Jubilant Industries Ltd Management Discussions

CAUTIONARY STATEMENT

Statements in the Annual Report, particularly those, which relate to Management Discussion & Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute forward- looking statements within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ significantly.

AN OVERVIEW OF THE GLOBAL ECONOMY

In todays world, global interconnectivity has reached unprecedented levels. Every region exerts influence on the others. Recognizing this intricate web of connections is essential for unlocking limitless growth potential. By understanding these dynamics, we gain a strategic edge in seizing opportunities and crafting forward-thinking strategies.

Relentless drive to sustain...

The global economy in FY 2024 remained resilient. According to the IMF, it stood at a modest and stagnant growth rate of 3.2%. Advanced economies witnessed slower growth rates due to the tightening of monetary and fiscal policies. Advanced economies grew at a pace of 1.6%, whereas emerging economies grew at 4.3%. This is projected to fall in the coming years due to softening of markets and increased policy tightening.

Inflation was at an all-time high in 2023, with headline inflation touching 6.8%. It is expected to fall in the coming years. IMF projects inflation to fall to 5.9% in 2024 and 4.5% in 2025.

Ongoing geopolitical conflicts and its impact.

The global economic landscape is increasingly affected by geopolitical conflicts across the globe. The ongoing Middle East conflict resulting in the Red Sea crisis impacted the global sea transport and its cost, coupled with the Russia-Ukraine conflict has hurt the global sentiments, leading to energy price hikes, food insecurity and disruption in trade flow. Russias isolation from global trade sets the tone for de-globalisation and isolationism. This can impact many economies deeply, as trade requires healthy intergovernmental relations and cooperation.

Impact on Manufacturing ...

Global manufacturing has remained stagnant in 2023 due to the recessionary headwinds in the global economy. United Nations Industrial Development Organisation (UNIDO) observes a 1.5% YoY growth in global production. Global output increased by a mere 0.2%. Year on Year also, every region has reported a net reduction in manufacturing except for China, as the country achieved a moderate growth rate of 2.7%.

Outlook for the coming years.

The global economy is expected to stand tough among the recessionary winds across the globe. It is set to grow at a modest 3% - 3.5%. Developing economies of Asia are predicted to grow faster than developed economies. Countries like China and India will be among the biggest beneficiaries if this prediction turns out to be true. Inflation is projected to reduce which will help in easing commodity prices. The outlook for the global economy is projected to be resilient, albeit with moderate growth.

AN OVERViEW OF iNDiAN ECONOMY

Despite the stagnant global economy, the Indian economy surprised the world with its agile and robust growth. It grew by 8.2% yearly, and economists expect this momentum to continue in the coming years. This growth helped India hit the US $ 3.9 trillion mark and made it the fastest-growing economy in the world (Source: https://www.imf.org/external/ datamapper/profile/IND).

The manufacturing sector grew by 9.9% compared to degrowth in FY 2023. Moreover, it is the second-highest growth after FY 2022. Mining and quarrying grew by 7.1% - the fastest in seven years. The construction sector grew at 9.9%. These sectors helped the Indian economy reach new heights.

iNDUSTRY SCENARiO

We operate in diverse sectors ranging from fertilizer; food polymers; performance polymers; wood-working adhesive and wood finish. Our performance is not only an indicator of the strategies we have adopted but it also depends upon the behavior of different sectors to which we cater.

Consumer Products Division: In FY24, The consumer products division is likely to encounter challenges as the industrys growth may plateau or experience a slight decline. Economic uncertainties and fluctuating consumer sentiments could contribute to this scenario. Demand across different segments of the consumer industry may vary, with construction activities potentially influencing certain sectors. Additionally, softening input prices might lead to a reduction in the final product price.

In Latex Business: Our products serve primaliary the tire industry. The Indian Tire Industry is supported by strong fundamentals, the primary drivers are rising demand for vehicles and sharp focus and continuous government investments in infrastructure sector. Additionally, a large and growing population of vehicles will continue to support tire demand in the replacement market. In FY24 domestic tire industry witnessed double digit growth owing to robust demand from OEM & Replacement segments and Indias tire exports, which represent around a fourth of the industrys overall revenues, declined on account of macro-economic headwinds impacting demand in the key export destinations. In last quarter recovery in exports also impacted by the Red Sea crisis, which has resulted in longer transit times for the key export destinations like Europe and the US and increased freight costs owing to longer routes.

In Food Polymers: our products serve the chewing gum and bubble gum industry. The Chewing/Bubble Gum industry somewhat recovered in FY 24, However, the industrys performance is still below its pre-pandemic levels. While there was a slight recovery, the industry faced significant challenges due to an exorbitant increase in the costs of raw materials and transportation. These cost increases also impacted on the margins of our Food Polymers business, although we managed to pass on some of these cost increases to our customers in the second half of the year. Overall, the Food Polymers business experienced growth this year, driven by

market share gains, the acquisition of new customers, and expansion into new geographic markets.

AGRi BUSiNESS

Agriculture is an important part of Indias economic and social structures. It is the principal source of livelihood for a sizable percentage of the population 60% approx and accounts for approximately 15% of GDP. The country has a broad agroclimate zone, which is predominantly dependent on rain, and grows a wide range of crops, including rice, wheat, millets, pulses, oilseeds, sugarcane, cotton, tea, coffee, spices, fruits, and vegetables. It is the worlds largest producer of milk, pulses, and spices, and has the worlds largest cattle herd, as well as the largest area under wheat, rice and cotton. It is the second largest producer of rice, wheat, cotton, sugarcane, farmed fish, sheep & goat meat, fruit, vegetables and tea. Indian agriculture confronts various obstacles, including fragmented landholdings, limited irrigation systems, unbalanced nutrient ratios and high reliance on weather.

The sector is mostly driven by Indias rapid population growth. Rising income levels in rural and urban areas, which have contributed to an increase in national demand for agricultural products, lend further support to this. In line with this, the market is being boosted by the increasing usage of cutting- edge techniques such as blockchain, artificial intelligence (AI), geographic information systems (GIS), drones, and remote sensing technologies, as well as the release of numerous e-farming applications.

The Indian Fertiliser Industry is an important and critical sector in the countrys agricultural development. India is one of the worlds top fertiliser consumers, because to its massive agriculture sector, and the business is critical to guaranteeing food security and increasing agricultural output. The industry includes the manufacturing of both chemical and organic fertilisers. India has limited domestic resources of P&K fertilizers, and relies heavily on imports from other countries. This makes India vulnerable to fluctuations in global prices and availability of these fertilisers.

In order to encourage the balanced use of chemical fertilisers and to promote alternative fertilisers like organic and biofertilizers, the Indian government has introduced PM PRANAM scheme to reward the Indian states and Union Territories. The new scheme will lower the subsidy burden and enable the government to direct the savings towards the adoption of innovative agricultural technologies and the betterment of farmers.

The government has also launched the One Nation One Fertiliser (ONOF) Scheme, which aims to standardise fertiliser brands throughout India. The Government will be undertaking a compressive review of the Agriculture research setup to bring the focus on raising productivity and developing climate resilient variety of crops.

The agricultural sector took a hit in FY 2024 due to high interest rates and a scanty unpredictable monsoon. It grew at a moderate rate of 1.4%. Despite this, agriculture constituted 17.7% of Indias GVA in FY 2024.

FiNANCiALS

The highlights of Consolidated Financial Results of the Company are presented below:

		( in millions)
Consolidated Profit and Loss	FY 2023	FY 2024
Revenue from Operations	14,705	12,509
Other Operating Income	24	24
Total Revenue	14,729	12,533
Expenses
Cost of Materials Consumed	9,485	6,862
Purchase of Stock-in-trade	281	325
Change in Inventories of Finished Goods, Work-in-progress and Stock-in trade	(227)	(91)
Employee Expense	1,064	1,298
Other Expenses	3,097	3,062
Total Expenses	13,700	11,456
ebitda	1,029	1,077
Other Income	29	14
Depreciation and Amortisation Expenses	142	151
Finance Cost	194	196
Profit/(loss) before exceptional items and tax from continuing operations	722	744
Exceptional items	—	335
Profit/(loss) before tax from continuing operations	722	409
Tax Expenses	194	117
net Profit After Tax	528	292

Revenue: The Consolidated Revenue from Operations during FY 2024 stands at 12,533 million against 14,729 million in FY 2023, resulting in a de-growth of 15% due to lower volume in P&K Fertilizers segment and Raw material price declined in performance polymers.

Total Expenditure: Total Expenditure stands at 11,456 million in FY 2024 as against 13,700 million in FY 2023. Major expense heads for the Company include Raw Material costs, Manufacturing costs, Employee benefits expenses and Selling General and Administrative expenses.

EBITDA: In FY 2024, the Companys EBITDA stood at 1,077 million compared to 1,029 million in FY 2023.

BUSiNESS SEGMENTS

Business Segment wise consolidated revenue from operations:

( in millions)

composition of Sales	FY 2023	FY 2024
a) Performance Polymers & Chemicals	9,308	9,578
b) P&K Fertilizers	5,293	2,823
c) Agri Nutrients	128	132
Total	14,729	12,533

Consumer Products and Performance Polymers

Business Profile - Our Consumer Products division specializes in Wood Working Adhesives and Wood Finishes.

4 Jivanjor stands out as a prominent name in the wood working adhesives sector. Our water-based adhesives are known for their quick setting time at room temperature and superior bond strength, which significantly enhance the durability of furniture and fixtures. Our product portfolio also encompasses a variety of specialty adhesives that cater to diverse requirements within the water-based category. Additionally, we offer contact adhesives that are synthetic rubber-based, providing rapid drying and excellent performance in vertical lamination applications.

4 Under our Wood Finishes brands Charmwood and Ultra Italia PU, we offer a comprehensive wood finishing system, as well as stains and ancillary products for the decoration and protection of wooden furniture. Our wood finishing system comprises Gloss and Matt variants of Melamine finish, Nitrocellulose finish, and PU Alkyd finish. These systems exhibit remarkable fast drying properties and offer resistance against stains and scratches. Moreover, our wide range of Wood stains allows for the creation of unique colors that cater to various consumer preferences. To ensure successful application, we also provide ancillaries such as sealers and thinners. Furthermore, we have ventured into the premium wood-finish market with our exclusive Ultra- Italia range of PU products.

With a nationwide distribution network, our brands Jivanjor, Charmwood and "Ultra Italia" are major players in their respective segments.

Wood Finish

ULTRA ITALIA

New Product Launches in Imported PU range

The company a constant emphasis on innovation, delivering unique offerings to our customers and channel partners.

As a testament to this commitment, we are thrilled to announce the launch of our new logo and packaging. Our new logo and packaging symbolize evolution, growth, and modernization while staying true to our heritage and commitment to excellence. The refreshed packaging embodies our renewed focus on sustainability, quality, and aesthetics, ensuring that our products not only meet but exceed expectations.

Our journey towards this milestone involved close

collaboration with both our R&D team and Verin Legno, our esteemed Italian partner. This strategic partnership has enabled us to enhance our product range, bolstering competitiveness and appeal across the market spectrum.

A comprehensive approach to innovation was undertaken, taking into account the diverse needs of stakeholders such as architects, contractors, dealers, and our sales team. The introduction of stains and Metal Primer addresses architects preferences for distinctive and less common options in the market.

In the past year, we successfully introduced innovative products such as Polyester, Acrylic PU, water-based PU, Floor Coating, and Special Effects, further demonstrating our commitment to pushing boundaries and exceeding customer expectations.

Food Polymers

Business profile - Jubilant is one of the leading supplier of Polyvinyl Acetate (PVAc) to the chewing gum industry. PVAc is the major raw material for making gum base for chewing gum and bubble gum. Our brand names under this category are Vamipol 5, Vamipol 14, Vamipol 15, Vamipol 17, Vamipol 30, Vamipol 60 and Vamipol 100 The customer profile of the Company in this business includes the market leaders in chewing gum industry worldwide.

industry Overview - Sugared chewing gum sales are declining due to consumers preference for sugar-free confectionery. However, Sugar free gums, which attract health-conscious consumers, and which also provide additional benefits of dental care, and also functional gums like energy gums, caffeine gums are expected to see a stronger growth rate albeit with a lower base.

Chewing gum has several direct substitutes such as mints, mouth-freshening sprays, and bubble gum. Apart from the direct substitutes, there are some indirect ones, like candies and toffee. The preference for mints over chewing gum is likely to affect the demand for gums in the coming times.

Business Performance - Despite substantial challenges this year, the SPVA business achieved improved profitability, attributed to enhanced cost management strategies and improved customer realizations.

Business Strategy - The business strategy revolves around two key pivots - New customers, and New product/ application development. During FY 2023-24, the business has worked around these pivots and has been able to include some new customers in Japan, Turkey, Europe and South America. We also increased our global market share through our regular customers, which helped with the volume increase this year. The business continues to have strong plans for new customers acquisition in international markets and share gain plans in the food polymers space.

Latex Business

Business Profile - We are amongst the largest manufacturers in India and globally of VP Latex which is used in dipping of automobile tyre cord and conveyor belt fabric. The Company also produces SBR and NBR Latex. The Company is bulk supplier of these lattices to global automobile tyre manufactures and dippers. The products under this category are Encord VP Latex and Encord SBR Latex. Another product Encord NBR Latex is used in automotive gasket jointing.

industry Overview - VP Latex is used to impregnate man made fabrics and enable the adhesion of fabrics to the rubber of automobile tires and conveyor belts.

Synthetic Latex Industry achieved growth in domestic and export markets, defying global slowdown signals in the

second half of the year due to Red Sea Crisis. Significant raw material price hikes in the first half of FY24, resulting in higher final product costs, the second half saw a decline in raw material prices, prompting corresponding adjustments in finished goods prices. The Indian tire industry effectively sustained growth momentum in domestic market throughout the year, while there is marginal decline in export in second half of year due to external pressures

Business Performance - In FY24 Latex Business achieved double digit growth and maintained a dominant market share in Domestic Market and continued to increase its market share & geographic presence in Exports Market.

Business Strategy - In FY 25, business development activities in the domestic & international market continue to be a focus area while maintaining share and margins in respective markets. At the same time to explore potential opportunities to enter into other lattices segments.

Agri Business

Business Profile - In Agribusiness, we offer a comprehensive range of Agri-input products in the Crop Nutrition category under the prestigious brand "Ramban". This brand has established a strong foothold in Uttar Pradesh, Uttarakhand, and Bihar, as well as in Rajasthan and Madhya Pradesh. Our company manufactures Single Super Phosphate (SSP) in both powder and granulated forms, reinforced with vital elements such as Boron, Zinc, and Magnesium, in accordance with the Fertiliser Control Orders (FCO) standards. In addition, we make and sell Sulphuric Acid in chemicals and Bio-Poshan, and Shakti-Zyme in bio stimulant category.

The RAMBAN brand is well-known and popular among the farming community. We, Jubilant, are the market leaders in the SSP segment in Uttar Pradesh and Uttarakhand.

Marketing Activities

The company has undertaken various marketing activities to raise awareness about the benefits of our products and to establish the Ramban brand.

Fertilizers have played a crucial role in agricultural production, supplying essential nutrients for crops and experiencing growing demand over the years. In India, an agrarian country with a substantial number of small and marginal farmers, issues like low productivity and suboptimal quality persist. Crops are predominantly rain-fed and cultivated on the same plots over time, leading to declining soil fertility in many regions. Consequently, there has been an increased reliance on nitrogen fertilizers in the country. In response, the Indian government has initiated economic reforms and ensured the availability of fertilizers at affordable prices to enhance productivity. Due to subsidy eligibility on notified fertilizers, the Indian fertilizer industry has been able to provide enhanced food security for the country. While agriculture is heavily dependent on the use of fertilizers, the government has met almost all demand for chemical fertilizers.

The most used phosphatic fertilizers are Diammonium Phosphate (DAP), NPKs and SSP. Urea stands as the most highly consumed fertilizer among nitrogeneous fertilizers.

SSP is a multi-nutrient fertilizer containingPhosphateas primary nutrient and Sulphur and Calcium as secondary nutrients. SSP is also fortified with Boron and Zinc as the deficiency of micro nutrients in Indian soils is gradually increasing. Hence, fortified SSP will be handy to the farmer to address the deficiencies of Boron, Zinc, Sulphur and Calcium etc.

DAP is the worlds most widely used phosphorus fertilizer. It is popular due to its relatively high nutrient content and its excellent physical properties. DAP is a source of phosphorus (P) and nitrogen (N) for plant nutrition.

NPKs, also called compound fertilizers, are fertilizers which contain all three nutrients, nitrogen, phosphorus, and potassium in different proportions. There are many types of NPK products in the market based on different nutrient recipes.

Nano Urea Liquid, is the only Nano Fertilizer approved by the Government of India and included in the Fertilizer Control Over (FCO). It is developed and patented by IFFCO. It is nanotechnology based revolutionary Agri-input which provide nitrogen to plants, save soil and increase the production. Its objective is to reduce the consumption of traditional Urea.

The government of India is willing to strengthen SSP industry. For this, with the guidance of DoF, FAI has constituted a Task Force (TF) to improve the quality of SSP and to promote it as an alternative of DAP.

SSP contributes 17% of the total Phosphatic segment (DAP, NP/NPK and SSP) during 2023-24 in India

The sales trend other Phosphatic fertilizers is mentioned below: -

Fertilizers	2017-18	2019-20	2019-20	2020-21	2021-22	2022-23	2023-24
DAP	18.32	19.97	24.15	22.49	19.91	24.91	20.55
NPK	5.50	6.90	5.91	6.16	5.52	5.30	8.29
SSP	3.78	3.97	4.43	5.25	5.36	5.68	4.18

Business Performance -

The companys expansion into new states has driven remarkable business growth, bolstered by a heightened focus on innovation that has led to an enriched and diversified product portfolio.

Business Strategy -

The use of smart farming practices, notably biologicals and other alternative fertilisers, is transforming agriculture by enhancing crop health and increasing environmental sustainability. The companys strategy includes expanding into Gujarat, Maharashtra, Chhattisgarh, and West Bengal, as well as strengthening its dealer network in Bihar, Rajasthan, Madhya Pradesh, Haryana, and Punjab with value-added products such as Fortified SSP with Zinc, Boron, Magnesium (Super Formula and Ultra Gold) in the chemical fertiliser segment and Shakti Zyme and Bio Poshan in the biologicals category, which will result in higher crop yields and better value prospects.

RESEARCH AND DEVELOPMENT iNiTiATiVES

Our commitment to Research and Development (R&D) and cutting-edge Technology forms the foundation of our success. With state-of-the-art R&D and Technology centres that adhere to international standards. Research and Development plays an important role in innovation and developing new technologies and new infrastructure that can be leveraged for seamless scale up of new products. R&D inputs to six sigma, play a vital role to foster the implementation of new technologies and enhance the efficiency of our manufacturing plants.

Jubilant has successfully developed launched many products in Consumer business.

R&D is fully involved in innovation and development of new technology & products and recipe optimizations, which provide better customer satisfaction and edge over competition in Consumer business. Jubilant has successfully developed new technology platforms in latex business, relevant to unmet customer needs. Collaborative product development with the end user has been put in place.

MANUFACTURiNG

We practice world-class manufacturing processes in our day to day operations, assuring our customers with unmatched quality and timely delivery of products through innovation and cutting-edge technology. Transforming manufacturing for operational excellence and sustainability with "zero tolerance to any non-compliance" is our core focus.

Sustainable growth has also been supported by proactive approach to regulatory compliance. During the year many initiatives have been taken up in areas like energy conservation, water conservation, Batch cycle time reduction, cost optimization and improving machine up-time through sustainable engineering practices etc. in all manufacturing plants

Use of mixture of agro waste like Rice Husk with coal, started at Kapasan plant, for replacing non-renewable fuel (coal) for hot air generators. At Gajraula we are using only renewable Fuel like Rice Husk for hot air generators thereby completely replacing Coal consumption. To embed continuous improvement into the companys DNA, and to further enhance its People, Process and System capabilities, various transformation methodologies Greenbelt methodology and 5-S, have been deployed across the manufacturing function. Many other initiatives have been taken across plants to strengthen EHS (Environment, Health and Safety) systems. Various measures to control fugitive emission at fertilizer plant at Gajraula have been taken.

We have continued emphasis on compliance to regulations, GMP (Good Manufacturing Practices) through continuous assessment and review of quality systems with industry guidelines and regulatory standards.

We have formulated Environment, Health and Safety (EHS) Policy, applicable to all locations irrespective of the type of operations and geographies. The policy outlines the fundamental ideology of not only complying with the regulatory standards but also excelling in improving its EHS performance through continual improvement approach. The EHS policy acts as a guiding principle for identifying, addressing and eliminating or mitigating any impacts/risks arising from resource utilization, processes, unsafe working conditions, waste, effluent generation or emissions. We value health and safety of the people above all and the need for preventing Pollution. EHS management systems have been one of the integral part of our business at all manufacturing locations.

Our Gajraula plant received below awards during the year.

4 Greentech Safety Award, for plants performance in Safety Excellence.

4 Four Star Rating from VZ-RSI (VISION ZERO RATING SYSTEM) for outstanding achievement in Safety Health and Wellbeing for Sustainable business growth.

4 ECOVADIS certificate for Sustainable Performance Our Savli plant received below award during the year

4 ECOVADIS certificate for Sustainable Performance Our Sahibabad plant received below award during the year

4 Greentech Environment Award", for Environment Excellence

4 Certificate of Appreciation", from NSCI (National Safety Council of India), for Safety performance.

Our Kapasan plant received below award during the year

4 Four Star rating in Environment Excellence award

SUPPLY CHAiN MANAGEMENT

In line with our unwavering commitment to excellence, we are proud to highlight our robust and strategic approach to supply chain management. The company upholds a resolute collaborative partnership with our valued suppliers, a partnership founded on transparency, trust, and shared success. Our supply chain management strategy is meticulously engineered to not only meet but exceed the expectations of our customers. We are proactive in identifying and mitigating potential supply chain risks, ensuring an uninterrupted flow of high-quality materials and components. By fortifying these measures, we ensure a stable and sustainable source, safeguarding the reliability of our products and services.

In FY 2024, the company took major initiatives to reduce costs by better inventory management, increased suppliers Credit terms, and alternate vendor development for A class RM, PM & Indirect Purchases. The business planning cycle was strengthened through S&OP (Sales & Operations planning) and S2F process improvements.

The finished goods, logistics and distribution structure of the Companys consumer products business was also remodeled this year for lower inventory yet not compromising on product availability and OTIF dispatches. Few geographically closer warehouses were merged so that the overall inventory got reduced.

Going forwards, we shall continue focus to develop alternate suppliers for key Raw Materials (Specially for Imported RM, Indirect Purchases & Capital Equipments), Packing Materials we shall continue to target and achieve higher levels of efficiency across categories with a primary focus in the area of Raw Material and logistics while ensuring delivery of value to our end customer.

HUMAN RESOURCES - "OUR KEY DIFFERENTIATOR"

At Jubilant Agri and Consumer Products, our employees have always been at the core of our strategy. This year was a consolidation year wherein the strides and initiatives taken during the last year spanning across all the businesses were critically reviewed on the stage gated success milestones.

Our teams across business were pivotal in driving the initiatives and were ably supported by adequacy of resource alignment to ensure each of our employees succeeded in their respective accountabilities. Our People processes, starting from the Organization design, Talent acquisition, Onboarding, engagement, and capability building were tightly aligned to the business strategy thereby acting as a catalyst.

At Jubilant Industries, we ensure an ethically compliant workplace, work ethos and a high level of corporate governance for our employees. We review our policies and people processes to make sure we are competitive across the relevant markets. We are confident in our strides, we assess and evaluate our hits and misses, we learn from both to fuel our journey of continual improvement.

"Caring, Sharing and Growing" are our core guiding principles, which are radiated through our integrated Talent Management initiatives, which is closely knit to the business strategy. This defines who we are and what we stand for.

Workforce planning is a live action agenda that we undertake. The markets and the customer needs are dynamic and so are our organization structure where each region, each product line and each customer is adequately touched through the dynamic and resilient organization plan that we create and sustain. Our people structures reflect a high level of customer centricity. New requirements stemming out of these structures are met through internal talent or infusing the right talent from the market.

Succession planning and internal talent dashboards are reviewed periodically to identify possible voids and plans created to ensure adequacy of talent across all critical and unique rolls. Critical positions have been filled either through internal talent portability or some critical capabilities have been addressed through lateral hires. The target setting exercise is done in a top down flow to ensure adequate sanctity and transparency across the organization.

The focus for the last two years has been to ensure a transition as a digital organization. The core team at the corporate office and a pool of strategic partnerships are working round the clock to ensure a phased digital ecosystem for all the businesses. The digital strategy is two pronged while the key focus has been to ensure that the work life of our field champions transforms, and the internal back-office system also experiences a digital revolution to ensure holistic integration. The digital blue print is based on our vision of giving "The Power to You", empowering our customer facing employees to leverage this technology edge and deliver superior customer delight and improved business results.

Driving excellence across processes has been another key initiative. As we speak, the Sales Excellence vertical works very closely with the B2C businesses delivering on the two Ps, people capability and process. All customer-interfacing roles get assessed for competencies to ensure "The Jubilant Way of Selling" is delivered across the geography. This also includes the influencer engagement teams who have the key responsibility to engage with influencers and deliver the sell-out. The training and certification programs are delivered Pan-India and this investment is showing early promising signs translating in to business results.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

Risk-taking is an inherent trait of any enterprise. It is essential for growth or creation of value in a company. At the same time, it is important that the risks are properly managed and controlled, so that the Company can achieve its objectives effectively and efficiently.

internal Financial Control Framework

Section 134(5)(e) of the Companies Act, 2013 requires a Company to lay down internal financial controls system (IFC) and to ensure that these are adequate and operating effectively. Internal financial controls, here, means the policy and procedure adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. Our Internal Financial Controls (IFC) system has been established with policies and procedures that incorporate all the five elements:

4 Orderly and efficient conduct of business 4 Safeguarding of its assets 4 Adherence to Companys policies 4 Prevention and detection of frauds and errors 4 Accuracy and completeness of the accounting records and timely preparation of reliable financial information

In addition, we have a transparent framework for periodic evaluation of the IFC through periodic internal audits and quarterly online controls self-assessment through Controls Manager software. This reinforces the Companys commitment to adopt the best corporate governance practices.

implementation of internal Financial Controls

To compete in industry, stringent Corporate Governance and financial control over operations is essential for the Company. To ensure a robust Internal Financial Controls framework, we have worked on three lines of defence strategy:

4 Build internal controls into operating processes: To this end, we have ensured that detailed Delegation of Authority and Standard Operating Procedures (SOPs) for the processes are followed, financial decision making is done through Committees, IT controls are built into the processes, segregation of duties is clear, strong budgetary control framework exists, the entity level controls including Code of Conduct, Ombudsperson office etc. are established.

4 Create an efficient review mechanism: We created a review mechanism under which all the businesses are reviewed for performance once in a month and functions are reviewed once in a quarter by the Chief Executive Officer (CEO).

4 independent assurance: We have appointed a Big Four firm as our internal auditors to perform systematic independent audit of every aspect of the business to provide independent assurance on the effectiveness of the internal controls and highlight the gaps for continuous improvement.

To improve the controls in operations, we have established, for each line of business, the concept of financial decisionmaking through operational committees. The entire purchase, credit control and capital expenditure decisions are taken jointly in committees. The key roles of these business committees are as under:

4 Purchase Committee ensures high quality purchases at economical cost and maintains reliability of supplies from reputed suppliers with long-term relationships.

4 Capex Committee ensures cost reduction with proper negotiation and monitors time and cost overrun.

4 Credit Committee evaluates the credit risk and approves the maximum specific credit which can be provided to any particular customer. This committee approves the credit limits annually and is empowered to make changes as and when required.

The Audit Committee act as a governing body to monitor the effectiveness of the Internal Financial Controls framework.

Risk Management

Our Vision on Risk Management

To establish and maintain enterprise wide risk management capabilities for active monitoring and mitigation of organizational risks on a continuous and sustainable basis.

Risk management strategy

The Company has a strong risk management framework in place that enables regular and active monitoring of business activities for identification, assessment and mitigation of potential internal or external risks. The Company has in place a well-established processes and guidelines along with a strong reviewing and monitoring system at the Board and senior management levels.

Our senior management team sets the overall tone and risk culture through defined and communicated corporate values, clearly assigned risk responsibilities and appropriately delegated authority. We have laid down procedures to inform Board members about the risk assessment and risk minimization procedures. As an organization, we promote strong ethical values and high levels of integrity in all our activities, which by itself significantly mitigates risk.

Risk Management Structure

Our risk management structure comprises the Board of Directors and Audit Committee at the Apex level, supported by the Managing Director, Business Heads, Functional Heads, and Unit Heads. As risk owners, the Heads are entrusted with the responsibility of identification and monitoring of risks. These are then discussed and deliberated at various review forums chaired by the Managing Director and actions are drawn upon. The Audit Committee, Managing Director, and CFO act as a governing body to monitor the effectiveness of the internal financial controls framework.

Risk Mitigation Methodology

We have a comprehensive internal audit plan exercise which helps to identify risks at an early stage and take appropriate steps to mitigate the same. We have completed twelve years of our certification process wherein, all concerned Control Owners certify the correctness of controls related to key operating, financial and compliance, every quarter. This has made our internal controls and processes stronger and also serves as the basis for compliance as per Regulation 17 (8) read with regulation 33 (2) (a) of Listing Regulation as stipulated by SEBI.

Management s Assessment of Risk

The Company identifies and evaluates several risk factors and draws out appropriate mitigation plans associated with the same. Some of the key risks affecting it businesses are laid out below:

Competition

The Company operates in a competitive business environment in each of its business segments. Climatic conditions have a pivotal role to play in Agri Products prospects. Uncertainty in monsoons and non-uniform distribution of rainfall has repercussions like sudden change in cropping pattern, pest attack, and changes in output prices of commodities. All these factors highly impact the demand and supply balance of fertilizers.

The movement of bulk fertilizers requires timely availability of carriers and railway wagons (rakes) which at times get affected due to movement of other commodities at the same time. In addition, price movements in the international market for alternatives to SSP such as DAP and NPK complexes, poses risk in the form of consumer preference for these alternative products thereby impacting demand for SSP.

In Agri Products is dependent on climate which plays a vital role. The SSP demand is influenced by the availability and import prices of other bulk phosphatic fertilizers like DAP and NPK complex which create intense competition in the market and an alternative to the farmer.

Further, the increase of international price of raw material like rock phosphate, Sulphur also affect the SSP selling price while giving an opportunity to the farmer to opt for alternative products such as DAP /NPK.

Government NSBS Policy and guidelines will also impact the demand and selling price of SSP.

In Consumer Product business, low involvement of consumer and price sensitivity makes the Company dependent on channel and influencer for creating demand for its products. The Company has worked out strategies to expand distribution channel, build up product portfolio in high growth segments and strengthen brand usage among influencers with loyalty programs and various interactive marketing initiatives. The company will also embark on a Brand Affinity building drive with End Consumers to establish JivanJor as a strong player in the Adhesives category in their consideration set. This will, in sync with various influencer programs, help amplify brand usage across.

In the Food Polymers and Latex business, the Company contends with international competition including China benefiting from cost advantages. Additionally, export- oriented activities face rivalry from European counterparts within an industry experiencing limited growth, resulting in pricing pressures among the top players. Despite these hurdles, robust customer and account management initiatives have secured long-term commitments, driving profitable outcomes in FY 2024. Plans are in place to replicate this success and sustain growth in the coming years.

Cost Competitiveness

The Company believes that its growth and market position is due to the quality & customer service that it stands for. Rising input prices amidst inflationary market conditions pose a risk to the Companys ability to remain price competitive and build profitability to drive future growth. Volatility in prices of raw materials any surge in logistics, cost may have a significant impact on operating margins.

The Company continues to take initiatives to reduce costs by business excellence initiatives, value engineering in RM & PM with support of R&D & alternate suppliers. Wherever feasible, the Company is entering into long term contracts with volume and price commitments with suppliers/PSUs. Alternative supply sources are being identified to negate the adverse impact of short supply of raw materials and R&D initiatives being evaluated to develop cheaper / easily available alternatives. The focus is also on improving profitability by increasing supply chain and R&D effectiveness, thereby reducing manufacturing costs.

Foreign Currency Fluctuations

Foreign currency exposures arising out of international revenues and significant import of key raw materials could adversely impact the profit margins of the Company. Depreciating rupee poses a risk of imports becoming dearer and raw materials more expensive. Further, volatility and uncertainty in Forex rates creates challenges in determining the right price of the product in the market.

The Company does not use any derivative financial instruments or other hedging techniques to cover the potential exposure as the net foreign currency exposure is not significant.

Capacity Planning and Optimization

As a part of its growth strategy, the Company makes investments to expand capacity and service capabilities and focuses on debottlenecking the existing plants. Debottlenecking/process improvements helped in generation of additional capacity with the available resources in Adhesives, SPVA plants. Additional capacities, through new equipment, have been created in the Latex plant. This is critical to achieve our business objectives of driving growth and maintaining market leadership. Non-availability of sufficient capacity due to delayed commissioning, cost overruns and inability to deliver as per standards, can significantly impact achievement of revenue targets, margins and expected return on investment (ROI). It can also result in customer dissatisfaction and an adverse impact on reputation. Uncontrollable breakdowns and idle capacities may contribute to inefficiencies in the manufacturing process. Similarly, unutilized capacity for short periods due to power breakdown, unavailability of labor, transport strike etc. may impact the ability to meet customer demand and garner market share.

The Company has robust processes in place to continuously monitor planned capacities and utilization ratio, aligned with good manufacturing practices and coprehensive Preventive maintenance plan. The Company takes additional initiatives to commit to customer orders only after taking into consideration the key capital projects planned for execution. The Companys growth objectives are aligned with the project team execution plan. It periodically embarks on

debottlenecking and other initiatives to improve efficiencies and build additional capacities.

Portfolio and mix: Product and Customer Concentration

A balanced portfolio in terms of customers, markets and products is critical for the Company to be able to execute business strategies and monitor the impact of decisions. Any change in customers organization behavior, needs or expectations may adversely impact the competitive position and margins of the Company. A high customer concentration poses a risk of sudden fall in revenue and margins and share of business due to any change in consumers needs and trends, preference for a competitor and /or liquidity crunch due to inability to collect dues from customers.

Agri Product, to meet emerging nutrient deficiency in crop produce which creates malnutrition condition, fertilizer industry in collaboration with Government of India makes continuous efforts to provide nutrient rich fertilizers to farmers. This helps farmers maintain crop yields and thus get higher returns. Jubilant also played its role in maintaining soil health and increasing crop yields by introducing more product under FCO - Boronated SSP(Granular), Zincated SSP (Powder), Zincated SSP (Granular), SSP fortified with Boron and Zinc (Super Formula - Granular) and SSP fortified with Boron, Zinc & Magnesium (Ultra Gold).

Business is in process of launching Mono Zinc, Nutri mix 5% (State Grade) and Bio-Poshan

As a part of business planning and periodic review meetings, the Company strives to identify and explore new profitable markets for its products as well as new downstream opportunities in terms of applications and alternative uses of the products available in its portfolio.

Food Polymers and Latex business, an over-dependence on single product or few customers, may adversely impact the realization of long term business objectives in the event of any regulation limiting the end use application. We continue to address this issue by adding newer customers as well as applications to the portfolio. Efforts on the Food Polymers continue but the challenge remains with limited customer base and even in that a few holding by far the majority share. Failure to effectively / optimally utilize co-products as per strategy may result in inventory build-up, distress sale and forced losses.

As a part of business planning and periodic review meetings, the Company strives to identify and explore new profitable markets for its products as well as new downstream opportunities in terms of applications and alternative uses of the products available in its portfolio.

Human Resources - Digital Experience

A Digital work life is a new way of working that brings with it the challenge of affecting this change management across the organization covering employees and even trade partners.

The organization has a clear vision and the same is being communicated with conviction to all the stakeholders. The toll to create a positive impact and succeed at Jubilant will be availability of adequate information with the employees managing the internal and external customer experience. Adequate resources are being deployed to ensure our digital initiatives are user friendly, secure and cleared post UAT. Training is being provided to all the stakeholders on the features of the digital interface to ensure a holistic ownership and commitment to this initiative.

Human Resources-Acquire and Retain Professional Talent

Our talent management strategy is anchored on the postulate that synergic teams ensure long-term success.

While on one hand, we continually review and assess our talent requirements to be in line with the market and competition, we are always open to external stimulus to bring onboard relevant talent from the market to further the velocity of our initiatives.

The Company has invested in talent planning, assessing and refining the most impactful parts of our hiring process by soliciting feedback from candidates and recent hires to better understand their experience and take the processes of recruitment, selection and onboarding to the next level.

Succession plans for critical roles are aggressively perused to address the inevitable impact on the business objectives in case of talent drain. Many internal movements have been executed which have yielded a positive impact for the organization.

Cross-functional teams at work ensure adequacy of empathy and sensitivity across business and function teams. The organization lays an overarching focus on utilizing the CFTs to mitigate live wire challenges across the board.

Our performance management system starting from target setting, cascade and then the performance assessment is adequately anchored across the financial targets for the organization. The assessment is data centric and differentiates "High Performance High Potential" employees. The sales incentive programs are also strongly aligned to the focus initiative for the specific period which ensures an extremely high level of commitment of the teams to the action agenda.

The Company continues to hire new and specialized talent for scientific and technical roles also, further cemented through the engagement programs being the reward and recognition programs. Focused capability building through need based training programs are provided to identified employees at all levels.

The organization is adequately poised to have an aggressive business plan for the new year which is based on the adequacy of a holistic people strategy.

distribution channel and Brand Recall

In Agri Products, for better brand recall and to impart product knowledge, it is important to engage with all stakeholders regularly through various activities. In Agri Products, various promotional activities are conducted at field level to generate awareness among the farming community/ channel partners etc. These activities include spot farmer meetings, shop/ wall/trolley paintings, dealer and retailer meetings, farmer consultations/ visits, jeep campaigns, field demonstrations, Kisan melas and field days. Crop and region-specific POP material also aid in raising product awareness among the stakeholders.

In Wood Adhesives and Wood Finishes business, the Company competes nationally with both National and Regional players, with a strong network of Distributors and Dealers, which ensures availability of our products across the length and breadth of the country. As distributors and dealers play a significant role in driving consumer behavior, managing their loyalty, continuity and commitment is of paramount importance to succeed.

The Company has earmarked several brand building initiatives to carry-out tailored programs for specific markets to maximize return on investment (ROI). To widen its distribution network, it plans to expand its distribution footprint in unrepresented markets and dealer-segments. Also, processes are being streamlined to manage distributor inventory and its liquidation which would in return offer better returns to distributors and hence secure their long term loyalty and commitment.

In Consumer Products business, the Company has started interactive CRM program to effectively reach out to its various stakeholders.

R&D effectiveness

Innovation in terms of new products, new applications and new cost saving techniques of manufacturing and building a robust product pipeline is critical to the success of the

Company. Failure in innovation and inability to build a robust product pipeline, which can be commercialized in a timely manner, may adversely impact the Companys competitive position. Risk of developing products which do not meet the required quality parameters may also significantly impact the Companys reputation and result in loss of future business. It is equally critical for the business to innovate new applications to maintain its leadership position.

The Company has robust plans in place with earmarked budgets and investments in R&D aligned to the business plans. Business teams keep a constant check on new technological advancements and work with R&D to sponsor these specific projects. This is complemented by a dedicated R&D team which keeps itself abreast of the regulations, upcoming technology changes and leading practices.

Compliance and Regulatory

We need to comply with a broad range of statutory compliances like obtaining approvals, licenses, registrations and permits for smooth working of our business, and failure to obtain or renew them in a timely manner may adversely impact the operations. For businesses like Latex and SPVA, compliance has become a critical factor due to ever increasing demand from key customers to obtain international approvals and licenses. Failure to achieve regulatory approval of new products can mean that we do not recoup our R&D investment through the sale of final products. Any change in regulations or reassessment of safety and efficacy of products based on new scientific knowledge or other factors could result in the amendment or withdrawal of existing approvals to market our products, which in turn could result in revenue loss. This may occur even if regulators take action falling short of actual withdrawal. We have adopted measures to address these stricter regulations by increasing the efficiency of our R&D process, reducing the impact of extended testing and making our products available in time.

In Food Polymers business, plans have been implemented to comply with regulations that have come in force in the recent past, both in India and in relevant markets. Further, developments in the regulatory space are being continuously monitored.

Environment Health and Safety (EHS)

In the current business climate of reputational threats and rising political backlash, corporates need to tread carefully to maintain public trust. Social acceptance and Corporate Social Responsibility (CSR) have become increasingly important over the last decade. Non-compliance with stringent emission standards for the manufacturing facilities and

other environmental regulations may adversely affect the business. Manufacturing of the Companys products involves hazardous chemicals, processes and by-products and is subject to stringent regulations. Proximity of plant locations to residential colonies amidst rapidly changing urbanization dynamics poses additional risk to its business.

The Company anticipates that environmental laws and regulations in the jurisdictions, where it operates, may become more restrictive and be enforced more strictly in future. It also anticipates that customer requirements as to the quality and safety of products will continue to increase. In anticipation of such requirements, the Company has incurred substantial expenditure and allocated other resources to proactively adopt and implement manufacturing processes to increase its adherence to environmental standards and enhance its industrial safety levels.

The challenges due to the Companys operations related to EHS aspects of the business, employees and society are mapped and mitigated through a series of systematic and disciplined sets of policies and procedures.

Various awards/accolades received for EHS performance, are listed in section named "Manufacturing"

Business interruption

The Companys core manufacturing facility for a majority of its business is concentrated at Gajraula, India. Any disruption or stoppage of work at this facility, for any reasons, may adversely affect our business. Besides, the presence of a majority of the workforce in the residential colony adjoining our plant premises ensures sustenance of plant operations under challenging circumstances.

Other external interruptions- Fertilizers being partly subsidized important Agri input; are under government regulations. Any changes in government policies need creation of awareness among dealers, retailers, and farmers etc. to ensure smooth implementation at ground level. Changes in the rainfall patterns also affect the business directly. The major change in fertilizer sector policy is that of DBT, Training of retailers/ farmers and information sharing with sales staff is crucial for smooth business functioning and to avoid any gaps.

Industrial Chemical- Sulphuric Acid is also facing stiff competition as the RM prices have up surged and the prices are highly volatile in nature. Hindustan Zinc Limited (HZL) produces Sulphuric Acid as a byproduct of their smelting activities. HZL makes most of the demand and supply dynamics and plays with market sentiments by sometimes supplying at rock bottom prices. This affects all the key manufacturers present in the market including us.

The administrative controls and volatility in market impact cash flows and impose additional cost to business.

In Food Polymers business, adequate finished goods inventory is being maintained at stock points within the factory, as also close to the main markets/customers, to maintain supplies to key customers in the event of any stoppage of manufacturing operations. This inventory cover, however, would be for a limited period. The risk of impact on business in case of a prolonged stoppage / interruption of operations remain.

In Latex business, the manufacturing facility is at Samlaya, Vadodara, India. Any disruption or stoppage of work at this facility, for any reasons, may adversely affect our business.

Butadiene is one of the major raw material used for

production of VP & SBR Lattices. Butadiene is currently available from limited manufacturers in the country. Being gaseous in nature it is not possible to import Butadiene in small parcels and there is limitation of storage, hence procured from domestic suppliers only. If there is an issue with the availability of Butadiene due to an unplanned shutdown taken by domestic suppliers, the production of lattices would be affected adversely.

To mitigate this risk, we have business relationships with multiple suppliers and keep an adequate inventory of Butadiene. We are also exploring to enhance the storage capacity of Butadiene at plant.

Industrial All Risk insurance protection has been taken by Jubilant to ensure continuity in its earning capacity.