Mar 31, 2022
Your Directors are pleased to present the Forty Fourth Annual Report together with the Audited Standalone and Consolidated Financial Statements for the year ended March 31,2022.
OVERVIEW
Jubilant Pharmova Limited (the ''Company'' or Jubilant Pharmova'') is a company engaged in Pharmaceuticals, Contract Research and Development Services and Proprietary Novel Drugs businesses. Pharmaceuticals business through Jubilant Pharma Limited, Singapore (JPL) is engaged in manufacturing and supply of Radiopharmaceuticals with a network of 48 radio-pharmacies in the US, Allergy Immunotherapy, Contract Manufacturing of Sterile
Injectables and Non-sterile products, Solid Dosage Formulations and APIs through six manufacturing facilities that cater to all the regulated markets including the US, Europe and other geographies. Jubilant Biosys Limited provides contract research and development services through two world class research centers in Bangalore and Noida in India. Jubilant Therapeutics is involved in Proprietary Novel Drugs business and is an innovative biopharmaceutical company developing breakthrough therapies in the areas of oncology and auto-immune disorders. Jubilant Pharmova Limited has a team of over 6,000 multicultural people across the globe. The Company is well recognised as a ''Partner of Choice'' by leading pharmaceuticals companies globally. For more information, please visit: www.iubilantpharmova.com.
(H/ million) |
||||
Standalone |
Consolidated |
|||
Particulars |
Year ended March 31, 2022 |
Year ended March 31, 2021 |
Year ended March 31, 2022 |
Year ended March 31, 2021 |
Continuing Operations: |
||||
Total Revenue from Operations |
877 |
27,095 |
61,302 |
60,985 |
Total Operating Expenditure |
946 |
22,824 |
49,739 |
47,020 |
EBITDA (before Other Income) |
(69) |
4,271 |
11,563 |
13,965 |
Other Income |
1,259 |
479 |
113 |
176 |
EBITDA |
1,190 |
4,750 |
11,676 |
14,141 |
Depreciation, Amortisation and Impairment Expense |
62 |
1,000 |
3,817 |
3,490 |
Finance Costs |
306 |
1,018 |
1,455 |
1,841 |
Exceptional Items |
- |
- |
- |
212 |
Share of profit of an associate |
- |
- |
(100) |
113 |
Profit before Tax |
822 |
2,732 |
6,304 |
8,711 |
Tax Expenses |
37 |
587 |
2,174 |
2,972 |
Profit for the year from continuing operations |
785 |
2,145 |
4,130 |
5,739 |
Discontinued Operations: |
||||
Profit from discontinued operations |
- |
- |
- |
3,409 |
Tax expense/(credit) of discontinued operations |
- |
- |
- |
792 |
Profit after tax of discontinued operations |
- |
- |
- |
2,617 |
Reported Net Profit After Tax |
785 |
2,145 |
4,130 |
8,356 |
Attributable to: |
||||
Owners of the Company |
785 |
2,145 |
4,139 |
8,359 |
Non-Controlling Interests |
- |
- |
(9) |
(3) |
Other Comprehensive Income |
- |
(18) |
2,440 |
1,743 |
Total Comprehensive Income for the year |
785 |
2,127 |
6,570 |
10,099 |
Retained Earnings brought forward from previous year |
11,549 |
11,533 |
43,177 |
38,448 |
(H/ million) |
||||
Standalone |
Consolidated |
|||
Particulars |
Year ended |
Year ended |
Year ended |
Year ended |
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Profit for the year (attributable to owners of the Company) |
785 |
2,145 |
4,139 |
8,359 |
Re-measurement of defined benefit obligations |
2 |
(8) |
9 |
(8) |
Dividend on Equity Shares |
(796) |
- |
(796) |
- |
Adjustment on account of consolidation of ESOP Trust |
- |
- |
1 |
- |
Transfer (to)/ from Legal Reserve |
- |
- |
- |
(2) |
Transfer of cumulative gain of equity investments classified at Fair Value through Other Comprehensive Income |
299 |
|||
Stock awards vested |
- |
- |
21 |
2 |
Adjustment on amalgamation of certain promoter controlled entities pursuant to the Composite Scheme of Arrangement |
1 |
1 |
||
Adjustment on account of demerger pursuant to the Composite Scheme of Arrangement |
- |
(2,122) |
- |
(3,623) |
Retained Earnings to be carried forward |
11,540 |
11,549 |
46,850 |
43,177 |
In the Financial Year 2021-22, on a standalone basis, the Company recorded total revenue from operations of H877 million.
For the year ended March 31, 2022, Earnings before Interest, Taxes, Depreciation and Amortisation (''EBITDA'') stood at H 1,190 million.
Reported Net Profit after Tax was H785 million in the Financial Year 2021-22. Basic Earnings per Share (''EPS'') stood at H4.93 per equity share of H1 each.
The Consolidated Financial Statements, prepared in accordance with the provisions of the Companies Act, 2013 (the ''Act''), the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ''Listing Regulations'') and Indian Accounting Standards (Ind-AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Act, form part of the Annual Report.
Performance Review
Revenue from the continuing operations for the year was H61,302 million as compared to H60,985 million in the Financial Year 2020-21. Revenue from the Pharmaceuticals segment was H56,507 million as compared to H57,897 million in the Financial Year 2020-21. Revenue from the Contract Research and Development Services was H4,574 million for the year as compared to H3,052 million in the Financial Year 2020-21. Revenue from Proprietary Novel Drugs was H18 million for the
year as compared to H37 million in the Financial Year 2020-21. Revenue from Management Services stood at H203 million for the year.
EBITDA from the continuing operations was H11,676 million for the year as compared to H 14,141 million in the Financial Year 2020-21. EBITDA of the Pharmaceuticals segment was H 10,871 million for the year as compared to H13,863 million in the Financial Year 2020-21 with margins of 19.2% as against 23.9% in the Financial Year 2020-21. Contract Research and Development Services reported EBITDA of H1,691 million as compared to H1,085 million in the Financial Year 2020-21 with margins of 37.0% as against 35.6% in the Financial Year 2020-21.
Profit after Tax from the continuing operations was H4,130 million as compared to H5,739 million in the Financial Year 202021. Earnings per Share (EPS) from the continuing operations was H26.00 per equity share of H1 each.
The Company has considered the possible effects that may result from the COVID-19 pandemic on the carrying amounts of receivables, inventories, property, plant and equipment and intangible assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions, the Company has used internal and external sources of information, including economic forecasts and estimates from market sources, on the expected future performance of the Company.
On the basis of evaluation and current indicators of future economic conditions, the Company expects to recover the carrying amounts of these assets and does not anticipate any impairment to these financial and non-financial assets. However, the impact assessment of COVID-19 is a continuing process, given the uncertainties associated with its nature and duration. The Company will continue to monitor any material changes to the future economic conditions.
The Board is pleased to recommend a dividend of 500% i.e. H5 per fully paid up equity share of H1 each amounting to H796.41 million for the year ended March 31, 2022. The payment of dividend is subject to approval of the shareholders at the forthcoming Annual General Meeting (''AGM'') of the Company and shall be subject to deduction of income tax at source.
During the year under review, no amount has been transferred to General Reserve of the Company.
During the year, there has been no change in the authorised, subscribed and paid-up share capital of the Company. As on March 31,2022, the paid-up share capital stood at H159,281,139 comprising 159,281,139 equity shares of H1 each.
The Company has an employee stock option plan namely JLL Employees Stock Option Plan 2018 (''Plan 2018''). There was no material change in the Plan 2018 during the year and the Plan is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (the ''SEBI ESOP Regulations'').
During the year, 35,734 Options were granted. Each Option entitles the holder to acquire one equity share of H1 each of the Company at the exercise price fixed at the time of grant.
The Company has a general employee benefits scheme namely Jubilant General Employee Benefits Scheme-2019 (''JGEBS-2019''). The Scheme is in compliance with the SEBI ESOP Regulations and there was no material change in the Scheme during the year.
The details of the Plan 2018 and JGEBS-2019 pursuant to the SEBI ESOP Regulations have been placed on the website of the Company and the same can be accessed at the web-link https:// www.iubilantpharmova.com/Uploads/image/893imguf esop disclosure2022.pdf.
(c) Debentures
In the Financial Year 2021, the Company had issued Secured Redeemable Unlisted Non-Convertible Debentures (''NCDs'') of H950 million for a period of upto 5 years. These NCDs are outstanding as on date.
The Board of Directors of the Company, at its meeting held on July 23, 2021, approved reorganisation of the APIs business of Jubilant Generics Limited (''JGL''), an indirect wholly-owned subsidiary for inter alia better operational synergy and management effectiveness, by way of a demerger of the APIs undertaking of JGL and vesting of the same with the Company, on a going concern basis (''the Demerger''), to be implemented through a Scheme of
Arrangement between JGL and the Company and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (''Scheme''). The Company and JGL have filed the required petition with the Hon''ble National Company Law Tribunal, Allahabad Bench (''NCLT'') seeking its approval for the Scheme.
Subsequent to the year end, the petition was heard by the Tribunal on April 25, 2022 and the Scheme was approved vide Order dated May 23, 2022. The Appointed Date of the Scheme is April 1,2022. The Scheme will take effect upon the filing of the Formal Order of the Tribunal with the Registrar of Companies, which filing is targeted/ expected on July 1,2022.
As on March 31, 2022, the Company had 35 subsidiaries. Brief particulars of the principal subsidiaries on a stand-alone basis are given below:
Jubilant Pharma Limited
Jubilant Pharma Limited, Singapore (''Jubilant Pharma'') is a wholly-owned subsidiary of the Company. Jubilant Pharma holds the global pharmaceutical business of the Company through its subsidiaries in the US, Canada, Europe, India and rest of the world. These subsidiaries of Jubilant Pharma are engaged in manufacturing, marketing and distribution of various pharmaceutical products and services including APIs, oral dosage forms (tablets and capsules), contract manufacturing of sterile injectables including vaccines, ointment, creams and liquids, allergy therapy products and radiopharmaceutical products. Jubilant Pharma also operates a network of radiopharmacies in the the US, through its wholly-owned subsidiary with 48 pharmacies in 21 states of the US. Total income of the company during the Financial Year 2022 was H350.39 million as compared to H393.17 million during the Financial Year 2021.
Jubilant Generics Limited
Jubilant Generics Limited (''JGL'') is a wholly-owned subsidiary of the Company through Jubilant Pharma. JGL is engaged in the business of manufacturing of Active Pharmaceutical Ingredients ("APIs") and Dosage Forms. It has three state of-the-art R&D Centres in Noida, Uttar Pradesh, which are equipped with world class infrastructure. JGL has India Branded Pharmaceuticals ("IBP") business which caters dosage formulations under its own brand name to the Indian market in therapeutic areas including chronic specialties like Cardiology and Diabetes.
JGL''s APIs portfolio is focused on Lifestyle driven Therapeutic Areas (CVS, CNS) and also targets complex and newly approved molecules. The company is among the leading global producers for five APIs in its portfolio helping it to maintain its competitive position in the industry. The APIs manufacturing plant at Nanjangud, Karnataka is spread over 69 acres, and caters to the sales worldwide primarily to the regulated markets. The manufacturing facility is inspected by the global regulatory agencies such as US FDA, Health Canada, TGA Australia, EU GMP from National Institute of Pharmacy and Nutrition Hungary, Japan PMDA, FSSAPS France, KFDA Republic of Korea, ANVISA Brazil, COFEPRIS, Mexico and others.
During the Financial Year 2019, US FDA inspected the Nanjangud facility of JGL and consequently in March 2019, this facility was put under US FDA''s Inspection Classification status of "Official Action Indicated"(''OAF). As a result, while supplies of the approved products to the US continue but the approvals of pending applications or supplements for products to the US may be withheld. JGL undertook a holistic review to implement necessary corrective and preventive actions and also engaged third party cGMP consultants to support and identify areas of improvement and has been voluntarily updating US FDA. JGL has completed all identified corrective and preventive actions and updated the agency.
The dosage formulations manufacturing location at Roorkee, Uttarakhand, with 5 acres of infrastructure, is inspected by global regulatory agencies such as US FDA, Japan PMDA, UK MHRA, Australia TGA, WHO and Brazil ANVISA. This facility primarily manufactures immediate and modified release oral solid dosage forms (Tablets, Capsules and Powder for Suspension) with capabilities on complex processes like fluid bed pellet coating, MUPS (Multi Unit Pellet System) and extended release drug delivery technology based on matrix formulations and functional coatings. In addition to manufacturing and supplies of finished formulations to the US market, JGL''s non-US finished formulations business is focussed on various markets in EU, Japan, Canada, Australia as well as various countries in the emerging markets. JGL also caters to the selected overseas markets under its own brand name. JGL''s major therapy areas includes Cardiovascular, CNS and Gastrointestinal products with special focus on vertical integration and in-house APIs leading to greater competitiveness in the market place.
During the Financial Year 2019, the US FDA inspected the Roorkee facility of JGL and consequently in March 2019 issued Warning Letter to the Roorkee facility. In March 2021, the US FDA conducted an inspection of the Roorkee facility and issued a Form 483 with seven observations. Subsequently in July 2021, US FDA listed JGL under import alert with an exception for 4 products manufactured at the Roorkee facility. JGL has engaged independent third party cGMP consultants to mitigate the gaps identified by the US FDA and it is keeping the US FDA updated on its corrective and preventive actions. Post import alert, JGL manufactures only the approved and permitted products at the Roorkee plant for distribution in US. JGL continues to manufacture and supply the products to all the other markets where the products are approved, other than US. New product approvals for US market will be withheld due to the import alert. JGL is committed to implement the necessary corrective actions required to address the US FDA concerns at the earliest and it continues to work in close coordination with the US agency.
Total income of JGL during the Financial Year 2022 was H12,896.32 million as compared to H14,771.53 million during the Financial Year 2021.
The Company is in compliance with Regulation 24A of the Listing Regulations. Secretarial Audit was conducted for JGL, an unlisted material subsidiary of the Company. Copy of the Secretarial Audit Report of JGL is attached as Annexure-1 to this Report. The Secretarial Audit report of JGL does not contain any qualification, reservation or adverse remark or disclaimer.
Jubilant Cadista Pharmaceuticals Inc., a corporation incorporated in Delaware, US is a wholly-owned subsidiary of Jubilant Pharma Holdings Inc. This company is engaged in the business of manufacturing solid dosage forms of generic prescription pharmaceuticals at its US FDA approved manufacturing facility in Salisbury, Maryland, US. Its customer base includes large wholesalers, retail and pharmacy chains. As on March 31, 2022, there were 13 products marketed in the US with focus in the therapeutic areas of CVS, CNS, Anti Allergic, Steroids, etc. Total income of the company during the Financial Year 2022 was H6,462.09 million as compared to H 10,100.86 million during the Financial Year 2021. The US FDA inspected the site last in February 2020 that resulted in a rating of GMP compliance.
Jubilant Cadista Pharmaceuticals Inc. facility at Salisbury, Maryland successfully completed the periodic inspection by Maryland, US Department of the Environment/ City of Salisbury, Maryland.
At our Salisbury, Maryland manufacturing facilities, structured improvement projects have been undertaken that have delivered significant conversion cost savings, while at the same time improving safety rate, deviation rate, productivity, batch rejections and service level. The site has undertaken numerous energy-saving projects to reduce our utilities costs.
Jubilant HollisterStier LLC (JHS) is a wholly-owned subsidiary of Jubilant Pharma Holdings Inc. This subsidiary is a fully integrated leading CMO player based out of North America with operations in Spokane, Washington, USA and Montreal, Canada. The facilities offer manufacturing services including sterile injectable (both liquid and lyophilization), ampoules and sterile and non-sterile ointments, creams, and liquids. This company is among the leading Contract Manufacturers in North America for sterile injectable and expanding its reach as a fill scale ophthalmic solution provider in the form of bottles including preservative free ointment and injectable. Its facilities are approved by regulators across the world including US FDA, Health Canada, ANVISA Brazil, PMDA Japan, Russia, MHRA and various others. The products manufactured at both sites are sold in over 50 countries across the globe by its customers. The company lays strong emphasis on compliance and protecting Intellectual Property Rights (IPR) for its customer base. The company will continue to focus on the highest level of compliance with a lean operation setup and supply of right quality products in a timely manner to its customers which helps it further grow the order book. The US FDA inspected the Spokane site last in 2021 by both the Center for Biologics Evaluation and Research and the Center for Drugs Evaluation and Research. These inspections resulted in ratings of ''GMP Compliance. The Spokane site was also inspected by Armenia in 2021 and again, the site received a ''GMP Compliant'' rating. The US FDA inspected the Montreal site last in 2018 that resulted in a ''GMP Compliance'' rating. In addition, the Montreal site was inspected by Health Canada in 2021 and again received a GMP compliant rating. Further the sites go through numerous client audits during the year that also enhance their readiness for FDA inspection. Injectables form an increasing proportion of new approvals by innovators for which there is shortage of capacity for high quality manufacturing
sterile sites as available with the company. The need for injectable has further been enhanced because of COVID pandemic. Its CDMO business has played a very integral role in current pandemic with contracts and various others for manufacturing vaccines and therapeutic drugs to fight the pandemic.
In May 2022, JHS entered into a cooperative agreement for $149.6 million (USD) with the Army Contracting Command, in coordination with the Joint Program Executive Office for Chemical, Biological, Radiological, and Nuclear Defense (JPEO-CBRND) on behalf of the Biomedical Advanced Research and Development Authority (BARDA), within the US Department of Health and Human Services. The effort was funded under the American Rescue Plan. This agreement will enable the company to double its injectable filling production capacity at a total cost of $193 million, at its Spokane, Washington manufacturing facility. This will be completed by 2025. This agreement is in addition to the $92 million filling line expansion announced in November 2021, which will be commercially available by the end of 2024. The planned expansion will double the injectable manufacturing capacity at Spokane. The lines will be latest technology high speed isolator fill lines with lyophilizers.
The Allergy Immunotherapy business provides products in the US and also exports to several international markets such as Canada, Europe and Australia. We supply bulk extracts to physicians who then use the products for diagnostic testing and to administer immunotherapy treatment. Allergenic extracts in our portfolio are offered in the form of consistent, high-quality, differentiated products along with a range of specialised diagnostic devices for skin testing.
A differentiated business of manufacturing and marketing of allergenic extracts is backed by one of the oldest and most trusted brands, HollisterStier, which is in existence for over 100 years. The company has been focusing on expanding market coverage and ensuring robust offering of our antigens to Customers. In addition, we have increased capacities in Lyophilization and are further increasing capacities in the Allergy Immunotherapy manufacturing facility to ensure consistent and reliable supply of our flying insect venom products. We are the sole producers and suppliers of venom immunotherapy in the US.
This business continues to build on the development of innovative products to address various allergies. The company is expanding its footprint beyond the US and is building networks in other regions outside of North America including EU, MEA and APAC with a focus on our venom immunotherapy products in these regions.
Total income of the company during the Financial Year 2022 was H16,286.86 million as compared to H15,874.96 million during the Financial Year 2021.
Jubilant DraxImage Inc. (''JDI'') is a wholly-owned subsidiary of the Company through Jubilant Pharma. JDI has a solid foundation in speciality pharma. JDI is headquartered in Montreal, Canada, where it operates a highly specialised manufacturing facility approved by US FDA, Health Canada and selected EU countries. JDI develops, manufactures, commercialises and distributes radiopharmaceuticals used in Nuclear Medicine for the diagnosis,
treatment and monitoring of a broad range of diseases. It serves hospital-based customers (Nuclear Medicine Physicians, Nuclear Cardiologists and Technologists) in addition to specialised commercial radiopharmacies in the United States and Canada. JDI employs about 820 highly skilled professionals dedicated to providing high quality, reliable products and services to healthcare providers around the globe. The business is supported by an experienced research and development organisation, specialised radiopharmaceutical manufacturing, strong regulatory affairs, quality systems and marketing and commercial operations. The disease areas of specialisation include cardiology, oncology, neurology, and therapeutics for neuro-endocrine and thyroid diseases. The business distributes radiopharmaceutical products through a network of 48 pharmacies in the United States.
Jubilant Radiopharmaceuticals business is a market leader in North America in several specialty areas, including I-131 Therapeutic and Diagnostics (Theranostics) for imaging and treatment of thyroid diseases and thyroid cancer, Macro-Aggregated Albumin (MAA) for lung perfusion imaging and Diethylene Triamine Penta-acetic Acid (DTPA) for renal, brain and functional pulmonary imaging. RUBYFILL®, a cutting-edge, novel technology for PET myocardial perfusion imaging (MPI) to evaluate regional myocardial perfusion in adult patients with suspected or known coronary artery disease is approved by US FDA, Health Canada, Swissmedic, Switzerland, BfArM, Germany and Le gouvernement du Grand- Duche de Luxembourg, Luxembourg.
Jubilant Radiopharmaceuticals business is sponsoring and supporting two clinical trials for I-131-MIBG, a unique approach under evaluation for first-line and later stage treatment of high-risk neuroblastoma. Approximately 800 patients are diagnosed with Neuroblastoma every year, mostly children.
Total income of the company during the Financial Year 2022 was H19,732.01 million as compared to H9,492.35 million during the Financial Year 2021. The US FDA inspected the site last in 2017. The site was also inspected with the ''Compliance'' rating by Health Canada in 2021 and 2022, both resulting in ratings of GMP compliance.
Effective June 1, 2021, Jubilant Draximage Inc. acquired the Radiopharmacies business which operates 48 radiopharmacies in 21 States and is headquartered in Yardley, PA. Jubilant''s radiopharmacy network is the second largest network of commercial nuclear radiopharmacies in the United States, directly serving over 3,000 individual hospitals, clinics and medical centers. Business delivers approx. 3 million patient doses per year.
This is a wholly-owned subsidiary of the Company through JGL and Jubilant Pharma. This company holds shares of Jubilant Pharmaceuticals NV (99.81%) and PSI Supply NV (99.50%) along with Jubilant Pharma which holds the balance shares.
This is a wholly-owned subsidiary of the Company through Jubilant Pharma NV, Belgium, which holds 99.81% of its shares and Jubilant Pharma holds the balance shares. This company is engaged in the business of licensing generic dosage forms and providing regulatory
Jubilant Discovery Services LLC Jubilant Clinsys Inc.
Jubilant Clinsys Limited Jubilant Therapeutics India Limited Jubilant Business Services Limited Jubilant Pharma SA Pty. Limited Jubilant Pharma UK Limited Jubilant Episcribe LLC Jubilant Epicore LLC Jubilant Prodel LLC Jubilant Epipad LLC
Drug Discovery and Development Solutions Limited Draxis Pharma LLC Draximage (UK) Limited TrialStat Solutions Inc.
Jubilant Pharma ME FZ-LLC
Jubilant Draximage Radiopharmacies Inc.
Jubilant Biosys Innovative Research Services Pte. Limited
During the year, the following changes have taken place pertaining to the subsidiaries of the Company:
1. 6981364 Canada Inc. amalgamated into Jubilant Draximage Inc.
2. Draximage General Partnership has been dissolved due to amalgamation of its partners i.e. 6981364 Canada Inc. and Jubilant Draximage Inc.
3. Draximage Limited, Ireland has been dissolved.
4. Jubilant Life Sciences (BVI) Limited has been dissolved.
5. Jubilant Drug Development Pte. Limited has been merged into Drug Discovery and Development Solutions Limited.
6. Jubilant Innovation Pte. Limited has been struck off.
Associate Company
SOFIE Biosciences Inc., USA is associate of the Company.
1359773 B.C. Unlimited Liability Company and SPV Laboratories Private Limited became subsidiary and associate company of the Company effective from April 26, 2022 and April 1,2022, respectively.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The performance and financial position of the subsidiaries are given in Form AOC-1 attached to the Financial Statements for the year ended March 31, 2022.
PARTNERSHIPS
Jubilant HollisterStier General Partnership
It is a Canada based partnership, owned by two subsidiaries of the Company - Jubilant HollisterStier Inc. and Draxis Pharma LLC, that provides contract manufacturing services. It manufactures products in two categories: sterile products and non-sterile products. Sterile
services to generic pharmaceutical companies. Total income of the company during the Financial Year 2022 was H0.65 million as compared to H7.81 million during the Financial Year 2021.
This is a wholly-owned subsidiary of the Company. 99.50% of its shares are held by Jubilant Pharma NV and the balance by Jubilant Pharma. It is engaged in the supply of generic dosage forms to the European markets. Total income of the company during the Financial Year 2022 was H229.18 million as compared to H330.99 million during the Financial Year 2021.
Jubilant Biosys Limited (''Biosys'') provides Drug Discovery and Contract Development and Manufacturing Services to global pharmaceutical and biotech companies as mentioned below:
⢠Collaborative/ Partnership Model with Integrated Drug Discovery program across a single or a portfolio of molecules;
⢠Services in the areas of Medicinal Chemistry, In Vitro Biology, In Vivo Biology, Structural Biology, Drug Metabolism and pharmacokinetics (DMPK), Toxicology and Discovery Informatics on Full Time Equivalent (FTE) or Fee For Service (FFS) based model;
⢠Synthetic Organic Chemistry, Process Research & Development, Scale up and GMP supplies under Full Time Equivalent, or Fee for Service model.
Total income of the company during the Financial Year 2022 was H4,870.98 million as compared to H3,214.48 million during the Financial Year 2021.
Jubilant Therapeutics is a clinical stage precision therapeutics company advancing potent and selective small molecule modulators to address unmet medical needs in oncology and autoimmune diseases. Jubilant Therapeutics'' platform uses Therapeutic Index & Brain Exposure Optimisation (TIBEO) to develop highly differentiated novel drugs for genetically defined patient populations. The company is progressing its most advanced program - first in class dual inhibitor of LSD1/HDAC6 to Phase I/ II in 2022, followed by additional INDs with novel brain-penetrant modulators of PRMT5 and PDL1, as well as PAD4 inhibitors in oncology and inflammatory indications. Total income of the company during the Financial Year 2022 was H0.08 million as compared to H0.74 million during the Financial Year 2021.
Other subsidiaries are mentioned below:
Jubilant Pharma Holdings Inc.
Jubilant Pharma Australia Pty. Limited Jubilant Innovation (USA) Inc.
Jubilant HollisterStier Inc.
Jubilant First Trust Healthcare Limited Jubilant DraxImage Limited Jubilant DraxImage (USA) Inc.
products include liquid and freeze-dried (lyophilized) injectables, ampoules, ophthalmic tubes/ solutions and sterile ointments and creams. Non-sterile products include non-sterile ointments, creams and liquids. The products manufactured by this partnership are supplied to over 50 countries. Another area of growth for this subsidiary is sterile ophthalmic. With ageing population across the globe, eye ointments are gaining popularity. The company is witnessing a lot of requests for proposals in this area as well. Basis this assessment, the company has set up a 200 bottles per minute ophthalmic line in Montreal site, which is undergoing validation. Once operational, the line is expected to further drive growth for the CMO business. The manufacturing location at Montreal, Quebec, Canada is approved by Health Canada, US FDA and other regulatory authorities.
In terms of provisions of Section 139 of the Act and the Rules made thereunder, the Shareholders of the Company have at the 40th AGM approved the reappointment of M/s. B S R & Co. LLP, Chartered Accountants as Statutory Auditors of the Company for another term of 5 years from conclusion of the 40th AGM of the Company till conclusion of the 45th AGM of the Company to be held in the year 2023.
The Auditors'' Reports for the Financial Year 2022 do not contain any qualification, reservation, adverse remark or disclaimer.
Pursuant to Section 148(1) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Company was not required to maintain the cost records during the Financial Year 2022.
The Board had appointed M/s Sanjay Grover & Associates, Company Secretaries to conduct Secretarial Audit pursuant to the provisions of Section 204 of the Act for the Financial Year 2022. The Report of the Secretarial Auditors is attached as Annexure-2 to this Report and does not contain any qualification, reservation, adverse remark or disclaimer.
The Company has also obtained a Secretarial Compliance Report from M/s Sanjay Grover & Associates, Company Secretaries confirming compliances with the provisions of the applicable SEBI Listing Regulations, Circulars and Guidelines for the year ended March 31, 2022. This Compliance Report was filed with the Stock Exchanges within prescribed time period and is also available on the websites of Stock Exchanges.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Priyavrat Bhartia and Mr. Arjun Shanker Bhartia retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.
The Shareholders have, at the 43rd AGM of the Company held on September 22, 2021, approved re-appointment of Mr. Hari S. Bhartia as Co-Chairman and Managing Director of the Company for a period of three years effective from April 1, 2022. At the said AGM, the shareholders have also approved the appointment of Mr. Pramod Yadav and Mr. Arvind Chokhany as Directors of the Company effective from February 5, 2021 and April 1, 2021, respectively. The shareholders have further approved appointment of Mr. Chokhany as Group Chief Financial Officer and Whole-time Director effective from April 1, 2021. The Shareholders have also approved re-appointment of Mr. Sushil Kumar Roongta and Mr. Vivek Mehra as Independent Directors for another term of 5 consecutive years effective from May 22, 2022.
MEETINGS OF THE BOARD
Five meetings of the Board of Directors of the Company were held during the Financial Year 2022.
DECLARATION OF INDEPENDENT DIRECTORS
All Independent Directors have given declaration that they meet the criteria of independence as provided under Section 149 of the Act and Regulation 16 of the Listing Regulations.
APPOINTMENT AND REMUNERATION POLICY
The Company has implemented Appointment and Remuneration Policy pursuant to the provisions of Section 178 of the Act and Regulation 19 read with Part D of Schedule II to the Listing Regulations. Salient features of the Policy and other details have been disclosed in the Corporate Governance Report attached to this Report. The Policy is available at the web-link: www.iubilantpharmova.com/investors/corporate-governance/ policies-and-codes/appointment-and-remuneration-policy.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD
A statement on annual evaluation of the performance of the Board, its Committees and of individual Directors forms part of the Corporate Governance Report attached to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors, based on the representation received from the management, confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2022 and of the profits of the Company for the year ended March 31, 2022;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
FOREIGN EXCHANGE EARNINGS AND OUTGO
(D/ million) |
||
Particulars |
2021-22 |
2020-21 |
Foreign exchange outgo in terms of actual outflows |
3 |
9,117 |
Foreign exchange earned in terms of actual inflows |
1,580 |
11,207 |
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.
Based on the framework of internal financial controls including the Controls Manager for financial reporting and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by the management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the Financial Year 2022; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
COMPOSITION OF AUDIT COMMITTEE
As on date, the Audit Committee comprises Mr. S Sridhar, Chairman, Ms. Sudha Pillai, Dr. Ashok Misra, Mr. Vivek Mehra, Mr. Priyavrat Bhartia and Mr. Arvind Chokhany. The Board has accepted all the recommendations made by the Audit Committee.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company did not have any manufacturing activities on a standalone basis during the Financial Year 2022. Hence, the details prescribed under Rule 8(3) of the Companies (Accounts) Rules, 2014 regarding conservation of energy and technology absorption are not applicable.
Particulars of Directors and Employees as required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as Annexure-3 and form part of this Report.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
Risk-taking is an inherent trait of any enterprise. However, if risks are not properly managed and controlled, they can affect the Company''s ability to attain its objectives. Risk management and internal financial control systems play a key role in directing and guiding the Company''s activities by continually preventing and managing risks. The Board, Risk Management Committee, Audit Committee and Senior Management team collectively set the overall tone and risk culture of the Company by identifying the risks impacting the Company''s business and documenting the process of risk identification, risk minimisation and risk optimisation as a part
of the risk management policy through defined and communicated corporate values, clearly assigned risk responsibilities, appropriately delegated authority and a set of processes and guidelines.
There exists a critical risk management framework across the Company and the same is reviewed on a periodic basis by the Board. Some of the critical risks identified in various businesses of the Company are:
⢠Pandemic Risk - Uncertainty due to COVID-19
⢠Information Technology (IT) Risk
⢠Dependence on certain key products and customer risk
⢠Dependence on single manufacturing facility risk
⢠Supply interruptions due to few suppliers risk
⢠Human Resources - Acquire and retain talent risk
⢠Manufacturing operations risk
⢠Compliance and regulatory risk
⢠Competition, cost competitiveness and pricing risk
⢠Capacity planning and optimisation risk
⢠Research and Development (R&D) effectiveness risk
⢠Environmental, Social, and Governance (ESG) risk
⢠Protecting Intellectual Property Rights (IPR) risk
⢠Failure to supply to customers risk
⢠Changes in tax legislation risk
⢠Liquidity, solvency, debt repayment risk
⢠Foreign currency exposure risk
⢠Risks related to the discovery and development of our product candidates
⢠Limited product pipeline
⢠Mergers and Acquisitions
⢠Political or Economic instability or acts of terrorism
⢠Labour unions
⢠Dependence on third parties to conduct our clinical trials
⢠Foreign manufacturing disincentive
⢠Ageing machinery and plant
⢠Outsourcing risk
The Company promotes strong ethical values and high levels of integrity in all its activities, which in itself is a significant risk mitigator. With the growth strategy in place, risk management holds the key to the success of the Company''s journey of continued competitive sustainability in attaining the desired business objectives.
Internal Financial Controls
To compete globally, world class Corporate Governance and Financial Controls over operations are a must for the Company. The Internal Financial Controls as mandated by the Companies Act not only require a certification from CEO-CFO but also put an obligation on the Board of Directors to ensure that the Internal Financial Controls are adequate and are operating effectively. Besides this, the Statutory Auditors are also required to give an opinion on the
adequacy and effectiveness of Internal Controls over Financial Reporting (''ICFR'').
To make the Internal Financial Controls framework robust, the Company has worked on three lines of defence strategy which is as under:
First Line of Defence: Build internal controls into operating processes - To this end, we have ensured that a detailed Delegation of Authority is issued, Standard Operating Procedures (SOPs) for the processes are created, financial decision making is done through Committees, IT controls are built into the processes, Segregation of Duties is done, strong budgetary control framework exists, the Entity level controls including Code of Conduct, Ombudsperson Office, etc. are established.
Second Line of Defence: Create an efficient review mechanism -We have created a review mechanism under which all the business units and functions are reviewed for performance at least once in a month by the respective CEOs and once in a quarter, by the Corporate team. The formats for these reviews are detailed and finalised with the help of global consulting firms.
Third Line of Defence: Independent assurance - A Big Four firm has been appointed 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.
We have implemented a programme under which more than 1,500 internal controls have been established and certified on a quarterly basis by the relevant process owners before the financial results are closed for the quarter. A quarterly certification process is maintained through a work flow based IT tool called ''Controls Manager'' and this certification is the basis of the CEO-CFO certification of internal controls as per Regulation 17(8) of the Listing Regulations.
We have implemented a web-based automated compliance management and reporting system. The objective of the system is to ensure that the compliances are regularly monitored and controlled with a view to support the Company''s business objectives and corporate policy requirements. The system includes a comprehensive check-list for ensuring compliance with the laws and regulations applicable to all plants and offices of the Company. To ensure timely and effective compliances, the compliance status is monitored on a real-time basis by the respective functions. The status is presented by the Legal Team and reviewed on a quarterly basis by the Senior Management and the Board of Directors. Pursuant to the Listing Regulations, the Company Secretary and Compliance Officer places a compliance report to the Board of Directors on a quarterly basis.
The Company regularly updates the controls library and Risk and Control Matrix. The updated control framework was tested for operational effectiveness by the statutory auditors and they have given an affirmative opinion about the adequacy and effectiveness of Internal Controls for Financial Reporting in the Company.
The Company has three business segments namely (a) Pharmaceuticals (b) Contract Research & Development Services and (c) Proprietary Novel Drugs. These Segments have a complete management set up with CEO, CFO and other functional heads
who are responsible for running the operations and report to the Chairman/ Co-Chairman and Managing Director (''CCMD'') and the Corporate Committee.
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.
A detailed note on Internal Control Systems and Risk Management is given under ''Management Discussion and Analysis Report''.
We continued to focus on the safety & well-being of our employees and their families, guided by our core philosophy of Caring, Sharing, Growing and in line with our ''Employee First'' approach.
During the COVID-19 pandemic, we ensured that all safety and precautionary measures were put in place at all our workplaces. We supported employees and their families with the necessary resources and assistance and built mechanisms for a personal and daily connect with those effected. To maintain business continuity, we established workplace rules which also prevented exposure of the employees to COVID-19. Work from home was encouraged.
Employee mental and emotional well-being became the centre point of our initiatives. We conducted multiple sessions/ communications to build awareness about the importance of mental health and well-being amongst employees. We launched #JubilantCares - an Employee Well-Being and Assistance Program (EWAP) positively impacting over 1,000 employees in association with a leading partner in this space. Through this initiative, employees were able to seek confidential counselling service for themselves and family members; access resources and have ready tools to manage stress and build mindfulness.
With our commitment to grow talent from within, we launched ''Online Development Centre'' for our high potential candidates and successors for critical roles. This was followed by robust development planning and actionable. We continued to focus on our talent strategy and further strengthened our succession pipeline identification via psychometric and 360° assessments in association with one of the top names in this space. Learning for employees is supported by quarterly program calendars, Virtual Instructor Led Training (VILT) and eLearning.
Jubilant has always believed in contributing towards and promoting the ''Inclusion & Diversity'' agenda. With this belief and commitment, we launched impactful initiatives including leadership inclusion immersion journeys, formation of cross-function teams to drive gender diversity and inclusion and creation of an eco-system where everyone has a voice, everyone is heard, everyone can bring their whole-selves to work and everyone is encouraged to succeed. Further, our focus on hiring diverse talent has helped us set specific goals that reflect our leadership team''s expectations. Tracking diversity hiring, via digital dashboard helps us to be on track and measure progress towards this endeavour. The Company has constituted Internal Complaints Committee in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
As part of our digital transformation agenda, we continued to amplify our employee experience and digitised our R&R program ''Applause''. This received an overwhelming employee response. Continuing with the legacy of ''Chairmen''s Annual Awards''- the highest and the most prestigious awards at Jubilant, we enhanced the digital engagement experience last year. The virtual event was streamed globally simultaneously, leading to the highest-ever viewership & engagement rate.
As an employer, it is important to take the opportunity to focus on how new hires are welcomed. From the time an offer is extended until the day the employee comes on board and becomes productive, the on-boarding experience can be used to create a foundation for long-term success. With this intent, we launched a digitised ''New Hire Pre-On Boarding'' platform which provides an overview of Jubilant''s diverse businesses and culture and helps the new joinee engage with us before they are on-boarded.
The COVID-19 pandemic brought seemingly instant and significant changes to the hiring processes around the globe. As an organisation, we responded and brought about immediate changes to hiring, including one of the most noteworthy hiring activities, campus recruiting. In 2021, campus hiring went completely virtual where we strengthened our association with more than 20 management and engineering academic partners.
Analytics is critical to us, we continue to enhance our systems and processes to measure our processes'' health across the globe so that we can make faster and better decisions. Further, our global analytics help in maintaining data integrity, ensuring better process governance and control, enhancing processes and delivering higher productivity.
We continue to strengthen our performance management process to drive a culture of performance.
The Company has adopted Vigil Mechanism and the same has been disclosed in the Corporate Governance Report. Further, the Whistle Blower Policy provides for adequate safeguards against victimisation of Director(s) or Employee(s) and also provides for direct access to the chairperson of the audit committee in appropriate or exceptional cases. Details of Vigil Mechanism is provided in the Corporate Governance Report and forms part of the Report.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is an integral part of sustainability framework of Jubilant. CSR activities at Jubilant are established in accordance with the provisions of Section 135 read with Schedule VII to the Act.
Jubilant Bhatia Foundation (''JBF''), established in the year 2007, a not-for-profit arm of the Jubilant Bhartia Group is responsible for conceptualisation and implementation of CSR activities of all group companies of Jubilant.
The CSR programs of Jubilant are strategised in line with the United Nations Sustainable Development Goals (SDGs), also known as Global Goals.
Jubilant has been publishing its Corporate Sustainability Report every year from 2003. The report is externally verified and is in accordance with the Global Reporting Initiative (''GRI'') guidelines.
From 2007, the Company was receiving application level A by GRI for our Corporate Sustainability Report. From the Financial Year 2017-18, our Sustainability Report is aligned with the Global Reporting Initiatives'' GRI Standards in accordance with the ''Comprehensive'' option. All our reports are available on the Company''s website at the weblink: www.iubilantpharmova.com/ sustainability/sustainability-report.
With a thrust on CSR, the Company is continuously working towards Economic, Environmental and Social performance. The CSR projects are designed in a way to empower the communities around the area of operations of Jubilant and add value to their life. The projects work on 4P model (Public-Private-People-Partnership). JBF''s detailed activities are available on its website www.iubilantbhartiafoundation.com.
Jubilant''s CSR programs are weaved in with a vision to bring progressive social change through strategic multi-stakeholder partnership and bring about a ''social change'' involving "knowledge generation & sharing, experiential learning and entrepreneurial ecosystem" through JBF.
During the Financial Year 2022, Jubilant continued working in the arena of Health, Education & Livelihood to improve the quality of life of the community around the manufacturing locations, which is considered as apex stakeholder. The brief information is given below:
⢠Supporting Rural Government Primary Education-Jubilant Bhartia Foundation is reaching out to over 1,00,000 students in primary schools through E-Muskaan (School Digitisation), Khushiyon Ki Pathshala (Value Education) and Muskaan Fellowship (Youth Leadership Programme).
⢠Providing affordable basic and preventive health care-Reaching out to over 6.5 Lac population in more than 100 villages through Jubilant Aarogya (Providing affordable healthcare through mobile and static clinics enabled with JUBICARE- Tele-clinic platform and Swasthya Prahari (Preventive Health Care) along with need based health awareness camps.
⢠Working towards providing Sustainable livelihood to the community through Nayee Disha (Skill Development), Samridhhi (SHG and Micro Enterprise Promotion), Jubifarm (Sustainable Agriculture program having sub programs like Pashu Sakhi and Paryavaran Sakhi).
Annual Report on CSR activities for the Financial Year 2022 including contents of the CSR Policy is attached as Annexure-4. In compliance with the Listing Regulations, Business Responsibility Report forms part of the Annual Report.
OTHER DISCLOSURES
i. Extracts of Annual Return: Pursuant to the provisions of Section 134(3)(a) of the Act, the Annual Return for the Financial Year 2021-22 has been uploaded on the Company''s website and can be accessed at https://www.iubilantpharmova. com/investors/financials/annual-return.
A detailed Report on Corporate Governance is attached as Annexure-5 and forms part of this Report. A certificate from a Practising Company Secretary confirming compliance with the conditions of Corporate Governance, as stipulated in Clause E of Schedule V to the Listing Regulations is attached to the Corporate Governance Report.
The Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for Directors and Senior Management for the year ended March 31, 2022. A certificate from the Co-Chairman & Managing Director confirming the same is attached to the Corporate Governance Report.
A certificate from the CEO and CFO confirming correctness of the financial statements, adequacy of internal control measures, etc. is also attached to the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company as provided under the Listing Regulations has been given separately and forms part of this Report.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the co-operation and assistance received from the Central and State Government authorities. Your Directors thank the shareholders, debentureholders, financial institutions, banks/ other lenders, debenture trustee, customers, vendors and other business associates for their confidence in the Company and its management and look forward to their continued support. The Board wishes to place on record its appreciation for the dedication and commitment of the Company''s employees at all levels, which has continued to be our major strength. We look forward to their continued support in the future.
For and on behalf of the Board
Shyam S. Bhartia Hari S. Bhartia
Chairman Co-Chairman & Managing Director
(DIN: 00010484) (DIN: 00010499)
Place: Noida Date: May 27, 2022
ii. Public Deposits: The Company has not accepted any deposits from the public during the year. The Company had no outstanding, overdue, unpaid or unclaimed deposits at the beginning and end of the Financial Year 2022.
iii. Loans, Guarantees and Investments: Details of loans, guarantees/ securities and investments along with the purpose for which the loan, guarantee or security is proposed to be utilised by the recipient have been disclosed in Note nos. 5, 6 and 41 to the Standalone Financial Statements, as applicable.
iv Particulars of Contracts or Arrangements with the Related Parties: The Company has formulated a policy on Related Party Transactions (''RPTs''), dealing with the review and approval of RPTs. The policy was revised during the year pursuant to the amendment of the provisions pertaining to the Related Party Transactions contained in the Listing Regulations. Prior omnibus approval is obtained for RPTs which are of repetitive nature. All RPTs are placed before the Audit Committee for review and approval. All RPTs entered into during the Financial Year 2022 were in the ordinary course of business and on arm''s length basis. No material RPTs were entered into during the Financial Year 2022 by the Company as defined in the Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions. Accordingly, the disclosure of RPTs as required under Section 134(3) (h) of the Act in Form AOC-2 is not applicable. Your Directors draw attention of the members to Note no. 37 to the Standalone Financial Statements which sets out the Related Party disclosures.
v. Material Changes in Financial Position: No material change or commitment has occurred after close of the Financial Year 2022 till the date of this Report, which affects the financial position of the Company.
vi. Orders passed by Courts/ Regulators: No significant or material order has been passed by the regulators or courts or tribunals impacting the going concern status of the Company or its future operations.
vii. Secretarial Standards: The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.
As a responsible corporate citizen, the Company is committed to
maintain the highest standards of Corporate Governance and
believes in adhering the best corporate practices prevalent globally.
Mar 31, 2018
Your Directors are pleased to present the Fortieth Annual Report together with the Audited Standalone and Consolidated Financial Statements for the year ended March 31, 2018.
Directors'' Report
OVERVIEW
Jubilant Life Sciences Limited (''the Company'' or''Jubilant'') is an integrated global Pharmaceutical and Life Sciences company engaged in Pharmaceuticals, Life Science Ingredients and Drug Discovery Solutions. The Pharmaceuticals segment, through its wholly owned subsidiary Jubilant Pharma Limited, is engaged in manufacture and supply of Active Pharmaceutical Ingredients (''APIs''), Solid Dosage Formulations, Radiopharmaceuticals, Allergy Therapy Products and Contract Manufacturing of Sterile and Non-sterile products through 6 US Food and Drug
RESULTS OF OPERATIONS AND STATE OF COMPANY''S AFFAIRS FINANCIAL RESULTS
(Rs, / Million)
Particulars |
Standalone |
Consolidated |
||
Year ended March 31, 2018 |
Year ended March 31, 2017 |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
|
Total Revenue from Operations |
33,430 |
26,230 |
75,578 |
60,063 |
Total Operating Expenditure |
28,037 |
23,050 |
60,394 |
46,610 |
EBITDA |
5,393 |
3,180 |
15,184 |
13,453 |
Other Income |
462 |
519 |
400 |
248 |
EBITDA including Other Income |
5,855 |
3,699 |
15,584 |
13,701 |
Depreciation, Amortisation and Impairment Expense |
826 |
811 |
4,150 |
2,914 |
Finance Costs |
1,352 |
1,743 |
2,843 |
3,411 |
Profit before Tax |
3,677 |
1,145 |
8,591 |
7,376 |
Tax Expenses |
1,043 |
353 |
2,247 |
1,630 |
Reported Net Profit After Tax |
2,634 |
792 |
6,344 |
5,746 |
Attributable to: |
||||
Shareholders of the Company |
- |
- |
6,428 |
5,756 |
Non-Controlling Interests |
- |
- |
(84) |
(10) |
Other Comprehensive Income |
(25) |
(9) |
654 |
(577) |
Total Comprehensive Income for the period |
2,609 |
783 |
6,998 |
5,169 |
Retained Earnings brought forward from previous year |
7,836 |
7,967 |
20,939 |
16,150 |
Adjustment on account of consolidation of Jubilant Employees Welfare Trust |
- |
- |
11 |
12 |
Retained Earnings available for appropriation which the Directors have appropriated as follows: |
10,442 |
8,747 |
27,349 |
21,890 |
- Dividend on Equity Shares |
478 |
478 |
478 |
478 |
- Tax on Dividend on Equity Shares |
721 |
581 |
97 |
97 |
- Transfer to Debenture Redemption Reserve |
375 |
375 |
375 |
375 |
- Transfer to Legal Reserve |
- |
- |
2 |
1 |
Retained Earnings to be carried forward |
9,517 |
7,836 |
26,397 |
20,939 |
''After reversal of dividend distribution tax of '' 24.57 Million (March 31, 2017: '' 39.27 Million), on account of dividend received during the year from a subsidiary company.
Administration (''USFDA'') approved manufacturing facilities in India, USA and Canada and a network of over 50 Radiopharmacies in the USA. The Life Science Ingredients segment is engaged in Specialty Intermediates, Nutritional Products and Life Science Chemicals through 5 manufacturing facilities in India. The Drug Discovery Solutions segment provides proprietary in-house innovation and collaborative research and partnership for out-licensing through 3 world class research centres in India and USA. Jubilant Life Sciences Limited has a team of around 7,600 multicultural people across the globe and is committed to deliver value to its customers across over 100 countries. The Company is well recognized as a ''Partner of Choice'' by leading pharmaceuticals and life sciences companies globally. For more information, please visit the Company''s website www.jubl.com.
(i) Standalone Financials Revenue from Operations
In the Financial Year 2017-18, on standalone basis, the Company recorded total Revenue from operations of Rs, 33,430 Million.
International Revenues
International business contributed 39% to the Net Revenue from operations at Rs, 13,185 Million.
EBITDA
For the year ended March 31, 2018, Earnings before Interest, Taxes, Depreciation and Amortization (''EBITDA'') stood at '' 5,855 Million with EBITDA margins at 18%.
Reported Net Profit after Tax and EPS
Reported Net Profit after Tax was Rs, 2,634 Million in the Financial Year 2017-18. Basic Earnings Per Share (''EPS'') stood at '' 16.54.
(ii) Consolidated Financials
The Consolidated Financial Statements, prepared in accordance with the provisions of the Companies Act, 2013 (the ''Act''), the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ''Listing Regulations'') and Ind-AS 110 ''Consolidated Financial Statements'' prescribed under Section 133 of the Act, form part of the Annual Report.
Performance Review
Our strong performance continued in the Financial Year 2017-18 and the Company reported highest ever revenue and profits during the year. This has been led by strong performance in Specialty Injectables and Life Science Ingredients businesses. We have a well defined strategy of being closer to our customers, with an integrated value-chain, to have a de-risked business model with a diversified portfolio and strong manufacturing capabilities from fully compliant sites. We are focussed on driving business growth in Specialty Injectables and better utilization of our assets in all our businesses.
Revenue from operations was the highest ever at Rs, 75,578 Million, up 26% YoY, with International revenue at Rs, 54,169 Million, contributing 72% of the total revenue. Pharmaceuticals revenues were at Rs, 40,166 Million, up 29% YoY and contributing 53% to the revenues. Within this segment, Specialty Injectables displayed a growth of 59% YoY. This consistent growth is a testimony to our strategy and differentiated business model wherein we have been able to build multiple levers of businesses with significant barriers to entry which have helped the business deliver robust performance, despite continued headwinds in the US Generics business from supply chain consolidation. Life Science Ingredients revenue stood at Rs, 33,649 Million, up 24% YoY and contributing 45% to the revenues. Drug Discovery Solutions revenue stood at Rs, 1,763 Million contributing 2% of the revenue.
EBITDA was 14% higher YoY at record Rs, 15,584 Million, with margins at 20.6% as against 22.8% in the Financial Year 2016-17. Pharmaceuticals segment reported EBITDA of Rs, 9,765 Million, a margin of 24.3% as against the margin of 31.3% achieved last year. The margins were lower due to the acquisition of the radiopharmaceutical distribution of Triad in the US during the year, which made a marginal loss during the year. The Pharmaceuticals segment now contributes about 63% to the overall EBITDA.
Life Science Ingredients reported EBITDA of Rs, 6,322 Million translating to EBITDA margin of 18.8%, an improvement from 16% in the Financial Year 2016-17. Drug Discovery Solutions EBITDA was at Rs, 185 Million translating to EBITDA margin of 10.5%. Depreciation, amortization and impairment in the Financial Year 2017-18 was at Rs, 4,150 Million as compared to Rs, 2,914 Million in the Financial Year 2016-17. Finance cost stood at Rs, 2,843 Million, lower by 17% YoY.
Net profit attributable to shareholders improved by 12% YoY at Rs, 6,428 Million as compared to Rs, 5,756 Million in the Financial Year 2016-17 with a Basic EPS of Rs, 41.25 as compared to Rs, 36.93 in the Financial Year 2016-17.
From Balance Sheet perspective, in the Financial Year 2017-18, the Company repaid Rs, 6,278 Million of Debt and the Net Debt stood at Rs, 32,201 Million.
DIVIDEND
The Board is pleased to recommend a dividend of 300% i.e. Rs, 3 per fully paid up equity share of Re. 1 for the year ended March 31, 2018. Total dividend payout of Rs, 576 Million includes tax on dividend of Rs, 97 Million. The payment of dividend is subject to approval of the shareholders at the forthcoming Annual General Meeting (''AGM'') of the Company.
CAPITAL STRUCTURE
(a) Share Capital
During the year, there has been no change in the authorized, subscribed and paid-up share capital of the Company. As on March 31, 2018, the paid-up share capital stood at Rs, 159,281,139 comprising of 159,281,139 equity shares of Re. 1 each.
(b) Employees Stock Option Plans (ESOPs)
The Company has two employees stock option plans namely Jubilant Employees Stock Option Plan 2005 (''Plan 2005'') and JLL Employees Stock Option Plan 2011 (''Plan 2011''). During the year, there was no material change in Plan 2005 and Plan 2011 and both the plans are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (the ''SEBI ESOP Regulations'').
Plan 2005: During the year, 2,066 Options were exercised by the option holders. As on March 31, 2018, no Options were outstanding under the Plan 2005. Each Option entitles the holder to acquire five equity shares of '' 1 each of the Company at the exercise price fixed at the time of grant, being the market value as per the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the ''SEBI Guidelines'').
Plan 2011: During the year, 31,804 Options were exercised by the option holders. As on March 31, 2018, 32,216 Options were outstanding under the Plan 2011. Each Option entitles the holder to acquire one equity share of ''1 each of the Company at the exercise price fixed at the time of grant, being the market value as per the SEBI Guidelines.
No dilution of paid-up capital is expected due to exercise of Options as it is envisaged to transfer the shares held by Jubilant Employees Welfare Trust to the employees on exercise of Options.
The details pursuant to the SEBI ESOP Regulations have been placed on the website of the Company and weblink of the same is http://jubl.com/Uploads/ image/893imguf esop disclosure2018.pdf.
(c) Debentures
In the financial year 2016-17, the Company had issued Secured Redeemable Non-Convertible Debentures (''NCDs'') of '' 4,950 Million on a private placement basis. NCDs are listed on the Whole-sale Debt Market Segment of National Stock Exchange of India Limited (''NSE'').
SUBSIDIARIES
As on March 31, 2018, the Company had 44 subsidiaries. Brief particulars of the principal subsidiaries are given below:
Jubilant Pharma Limited
Jubilant Pharma Limited, Singapore (''Jubilant Pharma'') is a wholly-owned subsidiary of your Company. Jubilant Pharma holds the global pharmaceutical business of the Company through its subsidiaries in USA, Canada, Europe, India and rest of the world. These subsidiaries of Jubilant Pharma are engaged in manufacturing, marketing and distribution of various pharmaceutical products and services including APIs, oral dosage forms (tablets and capsules), contract manufacturing of sterile injectables, ointment, creams and liquids, allergy therapy products and radiopharmaceutical products. Jubilant Pharma also operates radiopharmacy network in the US through its wholly-owned subsidiary with more than 50 pharmacies in different states of USA. Revenue of the company during the Financial Year 2017-18 was Rs,192.19 Million as compared to Rs,833.18 Million during the Financial Year 2016-17.
In the Financial Year 2016-17, Jubilant Pharma had issued 4.875% Rated Unsecured High Yield Bonds (''Notes'') of US$ 300 Million under Regulation S of the US Securities Act of 1933. The Notes are listed on the Singapore Exchange Securities Trading Limited.
Jubilant Generics Limited
Jubilant Generics Limited (''JGL'') is a wholly-owned subsidiary of the Company through Jubilant Pharma. JGL owns two manufacturing facilities; one at Nanjangud, Karnataka and another at Roorkee, Uttarakhand which are engaged in APIs and Dosage Forms business, respectively.
The manufacturing location at Nanjangud, Karnataka, spread over 69 acres, is engaged in manufacturing of APIs and caters to the sales worldwide primarily to regulated markets. The manufacturing facility is approved by global regulatory agencies, which include USFDA, Canadian Health Authority, Japanese PMDA among others. API portfolio is focused on Lifestyle driven Therapeutic Areas (CVS, CNS) and also targets complex and newly approved molecules. The company is market leader in four APIs and is amongst the top 3 players for another three APIs in its portfolio helping it to maintain a high contribution margin.
The manufacturing location at Roorkee, Uttarakhand, with 5 acres of infrastructure, is USFDA, Japan PMDA, UK MHRA, TGA, WHO and Brazil ANVISA audited and approved. This facility primarily manufactures oral solids (Tablets and Capsules) with capabilities on complex processes like pallet coating, MUPS (Multi Unit Particulate System) and extended release technology based on Matrix formulations and functional coating. JGL''s non-US finished formulation business is focussed on B2B business model in EU, Japan, Canada, Australia and it has also initiated B2C model in select countries of emerging markets. JGL''s major therapy area includes Cardiovascular, CNS and Gastrointestinal products with special focus on backward integration and in-house API leading to greater competitiveness in the market place. JGL has capabilities to develop multiple dosage forms including Oral solid, injectable and ophthalmic dosage forms at its research and development centre at Noida, Uttar Pradesh. Revenue of the company during the Financial Year 2017-18 was Rs, 9,944.09 Million as compared to Rs, 10,726.90 Million during the Financial Year 2016-17.
Jubilant Pharma Trading Inc.
This corporation incorporated in Delaware, USA is a wholly-owned subsidiary of Jubilant Pharma. It undertakes sales and distribution of APIs in North America. Revenue of the company during the Financial Year 2017-18 was Rs, 1,056.03 Million as compared to Rs, 1,232.63 Million during the Financial Year 2016-17.
Cadista Holdings Inc. and Jubilant Cadista Pharmaceuticals Inc.
(i) Cadista Holdings Inc. (''Cadista''), a corporation incorporated in Delaware, USA is a wholly-owned subsidiary of Jubilant Pharma Holdings Inc.
(ii) Jubilant Cadista Pharmaceuticals Inc., a corporation incorporated in Delaware, USA is a wholly-owned subsidiary of Cadista. This company is in the business of manufacturing solid dosage forms of generic prescription pharmaceuticals at its USFDA approved manufacturing facility in Salisbury, Maryland, USA. Its customer base includes large wholesalers, retail and grocery chains. Besides manufacturing its own label products, it also provides product development and contract manufacturing services. As on March 31, 2018, there were 35 products marketed in the US with focus in the therapeutic areas of CVS, CNS, Anti Allergic, Steroids, etc. Revenue of the company during the Financial Year 2017-18 was Rs, 5,610.94 Million as compared to Rs, 5,374.65 Million during the Financial Year 2016-17.
Jubilant HollisterStier LLC
This subsidiary is based in Spokane, State of Washington, USA. It is a wholly-owned subsidiary of HSL Holdings Inc. This subsidiary has 2 businesses; Contract Manufacturing (CMO) and Allergenic Extracts.
In the contract manufacturing business of sterile injectables, this company provides a complete range of services to support drug manufacturing in the pharmaceutical and biopharmaceutical industries. Its contract manufacturing capabilities include aseptic liquid fill/ finishing and lyophilisation of small lot parenteral for commercial and clinical requirements. Its capabilities can be applied to a variety of projects from pre-clinical through commercial scale across a multitude of dosage forms including microspheres, suspensions, WFI/ diluents, biologics (proteins), lyophilized products and liposomes. Jubilant HollisterStier is approved across global regulated markets including USFDA (both CDER and CBER), Europe, Japan, Brazil and Canada. Its contract manufacturing business serves customers including innovators ranging from small biotechnology to large pharmaceutical companies.
Additionally, it is an innovator, manufacturer and distributor of allergenic extracts, targeted primarily at treating allergies. With nearly 100 years of leadership in research, extract production and immunotherapy products, the organization is respected worldwide in the field of allergy. Currently, the business is comprised of allergenic extracts and mixes, along with specialized skin test diagnostic devices. The business lays special emphasis on innovation towards introducing new products to treat and cure allergies. Revenue of the company during the Financial Year 2017-18 was Rs, 7,968.58 Million as compared to Rs, 7,133.07 Million during the Financial Year 2016-17.
Jubilant DraxImage Inc.
Jubilant DraxImage Inc. (''JDI'') is a wholly-owned subsidiary of the Company through Jubilant Pharma. JDI has a solid foundation in speciality pharma. JDI is headquartered in Montreal, Canada, where it operates a highly specialized manufacturing facility approved by both USFDA and Health Canada. JDI develops, manufactures and commercializes radiopharmaceuticals used in Nuclear Medicine for the diagnosis, treatment and monitoring of various diseases. It serves hospital-based customers (Nuclear Medicine Physicians, Nuclear Cardiologists and Technologists) in addition to specialized commercial radiopharmacies. JDI employs about 170 highly skilled professionals dedicated to providing high quality, reliable products and services to healthcare providers around the globe. The business is backed by a dedicated research and development team, specialized manufacturing, strong regulatory affairs and commercial operations. The areas of specialization include cardiac, pulmonary, skeletal and thyroid diseases.
JDI is a market leader in North America in several specialty niche products including I-131 Therapeutic and Diagnostic capsules for imaging and treatment of thyroid diseases and thyroid cancer, Methylene-Diphosphonate (MDP) for bone imaging, Macro-Aggregated Albumin (MAA) for lung imaging and Diethylene Triamine Penta-acetic Acid (DTPA) for renal, brain and functional pulmonary imaging. Recently,
JDI received approval from USFDA and Health Canada for RubyFill®, a cutting edge technology for PET myocardial perfusion imaging (MPI) under rest and pharmacological stress conditions to evaluate regional myocardial perfusion in adult patients with suspected or existing coronary artery disease. JDI has a strong vision to improve lives through nuclear medicine on a global scale, and continues to invest in the development of novel radiopharmaceutical products in the fields of diagnostics and radiotherapy "Theranostics" which will enable early and accurate diagnosis and treatment of diseases leading to better patient recovery across the globe. Revenue of the company during the Financial Year 2017-18 was Rs, 10,526.37 Million as compared to Rs, 8,112.66 Million during the Financial Year 2016-17.
Jubilant Pharma NV
This is a wholly-owned subsidiary of the Company through JGL and Jubilant Pharma. This company holds shares of Jubilant Pharmaceuticals NV (99.81%) and PSI Supply NV (99.50%) along with Jubilant Pharma which holds the balance shares.
Jubilant Pharmaceuticals NV
This is a wholly-owned subsidiary of the Company through Jubilant Pharma NV, Belgium, which holds 99.81% of its shares and Jubilant Pharma holds the balance shares. This company is engaged in the business of licensing generic dosage forms and providing regulatory services to generic pharmaceutical companies. Revenue of the company during the Financial Year 2017-18 was Rs, 5.83 Million as compared to Rs, 35.12 Million during the Financial Year 2016-17.
PSI Supply NV
This is a wholly-owned subsidiary of the Company. 99.50% of its shares are held by Jubilant Pharma NV and the balance by Jubilant Pharma. It is engaged in the supply of generic dosage forms to the European markets. Revenue of the company during the Financial Year 2017-18 was Rs, 470.40 Million as compared to Rs, 219.50 Million during the Financial Year 2016-17.
Jubilant Life Sciences NV
This is a wholly-owned subsidiary of the Company. 99.99% of its shares are held by the Company and the balance by Jubilant Infrastructure Limited. It is engaged in the supply of bulk chemicals such as ethyl acetate, acetic anhydride, etc. and vitamins (feed and food grade) to the European markets. Revenue of the company during the Financial Year 2017-18 was Rs, 3,723.21 Million as compared to Rs, 3,018.02 Million during the Financial Year 2016-17.
Jubilant Biosys Limited
This company is a subsidiary of the Company through Jubilant Biosys (Singapore) Pte. Ltd. (a wholly-owned subsidiary of the Company). Jubilant Biosys (Singapore) Pte. Ltd. holds 66.98% equity of this company.
This company provides Drug Discovery Services to global pharmaceutical and biotech companies in:
- Standalone Service Model including functional services in the areas of Medicinal Chemistry, In Vitro Biology, In Vivo Biology, Structural Biology, DMPK, Toxicology and
Discovery Informatics, on Full Time Equivalent (FTE) or Fee For Service (FFS) based model;
- Collaborative/Partnership Model with integrated discovery program across a single or a portfolio of molecules;
- In house proprietary model to develop assets that can be out-licensed under terms including research funding, payments for scientific milestones achieved through Discovery, Development and Commercialisation phases and royalties on successful commercialization of drugs.
Revenue of the company during the Financial Year 2017-18 was Rs, 844.70 Million as compared to Rs, 887.26 Million during the Financial Year 2016-17.
Jubilant Chemsys Limited
This company is a wholly-owned subsidiary of the Company through Jubilant Drug Development Pte. Ltd., Singapore. This company offers services in Synthetic Organic Chemistry, Combinatorial Chemistry, Medicinal Chemistry, Process Research and Development, Scale up services and GMP Manufacturing-Clinical Supply to drug discovery companies of US, Europe and rest of the world on Full Time Equivalent, Fee for Service and Hybrid Model.
It also works closely with Jubilant Biosys Limited in collaborative drug discovery research. Revenue of the company during the Financial Year 2017-18 was Rs, 1,014.15 Million as compared to Rs, 988.78 Million during the Financial Year 2016-17.
Jubilant Clinsys Limited
During the year, Jubilant Chemsys Limited has acquired entire share capital of Jubilant Clinsys Limited (''JCL'') from Jubilant Drug Development Pte. Ltd. Thus, JCL continues to be a wholly-owned subsidiary of the Company through Jubilant Chemsys Limited. Revenue of the company during the Financial Year 2017-18 was Rs, 9.66 Million as compared to Rs, 35.06 Million during the Financial Year 2016-17.
During the year, JCL has received order of National Company Law Tribunal (''NCLT'') confirming extinguishment of its preference share capital of '' 270.50 Million held by the Company. Accordingly, JCL cancelled its preference share capital of '' 270.50 Million and paid equivalent amount to the Company.
Jubilant Infrastructure Limited
This wholly-owned subsidiary of the Company has developed a Sector Specific Special Economic Zone (''SEZ'') for Chemicals in Gujarat with the best in class infrastructure facilities and utility plants like Boiler, Gas Turbine, Effluent Treatment, Incinerator and DM Water.
The Company has two units in this SEZ. The finished products of Unit-1 and Unit-2 are fully backward integrated and are using in-house developed innovative technologies. The Company is in the process of entering into an agreement for taking on lease about 16 acres of land for 25 years for upcoming Unit-4. The Unit-4 will become operational by December, 2018.
The global scale plants of Vitamin B3 and 3-Cyanopyridine at the SEZ make your Company the largest producer of Vitamin B3 in India and the second largest globally. Revenue of the company during the Financial Year 2017-18 was Rs, 786.62 Million as compared to Rs, 715.99 Million during the Financial Year 2016-17.
Jubilant Life Sciences (USA) Inc.
This corporation incorporated in Delaware, USA is a wholly-owned subsidiary of the Company. It undertakes sales and distribution of advance intermediates, vitamins, life science chemicals and fine ingredients in North America. Revenue of the company during the Financial Year 2017-18 was Rs, 1,521.88 Million as compared to Rs, 1,508.07 Million during the Financial Year 2016-17.
Jubilant Life Sciences (Shanghai) Limited
This wholly-owned subsidiary of the Company is held through Jubilant Life Sciences International Pte. Limited. It undertakes sales and distribution of products in China. This company is engaged in trading of advance intermediates (pyridine and its derivatives), specialty ingredients and nutrition products. It is catering to pharmaceutical, animal feed and agrochemical industries in China. This subsidiary is also a sourcing hub of raw materials for your Company. Revenue of the company during the Financial Year 2017-18 was Rs, 1,310.89 Million as compared to Rs, 1,036.30 Million during the Financial Year 2016-17.
Jubilant DraxImage Radiopharmacies Inc.
Jubilant DraxImage Radiopharmacies Inc. (''JDRI'') is a wholly-owned subsidiary of the Company through Jubilant Pharma Holdings Inc. JDRI undertakes specialty pharma business in the United States.
During the year, JDRI signed an Asset Purchase Agreement with Triad Isotopes Inc. (''Triad'') and its parent, Isotope Holdings, Inc. and has acquired substantially all of the assets which comprise the radiopharmacy business of Triad. Postacquisition of Triad''s business, JDRI has become the second largest radio pharmacy network in the US with more than 50 pharmacies, distributing nuclear medicine products to the largest National General Purchasing Organizations, regional health systems, stand-alone imaging centres, cardiologists and hospitals. The acquisition has provided Jubilant with direct access to hospital networks with ability to deliver more than 3 million patient doses annually through approximately 1,700 customers. The acquisition has facilitated Jubilant forward integrate in the radiopharmaceutical business. The business operations are being managed independently by a team of experienced professionals. Revenue of the company during the Financial Year 2017-18 was '' 7,701.06 Million.
Other subsidiaries are mentioned below:
Jubilant Pharma Holdings Inc.
Jubilant Pharma Australia PTY Limited Jubilant Life Sciences International Pte. Limited Jubilant Life Sciences (BVI) Limited Jubilant Innovation Pte. Limited Jubilant Innovation (USA) Inc.
Jubilant Innovation (India) Limited Jubilant HollisterStier Inc.
Jubilant First Trust Healthcare Limited Jubilant Drug Discovery & Development Services Inc. Jubilant Drug Development Pte. Limited Jubilant DraxImage Limited Jubilant DraxImage (USA) Inc.
Jubilant Discovery Services LLC Jubilant Clinsys Inc.
Jubilant Biosys (Singapore) Pte. Limited Jubilant Biosys (BVI) Limited HSL Holdings Inc.
Drug Discovery and Development Solutions Limited
Draxis Pharma LLC
Draximage Limited, Ireland
Draximage Limited, Cyprus
Draximage (UK) Limited
6981364 Canada Inc.
6963196 Canada Inc. (Merged into 6981364 Canada Inc. effective from April 1, 2018)
Vanthys Pharmaceutical Development Private Limited
During the year, Jubilant Innovation (BVI) Limited, DAHI Animal Health (UK) Limited and Jubilant Life Sciences (Switzerland) AG have been liquidated and Draximage LLC and Deprenyl Inc., USA have been merged into Jubilant Draximage (USA) Inc.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The performance and financial position of the subsidiaries are given in Form AOC-1 attached to the Financial Statements for the year ended March 31, 2018.
PARTNERSHIPS
Jubilant HollisterStier General Partnership
It is a Canada based partnership managed by two subsidiaries of the Company - Jubilant HollisterStier Inc. and Draxis Pharma LLC. This partnership provides contract manufacturing services. It manufactures products in two categories: sterile products and non-sterile products. Sterile products include liquid and freeze-dried (lyophilized) injectables, ophthalmic tubes/ solutions and sterile ointments and creams. Non-sterile products include non-sterile ointments, creams and liquids. The products manufactured by this partnership are supplied to over 50 countries. The manufacturing location at Montreal, Quebec, Canada is approved by Health Canada, USFDA and other regulatory authorities.
Draximage General Partnership
It is a partnership based in Canada managed by two Canadian subsidiaries of the Company i.e. Jubilant Draximage Inc. (90%) and 6981364 Canada Inc. (10%).
STATUTORY AUDITORS
M/s B S R & Co. LLP, Chartered Accountants (''BSR'') were appointed as the Statutory Auditors of the Company at the 36th AGM of the Company to hold office until conclusion of the AGM to be held in the year 2018. Accordingly, the tenure of BSR as Statutory Auditors is expiring at the ensuing AGM.
In terms of provisions of Section 139 of the Act and the Rules made thereunder, your Directors have proposed re-appointment of BSR as Statutory Auditors of the Company for another term of 5 consecutive years from conclusion of the ensuing AGM of the Company till conclusion of the 45th AGM of the Company to be held in the year 2023, for approval of Shareholders of the Company. BSR has given consent to act as Auditors of the Company and has further confirmed that their appointment, if made, at the ensuing AGM shall be in accordance with conditions specified in the Act.
The Auditors'' Reports for the Financial Year 2017-18 do not contain any qualification, reservation, adverse remark or disclaimer.
COST AUDIT
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Central Government has prescribed audit of cost records for certain products. Accordingly, the Company needs to carry out cost audit of its products. Based on the recommendations of the Audit Committee, the Board of Directors has re-appointed M/s J. K. Kabra & Co., Cost Accountants as Cost Auditors of the Company to conduct cost audit for the Financial Year 2017-18.
SECRETARIAL AUDIT
The Board had appointed M/s Sanjay Grover & Associates, Company Secretaries to conduct Secretarial Audit pursuant to the provisions of Section 204 of the Act for the Financial Year 2017-18. The Report of the Secretarial Auditors is attached as Annexure-1 to this Report and does not contain any qualification, reservation, adverse remark or disclaimer.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Shyam S Bhartia retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
The Board has appointed Mr. Rajesh Kumar Srivastava as Whole-time Director of the Company for a period of 5 years effective from January 17, 2018 subject to approval of shareholders at the ensuing AGM.
The tenure of Mr. S Sridhar, Ms. Sudha Pillai and Dr. Ashok Misra as Independent Directors shall expire on March 31, 2019. The Board has, at its meeting held on May 9, 2018, recommended re-appointment of Mr. S Sridhar, Ms. Sudha Pillai and Dr. Ashok Misra as Independent Directors for another term of 5 consecutive years effective from April 1, 2019 for approval of Shareholders at the ensuing AGM.
The Shareholders have approved appointment of Mr. Sushil Kumar Roongta and Mr. Vivek Mehra as Independent Directors and Mr. Priyavrat Bhartia and Mr. Arjun Shanker Bhartia as Non-Executive Directors at the 39th AGM of the Company held on August 29, 2017.
Mr. Pramod Yadav resigned from the Board effective from January 17, 2018 on his appointment as Director and CEO of Jubilant Pharma Limited, a wholly-owned subsidiary of the Company.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors of the Company were held during the Financial Year 2017-18.
DECLARATION OF INDEPENDENT DIRECTORS
All Independent Directors have given declaration that they meet the criteria of independence as provided under Section 149 of the Act and Regulation 16 of the Listing Regulations.
APPOINTMENT AND REMUNERATION POLICY
The Company has implemented Appointment and Remuneration Policy pursuant to the provisions of Section 178 of the Act and Regulation 19 read with Schedule II, Part D of the Listing Regulations. The salient features of the Policy and other details have been disclosed in the Corporate Governance Report attached to this Report.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD
A statement on annual evaluation by the Board of its own performance and performance of its Committees as well as individual Directors forms part of the Corporate Governance Report attached to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors, based on the representation received from the management, confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2018 and of the profits of the Company for the year ended March 31, 2018;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.
Based on the framework of internal financial controls including the Controls Manager for financial reporting and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by the management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the Financial Year 2017-18; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
COMPOSITION OF AUDIT COMMITTEE
During the year, the Audit Committee was re-constituted. As on date, the Audit Committee comprises Mr. S Sridhar, Chairman, Ms. Sudha Pillai, Dr. Ashok Misra, Mr. Vivek Mehra and Mr. Priyavrat Bhartia. The Board has accepted all the recommendations made by the Audit Committee.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required to be disclosed pursuant to Section 134 of the Act read with the Companies (Accounts) Rules, 2014 is given as Annexure-2 and forms part of this Report.
EMPLOYEES
Particulars of Directors and Employees as required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as Annexure-3 and form part of this Report.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
Risk-taking is an inherent trait of any enterprise. However, if risks are not properly managed and controlled, they can affect the Company''s ability to attain its objectives. Risk management and internal financial control systems play a key role in directing and guiding the Company''s activities by continually preventing and managing risks. The Board, Audit Committee and Senior Management team collectively set the overall tone and risk culture of the Company by identifying the risks impacting the Company''s business and documenting the process of risk identification, risk minimization and risk optimization as a part of the risk management policy through defined and communicated corporate values, clearly assigned risk responsibilities, appropriately delegated authority and a set of processes and guidelines.
There exists a critical risk management framework across the Company and the same is reviewed on a periodic basis by the Board. Some of the critical risks identified in various businesses of the Company are:
- Competition, Cost Competitiveness and Pricing
- Dependence on Certain Key Products and Customers
- Foreign Currency and Interest Rate Exposures
- Capacity Planning and Optimization
- Manufacturing Operations
- Dependence on Single Manufacturing facility
- Research and Development (R&D) Effectiveness
- Supply Interruptions due to Single Source Supplier
- Limited Product Pipeline
- Failure to Supply to Customers
- Human Resources- Acquire and Retain Talent
- Compliance and Regulatory
- Environment, Health and Safety (EHS)
- Protecting Intellectual Property Rights (IPR)
- Information Technology (IT)
- Risk of changes in Tax Legislation
- Mergers and Acquisitions
- Political or Economic Instability or Acts of Terrorism
- Duties by Export Destination Countries
- Acceptance of Our Products in Market
- Policies regarding returns, allowances and charge backs in the United States
- Labour Unions
- Consolidation of Customer Base
- Business Interruption
The Company promotes strong ethical values and high levels of integrity in all its activities, which in itself is a significant risk mitigator. With the growth strategy in place, risk management holds the key to the success of the Company''s journey of continued competitive sustainability in attaining the desired business objectives.
Implementation of Internal Financial Controls
To compete globally, world class Corporate Governance and Financial Controls over operations are a must for the Company. The Internal Financial Controls as mandated by the Act not only require a certification from CEO-CFO but also put an obligation on the Board of Directors to ensure that the Internal Financial Controls are adequate and operating effectively. Besides this, the Statutory Auditors are also required to give an opinion on the adequacy and effectiveness of Internal Controls over Financial Reporting (''ICFR'').
To make the Internal Financial Controls framework robust, the Company has worked on three lines of defense strategy which is as under:
- First Line of Defense: Build internal controls into operating processes - To this end, we have ensured that a detailed Delegation of Authority is issued, Standard Operating Procedures for the processes are created, financial decision making is done through Committees, IT controls are built into the processes, Segregation of Duties is done, strong budgetary control framework exists, the Entity level controls including Code of Conduct, Ombudsman Office are put in place, etc.
- Second Line of Defense: Create an efficient review mechanism - We created a review mechanism under which all the business units and functions are reviewed for performance at least once in a month by the respective CEOs and once in a quarter, by the Corporate team. The formats for these reviews are detailed and finalized with the help of global consulting firms.
- Third Line of Defense: Independent assurance - A Big Four firm has been appointed 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.
We have implemented a programme under which more than 2,000 financial controls are established and certified on a quarterly basis by the relevant process owners before the financial results are closed for the quarter. A quarterly certification process is maintained through a work flow based IT tool called ''Controls Manager'' and this certification is the basis of the CEO-CFO certification stipulated by Regulation 17(8) read with Part B of Schedule II to the Listing Regulations.
We have implemented a web-based automated compliance management and reporting system. The objective of the system is to ensure that the compliances are effectively managed and controlled and that they support the Company''s business objectives and corporate policy requirements. The system includes a comprehensive checklist for ensuring compliance with the laws and regulations applicable to all plants and offices of the Company. To ensure timely and effective compliances, the compliance status is monitored on a real-time basis by the Secretarial Team. The status is reviewed on a quarterly basis by the Senior Management and the Board of Directors. Pursuant to the Listing Regulations, the Company Secretary and Compliance Officer places a compliance report to the Board of Directors on a quarterly basis.
The Company regularly updates the controls library and Risk and Control Matrix. The exercise of review of controls was conducted during the year by the in-house process owners with the help of a Big Four firm. The revised control framework after such review was tested for operational effectiveness by the Statutory Auditors and they have given an affirmative opinion about the adequacy and effectiveness of the Internal Controls for Financial Reporting in the Company.
The Company has three business segments namely (a) Pharmaceuticals (b) Life Science Ingredients and (c) Drug Discovery Solutions. Each segment has a complete management set up with CEO, CFO, Business leaders and other functional heads who are responsible for running the operations and report to the Chairman/Co-Chairman and Managing Director and the Corporate Committee.
To improve the controls in operations, we have established, for each line of business, the concept of financial decision making through operational committees.
A detailed note on Internal Control Systems and Risk Management is given under ''Management Discussion and Analysis Report''.
CERTIFICATIONS
The Corporate Office in Noida and Gajraula Manufacturing facility are certified for Responsible Care®14001:2013 under the American Chemistry Council''s (ACC) Responsible Care® program. Implementation of RC14001 and Responsible Care Management System by Jubilant demonstrates its commitment to employee health and safety, community and the environment.
Responsible Care initiative encompasses comprehensive environmental management system, occupational health and safety, product stewardship, security, community outreach and transportation safety and aims at achieving and sustaining high standards of performance.
Gajraula, Nira, Bharuch and Savli Manufacturing facilities are certified under Integrated Management System program for ISO 9001 (Quality Management System), ISO 14001 (Environmental Management System) and OHSAS 18001 (Occupational Health and Safety Management system).
Gajraula
Gajraula Quality Control Laboratory has also been accredited by National Accreditation Board for Testing and Calibration Laboratories in accordance with the ISO/ IEC 17025:2005. The Carbon Dioxide manufacturing facility is certified for FSSC 22000 (Food Safety System Certification) for production and dispatch of food grade Carbon Dioxide for Beverages. Carbon Dioxide product is approved by Food Safety and Standards Authority of India (FSSAI).
Gajraula manufacturing facility is Kosher and Halal Certified for key products used for human consumption.
Savli
Animal Nutrition Unit at Savli is certified for FAMI-QS Code Version 5.1 in Feed Safety Management System.
Ambernath
Ambernath Manufacturing facility is ISO 9001:2015 certified for Quality Management System.
Bharuch
Bharuch Site is certified for Energy Management System Certification ISO 50001:2011 for Energy Conservation programme (ENCON).
Vitamins plant at Bharuch is certified for FAMI-QS Code Version 5.1 in Feed Safety Management System, Kosher, Halal-India, Halal-Malaysia, Halal-Indonesia, FSSC 22000 (Food Safety System Certification) and Good Manufacturing Practices (''GMP'').
Nira
Acetyl manufacturing facility at Nira has been certified for FSSC 22000 (Food Safety System Certification) for production and dispatch of Acetic Anhydride and Ethyl Acetate and also for storage, packaging and dispatch of Glacial Acetic Acid for food application. Manufacturing facility at Nira is Kosher and Halal certified for key products used for human consumption.
HUMAN RESOURCES
Our employees remain at the core of the Company''s growth strategy and play a vital role in ensuring sustainable business growth and future readiness. The Company has been focusing on strengthening its talent management and employee engagement processes through clear role expectations with specific and well defined Key Performance Indicators for each role. We believe in creating a culture of performance and merit that provides all our employees with opportunities to excel, learn and progress. We have been focusing on attracting the best talent from India''s leading campuses to have a steady flow of fresh talent, thereby creating a strong pool of internal talent.
Our well defined Leadership Competency Framework lays tremendous focus on outlining a common leadership culture throughout the organization. All our initiatives are backed by an action oriented development plan. The development initiatives lay the foundation of our talent pipeline.
Last year, we have conducted culture survey across businesses and geographies. The results of the survey have been published and shared with employees and appropriate initiatives would be taken in this regard.
In the learning and development space, we launched "Learning Management System" providing online training courses on business, functional, management and leadership skills to hone and foster a culture of continuous learning in the organisation. Additionally, we have mandatory programs for employees on the Code of Conduct, Whistle Blower Policy and Policy on Prevention of Sexual Harassment at workplace to reinforce our commitment to governance and adherence to the code of conduct and fair business practices. The Company has not received any complaint during the year under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
At Jubilant, we continue to strive to attract the best talent to fuel accelerated contribution and growth. However, there is talent scarcity across the industry. To mitigate the same, it is imperative for us to attract the best talent. To meet this objective, we had launched employee branding survey to understand how external world - Customers, Students, prospective candidates, etc. - perceive Jubilant and how different it is from the internal perception. We have received satisfactory response and have identified the focus areas to strengthen our Employer''s Value Proposition.
As on March 31, 2018, a total of 355 employees at our manufacturing plants at Savli, Nira and Gajraula were either members of unions or had collective bargaining capabilities. During the year, we enjoyed cordial relations with our employees and there have been no instances of labour unrest or disputes at any of the manufacturing sites.
A detailed note on Human Resource Management is given in the ''Management Discussion and Analysis Report''.
INVESTOR SERVICES
With a view to keep the investors well informed of its activities, the Company has taken the following initiatives:
- E-mailing quarterly results and press releases to the Shareholders soon after they are sent to the stock exchanges and e-mailing Annual Reports. Maintaining user friendly Investor Section on the website of the Company www.jubl.com;
- A dedicated e-mail address viz. [email protected] for interacting on various matters with respect to share transfer, transmission, dividends and other related issues with the Company Secretary and Compliance Officer;
- The Company has placed an Investor Feedback form on its website www.jubl.com under the head ''Investor Feedback Form'' to obtain valuable feedback and suggestions of the investors, by submitting the Form electronically;
- Earnings Presentation and Release detailing the quarterly results are uploaded on the website of the Company www.jubl.com. Earnings call is typically conducted post announcement of results to the stock exchanges as per the schedule mentioned in the Concall Invite which is also uploaded on the website of the Company. Earnings calls playback is made available on the link shared in the Concall Invite and transcripts are uploaded on the website of the Company;
- The presentation and meeting schedule of Road shows attended by the Company are uploaded on its website after intimating the same to the Stock Exchanges; and
- Disclosure made to the Stock Exchanges are promptly uploaded on the website of the Company for information of the Investors.
AWARDS AND ACCOLADES
During the year, various awards and accolades were received by the Company like:
- Most Consistent IR (Investor Relations) Practice in the country award instituted by IR Society of India;
- FICCI award for Efficiency in Energy Usage in Chemical sector; and
- Gold award by Chemexcil in Large Scale Manufacturer plus Merchant Exporter sector.
VIGIL MECHANISM
During the year, the Board has revised Vigil Mechanism (Whistle Blower Policy) to make the process more robust. The details of Vigil Mechanism adopted by the Company have been disclosed in the Corporate Governance Report, which is attached to and forms an integral part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (''CSR'') is an integral part of Jubilant''s framework for sustainable development. The Company''s approach towards sustainable development focuses on the triple bottom line of Economic, Environmental and Social performance. The CSR activities at Jubilant are in line with the provisions of Section 135 read with Schedule VII to the Act. The Company''s CSR initiatives thrust on creating value in the lives of the communities around its areas of operations. Jubilant as a responsible corporate works in the line of Sustainable Development Goals (SDGs) with a strong focus on social performance indicated in the CSR projects of the organization. The SDGs, otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.
Following are the highlights of CSR at Jubilant:
- CSR is deeply imbibed in the Company''s approach towards sustainable development. Jubilant considers community as one of its apex stakeholders and believes in inclusive growth.
- During the year, Jubilant continued its CSR initiatives in the realm of Education, Health, Livelihood and Social Entrepreneurship.
- Jubilant has been publishing its Corporate Sustainability Report every year from 2003 onwards. The report is externally verified and is in accordance with the Global Reporting Initiative (''GRI'') guidelines.
- Acknowledged application level A by GRI for our Corporate Sustainability Report since 2007 onwards. Report for FY 2016-17 was prepared in line with GRI G4 Guidelines in accordance with ''Comprehensive'' option. All our reports are available on the Company''s website www.jubl.com.
- CSR initiatives of the Company are conceptualized and implemented through Jubilant Bhartia Foundation (''JBF''), the social wing of Jubilant Bhartia Group, established in 2007 as a not-for-profit organization. JBF works on 4P model (Public-Private-People-Partnership) for empowering communities. JBF in partnership with Schwab Foundation for Social Entrepreneurship has been conferring Social Entrepreneur of the Year (SEOY) Award in India since the year 2010. The award celebrates mature-stage social entrepreneurs and their organizations that implement innovative, sustainable and large-scale solutions to address social issues. SEOY does not fall in the purview of CSR activities pursuant to the provisions of Schedule VII to the Act. The Company shall, however, continue to confer the SEOY award over and above CSR budget of the Company in view of the social benefits of the award.
- JBF''s detailed activities are available on its website www.jubilantbhartiafoundation.com. Annual Report on CSR including contents of the CSR Policy is attached as Annexure-4 to this Report. In compliance with the Listing Regulations, Business Responsibility Report forms part of the Annual Report.
- During the Financial Year 2015, Jubilant Pharma had taken loan from International Finance Corporation (''IFC''). Jubilant Pharma had ensured compliance towards the Environmental and Social Action Plan suggested by IFC post Environment and Social Due Diligence. Jubilant Pharma is also submitting Annual Monitoring Report (''AMR'') to IFC containing detailed environment and social performance of the company with respect to the IFC Performance Standards in a timely manner. The AMR also includes the latest compliance status towards the Environmental and Social Action Plan recommended by IFC during their annual E&S supervision visit.
OTHER DISCLOSURES
i. Extracts of Annual Return: Pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, extract of the Annual Return is attached as Annexure-5 to this Report.
ii. Public Deposits: The Company has not accepted any deposits from the public during the year. The Company had no outstanding, overdue, unpaid or unclaimed deposits at the beginning and end of the Financial Year 2017-18.
iii. Loans, Guarantees and Investments: Details of loans, guarantees/ securities and investments along with the purpose for which the loan, guarantee or security is proposed to be utilised by the recipient have been disclosed in Note nos. 5, 6, 11, 38A and 40 to the Standalone Financial Statements.
iv. Particulars of Contracts or Arrangements with the. Related Parties: The Company has formulated a policy on Related Party Transactions (''RPTs''), dealing with the review and approval of RPTs. Prior omnibus approval is obtained for RPTs which are of repetitive nature. All RPTs are placed before the Audit Committee for review and approval.
All RPTs entered into during the Financial Year 201718 were in the ordinary course of business and on arm''s length basis. No material RPTs were entered into during the Financial Year 2017-18 by the Company as defined in the Policy on Materiality of Related Party Transactions. Accordingly, the disclosure of RPTs as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable. Your Directors draw attention of the members to Note no. 37 to the Standalone Financial Statements which sets out the Related Party disclosures.
v. Material Changes in Financial Position: No material change or commitment has occurred after the close of the Financial Year 2017-18 till the date of this Report, which affects the financial position of the Company.
vi. Orders passed by Courts/ Regulators: No significant or material order has been passed by the regulators or courts or tribunals impacting the going concern status of the Company or its future operations.
vii. Secretarial Standards: The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.
CORPORATE GOVERNANCE
As a responsible corporate citizen, the Company is committed to maintain the highest standards of Corporate Governance and believes in adhering the best corporate practices prevalent globally.
A detailed Report on Corporate Governance is attached as Annexure-6 and forms part of this Report. A certificate from a Practising Company Secretary confirming compliance with the conditions of Corporate Governance, as stipulated in Clause E of Schedule V to the Listing Regulations is attached to the Corporate Governance Report.
The Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for Directors and Senior Management for the year ended March 31, 2018. A certificate from the Co-Chairman & Managing Director confirming the same is attached to the Corporate Governance Report.
A certificate from the CEO and CFO confirming correctness of the financial statements, adequacy of internal control measures, etc. is also attached to the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company as provided under the Listing Regulations has been given separately and forms part of this Report.
ACKNOWLEDGMENTS
Your Directors acknowledge with gratitude the cooperation and assistance received from the Central and State Government authorities. Your Directors thank the shareholders, debenture holders, financial institutions, banks/ other lenders, debenture trustees, customers, vendors and other business associates for their confidence in the Company and its management and look forward to their continued support. The Board wishes to place on record its appreciation for the dedication and commitment of the Company''s employees at all levels, which has continued to be our major strength. We look forward to their continued support in the future.
For and on behalf of the Board
Shyam S Bhartia Hari S Bhartia
Chairman Co-Chairman & Managing Director
(DIN: 00010484) (DIN: 00010499)
Place: Noida
Date: May 9, 2018
Mar 31, 2017
the Directors are happy in presenting the Thirty Ninth Annual Report together with the Audited Standalone and Consolidated Financial Statements for the year ended March 31, 2017.
OVERVIEW
Jubilant Life Sciences Limited (âthe Companyâ or âJubilantâ) is an integrated global Pharmaceutical and Life Sciences company engaged in Pharmaceuticals, Life Science Ingredients and Drug Discovery Solutions. The Pharmaceuticals segment, through its wholly-owned subsidiary Jubilant Pharma Limited, is engaged in manufacture and supply of Active Pharmaceutical Ingredients (âAPIsâ), Solid Dosage Formulations, Radiopharmaceuticals, Allergy Therapy Products and
RESULTS OF OPERATIONS AND STATE OF COMPANY''S AFFAIRS FINANCIAL RESULTS
('' / Million)
Particulars |
Standalone |
Consolidated |
||
Year ended March 31, 2017 |
Year ended March 31, 2016 |
Year ended March 31, 2017 |
Year ended March 31, 2016 |
|
Total Revenue from Operations |
26,230 |
27,910 |
60,063 |
58,933 |
Total Operating Expenditure |
23,050 |
24,787 |
46,610 |
46,464 |
EBITDA |
3,180 |
3,123 |
13,453 |
12,469 |
Other Income |
519 |
617 |
248 |
134 |
EBITDA including Other Income |
3,699 |
3,740 |
13,701 |
12,603 |
Depreciation and Amortisation Expense |
811 |
870 |
2,914 |
3,467 |
Finance Costs |
1,743 |
2,006 |
3,411 |
3,714 |
Profit after Depreciation and Finance Cost but before Exceptional Items |
1,145 |
864 |
7,376 |
5,422 |
Exceptional Item - (Gain)/ Loss |
- |
- |
- |
- |
Tax Expenses |
353 |
134 |
1,630 |
1,554 |
Reported Net Profit After Tax |
792 |
730 |
5,746 |
3,868 |
Attributable to: |
||||
Shareholders of the Company |
- |
- |
5,756 |
3,918 |
Non-Controlling Interests |
- |
- |
(10) |
(50) |
Other Comprehensive Income |
(9) |
(8) |
(577) |
731 |
Total Comprehensive Income for the period |
783 |
722 |
5,169 |
4,599 |
Retained Earnings brought forward from previous year |
7,976 |
7,761 |
16,167 |
12,606 |
Transfer on account of sale of Equity Instruments |
- |
- |
- |
203 |
Adjustment on account of consolidation of Jubilant Employees Welfare Trust |
- |
- |
12 |
14 |
Retained Earnings available for appropriation which the Directors have appropriated as follows: |
8,768 |
8,491 |
21,935 |
16,741 |
- Dividend on Equity Shares |
478 |
478 |
478 |
478 |
- Tax on Dividend on Equity Shares |
581 |
371 |
97 |
97 |
- Transfer to Debenture Redemption Reserve |
375 |
- |
375 |
- |
- Transfer to Legal Reserve |
- |
- |
1 |
(1) |
Retained Earnings to be carried forward |
7,857 |
7,976 |
20,984 |
16,167 |
Contract Manufacturing of Sterile and Non-sterile products through 6 USFDA approved manufacturing facilities in India, USA and Canada. The Life Science Ingredients segment, is engaged in Specialty Intermediates, Nutritional Products and Life Science Chemicals through 5 manufacturing facilities in India. The Drug Discovery Solutions segment provides proprietary in-house innovation and collaborative research and partnership for out-licensing through 3 world class research centres in India and USA. Jubilant Life Sciences Limited has a team of over 6,500 multicultural people across the globe and is committed to deliver value to its customers across over 100 countries. The Company is well recognized as a âPartner of Choiceâ by leading pharmaceuticals and life sciences companies globally. For more information, please visit the Companyâs website www.jubl.com.
Wter reversal of dividend distribution tax of '' 39 Million (March 31, 2016: '' 60 Million), on account of dividend received during the year from a subsidiary company.
(i) Standalone Financials Revenue from Operations
In the Financial Year 2016-17, on standalone basis, the Company recorded total Revenue from operations of Rs, 26,230 Million.
International Revenues
International business contributed 40% to the Net Revenue from operations at Rs, 10,365 Million.
EBITDA
For the year ended March 31, 2017, Earnings before Interest, Taxes, Depreciation and Amortization (âEBITDAâ) stood at Rs, 3,699 Million with EBITDA margins at 14%.
Reported Net Profit/ Loss after Tax and EPS
Reported Net Profit after Tax was Rs, 792 Million in the Financial Year 2016-17. Basic Earnings Per Share (âEPSâ) stood at Rs, 4.97.
(ii) Consolidated Financials
The Consolidated Financial Statements, prepared in accordance with the provisions of the Companies Act, 2013 (the âActâ), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the âListing Regulationsâ) and Ind-AS 110 ''Consolidated Financial Statements'' prescribed under Section 133 of the Act, form part of the Annual Report.
Performance Review
Our strong performance continued in the Financial Year 2016-17 and the Company reported highest ever revenue and profits during the year. The differentiated business model focusing on Specialty Pharmaceuticals (Injectables) has enabled us to deliver exceptional results and build a strong base for growth going forward in our Pharma business. The Company has generated strong operating cash flow which enabled reduction of debt and is expected to deliver better results going forward. Our focus is to strengthen the Balance Sheet, invest in strategic opportunities without increasing debt levels and build strong pipeline of products across our businesses.
Revenue from operations was the highest ever at Rs, 60,063 Million, up 2% YoY, with International revenue at Rs, 42,468 Million, contributing 71% of the total revenue. Pharmaceuticals revenues were at Rs, 31,167 Million, up 8% YoY and contributing 52% to the revenues. Within this segment, Specialty Pharmaceuticals (Injectables) displayed a growth of 11% YoY. The Company believe that, this growth is a testimony to our strategy and the business model wherein we have been able to build multiple levers of exciting and differentiated businesses which have helped the business deliver robust performance. This has been aptly demonstrated in the consistent growth witnessed in Specialty Pharmaceuticals (Injectables) despite strong headwinds in the US Generics business from supply chain consolidation. Life
Science Ingredients revenue stood at Rs, 27,076 Million and contributed 45% to the revenue. Drug Discovery Solutions revenue improved 45% YoY to Rs, 1,821 Million contributing 3% of the revenue.
EBITDA was 9% higher YoY at record Rs, 13,701 Million, translating to margin improvement of 143 basis points at 22.8% as against 21.4% in the Financial Year 2015-16. This was led by the Pharmaceuticals segment which reported EBITDA of Rs, 9,751 Million, a growth of 9% YoY with a margin of 31.3% as against the margin of 30.9% achieved last year. The Pharmaceuticals segment now contributes about 68% to the overall EBITDA.
Life Science Ingredients reported EBITDA of Rs, 4,338 Million translating to EBITDA margin of 16%, an improvement from 15% in the Financial Year 2015-16. Drug Discovery Solutions EBITDA was at Rs, 258 Million translating to EBITDA margin of 14.2%. Depreciation and amortization in the Financial Year 2016-17 was at Rs, 2,914 Million as compared to Rs, 3,467 Million in the Financial Year 2015-16. Finance cost stood at Rs, 3,411 Million, lower by 8% YoY.
Net profit attributable to shareholders improved by 47% YoY at Rs, 5,756 Million as compared to Rs, 3,918 Million in the Financial Year
2015-16 with a Basic EPS of Rs, 36.93 as compared to Rs, 25.10 in the Financial Year 2015-16.
From Balance Sheet perspective, in the Financial Year 2016-17, the Company repaid Rs, 5,056 Million of Debt and the Net Debt stood at Rs, 36,844 Million on a constant currency basis.
DIVIDEND
The Board is pleased to recommend a dividend of 300% i.e. 3 per fully paid up equity share of Rs, 1 for the year ended March 31, 2017. Total dividend payout of Rs, 536 Million includes tax on dividend of Rs, 58 Million (net of reversal of dividend distribution tax of Rs, 39 Million for the year ended March 31, 2016, on account of dividend received during the year from a subsidiary company). The payment of dividend is subject to approval of the shareholders at the forthcoming Annual General Meeting (âAGMâ) of the Company.
CAPITAL STRUCTURE
(a) Share Capital
During the year, there has been no change in the authorized, subscribed and paid-up share capital of the Company. As on March 31, 2017, the paid-up share capital stood at Rs, 159,281,139 comprising of 159,281,139 equity shares of Rs, 1 each.
(b) Employees Stock Option Plans (ESOPs)
The Company has two employees stock option plans namely Jubilant Employees Stock Option Plan 2005 (''Plan 2005'') and JLL Employees Stock Option Plan 2011 (''Plan 2011''). During the year, there was no material change in Plan 2005 and Plan 2011 and both the plans are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (the ''SEBI ESOP Regulations'').
Plan 2005: During the year, 3,700 Options were exercised by the option holders. As on March 31, 2017, 2,867 Options were outstanding under the Plan 2005. Each Option entitles the holder to acquire five equity shares of Rs, 1 each of the Company at the exercise price fixed at the time of grant, being the market value as per the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the âSEBI Guidelinesâ).
Plan 2011: During the year, 337,075 Options were exercised by the option holders. As on March 31, 2017, 71,185 Options were outstanding under the Plan 2011. Each Option entitles the holder to acquire one equity share of Rs, 1 of the Company at the exercise price fixed at the time of grant, being the market value as per the SEBI Guidelines.
No dilution of paid-up capital is expected due to exercise of Options as it is envisaged to transfer the shares held by Jubilant Employees Welfare Trust to the employees on exercise of Options.
The details pursuant to the SEBI ESOP Regulations have been placed on the website of the Company and we blink of the same is www.jubl.com/Uploads/image/499imguf_ esop_disclosure2017.pdf.
(c) Debentures
During the year, the Company has offered, issued and allotted Secured Redeemable Non-Convertible Debentures (âNCDsâ) of Rs, 4,950 Million on a private placement basis. NCDs are listed on Whole-sale Debt Market Segment of National Stock Exchange of India Limited (âNSEâ). The net proceeds of the funds raised have primarily been used to refinance the existing debt of the Company.
SUBSIDIARIES
As on March 31, 2017, the Company had 49 subsidiaries. Brief particulars of the principal subsidiaries are given below:
Jubilant Pharma Limited
Jubilant Pharma Limited, Singapore (âJubilant Pharmaâ) is a wholly-owned subsidiary of your Company. Jubilant Pharma holds the global pharmaceutical business of the Company through its subsidiaries in USA, Canada, Europe, India and rest of the world. These subsidiaries of Jubilant Pharma are engaged in manufacturing and marketing of various pharmaceutical products and services like APIs, oral dosage forms (tablets and capsules), contract manufacturing of sterile injectables, ointment, creams and liquids, allergy therapy products and radiopharmaceutical products. Revenue of the company during the Financial Year 2016-17 was '' 833.18 Million as compared to '' 521.90 Million during the Financial Year 2015-16.
During the year, Jubilant Pharma has, through its debut issue, raised US$ 300 Million by offering 4.875% Rated Unsecured High Yield Bonds (''Notes'') under Regulation S of the US Securities Act of 1933. The Notes are listed on the Singapore Exchange Securities Trading Limited. The net proceeds of the funds raised have primarily been used to refinance the existing debt of the Company and its subsidiaries.
Jubilant Generics Limited
Jubilant Generics Limited (''JGL'') is a wholly-owned subsidiary of the Company through Jubilant Pharma. JGL owns two manufacturing facilities; one at Nanjangud, Karnataka and another at Roorkee, Uttarakhand which are engaged in APIs and Dosage Forms business, respectively.
The manufacturing location at Nanjangud spread on 69 acres is engaged in manufacturing of APIs and caters to the sales worldwide. API portfolio is focused on Lifestyle driven Therapeutic Areas (CVS, CNS) and also targets complex and newly approved molecules. The company is market leader in four APIs and is amongst the top 3 players for another three APIs in its portfolio helping it maintain a high contribution margin. The manufacturing location at Roorkee, Uttarakhand with 5 acres of infrastructure is USFDA, Japan PMDA, UK MHRA, TGA, WHO and Brazil ANVISA audited and approved. This business focusses on B2B model for EU, Canada and emerging markets. It has capabilities to develop multiple dosage forms including Oral solid, injectable and ophthalmic dosage forms. Revenue of the company during the Financial Year 2016-17 was '' 10,726.09 Million as compared to '' 9,197.82 Million during the Financial Year 2015-16.
Jubilant Pharma Trading Inc.
This corporation incorporated in Delaware, USA is a wholly-owned subsidiary of Jubilant Pharma. It undertakes sales and distribution of APIs in North America. Revenue of the company during the Financial Year 2016-17 was '' 1,232.63 Million as compared to '' 1,296.41 Million during the Financial Year 2015-16.
Cadista Holdings Inc. and Jubilant Cadista Pharmaceuticals Inc.
(i) Cadista Holdings Inc. (''Cadista''), a corporation incorporated in Delaware, USA is a wholly-owned subsidiary of Jubilant Pharma Holdings Inc.
(ii) Jubilant Cadista Pharmaceuticals Inc., a corporation incorporated in Delaware, USA is a wholly-owned subsidiary of Cadista. This company is in the business of manufacturing solid dosage forms of generic pharmaceuticals at its U.S. Food and Drug Administration (âUSFDAâ) approved manufacturing facility in Salisbury, Maryland, USA. Its customer base includes all the large wholesalers, retail and grocery chains. Besides manufacturing its own label products, it also provides product development and contract manufacturing services. As on March 31, 2017, there were 29 products marketed in the US with focus in the therapeutic areas of CVS, CNS, Anti Allergic, Steroids, etc. Revenue of the company during the Financial Year 2016-17 was '' 5,374.65 Million as compared to '' 5,822.31 Million during the Financial Year 2015-16.
Jubilant HollisterStier LLC
This subsidiary is based in Spokane, State of Washington, USA. It is a wholly-owned subsidiary of HSL Holdings Inc.
This subsidiary has 2 businesses; Contract Manufacturing (CMO) and Allergenic Extracts.
In the contract manufacturing business of sterile injectables, this company provides a complete range of services to support drug manufacturing in the pharmaceutical and biopharmaceutical industries. Its contract manufacturing capabilities include aseptic liquid fill/ finishing and lyophilisation of small lot parenteral for commercial and clinical requirements. Its capabilities can be applied to a variety of projects from pre-clinical through commercial scale across a multitude of dosage forms including microspheres, suspensions, WFI/ diluents, biologics (proteins), lyophilized products and liposomes. Jubilant HollisterStier is approved across global regulated markets including FDA (both CDER and CBER), Europe, Japan, Brazil and Canada. Its contract manufacturing business serves customers including innovators ranging from small biotechnology to large pharmaceutical companies.
Additionally, it is an innovator, manufacturer and distributor of allergenic extracts, targeted primarily at treating allergies and asthma. With nearly 100 years of leadership in research, extract production and immunotherapy products, the organization is respected worldwide in the field of allergy. Currently, the business is comprised of allergenic extracts and mixes, along with specialized skin test diagnostic devices. The business lays special emphasis on innovation towards introducing new products to treat and cure allergies. Revenue of the company during the Financial Year 2016-17 was '' 7,133.07 Million as compared to '' 6,709.53 Million during the Financial Year 2015-16.
Jubilant DraxImage Inc.
Jubilant DraxImage Inc. (âJDI'') is a wholly-owned subsidiary of the Company through Jubilant Pharma. JDI develops, manufactures and markets radiopharmaceuticals used in Nuclear Medicine for the diagnosis, treatment and monitoring of various diseases. It serves hospital-based customers (Nuclear Medicine Physicians and Technologists) in addition to specialized radiopharmacies and through them patients, globally with high quality and reliable specialty products. The business is backed by a dedicated research and development team, specialized manufacturing, strong regulatory affairs and commercial operations. The areas of specialization include cardiac, lung, bone and thyroid diseases. JDI employs about 160 skilled professionals and is based in Montreal, Canada, where it operates a manufacturing facility approved by USFDA and Health Canada.
JDI has earned and maintained market leadership in North America in several specialty niche products including I-131 Therapeutic & Diagnostic capsules for imaging and treatment of thyroid diseases and thyroid cancer, Methylene-Diphosphonate (MDP) for bone imaging, Macro-Aggregated Albumin (MAA) for lung imaging and Diethylene Triamine Penta-acetic Acid (DTPA) for renal and brain imaging. Recently, JDI received approval from USFDA for RubyFill®, a cutting edge technology for PET myocardial perfusion imaging (MPI) under rest and pharmacological stress conditions to evaluate regional myocardial perfusion in adult patients with suspected or existing coronary artery disease. Revenue of the company during the Financial Year 2016-17 was '' 8,112.66 Million as compared to '' 7,049.54 Million during the Financial Year 2015-16.
Jubilant DraxImage Limited
This is a wholly-owned subsidiary of the Company through Jubilant Pharma. Jubilant Draximage Limited (âJDI, Indiaâ) has been set up with a vision to cater to the Radiopharmaceutical and Nuclear Medicine field in India which lacks a structured focus from Pharmaceutical Industry. This company is engaged in marketing of innovative diagnostic imaging, radiopharmaceutical solution and therapeutic radiopharmaceutical products. Presently, JDI, India is marketing Lyophilized kits like Sestamibi, DTPA MDP and MAA in rest of the world. It is also involved in distribution of wide range of radioisotopes which include Tc-99m Generator (used in the diagnosis of Bone Cancer, Renal Imaging, Cerebral Perfusion Imaging and Myocardial Perfusion Imaging), Thallium-201 and Iodine-131 (Ranked 2nd in market share value wise in India) capsules and solution (for the diagnosis and treatment of Thyroid and its related disease), Lutetium-177 and Gallium-68 generator (Ranked 2nd in market share value wise in India) via various partnerships across South Asia. The target customers are Nuclear Medicine physicians, Cardiologists and Oncologists of various hospitals and imaging labs. Revenue of the company during the Financial Year 2016-17 was '' 112.97 Million as compared to '' 99.23 Million during the Financial Year 2015-16.
Jubilant Pharma NV
This is a wholly-owned subsidiary of the Company through JGL and Jubilant Pharma. This company holds shares of Jubilant Pharmaceuticals NV (99.8%) and PSI Supply NV (99.5%) along with Jubilant Pharma which holds the balance shares.
Jubilant Pharmaceuticals NV
This is a wholly-owned subsidiary of the Company through Jubilant Pharma NV, Belgium, which holds 99.8% of its shares and Jubilant Pharma holds the balance shares. This company is engaged in the business of licensing generic dosage forms and providing regulatory services to generic pharmaceutical companies. Revenue of the company during the Financial Year 2016-17 was '' 35.12 Million as compared to '' 43.85 Million during the Financial Year 2015-16.
PSI Supply NV
This is a wholly-owned subsidiary of the Company. 99.5% of its shares are held by Jubilant Pharma NV and the balance by Jubilant Pharma. It is engaged in the supply of generic dosage forms to the European markets. Revenue of the company during the Financial Year 2016-17 was '' 219.50 Million as compared to '' 239.03 Million during the Financial Year 2015-16.
Jubilant Life Sciences NV
This is a wholly-owned subsidiary of the Company. 99.99% of its shares are held by the Company and the balance by Jubilant Infrastructure Limited. It is engaged in the supply of bulk chemicals such as ethyl acetate, acetic anhydride, etc. and vitamins (feed and food grade) to the European markets.
Revenue of the company during the Financial Year 2016-17 was '' 3,018.02 Million as compared to '' 3,341.75 Million during the Financial Year 2015-16.
Jubilant Biosys Limited
This company is a subsidiary of the Company through Jubilant Biosys (Singapore) Pte. Ltd. (a wholly-owned subsidiary of the Company). Jubilant Biosys (Singapore) Pte. Ltd. holds 66.98% equity of this company.
This company provides Drug Discovery Services to global pharmaceutical and biotech companies in:
- Standalone Service Model including functional services in the areas of In Vitro Biology, In Vivo Biology, Structural Biology, DMPK, Toxicology and Discovery Informatics, on Full Time Equivalent (FTE) or Fee For Service (FFS) based model;
- Collaborative/Partnership Model with integrated discovery program across a single or a portfolio of molecules;
- In house proprietary model to develop assets that can be out-licensed under terms including research funding, payments for scientific milestones achieved through Discovery and Development phase and royalties on successful commercialization of drugs.
Revenue of the company during the Financial Year 201617 was '' 887.26 Million as compared to '' 588.47 Million during the Financial Year 2015-16.
During the Financial Year 2016-17, the Company acquired
186,620,000 12% Optionally Convertible Non-cumulative Redeemable Preference Shares of '' 10 each of Jubilant Biosys Limited at par aggregating to '' 1,866.20 Million. The loans granted earlier by the Company have been applied towards subscription money for the Preference Shares.
Jubilant Chemsys Limited
This company is a wholly-owned subsidiary of the Company through Jubilant Drug Development Pte. Ltd., Singapore. This company offers services in Synthetic Organic Chemistry, Combinatorial Chemistry, Medicinal Chemistry, Process Research & Development and Manufacturing, Scale up services and GMP Manufacturing-Clinical Supply to drug discovery companies of US, Europe and rest of the world on Full Time Equivalent, Fee For Service and Hybrid Model.
It also works closely with Jubilant Biosys Limited in collaborative drug discovery research. Revenue of the company during the Financial Year 2016-17 was '' 988.78 Million as compared to '' 662.42 Million during the Financial Year 2015-16.
Jubilant Clinsys Limited
Jubilant Clinsys Limited (âJCLâ) is a wholly-owned subsidiary of the Company through Jubilant Drug Development Pte. Ltd., Singapore. Revenue of the company during the Financial Year 2016-17 was '' 35.06 Million as compared to '' 25.54 Million during the Financial Year 2015-16.
During the year, JCL made an application to the National Company Law Tribunal (âNCLTâ) to extinguish its preference share capital of '' 270.50 Million held by the Company and payment of equivalent amount to the Company. The order of NCLT is awaited.
Jubilant Clinsys Inc.
This New Jersey based USA Corporation is a wholly-owned subsidiary of Jubilant Pharma Holdings Inc. This company provides Clinical Research Data Management services through TrialStat platform. Revenue of the company during the Financial Year 2016-17 was '' 17.40 Million as compared to '' 37.62 Million during the Financial Year 2015-16.
Jubilant Discovery Services Inc.
This Delaware based USA Corporation is a wholly-owned subsidiary of Jubilant Biosys Limited.Thiscompanyis providing Ion channel screening services using electrophysiology. It also performs Assay development, medium-high-throughput screening, comprehensive cell-culture services under FTE and FFS business models. Apart from these services, it also provides sales, marketing and liaising services to Jubilant Biosys Limited and Jubilant Chemsys Limited. Revenue of the company during the Financial Year 2016-17 was '' 176.04 Million as compared to '' 133.21 Million during the Financial Year 2015-16.
Jubilant Infrastructure Limited
This wholly-owned subsidiary of the Company had entered into a Memorandum of Understanding (''MOU'') with the Government of Gujarat during the ''Vibrant Gujarat'' conference in 2007 for development of Sector Specific Special Economic Zone (''SEZ'') for Chemicals in Gujarat. About 107 hectares land was taken on lease from Gujarat Industrial Development Corporation (''GIDC'') in Bharuch District, Gujarat.
This SEZ became operational in October 2011 with the best in class infrastructure facilities and utility plants like Boiler, Gas Turbine, Effluent Treatment, Incinerator and DM Water.
The Company has two units in this SEZ. The finished products of Unit-1 and Unit-2 are fully backward integrated and are using in-house developed innovative technologies.
The global scale plants of Vitamin B3 and 3-Cyanopyridine at SEZ make your Company the largest producer of Vitamin B3 in India and the second largest globally. Revenue of the company during the Financial Year 2016-17 was '' 715.99 Million as compared to '' 889.10 Million during the Financial Year 2015-16.
Jubilant Life Sciences (USA) Inc.
This corporation incorporated in Delaware, USA is a wholly-owned subsidiary of the Company. It undertakes sales and distribution of advance intermediates, nutrition ingredients and fine chemicals in North America. Revenue of the company during the Financial Year 2016-17 was '' 1,508.07 Million as compared to '' 1,506.87 Million during the Financial Year 2015-16.
Jubilant Life Sciences (Shanghai) Limited
This wholly-owned subsidiary of the Company is held through Jubilant Life Sciences International Pte. Limited. It undertakes sales and distribution of products in China. This company is engaged in trading of advance intermediates (pyridine and its derivatives), specialty ingredients and nutrition products. It is catering to pharmaceutical, animal feed and agrochemical industries in China. This subsidiary is also a sourcing hub of raw materials for your Company. Revenue of the company during the Financial Year 2016-17 was '' 1,036.30 Million as compared to '' 1,325.07 Million during the Financial Year 2015-16.
Jubilant DraxImage Radiopharmacies Inc.
During the year, Jubilant DraxImage Radiopharmacies Inc. (âJDRIâ) was incorporated as a wholly-owned subsidiary of the Company through Jubilant Pharma Holdings Inc. to undertake speciality pharma business in the United States.
JDRI has signed an Asset Purchase Agreement with Triad Isotopes Inc. and its parent, Isotope Holdings, Inc. (âTriadâ) to acquire substantially all of the assets which comprise the radio pharmacy business of Triad. The closing of the transaction is subject to customary closing conditions, including contract, regulatory and other approvals. This is the second largest radio pharmacy network in the US with more than 50 pharmacies, distributing nuclear medicine products to the largest National GPOs, regional health systems, standalone imaging centres, cardiologists and hospitals. The acquisition will provide Jubilant with direct access to hospital networks with ability to deliver more than 3 million patient doses annually through approximately 1,700 customers. The acquisition will facilitate Jubilant forward integrate in the radiopharmaceutical business.
Jubilant Pharma Australia PTY Limited
During the year, Jubilant Pharma Australia PTY Limited (âJPAâ) was incorporated as a wholly-owned subsidiary of the Company through Jubilant Pharma. JPA has been set up to make regulatory filings in its own name in timely and efficient manner. This will enable Jubilant to carry on its pharma business in Australia in an effective manner. JPA will continue to follow a B2B partnership model for marketing its products in Australia.
Other subsidiaries are mentioned below:
Jubilant Innovation Pte. Limited
Jubilant Biosys (Singapore) Pte. Limited
Jubilant Drug Development Pte. Limited
Drug Discovery and Development Solutions Limited
Jubilant Life Sciences International Pte. Limited
Jubilant Innovation (BVI) Limited
Jubilant Life Sciences (BVI) Limited
Jubilant Biosys (BVI) Limited
Jubilant Innovation (USA) Inc.
Jubilant Pharma Holdings Inc.
HSL Holdings Inc.
Draxis Pharma LLC Jubilant DraxImage (USA) Inc.
Draximage LLC (Merged into Jubilant DraxImage (USA) Inc. effective from April 1, 2017)
Deprenyl Inc., USA (Merged into Jubilant DraxImage (USA) Inc. effective from April 1, 2017)
Jubilant HollisterStier Inc.
Draximage Limited, Cyprus Draximage Limited, Ireland 6963196 Canada Inc.
6981364 Canada Inc.
DAHI Animal Health (UK) Limited Draximage (UK) Limited
Jubilant Drug Discovery & Development Services Inc. Jubilant Life Sciences (Switzerland) AG Vanthys Pharmaceutical Development Private Limited Jubilant Innovation (India) Limited Jubilant First Trust Healthcare Limited
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The performance and financial position of the subsidiaries are given in Form AOC-1 attached to the Financial Statements for the year ended March 31, 2017.
PARTNERSHIPS Jubilant HollisterStier General Partnership
It is a Canada based partnership managed by two subsidiaries of the Company - Jubilant Hollister tier Inc. and Draxis Pharma LLC. This partnership provides contract manufacturing services. It manufactures products in two categories: sterile products and non-sterile products. Sterile products include liquid and freeze-dried (lyophilized) injectables and sterile ointments and creams. Non-sterile products include non-sterile ointments, creams and liquids.
Draximage General Partnership
It is a partnership based in Canada managed by two Canadian subsidiaries of the Company i.e. Jubilant Draximage Inc. (90%) and 6981364 Canada Inc. (10%).
STATUTORY AUDITORS
M/s B S R & Co. LLP, Chartered Accountants (''BSR'') were appointed as the Statutory Auditors of the Company at the 36th AGM of the Company to hold office until the conclusion of AGM to be held in the year 2018, subject to ratification by the members at every AGM. BSR has confirmed that ratification of their appointment, if made at the ensuing AGM, shall be in accordance with the conditions specified in the Act.
The Auditorsâ Reports for the Financial Year 2016-17 do not contain any qualification, reservation, adverse remark or disclaimer.
COST AUDIT
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Central Government has prescribed audit of cost records for certain products. Accordingly, the Company needs to carry out cost audit of its products. Based on the recommendations of the Audit Committee, the Board of Directors has re-appointed M/s J. K. Kabra & Co., Cost Accountants as Cost Auditors of the Company to conduct cost audit for the Financial Year 2016-17.
SECRETARIAL AUDIT
The Board had appointed M/s Sanjay Grover & Associates, Company Secretaries to conduct Secretarial Audit pursuant to the provisions of Section 204 of the Act for the Financial
Year 2016-17. The Report of the Secretarial Auditors is attached as Annexure-1 to this Report and does not contain any qualification, reservation, adverse remark or disclaimer.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Hari S Bhartia was re-appointed as Co-Chairman and Managing Director of the Company for a period of 5 years effective from April 1, 2017 by the Shareholders at the AGM held on August 30, 2016. Mr. Hari S Bhartia retires by rotation at the forthcoming AGM and being eligible, offers himself for re-appointment.
The Board has appointed Mr. Pramod Yadav as Whole-time Director of the Company for a period of 2 years effective from April 1, 2017 subject to approval of the Shareholders at the ensuing AGM.
The Board has, at its meeting held on May 23, 2017, appointed Mr. Sushil Kumar Roongta and Mr. Vivek Mehra as Additional Directors in the category of Independent Directors and Mr. Priyavrat Bhartia and Mr. Arjun Shanker Bhartia as Additional Directors in the category of Non-Executive Directors.
Mr. Shardul S Shroff resigned from the Board of Directors of the Company effective from May 24, 2016. Mr. Shyamsundar Bang resigned as Executive Director of the Company effective from February 7, 2017 on his superannuation from the services of the Company. He continued as Non-Executive Director of the Company till March 31, 2017.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors of the Company were held during the Financial Year 2016-17.
DECLARATION OF INDEPENDENT DIRECTORS
All Independent Directors have given declaration that they meet the criteria of independence as provided under Section 149 of the Act and Regulation 16 of the Listing Regulations.
APPOINTMENT AND REMUNERATION POLICY
The Company has implemented Appointment and Remuneration Policy pursuant to the provisions of Section 178 of the Act and Regulation 19 read with Schedule II, Part D of the Listing Regulations. The Policy has been disclosed in the Corporate Governance Report attached to this Report.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD
A statement on annual evaluation by the Board of its performance and performance of its Committees as well as individual Directors forms part of the Corporate Governance Report attached to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors, based on the representation received from the management, confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2017 and of the profits of the Company for the year ended March 31, 2017;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.
Based on the framework of internal financial controls including the Controls Manager for financial reporting and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by the management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the Financial Year 2016-17;and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
COMPOSITION OF AUDIT COMMITTEE
As on date, the Audit Committee comprises Mr. S Sridhar, Chairman, Ms. Sudha Pillai and Dr. Ashok Misra. The Board has accepted all the recommendations made by the Audit Committee.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed pursuant to Section 134 of the Act read with the Companies (Accounts) Rules, 2014 is given as Annexure-2 and forms part of this Report.
EMPLOYEES
Particulars of Directors and Employees as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are given as Annexure-3 and form part of this Report.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
Risk-taking is an inherent trait of any enterprise. However, if risks are not properly managed and controlled, they can affect the Companyâs ability to attain its objectives. Risk management and internal financial control systems play a key role in directing and guiding the Companyâs activities by continually preventing and managing risks. The Board, Audit Committee and Senior Management team collectively set the overall tone and risk culture of the Company by identifying the risks impacting the Companyâs business and documenting the process of risk identification, risk minimization and risk optimization as a part of the risk management policy through defined and communicated corporate values, clearly assigned risk responsibilities, appropriately delegated authority and a set of processes and guidelines.
There exists a critical risk management framework across the Company and the same is reviewed on a periodic basis by the Board. Some of the critical risks identified in various businesses of the Company are:
- Competition, Cost Competitiveness and Pricing
- Dependence on Certain Key Products and Customers
- Foreign Currency and Interest Rate Exposures
- Capacity Planning and Optimization
- Manufacturing Operations
- Dependence on Single Manufacturing facility
- Research & Development Effectiveness
- Supply Interruptions due to Single Source Supplier
- Limited Product Pipeline
- Failure to Supply to Customers
- Human Resources- Acquire and Retain Talent
- Compliance and Regulatory
- Environment, Health and Safety
- Protecting Intellectual Property Rights
- Information Technology
- Risk of changes in Tax Legislation
- Mergers & Acquisitions
- Political or Economic Instability or Acts of Terrorism
- Duties by Export Destination Countries
- Acceptance of Our Products in Market
- Policies regarding returns, allowances and chargebackâs in the United States
- Labour Unions
- Consolidation of Customer Base
The Company promotes strong ethical values and high levels of integrity in all its activities, which in itself is a significant risk mitigator. With the growth strategy in place, risk management holds the key to the success of the Companyâs journey of continued competitive sustainability in attaining the desired business objectives.
Implementation of Internal Financial Controls
To compete globally, world class Corporate Governance and Financial Controls over operations are a must for the Company. The Internal Financial Controls as mandated by the Act, not only require a certification from CEO-CFO but also put an obligation on the Board of Directors to ensure that the Internal Financial Controls are adequate and operating effectively. Besides this, the Statutory Auditors are also required to give an opinion on the adequacy and effectiveness of Internal Controls over Financial Reporting (âICFRâ).
To make the Internal Financial Controls framework robust, the Company has worked on three lines of defense strategy which is as under:
- First Line of Defense: Build internal controls into operating processes - To this end, we have ensured that a detailed Delegation of Authority is issued, Standard Operating Procedures for the processes are created, financial decision making is done through Committees, IT controls are built into the processes, Segregation of Duties is done, strong budgetary control framework exists, the Entity level controls including Code of Conduct, Ombudsman Office are put in place, etc.
- Second Line of Defense: Create an efficient review mechanism - We created a review mechanism under which all the business units and functions are reviewed for performance at least once in a month by the respective CEOs and once in a quarter, by the Corporate team. The formats for these reviews are detailed and finalized with the help of global consulting firms.
- Third Line of Defense: Independent assurance - A Big Four firm has been appointed 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.
We have implemented a programme under which more than 2,000 financial controls are established and certified on a quarterly basis by the relevant process owners before the financial results are closed for the quarter. A quarterly certification process is maintained through a work flow based IT tool called âControls Managerâ and this certification is the basis of the CEO-CFO certification stipulated by Regulation 17(8) read with Part B of Schedule II to the Listing Regulations.
The Company regularly updates the controls library and Risk and Control Matrix. The exercise of review of controls was conducted during the year by the in-house process owners with the help of a Big Four firm. The revised control framework after such review was tested for operational effectiveness by the Statutory Auditors and they have given an affirmative opinion about the adequacy and effectiveness of the Internal Controls for Financial Reporting in the Company.
The Company has three business segments namely
(a) Pharmaceuticals (b) Life Science Ingredients and
(c) Drug Discovery Solutions. Each segment has a complete management set up with CEO, CFO and other functional heads who are responsible for running the operations and report to the Chairman/Co-Chairman and Managing Director and the Corporate Committee.
To improve the controls in operations, we have established, for each line of business, the concept of financial decision making through operational committees.
A detailed note on Internal Control Systems and Risk Management is given under âManagement Discussion and Analysis Report''.
CERTIFICATIONS
The Company has received Responsible Care®14001:2013 certification under the American Chemistry Councilâs (ACC) Responsible Care® program for Corporate Office in Noida and Gajraula Manufacturing facility. Implementation of RC14001 and Responsible Care Management System by Jubilant demonstrates its commitment to employee health and safety, community and the environment.
Responsible Care initiative encompasses comprehensive environmental management system, occupational health and safety, product stewardship, security, community outreach and transportation safety and aims at achieving and sustaining high standards of performance.
Gajraula, Nira, Bharuch and Savli Manufacturing facilities are certified under Integrated Management System program for ISO 9001 (Quality Management System), ISO 14001 (Environmental Management System) and OHSAS 18001 (Occupational Health and Safety Management system).
Gajraula
Gajraula Quality Control Laboratory has also been accredited by National Accreditation Board for Testing and Calibration Laboratories in accordance with the ISO/ IEC 17025:2005. The Carbon Dioxide manufacturing facility has been certified for FSSC 22000:2005 and TS 22002-01:2009 (Food Safety System Certification) for production and dispatch of food grade Carbon Dioxide for Beverages. Carbon Dioxide product is approved by Food Safety and Standards Authority of India (FSSAI).
Gajraula manufacturing facility has been Kosher and also Halal Certified for key products going in for human consumption.
Savli
Animal Nutrition Unit at Savli is certified for FAMI-QS Code Version 5.1 in Feed Safety Management System.
Ambernath
Ambernath Manufacturing facility is ISO 9001:2008 certified for Quality Management System.
Bharuch
Bharuch Site has received Energy Management System Certification ISO 50001:2011 for energy Conservation programme (ENCON).
Vitamins plant at Bharuch is certified for FAMI-QS Code Version 5.1 in Feed Safety Management System, Kosher, Halal-India, Halal-Malaysia, Halal-Indonesia, FSSC 22000 (Global Food Safety) Compliance, Hazard Analysis and Critical Control Points (''HACCP'') and Good Manufacturing Practices (''GMP'').
Nira
Acetyl manufacturing facility at Nira has been recommended for FSSC/ ISO 22000:2005 (Food Safety System Certification) for production and dispatch of these food grade products. Further, Glacial acetic acid from Nira has been recommended to FSSC /ISO 22000:2005 for storage and supply of food grade acetic acid. Manufacturing facility at Nira has been Kosher approved and Halal certified for the products manufactured at the facility.
HUMAN RESOURCES
Our employees remain at the core of the Companyâs growth strategy and play a vital role in ensuring sustainable business growth and future readiness. The Company has been focusing on strengthening its talent management and employee engagement processes through clear role expectations with specific and well defined Key Performance Indicators for each role. We believe in creating a culture of performance and merit that provides all our employees with opportunities to excel, learn and progress. We have been focusing on attracting the best talent from Indiaâs leading campuses to have a steady flow of fresh talent, thereby creating a strong pool of internal talent.
Our well defined Leadership Competency Framework lays tremendous focus on outlining a common leadership culture throughout the organization. All our initiatives are backed by an action oriented development plan. The development initiatives lay the foundation of our talent pipeline.
Last year, we participated in the Great Place to Work survey. The results of the survey has enabled us to re-design our practices and address areas that concern our employees.
As on March 31, 2017, a total of 384 employees at our manufacturing plants at Savli, Nira and Gajraula were either members of unions or had collective bargaining capabilities. During the year, we enjoyed cordial relations with our employees and there have been no instances of labour unrest or disputes at any of the manufacturing sites.
The Company has a Policy on Prevention of Sexual Harassment at workplace and the Company has not received any complaint during the year under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
A detailed note on Human Resource Management is given in the ''Management Discussion and Analysis Report''.
INVESTOR SERVICES
With a view to keep its investors well informed of its activities, the Company has taken the following initiatives:
- E-mailing quarterly results and press releases to the Shareholders soon after they are sent to the stock exchanges and e-mailing Annual Reports. Maintaining user friendly Investor Section on the website of the Company www.jubl.com;
- A dedicated e-mail address viz. [email protected] for interacting on various matters with respect to share transfer, transmission, dividends and other related issues with the Company Secretary and Compliance Officer;
- Mailing feedback forms to the investors on an annual basis so as to obtain valuable feedback and suggestions for improvement. The Company has also placed an online Investor Feedback form on its website www.jubl.com under the head ''Investor Feedback Form'' to facilitate electronic submission of the Form;
- Earnings Presentation and Release detailing the quarterly results that are uploaded on the website www.jubl.com. Earnings call is typically conducted post announcement of results to the stock exchanges as per the schedule mentioned in the Concall Invite which is also uploaded on the website of the Company. Earnings calls playback is made available on the link shared in the Concall Invite and transcripts are uploaded on the website of the Company;
- Meeting the investors and analysts from time to time at their request;
- The presentation and meeting schedule of Roadshows attended by the Company are uploaded on its website after intimating the same to the Stock Exchanges; and
- Disclosure made to the Stock Exchanges are promptly uploaded on the website of the Company for information of the Investors.
AWARDS AND ACCOLADES
During the year, various awards and accolades were received by the Company like:
- 17th CII National Award for Excellence in Energy conferred under the Chemical/Pharma/Fertilizers category - Gajraula Plant, India;
- Sustainability Award for âBest Green Processâ in Chemical sector in FICCI Chemicals & Petrochemicals Awards, 2016 - Gajraula Plant, India;
- ICC Certificate of Merit for continuous efforts of âwater resources management in chemical industriesâ- Gajraula Plant, India; and
- One Gold and Three Silver Awards in Kaizen Category at Quality Circle Forum of India, Ankleshwar, Gujarat -Bharuch Plant, India.
VIGIL MECHANISM
The details of Vigil Mechanism (Whistle Blower Policy) adopted by the Company have been disclosed in the Corporate Governance Report attached to this Report and which forms an integral part of this Report.
GREEN INITIATIVES
With the aim of going green and minimizing our impact on the environment, the Company continued with the green initiatives in its operations which include:
- Conducting paperless Board/ Committee Meetings;
- Uploading the Corporate Sustainability Report on the website of the Company (instead of circulating in paper or CD form) and providing its we blink to the Shareholders along with the Annual Report; and
- E-mailing Annual Reports to the Shareholders whose e-mail addresses are provided by the depositories or who have opted for the electronic version.
CORPORATE SOCIAL RESPONSIBILITY
Jubilant''s approach to sustainable development focuses on the triple bottom line of Economic, Environmental and Social performance. Corporate Social Responsibility (''CSR'') is an integral part of the social performance of the Company. At Jubilant, CSR is the commitment of the Company to contribute towards inclusive growth. The thrust of CSR initiatives is to create value in the lives of the communities around the area of operations of the Company, which is an important stakeholder. Following are the highlights of CSR at Jubilant:
- During the Financial Year 2016-17, Jubilant continued its CSR initiatives in various sectors;
- Following the approach of âtriple bottom lineâ, Jubilant has been publishing its Corporate Sustainability Report every year from 2003 onwards. The report is externally verified and is in accordance with Global Reporting Initiative (âGRIâ) guidelines; and
- Acknowledged application level A by GRI for our Corporate Sustainability Report since 2007 onwards. Latest report is in accordance with GRI G4
- Comprehensive. All our reports are available on the Companyâs website www.jubl.com.
CSR initiatives of the Company are conceptualized and implemented through Jubilant Bhartia Foundation (''JBF''), the social wing of Jubilant Bhartia Group, established in 2007 as a not-for-profit organization. JBF works on 4P model (Public-Private-People-Partnership) for empowering communities and believes that for sustainable social intervention, participation of communities must be ensured in the Companyâs CSR projects/ programmes. Jubilantâs role is to act as a catalyst and facilitate the process. The social initiatives of the Company are in line with the United Nations Sustainable Development Goals.
JBF in partnership with Schwab Foundation for Social Entrepreneurship has been conferring Social Entrepreneur of the Year (SEOY) Award in India since the year 2010. The award celebrates mature-stage social entrepreneurs and their organizations that implement innovative, sustainable and large-scale solutions to address poverty, indignity and lack of basic services and resources in âBottom of the Pyramidâ and ultra-poor communities. They work in areas as diverse as health, education, job creation, water, clean energy, building identity and entitlements and access to information and technology. Whether they set up social businesses, hybrid social ventures or not-for-profit organizations, the primary focus of social entrepreneurs is large-scale, transformational impact.
SEOY does not fall in the purview of CSR activities pursuant to the provisions of Schedule VII to the Act. The Company shall, however, continue to confer the SEOY award over and above CSR budget of the Company in view of the social benefits of the award.
JBFâs detailed activities are available on its website www.jubilantbhartiafoundation.com. Annual Report on CSR including contents of the CSR Policy is attached as Annexure-4 to this Report.
The Listing Regulations have mandated inclusion of the Business Responsibility Report (âBR Reportâ) as part of the Annual Report starting from the Financial Year 2016-17 for top 500 listed entities based on market capitalization. In compliance with the Listing Regulations, BR Report forms part of the Annual Report.
During the Financial Year 2015, Jubilant Pharma had taken loan from International Finance Corporation (''IFC''). Jubilant Pharma had ensured compliance towards the Environmental and Social Action Plan suggested by IFC post Environment and Social Due Diligence. Jubilant Pharma is also submitting Annual Monitoring Report (''AMR'') to IFC containing detailed environment and social performance of the company with respect to the IFC Performance Standards in a timely manner. The AMR also includes the latest compliance status towards the Environmental and Social Action Plan recommended by IFC during their annual E&S supervision visit.
OTHER DISCLOSURES
i. Extracts of Annual Return: Pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, extract of the Annual Return is attached as Annexure-5 to this Report.
ii. Public Deposits: No deposits have been accepted by the Company during the year from the public. The Company had no outstanding, overdue, unpaid or unclaimed deposits at the beginning and end of the Financial Year 2016-17.
iii. Loans, Guarantees and Investments: Details of loans, guarantees/ securities and investments along with the purpose for which the loan, guarantee or security is proposed to be utilized by the recipient have been disclosed in Note nos. 5, 6, 11, 40 and 41 to the Standalone Financial Statements.
iv. Particulars of Contracts or Arrangements with the Related Parties: The Company has formulated a policy on Related Party Transactions (âRPTsâ), dealing with the review and approval of RPTs. Prior omnibus approval is obtained for RPTs which are of repetitive nature. All RPTs are placed before the Audit Committee for review and approval.
All RPTs entered into during the Financial Year 2016-17 were in the ordinary course of business and on armâs length basis. No material RPTs were entered into during the Financial Year 2016-17 by the Company as defined in the Policy on Materiality of Related Party Transactions. Accordingly, the disclosure of RPTs as required under Section 134(3)(h) of the Act in Form aOc-2 is not applicable. Your Directors draw attention of the members to Note no. 37 to the Standalone Financial Statements which sets out the Related Party disclosures.
v. Material Changes in Financial Position: No material change or commitment has occurred after the close of the Financial Year 2016-17 till the date of this Report, which affects the financial position of the Company.
vi. Orders passed by Courts/ Regulators: No significant or material order has been passed by the regulators or courts or tribunals impacting the going concern status of the Company or its future operations.
CORPORATE GOVERNANCE
As a responsible corporate citizen, the Company is committed to maintain the highest standards of Corporate Governance and believes in adhering to the best corporate practices prevalent globally.
A detailed Report on Corporate Governance is attached as Annexure-6 and forms part of this Report. A certificate from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance, as stipulated in Clause E of Schedule V to the Listing Regulations is attached to the Corporate Governance Report.
The Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for Directors and Senior Management for the year ended March 31, 2017. A certificate from the Co-Chairman & Managing Director confirming the same is attached to the Corporate Governance Report.
A certificate from the CEO and CFO confirming correctness of the financial statements, adequacy of internal control measures, etc. is also attached to the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company as provided under the Listing Regulations has been given separately and forms part of this Report.
ACKNOWLEDGMENTS
Your Directors acknowledge with gratitude the co-operation and assistance received from the Central and State Government authorities. Your Directors thank the shareholders, debenture holders, financial institutions, banks/ other lenders, debenture trustees, customers, vendors and other business associates for their confidence in the Company and its management and look forward to their continued support. The Board wishes to place on record its appreciation for the dedication and commitment of the Companyâs employees at all levels, which has continued to be our major strength. We look forward to their continued support in the future.
For and on behalf of the Board
Shyam S Bhartia Hari S Bhartia
Chairman Co-Chairman & Managing Director
(DIN: 00010484) (DIN: 00010499)
Place: Noida
Date: May 23, 2017
Mar 31, 2016
The Directors are happy in presenting the Thirty Eighth Annual Report
together with the Audited Standalone and Consolidated Financial
Statements for the year ended March 31, 2016.
OVERVIEW
Jubilant Life Sciences Limited (''the Company'' or ''Jubilant'') is an
integrated global Pharmaceutical and Life Sciences company engaged in
manufacture and supply of Active Pharmaceutical Ingredients, Solid
Dosage Formulations, Radiopharmaceuticals, Allergy Therapy Products and
Life Sciences Ingredients. It also provides services in Contract
Manufacturing of Sterile Products and Drug Discovery Solutions. The
Company''s strength lies in its unique offerings of Pharmaceutical and
Life Sciences products and services across the value chain. With 11
world-class manufacturing facilities in India, US and Canada and a team
of about 6,200 multicultural people across the globe, the Company is
committed to deliver value to its customers spread across over 100
countries. The Company is well recognized as a ''Partner of Choice'' by
leading pharmaceuticals and life sciences companies globally. For more
information, please visit the Company''s website www.jubl.com.
RESULTS OF OPERATIONS AND STATE OF COMPANY''S AFFAIRS
(i) Standalone Financials
Income from Operations
In the Financial Year 2015-16, on standalone basis, the Company
recorded income from operations ofRs." 26,562 million.
International Revenues
International business contributed 46% to the Net Revenue from
operations at Rs. 12,339 million.
EBITDA
For the year ended March 31, 2016, Earnings before Interest, Taxes,
Depreciation and Amorization (''EBITDA'') stood at Rs. 4,026 million with
EBITDA margins at 15%.
Reported Net Profit/ Loss after Tax and EPS
Reported Net Profit after Tax was Rs.791 million in the Financial Year
2015-16. Basic Earnings Per Share (''EPS'') stood at Rs. 4.96. However,
Normalised Net Profit after Tax stood at Rs. 1,010 million after
adjusting exceptional loss of Rs. 219 million, mainly on account of
Foreign Currency Monetary Item Translation Difference Account
(''FCMITDA) amortisation of Rs. 252 million on account of unrealised
foreign exchange loss amortised over the tenure of the loan as per
Indian Accounting Standards, foreign exchange gain of Rs. 37 million
and mark-to-market book loss of Rs. 4 million on forward covers
outstanding. Normalised EPS stood at Rs. 6.34 for the Financial Year
2015-16.
FINANCIAL RESULTS (STANDALONE)
(Rs./million)
Particulars Year ended Year ended
March 31, March 31,
2016 2015
Income from Operations 26,075 31,406
Other Operating Income 487 357
Total Income from 26,562 31,763
Operations
Total Expenditure 23,153 29,001
Operating Profit 3,409 2,762
Other Income 617 1,064
EBITDA including Other 4,026 3,826
Income
Depreciation 869 1,074
Finance Cost 2,024 2,271
Profit after Depreciation 1,133 481
and Finance Cost but before Exceptional Items
Exceptional Item - (Gain)/ 219 (1,982)
Loss
Tax Expenses 123 412
Reported Net Profit/ 791 2,051
(Loss) After Tax
Profit brought forward 7,711 6,388
from previous year
Adjustment on account - (67)
of (deconsolidation)/ consolidation of
Jubilant Employees Welfare Trust
Adjustment on account of - (86)
revised useful life of fixed assets
PROFIT AVAILABLE 8,502 8,286
FOR APPROPRIATION
Which the Directors have appropriated
as follows:
- Proposed Dividend on 478 478
Equity Shares
- Tax on Dividend on 37 97
Equity Shares*
- Transfer to General Reserve - -
Balance to be carried 7,987 7,711
forward
*After reversal of dividend distribution tax provided on the proposed
dividend for the year ended March 31, 2015 amounting to Rs. 60.21
million on dividend received from a subsidiary company during the year
ended March 31, 2016.
(ii) Consolidated financials
The Consolidated Financial Statements, prepared in accordance with the
provisions of the Companies Act, 2013 (the ''Act''), SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (the
''Listing Regulations'') and Accounting Standard-21 on Consolidated
Financial Statements (AS-21), form part of the Annual Report.
Income from Operations
In the Financial Year 2015-16, income from operations was Rs. 58,023
million, down from Rs. 58,262 million in the previous year.
International business contributed 73% to the Revenue from Operations
at Rs. 42,595 million. Sales from key developed markets were at Rs.
35,432 million contributing 61% to the Revenue of the Company. Revenues
from domestic market stood at Rs. 15,428 million, contributing 27% to
overall revenues.
Pharmaceuticals segment
This segment includes revenue lines of (i) Generics comprising Active
Pharmaceutical Ingredients (''APIs'') and Solid Dosage Formulations (ii)
Specialty Pharmaceuticals (sterile products) comprising
Radiopharmaceuticals, Allergy Therapy Products and CMO of Sterile
Injectables (iii) Indian Branded Pharmaceuticals and (iv) Drug
Discovery Solutions. In the Financial Year 2015-16, Income from
Operations from this segment was Rs. 30,548 million contributing 53% to
the total revenue and a growth of 14% for the Company. EBITDA stood at
Rs. 8,895 million with margins being 29%, up from Rs. 4,447 million
with 17% margin in the previous year.
Life science ingredients segment
This segment comprises our Speciality Intermediates, Nutritional
Products and Life Science Chemicals businesses. In the Financial Year
2015-16, income from operations from this segment stood at Rs. 27,475
million, down from Rs. 31,442 million in the previous year,
contributing 47% to our overall revenues. EBITDA stood at Rs. 4,467
million with 16% margins for the year as compared to Rs. 3,220 million
with 10% margins in the previous year. The segment performance was
driven by better price realization in Nutritional Products and better
performance in Fine Ingredients. The segment also witnessed volume
reduction in Advance Intermediates due to lower demand of agrochemicals
and increased competition in China. The Life Sciences Chemicals revenue
were lower due to price led competition from crude derived substitutes
and lower demand.
EBITDA and net profit
For the year ended March 31, 2016, EBITDA stood at Rs. 12,914 million
with EBITDA margins at 22.3% compared to EBITDA of Rs. 7,317 million
with margin of 12.6% in the previous year.
Net Profit after Tax was Rs. 4,315 million in the Financial Year
2015-16 with EPS of Rs. 27.09 for Rs. 1 paid-up share.
DIVIDEND
The Board is pleased to recommend a dividend of 300% i.e. Rs. 3 per
fully paid up equity share of Rs. 1 for the year ended March 31, 2016.
Total dividend payout of Rs. 514.91 million includes tax on dividend of
Rs. 37 million (net of reversal of dividend distribution tax of Rs.
60.21 million for the year ended March 31, 2015, on account of dividend
received during the year from a subsidiary company). The payment of
dividend is subject to approval of the shareholders at the forthcoming
Annual General Meeting (''AGM'') of the Company.
CAPITAL STRUCTURE
(a) Share Capital
During the year, there has been no change in the authorised, subscribed
and paid-up share capital of the Company. As at March 31, 2016, the
paid-up share capital stood at Rs. 159,281,139 comprising of
159,281,139 equity shares of Rs. 1 each.
(b) Employees stock Option plans (ESOPS)
The Company has two employees stock option plans namely Jubilant
Employees Stock Option Plan 2005 (''Plan 2005'') and JLL Employees Stock
Option Plan 2011 (''Plan 2011''). During the year, there was no material
change in Plan 2005 and Plan 2011 and both the plans are in compliance
with SEBI (Share Based Employee Benefits) Regulations, 2014 (the ''SEBI
ESOP Regulations'').
Plan 2005: During the year, 81,178 options were exercised by the option
holders. As on March 31, 2016, 8,467 Options were outstanding under the
Plan 2005. Each Option entitles the holder to acquire five equity
shares of Rs. 1 each of the Company at the exercise price fixed at the
time of grant being the market value as per the erstwhile SEBI
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 (the ''SEBI Guidelines'').
Plan 2011: During the year, 523,080 Options were exercised by the
option holders. As on March 31, 2016, 431,256 Options were outstanding
under the Plan 2011. Each Option entitles the holder to acquire one
equity share of Rs. 1 of the Company at the exercise price fixed at the
time of grant being the market value as per the SEBI Guidelines.
No dilution of capital is expected due to exercise of Options as it is
envisaged to transfer the shares held by Jubilant Employees Welfare
Trust to the employees on exercise of Options.
The details pursuant to the SEBI ESOP Regulations have been placed on
the website of the Company and weblink of the same is
http://jubl.com/Uploads/image/177imguf_ ESOP_Disclosure.pdf.
SUBSIDIARIES
As on March 31, 2016, the Company had 47 subsidiaries. Brief
particulars of the principal subsidiaries are given below:
Jubilant pharma limited
Jubilant Pharma Limited, Singapore (''Jubilant Pharma'') is the
wholly-owned subsidiary of your Company. Jubilant Pharma holds the
global pharmaceutical business of the Company through its subsidiaries
in USA, Canada, Europe, India and rest of the world. These subsidiaries
of Jubilant Pharma are engaged in manufacturing and marketing of
various pharmaceutical products and services like APIs, oral dosage
forms (tablets and capsules), contract manufacturing of sterile
injectables, ointment, creams and liquids, allergy therapy products and
radiopharmaceutical products.
Jubilant Generics limited
Jubilant Generics Limited (''JGL'') is a wholly-owned subsidiary of the
Company through Jubilant Pharma. JGL owns two manufacturing locations;
one at Nanjangud, Karnataka and another at Roorkee, Uttarakhand which
are engaged in APIs and Dosage Forms business, respectively.
Jubilant pharma trading inc.
This corporation incorporated in Delaware, USA is a wholly- owned
subsidiary of Jubilant Pharma. It undertakes sales and distribution of
APIs in the USA.
Cadista Holdings inc. and Jubilant Cadista pharmaceuticals inc.
i) Cadista Holdings Inc. (''Cadista''), a corporation incorporated in
Delaware, USA, is a wholly-owned subsidiary of Jubilant Pharma Holdings
Inc.
ii) Jubilant Cadista Pharmaceuticals Inc., a corporation incorporated
in Delaware, USA is a wholly-owned subsidiary of Cadista. This company
is in the business of manufacturing solid dosage forms of generic
pharmaceuticals at its U.S. Food and Drug Administration (USFDA)
approved manufacturing facility in Salisbury, Maryland, USA. Its
customer base includes all the large wholesalers, retail and grocery
chains. Besides manufacturing its own label products, it also provides
Product Development and Contract Manufacturing Services. As on March
31, 2016, there were 25 products marketed in the US with focus in the
therapeutic areas of CVS, CNS, Anti Allergic, Steroids, etc.
Jubilant Hollisterstier llC
This subsidiary is based in Spokane, State of Washington, USA. It is a
wholly-owned subsidiary of HSL Holdings Inc. It is engaged in the
contract manufacturing of sterile injectables, which includes,
lyophilized products, liquid fills, biologics, suspensions, WFI/
diluents. This company provides a complete range of services to support
drug manufacturing in the pharmaceutical and biopharmaceutical
industries. Additionally, it is an innovator, manufacturer and
distributor of allergenic extracts, targeted primarily at treating
allergies and asthma.
Its contract manufacturing capabilities include aseptic liquid fill/
finishing and lyophilization of small lot parenterals for commercial
and clinical requirements. Its capabilities can be applied to a variety
of projects from pre-clinical through commercial scale across a
multitude of dosage forms including microspheres, suspensions, WFI/
diluents, biologics (proteins), lyophilized products and liposomes.
Jubilant HollisterStier is approved across global regulated markets
including FDA (both CDER and CBER), Europe, Japan, Brazil and Canada.
Its contract manufacturing business serves customers including
innovators ranging from small biotechnology to large pharmaceutical
companies.
With nearly 100 years of leadership in research, extract production and
immunotherapy products, the organization is respected worldwide in the
field of allergy. Currently, the business is comprised of allergenic
extracts and mixes, along with specialized skin test diagnostic
devices. The business lays special emphasis on innovation towards
introducing new products to treat and cure allergies.
Jubilant Draximage inc.
Jubilant DraxImage Inc. (''JDI'') is a wholly-owned subsidiary of the
Company through Jubilant Pharma. JDI develops, manufactures and markets
radiopharmaceuticals used in Nuclear Medicine for the diagnosis,
treatment and monitoring of various diseases. It serves hospital-based
customers (Nuclear Medicine Physicians and Technologists) in addition
to specialized radiopharmacies and through them patients, globally with
high quality and reliable specialty products. The business is backed by
a dedicated research and development team, specialized manufacturing,
strong regulatory affairs and commercial operations. The areas of
specialization include cardiac, lung and bone imaging as well as
thyroid therapy. JDI employs around 150 skilled professionals and is
based in Montreal, Canada, where it operates a manufacturing facility
approved by USFDA and Health Canada.
JDI has earned and maintained market leadership in North America for
several specialty niche products including I-131 Therapeutic &
Diagnostic capsules for thyroid and cancer, Methylene-Diphosphonate
(MDP) for bone imaging, Macro- Aggregated Albumin (MAA) for lung
imaging, Diethylene Triamine Penta-acetic Acid (DTPA) for renal and
brain imaging.
JDI intends to expand the range of product offerings and consolidate
its market share for Radiopharmaceuticals in North America. It is also
expanding in markets such as Latin America, Europe and Asia through
collaboration and contractual arrangements with partners and new
distribution channels to drive growth in the current and pipeline
products.
Jubilant Draximage limited
This is a wholly-owned subsidiary of the Company through DraxImage
Limited, Cyprus. It operates under the Jubilant India Branded
Pharmaceuticals Banner in India. This company is engaged in marketing
of innovative diagnostic imaging, radiopharmaceutical solution and
therapeutic radiopharmaceutical products. Presently JDI, India is
marketing Lyophilized kits like Sestamibi, DTPA MDP and MAA in India
and rest of the world. It is also involved in distribution of wide
range of radioisotopes which include Tc-99m Generator (used in the
diagnosis of Bone Cancer, Renal Imaging, Cerebral Perfusion Imaging and
Myocardial Perfusion Imaging), Thallium-201 and Iodine-131 capsules and
solution (for the diagnosis and treatment of Thyroid and its related
disease), Lutetium-177 and Gallium-68 generator via various
partnerships across the South Asia. The target customers are Nuclear
Medicine physicians, Cardiologists and Oncologists of various hospitals
and imaging labs.
Jubilant pharmaceuticals nv
This is a wholly-owned subsidiary of the Company through Jubilant
Pharma NV, Belgium, which holds 99.8% of its shares and Jubilant Pharma
holds the balance shares. This company is engaged in the business of
licensing generic dosage forms providing regulatory services to generic
pharmaceutical companies.
PSI Supply NV
This is a wholly-owned subsidiary of the Company. 99.5% of its shares
are held by Jubilant Pharma NV and the balance by Jubilant Pharma. It
is engaged in the supply of generic dosage forms to the European
markets.
Jubilant life sciences nv
This is a wholly-owned subsidiary of the Company. 99.99% of its shares
are held by the Company and the balance by Jubilant Infrastructure
Limited. It is engaged in the supply of bulk chemicals such as ethyl
acetate, acetic anhydride, etc. and vitamins (feed and food grade) to
the European markets.
Jubilant pharma nv
This is a wholly-owned subsidiary of the Company through JGL, India and
Jubilant Pharma. This company holds shares of Jubilant Pharmaceuticals
NV (99.8%) and PSI Supply NV (99.5%) along with Jubilant Pharma which
holds the balance shares.
Jubilant Biosys limited
This company is a subsidiary of the Company through Jubilant Biosys
(Singapore) Pte. Ltd. (a wholly-owned subsidiary of the Company).
Jubilant Biosys (Singapore) Pte. Ltd. holds 66.98% equity of this
company.
This company provides Drug Discovery Services to global pharmaceutical
and biotech companies in:
- Standalone Service Model
Functional services in the areas of Discovery Informatics, In Vitro
Biology, In Vivo Biology, Structural Biology, Computational Chemistry,
DMPK and Toxicology on Full Time Equivalent (FTE) or Fee For Service
(FFS) based model
- Collaborative/ Partnership Model
Integrated discovery program across a single or a portfolio of
molecules
Shared risk model
Milestone and Hybrid Model
- Research Funding
- Payments for scientific milestones including bonus achieved through
Discovery and Development phase
- Royalties on successful commercialization of drug
Jubilant Chemsys limited
This company is a wholly-owned subsidiary of the Company through
Jubilant Drug Development Pte. Ltd., Singapore. This company offers
the following services to drug discovery companies of US, Europe and
rest of the world on Full Time Equivalent, Fee For Service and Hybrid
Model in:
- Synthetic Organic Chemistry
- Combinatorial Chemistry
- Medicinal Chemistry
- Process Research & Development and Manufacturing
- Scale up services and
- GMP Manufacturing-Clinical Supply
It also works closely with Jubilant Biosys Limited in collaborative
drug discovery research.
Jubilant Clinsys limited
This company is a wholly-owned subsidiary of the Company through
Jubilant Drug Development Pte. Ltd., Singapore.
This company is engaged in providing Pharmacovigilance, Medical
Writing, Electronic Data Capturing and Staffing Solution services to
external and internal customers.
Jubilant Clinsys inc.
This New Jersey based USA Corporation is a wholly-owned subsidiary of
Jubilant Pharma Holdings Inc. This company provides Clinical Research
Data Management services through TrialStat platform.
Jubilant Discovery services inc.
This Delaware based USA Corporation is a wholly-owned subsidiary of
Jubilant Biosys Limited. This company is providing Ion channel
screening capabilities using electrophysiology and atomic absorption
spectroscopy, Assay development, medium-high-throughput screening,
comprehensive cell- culture related capabilities to Mnemosyne, Orion,
Jansen Pharmaceutical NV, Adhaere Pharmaceuticals and GSK. Apart from
Fee For Services, it also provides sales, marketing and liaising
services to Jubilant Biosys Limited and Jubilant Chemsys Limited.
Jubilant infrastructure limited
This wholly-owned subsidiary of the Company had entered into a
Memorandum of Understanding (''MOU'') with the Government of Gujarat
during the ''Vibrant Gujarat'' conference in 2007 for development of
Sector Specific Special Economic Zone (''SEZ'') for Chemicals in Gujarat.
About 107 hectares land was taken on lease from Gujarat Industrial
Development Corporation (''GIDC) in Bharuch District, Gujarat.
This SEZ became operational in October 2011 with the best in class
infrastructure facilities and utility plants like Boiler, Gas Turbine,
Effluent Treatment, Incinerator and DM Water.
The Company has set up two units in this SEZ and both the units have
commenced commercial production. The finished products of Unit-1 and
Unit-2 are fully backward integrated and are using in-house developed
innovative technologies.
The global scale plants of Vitamin B3 and 3-Cynopyredine at SEZ make
your Company the largest producer of Vitamin B3 in India and the second
largest globally.
Jubilant first trust Healthcare limited
Jubilant First Trust Healthcare Limited (''JFTHL'') is a wholly- owned
subsidiary of the Company.
During the year, First Trust Medicare Private Limited (''FTMPL''), a
wholly-owned subsidiary of the Company, merged into JFTHL effective
from September 4, 2015, in accordance with a Scheme of Amalgmation,
Compromise and Arrangement (''Scheme'') approved by the Hon''ble High
Court of Allahabad. Pursuant to the Scheme, paid-up share capital of
JFTHL reduced.
Jubilant life sciences (usa) inc.
This corporation incorporated in Delaware, USA is a wholly- owned
subsidiary of the Company. It undertakes sales and distribution of
advance intermediates, nutrition ingredients and fine chemicals in the
USA.
Jubilant life sciences (shanghai) limited
This wholly-owned subsidiary of the Company is held through Jubilant
Pharma. It undertakes sales and distribution of products in China. This
company is engaged in trading of advance intermediates (pyridine and
its derivatives), specialty ingredients and nutrition products. It is
catering to pharmaceutical, animal feed and agrochemical industries in
China. This subsidiary is also a sourcing hub of raw materials for your
Company.
Other subsidiaries are mentioned below:
Jubilant Innovation Pte. Limited
Jubilant Biosys (Singapore) Pte. Limited
Jubilant Drug Development Pte. Limited
Drug Discovery and Development Solutions Limited
Jubilant Life Sciences International Pte. Limited
Jubilant Innovation (BVI) Limited
Jubilant Life Sciences (BVI) Limited
Jubilant Biosys (BVI) Limited
Jubilant Innovation (USA) Inc.
Jubilant Pharma Holdings Inc.
HSL Holdings Inc.
Draximage LLC
Jubilant DraxImage (USA) Inc.
Deprenyl Inc., USA
Draxis Pharma LLC
Jubilant HollisterStier Inc.
Draximage Limited, Cyprus
Draximage Limited, Ireland
6963196 Canada Inc.
6981364 Canada Inc.
DAHI Animal Health (UK) Limited
Draximage (UK) Limited
Jubilant Drug Discovery & Development Services Inc.
Jubilant Life Sciences (Switzerland) AG
Vanthys Pharmaceutical Development Private Limited
Jubilant Innovation (India) Limited
First Trust Medicare Private Limited (Merged into Jubilant First Trust
Healthcare Limited effective from September 4, 2015.)
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The performance and financial position of the subsidiaries are given in
Form AOC-1 attached to the Financial Statements for the year ended
March 31, 2016.
PARTNERSHIPS
Jubilant Hollisterstier General partnership
It is a Canada based partnership managed by two subsidiaries of the
Company - Jubilant HollisterStier Inc. and Draxis Pharma LLC. This
partnership provides contract manufacturing services. It manufactures
products in two categories: sterile products and non-sterile products.
Sterile products include liquid and freeze-dried (lyophilized)
injectables and sterile ointments and creams. Non-sterile products
include non- sterile ointments, creams and liquids.
Draximage General partnership
It is a Canada based partnership managed by two subsidiaries of the
Company - Jubilant DraxImage Inc. and 6981364 Canada Inc.
STATUTORY AUDITORS
M/s B S R & Co. LLP, Chartered Accountants (''BSR'') was appointed as the
Statutory Auditors of the Company at the 36th Annual General Meeting of
the Company to hold office until the conclusion of Annual General
Meeting to be held in the year 2018, subject to ratification by the
members at every Annual General Meeting. BSR has confirmed that
ratification of their appointment, if made at the ensuing AGM, shall be
in accordance with the conditions specified in the Act.
The Auditors'' Reports for the Financial Year 2015-16 do not contain any
qualification, reservation, adverse remark or disclaimer.
COST AUDIT
Pursuant to Section 148 of the Act read with the Companies (Cost
Records and Audit) Rules, 2014, the Central Government has prescribed
audit of cost records for certain products. Accordingly, the Company
needs to carry out cost audit of its products. Based on the
recommendations of the Audit Committee, the Board of Directors has
re-appointed M/s J. K. Kabra & Co., Cost Accountants as Cost Auditors
of the Company to conduct cost audit for the Financial Year 2015-16.
SECRETARIAL AUDIT
The Board had appointed M/s Sanjay Grover & Associates, Company
Secretaries to conduct Secretarial Audit pursuant to the provisions of
Section 204 of the Act for the Financial Year 2015-16. The Report of
the Secretarial Auditors is attached as annexure-1 to this Report. The
Report for the Financial Year 2015-16 does not contain any
qualification, reservation, adverse remark or disclaimer.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The shareholders have approved the appointment of Dr. Ashok Misra as
an Independent Director at the 37th AGM of the Company held on
September 1, 2015. Mr. Shardul S Shroff has resigned from the Board of
Directors of the Company effective from May 24, 2016.
Mr. Shyam S Bhartia retires by rotation at the forthcoming Annual
General Meeting and being eligible, offers himself for re- appointment.
The Board recommends his re-appointment.
The present term of Mr. Hari S Bhartia as Co-Chairman and Managing
Director of the Company shall expire on March 31, 2017. The Board
recommends re-appointment of Mr. Hari S Bhartia as Co-Chairman and
Managing Director of the Company effective from April 1, 2017 for a
further term of five years.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors of the Company were held during
the Financial Year 2015-16.
DECLARATION OF INDEPENDENT DIRECTORS
All Independent Directors have given declaration that they meet the
criteria of independence as provided under Section 149 of the Act and
Regulation 16 of the Listing Regulations.
APPOINTMENT AND REMUNERATION POLICY
The Company has implemented an Appointment and Remuneration Policy
pursuant to the provisions of Section 178 of the Act read with Clause
49 of the erstwhile Listing Agreement (corresponding to Regulation 19
of the Listing Regulations). The Policy has been disclosed in the
Corporate Governance Report attached to this Report.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD
A statement on annual evaluation by the Board of its performance and
performance of its Committees as well as individual Directors forms
part of the Corporate Governance Report attached to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors, based on the representation received from the
management, confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as on March 31, 2016 and of the profits of the Company
for the year ended March 31, 2016;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern
basis;
(v) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively.
Based on the framework of internal financial controls including the
Control Manager for financial reporting and compliance systems
established and maintained by the Company, work performed by the
internal, statutory and secretarial auditors and the reviews performed
by the management and the relevant Board committees, including the
Audit Committee, the Board is of the opinion that the Company''s
internal financial controls were adequate and effective during the
Financial Year 2015-16; and
(vi) the Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.
COMPOSITION OF AUDIT COMMITTEE
As on date, the Audit Committee comprises of Mr. S. Sridhar, Chairman,
Ms. Sudha Pillai and Dr. Ashok Misra. The Board has accepted all the
recommendations made by the Audit Committee.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo, required to be disclosed
pursuant to Section 134 of the Act read with the Companies (Accounts)
Rules, 2014, is given as annexure-2 and forms part of this Report.
EMPLOYEES
Particulars of Directors and Employees, as required under Section
197(12) of the Act read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are given as
annexure-3 and form part of this Report.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
Risk-taking is an inherent trait of any enterprise. However, if risks
are not properly managed and controlled, they can affect the Company''s
ability to attain its objectives. Risk management and internal
financial control systems play a key role in directing and guiding the
Company''s activities by continually preventing and managing risks. The
Board, Audit Committee and Senior Management team collectively set the
overall tone and risk culture of the Company by identifying the risks
impacting the Company''s business and documenting the process of risk
identification, risk minimization and risk optimization as a part of
the risk management policy through defined and communicated corporate
values, clearly assigned risk responsibilities, appropriately delegated
authority and a set of processes and guidelines.
There exists a critical risk management framework across the Company
and the same is reviewed on a periodic basis by the Board. Some of the
critical risks identified in various businesses of the Company are:
- Competition, Cost Competitiveness and Pricing
- Foreign Currency and Interest Rate Exposures
- Capacity Planning and Optimization
- Manufacturing Operations
- R&D Effectiveness
- Human Resources- Acquire and Retain Talent
- Compliance and Regulatory
- Environment, Health and Safety
- Protecting Intellectual Property Rights
- Information Technology
The Company promotes strong ethical values and high levels of integrity
in all its activities, which in itself is a significant risk mitigator.
With the growth strategy in place, risk management holds the key to the
success of the Company''s journey of continued competitive
sustainability in attaining the desired business objectives.
Implementation of internal financial Controls
To compete globally, world class Corporate Governance and Financial
Control over operations are a must for Jubilant. The Internal Financial
Controls as mandated by the Companies Act, 2013, not only require a
certification by the CEO- CFO but also put an obligation on the Board
of Directors to ensure that the Internal Financial Controls are
adequate and operating effectively. Besides, the Statutory Auditors are
also required to give an opinion on the adequacy and effectiveness of
Internal Controls for Financial Reporting (''ICFR'').
To make the internal financial control framework robust in Jubilant, we
have worked on three lines of defense strategy which is as under:
- First Line of Defense: Build internal controls into operating
processes To this end, we have ensured that a detailed Delegation of
Authority is issued, SOPs for the processes are created, financial
decision making is made through Committees, IT controls are built into
the processes, Segregation of Duties are made, strong budgetary control
framework exists, the Entity level controls including Code of Conduct,
Code of Ethics, Ombudsman Office are put in place, etc.
- Second Line of Defense: Create an efficient review mechanism - We
created a review mechanism under which all the business units and
functions are reviewed for performance at least once in a month by the
respective CEOs and once in a quarter, by the Corporate team. The
formats for these reviews are detailed and finalized with the help of
global consulting firms.
- Third Line of Defense: Independent assurance  We have appointed a
Big Four firm as our internal auditors and which are doing 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.
We have implemented a program under which more than 2000 financial
controls are established and confirmation that such controls are being
exercised is made every quarter by the relevant process owners before
the financial results are closed for the quarter. This confirmation of
control mechanism called ''Control Manager'' is run through a work flow
based IT tool and it forms the backbone of the CEO-CFO certification
stipulated by Clause 49 of the Listing Agreement [corresponding to
Regulation 17(8) read with Part B of Schedule II to the Listing
Regulations in India].
During FY 2015-16, we also started another journey for review and
strengthening of Internal Financial Controls under which the entire
control library and Risk and Control Matrix were reviewed and
re-written. The entire exercise of review and re-writing of controls
was conducted by an in-house team of professionals with the help of a
Big Four firm. The revised control framework after such review was
tested for design effectiveness and operational effectiveness by the
Statutory Auditors and they have given an affirmative opinion about the
adequacy and effectiveness of Internal Controls for Financial Reporting
in the Company.
The Company has two main business segments namely Pharmaceuticals and
Life Science Ingredients. Each segment has a complete management set up
with CEO, CFO and other functional heads who are responsible for
running the operations and report to the Chairman/Co-Chairman and
Managing Director and the Corporate Committee.
To improve the controls in operations, we have established, for each
line of business, the concept of financial decision making through
operational committees.
A detailed note on Internal Control Systems and Risk Management is
given in the ''management Discussion and analysis Report''.
CERTIFICATIONS
The Company follows several externally developed initiatives in the
economic, environmental and social areas. Manufacturing plants at
Gajraula, Nira, Savli and Ambernath are ISO 9001:2008 certified for
Quality Management System. Further, plants at Gajraula, Nira and Savli
are ISO 14001:2004 certified for Environmental Management System and
OHSAS 18001:2007 for Occupational Health and Safety at Work Place.
Unit-1 of plant at Bharuch is certified for ISO 9001:2015 for Quality
Management System, ISO 14001:2015 for Environmental Management System
and OHSAS 18001:2007 for Occupational Health and Safety at Work Place.
Plants at Gajraula, Nira, Savli and Bharuch are also certified for IMS
(Integrated Management System).
ANU (Animal Nutrition Unit) at Savli is certified for FAMI-QS
Code Version 5.1 in Feed Safety Management System. Vitamins plant at
Bharuch is certified for FAMI-QS Code Version 5.1 (in Feed Safety
Management System), Kosher, Halal-India, Halal-Malaysia, Halal
Indonesia, ISO 22000:2005 (in Food Safety Management System), HACCP
(Hazard Analysis and Critical Control Points), GMP (Good Manufacturing
Practices) and FSSC 22000 (Global Food Safety) Compliance.
Gajraula Quality Control Laboratory has also been certified for
chemical testing by NABL (National Accreditation Board for Testing and
Calibration Laboratories) in accordance with the ISO/ IEC 17025:2005.
Gajraula Carbon Dioxide manufacturing facility has been certified for
FSSC 22000:2010 (Food Safety System Certification) for production and
dispatch of food grade Carbon Di-oxide for Beverages. Moreover, our
Carbon Dioxide product is approved by Food Safety and Standards
Authority of India (FSSAI). Gajraula manufacturing facility has been
Kosher approved for 9 core products i.e. 2 Acetyl Pyridine, 3 Hydroxyl
Methyl Pyridine, Acetic Anhydride, Beta Picoline, Cetyl Pyridinium
Chloride, Ethyl Acetate, Glacial Acetic Acid, Niacin and Pyridine. The
facility is also Halal Certified for the products Acetic Anhydride,
Ethyl Acetate, Cetyl Pyridinium Chloride Monohydrate, 2 Acetyl Pyridine
and Pyridine.
Cetyl Pyridinium Chloride Monohydrate has been approved during the year
by the Food and Drug Administration (FDA), Government of Uttar Pradesh.
Nira facility is approved by Kosher for Ethyl Acetate, Acetic Anhydride
and Ethyl alcohol and is Halal certified for Ethyl Acetate and Acetic
Anhydride plants.
HUMAN RESOURCES
Our employees are backbone of the Company''s growth strategy and play a
vital role in ensuring sustainable business growth and future
readiness. The Company has been focusing on strengthening its talent
management and employee engagement processes through clear role
expectations with specific and well defined Key Performance Indicators
for each role. We believe in creating a culture of performance and
merit that provides all our employees with opportunities to excel,
learn and progress. We have been focusing on attracting the best talent
from India''s leading campuses to have a steady flow of fresh talent,
thereby creating a strong pool of internal talent.
Our well defined Leadership Competency Framework lays tremendous focus
on outlining a common leadership culture throughout the organization.
We reinforce the leadership values through development initiatives like
Development Centres and 3600 Feedback. All the initiatives are backed
by an action oriented development plan. The development initiatives lay
the foundation of our talent pipeline.
With the aim of becoming one of the preferred employers in the
industry, the Company also participated in the Great Place to Work
survey in the year 2015. The results of the survey will enable us to
re-design our practices and address areas that concern our employees.
As on March 31, 2016, a total of 396 employees at our manufacturing
plants at Savli, Nira and Gajraula were either members of unions or had
collective bargaining capabilities. During the year, we enjoyed
cordial relations with our employees and there have been no instances
of labour unrest or disputes at any of the manufacturing sites.
The Company has adopted a Policy on Prevention of Sexual Harassment at
workplace and the Company has not received any complaint during the
year under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
A detailed note on Human Resource Management is given in the
''management Discussion and analysis Report''.
INVESTOR SERVICES
With a view to keep its investors well informed of its activities, the
Company has taken the following initiatives:
- E-mailing quarterly results and press releases to the shareholders
soon after they are sent to the stock exchanges; e-mailing Annual
Reports and Corporate Sustainability Reports;
- Maintaining user friendly Investor Section on the website of the
Company www.jubl.com;
- A dedicated e-mail address viz. [email protected] for interacting on
various matters with respect to share transfer, transmission, dividends
and other related issues with the Company Secretary and Compliance
Officer;
- Mailing feedback forms to the investors on an annual basis so as to
obtain valuable feedback and suggestions for improvement. The Company
has also placed an online Investor Feedback form on its website
www.jubl.com under the head Investor Feedback Form'' to facilitate
electronic submission of the Form;
- Earnings Presentation and Release detailing the quarterly results are
uploaded on the website (www.jubl.com). Earnings call is typically
conducted post announcement of results as per the schedule mentioned in
the Concall Invite, which is also uploaded on the website of the
Company. Earnings calls playback is made available on the link shared
in the Concall Invite and transcripts are uploaded on the website of
the Company.
- The Company''s management also meets investors and analysts from
time-to-time at their request.
- The presentation and meeting schedule of Roadshows attended by the
Company are uploaded on the website after intimating the same to the
Stock Exchanges.
AWARDS AND ACCOLADES
During the year, various awards and accolades were received by the
Company like:
- 16th Annual Greentech Environment Award 2015 (Gold Category),
conferred under the Chemicals and Pharmaceutical sector category -
Gajraula plant, India
- Gold Award in Ankleshwar Chapter Convention on Quality Concepts 2015
(ACCQC) competition organized by Quality Circle Forum of India (QCFI),
Ankleshwar presented to our Bharuch plant, India
- Golden Peacock National Quality Award for Quality, Training, Business
Excellence and Innovative Product / Service 2015, presented at Dubai
Global Convention, organized by the Institute of Directors
- Safety Innovation Award from the Institution of Engineers (India),
Delhi Chapter for implementing Innovative Safety Management Systems at
Nanjangud Plant, India
- Uththama Suraksha Puraskara from National Safety Council, Karnataka
Chapter - Nanjangud Plant, India
- Two Honors at the 10th Annual CIO100 Awards by CIO Magazine - CIO100
Innovation Architect Special Awards 2015 and Versatile 100 honorees
VIGIL MECHANISM
The details of Vigil Mechanism (Whistle Blower Policy) adopted by the
Company have been disclosed in the Corporate Governance Report attached
to this Report and form an integral part of this Report.
GREEN INITIATIVES
With the aim of going green and minimising our impact on the
environment, the Company continued with the green initiatives in its
operations which include:
- Conducting paperless Board/ Committee Meetings;
- Uploading the Corporate Sustainability Report on the website of the
Company (instead of circulating in paper or CD form) and providing its
weblink to the shareholders alongwith the Annual Report; and
- E-mailing Annual Reports to the shareholders whose e-mail addresses
are provided by the depositories or who have opted for the electronic
version.
CORPORATE SOCIAL RESPONSIBILITY
Jubilant''s approach to sustainable development focuses on the triple
bottom line of Economic, Environmental and Social performance.
Corporate Social Responsibility (''CSR'') is an integral part of the
social performance of the Company. At Jubilant, CSR is the commitment
of the Company to contribute towards inclusive growth. The thrust of
CSR initiatives is to create value in the lives of the communities
around the area of operations of the Company, which is an important
stakeholder. Following are the highlights of CSR at Jubilant:
- During the Financial Year 2015-16, Jubilant continued its CSR
initiatives in various sectors.
- Following the approach of ''triple bottom line'', Jubilant has been
publishing its Corporate Sustainability Report based on the Global
Reporting Initiative (''GRI'') guidelines, which is externally verified.
- Rated A by GRI for Corporate Sustainability Report since 2007
onwards. The report is available on the Company''s website www.jubl.com.
- During the year, the Company has initiated the process for obtaining
the Responsible Care Certification i.e. RC 14000 which will add value
in its sustainability efforts.
CSR initiatives of the Company are conceptualized and implemented
through Jubilant Bhartia Foundation (''JBF''), the social wing of
Jubilant Bhartia Group, established in 2007 as a not-for-profit
organization. JBF works on 4P model (Public-Private-People-Partnership)
for empowering communities and believes that for sustainable social
intervention, participation of communities must be ensured in the
Company''s CSR projects/ programmes. Jubilant''s role is to act as a
catalyst and facilitate the process. The social initiatives of the
Company are in line with the United Nations Millennium Development
Goals.
JBF in partnership with Schwab Foundation for Social Entrepreneurship
has been conferring Social Entrepreneur of the Year (SEOY) Award in
India since the year 2010. The award celebrates mature-stage social
entrepreneurs and their organizations that implement innovative,
sustainable and large-scale solutions to address poverty, indignity and
the lack of basic services and resources in ''Bottom of the Pyramid'' and
ultra-poor communities. They work in areas as diverse as health,
education, job creation, water, clean energy, building identity and
entitlements and access to information and technology. Whether they set
up social businesses, hybrid social ventures or not-for-profit
organizations, the primary focus of social entrepreneurs is
large-scale, transformational impact.
SEOY does not fall in the purview of CSR activities pursuant to the
provisions of Schedule VII to the Act. We shall, however, continue to
confer the SEOY award over and above CSR budget of the Company in view
of the social benefits of the award.
JBF''s detailed activities are available on its website www.
jubilantbhartiafoundation.com. Annual Report on CSR including contents
of the CSR Policy is attached as annexure-4 to this Report.
Last year, Jubilant Pharma had taken loan from International Finance
Corporation (''IFC''). Post the Environmental & Social (''E&S'') due
diligence of Jubilant Pharma''s business, IFC had suggested optimisation
through time bound Environmental and Social Action Plan to match
Jubilant Pharma''s operating system with IFC''s Performance Standard
requirements. Jubilant Pharma has completed the action plan and
ensured compliance with the relevant IFC Performance Standards in a
timely manner.
In addition, Jubilant Pharma also submits the Annual Monitoring Report
to IFC.
OTHER DISCLOSURES
i. Extracts of Annual Return: Pursuant to the provisions of Section 92
of the Act read with Rule 12 of the Companies (Management and
Administration) Rules, 2014, extract of the Annual Return is attached
as annexure-5 to this Report.
ii. Public Deposits: No deposits have been accepted by the Company
during the year from the public. The Company had no outstanding,
overdue, unpaid or unclaimed deposits at the beginning and end of the
Financial Year 2015-16.
iii. Loans, Guarantees and Investments: Details of loans, guarantees/
securities and investments along with the purpose for which the loan,
guarantee or security is proposed to be utilised by the recipient have
been disclosed in Note nos. 13, 16, 32, 34 and 35 of the Notes to the
Standalone Financial Statements.
iv. Particulars of Contracts or Arrangements with the Related Parties:
The Company has formulated a policy on Related Party Transactions
(''RPTs''), dealing with the review and approval of RPTs. During the
Financial Year 2015-16, the Board of Directors of the Company approved
the revised criteria for granting omnibus approval for RPTs by the
Audit Committee within the overall framework of the policy on RPTs.
Prior omnibus approval is obtained for RPTs which are of repetitive
nature. All RPTs are placed before the Audit Committee for review and
approval.
All RPTs entered into during the Financial Year 2015-16 were in the
ordinary course of business and on arm''s length basis. No material RPTs
were entered into during the Financial Year 2015-16 by the Company as
defined in the Policy of the Company on Materiality of Related Party
Transactions. Accordingly, the disclosure of RPTs as required under
Section 134(3)(h) of the Act in Form AOC 2 is not applicable. Your
Directors draw attention of the members to Note no. 52 to the
Standalone Financial Statements which sets out the Related Party
disclosures.
v. Material Changes in Financial Position: No material change or
commitment has occurred after the close of the Financial Year 2015-16
till the date of this Report, which affects the financial position of
the Company.
vi. Orders passed by Courts/ Regulators: No significant or material
order has been passed by the regulators or courts or tribunals
impacting the going concern status of the Company or its future
operations.
CORPORATE GOVERNANCE
As a responsible corporate citizen, the Company is committed to
maintain the highest standards of Corporate Governance and believes in
adhering to the best corporate practices prevalent globally.
A detailed Report on Corporate Governance is attached as annexure-6 and
forms part of this Report. A certificate from a Practising Company
Secretary confirming compliance with the conditions of Corporate
Governance, as stipulated in Clause E of Schedule V to the Listing
Regulations is attached to the Corporate Governance Report.
The Board Members and Senior Management Personnel have affirmed
compliance with the Code of Conduct for Directors and Senior Management
for the year ended March 31, 2016. A certificate from the Co-Chairman
& Managing Director confirming the same is attached to the Corporate
Governance Report.
A certificate from the CEO and CFO confirming correctness of the
financial statements, adequacy of internal control measures, etc. is
also attached to the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the
Company as provided under the Listing Regulations has been given
separately and forms part of this Report.
ACKNOWLEDGMENTS
Your Directors acknowledge with gratitude the co-operation and
assistance received from the Central and State Government authorities.
Your Directors thank the shareholders, financial institutions, banks/
other lenders, customers, vendors and other business associates for
their confidence in the Company and its management and look forward to
their continued support. The Board wishes to place on record its
appreciation for the dedication and commitment of the Company''s
employees at all levels, which has continued to be our major strength.
We look forward to their continued support in the future.
For and on behalf of the Board
Shyam S Bhartia Hari S Bhartia
Chairman Co-Chairman & Managing Director
(DIN: 00010484) (DIN: 00010499)
Place: Noida
Date: May 24, 2016
Mar 31, 2015
Dear Members,
The Directors are happy in presenting the Thirty Seventh Annual Report
together with the Audited Standalone and Consolidated Financial
Statements for the year ended March 31,2015.
Overview
Jubilant Life Sciences Limited ("the Company" or "Jubilant") is an
integrated global Pharmaceutical and Life Sciences company engaged in
manufacture and supply of Active Pharmaceutical Ingredients, Solid
Dosage Formulations, Radiopharmaceuticals, Allergy Therapy Products and
Life Science Ingredients. It also provides services in Contract
Manufacturing of Sterile Injectables and Drug Discovery Solutions. The
Company's strength lies in its unique offerings of Pharmaceutical and
Life Sciences products and services across the value chain. With 10
world-class manufacturing facilities in India, US and Canada and a team
of about 6,100 multicultural people across the globe, the Company is
committed to deliver value to its customers spread across over 100
countries. The Company is well recognized as a "Partner of Choice" by
leading pharmaceuticals and life sciences companies globally. For more
information, please visit the Company's website www.jubl.com.
Results of Operations and the State of Company's Affairs
(i) Standalone Financials
Income from Operations
In the Financial Year 2014-15, on standalone basis, the Company
recorded income from operations of Rs. 31,763 million.
International Revenues
International business contributed 49% to the Net Revenue from
operations at Rs. 15,717 million.
EBITDA
For the year ended March 31, 2015, EBITDA stood at Rs. 3,826 million
with EBITDA margins at 12%.
Reported Net Profit/ (Loss) After Tax and EPS
Reported Net Profit After Tax was Rs. 2,051 million in the Financial
Year 2014-15. Basic EPS stood at Rs. 12.88. However, Normalised Net
Profit After Tax stood at Rs. 69 million after adjusting for
exceptional gain of Rs. 1,982 million, mainly on account of profit on
sale of business/ investments, write-off of irrecoverable loans and
advances. Normalised EPS stood at Rs. 0.43 for the Financial Year
2014-15.
Financial Results (Standalone)
(Rs. /million)
Particulars Year ended Year ended
March 31, March 31,
2015 2014
Income from Operations 31,406 36,275
Other Operating Income 357 453
Total Income from 31,763 36,728
Operations
Total Expenditure 29,001 30,911
Operating Profit 2,762 5,817
Other Income 1,064 299
EBITDA including Other 3,826 6,116
Income
Depreciation 1,074 1,753
Finance Cost 2,271 2,776
Profit after Depreciation 481 1,587
and Finance Cost but
before Exceptional Items
Exceptional Item - (1,982) 2,269
(Gain)/ Loss
Tax Expenses 412 (690)
Reported Net Profit/ 2,051 8
(Loss) After Tax
Profit brought forward 6,388 6,871
from previous year
Adjustment on account (67) 53
of (deconsolidation)/
consolidation of Jubilant
Employees Welfare Trust
Adjustment on account (86) -
of revised useful life of
fixed assets
PROFIT AVAILABLE 8,286 6,932
FOR APPROPRIATION
Which the Directors
have appropriated as
follows:
- Proposed Dividend on 478 463
Equity Shares
- Tax on Dividend on 97 81
Equity Shares
- Transfer to General - -
Reserve
Balance to be carried 7,711 6,388
forward
(ii) Consolidated Financials Income from Operations
In the Financial Year 2014-15, income from operations was Rs. 58,262
million, up from Rs. 58,034 million in the previous year.
International Revenues
International business contributed 71% to the Revenue from Operations
at Rs. 41,367 million. Sales from key developed markets were at Rs.
33,649 million contributing 58% to the Revenue of the Company. Revenues
from domestic market stood at Rs. 16,895 million, contributing 29% to
overall revenues.
Pharmaceuticals Segment
This segment comprises revenue lines of Active Pharmaceutical
Ingredients ("APIs"), Solid Dosage Formulations, Radiopharmaceuticals,
Allergy Therapy Products, Contract Manufacturing Operations ("CMO") of
Sterile Injectables, Drug Discovery Solutions and Indian Branded
Pharmaceuticals. In the Financial Year 2014-15, Income from Operations
from this segment was Rs. 26,820 million contributing 46% to the total
revenue of the Company. EBITDA margins for the segment were 17% and
EBITDA stood at Rs. 4,447 million, down from Rs. 6,102 million in the
previous year. During the Financial Year 2014-15, Revenue in the
segment was affected on account of Warning Letter in the CMO business
and delay in new product launches in Solid Dosage Formulations, which
was partially offset by revenue increase in Radiopharmaceuticals.
Life Science Ingredients Segment
This segment comprises our Advanced Intermediates and Specialty
Ingredients, Nutritional Products and Life Science Chemicals
businesses. In the Financial Year 2014-15, Income from Operations from
this segment stood at Rs. 31,442 million, up from Rs. 30,757 million in
the previous year, contributing 54% to our overall revenues. EBITDA
stood at Rs. 3,220 million with 10% margins for the year as compared to
Rs. 4,832 million with 16% margins in the previous year. The segment
performance was driven by revenue increase in Life Science Chemicals
and Fine Ingredients. The Company witnessed price and volume growth in
Nutritional Products. EBITDA was impacted due to unabsorbed cost in
Symtet and volume and margin reduction due to anti-dumping duty in
China and increased competition in Advanced Intermediates.
EBITDA
For the year ended March 31, 2015, EBITDA stood at Rs. 7,317 million
with EBITDA margins at 12.6%.
Reported Net Profit/ Loss After Tax and EPS
Reported Loss After Tax was Rs. 578 million in the Financial Year
2014-15. Basic EPS stood at Rs. (3.63). However, Normalised Loss After
Tax stood at Rs. 97 million after adjusting for exceptional items of
Rs. 481 million. Exceptional items consisted of mark-to- market book
loss of Rs. 251 million mainly on account of currency movement in US
dollar from Rs. 59.91 last year to Rs. 62.50 on March 31,2015 with
respect to the rupee loan swapped into a US dollar loan, which was
entirely repaid during the year; interest swap income of Rs. 419
million; FCMITDA amortisation of Rs. 448 million on account of
unrealised foreign exchange loss amortised over the tenure of the loan
as per the Indian Accounting Standards; goodwill impairment of Rs. 51
million; loss on discard of assets of Rs. 640 million and foreign
exchange gain of Rs. 490 million. Normalised EPS stood at Rs. (0.61)
for the Financial Year 2014-15.
Consolidated Financial Statements
The Consolidated Financial Statements, in accordance with the Companies
Act, 2013 (the "Act"), Clause 32 of the Listing Agreement with the
Stock Exchanges (the "Listing Agreement") and Accounting Standard-21 on
Consolidated Financial Statements (AS-21) form part of the Annual
Report.
Nature of Business
During the year ended March 31, 2015, with the objective of
consolidating and re-organising the Company's pharmaceuticals business
segment, the Company transferred, by way of a "slump sale", its
(i) API business and (ii) Dosage Forms business, on a going concern
basis, and also investments in Jubilant Pharma Holdings Inc., USA and
Jubilant Pharma NV, Belgium to Jubilant Generics Limited, a
wholly-owned subsidiary of the Company through Jubilant Pharma Limited,
Singapore. Accordingly, the Company now focuses on the Life Science
Ingredients business.
Dividend
The Board is pleased to recommend a dividend of 300% i.e. Rs. 3 per
fully paid up equity share of Rs. 1 for the year ended March 31,2015.
Total dividend payout inclusive of Rs. 97.28 million as tax on dividend
will amount to Rs. 575.12 million. The payment of dividend is subject
to approval of the shareholders at the forthcoming Annual General
Meeting ("AGM") of the Company.
Capital Structure
(a) Share Capital
During the year, there has been no change in the authorised, subscribed
and paid-up share capital of the Company. As at March 31, 2015, the
paid-up share capital stood at Rs. 159,281,139 comprising of
159,281,139 equity shares of Rs. 1 each.
(b) Employees Stock Options (ESOPs)
During the year, no Options were granted under Jubilant Employees Stock
Option Plan 2005 ("Plan 2005") and JLL Employees Stock Option Plan 2011
("Plan 2011").
* Plan 2005: As on March 31, 2015, 105,495 Options were outstanding
under the Plan 2005. Each Option entitles the holder to acquire five
equity shares of Rs. 1 each at the exercise price fixed at the time of
grant being the market value as per the SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI
Guidelines"). A maximum of 527,475 shares will be allotted by the
Company/ transferred from Jubilant Employees Welfare Trust upon
exercise of these Options.
* Plan 2011: As on March 31, 2015, 1,1 12,306 Options were outstanding
under the Plan 2011. Each Option entitles the holder to acquire one
equity share of Rs. 1 at the exercise price fixed at the time of grant
being the market value as per the SEBI Guidelines. A maximum of
1,112,306 shares will be allotted by the Company/ transferred from
Jubilant Employees Welfare Trust upon exercise of these Options.
No dilution of capital is expected due to exercise of ESOPs as it is
envisaged to transfer the shares held by Jubilant Employees Welfare
Trust to the employees on exercise of Options.
Disclosures as required under Regulation 12 of the SEBI Guidelines are
given in Annexure-1 and forms part of this Report.
Subsidiaries
As on March 31, 2015, the Company had 48 subsidiaries. Brief
particulars of the principal subsidiaries are given below:
Jubilant Pharma Limited
Jubilant Pharma Limited, Singapore ("Jubilant Pharma") is the
wholly-owned subsidiary of the Company. Jubilant Pharma holds the
global pharmaceutical business of the Company through its subsidiaries
in USA, Canada, Europe and India. These subsidiaries of Jubilant Pharma
are engaged in manufacturing and marketing of various pharmaceutical
products and services like active pharmaceutical ingredients, oral
dosage forms (tablets and capsules), contract manufacturing of sterile
injectables, ointment, creams and liquids, allergy therapy products and
radiopharmaceutical business.
Jubilant Generics Limited
Jubilant Generics Limited ("JGL") is a wholly-owned subsidiary of the
Company through Jubilant Pharma. During the year, JGL has, by way of
slump sale, acquired (i) API business and (ii) Dosage Forms business of
the Company through Business Transfer Agreement, on a going concern
basis. JGL has also acquired investments of the Company in Jubilant
Pharma Holdings Inc., USA and Jubilant Pharma NV, Belgium.
JGL owns two manufacturing locations; one at Nanjangud, Karnataka and
another at Roorkee, Uttarakhand which are engaged in API and Dosage
Forms business, respectively.
Cadista Holdings Inc. and Jubilant Cadista Pharmaceuticals Inc.
i) Cadista Holdings Inc. ("Cadista"), a corporation incorporated in
Delaware, USA, is a wholly-owned subsidiary of Jubilant Pharma Holdings
Inc. Effective December 22, 2014, Jubilant Generics Inc. which held
82.38% shares in Cadista, acquired 17.62% shares held by the minority
shareholders in Cadista through Tender Offer. Pursuant to this
acquisition, Jubilant Generics Inc. merged into Cadista.
ii) Jubilant Cadista Pharmaceuticals Inc., a corporation
incorporated in Delaware, USA is a wholly-owned subsidiary of Cadista
Holdings Inc. This company is in the business of manufacturing solid
dosage forms of generic pharmaceuticals at its USFDA approved
manufacturing facility in Salisbury, Maryland, USA. Its customer base
includes all the large wholesalers, retail and grocery chains. Besides
manufacturing its own label products, it also provides Product
Development and Contract Manufacturing Services. As on March 31, 2015,
there were 22 products commercialized in the US with focus in the
therapeutic areas of CVS, CNS, Anti Allergic, Steroids, etc. This
company is the US market leader in 2 products and ranked top 2 in 4
products.
Jubilant Pharmaceuticals NV
This is a wholly-owned subsidiary of your Company through Jubilant
Pharma NV, Belgium, which holds 99.8% of its shares and Jubilant Pharma
holds the balance shares. This company is engaged in the business of
licensing generic dosage forms providing regulatory services to generic
pharmaceutical companies.
PSI Supply NV
This is a wholly-owned subsidiary of your Company. 99.5% of its shares
are held by Jubilant Pharma NV and the balance by Jubilant Pharma. It
is engaged in the supply of generic dosage forms to the European
markets.
Jubilant Life Sciences NV
This is a wholly-owned subsidiary of your Company. 99.99% of its shares
are held by the Company and the balance by Jubilant Infrastructure
Limited. It is engaged in the supply of bulk chemicals such as acetyls,
acetic anhydride and vitamins to the European markets.
Jubilant Pharma NV
This is a wholly-owned subsidiary of your Company through Jubilant
Generics Limited, India and Jubilant Pharma. This company holds shares
of Jubilant Pharmaceuticals NV (99.8%) and PSI Supply NV (99.5%) along
with Jubilant Pharma which holds the balance shares.
Jubilant DraxImage Inc.
Jubilant DraxImage Inc. ("JDI") is a wholly-owned subsidiary of your
Company through Jubilant Pharma. JDI develops, manufactures and markets
radiopharmaceuticals used in Nuclear Medicine for the diagnosis,
treatment and monitoring of various diseases. It serves hospital-based
customers (Nuclear Medicine Physicians and Technologists) in addition
to specialized radiopharmacies and through them patients, globally with
high quality and reliable specialty products. The business is backed by
a dedicated research and development team, specialized manufacturing,
strong regulatory affairs and commercial operations. The areas of
specialization include cardiac, lung and bone imaging as well as
thyroid therapy. JDI employs around 150 skilled professionals and is
based in Montreal, Canada, where it operates a manufacturing facility
approved by U.S. Food and Drug Administration (USFDA) and Health
Canada.
JDI has earned and maintained market leadership in North America for
several specialty niche products including I-131 Therapeutic &
Diagnostic capsules for thyroid and cancer, Methylene-Diphosphonate
(MDP) for bone imaging, Macro- Aggregated Albumin (MAA) for lung
imaging, Diethylene Triamine Penta-acetic Acid (DTPA) for renal and
brain imaging.
In the Financial Year 2014-15, revenues doubled to USD 81 million due
to price correction in key products in our Radiopharmaceutical
Business.
JDI intends to expand the range of product offerings and consolidate
its market share for Radiopharmaceuticals in North America. It is also
expanding in markets such as Latin America, Europe and Asia through
collaboration and contractual arrangements with partners and new
distribution channels to drive growth in the current and pipeline
products.
Jubilant HollisterStier LLC
This subsidiary is based in Spokane, State of Washington, USA. It is a
wholly-owned subsidiary of HSL Holdings Inc. It is engaged in the
contract manufacturing of sterile injectables, which includes,
lyophilized products, liquid fills, biologics, suspensions, WFI/
diluents. This company provides a complete range of services to support
drug manufacturing in the pharmaceutical and biopharmaceutical
industries. Additionally, it is an innovator, manufacturer and
distributor of allergenic extracts, targeted primarily at treating
allergies and asthma.
Its contract manufacturing capabilities include aseptic liquid fill/
finishing and lyophilization of small lot parenterals for commercial
and clinical requirements. Its capabilities can be applied to a variety
of projects from pre-clinical through commercial scale across a
multitude of dosage forms including microspheres, suspensions, WFI/
diluents, biologics (proteins), lyophilized products and liposomes.
Jubilant HollisterStier is approved across global regulated markets
including FDA (both CDER and CBER), EMA, Japan, Brazil and Canada. Its
contract manufacturing business serves customers including innovators
ranging from small biotechnology to large pharmaceutical companies.
With nearly 100 years of leadership in research, extract production and
immunotherapy products, the organization is respected worldwide in the
field of allergy. Currently, the business is comprised of allergenic
extracts and mixes, along with specialized skin test diagnostic
devices. The business lays special emphasis on innovation towards
introducing new products to treat and cure allergies.
Jubilant Biosys Limited
This company is a subsidiary of your Company through Jubilant Biosys
(Singapore) Pte. Ltd., a wholly-owned subsidiary of the Company, which
holds 66.98% equity of this company.
This company provides Drug Discovery Services to global pharmaceutical
and biotech companies in:
* Standalone Service Model
* Functional services in the areas of Discovery Informatics, In Vitro
Biology, In Vivo Biology, Structural Biology, Computational Chemistry,
DMPK and Toxicology on Full time equivalent (FTE) or Fee for service
(FFS) based model
* Collaborative/ Partnership Model
* Integrated discovery program across a single or a portfolio of
molecules
* Shared risk model
* Milestone and Hybrid Model
* Research Funding
* Payments for scientific milestones including bonus achieved through
Discovery and Development phase
* Royalties on successful commercialization of drug Jubilant Chemsys
Limited
This company is a wholly-owned subsidiary of your Company through
Jubilant Drug Development Pte. Ltd., Singapore. This company offers
the following services to drug discovery companies of US, Europe and
rest of the world on Full Time Equivalent, Fee for Service and Hybrid
Model in:
* Synthetic Organic Chemistry
* Combinatorial Chemistry
* Medicinal Chemistry
* Process Research & Development and Manufacturing, and
* Scale up services
It also works closely with Jubilant Biosys Limited in collaborative
drug discovery research.
Jubilant Clinsys Limited
This company is a wholly-owned subsidiary of your Company through
Jubilant Drug Development Pte. Ltd., Singapore.
This company is engaged in providing Pharmacovigilance, Medical
Writing, Electronic Data Capturing and Staffing Solution services to
external and internal customers. During the year, this company has
closed down its operations relating to Clinical Trial and Data
Management services.
Jubilant Clinsys Inc.
This New Jersey based USA Corporation is a wholly-owned subsidiary of
Jubilant Pharma Holdings Inc.
This company provides Clinical Research Data Management services
through TrialStat platform.
Jubilant Discovery Services Inc.
This Delaware based USA Corporation is a wholly-owned subsidiary of
Jubilant Biosys Limited. This company is providing Ion channel
screening capabilities using electrophysiology and atomic absorption
spectroscopy, Assay development, medium-high-throughput screening,
comprehensive cell-culture related capabilities to Mnemosyne, Orion and
Jansen Pharmaceutical NV. Apart from fee for services, it also provides
sales, marketing and liaising services to Jubilant Biosys Limited and
Jubilant Chemsys Limited.
Jubilant Infrastructure Limited
This wholly-owned subsidiary of your Company had entered
into a Memorandum of Understanding ("MOU") with the Government of
Gujarat during the 'Vibrant Gujarat' conference in 2007 for development
of Sector Specific Special Economic Zone ("SEZ") for Chemicals in
Gujarat. About 107 hectares land was taken on lease from Gujarat
Industrial Development Corporation ("GIDC") in Bharuch District,
Gujarat.
This SEZ became operational in October 2011 with the best in class
infrastructure facilities and utility plants like Boiler, Gas Turbine,
Effluent Treatment, Incinerator and DM Water.
The Company has set up two units in this SEZ and both the units have
commenced commercial production. The finished products of Unit-1 and
Unit-2 are fully backward integrated and are using in-house developed
innovative technologies.
The global scale plants of Vitamin B3 and 3-Cynopyredine at SEZ make
your Company the largest producer of Vitamin B in India and the second
largest globally. The production of Symtet in Unit-2 will make your
Company the world's largest producer of the crop science ingredient for
the insecticide through green route. The operations of Unit-2 are
stabilizing in steps.
Jubilant First Trust Healthcare Limited
Jubilant First Trust Healthcare Limited ("JFTHL") is a wholly- owned
subsidiary of your Company. 95.8% of its capital is held directly by
the Company and the balance 4.2% by First Trust Medicare Private
Limited.
This company has filed a Scheme of Arrangement and Reduction of Capital
before the Hon'ble High Court of Allahabad whereby First Trust Medicare
Private Limited will be merged into JFTHL and subsequently, capital of
the merged entity shall be reduced.
Jubilant Life Sciences (USA) Inc.
This corporation incorporated in Delaware, USA is a wholly- owned
subsidiary of the Company. It undertakes sales and distribution of
advance intermediates, nutrition ingredients, fine chemicals and APIs
in the USA.
Jubilant Life Sciences (Shanghai) Limited
This wholly-owned subsidiary of your Company is held through Jubilant
Pharma. It undertakes sales and distribution of products in China. This
company is engaged in trading of advance intermediates (pyridine and
its derivatives), speciality ingredients and nutrition products. It is
catering to pharmaceutical, animal feed and agrochemical industries in
China. This subsidiary is also a sourcing hub of raw materials for your
Company.
Jubilant DraxImage Limited
This is a wholly-owned subsidiary of your Company through DraxImage
Limited, Cyprus. It operates under the Jubilant India Branded
Pharmaceuticals Banner in India. This company is engaged in marketing
of innovative diagnostic imaging, radiopharmaceutical solution and
therapeutic radiopharmaceutical products. It has launched the
Lyophilized kits MDP, MAA and Sestamibi and would soon be launching
DTPA and DMSA. It is also involved in distribution of wide range of
radioisotopes which include Tc-99m Generator (used in the diagnosis of
Bone Cancer, Renal Imaging, Cerebral Perfusion Imaging and Myocardial
Perfusion Imaging), Thallium-201 and Iodine-131 capsules and solution
(for the diagnosis and treatment of Thyroid and its related disease),
Lutetium-177, Gallium-68 generator and Rhenium-188 generator via
various partnerships across the world. The target customers are Nuclear
Medicine physicians, Cardiologists and Oncologists of various hospitals
and imaging labs.
Other subsidiaries are mentioned below:
First Trust Medicare Private Limited
Jubilant Innovation Pte. Limited
Jubilant Biosys (Singapore) Pte. Limited
Jubilant Drug Development Pte. Limited
Drug Discovery and Development Solutions Limited
Jubilant Life Sciences International Pte. Limited
Jubilant Innovation (BVI) Limited
Jubilant Life Sciences (BVI) Limited
Jubilant Biosys (BVI) Limited
Jubilant Innovation (USA) Inc.
Jubilant Generics Inc. 1
Jubilant Pharma Holdings Inc.
HSL Holdings Inc.
Draximage LLC
Jubilant DraxImage (USA) Inc.
Deprenyl Inc., USA
Draxis Pharma LLC
Jubilant HollisterStier Inc.
Draximage Limited, Cyprus
Draximage Limited, Ireland
6963196 Canada Inc.
6981364 Canada Inc.
DAHI Animal Health (UK) Limited
Draximage (UK) Limited
Jubilant Drug Discovery & Development Services Inc.
Jubilant Life Sciences (Switzerland) AG
Jubilant Pharma Trading Inc.2
Vanthys Pharmaceutical Development Private Limited
Jubilant Innovation (India) Limited
1. Merged into Cadista Holdings Inc. effective from December 22, 2014
2. Became a subsidiary effective from April 24, 2014
Performance and Financial Position of Subsidiaries
The performance and financial position of the subsidiaries are given in
Form AOC-1 attached to the Financial Statements for the year ended
March 31,2015.
Partnerships
Jubilant HollisterStier General Partnership
It is a Canada based partnership managed by two subsidiaries of the
Company - Jubilant HollisterStier Inc. and Draxis Pharma LLC. This
partnership provides contract manufacturing services. It manufactures
products in two categories: sterile products and non-sterile products.
Sterile products include liquid and freeze-dried (lyophilized)
injectables and sterile ointments and creams. Non-sterile products
include non- sterile ointments, creams and liquids.
Draximage General Partnership
It is a Canada based partnership managed by two subsidiaries of the
Company - Jubilant Draximage Inc. and 6981364 Canada Inc.
Statutory Auditors
M/s B S R & Co. LLP, Chartered Accountants ("BSR") was appointed as the
Statutory Auditor of the Company at the 36th Annual General Meeting of
the Company to hold office until the conclusion of Annual General
Meeting to be held in the year 2018, subject to ratification by the
members at every Annual General Meeting. BSR has confirmed its
eligibility to the effect that ratification of its appointment, if
made, would be within the limits prescribed under the Act and it is not
disqualified for re-appointment.
Observations made in the Auditor's Report are self- explanatory and do
not call for any comments.
Cost Audit
Pursuant to Section 148 of the Act read with the Companies (Cost
Records and Audit) Rules, 2014, the Central Government has prescribed
audit of cost records for certain products. Accordingly, the Company
needs to carry out cost audit of its products.
Based on the recommendations of the Audit Committee, the Board of
Directors has re-appointed M/s. J. K. Kabra & Co., Cost Accountants as
Cost Auditors of the Company to conduct the cost audit for the
Financial Year 2014-15.
Secretarial Audit
The Board has appointed M/s Sanjay Grover & Associates, Company
Secretaries to conduct Secretarial Audit pursuant to the provisions of
Section 204 of the Act for the Financial Year 2014-15. The report of
the Secretarial Auditor is attached as Annexure-2 to this Report.
Observations made in the Secretarial Auditor's Report are
self-explanatory and do not call for any comments.
Directors and Key Managerial Personnel
During the year, Dr. Ashok Misra was appointed as an Additional
Director with effect from September 15, 2014.
Mr. Abhay Havaldar, Mr. Suresh Kumar and Dr. Inder Mohan Verma resigned
as Directors during the year. Consequent to the appointment of Mr.
Shyam S. Bhartia as Chairman and Managing Director of Jubilant Pharma
Limited, Singapore, a wholly-owned subsidiary of the Company, he has
resigned from the position of Managing Director of the Company
effective from March 25, 2015. He continues to be Non- executive
Chairman and Director of the Company.
Mr. Hari S. Bhartia retires by rotation at the forthcoming Annual
General Meeting and being eligible, offers himself for re-appointment.
The Board commends his re-appointment.
Mr. R. Sankaraiah, Executive Director-Finance, has been designated as
the Chief Financial Officer in the category of Key Managerial Personnel
during the year.
Further, Mr. Lalit Jain, Company Secretary, retired from the services
of the Company during year. In his place, Mr. Rajiv Shah has been
appointed as the Company Secretary and designated as Compliance Officer
in the category of Key Managerial Personnel during the year.
Meetings of the Board
Five meetings of the Board of Directors of the Company were held during
the Financial Year 2014-15.
Declaration of Independent Directors
All Independent Directors have given declaration that they meet the
criteria of independence as provided under Section 149 of the Act and
Clause 49 of the Listing Agreement.
Appointment and Remuneration Policy
The Company has framed an Appointment and Remuneration Policy pursuant
to the provisions of Section 178 of the Act read with Clause 49 of the
Listing Agreement. The Policy has been disclosed in the Corporate
Governance Report attached to this Report.
Annual Performance Evaluation of the Board
A statement on annual evaluation by the Board of its performance and
performance of its Committees as well as individual Directors forms
part of the Corporate Governance Report attached to this Report.
Directors' Responsibility Statement
Your Directors, based on the representation received from the
management, confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as on March 31,2015 and of the profits of the Company
for the year ended March 31,2015;
(iii) the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) the Directors had prepared the annual accounts on a going concern
basis;
(v) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively.
Based on the framework of internal financial controls
including the Control Manager for financial reporting and compliance
systems established and maintained by the Company, work performed by
the internal, statutory and secretarial auditors and the reviews
performed by the management and the relevant Board committees,
including the Audit Committee, the Board is of the opinion that the
Company's internal financial controls are adequate and effective during
the Financial Year 2014-15; and
(vi) the Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.
Composition of Audit Committee
As on date, the Audit Committee comprises of Mr. S. Sridhar, Chairman,
Ms. Sudha Pillai and Dr. Ashok Misra. The Board has accepted all the
recommendations made by the Audit Committee.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo, required to be disclosed
pursuant to Section 134 of the Act read with the Companies (Accounts)
Rules, 2014, is given in Annexure-3 and forms part of this Report.
Employees
Particulars of Directors and Employees, as required under Section
197(12) of the Act read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are given in
Annexure-4 and form part of this Report.
Risk Management
Risk-taking is an inherent trait of any enterprise. However, if risks
are not properly managed and controlled, they can affect the Company's
ability to attain its objectives. Risk management and internal
financial control systems play a key role in directing and guiding the
Company's activities by continually preventing and managing risks. The
Board, Audit Committee and Senior Management team collectively set the
overall tone and risk culture of the Company by identifying the risks
impacting the Company's business and documenting the process of risk
identification, risk minimization and risk optimization as a part of
the risk management policy through defined and communicated corporate
values, clearly assigned risk responsibilities, appropriately delegated
authority and a set of processes and guidelines.
There exists a critical risk management framework across the Company
and the same is reviewed on a six monthly basis by the Board. Some of
the critical risks identified in various businesses of the Company are:
* Competition
* Cost competitiveness
* Foreign Currency and Interest Rate Exposures
* Capacity Planning and Optimisation
* R&D Effectiveness
* Human Resources- Acquire and Retain Talent
* Portfolio and Mix: Customer and Product
Concentration
* Compliance and Regulatory
* Environment, Health and Safety
* Protecting Intellectual Property Rights
The Company promotes strong ethical values and high levels of integrity
in all its activities, which in itself is a significant risk mitigator.
With the growth strategy in place, risk management holds the key to the
success of the Company's journey of continued competitive
sustainability in attaining the desired business objectives.
A detailed note on Internal Control Systems and Risk Management is
given in the "Management Discussion & Analysis Report".
Certifications
The Company follows several externally developed initiatives in the
economic, environmental and social areas. Manufacturing plants at
Gajraula, Nira, Savli, Nanjangud, Ambernath and Bharuch are ISO
9001:2008 certified for Quality Management System. Plants at Gajraula,
Nira, Savli, Nanjangud and Bharuch are also ISO 14001:2004 certified
for Environmental Management System and OHSAS 18001:2007 for
Occupational Health and Safety at work place. Plants at Gajraula, Nira,
Savli and Bharuch are certified for IMS (Integrated Management System).
ANU (Animal Nutrition Unit) at Savli is certified for FAMI-QS Code
Version 5.1 in Feed Safety Management System.
Vitamins plant at Bharuch is certified for FAMI-QS Code Version 5 (in
Feed Safety Management System), Kosher, Halal- India, Halal-Malaysia,
Halal Indonesia, ISO 22000:2005 (in Food Safety Management System),
HACCP (Hazard Analysis and Critical Control Points), GMP (Good
Manufacturing Practices) and is FSSC 22000:2010 (Global Food Safety)
Compliance.
Gajraula Quality Control Laboratory has also been certified for
chemical testing by NABL (National Accreditation Board for Testing and
Calibration Laboratories) in accordance with the ISO/ IEC 17025:2005.
In addition to this, Gajraula Carbon Dioxide manufacturing facility has
been certified for FSSC 22000:2010 (Food Safety System Certification)
for production and dispatch of Carbon Di-oxide for Beverages of food
grade Carbon Di-oxide. Ethyl Acetate & Acetic Anhydride manufacturing
facility has been approved for KOSHER certification. 2 Acetyl Pyridine,
3 Hydroxyl Methyl Pyridine, Acetic Anhydride, Beta Picoline, Cetyl
Pyridinium Chloride, Ethyl Acetate, Glacial Acetic Acid, Niacin and
Pyridine facility are certified for KOSHER certification.
Ethyl Acetate and Acetic Anhydride manufacturing facility at Nira plant
has been approved for KOSHER and HALAL certification. Dosage Forms
facility at Roorkee follows Good Manufacturing Practices ("GMP") as per
World Health Organisation ("WHO") specifications in manufacturing and
testing of pharmaceutical products and hence, has been granted WHO GMP
certificate by the Drug Licensing and Controlling Authority,
Uttarakhand. This facility is also approved by UK-Medicines and
Healthcare Products Regulatory Agency (UK-MHRA) to export drugs to
European Market and USFDA to export drugs to the US market. The other
approvals for the plant are Jordan Food & Drug Administration, Agencia
Nacional de Vigilancia Sanitaria Brazil (ANVISA) Brazil,Pharmaceuticals
and Medical Devices Agency (PMDA) Japan, Medicines Control Council
(MCC), South Africa, Health Canada, Therapeutic Goods Administration
(TGA), Australia and several Ministries of Health of countries like
Uganda, Tanzania, Ivory Coast, Taiwan, Kenya, Zimbabwe, Botswana and
Belarus.
Nanjangud plant has received USFDA approval for exporting certain
products to the US market, ANSM (agence nationale de securite du
medicament et des produits de sante-the French Health Products Safety
Agency) approval for exporting products to EU countries, PMDA approval
for exporting products to the Japanese market, Korea Food and Drug
Administration approval for exporting products to Korean market,
COFEPRIS approval (Federal Commission for Protection against Health
Risks, Mexico) for exporting products to Mexican market, ANVISA
approval for exporting products to Brazil market and TGA approval for
exporting certain products to Australia. This plant was audited by
CDSCO (Central Drugs Standard Control Organization) and received
written confirmation to export products to EU countries.
Human Resources
At Jubilant, our employees are the backbone of our growth strategy and
play a vital role in ensuring sustainable business growth and future
readiness. The Company has been focusing on strengthening its talent
management and employee engagement processes through clear role
expectations with specific and well defined Key Performance Indicators
for each role. We believe in creating a culture of performance and
merit that provides all our employees with opportunities to excel,
learn and progress. We have been focusing on attracting the best talent
from India's leading campuses to have a steady fresh talent flow
thereby creating a strong pool of internal talent.
Our well defined Leadership Competency Framework lays tremendous focus
on outlining a common leadership culture throughout the organization.
We reinforce the leadership values through development initiatives like
Development Centres and 3600 Feedback. All the initiatives are backed
by an action oriented development plan. The development initiatives lay
the foundation of our talent pipeline.
We strive toward technology enabled HR systems and processes that are
based on globally adopted best practices. In this direction, we have
implemented world renowned PeopleSoft based Human Resource Information
System ("HRIS") at the facilities of the Company in India and North
America. The common HRIS platform enables us to weave a common
performance and process culture across the organization thereby
bringing in efficiency and consistency.
At Jubilant, we ensure that there is full adherence to the Code of
Business Conduct and Fair Business Practices. We have signed a policy
on CII Code of Conduct on Affirmative Action that reconfirms our
commitment that equal opportunity in employment for all sections of the
society is a component of our growth and competitiveness.
As on March 31, 2015, a total of 399 employees at our manufacturing
plants at Savli, Nira and Gajraula were members of unions or had
collective bargaining capability. During the year, we enjoyed cordial
relations with our employees and there have been no instances of major
strikes, lockouts or other disruptive labour disputes.
The Company has adopted a Policy on Prevention of Sexual Harassment at
workplace and the Company has not received any complaint during the
year under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
A detailed note on Human Resource Management is given in the
"Management Discussion & Analysis Report".
Investor Services
The Company values its investors immensely. With a view to keep its
investors well informed of its activities, the Company has taken the
following initiatives:
* E-mailing quarterly results, press releases and other similar
communications to the shareholders soon after they are sent to the
stock exchanges; e-mailing Annual Reports and Corporate Sustainability
Report;
* Maintaining user friendly Investor Section on the website of the
Company www.jubl.com;
* A dedicated e-mail ID viz. [email protected] for interacting on
various matters with respect to share transfer, transmission, dividends
and other related issues with the Company Secretary and Compliance
Officer;
* Mailing feedback forms to the investors on an annual basis so as to
obtain valuable feedback and suggestions for improvement. The Company
has also placed an online Investor Feedback form on its website
www.jubl.com under the head "Investor Feedback Form" to facilitate
electronic submission of the Form;
* Earnings calls are conducted and the transcripts are uploaded on the
website www.jubl.com. The Earnings call is typically accompanied by
Results Presentation and Release that are also uploaded on the website;
and
* The Company's management also meets institutional investors and
analysts at their request.
Awards and Accolades
During the year, various awards and accolades were received by the
Company/ its management. These are:
* ASSOCHAM's 'Responsible Organization Excellence' Award 2014-15
* 15th Annual Greentech Environment Award 2014 - Gold Category winner
under "Chemicals and Pharmaceutical sector" - Gajraula plant, India
* Two Awards at UBM India Pharma Awards 2014: Excellence in Corporate
Social Responsibility & Excellence in Environment, Health & Safety
(EHS)
* CII Energy Efficient Unit Award 2014 conferred to our Gajraula plant,
India
* I.C.O.N.I.C IDC Insights Award under 'Health and Life Sciences'
vertical
* CIO 100 Awards and Express Uptime Champion Award conferred to
Jubilant's CIO, Mr. Umesh Mehta
* Golden Peacock Global Award for Excellence in Corporate Governance
for the year 2014, presented by the Rt Hon Theresa May MP, Secretary of
State for the Home Department, Government of UK
* FICCI Chemicals & Petrochemicals Awards 2014 - "Process Innovator of
the Year 2014" in Fine Chemicals category
* Golden Peacock Business Excellence Award-2014 recognized under the
Chemicals and Pharmaceutical category, presented by The Hon'ble
Governor of Tamil Nadu, Mr. K. Rosaiah to our Gajraula plant, India
* 3rd FICCI Quality Systems Excellence Awards for Manufacturing-2014 -
First Prize in the large size category presented to our Gajraula plant,
India
* Dataquest Business Technology Awards for Best IT Implementation in
Analytics, Mobility, Cloud, ERP/ CSM/ CRM
* 50 Most Talented Sustainability Leaders Award, conferred to Jubilant
Life Sciences' CSO, Mr. Ganesh C. Tripathy during the World CSR
Congress
Vigil Mechanism
The details of Vigil Mechanism (Whistle Blower Policy) adopted by the
Company have been disclosed in the Corporate Governance Report attached
to this Report and form an integral part of this report.
Green Initiatives
With the aim of going green and minimising our impact on the
environment, the Company continued with its green initiatives in its
operations which include:
* Conducting paperless Board/ Committee Meetings;
* Publishing and circulating Corporate Sustainability Report in CD
form; and
 E-mailing Annual Reports to the shareholders whose e-mail addresses
are provided by the depositories or who have opted for the electronic
version.
Corporate Social Responsibility
Corporate Social Responsibility ("CSR") at Jubilant is the commitment
of businesses to contribute to sustainable economic development by
working with the employees, their families, the local community and the
society at large to improve their lives in ways that are good for
business and for its development.
During the Financial Year 2014-15, Jubilant continued its CSR
initiatives in various fields.
At Jubilant, we ensure transparency and accountability of our
practices. We present our values and disclose our economic,
environmental and social performance through our Sustainability Report.
Jubilant is an Organisational Stakeholder of the Global Reporting
Initiative ("GRI"), an international not-for-profit organisation which
sets guidelines for sustainability reporting. The Company's first
Corporate Sustainability Report was published in the year 2003. Since
then, Sustainability Reports are released annually in accordance with
the GRI Guidelines and are externally assured by Ernst & Young. In the
year 2013, we also started voluntary reporting of sustainability
performance in line with National Voluntary Guidelines. Jubilant also
ensures to report community and social initiatives in line with United
Nations Millennium Development Goals. With the aim of mitigating impact
on the environment, like last year, this year too we are sending
Corporate Sustainability Report in CD form alongwith the Annual Report
to the shareholders. The same is also available on the Company's
website at www.jubl.com.
CSR initiatives of the Company are conceptualized and implemented
through Jubilant Bhartia Foundation ("JBF"), the social wing of
Jubilant Bhartia Group, established in 2007 as a not-for-profit
organisation. JBF works on 4P model (Public-
Private-People-Partnership) for empowering communities and believes
that for sustainable social intervention, participation of communities
must be ensured in the Company's CSR projects/ programmes. Jubilant's
role is to act as a catalyst and facilitate the process.
Pursuant to the provisions of Section 135 of the Act read with the
Companies (Corporate Social Responsibility Policy) Rules, 2014, the
Company has framed a Corporate Social Responsibility Policy ("CSR
Policy") which is placed on the Company's website. The Sustainability &
CSR Committee approved the following projects of JBF which are in line
with Schedule VII to the Act:
* Project Arogya and Swasthya Prahari: Improving health indices through
innovative services and promoting health seeking behavior;
* Project Muskaan: Universalizing elementary education and improving
quality parameters for primary education through community involvement;
* Nayee Disha: Enhancing employability through vocational training; and
* Rural Development: Supporting the community
infrastructure as and when identified in the project area.
With these initiatives beginning to show results, Jubilant plans to
continue its focus on the social initiatives of the Company and slowly
spread its area of influence in terms of geography. A summary of the
activities of JBF is provided on its website
www.iubilantbhartiafoundation.com. Details of the sustainability
initiatives are given in the Corporate Sustainability Report.
Annual Report on CSR including contents of the CSR Policy is attached
as Annexure-5.
During the year, Jubilant Pharma has taken loan from International
Finance Corporation ("IFC").
IFC carried out a detailed Environmental & Social ("E&S") due diligence
of Jubilant Pharma's business for evaluating the E&S management system
in order to ascertain capacity, maturity and reliability of Jubilant
Pharma's environmental and social management systems to manage
environmental and social risks. Based on the due diligence, IFC
suggested optimisation through time bound Environmental and Social
Action Plan to match the Jubilant Pharma's operating system with IFC's
Performance Standard requirements. Jubilant Pharma has since completed
the action plan in timely manner and ensured compliance with the
relevant IFC Performance Standards as stated below:
* PS1: Assessment and Management of Environmental and Social Risks and
Impacts
* PS2: Labour and Working Conditions
* PS3: Resource Efficiency and Pollution Prevention
* PS4: Community Health, Safety and Security
In addition, Jubilant Pharma has also submitted Annual Monitoring
Report for the Financial Year 2014-15 to IFC.
Other Disclosures
i. Extracts of Annual Return: Pursuant to the provisions of Section 92
of the Act read with Rule 12 of the Companies (Management and
Administration) Rules, 2014, the extract of Annual Return is attached
as Annexure-6 to this Report.
ii. Fixed Deposits: No deposits have been accepted by the Company
during the year from the public. As on March 31,2015, the Company had
no outstanding, overdue or unclaimed deposits.
iii. Loans, Guarantees and Investments: Details of loans, guarantees/
securities and investments along with the purpose for which the loan,
guarantee or security is proposed to be utilised by the recipient have
been disclosed in Note nos. 15, 18, 34, 35 and 36 of the Notes to the
Standalone Financial Statements.
iv. Particulars of Contracts or Arrangements with the Related Parties:
The Company has not entered into any transaction with a Related Party
which is not at arm's length or any material transaction with any
Related Party, as defined in the policy of the Company on materiality
of Related Party Transactions. Your Directors draw attention of the
members to Note no. 53 to the Standalone Financial Statements which
sets out Related Party disclosures.
v. Material Changes in Financial Position: No material change or
commitment has occurred after the close of the Financial Year 2014-15
till the date of this Report, which affects the financial position of
the Company.
vi. Orders Passed by Courts/ Regulators: There is no significant or
material order passed by the regulators or courts or tribunals
impacting the going concern status and the Company's operations in
future.
Corporate Governance
As a responsible corporate citizen, the Company is committed to
maintain the highest standards of Corporate Governance and believes in
adhering to the best corporate practices prevalent globally.
A detailed report on Corporate Governance is attached as Annexure-7. A
certificate from a Practising Company Secretary confirming compliance
with the conditions of Corporate Governance, as stipulated in Clause 49
of the Listing Agreement, is attached to the Corporate Governance
Report.
The Board Members and Senior Management Personnel have affirmed
compliance with the Code of Conduct for the year ended March 31, 2015.
A certificate from the Co-Chairman & Managing Director confirming the
same is attached to the Corporate Governance Report.
A certificate from the CEO and CFO confirming correctness of the
financial statements, adequacy of internal control measures, etc. is
also attached to the Corporate Governance Report.
Management Discussion & Analysis Report
The Management Discussion and Analysis Report on the operations of the
Company as provided under the Listing Agreement has been given
separately and forms part of the Annual Report.
Acknowledgments
Your Directors acknowledge with gratitude the co- operation and
assistance received from the Central and State Government authorities.
Your Directors thank the Shareholders, Private Equity Investors,
Financial Institutions, Banks/ other lenders, Customers, Vendors and
other Business Associates for their confidence in the Company and its
management and look forward to their continued support. The Board
wishes to place on record its appreciation for the dedication and
commitment of the Company's employees at all levels, which has
continued to be our major strength. We look forward to their continued
support in the future.
For and on behalf of the Board
Shyam S Bhartia Hari S Bhartia
Chairman Co-Chairman &
Managing Director
Place: Noida
Date : May 12, 2015
Mar 31, 2013
The Directors are delighted in presenting the Thirty Fifth Annual
Report together with the Audited Standalone and Consolidated financial
statements for the year ended March 31, 2013.
Overview
Jubilant Life Sciences Limited is a global Pharmaceutical and Life
Sciences Company engaged in manufacture and supply of Generics
(including Active Pharmaceutical Ingredients (APIs) and Solid Dosage
Formulations), Specialty Pharmaceuticals (including
Radiopharmaceuticals, Allergy Therapy Products and Sterlite Injectibles
& Ointments, Creams and Liquids (OCL)) and Life Science Ingredients
(including Proprietary Products and Exclusive Synthesis (PPES),
Nutrition Ingredients (NI) and Life Science Chemicals (LSC). It also
provides Drug Discovery and Development Solutions (DDDS) and other
Healthcare services. The Company''s strength lies in its unique
offerings of Pharmaceuticals and Life Science products and services
across the value chain. With 10 world- class manufacturing facilities
in India, US and Canada and a team of over 6,200 multicultural people
across the globe, the Company is committed to deliver value to its
customers spread across 98 countries. The Company is well recognised as
a "Partner of Choice" by leading pharmaceuticals and life sciences
companies globally.
Financial Results
(Rs. in million)
Year ended Year ended
March 31, 2013 March 31, 2012
Income from Operations 31,248 26,176
Other Operating Income 215 234
Total Income from 31,463 26,410
Operations
Total Expenditure 26,921 22,294
Operating Profit 4,542 4,116
Other Income 89 89
EBITDA including Other 4,631 4,205
Income
Depreciation 1,522 1,320
Finance Costs 1,712 1,544
Profit after Interest but 1,397 1,341
before Exceptional Items
Exceptional Item - (Loss) (1,525) (1,800)
Tax Expenses 305 350
Reported Net (Loss) After (433) (809)
Tax and Minority Interest
Profit brought forward from 7,863 9,227
previous year
PROFIT AVAILABLE FOR 7,430 8,418
APPROPRIATION
Which the Directors have
appropriated as follows:
- Proposed Dividend on 478 478
Equity shares
- Tax on Dividend on 81 77
Equity Shares
- Transfer to General - -
Reserve
Balance to be carried 6,871 7,863
forward
Financial Highlights
(i) Standalone Financials Income from Operations
In FY 2013, the Company recorded income from operations of Rs. 31,463
million, which grew by 19% over last year.
International Revenues
International business contributed 58% to the Revenue from Operations
at Rs. 18,399 million.
EBITDA
For the year ended March 31, 2013, EBITDA stood at Rs. 4,631 million
with EBITDA margins at 15%.
Reported and Normalised Profit After Tax and EPS
Reported Loss After Tax was Rs. 433 million in FY 2013. Basic EPS
stood at Rs. (2.72). However, Normalised Profit After Tax stood at Rs.
1,092 million after adjusting for exceptional items of Rs. 1,525
million, mainly on account of unrealised exchange losses. Normalised
EPS stood at Rs. 6.86 for the FY 2013.
(ii) Consolidated Financials Income from Operations
In FY 2013, income from operations was Rs. 51,610 million, up from Rs.
42,782 million in previous year (excluding onetime other income of Rs.
249 million) reporting a growth of 21%.
International Revenues
International business contributed 74% to the Revenue from Operations
at Rs. 38,276 million. Sales from key developed markets were at Rs.
31,909 million contributing 62% to the Revenue of the Company as
compared to 58% in previous year.
Pharmaceuticals Segment
This segment comprises revenue lines of APIs, Solid Dosage
Formulations, Radiopharmaceuticals, Allergy Therapy Products, Sterile
Injectables & OCL, DDDS and other Healthcare services. In FY 2013,
income from operations from this segment was Rs. 26,580 million
contributing 52% to the total revenue of the Company, up from Rs.
21,764 million (excluding onetime other income of Rs. 249 million) in
previous year reporting a growth of 22%. EBITDA stood at Rs. 7,504
million, up from Rs. 5,783 million (excluding onetime other income of
Rs. 249 million) in previous year, reporting a growth of 30% in
Pharmaceuticals segment with EBITDA margins at 28% on account of better
product mix.
Life Science Ingredients Segment
This segment comprises PPES, NI and LSC. In FY 2013, Income from
operations from this segment was Rs. 25,030 million, up from Rs. 21,018
million in previous year, recording a growth of 19%. EBITDA stood at
Rs. 3,819 million with 15% margins for the year as compared to Rs.
3,472 million with 17% margins in previous year. Life Science
Ingredients segment EBITDA was up 10% on back of higher volumes albeit
with slightly lower EBITDA margins due to lower pricing of certain
products in NI and LSC during the year.
EBITDA
For the year ended March 31, 2013, EBITDA stood at Rs. 10,548 million
with EBITDA margins at 20%.
Reported and Normalised Profit After Tax and EPS
Reported Profit After Tax was Rs. 1,527 million in FY 2013. Basic EPS
stood at Rs. 9.59. However, Normalised Profit After Tax stood at Rs.
3,824 million after adjusting for exceptional items of Rs. 2,297
million. Exceptional items consisted of unrealised mark-to-market book
loss of Rs. 839 million mainly on account of currency movement in US
dollar from the base rate of Rs. 50.88 last year to Rs. 54.29 on March
31, 2013 with respect to the rupee loans of Rs. 9,100 million swapped
into a US dollar loan of $202 million; FCMITDA amortisation of Rs. 632
million on account of unrealised exchange loss amortised over a period
of the tenure of the loan as per the Indian Accounting Standards; and
Rs. 826 million due to write-off with respect to intangible assets
under product development and inventory write down etc. and profit on
sale of non-operating assets. Normalised EPS stood at Rs. 24.01 for
the FY 2013.
Dividend
The Board is pleased to recommend a dividend of 300% i.e. Rs. 3 per
fully paid-up equity share of Rs. 1 for the year ended March 31, 2013.
Total dividend payout inclusive of Rs. 81.21 million as tax on dividend
will amount to Rs. 559.05 million based on existing capital. Payment of
dividend is subject to the approval of the shareholders at the
forthcoming Annual General Meeting (AGM) of the Company.
Capital Structure (a) Employees Stock Options (ESOPs)
During the year, 918,351 Options were granted under JLL Employees Stock
Option Plan 2011 (''Plan 2011''). However, no Options were granted
under Jubilant Employees Stock Option Plan 2005 (''Plan 2005'').
As on March 31, 2013, 145,443 Options were outstanding under Plan 2005.
Each Option entitles the holder to acquire five equity shares of Rs. 1
each at the exercise price fixed at the time of grant being market
value as per the SEBI (Employee Stock Option Scheme and Employees Stock
Purchase Scheme) Guidelines, 1999 (''SEBI Guidelines'').
A maximum of 727,215 shares will be allotted by the Company /
transferred from Jubilant Employees Welfare Trust upon exercise of
these Options.
As on March 31, 2013, 1,585,055 Options were outstanding under Plan
2011. Each Option entitles the holder to acquire one equity share of
Rs. 1 at the exercise price fixed at the time of grant being market
value as per the SEBI Guidelines.
No dilution of capital is expected due to exercise of ESOPs as it is
envisaged to transfer the shares held by Jubilant Employees Welfare
Trust to employees on exercise.
Disclosures as required under Regulation 12 of the SEBI Guidelines are
given in Annexure A and form part of this Report.
(b) Share Capital
During the year, there has been no change in the authorised, subscribed
and paid-up share capital of the Company. As at March 31, 2013, the
paid-up share capital stands at Rs. 159,281,139 comprising of
159,281,139 equity shares of Rs. 1 each, the same as in previous year.
Subsidiaries
As on March 31, 2013, the Company had 46 subsidiaries. Brief
particulars of principal subsidiaries are given below:
Jubilant HollisterStier LLC
This subsidiary is based in Spokane, State of Washington, USA. It is a
wholly owned subsidiary of HSL Holdings Inc. It is a recognised
contract manufacturer of sterile injectables (vials and ampoules),
lyophilized products, liquid fills, biologics, suspensions,
WFI/Diluents and provides a complete range of services to support the
pharmaceutical and biopharmaceutical industries. Additionally, it is a
manufacturer of allergenic extracts, targeted primarily at treating
allergies and asthma.
Its contract manufacturing capabilities include aseptic liquid fill /
finishing and lyophilization in three distinct cGMP areas designated as
Small Volume Parenteral (SVP), Small Lot Manufacturing (SLM) and
Clinical Trial Manufacturing (CTM). Its capabilities can be applied to
a variety of projects from pre-clinical through commercial scale across
a multitude of dosage forms including microspheres, suspensions,
WFI/diluents, biologics (proteins), lyophilized products and liposomes.
Jubilant HollisterStier maintains an outstanding regulatory record with
the FDA (CBER and CDER), EMA and Japan''s and Brazil''s regulatory
agencies. Its contract manufacturing business serves customers
including innovators ranging from small biotechnology to large
pharmaceutical companies.
Jubilant DraxImage Inc. - This company is a wholly owned subsidiary of
your Company through Jubilant Pharma Pte. Limited. It deals in
radiopharmaceuticals which is a niche, high entry barrier business.
DraxImage develops, manufactures and markets innovative diagnostic
imaging radiopharmaceuticals solutions and therapeutic
radiopharmaceutical products for the global market. The application of
these products extends to cardiology, thyroid uptake and scan, lung
scan, kidney imaging, bone scan etc.
This company is the major supplier of lyophilised radiopharmaceutical
kits for use with Technetium - 99m including DRAXIMAGE MAA, MDP, DTPA,
Glucoheptonte and Sestamibi. Its I-131 products are the market leaders
in the US with more than 70% market share. These 131 products are
currently the major revenue drivers. Radiopharmaceuticals are used for
both therapeutic and diagnostic molecular imaging applications to
customers comprising hospitals, imaging centres and cardiology /
oncology clinics.
DraxImage also markets non-radioactive products, which are solid in
lyophilized form.
This company operates a US FDA and Health Canada approved manufacturing
facility in Montreal at Canada. It is recognised globally for its
quality and execution capabilities, strong regulatory track record and
has an established customer base comprising large innovator and
specialty pharmaceutical companies.
Jubilant Biosys Limited - This company is a subsidiary of your Company
through Jubilant Biosys (Singapore) Pte. Limited, a wholly owned
subsidiary of your Company, which holds 66.98% of the equity of this
company.
This company provides Drug Discovery Services to Global Pharmaceutical
and Biotech companies in:
- Stand alone Service Model
- Functional services in area of Discovery Informatics, Structural
Biology and In Vivo & Invitro Biology and Insilico on FTE or Fee based
model
- Collaborative / Partnership Model
- Integrated discovery program across a single or a portfolio of
molecules; and
- Risk / reward sharing option
- Research Funding
- Payments for scientific milestones including bonus achieved through
Discovery and Development phase
- Royalties on successful commercialisation of drug
During 2012-13, this company has:
- Continued to provide Drug Discovery Services in integrated drug
discovery programmes, functional service in structural biology, High
thru put screening, Insilco modeling and IN Vivo Biology and Invitro
Biology;
- Expanded relationship with a couple of midsized biotech companies
such as Norgine, Mnemosyne;
- Successfully engaged a number of potential big clients which once
closed, would give a continued stream of revenue;
- Successfully received a developmental milestone from one of its
customers named Endo Pharmaceuticals, culminating in its business
model;
- Successfully delivered a number of scientific milestones in
different Therapeutic areas; and
- Commenced internal research on new molecules which would be
available for either partnering with existing clients or outlicencing
to the interested potential clients.
Jubilant Discovery Services Inc. - This Delaware based USA corporation,
is a wholly owned subsidiary of Jubilant Biosys Limited. This company
apart from providing sales, marketing and liaisoning services to
Jubilant Biosys Limited for its US based customers is also providing
electrophysiology services to Jansen Pharmaceutical NV and Mnemosyne.
During the year, this company has expanded its reach and a number of
potential clients have shown interest in this capability and has been a
key differential to the competitors.
Jubilant Discovery Services Inc. has completed an important step in the
realisation of a long term strategy to extend capabilities in
prosecuting ion channel targets and expanding the capabilities in other
targets including GPCRS and Kinases. As part of company''s strategy to
extend its capabilities, company started the ''State of the Art
Discovery Center'' in North America for ion Channel targets. This
center is enabled with comprehensive discovery biology capabilities
with a focus in Voltage gated and ligand gated ion channels, GPCRs and
Kinases.
Jubilant Chemsys Limited - This company is a subsidiary of your Company
through Jubilant Drug Development Pte. Limited, a wholly owned
subsidiary of your Company, which holds entire equity of this company.
This company offers following services to drug discovery companies
based out of US, Europe and Japan on Full Time Equivalent and Molecule
basis:
- Discovery Chemistry Functions;
- Hit-to-Lead and Lead Optimisation;
- Medicinal Chemistry Services; and
- Scaling up from mg to kg in kilo lab and pilot plant.
It also works closely with Jubilant Biosys Limited in collaborative
drug discovery research services arena.
During the year, the chemistry business has been challenging and the
same has been compounded due to certain customer contract
cancellations. The management has, however, put together a plan for the
revival of this business and expansion to other related areas such as
GMP scale up facility.
Jubilant Clinsys Limited - This company is a subsidiary of your Company
through Jubilant Drug Development Pte. Limited, a wholly owned
subsidiary of your Company, which holds entire equity of this company.
This company is a full service, scientifically-focused contract
research organisation that provides pharmaceutical, biotechnology and
medical device companies with a wide range of services in support of
Phase I-IV drug and device development. These services range from
bio-analytical, bio-equivalence & pharmacokinetic studies, all phases
of clinical trials, biostatistics, clinical data management, medical
and scientific support including medical writing, drug safety,
regulatory, quality assurance, end-to-end project management, clinical
monitoring, site management, investigator and site recruitment. This
company operates an 80 bedded Clinical Pharmacology Unit in Noida and
is equipped with a bio-analytical as well as a clinical laboratory
accredited by College of American Pathologists (CAP) and NABL, India.
During the year, this company has extended its reach to European
clients and signed contracts with NRIM (U.K) and Aristo Pharma
(Germany).
Jubilant Clinsys Inc. - This New Jersey based USA corporation is a
wholly owned subsidiary of Jubilant Life Sciences Holdings Inc. and is
a therapeutically focused full service clinical research organisation.
This company has expertise in a wide range of highly specialised
therapeutic areas including oncology, cardiovascular, central nervous
system, respiratory, dermatology and allergy/immunology. It offers
broad range of clinical research services to pharmaceutical,
biotechnology and medical device companies in support of Phase I I-IV
drug and device development including project management, clinical
monitoring, scientific and medical support, patient and investigator
recruitment, site management, biostatistics, data management, drug
safety, quality assurance, regulatory affairs and medical writing. This
company expanded therapeutically, geographically and added functional
service offerings. It has operations in Bedminster, New Jersey,
Raleigh,
North Carolina, Ottawa, Ontario, Canada and Dusseldorf, Germany.
Jubilant Infrastructure Limited - This wholly owned subsidiary of your
Company had entered into a Memorandum of Understanding (MOU) with the
Government of Gujarat during the ''Vibrant Gujarat'' conference in
2007 for development of Sector Specific Special Economic Zone (SEZ) for
Chemicals in Gujarat. About 107 hectares land was taken on lease from
Gujarat Industrial Development Corporation (GIDC) in Bharuch District,
Gujarat.
This SEZ became operational last year and commenced commercial
production of Unit-1. The finished products from this facility would be
fully backward integrated and based on in-house developed innovative
technologies, making it a hub for world class quality offering value to
all stakeholders.
The global scale plants of Vitamin B3 and 3-Cyanopyridine at SEZ make
your Company the largest producer of Vitamin B3 in India and second
largest globally.
During the year, the commercial production of Symtet, a crop science
ingredient for one of the world''s largest and safest low cost
insecticide, commenced in Unit-2 through an environment friendly
process. This will make your Company the world''s largest producer of
the crop science ingredient for the insecticide through green route.
Jubilant First Trust Healthcare Limited - This company is a wholly
owned subsidiary of your Company. 95.8% of its capital is being held
directly by your Company and 4.2% by First Trust Medicare Private
Limited.
With a vision for providing quality healthcare at affordable cost, this
company has set up multi-specialty hospitals in the district towns of
West Bengal. It addresses vital disease segments like critical care,
neonatal care, high risk pregnancies, dialysis, neuro sciences, plastic
surgery to name a few. It has projected itself as a friendly
neighbourhood hospital with a firm belief in ethics.
Asia Healthcare Development Limited - This company is a subsidiary of
your Company through Jubilant First Trust Healthcare Limited, which
holds its entire capital. This company runs a 50 bedded low cost model
multispecialty hospital in Behrampur on a Public-Private- Partnership
(PPP) with the Government of West Bengal.
For years, it has been serving the health needs and has stood as number
one choice for the people of this region.
Cadista Holdings Inc. and Jubilant Cadista Pharmaceuticals Inc.
i) Cadista Holdings Inc., a corporation incorporated in Delaware, got
registered with the Securities and Exchange Commission (SEC) during the
year ended March 31, 2012. The registration was obtained pursuant to
section 12(g) of the Securities and Exchange Act of 1934 according to
which, a company has to get registered with SEC on the number of
shareholders exceeding 500. However, such registration did not
constitute an offering of securities by the Company and no fresh money
was raised pursuant to such registration. Your Company, through its
subsidiary, Generic Pharmaceuticals Holdings Inc., holds 82.38% of
common stock of this company.
ii) Jubilant Cadista Pharmaceuticals Inc., a corporation incorporated
in Delaware, is a wholly owned subsidiary of Cadista Holdings Inc. This
company is in the business of manufacturing solid dosage forms of
generic pharmaceuticals at its US FDA approved manufacturing facility
in Salisbury, Maryland, USA. Its customer base includes all the large
wholesalers, retail and grocery chains. Besides manufacturing its own
label products, it also provides Product Development and Contract
Manufacturing services. As of March 31, 2013 there were 16 products
commercialised in the US with focus in the therapeutic areas of CVS,
CNS, Anti Allergic, Steroids etc. The company is the US market leader
in 3 products and ranked in top 2 in 2 products and has a strong
pipeline of product filings for future growth.
Jubilant Life Sciences (USA) Inc. - This corporation in the State of
Delaware, USA, is a wholly owned subsidiary of your Company. It
undertakes sales and distribution of advance intermediates, nutrition
ingredients, fine chemicals and APIs in the USA.
Jubilant Life Sciences (Shanghai) Limited - This wholly owned
subsidiary of your Company is held through Jubilant Pharma Pte.
Limited. It undertakes sales and distribution of products in China. It
is into trading of advance intermediates - pyridine & its derivatives,
vitamins, fine chemicals and crop protection chemicals. It is catering
to pharmaceutical, animal feed and agrochemical industries in China.
This subsidiary is also a sourcing hub of raw materials for your
Company.
Jubilant Pharmaceuticals NV - This is a wholly owned subsidiary of your
Company through Jubilant Pharma NV, Belgium, which holds 99.8% of its
shares and Jubilant Pharma Pte. Limited which holds the balance shares,
both of which are wholly owned subsidiaries of your Company. This
company is engaged in the business of licensing of generic dosage forms
providing regulatory services to generic pharmaceutical companies and
distribution of life science chemicals and vitamins to European
customers.
PSI Supply NV - This is a wholly owned subsidiary of your Company.
99.5% shares of this company are held by Jubilant Pharma NV and balance
by Jubilant Pharma Pte. Limited. This company is engaged in the supply
of generic dosage forms to European markets.
Jubilant DraxImage Limited -This is a wholly owned subsidiary of your
Company through Draximage Limited, Cyprus. This company is engaged in
marketing of innovative diagnostic imaging radiopharmaceutical solution
and therapeutic radiopharmaceutical products. It is providing wide
range of radioisotopes which include Tc-99m Generator (used in the
diagnosis of Bone Cancer, Renal Imaging, Cerebral Perfusion Imaging,
Myocardial Perfusion Imaging), Thallium-201 and Iodine-131 capsules and
solution for the diagnosis and treatment of Thyroid and its related
disease. It has also launched the Lyophilized kits MDP, MAA and
Sestamibi and would soon be launching DTPA. The target customers are
Nuclear Medicine physicians, Cardiologists & Oncologists of various
hospitals and imaging labs.
Other subsidiaries as at the year end are as follows:
First Trust Medicare Private Limited
Jubilant Innovation (India) Limited
Vanthys Pharmaceutical Development Private Limited
Jubilant Innovation Pte. Limited
Jubilant Biosys (Singapore) Pte. Limited
Jubilant Drug Development Pte. Limited
Jubilant Pharma Pte. Limited
Jubilant Life Sciences International Pte. Limited
Jubilant Innovation (BVI) Limited
Jubilant Life Sciences (BVI) Limited
Jubilant Biosys (BVI) Limited
Jubilant Innovation (USA) Inc.
Generic Pharmaceuticals Holdings, Inc.
Jubilant Life Sciences Holdings Inc.
HSL Holdings Inc.
Draximage LLC.
Jubilant DraxImage (USA) Inc.
Deprenyl Inc., USA
Draxis Pharma LLC
Jubilant Hollister Stier Inc.
Draximage Limited, Cyprus
Draximage Limited, Ireland
Jubilant Pharma NV
6963196 Canada Inc.
6981364 Canada Inc.
Jubilant Drug Discovery & Development Services Inc.
DAHI Animal Health (UK) Limited
Draximage (UK) Limited
Jubilant Life Sciences (Switzerland) AG
Partnerships
Jubilant HollisterStier General Partnership
It is a Canada based partnership among two subsidiaries of your Company
- Jubilant HollisterStier Inc. and Draxis Pharma LLC. This partnership
is a recognised contract manufacturer of Non-Sterile products in
semi-solid and solid dosage forms. Semi-solid dosage forms offerings
are Dermatological creams, Antibiotic Ointments, Syrups, Suspensions
and Gels. Solid dosage forms offerings are Capsules, Tablets and Powder
blends.
Draximage General Partnership - It is a Canada based partnership among
two subsidiaries of your Company - Jubilant DraxImage Inc. and 6981364
Canada Inc.
Consolidated Financial Statements
Consolidated Financial Statements, in terms of Clause 32 of the Listing
Agreement and in compliance with the Accounting Standard - 21 on
Consolidated Financial Statements (AS-21) as specified in Companies
(Accounting Standards) Rules, 2006, form part of Annual Report.
Particulars required as per Section 212 of The Companies Act, 1956
In terms of general exemption granted by the Ministry of Corporate
Affairs (MCA), Government of India vide its general circular no. 2/2011
dated February 8, 2011, from attaching the Directors'' Reports,
Balance Sheets, Statement of Profit & Loss and other particulars of the
subsidiary companies subject to fulfillment of certain conditions
mentioned therein, the same have not been attached to this Report. The
Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information upon request by any
member of the Company or its subsidiary companies. The Annual Accounts
of the subsidiary companies will also be kept open for inspection by
any member at the registered office of the Company and the subsidiary
companies during business hours.
Fixed Deposits
No fresh deposits have been accepted by your Company during the year
from the public. As on March 31, 2013, your Company had no outstanding
Fixed Deposits. There were no overdue deposits. There were, however, 9
unclaimed deposits amounting to Rs. 0.15 million.
Cost Audit
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed audit of cost records for certain products.
Based on the recommendations of the Audit Committee and subject to the
approval of the Central Government, the Board of Directors had
re-appointed M/s. J. K. Kabra & Co., Cost Accountants, [Firm
Registration Number - 9] as Cost Auditors of the Company, for the
financial year 2012- 13 under Section 233B of the Act to conduct the
cost audit for the FY 2012-13.
The relevant compliance report and cost audit report for the FY 2011-12
were filed with the Central Government in the extensible Business
Reporting Language (''XBRL'') format on December 27, 2012 & January
7, 2013 respectively, against the due date of February 28, 2013.
Secretarial Audit
As a voluntary initiative for good corporate governance, M/s. Sanjay
Grover & Associates, Company Secretaries, were appointed to conduct the
Secretarial Audit of compliances and records of the Company for the
financial year ended March 31, 2013. They have submitted their Report
confirming compliance of applicable corporate laws. A copy of the
Secretarial Audit Report is attached as Annexure H.
Directors
During the year, Mr. Suresh Kumar was appointed as an Independent
Director of the Company with effect from July 23, 2012.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Shyam S. Bhartia and Mr.
Shardul S. Shroff retire by rotation at the forthcoming Annual General
Meeting (AGM) and being eligible, offer themselves for re-appointment.
The Board recommends their re-appointment.
The Board has fixed a tenure of 9 years for Independent Directors.
Accordingly, Mr. H. K. Khan, Dr. Naresh Trehan and Mr. Surendra Singh,
who had completed 9 years'' tenure, ceased to be Directors with effect
from April 4, April 12 & April 15, 2013 respectively. The Board records
its appreciation for their excellent contribution during their tenure.
Directors'' Responsibility Statement
The Directors of your Company, based on the representation received
from the management, confirm:
- that in the preparation of annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
- that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2013 and of the loss of the
Company for the year ended March 31, 2013;
- that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
- that the Directors have prepared the annual accounts on a going
concern basis; and
- that proper systems are in place to ensure compliance of all laws
applicable to the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo, required to be made pursuant
to Section 217(1)(e) of the Companies Act, 1956, read with Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is given in Annexure B and forms part of this Report.
Employees
Particulars of employees, as required under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, are given in Annexure C and form part of this Report.
Corporate Governance
As a responsible corporate citizen, the Company is committed to
maintain the highest standards of Corporate Governance and believes in
adhering to the best corporate practices prevalent globally.
A detailed Report on Corporate Governance (Annexure D) alongwith a
certificate from the Auditors of the Company (Annexure E) confirming
compliance of the conditions of Corporate Governance, as stipulated in
Clause 49 of the Listing Agreement with the Stock Exchanges, has been
given separately.
A Certificate from the Chairman & Managing Director (Annexure F)
confirming that all the Board Members and Senior Management Personnel
have affirmed compliance with the Code of Conduct for the year ended
March 31, 2013 is attached to the Corporate Governance Report and forms
part of this Report.
A Certificate from CEO/CFO (Annexure G) confirming the correctness of
the financial statements, adequacy of the internal control measures
etc. is also enclosed and forms part of this Report.
Management Discussion & Analysis Report
The Management Discussion & Analysis Report on the operations of the
Company, as required under the Listing Agreement with the Stock
Exchanges, has been given separately and forms part of the Annual
Report.
Risk Management
Risk-taking is an inherent trait of any enterprise. However, if risks
are not properly managed and controlled, they can affect the
Company''s ability to attain its objectives. Risk management and
internal control systems play a key role in directing and guiding the
Company''s various activities by continually preventing and managing
risks. The Board, Audit Committee and Senior Management team
collectively sets the overall tone and risk culture of the Company by
identifying the risks impacting the Company''s business and
documenting their process of risk identification, risk minimisation,
risk optimisation as a part of risk management policy through defined
and communicated corporate values, clearly assigned risk
responsibilities, appropriately delegated authority, and a set of
processes and guidelines.
There exists a critical risk management framework across the Company
and the same is overseen once every six months by the Board. Some of
the critical risks identified in various businesses of the Company are:
- Trade barriers in major markets
- Product portfolio
- Competition
- Market dynamics and changing trends
- Product portfolio
- Production capacity
- Disaster/ business interruption
- Input cost/ availability
- Foreign exchange fluctuation
The Company promotes strong ethical values and high levels of integrity
in all its activities, which in itself is a significant risk mitigator.
With the growth strategy in place, risk management holds the key to the
success of the Company''s journey of continued competitive
sustainability in attaining the desired business objectives.
A detailed note on Risk Management is given as part of "Management
Discussion & Analysis".
Certifications
Your Company follows several externally developed initiatives in the
economic, environmental and social areas. Manufacturing Plants of the
Company at Gajraula, Nira, Savli, Nanjangud, Ambernath and Bharuch are
ISO 9001:2008 certified for Quality Management System. Plants at
Gajraula, Nira, Savli, Nanjangud, and Bharuch are also ISO 14001:2004
certified for Environmental Management System and OHSAS 18001:2007 for
Occupational Health and Safety at work place. Plants at Gajraula, Nira,
Savli and Bharuch are certified for IMS (Integrated Management System).
Plants at Bharuch and Savli are certified for FAMI-QS Code Version 5 in
Feed Safety Management System. Additionally, Bharuch Plant is
certified for ISO 22000 and HACCP (Hazard Analysis and Critical Control
Points) for Food Safety Management System and also awarded
certification for KOSHER, HALAL Malaysia and HALAL Indonesia.
Gajraula Quality Control Laboratory has also been certified for
chemical testing by NABL (National Accreditation Board for Testing and
Calibration Laboratories) in accordance with the ISO/IEC 17025:2005. In
addition to this, Gajraula Carbon Dioxide manufacturing facility has
been certified for FSSC 22000:2010 (Food Safety System Certification)
for production and despatch of Carbon Di-Oxide for Beverages of food
grade Carbon Dioxide. Ethyl Acetate & Acetic Anyhydride manufacturing
facility has been approved for KOSHER certification. 2 Acetyl Pyridine,
3 Hydroxyl Methyl Pyridine and Pyridine have been approved for KOSHER
certification.
Ethyl Acetate and Acetic Anhydride manufacturing facility at Nira Plant
has been approved for KOSHER and HALAL certification. Dosage Forms
facility at Roorkee follows Good Manufacturing Practices (GMP) as per
World Health Organisation (WHO) specifications in manufacturing and
testing of pharmaceutical products and hence has been granted WHO GMP
certificate by the Drug Licensing and Controlling Authority,
Uttarakhand. The facility is also approved by UK-MHRA (UK- Medicines
and Healthcare Products Regulatory Agency) to export drugs to European
Market and USFDA (United States Food & Drug Administration) to export
drugs to US market. The other approvals for the Plant are FDA (Jordan),
ANVISA (Brazil), PMDA (Japan), MCC (Medicines Control Council, South
Africa), Health Canada, Therapeutic Goods Administration (TGA)
(Australia) and several Ministries of Health like Kenya, Zimbabwe,
Botswana and Belarus.
Nanjangud plant has got USFDA approval for exporting certain products
to US market, ANSM (Agence nationale de securite du medicament et des
produits de sante -the French Health Products Safety Agency) approval,
GMP approval for certain products, PMDA approval (Pharmaceuticals and
Medical Devices Agency, Japan) for exporting Risperidone and HCl to the
Japanese market, KFDA (Korea Food and Drug Administration) approval for
exporting Valsartan and Losartan to Korean market, COFEPRIS approval
(Federal Commission for Protection against Health Risks) for exporting
Pinaverium Bromide to Mexican market, ANVISA, Brazil approval for
exporting Carbamazepine to Brazil market and TGA, Australia approval
for exporting certain products to Australia.
Plants producing Olanzapine and Losartan were audited and certified by
the United States Pharmacopeia for the use of USP logo.
Human Resources
We believe in an open, fair and transparent culture and stand by our
promise of Caring, Sharing, Growing and make efforts to make Jubilant
one of the best places to work for. In this direction, we have been
conducting regular employee engagement surveys to gauge
organisation''s health. This allows us to get an insight into the
voice of employees and thereby implementing the necessary
interventions. There is a strong organisational focus on employee
growth and development in order to prepare them for a dynamic and
competitive business environment.
We strive toward technology driven HR systems and processes and have
implemented world renowned PeopleSoft based human resource Information
system known as ''HRIS''. Its key features include employee personal
and job database, employee self-service features like reimbursements,
pay slips, leaves, income tax declarations & computations, online LTA
claim and exit process etc. We are in the process of implementing the
PeopleSoft Core modules globally so as to have a common HR business
process. The modules include position management, performance
management system, online recruiting solutions, compensation
management, employee profile, training administration, career and
succession planning.
We have signed a policy on CII Code of Conduct on Affirmative Action
that reconfirms our commitment that equal opportunity in employment for
all sections of society is a component of our growth and
competitiveness.
As of March 31, 2013, 658 of our employees at our manufacturing plants
at Savli, Nira, Gajraula and Nanjangud, were members of unions or had
collective bargaining capability. During the year, we enjoyed cordial
relations with our employees and there have been no instances of major
strikes, lockouts or other disruptive labour disputes.
A detailed note on HR Management is given in the "Management
Discussion & Analysis".
Investor Services
Your Company values its investors immensely. With a view to keeping its
investors well informed of its activities, your Company has taken
following initiatives:
- E-mailing to the shareholders quarterly results, press releases and
other similar communications soon after they are sent to the stock
exchanges; e-mailing Annual Reports and Corporate Sustainability
Report;
- User friendly Investor Section on the website of the Company at
http://www.jubl.com/investor-relation- landing.html;
- A dedicated e-mail ID viz. [email protected] for interacting on
various matters with respect to share transfer, transmission, dividends
and other related issues with the Company Secretary / Compliance
Officer;
- Mailing feedback forms to investors on annual basis so as to obtain
valuable feedback and suggestions for improvement. The Company has also
placed an online Investor Feedback Form on its website www.jubl.com
under the head "Investors" to facilitate electronic submission of
the Form;
- Earnings calls are conducted and the transcripts are uploaded on
the website. The Earnings call is typically accompanied by Results
Presentation and Release that is also uploaded on the website
www.jubl.com; and
- The Company also meets institutional investors and analysts
throughout the year and participates in various Investor Conferences.
Awards and Accolades
During the year, various awards and accolades were received by the
Company/its management. These are:
- ''FICCI Quality System Excellence Award 2012'' silver prize under
large scale category won by Gajraula Plant, India;
- ''AIMA Managing India Awards 2013: Entrepreneurs of the Year''
award won by Mr. Shyam S. Bhartia and Mr. Hari S. Bhartia, presented by
the President of India, Mr. Pranab Mukherjee;
- NDTV Profit ''Business Leadership Award 2012 under Corporate
Social Responsibility category'' won by the Company presented by Dr.
Montek Singh Ahluwalia, Deputy Chairman, Planning Commission,
Government of India;
- ''7 Star Category Certificate'' from Directorate of Industries,
U.P, (valid for two years), won by Gajraula Plant, India;
- ''ICC Award for Water Resource Management in Chemical Industry''
for the year 2011 won by Gajraula Plant, India;
- ''The Economic Times - Frost & Sullivan India Manufacturing
Excellence Gold Award - Process Sector'' for 2012 won by Gajraula
Plant, India - second time in a row;
- CII ''National Award for Excellence in Water Management 2012'' as
Water Efficient Unit won by Gajraula Plant, India;
- ''National Quality Excellence Award'' for best in Class
manufacturing presented by Stars of the Industry Group, won by Gajraula
Plant, India;
- ''Golden Peacock Environment Management Award 2012'' won by
Gajraula Plant, India; and
- ''Golden Peacock Award for Sustainability 2012'' won by Gajraula
Plant, India.
Green Initiatives
With the aim of going green and minimising our impact on the
environment, the Company continued with its green initiatives in its
operations which include:
- Conducting Paperless Board /Committee Meetings;
- Publishing and circulating Corporate Sustainability Report in CD
form; and
- E-mailing Annual Reports to the shareholders who have opted for the
electronic version.
Corporate Social Responsibility
Corporate Social Responsibility at Jubilant is the commitment of
business towards Inclusive Growth. Jubilant believes that long-term
sustainability can be achieved by good performance in the social,
environmental and financial areas. During the year 2012-13, Jubilant
continued its corporate social responsibility initiatives in various
fields.
Your Company remains focused on its policy of sustainable development
by ensuring Equal Opportunities for All, Climate Change Mitigation,
Environment, Health and Safety and Green Supply Management. Corporate
Sustainability Report on the various social initiatives undertaken by
the Company is duly audited by Ernst & Young, and conforms to the
Global Reporting Initiative G3.1 Reporting Guidelines launched on March
23, 2011 by Global Reporting Initiative. As a part of our
Sustainability Policy with the aim of mitigating impact on environment,
like last year, this year too we are sending Corporate Sustainability
Report in CD form alongwith the Annual Report to shareholders. The same
is also available on your Company''s website at
www.jubl.com/sustainability-report.html.
Corporate Social Responsibility initiatives of your Company are
conceptualised and implemented through Jubilant Bhartia Foundation
(JBF), the social wing of Jubilant Bhartia Group established in 2007,
as a not for profit organisation. JBF works on 4P model (Public-
Private-People-Partnership) for empowering communities and believes
that for sustainable social intervention, the people themselves would
have to be the drivers of these projects.
Based on the 4P approach, following three major areas have been
selected for social initiatives by Jubilant:
- Supporting Government Rural Primary Education System;
- Strengthening Basic Healthcare Facilities; and
- Improving Employability of Local Youths through Vocational Training
Programmes.
A summary of the activities of JBF is provided on its website
www.jubilantbhartiafoundation.com. Sustainability initiatives are set
out in greater detail in the Corporate Sustainability Report.
Material Changes and Commitments affecting the financial position of
the Company after March 31, 2013
The Company is proposing to explore options and opportunities to raise
debt, including by way of issue of foreign currency bonds and/or
non-convertible debentures, or by any one or more or a combination of
the above or otherwise, to be denominated in Indian rupees or foreign
currency, as the case may be, to various eligible investors in or
outside India, whether by way of public offering or by way of a private
placement, in the best interests of the Company and all its
stakeholders, upto an amount not exceeding US $ 250 million for the
purpose of pre-payment of the existing debt and other general corporate
purposes without increasing the overall net debt levels of the Company.
For this purpose, a committee of the Board of Directors namely ''Issue
Committee'' has been constituted.
Acknowledgments
Your Directors acknowledge with gratitude the co-operation and
assistance received from the Central and State Government Authorities.
Your Directors thank the Shareholders, Private Equity Investors,
Financial Institutions, Banks/other lenders, Customers, Vendors and
other business associates for their confidence in the Company and its
management and look forward to their continued support. The Board
wishes to place on record its appreciation for the dedication and
commitment of your Company''s employees at all levels, which has
continued to be our major strength. We look forward to their continued
support in the future.
For and on behalf of the Board
Place : Noida Shyam S. Bhartia
Date : May 7, 2013 Chairman & Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the Thirty Fourth Annual
Report and Audited Accounts for the year ended March 31, 2012.
Financial Results
(Rs. in million)
Year ended Year ended
March 31,
2012 March 31,
2011
Income from Operations 26,176 21,904
Other Operating Income 234 181
Total Income from 26,410 22,085
Operations
Total Expenditure 22,294 17,625
Operating Profit 4,116 4,460
Other Income 89 51
EBITDA (including Other 4,205 4,511
Income)
Depreciation 1,320 999
Finance Costs 1,544 467
Profit after Interest but 1,341 3,045
before Exceptional Items
Exceptional Item - Gain/ (1,800) (46)
(Loss)
Tax Expenses 350 203
Reported Net Profit / (809) 2,796
(Loss) after Tax
Profit brought forward from 9,228 8,819
previous year
Adjustment on - 1,017
implementation of Scheme of Amalgamation
and Demerger
PROFIT AVAILABLE FOR 8,419 10,598
APPROPRIATION
Which the Directors have
appropriated as follows:
- Proposed Dividend on 478 318
Equity shares
- Tax on Dividend on 77 52
Equity Shares
- Transfer to General - 1,000
Reserve
Balance to be carried 7,864 9,228
forward
Standalone Financials Income from Operations
In FY2012, the Company recorded income from operations of Rs. 26,410
million, which grew by 20% over last year.
International Revenues
International business contributed 53% to the net revenue from
operations at Rs. 13,982 million.
EBITDA
For the year ended March 31, 2012, EBITDA stood at Rs. 4205 million with
EBITDA margins at 16%.
Reported Profit/(Loss) After Tax and EPS
Reported Loss After Tax was Rs. 809 million in FY2012. Basic EPS stood at
Rs. (5.08). However, Normalised Profit After Tax stood at Rs. 991 million
after adjusting for exceptional items of Rs. 1800 million, mainly on
account of unrealised exchange losses. Normalised EPS stood at Rs. 6.22
for the FY2012.
Consolidated Financials Income from Operations
In FY2012, income from operations was Rs. 43,031 million, which grew by
25% over last year.
International Revenues
International business contributed 71% to the Revenue at Rs. 30,360
million. Sales from regulated markets at Rs. 24,853 million were 58%
compared to 52% in previous year.
Pharmaceutical Business
This comprises revenue lines of APIs, Generics, Speciality Pharma, CMO,
DDDS and Healthcare. In FY2012, Income from operations of this business
was Rs. 21,753 million contributing 51% to the total revenue and recorded
a growth of 41%. EBITDA stood at Rs. 5801 million, up from Rs. 1674 million
in previous year, reporting growth of 247%. EBITDA margins stood at
26.7% in FY2012.
Life Sciences Ingredients Business
This business comprises Proprietary Products and Exclusive Synthesis,
Nutrition Ingredients and Life Science Chemicals. In FY2012, Income
from operations at Rs. 21,029 million recorded an increase of 11% over
last year same period. EBITDA stood at Rs. 3542 million with 16.8%
margins for the year compared to Rs. 4680 million and 24.6% margins in
previous year. The margin reduction is mainly on account of competitive
pricing to enhance market share and higher input material costs. The
situation is expected to be corrected during FY2013 due to cost
rationalization and operating leverage.
EBITDA
For the year ended March 31, 2012, EBITDA stood at Rs. 8930 million with
EBITDA margins at 20.9%.
Reported and Normalised Profit After Tax and EPS
Reported Profit After Tax was Rs. 146 million in FY2012. Basic EPS
stood at Rs. 0.91. However, Normalised Profit After Tax stood at Rs.
3632 million after adjusting for exceptional items of Rs. 3487 million,
mainly on account of impairment of goodwill in US clinical research
business and unrealised exchange losses. Normalised EPS stood at Rs.
22.80 for the FY2012.
Dividend
Your Directors recommend a dividend of 300% i.e. Rs. 3 per fully paid up
equity share of Rs. 1 for the year ended March 31, 2012.
This will absorb Rs. 555 million (inclusive of tax) based on existing
capital. The payment of dividend is subject to the approval of the
shareholders at the forthcoming Annual General Meeting (AGM) of the
Company.
Capital Structure
(A) Foreign Currency Convertible Bonds (FCCBs)
During the year, the outstanding balance of FCCBs amounting to USD
142.10 million was redeemed. There are no further FCCBs outstanding.
(B) Employees Stock Options (ESOPs)
During the year, no Stock Options were granted under Jubilant Employees
Stock Option Plan 2005.
As on March 31, 2012, 1,64,562 Stock Options were outstanding. Each
Option entitles the holder to acquire five equity shares of Rs.1 each at
the exercise price fixed at the time of grant being market value as per
the SEBI (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 (SEBI Guidelines). A maximum of 8,22,810
shares will be allotted by the Company / transferred from Jubilant
Employees Welfare Trust upon exercise of these Options.
Further, during the year, your Company instituted JLL Employees Stock
Option Plan, 2011, in terms of approval of shareholders accorded at the
AGM held on August 23, 2011 and in accordance with SEBI Guidelines.
Under this Plan, 8,91,383 Stock Options were granted during the year
and as on March 31, 2012, 8,60,580 Stock Options were outstanding. Each
Option entitles the holder to acquire one equity share of Rs. 1 at the
exercise price fixed at the time of grant being market value as per the
SEBI Guidelines.
No dilution of capital is expected due to ESOPs as it is envisaged to
transfer the shares held by Jubilant Employees Welfare Trust to
employees on exercise.
The disclosures required under Regulation 12 of the SEBI Guidelines are
given in Annexure A and form part of this Report.
(C) Paid-up Capital
The Paid-up Capital as at March 31, 2012 stands at Rs. 159,281,139
comprising of 159,281,139 equity shares of Rs. 1 each, same as in
previous year.
Subsidiaries
Brief particulars of principal subsidiaries are given below: Jubilant
HollisterStier LLC
This subsidiary is based in Spokane, State of Washington, USA. It is a
wholly owned subsidiary of HSL Holdings Inc. It is a recognized
contract manufacturer of sterile injectables (vials and ampoules),
lyophilized products, liquid fills, Biologics, Suspensions,
WFI/Diluents and provides a complete range of services to support the
pharmaceutical and biopharmaceutical industries. Additionally, it is a
manufacturer of allergenic extracts, targeted primarily at treating
allergies and asthma.
Its contract manufacturing capabilities include aseptic liquid fill /
finishing and lyophilization in three distinct cGMP areas designated as
Small Volume Parenteral (SVP), Small Lot Manufacturing (SLM) and
Clinical Trial Manufacturing (CTM). Its capabilities can be applied to
a variety of projects from pre- clinical through commercial scale
across a multitude of dosage forms including microspheres, suspensions,
WFI/diluents, biologics (proteins), lyophilized products and liposomes.
Jubilant HollisterStier maintains an outstanding regulatory record with
the FDA (CBER and CDER), EMA and Japan's and Brazil's regulatory
agencies. Its contract manufacturing business serves customers
including innovators ranging from small biotechnology to large
pharmaceutical companies.
Jubilant DraxImage Inc. - This company is a wholly owned subsidiary of
your Company through Jubilant Pharma Pte. Limited. It deals in
radiopharmaceuticals which is a niche, high entry barrier business.
DraxImage develops, manufactures and markets innovative diagnostic
imaging radiopharmaceuticals solutions and therapeutic
radiopharmaceutical products for the global market. The application of
these products extends to cardiology, thyroid uptake and scan, lung
scan, kidney imaging, bone scan etc.
This company is the major supplier of lyophilised radiopharmaceutical
kits for use with Technetium - 99m including DRAXIMAGE MAA, MDP, DTPA,
Glucoheptonte and Sestamibi. Its I-131 products are the market leaders
in the US with more than 70% market share. These 131 products are
currently the major revenue drivers. Radiopharmaceuticals are used for
both therapeutic and diagnostic molecular imaging applications to
customers comprising hospitals, imaging centres and cardiology /
oncology clinics.
DraxImage also markets non-radioactive products, which are solid in
lyophilized form.
This company operates a US FDA and Health Canada approved manufacturing
facility at Montreal in Canada. It is recognised globally for its
quality and execution capabilities, strong regulatory track record and
has an established customer base comprising large innovator and
specialty pharmaceutical companies.
Jubilant Biosys Limited - This company is a subsidiary of your Company
through Jubilant Biosys (Singapore) Pte. Limited, wholly owned
subsidiary of your Company, which holds 66.98% of the equity of this
company.
This company provides Drug Discovery Services to global Pharmaceutical
and Biotech companies in:
- Stand alone Service Model
- Functional services in area of Discovery Informatics, Structural
Biology and In Vivo & Invitro Biology on FTE or Fee based model.
- Collaborative / Partnership Model
- Integrated discovery program across a single or a portfolio of
molecules
- Risk / Reward sharing option
- Research Funding
- Payments for scientific milestones including bonus achieved through
Discovery and Development phase
- Royalties on successful commercialization of drug.
During 2011-12, this company has:
- consolidated its position in the Drug Discovery Services by
providing services in integrated drug discovery programmes, functional
service in structural biology, High thru put screening, Insilco
modeling and In Vivo Biology and Invitro Biology;
- signed integrated programs deal with another major Pharma Janssen
Pharmaceutical NV and Biotech companies Mnemosyne Pharmaceutical Inc
and Norgine BV, Netherlands;
- successfully delivered a number of scientific milestones including
a drug candidate in the Oncology Therapeutic Area.
Jubilant Discovery Services Inc. - This Delaware based USA corporation,
is a wholly owned subsidiary of Jubilant Biosys Limited. Until June
2011 this company was primarily providing sales, marketing and liaising
services to Jubilant Biosys Limited for its US based customers. During
the year, this company has entered into research collaboration
agreement with Jansen Pharmaceutical NV, and is also supporting
electrophysiology services to Mnemosyne.
Jubilant Discovery Services Inc. has completed an important step in the
realization of a long term strategy to extend capabilities in
prosecuting ion channel targets and expanding the capabilities in other
targets including GPCRS and Kinases. As part of company's strategy
to extend its capabilities, company started the 'state of the art
Discovery Center' in North America for ion Channel targets. This
center is enabled with comprehensive discovery biology capabilities
with a focus in Voltage gated and ligand gated ion channels, GPCRs and
Kinases.
Jubilant Chemsys Limited - This company is a subsidiary of your Company
through Jubilant Drug Development Pte. Limited, wholly owned
subsidiary of your Company, which holds entire equity of this company.
This company offers following services to drug discovery companies
based out of US, Europe and Japan on Full Time Equivalent and molecule
basis:
- Discovery Chemistry Functions
- Hit to Lead and Lead Optimization
- Medicinal Chemistry Services
- Scaling up from mg to kg in kilo lab and pilot plant
It also works closely with Jubilant Biosys Limited in collaborative
drug discovery research services arena.
Jubilant Clinsys Limited - This company is a subsidiary of your Company
through Jubilant Drug Development Pte. Limited, wholly owned subsidiary
of your Company, which holds entire equity of this company. This
company offers following services to pharmaceutical, biotechnology and
medical device companies:
- Bio-analytical, Bio equivalence & Pharmacokinetics studies with 80
bed facility at Noida
- Clinical Trials from Phase I-IV
- Clinical Data Management studies
During 2011-12, this company has been able to sign major Clinical Trial
(CT) contracts with Otsuka Pharma Development and Commercialization
Inc., US, as part of its endeavor to enhance CT business.
Jubilant Clinsys Inc. - This New Jersey based USA corporation, is a
wholly owned subsidiary of Jubilant Life Sciences Holdings Inc. and is
a therapeutically focused full service clinical research organization.
This company has expertise in a wide range of highly specialized
therapeutic areas including oncology, cardiovascular, central nervous
system, respiratory, dermatology and allergy/ immunology. It offers
broad range of clinical research services to pharmaceutical,
biotechnology and medical device companies in support of Phase II-IV
drug and device development including project management, clinical
monitoring, scientific and medical support, patient and investigator
recruitment, site management, biostatistics, data management, drug
safety, quality assurance, regulatory affairs and medical writing. This
company has operations in Bedminster, New Jersey, Raleigh, North
Carolina, Ottawa, Ontario and Dusseldorf.
Jubilant Infrastructure Limited - This wholly owned subsidiary of your
Company had entered into a Memorandum of Understanding (MOU) with the
Government of Gujarat during the 'Vibrant Gujarat' conference in
2007 for development of sector specific Special Economic Zone (SEZ) for
Chemicals in Gujarat. About 107 hectares land was taken on lease from
GIDC in Bharuch District, Gujarat.
During the year, this SEZ became operational and your Company commenced
commercial production of Unit-1. The finished products from this
facility would be fully backward integrated and based on in-house
developed innovative technologies, making it a hub for world class
quality offering value to all stakeholders.
The global scale plants of Vitamin B3 and 3-Cyanopyridine, at SEZ make
your Company the largest producer of Vitamin B3 in India and second
largest globally.
Your Company is also setting up Unit-2, a manufacturing plant for
Symtet, a crop science ingredient for one of the world's largest and
safest low cost insecticide through an environment friendly process.
This will make your Company the world's largest producer of the crop
science ingredient for the insecticide through green route.
Jubilant First Trust Healthcare Limited - This company is in the
business of healthcare and is involved in setting up an integrated
hub-and-spoke network. The company owns two hospitals in West Bengal
and a modern dialysis unit. Consequent upon acquisition of entire
shareholding of First Trust Medicare Private Limited by your Company,
this Company has become wholly owned subsidiary of your Company, 95.8%
of its capital being held directly by your Company and 4.2% through
First Trust Medicare Private Limited.
Asia Healthcare Development Limited - This company is a subsidiary of
your Company through Jubilant First Trust Healthcare Limited, which
holds 100% of its capital. This company runs a hospital in Behrampur,
on a Public-Private- Partnership with Government of West Bengal.
Cadista Holdings Inc. and Jubilant Cadista Pharmaceuticals Inc.
i) Cadista Holdings Inc., a Delaware based subsidiary of your Company,
got registered with the Securities and Exchange Commission (SEC) during
the year. The registration was obtained pursuant to mandatory
requirements under the Securities and Exchange Act of 1934 according to
which, where the total number of shareholders exceeds 500, a company
has to get registered with SEC. However, such registration did not
constitute an offering of securities by this company and no fresh money
was raised pursuant to such registration. Your Company, through its
subsidiary, Generic Pharmaceuticals Holdings Inc., holds 82.38% of
common stock of this company.
ii) Jubilant Cadista Pharmaceuticals Inc., a corporation incorporated
in Delaware, is a wholly owned subsidiary of Cadista Holdings Inc. This
company is in the business of manufacturing solid dosage forms of
generic pharmaceuticals, and has a US FDA approved manufacturing
facility in the USA. Its customer base includes all large wholesalers,
retail and grocery chains. Besides manufacturing its own label
products, it also provides Product development and Contract
manufacturing services. Over 10 products are commercialized in the US
and Europe with focus in the therapeutic areas of CVS, CNS, Anti
Allergic, Steroids etc. The company is the US market leader in 2
products and ranked among top 3 in 4 products and has a strong pipeline
of product filings for future growth.
Jubilant Life Sciences (USA) Inc. - This Delaware based USA
corporation, is a wholly owned subsidiary of your Company. It
undertakes sales and distribution of advance intermediates, nutrition
ingredients, fine chemicals and APIs in the USA.
Jubilant Life Sciences (Shanghai) Limited - This wholly owned
subsidiary of your Company is held through Jubilant Pharma Pte. Limited
It undertakes sales and distribution of products in China. It is into
trading of advance intermediates - Pyridine & its derivatives,
vitamins, fine chemicals and crop protection chemicals. It is catering
to pharmaceutical, animal feed and agrochemical industries in China.
This subsidiary is also a sourcing hub of raw materials for your
Company.
Jubilant Pharmaceuticals NV - This is a wholly owned subsidiary of your
Company through Jubilant Pharma NV, Belgium, which holds 99.8% of its
shares and Jubilant Pharma Pte. Limited, Singapore which holds the
balance shares, both of which are wholly owned subsidiaries of your
Company. This company is engaged in the business of licensing of
generic dosage forms and offers regulatory affairs services to generic
pharmaceutical companies for the diverse European market. During the
year, this company has started its operations of distribution of life
science chemicals to European customers.
PSI Supply NV - This is a wholly owned subsidiary of your Company.
99.5% shares of this company are held by Jubilant Pharma NV and balance
by Jubilant Pharma Pte. Limited. This company is engaged in the supply
of generic dosage forms to European markets.
Jubilant DraxImage Limited -This is a wholly owned subsidiary of your
Company through Draximage Limited, Cyprus. This company is engaged in
marketing of innovative diagnostic imaging radiopharmaceutical solution
and therapeutic products. It is providing wide range of radioisotopes
which include Tc- 99m Generator, Thallium-201 and Iodine-131 capsules,
and solution for the diagnosis and treatment of Thyroid and its related
disease. It has also launched the Lyophilized kits MDP, MAA and
Sestamibi and would soon be launching DTPA.
Vanthys Pharmaceutical Development Private Limited-
This Joint Venture between Eli Lilly and your Company was terminated
during the year. Consequently, this company became subsidiary of your
Company through Jubilant Innovation Pte. Limited.
Other subsidiaries as at the year end are as follows:
First Trust Medicare Private Limited*
Jubilant Innovation (India) Limited
Jubilant Innovation Pte. Limited
Jubilant Biosys (Singapore) Pte. Limited
Jubilant Drug Development Pte. Limited
Jubilant Pharma Pte. Limited
Jubilant Life Sciences International Pte. Limited
Jubilant Innovation (BVI) Limited
Jubilant Life Sciences (BVI) Limited
Jubilant Biosys (BVI) Limited
Jubilant Innovation (USA) Inc.
Generic Pharmaceuticals Holdings, Inc.
Jubilant Life Sciences Holdings Inc.
HSL Holdings Inc.
Draximage LLC.
Jubilant DraxImage (USA) Inc.
Deprenyl Inc., USA
Draxis Pharma LLC
Jubilant HollisterStier Inc. ((formerly Draxis Pharma Inc.)
Draximage Limited, Cyprus
Draximage Limited, Ireland
Jubilant Pharma NV
6963196 Canada Inc.
6981364 Canada Inc.
Jubilant Drug Discovery & Development Services Inc.*
DAHI Animal Health (UK) Limited
Draximage (UK) Limited
Jubilant Life Sciences (Switzerland) AG
* became subsidiary during the year
Partnerships
Jubilant HollisterStier General Partnership (formerly known as Draxis
Pharma General Partnership)
It is a Canada based partnership among two subsidiaries of your Company
- Jubilant HollisterStier Inc. (formerly Draxis Pharma Inc.) and Draxis
Pharma LLC. This partnership is a recognized contract manufacturer of
Non-Sterile products in semi-solid and solid dosage forms. Semi -solid
dosage forms offerings are Dermatological creams, Antibiotic Ointments,
Syrups, Suspensions and gels. Solid dosage forms offerings are
Capsules, Tablets and Powder blends.
Draximage General Partnership - It is a Canada based partnership among
two subsidiaries of your Company - Jubilant DraxImage Inc. and 6981364
Canada Inc.
Consolidated Financial Statements
The Consolidated Financial Statements, in terms of Clause 32 of the
Listing Agreement and prepared in accordance with AS- 21 as specified
in Companies (Accounting Standards) Rules, 2006 form part of the Annual
Report.
Particulars required as per Section 212 of the Companies Act, 1956
In terms of the general exemption granted by the Government of India
vide its general circular no. 2/2011 dated February 08, 2011, from
attaching the Directors' Reports, Balance Sheets, Profit & Loss
Accounts and other particulars of the subsidiaries, the same have not
been attached to this Report. The Company will make available the
Annual Accounts of the subsidiary companies and the related detailed
information upon request by any member of the Company or its subsidiary
companies. The Annual Accounts of the subsidiary companies will also
be kept open for inspection by any member at the registered office of
the Company and the subsidiary companies during business hours.
Fixed Deposits
No fresh deposits have been accepted by your Company during the year
from the public. As on March 31, 2012, your Company had no outstanding
Fixed Deposits. There were no overdue deposits. There were, however, 17
unclaimed deposits amounting to Rs. 0.24 million.
Auditors
M/s. K. N. Gutgutia & Co., Chartered Accountants, [ICAI Registration
Number - 304153E] Auditors of the Company, retire at the ensuing Annual
General Meeting and offer themselves for re-appointment. They have
confirmed that their re-appointment, if made, shall be within the
limits laid down in Section 224 (1B) of the Companies Act, 1956.
Cost Auditors
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed audit of cost records for certain products.
Based on the recommendations of the Audit Committee, and with the
approval of the Central Government, the Board of Directors had
appointed M/s. J. K. Kabra & Co., Cost Accountants, [Firm Registration
Number - 9] as Cost Auditors of the Company, for the financial year
2011-12.
The relevant cost audit reports for the financial year 2010-11 for
Industrial Alcohol and Bulk Drugs & Formulations were filed on
September 20, 2011, against the due date of September 27, 2011.
Directors
Dr. Jag Mohan Khanna, Executive Director, retired from the services of
the Company w.e.f. July 5, 2011. Unfortunately, the very next day, he
suffered a stroke and despite best treatment, breathed his last on
September 1, 2011. The Board places on record its deep sense of
appreciation for Dr. Khanna's valuable contribution towards the
growth of the Company during his tenure as a Board member.
In accordance with the provisions of the Act and the Articles of
Association of the Company, Dr. Inder Mohan Verma, Mr. Abhay Havaldar
and Mr. H.K. Khan retire by rotation at the forthcoming Annual General
Meeting and being eligible, offer themselves for re-appointment.
The Board of Directors in their meeting held on February 6, 2012 have
re-appointed Mr. Shyam S. Bhartia as Chairman and Managing Director,
and Mr. Hari S. Bhartia as Co-Chairman and Managing Director, for a
further period of 5 years effective April 1, 2012. These
re-appointments are subject to shareholders' approval.
Directors' Responsibility Statement
In compliance of Section 217 (2AA) of the Companies Act, 1956, the
Directors of your Company, based on the representation received from
the management, confirm:
- that in the preparation of annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
- that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2012 and of the profit or
loss of the Company for the year ended March 31, 2012;
- that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
- that the Directors had prepared the annual accounts on a going
concern basis.
Conservation Of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo, required to be made pursuant
to Section 217(1)(e) of the Companies Act, 1956, read with Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is given in Annexure B and forms part of this Report.
Employees
The particulars of employees, as required under Section 217(2A) of the
Companies Act 1956, read with the Companies (Particulars of Employees)
Rules, 1975, are given in Annexure C and form part of this Report.
Corporate Governance
As a responsible corporate citizen, your Company is committed to
maintain the highest standards of Corporate Governance and believes in
adhering to the best corporate practices prevalent globally.
A detailed Report on Corporate Governance (Annexure D) and a
certificate from the Auditors of the Company (Annexure
E) confirming compliance of the conditions of Corporate Governance, as
stipulated in Clause 49 of the Listing Agreement with the Stock
Exchanges, have been given separately and form part of this Report.
A Certificate from the Chairman & Managing Director (Annexure
F) confirming that all the Board Members and Senior Management
Personnel have affirmed compliance with the Code of Conduct for the
year ended March 31, 2012 is attached to the Corporate Governance
Report and forms part of this Report.
A Certificate from CEO/CFO (Annexure G) inter alia certifying the
accuracy of financial statements and the adequacy of the internal
controls for financial reporting purposes, as stipulated in Clause
49(V) of the Listing Agreement with the Stock Exchanges, is also
attached and forms part of this report.
Secretarial Audit Report
As a measure of good corporate governance practice, the Company had
appointed M/s. Sanjay Grover & Associates, Company Secretaries, to
conduct Secretarial Audit of compliances and records of the Company for
the financial year ended March 31, 2012. They have submitted their
Report confirming the compliance of the applicable corporate laws. A
copy of the Report is attached as Annexure H.
Management Discussion & Analysis Report
The Management Discussion & Analysis Report on the operations of the
Company, as required under the Listing Agreement with the Stock
Exchanges has been given separately and forms part of this Report.
Risk Management
Risk-taking is an inherent trait of any enterprise. However, if risks
are not properly managed and controlled, they can affect the
Company's ability to attain its objectives. Risk management and
internal control systems play a key role in directing and guiding the
Company's various activities by continually preventing and managing
risks. The senior management team sets the overall tone and risk
culture of the organization through defined and communicated corporate
values, clearly assigned risk responsibilities, appropriately delegated
authority, and a set of processes and guidelines. The Company has laid
down procedures to inform Board members about the risk assessment and
risk minimization procedures. The Company promotes strong ethical
values and high levels of integrity in all our activities, which in
itself is a significant risk mitigator.
With the growth strategy in place, risk management holds a key to the
success of the Company's journey of continued competitive
sustainability in attaining its desired business objectives.
A detailed note on Risk Management is given as part of "Management
Discussion & Analysis".
Certifications
Your Company follows several externally developed initiatives in the
economic, environmental and social areas. Facilities of the Company at
Gajraula, Nira, Savli, Nanjangud and Ambernath are ISO 9001:2008
certified for Quality Management System. These manufacturing facilities
are also ISO 14001:2004 certified for Environmental Management System.
For Occupational Health and Safety at work place, these manufacturing
facilities are also certified to OHSAS 18001:2007. The locations of
Gajraula, Nira and Savli are certified for Integrated Management System
(IMS). Facilities at Savli are certified for FAMI- QS Version - 5
Quality in Feed Safety Management System. Gajraula Quality Control
Laboratory has also been certified for chemical testing by NABL
(National Accreditation Board for Testing and Calibration Laboratories)
in accordance with the ISO / IEC 17025:2005. In addition to this,
Gajraula Carbon Dioxide manufacturing facility has been certified for
FSSC 22000:2012-Food Safety System Certification for production of food
grade Carbon Dioxide. Ethyl Acetate & Acetic Anyhydride manufacturing
facility has been approved for KOSHER certification.
Dosage Forms facility at Roorkee follows Good Manufacturing Practices
(GMP) as per World Health Organisation (WHO) specifications in
manufacturing and testing of pharmaceutical products and hence, has
been granted WHO GMP certificate by the Drug Licensing and Controlling
Authority, Uttarakhand. The facility is also approved by UK-MHRA (UK-
Medicines and Healthcare Products Regulatory Agency) to export drugs to
European Market. The other approvals for the facility are Jordan FDA,
US FDA, Anvisa (Brazil), Japan PMDA and Kenyan Health Authorities.
Nanjangud plant has got US FDA (United States Food & Drug
Administration) approval for exporting certain products to the US
market. AFSSAPS (Agence Francaise de Securite Sanitaire des Produits de
Sante -The French Health Products Safety Agency), GMP approval for
certain products, PMDA approval (Pharmaceuticals and Medical Devices
Agency, Japan) for exporting Risperidone HCl to the Japanese market,
KFDA (Korea Food and Drug Administration) for exporting Valsartan and
Losartan to Korean market, COFEPRIS approval for exporting Pinaverium
Bromide to Mexican market, ANVISA, Brazil approval for exporting
Carbamazepine to Brazil market and TGA, Australia approval for
exporting certain products to Australia.
Plants producing Olanzapine and Losartan were audited and certified by
the United States Pharmacopeia for the use of USP logo.
Human Resource Management
We believe in an open, fair and transparent culture and stand by our
promise of Caring, Sharing, Growing and make efforts to make Jubilant
one of the best places to work for. In this direction, we have been
conducting the Gallup employee engagement survey to gauge the
organization's health. This allows us to track the proportion of
engaged to actively disengaged employees so that mid-course corrections
or interventions can be implemented.
We strive towards technology driven HR systems and processes and have
implemented world renowned PeopleSoft based human resource management
system 'Synergy HRIS'. Its key features include employee personal
and job database, self service features like reimbursements, pay slips,
leaves, income tax declarations & computations, loans and exit process
etc.
We have signed a policy on CII Code of Conduct on Affirmative Action
that reconfirms our commitment that equal opportunity in employment for
all sections of society is a component of our growth and
competitiveness.
As on March 31, 2012, 658 of our employees at our manufacturing plants
at Samlaya, Nira, Gajraula and Nanjangud, were members of unions or had
collective bargaining capability. We enjoy cordial relations with our
employees and there have been no instances of major strikes, lockouts
or other disruptive labour disputes.
A detailed note on Human Resource Management is given in the
"Management Discussion & Analysis".
Investor Services
Your Company values its investors immensely. With a view to keeping its
investors well informed of its activities, your Company has taken
following initiatives:
- E-mailing to the shareholders, quarterly results, press releases
and other similar communications soon after they are sent to the stock
exchanges;
- User friendly Investor Section on the website of the Company
www.jubl.com.
- A dedicated e-mail ID viz. [email protected] for sending
communications to the Company Secretary / Compliance Officer. Members
may lodge their complaints or suggestions on this e-mail ID as well.
- Mailing feedback forms to investors on annual basis so as to obtain
valuable feedback and suggestions for improvement. The Company has
also placed an online Investor Feedback Form on its website
www.jubl.com under the Investor Section to facilitate electronic
submission of the Form.
Awards and Accolades
During the year, various awards and accolades were received. These
are:
Received by the Company
- 'Golden Peacock National Quality Award - 2011' in
Pharmaceutical Sector under Large Enterprises category, presented
during the 22nd World Congress on Total Quality, organized in
association with ET Now to Gajraula Plant, India;
- 'Certificate of Appreciation - Safety Awards 2010' - from
National Safety Council of India, for Gajraula Plant, India;
- 2nd Prize in 'National Energy Conservation Awards - 2011', in
the chemicals sector, for Gajraula Plant, India;
- 'The Economic Times - Frost & Sullivan India Manufacturing
Excellence Gold Award - Process Sector, Medium Business' for the
Pyridine & Picoline Plant at Gajraula, India;
- 'Certificate of Appreciation - Safety Awards 2010' from
National Safety Council of India for Gajraula Plant, India;
- 'Indian Chemical Council Award for Social Responsibility' for
the year 2010;
- 'Information Week EDGE Award 2011' (Enterprise Driving Growth &
Excellence - through IT) from UBM (United Business Media Group);
- 'DHL - CNBC TV 18 International Trade Awards' 2010-11, powered
by ICRA;
- 'Level 4 rating by The Karmayog Corporate Social Responsibility
(CSR) Study on CSR Ratings of India's Largest 500 companies:
2009-10';
- 'International Quality & Productivity Centre (IQPC) Award
(2011)' for the Best Innovative Continuous Improvement Project -
Process Re-engineering implemented in North American Subsidiaries.
Received by Executives
- Jubilant's Group CFO-Mr. R. Sankaraiah, chosen as the 'Best CFO
in the Pharma and Healthcare Space' in 2011 in All Asia Executive
Team Survey by Institutional Investor;
- Jubilant's CIO, India - Mr. Umesh Mehta, awarded CIO 100 by IDG
India's CIO magazine for highest level of operational and strategic
excellence in Information Technology.
Received by Subsidiary
- 'Frost & Sullivan Award- Indian Contract Research Organization'
of the Year - 2011 to Jubilant Biosys Limited.
Green Initiatives
Your Company being committed to policy of sustainable development, has
taken several green initiatives in its operations which include:
- Conducting Paperless Board Meetings;
- Publishing and circulating Corporate Sustainability Report on CD;
- E-mailing annual reports to shareholders who have opted for the
electronic version.
Corporate Sustainability Report
Corporate Social Responsibility at Jubilant is the commitment of
business towards Inclusive Growth. Your Company remains focused on its
policy of sustainable development by ensuring equal opportunities for
all, Climate Change Mitigation, Environment, Health and Safety and
Green Supply Management. Corporate Sustainability Report on the
various social initiatives undertaken by the Company is duly audited by
Ernst & Young, and conforms to the Global Reporting Initiative G3.1
Reporting Guidelines launched on March 23, 2011 by Global Reporting
Initiative. As a part of our Sustainability Policy with the aim of
mitigating impact on environment, like last year, this year too we are
sending Corporate Sustainability Report in CD alongwith the Annual
Report to our shareholders. The same is also available on your
Company's website www.jubl.com.
Corporate Social Responsibility initiatives of your Company are
conceptualized and implemented through Jubilant Bhartia Foundation
(JBF), the social wing of Jubilant Bhartia Group established in 2007,
as a not for profit organisation. JBF initiatives focus on primary
education, basic healthcare and skill development for employability and
self-sustenance. A summary of the activities of JBF is provided on its
website www.jubilantbhartiafoundation.com.
Acknowledgments
Your Directors acknowledge with gratitude the co-operation and
assistance received from the Central and State Government Authorities.
Your Directors thank the Shareholders, Private Equity Investors,
Financial Institutions, Banks/other lenders, Customers, Vendors and
other business associates for their confidence in the Company and its
management and look forward to their continued support. The Board
wishes to place on record its appreciation for the dedication and
commitment of your Company's employees at all levels, which has
continued to be our major strength.
For and on behalf of the Board
Noida Shyam S. Bhartia
May 7, 2012 Chairman & Managing Director
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the Thirty Third Annual
Report and Audited Accounts for the year ended March 31, 2011.
Financial Results
Year ended Year ended
March 31, 2011 March 31, 2010
[Rs./Million] [Rs./Million]
Sales and Other Income 22,883 25,537
Net Sales 22,009 24,561
EBITDA 4,507 6,469
Interest 463 997
PBDT 4,044 5,472
Depreciation 999 651
Exceptional items 46 228
PBT 2,999 4,593
Provision for Taxation 203 962
PAT 2,796 3,631
Profit brought forward 8,819 7,558
from previous year
Adjustment on 1,017 -
implementation
of Scheme of
Amalgamation &
Demerger
PROFIT AVAILABLE 10,598 11,189
FOR APPROPRIATION
Which the Directors
have appropriated as
follows:
à Proposed Dividend 318 317
on Equity shares
à Tax on Dividend on 52 53
Equity Shares
à Transfer to General 1,000 2,000
Reserve
Balance to be carried 9,228 8819
forward
Operations
The above financial results for year ended March 31, 2011 are for the
businesses remaining with the Company, after giving effect to the
Scheme of Amalgamation & Demerger and accordingly, are not strictly
comparable with the previous corresponding period. For better
comparison and understanding, financial highlights for current year
compared to adjusted previous year figures (after giving effect to the
Scheme of Amalgamation & Demerger) are discussed below:
Standalone Financials
Revenues
In FY2011, Revenues for the Company were at Rs. 22,009 million, which
grew by 8% over last year same period.
International Revenues
International business contributed 52% to the Net Sales at Rs. 11,522
million.
EBITDA
For the year ending March 31, 2011, EBITDA stood at Rs. 4,507 million
with EBITDA margins at 20.5%.
Profit Before Tax, Net Profit and EPS
Profit Before Tax in FY2011 stood at Rs. 2,999 million. The Company
registered Net Profit of Rs. 2,796 million with Basic EPS at Rs. 17.56 for
the financial year 2011.
Consolidated Financials
Revenues
In FY2011, Net Sales were at Rs. 34,334 million, which grew by 1% over
last year same period (excluding the one-time revenues from H1N1
opportunity, the Company recorded growth of 7% in the year).
International Revenues
International business contributed 69% to the Net Sales at Rs. 23,691
million. Sales from regulated markets at Rs. 17,995 million was 52% of
the Net Sales.
Life Sciences Products
Revenue from Life Sciences Products at Rs. 26,849 million contributed 78%
to the total revenue of the Company and grew 9% in the year with good
volume growth of over 15% across Products. Life Sciences Ingredients
share in revenue was up at 65% and Generics contributed 13% to the top
line. This growth is mainly driven by 19% growth in API and 18% growth
in Generics.
Life Sciences Services
Services Revenue stood at Rs. 7,485 million compared to Rs. 9,190 million
last year. Excluding the onetime revenue from H1N1 opportunity of Rs.
1,580 million in FY10, the CMO Services business recorded a growth of
5% during the year. However, Clinical Research business witnessed
slowdown impacting the overall Services growth.
EBITDA
For the year ended March 31, 2011, EBITDA stood at Rs. 5,672 million with
EBITDA margins at 16.5%. EBITDA margins in Products business were at a
high of 22.4% and 4.6% in Services business.
Profit Before Tax, Net Profit and EPS
Profit Before Tax in FY2011 stood at Rs. 2,406 million. The Company
registered Net Profit of Rs. 2,297 million with Basic EPS at Rs. 14.42 for
the financial year 2011.
Dividend
Your Directors recommend a dividend of 200% i.e. Rs. 2 per fully paid up
equity share of Rs. 1 for the year ended March 31, 2011. This will absorb
Rs. 370 million (inclusive of tax) based on existing capital.
Appropriations
It is proposed to transfer Rs. 1,000 million to General Reserve and
retain the balance in Profit and Loss Account.
Capital Structure
(A) Foreign Currency Convertible Bonds (FCCBs)
Your Company, during 2005-06 and 2006-07, issued Foreign Currency
Convertible Bonds (FCCBs) of USD 75 million (FCCB 2010) and USD 200
million (FCCB 2011), respectively. During the year, the outstanding
balance of FCCB 2010 was completely redeemed.
Whilst the FCCBs are listed on Singapore Stock Exchange, the Global
Depository Shares (GDSs) arising out of conversion of FCCBs are listed
on Euro MTF Market of the Luxembourg Stock Exchange.
The balance of FCCB 2011 amounting to USD 142.10 million outstanding as
of date, would be redeemed on May 20, 2011.
(B) Employees Stock Options (ESOPs)
During the year, no Stock Options were granted under the Jubilant
Employees Stock Option Plan 2005.
As on 31st March, 2011, 1,82,013 Stock Options were outstanding. Each
option entitles the holder to acquire fve equity shares of Rs. 1 each at
the exercise price fixed at the time of grant being market value as per
SEBI Guidelines. A maximum of 9,10,065 shares will be allotted by the
Company / transferred from Jubilant Employees Welfare Trust upon
exercise of these Options.
The details as required under Regulation 12 of Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are given in Annexure A and form part
of this Report.
(C) Paid-up Capital
The paid-up Capital as at March 31, 2011 stands at Rs. 159,281,139
comprising of 159,281,139 equity shares of Rs. 1 each.
No dilution on account of conversion of FCCBs is envisaged as
conversion right ceases on May 10, 2011.
Further, no dilution under ESOPs is expected, as Jubilant Employees
Welfare Trust is envisaged to transfer the shares held by it to
employees on exercise.
Scheme of Amalgamation & Demerger
During the year, a Scheme of Amalgamation & Demerger (Scheme), was
sanctioned by the Hon'ble High Court of Judicature at Allahabad vide
its orders dated October 28, 2010 and November 08, 2010. The Scheme
became effective with effect from November 15, 2010 (the effective
date) and Speciality Molecules Limited (SML) Ã a wholly owned
subsidiary of the Company and Pace Marketing Specialities Limited
(PMSL) were amalgamated into the Company and the Company's Agri
Products, Performance Polymer and IMFL divisions were demerged into
Jubilant Industries Limited (JIL) - a subsidiary of the Company.
The amalgamations were effective from the amalgamation appointed date
viz., close of business on March 31, 2010 and the demerger was
effective from the demerger appointed date viz., commencement of
business on April 1, 2010.
Name Change
During the year, the name of the Company was changed to 'Jubilant Life
Sciences Limited' to refect the evolved character of the Company as an
integrated Pharmaceutical and Life Sciences Company.
Subsidiaries
Brief particulars of principal subsidiaries are given below:
Jubilant HollisterStier LLC (formerly Hollister-Stier Laboratories LLC)
- This Spokane State of Washington, USA based company, is a wholly
owned subsidiary of HSL Holdings Inc. It is a recognized contract
manufacturer of sterile injectable vials, syringes and lyophilized
products and provides a complete range of services to support the
pharmaceutical and biopharmaceutical industries. Additionally, it is a
manufacturer of allergenic extracts, targeted primarily at treating
allergies and asthma.
Its contract manufacturing capabilities include aseptic liquid fll /
fnishing and lyophilization in three distinct cGMP areas designated as
Small Volume Parenteral (SVP), Small Lot Manufacturing (SLM) and
Clinical Trial Manufacturing (CTM). Its capabilities can be applied to
a variety of projects from pre-clinical through commercial scale across
a multitude of dosage forms including: microspheres, suspensions, WFI/
diluents, biologics (proteins), lyophilized products, liposomes and BD
Hypak syringes. Jubilant HollisterStier maintains an outstanding
regulatory record with the FDA (CBER and CDER), EMA and Japan's and
Brazil's regulatory agencies. Jubilant HollisterStier's contract
manufacturing business serves 38 customers, some of which involve
multiple products, ranging from small biotechnology to large
pharmaceutical companies.
Jubilant DraxImage Inc. (formerly Draxis Specialty Pharmaceuticals
Inc.) Ã This company is a wholly owned subsidiary of your Company
through Jubilant Pharma Pte. Limited. It deals in radiopharmaceuticals.
Radiopharmaceuticals is a niche, high entry barrier business.
DraxImage markets radioactive products with radioactive isotope already
incorporated, and non-radioactive products, which are solid in
lyophilized form. Radiopharmaceuticals are used for both therapeutic
and diagnostic molecular imaging applications to customers comprising
hospitals, imaging centres and cardiology / oncology clinics.
This company operates a US FDA approved manufacturing facility in
Montreal at Canada. It is recognised globally for its quality and
execution capabilities, strong regulatory track record and has an
established customer base comprising large innovator and specialty
pharmaceutical companies.
Jubilant Biosys Limited à This company is a subsidiary of your Company
through Jubilant Biosys (Singapore) Pte. Ltd., wholly owned subsidiary
of your Company, which holds 66.98% of the equity of this company.
This company provides Drug Discovery Services to Global Pharmaceutical
and Biotech companies in:
à Stand alone Service Model
- Functional services in area of Discovery Informatics, Structural
Biology and In Vivo & Invitro Biology on FTE or Fee based model.
à Collaborative / Partnership Model
- Integrated discovery program across a single or a portfolio of
molecules
- Risk / Reward sharing option
à Research Funding
à Payments for scientifc milestones including bonus achieved through
Discovery and Development phase
à Royalties on successful commercialization of drug.
During 2010-11, this company has been able to consolidate its position
in the Drug Discovery Services by providing services in integrated drug
discovery programmes, functional service in structural biology, High
thru put screening, Insilco modeling and IN Vivo Biology and Invitro
Biology.
During the year, it signed integrated programs deal with another major
Pharma Abbott Lab and Biotech Company Vega Therapeutics Inc.
Jubilant Discovery Services Inc. - This Delaware based USA corporation,
is a wholly owned subsidiary of Jubilant Biosys Limited. This company
provides sales, marketing and liaising services to Jubilant Biosys
Limited for its US based customers.
Jubilant Chemsys Limited à This company is a subsidiary of your Company
through Jubilant Drug Development Pte. Ltd., wholly owned subsidiary of
your Company, which holds entire equity of this company. This company
offers following services to drug discovery companies based out of US,
Europe and Japan on Full Time Equivalent and molecule basis:
- Discovery Chemistry Functions
- Hit to Lead and Lead Optimization
- Medicinal Chemistry Services
- Scaling up from mg to kg in kilo lab and pilot plant
It also works closely with Jubilant Biosys Limited in collaborative
drug discovery research services arena.
Jubilant Clinsys Limited (formerly Clinsys Clinical Research Limited) Ã
This company is a subsidiary of your Company through Jubilant Drug
Development Pte. Ltd., wholly owned subsidiary of your Company, which
holds entire equity of this company.
This company offers following services to pharmaceutical, biotechnology
and medical device companies:
- Bio-analytical, Bio equivalence & Pharmacokinetics studies with 52
bed facility at Noida
- Clinical Trials from Phase I-IV
- Clinical Data Management studies
- Clinical Trial Staffng solutions
During 2010-11, this company has been able to sign major Clinical data
management (CDM) contracts with Novartis and Lotus Labs (P) Ltd as part
of its endeavor to enhance CDM business.
Jubilant Clinsys Inc. (formerly Clinsys Clinical Research Inc.) Ã This
New Jersey based USA corporation, is a wholly owned subsidiary of
Jubilant Life Sciences Holdings Inc. and is a therapeutically focused
full service clinical research organization.
This company has expertise in a wide range of highly specialized
therapeutic areas including oncology, cardiovascular, central nervous
system, respiratory, dermatology and allergy/ immunology. It offers
broad range of clinical research services to pharmaceutical,
biotechnology and medical device companies in support of Phase II-IV
drug and device development including project management, clinical
monitoring, scientifc and medical support, patient and investigator
recruitment, site management, biostatistics, data management, drug
safety, quality assurance, regulatory affairs and medical writing. This
company has operations in Bedminster, New Jersey, Raleigh, North
Carolina, Ottawa, Ontario and Dusseldorf.
Jubilant Innovation (India) Limited à This company is a wholly owned
subsidiary of your Company through Jubilant Innovation (BVI) Limited.
This company provides services in the areas of:
- Drug Development Scientifc Services
- Project Management services and
- Related and ancillary activities for the development of molecules
owned/ co-owned by Jubilant Innovation (BVI) Limited.
The company fosters the development of molecules owned/ co- owned by
Jubilant Innovation (BVI) Limited, in terms of fnding right CRO's in
India to get maximum cost arbitrage based on their capabilities,
overseeing, analysis and monitoring of information on clinical /
toxicology studies being conducted in India on Jubilant Innovation
(BVI) Limited's molecules.
Jubilant Innovation Pte. Limited à This Singapore Company is a wholly
owned subsidiary of Jubilant Innovation (BVI) Limited. The company is
an investment company and owns 50% share holding in Vanthys
Pharmaceutical Development (P) Limited, a 50:50 Drug development Joint
Venture with Lilly. It has also signed a Joint Venture agreement with
University of Alabama, US and Southern Research Institute, US in the
feld of Drug Discovery.
Jubilant Innovation (BVI) Limited à This British Virgin Island based
company is a wholly owned subsidiary of Jubilant Pharma Pte. Limited.
This Company co-develops /in licenses the prescription pharmaceuticals
in late discovery or preclinical phases, and develops these molecules
through a phase II Proof of Concept (POC) trial.
The company develops these molecules on and at risk basis with either a
predetermined return structure or an equity interest and sells these
molecules after Phase II POC study for development completion. The
selling /out licensing will have upside in terms of upfront payment,
various milestone payments including sales milestones and/or sales
royalties.
Jubilant Innovation (USA) Inc. Ã This Delaware based USA corporation,
is a wholly owned subsidiary of your Company through Jubilant
Innovation (BVI) Limited. This company provides services in the areas
of:
- Drug Development Scientifc Services
- Project Management services and
- Related and ancillary activities for the development of molecules
owned/ co-owned by Jubilant Innovation (BVI) Limited.
The company fosters the development of molecules owned/ co- owned by
Jubilant Innovation (BVI) Limited, in terms of fnding right CRO's in US
and Europe based on their capabilities, overseeing, analyses and
monitoring of information on clinical / toxicology studies being
conducted outside India on Jubilant Innovation (BVI) Limited's
molecules.
Jubilant Infrastructure Limited à This wholly owned subsidiary of your
Company has set up Sector Specifc Special Economic Zone (SEZ) for
Chemicals and Pharmaceuticals in Gujarat. About 107 hectares land has
been taken on lease from GIDC in Bharuch District, Gujarat. The
Government of India notifed the SEZ in February 2008. In September
2008, the Central Government constituted the Approval Committee for
this SEZ.
During frst Approval Committee meeting for this SEZ in November 2008,
SEZ unit of this company was considered for approval and accordingly, a
Letter of Approval has been issued for setting up Unit in the SEZ.
This SEZ has received all the required permissions, approvals,
eligibility certifcates & licenses under SEZ Act and Rules & other
relevant Laws. It has received Environment Clearance from Ministry of
Environment & Forest, Government of India and accordingly, Consent to
Establish has also been received from Gujarat Pollution Control Board
under the applicable Water and Air Acts.
Jubilant First Trust Healthcare Limited - This company is in the
business of healthcare and is involved in setting up an integrated
hub-and-spoke network with a total of about 1,000 beds in West Bengal.
The effort is led by a team of professional doctors and healthcare
planners in West Bengal. In 2009, the company commissioned a 120-bed
super-specialty hospital. The company is having a total capacity of
170 beds across two hospitals in West Bengal. Your Company holds 93.24%
of equity capital of this company. This company holds 99.77% capital of
Asia Healthcare Development Limited.
Asia Healthcare Development Limited - This company is a subsidiary of
your Company through Jubilant First Trust Healthcare Limited, which
holds 99.77% of its total capital. This company runs a hospital in
Behrampur, 200 kms away from Kolkata, on a Public-Private-Partnership
with Government of West Bengal.
Jubilant Cadista Pharmaceuticals Inc. (formerly Cadista Pharmaceuticals
Inc.) Ã This Delaware based USA corporation, is a wholly owned
subsidiary of Cadista Holdings Inc. This Company is in the business of
manufacturing generic pharmaceuticals, solid dosage forms and has a US
FDA approved manufacturing facility in USA. Its customer base includes
all the large wholesalers, retail and grocery chains. Besides
manufacturing its own label products, it also provides Product
development and Contract manufacturing services.
Jubilant Life Sciences (USA) Inc. [formerly Jubilant Organosys (USA)
Inc.] Ã This Delaware based USA corporation, is a wholly owned
subsidiary of your Company. It undertakes sales and distribution of
advance intermediates, fne chemicals and APIs in USA.
Jubilant Life Sciences (Shanghai) Limited (formerly Jubilant Organosys
(Shanghai) Limited) Ã This wholly owned subsidiary of your Company is
held through Jubilant Pharma Pte. Limited. It undertakes sales and
distribution of products in China. It is into trading of advance
intermediates
- Pyridine & its derivatives, vitamins and fne chemicals. It is
catering to pharmaceutical, animal feed and agrochemical industries in
China. This subsidiary is also a major sourcing hub of raw materials
for your company.
Jubilant Pharmaceuticals NV - This is a wholly owned subsidiary of your
Company through Jubilant Pharma NV, Belgium, which holds 99.8% of its
shares and Jubilant Pharma Pte. Limited, Singapore which holds the
balance shares, both of which are wholly owned subsidiaries of your
Company. This company is engaged in the business of licensing of
generic dosage forms and offers regulatory affairs services to generic
pharmaceutical companies for the diverse European market.
PSI Supply NV Ã This is a wholly owned subsidiary of your Company.
99.5% shares of this company are held by Jubilant Pharma NV and balance
by Jubilant Pharma Pte. Limited. This company is engaged in the supply
of generic dosage forms to European markets
Jubilant DraxImage Limited (formerly Draximage India Limited) - This
company is a wholly owned subsidiary of your Company through Draximage
Limited, Cyprus. The company has started its operation from January 01,
2011 by launching radioactive isotopes. The product which it is
presently selling is Tc-99m Generator which is used in the diagnosis of
Bone scans, cerebral perfusion imaging, Myocardial Perfusion Imaging.
The other products it is selling are Thallium-201 and Lodine-131
capsules and solution, which are used for Myocardial Perfusion Imaging
and for the diagnosis and treatment of Thyroid and its related
diseases. This company plans to introduce, from April 2011, Lyophilized
kits which are Sestamibi, MDP, MAA and DTPA and RUBY-FILL (Rubidium- 82
Generator-PET isotope).
This company also proposes to set up a centralized Radio pharmacy which
will further propel its growth and help not only to provide a strategic
advantage over competitors but also to achieve the leadership status in
the Nuclear Medicine.
Other subsidiaries as at the year end are as follows:
Cadista Holdings Inc., USA
DAHI Animal Health (UK) Limited, UK
Deprenyl Inc., USA
Draximage (UK) Limited, UK
Draximage Limited, Cyprus
Draximage Limited, Ireland
Draximage LLC, USA
Draxis Pharma Inc., USA
Draxis Pharma LLC, USA
* Generic Pharmaceuticals Holdings Inc., USA HSL Holdings Inc., USA
Jubilant Biosys (BVI) Limited, British Virgin Islands
Jubilant Biosys (Singapore) Pte. Ltd., Singapore
Jubilant DraxImage (USA) Inc. (formerly DSPI Inc.), USA
Jubilant Drug Development Pte. Ltd., Singapore
Jubilant Life Sciences (BVI) Ltd. (formerly Jubilant Organosys (BVI)
Limited), British Virgin Islands
* Jubilant Life Sciences (Switzerland) AG, Schaffhausen
Jubilant Life Sciences Holdings Inc. (formerly Clinsys Holdings Inc.),
USA
Jubilant Life Sciences International Pte. Ltd. (formerly Jubilant
Organosys International Pte. Limited), Singapore
Jubilant Pharma NV, Belgium
Jubilant Pharma Pte. Limited, Singapore
6963196 Canada Inc., Canada
6981364 Canada Inc., Canada
* became subsidiary during the year
During the year Colvant Sciences Inc., DAHI LLC and Cadista
Pharmaceuticals (UK) Limited ceased to be subsidiaries of the Company.
Pursuant to Scheme of Amalgamation and Demerger, Speciality Molecules
Limited merged with the Company and certain businesses of the Company
were hived off to demerged Jubilant Industries Ltd. (formerly Hitech
Shiksha Limited). Both these companies ceased to be subsidiaries of the
Company.
Particulars required as per Section 212 of The Companies Act, 1956
In terms of the general exemption granted by the Government of India
vide its general circular no. 2/2011 dated February 08, 2011, from
attaching the Directors' Reports, Balance Sheets, Profit & Loss Accounts
and other particulars of the subsidiaries, the same have not been
attached to this Report.
Fixed Deposits
No fresh deposits have been accepted by your Company during the year
from the public. As on March 31, 2011, your Company had no outstanding
Fixed Deposits. There were no overdue deposits. There were, however, 25
unclaimed deposits amounting to Rs. 3.82 lacs.
Auditors
K. N. Gutgutia & Co., Chartered Accountants, [ICAI Registration Number
- 304153E] Auditors of the Company, retire at the ensuing Annual
General Meeting and offer themselves for re- appointment. They have
confrmed that their re-appointment, if made, shall be within the limits
laid down in Section 224 (1B) of the Companies Act, 1956.
Cost Auditors
J. K. Kabra & Co., Cost Accountants, [Firm Registration Number - 9]
Cost Auditors of the Company, have confrmed that their re-appointment,
if made, shall be within the limits laid down in Section 224 (1B) of
the Companies Act, 1956. During the financial year 2010-11, the Cost
Audit Reports of Chemical (Sulphuric Acid), Industrial Alcohol & Bulk
Drugs were fled on September 17, 2010 and of Fertilizer were fled on
September 21, 2010, against the due date of September 27, 2010.
Directors
Mr. Rahul Yadav, Nominee Director of Citicorp International Finance
Corporation and HPC (Mauritius) Limited à Equity Investors and Mr.
Vishal Marwaha, Alternate Director to Mr. Rahul Yadav, ceased to be
Directors with effect from July 07, 2010.
Effective from November 11, 2010, Mr. Arabinda Ray resigned from the
Board.
In accordance with the Articles of Association of the Company, Mr. Hari
S. Bhartia, Mr. Shyamsundar Bang and Dr. Naresh
Trehan retire by rotation at the forthcoming Annual General Meeting
and, being eligible, offer themselves for re- appointment.
Directors' Responsibility Statement
In compliance of Section 217 (2AA) of the Companies Act, 1956, the
Directors of your Company, based on the representation received from
management, confrm:
- that in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
- that the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as on March 31, 2011 and of the Profit or loss of the
Company for the year ended March 31, 2011.
- that the Directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
- that the Directors have prepared the annual accounts on a going
concern basis.
Conservation Of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo, required to be made pursuant
to Section 217(1)(e) of the Companies Act, 1956, read with Companies
[Disclosure of Particulars in the Report of Board of Directors] Rules,
1988, is given in Annexure B and forms part of this Report.
Employees
The particulars of employees, as required under Section 217(2A) of the
Companies Act 1956, read with the Companies (Particulars of Employees)
Rules, 1975, are given in Annexure C and form part of this Report.
Corporate Governance
A separate section on Corporate Governance is attached to this Report
as Annexure D. A certifcate from the auditors of the Company regarding
compliance of conditions of Corporate Governance as stipulated under
clause 49 of the Listing Agreements with Stock Exchanges is enclosed as
Annexure E. A certifcate from the Chairman & Managing Director that all
Board members and senior management personnel have affrmed compliance
with the Code of Conduct for the year ended March 31, 2011 is attached
as Annexure F. CEO/CFO certifcate is enclosed as Annexure G.
Management Discussion & Analysis
Notes on Management Discussion & Analysis of the financial position of
the Company have been given separately and form part of this Report.
Corporate Sustainability Report
Your Company, being committed to address environmental issues and
discharge its corporate social responsibility, is publishing for the
ninth year in a row, Corporate Sustainability Report, duly audited by
Ernst & Young, and conforming to Global Reporting Initiative (GRI)
Guidelines. The Report is being sent to all our shareholders.
Risk Management
Today's business environment remains challenging for the Corporate
World and risk management retains its high position on every
organization's agenda. The Company has several risk factors which could
potentially impact its business objectives, if not perceived and
mitigated in a timely manner. With an effective risk management
framework in place, the Company looks at these risks as challenges and
opportunities to create value for its stakeholders. With its
established processes and guidelines in place, combined with a strong
oversight and monitoring system at the Board and senior management
levels, the Company has a robust risk management strategy in place.
The senior management team sets the overall tone and risk culture of
the organization through defned and communicated corporate values,
clearly assigned risk responsibilities, appropriately delegated
authority, and a set of processes and guidelines. The Company has laid
down procedures to inform Board members about the risk assessment and
risk minimization procedures. The Company promotes strong ethical
values and high levels of integrity in all our activities, which in
itself is a significant risk mitigator.
With the growth strategy in place, risk management holds a key to the
success of its journey of continued competitive sustainability in
attaining its desired business objective.
A detailed note on Risk Management is given as part of "Management
Discussion & Analysis".
Human Resource Management
As of March 31, 2011, we had 5763 employees including those in our
Subsidiary companies.
As of March 31, 2011, 661 of our employees at our manufacturing plants
at Samlaya, Nira, Gajraula and Nanjangud, were members of unions or had
collective bargaining capability. We enjoy cordial relations with our
employees and there have been no instances of major strikes, lockouts
or other disruptive labour disputes.
We have signed a policy on CII Code of Conduct on Affrmative Action
that reconfrms our commitment that equal opportunity in employment for
all sections of society is a component of our growth and
competitiveness.
We strive toward technology driven HR systems and processes and have
implemented world renowned PeopleSoft based human resource management
system 'Synergy HRIS'. Its key features include employee personal and
Job database, self service features like reimbursements, pay slips,
leaves, income tax declarations & computations, loans and exit process
etc.
We believe in an open, fair and transparent culture and stand by our
promise of Caring, Sharing, Growing and make efforts to make Jubilant
one of the best places to work for. In this direction, we have been
conducting the Gallup employee engagement survey to gauge the
organization's health. This allows us to track the proportion of
engaged to actively disengaged employees and so that mid-course
corrections or interventions can be implemented thereof.
A detailed note on HR Management is given in the "Management Discussion
& Analysis".
Awards and Accolades
During the year 2010-11, the Company won the following:
- Two Environmental Best Practices Award 2011, by CII- Sohrabji Godrej
Green Business Centre, under Most Innovative Environmental Project and
Most Useful Environmental Project for the Co-processing of Hazardous
waste in Cement Kiln at Nanjangud plant, Mysore, India
- Golden Peacock Innovation Award 2011 for developing Niacin by Vapour
Phase Catalytic Oxidation of Beta Picoline
- Ernst & Young Entrepreneur of the Year 2010 for Life Sciences &
Consumer Products to Mr. Shyam S Bhartia, Chairman & Managing Director
and Mr. Hari S Bhartia, Co-Chairman & Managing Director
- CII Ã EHS Award 2010 - First Place for Excellence in EH&S systems at
the Nanjangud Plant, among medium scale industries
- Safety Innovation Award 2010 by The Institution of Engineers (India)
for implementing Innovative Safety Management Systems at Nanjandgud
Plant
- National Award for Excellence in Water Management à 2010 by
CII-Sohrabji Godrej Green Business Centre for Nanjangud plant
- India Manufacturing Excellence Award 2010 - 'Gold Certifcate of
Merit' by The Economic Times - Frost & Sullivan for EOU facility at
Gajraula
- Certification of Commendation for Strong Commitment for Sustainability
by CII-ITC Sustainability Awards 2010
- Two ABCI Awards 2010 for Communication efforts of Jubilant Life
Sciences- Gold for e-newsletter and Bronze for CSR Communication
- Jubilant was included in the Forbes Asia 'Best Under a Billion' Asia
List à released in Sept 2010
- A rating from GRI for Corporate Sustainability Report 2010
(consecutively for the last four years since 2007)
- Golden Peacock Environment Management Award 2010 by World Environment
Foundation (WEF) for API facility at Nanjangud, Mysore, India
Certifications
Your Company follows several externally developed initiatives in the
economic, environmental and social areas. Facilities of the Company at
Gajraula, Nira, Savli, Nanjangud and Ambernath are ISO 9001:2008
certified for Quality Management System. These manufacturing facilities
are also ISO 14001:2004 certified for Environmental Management System.
For Occupational Health and Safety at work place, these manufacturing
facilities are also certified to OHSAS 18001:2007. The locations of
Gajraula, Nira and Savli are certified for Integrated Management System
(IMS). Facilities at Savli are certified for FAMI- QS Version à 5
Quality in Feed Safety Management System. Gajraula Quality Control
Laboratory has also been certified for chemical testing by NABL
(National Accreditation Board for Testing and Calibration Laboratories)
in accordance with the ISO / IEC 17025:2005.
Dosage Forms facility at Roorkee follows Good Manufacturing Practices
(GMP) as per World Health Organisation (WHO) specifcations in
manufacturing and testing of pharmaceutical products and hence has been
granted WHO GMP certifcate by the Drug Licensing and Controlling
Authority, Uttarakhand. The facility is also approved by UK-MHRA (UK-
Medicines and Healthcare Products Regulatory Agency) to export drugs to
European Market.
Nanjangud plant has got US FDA (United States Food & Drug
Administration) approval for exporting certain products to US market.
AFSSAPS (Agence Francaise de Securite Sanitaire des Produits de Sante
-The French Health Products Safety Agency), GMP approval for certain
products, PMDA (Pharmaceuticals and Medical Devices Agency, Japan) for
exporting Risperidone HCl to the Japanese market, KFDA (Korea Food and
Drug Administration) for exporting Valsartan and Losartan to Korean
market, COFEPRIS for exporting Pinaverium Bromide to Mexican market.
Olanzapine, Losartan was audited by United State Pharmacopeia and
approved for the use of USP logo.
Investor Services
In its endeavor to improve investor services, your Company has taken
the following initiatives:
- With a view to communicating on a real time basis, your Company has
been e-mailing to the shareholders, quarterly results, press releases
and other similar communications soon after they are sent to the stock
exchanges.
- For effective communication with shareholders, during the year, the
Company also e-mailed Annual Report, Corporate Sustainability Report
and Notice of Annual General Meeting to shareholders on their email IDs
as available, in addition to statutory physical mailing.
- The Investor Section on the website of the Company www.jubl.com is
more user friendly now.
- A dedicated e-mail ID viz. [email protected] for sending
communications to the Company Secretary / Compliance Officer has been
made effective. Members may lodge their complaints or suggestions on
this e-mail as well.
- The Company has been mailing feedback forms to investors, annually,
so as to bring about improvement in service level based on responses
received. The Company has also placed an online Investor Feedback Form
on its website www.jubl.com under the head "Investors". This form can
be submitted electronically.
Acknowledgments
Your Directors acknowledge with gratitude the co-operation and
assistance received from the Central and State Government Authorities.
Your Directors thank the Shareholders, Private Equity Investors,
Financial Institutions, Banks/other lenders, Customers, Vendors and
other business associates for their confdence in the Company and its
management and look forward to their continued support. The Board
wishes to place on record its appreciation for the dedication and
commitment of your Company's employees at all levels, which has
continued to be our major strength.
For and on behalf of the Board
Noida Shyam S. Bhartia
May 10, 2011 Chairman & Managing Director
Mar 31, 2010
The Directors have pleasure in presenting the Thirty Second Annual
Report and Audited Accounts for the year ended March 31, 2010. Your
Company recorded robust growth in revenue and operating profits due to
its strategic thrust on moving up the value chain in its Pharma and
Life Science businesses. Outsourcing remains our key strategy and your
Company is the largest Custom Research and Manufacturing and Drug
Discovery and Development Services Company out of India.
Financial Results
Year ended Year ended
March 31, 2010 March 31, 2009
Rs./million] [Rs./million]
Sales and Other Income 25,537 26,287
Net Sales 24,462 24,307
EBITDA 6,469 4,399
Interest 997 544
PBDT 5,472 3,855
Depreciation 651 746
Exceptional items 228 379
PBT 4,593 2,730
Provision for Taxation 962 123
PAT 3,631 2,607
Profit brought forward from previous year 7,558 6,712
PROFIT AVAILABLE FOR APPROPRIATION 11,189 9,319
Which the Directors have
appropriated as follows:
- Proposed Dividend on Equity shares 317 223
- Tax on Dividend on Equity Shares 53 38
- Transfer to General Reserve 2,000 1,500
Balance to be carried forward 8,819 7,558
Operations
Standalone Financials
Revenues
Revenues in FY2010 increased by 0.6% and were at Rs. 24,462 million
from Rs. 24,307 million in FY2009.
PLSPS
The revenue in PLSPS segment grew by 7.6% to Rs. 20,281 million from`
Rs. 18,840 million in FY2009. The CRAMS revenues increased by 7.4% to
Rs. 11,934 million from Rs. 11,109 million last year.
APP
The APP segment revenues were at Rs.4,181 million from Rs. 5,468 million
in FY2009. The lower revenue in APP was on account of decline in
revenues in Application Polymers & Fertilizers businesses.
International Revenues
International Revenues were at 45.9% of the Companys total revenues
and at 52.2% of PLSPS revenues. In FY2010 it was higher by 2.2% to `
11,219 million from ` 10,978 million previously. China showed revenue
improvement by 30.7% to Rs. 3,441 million.
EBITDA
In FY2010, the EBITDA expanded by 47.1% to Rs. 6,469 million from Rs. 4,399
million in FY2009. The EBITDA margin was at 26.4% as compared to 18.1%
in FY2009. The EBITDA margins in PLSPS business stood at 34.3% from
25.2% last year and in APP segment stood at 4.7% from 8.3% last year.
Profit Before Tax
Profit Before Tax in FY2010 showed outstanding growth of 68.2% at Rs.
4,593 million against Rs. 2,730 million in FY2009.
Net Profit and EPS
The FY2010 Net Profits grew 39.3% to Rs. 3,631 million against Rs. 2,607
million last year. The EPS was at Rs. 24.60 against Rs. 17.70 last year.
Consolidated Financials
Revenues
Revenues in FY2010 increased by 7.5% and were at Rs. 37,813 million from
Rs. 35,180 million in FY2009.
PLSPS
The revenue in PLSPS segment grew by 13.1% to Rs. 33,618 million from Rs.
29,715 million in FY2009. The CRAMS revenues increased by 12.3% to Rs.
21,317 million from Rs. 18,983 million last year. The CMO operations have
shown good revenue growth of 35.2% at Rs. 6,616 million from Rs. 4,895
million. Growth in Pharmaceuticals Products was also very good at 25.2%
to Rs. 3,830 million.
APP
The APP segment revenues were at Rs. 4,195 million from Rs. 5,465 million
in FY2009. The lower revenue in APP was on account of decline in
revenues in Application Polymers & Fertilizers businesses.
International Revenues
International Revenues were at 64.9% of the Companys total revenues
and at 71.1% of PLSPS revenues. In FY2010 it was higher by 12.7% to Rs.
24,540 million from Rs. 21,771 million previously. China showed revenue
improvement by 27.7% to Rs. 3,708 million and North America showed growth
of 17.8% to Rs. 13,919 million in FY 2010.
EBITDA
In FY2010, the EBITDA expanded by 34.3% to Rs. 8,260 million from Rs. 6,148
million in FY2009. The EBITDA margin was at 21.8% as compared to 17.5%
in FY2009. The EBITDA margins in PLSPS business stood at 26.0% from
21.8% last year and in APP segment stood at 4.6% from 8.1% last year.
Profit Before Tax
Profit Before Tax in FY2010 showed outstanding growth of 74.6% at Rs.
5,179 million against Rs. 2,966 million in FY2009.
Net Profit and EPS
The FY2010 Net Profits grew 48.8% to Rs. 4,215 million against Rs. 2,832
million last year. The EPS was at Rs. 28.56 against Rs. 19.22 last year.
Dividend
Your Directors recommend a dividend of 200% i.e. Rs. 2 per fully paid up
equity share of Rs. 1 for the year ended March 31, 2010. This will result
in a dividend payout of ` 370 million (inclusive of tax) based on
existing capital.
Appropriations
It is proposed to transfer Rs. 2,000 million to General Reserve and
retain the balance in Profit and Loss Account.
Capital Structure
(A) Foreign Currency Convertible Bonds (FCCBs)
Your Company, during 2004-05, 2005-06 and 2006-07, issued Foreign
Currency Convertible Bonds (FCCBs) of USD 35 million (FCCB 2009), USD
75 million (FCCB 2010) and USD 200 million (FCCB 2011), respectively.
During the year, the outstanding balance of FCCB 2009 was completely
redeemed.
The balance FCCBs along with the number of shares to be issued, if
converted, is given below:
Particulars Year of Size of Interest FCCBs FCCBs
Issue Issue Rate converted bought
(in million (%) into equity back
USD) shares (in
million
(in million USD)
USD)
FCCB 2010 2005-06 75 0 22.3 3.0
FCCB 2011 2006-07 200 0 0 57.9
Total 275 22.3 60.9
Balance Conversion Details No. of shares
FCCBs of Rs. 1 each
outstanding Conversion Conversion (to be allotted if
(in million Period Price per converted for
Particulars USD) Equity Share outstanding
(Rs.) FCCBs)
FCCB 2010 49.7 July 3,
2 005 to 273.0648 7,883,231
May 14,
2010
FCCB 2011 142.1 June 30,
2006 to 413.4498 15,483,391
May 10,
2011
Total 191.8 23,366,622
Whilst the FCCBs are listed on Singapore Stock Exchange, the Global
Depository Shares (GDSs) arising out of conversion of FCCBs are listed
on Euro MTF Market of the Luxembourg Stock Exchange.
(B) Employees Stock Options (ESOPs)
During the year, 41,523 Stock Options were granted under the Jubilant
Employees Stock Option Plan 2005. Each option is convertible into five
equity shares of `1 each at the exercise price fixed at the time of
grant being market value as per SEBI Guidelines.
As on 31st March, 2010, 365,331 Stock Options were outstanding. A
maximum of 1,826,655 shares will be allotted / transferred from
Jubilant Employees Welfare Trust upon exercise of these Options.
However, no dilution under ESOPs is expected, as Jubilant Employees
Welfare Trust is envisaged to transfer the shares held by it to
employees on exercise.
The details as required under Regulation 12 of Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are given in Annexure A.
(C) Issue to Qualified Institutional Buyers
During the last week of March, 2010, your Company raised ` 3,871.32
million by way of private placement to Qualified Institutional Buyers.
The Company allotted 11,237,517 shares of ` 1 each at a price of `
344.50 per share. Consequently, the paid up share capital of the
Company increased from ` 147,542,258 to ` 158,779,775. The proceeds of
the issue will be used for capital expenditure for organic growth,
investment in Subsidiary companies and joint ventures, working capital,
payment of debts and other general corporate purposes.
(D) Paid Up Capital
The paid up Capital as at March 31, 2010 stands at Rs. 158,779,775/-
comprising of 158,779,775 equity shares of Rs.1 each.
The impact of future conversions of FCCBs into equity shares on the
share capital assuming full conversion would be as follows:-
Particulars No. of Shares
of Rs. 1 each
Existing nos. of shares as on March 31, 2010 158,779,775
Add: Shares to be allotted on conversion
of outstanding FCCBs 23,366,622
Fully diluted no. of equity shares on
conversion of FCCBs 182,146,397
Note: No dilution under ESOPs is expected, as Jubilant Employees
Welfare Trust is envisaged to transfer the shares held by it to
employees on exercise.
(E) Proposed Demerger
In the last quarter of 2009-10, the Board of Directors of the Company
approved the demerger of its Agri and Performance Polymer business into
a separate company for pursuing the growth prospects of both the
businesses independently and efficiently. Detailed scheme is expected
to be considered by the Board in June/July 2010 and the process is
expected to be completed in Q3 FY 2011.
(F) Name Change
To reflect the evolved character of the Company as an integrated
Pharmaceutical and Life Sciences Company, the Board of Directors on
October 22, 2009 approved the change of name of the Company to
"Jubilant Life Sciences Limited". The shareholders also approved such
change by a Special Resolution through Postal Ballot on December 2,
2009.
The Company is in the process of completing the procedural formalities
for change of name. We expect the name change process to be completed
along with the Demerger.
Subsidiaries
Brief particulars of principal subsidiaries are given below:
Hollister-Stier Laboratories LLC - This Delaware, USA based company, is
a wholly owned subsidiary of HSL Holdings Inc. It is a recognised
contract manufacturer of sterile injectable vials, syringes and
lyophilized products and provides a complete range of services to
support the pharmaceutical and biopharmaceutical industries.
Additionally, it is a manufacturer of allergenic extracts, targeted
primarily at treating allergies and asthma.
Its contract manufacturing capabilities include aseptic liquid fill /
finishing and lyophilization in three distinct cGMP areas designated as
Small Volume Parenteral (SVP), Small Lot Manufacturing (SLM) and
Clinical Trial Manufacturing (CTM). Its capabilities can be applied to
a variety of projects from pre-clinical through commercial scale across
a multitude of dosage forms including: microspheres, suspensions,
WFI/diluents, biologics (proteins), lyophilized products, liposomes and
BD Hypak syringes. Hollister-Stier maintains an outstanding regulatory
record with the FDA (CBER and CDER), EMEA and Japans and Brazils
regulatory agencies. Hollister-Stiers contract manufacturing business
serves 38 customers, some of which involve multiple products, ranging
from small biotechnology to large pharmaceutical companies.
Draxis Specialty Pharmaceuticals Inc. - This Company is a subsidiary of
your company and provides products in three categories: sterile
products, non-sterile products and radiopharmaceuticals. Sterile
products include liquid and freeze-dried (lyophilized) injectables plus
sterile ointments and creams. Non-sterile products are produced as
solid oral and semi-solid dosage forms. Radiopharmaceutical is a niche,
high entry barrier business. Draximage markets radioactive products
with radioactive isotope already incorporated, and non-radioactive
products, which are solid in lyophilized form. Radiopharmaceuticals
are used for both therapeutic and diagnostic molecular imaging
applications to customers comprising hospitals, imaging centres and
cardiology / oncology clinics. Pharmaceutical contract manufacturing
services are provided through the DRAXIS Pharma division and
radiopharmaceuticals are developed, produced, and sold through the
DRAXIMAGE division.
DRAXIS operates a USFDA approved manufacturing facility in Montreal at
Canada. It is recognised globally for its quality and execution
capabilities, strong regulatory track record and has an established
customer base comprising large innovator and specialty pharmaceutical
companies.
Jubilant Biosys Limited - This Company is a subsidiary of your Company
through Jubilant Biosys (Singapore) Pte. Limited, wholly owned
subsidiary of your Company, which holds 66.98% of the equity of this
company.
This company provides Drug Discovery Services to Global Pharmaceutical
and Biotech companies in:
- Stand alone service model
. Functional services in area of Discovery Informatics, Structural
Biology and In Vivo & Invitro Biology on FTE or Fee based model.
- Collaborative / Partnership Model
. Integrated discovery program across a single or a portfolio of
molecules Risk / Reward sharing option
- Research Funding
. Payments for scientific milestones including bonus achieved
through Discovery and Development phase
- Royalties on successful commercialisation of drug.
During 2009-10, this company has been able to consolidate its position
in the Drug Discovery Services by providing services in integrated drug
discovery programmes, functional service in structural biology, High
through put screening, Insilco modeling and In Vivo Biology and Invitro
Biology.
Its collaboration with Lilly has been renewed for next 5 years in the
4th year of its existing 5 year collaboration term because of its
scientific and business success. In April 2009 the Company signed major
five year Integrated portfolio collaboration deal with Astra Zeneca and
Endo Pharmaceutical on shared risk basis, and Integrated programmes
under these deals are running successfully. In July 2009, it signed
another deal with Merck on FTE basis.
Jubilant Discovery Services Inc. - This Delaware, USA corporation, is a
wholly owned subsidiary of Jubilant Biosys Limited. This company
provides sales, marketing and liaising services to Jubilant Biosys
Limited for its US based customers.
Jubilant Chemsys Limited - This Company is a subsidiary of your Company
through Jubilant Drug Development Pte. Limited, wholly owned
subsidiary of your Company, which holds entire equity of this company.
This company offers following services to drug discovery companies
based out of US, Europe and Japan on Full Time Equivalent and molecule
basis:
- Discovery Chemistry functions
- Hit to lead and lead optimization
- Medicinal Chemistry Services
- Scaling up from mg to kg in kilo lab and pilot plant
It also works closely with Jubilant Biosys Limited in collaborative
drug discovery research services areas.
Clinsys Clinical Research Limited - This Company is a subsidiary of
your Company through Jubilant Drug Development Pte. Limited, wholly
owned subsidiary of your Company, which holds entire equity of this
company.
This company offers following services to pharmaceutical, biotechnology
and medical device companies: Bio-analytical, Bio equivalence &
Pharmacokinetics studies with 52 bed facility at Noida Clinical trials
from Phase I-IV Clinical Data Management studies Clinical Trial
Staffing solutions
During 2009-10, this Company has been able to sign major Clinical trial
contracts with Lupin and Sandoz, which will enhance its Clinical trial
business.
Clinsys Clinical Research Inc. - This New Jersey, USA corporation, is a
wholly owned subsidiary of Clinsys Holdings Inc. and is a
therapeutically focused full service clinical research organisation.
This company has expertise in a wide range of highly specialised
therapeutic areas including oncology, cardiovascular, central nervous
system, respiratory, dermatology and allergy/immunology. It is offering
broad range of clinical research services to pharmaceutical,
biotechnology and medical device companies in support of Phase II-IV
drug and device development including project management, clinical
monitoring, scientific and medical support, patient and investigator
recruitment, site management, biostatistics, data management, drug
safety, quality assurance, regulatory affairs and medical writing. This
company has operations in Bedminster, New Jersey, Raleigh, North
Carolina, Ottawa, Ontario, Canada and Dusseldorf, Germany.
Jubilant Innovation (India) Ltd. - This Company became wholly owned
subsidiary of your Company through Jubilant Innovation (BVI) Limited,
during the year. This company provides services in the area of:-
Drug Development Scientific Services,
Project Management services and
Related and ancillary activities for the above-mentioned services for
the development of molecules owned/ co-owned by Jubilant Innovation
(BVI) Limited.
The company fosters the development of molecules owned/ co-owned by
Jubilant Innovation (BVI) Limited, in terms of finding right CROs in
India to get maximum cost arbitrage based on their capabilities,
overseeing, analysis and monitoring of information on clinical /
toxicology studies being conducted in India on Jubilant Innovation
(BVI) Limiteds molecules.
Jubilant Innovation Pte. Limited - This Singapore Company is a wholly
owned subsidiary of Jubilant Innovation (BVI) Limited. The company is
an investment company and owns 50% share holding in Vanthys
Pharmaceutical Development (P) Limited, a 50:50 Drug Development Joint
Venture with Lilly. It has also signed a Joint Venture agreement with
University of Alabama, US and Southern Research Institute, US in field
of Drug Discovery.
Jubilant Innovation (BVI) Limited - This British Virgin Island company
is a wholly owned subsidiary of Jubilant Pharma Pte. Limited. This
Company co-develops /in licenses the prescription pharmaceuticals at
late discovery or preclinical phases, and develops these molecules
through a phase II Proof of Concept (POC) trial.
The company develops these molecules on and at risk basis with either a
predetermined return structure or an equity interest and sells these
molecules after Phase II POC study for development completion. The
selling /out licensing will have upside in terms of upfront payment,
various milestone payments including sales milestones and/or sales
royalties.
Jubilant Innovation (USA) Inc. - This Delaware, USA Corporation, became
wholly owned subsidiary of your Company through Jubilant Innovation
(BVI) Limited, during the year. This company provides services in the
area of:- Drug Development Scientific Services,
Project Management services and
Related and ancillary activities for the above-mentioned services for
the development of molecules owned/ co-owned by Jubilant Innovation
(BVI) Limited.
The company fosters the development of molecules owned/ co-owned by
Jubilant Innovation (BVI) Limited, in terms of finding right CROs in
US and Europe based on their capabilities, overseeing, analyses and
monitoring of information on clinical / toxicology studies being
conducted outside India on Jubilant Innovation (BVI) Limiteds
molecules.
Jubilant Infrastructure Limited - This wholly owned subsidiary of your
Company has set up Sector Specific Special Economic Zone (SEZ) for
Chemicals and Pharmaceuticals in Gujarat. About 107 hectares land has
been taken on lease from GIDC in Bharuch District, Gujarat. The
Government of India notified the SEZ in February 2008. In September
2008, the Central Government constituted the Approval Committee for
this SEZ.
During first Approval Committee meeting for this SEZ in November 2008,
SEZ unit of this company was considered for approval and accordingly, a
Letter of Approval has been issued for setting up Unit in the SEZ.
This SEZ has received all the required permissions, approvals,
eligibility certificates & licenses under SEZ Act and Rules & other
relevant Laws. It has received Environment Clearance from Ministry of
Environment & Forest, Government of India and accordingly, Consent to
Establish has also been received from Gujarat Pollution Control Board
under the applicable Water and Air Acts.
Jubilant First Trust Healthcare Limited - This Company is in the
business of healthcare and is involved in setting up an integrated
hub-and-spoke network with a total of about 1,000 beds in West Bengal.
The effort is led by a team of professional doctors and healthcare
planners in West Bengal. During the year, the Company commissioned a
new 120-bed super- specialty hospital and added 73 beds during the year
to have a total capacity of 165 beds across two hospitals in West
Bengal. Your Company holds 92.89% of equity capital of this company.
This company holds 99.77% capital of Asia Healthcare Development
Limited.
Asia Healthcare Development Limited - This Company is a subsidiary of
your Company through Jubilant First Trust Healthcare Limited, which
holds 99.77% of its total capital. This Company runs a hospital in
Behrampur, 200 kms away from Kolkata, on a Public-Private-Partnership
with Government of West Bengal.
Speciality Molecules Limited - This is a wholly owned subsidiary of
your Company and is engaged in the manufacturing of Fine Chemicals
which are halogenated Pyridine derivatives. These products are used in
Life Science Industry including Pharma, Agro & Cosmetic Industry. The
Company has niche technology of halogenation and is a winner of Acharya
P.C. Ray award for development of indigenous technologies.
It has 12 commercial products in its portfolio and is one of the
largest producers of 2-Chloro Pyridine globally and has aspiration to
have global leadership in it within 2-3 years time.
This Company is scaling up two new products, one of which is used in
large volumes in agrochemical industry and is working aggressively to
map all global customers of other halogenated products and develop them
to maximise revenue from these products.
Cadista Pharmaceuticals Inc. - This Delaware, USA corporation, is a
wholly owned subsidiary of Cadista Holdings Inc. This Company is in
the business of manufacturing generic pharmaceuticals, solid dosage
forms and has a US FDA approved manufacturing facility in USA. It
supplies its products to almost all the large wholesalers, retail and
grocery chains. Besides manufacturing its own label products, it also
provides Product development and Contract manufacturing services.
Jubilant Organosys (USA) Inc. - This Delaware, USA corporation, is a
wholly owned subsidiary of your Company. It undertakes sales and
distribution of advance intermediates, fine chemicals, CRAMS and APIs
in USA.
Jubilant Organosys (Shanghai) Limited - This wholly owned subsidiary of
your Company is held through Jubilant Pharma Pte. Limited. It
undertakes sales and distribution of products in China. It is into
trading of advance intermediates - Pyridine & its derivatives and fine
chemicals. It is catering to pharmaceutical and agrochemical industry
in China. This subsidiary is also a sourcing hub for raw materials for
your company.
Jubilant Pharmaceuticals N.V. - This is a wholly owned subsidiary of
your Company through Jubilant Pharma N.V. Belgium, which holds 99.8% of
its shares and Jubilant Pharma Pte. Limited, Singapore which holds the
balance shares, both of which are wholly owned subsidiaries of your
Company. This Company is engaged in the business of licensing of
generic dosage forms and offers regulatory affairs services to generic
pharmaceutical companies for the diverse European market.
PSI Supply N.V. - This is a wholly owned subsidiary of your Company.
99.5% shares of this company are held by Jubilant Pharma NV and balance
by Jubilant Pharma Pte. Limited. This Company is engaged in the supply
of generic dosage forms to European markets.
Draximage India Limited - This Company became a wholly owned subsidiary
of your Company through Draximage Limited, Cyprus, during this year.
The Company has not yet started its operations but intends to place
itself in the market as a first choice of Customers as it will become
one point solution to customers for all their products & services needs
in Nuclear Medicine. The Companys vision is to be a global partner of
choice in delivering innovative imaging and radiopharmaceutical
solutions especially in the field of Myocardial Perfusion imaging,
Infection Imaging, Oncology (Predict, Diagnose, Inform & Treat).
The Company also proposes to set up a centralised Radio pharmacy which
will further propel growth for the company and help us not only to
provide a strategic advantage over competitors but also to achieve the
leadership status in the Nuclear Medicine.
Other subsidiaries as at the year end are as follows:
Clinsys Holdings Inc., USA
Jubilant Pharma Pte. Limited, Singapore
Cadista Holdings Inc., USA
Jubilant Pharma NV, Belgium
HSL Holdings Inc., USA
Cadista Pharmaceuticals (UK) Limited, UK
Jubilant Biosys (Singapore) Pte. Ltd., Singapore
Jubilant Drug Development Pte. Ltd., Singapore
Jubilant Organosys (BVI) Ltd., British Virgin Islands
Jubilant Biosys (BVI) Ltd., British Virgin Islands
Jubilant Organosys International Pte. Limited, Singapore
Colvant Sciences Inc., USA
Draximage Limited, Cyprus
Draximage Limited, Ireland
Deprenyl Inc., USA
DSPI Inc., USA
Draximage LLC, USA
6963196 Canada Inc., Canada
6981364 Canada Inc., Canada
Draximage (UK) Limited, UK
DAHI Animal Health (UK) Limited, UK
DAHI LLC, USA
*Draxis Pharma LLC, USA
*Draxis Pharma Inc., USA
*Hitech Shiksha Limited
* became subsidiary during the year
Particulars required as per Section 212 of The Companies Act, 1956
In terms of the exemption granted by the Government of India vide its
letter dated April 22, 2010, from attaching the Directors Reports,
Balance Sheets, Profit & Loss Accounts and other particulars of the
aforesaid subsidiaries, the same have not been attached to this Report.
Fixed Deposits
No fresh deposits have been accepted by your Company during the year
from the public. As on March 31, 2010, your Company had no outstanding
Fixed Deposits. There were no overdue deposits. There were, however, 63
unclaimed deposits amounting to ` 9.63 lacs.
Auditors
K. N. Gutgutia & Co., Chartered Accountants, Auditors of the Company,
retire at the ensuing Annual General Meeting and offer themselves for
re-appointment. They have confirmed that their re-appointment, if made,
shall be within the limits laid down in Section 224 (1B) of the
Companies Act, 1956.
Directors
On November 3, 2009, Mr. S. N Singh retired as an Executive Director of
the Company. In his association for 28 years, he held different
positions in the Company and made remarkable contributions in its
evolution and growth.
In accordance with the Articles of Association of the Company, Mr.
Shyam S. Bhartia, Mr. Arabinda Ray and Mr. Surendra Singh retire by
rotation at the forthcoming Annual General Meeting and, being eligible,
offer themselves for re-appointment.
Dr. Inder Mohan Verma and Mr. Shardul S. Shroff were appointed as
Additional Directors and hold office upto the ensuing Annual General
Meeting.
Dr. Inder Mohan Verma, a professor in the Laboratory of Genetics and
American Cancer Society at Salk Institute, California, is one of the
worlds leading authorities on the development of viruses for gene
therapy vectors. He currently holds the Irwin and Joan Jacobs Chair in
Exemplary Science and is also the director of the Laboratory of
Genetics.
Mr. Shardul S. Shroff, a Corporate Attorney, has extensive experience
in areas of infrastructure, projects & project finance, privatisation
and disinvestment, mergers and acquisitions, joint ventures, banking
and finance, capital markets and commercial contracts. He is the
Managing Partner of reputed law firm, Amarchand & Mangaldas & Suresh A
Shroff & Co.
Notices under Section 257 of the Companies Act, 1956 have been received
from members, proposing Dr. Inder Mohan Vermas and Mr. Shardul S.
Shroffs candidatures as Directors.
Directors Responsibility Statement
In compliance of Section 217 (2AA) of the Companies Act, 1956, the
Directors of your Company, based on the representation received from
management, confirm:
that in the preparation of annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures.
that the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as on March 31, 2010 and of the profit or loss of the
Company for the year ended March 31, 2010.
that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
that the Directors had prepared the annual accounts on a going concern
basis.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo, required to be made pursuant
to Section 217(1)(e) of the Companies Act, 1956, read with Companies
[Disclosure of Particulars in the Report of Board of Directors] Rules,
1988, is given in Annexure B and forms part of this Report.
Employees
The particulars of employees, as required under Section 217(2A) of the
Companies Act 1956, read with the Companies (Particulars of Employees)
Rules, 1975, are given in Annexure C and form part of this Report.
Corporate Governance
A separate section on Corporate Governance is attached to this Report
as Annexure D. A certificate from the auditors of the Company regarding
compliance of conditions of Corporate Governance as stipulated under
clause 49 of the Listing Agreements with Stock Exchanges is enclosed as
Annexure E. A certificate from the Chairman & Managing Director that
all Board members and senior management personnel have affirmed
compliance with the Code of Conduct for the year ended March 31, 2010
is attached as Annexure F. CEO/CFO certificate is enclosed as Annexure
G.
Management Discussion & Analysis
Notes on Management Discussion & Analysis of the financial position of
the Company have been given separately and form part of this Report.
Corporate Sustainability Report
Your Company, being committed to address environmental issues and
discharge its corporate social responsibility, is publishing for the
eighth year in a row, Corporate Sustainability Report, duly audited by
Ernst & Young, and conforming to Global Reporting Initiative
Guidelines. The Report is being mailed to all our shareholders.
Risk Management
Your Company has several risk factors which could potentially impact
its business objectives, if not perceived and mitigated in a timely
manner. With an effective risk management framework in place, the
Company looks at these risks as challenges and opportunities to create
value for its stakeholders. With its established processes and
guidelines in place, combined with a strong oversight and monitoring
system at the Board and senior management levels, we believe we have a
robust risk management strategy in place.
Our senior management team sets the overall tone and risk culture of
the organisation through defined and communicated corporate values,
clearly assigned risk responsibilities, appropriately delegated
authority, and a set of processes and guidelines. We have laid down
procedures to inform Board members about the risk assessment and risk
minimisation procedures. As an organisation, we promote strong ethical
values and high levels of integrity in all our activities, which in
itself is a significant risk mitigator.
With our growth strategy in place, risk management holds a key to the
success of our journey of continued competitive sustainability in
attaining its desired business objective.
A detailed note on Risk Management is given as part of "Management
Discussion & Analysis".
Human Resource Management
As of March 31, 2010, we had 5,950 employees including those in our
Subsidiary companies.
As of March 31, 2010, all of our employees at our manufacturing plants
at Samlaya, Nira, Gajraula, Nanjangud, Spokane and Montreal, were
members of unions or had collective bargaining capability. We enjoy
cordial relations with our employees and there have been no instances
of major strikes, lockouts or other disruptive labor disputes.
We provide various benefits to our employees, such as subsidised
interest payment on housing loans, housing for certain of our employees
at our Gajraula and Nira plants, funding for schools for our employees
children, and healthcare coverage. We provide a provident fund for
employees retirement. We also provide a superannuation plan for
employees above a certain level. The wages and benefits of our
unionised employees are generally established by collective bargaining
agreements of three-year duration.
We have several initiatives to train and develop employees in building
skills and capabilities. The training activities are broadly grouped
under five areas with a focus on functional requirements or generic
skills enhancements: marketing skills, behavioral skills, information
technology, environmental awareness training, health and safety, and
manufacturing or technical skills enhancement training.
A detailed note on HR policies is given in the "Management Discussion &
Analysis".
Awards and Accolades
During the year 2009-10, the Company won the following:
NDTV Profit Business Leader of the Year 2009 Award as the Best
Pharmaceutical Company
PHD Chamber Annual Excellence Award 2009 - for Good Corporate Citizen
Corporate Excellence Award as the best pharma company from Amity
University
Industry Excellence Award 2009 from Institute of Engineers India,
Kolkata
Best Contract Research Manufacturing Organisation of the Year 2009
Award by Frost and Sullivan.
ET - IMEA 2009 Platinum Award in the Pharmaceutical category given to
API facility at Nanjangud by Frost & Sullivan.
Acharya PC Ray Award for Development of Indigenous Technology-4DMAP
Certificate of Appreciation for successful implementation of HIV/AIDS
programme from International Labour Organisation (ILO).
Certifications
Your Company follows several externally developed initiatives in the
economic, environmental and social areas. Facilities of the Company at
Gajraula, Nira, Savli and Nanjangud are ISO 9001:2000 certified for
Quality Management System. These manufacturing facilities are also ISO
14001 certified for Environmental Management System. For Occupational
Health and Safety at work place, the manufacturing facilities are also
ce rtified to OHSAS 18001.The locations of Gajraula, Nira and Savli are
certified for Integrated Management System (IMS).
Dosage Forms facility at Roorkee follows Good Manufacturing Practices
(GMP) as per World Health Organisation (WHO) specifications in
manufacturing and testing of pharmaceutical products and hence has been
granted WHO GMP certificate by the Drug Licensing and Controlling
Authority, Uttarakhand. The facility is also approved by UK-MHRA (UK-
Medicines and Healthcare Products Regulatory Agency) to export drugs in
European Market.
Nanjangud plant has got US FDA (United States Food & Drug
Administration) approval for exporting certain products in US market,
AFSSAPS (Agence Francaise de Securite Sanitaire des Produits de Sante
-The French Health Products Safety Agency) and GMP approval for certain
products and PMDA (Pharmaceuticals and Medical Devices Agency, Japan)
for exporting Risperidone HCl into the Japanese market.
Investor Services
In its endeavor to improve investor services, your Company has taken
the following initiatives:
With a view to communicating on a real time basis, your Company has
been e-mailing to the shareholders, quarterly financial results, press
releases and other similar communications soon after they are sent to
the stock exchanges.
For effective communication with shareholders, during the year, the
Company also started emailing Annual Report, Corporate Sustainability
Report and Notice of Annual General Meeting to shareholders on their
email IDs as available, in addition to statutory physical mailing.
The Investor Section on the website of the Company www.jubl.com has
been revamped and enlarged and is more user friendly now.
A dedicated e-mail ID viz. [email protected] for sending
communications to the Company Secretary has been made effective.
Members may lodge their complaints or suggestions on this e-mail as
well.
The Company has been mailing feedback forms to investors, annually, so
as to bring about improvement in service level based on responses
received. The Company has also placed an online Investor Feedback Form
on its website www.jubl.com under the sub-head "Forms" under the head
"Investors". This form can be submitted electronically.
Acknowledgments
Your Directors acknowledge with gratitude the co-operation and
assistance received from the Central and State Government Authorities.
Your Directors thank the Shareholders, Private Equity Investors,
Financial Institutions, Banks/other lenders, Depositors, Customers,
Vendors and other business associates for their confidence in the
Company and its management and look forward to their continued support.
The Board wishes to place on record its appreciation for the dedication
and commitment of your Companys employees at all levels, which has
continued to be our major strength.
For and on behalf of the Board
Shyam S. Bhartia
Chairman & Managing Director
Place : Noida
Date : May 10, 2010