Jubilant Life Sciences Ltd

Pharma & Life Sciences Growth

The demand for pharmaceutical products and services is seeing robust growth acrossemerging nations. Even as innovators strive to bring newer drugs and novel therapies tomarket to replenish sales lost on account of blockbuster drugs loosing patent protection,it is the generic dosage forms sector that is showing a sustained uptick. The developedworld is showing higher rates of adoption of these low-cost products which are widely usedin the developing countries. The US market for generics is expected to grow to over US$100 billion in the next two years.

Similarly agrochemicals have good potential to deliver. Years of stagnant investment inagriculture has pushed food grain output to a plateau. Proper use of agrochemicals andright quality of seeds is the least risky method of charting a revival in farmlandproductivity. The global crop science market stands at just under US$ 50 billion. Giventhe acute need to increase the food output to feed a growing world population, farmers areturning to crop protection & crop nutrition products. Globally Life Sciences, which isa tightly regulated market by nature, is thus seeing handsome growth.

Companies such as Jubilant Life Sciences are very well-positioned to offer expertiseand value to fellow pharma and life sciences companies –whether it is in developingprocess improvements, or supplying generic dosage forms or simply helping design anddevelop drugs of the future. With our complete range of outsourcing services we are wellaccepted as value creators in our chosen segments.

Outsourcing Opportunity

Pharma (CRO & CMO) - Global spending by the pharmaceutical industry on outsourcing(including CMO and CRO) which was valued at US$ 67 billion in 2010 is estimated to reachUS$ 90 billion by 2012. The global CMO market is growing steadily at a CAGR of 13% and isestimated at US$ 47 billion in 2011. India has captured a significant share of this marketopportunity with Indian CMO industry expected to garner US$ 3 billion in 2011, registeringa growth of over 40%. Similarly the Global CRO market is growing at a CAGR of 19%, and islikely to attain a size of US$ 28 billion in 2011. India is fast gaining recognition forits work in this area.

This growth in outsourcing is largely on account of global pharma industry experiencingdeclining growth and margin pressures led by National Governments bearing down expensivedrugs to rein in costs of healthcare delivery to an ageing populace. Patent expiry ofinnovator products that is crimping revenue & margins and declining R&Dproductivity is leading to an inadequate pipeline of new products.

The recent global economic slowdown has also catalysed the adoption of the contractmanufacturing model with innovators and generic makers alike searching for better qualityand optimal cost options. All of these factors augur well for the Indian Custom Research& Manufacturing Services (CRAMS) players.

India Opportunity

Indian companies are well equipped to capitalise on the opportunities in globaloutsourcing. These companies have strengthened their presence in the market by acquiringbetter technologies and developing expertise in niche segments that offer high margins andhave higher entry barriers. India offers tremendous advantage in terms of world-class USFDA compliant infrastructure set up by leading players, large talent pool, low R&D andmanufacturing cost and high capital efficiency.

Traditionally Intermediates and Active Pharmaceutical Ingredients (APIs) outsourcinghas been more prevalent in India; where around 64% of total outsourcing is in thissegment. However the scenario is changing rapidly as many Indian companies have expandedtheir offering to include dosage forms, injectables, bio-similars etc. under contractmanufacturing and have also built capabilities in the areas of contract research fordiscovery and development.

Over the years, some of the Indian companies including Jubilant have steadily moved upthe value chain and have significantly expanded their capacities and capabilities,sometimes through acquisitions to gain a foot hold in high value, niche areas likeinjectables and biologics. This capacity expansion has enabled Indian companies to offeradvantages of scale to the global pharmaceutical and life sciences industry. Jubilant hasalso been a pioneer in India, in the area of drug discovery and development by offeringintegrated solutions across target validation, discovery, pre-clinical and clinicaldevelopment.

Jubilant Life Sciences The Spirit of Partnership

Jubilant Life Sciences Ltd. is an integrated pharmaceuticals and life sciences companywith a presence across the pharmaceutical value chain. We have built a significantpresence throughout Life Science Products and Life Science Services businesses byleveraging upon the global scale of our operations. We are well positioned as an effectiveoutsourcing partner for the global pharmaceuticals and life sciences industry.

Our Life Science Products offering comprises Life Sciences Ingredients and Generics.The former constitutes Active Pharmaceutical Ingredients (APIs), Nutrition Ingredients,Proprietary Products & Exclusive Synthesis business and Life Science Chemicals whereasthe latter comprises Solid Dosage Forms, Radiopharmaceutical Products and AllergenicExtracts. Our Life Science Services offerings broadly include Contract ManufacturingOperations (CMO), and Drug Discovery & Development Solutions (DDDS).

Our philosophy has been grounded in partnering and value-creation. The niche we havedeveloped in outsourcing underlines our belief in partnering with our customers. Today ouroutsourcing business for pharmaceuticals and life sciences is one of the largest in India.We are proud to state that we partner rather than compete with the global biotech andpharma majors and this is the basis of our successful relationships and continued maturityas an outsourcing company.

We have been able to build a sustained partnership model on the back of our end-to-endoutsourcing infrastructure. For instance our APIs business is modeled to delivertrue-value to our customers, being fully integrated into raw materials and downstreamproducts of APIs. Solid Dosage Forms is a business that draws on indigenous productdevelopment through in-house R&D and partnerships with customers. Moving on, in ourCMO business we have taken the collaborative approach for growth in a market with highentry barriers. Similarly our integrated approach offered in drug discovery anddevelopment is anchored on trust and respect for Intellectual Property (IP). We areworking to deliver new product solutions by way of our partnerships with several pharma& bio-pharma companies and academic institutions.

We have seven manufacturing locations in India and three in North America. Our Indianmanufacturing facilities at Gajraula, Nira, Samlaya and Nanjangud have ISO-9001, ISO-14001and OHSAS 18001 certification. The APIs plant in Nanjangud, the Dosage Forms plant inSalisbury, Maryland, United States and the Sterile Injectables and Non-sterile productsmanufacturing facilities in Spokane, Washington, United States and Montreal, Quebec,Canada all are US FDA approved. The dosage forms plant in Roorkee, India also has

US FDA and UK MHRA approval. We have a state-of-the-art Drug Discovery Centre based inBengaluru, India. Our Corporate Headquarters and Central R&D centre are at Noida,Delhi NCR, India.

We export our products and provide services to customers in over 70 countries. We havemarketing subsidiaries in the United States, Europe and China to effectively penetratethese major markets. Jubilant Pharmaceuticals and PSI Supply focus on pharmaceuticalsregulatory affairs and supply of dosage forms business in Europe. Jubilant Pharmaceuticalsand Jubilant Cadista focus on manufacturing and distribution of solid dosage forms in theUS market.

The Company reported Consolidated Net Sales of Rs. 34,334 million for FY 2011 from itsproducts and services business lines. EBITDA for the year stood at Rs. 5,672 million withProfit after Tax at Rs. 2,297 million for FY 2011.

In FY 2011, international markets contributed 69% to the total revenue with 37% comingfrom North America and 16% from other regulated markets of Europe and Japan. Revenue fromEmerging markets recorded 36% growth in the year, followed by 14% revenue growth fromEurope and Japan markets.

Business Segment Wise Consolidated Net Sales Jubilant Life Sciences

Life Science Products

The Life Science Products business comprises Life Science Ingredients and Genericsbusiness and contributed 78% to total revenues at Rs. 26,849 million in FY 2011 from Rs.24,669 million in FY 2010 with EBITDA of Rs. 6,003 million and margin of 22.4% for theyear.

LIFE SCIENCE INGREDIENTS (LSI)

The LSI business comprising Active Pharmaceutical Ingredients (APIs), NutritionIngredients, Proprietary Products & Exclusive Synthesis and Life Science Chemicalscontributed 65% to total revenues in FY 2011 at Rs. 22,327 million as compared to Rs.20,840 million in FY 2010.

a. Active Pharmaceutical Ingredients (APIs)

Business USP: Developing APIs with non-infringing processes supported bystate-of-the-art R&D centre and pilot plant. Over a period of time we have become apreferred API supplier to leading pharma companies in Europe and US.

Business Overview: APIs are key active ingredients used in formulations and are alsoknown as bulk active substances or bulk drugs. APIs are typically combined with additionalinactive ingredients to produce formulations in the form of tablets, capsules or liquids.Our APIs are primarily sold to manufacturers of formulations of generic drugs, these aredrugs whose patents have expired in regulated markets. Our focus therapeutic areas includeCentral Nervous System (CNS), Cardiovascular System (CVS), Anti-infective, Anti-ulcerant,Analgesics, Anti-osteoporotic, Muscle relaxant and Urinary-antispasmodic.

Product Development & Filings: We are currently offering a number of APIsmanufactured at our commercial scale plants, of which Carbamazepine, Oxcarbazepine,Lamotrigine, Citalopram bromide, Risperidone, Donepezil and Olanzapine have marketleadership positions globally. We have filed 51 Drug Master Files (DMFs) in the US, 25DMFs in Canada, 24 DMFs in Europe, and 6 DMFs in Japan till March 31, 2011.

Growth Strategy: Commercialisation of the new Sartans production block which is one ofthe largest generic sartan capacities would be a key element for future growth and hasrevenue potential of US$ 60 million at full capacity at current market prices. Theproposed more than 50 new product launches in next 3 years with a primary focus ontherapeutic segments of CNS and CVS are expected to drive growth, tapping into anestimated market opportunity of US$ 1.3 billion. North Americas would see major portion oflaunches, though growth would be faster and higher in the European region. We also have astrong product pipeline with plans to file 39 DMFs in US, 20 in Canada, 46 EDMFs in EU and6 in Japan over the next 3 years.

Performance Overview: Revenues in FY 2011 stood at Rs. 3,372 million from Rs. 2,835million in the previous year. Our business delivered 19% growth on the back of good salesof existing products and additional sales from newer product launches. We remain thepreferred API supplier to leading companies in US and Europe and are ranked globally No.1for APIs like Valsartan, Carbamazepine, Oxcarbazepine, Lamotrigine and Pinaverium Bromideand No.2 for Citalopram & Risperidone.

Outlook: The outlook remains positive for our API business with almost 85% of salesbeing generated from US and Europe. We continue to remain a preferred supplier to some ofthe leading global pharma companies. Our capacity in Sartans will help us consolidate ourglobal presence and we expect the facility to run at high level of capacity utilisation.We plan to integrate our existing APIs with our solid dosage forms to improve synergiesand profitability through better supply chain efficiency and market mix.

b. Nutrition Ingredients

Business USP:

We are an integrated manufacturer of Vitamin Ours B3. is the lowest cost operationglobally. Besides Human Nutrition Ingredients, we are also present in Animal Nutritionproducts, through value addition.

Business Overview: We are backward integrated into Beta Picoline through ourProprietary Products and Exclusive Synthesis business to derive Niacin and Niacinamide.Ours is a global business based on outsourced manufacturing model with distribution ofproducts across the US, Europe and Emerging markets. We cater to the top 5 companiesglobally in each of our product lines. Our chief customers in Animal Nutrition includeintegrators, breeding farmers, feed millers, and formulator/pharma companies, commercial– broiler & layer farmers.

Product Development: We have developed various grades of Niacin and Niacinamide(Vitamin B3) suitable for human, pharmacological and personal care use. We are alsoevaluating to launch certain other products in the coming months under Human Nutrition.

In Animal Nutrition, we are the largest producer of Choline Chloride in India (alsoreferred to as Vitamin B4), an important feed additive for poultry. We also producevarious premixes based on vitamins or minerals or its combination, thereof. SpecialtyProducts such as growth promoters and liver protection products for poultry are also inour product portfolio. Here we have a range of launches planned over the next 3 years.

Growth Strategy: We aim to extend our global leadership in Nutrition Ingredients. Weare putting up a large for Niacinamide at SEZ, Bharuch, Gujarat along with 10,000 MTPA 3Cyano Pyridine plant, a key raw material for Niacinamide. The plant has an estimatedrevenue potential of over US$ 75 million at full capacity. The integration inBeta-Picoline will aid us as we create a pipeline of products to launch. In AnimalNutrition our aim is to expand our range with an exciting portfolio of products in dairyand aquatic sectors, while deriving benefit from our integration synergies within theCompany. Over a 3 year period we are aiming for a multi-fold growth due to enhancedutilisation of new capacity with new launches and newer applications in cholesterollowering market for Vitamin B3.

Performance Overview: Revenues in FY 2011 stood at Rs. 1,917 million from Rs. 1,966million in the previous year. Going forward, the good demand from markets in Europe andEmerging markets is expected to support the increase in volumes. We are focusing onreclaiming the corrections in realisations of our products in this business and remainhopeful that the momentum will improve.

Outlook: The Vitamins business holds a lot of promise for the future. Our backwardintegration and breakthrough technologies will enable us to continue to be one of thelowest cost and good quality manufacturer of Niacin and Niacinamide. This coupled withrobust sales and distribution in US, Europe and China will help us to further strengthenour presence. The Animal Nutrition business also looks positive in the domestic andinternational markets which would further boost our Nutrition Ingredients business.

c. Proprietary Products & Exclusive Synthesis (PPES)

Business USP: Lowest cost manufacturer of Pyridine and its derivatives through completevertical integration and continue our development efforts for new products inpharmaceutical and agrochemicals industries. Have more than 30 years of Pyridine chemistryexperience.

Business Overview: The PPES business comprises Proprietary Products and ExclusiveSynthesis businesses. Our Proprietary products portfolio includes key products namelyPyridine, Picolines, Piperidines, Cyanopyridine, Aminopyridines, Chloro &Bromopyridines manufactured under the Advance Intermediates, Fine Chemicals and CropScience Chemicals business units. We are global leaders in most of these products and havebeen growing our market share with all our customers thus retaining our leadership inthese products. In all our

Proprietary products, we are vertically integrated and use our own captive basic rawmaterials. This gives us a competitive edge in the market place against other globalmanufacturers. We offer various chemistry platforms like Vapour phase catalyticalReaction, High pressure (58 Kg) Reaction, High temperature (more than 2500C) Reaction,Amination, Chlorination, Bromination, Fluorination reactions and many more to manufactureour proprietary products. Our Exclusive Synthesis business mainly works with innovatorcompanies from early stage of development to offer intermediates and APIs for NCEs (NewChemical Entities) taking it through various stages upto launch and commercial scale.

Growth Strategy:

We strive to focus on reducing manufacturing cost by improving technology efficiencies;selling value added derivatives and products with potentially high margin applications.Growth in this business will be driven by expansion of our Pyridine capacity by middle ofFY 2012.

We are looking at commissioning plants for 2 new agrochemical actives and intermediatesand have planned new launches of fine chemicals and intermediates. We will continue toincrease our capacities by minimum investments coupled with debottlenecking of ourexisting facility at Gajraula to benefit from volume growth potential. We plan to increasebusiness with our existing customers and look at further penetration into the European andEmerging markets. Through newer applications of our captive raw materials like Pyridine& Picolines, our Fine Chemicals and Crop Science business is expected to steer growth,using existing and new facilities coming up in our Special Economic Zone (SEZ) at Bharuch(Gujrat), India.

Performance Overview: Revenue in FY 2011 stood at Rs. 9,492 million from Rs. 9,452million in the previous year. Although volume growth was at 8%, we witnessed pricingpressure on account of market conditions. We have focused on operating efficiencies andexpect to benefit from an opportune market environment through expansion in our productportfolio.

Outlook: The outlook remains positive for our PPES business despite pricing pressuresand uncertainties, with improved efficiencies in our processes technology and high captiveconsumption of Pyridine and its value added derivatives.

We would utilise Beta Picoline to produce 3-Cyanopyridine (3CP) and Niacinamide and usePyridine for large volume of Symtet (2,3,5,6-Tetrachloropyridine) which would help inincreasing captive consumption of our Advance Intermediates to manufacture value addedproducts. We expect to launch Symtet on a bigger scale and it is expected to be a bigbusiness driver in our forward integrated model with potential peak revenues of US$ 90million at full capacity of 24,000MT per annum. We look forward to penetrating into newerand high margin applications like Electronic grade Pyridine for Semiconductors chips,LCD’s & Optical Lights.

d. Life Science Chemicals

Business USP: A significant player in the global Acetyls market, including top-rankingpositions in products such as Acetic Anhydride (7th largest globally & 4th largest onmerchant sales basis) and Ethyl Acetate (7th largest globally), considering the newcapacities coming on stream later this year.

Business Overview: Our Life Sciences Chemicals (LSC) business segment produces variousOrganic Intermediates. Jubilant is present across the Acetyls value chain based ondownstream products of Acetic Acid and Ethyl Alcohol. Our products are typicallyprecursors to downstream products such as pharmaceuticals, aromatics, adhesives, food,packaging, beverages, crop protection chemicals, textiles and other solvents. Asignificant portion of our Organic Intermediates products is used for internal consumptionto manufacture value-added Fine Chemicals and APIs. Owing to our strengths in integrationand efficient manufacturing we have been able to carve out a market leadership position inSouth Asian Region for ourself.

We have capabilities to produce Acetyls from agro-based feedstock including molassesand alcohol. With this feedstock, we very often take the "make or buy" decision,depending on sector dynamics and our own operating imperatives. We have large storagecapacities to stock up our key raw material for extended periods along with largewarehousing capacity at Indian ports for our products and feedstock alike.

Product Portfolio: Our range of manufactured and traded products includes Acetic Acid,Acetic Anhydride, Ethyl Acetate, Carbon Dioxide, Ethylene Oxide mixtures, Mono ChloroAcetic Acid and Vinyl Acetate Monomer.

Growth Strategy: We are focused on completing and stabilising the current round ofCapex which will allow us to partake in a rapidly growing opportunity. We are employingmore marketing resources to support existing operations and to explore new markets,especially in the European and Middle Eastern region. Our growth plan also includesinvesting in infrastructure creation for our products in new markets. Focus continues onefforts to optimise our procurement of feed stock with excellent supply chain operations.

Performance Overview: Revenues in FY 2011 stood at Rs. 7,546 million from Rs. 6,587million in the previous year. Operationally the business demonstrated good uptick in salesperformance with key demand coming from India, Europe, Japan and

Emerging markets. The buoyancy in pharma and agrochemical industries for theseproducts, is driving volume growth for us. There was a good improvement in margins of thebusiness as well. We had certain high cost inventory of input materials which we havedrawn down completely thereby supporting the momentum in earnings. Our capacity incrementsare aimed at sustaining this pace of growth.

Outlook: The Acetyls business is on an upward trend on account of increasing domesticdemand coupled with demand from the US and Europe. Our successful roll-out in Europe andopportunities in the Far East should support growth momentum especially with the upcomingnew capacities.

GENERICS

The Generics business comprising of Solid Dosage Forms, Radiopharmaceutical Productsand Allergenic Extracts contributed to 13% of consolidated revenues in FY 2011 at Rs.4,522 million from 11% last year at Rs. 3,829 million, with 18% growth year on year.

Business USP:

Our Solid Dosage Forms business is positioned to derive benefit from backwardintegration with our APIs business and is supported by our in-house R&D facility forformulation development, regulatory filings and cost effective manufacturing.

Business Overview: We primarily supply to the US market, (presently 94% of sales isfrom US) where we have 11 products in the market, including few under supply to theVeterans Health Administration program. We have leadership position in US for Terazosinand Methylprednisolone, are amongst top 3 in Cyclobenzaprine, Hydrochlorothiazide capsule,Lamotrigine and Meclizine and in top 5 in Oxcarbazepine, PCP and Prednisone.

In the European market we are engaged in provision of regulatory affairs services,formulation development, licensing of marketing authorisations and supply of Solid DosageForms to Generic pharmaceutical companies. We have a portfolio of Dossiers, most of whichincorporate our in-house APIs, which we license to these companies.

We also offer turnkey products and services to Generic pharmaceutical companies byundertaking the supply of Solid Dosage Forms and APIs based on ANDAs and Dossiersdeveloped by us and arrange market authoriations and release for facilitating sales ofSolid Dosage Forms in European Union (EU) countries and North America. Our services alsoinclude upgrading/updating old Dossiers for cost/process effective solutions.

Our Solid Dosage Forms business develops over the counter drugs. In addition, wedevelop value-added formulations and special formulations, taste masking, flash tablets,oral dispersible forms, chewable tablets and modified release forms.

Product Development & Filings: We have 11 commercialised products in the US and 8in Europe. Our Generics business has a strong pipeline of products in various stages ofdevelopment. We have 18 ANDAs & 9 Dossiers awaiting approval as on March 31, 2011.There are plans to file 20 ANDAs in US, 10 in Canada and over 15 Dossiers in EU –which will create new growth avenues for us. We expect to have over 100 filings in variousmarkets over next 3 years .

Overall there is a team of about 100 scientists at Noida, developing dosage formsthrough non-infringing processes. Given our intention to stay within the realm ofoutsourcing it is imperative that our business model is based on partnership rather thancompetition.

Our laboratory is equipped with modern scientific instruments and has the ability todevelop solids, liquids, powders and ointments. It is currently focused on value-addedgenerics such as oral disintegration and chewable tablets.

Growth Strategy: Our primary objective is to drive unique advantage due to our verticalintegration with pharma intermediates and in-house

APIs. We remain open to partnering with larger players in the Generic space. We haveover 40 launches planned in focused therapeutic areas across geographies, 40% of which arein regulated markets. Over a span of 3 years we plan over 70 new launches across US,Europe and Emerging Markets. With 70% of revenues from products using our in-house APIs weexpect to gain competitive advantage and higher margins.

Performance Overview: Revenues in FY 2011 stood at Rs. 2,028 million, up 33% from Rs.1,519 million in the previous year. Our business delivered very strong growth on the backof good sales of existing products and additional sales from new launches. We enjoyrecognition for quality and execution capabilities backed by our strong regulatory focus.Given our global manufacturing presence we are in a position to launch and developproducts in regulated and emerging markets alike, thereby fulfilling the demand of lowcosthealthcare.

Outlook: We have an exciting pipeline of products lined up through FY 2014 and intendto have many products in key markets like Canada, South Africa, Russia and Brazil. We willget into partnerships with prominent distributors in these markets to extend our reach.

b. Radiopharmaceutical Products

Business USP: We provide a comprehensive suite of therapeutic and diagnostics nuclearimaging products and complementary equipments. Our I-131 solution-HICON, is the only USFDA approved product for radiopharmacies and has catapulted us into the top most suppliercategory.

Business Overview: We develop, manufacture and market Diagnostic Imaging andTherapeutic, Radiopharmaceutical Products. Radiopharma operates in a highly regulatedmarket. In the US our products are sold as kits through radiopharmacies and largehospitals. In the European market we have an agreement with a leading nuclear imagingplayer.

Our business is anchored by our expertise in R&D, Manufacturing, Quality Controlsand Regulatory Affairs. We have a portfolio of existing products like I-131 used in thetreatment of Thyroid Cancer and the related Smart-FillTM indigenous I-131 capsuledispenser; Macro Aggregates of Albumin (MAA) for Lung Imaging, Diethylene Triamine PentaAceticacid (DTPA) for Lung and Renal Imaging, Methyl Diphosphonate (MDP) for Bone Scan,I-131 Diagnostics for Thyroid Scan, Gluceptate for Kidney and Brain Imaging and Sestamibifor Myocardial Perfusion Imaging. We enjoy market leadership in North America in the I-131therapeutic line. We have dominant market share in North America for MAA and DTPA while weenjoy market leadership in Canada for MDP.

Product Development & Filings: We have re-launched Sestamibi, our diagnosticcardiac imaging agent used in Myocardial Perfusion Imaging (MPI). Further we are aiming toestablish a comprehensive portfolio of Single Photon Emission Computed Tomography (SPECT)products covering both Generators and Lyo-kits. This will be complemented by our range ofPositron Emission Tomography (PET) products and we would be the only players withofferings in both technologies.

Our Radiopharmaceutical division also has a number of other products in late stagedevelopment. This includes, a new molecular entity for therapeutic treatment ofneuroendocrine tumors in children, aimed at the North American market. Under SPECT we haveMoly-Fill to be launched in the US and generic Ceretec to be launched in both US andEurope. We also have Ruby-Fill, which is, a PET product, to be launched in the U.S.,Canada and Europe. Another important launch is Gadopentate, a contrast agent, for theNorth American markets.

Growth Strategy: To launch and establish our existing range of products in targetmarkets of US and Europe. We endeavour to develop a presence in India, where we launchedoperations in the year under review. Our new markets’ thrust includes the Middle Eastand Latin American region. We are keen to increase the size of our business throughstrengthened marketing initiatives for Smart-FillTM which is our own indigenous I-131capsule dispenser. Similarly we plan to derive upsides for our other products: MAA, DTPA,MDP, Sestamibi and ISO-Fill.

Performance Overview: Revenues in FY 2011 stood at Rs. 1,295 million, up 18% from Rs.1,098 million in the previous year. The key highlight of our performance was the re-launchof Sestamibi following resumption of supplies of the isotope used in the product. We havestarted receiving regular supplies from the now revived Canadian nuclear reactor. Moreoverwe have diversified our supplier of nuclear input materials by appointing two otherreactors in different continents. These would also support our growth plans for otherproducts hereafter.

Outlook: The Radiopharmaceutical business is one of our more exciting businesses andhas a lot of potential to grow. This business enjoys high entry barriers on account of itsnature. We plan to undertake various initiatives to improve the penetration of ourexisting products and are working to launch newer line extensions and products into themarkets. Also our efforts in entering newer markets like Spain, Germany, UK, France andemerging markets like India are expected to pay off.

c. Allergenic Extracts

Business USP: Manufacturing and supply of a wide range of US FDA approved humanallergen extracts used for immunotherapy across various allergen categories like Pollen,Mites, Envrionmentals, Venom, Mold and Food.

Business Overview: We are one of the leaders in North American immunotherapy andvaccine products and have the benefit of over 85 years of experience in this business. Weoffer up to 200 products which are sold both in bulk quantities and against customerprescribed preparation formats. In the US, our key customers include c o n v e n t i o n al allergists, ENT and other physician besides managed care and hospital based clinics.However, in Europe and Canada, we have partnerships with leading immunotherapy players anddistributors. Ours is the second largest allergy immunotherapy business in the US. InVenom category of products, we enjoy a niche and are one of the only two US based makersof stinging insect Venom Immunotherapy products.

Product Portfolio: Our product range includes diagnostics extracts and skin-testdevices for allergy scratch and intradermal testing. The business also offers acomprehensive scratch-test device portfolio of multiple and single tip devices. Some ofour key products include Venomil venom products, Acetone Precipitated (AP™) line ofextracts and QUINTIP & ComforTen™ diagnostic skin test devices.

Growth Strategy: We are determined to exploit our market share and product developmentcapabilities to build further niches in the US. Moreover we have plans to extend ourpresence in more geographies, especially in emerging countries including India.

Performance Overview: Revenues in FY 2011 were at Rs. 1,199 million from Rs. 1,212million last year. We continued to deliver a steady performance in this business withpositive growth in dollar terms.

Outlook: The prospects of Immunotherapy holds good especially in the US markets, sincethis market is one of the largest though least penetrated. The Company has undertakenvarious steps to drive growth and bring in efficiencies namely manufacturing of vialsin-house, increasing awareness of its products and sales force optimisation. Going forwardwe expect this business to grow bigger in current geographies.

Life Science Services

The Life Science Services business comprises of Contract Manufacturing Operations (CMO)of Sterile Injectables and Non-sterile Products, Drug Discovery and Development Solutions(DDDS) and Others. It contributed 22% of total revenues at Rs. 7,485 million in FY 2011from Rs. 9,190 million in FY 2010. EBITDA for the year was at Rs. 345 million with marginat 4.6%.

a. Contract Manufacturing Operations (CMO) of Sterile Injectables and Non-sterileProducts

Business USP: We are partners in global Contract Manufacturing of sterile injectablesand non-sterile products, through dual locations, with significant capacity acrossmultiple dosages. We service the top innovator companies in the world in our CMOinitiatives.

Business Overview: We provide CMO of Sterile and Non-sterile products and relatedservices and enjoy a large presence in the North American market. In fact, we are placedamongst the Top 5 within the North American CMO players. We have integrated CMO operationsacross 2 primary locations, our US and Canadian facilities. We are executing a large,multi-year contract for one of the innovator companies where we are supplying apre-determined basket of products.

Services Portfolio: We offer CMO services for a broad range of Sterile products such asVial and Ampoule Liquid Fills, Freeze-dried (Lyophilized) Injectables, Biologics,Suspensions and Water for Injection (WFI) diluents. We manufacture clinical trialquantities as well as quantities for commercial supply. Our Non-sterile products includeSolid Oral and Semi-solid Dosage Forms, including Antibiotic Ointments, DermatologicalCream and Liquids (Syrups and Suspensions), Capsules, Tablets and Powder Blends.

Growth Strategy: We are singularly focused on increasing the volumes with an eye onhealthy margins. Our marketing strategy has been fine-tuned so that we are able to developa credible order backlog.

Performance Overview: Our Net Sales in FY 2011 were at Rs. 5,265 million compared toRs. 6,616 million in the previous year. We reported a steady performance in this businessdespite the effect of the one-time order supplied for H1N1 vaccines, which was undertakenin the previous year. We experienced changes in customer demand and delays in theirsubmission approvals. Additionally, we saw reductions in key customer forecasts due toslowdown in the commercialisation of their products. We expect resumption of normalisedoperations as we progress into next year with much more focus on business development.Secondly we have undertaken an alignment of costs to our projections on deliveries, whichwill also translate into better profitability.

Outlook: We plan to increase the capacity utilisation of small volume parenterals inthe coming year. Also plans are underway to expand the support services in order to offera better value proposition to our business partners. In this year, initiatives are on tofurther improve the efficiency and reliability of operations along with optimum sourcingand cost saving initiatives. Focus has been sharpened on profitability improvement.

b. Drug Discovery and Development Solutions (DDDS)

Business USP: We offer integrated Drug Discovery and Development Solutions to leadingglobal pharmaceutical companies. Our business is spread across US, Europe and India whichgives us the flexibility to be close to our customers and offer best cost andtime-to-market solutions.

Business Overview: Our service portfolio under this business includes collaborativeintegrated drug discovery programs in chosen therapeutic areas. Under the functionalservices we undertake drug discovery in Structural Biology, Insilico Technologies

Chemistry. Our drug development activities pertain to clinical research from Phase I toPhase IV including clinical trials and data management in Oncology, CVS, CNS, Dermatology,Respiratory and Allergy Immunotherapy. We also have collaborations with 3 Academicinstitutions to develop new targets/ molecules for drug discovery and development.

The service is delivered against Research Fees, where cost of the research is coveredand includes some ‘discovery milestones’ and/ or development milestones, whichcovers royalty payments on launch of products.

Product Development & Filings:

Currently we are running 17 integrated research programs in collaborations with 7global clients. The therapeutic areas of focus are Oncology, CVS, CNS-Pain andInflammation.

Growth Strategy: Our objective is to drive forward our DDDS business through ourintegrated service platforms. Early stage development partnerships and aggressive businessdevelopment activity would drive future growth rates. We are focusing on innovativeattrition based deal structuring to minimise cancellation risks and expect this businessto contribute better to the earnings growth.

Performance Overview: Revenues in 2010-11 stood at Rs. 2,101 million. This performancehas been witnessed in the light of successfully integrating our research platforms andbeing able to successfully offer a gamut of services. However growth would have been muchhigher, but for reduction in research budgets by pharma sector undergoing a consolidationphase and dried up funding for mid-size Biotech companies from venture funds post therecession.

Outlook: Growth in discovery services business will be driven by increase in number ofintegrated collaborative programs which will lead to an increase in revenue from researchfunding. While Structural biological services would drive functional services growth,Medicinal chemistry will drive growth by higher capacity utilisation coupled with higherefficiency. We are expanding our capabilities to meet the needs of our clients inpreclinical development and early discovery. Global clinical services will be mainlydriven by Clinical Trial Management (CTM) and Clinical Data Management (CDM) services andnew contracts. Further integration of our US and Indian subsidiaries will drive costsynergies and help in expanding the product portfolio and margins.

c. Others

Our Healthcare business is operated through Jubilant First Trust Healthcare (JFTH)which focuses on providing ‘Better Care at Affordable Cost’, and ourbeneficiaries are spread across the middle-income population in the districts and towns ofWest Bengal, India.

We currently run two operational hospitals, located at Berhampore with 50 beds and atBarasat with 120 beds, in West Bengal. Jubilant Kalpataru Hospital, which is a 120-bedspeciality hospital set up in 2009 provides services such as Neurosurgery, Neonatal andPediatric Intensive Care. The hospital has a team of full-time doctors in major medicaldisciplines, who are also available on-call to extend emergency care to patients.

Operating Review & Outlook: Revenues in 2010-11 stood at

Rs. 119 million from Rs. 81 million in the previous year. We are looking at improvingprofitability without further capex in the short term.

Research & Development and Intellectual Property

In order to create value for our customers, we continuously invest resources inResearch and Development of new and existing products, which is reflected by the 1,336employees fully dedicated to R&D centres across our multiple locations. Our efforts inR&D have helped us develop our own intellectual property which is well protected indefined geographies of our business interests. Our intellectual property has been furtheraugmented through our acquisitions made over the years. Our production technologiestypically incorporate specialised proprietary know-how, developed and improved over aperiod of time. Depending on opportunities, we may grant licences to third parties to useour patents and know-how, and may obtain licenses from others to manufacture and sellproducts using their technology and know-how.

Manufacturing

Pursuit of excellence is the epicenter of all manufacturing initiatives at JubilantLife Sciences Ltd with sustainability as the underlying principle thus keeping focus onsafety and environment. All manufacturing locations have been constantly contributing tobusiness growth through innovative approach for minimising costs of operations.

Capacity debottlenecking through value engineering initiatives, energy conservation andsubstitution and implementation of World Class Manufacturing techniques (WCM) & TotalProductive Maintenance (TPM) have been significant contributors towards building a robustorganisation. Implementation of advanced maintenance management tool "Maximo" atmajor locations has helped in significant reduction of maintenance costs and improvementsin plant reliability & uptime.

All major manufacturing locations have in place, an Integrated Management System (IMS)and accreditations encompassing ISO 9001, ISO 14001 & OHSAS 18001. API manufacturingfacility which follows the cGMP guidelines has regulatory approvals from all majorcountries including US FDA. The dosage forms facility at Roorkee also has approvals fromUSFDA, UK MHRA and PMDA –Japan. With a strong foundation of manufacturing, theorganisation is adequately poised to scale even greater heights.

Supply Chain

Value creation through continual improvement within supply chain across the businesseshas been the approach to build excellence and create world class processes.

The seamless flow through the e-procurement buying process (EJ-BUY) which was startedlast year has now matured with negotiations and approvals happening on this platform. Thishas lead to transparency, visibility and faster processing of transactions across thevalue chain. This also supports our CSR initiative towards environment protection, withpaperless buying. This EJ-BUY process would be extended to more categories of materialsourcing for this year. The reverse auctions which have also been initiated on theplatform and are tools for better negotiations would result in cost reduction. Initiativeson alternate sourcing, consolidation and single window buying have been the otherinitiatives envisaged to bring more value within the buying process. The activities havebeen further extended to global sourcing initiatives with specific sourcing strategy forChina.

Our major initiatives on the SCOR (Supply Chain Operation Reference) model have broughtproper measurement systems which are able to measure the critical parameters for supplychain accuracy. They also improve the customer facing metrics by looking at ordermanagement process along with forecast accuracy measurement thereby continuously creatingvisibility across the end to end supply chain. We are also working with our suppliers totake initiatives on greening supply chain. In this, we are working with a target ofsustainable growth with our ‘Partners in Progress’ with a strong commitmenttowards environment while we learn and grow continuously along with our stakeholders.

Business Excellence

At Jubilant Life Sciences, Business Excellence entails value chain transformationstarting from the customer facing processes and spanning across all core functions ofSales & Marketing, Planning, Sourcing, Manufacturing and Distribution. Peopleinvolvement is a key to the success of this Companywide program which draws on selfmotivated Mission Directed Teams (MDT) for inter and intra functional synergy. Thebusiness strategy is used as a guiding document, a balanced scorecard is drawn out, gapsbetween current and future state identified and addressed through projects using theuniquely crafted Business Excellence (BE) Model and toolkit. These programs have been acommon thread across diverse businesses, geographies and product lines with an aim ofunified approach towards value enhancement.

With the core objective of making excellence the DNA of the organisation; BE Modelcomprises of systematic Process Reengineering & Quality Management tools namely Lean,Six Sigma, Total Productive Maintenance (TPM), Supply Chain Operations Reference (SCOR),Design for Six Sigma (DFSS), Innovation Management, Theory of Constraints (ToC) andBalanced Scorecard (BSC); which leads to continual improvement in business processes, animportant plank in the Company’s growth strategy.

The model governs the structure of the Business Excellence program and function. Adedicated team of Black Belts is placed at all sites to enable improvement projects andprograms. A wide variety of complex problems are solved using the structured approach ofLean Six Sigma. Company-wide project opportunities consisting of improvement targets arebudgeted annually and incorporated into the business plans. The team of black belts hascompleted more than 70 projects in the last financial year.

The Business Excellence programs are also driven bottom-up, with workgroup levelinvolvement in suggestion scheme titled "Sankalp" which has been instrumental increating grass-root level involvement and leading to significant financial gains. Morethan 5000 Sankalps have been implemented across all the sites in the last financial year.

One of the significant achievements of the last financial year is the multiple projectsconcluded in the area of Quality Improvement. Six Sigma was used to support processimprovement initiatives for customer returns in CMO businesses. Capacity enhancementacross various product lines in all Indian and North American sites was done using Leanprinciples leading to low cost expansion. Other than local improvements that harnessfunctional synergy, strategic transformation programs have been deployed.

One such program was implementation of Best-In-Class Sales and Operations Planningprocess at the formulations unit in North America, the backbone was an integrated Planning& Scheduling framework for improving Customer Service level. An end to endtransformation program was designed and effectively implemented to reduce delivery leadtimes in the radiopharma business which led to optimisation of raw material procurement.This raw material being radioactive and perishable in nature, this initiative lead tosignificant cost savings for the organisation.

The best practices developed internally are also shared across the organisation throughvarious communication channels and horizontal replication. Knowledge management isencouraged through reward and recognition programs. Accordingly a Business Excellence BestPrax Club was formed, which brings out a Knowledge letter ("K–Letter").This initiative has helped in seeding the ideas for future projects as well as enrolmentof more teams into the Business Excellence program. Business excellence model aims toconverge Innovation-Centric Value creation with improved efficiency and effectiveness incurrent operations.

Human Resource Management

We believe that people perform to the best of their abilities in organisations to whichthey feel truly connected. We are committed to creating an inclusive environment —one that is progressive, flexible and values the individual contributions of all of ourpeople. We’re proud to have a culture that brings out the best in individuals andencourages them to pursue excellence.

Talent Management

Our Strategic Talent & Succession Management Process launched with the objective ofshaping the competencies that organisation will need in future has been instrumental inaligning our Talent Strategy with our Business Strategy. After identification of thetalent pool of high performers, they are provided with focused development ranging from onthe job assignments to class room training. We nurture internal talent by providingopportunities of growth by way of lateral movement, job rotation, role enlargement, globalopportunities etc. We believe that acknowledging our top performers either throughpreparing them for higher role or giving them additional responsibilities will help retainour valuable employees and set them—and our Company—up for future success.

Development - We continuously strive to utilise the optimum potential of eachindividual by providing them development and knowledge resources in four major areas -Programs for leadership development, strategic initiatives, customised programs and SelfDevelopment Programs that help employees build their skills and knowledge in areas such astechnical, functional, behavioral, quality, environment, health & safety etc. We havebeen able to achieve the target of 3 Training man-days per employee and strive to take onhigher targets for future.

Talented professionals are our most vital resources besides cutting edge technology. Toexecute our growth and diversification plans, we continue to hire new, highly-skilledscientific and technical personnel. We recruit young graduates (Engineers) &postgraduates from leading Engineering & Business Schools each year as MT’s andGET’s.

High Performance & Rewarding Culture

Our performance driven culture that’s calibrated through rigorous processes isgeared to reward high performing individuals and teams to achieve challenging andstretchable targets. Rewards can take many forms, from competitive salaries, traditionalbenefits, performance linked pay to internal recognition for superior performance.

• Our compensation philosophy strives towards a pay for performance culturethrough our various compensation and benefits plans, short and long term incentive planswhich are based on a strong performance criteria both at individual and organisationlevel.

• We continuously reward our people for achieving breakthrough performance&/or demonstrating organisation values by means of our Reward & RecognitionProgram, "Applause". This includes a number of award categories like Spot-On,Star of the Month, Outstanding Team Award under which employees are rewarded in a timelyand effective manner throughout the year.

Employee Engagement

In continuation of our efforts to make Jubilant one of the best places to work for, wehave been conducting the Gallup Employee Engagement survey. In December’ 2010 surveyresponse of 87% was achieved from across the group. We strive towards building aparticipative and cordial work environment that enables maintaining a healthy work-lifebalance. We encourage our employees to seek personal growth and happiness by activelyparticipating in fun and wellness programs.

We have signed a policy on CII Code of Conduct on Affirmative Action which reconfirmsour commitment that equal opportunity in employment for all sections of society is acomponent of our growth and competitiveness. In view of our efforts to enhance ourEmployer Brand, we have revamped our new employee on-boarding process to have a focusedapproach towards integrating new employees into the company faster.

Internal Control

Systems & Risk Management

Internal Control Systems & Risk Management

Today’s business environment, remains challenging and risk management retains itshigh position on every organisation’s agenda. The business dynamics in terms ofglobal operations and continuous enhancement in product pipeline, capacities andtechnologies coupled with intensifying competition bring in new risks. An effective riskmanagement framework enhances the organisation’s ability to proactively address itsrisks & opportunities by determining a risk response strategy & monitoring itsprogress on an ongoing basis.

Jubilant’s Vision on Risk Management

To establish and maintain enterprise wide risk management capabilities for activemonitoring & mitigation of organisational risks on a continuous and sustainable basis.

Risk Management Framework

Our risk management framework is intended to ensure that risks are taken with duediligence and care and helps to identify, assess, prioritise, manage, monitor andcommunicate risks across the Company.

The framework operates with the objectives of proactively identifying and highlightingrisks to the right stakeholders; facilitating discussions around risk prioritisation andrisk mitigation; providing a framework to assess risk capacity and appetite and to developsystems to warn when the latter is getting breached and for providing an analysis that aformal and focused risk management process is facilitating reduction in residual risks.

Risk Management Strategy

Jubilant has a strong risk management framework in place that enables active monitoringof business activities for identification, assessment and mitigation of potential internalor external risks, given the established processes and guidelines we have in place, alongwith a strong oversight and monitoring system at the Board and senior management levels.Our senior management team sets the overall tone and risk culture through defined andcommunicated corporate values, clearly assigned risk responsibilities and appropriatelydelegated authority. We have laid down procedures to inform Board members about the riskassessment and risk minimisation procedures. As an organisation, we promote strong ethicalvalues and high levels of integrity in all our activities, which by itself significantlymitigates risk.

Risk Management Structure

Our risk management structure comprises the Board of Directors and Audit Committee atthe Apex level, supported by Executive Directors, Heads of Businesses, Functional Heads,Unit Heads, Divisional Heads of Accounts & Finance and Head of Assurance function. Asrisk owners, the Heads are entrusted with the responsibility of identification andmonitoring of risks. These are then discussed and deliberated at various review forumschaired by the Executive Directors and actions are drawn upon. The Audit Committee,Executive Directors and Head of Assurance function act as a governing body to monitor theeffectiveness of the internal controls framework. There is a perpetual internal auditactivity carried out by M/s Ernst & Young Private Ltd., who make an independentassessment of our risk mitigating measures and provide suggestions for improvement.

The Audit Committee, on a quarterly basis, reviews the adequacy and effectiveness ofthe internal controls being exercised by various businesses and support functions andadvises the Board on matters of core concern for appropriate redressal.

Risk Mitigation Methodology

Our Board along with professional managers try to identify risks at an early stage andtake appropriate steps to pre-empt or mitigate the same.

We have completed five years of our certification process wherein, all concernedControl Owners certify the correctness of about 1500 controls related to key operating,financial and compliance related issues, every quarter. This has made our internalcontrols and processes stronger and also serves as the basis for compliance with revisedClause 49 requirements mandated by the Securities and Exchange Board of India (SEBI). Wehave also identified entity level controls for the organisation, covering integrity andethical values, adequacy of audit and control mechanisms and effectiveness of internal andexternal communication, there by strengthening the internal controls systems and processeswith clear documentation on key control points.

Management’s Assessment of Risk

The Company identifies and evaluates several risk factors and makes appropriatemitigation plans associated with the same in detail. Some of the key risks affecting itsbusiness are laid out below.

Cost Competitiveness

The Company believes that it is a low-cost manufacturer for most of its products and isa major contender for outsourcing opportunities with global corporations offering productsthat also conform to quality standards set in developed markets. We continue to takeinitiatives in reducing our costs by employing Business Excellence initiatives.Significant variations in the cost as well as availability of raw materials and energy mayimpact our operating results. Where ever feasible, the Company enters into long termcontracts with volume commitments and prices which are linked to key input material pricesto mitigate risks.

Compliance and Regulatory Framework

We need to comply with a broad range of regulatory controls on testing, manufacture andmarketing of our products in the Pharma and Life Sciences space. In some countries,including the US, regulatory controls have become increasingly demanding leading toincreased costs and reduced operating margins for our line of products and services.Failure to achieve regulatory approval of new products can mean that we do not recoup ourR&D investment through the sale of final products. Any time change in regulations orreassessment of safety and efficacy of products based on new scientific knowledge or otherfactors could result in the amendment or withdrawal of existing approvals to market ourproducts, which in turn could result in revenue loss. This may occur even if regulatorstake action falling short of actual withdrawal. We have adopted measures to address thesestricter regulations by increasing the efficiency of our R&D process, reduce theimpact of extended testing and making our products available in time.

Environment, Health & Safety Risks

In the current business climate of reputational threats and rising political backlash,corporates need to tread carefully to maintain public trust. Social acceptance andCorporate Social Responsibility (CSR) have become increasingly important over the lastdecade. Compliance with stringent emission standards for the manufacturing facilities andother environmental regulations, may adversely affect the business. R&D, Life ScienceServices and manufacturing of products involve dangerous chemicals, process andby-products and are subjected to stringent regulations. The Company anticipates thatenvironmental laws and regulations in the jurisdictions, where it operates, may becomemore restrictive and be enforced more strictly in the future. It also anticipates thatcustomer requirements as to the quality and safety of products will continue to increase.In anticipation of such requirements, the Company has incurred substantial expenditure andallocated other resources to proactively adopt and implement manufacturing processes toincrease its adherence to environmental quality standards and enhance its industrialsafety levels.

At Jubilant, the challenges due to Company’s operations related to Environment,Health and Safety (EHS) aspects of the business, employees and society are mapped andmitigated through a series of systematic and disciplined sets of policies and procedures.For further details on EHS Risks and their mitigation plans, investors may kindly refer tothe Corporate Sustainability Report of the Company which is available on the website,www.jubl.com under the "sustainability" section.

Foreign Currency and Interest Rate Exposures

Foreign currency exposures on account of global operations could impact the financialresults of the Company. Foreign currency exposures arise out of international revenues,imports and foreign currency debt, including convertible bonds.

Constantly increasing interest cost may impact the profitability of the organisationadversely. To mitigate foreign currency related risks, a risk management team formulatesthe approach and reviews it dynamically to align it with external environment and businessexigency. Further, currency swaps and interest rate swaps are considered forimplementation on Company’s loans and interest rate exposures. A quarterly update onforeign exchange exposures, outstanding forward contracts and derivatives is placed beforethe Board, for information.

Acquire and Retain Professional Talent

The Company’s dependence on R&D activity makes it very important that itrecruits and retains high quality R&D specialists. In case the company fails to hireand retain sufficient numbers of qualified personnel our operating results and financialcondition could be harmed.

The Company has committed substantial resources to this effort given the competitionfor qualified and experienced scientists from biotechnology, pharmaceutical and chemicalCompanies, as well as universities and research institutes, in India and abroad. Toexecute its growth and diversification plans, while on one hand the Company continues tohire new, highly-skilled scientific and technical personnel staff, it also introducedRewards & Recognition policies for effective employee engagement.

Protecting Intellectual Property Rights (IPRs)

Our success will depend, in part, on our ability in the future to obtain and protectIPRs and operate without infringing the same of others. Our competitors may have filedpatent applications, or hold issued patents, relating to products or processes thatcompete with those we are developing, or their patents may impair our ability to dobusiness in a particular geography.

The Company in addition to patents has relied on trade secrets, know-how and otherproprietary information and hence our employees, vendors and suppliers signconfidentiality agreements.

Financial instability in other countries could disrupt Indian markets and our business

The Indian financial markets and the Indian economy are influenced by economic andmarket conditions in other major countries of the world. Investors‘ reactions todevelopments in one country can have adverse effects on the securities of companies inother countries, including India. A loss of investor confidence in the financial systemsof other emerging markets may cause volatility in Indian financial markets and in theIndian economy in general. Any worldwide financial instability, as experienced in recentyears across the globe, could also have a negative impact on the Indian economy which inturn could negatively impact the movement of exchange rates and interest rates in India.Accordingly, any significant financial disruption could have an adverse effect on ourbusiness and future financial performance.

Business Interruption due to Force Majeure

The Company’s largest manufacturing facility for organic intermediates is atGajraula, India. Any disruption or stoppage of work at this facility, for any reasons, mayadversely affect our business and results of operations not just for this but otherbusiness segments which depend on supplies from Gajraula plant. Industrial all riskinsurance protection has been taken by Jubilant to ensure continuity in its earningcapacity. Besides, the presence of a majority of the workforce in the residential colonyadjoining our plant premises ensures sustenance of plant operations under challengingcircumstances.

Third Party Liability Risks

The Company’s business inherently exposes it to potential liability from itscustomers or end users for defects in products and services, especially in highlyregulated markets noted for their litigious nature and high awards of damages. The Companycarries global product liability insurance program with respect to its major manufacturedproducts which provides a compensating safeguard against such risks, if they were tomaterialise.