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Notes to Accounts of Jubilant Life Sciences Ltd.

Mar 31, 2016

1. Corporate information

Jubilant Life Sciences Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its shares are listed on BSE Limited and National Stock Exchange of India. The Company is a global pharmaceutical and life sciences player engaged in manufacture and supply of Generics [including Active Pharmaceutical Ingredients (APIs), Solid Dosage Formulations (Refer note 37) and Indian Branded Pharmaceuticals] and supply of Life Science Ingredients (including Specialty Intermediates, Nutritional Products and Life Science Chemicals). The Company''s strength lies in its unique offerings of Pharmaceuticals and Life Sciences products and services across the value chain. It is well recognised as a ''Partner of Choice'' by leading pharmaceuticals and life sciences companies globally.

2. Commitments as at year end:

a) Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (Net of advances) Rs. 140.68 million (Previous year Rs. 147.89 million).

b) Other Commitments:

I) Export obligation under Advance License Scheme/DFIA scheme on duty free import of specific raw materials, remaining outstanding is Rs. 5,606.88 million (Previous year Rs. 3,213.44 million).

II) Outstanding export obligation amounting to Rs. 5.61 million (Previous year Rs. 1,202.78 million), against equivalent supplier advance received from a step down wholly owned subsidiary.

III) For lease commitments refer note 41.

32. Contingent liabilities to the extent not provided for: a. Guarantees:

i. The Company has given following corporate guarantee on behalf of its subsidiaries to secure financial facilities :

Total effective guarantee as on 31 March 2016 is Rs. Nil (Previous year Rs. Nil)

ii. Outstanding guarantees furnished by banks on behalf of the Company are Rs. 406.01 million (Previous year Rs. 433.63 million).

B. Claims against Company, disputed by the Company, not acknowledged as debt:

Excluding claims in respect of businesses transferred to Jubilant Generics Limited (Refer note 37) and to Jubilant Industries Limited in accordance with the demerger scheme approved by the Hon''ble Allahabad High Court, though the litigations may be continuing in the name of the Company.

Future cash outflows in respect of the above matters as well as for matters listed under 32(C) below are determinable only on receipt of judgments/decisions pending at various stages/forums.

C. Other contingent liabilities as at 31 march 2016:

i. Liability in respect of bills discounted with banks is Rs. 207.75 million (Previous year Rs. 447.01 million).

ii. The Company''s writ petition against the levy of transport fee by the State of Maharashtra on consumption of rectified spirit and molasses within Nira factory has been allowed by the Hon''ble Bombay High Court with consequential refund. The Company has filed a refund claim for an amount of Rs. 2.51 million (Previous year Rs. 2.51 million) deposited during the period when the dispute was pending before the High Court. The total amount of disputed transport fee is Rs. 227.20 million (Previous year Rs. 209.13 million). The State of Maharashtra has filed a Special Leave Petition in the Supreme Court and has sought a stay on the operation of the High Court order.

iii. The Company has challenged before the Hon''ble Allahabad High Court, the increase in denaturing fee by the State of Uttar Pradesh w.e.f 1 April 2004 on denaturing of rectified spirit in the Gajraula factory and the writ petition has been admitted by the court. The Company has deposited Rs. 26.45 million (Previous year Rs. 25.55 million) under protest which is shown as deposits.

iv. Zila Panchayat at J.P. Nagar (in respect of the Company''s Gajraula plant) served a notice demanding a compensation of Rs. 277.40 million (Previous year Rs. 277.40 million) allegedly for, percolation of poisonous water stored in lagoons and flowing through the land of Zila Panchayat resulting in loss of crops and cattle of the farmers and for putting poisonous fly ash on national highway which caused loss to the health and damages to eyes and skin of people.

District Magistrate issued a recovery certificate along with 10% collection charges inflating the demand to Rs. 305.14 million (Previous year Rs. 305.14 million). In the opinion of the Company, the Zila Panchayat has no jurisdiction in raising this demand. The demand was challenged in Hon''ble Allahabad High Court and the court stayed the demand till further orders.

v. The Company has challenged, before the Hon''ble Allahabad High Court, the levy of license fees of Rs. 2.87 million (Previous year Rs. 2.87 million) by State of Uttar Pradesh, for grant of PD-2 license for manufacture of ethyl alcohol for industrial use. The writ petition has been admitted and is being listed for final hearing. Though the amount has been deposited and shown as such, no provision against this has been made as the issue is covered by the earlier favorable judgment of the Hon''ble Supreme Court of India.

vi. The State of Uttar Pradesh (UP) has imposed levy on import of denatured spirit into the State of Uttar Pradesh (UP). The Company has imported denatured spirit into the State of Uttar Pradesh and has challenged levy amounting to Rs. 90.00 million (Previous year Rs. 90.00 million) before Hon''ble Allahabad High Court. The writ petition has been allowed by the High Court in favour of the Company. The State of Uttar Pradesh filed a Special Leave Petition (SLP) with Hon''ble Supreme Court. The SLP has been admitted but the Hon''ble Supreme Court has declined the request of the State of Uttar Pradesh (UP) to stay the operation of High Court Order. The Hon''ble Supreme court has ordered to list the appeal after the decision in Civil Appeal No. 151 of 2007.

vii. The Hon''ble Supreme Court has quashed the levy of license fee by State of Uttar Pradesh on captive consumption of denatured spirit in the Gajraula factory, and has ordered the refund of the fee paid during the period of dispute subject to condition that the amount has not been collected from the Company''s customers. Further the Court has directed the State to investigate whether the Company has collected the disputed fee from its customers to the extent bank guarantees were furnished.

The Company is entitled to a refund of Rs. 84.06 million (Previous year Rs. 84.06 million) as the amount paid during the period of dispute or secured by bank guarantees was not collected from its customers. Accordingly the Company has approached the State of Uttar Pradesh for the refund of the said amount. The amount paid has been shown as deposit.

viii. A group of villagers from Nira in Pune District, State of Maharashtra had filled a Public Interest Litigation against the Company on account of ground water contamination against which National Green Tribunal (NGT), Pune Bench passed an order on 16 May 2014. In this order, NGT has instructed the Company to comply with the recommendations of National Environmental Engineering Research Institute (NEERI), Maharashtra Pollution Control Board (MPCB) and Central Ground Water Board (CGWB) to ensure zero discharge and remediation to contaminated ground water. NGT in its order has also instructed the district authority to form a committee to conduct an enquiry around 2 Km radius of Nira unit to ascertain extent of loss and recommend the loss if any, caused to agriculturist due to effluent discharge to Nira river and asked Company to deposit adhoc amount of Rs. 2.50 million (Previous year Rs. 2.50 million) with the Collector of Pune. Company deposited the above amount with the Collector of Pune. In its report, the Committee has found that no loss was shown to have been caused to fertility of the land or the agriculturists. Company''s compliances are being regularly monitored by MPCB and status is being informed to NGT. NEERI has submitted its recommendations and NGT has asked few clarifications on the report from NEERI. Meanwhile, company has submitted its comments on the NEERI report and also made suggestions for quicker ground water aquifer remediation. The matter is pending before NGT.

ix. Uttar Pradesh Pollution Control Board served notices upon 3 units of Company at Gajraula to appear and present their submissions in the National Green Tribunal, New Delhi (NGT) in a pending matter (M.C. Mehta vs. Union of India & Ors.) regarding pollution of Ganga and its tributaries. NGT directed all the parties to give their compliance status on Zero Liquid Discharge (ZLD). All 3 units of Company have duly filed submissions that they are compliant of the terms of consent/ ZLD. Additionally, the Company''s Distillery Unit filed a Miscellaneous Application in the matter seeking review of some of the directions of Central Pollution Control Board based on their technical and practical limitations and also requested for considering alternate technologies that are environmentally sustainable options for ZLD. The matter is pending before NGT.

x. Additionally, the Company is involved in other disputes, lawsuits, claims, governmental and/ or regulatory inspections, inquiries, investigations and proceedings, including commercial matters that arise from time to time in the ordinary course of business. The Company believes that none of these matters, either individually or in aggregate, are expected to have any material adverse effect on its financial statements.

3. During the current year, the Hon''ble Allahabad High Court vide its order dated 17 August 2015 ("Order") sanctioned the Scheme of Amalgamation, Compromise and Arrangements ("the Scheme") between two subsidiaries of the Company viz. Jubilant First Trust Healthcare Limited ("JFTHL") and First Trust Medicare Private Limited ("FTMPL"). The Scheme became effective on 4 September 2015 on filing of the certified true copy of the Order with the Registrar of Companies. As per the provisions of the Scheme, FTMPL merged into JFTHL and the shareholders of FTMPL received 6.5 fully paid up equity shares of the JFTHL against each fully paid up share of FTMPL with effect from the appointed date, i.e. 1 April 2014. Subsequently, as per the provisions of the Scheme, equity share capital of JFTHL amounting to Rs. 135.63 million (i.e. 13,563,171 equity shares of face value Rs. 10 each) held by the Company along with the securities premium amounting to Rs. 540.49 million was cancelled with effect from the appointed date, i.e. 1 March 2015. The consequent impact on the value of investment has been recorded in the books of account of the Company during the current year.

4. Loans to subsidiary companies, including interest accrued thereon pursuant to information required to be disclosed under clause 32 of listing agreement [Refer note 52(33) and 52(34)]:

5. micro, small and medium enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31 March 2016. The information as required to be disclosed in relation to Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. During the year ended 31 March 2015, the Company completed the Pharma consolidation under its wholly owned subsidiary Jubilant Pharma Limited Singapore (JPL). Under Pharma consolidation:

(i) the Company transferred, with effect from 1 July 2014, its Active Pharmaceutical Ingredients and Dosage Forms business to Jubilant Generics Limited (JGL), a wholly owned Subsidiary of JPL, by way of a slump sale on going concern basis for a lump sum consideration of Rs. 9,293.00 million (net of debts of Rs. 3,923.00 million) and the profit on sale of such businesses amounting to Rs. 2,754.28 million was classified under exceptional items. The Company reversed net Deferred Tax Liabilities amounting to Rs. 1,642.96 million relating to the sold businesses in its books of account. A portion of the consideration, to the extent discharged, was paid directly to lenders of the Company.

(ii) the Company transferred shares held by it in Jubilant Pharma Holding Inc, USA and Jubilant Pharma NV, Belgium to JGL, for a consideration of Rs. 2,158.00 million (net of debts of Rs. 1,897.00 million) and the profit on sale of such shares amounting to Rs. 1,650.77 million was classified under exceptional items. A portion of the consideration was paid directly to lenders of the Company.

Accordingly, the Active Pharmaceutical Ingredients (API) and Dosage Forms business of the Company was treated as discontinuing operations for the purpose of these financial reporting for the year ended 31 March 2015. The required relevant information for these discontinued operations which had been derived on the basis of assumptions used and available information is as below:

7. During the year ended 31 March 2015, pursuant to the Companies Act, 2013 (''the Act'') being effective from 1 April 2014, the Company revised depreciation rates on fixed assets as per the useful life specified in Part ''C'' of Schedule II of the Act. As a result of this change, the depreciation charge for the year ended 31 March 2015 was lower by Rs. 243.52 million. Further, based on the transitional provision provided in Note 7(b) of the Schedule II an amount of Rs. 85.41 million (after adjustment for related tax impact of Rs. 45.21 million) was debited to opening balance of retained earnings in respect of the fixed assets where life had expired as per the said Schedule as on 31 March 2014.

8. employee stock Option scheme

The Company has two stock option plans in place namely:

– Jubilant Employees Stock Option Plan, 2005 ("Plan 2005")

– JLL Employees Stock Option Plan, 2011 ("Plan 2011")

The Nomination, Remuneration and Compensation Committee (''Committee'') of the Board of Directors which comprises a majority of Independent Directors is responsible for administration and supervision of the Stock Option Plans.

Under Plan 2005, as amended, and under Plan 2011, up to 1,100,000 Stock Options and up to 5,352,000 Stock Options, respectively, can be issued to eligible directors (other than promoter directors) and other specified categories of employees of the Company/ subsidiaries. Options are to be granted at market price. As per the SEBI guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Under Plan 2005, each option, upon vesting, shall entitle the holder to acquire five equity shares of Rs. 1 each. Options granted up to 28 August 2009 will vest entirely within two years from the grant date, with certain lock-in provisions. Options granted after 28 August 2009 will vest gradually over a period of 5 years from the grant date, without any lock-in provisions.

Under Plan 2011, each option, upon vesting, shall entitle the holder to acquire one equity share of Rs. 1 each. Options granted will vest gradually over a period of 3 years from the grant date. Vesting of Options is a function of achievement of performance criteria or any other criteria, as specified by the Committee and communicated in the grant letter.

In 2008-09, members approved constitution of Jubilant Employees Welfare Trust (''Trust'') for the purpose of acquisition of equity shares of the Company from the Secondary market or subscription of shares from the Company, to hold the shares and to allocate/transfer these shares to eligible employees of the Company/subsidiaries from time to time on the terms and conditions specified under respective Plans. The members authorised grant of loan(s) from time to time to the Trust in one or more tranches, up to Rs. 1,000 million either free of interest or at interest agreed between the Board and the Trust. The outstanding loan to the Trust as at 31 March 2016 is Rs. 200.99 million (Previous year Rs. 410.39 million).

Up to 31 March 2016, the Trust has purchased 6,363,506 equity shares of the Company from the open market, out of interest free loan provided by the Company, of which 2,458,980 (Previous year 1,530,010) shares were transferred to the employees on exercise of Options. The Trust has also been issued 192,086 (Previous year 192,086) equity shares of Jubilant Industries Limited in accordance with the Scheme of Amalgamation and Demerger amongst the Company, Jubilant Industries Limited and others.

The movement in the stock options under both the Plans, during the year, is set out below:

9. During the year ended 31 March 2015, SEBI vide notification no. LAD-NRO/GN/2014-15/16/1729 dated 28 October 2014, issued Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (''new guidelines'') repealing Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. According to the new guidelines, any company implementing any of the share based schemes shall follow the requirements of the ''Guidance Note on Accounting for employee share-based Payments'' (Guidance Note) or Accounting Standards as may be prescribed by the ICAI from time to time, including the disclosure requirements prescribed therein. The Jubilant Employee Welfare Trust (Trust) primarily holds equity shares of the Company which are to be transferred to employees of the company and its subsidiaries upon exercise of their stock options under various Employee Stock Options Plans (ESOP) in force. As a consequence, since shares held by the Trust are purchased from market instead of direct issuance by the Company, the consolidation thereof, in these financial statements, was discontinued and consequential adjustments were made in the financial statements.

10. leases:

a) The Company''s significant operating lease arrangements are in respect of premises (residential, offices, godown etc.). These leasing arrangements, which are cancellable, range between 11 months and 3 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses. Rental expenses recognized under such leases amounting to Rs. 93.26 million (Previous year Rs. 93.24 million) has been included under rent expense in note 29.

b) The Company has operating lease arrangements in respect of vehicles which are cancellable, range between 2 years and 5 years. The aggregate lease rentals payable are charged as expenses. Rental expenses recognized under such leases amounting to Rs. 4.65 million (Previous year Rs. 1.79 million) has been included under vehicle running and maintenance expense in note 29.

c) The Company has significant operating lease arrangements which are non-cancellable for a fixed period of 25 years. The lease rental is subject to escalation whereby the Lessor is entitled to increase the lease rental by 10% of the average lease rental of preceding three years blocked period.

The schedule of future minimum lease rental payments in respect of non-cancellable operating leases is set out below:

d) Assets acquired under finance lease:

The Company has taken vehicles under finance lease. Future minimum lease payments and their present values under finance leases are as follows:

11. a) In line with the applicable Accounting Standards, during the year, finance costs amounting to Rs. Nil (Previous year Rs. 22.13 million) and expenditure incurred on start up and commissioning of the project and/ or substantial expansion and development, including the expenditure incurred on trial runs (Net of trial run receipts, if any) up to the date of capitalization amounting to Rs. 62.89 million (Previous year Rs. 11.51 million) have been capitalised.

b) Interest expenses includes Rs. 17.18 million (Previous year Rs. Nil) towards interest relating to Income-tax payments.

12. During the year ended 31 March 2015, the Company had identified and written off idle assets of net book value (adjusted for net realizable value) amounting to Rs. 552.01 million on usability assessment, and the same was reported under exceptional items. The realisable value of the same has been included under other current assets.

13. Consequent to re-evaluation of certain tax provisions pertaining to earlier years, tax benefit (including deferred tax credit) amounting to Rs. 220.77 million has been recognised during the current year.

14. Distribution tax on proposed dividend includes :

i. Distribution tax on proposed dividend for the year ended 31 March 2016 amounting to Rs. 97.28 million.

ii. Reversal of distribution tax provided on proposed dividend for the year ended 31 March 2015 amounting to Rs. 60.21 million on account of dividend received from subsidiary companies during the year ended 31 March 2016.

15. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Para 46A of Accounting Standard 11 (AS-11) – "The Effects of Changes in Foreign Exchange Rates" notified by the Ministry of Corporate Affairs on 29 December 2011. Accordingly during year ended 31 March 2016, the Company has capitalised exchange difference amounting to Rs. 136.03 million (Previous year Rs. 98.54 million) to the cost of fixed assets and Rs. 152.31 million (Previous year Rs. 117.11 million) to foreign currency monetary item translation difference account (FCMITDA). During the year Rs. 251.90 million (Previous year Rs. 447.52 million) has been amortised to the Statement of Profit and Loss in terms of the said notification and balance of Rs. 50.73 million (Previous year Rs. 150.32 million) is carried in Balance Sheet as on 31 March 2016.

16. Hedging and derivatives instruments:

(i) The Company uses various derivative instruments such as foreign exchange forward contracts, currency and interest rate swaps to selectively hedge its exposures to movement in foreign exchange rates and interest rates. These derivatives instruments are not used for speculative or trading purposes.

(ii) foreign currency exposure not hedged by derivative instrument:

The above foreign currency exposure excludes impact of forward contracts taken for hedging currency risk of highly probable forecasted transaction as per note (i) above maturing during the credit period of receivable/payables as per note (ii). For foreign currency exposure in relation to currency swap (including currency and interest rate swaps)-refer note (i) above.

(iii) Mark to market loss amounting to Rs. 4.02 million (Previous year gain amounting to Rs. 167.60 million) in respect of currency and interest rate swaps and forward contracts have been charged/credited to the Statement of Profit and Loss. The accumulated mark to market losses on currency and interest rate swaps and forward contract outstanding as at 31 March 2016 is Rs. 4.02 million (Previous year Rs. Nil).

(iv) During the year ended 31 March 2015, the Company discontinued hedge accounting applied in respect of certain foreign currency transactions including forward contracts under Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" and the financial impact of the same was insignificant on the profit for the year.

17. employee benefits have been calculated as under:

(a) Defined Contribution plans

a. Provident fund*

b. Superannuation fund

(B) Defined Benefit plans

i. Gratuity

In accordance with Accounting Standard 15 (AS-15) "Employee Benefits (Revised 2005)", an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 7.90% p.a. (Previous year 7.74% p.a.) which is determined by reference to market yield at the Balance Sheet date on Government bonds. The retirement age has been considered at 58 years (Previous year 58 years) and mortality table is as per IALM (2006-08) (Previous year IALM (2006-08)).

The estimates of future salary increases, considered in actuarial valuation is 10% p.a. for first three years and 6% p.a. thereafter (Previous year 10% p.a. for first three years and 6% p.a. thereafter), taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The plans assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme for certain employees of the Company. The details of investments maintained by Life Insurance Corporation are not available with the Company, hence not disclosed. The expected rate of return assumed on plan assets is 9.00% p.a. (Previous year 9.00% p.a.).

ii. provident fund

The guidance on implementation of AS-15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving provident funds, which require interest shortfall to be compensated, are to be considered as defined benefit plans. The actuary has worked out a liability of Rs. Nil (Previous year Rs. Nil) likely to arise towards interest guarantee. The trust is managing common corpus of some of the group companies. The total liability of Rs. Nil (Previous year Rs. Nil) as worked out by the actuary has been allocated to each entity based on the corpus value of each entity as on 31 March 2016. Accordingly, liability of Rs. Nil (Previous year Rs. Nil) has been allocated to Company and Rs. Nil (Previous year Rs. Nil) has been charged to Statement of Profit and Loss during the year. The Company has contributed Rs. 64.62 million (Previous year Rs. 79.73 million) to Provident Fund for the year.

18. segment Reporting:

i) Based on the guiding principles given in accounting standard 17 (as-17) on "segment Reporting", the Company''s primary Business segments were organised around customers on industry and product lines as under:

a. pharmaceuticals : Generics comprising Indian Branded Pharmaceuticals (Previous year : Active Pharmaceuticals Ingredients (APIs), Solid Dosage Formulations and Indian Branded Pharmaceuticals)(Refer note 37).

b. life sciences ingredients : i) Specialty Intermediates ii) Life Sciences Chemicals iii) Nutritional Products. ii) in respect of secondary segment information, the Company has identified its geographical segments as:

(i) Within India (ii) Outside India.

iii) inter segment transfer pricing

Inter segment transfer prices are based on market prices.

iv) the financial information about the primary business segments is presented in the table given below:

19. Related party Disclosures

1. Related parties where control exists:

a) subsidiaries including step-down subsidiaries:

Jubilant Pharma Limited, Draximage Limited, Cyprus, Draximage Limited, Ireland, Draximage LLC, Jubilant DraxImage (USA) Inc., Deprenyl Inc., USA, Jubilant DraxImage Inc., 6963196 Canada Inc., 6981364 Canada Inc., DAHI Animal Health (UK) Limited, Draximage (UK) Limited, Jubilant Pharma Holdings Inc., Jubilant Clinsys Inc., Cadista Holdings Inc., Jubilant Cadista Pharmaceuticals Inc., Jubilant Life Sciences International Pte. Limited, HSL Holdings Inc., Jubilant HollisterStier LLC, Jubilant Life Sciences (Shanghai) Limited, Jubilant Pharma NV, Jubilant Pharmaceuticals NV, PSI Supply NV, Jubilant Life Sciences (USA) Inc., Jubilant Life Sciences (BVI) Limited, Jubilant Biosys (BVI) Limited, Jubilant Biosys (Singapore) Pte. Limited, Jubilant Biosys Limited, Jubilant Discovery Services Inc., Jubilant Drug Development Pte. Limited, Jubilant Chemsys Limited, Jubilant Clinsys Limited, Jubilant Infrastructure Limited, Jubilant First Trust Healthcare Limited, Jubilant Innovation (BVI) Limited, Jubilant Innovation Pte. Limited, Jubilant DraxImage Limited, Jubilant Innovation (India) Limited, Jubilant Innovation (USA) Inc., Jubilant HollisterStier Inc., Draxis Pharma LLC, Jubilant Generics Inc. (upto 22 December 2014), Jubilant Life Sciences (Switzerland) AG, First Trust Medicare Private Limited (Refer note 33), Jubilant Drug Discovery & Development Services Inc., Vanthys Pharmaceutical Development Private Limited, Jubilant Life Sciences NV, Jubilant Generics Limited, Jubilant Pharma Trading Inc., Drug Discovery and Development Solutions Limited.

b) Other entities:

Jubilant HollisterStier General Partnership Canada, Draximage General Partnership Canada (controlled through subsidiaries/step down subsidiaries).

2. Key management personnel (Kmp):

Mr. Shyam S. Bhartia (up to 25 March 2015), Mr. Hari S. Bhartia, Mr. R Sankaraiah, Mr. Shyamsundar Bang, Mr. Rajiv Shah (w.e.f. 16 February 2015), Mr. Lalit Jain (up to 31 January 2015).

3. Other Related parties with whom transactions have taken place during the year:

a) enterprise over which certain key management personnel have significant influence:

Jubilant Enpro Private Limited, Jubilant Oil & Gas Private Limited, Jubilant FoodWorks Limited, Tower Promoters Private Limited, B&M Hot Breads Private Limited, Jubilant Industries Limited, Jubilant Agri and Consumer Products Limited, Jubilant MotorWorks Private Limited, Jubilant Fresh Private Limited, Priority Vendor Technologies Private Limited (Enterprise over which relatives of KMP have significant influence).

b) Others:

Vam Employees Provident Fund Trust, Jubilant Employee Welfare Trust, Jubilant Bhartia Foundation, Vam Officers Superannuation Fund


Mar 31, 2015

1. Corporate information

Jubilant Life Sciences Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange of India. The Company is a global pharmaceutical and life sciences player engaged in manufacture and supply of Generics [including Active Pharmaceutical Ingredients (APIs) and Solid Dosage Formulations (Refer note 38)] and Life Science Ingredients (including Advance Intermediates and Specialty Ingredients, Nutritional Products and Life Science Chemicals). The Company's strength lies in its unique offerings of Pharmaceuticals and Life Sciences products and services across the value chain. It is well recognised as a 'Partner of Choice' by leading pharmaceuticals and life sciences companies globally.

2. Paid up capital includes, 501,364 (Previous year 501,364), equity shares of Rs. 1 each allotted and issued pursuant to the Scheme of Amalgamation and Demerger, to the shareholders of erstwhile Pace Marketing Specialities Limited for consideration other than cash during the year ended 31 March 2011.

3. The Company has only one class of shares referred to as equity shares having par value of Rs. 1 each. Holder of each equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4. a) 1 14,835 (Previous year 1 14,835) equity shares of Rs. 1 each allotted on exercise of the vested stock options in accordance with the terms of exercise under the "Jubilant Employees Stock Option Plan, 2005".

b) Under the Jubilant Employees Stock Option 2005 Plan, as at 31 March 2015- 105,495 (Previous year 132,684) outstanding options are convertible into 527,475 (Previous year 663,420) shares. (Refer note 42).

c) Under the Jubilant Employees Stock Option 2011 Plan, as at 31 March 2015- 1,112,306 (Previous year 1,428,939) outstanding options are convertible into 1,1 12,306 (Previous year 1,428,939) shares. (Refer note 42).

5. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

6. Indian rupee loans amounting to Rs. 10,181.53 million (Previous year Rs. 9,744.48 million) from Axis Bank Limited, IFCI Limited, IndusInd Bank Limited, Yes Bank Limited (Previous year from Corporation Bank, Central Bank of India, Indian Bank, Axis Bank Limited) and External commercial borrowings amounting to Rs. 2,968.75 million (Previous year Rs. 2,995.50 million) from DBS Bank Limited, Singapore and foreign currency loans amounting to Rs. 2,187.50 million (Previous year Rs. 2,695.95 million) from Export Import Bank of India are secured by a first pari-passu charge created/ to be created amongst the lenders by way of:

a. Mortgage of the immovable fixed assets both present and future situated at Bhartiagram, District Amroha, Uttar Pradesh and immovable fixed assets situated at Village Samlaya, Taluka Savli, District Vadodara, Gujarat, and

b. Hypothecation on the entire movable fixed assets, both present and future of the Company.

Indian rupee loan from Axis Bank Limited is further secured by exclusive first charge created by way of hypothecation on receivable of USD 52.50 million (rupee equivalent converted at closing rate Rs. 3,281.25 million) (Previous year Rs. Nil) from Jubilant Generics Limited arising on account of Business Transfer Agreement (Refer note 38).

7. Indian rupee loan amounting to Rs. 3,000.00 million (Previous year Rs. Nil) from Housing Development Finance Corporation Limited is secured by first mortgage by way of deposit of original title deeds of specified land and buildings situated at Noida, Greater Noida, Ambernath and also at Bharuch owned by one of the subsidiaries of the Company.

8. Foreign currency loan amounting to Rs. Nil (Previous year Rs. 5,691.45 million) from Housing Development Finance Corporation Limited was secured by first mortgage by way of deposit of original title deeds of specified land and buildings situated at Noida, Greater Noida, Nanjangud, Nira, Roorkee, Ambernath and also at Bharuch owned by one of the subsidiaries of the Company.

9. Indian rupee loan amounting to Rs. 1,800.00 million (Previous year Rs. Nil) from Yes Bank Limited is repayable in twelve equal quarterly instalments commencing from June 2017.

10. Indian rupee loan amounting to Rs. 3,000.00 million (Previous year Rs. Nil) from IFCI Limited is repayable in twelve equal quarterly instalments commencing from May 2017.

11. Indian rupee loan amounting to Rs. 3,000.00 million (Previous year Rs. Nil) from Housing Development Finance Corporation Limited is repayable in eight equal half yearly instalments commencing from March 2017.

12. Indian rupee loan amounting to Rs. 3,500.00 million (Previous year Rs. Nil) from Axis Bank Limited is repayable in fourteen half yearly instalments commencing from September 2015.

13 Indian rupee loan amounting to Rs. 1,881.53 million (Previous year Rs. Nil) from IndusInd Bank Limited is repayable in twenty quarterly instalments commencing from June 2015.

14. External commercial borrowing amounting to Rs. 2,968.75 million (Previous year Rs. 2,995.50 million) from DBS Bank Limited, Singapore is repayable in three yearly instalments from December 2015.

15. Foreign currency loan amounting to Rs. 2,187.50 million (Previous year Rs. 2,695.95 million) from Export Import Bank of India is repayable in two yearly instalments from May 2015.

16. Indian rupee loans amounting to Rs. 9,744.48 million from Corporation Bank, Central Bank of India, Indian Bank, Axis Bank Limited and foreign currency loan amounting to Rs. 5,691.45 million from Housing Development Finance Corporation Limited outstanding at the end of previous year have been fully repaid during the current year.

17. Loans from subsidiaries are repayable at end of five years from the date of respective disbursement.

18. Finance lease obligations are secured by hypothecation of specific assets taken under such lease. The same are repayable within five years.

18. The term loans carry floating interest rate calculated in accordance with the terms of the arrangement which is a specified benchmark rate (reset at periodic intervals), adjusted for agreed spread. During the year ended 31 March 2015, the interest rate on Indian currency loans and foreign currency loans range from 9.50% to 13.25% per annum (Previous year 9.50% to 12.75% per annum) and 3.50% to 4.50% per annum (Previous year 3.25% to 4.95% per annum), respectively.

19. Working capital facilities (including cash credit) sanctioned by consortium of banks and notified financial institutions comprising of ICICI Bank Limited, Corporation Bank, Punjab National Bank, State Bank of India, The Hongkong and Shanghai Banking Corporation Limited, ING Vysya Bank Limited, Central Bank of India, Yes Bank Limited, DBS Bank Limited and Export Import Bank of India, are secured by a first charge by way of hypothecation, ranking pari passu inter- se banks, of the entire book debts and receivables and inventories both present and future, of the Company wherever the same may be or be held. During the previous year, the working capital sanctioned limits also included commercial paper programme of Rs. 3,000.00 million as sublimit carved out from the funded limits, against which the maximum balance outstanding at any time during the previous year was Rs. Nil and balance outstanding as at end of previous year was Rs. Nil. Other working capital loans are repayable as per terms of agreement within one year.

20. Short term loans are availed in Indian rupees and in foreign currency which carry floating interest rate calculated in accordance with the terms of the arrangement which is a specified benchmark rate (reset at periodic intervals), adjusted for agreed spread. During the year ended 31 March 2015, the interest rate on Indian currency loans and foreign currency loans range from 9.50% to 14.00% per annum (Previous year 9.50% to 13.85% per annum) and 0.50% to 4.50% per annum (Previous year 0.25% to 4.75% per annum), respectively.

The composition of assets/ fixed assets and current assets as mentioned above are defined in detail in the respective financing/ credit arrangements.

21. Commitments as at year end:

a) Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (Net of advances) Rs. 147.89 million (Previous year Rs. 239.89 million).

b) Other Commitments:

I) Export obligation under Advance License Scheme/DFIA scheme on duty free import of specific raw materials, remaining outstanding is Rs. 3,213.44 million (Previous year Rs. 6,125.53 million).

II) Outstanding export obligation amounting to Rs. 1,202.78 million (Previous year Rs. 2,663.57 million), against equivalent supplier advance received from a step down wholly owned subsidiary.

III) For lease commitments refer note 44.

22. Contingent liabilities to the extent not provided for:

A. Guarantees:

i. The Company has given following corporate guarantee on behalf of its subsidiaries to secure financial facilities :

Particulars Bank As at As at 31 March 31 March 2015 2014

Jubilant HollisterStier Inc. ICICI Bank

Outstanding as at the beginning of year Canada USD 4.20 USD 20.93 million million Provided during the year - -

Settled/expired during the year USD 4.20 USD 16.73 million million

Outstanding as at the end of year - USD 4.20 million

Jubilant Life Sciences International Pte. Limited ICICI Bank

Outstanding as at the beginning of year Limited - SGD 22.00 million Singapore

Provided during the year - -

Settled/expired during the year - SGD 22.00 million Outstanding as at the end of year - -

Total effective guarantee as on 31 March 2015 is Rs. Nil (Previous year Rs. 251.78 million)

ii. Outstanding guarantees furnished by banks on behalf of the Company are Rs. 433.63 million (Previous year Rs. 518.27 million).

B. Claims against Company, disputed by the Company, not acknowledged as debt:

(Rs. in million)

Particulars As at As at 31 March 31 March 2015 2014

Central Excise 1,138.57 1,093.17

Customs 18.61 11.49

Sales Tax 56.47 51.59

Income Tax 505.77 563.52

Service Tax 7.48 222.68

Others 332.16 27.19

Excluding claims in respect of businesses transferred in current year to Jubilant Generics Limited (Refer note 38) and claims in respect of business transferred in earlier year to Jubilant Industries Limited in accordance with the demerger scheme approved by the Hon'ble Allahabad High Court, though the litigations may be continuing in the name of the Company.

Future cash outflows in respect of the above matters as well as for matters listed under 34(C) below are determinable only on receipt of judgments/decisions pending at various stages/forums.

C. Other contingent liabilities as at 31 March 2015:

i. Liability in respect of bills discounted with banks is Rs. 447.01 million (Previous year Rs. 699.85 million).

ii. The Company's writ petition against the levy of transport fee by the State of Maharashtra on consumption of rectified spirit and molasses within Nira factory has been allowed by the Hon'ble Bombay High Court with consequential refund. The Company has filed a refund claim for an amount of Rs. 2.51 million (Previous year Rs. 2.51 million) deposited during the period when the dispute was pending before the High Court. The total amount of disputed transport fee is Rs. 209.13 million (Previous year Rs. 193.06 million). The State of Maharashtra has filed a special leave petition in the Supreme Court and has sought a stay on the operation of the High Court order.

iii. The Company has challenged before the Hon'ble Allahabad High Court, the increase in denaturing fee by the State of Uttar Pradesh w.e.f 1 April 2004 on denaturing of rectified spirit in the Gajraula factory and the writ petition has been admitted by the court. The Company has deposited Rs. 25.55 million (Previous year Rs. 24.45 million) under protest which is shown as deposits.

iv. Zila Panchayat at J.P. Nagar (in respect of the Company's Gajraula plant) served a notice demanding a compensation of Rs. 277.40 million (Previous year Rs. 277.40 million) allegedly for, percolation of poisonous water stored in lagoons and flowing through the land of Zila Panchayat resulting in loss of crops and cattle of the farmers and for putting poisonous fly ash on national highway which caused loss to the health and damages to eyes and skin of people.

District Magistrate issued a recovery certificate along with 10% collection charges inflating the demand to Rs. 305.14 million (Previous year Rs. 305.14 million). In the opinion of the Company, the Zila Panchayat has no jurisdiction in raising this demand. The demand was challenged in Hon'ble Allahabad High Court and the court stayed the demand till further orders.

v. The Company has challenged, before the Hon'ble Allahabad High Court, the levy of license fees of Rs. 2.87 million (Previous year Rs. 2.87 million) by State of Uttar Pradesh, for grant of PD-2 license for manufacture of ethyl alcohol for industrial use. The writ petition has been admitted and is being listed for final hearing. Though the amount has been deposited and shown as such, no provision against this has been made as the issue is covered by the earlier favorable judgment of the Hon'ble Supreme Court of India.

vi. The State of Uttar Pradesh (UP) has imposed levy on import of denatured spirit into the State of Uttar Pradesh (UP). The Company has imported denatured spirit into the State of Uttar Pradesh and has challenged levy amounting to Rs. 90.00 million (Previous year Rs. 90.00 million) before Hon'ble Allahabad High Court. The writ petition has been allowed by the High Court in favour of the Company. The State of Uttar Pradesh filed a special leave petition (SLP) with Hon'ble Supreme Court. The SLP has been admitted but the Hon'ble Supreme Court has declined the request of the State of Uttar Pradesh (UP) to stay the operation of High Court Order.

vii. The Hon'ble Supreme Court has quashed the levy of license fee by State of Uttar Pradesh on captive consumption of denatured spirit in the Gajraula factory, and has ordered the refund of the fee paid during the period of dispute subject to condition that the amount has not been collected from the Company's customers. Further the Court has directed the State to investigate whether the Company has collected the disputed fee from its customers to the extent bank guarantees were furnished.

The Company is entitled to a refund of Rs. 84.06 million (Previous year Rs. 84.06 million) as the amount paid during the period of dispute or secured by bank guarantees was not collected from its customers. Accordingly the Company has approached the State of Uttar Pradesh for the refund of the said amount. The amount paid has been shown as deposit.

viii. A group of villagers from Nira in Pune District, State of Maharashtra had filled a Public Interest Litigation against the Company on account of ground water contamination against which National Green Tribunal (NGT), Pune Bench passed an order on 16 May 2014. In this order, NGT has instructed the Company to comply with the recommendations of National Environmental Engineering Research Institute (NEERI), Maharashtra Pollution Control Board (MPCB) and Central Ground Water Board (CGWB) to ensure zero discharge and remediation to contaminated ground water. NGT in its order has also instructed the district authority to form a committee to conduct an enquiry around 2 Km radius of Nira unit to ascertain extent of loss and recommend the loss if any, caused to agriculturist due to effluent discharge to Nira river and asked Company to deposit adhoc amount of Rs. 2.50 million (Previous year Rs. 2.50 million) with the Collector of Pune. During current year Company deposited the above amount with the Collector of Pune. The report of the nominated committee is awaited.

ix. Additionally, the Company is involved in other disputes, lawsuits, claims, governmental and/ or regulatory inspections, inquiries, investigations and proceedings, including commercial matters that arise from time to time in the ordinary course of business. The Company believes that none of these matters, either individually or in aggregate, are expected to have any material adverse effect on its financial statements.

23. Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31 March 2015. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) has been determined to the extent such parties have been identified on the basis of information available with the Company.

24. During the current year, the Company completed the Pharma consolidation under its wholly owned subsidiary Jubilant Pharma Limited Singapore (JPL). Under Pharma consolidation:

(i) the Company has transferred, with effect from 1 July 2014, its Active Pharmaceutical Ingredients and Dosage Forms business to Jubilant Generics Limited (JGL), a wholly owned Subsidiary of JPL, by way of a slump sale on going concern basis for a lump sum consideration of Rs. 9,293.00 million (net of debts of Rs. 3,923.00 million) and the profit on sale of such businesses amounting to Rs. 2,754.28 million has been classified under exceptional items. The Company has reversed net Deferred Tax Liabilities amounting to Rs. 1,642.96 million relating to the sold businesses in its books of account. A portion of the consideration, to the extent discharged, was paid directly to lenders of the company.

(ii) the Company has transferred shares held by it in Jubilant Pharma Holding Inc, USA and Jubilant Pharma NV, Belgium to JGL, for a consideration of Rs. 2,158.00 million (net of debts of Rs. 1,897.00 million) and the profit on sale of such shares amounting to Rs. 1,650.77 million has been classified under exceptional items. A portion of the consideration was paid directly to lenders of the company.

25. During the current year, pursuant to the Companies Act, 2013 ('the Act') being effective from 1 April 2014, the Company has revised depreciation rates on fixed assets as per the useful life specified in Part 'C' of Schedule II of the Act. As a result of this change, the depreciation charge for the year ended 31 March 2015 is lower by Rs. 243.52 million. Further, based on the transitional provision provided in Note 7(b) of the Schedule II an amount of Rs. 85.41 million (after adjustment for related tax impact of Rs. 45.21 million) has been debited to opening balance of retained earnings in respect of the fixed assets where life has expired as per the said Schedule as on 31 March 2014.

26. Donation includes Rs. Nil (Previous year Rs. 38.80 million) to Satya Electoral Trust during the year.

27. Employee Stock Option Scheme

The Company has two stock option plans in place namely:

* Jubilant Employees Stock Option Plan, 2005 ("Plan 2005")

* JLL Employees Stock Option Plan, 2011 ("Plan 2011")

The Nomination, Remuneration and Compensation Committee ('Committee') of the Board of Directors which comprises a majority of Independent Directors is responsible for administration and supervision of the Stock Option Plans.

Under Plan 2005, as amended, and under Plan 2011, upto 1,100,000 Stock Options and upto 5,352,000 Stock Options, respectively, can be issued to eligible directors (other than promoter directors) and other specified categories of employees of the Company/ subsidiaries. Options are to be granted at market price. As per the SEBI guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Under Plan 2005, each option, upon vesting, shall entitle the holder to acquire five equity shares of Rs. 1 each. Options granted upto 28 August 2009 will vest entirely within two years from the grant date, with certain lock-in provisions. Options granted after 28 August 2009 will vest gradually over a period of 5 years from the grant date, without any lock-in provisions.

Under Plan 2011, each option, upon vesting, shall entitle the holder to acquire one equity share of Rs. 1 each. Options granted will vest gradually over a period of 3 years from the grant date. Vesting of Options is a function of achievement of performance criteria or any other criteria, as specified by the Committee and communicated in the grant letter.

28. During the previous year, the Company had changed its policy with respect to treatment of shares issued to Jubilant Employee Welfare trust ('Trust'). The Trust primarily holds equity shares of the Company which are to be transferred to employees of the Company and it's subsidiaries upon exercise of their stock options under various Employee Stock Option Plans (ESOP) in force. As per an opinion of the Expert Advisory Committee ('EAC') of The Institute of Chartered Accountants of India (ICAI), as on the reporting date, the shares held by the trust but yet to be allotted to employees be shown as a deduction, from the Share Capital to the extent of face value of the shares and Securities Premium to the extent of amount exceeding face value of shares, with a corresponding adjustment to the, loan receivable from Trust, Capital Reserve (for the amount of profit on sale of shares) and Surplus (to the extent of dividend received net of operating expenses). Consequently, the face value of 4,833,496 equity shares held by trust as at 31 March 2014 amounting to Rs. 4.84 million was reduced from the share capital and the excess of net worth (after elimination of inter-company loans) of Rs. 420.00 million was adjusted from securities premium Rs. 577.59 million, capital reserve (Rs. 104.77 million) and surplus (Rs. 52.82 million).

During the current year, SEBI vide notification no. LAD-NRO/GN/2014-15/16/1729 dated 28 October 2014, has issued Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ('new guidelines') repealing Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. According to the new guidelines, any company implementing any of the share based schemes shall follow the requirements of the 'Guidance Note on Accounting for employee share-based Payments' (Guidance Note) or Accounting Standards as may be prescribed by the ICAI from time to time, including the disclosure requirements prescribed therein. As a consequence, since shares held by the Trust are purchased from market instead of direct issuance by the Company, the consolidation thereof as prescribed above, in these financial statements, has been discontinued and consequential adjustments have been made in the financial statements.

28. Leases:

a) The Company's significant operating lease arrangements are in respect of premises (residential, offices, godown etc.). These leasing arrangements, which are cancellable, range between 11 months and 3 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses. Rental expenses recognized under such leases are Rs. 93.24 million (Previous year Rs. 80.59 million).

b) The Company has significant operating lease arrangements which are non-cancellable for a fixed period of 25 years. The lease rental is subject to escalation whereby the Lessor is entitled to increase the lease rental by 10% of the average lease rental of preceding three years blocked period.

29. In line with the applicable Accounting Standards, during the year, finance costs amounting to Rs. 22.13 million (Previous year Rs. 80.37 million) and expenditure incurred on start up and commissioning of the project and/ or substantial expansion and development, including the expenditure incurred on trial runs (Net of trial run receipts, if any) up to the date of capitalisation amounting to Rs. 11.51 million (Previous year Rs. 16.10 million) have been capitalised.

30. During the current year, the Company has identified and written off idle assets of net book value (adjusted for net realizable value) amounting to Rs. 552.01 million on usability assessment, and the same has been reported under exceptional items. The realisable value of the same has been included under other current assets.

31. Consequent to re-evaluation of certain tax provisions pertaining to earlier years (including deferred taxes), tax benefit amounting to Rs. 591.86 million was recognised in the previous year.

32. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Para 46A of Accounting Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates" notified by the Ministry of Corporate Affairs on 29 December 2011. Accordingly during year ended 31 March 2015, the Company has capitalised exchange difference amounting to Rs. 98.54 million (Previous year Rs. 281.00 million) to the cost of fixed assets and Rs. 117.11 million (Previous year Rs. 805.49 million) to foreign currency monetary item translation difference account (FCMITDA). During the year Rs. 447.52 million (Previous year Rs. 1,000.21 million) has been amortised to the Statement of Profit and Loss in terms of the said notification and balance of Rs. 150.32 million (Previous year Rs. 480.73 million) is carried in Balance Sheet as on 31 March 2015.

iii) Mark-to-market gains amounting to Rs. 167.60 million (Previous year loss amounting to Rs. 764.55 million) in respect of currency and interest rate swaps contracts have been credited/ charged to the Statement of Profit and Loss. The accumulated mark-to-market losses on currency swaps (including currency and interest rate swaps) as at 31 March 2015 is Rs. Nil (Previous year Rs. 3,098.88 million).

iv) During the current year, the Company discontinued hedge accounting applied in respect of certain foreign currency transactions including forward contracts under Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" and the consequent financial impact is insignificant on the profit for the year had the Company continued to follow hedge accounting.

33. (B) Defined Benefit Plans

i. Gratuity

In accordance with Accounting Standard 15 (AS-15) "Employee Benefits (Revised 2005)", an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 7.74% p.a. (Previous year 9.40% p.a.) which is determined by reference to market yield at the Balance Sheet date on Government bonds. The retirement age has been considered at 58 years (Previous year 58 years) and mortality table is as per IALM (2006-08) (Previous year IALM (2006-08)).

The estimates of future salary increases, considered in actuarial valuation is 10% p.a. for first three years and 6% p.a. thereafter (Previous year 10% p.a. for first three years and 6% p.a. thereafter), taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The plans assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme for certain employees of the Company. The details of investments maintained by Life Insurance Corporation are not available with the Company, hence not disclosed. The expected rate of return assumed on plan assets is 9.00% p.a. (Previous year 9.00% p.a.).

ii. Provident Fund

The guidance on implementation of AS-15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving provident funds, which require interest shortfall to be compensated, are to be considered as defined benefit plans. The actuary has worked out a liability of Rs. Nil (Previous year Rs. Nil) likely to arise towards interest guarantee. The trust is managing common corpus of some of the group companies. The total liability of Rs. Nil (Previous year Rs. Nil) as worked out by the actuary has been allocated to each entity based on the corpus value of each entity as on 31 March 2015. Accordingly, liability of Rs. Nil (Previous year Rs. Nil) has been allocated to Company and Rs. Nil (Previous year Rs. Nil) has been charged to Statement of Profit and Loss during the year. The Company has contributed Rs. 79.73 million (Previous year Rs. 115.16 million) to Provident Fund for the year.

34. Segment Reporting:

i) Based on the guiding principles given in Accounting Standard 17 (AS-17) on " Segment Reporting", the Company's Primary Business Segments were organised around customers on industry and product lines as under:

a. Pharmaceuticals : Generics comprising Active Pharmaceuticals Ingredients (APIs), Solid Dosage Formulations and Indian Branded Pharmaceuticals (Refer note 38).

b. Life Sciences Ingredients : i) Advance Intermediates and Specialty Ingredients ii) Life Sciences Chemicals iii) Nutritional Products.

ii) In respect of Secondary Segment information, the Company has identified its geographical segments as:

(i) Within India (ii) Outside India.

iii) Inter segment transfer pricing

Inter segment transfer prices are based on market prices.

34. Related Party Disclosures

1. Related parties where control exists:

a) Subsidiaries including step-down subsidiaries:

Jubilant Pharma Limited (formerly known as Jubilant Pharma Pte. Limited), Draximage Limited, Cyprus, Draximage Limited, Ireland, Draximage LLC, Jubilant Draximage (USA) Inc., Deprenyl Inc., USA, Jubilant Draximage Inc., 6963196 Canada Inc., 6981364 Canada Inc., DAHI Animal Health (UK) Limited, Draximage (UK) Limited, Jubilant Pharma Holdings Inc. (formerly known as Jubilant Life Sciences Holdings Inc.), Jubilant Clinsys Inc., Cadista Holdings Inc., Jubilant Cadista Pharmaceuticals Inc., Jubilant Life Sciences International Pte. Limited, HSL Holdings Inc., Jubilant HollisterStier LLC, Jubilant Life Sciences (Shanghai) Limited, Jubilant Pharma NV, Jubilant Pharmaceuticals NV, PSI Supply NV, Jubilant Life Sciences (USA) Inc., Jubilant Life Sciences (BVI) Limited, Jubilant Biosys (BVI) Limited, Jubilant Biosys (Singapore) Pte. Limited, Jubilant Biosys Limited, Jubilant Discovery Services Inc., Jubilant Drug Development Pte. Limited, Jubilant Chemsys Limited., Jubilant Clinsys Limited, Jubilant Infrastructure Limited, Jubilant First Trust Healthcare Limited, Asia Healthcare Development Limited (upto 3 March 2014), Jubilant Innovation (BVI) Limited, Jubilant Innovation Pte. Limited, Jubilant DraxImage Limited, Jubilant Innovation (India) Limited, Jubilant Innovation (USA) Inc., Jubilant HollisterStier Inc., Draxis Pharma LLC, Jubilant Generics Inc. (upto 22 December 2014), Jubilant Life Sciences (Switzerland) AG, First Trust Medicare Private Limited, Jubilant Drug Discovery & Development Services Inc., Vanthys Pharmaceutical Development Private Limited, Jubilant Life Sciences NV, Jubilant Generics Limited, Jubilant Pharma Trading Inc., Drug Discovery and Development Solutions Limited.

b) Other Entities:

Jubilant HollisterStier General Partnership Canada, Draximage General Partnership Canada (controlled through subsidiaries/step down subsidiaries).

2. Other Related parties with whom transactions have taken place during the year:

a) Enterprise over which certain key management personnel have significant influence:

Jubilant Enpro Private Limited, Jubilant Oil & Gas Private Limited, Jubilant FoodWorks Limited, Tower Promoters Private Limited, B&M Hot Breads Private Limited, Jubilant Industries Limited, Jubilant Agri and Consumer Products Limited, Jubilant Motors Private Limited, Jubilant Aeronautics Private Limited, Jubilant Fresh Private Limited, Sankur Chalets Private Limited.

b) Key management personnel:

Mr. Shyam S. Bhartia (upto 25 March 2015), Mr. Hari S. Bhartia, Mr. R. Sankaraiah, Mr. Shyamsundar Bang, Mr. Rajiv Shah (w.e.f. 16 February 2015), Mr. Lalit Jain (upto 31 January 2015).

c) Others:

Vam Employees Provident Fund Trust, Jubilant Employee Welfare Trust*, Jubilant Bhartia Foundation, Vam Officers Superannuation Fund.

*Refer note 43

Disclosure in respect of material related party transactions during the year:

1. Sale of goods and services to Jubilant Life Sciences (Shanghai) Limited Rs. 404.79 million (Previous year Rs. 602.27 million), Jubilant Life Sciences (USA) Inc. Rs. 761.69 million (Previous year Rs. 1,791.20 million), PSI Supply NV Rs. 55.85 million (Previous year Rs. 218.43 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 197.97 million (Previous year Rs. 934.51 million), Jubilant Pharmaceuticals NV Rs. Nil (Previous year Rs. 1,491.32 million), Jubilant Chemsys Limited Rs. 15.92 million (Previous year Rs. 15.88 million), Jubilant Agri and Consumer Products Limited Rs. 133.57 million (Previous year Rs. 201.32 million), Jubilant Infrastructure Limited Rs. 3.08 million (Previous year Rs. 2.86 million), Jubilant Life Sciences International Pte. Limited Rs. 2,758.32 million (Previous year Rs. 3,198.42 million), Jubilant Life Sciences NV Rs. 2,556.43 million (Previous year Rs. 1,620.01 million) and Jubilant Generics Limited Rs. 55.68 million (Previous year Rs. Nil).

2. Rental and other income from Jubilant Chemsys Limited Rs. 7.04 million (Previous year Rs. 9.95 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 0.55 million (Previous year Rs. 0.51 million), Jubilant HollisterStier LLC Rs. 1.75 million (Previous year Rs. 1.75 million), Jubilant DraxImage Inc. Rs. 0.40 million (Previous year Rs. 0.44 million), Jubilant HollisterStier General Partnership Rs. 0.95 million (Previous year Rs. 0.95 million), Jubilant Enpro Private Limited Rs. 9.18 million (Previous year Rs. 7.64 million), Jubilant Oil & Gas Private Limited Rs. 9.70 million (Previous year Rs. 5.28 million), Jubilant FoodWorks Limited Rs. 13.44 million (Previous year Rs. 13.51 million), Jubilant Industries Limited Rs. 0.18 million (Previous year Rs. 0.18 million), Jubilant Agri and Consumer Products Limited Rs. 46.21 million (Previous year Rs. 51.08 million), B&M Hot Breads Private Limited Rs. 0.71 million (Previous year Rs. 0.29 million), Jubilant Aeronautics Private Limited Rs. Nil (Previous year Rs. 0.30 million), Jubilant Biosys Limited Rs. 2.81 million (Previous year Rs. Nil), Jubilant Fresh Private Limited Rs. 0.01 million (Previous year Rs. 0.09 million), and Jubilant Generics Limited Rs. 77.49 million (Previous year Rs. Nil).

3. Interest income from Jubilant Biosys Limited Rs. 153.80 million (Previous year Rs. 153.80 million), Jubilant Pharma Limited Rs. 11.80 million (Previous year Rs. 4.01 million), Jubilant Pharma Holdings Inc. Rs. 55.55 million (Previous year Rs. 6.05 million) and Jubilant Generics Limited Rs. 416.19 million (Previous year Rs. Nil).

4. Purchase of goods and services from Jubilant Clinsys Limited Rs. Nil (Previous year Rs. 50.24 million), Jubilant Pharmaceuticals NV Rs. 9.56 million (Previous year Rs. 33.23 million), Jubilant Infrastructure Limited Rs. 846.42 million (Previous year Rs. 742.95 million), Jubilant Biosys Limited Rs. Nil (Previous year Rs. 0.45 million), Jubilant Agri and Consumer Products Limited Rs. 129.89 million (Previous year Rs. 120.16 million) and Jubilant Generics Limited Rs. 19.04 million (Previous year Rs. Nil).

5. Recovery of expenses from Jubilant Chemsys Limited Rs. 8.93 million (Previous year Rs. 8.08 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 61.58 million (Previous year Rs. 9.85 million), Jubilant HollisterStier LLC Rs. 87.70 million (Previous year Rs. 23.98 million), Jubilant DraxImage Inc. Rs. 58.60 million (Previous year Rs. 5.33 million), Jubilant DraxImage Limited Rs. 0.34 million (Previous year Rs. Nil), Jubilant HollisterStier General Partnership Rs. 33.83 million (Previous year Rs. 12.73 million), Jubilant Clinsys Inc. Rs. Nil (Previous year Rs. 1.19 million), Jubilant Infrastructure Limited Rs. 155.47 million (Previous year Rs. 96.71 million), Jubilant Enpro Private Limited Rs. 0.09 million (Previous year Rs. Nil), Jubilant Oil & Gas Private Limited Rs. 1.32 million (Previous year Rs. 0.18 million), Jubilant Industries Limited Rs. Nil (Previous year Rs. 1.14 million), Jubilant Agri and Consumer Products Limited Rs. 17.73 million (Previous year Rs. 23.20 million), Jubilant Biosys Limited Rs. 10.68 million (Previous year Rs. Nil), PSI Supply NV Rs. 11.22 million (Previous year Rs. 0.04 million), Jubilant Pharmaceuticals NV Rs. Nil (Previous year Rs. 0.04 million), Jubilant Clinsys Limited Rs. 0.50 million (Previous year Rs. 0.77 million), Jubilant Life Sciences (USA) Inc. Rs. 0.42 million (Previous year Rs. Nil) and Jubilant Generics Limited Rs. 167.21 million (Previous year Rs. Nil).

6. Reimbursement of expenses to Jubilant Pharmaceuticals NV Rs. 43.87 million (Previous year Rs. 129.88 million), Jubilant Biosys Limited Rs. 0.14 million (Previous year Rs. 0.08 million), Jubilant Infrastructure Limited Rs. 0.01 million (Previous year Rs. 0.15 million), PSI Supply NV Rs. 2.19 million (Previous year Rs. 9.62 million), Jubilant DraxImage Inc. Rs. 2.07 million (Previous year Rs. 6.84 million), Jubilant HollisterStier LLC Rs. Nil (Previous year Rs. 1.15 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 13.98 million (Previous year Rs. 15.36 million), Jubilant HollisterStier

General Partnership Rs. Nil (Previous year Rs. 0.03 million), Jubilant Clinsys Limited Rs. 0.35 million (Previous year Rs. 10.67 million), Jubilant Life Sciences NV Rs. 0.62 million (Previous year Rs. 0.42 million) and Jubilant Enpro Private Limited Rs. 0.82 million (Previous year Rs. Nil).

7. Remuneration and related expenses to Mr. R. Sankaraiah Rs. 39.95 million (Previous year Rs. 36.05 million), Mr. Lalit Jain Rs. 7.87 million (Previous year Rs. 6.22 million) and Mr. Rajiv Shah Rs. 0.59 million (Previous year Rs. Nil).

8. Payment of retiral dues (accrued over the years on the basis of actuarial valuation for the Company as a whole) on resignation made to Mr. Shyam S. Bhartia Rs. 20.11 million (Previous year Rs. Nil).

9. Company's contribution to Vam Employees Provident Fund Trust Rs. 79.73 million (Previous year Rs. 115.16 million).

10. Company's contribution to Vam Officers Superannuation Fund Rs. 8.79 million (Previous year Rs. 11.99 million).

11. Rent expenses to Jubilant Enpro Private Limited Rs. 7.81 million (Previous year Rs. 4.09 million), Tower Promoters Private Limited Rs. Nil (Previous year Rs. 52.00 million) and Sankur Chalets Private Limited Rs. Nil (Previous year Rs. 1.40 million).

12. Donation to Jubilant Bhartia Foundation Rs. 21.64 million (Previous year Rs. 17.20 million).

13. Sharing of licensing fees with Jubilant Pharmaceuticals NV Rs. 2.00 million (Previous year Rs. 42.89 million).

14. Lease rental to Jubilant Infrastructure Limited Rs. 15.10 million (Previous year Rs. 14.84 million).

15. Business sale consideration (net of debts of Rs. 3,923.00 million) from Jubilant Generics Limited Rs. 9,293.00 million (Previous year Rs. Nil).

16. Investment sale consideration (net of debts of Rs. 1,897.00 million) from Jubilant Generics Limited Rs. 2,158.00 million (Previous year Rs. Nil).

17. Sale of tangible/intangible assets to Jubilant FoodWorks Limited Rs. 302.87 million (Previous year Rs. Nil).

18. Business purchase consideration to Jubilant Clinsys Limited Rs. Nil (Previous year Rs. 87.00 million).

19. Purchase of tangible/intangible assets from Jubilant Motors Private Limited Rs. Nil (Previous year Rs. 5.32 million) and Jubilant Oil & Gas Private Limited Rs. 1.46 million (Previous year Rs. 3.86 million).

20. Purchase of investments being equity shares of Jubilant Life Sciences International Pte. Limited purchased from Jubilant Pharma Limited Rs. Nil (Previous year Rs. 2.91 million).

21. Investments in equity share capital of Jubilant Pharma Limited Rs. Nil (Previous year Rs. 264.89 million), Jubilant Life Sciences NV Rs. Nil (Previous year Rs. 7.81 million) and Drug Discovery and Development Solutions Rs. 6.20 million (Previous year Rs. Nil).

22. Interest expense on loans from Jubilant Infrastructure Limited Rs. 33.96 million (Previous year Rs. 21.75 million), Jubilant Clinsys Limited Rs. 3.83 million (Previous year Rs. 3.92 million), Jubilant First Trust Healthcare Limited Rs. 64.09 million (Previous year Rs. 26.34 million), Asia Healthcare Development Limited Rs. Nil (Previous year Rs. 0.74 million) and Vanthys Pharmaceutical Development Private Limited Rs. 2.50 million (Previous year Rs. 2.37 million).

23. Loans given to Jubilant Pharma Limited Rs. Nil (Previous year Rs. 312.85 million) and Jubilant Pharma Holdings Inc. Rs. 776.65 million (Previous year Rs. 542.01 million).

24. Loans received back from Jubilant Pharma Limited Rs. 124.10 million (Previous year Rs. 18.44 million), Jubilant Employee Welfare Trust Rs. 14.50 million (Previous year Rs. Nil) and Jubilant Pharma Holdings Inc. Rs. 1,349.58 million (Previous year Rs. Nil).

25. Loan (including accrued interest) to Jubilant Biosys Limited written off Rs. 1,866.18 million (Previous year Rs. Nil).

26. Loans taken from Jubilant Infrastructure Limited Rs. Nil (Previous year Rs. 130.00 million), Jubilant Clinsys Limited Rs. 15.00 million (Previous year Rs. 25.00 million), Jubilant First Trust Healthcare Limited Rs. 33.10 million (Previous year Rs. 478.90 million) and Vanthys Pharmaceutical Development Private Limited Rs. 2.50 million (Previous year Rs. Nil).

27. Loans repaid to Jubilant First Trust Healthcare Limited Rs. 20.13 million (Previous year Rs. 21.70 million), Asia Healthcare Development Limited Rs. Nil (Previous year Rs. 8.50 million) and Jubilant Clinsys Limited Rs. 10.00 million (Previous year Rs. 40.00 million).

28. Advance against goods/assets from Jubilant Life Sciences International Pte. Limited Rs. Nil (Previous year Rs. 2,388.85 million), Jubilant Life Sciences NV Rs. 2,325.89 million (Previous year Rs. 2,095.56 million) and Jubilant FoodWorks Limited Rs. Nil (Previous year Rs. 60.57 million).

29. Loan payable to Jubilant Infrastructure Limited Rs. 357.50 million (Previous year Rs. 357.50 million), Jubilant Clinsys Limited Rs. 50.00 million (Previous year Rs. 45.00 million), Jubilant First Trust Healthcare Limited Rs. 671.37 million (Previous year Rs. 658.40 million) and Vanthys Pharmaceutical Development Private Limited Rs. 27.50 million (Previous year Rs. 25.00 million).

30. Interest on loans payable to Jubilant Infrastructure Limited Rs. 30.56 million (Previous year Rs. 20.08 million), Jubilant Clinsys Limited Rs. 3.45 million (Previous year Rs. 4.37 million), Jubilant First Trust Healthcare Limited Rs. 29.15 million (Previous year Rs. 31.58 million) and Vanthys Pharmaceutical Development Private Limited Rs. 2.25 million (Previous year Rs. 2.13 million).

31. Trade and other payables to Jubilant Clinsys Limited Rs. 87.00 million (Previous year Rs. 107.05 million), Jubilant Pharmaceuticals NV Rs. 12.45 million (Previous year Rs. 158.40 million), Jubilant Life Sciences USA Inc. Rs. 10.35 million (Previous year Rs. 9.92 million), Jubilant Cadista Pharmaceuticals Inc. Rs. Nil (Previous year Rs. 2.38 million), Jubilant Infrastructure Limited Rs. 133.19 million (Previous year Rs. 81.92 million), Jubilant Industries Limited Rs. 0.83 million (Previous year Rs. 0.97 million), Jubilant Agri and Consumer Products Limited Rs. 10.00 million (Previous year Rs. 8.70 million), PSI Supply NV Rs. 1.00 million (Previous year Rs. 12.21 million), Jubilant DraxImage Inc. Rs. Nil (Previous year Rs. 9.14 million), Jubilant HolisterStier General Partnership Rs. Nil (Previous year Rs. 0.12 million), Jubilant Oil & Gas Private Limited Rs. 1.44 million (Previous year Rs. Nil), B&M Hot Breads Private Limited Rs. 0.32 million (Previous year Rs. Nil), Jubilant Chemsys Limited Rs. Nil (Previous year Rs. 0.42 million), Jubilant Biosys Limited Rs. 0.27 million (Previous year Rs. 0.27 million), Jubilant Life Sciences NV Rs. 0.60 million (Previous year Rs. 0.42 million) and Jubilant Generics Limited Rs. 19.04 million (Previous year Rs. Nil), Vam Employees Provident Fund Trust Rs. 14.20 million (Previous year Rs. 17.58 million), Vam Officers Superannuation Fund Rs. 0.81 million (Previous year Rs. 0.96 million).

32. Loans recoverable from Jubilant Pharma Limited Rs. 831.25 million (Previous year Rs. 916.62 million), Jubilant Biosys Limited Rs. Nil (Previous year Rs. 1,513.80 million), Jubilant Pharma Holdings Inc. Rs. Nil (Previous year Rs. 521.22 million) and Jubilant Employee Welfare Trust Rs. 410.39 million (Previous year Rs. Nil).

33. Interest recoverable from Jubilant Pharma Limited Rs. 13.78 million (Previous year Rs. 3.40 million), Jubilant Biosys Limited Rs. Nil (Previous year Rs. 213.96 million), Jubilant Pharma Holdings Inc. Rs. Nil (Previous year Rs. 5.92 million) and Jubilant Generics Limited Rs. 374.58 million (Previous year Rs. Nil).

34. Trade receivables from Jubilant Pharmaceuticals NV Rs. Nil (Previous year Rs. 326.29 million), PSI Supply NV Rs. Nil (Previous year Rs. 109.59 million), Jubilant Life Sciences (USA) Inc. Rs. 83.26 million (Previous year Rs. 474.70 million), Jubilant Life Sciences (Shanghai) Limited Rs. 3.73 million (Previous year Rs. 239.59 million), Jubilant Cadista Pharmaceuticals Inc. Rs. Nil (Previous year Rs. 111.76 million), Jubilant Agri and Consumer Products Limited Rs. 8.46 million (Previous year Rs. 37.19 million), Jubilant Chemsys Limited Rs. 0.79 million (Previous year Rs. 0.01 million), Jubilant Infrastructure Limited Rs. 0.23 million (Previous year Rs. 0.15 million), Jubilant Life Sciences International Pte. Limited Rs. 889.15 million (Previous year Rs. 664.96 million), Jubilant Generics Limited Rs. 12.48 million (Previous year Rs. Nil) and Jubilant Life Sciences NV Rs. 118.79 million (Previous year Rs. 231.77 million).

35. Deposits recoverable from Tower Promoters Private Limited Rs. 21.00 million (Previous year Rs. 21.00 million) and Jubilant Enpro Private Limited Rs. 1.27 million (Previous year Rs. Nil).

36. Other recoverables from Jubilant Pharmaceuticals NV Rs. Nil (Previous year Rs. 58.93 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 1.00 million (Previous year Rs. 1.18 million), Jubilant HollisterStier LLC Rs. 106.00 million (Previous year Rs. 15.15 million), Jubilant Clinsys Inc. Rs. 12.89 million (Previous year Rs. 12.34 million), Jubilant HollisterStier General Partnership Rs. 93.49 million (Previous year Rs. 68.13 million), Jubilant DraxImage Inc. Rs. 7.11 million (Previous year Rs. 46.66 million), Jubilant DraxImage Limited Rs. 7.09 million (Previous year Rs. 6.44 million), Jubilant Chemsys Limited Rs. 4.14 million (Previous year Rs. 13.41 million), Jubilant Oil & Gas Private Limited Rs. Nil (Previous year Rs. 1.96 million), Jubilant Agri and Consumer Products Limited Rs. 13.30 million (Previous year Rs. 13.32 million), B&M Hot Breads Private Limited Rs. 0.16 million (Previous year Rs. 0.06 million), Jubilant Biosys Limited Rs. 1.54 (Previous year Rs. Nil), Jubilant Life Sciences (Switzerland) AG Schaffhausen Rs. 0.85 million (Previous year Rs. 0.90 million), Jubilant FoodWorks Limited Rs. 1.97 million (Previous year Rs. 8.93 million), Jubilant Clinsys Limited Rs. Nil (Previous year Rs. 1.07 million), PSI Supply NV Rs. 6.72 million (Previous year Rs. Nil), Jubilant Generics Limited Rs. 4,183.45 million (Previous year Rs. Nil), Jubilant Enpro Private Limited Rs. 0.09 million (Previous year Rs. Nil), Mr. R. Sankaraiah Rs. Nil (Previous year Rs. 25.00 million) and remuneration recoverable from Mr. Shyam S. Bhartia Rs. Nil (Previous year Rs. 40.06 million), Mr. Hari S. Bhartia Rs. Nil (Previous year Rs. 40.05 million), Mr. Shyamsundar Bang Rs. Nil (Previous year Rs. 23.96 million).

37. Advance from Jubilant Life Sciences International Pte. Limited Rs. Nil (Previous year Rs. 1,908.52 million), Jubilant Life Sciences NV Rs. 1,202.78 million (Previous year Rs. 755.05 million) and Jubilant FoodWorks Limited Rs. Nil (Previous year Rs. 60.57 million).

38. Financial guarantees given on behalf of subsidiaries for Jubilant HollisterStier Inc. Rs. Nil (Previous year Rs. 251.78 million).

39. Mortgage of land and building at Bharuch owned by one of subsidiaries as security against term loan.

40. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the specified domestic transactions entered into with the specified persons and the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence before the due date of filing of income tax return. The management is of the opinion that its specified domestic transactions and international transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.


Mar 31, 2014

1. Corporate information

Jubilant Life Sciences Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange of India. The Company is a global Pharmaceutical and Life Sciences player engaged in manufacture and supply of Generics (including Active Pharmaceutical Ingredients (APIs) and Solid Dosage Formulations) and Life Science Ingredients (including Advance Intermediates and Specialty Ingredients, Nutritional Products and Life Science Chemicals). The Company''s strength lies in its unique offerings of Pharmaceuticals and Life Sciences products and services across the value chain. It is well recognised as a ''Partner of Choice'' by leading pharmaceuticals and life sciences companies globally.

3.1 Paid up capital includes, 501,364, equity shares of Rs. 1 each allotted and issued pursuant to the Scheme of Amalgamation and Demerger, to the shareholders of erstwhile Pace Marketing Specialities Limited for consideration other than cash during the year ended 31 March 2011.

3.2 The Company has only one class of shares referred to as equity shares having par value of Rs. 1 each. Holder of each equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

3.5. a) 114,835 (Previous year 114,835), equity shares of Rs. 1 each allotted on exercise of the vested stock options in accordance with the terms of exercise under the "Jubilant Employees Stock Option Plan, 2005".

b) Under the Jubilant Employees Stock Option 2005 Plan, as at 31 March 2014 - 132,684 (Previous year 145,443) options are outstanding convertible into 663,420 (Previous year 727,215) shares. (Refer note 42).

c) Under the Jubilant Employees Stock Option 2011 Plan, as at 31 March 2014 - 1,428,939 (Previous year 1,585,055) options are outstanding convertible into 1,428,939 (Previous year 1,585,055) shares. (Refer note 42).

3.6 The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

5. Nature of security of long term borrowings and other terms of repayment

5.1 Indian rupee loans amounting to Rs. 9,744.48 million (Previous year Rs. 9,100.00 million) from Corporation Bank, Axis Bank Limited, Central Bank of India and Indian Bank, External commercial borrowings amounting to Rs. 2,995.50 million (Previous year Rs. 3,165.09 million) from Citibank N.A., London and DBS Bank Limited, Singapore and foreign currency loans amounting to Rs. 2,695.95 million (Previous year Rs. 2,714.50 million) from Export Import Bank of India are secured by a frst pari-passu charge amongst the lenders by way of: -

a. Mortgage of the immovable fixed assets both present and future situate at Bhartiagram, District Amroha, Uttar Pradesh and immovable fixed assets situate at Village Samlaya, Taluka Savli, District Vadodara, Gujarat, and

b. Hypothecation on the entire movable fixed assets, both present and future of the Company.

5.2 Foreign currency loans amounting to Rs. 5,691.45 million (Previous year Rs. 5,157.55 million) from Housing Development Finance Corporation Limited is secured by frst mortgage by way of deposit of original title deeds of specified land and buildings situated at Noida, Greater Noida, Nanjangud, Nira, Roorkee, Ambernath and also at Bharuch owned by one of the subsidiaries of the Company. Land mortgaged at Chittorgarh demerged into a group company consequent upon the Scheme of demerger is under process of release.

5.3 Rupee Term Loan amounting to Rs. Nil (Previous year Rs. 1,600.00 million) is secured by Fixed Deposits.

5.4 Indian rupee loans amounting to Rs. 2,700.00 million (Previous year Rs. 2,700.00 million) and Rs. 1,000.00 million (Previous year Rs. 1,000.00 million) from Corporation Bank is repayable in two equal yearly installments commencing from February 2015 and March 2015 respectively.

5.5 Indian rupee loans amounting to Rs. 3,000.00 million (Previous year Rs. 3,000.00 million) from Axis Bank Limited is repayable in four equal half yearly installments commencing from September 2014.

5.6 Indian rupee loans amounting to Rs. 1,800.00 million (Previous year Rs. 2,400.00 million) from Central Bank of India. Balance is repayable in two yearly installments from March 2015.

5.7 Indian rupee loans amounting to Rs. 1,244.48 million (Previous year Rs. 1,600.00 million) from Indian Bank. Balance is repayable in three yearly installments from March 2015.

5.8 External commercial borrowing amounting to Rs. 2,995.50 million (Previous year Rs. 2,714.50 million) from DBS Bank Limited, Singapore is repayable in four yearly installments commencing from December 2014.

5.9 Foreign currency loans amounting to Rs. 2,695.95 million (Previous year Rs. 2,714.50 million) from Export Import Bank of India. Balance is repayable in three yearly installments from May 2014.

5.10 Foreign currency loans amounting to Rs. 5,691.45 million (Previous year Rs. 5,157.55 million) from Housing Development Finance Corporation Limited is repayable in single installment in July 2014.

5.11 Loans from subsidiaries are repayable at end of five years from the date of respective disbursement.

5.12 Finance Lease obligations are secured by hypothecation of Specific assets taken under such lease. The same are repayable within two to five years.

5.13 The Indian rupee loans carry interest rate ranging from 9.5% to 12.75% and foreign currency loan carry interest rate of Libor plus spread ranging from 250 to 450 basis points. Libor are reset at periodic intervals as per the terms of the loan.

9. Nature of security of short term borrowings and other terms of repayment

9.1 Working capital facilities (including cash credit) sanctioned by consortium of banks and notifed financial institutions comprising of ICICI Bank Limited, Corporation Bank, Punjab National Bank, State Bank of India, The Hongkong and Shanghai Banking Corporation Limited, ING Vysya Bank Ltd., Central Bank of India, Yes Bank Limited, DBS Bank Limited and Export Import Bank of India, are secured by a frst charge by way of hypothecation, ranking pari passu inter-se Banks, of the entire book debts and receivables and inventories both present and future, of the Company wherever the same may

be or be held. The working capital sanctioned limits also include commercial paper programme of Rs. 3,000 million (Previous year Rs. 3,000 million) as sublimit carved out from the funded limits, against which the balance outstanding as at year end is Rs. Nil (Previous year Rs. Nil). Maximum balance of commercial paper outstanding at any time during the year was Rs. Nil (Previous year Rs. 600.00 million). Other working capital loans are repayable as per terms of agreement within one year.

33. Commitments as at year end:

a) Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (Net of advances) Rs. 239.89 million (Previous year Rs. 173.25 million).

b) Other Commitments:

I) Exports obligation undertaken by the Company under EPCG scheme to be completed over a period of five/ eight years on account of import of capital goods at concessional import duty and remaining outstanding is Rs. Nil (Previous year Rs. 6.60 million). Similarly export obligation under Advance License Scheme/DFIA scheme on duty free import of Specific raw materials, remaining outstanding is Rs. 6,125.53 million (Previous year Rs. 4,550.88 million).

II) Outstanding export obligation amounting to Rs. 2,663.57 million (Previous year Rs. 1,554.84 million), against equivalent supplier advance received from a step down wholly owned subsidiary.

III) For lease commitments refer note 44.

34. Contingent liabilities to the extent not provided for: A. Guarantees:

i. The Company has given following corporate guarantee on behalf of its subsidiaries to secure financial facilities:

Name of Subsidiary Bank As at As at

31 March 2014 31 March 2013

Jubilant HollisterStier Inc. ICICI Bank Canada USD 4.20 million USD 20.93

million Jubilant Life Sciences International Pte. Limited ICICI Bank Limited SGD Nil SGD 22.00

Singapore million

Total effective guarantee as on 31 March 2014 is Rs. 251.78 million (Previous year Rs. 2,098.11 million)

ii. Outstanding guarantees furnished by banks on behalf of the Company is Rs. 518.27 million (Previous year Rs. 498.58 million).

B. Claims against Company, disputed by the Company, not acknowledged as debt:

Excluding demands in respect of business transferred in earlier year to Jubilant Industries Limited in terms of the scheme of demerger though the demands may be continuing in the name of the Company.

Future cash outflows in respect of the above matters as well as for matters listed under 34(C) below are determinable only on receipt of judgments/decisions pending at various stages/forums.

C. Other contingent liabilities as at 31 March 2014:

i. Liability in respect of bills discounted with banks is Rs. 699.85 million (Previous year Rs. 1,149.38 million).

ii. The Company''s writ petition against the levy of transport fee by the State of Maharashtra on consumption of rectifed spirit and molasses within Nira factory has been allowed by the Hon''ble Bombay High Court with consequential refund. The Company has fled a refund claim for an amount of Rs. 2.51 million (Previous year Rs. 2.51 million) deposited during the period when the dispute was pending before the High Court. The total amount of disputed transport fee is Rs. 193.06 million (Previous year Rs. 171.66 million). The State of Maharashtra has fled a special leave petition in the Supreme Court and has sought a stay on the operation of the High Court order.

iii. The Company has challenged before the Hon''ble Allahabad High Court, the increase in denaturing fee by the State of Uttar Pradesh w.e.f 1 April 2004 on denaturing of rectifed spirit in the Gajraula factory and the writ petition has been admitted by the court. The Company has deposited Rs. 24.45 million (Previous year Rs. 22.52 million) under protest which is shown as deposits.

iv. Zila Panchayat at J.P. Nagar (in respect of the Company''s Gajraula plant) served a notice demanding a compensation of Rs. 277.40 million (Previous year Rs. 277.40 million) allegedly for, percolation of poisonous water stored in lagoons and fowing through the land of Zila Panchayat resulting in loss of crops and cattle of the farmers and for putting poisonous fy ash on national highway which caused loss to the health and damages to eyes and skin of people.

District Magistrate issued a recovery certifcate along with 10% collection charges infating the demand to Rs. 305.14 million (Previous year Rs. 305.14 million). In the opinion of the Company, the Zila Panchayat has no jurisdiction in raising this demand. The demand was challenged in Hon''ble Allahabad High Court and the court stayed the demand till further orders.

v. The Company has challenged, before the Hon''ble Allahabad High Court, the levy of license fees of Rs. 2.87 million (Previous year Rs. 2.87 million) by State of Uttar Pradesh, for grant of PD-2 license for manufacture of ethyl alcohol for industrial use. The writ petition has been admitted and is being listed for final hearing. Though the amount has been deposited and shown as such, no provision against this has been made as the issue is covered by the earlier favorable judgment of the Hon''ble Supreme Court of India.

vi. The State of Uttar Pradesh (UP) has imposed levy on import of denatured spirit into the State of Uttar Pradesh (UP). The Company has imported denatured spirit into the State of Uttar Pradesh and has challenged levy amounting to Rs. 90.00 million (Previous year Rs. 90.00 million) before Hon''ble Allahabad High Court. The writ petition has been allowed by the High Court in favour of the Company. The State of Uttar Pradesh fled a special leave petition (SLP) with Hon''ble Supreme Court. The SLP has been admitted but the Hon''ble Supreme Court has declined the request of the State of Uttar Pradesh (UP) to stay the operation of High Court Order.

vii. The Hon''ble Supreme Court has quashed the levy of license fee by State of Uttar Pradesh on captive consumption of denatured spirit in the Gajraula factory, and has ordered the refund of the fee paid during the period of dispute subject to condition that the amount has not been collected from the Company''s customers. Further the Court has directed the State to investigate whether the Company has collected the disputed fee from its customers to the extent bank guarantees were furnished.

The Company is entitled to a refund of Rs. 84.06 million (Previous year Rs. 84.06 million) as the amount paid during the period of dispute or secured by bank guarantees was not collected from its customers. Accordingly the Company has approached the State of Uttar Pradesh for the refund of the said amount. The amount paid has been shown as deposit.

viii. A group of villagers from Nira in Pune District of Maharashtra State, had filled a Public Interest Litigation against the Company on account of ground water contamination against which National Green Tribunal (NGT), Pune Bench passed an order on 16 May 2014. In this order, NGT has instructed the Company to comply with the recommendations of National Environmental Engineering Research Institute (NEERI), Maharashtra Pollution Control Board (MPCB) and Central Ground Water Board (CGWB), to ensure zero discharge and remediation to contaminated ground water. NGT in its order has also instructed the district authority to form a committee to conduct an enquiry around 2 Km radius of Nira unit to ascertain extent of loss and recommend the loss if any, caused to agriculturist due to effuent discharge to Nira river and asked Company to deposit adhoc amount of Rs. 2.50 million with the Collector of Pune.

36. Micro, Small and Medium Business Entities

There are no Micro, Small & Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31 March 2014. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) has been determined to the extent such parties have been identified on the basis of information available with the Company.

37. During the year, the Company has acquired BA/BE business from Jubilant Clinsys Limited(a step-down wholly owned subsidiary of Company) for a consideration of Rs. 87.00 million on fair value basis, in order to bring synergy with dosage formulation business of the Company. The purchase consideration has been allocated to various assets acquired, as per respective fair value on the date of acquisition.

38. The Company plans to consolidate its Pharmaceuticals business under its wholly owned subsidiary Jubilant Pharma Limited Singapore (JPL) and evaluate the option and opportunity to raise money to reduce the consolidated debt of the Company. Accordingly, the Board in its meeting held on 4 October 2013 approved transfer of Active Pharmaceutical Ingredients (API) and Dosage Forms business of the Company by way of a slump sale on going concern basis and shares held by it in Jubilant Pharma Holdings Inc USA and Jubilant Pharma NV Belgium, to a wholly owned Indian subsidiary of JPL for a net consideration of Rs. 11,451 million (net of debts). The shareholders of the Company on 21 March 2014 have approved the aforesaid sale subject to the concerned subsidiaries achieving financial closure to meet their obligation under the said purchase, and authorised the Board to decide whether to make this approval effective. JPL has received an approval from the Foreign Investment Promotion Board in this regard and subsequent to the year end, the board approved the share purchase agreement between the parties for above mentioned sale of shares held by the Company.

39. Other operating income is in the nature of export incentives, scrap sales, licensing income, etc.

40. During the previous year, the Company has changed useful life of dies and punches, used for manufacturing of dosages formulations from five years to "one to two years". Accordingly the depreciation for the previous year was higher by Rs. 17.09 million.

41. Donation includes Rs. 38.80 million payments made to Satya Electoral Trust (Previous year Rs. 10.00 million to General Electoral Trust) during the year.

42. Employee Stock Option Scheme

The Company has two stock option plans in place namely:

- Jubilant Employees Stock Option Plan, 2005 ("Plan 2005")

- JLL Employees Stock Option Plan, 2011 ("Plan 2011")

The Board of Directors had constituted Compensation Committee (''Committee'') comprising a majority of Independent Directors for administration and supervision of the Stock Option Plans.

Under Plan 2005, as amended, and under Plan 2011, upto 1,100,000 Stock Options and upto 5,352,000 Stock Options, respectively, can be issued to eligible directors (other than promoter directors) and other specified categories of employees of the Company/Subsidiaries. Options are to be granted at market price. As per the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 (''Guidelines''), the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Under Plan 2005, each option, upon vesting, shall entitle the holder to acquire five equity shares of Rs. 1 each. Options granted upto 28 August 2009 will vest entirely within two years from the grant date, with certain lock-in provisions. Options granted after 28 August 2009 will vest gradually over a period of 5 years from the grant date, without any lock-in provisions.

Under Plan 2011, each option, upon vesting, shall entitle the holder to acquire one equity share of Rs. 1 each. Options granted will vest gradually over a period of 3 years from the grant date. Vesting of Options is a function of achievement of performance criteria or any other criteria, as specified by the Committee and communicated in the grant letter.

In 2008-09, members approved constitution of Jubilant Employees Welfare Trust (''Trust'') for the purpose of acquisition of equity shares of the Company from the secondary market or subscription of shares from the Company, to hold the shares and to allocate/transfer these shares to eligible employees of the Company/subsidiaries from time to time on the terms and conditions specified under respective Plans. The members authorised grant of loan(s) from time to time to the Trust in one or more tranches, upto Rs. 1,000 million either free of interest or at interest agreed between the Board and the Trust. The outstanding loan to the Trust as at 31 March 2014 is Rs. 424.89 million (Previous year Rs. 439.39 million- Also Refer note 43).

Upto 31 March 2014, the Trust has purchased 6,363,506 equity shares of the Company from the open market, out of interest free loan provided by the Company, of which 1,530,010 shares were transferred to the employees on exercise of Options. The Trust has also been issued 192,086 equity shares of Jubilant Industries Limited in accordance with the Scheme of Amalgamation & Demerger amongst the Company, Jubilant Industries Ltd. and others.

The Company has opted for intrinsic value method of accounting for Employee Stock Options. As market price of the options is equal to the exercise price on the date of grant, intrinsic value is Rs. Nil. Hence, there is no cost charged to the Statement of Profit and Loss on account of options granted to employees under the Employee Stock Option Plans of the Company.

43. During the current period, the Company has changed its policy with respect to treatment of shares issued to Jubilant Employee Welfare trust (''Trust''). The Trust primarily holds equity shares of the Company which are to be transferred to employees of the Company and it''s subsidiaries upon exercise of their stock options under various Employee Stock Option Plans (ESOP) in force. As per a recent opinion of the Expert Advisory Committee (''EAC'') of The Institute of Chartered Accountants of India, as on the reporting date, the shares issued to a trust but yet to be allotted to employees be shown as a deduction, from the Share Capital to the extent of face value of the shares and Securities Premium to the extent of amount exceeding face value of shares, with a corresponding adjustment to the, loan receivable from Trust, Capital Reserve (for the amount of Profit on sale of shares) and Surplus (to the extent of dividend received net of operating expenses). Consequently, the face value of 4,833,496 equity shares held by trust as at 31 March 2014 amounting to Rs. 4.84 million is reduced from the share capital and the excess of net worth (after elimination of inter-company loans) of Rs. 420.00 million has been adjusted from securities premium Rs. 577.59 million, capital reserve (Rs. 104.77 million) and surplus (Rs. 52.82 million).

44. Leases:

a) The Company''s significant operating lease arrangements are in respect of premises (residential, offices, godown etc.). These leasing arrangements, which are cancellable, range between 11 months and 3 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses. Rental payments under such leases are Rs. 80.59 million (Previous year Rs. 94.20 million).

b) Also, the Company has significant operating lease arrangements which are non-cancellable for a fixed period of 25 years. The lease rental is subject to escalation whereby the Lessor is entitled to increase the lease rental by 10% of the average lease rental of preceding three years blocked period.

There is no element of contingent rent or sub lease payments. The Company has option to purchase the assets at the end of the lease term. There are no restrictions imposed by these lease arrangements regarding dividend, additional debt and further leasing.

45. In line with the applicable Accounting Standards, during the year, interest amounting to Rs. 80.37 million (Previous year Rs. 223.65 million) and expenditure incurred on start up and commissioning of the project and/or substantial expansion and development, including the expenditure incurred on trial runs (Net of trial run receipts, if any) up to the date of capitalisation amounting to Rs. 16.10 million (Previous year Rs. 406.34 million) have been capitalised. The said expenditure (net of trial run receipts), so capitalised are accumulated as capital work in progress to be allocated to fixed assets on capitalisation.

46. The carrying value of internally generated intangible asset – product development and other intangibles under progress has been reviewed and based on financial and technical assessment, carrying value of certain internally generated intangible assets/other intangibles under development of Rs. 25.56 million (Previous year Rs. 55.56 million) have been charged to the Statement of Profit and Loss.

47. Consequent to re-evaluation of certain tax provisions pertaining to earlier years (including deferred taxes), tax benefit is amounting to Rs. 591.86 million has been recognised in the current year.

49. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Para 46A of Accounting Standard 11 (AS-11) – "The Effects of Changes in Foreign Exchange Rates" notifed by the Ministry of Corporate Affairs on 29 December 2011. Accordingly during year ended 31 March 2014, the Company has capitalised exchange difference amounting to Rs. 281.00 million (Previous Year Rs. 170.75 million) to the cost of fixed assets and Rs. 805.49 million (Previous year Rs. 579.64 million) to foreign currency monetary item translation difference account (FCMITDA). During the year Rs. 1,000.21 million (Previous Year Rs. 631.61 million) has been amortised to the Statement of Profit and Loss in terms of the said notifcation and balance of Rs. 480.73 million (Previous Year Rs. 675.45 million) is carried in Balance Sheet as on 31 March 2014.

50. Hedging and Derivatives:

i) The Company uses various derivative instruments such as foreign exchange forward contracts, interest rate swaps and currency swaps to selectively hedge its exposures to movement in foreign exchange rates and interest rates. These derivatives are not used for speculative or trading purposes.

iii) Mark to market losses in respect of currency and interest rate swaps contracts amounting to Rs. 764.55 million (Previous year Rs. 314.53 million) has been charged to the Statement of Profit and Loss. The accumulated mark to market losses on currency swaps (including currency and interest rate swaps) as at 31 March 2014 is Rs. 3,098.88 million (Previous year Rs. 2,031.12 million).

iv) The Company has opted for hedge accounting in respect of certain transactions including forward contracts under Accounting Standard 30 issued by the Institute of Chartered Accountants of India. Accordingly during the year:

a) An amount of Rs. 9.23 million (Previous Year Rs. 354.14 million), net of related tax effect, has been credited to Hedge Reserve Account on account of outstanding forward contracts of USD 70 million (Previous Year USD 258 million) for which highly probable forecast sale of USD 70 million (Previous Year USD 258 million) is expected to occur between April 2014 and Aug 2014.

b) An amount of Rs. 479.65 million (Previous Year Rs. 181.03 million) net of tax has been transferred from Hedge Reserve Account to Statement of Profit and Loss under sales on occurrence of highly probable forecast transactions.

51. Employee benefits have been calculated as under:

(A) Defined Contribution Plans

a. Provident fund*

b. Superannuation fund

(B) Defined benefit Plans

i. Gratuity

In accordance with Accounting Standard 15(AS 15)-"Employee benefits (Revised 2005)", an actuarial valuation has been carried out in respect of gratuity. The discount rate assumed is 9.40% p.a. (Previous year 8.00% p.a.) which is determined by reference to market yield at the Balance Sheet date on Government bonds. The retirement age has been considered at 58 years and mortality table is as per IALM (2006-08) (Previous year IALM (1994-96)).

The estimates of future salary increases, considered in actuarial valuation is 10% p.a. for frst three years and 6% p.a. thereafter (Previous year 5% p.a.), taking into account of infation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The plans assets are maintained with Life Insurance Corporation of India in respect of gratuity scheme for certain employees of two units of the Company. The details of investments maintained by Life Insurance Corporation are not available with the Company, hence not disclosed. The expected rate of return assumed on plan assets is 9.00% p.a. (Previous year 9.00% p.a.).

ii. Provident Fund

The Guidance on implementation of AS 15, Employee benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving provident funds, which require interest shortfall to be compensated, are to be considered as Defined benefit plans. The actuary has worked out a liability of Rs. Nil (Previous year Rs. 9.67 million) likely to arise towards interest guarantee. The trust is managing common corpus of some of the group companies. The total liability of Rs. Nil (Previous year Rs. 9.67 million) as worked out by the actuary has been allocated to each entity based on the corpus value of each entity as on 31 March 2014. Accordingly, liability of Rs. Nil (Previous year Rs. 8.40 million) has been allocated to Company and Rs. Nil (Previous year Rs. 1.26 million) has been charged to Statement of Profit and Loss during the year. The Company has contributed Rs. 115.16 million (Previous year Rs. 104.16 million) to Provident Fund for the year.

52. Segment Reporting :

i) Based on the guiding principles given in Accounting Standard 17 (AS-17) on " Segment Reporting", the Company''s Primary Business Segments were organised around customers on industry and product lines as under:

a. Pharmaceuticals :

Generics, comprising Active Pharmaceuticals Ingredients (APIs) and Solid Dosage Formulations

b. Life Sciences Ingredients :

i) Advance Intermediates and Specialty Ingredients ii) Life Sciences Chemicals iii) Nutritional Products

ii) In respect of secondary segment information, the Company has identified its geographical segments as:

(i) Within India (ii) Outside India.

iii) Inter segment transfer pricing

Inter segment transfer prices are based on market prices.

53. Related Party Disclosures

1. Related parties where control exists:

a) Subsidiaries including step-down subsidiaries:

Jubilant Pharma Limited (formerly known as Jubilant Pharma Pte. Ltd), Draximage Limited, Cyprus, Draximage Limited, Ireland, Draximage LLC, Jubilant DraxImage (USA) Inc., Deprenyl Inc., USA, Jubilant DraxImage Inc., 6963196 Canada Inc., 6981364 Canada Inc. DAHI Animal Health (UK) Limited, Draximage (UK) Limited, Jubilant Pharma Holdings Inc. (formerly known as Jubilant Life Sciences Holdings Inc.), Jubilant Clinsys Inc., Cadista Holdings Inc., Jubilant Cadista Pharmaceuticals Inc., Jubilant Life Sciences International Pte. Limited, HSL Holdings Inc., Jubilant HollisterStier LLC, Jubilant Life Sciences (Shanghai) Limited, Jubilant Pharma NV, Jubilant Pharmaceuticals NV, PSI Supply NV, Jubilant Life Sciences (USA) Inc., Jubilant Life Sciences (BVI) Limited, Jubilant Biosys (BVI) Limited, Jubilant Biosys (Singapore) Pte. Limited, Jubilant Biosys Limited, Jubilant Discovery Services, Inc., Jubilant Drug Development Pte. Limited, Jubilant Chemsys Limited, Jubilant Clinsys Limited, Jubilant Infrastructure Limited, Jubilant First Trust Healthcare Limited, Asia Healthcare Development Limited (ceased to be a subsidiary with effect from 3 March 2014), Jubilant Innovation (BVI) Limited, Jubilant Innovation Pte. Limited, Jubilant DraxImage Limited India, Jubilant Innovation (India) Limited, Jubilant Innovation (USA) Inc, Jubilant HollisterStier Inc., Draxis Pharma LLC, Jubilant Generics Inc. (formerly known as Generic Pharmaceuticals Holdings, Inc.), Jubilant Life Sciences (Switzerland) AG, First Trust Medicare Private Limited, Jubilant Drug Discovery & Development Services Inc., Vanthys Pharmaceutical Development Private Limited, Jubilant Life Sciences NV, Jubilant Generics Limited, Drug Discovery and Development Solutions Limited.

b) Other Entities:

Jubilant HollisterStier General Partnership Canada, Draximage General Partnership Canada (controlled through subsidiaries/step down subsidiaries).

2. Other Related parties with whom transactions have taken place during the year.

a) Enterprise over which certain key management personnel have significant infuence:

Jubilant Enpro Private Limited, Jubilant Oil & Gas Private Limited, Jubilant FoodWorks Limited, Tower Promoters Private Limited, B&M Hot Breads Private Limited, Jubilant Industries Limited, Jubilant Agri and Consumer Products Limited, Jubilant Motors Private Limited, Jubilant Aeronautics Private Limited, Jubilant Fresh Private Limited, Sankur Chalets Private Limited.

b) Key management personnel:

For the year ended 31 March 2014: Mr. Shyam S. Bhartia, Mr. Hari S. Bhartia , Mr. R. Sankaraiah, Mr. Shyamsundar Bang, Mr. Lalit Jain.

For the year ended 31 March 2013: Mr. Shyam S. Bhartia, Mr. Hari S. Bhartia , Mr. R. Sankaraiah, Mr. Shyamsundar Bang, Mr. Pramod Yadav, Mr. Rajesh Srivastava, Mr. Neeraj Agrawal, Mr. Chandan Singh.

c) Others:

Vam Employees Provident Fund Trust, Jubilant Employee Welfare Trust*, Jubilant Bhartia Foundation, Vam officers Superannuation Fund.

*Refer note 43

Disclosure in respect of material related party transactions during the year:

1. Sales of goods and services include to Jubilant Life Sciences (Shanghai) Limited Rs. 602.27 million (Previous year Rs. 1,801.44 million), Jubilant Life Sciences (USA) Inc. Rs. 1,791.20 million (Previous year Rs. 2,082.96 million), PSI Supply NV Rs. 218.43 million (Previous year. Rs. 126.02 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 934.51 million (Previous year Rs. 828.80 million), Jubilant Pharmaceuticals NV Rs. 1,491.32 million (Previous year Rs. 1,769.94 million), Jubilant Chemsys Limited Rs. 15.88 million (Previous year Rs. 38.91 million), Jubilant Agri and Consumer Products Limited Rs. 201.32 million (Previous year Rs. 426.39 million), Jubilant Infrastructure Limited Rs. 2.86 million (Previous year Rs. 1.28 million), Jubilant Life Sciences International Pte. Limited Rs. 3,198.42 million (Previous year Rs. 1,037.70 million) and Jubilant Life Sciences NV Rs. 1,620.01 million (Previous year Rs. Nil)

2. Interest on loan charged to Jubilant Biosys Limited Rs. 153.80 million (Previous year Rs. 153.80 million), Jubilant Pharma Limited Rs. 4.01 million (Previous year Rs. Nil), Jubilant Pharma Holdings Inc. Rs. 6.05 million (Previous year Rs. Nil).

3. Purchases of goods and services include from Jubilant Clinsys Limited Rs. 50.24 million (Previous year Rs. 141.10 million), Jubilant Pharmaceuticals NV Rs. 33.23 million (Previous year Rs. 39.34 million), Jubilant Infrastructure Limited Rs. 742.95 million (Previous year Rs. 852.90 million), Jubilant Chemsys Limited Rs. Nil (Previous year Rs. 0.62 million), PSI Supply NV Belgium. Rs. Nil (Previous year Rs. 0.67 million), Jubilant Biosys Limited Rs. 0.45 million (Previous year Rs. Nil) and Jubilant Agri and Consumer Products Limited Rs. 120.16 million (Previous year Rs. 94.87 million).

4. Recovery of expenses and utilities charges includes from Jubilant Chemsys Limited Rs. 18.03 million (Previous year Rs. 19.06 million, Jubilant Cadista Pharmaceuticals Inc Rs. 10.36 million (Previous year Rs. 12.69 million), Jubilant HollisterStier LLC Rs. 25.73 million (Previous year Rs. 40.57 million), Jubilant DraxImage Inc. Rs. 5.77 million (Previous year Rs. 13.29 million), Jubilant DraxImage Limited Rs. Nil (Previous year Rs. 0.05 million), Jubilant HollisterStier General Partnership Rs. 13.68 million (Previous year Rs. 12.25 million), Jubilant Clinsys Inc Rs. 1.19 million (Previous year Rs. 1.51 million), Jubilant Infrastructure Limited Rs. 96.71 million (Previous year Rs. 80.10 million), Jubilant Enpro Private Limited Rs. 7.64 million (Previous year Rs. 8.21 million), Jubilant Oil & Gas Private Limited Rs. 5.45 million (Previous year Rs. 4.23 million), Jubilant FoodWorks Limited Rs. 13.51 million (Previous year Rs. 5.97 million), Jubilant Industries Limited Rs. 1.32 million (Previous year Rs. 0.18 million), Jubilant Agri and Consumer Products Limited Rs. 74.29 million (Previous year Rs. 69.43 million), B&M Hot Breads Private Limited Rs. 0.29 million(Previous year Rs. 0.59 million), Jubilant Aeronautics Private Limited Rs. 0.30 million (Previous year Rs. 0.16 million), Jubilant Biosys Limited Rs. Nil (Previous year Rs. 5.12 million), Jubilant Innovation Pte. Limited Rs. Nil (Previous year Rs. 0.03 million) and Jubilant Fresh Private Limited Rs. 0.09 million (Previous year Rs. Nil), PSI Supply NV Belgium. Rs. 0.04 million (Previous year Rs. Nil million), Jubilant Pharmaceuticals NV Rs. 0.04 million (Previous year Rs. Nil), Jubilant Clinsys Limited Rs. 0.77 million (Previous year Rs. Nil).

5. Reimbursement of expenses to Jubilant Pharmaceuticals NV Rs. 129.88 million (Previous year Rs. 109.20 million), Jubilant Biosys Limited Rs. 0.08 million (Previous year Rs. 0.44 million), Jubilant Infrastructure Limited Rs. 0.15 million (Previous year Rs. 0.16 million), PSI Supply NV Belgium. Rs. 9.62 million (Previous year Rs. 2.46 million), Jubilant DraxImage Inc Rs. 6.84 million (Previous year Rs. 2.69 million), Jubilant HollisterStier LLC Rs. 1.15 million (Previous year Rs. 2.13 million), Jubilant Cadista Pharmaceuticals Inc Rs. 15.36 million (Previous year Rs. 7.80 million), Jubilant Hollister Stier General Partnership Rs. 0.03 million (Previous year Rs. 0.10 million), Jubilant Clinsys Limited Rs. 10.67 million (Previous year Rs. Nil), Jubilant Life Sciences NV Rs. 0.42 million (Previous year Rs. Nil) and Jubilant Oil & Gas Private Limited Rs. Nil (Previous year Rs. 0.28 million).

6. Remuneration and related expenses to Mr. Shyam S Bhartia Rs. Nil (Previous year Rs. 57.50 million), Mr. Hari S Bhartia Rs. Nil (Previous year Rs. 57.50 million), Mr. Shyamsundar Bang Rs. Nil (Previous year Rs. 21.31 million), Mr. R Sankaraiah Rs. 36.05 million (Previous year Rs. 36.17 million), Mr. Pramod Yadav Rs. Nil (Previous year Rs. 18.57 million), Mr. Rajesh Srivastava Rs. Nil (Previous year Rs. 18.91 million), Mr. Chandan Singh Rs. Nil (Previous year Rs. 11.08 million), Mr. Neeraj Agrawal Rs. Nil (Previous year Rs. 21.72 million), Mr. Lalit Jain Rs. 6.22 million (Previous year Rs. Nil).

7. The Company''s contribution to PF Trust to Vam Employees Provident Fund Trust Rs. 115.16 million (Previous year Rs. 104.16 million).

8. The Company''s contribution to superannuation fund to Vam officers Superannuation Fund Rs. 11.99 million (Previous year Rs. 14.09 million).

9. Rent expenses paid to Jubilant Enpro Private Limited Rs. 4.09 million (Previous year Rs. 2.59 million), Tower Promoters Private Limited Rs. 52.00 million (Previous year Rs. 52.00 million), Sankur Chalets Private Limited Rs. 1.40 million (Previous year Rs. 1.80 million).

10. Donation to Jubilant Bhartia Foundation Rs. 17.20 million (Previous year Rs. 24.61 million).

11. Sharing of licensing fees with Jubilant Pharmaceuticals NV Rs. 42.89 million (Previous year Rs. 58.07 million).

12. R&D services rendered to Jubilant Cadista Pharmaceuticals Inc. Rs. Nil (Previous year Rs. 13.35 million).

13. Lease rental paid to Jubilant Infrastructure Limited Rs. 14.84 million (Previous year Rs. 14.22 million).

14. Business transfer consideration paid to Jubilant Clinsys Limited Rs. 87.00 million (Previous year Rs. Nil).

15. Purchase of tangible/intangible assets from Jubilant Pharmaceuticals NV Rs. Nil (Previous year Rs. 13.90 million), Jubilant Motors Private Limited Rs. 5.32 million (Previous year Rs. 6.15 million) and Jubilant Oil & Gas Private Limited Rs. 3.86 million (Previous year Rs. Nil).

16. Purchase of investments being equity shares of Jubilant Life Sciences International Pte. Limited purchased from Jubilant Pharma Limited Rs. 2.91 million (Previous year Rs. Nil).

17. Investments in equity share capital include to Jubilant Pharma Limited Rs. 264.89 million (Previous year Rs. 307.82 million), Jubilant Life Sciences NV Rs. 7.81 million (Previous year Rs. Nil).

18. Interest on loan paid to Jubilant Infrastructure Limited Rs. 21.75 million (Previous year Rs. 0.78 million), Jubilant Clinsys Limited Rs. 3.92 million (Previous year Rs. 0.94 million), Jubilant First Trust Healthcare Limited Rs. 26.34 million (Previous year Rs. 8.75 million), Asia Healthcare Development Limited Rs. 0.74 million (Previous year Rs. 0.36 million) and Vanthys Pharmaceutical Development Private Limited Rs. 2.37 million (Previous year Rs. 0.81 million).

19. Redemption of optionally convertible non-cumulative redeemable preference shares by Jubilant Chemsys Limited Rs. Nil (Previous year Rs. 120.00 million).

20. Loans given to Jubilant Pharma Limited Rs. 312.85 million (Previous year Rs. 409.98 million) and Jubilant Pharma Holdings Inc. Rs. 542.01 million (Previous year Rs. Nil).

21. Loans received back from Jubilant Pharma Limited Rs. 18.44 million (Previous year. Rs. Nil) and Jubilant Employee Welfare Trust Rs. Nil (Previous year Rs. 14.50 million).

22. Loans taken from Jubilant Infrastructure Limited Rs. 130.00 million (Previous year Rs. 227.50 million), Jubilant Clinsys Limited Rs. 25.00 million (Previous year Rs. 60.00 million), Jubilant First Trust Healthcare Limited Rs. 478.90 million (Previous year Rs. 209.20 million), Asia Healthcare Development Limited Rs. Nil (Previous year Rs. 8.50 million) and Vanthys Pharmaceutical Development Private Limited Rs. Nil (Previous year Rs. 25.00 million).

23. Loans repaid to Jubilant Infrastructure Limited Rs. Nil (Previous year Rs. 65.00 million), Jubilant First Trust Healthcare Limited Rs. 21.70 million (Previous year Rs. 8.00 million) and Asia Healthcare Development Limited Rs. 8.50 million (Previous year Rs. Nil) and Jubilant Clinsys Limited Rs. 40.00 million (Previous year Rs. Nil).

24. Advance from customer against goods/assets Jubilant Life Sciences International Pte. Limited Rs. 2,388.85 million (Previous year Rs. 2,568.06 million), Jubilant Life Sciences NV Rs. 2,095.56 million (Previous year Rs. Nil) and Jubilant FoodWorks Limited Rs. 60.57 million (Previous year Rs. Nil).

25. Loan payable to Jubilant Infrastructure Limited Rs. 357.50 million (Previous year Rs. 227.50 million), Jubilant Clinsys Limited Rs. 45.00 million (Previous year Rs. 60.00 million), Jubilant First Trust Healthcare Limited Rs. 658.40 million (Previous year Rs. 201.20 million), Asia Healthcare Development Limited Rs. Nil (Previous year Rs. 8.50 million) and Vanthys Pharmaceutical Development Private Limited Rs. 25.00 million (Previous year Rs. 25.00 million).

26. Interest on loans payable to Jubilant Infrastructure Limited Rs. 20.08 million (Previous year Rs. 0.51 million), Jubilant Clinsys Limited Rs. 4.37 million (Previous year Rs. 0.84 million), Jubilant First Trust Healthcare Limited Rs. 31.58 million (Previous year Rs. 7.86 million), Asia Healthcare Development Limited Rs. Nil (Previous year Rs. 0.33 million) and Vanthys Pharmaceutical Development Private Limited Rs. 2.13 million (Previous year Rs. 0.73 million).

27. Trade and other payables include to Jubilant Clinsys Limited to Rs. 107.05 million (Previous year Rs. 14.19 million), Jubilant Pharmaceuticals NV Rs. 158.40 million (Previous year Rs. 154.92 million), Jubilant Life Sciences USA Inc Rs. 9.92 million (Previous year Rs. 9.67 million), Jubilant Cadista Pharmaceuticals Inc Rs. 2.38 million (Previous year Rs. Nil), Jubilant Infrastructure Limited Rs. 81.92 million (Previous year Rs. 147.64 million), Jubilant Industries Limited Rs. 0.97 million (Previous year Rs. Nil), Jubilant Agri and Consumer Products Limited Rs. 8.70 million (Previous year Rs. 21.29 million), PSI Supply NV Rs. 12.21 million (Previous year Rs. 2.34 million), Jubilant DraxImage Inc Rs. 9.14 million (Previous year Rs. 2.63 million), Jubilant HolisterStier General Partnership Rs. 0.12 million (Previous year Rs. 0.10 million), Jubilant Chemsys Limited Rs. 0.42 million (Previous year Rs. Nil), Jubilant Biosys Limited Rs. 0.27 million (Previous year Rs. Nil) and Jubilant Life Sciences NV Rs. 0.42 million (Previous year Rs. Nil).

28. Loans recoverable from Jubilant Pharma Limited Rs. 916.62 million (Previous year Rs. 570.04 million) and Jubilant Biosys Limited Rs. 1,513.80 million (Previous year Rs. 1,513.80 million), Jubilant Pharma Holdings Inc. Rs. 521.22 million (Previous year Rs. Nil) and Jubilant Employee Welfare Trust Rs. Nil (Previous year Rs. 439.39 million).

29. Interest on loan recoverable from Jubilant Pharma Limited Rs. 3.40 million (Previous year Rs. Nil) and Jubilant Biosys Limited Rs. 213.96 million (Previous year Rs. 75.54 million), Jubilant Pharma Holdings Inc. Rs. 5.92 million (Previous year Rs. Nil).

30. Trade receivables include from Jubilant Pharmaceuticals N.V Rs. 326.29 million (Previous year Rs. 649.42 million), PSI Supply NV Rs. 109.59 million(Previous year Rs. 49.08 million), Jubilant Life Sciences (USA) Inc Rs. 474.70 million (Previous year Rs. 563.49 million), Jubilant Life Sciences (Shanghai) Limited Rs. 239.59 million (Previous year Rs. 383.25 million), Jubilant Cadista Pharmaceuticals Inc Rs. 111.76 million (Previous year Rs. 93.69 million), Jubilant Agri and Consumer Products Limited Rs. 37.19 million (Previous year Rs. 47.05 million), Jubilant Chemsys Limited Rs. 0.01 million (Previous year Rs. 1.54 million), Jubilant Infrastructure Limited Rs. 0.15 million (Previous year Rs. Nil), Jubilant Life Sciences International Pte. Limited Rs. 664.96 million (Previous year Rs. Nil) and Jubilant Life Sciences NV Rs. 231.77 million (Previous year Rs. Nil).

31. Deposit recoverable from Tower Promoters Private Limited Rs. 21.00 million (Previous year Rs. 21.00 million).

32. Other recoverable include from Jubilant Pharmaceuticals NV Rs. 58.93 million (Previous year Rs. Nil), Jubilant Cadista Pharmaceuticals Inc Rs. 1.18 million (Previous year Rs. 6.85 million), Jubilant HollisterStier LLC Rs. 15.15 million (Previous year Rs. 94.51 million), Jubilant Clinsys Inc Rs. 12.34 million (Previous year Rs. 10.15 million), Jubilant HollisterStier General Partnership Rs. 68.13 million (Previous year Rs. 54.29 million), Jubilant DraxImage Inc Rs. 46.66 million(Previous year Rs. 39.83 million), Jubilant DraxImage Limited Rs. 6.44 million (Previous year Rs. 6.31 million), Jubilant Chemsys Limited Rs. 13.41 million(Previous year Rs. 2.26 million), Mr. R. Sankaraiah Rs. 25.00 million (Previous year Rs. 25.00 million), Jubilant Oil & Gas Private Limited Rs. 1.96 million (Previous year Rs. Nil), Jubilant Industries Limited Rs. Nil (Previous year Rs. 17.17 million), Jubilant Agri and Consumer Products Limited Rs. 13.32 million (Previous year Rs. 63.98 million), B&M Hot Breads Private Limited Rs. 0.06 million (Previous year Rs. Nil), Jubilant Biosys Limited Rs. Nil (Previous year Rs. 4.68 million), Jubilant Life Sciences (Switzerland) AG Schaffhausen Rs. 0.90 million (Previous year Rs. 0.75 million), Jubilant FoodWorks Limited Rs. 8.93 million (Previous year Rs. 5.37 million) and Jubilant Clinsys Limited Rs. 1.07 million (Previous year Rs. Nil) and remuneration recoverable from Mr. Shyam S Bhartia Rs. 40.06 million (Previous year Rs. Nil), Mr. Hari S Bhartia Rs. 40.05 million (Previous year Rs. Nil), Mr. Shyamsundar Bang Rs. 23.96 million (Previous year Rs. Nil).

33. Advance from customer payable to Jubilant Life Sciences International Pte. Limited Rs. 1,908.52 million (Previous year Rs. 1,554.84 million) and Jubilant Life Sciences NV Rs. 755.05 million (Previous year Rs. Nil) and Jubilant FoodWorks Limited Rs. 60.57 million (Previous year Rs. Nil).

34. Financial guarantees given on behalf of subsidiaries include for Jubilant HollisterStier Inc. Rs. 251.78 million (Previous year Rs. 1,136.45 million), Jubilant Life Sciences International Pte. Limited Rs. Nil (Previous year Rs. 961.66 million).

35. Mortgage of land and building at Bharuch owned by one of subsidiaries as security against term loan.

36. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the specified domestic transactions entered into with the specified persons and the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence before the due date of fling of income tax return. The management is of the opinion that its specified domestic transactions and international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

37. Prior period items for the year Rs. Nil (Previous year Rs. 37.33 million).

38. Previous year figures were audited by another firm of Chartered Accountants.


Mar 31, 2013

Corporate Information

Jubilant Life Sciences Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange of India. The company is a global Pharmaceutical and Life Sciences player engaged in manufacture and supply of Generics (Including Active Pharmaceuticals Ingredients (APIs) and Solid Dosage Formulations) and Life Science Ingredients (Including Proprietary Products and Exclusive Synthesis, Nutrition Ingredients and Life Sciences Chemicals). The company''s strength lies in its unique offerings of Pharmaceuticals and Life Sciences products and services across the value chain. It is well recognised as a ''Partner of Choice'' by leading pharmaceuticals and life sciences companies globally.

1. Commitments

a) Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (Net of advances) Rs. 173.25 million (Previous year Rs. 711.37 million) [Advances Rs. 16.01 million (Previous year Rs. 53.93 million)].

b) Other Commitments:

i. Exports obligation undertaken by the Company under EPCG scheme to be completed over a period of five/eight years on account of import of capital goods at concessional import duty and remaining outstanding is Rs. 6.60 million (Previous year Rs. 59.48 million). Similarly export obligation under Advance License Scheme/ DFIA scheme on duty free import of specific raw materials, remaining outstanding is Rs. 4,550.88 million (Previous year Rs. 3,539.28 million).

ii. Outstanding export obligation amounting to Rs. 1,554.84 million, against equivalent supplier advance received from a step down wholly owned subsidiary.

iii For lease commitments refer note No 45.

2. Contingent liabilities to the extent not provided for: A. Guarantees:

i. The Company has given following corporate guarantee on behalf of its subsidiaries to secure financial facilities :

- Name of Bank 2013 2012 I Subsidiary I

Jubilant ICICI US$ US$ HollisterStier Bank 20.93 37.66 Inc. Canada million million

Jubilant Life ICICI SGD - Sciences Bank Ltd. 22.00 International Singapore million Pte. Ltd

Total effective guarantee as on 31st March, 2013 in Rs. 2,098.11 million (previous year Rs. 2,234.09 million).

ii. Outstanding guarantees furnished by banks on behalf of the Company/by the Company including in respect of letters of credits is Rs. 2,794.99 million (Previous year Rs. 2,101.03 million).

Excluding demands in respect of business transferred in earlier year to Jubilant Industries Limited in terms of the scheme of demerger though the demands may be continuing in the name of the Company.

Future cash outflows in respect of the above matters as well as for matters listed under 33(C) below are determinable only on receipt of judgments/decisions pending at various stages/forums.

C. Other contingent liabilities:

i. Liability in respect of bills discounted with banks is Rs. 1,050 million (Previous year Rs. 500 million).

ii. The Company''s writ petition against the levy of transport fee by the State of Maharashtra on consumption of rectified spirit and molasses within Nira factory has been allowed by the Hon''ble Bombay High Court with consequential refund. The Company has filed a refund claim for an amount of Rs. 2.51 million deposited during the period when the dispute was pending before the High Court. The total amount of disputed transport fee is Rs. 171.66 million. The State of Maharashtra has filed a special leave petition in the Supreme Court and has sought a stay on the operation of the High Court order.

iii. The Company has challenged before the Hon''ble Allahabad High Court, the increase in denaturing fee by the State of Uttar Pradesh w.e.f 1st April, 2004 on denaturing of rectified spirit in the Gajraula factory and the writ petition has been admitted by the court. The Company has deposited Rs. 22.52 million under protest which is shown as deposits.

iv. Zila Panchayat at J.P. Nagar (in respect of the Company''s Gajraula plant) served a notice demanding a compensation of Rs. 277.40 million allegedly for, percolation of poisonous water stored in lagoons and flowing through the land of Zila Panchayat resulting in loss of crops and cattle of the farmers and for putting poisonous fly ash on national highway which caused loss to the health and damages to eyes and skin of people.

District Magistrate issued a recovery certificate along with 10% collection charges inflating the demand to Rs. 305.14 million. In the opinion of the Company, the Zila Panchayat has no jurisdiction in raising this demand. The demand was challenged in Hon''ble Allahabad High Court and the court stayed the demand till further orders.

v. The Company has challenged, before the Hon''ble Allahabad High Court, the levy of license fees of Rs. 2.87 million by State of Uttar Pradesh, for grant of PD-2 license for manufacture of ethyl alcohol for industrial use. The writ petition has been admitted and is being listed for final hearing. Though the amount has been deposited and shown as such, no provision against this has been made as the issue is covered by the earlier favorable judgment of the Hon''ble Supreme Court of India.

vi. The State of Uttar Pradesh (UP) has imposed levy on import of denatured spirit into the State of Uttar Pradesh (UP). The Company has imported denatured spirit into the State of Uttar Pradesh and has challenged levy amounting to Rs. 90 million before Hon''ble Allahabad High Court. The writ petition has been allowed by the High Court in favour of the Company. The State of Uttar Pradesh filed a special leave petition (SLP) with Hon''ble Supreme Court. The SLP has been admitted but the Hon''ble Supreme Court has declined the request of the State of Uttar Pradesh (UP) to stay the operation of High Court Order.

vii. The Hon''ble Supreme Court has quashed the levy of license fee by State of Uttar Pradesh on captive consumption of denatured spirit in the Gajraula factory, and has ordered the refund of the fee paid during the period of dispute subject to condition that the amount has not been collected from the Company''s customers. Further the Court has directed the State to investigate whether the Company has collected the disputed fee from its customers to the extent bank guarantees were furnished.

The Company is entitled to a refund of Rs. 84.06 million as the amount paid during the period of dispute or secured by bank guarantees was not collected from its customers. Accordingly the Company has approached the State of Uttar Pradesh for the refund of the said amount. The amount paid has been shown as deposit.

viii. The State of Uttar Pradesh (UP) has also levied trade tax (VAT) in addition to the administrative fee on sale of molasses within the State. The Hon''ble Allahabad High Court had struck down the levy of VAT on grounds that once an administrative fee, in the form of tax, has already been charged under a Special Act, no Trade Tax or VAT can be charged under a general act. The Hon''ble Supreme Court (SC) has also declined to grant stay in SLP filed by the State of UP and the VAT authorities are currently treating molasses as goods not subject to VAT. The Company discontinued paying VAT on molasses purchased during FY 2011- FY 2013. The issue of applicability of VAT on sale of molasses is pending before the Hon''ble S.C and in case it is decided in favour of the State of UP, VAT amounting to Rs. 228.40 million would become payable on molasses purchased till FY 2013 and the net liability would be Rs. 24.70 million after adjustment of VAT credit to the extent of Rs. 203.70 million.

3. Loans to Subsidiary Companies, including interest accrued thereon pursuant to information required to be disclosed under clause 32 of listing agreement.

4. Micro, Small and Medium Business Entities

There are no Micro, Small & Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2013. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) has been determined to the extent such parties have been identified on the basis of information available with the Company.

5. As per share purchase agreement with Jubilant Cadista Pharmaceuticals Inc, a step down subsidiary, the company has delivered 10 Pre-Abbreviated New Drug Application (ANDA). Pending receipt of approval from FDA, company is yet to recognise revenue for 3 ANDAs.

6. Other operating income is in the nature of scrap sales, and licensing income etc.

7. Excise Duty under manufacturing expenses denotes provision on stock differential and other claims/ payments.

8. During the year, the company has changed useful life of dies and punches, used for manufacturing of dosages formulations from five years to "one to two years", Accordingly the depreciation for the year is higher by Rs. 17.09 million.

9. Donation includes Rs. 10.00 million (Previous year Rs. 15.02 million) payments made to General Electoral Trust during the year.

10. Prior period items for the year Rs. 37.33 million (Previous year Rs. 4.23 million).

11. Interest expenses are net of settlement received under interest rate swap as per Note 51.

12. Employee Stock Option Scheme

The Company has two stock option plans in place namely:

- Jubilant Employees Stock Option Plan, 2005 ("Plan 2005")

- JLL Employees Stock Option Plan, 2011 ("Plan 2011")

The Board of Directors had constituted a Compensation Committee (''Committee'') comprising a majority of Independent Directors for administration and supervision of the Stock Option Plans.

Under Plan 2005, as amended, and under Plan 2011, up to 1,100,000 Stock Options and up to 5,352,000 Stock Options, respectively, can be issued to eligible directors (other than promoter directors) and other specified categories of employees of the Company/ Subsidiaries. Options are to be granted at market price. As per the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 (''Guidelines''), the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Under Plan 2005, each option, upon vesting, shall entitle the holder to acquire five equity shares of Rs. 1 each. Options granted up to 28th August 2009 will vest entirely within two years from the grant date, with certain lock-in provisions. Options granted after 28th August 2009 will vest gradually over a period of 5 years from the grant date, without any lock-in provisions.

Under Plan 2011, each option, upon vesting, shall entitle the holder to acquire one equity share of Rs. 1 each. Options granted will vest gradually over a period of 3 years from the grant date. Vesting of options is a function of achievement of performance criteria or any other criteria, as specified by the Committee and communicated in the Grant Letter.

13. Leases:

a) The Company''s significant operating lease arrangements are in respect of premises (residential, offices, godown etc.). These leasing arrangements, which are cancellable, range between 11 months and 3 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses.

b) Also, the Company has significant operating lease arrangements which are non-cancellable for a fixed period of 25 years. The lease rental is subject to escalation whereby the Lessor is entitled to increase the lease rental by 10% of the average lease rental of preceding three years (blocked period).

The schedule of future minimum lease rental payments in respect of non-cancellable operating leases is set out below:

c) Assets acquired under finance lease:

The Company has taken vehicles under finance lease. Future minimum lease payments and their present values under finance leases are as follows:

There is no element of contingent rent or sub lease payments. Company has option to purchase the assets at the end of the lease term. There are no restrictions imposed by these lease arrangements regarding dividend, additional debt and further leasing.

14. In line with the applicable Accounting Standards, during the year, interest amounting to Rs. 223.65 million (Previous year Rs. 253.51 million) and expenditure incurred on start up and commissioning of the project and /or substantial expansion and development, including the expenditure incurred on trial runs (Net of trial run receipts, if any) up to the date of capitalisation amounting to Rs. 406.34 million (Previous year Rs. 286.55 million) have been capitalised. The said expenditure (net of trial run receipts), so capitalised are accumulated as Capital work in progress to be allocated to fixed assets on capitalisation.

15. The carrying value of internally generated intangible asset - product development and other intangibles under progress has been reviewed and based on financial and technical assessment, carrying value of certain internally generated intangible assets/other intangibles under development of Rs. 55.56 million (Previous year Rs. 197.37 million) have been charged to the Statement of Profit and Loss.

16. Current Tax includes Rs. Nil (Previous year Rs. (7.45) million) related to previous years.

17. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Para 46A of Accounting Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates" notified by the Ministry Of Corporate Affairs on 29th December, 2011. Accordingly during 2012-13, the Company has capitalised exchange difference amounting to Rs. 170.75 million (Previous Year Rs. (-) 47.12 million) to the cost of fixed assets and Rs. 579.64 million (Previous Year Rs. 1,132.47 million) to foreign currency monetary item translation difference account (FCMITDA). During the year Rs. 631.61 million (Previous Year Rs. 405.05 million) has been amortised to Statement of Profit and Loss in terms of the said notification and balance of Rs. 675.45 million (Previous Year Rs. 727.42 million) is carried in Balance Sheet as on 31st March, 2013.

18. Hedging and Derivatives:

i) The Company uses various derivative instruments such as foreign exchange forward contracts, interest rate swaps and currency swaps to selectively hedge its exposures to movement in foreign exchange rates and interest rates. These derivatives are not used for speculative or trading purposes.

iii) Mark to market losses in respect of currency and interest rate swaps contracts amounting to Rs. 832.70 million (Previous year Rs. 1,198.42 million) has been charged to the Statement of Profit and Loss.

iv) The company has opted for hedge accounting in respect of certain transactions including forward contracts under Accounting Standard 30 issued by the Institute of Chartered Accountants of India. Accordingly during the year:

a) An amount of Rs. 536.47 million has been credited to Hedge Reserve Account on account of outstanding forward contracts of US$ 258 million for which highly probable forecast sale of US$ 258 million is expected to occur between April 2013 and May 2014.

b) An amount of Rs. 181.03 million has been transferred from Hedge Reserve Account to Statement of Profit and Loss under sales on occurrence of highly probable forecast transaction.

c) A gain of Rs. 6.24 million has been transferred from Hedge Reserve Account to Statement of Profit and Loss under exceptional items on account of forecasted transaction not expected to occur.

19. Employee Benefits have been calculated as under:

(A) Defined Contribution Plans

a. Provident fund*

b. Superannuation fund

(B) Defined benefit plans

i. Compensated absences and gratuity

In accordance with Accounting Standard 15(AS 15)-"Employee Benefits (Revised 2005)", an actuarial valuation has been carried out in respect of gratuity and compensated absences. The discount rate assumed is 8% which is determined by reference to market yield at the Balance Sheet date on Government bonds. The retirement age has been considered at 58 years and mortality table is as per LIC (1994-96).

The estimates of future salary increases, considered in actuarial valuation is 5%, taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

20. Segment Reporting :

i) Based on the guiding principles given in Accounting Standard 17 (AS-17) on "Segment Reporting", the Company''s Primary Business Segments were organised around customers on industry and product lines as under:

a. Pharmaceuticals :

i) Generics, comprising Active Pharmaceuticals Ingredients (APIs) and Solid Dosage Formulations

b. Life Sciences Ingredients :

i) Proprietary Products and Exclusive Synthesis

ii) Life Sciences Chemicals

iii) Nutrition Ingredients

ii) In respect of Secondary Segment information, the Company has identified its Geographical segments as:

(i) Within India

(ii) Outside India.

iii) Inter Segment Transfer Pricing

Inter Segment Transfer prices are based on market prices.

21. Related Party Disclosures

1. Related parties where control exists:

a) Subsidiaries including Step-down subsidiaries:

Jubilant Pharma Pte Ltd, Draximage Limited, Cyprus, Draximage Limited, Ireland, Draximage LLC, Jubilant DraxImage (USA) Inc., Deprenyl Inc., USA, Jubilant DraxImage Inc., 6963196 Canada Inc., 6981364 Canada Inc. DAHI Animal Health (UK) Ltd., Draximage (UK) Ltd., Jubilant Life Sciences Holdings Inc., Jubilant Clinsys Inc., Cadista Holdings Inc., Jubilant Cadista Pharmaceuticals Inc., Jubilant Life Sciences International Pte. Ltd., HSL Holdings Inc., Jubilant HollisterStier LLC, Jubilant Life Sciences (Shanghai) Ltd., Jubilant Pharma NV, Jubilant Pharmaceuticals NV, PSI Supply NV, Jubilant Life Sciences (USA) Inc., Jubilant Life Sciences (BVI) Ltd., Jubilant Biosys (BVI) Limited, Jubilant Biosys (Singapore) Pte. Ltd., Jubilant Biosys Ltd., Jubilant Discovery Services, Inc., Jubilant Drug Development Pte. Ltd., Jubilant Chemsys Ltd., Jubilant Clinsys Ltd., Jubilant Infrastructure Ltd., Jubilant First Trust Healthcare Ltd., Asia Healthcare Development Ltd., Jubilant Innovation (BVI) Ltd., Jubilant Innovation Pte. Limited, Jubilant DraxImage Ltd. India, Jubilant Innovation (India) Ltd., Jubilant Innovation (USA) Inc, Jubilant HollisterStier Inc., Draxis Pharma LLC, Generic Pharmaceuticals Holdings, Inc., Jubilant Life Sciences (Switzerland) AG, First Trust Medicare Pvt. Ltd, Jubilant Drug Discovery & Development Services Inc., Vanthys Pharmaceutical Development Pvt. Ltd.

b) Other Entities:

Jubilant HollisterStier General Partnership Canada, Draximage General Partnership Canada (controlled through subsidiaries/step down subsidiaries).

2. Other Related parties with whom transactions have taken place during the year.

a) Enterprise over which certain key management personnel have significant influence:

Jubilant Enpro Pvt. Ltd., Jubilant Oil & Gas Pvt. Ltd., Jubilant FoodWorks Ltd., Tower Promoters Pvt. Ltd., B&M Hot Breads Pvt. Ltd, Jubilant Industries Ltd., Jubilant Agri and Consumer Products Ltd., Jubilant Motors Pvt. Ltd., Jubilant Aeronautics Pvt. Ltd, Sankur Chalets Pvt. Ltd.

b) Key management personnel:

Mr. Shyam S. Bhartia, Mr. Hari S. Bhartia , Mr. Shyamsundar Bang, Mr. R. Sankaraiah, Mr. Pramod Yadav, Mr. Rajesh Srivastava, Mr. Neeraj Agrawal, Mr. Chandan Singh.

c) Others:

Vam Employees Provident Fund Trust, Jubilant Employee Welfare Trust, Jubilant Bhartia Foundation, Vam Officers Superannuation Fund.

3. Transactions with related parties during the year:

Disclosure in respect of material related party transactions during the year:

1. Sales of goods & services include to Jubilant Life Sciences (Shanghai) Limited Rs. 1,801.44 million (P.Y Rs. 2,221.87 million), Jubilant Life Sciences (USA) Inc. Rs. 2,082.96 million(P.Y Rs. 1,284.04 million), PSI Supply NV Rs. 126.02 million (P.Y. Rs. 92.35 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 828.80 million(P.Y Rs. 367.03 million), Jubilant Clinsys Inc Rs. Nil (P.Y Rs. 3.76 million), Jubilant Pharmaceuticals NV Rs. 1,769.94 million (P.Y Rs. 497.92 million), Jubilant Chemsys Ltd Rs. 38.91 million (P.Y Rs. 6.09 million), Jubilant Industries Ltd Rs. Nil (P.Y Rs. 380.26 million) and Jubilant Agri and Consumer Products Ltd Rs. 426.39 million (P.Y Rs. 14.69 million), Jubilant Infrastructure Ltd Rs. 1.28 million (P.Y Rs. Nil), Jubilant Life Sciences International Pte. Ltd Rs. 1,037.70 million (P.Y Rs. Nil).

2. Interest on loan charged to Jubilant Biosys Ltd. Rs. 153.80 million (P.Y Rs. 152.35 million).

3. Purchases of goods & services include from Jubilant Clinsys Ltd. Rs. 141.10 million (P.Y Rs. 207.03 million), Jubilant Pharmaceuticals NV Rs. 39.34 million (P.Y Rs. 85.73 million), Jubilant Infrastructure Limited Rs. 852.90 million (P.Y Rs. 350.82 million), Jubilant Chemsys Ltd Rs. 0.62 million (P.Y Rs. 2.03 million), PSI Supply NV Belgium. Rs. 0.67 million (P.Y Rs. Nil), Jubilant Life Sciences (Switzerland) AG Rs. Nil (P.Y Rs. 16.76 million), Jubilant Industries Ltd Rs. Nil (P.Y Rs. 9.58 million) and Jubilant Agri and Consumer Products Ltd Rs. 94.87million (P.Y Rs. 74.26 million).

4. Recovery of expenses & utilities charges includes from Jubilant Chemsys Ltd. Rs. 19.06 million (P.Y Rs. 17.08 million), PSI Supply NV Rs. Nil (P.Y Rs. 0.86 million), Jubilant Cadista Pharmaceuticals Inc Rs. 12.69 million (P.Y Rs. 5.20 million), Jubilant HollisterStier LLC Rs. 40.57 million (P.Y Rs. 25.77 million), Jubilant Life Sciences USA Inc Rs. Nil (P.Y Rs. 4.15 million), Jubilant DraxImage Inc. Rs. 13.29 million (P.Y Rs. 5.21 million), Jubilant DraxImage Ltd. Rs. 0.05 million (P.Y Rs. 0.19 million), Jubilant HollisterStier General Partnership Rs. 12.25 million (P.Y Rs. 5.37 million), Jubilant Clinsys Inc Rs. 1.51 million (P.Y Rs. 2.18 million), Asia Healthcare Development Ltd Rs. Nil (P.Y Rs. 0.14 million), Jubilant Drug Discovery Services Inc Rs. Nil (P.Y Rs. 0.27 million), Jubilant Life Sciences (Switzerland) AG Rs. Nil (P.Y Rs. 0.75 million), Jubilant Innovation (USA) Inc. Rs. Nil million (P.Y Rs. 0.26 million), HSL Holdings Inc Rs. Nil (P.Y Rs. 0.26 million), Jubilant Life Sciences Holdings Inc. Rs. Nil (P.Y Rs. 0.26 million), Jubilant Infrastructure ltd. Rs. 80.10 million(P.Y Rs. 72.48 million), Jubilant First Trust Healthcare Ltd. Rs. Nil (P.Y Rs. 0.01 million), Jubilant Enpro Pvt. Ltd. Rs. 8.21 million (P.Y Rs. 7.87 million), Jubilant Oil & Gas Pvt. Ltd. Rs. 4.23 million (P.Y Rs. 2.39 million), Jubilant FoodWorks Ltd. Rs. 5.97 million (P.Y Rs. 3.38 million), Jubilant Industries Ltd. Rs. 0.18 million (P.Y Rs. 66.50 million), Jubilant Agri and Consumer Products Ltd. Rs. 69.43 million (P.Y Rs. 7.07 million), B&M Hot Breads Pvt. Ltd. Rs. 0.59 million (P.Y Rs. 0.52 million), Jubilant Aeronautics Pvt. Ltd. Rs. 0.16 million (P.Y Rs. Nil), Jubilant Biosys Ltd. Rs. 5.12 million (PY Rs. Nil) , Jubilant Innovation Pte. Ltd. Singapore Rs. 0.03 million (PY Rs. Nil).

5. Reimbursement of expenses to Jubilant Pharmaceuticals NV Rs. 109.20 million (P.Y Rs. 39.86 million), Jubilant Biosys Ltd. Rs. 0.44 million (PY Rs. 1.35 million), Jubilant Infrastructure Ltd. Rs. 0.16 million (PY Rs. 0.50 million), PSI Supply NV Belgium. Rs. 2.46 million (PY Rs. Nil), Jubilant DraxImage Inc Rs. 2.69 million (PY Rs. 0.94 million), Jubilant HollisterStier LLC Rs. 2.13 million (P.Y Rs. 3.45 million), Jubilant Cadista Pharmaceuticals Inc Rs. 7.80 million (PY Rs. 0.83 million), Jubilant HollisterStier General Partnership Rs. 0.10 million (PY Rs. Nil) and Jubilant Oil & Gas Pvt Ltd Rs. 0.28 million (PY Rs. 0.23 million).

6. Remuneration and related expenses to Mr. Shyam S Bhartia Rs. 57.50 million (PY Rs. 23.80 million), Mr. Hari S Bhartia Rs. 57.50 million (P.Y Rs. 22.99 million), Mr. Shyamsundar Bang Rs. 21.31 million(PY Rs. 18.68 million), (Late) Dr J M Khanna Rs. Nil (P.Y Rs. 19.51 million), Mr. R Sankaraiah Rs. 36.17 million (PY Rs. 28.06 million), Mr Pramod Yadav Rs. 18.57 million (PY Rs. 16.71 million), Mr Rajesh Srivastava Rs. 18.91 million (PY Rs. 16.56 million), Mr. Chandan Singh Rs. 11.08 million (PY Rs. 10.02 million), Mr Neeraj Agrawal Rs. 21.72 million (PY Rs. 16.61 million).

7. Company''s contribution to PF Trust to Vam Employees Provident Fund Trust Rs. 104.16 million (P.Y Rs. 86.77 million).

8. Company''s contribution to Superannuation Fund to Vam Officers Superannuation Fund Rs. 14.09 million (PY Rs. 14.88 million).

9. Rent expenses paid to Jubilant Enpro Pvt. Ltd. Rs. 2.59 million (P.Y Rs. 2.54 million), Jubilant Oil & Gas Pvt. Ltd. Rs. Nil (P.Y Rs. 0.94 million), Tower Promoters Pvt. Ltd. Rs. 52.00 million (P.Y Rs. 42.00 million), Ms Asha Khanna (wife of (Late) Dr. J .M. Khanna) Rs. Nil (PY Rs. 0.82 million), Ms Shobha Bang(wife of Mr. Shyamsundar Bang) Rs. Nil (P.Y Rs. 5.16 million), Sankur Chalets Pvt. Ltd. Rs. 1.80 million (P.Y Rs. Nil)

10. Donation to Jubilant Bhartia Foundation Rs. 24.61 million (PY Rs. 19.80 million).

11. Sharing of licensing fees with Jubilant Pharmaceuticals NV Rs. 58.07 million (PY Rs. 90.78 million).

12. R&D services rendered to Jubilant Cadista Pharmaceuticals Inc. Rs. 13.35 (P.Y Rs. Nil).

13. Professional services-fees paid to Amarchand & Mangaldas & Suresh A. Shroff & Co. Rs. - (PY Rs. 2.14 million).

14. Lease rental paid to Jubilant Infrastructure Ltd. Rs. 14.22 million (P.Y Rs. 16.38 million).

15. Development charges paid to Jubilant Infrastructure Ltd. Rs. Nil (PY Rs. 141.79 million).

16. Purchase of tangible/intangible assets from Jubilant Pharmaceuticals NV Rs. 13.90 million (PY Rs. Nil) and Jubilant Motors Pvt Ltd Rs. 6.15 million (PY Rs. Nil)

17. Investments in equity share capital include to Jubilant Pharma Pte Ltd. Rs. 307.82 million (P.Y Rs. 205.60 million), Jubilant Infrastructure Ltd. Rs. Nil (PY Rs. 495.00 million) and Jubilant First Trust Healthcare Ltd. Rs. Nil (P.Y Rs. 274.10 million).

18. Interest paid on loan from Jubilant Infrastructure Ltd. Rs. 0.78 million (P.Y Rs. 1.13 million), Jubilant Clinsys Ltd. Rs. 0.94 million (PY Rs. Nil), Jubilant First Trust Healthcare Ltd. Rs. 8.75 million (PY Rs. Nil), Asia Healthcare Development Ltd. Rs. 0.36 million (P.Y Rs. Nil) and Vanthys Pharmaceutical Development Pvt. Ltd Rs. 0.81 million (PY Rs. Nil).

19. Redemption of optionally convertible non-cumulative redeemable preference shares by Jubilant Chemsys Ltd. Rs. 120.00 million (P.Y Rs. 48.00 million).

20. Loans given to Jubilant Pharma Pte Ltd. Rs. 409.98 million (P.Y Rs. 152.63 million), Jubilant Biosys Ltd Rs. Nil (P.Y Rs. 30.00 million) and Jubilant Employee Welfare Trust Rs. Nil (PY Rs. 183.99 million).

21. Loans received back from Jubilant Pharma Pte Ltd. Rs. Nil (P.Y. Rs. 445.95 million) and Jubilant Employee Welfare Trust Rs. 14.50 million (P.Y Rs. Nil).

22. Loans taken from Jubilant Infrastructure Ltd. Rs. 227.50 million (PY Rs. 120.00 million), Jubilant Clinsys Ltd. Rs. 60.00 million (PY Rs. Nil), Jubilant First Trust Healthcare Ltd. Rs. 209.20 million (PY Rs. Nil), Asia Healthcare Development Ltd. Rs. 8.50 million (PY Rs. Nil) and Vanthys Pharmaceutical Development Pvt. Ltd Rs. 25.00 million (P.Y Rs. Nil),

23. Loans repaid to Jubilant Infrastructure Ltd. Rs. 65.00 million (P.Y Rs. 55.00 million) and Jubilant First Trust Healthcare Ltd. Rs. 8.00 million (P.Y Rs. Nil) .

24. Advance from customer Jubilant Life Sciences International Pte Ltd Rs. 2,568.06 million (P.Y Rs. Nil)

25. Loans payable to Jubilant Infrastructure Ltd. Rs. 227.50 million(P.Y Rs. 65.00 million), Jubilant Clinsys Ltd. Rs. 60.00 million (PY Rs. Nil), Jubilant First Trust Healthcare Ltd. Rs. 201.20 million (P.Y Rs. Nil), Asia Healthcare Development Ltd. Rs. 8.50 million (PY Rs. Nil) and Vanthys Pharmaceutical Development Pvt. Ltd Rs. 25.00 million (PY Rs. Nil).

26. Interest payable on loans from Jubilant Infrastructure Ltd. Rs. 0.51 million (PY Rs. 1.02million), Jubilant Clinsys Ltd. Rs. 0.84 million (P.Y Rs. Nil), Jubilant First Trust Healthcare Ltd. Rs. 7.86 million (PY Rs. Nil), Asia Healthcare Development Ltd. Rs. 0.33 million (P.Y Rs. Nil) and Vanthys Pharmaceutical Development Pvt. Ltd Rs. 0.73 million (P.Y Rs. Nil).

27. Trade and other payables include to Jubilant Clinsys Ltd to Rs. 14.19 million(PY Rs. 36.72 million), Jubilant Pharmaceuticals NV Rs. 154.92 million(P.Y Rs. 122.42 million), Jubilant Life Sciences USA Inc Rs. 9.67 million(P.Y Rs. 9.07 million), Jubilant Cadista Pharmaceuticals Inc Rs. Nil (PY Rs. 26.71 million), Jubilant Infrastructure Ltd Rs. 147.64 million(PY Rs. 270.60 million), Jubilant Life Sciences (Switzerland) AG Rs. Nil (P.Y Rs. 4.89 million) , Amarchand & Mangaldas & Suresh A. Shroff & Co Rs. - (P.Y Rs. 0.19 million), Jubilant Industries Ltd. Rs. Nil (PY Rs. 1.91 million), Jubilant Agri and Consumer Products Ltd Rs. 21.29 million(PY Rs. 13.40 million),PSI Supply NV Belgium Rs. 2.34 million (P.Y Rs. Nil), Jubilant Draximage Inc Rs. 2.63 million (P.Y Rs. Nil), Jubilant Holister Stier General Partnership Rs. 0.10 million (PY Rs. Nil).

28. Loans recoverable from Jubilant Pharma Pte Ltd Rs. 570.05 million (PY Rs. 152.63 million) and Jubilant Biosys Ltd Rs. 1,589.33 million (PY Rs. 1,650.92 million), Jubilant Employee Welfare Trust Rs. 439.39 million(PY Rs. 453.89 million).

29. Trade receivables include from Jubilant Pharmaceuticals N.V Rs. 649.42 million (P.Y Rs. 413.34 million), PSI Supply NV Rs. 49.08 million(PY Rs. 44.81 million), Jubilant Life Sciences (USA) Inc Rs. 563.49 million(P.Y Rs. 401.17 million), Jubilant Life Sciences (Shanghai) Ltd Rs. 383.25 million(P.Y Rs. 652.27 million), Jubilant Cadista Pharmaceuticals Inc Rs. 93.69 million(PY Rs. 174.83 million), Jubilant Clinsys Inc. Rs. Nil (PY Rs. 3.82 million), Jubilant Industries Ltd. Rs. Nil (P.Y Rs. 35.29 million), Jubilant Agri and Consumer Products Ltd Rs. 47.05 million (PY Rs. 9.03 million), Jubilant Chemsys Limited Rs. 1.54 million (PY Rs. Nil).

30. Deposit recoverable from Tower Promoters Pvt. Ltd. Rs. 21.00 million (P.Y Rs. 21.00 million).

31. Other recoverable include from PSI Supply NV Rs. Nil (P.Y Rs. 0.10 million), Jubilant Cadista Pharmaceuticals Inc Rs. 6.85 million (PY Rs. Nil), Jubilant HollisterStier LLC Rs. 94.51 million(PY Rs. 52.65 million), Jubilant Clinsys Inc Rs. 10.15 million(PY Rs. 8.13 million), Jubilant HollisterStier General Partnership Rs. 54.29 million(PY Rs. 40.15 million), Jubilant DraxImage Inc Rs. 39.83 million(P.Y Rs. 25.44 million), Jubilant Draximage Ltd Rs. 6.31 million(P.Y Rs. 2.26 million), Jubilant Chemsys ltd Rs. 2.26 million(PY Rs. 0.53 million), Jubilant Infrastructure Ltd. Rs. Nil (P.Y Rs. 0.41 million), Jubilant Innovation (USA) Inc. Rs. Nil (PY Rs. 0.25 million), Mr. R. Sankaraiah Rs. 25.00 million (PY Rs. 25.00 million), Jubilant Oil & Gas Pvt. Ltd. Rs. Nil (PY Rs. 0.18 million), Jubilant Industries Ltd. Rs. 17.17 million (PY Rs. 21.19 million), Jubilant Agri and Consumer Products Ltd Rs. 63.98 million (PY Rs. 15.26 million), B&M Hot Breads Pvt Ltd. Rs. Nil(PY Rs. 0.04 million),Jubilant Biosys Limited Rs. 4.68 million (P.Y Rs. Nil), Jubilant Life Sciences (Switzerland) AG Schaffhausen Rs. 0.75 million (P.Y Rs. Nil), Jubilant FoodWorks Ltd Rs. 5.37 million (PY Rs. Nil)

32. Advance from customer payable to Jubilant Life Sciences International Pte Ltd Rs. 1,554.84 million (P.Y Rs. Nil).

33. Financial guarantees given on behalf of subsidiaries include for HSL Holdings Inc Rs. Nil (PY Rs. 317.97 million), Jubilant HollisterStier Inc. Rs. 1,136.45 million (PY Rs. 1,916.12 million), Jubilant Life Sciences International Pte. Ltd. Rs. 961.66 million (PY Rs. Nil).

22. Previous Year''s figures have been regrouped/rearranged wherever considered necessary to conform to this year''s classification.


Mar 31, 2012

Corporate Information

Jubilant Life Sciences Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange of India. The company is a global Pharmaceutical and Life Sciences player engaged in manufacture and supply of APIs, Generics and Life Science Ingredients. The company's strength lies in its unique offerings of Pharmaceutical and Life Sciences products and services across the value chain. It is well recognised as a 'Partner of Choice' by leading pharmaceuticals and life sciences companies globally.

Notes :

1.1 Paid up capital includes, 501,364, equity shares of Rs. 1 allotted and issued pursuant to the Scheme of Amalgamation and Demerger, to the shareholders of erstwhile Pace Marketing Specialities Limited for consideration other than cash during the year 2010-11.

1.2 The Company has only one class of shares referred to as equity shares having par value of Rs. 1. Each holder of equity shares is entitled to one vote per share.

1.3. a) 114,835, equity shares of Rs. 1 each allotted on exercise of the vested stock options in accordance with the terms of exercise under the "Jubilant Employees Stock Option Plan"(Refer Note 43).

b) Under the Jubilant Employees Stock Option 2005 Plan , as at 31st March,2012- 164,562 options are outstanding convertible into 822,810 shares.

c) Under the Jubilant Employees Stock Option 2011 Plan , as at 31st March,2012- 860,580 options are outstanding convertible into 860,580 shares.

1.4 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.5 The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

2. Nature of security of long term borrowings and other terms of repayment:

2.1 Rupee term loans amounting to Rs. 13,400.00 million from Corporation Bank, Allahabad Bank, Axis Bank Limited, Central Bank of India and Indian Bank and External Commercial Borrowings amounting to Rs. 3,699.74 million from Citibank N.A., London and DBS Bank Limited, Singapore and other term loan in foreign currency amounting to Rs. 2,543.75 million from Export Import Bank of India are secured by a first pari-passu charge amongst the lenders by way of: -

a) Mortgage of the immovable fixed assets both present and future situate at Bhartiagram, district Jyotiba Phoolay Nagar, Uttar Pradesh and immovable fixed assets situate at village Samlaya, taluka Savli, district Vadodara, Gujarat, and

b) Hypothecation on the entire movable fixed assets, both present and future of the Company.

2.2 Rupee term loans amounting to Rs. 2,700.00 million and Rs. 1,000.00 million from Corporation Bank is repayable in two equal yearly installments commencing from February, 2015 and March, 2015 respectively.

2.3 Rupee term loans amounting to Rs. 2,700.00 million from Allahabad Bank is repayable in two equal yearly installments commencing from December, 2014.

2.4 Rupee term loan amounting to Rs. 3,000.00 million from Axis Bank Limited is repayable in four equal half yearly installments commencing from September, 2014.

2.5 Rupee term loan amounting to Rs. 2,400.00 million from Central Bank of India is repayable in three yearly installments commencing from March, 2014.

2.6 Rupee term loan amounting to Rs. 1,600.00 million from Indian Bank is repayable in four yearly installments commencing from March, 2014.

2.7 External commercial borrowing amounting to Rs. 1,155.99 million from Citibank N.A., London is repayable in eight half yearly installments from April, 2012.

2.8 External commercial borrowing amounting to Rs. 2,543.75 million from DBS Bank Limited, Singapore is repayable in four yearly installments commencing from December, 2014.

2.9 Other term loan in foreign currency amounting to Rs. 2,543.75 million from Export Import Bank of India is repayable in four yearly installments starting from May, 2013.

2.10 Other term loan in foreign currency amounting to Rs. 4,833.13 million from Housing Development Finance Corporation Limited is secured by first mortgage by way of deposit of original title deeds of specified land and buildings situated at Noida, Greater Noida, Nanjangud, Nira, Roorkee, Ambernath and also at Bharuch owned by one of the subsidiaries of the Company. Land mortgaged at Chittorgarh demerged into a group company consequent upon the scheme of demerger is under process of release. The loan is repayable in single installment in July, 2014.

3.1 Nature of security of short term borrowings and other terms of repayment:

Working capital facilities sanctioned by consortium of banks and notified financial institutions comprising of ICICI Bank Limited, Corporation Bank, Punjab National Bank, State Bank of India, The Hongkong and Shanghai Banking Corporation Limited, ING Vysya Bank Limited, Central Bank of India, Yes Bank Limited and Export Import Bank of India, are secured by a first charge by way of hypothecation, ranking pari passu inter-se banks, of the entire book debts and receivables and inventories both present and future, of the Company wherever the same may be or be held. The working capital sanctioned limits also include commercial paper programme of Rs. 3,000 million as sublimit carved out from the funded limits, against which the balance outstanding as at 31st March, 2012 Rs. 600.00 million. Maximum balance of commercial paper outstanding during the year at any time was Rs. 1,150 million.

4. Commitments

a) Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (Net of advances) Rs. 711.37 million (Previous year Rs. 1,021.43 million) [Advances Rs. 53.93 million (Previous year Rs. 83.82 million)].

b) Other Commitment

(i) Exports obligation undertaken by the Company under EPCG scheme to be completed over a period of five/eight years on account of import of capital goods at concessional import duty and remaining outstanding is Rs. 59.48 million (Previous year Rs. 434.05 million). Similarly export obligation under Advance License Scheme/ DFIA scheme on duty free import of specific raw materials, remaining outstanding is Rs. 3,539.28 million (Previous year Rs. 2,363.44 million).

ii For lease commitment refer Note 44.

5. Contingent liabilities to the extent not provided for:

A. Claims against Company not acknowledged as debt:

(Rs. in million)

As at 31st March, 2012 2011

Central Excise 320.33 50.85

Customs 12.59 14.14

Sales Tax 45.54 18.36

Income Tax 411.19 214.83

Service Tax 105.83 34.13

Others 41.83 57.62

Excluding demands in respect of business transferred in earlier year to Jubilant Industries Limited in terms of the scheme of demerger though the demands may be continuing in the name of the Company.

B. Guarantees:

i. The Company has given corporate guarantee on behalf of its subsidiaries, HSL Holdings Inc. & Jubilant HollisterStier Inc (formerly known as Draxis Pharma Inc) to ICICI Bank UK. PLC. & ICICI Bank, Canada for USD 50 million - effective guarantee as at 31st March, 2012 USD 6.25 million(Previous year USD 18.75 million) and USD 37.66 million (Previous year USD 50.21 million) respectively - total effective guarantee equivalent to Rs. 2,234.09 million(Previous year Rs. 3,075.31 million), to secure financial facilities granted by them.

ii. Outstanding guarantees furnished by banks on behalf of the Company/by the Company including in respect of letters of credits is Rs. 2,101.03 million (Previous year Rs. 2,197.90 million).

C. Other contingent liabilities:

i. The Company's writ petition against the levy of transport fee by the state of Maharashtra on consumption of rectified spirit and molasses within Nira factory has been allowed by the Hon'ble Bombay High Court with consequential refund. The Company has filed a refund claim for an amount of Rs. 2.51 million deposited during the period when the dispute was pending before the High Court. The total amount of disputed transport fee is Rs. 156.31 million. The State of Maharashtra has filed a special leave petition in the Supreme Court and has sought a stay on the operation of the High Court order.

ii. Liability in respect of bills discounted with banks is Rs. 500 million (Previous year Rs. 200 million).

iii. The Company has challenged before the Hon'ble Allahabad High Court, the increase in denaturing fee by the State of Uttar Pradesh w.e.f 1st April, 2004 on denaturing of rectified spirit in the Gajraula factory and the writ petition has been admitted by the court. The Company has deposited Rs. 21.02 million under protest which is shown as deposits.

iv. Zila Panchayat at J.P. Nagar (in respect of the Company's Gajraula plant) served a notice demanding a compensation of Rs. 277.40 million allegedly for, percolation of poisonous water stored in lagoons and flowing through the land of Zila Panchayat resulting in loss of crops and cattle of the farmers and for putting poisonous fly ash on national highway which caused loss to the health and damages to eyes and skin of people.

District Magistrate issued a recovery certificate along with 10% collection charges inflating the demand to Rs. 305.14 million. In the opinion of the Company, the Zila Panchayat has no jurisdiction in raising this demand. The demand was challenged in Hon'ble Allahabad High Court and the court stayed the demand till further orders.

v. The Company has challenged, before the Hon'ble Allahabad High Court, the levy of license fees of Rs. 2.87 million by State of Uttar Pradesh, for grant of PD-2 license for manufacture of ethyl alcohol for industrial use. The writ petition has been admitted and is being listed for final hearing. Though the amount has been deposited and shown as such, no provision against this has been made as the issue is covered by the earlier favorable judgment of the Hon'ble Supreme Court of India.

vi. The State of Uttar Pradesh (UP) has imposed levy on import of denatured spirit into the State of Uttar Pradesh (UP). The Company has imported denatured spirit into the State of Uttar Pradesh and has challenged levy amounting to Rs. 90 million before Hon'ble Allahabad High Court. The writ petition has been allowed by the High Court in favour of the Company. The State of Uttar Pradesh filed a special leave petition (SLP) with Hon'ble Supreme Court. The SLP has been admitted but the Hon'ble Supreme Court has declined the request of the State of Uttar Pradesh (UP) to stay the operation of High Court Order.

vii. The Hon'ble Supreme Court has quashed the levy of license fee by State of Uttar Pradesh on captive consumption of denatured spirit in the Gajraula factory, and has ordered the refund of the fee paid during the period of dispute subject to condition that the amount has not been collected from the Company's customers. Further the Court has directed the State to investigate whether the Company has collected the disputed fee from its customers to the extent bank guarantees were furnished.

The Company is entitled to a refund of Rs. 84.06 million as the amount paid during the period of dispute or secured by bank guarantees was not collected from its customers. Accordingly the Company has approached the State of Uttar Pradesh for the refund of the said amount. The amount paid has been shown as deposit.

6. Micro, Small and Medium Business Entities

There are no Micro, Small & Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. Foreign Currency Convertible Bonds (FCCB)

The Company issued zero coupon foreign currency convertible bonds due 2011 (FCCB 2011) for an aggregate value of USD 200 million, convertible at any time between 30th June, 2006 to 10th May, 2011 by holders into fully paid equity shares of Rs. 1 each of the Company or Global Depositary Shares (GDSs) each representing one equity share at an initial conversion price of Rs. 413.4498 per share with a fixed rate of exchange of Rs. 45.05 = USD 1. The conversion price was subject to adjustment in certain circumstances. The Bonds could also be redeemed, in whole but not in part, at the option of the Company at any time on or after 19th May, 2009, subject to satisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the Bonds were to be redeemed on 20th May, 2011 at 142.429% of their principal amount. The FCCBs were listed on Singapore Stock Exchange. The GDSs arising out of conversion of FCCBs were to be listed on Luxembourg Stock Exchange. Out of these FCCB 2011, USD 57.90 million Bonds were bought back at a discount and were cancelled. The balance bonds of USD 142.10 million outstanding were redeemed during the year.

The FCCB balance and provision for premium on redemption outstanding as at 31st March 2011, under corresponding previous year figures has been classified under current liability as the same has been redeemed during the financial year even though option of conversion or redemption, both were available to the bondholders as at 31st March 2011.

8. As per share purchase agreement with Jubilant Cadista Pharmaceuticals Inc, a step down subsidiary, the company has delivered 10 Pre-Abbreviated New Drug Application (ANDA). Pending receipt of approval from FDA, company is yet to recognise revenue for 5 ANDAs.

9. Other operating income is in the nature of scrap sales, and licensing income etc.

10. Excise Duty under manufacturing expenses denotes provision on stock differential and other claims/payments.

11. During the year, the company has changed accounting policy in respect of premium on lease hold land.

Accordingly the premium has been amortised over the life of the lease with retrospective effect. The depreciation and amoritsation expenses for the year are higher by Rs. 75.24 million and the net loss is higher by the same amount.

12. a) Donation includes Rs. 15.02 million payments made to

General Electoral Trust during the year.

b) Prior period items for the year Rs. 4.23 million.

13. Employee Stock Option Scheme

In terms of approval of shareholders accorded at the AGM held on August 29, 2005 and in accordance with SEBI (ESOP & ESPS) Guidelines, 1999, the Company instituted Jubilant Employees Stock Option Plan, 2005 ("Plan 2005") for specified categories of employees and Directors of the Company and its Subsidiaries.

During the year, the Company also instituted JLL Employees Stock Option Plan, 2011 ("Plan 2011") , in terms of approval of shareholders accorded at the AGM held on August 23, 2011 and in accordance with SEBI (ESOP & ESPS) Guidelines 1999.

Under Plan 2005 as amended, and under Plan 2011, upto 1,100,000 stock options and upto 53,52,000 stock options, respectively, can be issued to eligible Directors (other than Promoter Directors) and other specified categories of employees of the Company/ Subsidiaries. Options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Under Plan 2005, each option, upon vesting, shall entitle the holder to acquire five equity shares of Rs. 1 each options granted upto 28th August 2009 will vest entirely within two years from the grant date, with certain lock-in provisions. Options granted after 28th August 2009 will vest gradually over a period of 5 years from the grant date, without any lock-in provisions.

Under Plan 2011, each option, upon vesting, shall entitle the holder to acquire one equity share of Rs. 1 each. Options granted will vest gradually over a period of 3 years from the grant date.

The Company has constituted a compensation committee comprising of a majority of independent Directors. This Committee is empowered to administer - Plan 2005 & Plan 2011.

In 2008-09, Jubilant Employees Welfare Trust was constituted for the purpose of acquisition of equity shares of the Company from the secondary market or subscription of shares from the Company, to hold the shares and to allocate/transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under these Plans. The members authorised grant of loan(s) from time to time to the trust in one or more tranches, upto Rs. 1,000 million either free of interest or at interest agreed between the Board and the Trust. The outstanding loan to the Trust as at 31st March, 2012 is Rs. 453.89 million (Previous year Rs. 269.90 million).

Upto 31st March, 2012, the trust has purchased 6,363,506 equity shares of the Company from the open market, out of interest free loan provided by the Company, out of which 1,530,010 shares were transferred to the employees on exercise of Options. The Trust has also been issued 192,086 equity shares of Jubilant Industries Limited in accordance with the scheme of amalgamation & demerger amongst the Company, Jubilant Industries Limited & others.

The movement in the stock options under both the Plans, during the year, is set out below:

Since Jubilant Employees Welfare Trust is holding sufficient number of equity shares of the Company, it is envisaged to transfer the shares from the trust to beneficiaries under Plan 2005 & Plan 2011 upon exercise. As such, there would be no fresh issue of shares by the Company and hence no dilution.

The Company has opted for intrinsic value method of accounting for Employee Stock Options. As market price of the options is equal to the exercise price on the date of grant, intrinsic value is Rs. Nil. Hence there is no cost charged to Statement of Profit and Loss on account of options granted to employees under the Employee Stock Option Plans of the company. Had the company opted for fair value accounting of Employee Stock options, Profit after tax for the financial year would have been lower by Rs. 12.78 million (Previous year Rs. 22.00 million).

14. Leases:

a) The Company's significant operating lease arrangements are in respect of premises (residential, offices, godown etc.). These leasing arrangements, which are cancelable, range between 11 months and 3 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses.

b) Also, the Company has significant operating lease arrangements which are non-cancellable for a fixed period of 25 years. The lease rental is subject to escalation whereby the Lessor is entitled to increase the lease rental by 10% of the average lease rental of preceding three years (blocked period).

There is no element of contingent rent or sub lease payments. Company has option to purchase the assets at the end of the lease term. There are no restrictions imposed by these lease arrangements regarding dividend, additional debt and further leasing.

15. In line with the applicable Accounting Standards, during the year, interest amounting to Rs. 253.51 million (Previous year Rs. 202.24 million) and expenditure incurred on start up and commissioning of the project and /or substantial expansion and development, including the expenditure incurred on trial runs (Net of trial run receipts, if any) up to the date of commencement of commercial production amounting to Rs. 286.55 million (Previous year Rs. 197.87 million) have been capitalised. The said expenditure (net of trial run receipts), so capitalised are accumulated as Capital work in progress to be allocated to fixed assets on commencement of commercial production.

16. The carrying value of internally generated intangible asset - product development and other intangibles including intangibles under progress is reviewed and based on technical assessment, carrying value of certain internally generated intangible assets/other intangibles under development Rs. 197.37 million (Previous year Rs. 91.61 million) have been charged to the Statement of Profit and Loss.

17. The deferred tax liability is net of amount recoverable of Rs. Nil (Previous year Rs. 15.50 million) from the Employee Welfare Trust towards the tax chargeable on the income of trust on which the tax is payable by the Company.

18. Current Tax includes Rs. (7.45) million (Previous year Rs. 32.70 million) related to previous year.

19. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with para 46A of Accounting Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates" notified by the Ministry Of Corporate Affairs on 29th December 2011. Accordingly during 2011-12, the Company has capitalised exchange difference amounting to Rs. (-) 47.12 million to the cost of fixed assets and Rs. 1,132.47 million to foreign currency monetary item translation difference account (FCMITDA). During the year, Rs. 405.05 million has been amortised to Statement of Profit and Loss in terms of the said notification and balance of Rs. 727.42 million is carried in Balance Sheet as on 31st March 2012.

20. Hedging and Derivatives:

i) The Company uses various derivative instruments such as foreign exchange forward contracts, interest rate swaps and currency swaps to selectively hedge its exposures to movement in foreign exchange rates and interest rates. These derivatives are not used for speculative or trading purposes.

Some of these derivatives are used as instrument to hedge foreign exchange fluctuation risk on highly probable forecast transactions upto the date of sale. These sale transactions are expected to occur between May 2012 and May 2013.

iii) Mark to market losses in respect of currency and interest rate swaps contracts amounting to Rs. 1,198.42 million has been charged to the Statement of Profit and Loss.

iv) During the year the company has opted for hedge accounting in respect of certain transactions including forward contracts under Accounting Standard 30 issued by the Institute of Chartered Accountants of India. Accordingly the loss for the year is higher by Rs. 148.93 million andan equivalent amount has been credited to hedge reserve as at 31st March 2012.

21. Employee Benefits have been calculated as under:

(A) Defined Contribution Plans

a. Provident fund*

b. Superannuation fund

(B) Defined benefit plans

i. Compensated absences and gratuity

In accordance with Accounting Standard 15(AS 15)-"Employee Benefits (Revised 2005)", an actuarial valuation has been carried out in respect of gratuity and compensated absences. The discount rate assumed is 8.57 % which is determined by reference to market yield at the Balance Sheet date on Government bonds. The retirement age has been considered at 58 years and mortality table is as per LIC (1994-96).

The estimates of future salary increases, considered in actuarial valuation, 10% for first year and 6% thereafter, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

ii. Provident Fund:

The Guidance on implementation of AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving provident funds, which require interest shortfall to be compensated, are to be considered as defined benefit plans. The actuary has worked out a liability of Rs. 8.04 million (Previous year Rs. 6.74 million) likely to arise towards interest guarantee. The trust is managing common corpus of some of the group companies. The total liability of Rs. 8.04 million (Previous year Rs. 6.74 Million) as worked out by the actuary has been allocated to each entity based on the corpus value of each entity as on 31st March, 2012. Accordingly, liability of Rs. 7.13 million (Previous year Rs. 5.81 million) has been allocated to Company and Rs. 1.33 million (Previous year Rs. 5.81 million) has been charged to Statement of Profit and Loss during the year. The Company has contributed Rs. 86.77 million to Provident Fund (Previous year Rs. 77.48 million) for the year.

22. Segment Reporting :

i) The Company operates under one reportable segment viz.Pharmaceuticals and Life Sciences Ingredients.

ii) In respect of Secondary Segment information, the Company has identified its Geographical segments as:

(i) Within India

(ii) Outside India.

23. A. Related Party Disclosures

1. Related parties where control exists:

a) Subsidiaries including Step-down subsidiaries:

Jubilant Pharma Pte Ltd, Draximage Limited, Cyprus, Draximage Limited, Ireland , Draximage LLC, Jubilant DraxImage (USA) Inc., Deprenyl Inc., USA, Jubilant DraxImage Inc., 6963196 Canada Inc., 6981364 Canada Inc. DAHI Animal Health (UK) Limited, Draximage (UK) Limited, Jubilant Life Sciences Holdings Inc., Jubilant Clinsys Inc., Cadista Holdings Inc., Jubilant Cadista Pharmaceuticals Inc., Jubilant Life Sciences International Pte. Limited, HSL Holdings Inc., Jubilant HollisterStier LLC, Jubilant Life Sciences (Shanghai) Limited, Jubilant Pharma NV, Jubilant Pharmaceuticals NV, PSI Supply NV, Jubilant Life Sciences (USA) Inc., Jubilant Life Sciences (BVI) Limited, Jubilant Biosys (BVI) Limited, Jubilant Biosys (Singapore) Pte. Limited, Jubilant Biosys Limited, Jubilant Discovery Services, Inc., Jubilant Drug Development Pte. Limited, Jubilant Chemsys Limited, Jubilant Clinsys Limited, Jubilant Infrastructure Limited, Jubilant First Trust Healthcare Limited, Asia Healthcare Development Limited, Jubilant Innovation (BVI) Limited, Jubilant Innovation Pte. Limited, Jubilant DraxImage Limited India, Jubilant Innovation (India) Limited, Jubilant Innovation (USA) Inc, Jubilant HollisterStier Inc., (Formerly Draxis Pharma Inc.) Draxis Pharma LLC, Generic Pharmaceuticals Holdings, Inc., Jubilant Life Sciences (Switzerland) AG, First Trust Medicare Pvt. Ltd, Jubilant Drug Discovery & Development Services Inc., Vanthys Pharmaceutical Development Pvt. Limited.

b) Other Entities:

Jubilant HollisterStier General Partnership Canada(formerly Draxis Pharma General Partnership), Draximage General Partnership Canada(controlled through subsidiaries/step down subsidiaries).

2. Other Related parties with whom transactions have taken place during the year.

a) Enterprise over which certain key management personnel have significant influence:

Jubilant Enpro Pvt. Limited, Jubilant Oil & Gas Pvt. Limited, Jubilant Foodworks Limited, Tower Promoters Pvt. Limited, B &M Hot Breads Pvt. Ltd, Jubilant Industries Limited, Jubilant Agri and Consumer Products Limited.

b) Key management personnel:

Mr. Shyam S. Bhartia, Mr. Hari S. Bhartia , Mr. Shyamsundar Bang, (Late) Dr. J. M. Khanna**, Mr. R. Sankaraiah, Mr. Pramod Yadav, Mr. Rajesh Srivastava, Mr. Neeraj Agarwal, Mr. Chandan Singh.

c) Relatives of key management personnel:

Ms. Asha Khanna (wife of (Late) Dr. J. M. Khanna**), Ms. Shobha Bang (wife of Mr. Shyamsundar Bang).

d) Others:

Vam Employees Provident Fund Trust, Jubilant Employee Welfare Trust , Jubilant Bhartia Foundation, Vam Officers Superannuation Fund, Amarchand & Mangaldas & Suresh A. Shroff & Co.

Note:

(1) Figures in ( ) indicates in respect of previous year.

(2) Related party relationship is as identified by the Company and relied upon by the Auditors.

(3) No amount has been written off/provided for in respect of dues from or to any related party.

(4) In addition to this, during FY 2011, Jubilant Employee Welfare Trust has transferred shares of the Company to Key Management Personnel on payment of exercise price to the Trust.

Disclosure in respect of material related party transactions during the year:

1. Sales of goods & services include to Jubilant Life Sciences (Shanghai) Limited Rs. 2,221.87 million (P.Y Rs. 2,085.97 million), Jubilant Life Sciences (USA) Inc. Rs. 1,284.04 million (P.Y Rs. 1,256.37 million), PSI Supply NV Rs. 92.35 million (P.Y. Rs. 76.02 million), Jubilant Cadista Pharmaceuticals Inc. Rs. 367.03 million (P.Y Rs. Nil), Jubilant Clinsys Inc Rs. 3.76 million (P.Y Rs. Nil), Jubilant Pharmaceuticals NV Rs. 497.92 million (P.Y Rs. Nil), Jubilant Chemsys Ltd Rs.6.09 million (P.Y Rs. Nil), Jubilant Industries Ltd Rs. 380.26 million (P.Y Rs. 350.11 million) and Jubilant Agri and Consumer Products Ltd Rs. 14.69 million (P.Y Rs. Nil).

2. Interest on loan charged to Jubilant Biosys Limited Rs. 152.35 million (P.Y Rs. 135.56 million).

3. Purchases of goods & services include from Jubilant Clinsys Limited Rs. 207.03 million (P.Y Rs. 130.64 million), Jubilant Pharmaceuticals NV Rs. 85.73 million (P.Y Rs. 62.46 million), Jubilant Infrastructure Limited Rs. 350.82 million (P.Y Rs. Nil) Jubilant Chemsys Ltd Rs. 2.03 million (P.Y Rs. 0.17 million) Jubilant Cadista Pharmaceuticals Inc. Rs. Nil (P.Y Rs. 0.73 million), Jubilant Life Sciences (Switzerland) AG Rs. 16.76 million (P.Y Rs. Nil), Jubilant Industries Ltd Rs. 9.58 million (P.Y Rs. 32.48 million) and Jubilant Agri and Consumer Products Ltd Rs. 74.26 million (P.Y Rs. Nil).

4. Recovery of expenses & utilities charges includes from Jubilant Chemsys Limited Rs. 17.08 million (P.Y Rs. 15.87 million), PSI Supply NV Rs. 0.86 million (P.Y Rs. 0.85 million), Jubilant Cadista Pharmaceuticals Inc Rs. 5.20 million (P.Y Rs. 6.06 million), Jubilant HollisterStier LLC Rs. 25.77 million (P.Y Rs. 10.78 million), Jubilant Life Sciences USA Inc Rs. 4.15 million (P.Y Rs. Nil), Jubilant DraxImage Inc. Rs. 5.21 million (P.Y Rs. 13.82 million), Jubilant DraxImage Limited Rs. 0.19 million (P.Y Rs. 2.04 million), Jubilant HollisterStier General Partnership Rs. 5.37 million (P.Y Rs. 5.78 million), Jubilant Clinsys Inc Rs. 2.18 million (P.Y Rs. 0.82 million), Asia Healthcare Development Ltd Rs. 0.14 million (P.Y Rs. Nil), Jubilant Drug Discovery Services Inc Rs. 0.27 million (P.Y Rs. Nil), Jubilant Life Sciences (Switzerland) AG Rs. 0.75 million (P.Y Rs. Nil), Jubilant Innovation Inc Rs. 0.26 million (P.Y Rs. Nil), HSL Holdings Inc Rs. 0.26 million (P.Y Rs. Nil), Jubilant Life Sciences Holdings Inc. Rs. 0.26 million (P.Y Rs. Nil), Jubilant Infrastructure Limited Rs. 0.51 million(P.Y Rs. 0.29 million), Jubilant First Trust Healthcare Limited Rs. 0.01 million(P.Y Rs. Nil), Jubilant Enpro Pvt. Limited Rs. 7.87 million (P.Y Rs. 7.57 million), Jubilant Oil & Gas Pvt. Limited Rs. 2.39 million (P.Y Rs. 6.87 million), Jubilant Foodworks Limited Rs. 3.38 million (P.Y Rs. 3.09 million), Jubilant Industries Limited Rs. 66.50 million (P.Y Rs. 30.52 million), Jubilant Agri and Consumer Products Ltd Rs. 7.07 million (P.Y Rs. Nil), B&M Hot Breads Pvt Limited Rs. 0.52 million(P.Y Rs. 0.38 million).

5. Reimbursement of expenses to Jubilant Pharmaceuticals NV Rs. 39.86 million (P.Y Rs. 14.55 million), Jubilant Biosys Limited Rs. 1.35 million (P.Y Rs. 4.92 million), Jubilant Infrastructure Limited Rs. 72.47 million (P.Y Rs. 5.69 million), Jubilant Life Sciences (USA) Inc. Rs. Nil (P.Y Rs. 4.30 million), Jubilant DraxImage Inc Rs. 0.94 million (P.Y Rs. Nil), Jubilant HollisterStier LLC Rs. 3.45 million (P.Y Rs. 0.27 million), Jubilant Cadista Pharmaceuticals Inc Rs. 0.83 (P.Y Rs. Nil) and Jubilant Oil and Gas Pvt Ltd Rs. 0.23 million (P.Y Rs. 1.32 million).

6. Remuneration and related expenses to Mr. Shyam S Bhartia Rs. 23.80 million (P.Y Rs. 42.00 million), Mr. Hari S Bhartia Rs. 22.99 million (P.Y Rs. 41.22 million), Mr. Shyamsundar Bang Rs. 18.68 million(P.Y Rs. 17.64 million), (Late) Dr J M Khanna Rs. 19.51 million (P.Y Rs. 22.27 million), Mr. R Sankaraiah Rs. 28.06 million (P.Y Rs. 23.27 million), Mr Pramod Yadav Rs. 16.71 million (P.Y Rs. 15.06 million), Mr Rajesh Srivastava Rs. 16.56 million (P.Y Rs. 14.80 million), Mr. Chandan Singh Rs. 10.02 million (P.Y Rs. 8.36 million), Mr Neeraj Agarwal Rs. 16.61 million (P.Y Rs. 11.57 million).

7. Company's contribution to PF Trust to Vam Employees Provident Fund Trust Rs. 86.77 million (P.Y Rs. 77.48 million).

8. Company's contribution to Superannuation Fund to Vam Officers Superannuation Fund Rs. 14.88 million (P.Y Rs. 16.26 million).

9. Rent expenses paid to Jubilant Enpro Pvt. Limited Rs. 2.54 million (P.Y Rs. 1.39 million), Jubilant Oil & Gas Pvt. Limited Rs. 0.94 million (P.Y Rs. 5.57 million), Tower Promoters Pvt. Limited Rs. 42.00 million (P.Y Rs. 42.00 million), Ms Asha Khanna (wife of (late) Dr. J .M. Khanna) Rs. 0.82 million(P.Y Rs. 2.92 million), Ms Shobha Bang(wife of Mr. Shyamsundar Bang) Rs. 5.16 million(P.Y Rs. 4.53 million).

10. Donation to Jubilant Bhartia Foundation Rs. 19.80 million (P.Y Rs. 23.20 million).

11. Sharing of licensing fees with Jubilant Pharmaceuticals NV Rs. 90.78 million (P.Y Rs. 12.88 million).

12. R&D services rendered to Jubilant Cadista Pharmaceuticals Inc. Rs. Nil (P.Y Rs. 5.59 million).

13. Professional services-fees paid to Amarchand & Mangaldas & Suresh A. Shroff & Co. Rs. 2.14 million (P.Y Rs. 2.53 million).

14. Lease rental paid to Jubilant Infrastructure Limited Rs. 16.38 million (P.Y Rs. 8.48 million).

15. Development charges paid to Jubilant Infrastructure Limited Rs. 141.79 million (P.Y Rs. 257.20 million).

16. Investments in equity share capital include to Jubilant Pharma Pte Limited Rs. 205.60 million (P.Y Rs. 1,771.77 million), Jubilant Infrastructure Limited Rs. 495.00 million (P.Y Rs. 425.00 million), Jubilant First Trust Healthcare Limited Rs. 274.10 million (P.Y Rs. 24.70 million).

17. Interest paid on loan from Jubilant Infrastructure Limited Rs. 1.13 million (P.Y Rs. 1.77 million).

18. Redemption of optionally convertible non-cumulative redeemable preference shares by Jubilant Chemsys Limited Rs. 48.00 million (P.Y Rs. 100 million).

19. Loan given to Jubilant Pharma Pte Limited Rs. 152.63 million (P.Y Rs. 445.95 million), Jubilant Biosys Ltd Rs. 30.00 million (P.Y Rs. 122.00 million), Jubilant Employee Welfare Trust Rs. 183.99 million (P.Y Rs. Nil).

20. Loan received back from Jubilant Pharma Pte Limited Rs. 445.95 million (P.Y. Rs. Nil), Jubilant Employee Welfare Trust Rs. Nil (P.Y Rs. 153.31 million).

21. Loan taken from Jubilant Infrastructure Limited Rs. 120.00 million (P.Y Rs. 160.00 million).

22. Loan repaid to Jubilant Infrastructure Limited Rs. 55.00 million (P.Y Rs. 160.00 million).

23. Loan payable to Jubilant Infrastructure Limited Rs. 65.00 (P.Y Rs. Nil).

24. Interest payable on loan from Jubilant Infrastructure Limited Rs. 1.02 million (P.Y Rs. Nil).

25. Trade and other payables include to Jubilant Clinsys Ltd to Rs. 36.72 million(P.Y Rs. 15.29 million), Jubilant Pharmaceuticals NV Rs. 122.42 million(P.Y Rs. 83.30 million), Jubilant Life Sciences USA Inc Rs. 9.07 million(P.Y Rs. 7.94 million), Jubilant Cadista Pharmaceuticals Inc Rs. 26.71 million(P.Y Rs. Nil), Jubilant Infrastructure Ltd Rs. 270.60 million(P.Y Rs. Nil), Jubilant Life Sciences (Switzerland) AG Rs. 4.89 million(P.Y Rs. Nil) , Amarchand & Mangaldas & Suresh A. Shroff & Co. Rs. 0.19 million(P.Y Rs. 0.81 million), Jubilant Industries Limited Rs. 1.91 million (P.Y Rs. 37.69 million), Jubilant Agri and Consumer Products Ltd Rs. 13.40 million(P.Y Rs. Nil).

26. Loans recoverable from Jubilant Pharma Pte Ltd Rs. 152.63 million (P.Y Rs. 445.95 million) and Jubilant Biosys Ltd Rs. 1,650.92 million (P.Y Rs. 1,483.80 million), Jubilant Employee Welfare Trust Rs. 453.89 million (P.Y Rs. 269.90 million).

27. Trade receivables include from Jubilant Pharmaceuticals N.V Rs. 413.34 million (P.Y Rs. 13.38 million), PSI Supply NV Rs. 44.81 million(P.Y Rs. 27.50 million), Jubilant Life Sciences (USA) Inc Rs. 401.17 million(P.Y Rs. 394.78 million), Jubilant Life Sciences (Shanghai) Ltd Rs. 652.27 million(P.Y Rs. 578.17 million), Jubilant Cadista Pharmaceuticals Inc Rs. 174.83 million(P.Y Rs. Nil), Jubilant Clinsys Inc. Rs. 3.82 million (P.Y Rs. Nil), Jubilant Industries Limited Rs. 35.29 million (P.Y Rs. Nil), Jubilant Agri and Consumer Products Ltd Rs. 9.03 million (P.Y Rs. Nil).

28. Deposit recoverable from Tower Promoters Pvt. Limited Rs. 21.00 million (P.Y Rs. 21.00 million).

29. Other recoverables include from PSI Supply NV Rs. 0.10 million(P.Y Rs. 3.64 million), Jubilant Cadista Pharmaceuticals Inc Rs. Nil(P.Y Rs. 40.93 million), Jubilant HollisterStier LLC Rs. 52.65 million(P.Y Rs. 26.20 million), Jubilant Clinsys Inc Rs. 8.13 million(P.Y Rs. 5.29 million), Jubilant HollisterStier General Partnership Rs. 40.15 million(P.Y Rs. 31.43 million), Jubilant DraxImage Inc Rs. 25.44 million(P.Y Rs. 18.81 million), Jubilant Draximage Ltd Rs. 2.26 million(P.Y Rs. 2.04 million), Jubilant Chemsys ltd Rs. 0.53 million(P.Y Rs. Nil), Jubilant Infrastructure ltd Rs. 0.41 million(P.Y Rs. 4.83 million), Jubilant Innovation (USA) Inc. Rs. 0.25 million.(P.Y Rs. Nil), Mr. R Sankaraiah Rs. 25.00 million(P.Y Rs. 25.00 million), Jubilant Oil & Gas Pvt. Limited Rs. 0.18 million (P.Y Rs. 2.79 million), Jubilant Foodworks Limited Rs. Nil (P.Y Rs. 2.81 million), Jubilant Industries Limited Rs. 21.19 million (P.Y Rs. Nil), Jubilant Agri and Consumer Products Ltd Rs. 15.26 million (P.Y Rs. Nil), B&M Hot Breads Pvt Limited Rs. 0.04 million(P.Y Rs. 0.03 million).

30. Financial guarantees given on behalf of subsidiaries include for HSL Holdings Inc Rs. 317.97 million (PY Rs. 836.16 million), Jubilant HollisterStier LLC Rs. 1,916.12 million(PY Rs. 2,239.15 million).


Mar 31, 2011

1. Capital Commitments

Estimated amount of Contracts remaining to be executed on Capital Account (Net of Advances) Rs. 1,021.43 million (Previous year Rs. 1,235.14 million) [Advances Rs. 83.82 million (Previous year Rs. 115.25 million)].

2. Contingent liabilities

a) Claims/Demands for the following matters in respect of which proceedings or appeals are pending and are not acknowledged as debts :

(Rs. in million)

As at 31st March, 2011 2010

Central Excise 50.85 32.27

Customs 14.14 40.69

Sales Tax 18.36 48.82

Income Tax 214.83 189.05

Service Tax 34.13 34.62

Others 57.62 144.27

Excluding demands in respect of business transferred to Jubilant Industries Limited in terms of the scheme of demerger though the demands may be continuing in the name of the Company.

b) The Company has challenged the levy of transport fee by State of Maharashtra on consumption of rectifed spirit and molasses in the Nira factory. The order of State imposing the levy was stayed by the Hon'ble Mumbai High Court on 22nd October, 2001. The Company has been advised that the levy of transport fee on rectifed spirit and molasses by State is not tenable. However, the Company has deposited Rs. 6.28 million under protest out of the total transport fee of Rs. 139.45 million which is shown as deposit in the financial statements.

c) Outstanding guarantees furnished by Banks on behalf of the Company/by the Company including in respect of Letters of Credits is Rs. 2,197.90 million (Previous year Rs. 2,605.60 million).

d) Liability in respect of Bills discounted with Banks is Rs. 200 million (Previous year Rs. 850 million).

e) The Company has given Corporate Guarantee on behalf of its subsidiaries, HSL Holdings Inc. & Draxis Pharma Inc. to ICICI Bank UK. PLC. & ICICI Bank, Canada for USD 50 million - effective guarantee as at 31st March, 2011 USD 18.75 million (Previous year USD 31.25 million) and USD 50.21 million respectively - total effective guarantee equivalent to Rs. 3,075.31 million (Previous year Rs. 3,657.59 million), to secure financial facility granted by them.

f) Exports obligation undertaken by the Company under EPCG scheme to be completed over a period of fve/ eight years on account of import of Capital Goods at concessional import duty and remaining outstanding is Rs. 434.05 million (Previous year Rs. 434.05 million). Similarly Export obligation under Advance License Scheme/DFIA scheme on duty free import of specifc raw materials, remaining outstanding is Rs. 2,363.44 million (Previous year Rs. 1,011.82 million).

g) The Company has challenged before the Hon'ble Allahabad High Court, the increase in denaturing fee by the State of Uttar Pradesh w.e.f 1st April, 2004 on denaturing of rectifed spirit in the Gajraula factory and the writ petition has been admitted by the court. The Company has deposited Rs. 19.19 million under protest which is shown as deposits.

h) Zila Panchayat at J.P. Nagar (in respect of the Company's Gajraula plant) served a notice demanding a compensation of Rs. 277.40 million allegedly for, percolation of poisonous water stored in lagoons and flowing through the land of Zila Panchayat resulting in loss of crops and cattle of the farmers and for putting poisonous fy ash on national highway which caused loss to the health and damages to eyes and skin of people.

District Magistrate issued a recovery certifcate along with 10% collection charges infating the demand to Rs. 305.14 million. In the opinion of the Company, the Zila Panchayat has no jurisdiction in raising this demand. The demand was challenged in Hon'ble Allahabad High Court and the court stayed the demand till further orders.

i) The Company has challenged, before the Hon'ble Allahabad High Court, the levy of license fees of Rs. 2.87 million by State of Uttar Pradesh, for grant of PD-2 license for manufacture of Ethyl Alcohol for industrial use. The writ petition has been admitted and is being listed for fnal hearing. Though the amount has been deposited and shown as such, no provision against this has been made as the issue is covered by the earlier favorable judgment of the Hon'ble Supreme Court of India.

j) The State of Uttar Pradesh (UP) has imposed levy on import of denatured spirit into the State of Uttar Pradesh (UP). The Company has imported denatured spirit into the State of Uttar Pradesh and has challenged levy amounting to Rs. 90 million before Hon'ble Allahabad High Court. The writ petition has been allowed by the High Court in favour of the Company. The State of Uttar Pradesh fled a Special Leave Petition (SLP) with Hon'ble Supreme Court. The SLP has been admitted but the Hon'ble Supreme Court has declined the request of the State of Uttar Pradesh (UP) to stay the operation of High Court Order.

k) The Hon'ble Supreme Court has quashed the levy of license fee by State of Uttar Pradesh on captive consumption of denatured spirit in the Gajraula factory, and has ordered the refund of the fee paid during the period of dispute subject to condition that the amount has not been collected from the Company's customers. Further the Court has directed the State to investigate whether the Company has collected the disputed fee from its customers to the extent bank guarantees were furnished.

The Company is entitled to a refund of Rs. 84.06 million as the amount paid during the period of dispute or secured by bank guarantees was not collected from its customers. Accordingly the Company has approached the State of Uttar Pradesh for the refund of the said amount. The amount paid has been shown as deposit.

3. During the year a Scheme of Amalgamation and Demerger (Scheme) among Jubilant Life Sciences Ltd (formerly Jubilant Organosys Ltd), Speciality Molecules Ltd, Pace Marketing Specialities Ltd and Jubilant Industries Ltd (formerly Hitech Shiksha Ltd) became effective on 15th November, 2010. Under the Scheme, Speciality Molecules Limited (SML) a wholly owned subsidiary of Jubilant Life Sciences Ltd (Company) and Pace Marketing Specialties Limited (PMSL) an exclusive contract manufacturer of adhesives for Consumer Product Division of the JLL amalgamated with the Company on 31st March, 2010. The Agri and Performance Polymer Businesses of the Company have been demerged into Jubilant Industries Limited (JIL) on 1st April, 2010. Adjustment on account of Demerger disclosed in the financial statements includes transactions between the appointed date and the effective date i.e. between 1st April, 2010 and 15th November, 2010.

On amalgamation, shareholders of PMSL were issued 501,364 equity shares of the Company and the equity share capital of SML was cancelled as the same was held entirely by the Company. Upon Demerger, the shareholders of the Company received one equity share of Rs. 10 each of Jubilant Industries Limited for every 20 equity shares of Rs. 1 each held in the company.

Effective, the Demerger appointed date, i.e. 1st April, 2010 till the scheme becoming effective, the operations of JIL were run by the company, for and on behalf of JIL, on trust and the economic Benefits attributable to JIL have been passed on to it, in terms of the said scheme. Since, the economic Benefits under the scheme have accrued from appointed date, the equity shares issued pursuant to the scheme have also been considered from the appointed date for the purpose of calculation of Earnings Per Share. Accordingly the results for the year are for the businesses remaining with the Company, post amalgamation/demerger, after giving the effect of the scheme and accordingly, not comparable with previous year.

4. The deferred tax liability is net of amount recoverable of Rs. 15.50 million (Previous year Rs. 11.69 million) from the Employee Welfare Trust towards the tax chargeable on the income of trust on which the tax is payable by the Company.

5. Micro, Small and Medium Business Entities

There are no Micro, Small & Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) has been determined to the extent such parties have been identifed on the basis of information available with the Company.

6. Foreign Currency Convertible Bonds (FCCB)

(A) FCCB – USD 75 million (FCCB 2010)

The Company issued Zero Coupon Foreign Currency Convertible Bonds due 2010 (FCCB 2010) for an aggregate value of USD 75 million, convertible at any time between 3rd July, 2005 to 14th May, 2010 by holders into fully paid equity shares of Rs. 1 each of the Company or Global Depositary Shares (GDSs) each representing one equity share of Rs. 1 each at an initial conversion price of Rs. 273.0648 per share with a fixed rate of exchange of Rs. 43.35 = USD 1. The conversion price was subject to adjustment in certain circumstances. The Bonds could also be redeemed, in whole but not in part, at the option of the Company at any time on or after 23rd May, 2008, subject to satisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the Bonds were to be redeemed on 24th May, 2010 at 138.383% of their principal amount. The FCCBs were listed on Singapore Stock Exchange. The GDSs arising out of conversion of FCCBs were listed on Luxembourg Stock Exchange. Out of these FCCB 2010, USD 22.343 million were converted upto 31st March, 2009 into equity shares and this represented 3,547,022 shares of Rs. 1 each as on 31st March, 2009 and USD 3 million Bonds were bought back at a discount and were cancelled. The balance bonds of USD 49.657 million outstanding were redeemed during the year.

(B) FCCB – USD 200 million (FCCB 2011)

The Company issued Zero Coupon Foreign Currency Convertible Bonds due 2011 (FCCB 2011) for an aggregate value of USD 200 million, convertible at any time between 30th June, 2006 to 10th May, 2011 by holders into fully paid equity shares of Rs. 1 each of the Company or Global Depositary Shares (GDSs) each representing one equity share at an initial conversion price of Rs. 413.4498 per share with a fixed rate of exchange of Rs. 45.05 = USD 1. The conversion price is subject to adjustment in certain circumstances. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time on or after 19th May, 2009, subject to satisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed on 20th May, 2011 at 142.429% of their principal amount. The FCCBs are listed on Singapore Stock Exchange. The GDSs arising out of conversion of FCCBs are listed on Luxembourg Stock Exchange. Out of these FCCB 2011, USD 57.90 million Bonds were bought back at a discount and were cancelled. The balance bonds of USD 142.10 million outstanding as of 31st March, 2011 are included under 'Unsecured Loans'.

The proceeds of FCCB 2011 have been used for funding new projects – Rs. 13.5 million (USD 0.30 million), investment in/acquisitions of overseas subsidiary companies - Rs. 8,873.0 million (USD 196.96 million) and issue expenses – Rs. 123.4 million (USD 2.74 million). There has been no conversion during the year in respect of the above FCCBs.

Post demerger, the conversion price, for the outstanding FCCB's amounting to USD 142.10 million has been reset to Rs. 379 per equity share of the company, based on valuation done by two independent Investment Bankers and has been intimated to the bondholders, as per the terms of the issue.

The outstanding balance of FCCB 2011 - USD 142.10 million, on conversion would result in allotment of 16,890,778 equity shares of Rs. 1 each.

7. Employee Stock Option Scheme

In terms of approval of shareholders accorded at the AGM held on 29th August, 2005 and in accordance with SEBI (ESOP & ESPS) Guidelines, 1999, the Company instituted Jubilant Employees Stock Option Plan, 2005 ("Plan") for specifed categories of employees and directors of the Company and its Subsidiaries. Under the Plan as amended, upto 1,100,000 Stock Options can be issued to eligible directors (other than promoter directors) and other specifed categories of employees of the Company/ Subsidiaries. Options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest.

Each option, upon vesting, shall entitle the holder to acquire fve equity shares of Rs. 1 each. Options granted upto 28th August 2009 will vest entirely within two years from the grant date, with certain lock-in provisions. Options granted after 28th August 2009 will vest gradually over a period of 5 years from the grant date, without any lock-in provisions.

The Company has constituted a Compensation Committee comprising of a majority of independent directors. This Committee is empowered to administer the Plan.

In 2008-09, Jubilant Employees Welfare Trust was constituted for the purpose of acquisition of equity shares of the Company from the Secondary market or subscription of shares from the Company, to hold the shares and to allocate/transfer these shares to eligible employees of the Company from time to time on the terms and conditions specifed under the Plan. The members authorised grant of loan(s) from time to time to the Trust in one or more tranches, upto Rs. 1,000 million either free of interest or at interest agreed between the Board and the Trust. The outstanding loan to the Trust as at 31st March, 2011 is Rs. 269.90 million (Previous year Rs. 423.21 million).

During the year, the Company modifed the Plan to incorporate special provisions consequential to Scheme of Amalgamation & Demerger amongst the Company, Jubilant Industries Ltd. & others and to provide:

(i) that an Option holder who is continuing with the Company, would be entitled to not only the equity shares of the Company but also the equity shares of Jubilant Industries Limited in accordance with the share exchange ratio i.e. One equity share of Rs. 10 each of Jubilant Industries Limited (JIL Share), free of cost, for every 20 equity shares of Rs. 1 each of the Company) when such options holder pays the exercise price in accordance with the Plan;

(ii) that the Lock-in provisions, in accordance with the Plan, wherever applicable to the equity shares of the Company will also apply to the JIL Shares acquired by a Participant.

(iii) for other specifc provisions applicable to Participant(s) transferred to Jubilant Industries Limited, including provision for accelerated vesting of Options on Effective Date, in case Options were granted at least one year before the Effective Date but not vested upto that date.

Further, pursuant to the scheme, to the extent the Trust holds equity shares of the Company, equity shares of the Jubilant Industries Limited has been issued, in accordance with the share exchange ratio.

Upto 31st March, 2011, the Trust has purchased 5,371,747 equity shares of the Company from the open market, out of interest free loan provided by the Company, out of which 1,530,010 shares were transferred to the employees on exercise of ESOPS. The Trust has also been issued 192,086 JIL Shares in accordance with the Scheme.

8. a) The Company's significant operating lease arrangements are in respect of premises (residential, offces, godown etc.). These leasing arrangements, which are cancelable, range between 11 months and 3 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses.

b) The Company has significant operating lease arrangement in respect of lease of land which are non-cancellable for a fixed period of 25 years. These lease rentals are subject to escalation whereby the Lessor is entitled to increase the Lease Rental by 10% of the average lease rental of preceding three years (blocked period).

9. In line with the applicable Accounting Standards, during the year, interest amounting to Rs. 202.24 million (Previous Year Rs. 69.65 million) and expenditure incurred on start up and commissioning of the project and /or substantial expansion, including the expenditure incurred on test runs and Trial Runs (Net of trial run receipts, if any) up to the date of commencement of commercial production amounting to Rs. 197.87 million (Previous Year Rs. 188.56 million) have been capitalised. The said expenditure (net of trial run receipts), so capitalised are accumulated as Capital work in progress.

10. The carrying value of internally generated Intangible Asset – Product Development including product development under progress is reviewed for impairment annually. Accordingly a sum of Rs. 91.61 million (Previous Year Rs. 62.63 million) has been written off during the year.

11. (A) Deferred Tax Assets and Liabilities are attributable to the following items:

(B) The Profit attributable to the operations under the (EOU) Export Oriented Units Scheme are deductible from taxable income for the year ended 2010- 11 and accordingly income from EOU setup at Nanjangud, Mysore, at Bhartiagram, Jyotiba Phoolay Nagar (Gajraula), Uttar Pradesh and at Ambernath, Maharashtra have been considered as tax deductible, and provision for tax is made accordingly.

(C) Current Tax includes Rs. 32.70 million related to previous year including interest thereon.

12. The bottling unit of the Company situated at Nira holds a potable liquor license for Indian Made Foreign Liquor (IMFL) and the same is bottling IMFL on the order of another Company and is charging bottling fee. The Accounts recognise Revenue and Expenditure only to the extent the Company enjoys benefcial interest. In Compliance with the requirements of Schedule VI to the Companies Act, 1956, the following information is given hereunder in respect of the transactions where the Company does not enjoy benefcial interest:

13. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with the Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS-11) – "The Effects of Changes in Foreign Exchange Rates" notifed by the Ministry of Corporate Affairs on 31st March, 2009. Accordingly during 2008-09 the Company had capitalized exchange difference amounting to Rs. 1,130.81 million to the cost of fixed assets and Rs. 1,596.03 million to foreign currency monetary item translation difference account (FCMITDA) including reversal of exchange gain amounting to Rs. 1,030.57 million credited to Profit & Loss Account in the 2007-08. During the year Rs. 161.30 million (Previous Year Rs. 1,436.57 millions) were reversed from the FCMITDA on account of exchange difference. Balance Rs. 102.68 million in the FCMITDA has been credited to Profit & Loss Account as required in terms of the said notifcation.

14. The Company uses derivative financial instruments such as forward contracts to selectively hedge its currency exposures, frm commitments and highly probable forecast transactions, denominated in USD and EURO. Usually, the forward contracts mature within two years. The Company actively manages its currency/interest rate exposures on loans through a centralised treasury setup and uses derivatives such as currency swaps and interest rate swaps to mitigate the risk from such exposures.

15. Employee Benefits has been calculated as under: (A) Defned Contribution Plans

a. Provident Fund*

b. Superannuation Fund

(B) Defned Beneft Plans

i. Compensated Absences and Gratuity

In accordance with Accounting Standard 15(AS 15) - "Employee Benefits (Revised 2005)", an actuarial valuation has been carried out in respect of gratuity and compensated absences. The discount rate assumed is 8.35 % which is determined by reference to market yield at the Balance Sheet date on Government bonds. The retirement age has been considered at 58 years and mortality table is as per LIC (1994-96).

The estimates of future salary increases, considered in actuarial valuation, 10% for frst year and 6% thereafter, take account of infation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

ii. Provident Fund:

The Guidance on implementation of AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that Benefits involving provident funds, which require interest shortfall to be compensated, are to be considered as defned beneft plans. The actuary has recommended a provision of Rs. 6.74 million towards liability likely to arise towards interest guarantee. The trust is managing common corpus of three companies. The total liability of Rs. 6.74 million as worked out by the actuary has been allocated to each entity based on the corpus value of each entity as on 31st March, 2011. Accordingly Rs. 5.81 million has been charged to Profit & Loss Account during the year. The Company has contributed Rs. 77.48 million to Provident Fund (Previous Year Rs. 68.38 million) for the year.

16. Segment Reporting :

i) Based on the guiding principles given in Accounting Standard 17 (AS-17) on "Segment Reporting", the Company's Primary Business Segments were organized around customers on industry and product lines as under, however, Post demerger of Agri & Performance Polymers Businesses the Company has identifed only one segment-PLSPS as reportable segment.

a. Pharmaceuticals and Life Sciences Products & Services (PLSPS) : i) Custom Research & Manufacturing Services (CRAMS)-Proprietary Products and Exclusive Synthesis, Active Pharmaceuticals Ingredients (APIs) ii) Pharmaceutical Products- Generics iii) Life Sciences Chemicals-Acetyls iv) Nutrition Ingredients-Nutrition ingredients for Pharma, Human and Animal applications.

b. Agri & Performance Polymers(APP) : i) Agri Products-SSP, Agro Chemicals ii) Performance Polymers-Consumer Products, Application Polymers, Food Polymers, Latex and other products.

ii) In respect of Secondary Segment information, the Company has identifed its Geographical segments as:

(i) Within India (ii) Outside India.

iii) Inter Segment Transfer Pricing

Inter Segment Transfer prices are based on market prices.

21. A. Related Party Disclosures

1. Related parties where control exists:

a) Subsidiaries including Step-down subsidiaries:

Jubilant First Trust Healthcare Ltd., Asia Healthcare Development Ltd., Jubilant Infrastructure Ltd., Jubilant Pharma Pte. Ltd., Cadista Holdings Inc., Jubilant Cadista Pharmaceuticals Inc. (formerly Cadista Pharmaceuticals Inc.), Colvant Sciences, Inc. (Dissolved wef 31st March, 2011), Jubilant Life Sciences (Shanghai) Ltd. (formerly Jubilant Organosys (Shanghai) Ltd.), Jubilant Life Sciences International Pte. Ltd. (formerly Jubilant Organosys International Pte. Ltd.), Draximage Ltd., Cyprus, Draximage Ltd., Ireland, Draximage LLC, Jubilant DraxImage (USA) Inc. (formerly DSPI Inc., USA), Deprenyl Inc., USA, Jubilant DraxImage Ltd. (formerly Draximage India Ltd.), Jubilant DraxImage Inc. (formerly Draxis Specialty Pharmaceuticals Inc.), 6963196 Canada Inc., 6981364 Canada Inc., DAHI LLC. (Dissolved wef 21st March 2011), DAHI Animal Health (UK) Ltd., Draximage (UK) Ltd., Jubilant Life Sciences (BVI) Ltd. (formerly Jubilant Organosys (BVI) Ltd.), Jubilant Biosys (BVI) Ltd., Jubilant Drug Development Pte. Ltd., Jubilant Chemsys Ltd., Jubilant Clinsys Ltd. (formerly Clinsys Clinical Research Ltd.), Jubilant Innovation (BVI) Ltd., Jubilant Innovation Pte. Ltd., Jubilant Life Sciences (Switzerland) AG, Schaffhausen, Jubilant Pharma NV, Jubilant Pharmaceuticals NV, PSI Supply NV, Jubilant Life Sciences Holdings Inc. (formerly Clinsys Holdings, Inc.), Jubilant Clinsys Inc. (formerly Clinsys Clinical Research, Inc.), HSL Holdings Inc., Jubilant HollisterStier LLC (formerly Hollister-Stier Laboratories LLC), Draxis Pharma Inc., Draxis Pharma LLC, Generic Pharmaceuticals Holdings, Inc., Jubilant Life Sciences (USA) Inc. (formerly Jubilant Organosys (USA) Inc.), Jubilant Innovation (India) Ltd., Jubilant Innovation (USA) Inc., Jubilant Biosys (Singapore) Pte. Ltd., Jubilant Biosys Ltd., Jubilant Discovery Services, Inc., Cadista Pharmaceuticals (UK) Limited (Dissolved on 13th April, 2010).

b) Other Entities:

Draxis Pharma General Partnership Canada, Draximage General Partnership Canada, Vanthys Pharmaceutical Development Pvt. Ltd (50:50 Joint Venture between Jubilant Innovation Pte. Ltd. and Eli Lilly & Co )

2. Other Related parties with whom transactions have taken place during the year.

a) Enterprise over which certain Key Management Personnel have significant infuence:

Jubilant Enpro Pvt. Ltd., Jubilant Oil & Gas Pvt. Ltd., Jubilant Foodworks Ltd., Tower Promoters Pvt. Ltd., Focus Brands Trading (India) Pvt. Ltd., B &M Hot Breads Pvt. Ltd, Jubilant Industries Ltd.

b) Key Management Personnel:

Mr. Shyam S. Bhartia, Mr. Hari S. Bhartia, Mr. Shyamsundar Bang, Dr. J. M. Khanna, Mr. R. Sankaraiah, Mr. Pramod Yadav, Mr. Rajesh Srivastava, Mr. Neeraj Agarwal, Mr. Chandan Singh.

c) Relatives of Key Management Personnel:

Ms. Asha Khanna (wife of Dr. J. M. Khanna), Ms. Shobha Bang (wife of Mr. Shyamsundar Bang).

d) Others:

Vam Employees Provident Fund Trust, Jubilant Employee Welfare Trust , Jubilant Bhartia Foundation, Vam Officers Superannuation Fund, Amarchand & Mangaldas & Suresh A. Shroff & Co.

17. B. Promoter Group

Group companies

The Company is controlled by Mr.Shyam S Bhartia/Mr. Hari S Bhartia group ("the promoter group"), being a group as defned in the Monopolies and Restrictive Trade Practices Act, 1969.

The persons constituting the promoter group include individuals and corporate bodies who/which jointly exercise, and are in a position to exercise, control over the Company. The names of these individuals and bodies corporate are Mr. Shyam S Bhartia, Mr. Hari S Bhartia, Mrs. Shobhana Bhartia, Mrs. Kavita Bhartia, Mr.Priyavrat Bhartia, Mr.Shamit Bhartia, Ms. Aashti Bhartia, Master Arjun S Bhartia, Mrs. Namrata Bhartia, Master Agastya Bhartia, Enpro Exports Private Ltd., Jaytee Private Ltd., Jubilant Enpro Private Ltd., Jubilant Securities Private Ltd., Jubilant Capital Private Ltd., Rance Investment Holdings Ltd., Cumin Investments Ltd., Torino Overseas Ltd., Vam Holdings Ltd., Nikita Resources Private Ltd., Jubilant Oil & Gas Pvt. Ltd., Enpro Oil Pvt Ltd, Tower Promoters Pvt. Ltd, U C Gas & Engineering Ltd., Western Drilling Contractors Pvt. Ltd, Jubilant Realty Pvt. Ltd, Jubilant Properties Pvt. Ltd., Indian Country Homes Pvt. Ltd., Jubilant E& P Ventures Pvt. Ltd, Jubilant Retail Pvt. Ltd., Jubilant Stock Holding Pvt. Ltd. (formerly Jubilant Retail Holding Pvt. Ltd.), Jubilant Motorworks Pvt. Ltd. (formerly Jubilant Motors Pvt. Ltd.), Jubilant Retail Consolidated Pvt. Ltd., B &M Hot Breads Pvt. Ltd.

18. (A) Capacities and Production: The ministry of Corporate Affairs, Government of India vide its General Notifcation No. S.O.301(E) dated 8th February 2011 issued under Section 211(3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their Profit & Loss Account. The Company being an 'export oriented company' is entitled to the exemption. The Board has given its consent with regards to Non-disclosure of information in terms of said Notifcation.

Accordingly, disclosures mandated by paragraphs 3(i)(a), 3(ii)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

19. Previous Year's figures have been regrouped/rearranged wherever considered necessary to conform to this year's classification. (Also Refer Note 4 of Schedule "N").


Mar 31, 2010

1. Capital Commitments

Estimated amount of Contracts remaining to be executed on Capital Account (Net of Advances) ` 1,235.14 million (Previous year ` 629.70 million) [Advances ` 115.25 million (Previous year ` 113.89 million)].

2. Contingent liabilities

a) Claims/Demands for the following matters in respect of which proceedings or appeals are pending and are not

(Rs. in million)

As at 31st March, 2010 2009

Central Excise 32.27 23.18

Customs 40.69 74.67

Sales Tax 48.82 48.01

Income Tax 189.05 162.36

Service Tax 34.62 3.12

Others 144.27 59.48

b) The Company has challenged the levy of transport fee by State of Maharashtra on consumption of rectified spirit and molasses in the Nira factory. The order of State imposing the levy was stayed by the Honble Mumbai High Court on 22nd October, 2001. The Company has been advised that the levy of transport fee on rectified spirit and molasses by State is not tenable. However, the Company has deposited ` 6.28 million under protest out of the total transport fee of ` 133.74 million.

c) Outstanding guarantees furnished by Banks on behalf of the Company/by the Company including in respect of Letters of Credits is ` 2,605.60 million (Previous year ` 1,066.75 million).

d) The Company has given Corporate Guarantee on behalf of its subsidiaries, HSL Holdings Inc. & Draxis Specialty Pharmaceuticals Inc., to ICICI Bank UK, PLC. & ICICI Bank, Canada for USD 50 million (effective guarantee as at 31st March, 2010 USD 31.25 million) and USD 50.21 million respectively (total effective guarantee equivalent to ` 3,657.59 million), to secure financial facility granted by them.

e) Exports obligation undertaken by the Company under EPCG scheme to be completed over a period of five/eight years on account of import of Capital Goods at concessional import duty are remaining outstanding is ` 434.05 million (Previous year ` 1,101.50 million). Similarly Export obligation under Advance License Scheme/DFIA scheme on duty free import of specific raw materials, remaining outstanding is ` 1,011.82 million (Previous year ` 558.01 million).

f) The Company has challenged the increase in denaturing fee by the State of Uttar Pradesh w.e.f. 1st April, 2004 on denaturing of rectified spirit in the Gajraula factory before the Honble Allahabad High Court and the writ petition has been admitted by the court. The Company has deposited ` 19.11 million under protest which is shown as deposits.

g) Zila Panchayat at J.P. Nagar (in respect of the Companys Gajraula plant) served a notice demanding a compensation of ` 277.40 million allegedly for, percolation of poisonous water stored in lagoons and flowing through the land of Zila Panchayat resulting in loss of crops and cattle of the farmers and for putting poisonous fly ash on national highway which caused loss to the health and damages to eyes and skin of people.

District Magistrate issued a recovery certificate along with 10% collection charges inflating the demand to ` 305.14 million. In the opinion of the Company, the Zila Panchayat has no jurisdiction in raising this demand. The demand was challenged in Honble Allahabad High Court and the court stayed the demand till further orders.

h) The Company has challenged the levy of license fees of ` 2.87 million by State of Uttar Pradesh, for grant of PD-2 license for manufacture of Ethyl Alcohol for industrial use, before the Honble Allahabad High Court. The writ petition has been admitted and is being listed for final hearing. Though the amount has been deposited and shown as such, no provision against this has been made as the issue is covered by the earlier favorable judgment of the Honble Supreme Court of India.

3. The Honble Supreme Court has quashed the levy of license fee by State of Uttar Pradesh on captive consumption of denatured spirit in the Gajraula factory, and has ordered the refund of the fee paid during the period of dispute subject to condition that the amount has not been collected from the Companys customers. Further the Court has directed the State to investigate whether the Company has collected the disputed fee from its customers to the extent bank guarantees were furnished.

The Company is entitled to a refund of Rs. 84.06 million as the amount paid during the period of dispute or secured by bank guarantees was not collected from its customers. Accordingly the Company has approached the State of Uttar Pradesh for the refund of the said amount.

4. In order to bring uniformity in accounting policy, beginning 1st April 2009, the depreciation method, in respect of certain assets has been changed from written down value method to straight line method with retrospective effect as per Accounting Standard 6 (AS-6) and consequent effect is cumulative lower depreciation charge by Rs. 311.64 million. Due to the effect of such change in the policy, the depreciation charge for the current year is also lower by Rs. 347.13 million for the year and the profit after tax is higher by similar amount.

5. The deferred tax liability is net of amount recoverable from the Employees Welfare Trust towards the tax chargeable on the income of trust on which the tax is payable by the Company.

6. Amount of Proposed Dividend includes dividend distribution tax of Rs. 52.74 million. This dividend distribution tax has been calculated considering the reduction in surcharge rate from existing 10% to 7.5% by the Finance Bill, 2010

7. Loans to Subsidiary Companies repayable on demand, including interest accrued thereon, namely, Jubilant Biosys Ltd. - Rs. 1,361.80 million (Previous year Rs. 1,083.80 million). {Maximum amount due at any time during the year, Jubilant Biosys Ltd. - Rs. 1,475.21 million (Previous year Rs. 1,148.53 million), Jubilant Pharma Pte. Ltd. Singapore- Rs. 2,328.12 million (Previous year Rs. 223.12 million)}.

8. Maximum balance outstanding, during the year, recoverable from following Companies in which Directors are interested, Jubilant Enpro Pvt. Ltd. - Rs. 1.89 million, Jubilant Oil & Gas Pvt. Ltd. - Rs. 2.62 million and B &M Hot Breads Pvt. Ltd. - Rs. 0.07 million. However, there are no outstanding against these companies as at 31st March, 2010.

9. Micro and Small Business Entities

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) has been determined to the extent such parties have been identified on the basis of information available with the Company.

10. The Company allotted 11,237,517 Nos. of Equity Share of Rs. 1 each at a premium of Rs. 343.50 to Qualified Institutional Buyers (QIB) on 31st March, 2010. The entire proceeds of the issue amounting to Rs. 3,871.33 million were lying in Escrow Accounts at 31st March, 2010.

11. Foreign Currency Convertible Bonds (FCCB)

(A) 1.5 % FCCB -USD 35 million (FCCB 2009)

The Company issued 1.5% Foreign Currency Convertible Bonds due 2009 (FCCB 2009) aggregating USD 35 million, in the year 2004-05. The Bonds were convertible at any time between 14th June, 2004 and 15th April, 2009 by holders into fully paid equity shares of Rs. 1 each of the Company or Global Depositary Shares (GDSs) each representing one equity share at an initial conversion price of Rs. 163.646 per share with a fixed rate of exchange on conversion of Rs. 44.805 = USD 1. The Bonds could also be redeemed, in whole but not in part, at the option of the Company at any time on or after 14th May, 2007, subject to satisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the Bonds were to be redeemed on 15th May, 2009 at 113.70% of their principal amount. The FCCBs were listed on Singapore Stock Exchange. The GDSs arising out of conversion of FCCBs are listed on Luxembourg Stock Exchange. Out of these FCCB 2009, USD 34.70 million were converted upto 31st March, 2009 into equity shares and this represents 9,500,521 shares of Rs. 1 each as on 31st March, 2009. The balance bonds of USD 0.30 million outstanding as of 31st March, 2009 were redeemed during the year. The proceeds were utilised for funding new projects & expansion of existing units - Rs. 795.4 million (USD 17.1 million), investment in/acquisition of overseas subsidiary companies - Rs. 722.0 million (USD 16.8 million) and issue expenses - Rs. 50.7 million (USD 1.1 million).

(B) FCCB - USD 75 million (FCCB 2010)

The Company issued Zero Coupon Foreign Currency Convertible Bonds due 2010 (FCCB 2010) for an aggregate value of USD 75 million, convertible at any time between 3rd July, 2005 to 14th May, 2010 by holders into fully paid equity shares of Rs. 1 each of the Company or Global Depositary Shares (GDSs) each representing one equity share of Rs. 1 each at an initial conversion price of Rs. 273.0648 per share with a fixed rate of exchange of Rs. 43.35 = USD 1. The conversion price is subject to adjustment in certain circumstances. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time on or after 23rd May, 2008, subject to satisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed on 24th May, 2010 at 138.383% of their principal amount. The FCCBs are listed on Singapore Stock Exchange. The GDSs arising out of conversion of FCCBs are listed on Luxembourg Stock Exchange. Out of these FCCB 2010, USD 22.343 million were converted upto 31st March, 2009 into equity shares and this represents 3,547,022 shares of Rs. 1 each as on 31st March, 2009 and USD 3 million Bonds were bought back at a discount and were cancelled upto 31st March, 2009. The balance bonds of USD 49.657 million outstanding as of 31st March, 2010 are included under Unsecured Loans.

The outstanding balance of FCCB 2010 - USD 49.657 million, on conversion would result in allotment of 7,883,231 equity shares of Rs. 1 each.

The proceeds of FCCB 2010 have been used for funding new projects & expansion of existing units - Rs. 1,384.1 million (USD 32.2 million), investment in/acquisition of overseas subsidiary companies - ` 1,827.9 million (USD 41.0 million), issue expenses - ` 78.0 million (USD 1.8 million).

(C) FCCB - USD 200 million (FCCB 2011)

The Company issued Zero Coupon Foreign Currency Convertible Bonds due 2011 (FCCB 2011) for an aggregate value of USD 200 million, convertible at any time between 30th June, 2006 to 10th May, 2011 by holders into fully

paid equity shares of Rs. 1 each of the Company or Global Depositary Shares (GDSs) each representing one equity share at an initial conversion price of Rs. 413.4498 per share with a fixed rate of exchange of Rs. 45.05 = USD 1. The conversion price is subject to adjustment in certain circumstances. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time on or after 19th May, 2009, subject to satisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed on 20th May, 2011 at 142.429% of their principal amount. The FCCBs are listed on Singapore Stock Exchange. The GDSs arising out of conversion of FCCBs are listed on Luxembourg Stock Exchange. Out of these FCCB 2011, USD 57.90 million Bonds were bought back at a discount and cancelled upto 31st March, 2009. The balance bonds of USD 142.10 million outstanding as of 31st March, 2010 are included under Unsecured Loans.

The outstanding balance of FCCB 2011 - USD 142.10 million, on conversion would result in allotment of 15,483,391 equity shares of Rs. 1 each.

The proceeds of FCCB 2011 have been used for funding new projects -Rs. 13.5 million (USD 0.30 million), investment in/acquisitions of overseas subsidiary companies - Rs. 8,873.0 million (USD 196.96 million) and issue expenses - Rs. 123.4 million (USD 2.74 million). There has been no conversion during the year in respect of the above FCCBs.

12. Employee Stock Option Scheme

In terms of approval of shareholders accorded at the AGM held on 29th August, 2005 and in accordance with SEBI (ESOP & ESPS) Guidelines, 1999, the Company instituted Jubilant Employees Stock Option Plan, 2005 ("Plan") for specified categories of employees and directors of the Company and its Subsidiaries. Under the Plan as amended, upto 1,100,000 Stock Options can be issued to eligible directors (other than promoter directors) and other specified categories of employees of the Company/ Subsidiaries. The options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest.

Each option, upon vesting, shall entitle the holder to acquire five equity shares of ` 1 each. The Options granted upto 28th August, 2009 will vest entirely within two years from the grant date, with certain lock-in provisions. The Options granted after 28th August, 2009 will vest gradually over a period of 5 years from the grant date, without any lock-in provisions.

The Company has constituted a Compensation Committee comprising of a majority of independent directors. This Committee is empowered to administer the Scheme.

In 2008-09, Jubilant Employees Welfare Trust was constituted for the purpose of acquisition of equity shares of the Company from the Secondary market or subscription of shares from the Company, to hold the shares and to allocate/ transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Plan. The members authorised grant of loan(s) from time to time to the Trust in one or more tranches, upto ` 1,000 million either free of interest or at interest agreed between the Board and the Trust. The outstanding loan to the trust as at 31st March, 2010 is ` 423.21 million (Previous year ` 567.85 million). Till date, the Trust has purchased 5,371,747 equity shares of the Company from the open market, out of interest free loan provided by the Company, out of which 736,405 shares were transferred to the employees on exercise of ESOPS during the year.

13. The Companys significant operating lease arrangements are in respect of premises (residential, offices, godown etc.). These leasing arrangements, which are cancelable, range between 11 months and 3 years generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable are charged as expenses.

14. In line with the applicable Accounting Standards, during the year, interest amounting to Rs. 69.65 million (Previous Year Rs. 220.09 million) and preoperative expenses including trial run expenses (net) for projects and/or substantial expansions amounting to Rs. 188.56 million(Previous Year Rs. 78.44 million) have been capitalised/pending capitalisation up to the date of commercial production/stabilisation of the project. Preoperative expenses include lease rent Rs. 4.92 million payable to a subsidiary company. The said expenditure (net of trial run receipts), so capitalised are accumulated as Capital work in progress and have been allocated to respective Fixed Assets to the extent fixed assets were put to use and balance is appearing in Capital work in progress.

15. The carrying value of internally generated Intangible Asset - Product Development including under progress is reviewed for impairment annually. Accordingly a sum of ` 62.63 million (Previous Year ` 79.49 million) has been written off during the year.

(B) The profit attributable to the operations under the (EOU) Export Oriented Units Scheme are deductible from taxable income for the year ended 31st March, 2010 and accordingly income from EOU setup at Nanjangud, Mysore, and at Bhartiagram, Jyotiba Phoolay Nagar (Gajraula), Uttar Pradesh have been considered as tax deductible, and provision for tax is made accordingly.

16. The bottling unit of the Company situated at Nira holds a potable liquor license for Indian Made Foreign Liquor (IMFL) and the same is bottling IMFL on the order of another Company and is charging bottling fee. The Accounts recognise Revenue and Expenditure, only to the extent the Company enjoys beneficial interest.

In Compliance with the requirements of Schedule VI to the Companies Act, 1956, the following information is given hereunder in respect of the transactions where the Company does not enjoy beneficial interest.

17. The Company has opted for accounting the exchange difference arising on reporting of long term Foreign currency monetary items in line with the Companies (Accounting Standards) Amendment Rules, 2009 on Accounting Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates" notified by the Ministry of Corporate Affairs on 31st March, 2009. Accordingly during 2008-09 the Company had capitalised exchange difference amounting to Rs. 1,130.81 million to the cost of fixed assets and Rs. 1,596.03 million to foreign currency monetary item translation difference account (FCMITDA) including reversal of exchange gain amounting to Rs. 1,030.57 million credited to Profit & Loss account in the 2007-08. During the year Rs. 1,436.57 millions were reversed from the FCMITDA on account of exchange difference and Rs. 100.84 million were amortised. The balance Rs. 58.62 million in FCMITDA will be amortised on or before March, 2011.

18. The Company uses derivative financial instruments such as forward contracts and currency swaps to selectively hedge its currency exposures, firm commitments and highly probable forecast transactions, denominated in USD and EURO. Usually, the forward contracts mature within two years. The Company also enters into interest rate swaps to selectively hedge its interest rate exposures. The Company actively manages its currency/interest rate exposures through a centralised treasury setup and uses derivatives to mitigate the risk from such exposures.

No derivative transactions are entered into for any speculative purpose.

iii) Forward contracts not applied for closing monetary assets and liabilities, and interest rate swap contracts, outstanding at the year end are marked to market and the resultant loss of Rs. 63.36 million (Previous Year Rs. 942.88 million) has been charged to Profit and Loss account. The loss on forward contracts cancelled during the year amounting to Rs. 99.58 million has also been charged to Profit & Loss Account.

19. Employee Benefits has been calculated as under:

(A) Defined Contribution Plans

a) Provident Fund

b) Superannuation Fund

During the year the Company has recognised the following amounts in the Profit and Loss account:

(C) Defined Benefit Plans

a) Gratuity

b) Leave Encashment

The discount rate assumed is 8.30 % which is determined by reference to market yield at the Balance Sheet date on Government bonds. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

20. Segment Reporting :

i) Based on the guiding principles given in Accounting Standard 17 (AS-17) on " Segment Reporting", notified by the Central Government of India. The Companys Primary Business Segments are organised around customers on industry and product lines as under :

a. Pharmaceuticals and Life Sciences Products & Services : i) Custom Research & Manufacturing Services(CRAMS)-Proprietary Products and Exclusive Synthesis, Active Pharmaceuticals Ingredients(APIs) ii) Pharmaceutical Products- Generics iii) Life Sciences Chemicals-Acetyls iv) Nutrition Ingredients-Nutrition ingredients for Pharma, Human and Animal applications.

b. Agri & Performance Polymers : i) Agri Products-SSP, Agro Chemicals ii) Performance Polymers-Consumer Products, Application Polymers, Food Polymers, Latex and other products.

ii) In respect of Secondary Segment information, the Company has identified its Geographical segments as:

(i) Within India (ii) Outside India.

iii) Inter Segment Transfer Pricing

Inter Segment Transfer prices are based on market prices.

Notes:

1) The Company has disclosed Business Segment as the Primary Segment.

2) Segments have been identified and reported taking into account the nature of products and services, the differing risk and returns, the organisation structure and the internal financial reporting systems.

3) The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

4) In line with the continued strategy to make the Company a focused Pharma and Life Sciences Company, the board has in principle approved business restructuring involving demerger of Agri and Performance Polymer business into a separate Company. Accordingly the reporting segments have been redefined as Pharmaceuticals and Life Sciences Products and Services (PLSPS) and Agri and Performance Polymers (APP) to reflect the results of these two businesses separately. The demerger will be carried out through a court scheme and is subject to necessary regulatory and other approvals/sanctions.

21. A. Related Party Disclosures

1. Related parties where control exists:

a) Subsidiaries including Step-down subsidiaries:

Jubilant Pharma Pte. Ltd. Singapore, Draximage Ltd. Cyprus, Draximage Ltd. Ireland, Draximage LLC. USA., DSPI Inc. USA, Deprenyl Inc. USA, Draxis Specialty Pharmaceuticals Inc. Canada., 6963196 Canada Inc. Canada, 6981364 Canada Inc. Canada, DAHI LLC. USA, DAHI Animal Health (UK) Ltd. UK., Draximage (UK) Ltd. UK., Clinsys Holdings Inc. USA., Clinsys Clinical Research, Inc. USA. Cadista Holdings Inc. USA., Cadista Pharmaceuticals Inc. USA., Colvant Sciences Inc. USA., Cadista Pharmaceuticals (UK) Limited, UK., Jubilant Organosys International Pte. Ltd. Singapore, HSL Holdings Inc. USA. , Hollister-Stier Laboratories LLC. USA., Jubilant Organosys (Shanghai) Ltd. China., Jubilant Pharma N.V. Belgium., Jubilant Pharmaceuticals N.V. Belgium., PSI Supply N.V. Belgium., Jubilant Organosys (USA) Inc. USA., Jubilant Organosys (BVI) Ltd. BVI., Jubilant Biosys (BVI) Ltd. BVI., Jubilant Biosys (Singapore) Pte Ltd. Singapore., Jubilant Biosys Ltd., Jubilant Discovery Services Inc. USA., Jubilant Drug Development Pte. Ltd. Singapore., Jubilant Chemsys Ltd., Clinsys Clinical Research Ltd., Jubilant Infrastructure Ltd., Jubilant First Trust Healthcare Ltd., Asia Healthcare Development Ltd., Speciality Molecules Ltd., Jubilant Innovation (BVI) Ltd., BVI., Jubilant Innovation Pte. Ltd., Singapore. Draximage India Ltd, Hitech Shiksha Ltd., Jubilant Innovation (India) Ltd., Jubilant Innovation (USA) Inc. USA., Draxis Pharma Inc. USA., Draxis Pharma LLC. USA.

b) Other Entities:

Draxis Pharma General Partnership Canada, Draximage General Partnership Canada, Vanthys Pharmaceutical Development Pvt. Ltd (50:50 Joint Venture)

2. Other Related parties with whom transactions have taken place during the year:

a) Enterprise over which certain Key Management Personnel have significant influence:

Jubilant Enpro Pvt. Ltd., Jubilant Oil & Gas Pvt. Ltd., Jubilant Foodworks Ltd., Tower Promoters Pvt. Ltd., Focus Brands Trading (India) Pvt. Ltd., B &M Hot Breads Pvt. Ltd.

b) Key Management Personnel:

Mr. Shyam S. Bhartia, Mr. Hari S. Bhartia, Mr. S. N. Singh*, Mr. Shyamsundar Bang, Dr. J. M. Khanna, Mr. R. Sankaraiah, Mr. Pramod Yadav, Mr. Rajesh Srivastava, Mr. Ananda Mukherjee.

*Employed for part of the year

c) Relatives of Key Management Personnel:

Ms. Asha Khanna (wife of Dr. J. M. Khanna), Ms. Shobha Bang (wife of Mr. Shyamsundar Bang)

d) Others:

Vam Employees Provident Fund Trust, Jubilant Employees Welfare Trust , Jubilant Bhartia Foundation, Vam Officers Superannuation Fund, Amarchand & Mangaldas & Suresh A. Shroff & Co.

Note: (1) Managerial remuneration - Details as per Note 25 of Schedule "O".

(2) Figures in ( ) indicates in respect of previous year.

(3) Related party relationship is as identified by the Company and relied upon by the Auditors.

(4) No amount has been written off/provided for in respect of dues from or to any related party.

(5) In addition to this, Jubilant Employees Welfare Trust has transferred some shares to Key Management Personnel during the year on payment of exercise price to the trust.

22. B. Promoter Group

Group companies

The Company is controlled by Mr. Shyam S Bhartia/Mr. Hari S Bhartia group ("the promoter group"), being a group as defined in the Monopolies and Restrictive Trade Practices Act, 1969.

The persons constituting the promoter group include individuals and corporate bodies who/which jointly exercise, and are in a position to exercise, control over the Company. The names of these individuals and bodies corporate are Mr. Shyam S Bhartia, Mr. Hari S Bhartia, Mrs. Shobhana Bhartia, Mrs. Kavita Bhartia, Mr. Priyavrat Bhartia, Mr. Shamit Bhartia, Ms. Aashti Bhartia, Master Arjun S Bhartia, Mrs. Namrata Bhartia, Master Agastya Bhartia, Best Luck Vanijya Private Ltd., Enpro Exports Private Ltd., Jaytee Private Ltd., Jubilant Enpro Private Ltd., Jubilant Securities Private Ltd., Jubilant Capital Private Ltd., Rance Investment Holdings Ltd., Cumin Investments Ltd., Torino Overseas Ltd., Vam Holdings Ltd., Nikita Resources Private Ltd., Jubilant Oil & Gas Pvt. Ltd., Enpro Oil Pvt Ltd, Tower Promoters Pvt. Ltd, U C Gas & Engineering Ltd., Asia Infrastructure Development Co Pvt Ltd, Western Drilling Contractors Pvt. Ltd, Jubilant Realty Pvt. Ltd, Jubilant Properties Pvt. Ltd., Indian Country Homes Pvt. Ltd., Jubilant E & P Ventures Pvt. Ltd, Jubilant Retail Pvt. Ltd., Jubilant Retail Holding Pvt. Ltd., Jubilant Motors Pvt. Ltd., Jubilant Retail Consolidated Pvt. Ltd., B & M Hot Breads Pvt. Ltd.

* Under the Industrial Policy Statement dated July 24, 1991 and the notifications issued thereunder,no licensing is required for the Companys products.

** Not our own production but for others on tolling basis.

# Exclusive of exhibit batches for R&D purposes.

## After effect of adjustments of shortage/excess/old obsolete inventory written off/provided for.

@@ Includes products manufactured by Contract Manufacturers on conversion basis wherever applicable

Notes:

a) Closing Stock has been arrived at after considering Captive Consumptions.

b) Installed capacities are as certified by the Management, being a technical matter and relied upon by the Auditors accordingly.

c) Acetaldehyde & Formaldehyde are also produced which are mainly used captively as process chemicals.

d) V.P. Latex / SBR Latex installed Capacity is on Wet Basis.

e) Agri chemicals production is on tolling basis.

f) Difference in quantitative tally represent materials damaged / obsolete / issue for sample etc.

g) Turnover includes subsidy / export incentives.

h) Previous year figures have been recast on reclassification.

Note: The Diluted EPS does not include the effect of vested employee stock options as number of shares held by Jubilant Employees Welfare Trust is in excess of employee stock option granted and outstanding. (Refer Note 13 of Schedule O)

23. Previous Years figures have been regrouped/rearranged wherever considered necessary to conform to this years classification.

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