Jubilant Industries Ltd Management Discussions

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Jubilant Industries Ltd Share Price 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.

Key Economic and Industry Trends

Global economy: The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID-19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, particularly in the United States and many emerging market and developing economies. Further, the ongoing retrenchment of Chinas real estate sector and slower-than-expected recovery of private consumption and the ongoing tension between Russia and Ukraine have limited the growth prospects.

Outlook

Global economic growth is projected at 3.6% in 2022 after a strong bounce back in 2021. The outlook is mixed with reopening of economies supporting greater demand coupled with challenges of Eastern Europe conflict having direct and global spill overs through commodity markets. In addition, there is the continued impact of lockdowns with new bottlenecks in global supply chains.

Infiationisexpectedtoremainelevatedforlongerperiod driven by commodity price increases and broadening price pressures. For Calendar Year (‘CY) 2022, inflation is projected at 5.7% in advanced economies and 8.7% in emerging markets and developing economies.

Energy prices have recorded unprecedented increases especiallynaturalgaspricesinEuropewhichrosesharply above baseline in 2022. Growth in the United States (‘US) is expected to be 3.7% in CY 2022, moderating to 2.3% in CY 2023 due to faster withdrawal of monetary support as policy tightens to rein in inflation. The European Union (‘EU) and the United Kingdom (‘UK) economies are expected to grow by 2.8% and 1.2% respectively in CY 2022. Among the Emerging Market and Developing Economies (‘EMDE), China is expected to grow by 4.4% in CY 2022.

India is expected to grow at the rate of 8.2% for CY 2022 and 6.9% in CY 2023. Growth is forecasted to be 4.6% in Middle East & Central Asia while 3.8% in Sub-Saharan Africa region for CY 2022.

Source: IMF World Economic Outlook April 2022

Review of Indian economy and growth outlook

Indias Gross Domestic Product (‘GDP) growth is estimated to be 8.2% for CY 2022 as against the real GDP growth rate of 8.9% in CY 2021. This growth is despite the impact of higher oil and commodity prices weighing on private consumption and investment. COVID-19 vaccination has played a critical role in minimizing loss of lives, boosting confidence in the economy towards resumption of activities and containing the sequential decline in output. 96% of the adult population has been vaccinated with the first dose, while 82% of the adult population and over 3.4 crore children in the 15 to 18 years age group are fully vaccinated. Vaccination drive has further been extended to the age group from 12 years which has further boosted peoples confidence of returning to normal.

In India, Consumer Price Index (‘CPI) inflation had moderated to 5.2% in FY 2021-22 (April-December) from 6.6% in the corresponding period of FY 2020-21 but has edged upto 6.1% as recorded in February 2022. Energy and food prices are major contributing factors to headline inflation. Risks are tilted to the upside amidst sanctions from the West and raw material shortages. The Government revenues have been growing from robust tax incomes. In February 2022, Goods and Services Tax (‘GST) collection recorded a year on year (‘y-o-y) growth of 17.6%, crossing the Rs 1.3 lakh crore mark. Total expenditure during April-January FY 2021-

22 registered a growth of 11.6% over FY 2020-21, with capital expenditure and revenue expenditure recording growth of 22% and 9.9% respectively.

Export/Import: Exports registered a growth of 25% on a y-o-y basis. Export growth was broad-based, with ten major commodity groups accounting for around 80% of exports of the expansion above pre-covid level. The improvement in export performance stemmed from higher value of shipments of engineering goods, petroleum products and chemicals. High import demand was driven by higher demand for petroleum products, electronic goods and gold. Import growth was broad-based, with major commodity groups accounting for more than 75% of imports recording an expansion above their pre-covid levels. Crude imports increased by 41.7% in February 2022 over Covid levels, reflecting the rise in crude oil prices.

Source: IMF World Economic Outlook April 2022, State of the Economy RBI Bulletin-March 2022

Indias Gross Domestic Product (‘GDP) growth is estimated to be 8.2% for Curent Year 2022 Agriculture Overview

Agriculture is the primary source of livelihood for about 58% of Indias population. The share of the sector in total GVA (Gross value Added) of the economy has a long-term trend of around 18%. The share of the agriculture & allied sector in total GVA, recorded 18.8% in 2021-22, which was 20.2% in the year 2020-21. Besides, it provides crucial backward and forward linkage to the rest of the economy. Government of India has launched various policies and Yojna to support for the agriculture sector growth like,

Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan) Benefits under the PM Kisan plan have been delivered to about 11.78 crores farmers as of February 22, 2022, and Rs 1.82 lakh crores (US$ 23.97 billion) have been released to qualified recipients across India in various payments. Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is an umbrella scheme to ensure minimum support price (MSP) to farmers. It comprises the previous price support scheme (PSS), with few modifications and introduction of new schemes, including price de_ciency payment scheme (PDPS) and pilot of private procurement and stockist scheme (PPSS). In Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) a minimum fixed pension of

Rs 3,000 (US$ 42.92) will be provided to eligible small and marginal farmers on attaining the age of 60 years, subject to certain exclusion clauses. Ministry of Civil Aviation launched the Krishi UDAN 2.0 scheme in October 2021. The scheme proposes assistance and incentive for movement of agri-produce by air transportation. The Krishi UDAN 2.0 will be implemented at 53 airports across the country largely focusing on Northeast and tribal regions and is expected to benefit farmers, freight forwarders and airlines.

Further, the government of India has initiated Digital Agriculture Mission for 2021-25 for agriculture projects based on new technologies such as artificial intelligence, block chain, remote sensing and GIS technology, drones, robots and others.

The cumulative rainfall in the country during the monsoon season i.e. 01st June to 30th September, 2021 has been 87 cm against Long Period Average (LPA) average 88.0 cm which is 99%. Rainfall in the four broad geographical divisions of the country during the above period as compared to LPA were as follows: Northwest India – 96%, Central India – 104%, South Peninsula-111% and 88 % in North East India of their respective LPA. This is for the third consecutive year that the country has recorded rainfall in the normal or above normal category. Rainfall was above normal in 2019 and 2020.

During the post-monsoon season (1st October to 31st December, 2021) and winter season (1st January to 28th February22), the country had recorded excess rainfall that was 44% higher than the LPA in each season.

As per IMD prediction for 2022, Southwest monsoon seasonal rainfall over the country is likely to be Normal. The rainfall is likely to be 99% of the LPA with a model error of 5% on either side.

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.

In Agri Products, the Indian Phosphatic fertilizers sales registered de-growth of 14.88% in FY 22 in comparison with FY 21 in the domestic market due to less import of DAP, MOP and Complex fertilizers. SSP industry has registered growth sales of 9% in India as compared to last year.

SSP Sales has recorded increase of 23% in Rajasthan, 34% in Haryana, 8% in Madhya Pradesh, and marginally increased 1% in Uttar Pradesh & Uttarakhand respectively during April 2021 to March 2022 over last year.

Consumer Products Division – The Adhesive industry in India was hit at the beginning of the Year with the COVID crisis and the subsequent lockdowns imposed in various parts of the country. The industry managed to bounce back in the last 6 months of the Financial Year. The Raw Material prices increases significantly, prompting the industry to take the first price hike in almost 2 years in March 2021. This hike has been followed up with another hike with effect from May 2021 as the Raw Material prices continued to increase.

In Latex Business, the global tyre manufacturers got benefitted from strong revival in demand in many markets as a result of catch-up effects from previous year, which on contrary resulted in some suppression in demand due to shortage of semiconductor chips, thus limiting demand in OEM type market segment. However global demand of replacement type market witnessed double digit growth.

In Food Polymers, our products cater to the chewing gum & bubble gum industry. The Chewing/Bubble Gum industry somewhat recovered in 2021-22, after seeing a sharp decline in 2020-21 due to pandemic. However, industry is still much lower than its pre-pandemic levels. Though industry could recover slightly but it faced significant headwinds due to exorbitant increase in costs of raw materials as well as transportation. The costs increase impacted margins of our Food Polymers business too but we could manage to pass on some of these costs increase to our customers towards 2nd half of the year. Over all Food Polymers business grew significantly this year through market share gain, adding new customers and new geographies in business.

Financials

Consolidated financial results of the Company are analyzed and presented below:

( Rs in millions)
Consolidated Profit and Loss FY 2021 FY 2022
Revenue from Operations 6,212 11,658
Other Income 31 10
Total Revenue 6,243 11,668
Expenses _
Cost of Materials Consumed 3,332 7,228
Purchase of Stock-in-trade 91 249
Change in Inventories of Finished Goods, Work-in-progress and Stock-in trade (140) (381)
Employee Expense 803 963
Other Expenses 1,610 2,602
Total Expenses 5,696 10,661
EBITDA 547 1,007
Depreciation and Amortisation Expenses 126 127
Finance Cost 162 146
Tax Expenses 345 188
Net Profit After Tax (86) 546

Revenue: The Consolidated Revenue from Operations during FY 2022 stands at Rs 11,658 million against

Rs 6,212 million in FY 2021, resulting in a growth of 88%. Total Expenditure: Total Expenditure stands at Rs 10,661 million in FY 2022 as against Rs 5,696 million in FY 2021. Major expense heads for the Company include Raw Material costs, Manufacturing costs, Employee benefits expenses and Selling General and Administrative expenses.

EBITDA: In FY 2022, the Companys EBITDA stood at

Rs 1,007 million, compared to Rs 547 million in FY 2021.

Business Segments

Business Segment wise consolidated revenue from operations:

(Rs in millions)
Composition of Sales FY 2021 FY 2022
Agri Products 2,501 4,842
Performance Polymers 3,711 6,816

Agribusiness

Business Profile – Agribusiness has a range of Agri-input products in Crop Nutrition and Crop Growth Regulator categories under the brand "Ramban". The brand has a strong reputation in Uttar Pradesh, Uttarakhand, Haryana, Punjab, Rajasthan, Madhya Pradesh and Bihar markets for its quality and services. The Company is engaged in the manufacturing of SSP and Boron and Zinc Fortified Granules SSP, Organic Manure Granules and Sulphuric Acid.

We have the highest market share in UP and UK while 55% market share in core command areas of West UP. RAMBAN is highly preferred brand among the farming community.

New Product Launch

Bio Poshan: A new In-House Organic multi-nutrients Bio-stimulants granule has been launched in 2021. It contents different Bio-Stimulants and multi-nutrients like (Boron and Zinc) to the plants. It helps in plant growth and protect it from abiotic stress as well. It helps in Seed initiation, Stem Elongation and Increase in productivity.

Dosage: 4 Kg /Acre during sowing or Planting or Flower-Initiation stage, Available in 1 Kg and 4 kg Pack.

Marketing Activities

The company has conducted various engagement programs to educate farmers and share the benefits of our products and service.

Industry Overview – Use of chemically processed fertilizers is inevitable for growth of Indian Agriculture. Fertilizers industry supports agriculture sector to meet food grain production to meet the domestic consumption and becoming premier in export of food grains and food process products to the global requirements. It is one of the largest employment provider in the country.

The Indian fertilizer industry consists of two key segments – Urea and P & K fertilizers:

The Urea fertilizer accounts for over 55.73% of the total fertilizer consumption. Nitrogenous fertilizers comes under regulated category in price and movement by the government.

As of now, the country has achieved 80% self-sufficiency in production capacity of Urea. As a result, India could manage its substantial requirement of Nitrogenous fertilizers through the indigenous industry beside imports.

Similarly 50% indigenous capacity has been developed in respect of Phosphatic fertilizers to meet domestic requirement. However, the raw material and intermediate for the same are largely imported.

The actual production of all major fertilizers during

FY 2021-22 and FY 2020-21 were 435.95 Lakh Mt and 433.66 Lakh Mt respectively. Its showing a marginal increase of 0.53% over in comparison of previous year.

The P&K segment consists of Di Ammonium

Phosphate (DAP), NP and NPK, Muriate of Potash (MOP) and Single Super Phosphate (SSP). This segment functions under a fixed subsidy and variable reasonable pricing freedom being granted by the government through Nutrient based Subsidy policy (NBS) since April 2011. In Phosphatic category, freight subsidy is reimbursed to all P&K fertilizers except SSP, which restricts the movement of SSP to nearby localities translating to a high degree of competition.

The government of India is willing to strengthen

SSP industry, which comes under "Aatmnirbhar Bharat" concept by addressing critical issues. The department of fertilizers (DOF) constituted team members from DOF and Industries to give recommendations on the following issues: o Freight subsidy applicability on the SSP Industry at par with other P&K fertilizers o Separate budget provision for the SSP Industry to support working capital requirement o The requirement of pre-analysis of Egyptian Rock phosphate for production of SSP o The quality check mechanism of the other input material like BRP etc. o The feasibility of developing an online monitoring system for real time monitoring of the identified key parameters during the production process which are essential for the production of good quality SSP. o Present system of quality checking mechanism for the finished SSP and suggest the improvement in the present system. o Any other aspect related to the quality of SSP.

DAP, NP / NPK and SSP are the main forms of Phosphate fertilizers used in India. SSP is a multi-nutrient fertilizer containing ‘Phosphate as primary nutrient and ‘Sulphur and ‘Calcium as secondary nutrients. SSP is also fortified with Boron and Zinc as the de_ciency of micro nutrients in Indian soils is gradually increasing. Hence, fortified SSP will be handy to the farmer to address the de_ciencies of Boron, Zinc, Sulphur and Calcium etc.

In India, SSP contributes 20% in total Phosphatic segment (DAP, NP/NPK and SSP) in FY 22

In Uttar Pradesh and Uttarakhand, the SSP sales was static in FY 22. The sales trend other Phosphatic fertilizers is mentioned below:-

(in Lakhs MT)
Fertilizers 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
DAP 15.62 22.13 20.43 18.32 19.97 24.15 22.49 19.91
MOP 2.06 2.23 2.81 3.04 2.18 2.67 2.91 1.25
NPK 6.13 6.92 5.14 5.50 6.90 5.91 6.16 5.52
SSP 3.12 3.74 3.72 3.78 3.97 4.43 5.25 5.36
TOTAL 26.92 35.01 32.09 30.65 33.02 37.16 36.81 32.04

Business Performance – In FY 2022, we had significant growth in our operating efficiencies over the last year. Our focus on selling more in our economic zone helped increase our market share in relevant markets with better profitability. Business Strategy – Our focus will be on increasing market share in core command areas of our both plants i.e. Gajraula (UP) and Kapasan (Rajasthan) and also increasing sales through rapid Expansion into other states also, for improving sales of value added products like Boronated SSP Zincated SSP, Fortified SSP with Zinc & Boron and Agri-nutrient products Like – Shaktizyme, and Bio Poshan, which gives promising results in crops and vegetables.

The Direct Benefit Transfer (DBT) in fertilizers has stabilized and working smoothly. DBT has also appointed state coordinator to resolve issues / problems that have faced by retailers. The Government has taken necessary steps to make use of POS machine mandatory at retailer points. DBT has improved the process of releasing of payment of subsidy bills.

Performance Polymers

Consumer Products

Business Profile – The Consumer Products business operates in the space of Wood Working Adhesives and Wood Finishes. Our Adhesive brands are ‘Jivanjor, "Vamicol", ‘Polystic and ‘Hero and Wood Finishes brand ‘Charmwood has strong market acceptance and is known for its product quality among the influencers and consumers.

‘Jivanjor is a leading brand in the wood working adhesives industry. The Companys water based adhesives are ready to use adhesives which set rapidly at room temperature and offer superior bond strength that enhances the durability of furniture and fixtures. The product portfolio boasts of specialty adhesives that cover a multitude of special requirements in the water-based category itself. The Company also offers contact adhesives, which are synthetic rubber based adhesives for exceptional fast drying and vertical lamination.

Our Wood Finishes brand ‘Charmwood offers a complete wood finishing system, stains and ancillaries for decoration and protection of wooden furniture. The wood finishing system includes Melamine finish in Gloss and Matt variants, Nitrocellulose finish and PU Alkyd finish. These systems offer exceptional fast drying properties, stain resistant and scratch resistance properties. We also offer a wide range of Wood stains to give colour to wood these can be mixed to generate unique colours to meet different consumer needs. The range also includes ancillaries like sealers and thinners, required for the purpose of successful application. The company has also entered the premium wood-finish space with the introduction of Ultra-Italia, its premium range of PU products. With a nationwide distribution network, both our brands ‘Jivanjor and ‘Charmwood are major players in their respective segments.

A few key strategic Brand Initiatives were rolled out in FY 2022:

New Visual Identity System for Jivanjor

The new Visual Identity System for JIVANJOR Premium Adhesives was rolled out in the market. The New logo unit of Jivanjor was developed in a bold, confident font highlighting the confidence we have in our quality products in the Jivanjor portfolio. The two Js of Jivanjor were used creatively to form an in_nity symbol highlighting the lifelong, mazboot Jod you will always get on using Jivanjor range of Premium Adhesives. The use of Bold and dynamic colors further strengthened the color association our products carry in the market. The new VIS created a unique and distinct identity for Jivanjor in Trade making our packs stand out from the category in the market. The new Identity further strengthened Jivanjors position as a strong Adhesive brand with an unmatched Jod, and was liked and appreciated by all in the Trade ecosystem. The new VIS and its adaptation to the Jivanjor range of products is as follows:

Enhanced Visibility in Trade

The new brand Visual Identity was also rolled out in the market in the form of Dealer Boards, In Store Branding and Wall paintings across the country. More than 6000 Dealers across the country had the new Jivanjor Dealer Boards and Glow Sign boards installed. This mega visibility drive made brand Jivanjor even more visible as it beautifully complemented the new attractive packs in the store. We also came up with Co-branded Wall paintings (along with Ramban Agri Products) across Northern India for visibility in smaller towns and rural markets. This helped in building awareness for the brand in emerging markets.

New Brand positioning & TVC for Jivanjor

We also developed the new ‘Pakka Hai brand positioning for Jivanjor. ‘Pakka Hai brings to life both the Functional (Strong, mazboot, Pakka Jod) as well as emotional benefits (Long lasting Trust, Assurance) which a consumer will get on using Jivanjor to build their furniture.

This positioning was brought to life in a Quirky and engaging Television Commercial, which we aired on TV in AP/Telangana and on digital (YouTube, Hotstar etc.) in other key markets across the country. The first ever TVC for Jivanjor garnered almost 1.5 Crore + views on digital and delivered a 70% reach on TV, and was quiet appreciated by the Trade Ecosystem; and helped the brand start its journey towards building Consumer awareness in a ‘Pakka Hai style.

Higher visibility in Digital and E Commerce

Jivanjor also forayed into E Commerce with our products being listed on popular B2C (Amazon, Flipkart) and B2B (Indiamart, Mowglix) E Commerce platforms. The initial response has been very positive and we hope to accelerate our presence on E Commerce to present Jivanjor as a credible player in the adhesives category. We backed our E Commerce foray with Digital advertising and marketing as well, with a view to strengthen our Digital presence and be seen as a credible Adhesive player across the landscape.

JACPL and JivanJor have always prided ourselves on the strong connect we have with all our stakeholder ecosystem. Some of the initiatives to strengthen this Jod with them are: - iClub 6 and iClub Royale Dealer Programs – We rolled out two Annual Dealer Programs – iClub 6 with a Promise of Saath Judenge, Saath Jeetenge; and iClub Royale – a specially curated program for top Dealers to provide them with an unmatched ‘Royale experiences.

- JivanJor continued with its successful Achievers Club contractor connect program, delivering record numbers through the year. As a part of the program, Jivanjor provided Health Insurance to almost 1500 contractors and their families under the Jivanjor Suraksha Kawach program. This insurance was a great support to our contractor partners especially during the very difficult Covid times. As we always pride ourselves on our unmatched product quality. We conducted more than 50,000 Product trials to demonstrate our product benefits and build usage.

- We also strengthened the Jivanjor portfolio with a series of new products launches. o We were the first player in the category to introduce a Super premium, D3 Certified, Quick Drying White adhesive with the launch of JIVANJOR Supremo in June. The product clicked instantly with the Trade Ecosystem with its unmatched performance and attractive benefits.

That is why Supremo was lovingly referred to as the King of Adhesives in the market. o We also strengthened our presence in Rubber Based Adhesives with the launch of JIVANJOR FASTX – a best in class Rubber adhesive. With a promise of Super-Fast Dying – Lagaaya, Chipkaaya, Ho Gaya!, the product was received well by the Trade

Business Performance – FY 2022 was a year filled with lots of challenges for the Adhesive and Wood Finish businesses – covid impact, Unprecedented increase in Raw Material Prices, Entry of new, formidable players in both categories etc. JivanJor continued to focus on strengthening our strong JOD with the consumers and business stakeholders to further gain market share across the country. We continued to offer an unmatched range of high quality products, regular NPDs to drive preference, strengthening our distribution network across the country to ensure best in class Service levels, Innovative Dealer and contractor Programs; and a sustained push on building the brand with higher visibility through relevant communication across multiple mediums to strengthen our position in their consideration set and establish ourselves as a Credible Strong Adhesive Player. We continued to valorize our range of products to have a higher weightage from the Premium and Super Premium products.

We will continue to do all of this and more as we enter the new year with an ambition to create value for everyone across the ecosystem.

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 – The gum industry is consolidated with top two companies together accounting for around 60% market share. The global market shares for the top five chewing gum companies are estimated to be around 83%. The Global Gum Industry struggled in 2020, with most countries showing a declining trend due to outbreak of COVID-19. The chewing gum industry will take some time in 2021 to recover as there will be impact on demand till COVID-19 persists & restrictions are there in many countries.

Sugar free gums, which attract health conscious consumers, and which also provide additional benefits of dental care, and also functional gums like ‘energy gums, ‘ca_eine 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 to_ee. The preference for mints over chewing gum is likely to affect the demand for gums in the coming times.

Business Performance – Despite significant headwinds this year, the SPVA business improved profitability & reached close to its EBITDA margins versus previous year through better cost management initiatives and improved realizations from customers. Ester Gum business though struggled a bit due to lower ofitake from customers.

Business Strategy – The business strategy revolves around two key pivots – New customers, and New product/ application development. During FY 2021-22, the business has worked around these pivots and has been able to include some new customers in Egypt, Brazil,Turkey&India.Wealsoincreasedourglobalmarket share through our regular customers which helped in volume increase this year. The business continues to have strong plans for new customer acquisitions and share gain plans in the food applications space with both SPVA and Ester Gum and also increase foot-print in the industrial applications space.

Latex Business

Business Profile – Jubilant ranks No. 1 in India and No. 2 globally, for manufacturing VP Latex (Vinyl Pyridine Latex) 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 tyres and conveyor belts. In entire FY22 Latex Business witnessed strong growth and healthy demand from both domestic & exports markets. The business was able to secure volumes & continued production all full capacity inspite of second wave of COVID-19. In FY22 Business also witnessed steep increase in input costs due the global supply chain disruptions, shipping challenges and skewed raw material availability, however was also able to pass on the increase in input costs to the market through time to time diligent price revisions of finished goods, Indian tyre manufacturing continued to get benefited as in FY21 government put curbs on the import of tyres used in cars, two-wheelers and heavy vehicles, moving it from list of free imports to the "restricted" category, as part of a strategy to buoy the domestic industry.

Business Performance – In FY22 Latex Business attained double digit growth in top line & bottom line leading to ever highest performance. Business maintained dominant market share in Domestic Market and increased its market share & geographic presence in Exports Market.

Business Strategy – In FY 2023, business development activities in the international market continue to be a focus area while maintaining domestic share and margins. At the same time to explore potential opportunity of other lattices. Research and Development Initiatives 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 new grades of SPVA for chewing gum and industrial applications and has also commercialized different grades of Ester Gum. 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 CPD 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, cycle time reduction, cost optimization and improving machine up time through sustainable engineering practices etc. at all manufacturing plants.

Use of agro waste like Rice Husk, Fuel Wood, Saw Dust & Mustard Husk Briquettes for replacing nonrenewable fuel - coal for hot air generators continued during the year as an effort for sustainable growth. To embed continuous improvement into the companys DNA, and to further enhance its People, Process and System capabilities, various transformation methodologies Lean Six Sigma, 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.

Our continuous 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, e_uent 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 most integrated part of our business at all manufacturing locations. Our Gajraula plant received one award during the year in Occupational, Health & Safety.

Gajraula plant has received PLATINUM AWARD for outstanding achievement in Occupational, Health & Safety in Indias Prestigious "GROW CARE INDIA Award – 2021"

Supply Chain Management

FY2022posednewerchallengesonthealreadyfractured value chains from the pandemic, with the freight markets across the globe disrupted and manufacturing activity impacted due to shortage of materials and manpower. Unlike the first wave in 2020, economic activity across the world continued, with localised and limited lockdowns during the second and third waves. However, in the connected world with extended supply chains cutting across geographies, this led to increased uncertainty, information asymmetry and additional strain on the value chains with intermittent start-stops impacting reliability of operations.

In FY 2022, the company took major initiatives to reduce cost and reducing its ‘Net working capital more effectively by better inventory, increase payment terms of suppliers and payable management. Business planning cycle was strengthened through S&OP (sales and 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, 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 Di_erentiator"

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 succeed 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 and some critical capabilities have been addressed through lateral hires. The target setting exercise in 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 a 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:

Orderly and efficient conduct of business
Safeguarding of its assets
Adherence to Companys policies
Prevention and detection of frauds and errors
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 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:

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.

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).

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 decision-making 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:

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

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

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 guidelinesalongwithastrongreviewingandmonitoring 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 eleven 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) of the Securities and Exchange Board of India (listing obligations and disclosure requirements) Regulations, 2015 (the ‘Listing Regulations).

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, the Company is focusing on expansion of new network and introduction of new products. 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 A_nity 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 Food Polymers and Latex business, the Company faces competition from international territories including China in terms of cost advantage enjoyed by our competitors. Further for these export oriented businesses, we face competition from European competitors. With the industry overall not growing, it is leading to pricing pressures between the top 3 players in the industry in order to gain share amongst the existing available opportunity and when it comes to customers that are based in Europe, we continue to be at a logistical disadvantage compared to competition. Despite these challenges, the Company has worked on a strong customer and account management programs to secure long-term commitments from our customers, which has led to the profitable business outcome in FY 2022. Strong plans have also been put in place to continue replicating the success of FY 2022 & continue to grow in future years.

Cost Competitiveness

The Company believes that its growth and market position is due to the quality 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 such as Sulphur, Rock Phosphate, VAM, PVA, Celvolit, Catalysts, Butadiene and 2-Vinyl Pyridine etc. and 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, alternate suppliers. Wherever feasible, the Company is entering into long term contracts with volume and price commitments. 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 Fertilizers, Adhesives, SPVA plants. Additional capacities, through new equipment, have been created in Latex and Fertilizers plants 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 adverse impact on reputation. Uncontrollable breakdowns and idle capacities contribute to ine_ciencies in 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 stringent plant 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 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 de_ciency 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). 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. E_orts 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 routine 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 quality 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.

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 sti_ 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 shut-down 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.

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