DIRECTORSYour Directors have pleasure in presenting the Thirty Third Annual Report and AuditedAccounts for the year ended March 31, 2011.
Financial Results
| Year ended March 31, 2011 | Year ended March 31, 2010 |
| [ Rs. /Million] | [ Rs. /Million] |
| Sales and Other Income | 22,883 | 25,537 |
| Net Sales | 22,009 | 24,561 |
| EBITDA | 4,507 | 6,469 |
| Interest | 463 | 997 |
| PBDT | 4,044 | 5,472 |
| Depreciation | 999 | 651 |
| Exceptional items | 46 | 228 |
| PBT | 2,999 | 4,593 |
| Provision for Taxation | 203 | 962 |
| PAT | 2,796 | 3,631 |
| Profit brought forward from previous year | 8,819 | 7,558 |
| Adjustment on implementation of Scheme of Amalgamation & Demerger | 1,017 | - |
| PROFIT AVAILABLE FOR APPROPRIATION | 10,598 | 11,189 |
| Which the Directors have appropriated as follows: | | |
| – Proposed Dividend on Equity shares | 318 | 317 |
| – Tax on Dividend on Equity Shares | 52 | 53 |
| – Transfer to General Reserve | 1,000 | 2,000 |
| Balance to be carried forward | 9,228 | 8819 |
Operations
The above financial results for year ended March 31, 2011 are for the businessesremaining with the Company, after giving effect to the Scheme of Amalgamation &Demerger and accordingly, are not strictly comparable with the previous correspondingperiod. For better comparison and understanding, financial highlights for current yearcompared to adjusted previous year figures (after giving effect to the Scheme ofAmalgamation & Demerger) are discussed below:
Standalone Financials
Revenues
In FY2011, Revenues for the Company were at Rs. 22,009 million, which grew by 8% overlast year same period.
International Revenues
International business contributed 52% to the Net Sales at Rs. 11,522 million.
EBITDA
For the year ending March 31, 2011, EBITDA stood at Rs. 4,507 million with EBITDAmargins at 20.5%.
Profit Before Tax, Net Profit and EPS
Profit Before Tax in FY2011 stood at Rs. 2,999 million. The Company registered NetProfit of Rs. 2,796 million with Basic EPS at Rs. 17.56 for the financial year 2011.
Consolidated Financials Revenues
In FY2011, Net Sales were at Rs. 34,334 million, which grew by 1% over last year sameperiod (excluding the one-time revenues from H1N1 opportunity, the Company recorded growthof 7% in the year).
International Revenues
International business contributed 69% to the Net Sales at Rs. 23,691 million. Salesfrom regulated markets at Rs. 17,995 million was 52% of the Net Sales.
Life Sciences Products
Revenue from Life Sciences Products at Rs. 26,849 million contributed 78% to the totalrevenue of the Company and grew 9% in the year with good volume growth of over 15% acrossProducts. Life Sciences Ingredients share in revenue was up at 65% and Genericscontributed 13% to the top line. This growth is mainly driven by 19% growth in API and 18%growth in Generics.
Life Sciences Services
Services Revenue stood at Rs. 7,485 million compared to Rs. 9,190 million last year.Excluding the onetime revenue from H1N1 opportunity of Rs. 1,580 million in FY10, the CMOServices business recorded a growth of 5% during the year. However, Clinical Researchbusiness witnessed slowdown impacting the overall Services growth.
EBITDA
For the year ended March 31, 2011, EBITDA stood at Rs. 5,672 million with EBITDAmargins at 16.5%. EBITDA margins in Products business were at a high of 22.4% and 4.6% inServices business.
Profit Before Tax, Net Profit and EPS
Profit Before Tax in FY2011 stood at Rs. 2,406 million. The Company registered NetProfit of Rs. 2,297 million with Basic EPS at Rs. 14.42 for the financial year 2011.
Dividend
Your Directors recommend a dividend of 200% i.e. Rs. 2 per fully paid up equity shareof Rs. 1 for the year ended March 31, 2011. This will absorb Rs. 370 million (inclusive oftax) based on existing capital.
Appropriations
It is proposed to transfer Rs. 1,000 million to General Reserve and retain the balancein Profit and Loss Account.
Capital Structure
(A) Foreign Currency Convertible Bonds (FCCBs)
Your Company, during 2005-06 and 2006-07, issued Foreign Currency Convertible Bonds(FCCBs) of USD 75 million (FCCB 2010) and USD 200 million (FCCB 2011), respectively.During the year, the outstanding balance of FCCB 2010 was completely redeemed.
Whilst the FCCBs are listed on Singapore Stock Exchange, the Global Depository Shares(GDSs) arising out of conversion of FCCBs are listed on Euro MTF Market of the LuxembourgStock Exchange.
The balance of FCCB 2011 amounting to USD 142.10 million outstanding as of date, wouldbe redeemed on May 20, 2011.
(B) Employees Stock Options (ESOPs)
During the year, no Stock Options were granted under the Jubilant Employees StockOption Plan 2005. As on 31st March, 2011, 1,82,013 Stock Options were outstanding. Eachoption entitles the holder to acquire five equity shares of Rs. 1 each at the exerciseprice fixed at the time of grant being market value as per SEBI Guidelines. A maximum of9,10,065 shares will be allotted by the Company / transferred from Jubilant EmployeesWelfare Trust upon exercise of these Options.
The details as required under Regulation 12 of Securities and Exchange Board of India(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 aregiven in Annexure A and form part of this Report.
(C) Paid-up Capital
The paid-up Capital as at March 31, 2011 stands at Rs. 159,281,139 comprising of159,281,139 equity shares of Rs. 1 each.
No dilution on account of conversion of FCCBs is envisaged as conversion right ceaseson May 10, 2011. Further, no dilution under ESOPs is expected, as Jubilant EmployeesWelfare Trust is envisaged to transfer the shares held by it to employees on exercise.
Scheme of Amalgamation & Demerger
During the year, a Scheme of Amalgamation & Demerger (Scheme), was sanctioned bythe Hon’ble High Court of Judicature at Allahabad vide its orders dated October 28,2010 and November 08, 2010. The Scheme became effective with effect from November 15, 2010(the effective date) and Speciality Molecules Limited (SML) a wholly owned subsidiary ofthe Company and Pace Marketing Specialities Limited (PMSL) were amalgamated into theCompany and the Company’s Agri Products, Performance Polymer and IMFL divisions weredemerged into Jubilant Industries Limited (JIL) - a subsidiary of the Company.
The amalgamations were effective from the amalgamation appointed date viz., close ofbusiness on March 31, 2010 and the demerger was effective from the demerger appointed dateviz., commencement of business on April 1, 2010.
Name Change
During the year, the name of the Company was changed to ‘Jubilant Life SciencesLimited’ to reflect the evolved character of the Company as an integratedPharmaceutical and Life Sciences Company.
Subsidiaries
Brief particulars of principal subsidiaries are given below:
Jubilant HollisterStier LLC (formerly Hollister-Stier Laboratories LLC) - ThisSpokane State of Washington, USA based company, is a wholly owned subsidiary of HSLHoldings Inc. It is a recognized contract manufacturer of sterile injectable vials,syringes and lyophilized products and provides a complete range of services to support thepharmaceutical and biopharmaceutical industries. Additionally, it is a manufacturer ofallergenic extracts, targeted primarily at treating allergies and asthma.
Its contract manufacturing capabilities include aseptic liquid fill / finishing andlyophilization in three distinct cGMP areas designated as Small Volume Parenteral (SVP),Small Lot Manufacturing (SLM) and Clinical Trial Manufacturing (CTM). Its capabilities canbe applied to a variety of projects from pre-clinical through commercial scale across amultitude of dosage forms including: microspheres, suspensions, WFI/ diluents, biologics(proteins), lyophilized products, liposomes and BD Hypak syringes. Jubilant HollisterStiermaintains an outstanding regulatory record with the FDA (CBER and CDER), EMA andJapan’s and Brazil’s regulatory agencies. Jubilant HollisterStier’scontract manufacturing business serves 38 customers, some of which involve multipleproducts, ranging from small biotechnology to large pharmaceutical companies.
Jubilant DraxImage Inc. (formerly Draxis Specialty Pharmaceuticals Inc.) Thiscompany is a wholly owned subsidiary of your Company through Jubilant Pharma Pte. Limited.It deals in radiopharmaceuticals. Radiopharmaceuticals is a niche, high entry barrierbusiness. DraxImage markets radioactive products with radioactive isotope alreadyincorporated, and non-radioactive products, which are solid in lyophilized form.Radiopharmaceuticals are used for both therapeutic and diagnostic molecular imagingapplications to customers comprising hospitals, imaging centres and cardiology / oncologyclinics.
This company operates a US FDA approved manufacturing facility in Montreal at Canada.It is recognised globally for its quality and execution capabilities, strong regulatorytrack record and has an established customer base comprising large innovator and specialtypharmaceutical companies.
Jubilant Biosys Limited This company is a subsidiary of your Company through JubilantBiosys (Singapore) Pte. Ltd., wholly owned subsidiary of your Company, which holds 66.98%of the equity of this company.
This company provides Drug Discovery Services to Global Pharmaceutical and Biotechcompanies in:
– Stand alone Service Model
• Functional services in area of Discovery Informatics,
Structural Biology and In Vivo & Invitro Biology on
FTE or Fee based model.
• Collaborative / Partnership Model
• Integrated discovery program across a single or a portfolio of molecules
• Risk / Reward sharing option
Discovery and Development phase
– Research Funding Payments for scientific milestones including bonus achievedthrough
– Royalties on successful commercialization of drug.
During 2010-11, this company has been able to consolidate its position in the DrugDiscovery Services by providing services in integrated drug discovery programmes,functional service in structural biology, High thru put screening, Insilco modeling and INVivo Biology and Invitro Biology.
During the year, it signed integrated programs deal with another major Pharma AbbottLab and Biotech Company Vega
Therapeutics Inc.
Jubilant Discovery Services Inc. - This Delaware based USA corporation, is a whollyowned subsidiary of Jubilant Biosys Limited. This company provides sales, marketing andliaising services to Jubilant Biosys Limited for its US based customers.
Jubilant Chemsys Limited This company is a subsidiary of your Company through JubilantDrug Development Pte. Ltd., wholly owned subsidiary of your Company, which holds entireequity of this company. This company offers following services to drug discovery companiesbased out of US, Europe and Japan on Full Time Equivalent and molecule basis:
• Discovery Chemistry Functions
• Hit to Lead and Lead Optimization
• Medicinal Chemistry Services
Scaling up from mg to kg in kilo lab and pilot plant It also works closely withJubilant Biosys Limited in collaborative drug discovery research services arena.
Jubilant Clinsys Limited (formerly Clinsys Clinical Research Limited) Thiscompany is a subsidiary of your Company through Jubilant Drug Development Pte. Ltd.,wholly owned subsidiary of your Company, which holds entire equity of this company.
This company offers following services to pharmaceutical, biotechnology and medicaldevice companies:
• Bio-analytical, Bio equivalence & Pharmacokinetics studies with 52 bedfacility at Noida
• Clinical Trials from Phase I-IV
• Clinical Data Management studies
• Clinical Trial Staffing solutions
During 2010-11, this company has been able to sign major Clinical data management (CDM)contracts with Novartis and Lotus Labs (P) Ltd as part of its endeavor to enhance CDMbusiness.
Jubilant Clinsys Inc. (formerly Clinsys Clinical Research Inc.) This New Jerseybased USA corporation, is a wholly owned subsidiary of Jubilant Life Sciences HoldingsInc. and is a therapeutically focused full service clinical research organization.
This company has expertise in a wide range of highly specialized therapeutic areasincluding oncology, cardiovascular, central nervous system, respiratory, dermatology andallergy/ immunology. It offers broad range of clinical research services topharmaceutical, biotechnology and medical device companies in support of Phase II-IV drugand device development including project management, clinical monitoring, scientific andmedical support, patient and investigator recruitment, site management, biostatistics,data management, drug safety, quality assurance, regulatory affairs and medical writing.This company has operations in Bedminster, New Jersey, Raleigh, North Carolina, Ottawa,Ontario and Dusseldorf.
Jubilant Innovation (India) Limited – This company is a wholly owned subsidiary ofyour Company through Jubilant Innovation (BVI) Limited. This company provides services inthe areas of:
• Drug Development Scientific Services
• Project Management services and
• Related and ancillary activities for the development of molecules owned/co-owned by Jubilant Innovation (BVI) Limited.
The company fosters the development of molecules owned/ co-owned by Jubilant Innovation(BVI) Limited, in terms of finding right CRO’s in India to get maximum cost arbitragebased on their capabilities, overseeing, analysis and monitoring of information onclinical / toxicology studies being conducted in India on Jubilant Innovation (BVI)Limited’s molecules.
Jubilant Innovation Pte. Limited This Singapore Company is a wholly owned subsidiary ofJubilant Innovation (BVI) Limited. The company is an investment company and owns 50% shareholding in Vanthys Pharmaceutical Development (P) Limited, a 50:50 Drug development JointVenture with Lilly. It has also signed a Joint Venture agreement with University ofAlabama, US and Southern Research Institute, US in the field of Drug Discovery.
Jubilant Innovation (BVI) Limited – This British Virgin Island based company is awholly owned subsidiary of Jubilant Pharma Pte. Limited. This Company co-develops /inlicenses the prescription pharmaceuticals in late discovery or preclinical phases, anddevelops these molecules through a phase II Proof of Concept (POC) trial.
The company develops these molecules on and at risk basis with either a predeterminedreturn structure or an equity interest and sells these molecules after Phase II POC studyfor development completion. The selling /out licensing will have upside in terms ofupfront payment, various milestone payments including sales milestones and/or salesroyalties.
Jubilant Innovation (USA) Inc. This Delaware based USA corporation, is a wholly ownedsubsidiary of your Company through Jubilant Innovation (BVI) Limited. This companyprovides services in the areas of:
• Drug Development Scientific Services
• Project Management services and
• Related and ancillary activities for the development of molecules owned/co-owned by Jubilant Innovation (BVI) Limited.
The company fosters the development of molecules owned/ co-owned by Jubilant Innovation(BVI) Limited, in terms of finding right CRO’s in US and Europe based on theircapabilities, overseeing, analyses and monitoring of information on clinical / toxicologystudies being conducted outside India on Jubilant Innovation (BVI) Limited’smolecules.
Jubilant Infrastructure Limited This wholly owned subsidiary of your Company has set upSector Specific Special Economic Zone (SEZ) for Chemicals and Pharmaceuticals in Gujarat.About 107 hectares land has been taken on lease from GIDC in Bharuch District, Gujarat.The Government of India notified the SEZ in February 2008. In September 2008, the CentralGovernment constituted the Approval Committee for this SEZ.
During first Approval Committee meeting for this SEZ in November 2008, SEZ unit of thiscompany was considered for approval and accordingly, a Letter of Approval has been issuedfor setting up Unit in the SEZ.
This SEZ has received all the required permissions, approvals, eligibility certificates& licenses under SEZ Act and Rules & other relevant Laws. It has receivedEnvironment Clearance from Ministry of Environment & Forest, Government of India andaccordingly, Consent to Establish has also been received from Gujarat Pollution ControlBoard under the applicable Water and Air Acts.
Jubilant First Trust Healthcare Limited - This company is in the business of healthcareand is involved in setting up an integrated hub-and-spoke network with a total of about1,000 beds in West Bengal. The effort is led by a team of professional doctors andhealthcare planners in West Bengal. In 2009, the company commissioned a 120-bedsuper-specialty hospital. The company is having a total capacity of 170 beds across twohospitals in West Bengal. Your Company holds 93.24% of equity capital of this company.This company holds 99.77% capital of Asia Healthcare Development Limited.
Asia Healthcare Development Limited - This company is a subsidiary of your Companythrough Jubilant First Trust Healthcare Limited, which holds 99.77% of its total capital.This company runs a hospital in Behrampur, 200 kms away from Kolkata, on aPublic-Private-Partnership with Government of West Bengal.
Jubilant Cadista Pharmaceuticals Inc. (formerly Cadista Pharmaceuticals Inc.)This Delaware based USA corporation, is a wholly owned subsidiary of Cadista Holdings Inc.This Company is in the business of manufacturing generic pharmaceuticals, solid dosageforms and has a US FDA approved manufacturing facility in USA. Its customer base includesall the large wholesalers, retail and grocery chains. Besides manufacturing its own labelproducts, it also provides Product development and Contract manufacturing services.
Jubilant Life Sciences (USA) Inc. [formerly Jubilant Organosys (USA) Inc.] ThisDelaware based USA corporation, is a wholly owned subsidiary of your Company. Itundertakes sales and distribution of advance intermediates, fine chemicals and APIs inUSA.
Jubilant Life Sciences (Shanghai) Limited (formerly Jubilant Organosys (Shanghai)Limited) This wholly owned subsidiary of your Company is held through Jubilant PharmaPte. Limited. It undertakes sales and distribution of products in China. It is intotrading of advance intermediates - Pyridine & its derivatives, vitamins and finechemicals. It is catering to pharmaceutical, animal feed and agrochemical industries inChina. This subsidiary is also a major sourcing hub of raw materials for your company.
Jubilant Pharmaceuticals NV - This is a wholly owned subsidiary of your Company throughJubilant Pharma NV, Belgium, which holds 99.8% of its shares and Jubilant Pharma Pte.Limited, Singapore which holds the balance shares, both of which are wholly ownedsubsidiaries of your Company. This company is engaged in the business of licensing ofgeneric dosage forms and offers regulatory affairs services to generic pharmaceuticalcompanies for the diverse European market.
PSI Supply NV This is a wholly owned subsidiary of your Company. 99.5% shares of thiscompany are held by Jubilant Pharma NV and balance by Jubilant Pharma Pte. Limited. Thiscompany is engaged in the supply of generic dosage forms to European markets
Jubilant DraxImage Limited (formerly Draximage India Limited) - This company is awholly owned subsidiary of your Company through Draximage Limited, Cyprus. The company hasstarted its operation from January 01, 2011 by launching radioactive isotopes. The productwhich it is presently selling is Tc-99m Generator which is used in the diagnosis of Bonescans, cerebral perfusion imaging, Myocardial Perfusion Imaging. The other products it isselling are Thallium-201 and Lodine-131 capsules and solution, which are used forMyocardial Perfusion Imaging and for the diagnosis and treatment of Thyroid and itsrelated diseases. This company plans to introduce, from April 2011, Lyophilized kits whichare Sestamibi, MDP, MAA and DTPA and RUBY-FILL (Rubidium- 82 Generator-PET isotope).
This company also proposes to set up a centralized Radio pharmacy which will furtherpropel its growth and help not only to provide a strategic advantage over competitors butalso to achieve the leadership status in the Nuclear Medicine.
Other subsidiaries as at the year end are as follows:
Cadista Holdings Inc., USA
DAHI Animal Health (UK) Limited, UK
Deprenyl Inc., USA
Draximage (UK) Limited, UK
Draximage Limited, Cyprus
Draximage Limited, Ireland
Draximage LLC, USA
Draxis Pharma Inc.,
USA Draxis Pharma LLC, USA
* Generic Pharmaceuticals Holdings Inc., USA
HSL Holdings Inc., USA
Jubilant Biosys (BVI) Limited, British Virgin Islands
Jubilant Biosys (Singapore) Pte. Ltd., Singapore
Jubilant DraxImage (USA) Inc. (formerly DSPI Inc.), USA
Jubilant Drug Development Pte. Ltd., Singapore
Jubilant Life Sciences (BVI) Ltd. (formerly Jubilant Organosys (BVI) Limited),British Virgin Islands
* Jubilant Life Sciences (Switzerland) AG, Schaffhausen
Jubilant Life Sciences Holdings Inc. (formerly Clinsys Holdings Inc.), USA
Jubilant Life Sciences International Pte. Ltd. (formerly Jubilant OrganosysInternational Pte. Limited), Singapore
Jubilant Pharma NV, Belgium
Jubilant Pharma Pte. Limited, Singapore
6963196 Canada Inc., Canada
6981364 Canada Inc., Canada
* became subsidiary during the year
During the year Colvant Sciences Inc., DAHI LLC and Cadista Pharmaceuticals (UK)Limited ceased to be subsidiaries of the Company. Pursuant to Scheme of Amalgamation andDemerger,
Speciality Molecules Limited merged with the Company and certain businesses of theCompany were hived off to demerged Jubilant Industries Ltd. (formerly Hitech ShikshaLimited). Both these companies ceased to be subsidiaries of the Company.
Particulars required as per Section 212 of The Companies Act, 1956
In terms of the general exemption granted by the Government of India vide its generalcircular no. 2/2011 dated February 08, 2011, from attaching the Directors’ Reports,Balance Sheets, Profit & Loss Accounts and other particulars of the subsidiaries, thesame have not been attached to this Report.
Fixed Deposits
No fresh deposits have been accepted by your Company during the year from the public.As on March 31, 2011, your Company had no outstanding Fixed Deposits. There were nooverdue deposits. There were, however, 25 unclaimed deposits amounting to Rs. 3.82 lacs.
Auditors
K. N. Gutgutia & Co., Chartered Accountants, [ICAI Registration Number - 304153E]Auditors of the Company, retire at the ensuing Annual General Meeting and offer themselvesfor reappointment. They have confirmed that their re-appointment, if made, shall be withinthe limits laid down in Section 224 (1B) of the Companies Act, 1956.
Cost Auditors
J. K. Kabra & Co., Cost Accountants, [Firm Registration Number - 9] Cost Auditorsof the Company, have confirmed that their re-appointment, if made, shall be within thelimits laid from the down in Section 224 (1B) of the Companies Act, 1956. During thefinancial year 2010-11, the Cost Audit Reports of Chemical (Sulphuric Acid), IndustrialAlcohol & Bulk Drugs were filed on September 17, 2010 and of Fertilizer were filed onSeptember 21, 2010, against the due date of September 27, 2010.
Directors
Mr. Rahul Yadav, Nominee Director of Citicorp International Finance Corporation and HPC(Mauritius) Limited Equity Investors and Mr. Vishal Marwaha, Alternate Director to Mr.Rahul Yadav, ceased to be Directors with effect from July 07, 2010.
Effective from November 11, 2010, Mr. Arabinda Ray resigned from the Board.
In accordance with the Articles of Association of the Company, Mr. Hari S. Bhartia, Mr.Shyamsundar Bang and Dr. Naresh Trehan retire by rotation at the forthcoming AnnualGeneral Meeting and, being eligible, offer themselves for reappointment.
Directors’ Responsibility Statement
In compliance of Section 217 (2AA) of the Companies Act, 1956, the Directors of yourCompany, based on the representation received from management, confirm:
• that in the preparation of annual accounts, the applicable accounting standardshave been followed along with proper explanation relating to material departures.
• that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on March 31, 2011 andof the profit or loss of the Company for the year ended March 31, 2011.
• that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956,for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
• that the Directors have prepared the annual accounts on a going concern basis.
Conservation Of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Information relating to Conservation of Energy, Technology Absorption and ForeignExchange Earnings and Outgo, required to be made pursuant to Section 217(1)(e) of theCompanies Act, 1956, read with Companies [Disclosure of Particulars in the Report of Boardof Directors] Rules, 1988, is given in Annexure B and forms part of this Report.
Employees
The particulars of employees, as required under Section 217(2A) of the Companies Act1956, read with the Companies (Particulars of Employees) Rules, 1975, are given inAnnexure C and form part of this Report.
Corporate Governance
A separate section on Corporate Governance is attached to this Report as from theauditors of AnnexureD.Acertificate the Company regarding compliance of conditions ofCorporate Governance as stipulated under clause 49 of the Listing
Agreements with Stock Exchanges is enclosed as Annexure Chairman & ManagingDirector that E.Acertificate all Board members and senior management personnel haveaffirmed compliance with the Code of Conduct for the year ended March 31, 2011 is attachedas Annexure F. CEO/CFO certificate is enclosed asAnnexure G.
Management Discussion & Analysis
Notes on Management Discussion & Analysis of the financial position of the Companyhave been given separately and form part of this Report.
Corporate Sustainability Report
Your Company, being committed to address environmental issues and discharge itscorporate social responsibility, is publishing for the ninth year in a row, CorporateSustainability Report, duly audited by Ernst & Young, and conforming to GlobalReporting Initiative (GRI) Guidelines. The Report is being sent to all our shareholders.
Risk Management
Today’s business environment remains challenging for the Corporate World and riskmanagement retains its high position on every organization’s agenda. The Company hasseveral risk factors which could potentially impact its business objectives, if notperceived and mitigated in a timely manner. With an effective risk management framework inplace, the Company looks at these risks as challenges and opportunities to create valuefor its stakeholders. With its established processes and guidelines in place, combinedwith a strong oversight and monitoring system at the Board and senior management levels,the Company has a robust risk management strategy in place.
The senior management team sets the overall tone and risk culture of the organizationthrough defined and communicated corporate values, clearly assigned risk responsibilities,appropriately delegated authority, and a set of processes and guidelines. The Company haslaid down procedures to inform Board members about the risk assessment and riskminimization procedures. The Company promotes strong ethical values and high levels ofintegrity in all our activities, which in itself is a significant risk mitigator.
With the growth strategy in place, risk management holds a key to the success of itsjourney of continued competitive sustainability in attaining its desired businessobjective.
A detailed note on Risk Management is given asof Merit’ by part of"Management Discussion & Analysis".
Human Resource Management
As of March 31, 2011, we had 5763 employees including those in our Subsidiarycompanies. As of March 31, 2011, 661 of our employees at our manufacturing plants atSamlaya, Nira, Gajraula and Nanjangud, were members of unions or had collective bargainingcapability. We enjoy cordial relations with our employees and there have been no instancesof major strikes, lockouts or other disruptive labour disputes.
We have signed a policy on CII Code of Conduct on Affirmative that reconfirms ourcommitment that equal opportunity in employment for all sections of society is a componentof our growth and competitiveness.
We strive toward technology driven HR systems and processes and have implemented worldrenowned PeopleSoft based human resource management system ‘Synergy HRIS’. Itskey features include employee personal and Job database, self service features likereimbursements, pay slips, leaves, income tax declarations & computations, loans andexit process etc.
We believe in an open, fair and transparent culture and stand by our promise of Caring,Sharing, Growing and make efforts to make Jubilant one of the best places to work for.In this direction, we have been conducting the Gallup employee engagement survey to gaugethe organization’s health. This allows us to track the proportion of engaged toactively disengaged employees and so that mid-course corrections or interventions can beimplemented thereof.
A detailed note on HR Management is given in the "Management Discussion &Analysis".
Awards and Accolades
During the year 2010-11, the Company won the following:
• Two Environmental Best Practices Award 2011, by CII-Sohrabji Godrej GreenBusiness Centre, under Most Innovative Environmental Project and Most Useful EnvironmentalProject for the Co-processing of Hazardous waste in Cement Kiln at Nanjangud plant,Mysore, India
• Golden Peacock Innovation Award 2011 for developing Niacin by Vapour PhaseCatalytic Oxdation of Beta Picoline
• Ernst & Young Entrepreneur of the Year 2010 for Life Sciences & ConsumerProducts to Mr. Shyam S Bhartia, Chairman & Managing Director and Mr. Hari S Bhartia,Co-Chairman & Managing Director
• CII EHS Award 2010 - First Place for Excellence in EH&S systems at theNanjangud Plant, among medium scale industries
• Safety Innovation Award 2010 by The Institution of Engineers (India) forimplementing Innovative Safety Management Systems at Nanjandgud Plant
• National Award for Excellence in Water Management 2010 by CII-Sohrabji GodrejGreen Business Centre for Nanjangud plant
• India Manufacturing Excellence Award 2010 - ‘Gold The Economic Times -Frost & Certificate Sullivan for EOU facility at Gajraula
• Certification of Commendation for Strong Commitment for Sustainability byCII-ITC Sustainability Awards 2010
• Two ABCI Awards 2010 for Communication efforts of Jubilant Life Sciences- Goldfor e-newsletter and Bronze for CSR Communication
• Jubilant was included in the Forbes Asia ‘Best Under a Billion’ AsiaList released in Sept 2010
• A+ rating from GRI for Corporate Sustainability Report 2010 (consecutively forthe last four years since 2007)
• Golden Peacock Environment Management Award 2010 by World Environment Foundation(WEF) for API facility at Nanjangud, Mysore, India
Certifications
Your Company follows several externally developed initiatives in the economic,environmental and social areas. Facilities of the
Company at Gajraula, Nira, Savli, Nanjangud and Ambernath are ISO 9001:2008 certifiedfor Quality Management System. These manufacturing facilities are also ISO 14001:2004certified for Environmental Management System. For Occupational
Health and Safety at work place, these manufacturing facilities are also certified toOHSAS 18001:2007. The locations of Gajraula, Nira and Savli are certified for IntegratedManagement System (IMS). Facilities at Savli are certified for FAMI- QS Version 5 Qualityin Feed Safety Management System. Gajraula Quality Control Laboratory has also beencertified for chemical testing by NABL (National Accreditation Board for Testing andCalibration Laboratories) in accordance with the ISO / IEC 17025:2005.
Dosage Forms facility at Roorkee follows Good Manufacturing Practices (GMP) as perWorld Health Organisation (WHO) specifications in manufacturing and testing ofpharmaceutical products and hence has been granted WHO GMP certificate by the DrugLicensing and Controlling Authority, Uttarakhand. The facility is also approved by UK-MHRA(UK- Medicines and Healthcare Products Regulatory Agency) to export drugs to EuropeanMarket.
Nanjangud plant has got US FDA (United States Food & Drug Administration) approvalfor exporting certain products to US market. AFSSAPS (Agence Francaise de SecuriteSanitaire des Produits de Sante -The French Health Products Safety Agency), GMP approvalfor certain products, PMDA
(Pharmaceuticals and Medical Devices Agency, Japan) for exporting Risperidone HCl tothe Japanese market, KFDA (Korea Food and Drug Administration) for exporting Valsartan andLosartan to Korean market, COFEPRIS for exporting Pinaverium Bromide to Mexican market.Olanzapine, Losartan was audited by United State Pharmacopeia and approved for the use ofUSP logo.
Investor Services
In its endeavor to improve investor services, your Company has taken the followinginitiatives:
• With a view to communicating on a real time basis, your Company has beene-mailing to the shareholders, quarterly results, press releases and other similarcommunications soon after they are sent to the stock exchanges.
• For effective communication with shareholders, during the year, the Company alsoe-mailed Annual Report, Corporate Sustainability Report and Notice of Annual GeneralMeeting to shareholders on their email IDs as available, in addition to statutory physicalmailing.
• The Investor Section on the website of the Company www.jubl.com is moreuser friendly now.
• A dedicated e-mail ID viz. investors@jubl.com for sending communications to theCompany Secretary / Compliance Officer has been made effective. Members may lodge theircomplaints or suggestions on this e-mail as well.
• The Company has been mailing feedback forms to investors, annually, so as tobring about improvement in service level based on responses received. The Company has alsoplaced an online Investor Feedback Form on its website www.jubl.com under the head"Investors". This form can be submitted electronically.
Acknowledgments
Your Directors acknowledge with gratitude the co-operation and assistance received fromthe Central and State Government Authorities. Your Directors thank the Shareholders,Private
Equity Investors, Financial Institutions, Banks/other lenders, Customers, Vendors andother business associates for their confidence in the Company and its management and lookforward to their continued support. The Board wishes to place on record its appreciationfor the dedication and commitment of your Company’s employees at all levels, whichhas continued to be our major strength.
| For and on behalf of the Board |
| Noida | Shyam S. Bhartia |
| May 10, 2011 | Chairman & Managing Director |
DIRECTORS’ REPORT & ANNEXURE TO THE DIRECTORS’ REPORT
Annexure-A
Details as per Regulation 12 of SEBI (ESOP & ESPS) Guidelines, 1999
| a) Options granted during 2010-11 | None |
| b) Options granted upto March 31, 2011 | 7,54,250 |
| c) Pricing formula | Market price of share as on the date of grant, as per SEBI |
| Guidelines. |
| d) Options vested upto March 31, 2011 | 480,763 |
| e) Options exercised upto March 31, 2011 | 3,28,969 |
| f) Total number of shares arising as a results of exercise of options upto March 31, 2011 | 16,44,845 Equity Shares of Rs. 1 each. |
| g) Options lapsed upto March 31, 2011 | 2,43,268 |
| h) Variation of terms of options upto March 31, 2011 | Modifications made on July 04, 2008: |
| i) The vesting period for the options granted upto August 28, 2009 was accelerated so that 10% of the Options vest on the 1st Anniversary of the Grant date and 90% vest on 2nd Anniversary of the Grant date subject to certain lock- in provisions. Summary of vesting and lock in provisions is given below: |
| Vesting Schedule (with Lock in) | | |
| Applicable for grants made upto August 28, 2009 | | |
| Vesting Date | % of Options scheduled to vest | Lock-in Period |
| 1 year from grant date | 10 | Nil |
| 2 years from grant date | 15 | Nil |
| 2 years from grant date | 20 | 1 year from vesting date |
| 2 years from grant date | 25 | 2 years from vesting date |
| 2 years from grant date | 30 | 3 years from vesting date |
| ii) Modification carried out to explicitly provide for recovery of Fringe Benefit Tax from the respective employees in respect of the exercise of Stock Options by them, in terms of Section 115WKA of the Income Tax Act, 1961. |
| Modification made on November 26, 2008: |
| Jubilant Employees Welfare Trust was constituted, for the purposes of acquisition of equity shares of the Company from the secondary market or subscription of shares from the Company, to hold the shares and to allocate / transfer these shares to eligible employees of the Company, on such terms and conditions as specified under the Jubilant Employees Stock Option Plan 2005. |
| Modification made on August 28, 2009: |
| The options granted after August 28, 2009 will vest gradually over a period of 5 years from the grant date, without any lock in provisions. Summary of vesting and lock in provisions is given below: |
| Vesting Schedule (without Lock in) | | |
| Applicable for grants made after August 28, 2009 | | |
| Vesting Date | % of Options scheduled to vest | Lock-in Period |
| 1 year from grant date | 10 | Nil |
| 2 years from grant date | 15 | Nil |
| 3 years from grant date | 20 | Nil |
| 4 years from grant date | 25 | Nil |
| 5 years from grant date | 30 | Nil |
| Modification made on September 28, 2010: |
| The Plan was modified to incorporate special provisions consequential to Scheme of Amalgamation & Demerger amongst the Company, Jubilant Industries Ltd. & others and to provide : |
| (i) that an Option holder who is continuing with the Company, would be entitled to not only the equity shares of the Company but also the equity shares of Jubilant Industries Limited in accordance with the share exchange ratio i.e. One equity share of Rs. 10 each of Jubilant Industries Limited (JIL Share), free of cost, for every 20 equity shares of Rs. 1 each of the Company) when such options holder pays the exercise price in accordance with the Plan; |
| (ii) that the Lock-in provisions, in accordance with the Plan, wherever applicable to the equity shares of the Company will also apply to the JIL Shares acquired by a Participant. |
| (iii) for other specific provisions applicable to Participant(s) transferred to Jubilant Industries Limited, including provision for accelerated vesting of Options on Effective Date, in case Options were granted atleast one year before the Effective Date but not vested upto that date. |
| i) Money realized by exercise of options upto March 31, 2011 | Received by the Company as subscription for allotment of 114,835 shares – Rs. 23,170,959. |
| Received by Jubilant Employees Welfare Trust on transfer of 1,530,010 shares - Rs. 309,427,888 |
| Total – Rs. 332,598,847 |
| j) Total number of options in force upto March 31, 2011 | 1,82,013 |
| k) Employee-wise details of options granted during 2010-11 | |
| to: | |
| i) senior management personnel; | NIL |
| ii) any other employee who received a grant in any one year of options amounting to 5% or more of options granted during that year; | NIL |
| iii) identified employees who are granted options, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant | NIL |
| l) Diluted Earning Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) - 20. | The Company has calculated the employee compensation cost using the intrinsic value method of accounting to account for options issued under "Jubilant Employees Stock Option Plan 2005". The stock based compensation cost as per the intrinsic value method for the financial year 2010-11 is NIL. |
| m) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits on EPS of the company shall also be disclosed | If the employee compensation cost was calculated as per the fair-value of options based on Black Scholes methodology, read with Guidance Note on "Accounting for Employee Share-based Payments" issued by Institute of Chartered Accountants of India, the total cost to be recognized in the financial statements for the year 2010-11 would be Rs. 22.00 million. The effect of adopting the fair value method on the net income and earnings per share is presented below. |
| Pro Forma Adjusted Net Income and Earnings Per Share: |
| Particulars | Rs. in million |
| Net Income - As Reported | 2796.26 |
| Add: Intrinsic Value Compensation Cost | Nil |
| Less: Fair Value Compensation Cost | 22.00 |
| Adjusted Pro Forma Net Income | 2,774.26 |
| Earnings Per Share of Rs. 1 each | |
| Basic (In Rs. ) | |
| As Reported | 17.56 |
| Adjusted Proforma | 17.42 |
| Earnings Per Share of Rs. 1 each | |
| Diluted (In Rs. ) | |
| As Reported | 15.87 |
| Adjusted Proforma | 15.75 |
| n) Weighted-average exercise prices and weighted- (i) average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock options | Where exercise price equals the market price of the stock options: |
| - Weighted average of exercise prices of options: Rs. 228.95 |
| - Weighted average of fair values of options: Rs. 104.05 |
| (ii) | Where exercise price exceeds the market price of the stock options: Not applicable |
| (iii) | Where exercise price is less than the market price of the stock options: Not applicable |
| o) A description of the method and significant assumptions Not applicable as no Options were granted during the year. used during the year to estimate the fair values of options, including the following weighted-average information : | |
| i) date of grant | |
| ii) risk-free interest rate, | |
| iii) expected life, | |
| iv) expected volatility, | |
| v) expected dividends, and | |
| vi) the price of the underlying share in market at the time of option grant. | |
ANNEXURE - B
DISCLOSURE UNDER SECTION 217(1)(e) OF ThE COMPANIES ACT, 1956 READ WITh COMPANIES(DISCLOSURE OF PARTICULARS IN ThE REPORT OF BOARD OF DIRECTORS) RULES, 1988.
A. Conservation of Energy
(a) Energy Conservation Measures Taken
Energy Conservation by optimizing operation of distillation columns
Installation of Thermo-compressor to create additional steam extraction demand
• Installation of de-superheater to recover the superheat of extraction steam ofTurbo Generator
• Rationalization of steam pressure to create additional steam extraction demandfor improving power generation efficiency
• Reduction in power consumption by utilizing cooling water in place of chilledwater for cooling of some process stream
• Reduction of steam consumption by increasing the Triple effect evaporator steamEconomy
• Power savings in water pumping through piping network re-engineering
• Power savings through provision of Interlocks for cooling tower pumps and fans
• Installation of the energy efficient motors
• Installation of Variable Frequency Drives (VFD) for motors
(b) Additional Investment and Proposals, if any, being implemented for reduction ofconsumption of energy
• To reduce power cost by utilizing low pressure steam in place of medium pressuresteam in distillation column
• To reduce steam consumption in process plant through vacuum distillation &pre-heater
• To reduce Steam consumption norm in process plant through reflux
• To reduce power consumption in compressed air network
• Reduction in steam, chilled water & chilled brine power consumption
• Reduction in power consumption in cooling water circuit through installation ofenergy efficientpumps and piping network re-engineering
• Installation of VFD for some machines
• Reduction in power consumption in boiler feed water circuit throughrationalization of pump head
• Installation of briquette fired boiler for eliminating liquid fuel consumption
Expected investment in above initiatives is Rs. 41 million, approx.
(c) Impact of measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods
• Reduction in steam and power consumption norms
• Reduction in power generation cost
1. Saving due to (a) conservation of energy: Rs. 30 million per annum, approx.
2. Saving due to (b): Rs. 45 million per annum, approx.
(d) Total Energy Consumption and Energy Consumption Per Unit of Production
FORM A
A. Power & Fuel Consumption
| | 2010 – 11 | 2009 - 10 |
| 1. Electricity | | | |
| A. Purchased | | | |
| i) Units | KWH | 53,343,061.00 | 46,760,660.42 |
| ii) Total Amount | Rs. /Million | 286.50 | 230.96 |
| iii) Rate / unit | Rs. /KWH | 5.37 | 4.94 |
| B. Own Generation | | | |
| - Through DG | | | |
| i) Units | KWH | 3,975,165.00 | 8,436,959.00 |
| ii) Unit per litre of RFO/LDO | KWH/LTR | 3.43 | 3.58 |
| iii) Cost / unit | Rs. /KWH | 9.25 | 7.27 |
| - Through Steam Turbine Generator * | | | |
| i) Units | KWH | 135,959,656.00 | 130,657,348.00 |
| ii) Units per MT of Steam | KWH/MT | 428.69 | 421.36 |
| iii) Cost / unit | Rs. /KWH | 2.16 | 2.30 |
| 2. Coal** | | | |
| Quantity | MT | 347,989.16 | 358,358.44 |
| Total Cost | Rs. /Million | 1,038.83 | 1,055.78 |
| Average Rate | Rs. /MT | 2,985.24 | 2,946.16 |
| 3. Steam Purchased | | | |
| Quantity | MT | 66,672.79 | - |
| Total Cost | Rs. /Million | 63.11 | - |
| Average Rate | Rs. /MT | 946.54 | - |
| 4. Furnace Oil | | | |
| Quantity | KL | 22,494.37 | 25,036.87 |
| Total Cost | Rs. /Million | 686.74 | 701.30 |
| Average Rate | Rs. /KL | 30,529.56 | 28,010.50 |
| 5. Biomass Briquetts | | | |
| Quantity | MT | 3,264.00 | - |
| Total Cost | Rs. /Million | 14.53 | - |
| Average Rate | Rs. /MT | 4,452.13 | - |
| 6. Others/Internal Generation | | | |
| Internal Generation - Biogas | | | |
| Quantity | NM3 | 10,696,136.00 | 5,542,460.00 |
| Total Cost *** | Rs. /Million | 4.68 | 3.17 |
| Average Rate | Rs. /NM3 | 0.44 | 0.57 |
* Steam is produced in boilers using coal, biomass briquetts, fuel and gas.
** E grade coal is used for power generation and C/D grade coal is used for steamgeneration.
*** No raw material cost as it is produced from waste water only.
B. Consumption per Unit of Production
| | 2010-11 | 2009-10 |
| Pharmaceuticals & Life Sciences Products | | | |
| Electricity | KWH/MT | 364.62 | 367.79 |
| Steam | MT/MT | 3.28 | 3.71 |
| Furnace Oil | LT/MT | 49.14 | 57.98 |
| Coal | MT/MT | 0.01 | - |
| Biomass Briquetts | MT/MT | 0.01 | - |
| Bio Gas | NM3/MT | 9.62 | 10.20 |
| Pharmaceuticals & Life Sciences Products (Dosage) | | | |
| Electricity | KWH/NO. | 0.03 | 0.02 |
| Steam | MT/ NO. | 0.00 | 0.00 |
| Furnace Oil | LT/ NO. | 0.00 | 0.00 |
| Bio Gas | NM3/ NO. | - | - |
| Agri & Performance Products | | | |
| Electricity | KWH/MT | - | 55.96 |
| Steam | MT/MT | - | 0.03 |
| Furnace Oil | L/MT | - | 3.46 |
| Bio Gas | NM3/MT | - | 1.31 |
Note: There is no major variation in consumption of power and fuel from standard ofprevious year. Further, the Previous year figures are not comparable as these includefigures for demerged businesses.
B. Technology Absorption
(a) Research and Development (R&D)
The Company has R&D Centres in India at Noida, Gajraula, Nanjangud and Samlaya. TheCompany has 459 R&D Employees out of which 88 are doctorates and others are postgraduates and graduates. R&D supports the activities of various businesses through newproduct and process development, process optimization, absorption technology andestablishing technologies at commercial scale, focusing green chemistry guidelines.R&D is a focal point for the continuous improvements of existing processes throughoutthe life cycle of the product.
1. Specific areas where Company carries out R&D:
(i) Active Pharmaceutical Ingredients and Solid Dosage Forms
• Non-infringing Process development of generic Active Pharmaceutical Ingredients(APIs)
• Non-infringing process development of generic high potency APIs
• Selection & optimisation of optimum PolyState Form of generic APIs
• Value creation in existing APIs through process improvement
• Development of chiral molecules through chemical and biological process
• Development of generic solid oral dosage forms for Human and Veterinary usemeeting the Global Regulatory requirements
• Development of Novel Drug Delivery System
• Development of new validated analytical methods for non-compendia products andsending them to Pharmacopoeial committee for inclusion in the Pharmacopoeia
• Electronic submissions of ANDA filings in Regulated and Emerging markets
(ii) Biotechnology
• Bioethanol
• Microbial processes for the treatment of industrial effluents
• Bio composting
(iii) Proprietary Products, Exclusive Synthesis and Nutrition Ingredients
• Product/process developments in the area of pyridine and its derivatives andrelated heterocyclic chemistry
• Development of advance heterogeneous catalysts
• Extension of chemistry skills to non-heterocyclic compounds
• Value creation in existing key products through process improvements / processintensification
• Chiral compounds
• Technology development of vitamins, especially B-3
• Development of animal health care products
(iv) Contract Manufacturing Outsourcing (CMO) and Drug Discovery & DevelopmentServices (DDDS)
• Process development & optimization for Innovator, Biotech & genericPharmaceutical companies on FTE and Molecule basis, by providing creative chemicalsolutions
• Analytical protocol development service on FTE and Molecule basis
• Small-scale exclusive custom synthesis for pre-clinical and clinical studies
2. Benefits derived as a result of the above R&D
• Strong position in generic Pharma businesses in regulated markets
• During the year, 8 Abbreviated New Drug Applications (ANDAs) were filed with theUSFDA and 2 ANDAs approvals received, 5 EU MA’s were filed and 6 EU MA Rs. sapprovals received, 18 ROW applications were filed and 2 approvals received
• 18 ANDAs and 9 EU MA’s are under review with the regulatory agencies
• During the year, the Company filed 17 USDMFs, 16 EDMFs, 5 Canada DMFs, 4 JapanDMFs, 1 Singapore DMFs, 7 Taiwan DMFs, 6 Russia Registration, 1China Registration, 4 CEPs(COSs)
• Partners of choice for global pharmaceuticals and agrochemical companies
• Global leadership in selected segments of our business
• Development of new products
• Generation of own IPRs to provide competitive edge and during the year 18Process Patents were filed and 9 Process Patents granted for Chemicals and Life ScienceIngredients
• Major growth in export of our products
• Competitiveness in cost and quality
• Effective effluent management
3. Future Action Plan
• Process development for identified Active Pharmaceutical Ingredients and highpotency products
• Process development for identified dosage forms
• Novel Drug Delivery System research for new dosage forms
• Process development of new derivatives of Pyridine and related heterocyclicchemicals
• Process development for non-heterocyclic chemicals leveraging existing skills
• Development of New Vitamins technologies
• Bio transformations for the manufacture of fine and specialty chemicals
• Synthesis of chiral compounds
• Improvement in the fermentation technology and effluent management
• Continue use of statistical tools ( six sigma) in R&D’s for enhancedefficiency
• Draximage & Allergy Research
4. Expenditure on R&D
| | ( Rs. /million) |
| 2010-11 | 2009-10 |
| (a) Capital | 506.24 | 597.36 |
| (b) Recurring | 293.22 | 282.58 |
| (c) Total | 799.46 | 879.94 |
| (d) Total R&D expenditure as a percentage of turnover | 3.63% | 3.60% |
b) Technology Absorption, Adaptation and Innovation:
1. Efforts, in brief, made towards technology absorption, adaptation andinnovation
Research & Development plays a vital role in developing and adopting newtechnologies to enhance our operational efficiencies. We develop new technologies at thelab scale and the scientists and manufacturing engineers work in close co-ordination toseamlessly scale-up the processes to commercial scale without losing on the efficiency ofthe process with a lead-time comparable to the best in the industry. Six Sigma initiativesat plants and R&D support the adoption of new technologies and enhancing theefficiencies of our manufacturing plants to provide better services to our customers.
2. Benefitsderived as a result of the above efforts, e.g. product improvement,cost reduction, product development, import substitution etc.
The innovation in all the areas of our business results in new and more efficientproducts, which helps in improvement of the performance of our customers. Our R&D isgrounded in business reality and we measure the performance of our R&D through the newproduct launches over the last five years and their contribution to the net sales of ourCompany.
These continuous efforts result in more cost effective and improved in our services toour customers.
3. In case of imported technology (imported during the last 5 years reckonedfrom the beginning of the financial year): Not Applicable
| Technology Imported | Year of import | Has technology been fully absorbed? | If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. |
| | NIL | |
C. Foreign Exchange Earnings and Outgo
a) Activities relating to exports, initiatives taken to increase exports, developmentof new export markets for products and services; and export plans
• Activities relating to exports
Jubilant achieved 2.7% export growth over the previous year. During FY 2011, exportswere Rs. 11,522 million, as compared to Rs. 11,219 million in the previous year. Exportscontributed 52.35% of the net sales of the Company during FY 2011, as compared to 45.7%during the previous year.
• Initiatives taken to increase exports
The company performed well in its exports to Americas & Europe and the exports grewby 24.7% during FY 2011 as compared to the previous year. The company’s exports toAmericas & Europe were Rs. 6733 million during FY 2011, as against Rs. 5399 million ofthe previous year. The company during the year expanded its geographical base with itsentry in new European contries and emerging markets. The company continued its focus onCustomer Satisfaction, through a review of "Customer Satisfaction Index" duringthe year.
• Development of new export markets for products and services
Several new customers were added within the existing strong markets of Asia Pacific andMiddle-East. The Company initiated several key discussions with large Pharmaceuticalcompanies for development of intermediates in markets of South Korea, Japan and Turkey.
The Company also enhanced its presence and widened the customer base in its strongexport markets of Europe in the area of Life Sciences Ingredients and Solid DosageFormulations.
The Company substantially increased Bulk Exports of its Acetyls products which cater tomajor end use segments of Packaging, Printing ink, Starch Derivatives and Acetate Towmanufacturing in Europe.
The Company enhanced its presence in core activity of Life Sciences Ingredients byadding new products to the existing portfolio for the global pharmaceutical and agrochemical majors. The Company has developed several key intermediates which are in advancedstages of clinical trials paving the way for good future sales. The Company has beenaccepted as a responsible and reliable supplier of intermediates and services to
Global Pharmaceutical and Agrochemical majors which has resulted in exclusivemanufacturing and development contracts.
• Export Plans
Going forward, the Company intends to keep its focus on being Pharmaceuticals and LifeSciences major across the established markets, and introduce number of products in the newmarkets. Your Company would strive to sustain the existing business with its focuscontinuing on Proprietary Products in China. Its endeavor would be to explore markets inEurope, Japan, China and other emerging markets. Your Company would emphasize on givingcustomized service and being reliable partner, as product’s quality is already wellestablished in the other geographies.
• Approach towards Foreign Exchange Risk Management
The Company enters into foreign exchange forward contracts, currency and interest ratederivative transactions for the purpose of managing the risks on its receivables/payables, managing its assets or liabilities or in connection with a line of business andnot for any purpose other than those permitted by the Reserve Bank of India.
(b) Total foreign exchange used and earned
| | ( Rs. /Million) |
| 2010-11 | 2009-10 |
| Foreign exchange used | 7,080 | 6,637 |
| Foreign exchange earned | 11,392 | 11,015 |
STATEMENT U/S 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (PARTICULARSOF EMPLOYEES) RULES, 1975 AND FORMING PART OF DIRECTORS’ REPORT FOR THE YEAR ENDEDMARCH 31, 2011
| S. No | Employee Name | Designation & Nature of Duties | Qualification | Total Work Experience (Years) | Date of Commencement of Employment | Age | Remuneration ( Rs. ) | Previous Employment Held |
| | | | | | | | Designation | Name of The Company |
| A. | Employed For Full Year And In Receipt Of Remuneration For The Year Which In Aggregate Was Not Less Than Rs. 6,000,000 | | | | | | | | |
| 1 | Agarwal Ashutosh (Dr) | CSO-Chemicals & Life Science Ingrediants | M.Sc, Ph.D. | 31 | Aug. 20, 98 | 53 | 18,657,084 | DGM - Organic Chemical Busines s | Ballarpur Industries Ltd. |
| 2 | Agrawal Neeraj | CEO Generic | B.Tech (Elect.), MBA | 14 | June 02, 03 | 38 | 11,574,132 | Business Strategy | Mckinsey & Company |
| 3 | * Bang Shyamsundar | Executive Director-Manufacturing & Supply Chain Operation | B.Tech., M.Tech. | 41 | Feb. 01, 97 | 60 | 25,363,141 | President | Enpro India Limited |
| 4 | Bhaskar Rajesh | Head-R&D Formulations | M.Pharma | 26 | July 26, 04 | 51 | 12,061,147 | Associate Director | Ranbaxy Research Laboratories |
| 5 | Bisht Prakash Chandra | Sr. VP - Group Accounts | B.Com., CA | 24 | Apr. 23, 09 | 47 | 6,822,215 | Head - Accounts | Apollo Tyres Ltd. |
| 6 | Gupta Kulbhushan | Head of Bussiness Excellence & Six Sigma | B.E | 16 | Aug. 18, 03 | 39 | 8,073,222 | Quality Leader Training Development | IGE Ltd. |
| 7 | Khanna Ajay | President-Stat.& Corporate Affairs | B Com, LLB | 22 | June 01, 09 | 51 | 12,013,569 | Partner | Accenture |
| 8 | * Khanna Jag Mohan (Dr) | Executive Director -Science & Technology | M.Sc, Ph.D. | 45 | Aug. 16, 02 | 70 | 40,439,972 | President (R&D) | Ranbaxy Laboratories Ltd. |
| 9 | Khare V P | President - International Sales | B.Sc, Diploma In Export Marketing | 36 | May 15, 98 | 54 | 9,937,737 | Deputy General Manager | Rajasthan Petro & Synthetics Ltd. |
| 10 | Kumar Anil | President-Projects | B.Tech (Chemical) | 35 | Jan. 24, 06 | 58 | 9,910,240 | President- Technical | Bajaj Hindustan Ltd. |
| 11 | Mukherji Gour (Dr) | Head-Novel Drug Delivery Services | Ph.D. | 24 | Mar. 01, 05 | 51 | 8,531,481 | Vice President | Wockhardt Research Center |
| 12 | Rao T Venkataswara | Business Unit Head-Fine Chemicals | B.Sc, PGDBM | 28 | July 17, 86 | 53 | 9,500,186 | Sales Officer | Punjab Alkalies & Chemicals Ltd. |
| 13 | Sahrawat Samai Singh | Sr. VP - HR | MSW | 32 | Apr. 03, 89 | 56 | 6,474,589 | Assistant Manager | Hero Honda Motors Ltd. |
| 14 | Sankaraiah R | Executive Director - Finance | B.Sc., FCA | 27 | Sep. 09, 02 | 52 | 35,844,366 | GM - Finance | SRF Limited |
| 15 | Sengar Chandan Singh | President-Acetyls & Ethanol | B.Sc., MBA | 25 | July 13, 88 | 47 | 12,572,461 | Assistant Officer | J.K. Synthetics Ltd. |
| 16 | Sharma Arun K | Sr. VP - Group Finance | B.Sc., CA | 22 | Aug. 27, 03 | 45 | 6,913,533 | GM - Treasury & Financial Resources | Escorts Ltd. |
| 17 | Singh Sanjay | Head Human Resources (Global) | B Sc, P G Diploma-PM & IR | 19 | June 23, 09 | 43 | 11,602,561 | Vice President | Whirlpool |
| 18 | Soni Manoj Devendra | Chief of Supply Chain | B.Tech (Mechanical) | 26 | July 20, 07 | 49 | 6,346,654 | GM - Supply Chain | New Holland Tractors |
| 19 | SrIvastava A P | Sr. VP - Corporate Affairs | BA | 38 | Nov. 17, 90 | 65 | 12,637,118 | Manager | Reliance Industries Ltd. |
| 20 | Srivastava Rajesh Kumar | CEO - Fine Chemicals & CRAMS | B.Tech, MMM | 24 | Aug. 19, 00 | 46 | 20,979,811 | Marketing Manager | Ranbaxy Fine Chemicals Limited |
| 21 | Verma P K | Sr. VP - Projects | B.Tech | 36 | Apr. 18, 01 | 60 | 6,323,134 | Chemical Consultant | Alembic Ltd. |
| 22 | Yadav Pramod | CEO - Advance Intermediate & Vitamins | B.Sc. (Tech), MMM | 24 | Sep. 04, 95 | 48 | 15,054,645 | Marketing Manager (North) | Bhansali Engg. Polymers Ltd. |
| S. No | Employee name | Designation & nature of duties | Qualification | Total work experience (years) | Date of commencement of employment | Age | Remuneration ( Rs. ) | Previous employment held |
| | | | | | | | Designation | Name of the company |
| B. | Employed for part of the year and in receipt of remuneration which in aggregate was not less than Rs. 500,000 P.M. | | | | | | | | |
| 1 | Aggarwal Nidhi | Sr. VP – Investor Relations | B.Com, MBA, DBF | 20 | Sep. 01, 10 | 43 | 3,760,770 | AED – Investor Relations | Dalmia Cement (Bharat) Ltd. |
| 2 | Arora Amit | Sr. Vice President - Financial Planning & Analysis | CA, ICWA | 17 | Aug. 12, 10 | 40 | 4,210,593 | Vice President – Finance Operations | HSBC Electronic Data Processing India Pvt. Ltd. |
| 3 | Ghose Ashok Kr | President - Corporate Social Responsibility | M.E. | 41 | May 16, 97 | 66 | 2,492,208 | Additional Director - Environment | Steel Authority of India Ltd. |
| 4 | Kalsi Paramjit | AVP - Supply Chain | MA, MBA | 35 | Oct. 21, 89 | 59 | 2,598,769 | Executive Assistant | Ballarpur Industries Ltd. |
| 5 | Krishnan Vinod Sivarama | CIO-Global | BE-Electrical, PGDM | 14 | Sep. 01, 10 | 41 | 3,799,244 | CIO | Palladyne International Asset Manageme nt |
| 6 | Muhuri Goutam | President - R&D Dosage Forms | M. Pharma, Ph.D. | 20 | Dec. 15, 10 | 52 | 5,388,300 | Director, Pharma- ceutical R&D | Teva Pharmaceuti- cals Inc. |
| 7 | Pande Anant | President – Manufacturing | B.E. (H.) - Chemical, M.Sc. (H) - Chemistry | 24 | Apr. 12, 10 | 48 | 10,112,365 | Chief Operating Officer | Indo Greenfuel Pvt. Ltd. |
| 8 | Rambal Ashok Kumar | Chief of Manufacturing | B.E. | 24 | Sep, 01, 06 | 58 | 7,103,458 | VP-Manufacturing | Solaris Chemtech |
| | | | | | | | | Ltd. |
| 9 | Singh Parminder | Sr. VP & CIO | AMIME (Mech.) MBA | 23 | Jan. 12, 09 | 44 | 4,408,988 | Vice President | Genpact Ltd. |
| 10 | Tandon L R | Sr. VP - International Sales | B.Sc. (Engg.) MBA | 36 | Mar. 01, 93 | 59 | 13,575,184 | Asst. General Manager | Mohan Export Ltd. |
| 11 | Venkatraman Prakash | Growth Unit Head | B.E., MBA | 21 | May 10, 10 | 45 | 5,823,600 | Associate Vice President | Wockhardt Ltd. |
NOTES
1 * Employment of these are contractual. Employments of others are governed by therules and regulations of the Company from time to time.
2 All above persons are/were full time employees of the Company.
3 None of the above employees is related to any Director of the Company.
4 No employee out of above, falls within the meaning of section 217(2A)(a)(iii) of theCompanies Act, 1956.
5 Remuneration comprises salary, allowances and perquisites/ taxable value ofperquisites including perquisite value of ESOPs exercised.
Abbreviations: CSO- Chief Scientific Officer; VP- Vice President;AVP- Associate VicePresident, Sr. VP- Senior Vice President; CEO- Chief Executive Officer; CIO ChiefInformation Officer; AED Associate Executive Director; GM- General Manager.