Jubilant Industries Ltd.

Event Update -- 12th December 2011

Retail Business Merger Approval

Contents : Retail Business Merger Approval Consolidated Structure of JIL post Merger & Demerger Overview of each of the Operational Segments Past 3 Years' Revenue of Each Segment IP ACP Retail Consolidated

Retail Business EBITDAR & EBITDA Loss Margins since Inception Critical Financial & Valuation Ratios of JIL as Consolidated Entity (post merger) as at FY11 Scenario post-merger of Retail Business

Retail Business Merger Approval

A court-directed Meeting of Shareholers of Jubilant Industries Ltd. (JIL) was held on 2 nd December 2011 in which shareholders approved the demerger of Agri & Consumer Products (ACP) business of JIL into its wholly-owned subsidiary, Jubilant Agri & Consumer Products Ltd. (JACPL) for a consideration of Rs. 164.88 cr. which will be received in the form of preference shares (of JACPL) by JIL. Simultaneously, Jubilant Bhartia group's Retail Mall-cumHypermarket business is being merged into JACPL for a consideration of 3.835 mn. equity shares of JIL. Court approval is expected to be received before 31 st December 2011 post which the entire demerger (of ACP business) and merger (of Retail business) process is expected to be completed within a fortnight. Post this entire scheme of arrangement coming into effect, JIL will have three distinct business lines viz., :

Industrial Products (IP) which will be directly under listed entity JIL Agri & Consumer Products (ACP) which will be under listed JIL's wholly-owned subsidiary JACPL. Retail (Mall-cum-Hypermarket) which will also be under listed JIL's wholly-owned subsidiary JACPL.

FY11 Revenues =
` 141.5 cr.

FY11 Revenues =
` 378.8 cr.

FY11 Revenues =
` 314.4 cr.

Consolidated FY11 Revenues =

` 834.7 cr.

Industrial Products (IP)

Agri & Consumer Products (ACP)

Hypermarket

Retail Mall cum

Jubilant Industries Ltd. (JIL)

Jubilant Agri & Consumer Products Ltd. (JACPL) 100 % owned Subsidiary

Details of each of the Businesses ( IP, ACP & Retail ) are given in subsequent pages

Industrial Products (IP)

Industrial Products (IP) business will be directly under listed JIL's fold and it comprises of two sub-segments viz., :

Food Polymers (3rd Largest Supplier Globally & Largest in India) Latex (4th Largest Supplier Globally & Largest in India for VP Latex)

Food Polymer : Under this segment, company manufactures and markets solid poly vinyl acetate (SPVA), which is used as an ingredient in making gum base for chewing gum and bubble gum. Synthetic polymers, of which solid PVA is but one type, are the main gum base constituent in 90% of the gum base manufactured worldwide. Latex : Under this segment, company manufactures and markets three kinds of latex namely, Vinyl Pyridine (VP), Styrene Butadiene Rubber (SBR) and Nitrile Butadiene (NBR). Vinyl Pyridine and SBR are used in dipping of tyre cord and conveyor belt fabric by tyre manufacturers who have in-house dipping facilities and also by tyre cord fabric dippers. In addition, they are also used to manufacture SBR Latex tyre carcasses, V-belts and conveyor belts. NBRs are used in automotive gasket binding applications.

Agri & Consumer Products (ACP)

Agri & Consumer Products (ACP) business will be under listed JIL's 100 % owned subsidiary JACPL's fold and it comprises of two sub-segments viz., :

Agri-Inputs (4th Largest Producer of SSP fertilizer in India with established brand 'Ramban' ) Consumer Products (2nd Largest Brand 'Jivanjor' in India next to Pidilite) Agri-Inputs : Under this segment, company manufactures and markets four broad categories of products namely, crop nutrition, plant growth regulators, crop protection and industrial chemicals. All of the company's products under this segment are sold under the brand name, Ramban and sales are primarily to the North and Central part of India and the brand is well known in these markets by the farming community for its quality, consistency and reliability. Company is the fourth largest producer of SSP fertilizer in India next to Khaitan Chemicals, Liberty Phosphate and Rama Phosphate. Consumer Products : Under this segment, company produces a range of products for woodworking adhesives, wood finishes, footwear adhesives and epoxy sealants. The products under this segment are sold under the umbrella brand called Jivanjor and it occupies 2 nd Largest Brand status in Indian Consumer Adhesives & Polish market after Pidilite.

Retail Mall-cum-Hypermarket (Retail)

Retail Mall-cum-Hypermarket (Retail) business will be under listed JIL's 100 % owned subsidiary JACPL's fold and it comprises of a chain of state-of-the-art hypermarkets and malls in Bangalore. The chain is run under the brand name 'Total' and it occupies 2 nd Largest position in Bangalore with an overall 20 % marketshare. The chain currently has 5 stores under operation in the mall-cum-hypermarket format with over 8 lakh square feet under operation serving over 10 lakh customers.

Stores Under Operation

@ Mysore Road @ Madiwala Road

Area = 1,33,094 sq.ft.

Stores Under Operation

5
Area Under Operation

Area = 1,69,034 sq.ft. Area = 1,71,590 sq.ft.

Area = 2,09,588 sq.ft.

@ Sarjapur Road

@ Old Airport Road

8,25,306 sq.ft. Area = 1,42,000 sq.ft.

@ Outer Ring Road

Past 3 Years' Revenue of Each Segment - IP

Industrial Products (IP)

( fig. In

cr. )

FY11
141.5

FY10
121.4

FY09
113.5

Industrial Products (IP) of which

Food Polymers Latex

60.8 80.7

48.1 73.3

47.4 66.1

Past 3 Years' Revenue of Each Segment - ACP

Agri & Consumer Products (ACP)

( fig. In

cr. )

FY11
378.8

FY10
251.3

FY09
355.2

Agri & Consumer Products (ACP) of which

Agri-Input Consumer Products

261.3 117.5

146.7 104.6

95.2

260

Past 3 Years' Revenue of Each Segment - Retail

Retail Mall-cum-Hypermarket (Retail)

( fig. In

cr. )

FY11

FY10

FY09

Retail Mall-cumHypermarket (Retail)

314.4

281.8

166.3

Past 3 Years' Revenue of Each Segment - Consolidated

( fig. In

cr. )

FY11
141.5

FY10
121.4

FY09
113.5

Industrial Products (IP)

Agri & Consumer Products (ACP)

378.8

251.3

355.2

Retail Mall-cumHypermarket (Retail)

314.4

281.8

166.3

Total Consolidated Revenue

834.7

654.5

635

Retail Business EBITDAR & EBITDA Loss Margins since Inception

Jubilant Bhartia Group's Retail Mall-cum-Hypermarket business started with the launch of first store under the brand 'Total' of 1,33,094 sq.ft. area in the year 2006 (December 2006) at Mysore Road, Bangalore. After that 2nd store was launched in July 2007, 3rd in February 2008, 4th in November 2008 and the latest 5th store in July 2011. Since Retail businesses are marred by the presence of operational losses, it is prudent to assess a retail business by its EBITDAR Margins (R = Rent) as well as EBITDA level (Loss) margins wherein a break-even can be gauged by the extent of reduction in loss margins w.r.t. revenues. On this count, given below are the EBITDAR as well as EBITDA loss margins achieved by JIL's Retail business since inception. Since the first store was opened in December 2006, the inception financial year is FY08.

FY11
EBITDAR Margin EBITDA Loss Margin (+) 6.8 %

FY10
(+) 4.1 %

FY09
(-) 3.8 %

FY08
(-) 15.4 %

12.3 %

17.2 %

35.2 %

35.7 %

Critical Financial & Valuation Ratios of JIL as Consolidated Entity (post merger) as at FY11
Consolidated Equity Capital Consolidated Book Value per share Consolidated Enterprise Value Consolidated Debt-to-Equity (D/E) Consolidated Revenues Current Marketcap Marketcap-to-Sales EV/Sales Price-to-Book

11.84 cr.
`

77

375.28 cr. 1.9 834.7 cr. 238 cr. 0.28 0.44 2.6

Scenario post-merger of Retail Business

(1) Demerger of ACP business into a wholly owned subsidiary will allow residual IP business to pursue its independent growth path in a more proper way. Residual IP business has strong growth prospects, especially, Food Polymer business, in which JIL is the 3 rd largest global supplier of SPVA. IP business is expected to considerably improve margins going forward because of better capacity utilisation of enhanced capacities which are already booked for supply. (2) JACPL, a 100 % owned subsidiary of JIL, is created to act as an umbrella of all well established brands of JIL. JACPL will have three strong brands under its fold viz., Jivanjor (2nd largest brand in Indian Consumer Adhesives & Polish market), Ramban (4th largest brand in Indian SSP fertilizer market), Total (2nd largest brand in Bangalore Retail market with 20 % share). (3) Retail (Total) business is close to break-even because of investment-phase in back-end having got concluded with only capex required for expansion in front-end which itself will drive break-even. Management expects Retail business to break-even at EBITDA-level in FY13. (4) Jivanjor & Ramban brands will act as cash-cow because of tremendous growth anticipated, especially in SSP fertilizer segment. (5) Each of the three brands, viz., Jivanjor, Ramban & Total, are expected to be scaled upto a considerable level by FY14 so as to make each an independent profit-generating Unit.