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Piramal Enterprises Limited

Investor Presentation

January 2013

Piramal Enterprises – an overview:

Piramal Enterprises

Pharma Financial Services

Equity Investment In Vodafone India –Rs. 5,862 crores

Information Management

2

PharmaSolutions

CriticalCare

OTC

• Partners with MNC pharma cos to service their mfg & development needs

• Sales – Rs. 13.5 bn

• Sells anesthetic products to hospitals globally

• Sales –Rs. 4.1 bn

• Sells OTCdrugs in India

• Sales – Rs. 1.4 bn

Life Sciences

• Has a pipeline of 16 compounds with 8 in clinical trials

• Received approval for cartilage repair gel –BST-Cargel®

NBFC Indiareit

• NBFC focused on lending to Real estate sector

• Book of Rs. 8.5 billion

• A Real Estate PE fund with domestic and offshore fund

• Total AUM – Rs. 42 billion

DRG

• Provides research, predictive analytics via proprietary databases & consulting to healthcare sector

• Sales (E) -$ 160 mn

Pharma Segment

3

Pharma Segment

Pharma Solutions

4

Pharma Solutions

Market Characteristics

• Global Outsourcing market estimated to be USD 32 billion, growing at 12%

• Market share of India extremely low

• Lower costs and high quality manufacturing skill presents compelling

rationale to shift manufacturing to India

• Cost pressures on big pharma due to patent expiries leading to

opportunities for Indian CMOs

India CMOs SizeGlobal Outsourcing Market Size

5Source: Business Insights 2012

India CMOs SizeGlobal Outsourcing Market Size

31.9

64.0

0

10

20

30

40

50

60

70

Year 2011 Year 2017

USD Bn

1.8

5.3

0

1

2

3

4

5

6

Year 2011 Year 2017

USD Bn

A full-service CMO across the drug life-cycle

Early Phase Custom Synthesis and Formulations Development Full scale supplies

Discovery Research

Pre-clinical Dev.API

Phase IAPI

Phase IIaAPI

Phase IIb Phase III Launch

CLINICAL DEVELOPMENT

Medicinal Chemistry

Pre-clinical Dev.Forms

Clinical Trials Formulations

Formulations development

APIAPI API

Medicinal


Discovery Research


Phase IAPI

Phase IIaAPI



Medicinal Chemistry




APIAPI API

Medicinal


Discovery Research


Phase IAPI

Phase IIaAPI



Medicinal Chemistry




APIAPI API

Medicinal

6

API

• Canada – Torcan

• UK – Morpeth,

• India – Ennore

Formulations

• UK – Morpeth

• India - Ahmedabad

API

•Canada - Torcan

•UK – Morpeth,

• India – Ennore,

Formulations

•UK – Morpeth

• India – Ahmedabad

API

• Torcan (niche APIs only)

• Morpeth,

• Digwal, Ennore

Formulations

• Morpeth

• Pithampur

Medicinal & Synthetic Chemistry Services –India -Ahmedabad

API


• UK – Morpeth,


Formulations

• UK – Morpeth


API

•Canada - Torcan

•UK – Morpeth,


Formulations

•UK – Morpeth


API


• Morpeth,

• Digwal, Ennore

Formulations

• Morpeth

• Pithampur


API


• UK – Morpeth


Formulations

• UK – Morpeth


API

•Canada - Torcan

•UK – Morpeth,


Formulations

•UK – Morpeth


API


• Morpeth,

• Digwal, Ennore

Formulations

• Morpeth

• Pithampur


Sales break-up (Rs. In crores) FY2012 Growth

Pharma Solutions 1,355 32.7%

From assets in India 801 52.7%

From assets outside India 554 11.6%

UNITED KINGDOMMorpeth

•API development & manufacturing

•Formulation development

•Commercial formulation manufacturing

•Clinical Trial supplies & distribution

Grangemouth

•Antibody Drug Conjugates development &

manufacturing

CANADAToronto


RM supplies

Pharma Solutions – Global Footprint

7

INDIAMumbai R&D

•API development

•Formulation development

Chennai


Hyderabad

•API manufacturing

•Ahmedabad

•Drug Discovery Services

•Formulations Development

•Clinical Trial manufacturing

•Pithampur

•Commercial formulation manufacturing

CHINAShanghai

•Sourcing Office

RM supplies

Critical CareCritical Care

8

Critical Care - expanding product portfolio and enhancing geographic reach

Geographies

/Products

Halothane

Isoflurane

Enflurane

Sevoflurane

US EU RoW

� � �

� � �

US EU RoW

� � �

� � �

� � �

�

US EU RoW

� � �

� � �

� � �

� � �

Addressable Market Opportunity $ Million

100 550 1,800

Desflurane

Propofol �

� � �

� � �

2006 2011 2016

9

Critical Care – Infrastructure in place for sustained rapid growth

38 Managers

32 Sales Field Force

84 Distributors

10

Products Products

Manufactured

Approvals/Certific

ation

Bethlehem USFDA, AFSSAPS

Digwal US FDA, WHO,

UKMHRA, MCC

Ambernath (BSV) WHO

Baddi (Abbott) UKMHRA

Sevoflurane PropofolEnflurane Isoflurane HalothaneDesflurane Haemaccel

(Rs. In crores) FY2012 Growth

Critical Care Sales 413 6.4%

OTC Business

11

OTC Business

OTC – Strong Track Record

• Lacto Calamine

won coveted

•Strong brand portfolio across various high growth segments

•Moved from no. 40 in 2008 to top-10 in 2011

• Field force expansion to improve distribution to 4 lakh chemists and

cover all 485 1 lakh+ towns in India

12

won coveted

2010 REBRAND

100 Winner

•Successful Rx to

OTC

transformation

for Polycrol,

Tetmosol and

Supractiv

Life Sciences

13

PEL is making progress in Life Sciences space

� Received the European CE mark approval for the innovative bio-orthopaedic

product for cartilage repair - BSTCarGel ®.

� Acquired molecular imaging development portfolio of Bayer pharma which includes rights to Florbetaben – a final stage Phase III clinical trial molecule.

� 16 other products under development in various stages in areas of Oncology, Metabolic Disorders, Inflammation and Anti-infectives

14

Metabolic Disorders, Inflammation and Anti-infectives

� Our lead molecule for P276 is currently undergoing Phase I/II clinical trials for

multiple indication of cancer: Pancreatic Cancer, Radiation induced Mucositis

� Potential Market size: >$ 2 billion;

� Started Phase II clinical trials for P276 for reduction of serious radiation

induced mucositis in patients of head and neck cancer receiving

chemoradiation

Annual spend : Rs. 230 – Rs. 250 crores

BST-CarGel® will be the first patented product to be launched from PEL� A novel bioscaffold for advanced cartilage regeneration that has clinically demonstrated consistently higher quality cartilage repair

� An EU class III medical device, it is a liquid scaffold which, combined with the patient’s whole blood, is then implanted into a debrided cartilage lesion prepared with bone marrow access

� Received European CE mark regulatory approval in April 2012

� Plans to commercially launch in the fourth quarter of the 2012 calendar year

� Filed for regulatory approval to sell in Canada and will soon file in India

Damaged CartilageBefore Treatment

CartilageAfter Treatment

Current European Market Potential

The CE mark enables us to access a potential $ 200 mn market in Europe.

While we can sell in all EU countries, the largest markets in Europe for BST-CarGel® are: UK, Germany, France, Spain, and Italy

MRI of patient treated with CarGel

15

� Acquired leading portfolio of molecular imaging tracers from Bayer AG – forming

subsidiary Piramal Imaging

� Lead compound Florbetaben - final stage Phase III molecule

� Reliably detects Beta-Amyloid in the brain, which is the pathological hallmark

of disease in probable Alzheimer's disease patients

� Potential tool to aid in diagnosis and assessment of Alzheimer’s disease

� Early diagnosis can both improve patients’ quality of life and reduce

healthcare costs

Piramal Imaging – Acquisition of Bayer’s molecular imaging development portfolio

healthcare costs

� Positive Phase III results presented on April 25 at American Academy of

Neurology Annual Meeting

� Potential Market size: $ 1.5 billion

� Earliest regulatory filing: 2012

� Other assets include strong pipeline of PET imaging tracers in CNS, Oncology, and

Cardiovascular diseases

� Core members of Bayer’s R&D team have joined Piramal Imaging leadership team

� Manufacturing & distribution alliance formed with IBA Molecular, a world leader in

Nuclear Medicine 16

Financial Services

17

PHL Finance:

Real Estate SME

� Lending to quality real estate

developers

� To foray into funding

education sector from FY13

PHL Finance: An overview

developers

� Currently focusing on Mumbai,

Pune, Bangalore and Chennai

�Not >25% of total assets towards

commercial and retail projects

� Book as on 30th September 2012:

Rs. 849 crores

education sector from FY13

� Fund established educational

institutions for growth,

upgrading facilities

�Newer verticals to be added

18

� Mr. A. K. Purwar – Chairman, PHL Finance:ex-Chairman of SBI with 40+

� Credit Committee

� Members who are experts in their fields: Mr. Deepak Satwalekar, Mr. A.

K. Purwar and Mr. Ajay Piramal

� Management team with vast banking experience

Strong systems & process in place now…..

years of experience in Banking and financial services

� Mrs. Sudha Ravi – CE0, over 30 years of banking experience

� Specialized team under them – specialists in real estate sector, education

Sector, relationship managers and compliance officer with deep knowledge

Of Banking and compliance

� Well defined processes – Loan Policy approved by Board

� Independent audit – pre and post disbursement

19

� Highly experienced Board members

� Strong knowledge bank within the Group

� Strong Parentage

� Piramal Group has significant recall with builder community

� A company with Ethical values – honesty and fair play

� Domain Knowledge

……to benefit from strong parentage and excellent domain knowledge

� Strong knowledge bank within the Group

� Shared resources – real estate private equity and realty arm –

with a pulse on the real estate market practice

To become profitable niche player in the market………

through domain knowledge expertise, world class risk management practices and highest ethical standards

20

Indiareit - Executive Summary

Best positioned to benefit from emerging Indian real estate

‒ Consistent fund raising

‒ Proven & consistent investment strategy

‒ Strong team with comprehensive investment experience;

Supplemented with key differentiators

‒ Realized exits across funds

‒ Exits commenced since October 2008

‒ Valuations in sync with guidance and exit delivery

‒ Estimate 2.22x pre-tax money multiple on valued portfolio (March ‘11)

‒ Ability to profitably deploy large pools of capital;

‒ Over USD 650Mn in 4 years

Proven fund

management

expertise,

Successful exits

across vehicles

– First to declare independent valuations

– First to commence exits in investee projects

– First to round trip investments across all fund

offerings

– First to manage third party portfolio

Comprehensive Experience

• 5 Top Tier 1 cities

• 8 Local partners

• 23 Projects

• 53.7m sq ft of Saleable area currently under development

History of firsts in

the Indian market

Domestic Fund Size (Rs. Crs) Offshore Funds Size ($ mn)

Fund scheme I 430 Offshore Fund I 200

Fund scheme III 585 Trinity Capital Plc 230

Fund scheme IV 923 Trafalgar/F&C Reit 36

Mumbai Redevelopment Fund 37021

Information Management Segment

22

Decision Resources Group - An Overview

• Subscription-based global decision support market leader and premium brand

in the healthcare information services market (~$5.7 billion 1)

• ~$2.4 billion segment is addressable by the Company today

• Provides web-enabled insights and predictive analytics via proprietary

databases, high-value analytical reports and tools

• Enables customers to make fully-informed key investment and cost containment

23

23

decisions in each phase of the life sciences lifecycle

• Proprietary content and data streams created in-house through a rigorous,

highly-analytical, knowledge-driven process

• Staff of approximately 290 analysts, including 100+ highly-credentialed PhDs, MDs,

MPHs, Pharmacists, MBAs and key industry experts

• Global scale and reach with offices in Belgium, Canada, England, Japan and

various locations across the U.S. (~500 full-time employees)

1. Veronis Suhler Stevenson, 2011..

• Long-standing, strategic relationships with the top pharmaceutical, medical

technology and managed care companies

• 95% average customer renewal rate

• 48 out of top-50 pharma companies are its clients

• 10+ year relationships with top ten customers

Decision Resources Group - An Overview

24

24

• 10+ year relationships with top ten customers

• Products and services are deeply imbedded in customers’ work flow and decision

making processes

• Since 2006, revenue has grown at a CAGR of ~20%, with profit growth higher

than sales growth

• Best-in-class profitability

DRG operates in 3 broad areas

BioPharma

• Decision Resources: Therapeutic area assessment (e.g. epidemiology forecasts, market share projection physician/payer insight)

Reports on therapeutic area and drug utilization trends, used by R&D and brand

teams

Market Access

• Health Leaders: Managed care market intelligence (e.g. data on payer market share within specific geography)

Data services on payer share and drugs coverage by

insurers

Medical Technology

• Millennium Research: Medical technology market intelligence, including hospital data on product utilization, syndicated reports, and

Therapeutic reports and sales audits covering major

device categories

25

25

physician/payer insight)

• BioTrends: Specialty therapeutic treatment algorithms, disease management patterns, assessment of new product launches

• Manhattan Research: Annual studies on eHealth trends and digital media adoption among healthcare professionals and consumers

• AMR: Hospital therapeutic audits and formulary insights

• Fingertip Formulary: Data portal that provides information on formulary status for drugs within a specific geography

• PharmaStrat: Payer focused strategy consulting, market research and market monitoring

• Pinsonault: data and analytic tools , training, research and events targeting “managed markets sales and marketing

syndicated reports, and customer research

• AMR: Syndicated audit of hospital diagnostic imaging procedure volumes and contrast media usage

Special Investments

26

Special Investments

PEL to invest surplus funds in investments that give:

o minority equity stake

o global companies in India

o high growth sectors

o short to medium term

o Minimal risk

27

o Minimal risk

o ROI: 17-20% p.a.

PEL has increased it’s stake in Vodafone Essar to ~11% with the total investment of $ 1.2 billion

The partnership underscores trust placed by global companies in Piramal values, ethics, corporate governance and good reputation

Thank you

28

For further details contact:Jatin Lal [email protected] Mhatre [email protected]

Back-up slides

29

Back-up slides

Business Mix – Consolidated Q2 FY2013

Rs. Crores

30-Sep-12 30-Sep-11 % Gr 30-Sep-12 30-Sep-11 % Gr

1 Pharma Solutions 42.3% 364.9 305.1 19.6% 749.5 595.3 25.9%

From Assets in India 22.2% 191.9 187.4 2.4% 430.6 359.8 19.7%

From Assets Outside India 20.0% 173.0 117.7 47.0% 319.0 235.5 35.5%

2 Piramal Critical Care 18.0% 155.5 91.6 69.8% 302.4 182.7 65.5%

3 OTC & Ophthalmology 7.8% 67.7 57.1 18.6% 139.4 112.8 23.6%

No. Net Sales break-up%

Sales

Quarter II ended Half Yearly ended

Notes:

1. Investment income for Q2FY13 is lower due to investment of ~Rs. 5,862 crores for buying ~11% stake in Vodafone India

2. Financial Services revenue includes revenue from NBFC and IndiaReit Fund

30

4 DRG 20.0% 172.6 - - 230.3 - -

5 Financial Services 6.3% 54.7 6.6 - 97.1 6.6 -

6 Investment Income 3.4% 29.6 50.5 -41.5% 61.6 121.5 -49.3%

7 Others 2.2% 18.6 24.0 -22.6% 30.5 28.0 9.0%

100.0% 863.5 534.7 61.5% 1,610.8 1,046.7 53.9%Total

Rs. Crores

Profit & Loss Account – Consolidated -Q2 FY2013

30-Sep-12 30-Sep-11 % Gr 30-Sep-12 30-Sep-11 % Gr

Total operating income 863.5 534.7 61.5% 1,610.8 1,046.7 53.9%

NCE R&D Exps 54.7 - - 87.7 - -

Other Operating Expenses 735.1 507.6 44.8% 1,370.9 941.1 45.7%

OPBIDTA 73.7 27.2 171.1% 152.2 105.3 44.5%

OPM % 8.5% 5.1% - 9.4% 10.1% -

28.3 102.6 -72.4% 85.8 179.0 -52.1%

Period ended - ConsolidatedQ2 Ended H1 Ended

31

Notes:

1. Non-operating other income is mainly FX gain arising out of restatement of receivables from sales of

Healthcare solutions business

Non-operating other income 28.3 102.6 -72.4% 85.8 179.0 -52.1%

EBIDTA 102.0 129.8 -21.4% 237.9 284.6 -16.4%

Interest 122.2 19.6 524.3% 209.8 30.6 586.1%

Depreciation 56.3 28.6 96.8% 97.4 55.6 75.2%

Profit before tax (76.6) 81.6 - (69.2) 198.5 -

Exceptional items 0.3 (1.1) - 1.6 1.1 -

Income tax 14.6 27.6 - 15.4 54.5 -

Profit after tax (91.5) 52.9 - (86.1) 142.9 -

EPS (Rs.) (5.3) 3.2 - (5.1) 8.5 -

Consolidated Balance Sheet – Q2 FY2013

Rs. Crores

As at As at

30-Sep-12 30-Sep-11

Equity capital 34.5 33.4

Reserves & Surplus 11,261.5 11,879.2

Networth 11,296.0 11,912.7

Minority interest 9.5 7.7

Deferred tax liability 58.4 46.1

Loan funds 6,331.9 1,088.9

Total 17,695.9 13,055.4

Period ended- Consolidated

32

Notes:

1. The increase in loan funds is mainly due to debt raised for acquisition of DRG

2. Net fixed assets increased due to consolidation of DRG assets

3. Increase in investments due to additional investment in equity of Vodafone India in February 2012

Total 17,695.9 13,055.4

Net fixed assets 5,892.2 1,717.9

Investments 6,855.1 3,917.5

Net current assets 4,948.7 7,420.0

Inventories 519.8 455.6

Sundry debtors 558.9 351.9

Other current assets 5,162.9 7,546.2

Current liabilities 1,292.9 933.7

Total 17,695.9 13,055.4

P276 CDKs

P276 – with

Gemcitabine

Pipeline: Oncology

P276 – with

radiation

P1446 – CDKs

Malignant Melanoma

Mantle Cell Lymphoma

Head & Neck Cancer Clinically complete

Stage I of Phase

I/II complete

Stage I of Phase I/II

complete

Pancreatic

RIM

Clinically Complete

POC complete DCGI Approval awaited

Phase II part of PhaseII/III initiated

India

US, India

Australia, NZ

India

India

India

Program Preclinical Phase I Phase II Phase III Phase IV Trial Location

POC complete

P1446 – CDKs

P1446 Combination

Clinically Complete India

India

CanadaClinically Complete

Malignant Melanoma

Mantle Cell Lymphoma

Head & Neck Cancer Phase I/II planned

Phase I/II planned

Phase I/II planned

US

US

Triple Negative Breast Cancer

Phase I/II planned US, India


Pipeline: Oncology

P2745

P7170 – PI3K/ mTOR

PL225B -

Merck

Target Y -

Merck

Ongoing

Lead Selection

Ph I plannedFinal regulatory Final regulatory

approval awaitedapproval awaited

India

India

India, US

India, US

Ongoing


Tinefcon

(oral) - TNFα

Pipeline: Inflammation

Tinefcon

Psoriasis

Ulcerative Colitis

Ankylosing Spondylitis Planned*

Recruitment

completed

Tinefcon

(oral) - TNFα

Tinefcon

(oral) - TNFα

Psoriasis PlannedTinefcon

(oral) - TNFα

India

India

India

Asia-Pacific

Planned

Planned

Tinefcon

(topical) - TNFα

P3914-NSAID

P7170-PI3K

Note: Note: TinefconTinefcon is a is a phytopharmaceuticalphytopharmaceutical

Ongoing

Preclinical

Psoriasis Ongoing India

India


P1736

Non-PPARγ

Pipeline: Diabetes and Metabolic Disorders

P1201 - Lilly

P2202 - Lilly

P7435 – DGAT1

Type 2 Diabetes

Ongoing

Clinically complete

Ongoing

India

India

Canada, India

Netherlands, France

Phase II Stage I Complete

Pipeline: Infectious Diseases


PP9706642 Anti-

HSV 2

PM181104 – MRSA/VRE

PM181108

Preclinical

Preclinical

NPH 30907

Dermatophyte

Complete

Recruitment closed

India

India

PM181108 Preclinical

Note: PP9706642 Note: PP9706642 is a is a phytopharmaceuticalsphytopharmaceuticals

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