SCHEME OF AMALGAMATION BETWEEN PIRAMAL PHARMACEUTICAL DEVELOPMENT SERVICES PRIVATE LIMITED AND OXYGEN BIO RESEARCH PRIVATE LIMITED AND PHL CAPITAL PRIVATE LIMITED AND PIRAMAL ENTERPRISES LIMITED AND THEIR RESPECTIVE SHAREHOLDERS PREAMBLE The Scheme of Amalgamation is presented under Sections 391 to 394 read with other applicable provisions of the Companies Act, 1956 for amalgamation of Piramal Pharmaceutical Development Services Private Limited (“PPDSPL”) and Oxygen Bio Research Private Limited (“O2H”) and PHL Capital Private Limited (“PHL Cap”) into Piramal Enterprises Limited (“PEL”) and their respective shareholders (“Scheme”) RATIONALE AND PURPOSE OF THE SCHEME All the aforesaid companies are part of PEL Group. The amalgamation of PPDSPL and O2H into PEL would have the following benefits: i.

PPDSPL is engaged in early phase drug research and development work for major pharmaceutical companies in the world and has its manufacturing facility in an SEZ. PPDSPL in turn holds 100% in O2H which also has a manufacturing facility situated in the same SEZ.

ii.

The entire manufacturing activities of the pharmaceutical business are under PEL except for these two manufacturing facilities at the SEZ. The merger of these into PEL will be vertical integration of the existing pharmaceutical solution business.

iii.

Merger will improve organizational capability arising from the pooling of human capital that has diverse skills, talent and vast experience with respect to manufacturing and research and development, if all the manufacturing facilities are housed under PEL

Page 1 of 16

iv.

Merger will improve the customer perception as ONE PIRAMAL as the customers will not be required to deal with different legal entities.

The amalgamation of PHL Cap into PEL would have the following benefits: i.

The amalgamation will eliminate additional layers of subsidiaries resulting into a simplified group structure.

ii.

The amalgamation being a part of overall restructuring of Piramal Group’s investment in financial services business will consolidate efforts of senior management and will also enable PEL to directly monitor its financial services companies

iii.

Real estate funding and lending are the new key focus areas of the Piramal Group and following the amalgamation of PHL Capital into PEL, it will enable PEL to closely monitor the activities of its financial services business.

PARTS OF THE SCHEME The Scheme is divided into the following three parts: Part A -

Deals with Definitions and Share Capital

Part B -

Deals with the amalgamation of Piramal Pharmaceutical Development Services Private Limited and Oxygen Bio Research Private Limited and PHL Capital Private Limited into Piramal Enterprises Limited

Part C -

Deals with General Clauses, Terms and Conditions PART A – DEFINITIONS AND SHARE CAPITAL

1

DEFINITIONS In this Scheme, unless inconsistent with the subject or context, the following expressions shall have the following meaning:

1.1

“Act” or “the Act” means the Companies Act, 1956 and shall include any statutory modifications, re-enactment or amendments thereof for the time being in force and also mean and refer to corresponding sections of the Companies Act, 2013 the rules and regulations made there under, as and when such corresponding sections and rules are notified by the Central Government. Page 2 of 16

1.2

“Appointed Date” means the April 01, 2014 or such other date as may be fixed or approved by the High Court or the National Company Law Tribunal or such other competent authority.

1.3

“Effective Date” means the later of the dates on which the certified copy of the Order of the High Court of Judicature at Bombay and the order of the High Court of Gujarat at Ahmadabad sanctioning the Scheme of Amalgamation are filed with the Registrar of Companies, Mumbai, Maharashtra and Registrar of Companies, Ahmadabad, Gujarat, as the case may be;

1.4

"High Court" or “Court” means the High Court of Judicature at Bombay in case of PPDSPL, PHL Capital and PEL and High Court of Gujarat at Ahmadabad in case of O2H and in all cases shall include the National Company Law Tribunal, if and when applicable.

1.5

“O2H” or “the Second Transferor Company” means Oxygen Bio Research Private Limited, a company incorporated under the Act and having its registered office at Plot No. 18, “Pharmez”, Pharmaceutical Special Economic Zone, Sarkhej Bavla Highway No. 8, Ahmedabad, Gujarat – 382213.

1.6

“PEL” or “the Transferee Company” means Piramal Enterprises Limited , a company incorporated under the Indian Companies Act, 1912 and having its registered office at Piramal Tower, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013.

1.7

“PHL Cap” or “the Third Transferor Company” means PHL Capital Private Limited, a company incorporated under the Act and having its registered office at 1st Floor, Piramal Tower Annexe, Ganpatrao Kadam Marg, Lower Parel, Mumbai, Maharashtra – 400013.

1.8

“PPSDPL” or “the First Transferor Company” means Piramal Pharmaceutical Development Services Private Limited, a company incorporated under the Act and having its registered office at Piramal Tower, Ganpatrao Kadam Marg, Lower Parel, Mumbai, Maharashtra – 400013. Page 3 of 16

1.9

“the Transferor Companies” means PPSDPL, O2H and PHL Cap collectively.

1.10 “Scheme” or “the Scheme” or “this Scheme” means this Scheme of Amalgamation in its present form as submitted to the Hon’ble High Court of Judicature at Bombay and High Court of Gujarat at Ahmadabad for sanction including / with any modifications / amendments thereto / therein made under Clause 16 of the Scheme. 1.11 Any references in the Scheme to “upon the Scheme becoming effective” or “on the scheme becoming effective” or “effectiveness of the Scheme” shall mean the Effective Date. 2

INTERPRETATION The expressions, which are used in this Scheme and not defined in this Scheme shall, unless repugnant or contrary to the context or meaning hereof, have the same meaning ascribed to them under the Act, the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992 (including the Regulations made there under), the Depositories Act, 1996 and other applicable laws, rules, regulations, bye-laws, as the case may be, including any statutory modification or re-enactment thereof, from time to time.

3

DATE OF TAKING EFFECT AND OPERATIVE DATE The Scheme set out herein in its present form or with any modification(s) approved or imposed or directed by the High Court or made as per Clause 16 of the Scheme, shall be effective from the Appointed Date but shall be operative from the Effective Date.

Page 4 of 16

4

SHARE CAPITAL

4.1

The authorized, issued, subscribed and paid-up share capital of PPDSPL as on March 31, 2014 is as under: Share Capital

INR in lakhs

Authorised Capital 200,000,000 Equity Shares of INR 10

20,000.00

each Total

20,000.00

Issued, Subscribed and Fully Paid Up 150,050,000 Equity Shares of INR 10

15,005.00

each Total

15,005.00

Subsequent to the above date and till the date of the Scheme being approved by the Board of Directors of PPDSPL, there has been no change in the authorized, issued, subscribed and paid-up share capital of PPDSPL. The entire share capital of PPDSPL is held by PHL Infrastructure Finance Company Pvt. Ltd, a wholly owned subsidiary of PEL. 4.2

The authorized, issued, subscribed and paid-up share capital of O2H as on March 31, 2014 is as under: Share Capital

INR in lakhs

Authorised Capital 10,00,000 Equity Shares of INR 10 each

100.00

Total

100.00

Issued, Subscribed and Fully Paid Up 9,32,500 Equity Shares of INR 10 each Total

93.30 93.30

Subsequent to the above date and till the date of the Scheme being approved by the Board of Directors of O2H, there has been no change in the authorized, issued,

Page 5 of 16

subscribed and paid-up share capital of O2H. The entire share capital of O2H is held by PPSDPL. 4.3

The authorized, issued, subscribed and paid-up share capital of PHL Cap as on March 31, 2014 is as under: Share Capital

INR in lakhs

Authorised Capital 12,500,000,000 Equity Shares of INR 10

250,000.00

each Total

250,000.00

Issued, Subscribed and Fully Paid Up 2,270, 665,000 Equity Shares of INR 10

227,066.50

each Total

227,066.50

Subsequent to the above date and till the date of the Scheme being approved by the Board of Directors of PHL Cap, there has been no change in the authorized, issued, subscribed and paid-up share capital of PHL Cap. The entire share capital of PHL Cap is held by PHL Infrastructure Finance Company Pvt. Ltd, a wholly owned subsidiary of PEL. 4.4

The authorized, issued, subscribed and paid-up share capital of PEL as on March 31, 2014 is as under: Authorized Share Capital

INR in lakhs

25,00,00,000 Equity Shares of Rs. 2/- each

5,000.00

30,00,000 Preference Shares of Rs. 100/- each

3,000.00

2,40,00,000 Preference Shares of Rs. 10/- each

2,400.00

10,50,00,000 Unclassified Shares of Rs. 2/- each

2,100.00 Total

Page 6 of 16

12,500.00

Issued, Subscribed and Paid-up Share Capital 17,25,63,100 Equity Shares of Rs. 2/- each

3,451.26 Total

3,451.26

Subsequent to the above date and till the date of the Scheme being approved by the Board of Directors of PEL, there has been no change in the authorized, issued, subscribed and paid-up share capital of PEL. PART B – AMALGAMATION OF PPDSPL AND O2H AND PHL CAP INTO PEL 5

TRANSFER AND VESTING

5.1

With effect from the opening of business as on the Appointed Date and upon the scheme becoming effective, the entire business and whole of the undertakings of the Transferor Companies, including all their properties, investments and assets (whether movable or immovable, tangible or intangible) of whatsoever nature and all other rights, title, interests, contracts, consents, approvals or powers of every kind nature and descriptions whatsoever shall, under the provisions of Sections 391 to 394 of the Act and pursuant to the orders of the High Court or any other appropriate authority sanctioning this Scheme and without further act, instrument or deed, but subject to the existing charges affecting the same as on the Effective Date shall stand transferred and/or deemed to be transferred to and vested in PEL so as to become the properties and assets of PEL. In so far as the various incentives, subsidies, rehabilitation Schemes, special status and other benefits or privileges enjoyed, granted by any Government body, local authority or by any other person, or availed of by any of the Transferor Companies are concerned, the same shall vest with and be available to PEL on the same terms and conditions.

5.2

The transfer and vesting as aforesaid shall be subject to the existing charges / hypothecation / mortgages, if any, as may be subsisting and agreed to be created over or in respect of the said assets or any part thereof, provided however, any reference in any security documents or arrangements to which the Transferor Companies are party wherein the assets of the Transferor Companies have been or are offered or agreed to be offered as security for any financial assistance or Page 7 of 16

obligations shall be construed as reference only to the assets pertaining to the Transferor Companies and vested in PEL by virtue of this Scheme to the end and intent that the charges shall not extend or deemed to extend to any assets of PEL. Provided that the Scheme shall not operate to enlarge the security for the said liabilities of the Transferor Companies which shall vest in PEL by virtue of the Scheme and PEL shall not be obliged to create any further, or additional security thereof after the merger has become effective or otherwise. 5.3

All the moveable assets capable of being transferred and vested by delivery, including plant and machinery, shall be handed over by physical delivery (together with duly executed transfer forms or other documents as may be required) to PEL along with such other documents as may be necessary towards the end and intent that the property therein passes to PEL on such delivery without requiring any deed or instrument of conveyance for the same and shall become the property of PEL accordingly. The investments held in dematerialized form will be transferred to PEL by issuing appropriate delivery instructions to the depository participant with whom the Transferor Companies have an account. Such delivery and transfer shall be made on a date mutually agreed upon between the respective Boards of Directors of the PEL and the Transferor Companies, being a date after the sanction of the Scheme by the High Court.

5.4

The moveable assets, other than those specified in Clause 5.3 above, including intangible assets, actionable claims, sundry debtors, outstanding loans and advances, if any, recoverable in cash or in kind or for value to be received, bank balances and deposits including deposits paid in relation to outstanding litigations, if any, with Government, semi-Government, local and other authorities and bodies, customers and other persons, shall, without any further act, instrument or deed, be transferred to and vested into as the property of PEL. PEL may, if required, give notice in such form as it may deem fit and proper to each person or debtor that, pursuant to the Scheme, the said person or debtor should pay the debt, loan or advance or make good the same or hold the same to its account and that the right of PEL to recover or realise the same is in substitution of the right of the Transferor

Page 8 of 16

Companies and that appropriate entry should be passed in their respective books to record the aforesaid charges. 5.5

Without prejudice to any of the Clauses above, with effect from the Appointed Date and upon the Scheme becoming effective, all immoveable properties, including land together with buildings and structure standing thereon, whether freehold or leasehold, relating to any of the Transferor Companies and any documents of title, rights, interests, claims, including leases, licenses and easements in relation thereto, shall, pursuant to the applicable provisions of the Act and the Scheme, without any further act, instrument, deed, matter or thing, stand transferred to and vested into PEL, as of the

Appointed Date. The mutation of the title to the immoveable

properties shall be made and duly recorded by the appropriate authorities pursuant to the sanction of the Scheme and upon the Scheme becoming effective, in accordance with the terms hereof, in favor of PEL

5.6

The liabilities, if any, of the Transferor Companies shall also, without any further act, instrument or deed be transferred to and vested in and assumed by and / or deemed to be transferred to and vested in and assumed by PEL pursuant to the provisions of Sections 391 to 394 of the Act, so as to become the liabilities of PEL and further that it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such liabilities have arisen, in order to give effect to the provisions of this Clause.

5.7

PEL may at any time after the coming into effect of the Scheme in accordance with the provisions of the Scheme, if so required, under any law or otherwise, execute Deeds of Confirmation, in favour of the secured creditors of the Transferor Companies or in favour of any other party to any contract or arrangement to which the Transferor Companies are party or any writings as may be necessary to be executed in order to give formal effect to the above provisions. PEL shall under the provisions of the Scheme be deemed to be authorised to execute any such writings on behalf of the Transferor Companies and to implement or carry out all such formalities or compliance referred to above on the part of the Transferor Companies to be carried out or performed. Page 9 of 16

6

CONSIDERATION

6.1

For the purposes of this Scheme, it is hereby clarified that since the Transferor Companies are indirectly wholly owned by the Transferee Company, the consideration would be nil. .

6.2

Upon the Scheme becoming effective and with effect from the Appointed Date, in consideration of the transfer and vesting of the undertakings including all assets and liabilities of the Transferor Companies in the Transferee Company in terms of this Scheme, the entire paid up share capital in the Transferor Companies fully held by the Transferee Company, through its subsidiary, on the Effective Date shall be extinguished and shall stand extinguished and the share certificate, if any, and / or the shares in electronic form representing shares held by the Transferee Company, through its subsidiary, in the Transferor Companies shall be deemed to be cancelled without any further application, act or deed.

7

ACCOUNTING TREATMENT IN THE BOOKS OF PEL On the Scheme becoming effective and with effect from the Appointed Date, PEL shall account for the amalgamation in its books of accounts, as per Accounting Standard (AS) 14 as notified under Section 211(3C) of the Companies Act, 1956 (corresponding to Section 133 of the Companies Act, 2013, which is effective in place of the erstwhile Section 211(3C) which stands repealed):

7.1

All assets and liabilities recorded in the books of the Transferor Companies shall be recorded by PEL at their respective book values as appearing in the books of the Transferor Companies, on the Appointed Date using the pooling of interest method.

7.2

All reserves and surplus, including but not limited to general reserve and securities premium account of the Transferor Companies as on the Appointed Date shall be transferred to and vested in PEL at their existing carrying amounts and in the same form in which they appear in the books of the Transferor Companies. Page 10 of 16

7.3

If and to the extent there are inter corporate loans, investments, deposits or balances as between the Transferor Companies inter-se and Transferee Company, the rights and obligations in respect thereof shall, on and from the Appointed Date, come to an end and corresponding suitable effect shall be given in the books of account and records of the Transferee Company.

7.4

The difference between the value of Share Capital of Transferor Companies and Consideration paid by PEL as per clause 6 above and after considering adjustments in sub clause 7.3 above shall be adjusted in Capital Reserve as per Accounting Standard 14.

8

CONDUCT OF BUSINESS TILL EFFECTIVE DATE Upon filing the Scheme with the Hon’ble High Court and upto and including the Effective Date:

8.1

The Transferor Companies shall be deemed to have been carrying on and shall carry on its business and activities and shall be deemed to have held and stood possessed of and shall hold and stand possessed of all their properties and assets pertaining to the businesses and undertakings of the Transferor Companies for and on account of and in trust for PEL. The Transferor Companies hereby undertake to hold their said assets with utmost prudence until the Effective Date.

8.2

The Transferor Companies shall carry on their business and activities with reasonable diligence, business prudence and shall not, except in the ordinary course of business or without prior written consent of PEL alienate, charge, mortgage, encumber or otherwise deal with or dispose of their assets or any part thereof.

8.3

With effect from the Appointed Date all the profits or income accruing or arising to the Transferor Companies or expenditure or losses arising or incurred or suffered by the Transferor Companies shall for all purposes be treated and be deemed to be accrued as the income or profits or losses or expenditure as the case may be of PEL. All Taxes (including Income Tax, Service Tax, Value Added Tax, etc.) paid or

Page 11 of 16

payable by the Transferor Companies in respect of the operations and / or the profits of the business before the Appointed Date shall be on account of the Transferor Companies. All Taxes (including Income Tax, Service Tax, Value Added Tax, etc.), paid or payable whether by way of deduction at source, advance tax or otherwise, by the Transferor Companies, in respect of the profits or activities or operations of business after the Appointed Date, the same shall be deemed to be paid or payable on behalf of PEL and shall, in all proceedings, be dealt with accordingly. 8.4

The Transferor Companies shall not vary the terms and conditions of employment of any of the employees except in the ordinary course of business or with the prior written consent of PEL or pursuant to any pre-existing obligation undertaken by the Transferor Companies, as the case may be, prior to the Appointed Date.

8.5

PEL shall be entitled, pending the sanction of the Scheme, to apply to the Central/State Government and all other agencies, departments and authorities concerned as are necessary under any law or rules, for such consents, approvals and sanctions, which PEL may require pursuant to this Scheme.

9

EMPLOYEES

9.1

On the Scheme becoming effective the employees, if any, of the Transferor Companies shall become the employees of PEL without any break or interruption in their services and on same terms and conditions on which they are engaged as on the Effective Date. PEL further agrees that for the purpose of payment of any retirement benefit / compensation, such immediate uninterrupted past services with the Transferor Companies shall also be taken into account.

9.2

The accounts / funds of the employees, if any whose services are transferred under Clause 10.1 above, relating to superannuation, provident fund and gratuity fund shall be identified, determined and transferred to the respective Trusts / Funds of PEL and such employees shall be deemed to have become members of such Trusts / Funds of PEL.

Page 12 of 16

10

LEGAL PROCEEDINGS

10.1 If any suit, appeal or other proceeding of whatever nature by or against the Transferor Companies are pending on the Effective Date, the same shall not abate or be discontinued or in any way be prejudicially affected by reason of or by anything contained in this Scheme, but the said suit, appeal or other legal proceedings may be continued, prosecuted and enforced by or against PEL, as the case may be, in the same manner and to the same extent as it would or might have been continued, prosecuted and enforced by or against the Transferor Companies as if this Scheme had not been made. 10.2 In case of any litigation, suits, recovery proceedings which are to be initiated or may be initiated against the Transferor Companies, PEL shall be made party thereto and any payment and expenses made thereto shall be the liability of PEL. 11

CONTRACTS, DEEDS, ETC.

11.1 Subject to the other provisions of this Scheme, all contracts, deeds, bonds, insurance, Letters of Intent, undertakings, arrangements, policies, agreements and other instruments, if any, of whatsoever nature pertaining to the Transferor Companies to which the Transferor Companies are party and subsisting or having effect on the Effective Date, shall be in full force and effect against or in favour of PEL, as the case may be, and may be enforced by or against PEL as fully and effectually as if, instead of the Transferor Companies, PEL had been a party thereto. 11.2 PEL shall enter into and/or issue and/or execute deeds, writings or confirmations or enter into any tripartite arrangements, confirmations or novations, to which the Transferor Companies will, if necessary, also be party in order to give formal effect to the provisions of this Scheme, if so required or becomes necessary. PEL shall be deemed to be authorised to execute any such deeds, writings or confirmations on behalf of the Transferor Companies and to implement or carry out all formalities required on the part of the Transferor Companies to give effect to the provisions of this Scheme.

Page 13 of 16

12

SAVING OF CONCLUDED TRANSACTIONS The transfer of properties and liabilities under Clause 5 above and the continuance of proceedings by or against the Transferor Companies under Clause 11 above shall not affect any transaction or proceedings already concluded by the Transferor Companies upon filing of the Scheme with the Hon’ble High Court of Judicature at Bombay and the High Court of Gujarat at Ahmadabad and till the Effective Date, to the end and intent that PEL accepts and adopts all acts, deeds and things done and executed by the Transferor Companies in respect thereto as done and executed on behalf of PEL.

13

WINDING UP

13.1 On the Scheme becoming effective, the Transferor Companies shall stand dissolved automatically without being wound-up. 13.2 On and with effect from the Effective Date, the name of the Transferor Companies shall be struck off from the records of the relevant Registrar of Companies. PART C – GENERAL CLAUSES, TERMS AND CONDITIONS 14

APPLICATION TO HIGH COURT The Transferor Companies and the Transferee Company shall with all reasonable dispatch make all necessary applications to the respective High Court for seeking approval to the Scheme under Sections 391 to 394 of the Act for an order or orders thereof for carrying the Scheme into effect and for dissolution of the Transferor Companies without winding up.

15

MODIFICATION OR AMENDMENTS TO THE SCHEME

15.1 The Transferor Companies and the Transferee Company by their respective Boards of Directors (‘the Board, which term shall include Committee (s) thereof), may assent to/make and/or consent to any modifications/amendments to the Scheme or to any conditions or limitations that the Courts and/or any other Authority under law may Page 14 of 16

deem fit to direct or impose, or which may otherwise be considered necessary, desirable or appropriate as a result of subsequent events or otherwise by them (i.e. the Board). The Transferor Companies and the Transferee Company by their respective Board are authorised to take all such steps as may be necessary, desirable or proper to resolve any doubts, difficulties or questions whatsoever for carrying the Scheme into effect, whether by reason of any directive or Orders of any other authorities or otherwise howsoever, arising out of or under or by virtue of the Scheme and/or any matter concerned or connected therewith. 15.2 For the purpose of giving effect to this Scheme or to any modification or amendments thereof or additions thereto, the delegate(s) and / or Directors of the Transferor Companies and / or the Transferee Company may give and are hereby authorized to determine and give all such directions as are necessary including directions for settling any question of doubt or difficulty that may arise and such determination or directions, as the case may be, shall be binding on all parties, in the same manner as if the same were specifically incorporated in this Scheme. 16

CONDITIONALITY OF THE SCHEME This Scheme is and shall be conditional upon and subject to:

16.1 The Scheme being approved by the requisite majorities in number and value of such classes of persons including the equity shareholders and / or creditors of the Transferor Companies and the Transferee Company, as may be directed by the High Court. 16.2 The sanction of the High Court under Sections 391 to 394 of the Act and to the necessary Orders under Section 394 of the said Act being obtained and certified copies of the same being filed with the Registrar of Companies. 16.3 All other sanctions and approvals as may be required by law in respect of this Scheme being obtained.

Page 15 of 16

17

EFFECT OF NON-RECEIPT OF APPROVALS In the event of any of the said sanctions and approvals referred to in the preceding Clause not being obtained and/ or the Scheme not being sanctioned by the High Court of Judicature at Bombay or such other competent authority and / or the Order not being passed as aforesaid before March 31, 2015 or within such further period or periods as may be agreed upon between the Transferor Companies and PEL by their Boards of Directors (and which the Boards of Directors of the Companies are hereby empowered and authorised to agree to and extend the Scheme from time to time without any limitation) this Scheme shall stand revoked, cancelled and be of no effect, save and except in respect of any act or deed done prior thereto as is contemplated hereunder or as to any rights and/ or liabilities which might have arisen or accrued pursuant thereto and which shall be governed and be preserved or worked out as is specifically provided in the Scheme or as may otherwise arise in law.

18

COSTS, CHARGES & EXPENSES All costs, charges, taxes including duties, levies and all other expenses, if any, arising out of or incurred in connection with and implementing this Scheme and matters incidental thereto shall be borne by PEL and / or its shareholders.

Page 16 of 16