on capital account and not

provided for;

b. Other Commitments

7,05,529 Shares kept in Abeyance for - 42.33

Buyback of shares

Commitment to invest in non-convertible 157.00 -

debentures

Loan Commitments 19.00 -

6. Income Tax

6.1 Current Tax

Provision for income tax has been made on the basis of Section 115JB of the Income Tax Act, 1961 (Minimum Alternate Tax).

6.2 MAT Credit Entitlement

Prior Period tax credit of Rs 17.70 Crores is on account of increase in MAT credit entitlement pertaining to earlier period which is now available and utilized for AY 2011-12.

6.3 Deferred Tax

The Company has acquired carried forward tax losses of Rs 771.47 Crores on account of de-merger of NCE unit of Piramal Life Sciences Limited (PLSL) into the Company. The Company has not recognized deferred tax on the same in absence of virtual certainty for availability of taxable profits in the foreseeable future.

7. Employee Benefits :

Brief description of the Plans:

The Company has various schemes for long term benefits such as Provident Fund, Superannuation, Gratuity, Leave Encashment, Pension and Long Term Service Award. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through trustees. The Company's defined contribution plans are 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 Company's defined benefit plans include Provident Fund, Gratuity, Pension, Leave Encashment and Long Term Service Award.

II. Disclosures for defined benefit plans based on actuarial reports as on March 31, 2012.

The Guidance on implementing Accounting Standard (AS - 15)(Revised 2005) "Employee Benefits" issued by Accounting Standards Board (ASB) states that provident funds set up by the employers which require the interest short fall to be met by the employers needs to be treated as defined benefit plan.

In terms of Guidance Note issued by The Institute of Actuaries of India, the actuary has provided a valuation of PF liability based on the assumptions listed below and determined that there is no shortfall as at March 31, 2012.

Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach:

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

J. Expected employer's contribution for the next year is Rs.1.77 Crores (Previous Year Rs.3.18 Crores) for Gratuity and Pension.

PK. The liability for Leave Encashment (Non - Funded) as at year end is Rs.16.00 Crores. (Previous year Rs.11.49 Crores)

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.

8. The Company is engaged in pharmaceutical business (mainly consisting of manufacturing and sale of own and traded bulk drugs and formulations) which is considered the Primary reportable business segment. The Secondary Segments based on geographical segmentation are considered to be Businesses outside India and within India.

9. Related Party Disclosures:

A. Controlling Companies

The Swastik Safe Deposits and Investments Limited * (w.e.f. December 30, 2011)

The Ajay G. Piramal Foundation*

Paramount Pharma Private Limited*

BMK Laboratories Private Limited Cavaal Fininvest Private Limited*

PHL Holdings Private Limited (formerly Known as Piramal International Private Limited)* (w.e.f. September 29, 2011) Piramal Management Services Private Limited* (upto September 29, 2011)

Piramal Healthcare Limited - Employee Option Scheme* (PHL ESOP)

Piramal Enterprises Limited - Trustees of Piramal Enterprises Executive Trust*

Piramal Life Sciences Limited - Senior Employees Stock Option Trust (w.e.f. December 30, 2011)*

*There are no transactions during the year with the above Companies.

B. Subsidiary Companies

PHL Fininvest Private Limited (PHL Fin invest)

Piramal Diagnostic Services Private Limited (PDSL) (upto August 20, 2010, consequent to divestment of shareholding) Piramal Pharmaceutical Development Services Private Limited (PPDSPL)

Oxygen Bio Research Private Limited #

Piramal International©

Piramal Holdings (Switzerland) Limited (Piramal Holdings)

NPIL Pharma Inc, USA *

Piramal Healthcare Inc.

Piramal Investment Holdings (Canada) Inc.*

Piramal Life Sciences (UK) Limited * @

Piramal Healthcare UK Limited (Piramal Healthcare UK) *

Piramal Healthcare Pension Trustees Limited * @

Piramal Healthcare (France) Limited * @

Piramal Healthcare (Canada) Limited (Piramal Healthcare, Canada) *

Oxygen Healthcare Limited, UK (Oxygen Healthcare) *

Piramal Critical Care Italia, SPA * @

Piramal Critical Care Inc (PCCI) **

Minrad EU (France) **@

PHL Capital Private Limited (PHL Capital) (w.e.f. May 25, 2011)

PHL Finance Private Limited (PHL Finance) (w.e.f. July 27, 2011) $

PHL Infrastructure Finance Company Private Limited (PHL Infra) (w.e.f. September 16, 2011) $@ Indiareit Fund Advisors Private Limited (w.e.f. August 12, 2011) $ @

Piramal Systems & Technologies Private Limited (Piramal Systems) (w.e.f. November 29, 2011) Indiareit Investment Management Company,Mauritius (w.e.f. March 12, 2012) $ @

Piramal Technologies SA (w.e.f. March 13, 2012) ## @

Piramal Imaging SA (w.e.f. February 6, 2012) * @

Piramal Molecular Imaging Development GmbH (w.e.f. February 27, 2012) * @

* Held through Piramal Holdings (Switzerland) Limited.

** Held through Piramal Healthcare Inc.

* Held through Piramal Pharmaceutical Development Services Private Limited.

$ Held through PHL Capital Private Limited.

## Held through Piramal Systems and Technologies Private Limited.

@ There are no transactions during the year with the above Companies.

C. Other related parties where common control exists Piramal Glass Limited (PGL)

Piramal Life Sciences Limited (PLSL)

Piramal Enterprises Limited (PEL)

Piramal Estates Private Limited (formerly known as Piramal Realty Limited) (Piramal Estates) India Venture Advisors Private Limited* (India Venture)

Allergan India Private Limited (Allergan)

Arkray Piramal Medical Private Limited (Arkray) (upto September 30, 2010)

* There are no transactions during the year with the above Company.

D. Investing parties with whom the Company is a JV Partner Allergan Inc.*

ARKRAY Inc.*

* There are no transactions during the year with the above companies.

E. Key Management Personnel and their relatives Mr. Ajay G. Piramal

Dr. (Mrs.) Swati A. Piramal

Mr. N. Santhanam (upto December 31, 2011)

Ms. Nandini Piramal

Mr. Vijay Shah (w.e.f. January 1, 2012)

b) During the year the Company has advanced interest free loans aggregating to Rs 86.00 Crores (Previous Year Rs 91.10 Crores) [maximum outstanding during the year Rs 91.10 Crores (Previous Year Rs 91.10 Crores)] to Piramal Pharmaceuticals Development Services Private Limited.

c) The Company has advanced interest-bearing loans aggregating to Rs NIL (Previous Year Rs 347.00 Crores) [maximum outstanding during the year Rs NIL (Previous Year Rs 347.00 Crores)] to Piramal Life Sciences Limited. (Refer Note 3.2)

10. The Company's significant leasing arrangements are mainly in respect of residential / office premises, computers and motor vehicles. The aggregate lease rentals payable on these leasing arrangements are charged as rent under "Other Expenses" in Note 32.

11. There are no Derivative contracts outstanding as on March 31, 2012.

12. Recoveries deducted from expenses are on account of sharing of common expenses with Subsidiaries and Group Companies.

13. Details of additions to fixed assets and Revenue Expenditure for Department of Scientific & Industrial Research (DSIR) approved research and development facilities / division of the Company for the year ended March 31, 2012 are as follows;

14. During the year, the following investments were made by the Company;

a. 340,530,000 equity shares of Rs 10/- each amounting to Rs 340.53 Crores in PHL Capital Private Limited

b. 10,000 equity shares of Rs 10/- each amounting to Rs 0.01 Crores in Piramal Systems and Technologies Private Limited

c. 45,425,328 equity shares (10.97%) in Vodafone India Limited of Rs 10/- each acquired from ETHL Communications Holdings Limited for cash consideration of Rs 5,864.37 Crores.

15. During the year, the Company has received Rs 1,854.44 Crores through discounting of receivables. Finance charges on the same amounting to Rs 111.74 Crores has been disclosed under "Finance Cost".

Note:

1. Includes products processed by third parties.

2. Stocks are net of breakages and unsaleable stock.

3. Opening stocks, purchases & closing stocks are net of physician samples.

4. In terms of Press Note No. 4 (1994 Series) dated October 25, 1994 issued by the Department of Industrial Development, Ministry of Industry, Government of India and Notification No. S.O 137 (E) dated March 1, 1999 issued by the Department of Industrial Policy and Promotion, Ministry of Industry, Government of India, industrial licensing has been abolished in respect of Bulk Drugs and Formulations.

5. The Pharmaceuticals business comprises of Manufacturing and trading of bulk drugs and formulations.

16. The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31,2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to confirm to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements except for accounting for dividend on investments in subsidiaries.

17. The figures for the year ended March 31, 2012 are not comparable to the previous year ended March 31, 2011 on account of the demerger of R&D NCE unit of PLSL into the Company (Refer Note 3).

 
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