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Directors Report of Jyothy Laboratories Ltd.

Mar 31, 2017

Dear Members,

It is our pleasure to present the 26th Annual Report of your Company together with the Audited Financial Statements for the financial year ended March 31, 2017.

FINANCIAL PERFORMANCE

The Company''s financial performance on standalone basis for the year ended March 31, 2017 compared with previous financial year is summarized below:

(Rs. in Crore)

Particulars

Financial Year ended March 31, 2017

Financial Year ended March 31, 2016

Gross Revenue from Operations

1698.16

1608.90

Other Income

4.24

11.74

Earnings before interest, tax, depreciation, amortization and impairment

264.39

239.75

Interest & Finance Charges/(Income) Net

43.73

52.12

Depreciation and Amortization- Tangibles

23.38

23.08

Depreciation and Amortization- Intangibles

31.36

31.12

Profit before tax and Share of (profit)/loss of an associate and a joint venture

165.92

133.42

Share of (profit)/loss of an associate and a joint venture

(0.04)

0.07

Profit Before Tax

165.96

132.34

Provision for tax

- Current tax- (MAT)

-

14.52

- Adjustment of Tax relating to earlier period

7.85

-

- Deferred Tax Charge

(43.94)

44.30

Profit after tax

202.05

74.52

Earnings Per Share (Basic) (In H)

11.12

4.12

Earnings Per Share (Diluted) (In H)

11.12

4.06

Dividend Per Share of face value of H1/- (In H)

6.00

5.00

PERFORMANCE HIGHLIGHTS

The gross revenue from operations (inclusive of excise duty) on standalone basis of your Company for the financial year 2016-17 grew by 5.55% and stood at Rs.1698.16 Crore compared to Rs.1,608.90 Crore in the previous financial year. The profit before tax was at Rs.165.96 Crore as against Rs.133.34 Crore in the previous financial year, registering a growth of 24.46%. The net profit for the financial year 2016-17 amounted to Rs.202.05 Crore compared to Rs.74.52 Crore in the previous financial year, depicting a growth of 171.14%.

The consolidated gross revenue from operations (inclusive of excise duty) of your Company for the year under review stood at Rs.1749.19 Crore as against Rs.1659.51 Crore in the previous year, reporting a growth of 5.40%. The consolidated profit before tax was at Rs.178.65 Crore registering a growth of 24.84% over the consolidated profit before tax of the previous financial year. The consolidated profit after tax for the financial year under review stood at H204.15 Crore against profit after tax of Rs.73.81 Crore in the previous financial year, reflecting a growth of 176.59%.

DIVIDEND

The Board is pleased to recommend a dividend of H6/-(Rupees Six) per Equity Share (i.e. @ 600% of face Value of Equity Share of Rs.1/- each) for the financial year ended March 31, 2017. The aforesaid dividend will involve a total payout of Rs.131.20 Crore (inclusive of tax of Rs. 22.19 Crore) and is subject to the approval of Members at the ensuing Annual General Meeting of your Company.

During the previous financial year, your Company had paid a total dividend of Rs.5/- (Rupees Five) per Equity Share of Rs.1/- each for the financial year 2015-16 including interim dividend of Rs.4/- (Rupees Four) per Equity share of Rs.1/- each involving total cash outflow of Rs.109.00 Crore (inclusive of tax of Rs.18.44 Crore).

DIVIDEND DISTRIBUTION POLICY

Your Company has adopted a policy on Dividend Distribution formulated in accordance with the Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ''Listing Regulations''), and the same is attached as annexure to this report and can be accessed from your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/DIVIDEND%20DISTRIBUTIQN%20 POLICY JLL FINAL.pdf

TRANSFER TO RESERVES

Your Company did not transfer any sum to the General Reserve for the financial year under review. However, your Company has transferred a sum of Rs.62.50 Crore (Rs.45.60 Crore in the previous financial year) to the Debenture Redemption Reserve during the year under review.

CONSOLIDATED ACCOUNTS

The consolidated financial statements of your Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Central Government under Section 133 of the Companies Act, 2013 and forms integral part of the Annual Report.

PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/ JOINT VENTURES

A report on the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies as per the Companies Act, 2013 is attached as Annexure to this report and hence not repeated here for the sake of brevity. Policy for determining material subsidiaries formulated and adopted by your Company can be accessed from your Company''s website at the link: http://www.jyothylaboratories.com/admin/docs/ PMS JLL Website.pdf

During the year under review, Jyothy Consumer Products Marketing Limited - JCPML (Wholly Owned Subsidiary of your Company) amalgamated with your Company pursuant to the Scheme of Amalgamation sanctioned by the Hon''ble Mumbai Bench of National Company Law Tribunal vide its Order dated March 1, 2017. The Appointed date for the above mentioned amalgamation was April 1, 2016 which came into effect on March 17, 2017 after filing of certified copy of the Order of the Hon''ble Mumbai Bench of National Company Law Tribunal with the Registrar of Companies and/ or Ministry of Corporate Affairs.

Except as mentioned above, no Company has become or ceased to be its subsidiaries, joint ventures or associate companies during the financial year 2016-17.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2017, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there were no material departures from the same;

b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2017 and of the profit of your Company for the year ended on that date;

c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared annual accounts of your Company on a going concern basis;

e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and

f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion & Analysis Report is attached and forms an integral part of this Report.

ISSUE OF SHARES

Issue of Equity Shares with differential rights

During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under provisions of Section 43(a)(ii) of the Companies Act, 2013 read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.

Issue of Sweat Equity Shares

During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(1)(d) of the Companies Act, 2013 read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules, 2014 is furnished.

Issue of Employee Stock Option

During the year under review, your Company in terms of the provisions of Section 62(1)(b) read with Section 39 of the Companies Act, 2013 has issued and allotted 4,52,558 (Four Lacs Fifty Two Thousand Five Hundred and Fifty Eight) Equity Shares of Rs.1/- each to Mr. S. Raghunandan under “Jyothy Laboratories Employees Stock Option Scheme 2014-A" (ESOS 2014-A) and 1,11,486 (One Lac Eleven Thousand Four Hundred and Eighty Six) Equity Shares of H1/- each to other eligible employees under “Jyothy Laboratories Employees Stock Option Scheme 2014" (ESOS 2014) respectively as approved by Members of your Company at the 23rd Annual General Meeting held on August 13, 2014.

INCREASE IN SHARE CAPITAL

During the year under review, pursuant to the Scheme of Amalgamation of Jyothy Consumer Products Marketing Limited into your Company, the Authorised Share Capital of your Company has increased to Rs.2,72,30,00,000 consisting of: (a) 2,72,00,00,000 Equity Shares of the face value of Rs.1/- each and (b) 30,000 11% Cumulative Redeemable Preference Shares of the face value of Rs.100/- each.

Further, after the issue of 5,64,044 Equity Shares under ESOS 2014 and ESOS 2014-A, the Paid up Equity Share Capital of your Company stands increased to Rs.18,16,83,724 consisting of 18,16,83,724 equity shares of your Company of Rs.1/- each fully paid-up.

DEBENTURES

During the year under review, your Company redeemed 4000 Zero Coupon Secured Redeemable Non-Convertible Debentures of Rs.10,00,000/- each aggregating to Rs.400 Crores on November 11, 2016 at an aggregate redemption premium of Rs.146.73 Crores.

Further, your Company during the year under review has also raised Rs.400 Crores through private placement of 4000 Secured Rated Unlisted Redeemable Nonconvertible Debentures of face value of Rs.10,00,000/-each on December 9, 2016 to refinance its existing debt.

CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations together with the Certificate received from your Company''s Statutory Auditors confirming compliance of Corporate Governance requirements is attached and forms an integral part of this report.

BUSINESS RESPONSIBILITY REPORT

The Securities and Exchange Board of India (SEBI), vide amendment to Regulation 34(2)(f) of the Listing Regulations dated December 22, 2015, had extended the applicability of Business Responsibility Reports to top 500 listed companies based on market capitalization. Earlier, the requirement of Business Responsibility Report was applicable only to Top 100 Listed entities based on market capitalization. As a result, your Company being one of the top 500 listed Companies is required to report on Business Responsibility. Accordingly, the report on Business Responsibility is attached as annexure and forms an integral part of this report.

RELATED PARTY TRANSACTIONS

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed form AOC-2 is appended as Annexure to the Board''s report. During the year, your Company had entered into contract / arrangement / transaction with related parties which were on arm''s length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further none of the contract/ arrangement/ transaction with related parties required approval of shareholders as the same were within the limits prescribed under Section 188(1) of the Companies Act, 2013 and the Rules framed there under.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed from your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/RPT JLL Website.pdf

Attention of Members is also drawn to Note 35 to the financial statements for the year ended March 31, 2017 which sets out the related party disclosures as per the Indian Accounting Standard (Ind AS) 24.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman & Managing Director of your Company even before the inception of Corporate Social Responsibility provisions under the Companies Act, 2013, has been involved in charitable and social activities in his individual capacity.

Your Company has undertaken projects in the area of skill development, promotion of education and rural development as part of its CSR initiative. These projects were in accordance with Schedule VII to the Companies Act, 2013 and the CSR policy framed by your Company. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended as annexure and forms an integral part of this report.

Details about the CSR Policy adopted and formulated by your Company can be accessed from your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/JLL CSR%20Policy Website.pdf

Your Company was required to spend Rs.294.10 lacs (2% of the average net profits of last three financial years) on CSR activities during the financial year 2016-17. Accordingly, your Company spent Rs.238.37 lacs on CSR activities during the year 2016-17 and an amount of Rs.55.73 lacs stands committed towards contribution for skill development etc. and the same will be expended in the current financial year. Further an amount of Rs.6.06 lacs pertaining to financial year 2015-16 was spent towards housing in adivasi area of Trichur District, Kerala in the financial year 2016-17.

MATERIAL CHANGES AND COMMITMENTS

Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year 2016-17 and date of this report.

INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework formulated by Ernst & Young, LLP based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-

1. Fixed Assets;

2. Financial Statement Closing Process;

3. Information Technology;

4. Inventory Management;

5. Marketing and Advertising;

6. Order to Cash;

7. Payroll;

8. Production Process;

9. Purchase to Pay;

10. Taxation;

11. Treasury.

During the year under review, no material or serious observations has been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.

CHANGE IN NATURE OF BUSINESS

During the year under review, there was no change in the nature of business of your Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by any Regulator/ Court that would impact the going concern status of your Company and its future operations.

REMUNERATION/ COMMISSION FROM ANY OF ITS SUBSIDIARIES

During the year under review, neither the Managing Director nor the Whole Time Directors of your Company received any remuneration or commission from any of its Subsidiaries.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Companies Act, 2013 are appended as Annexure and forms integral part of this report.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

Your Company has adopted Jyothy Laboratories Employee Stock Option Scheme 2014 -A (“ESOS 2014-A") for granting of options to Mr. S. Raghunandan, Whole Time Director and Chief Executive Officer of your Company (relinquished the office of Whole Time Director and Chief Executive Officer of the Company w.e.f. May 23, 2016) and Jyothy Laboratories Employee Stock Option Scheme 2014 (“ESOS 2014") for granting of options to other eligible employees of your Company as approved by the Members of your Company at the 23rd Annual General Meeting held on August 13, 2014.

Disclosure as required under Section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulation, 2014 are furnished below:

Jyothy Laboratories Employee Stock Option Scheme 2014- A (“ESOS 2014-A")

Jyothy Laboratories Employee Stock Option Scheme 2014 (“ESOS 2014")

1

Date of Shareholders'' approval

August 13, 2014

August 13, 2014

2

Total number of options approved under ESOS

27,15,352

27,15,352

3

Vesting Requirements

Options granted under ESOS 2014-A would Vest after one year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters.

Options granted under ESOS 2014 would Vest after one year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters

4

Exercise price or pricing formula

H1 per option

H1 per option

5

Maximum term of options granted

5 years

5 years

6

Source of shares

Primary

Primary

7

Variation in terms of option

No variation in the terms of option

No variation in the terms of the option

8

Method of Option Valuation

Intrinsic Value

Intrinsic Value

9

Option Movement during the year

Number of Options outstanding at the beginning of the

22,62,793

3,00,804

period

Number of options granted during the year

-

-

Number of options forfeited/ lapsed during the year

-

54,181

Number of options vested during the year

4,52,558

1,11,486

Number of options exercised during the year

4,52,558

1,11,486

Number of shares arising as a result of exercise of options

4,52,558

1,11,486

Money realized by exercise of options (Amount in H)

4,52,558

1,11,486

Loan repaid by the Trust during the year from exercise

N.A.

N.A.

price received

Number of Options outstanding at the end of the year

18,10,235

1,35,137

Number of options exercisable at the end of the year

18,10,235

1,35,137

10

Employee Wise details of Options Granted

i. Senior Managerial Personnel

Name Designation

Options Granted during the Year

Exercise Price

None -

-

-

Jyothy Laboratories Employee Stock Option Scheme 2014- A (“ESOS 2014-A")

Jyothy Laboratories Employee Stock Option Scheme 2014 (“ESOS 2014")

ii. any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year; and

Name

Designation

Options Granted during the Year

Exercise Price

None

-

-

-

iii. identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversations) of the company at the time of grant.

Name

Designation

Options Granted during any one Year

Exercise Price

Mr. S. Raghunandan

Whole Time Director & Chief Executive Officer*

27,15,352#

Rs.1/- per Option

*Ceased to be Whole Time Director and Chief Executive Officer of the Company and re-designated as President of the Company w.e.f. May 23, 2016.

# Options Granted to Mr. S. Raghunandan during the financial year 2014-15.

Note: Other details as required under Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular bearing number CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 forms part of the Notes to Accounts of the Financial Statements in the Annual Report.

Further, the aforesaid details are also available on your Company''s website at the link: http://www.jyothylaboratories. com/admin/docs/ESOP Reg.%2014.pdf

The certificate from the Statutory Auditors in respect of implementation of Jyothy Laboratories Employee Stock Option Scheme 2014-A (“ESOS 2014-A") and Jyothy Laboratories Employee Stock Option Scheme 2014 (“ESOS 2014") in accordance with the resolution passed by the Members at the 23rd Annual General Meeting of your Company held on August 13, 2014, shall be placed at the ensuing Annual General Meeting for inspection by Members.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and the Article 140 of the Articles of Association of your Company, Ms. M. R. Jyothy, Whole Time Director and Chief Marketing Officer of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

During the year under review, the members approved re-appointment of Mr. M. P. Ramachandran as the Chairman and Managing Director of your Company for a term of five years with effect from August 22, 2016 to August 21, 2021 at the 25th Annual General Meeting of your Company held on July 21, 2016 by passing special resolution.

Further, the members have also approved re-appointment of Mr. K. Ullas Kamath as the Joint Managing Director and Chief Financial Officer of your Company for a term of five years with effect from January 23, 2017 to January 22, 2022 and Ms. M. R. Jyothy as the Whole Time Director and Chief Marketing Officer of your Company for a term of five years with effect from January 1, 2017 to December 31, 2021 through Postal Ballot dated December 1, 2016.

Mr. Bipin R. Shah resigned as the Independent Director of your Company with effect from August 11, 2016. The Board placed on record, its appreciation for the contribution made by Mr. Shah during his tenure as the Independent Director.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Board in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and remuneration for Directors, Key Managerial Personnel and other employees.

Major criteria defined in the Policy framed for appointment of the Directors including criteria for determining qualifications, positive attributes, Independence etc. are as under:

(I) Selection

In case of Executive Directors and Key Managerial Personnel, the selection can be made either by recruitment from outside or from within your Company hierarchy or upon recommendation by the Chairman or other Directors. The appointment may be made either to fill up a vacancy caused by retirement, resignation, death or removal of an existing Executive Director and Key Managerial Personnel or it may be a fresh appointment.

In case of Non-Executive Directors, the selection can be made either by way of selection from the data bank of Independent Directors maintained by the Government of India or upon recommendation by the Chairman or other Directors. The appointment may be made either to fill up a vacancy caused by resignation, death or removal of an existing Non-Executive Director or it may be an appointment as an additional director or an alternate director.

(II) Qualifications, Experience and Positive Attributes

a) While appointing a Director, it has to be ensured that the candidate possesses appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to your Company''s business.

b) In case of appointment as an Executive Director, the candidate must have the relevant technical or professional qualifications and experience as are considered necessary based on the job description of the position. In case no specific qualification or experience is prescribed or thought necessary for the position then, while recommending the appointment, the Human Resource Department shall provide the job description to the Committee and justify that the qualifications, experience and expertise of the recommended candidate are satisfactory for the relevant appointment. In such circumstances, the Committee may call for an expert opinion on the appropriateness of the qualifications and experience of the candidate for the position of the Executive Director.

c) In case of appointment as a Non-Executive Director, the candidate must have a post graduate degree, diploma or a professional qualification in the field of his practice/ profession/ service and shall have not less than five years of working experience in such field as a professional in practice, advisor, consultant or as an employee. Provided that the Board may waive the requirements of qualification and/ or experience under this paragraph for a deserving candidate.

d) The Board, while making the appointment of a Director, shall also try to assess from the information available and from the interaction with the candidate that he is a fair achiever in his chosen field and that he is a person with integrity, diligence and open mind.

(III) Board Diversity and Independence

While making appointment of directors, following principles shall be observed by the Board, as far as practicable:

a) There shall be a proper mix of Executive and Non-Executive Directors and Independent and Non-Independent Directors on the Board. Your Company must always be in compliance of the provisions of Section 149 of the Companies Act, 2013 and Clause 17 of the Listing Regulations, as amended from time to time, in this regard.

b) There shall be a workable mix of directors drawn from various disciplines, like technical, finance, commercial, legal etc. The Board shall not at any time be entirely comprised of persons drawn from one discipline or field.

c) While appointing a director to fill in a casual vacancy caused by death, resignation etc. of a director, an effort shall be made, as far as possible, to appoint such a person in his place who has the relevant experience in the fields or disciplines in which the outgoing director had the experience or the person with relevant experience in the fields or disciplines which are not represented in the Board as requisite to business of your Company.

d) No preference on the basis of gender, religion or cast shall be given while considering the appointment of directors.

e) Generally, an effort shall be made to maintain the Board diversity by appointment of persons from diverse disciplines (relevant to your Company''s business), of different age groups and of both the genders (male as well as female) as Directors.

f) While appointing Independent Directors, the criteria for the independent directors, as laid down in Section 149 (6) of the Companies Act, 2013 and Listing Regulations are followed.

REMUNERATION POLICY

Your Company follows the policy on Remuneration of Directors and Senior Management Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board. A detailed report on the same is given in the Corporate Governance Report.

PERFORMANCE EVALUATION

In accordance with the Companies Act, 2013 and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.

Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits and efforts for personal development.

Similarly, performance evaluation of the Chairman and Non - Independent Directors was carried out by the Independent Directors. Your Directors also expressed their satisfaction with the evaluation process.

TRAINING OF INDEPENDENT DIRECTORS

All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link:

http://www.jyothylaboratories.com/admin/docs/ Familiarisation%20Programme JLL 2016-17.pdf

MEETING OF INDEPENDENT DIRECTORS

Your Company''s Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel and the meeting is conducted informally. During the year under review, one meeting of Independent Director was held on May 23, 2016.

BOARD MEETINGS

The Board of Directors met 6 times during the financial year ended March 31, 2017 in accordance with the provisions of the Companies Act, 2013 and the Rules made thereunder.

The dates on which the Board of Directors met during the financial year under review are provided in the Corporate Governance Report.

AUDIT COMMITTEE

The Audit Committee of your Company consists of all Independent Directors and Mr. K. Ulass Kamath, Joint Managing Director and Chief Financial Officer of your Company. The detailed composition of the Audit Committee is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.

The Vigil Mechanism/ Whistle Blower Policy of your Company can be accessed from your Company''s website at the link:

http://www.jyothylaboratories.com/admin/docs/ JLL Vigil%20Mechanism%20Policy amended Final 28012016.pdf

The Whistle Blowers have a right/option to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of conduct or policy directly to the Chairman of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.

RISK MANAGEMENT

The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is monitored on a periodic basis by your Company :

1. The Management Approach;

2. JLL''s Vision & Mission;

3. Key Business Goals;

4. Risk Library;

5. Risk Management Focus.

Also, the Management has adopted the following 5 step approach keeping in view your Company''s Vision and Mission:

- Identifying ''Key'' Business goals;

- Identifying the Risk Management focus;

- Identifying Business risks;

- Prioritizing the identified business risks;

- Rating the current risk management capability for identified risks.

Further, your Company identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.

INTERNAL CONTROL SYSTEMS

Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operations and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down for each process owners. Management Information System has been established which ensure that adequate and accurate information is available for reporting and decision making.

Internal Audit is conducted by an independent firm of Chartered Accountants viz, M/s Mahajan & Aibara Chartered Accountants LLP. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.

Your Company has also in place a ''Compliance Tool'' designed and implemented by Ernst & Young, LLP which ensures compliance with the provisions of all applicable laws to your Company adequately and efficiently.

AUDITORS & AUDIT REPORTS

Statutory Auditors and their Report

The present Statutory Auditors of your Company, M/s S R B C & Co LLP, Chartered Accountants (ICAI Registration No. 324982E/ E300003) have served as Statutory Auditors of your Company for a period more than two terms of five consecutive years as provided under Section 139(2) of the Companies Act, 2013 and will hold office till the conclusion of 26th Annual General Meeting (AGM) of your Company.

Therefore, the Board upon recommendation of the Audit Committee, proposed appointment of M/s B S R & Co. LLP, Chartered Accountants in place of M/s S R B C & Co LLP, Chartered Accountants, the retiring Auditors, as the Statutory Auditors, who shall hold the office from the conclusion of the 26th Annual General Meeting for a term of five consecutive years, i.e. until the conclusion of the 31st Annual General Meeting subject to ratification by the members at 27th, 28th, 29th and 30th Annual General Meeting to be held in the financial year 2018, 2019, 2020 and 2021 respectively. Further, Special Notice under Section 115 read with Section 140(4) of the Companies Act, 2013 is not required as the retiring Auditor has completed a consecutive tenure of ten years as provided under Section 139(2) of the Companies Act, 2013.

A certificate has been received from M/s B S R & Co. LLP, Chartered Accountants to the effect that they are eligible for appointment and if made would be, as per the provisions of Section 141 of the Companies Act, 2013 read with Section 139 ibid and rules made there under.

The Board placed on record its appreciation for the services rendered by M/s S R B C & Co LLP Chartered Accountants, Mumbai, as Statutory Auditors of your Company.

The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or any adverse remark.

Cost Auditors and their Report

As per section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee appointed M/s R. Nanabhoy & Co., Cost Accountants, Mumbai (Registration No. 000010) as the Cost Auditors to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2017-18. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice of the 26th Annual General Meeting of your Company.

The appointment of M/s R. Nanabhoy & Co., Cost Accountants, Mumbai as the Cost Auditors of your Company is within the prescribed limits of the Companies Act, 2013 and free from any disqualifications specified there under. Your Company has received the Certificate from the Cost an Auditors confirming their independence and relationship on arm''s length basis.

The Cost Audit Report for the financial year ended 31st March 2016, issued by M/s R. Nanabhoy & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules does not contain any qualification, reservation or adverse remark and the same was filed with the Ministry of Corporate Affairs on September 9, 2016. The Cost Audit Report for the financial year ended March 31, 2017 is being submitted shortly.

Secretarial Auditors and their Report

In terms of Section 204 of the Companies Act, 2013, the Board had appointed M/s Rathi & Associates, Company Secretaries, Mumbai as the Secretarial Auditors of your Company to carry out Secretarial Audit for the financial year 2016-17. The report of the Secretarial Auditors in the prescribed form MR-3 is appended as annexure to this report. The report does not contain any qualification, reservation or adverse remark which calls for any explanation from the Board of Directors.

Your Board has decided to appoint M/s Rathi & Associates, Company Secretaries, Mumbai as the Secretarial Auditors of your Company for the financial year 2017-18, based on the recommendations of the Audit Committee.

INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS

There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the

Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the Equity Shares of the Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of Investor Education and Protection Fund Authority (IEPF Account).

Accordingly, 1322 shares of your Company belonging to 28 Shareholders would be due for transfer to IEPF Account on May 31, 2017. Your Company has sent individual notices to all the aforesaid 28 shareholders of your Company and has also published the notice in the leading English and Marathi newspaper. The details of the aforesaid 28 shareholders are available on the website of your Company viz., www.jyothylaboratories. com.

Further, pursuant to the provisions of Section 124(5) of the Companies Act, 2013, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.

As a result, the unclaimed/ unpaid dividend for the year 2008-09 which remained unpaid and unclaimed for a period of 7 years has already been transferred by your Company to the IEPF.

Your Company has uploaded the details of unclaimed/ unpaid dividend for the financial year 2009-10 onwards on its website viz., www.jyothylaboratories.com and on website of the Ministry of Corporate Affairs viz., www.mca.gov.in and the same gets revised/ updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.

Further, the unpaid dividend amount pertaining to the financial year 2009-10 will be transferred to IEPF during the Financial Year 2017-18.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is appended as annexure to this Report.

EMPLOYEE RELATIONS

Your Company has always provided a congenial atmosphere for work to all its employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.

MANUFACTURING FACILITIES

Your Company has state-of-the-art facilities at all of its manufacturing locations spread across India. Furthermore, five manufacturing plants of your Company situated at Roorkee, Wayanad, Jammu, Pithampur, Puducherry and Baddi are ISO 9001:2015 certified.

PREVENTION OF SEXUAL HARASSMENT

Your Company has framed ''Anti - Sexual Harassment Policy'' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under. No complaints with allegations of any sexual harassment were reported during the year under review.

FIXED DEPOSITS

Your Company did not accept/ renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2017.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

With regard to the requirements of conservation of energy and technology absorption pursuant to the provision of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, your Company has nothing specific to report.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of foreign exchange earnings and outgo are as below:

(Rs. in Crore)

Particulars

2016-17 1

2015-16

Foreign exchange earnings

13.30

12.29

Foreign exchange outgo

37.80

26.92

PARTICULARS OF EMPLOYEES

The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 and forming part of the Directors'' Report for the year ended March 31, 2017 is given in a separate Annexure to this Report.

CAUTIONARY NOTE

Certain statements in the “Management Discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the contribution and commitment of the employees of your Company at all levels and for the excellent support provided by shareholders, customers, distributors, suppliers, bankers, media and other Stakeholders, during the financial year under review. Your Company looks forward to continued and unstinted support in its endeavor to make lives of consumers better by providing world class products at affordable price.

For and on behalf of the Board of Directors

For Jyothy Laboratories Limited

Sd/-

M. P. Ramachandran

Chairman & Managing Director

(DIN:00553406)

Mumbai, May 18, 2017


Mar 31, 2016

It is our pleasure to present the 25th Annual Report of your Company together with the Audited Financial Statements for the financial year ended March 31, 2016.

FINANCIAL PERFORMANCE

Your Company''s financial performance for the financial year ended March 31, 2016 compared with previous financial year is summarised below:

(Rs. in Crore)

Financial results Financial Year ended Financial Year ended March 31, 2016 March 31, 2015

Net Sales 1,573.51 1,428.27

Other Income 11.38 16.25

Earnings before interest, tax, depreciation, amortization and impairment 227.19 172.25

Interest & Finance Charges/(Income) Net (42.16) (47.13)

Depreciation, Amortization and Impairment- Tangibles 22.48 24.27

Depreciation and Amortization- Intangibles 45.46 46.10

Exceptional Item - 2.09

Profit before tax 201.41 146.92

Provision for tax

- Current tax- (MAT) 43.12 30.75

- MAT Credit entitlement (28.60) (30.75)

- Excess tax provision/ MAT credit reversal of earlier years - 4.13

- Deferred Tax change 24.53 -

Profit after tax 162.36 142.79

Balance as per last Balance Sheet

- Brought forward 21.09 22.28

Balance available for appropriations 183.45 165.07

Appropriations:

Dividend Paid (Interim) 72.45 -

Corporate Dividend Tax on Interim Dividend 14.75 -

Proposed Dividend (Final) 18.11 72.41

Corporate Dividend Tax on proposed dividend 3.69 14.74

Depreciation as per Schedule II of Companies Act, 2013 - 3.11

Transfer to General Reserve - -

Transfer to Debenture Redemption Reserve 45.60 53.72

Balance Carried Forward (Profit and Loss Account) 28.86 21.09

Earning Per Share (Basic) (In Rs.) 8.97 7.89

Earning Per Share (Diluted) (In Rs.) 8.84 7.83

Dividend Per Share of face value of Rs. 1/- (In Rs.) 5.00 4.00

PERFORMANCE HIGHLIGHTS

The gross sales (including Excise Duty) from operations on standalone basis of your Company for the financial year 2015- 16 grew by 10.25% and stood at Rs. 1,632.88 Crore compared to Rs. 1,481.14 Crore in the previous financial year. The profit before tax was at Rs. 201.41 Crore as against Rs. 146.92 Crore in the previous financial year, registering a growth of 37.08%. The net profit for the financial year 2015-16 amounted to Rs. 162.36 Crore compared to Rs. 142.79 Crore in the previous financial year.

The consolidated gross sales (including Excise Duty) from operations of your Company for the year under review stood at Rs. 1,660.85 Crore as against Rs. 1,515.97 Crore in the previous financial year, reporting a growth of 9.56%. The consolidated profit before tax was at Rs. 197.26 Crore registering a growth of 55.79% over the consolidated profit before tax of the previous financial year. The consolidated profit aftertax atRs. 157.96 Crore reflected a growth of 30.42% against profit after tax of the previous financial year.

DIVIDEND

The Board has enhanced the total dividend (Interim and Final) to Rs. 5/- (Rupees Five) per Equity Share of Rs. 1/- each for the financial year 2015-16 as againstRs.4/- (Rupees Four) per Equity share Rs. 1/- each paid in the previous financial year.

The Board is pleased to recommend a Final Dividend of Rs. 1/- (Rupee One) per Equity Share (@ 100% of face Value of Equity Share of Rs. 1/- each) for the financial year ended March 31, 2016. The Final Dividend payout of Rs. 21.80 Crore (inclusive of tax of Rs. 3.69 Crore) is subject to the approval of Members at the ensuing Annual General Meeting of your Company. Further, your Company paid in March 2016, an interim dividend of Rs. 4/- (Rupees Four) per Equity Share (@ 400% of face value of Equity Share of Rs. 1/- each) amounting to Rs. 87.20 Crore (inclusive of tax of Rs. 14.75 Crore).

TRANSFER TO RESERVES

Your Company transferred a sum of Rs. 45.60 Crore (Rs. 53.72 Crore in the previous financial year) to the Debenture Redemption Reserve during the year under review.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of your Company are prepared in accordance with the relevant Accounting Standards viz., AS-21 issued by the Institute of Chartered Accountants of India and forms integral part of the Annual Report.

PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES/ JOINT VENTURES

A report on the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies as per the Companies Act, 2013 is attached as Annexure to this report and hence not repeated here for the sake of brevity. Policy for determining material subsidiaries formulated and adopted by your Company can be accessed from your Company''s website at the link: http://www.jyothylaboratories.com/admin/docs/ PMS JLL Website.pdf

During the year under review, Associated Industries Consumer Products Private Limited - AICPPL (Wholly Owned Subsidiary of your Company) amalgamated with Jyothy Consumer Products Marketing Limited - JCPML (Step down subsidiary of your Company i.e. Wholly Owned Subsidiary of AICPPL) pursuant to the Scheme of Amalgamation sanctioned by the Hon''ble High Court of Judicature at Bombay vide its Order dated July 3, 2015 which came into effect on August 6, 2015 and as a result, JCPML which was a step down subsidiary became direct subsidiary of your Company.

Except as mentioned above, no company has become or ceased to be its subsidiary, joint venture or associate company during the financial year 2015-16.

AMALGAMATION OF SUBSIDIARY

The Board of Directors at its meeting held on May 23, 2016 approved the proposal of Amalgamation of its wholly owned subsidiary viz., Jyothy Consumer Products Marketing Limited with your Company. The Appointed Date for the said Amalgamation is fixed as April 1, 2016.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, in relation to the Audited Financial Statements of your Company for the financial year ended March 31, 2016, the Board of Directors hereby confirms that:

a. In the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there were no material departures from the same;

b. your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2016 and of the profit of your Company for the year ended on that date;

c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared annual accounts of your Company on a going concern basis;

e. your Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and

f. your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In terms of the provisions of Regulation 34(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion & Analysis Report is attached and forms an integral part of this Report.

ISSUE OF SHARES

a) Issue of Equity Shares with differential rights

During the year under review and to date, your Company has not issued any shares with differential rights, hence no information prescribed under provisions of Section 43(a)(ii) of the Companies Act, 2013 read with Rule 4(4) of the Companies (Share Capital & Debentures) Rules, 2014 has been furnished.

b) Issue of Sweat Equity Shares

During the year under review and to date, your Company has not issued any sweat equity shares. Hence no information as per the provisions of Section 54(l)(d) of the Companies Act, 2013 read with Rule 8(13) of the Companies (Share Capital & Debentures) Rules, 2014 is furnished.

c) Issue of Employee Stock Option

During the year under review, your Company in terms of the provisions of Section 62(l)(b) read with Section 39 of the Companies Act, 2013 has issued and allotted 96,184 (Ninety Six Thousand One Hundred and Eighty Four) Equity Shares of Rs. 1/- each to its employees on exercise of options granted under "Jyothy Laboratories Employees Stock Option Scheme 2014" (ESOS 2014) approved by the Shareholders of your Company at the 23rd Annual General Meeting held on August 13, 2014.

After the issue of aforesaid 96,184 Equity Shares, the Paid up Equity Share Capital of your Company stands increased to Rs. 18,11,19,680 consisting of Rs. 18,11,19,680 Equity Shares of Rs. 1/- each fully paid-up.

CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) togetherwith the Certificate received from your Company''s Statutory Auditors confirming compliance of Corporate Governance requirements is attached and forms an integral part of this report.

RELATED PARTY TRANSACTIONS

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2 is appended as Annexure to this Report. During the year, your Company had entered into contract/ arrangement/ transaction with related parties which were on arm''s length basis and none of which could be considered as material in accordance with the policy of your Company on Materiality of Related Party Transactions. Further none of the contract/ arrangement/ transaction with related parties required approval of Shareholders as the same were within the limits prescribed under Section 188(1) of the Companies Act, 2013 and Rules framed thereunder.

The Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board may be accessed from your Company''s website at the link: http:// www.jyothylaboratories.com/admin/docs/RPT JLL Website.pdf

Attention of Members is also drawn to Note No. 31 to the financial statements for the financial year ended March 31, 2016 which sets out the related party disclosures as perAS-18.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has been a firm believer that each and every individual including an artificial person owe something to the society at large. Mr. M. P. Ramachandran, Chairman & Managing Director of your Company even before the inception of Corporate Social Responsibility under the Companies Act, 2013, has been involved in charitable and social activities in his individual capacity.

Your Company has undertaken projects in the area of rural development and sanitation as part of its CSR initiative. These projects were in accordance with Schedule VII of the Companies Act, 2013 and the CSR Policy framed by your Company. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended as annexure and forms an integral part of this report.

Details about the CSR Policy adopted and formulated by your Company can be accessed from your Company''s website at the link: http://www.jyothylaboratories.com/admin/docs/JLL CSR%20Policy Website.pdf

Your Company was required to spend Rs. 1.95 Crore (2% of the average net profits of last three financial years) on CSR activities during the financial year 2015-16. Accordingly, your Company spent Rs. 1.89 Crore on CSR activities during the year 2015-16 and an amount of Rs. 0.06 Crore stands committed towards housing in Adivasi Area of Trichur District and the aforesaid projects being construction projects have a timeline. The balance amount of expenditure stands committed and will be spent in the current financial year.

MATERIAL CHANGES AND COMMITMENTS

Except as disclosed elsewhere in this report, no material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year 2015-16 and date of this report.

INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls adopted and followed by your Company are adequate and are operating effectively. Your Company has adopted a dynamic Internal Financial Controls framework formulated by Ernst & Young, LLP based on the best practices followed in the industry. Under the said framework, Risk and Control Matrix are defined for the following process(es):-

1. Fixed Assets;

2. Financial Statement Closing Process;

3. Information Technology;

4. Inventory Management;

5. Marketing and Advertising;

6. Order to Cash;

7. Payroll;

8. Production Process;

9. Purchase to Pay;

10. Taxation;

11. Treasury.

During the year under review, no material or serious observations have been received from the Internal Auditors of your Company regarding inefficiency or inadequacy of such controls.

CHANGE IN NATURE OF BUSINESS

During the year under review, there was no change in the nature of business of your Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by any Regulator/ Court that would impact the going concern status of your Company and its future operations.

REMUNERATION/ COMMISSION FROM ANY OF ITS SUBSIDIARIES

During the year under review, neither the Managing Director nor the Whole Time Directors of your Company receive any remuneration or commission from any of its Subsidiaries.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The details of Loans, Guarantees and Investments as prescribed under Section 186 of the Companies Act, 2013 are appended as Annexure and forms integral part of this report.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

Your Company has adopted Jyothy Laboratories Employee Stock Option Scheme 2014-A ("ESOS 2014-A") for granting of options to Mr. S. Raghunandan, Whole Time Director and Chief Executive Officer of your Company and Jyothy Laboratories Employee Stock Option Scheme 2014 ("ESOS 2014") for granting of options to other eligible employees of your Company approved by the Members of your Company at the 23rd Annual General Meeting held on August 13, 2014.

Disclosure as required under Section 62(l)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 are appended as below:

Jyothy Laboratories Employee Stock Option Scheme 2014-A ("ESOS 2014-A")

1 Date of Shareholders'' approval August 13, 2014

2 Total number of options 27,15,352 approved under ESOS

3 Vesting Requirements Options granted under ESOS 2014-A would Vest after One year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performanc parameters.

4 Exercise price or pricing Rs. 1 per option formula

5 Maximum term of options 5 years granted

6 Source of shares Primary

7 Variation in terms of option No variation in the terms of option

8 Method of Option Valuation Intrinsic Value

9 Option Movement during - the year

Number of Options outstanding 27,15,352 at the beginning of the period

Number of options granted - during the year

Number of options forfeited/ 4,52,558 lapsed during the year

Number of options vested during the year -

Number of options exercised during the - year

Number of shares arising as a result of exercise of options -

Money realized by exercise of options - (Amount in Rs.)

Loan repaid by the Trust during N.A. the year from exercise price received

Number of Options outstanding 22,62,794 at the end of the year

Number of options exercisable 22,62,794 at the end of the year





Jyothy Laboratories Employee Stock Option Scheme 2014-A ("ESOS 2014-A")

1 Date of Shareholders'' approval August 13, 2014

2 Total number of options 27,15,352 approved under ESOS

3 Vesting Requirements Options granted under ESOS 2014 would Vest after One year but not later than four years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performanc parameters.

4 Exercise price or pricing Rs. 1 per option formula

5 Maximum term of options 5 years granted

6 Source of shares Primary

7 Variation in terms of option No variation in the terms of option

8 Method of Option Valuation Intrinsic Value

9 Option Movement during - the year

Number of Options outstanding 4,84,958 at the beginning of the period

Number of options granted - during the year

Number of options forfeited/ 87,970 lapsed during the year

Number of options vested during the year 96,184

Number of options exercised during the 96,184 year

Number of shares arising as a result of exercise of options 96,184

Money realized by exercise of options 96,184 (Amount in Rs.)

Loan repaid by the Trust during N.A. the year from exercise price received

Number of Options outstanding 3,00,804 at the end of the year

Number of options exercisable 3,00,804 at the end of the year

10 Employee Wise details of Options Granted

i. Senior Managerial Personnel

Name Designation Options Granted during the Year Exercise Price

None - - -

ii. any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year; and

Name Designation Options Granted during the Year Exercise Price

None - - -

iii. identifed employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital(excluding outstanding warrants and conversations) of the company at the time of grant.

Name Designation Options Granted during the Year Exercise Price

Mr. S. Raghunandan Whole Time Director & Chief 27,15,352# Rs.1/- per Option

Executive Ofcer*

* Ceased to be Whole Time Director and Chief Executive Officer of your Company and re-designated as President of your Company w.e.f. May 23, 2016.

# Granted during the financial year 2014-15.

Note: Other details as required under Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular bearing number CIR/CFD/POLICY CELL/2/ 2015 DATED June 16, 2015 form part of the Notes to Accounts of the Financial Statements in this Annual Report

Further the aforesaid details are also available on your Company''s website at the link: http://www.jyothylaboratories.com/admin/ docs/ESOP Reg.%2014.pdf

The certificate from the Statutory Auditors in respect of implementation of Jyothy Laboratories Employee Stock Option Scheme 2014-A ("ESOS 2014-A"), Jyothy Laboratories Employee Stock Option Scheme 2014 ("ESOS 2014") and the resolution passed by the Members at the 23rd Annual General Meeting of your Company held on August 13, 2014, shall be placed at the ensuing Annual General Meeting for inspection by Members.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and the Article 140 of the Articles of Association of your Company, Mr. K. Ullas Kamath, Joint Managing Director and Chief Financial Officer of your Company retires by rotation at the ensuing Annual General Meeting and being eligible, offered himself for re-appointment.

The Board at its meeting held on May 23, 2016 approved appointment of Mr. M. P. Ramachandran as the Chairman and Managing Director of your Company for a term of five years with effect from August 22, 2016 to August 21, 2021 subject to the approval of Shareholders by passing a Special Resolution at the ensuing Annual General Meeting on the terms and conditions specified in the Special Resolution set out at Item No. 6 of the notice convening 25th Annual General Meeting of your Company.

The Board at its meeting held on May 23, 2016 also accepted the resignation of Mr. S. Raghunandan, Whole Time Director and Chief Executive Officer of your Company. Mr. S. Raghunandan has been re-designated as the President of your Company. The Board placed on record, its appericiation for the services rendered by Mr. S. Raghunandan during his tenure as Whole Time Director and Chief Executive Officer. The Board Members also took note of relinquishment of Mr. M. L. Bansal, Company Secretary of your Company. In the same Board Meeting, Mr. Shreyas Trivedi was appointed as the Company Secretary, Compliance Officer and a Key Managerial Personnel in accordance with Section 203 of the Companies Act, 2013.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013.

During the financial year 2015-16, there was no change in Key Managerial Personnel of your Company.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Board in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and remuneration for Directors, Key Managerial Personnel and other employees.

Major criteria defined in the Policy framed for appointment of the Directors including criteria for determining qualifications, positive attributes, independence etc are as under:

(I) Selection

In case of Executive Directors and Key Managerial Personnel, the selection can be made either by recruitment from outside or from within your Company hierarchy or upon recommendation by the Chairman or other Directors. The appointment may be made either to fill up a vacancy caused by retirement, resignation, death or removal of an existing Executive Director or it may be a fresh appointment.

In case of Non-Executive Directors, the selection can be made either by way of selection from the data bank of Independent Directors maintained by the Government or upon recommendation by Chairman or other Directors. The appointment may be made either to fill up a vacancy caused by resignation, death or removal of an existing Non-Executive Director or it may be an appointment as an additional director or an alternate director.

(II) Qualifications, Experience And Positive Attributes

a) While appointing a Director, it shall always be ensured that the candidate possesses appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to your Company''s business.

b) In case of appointment as an Executive Director, the candidate must have the relevant technical or professional qualifications and experience as are considered necessary based on the job description of the position. In case no specific qualification or experience is prescribed or thought necessary for the position then, while recommending the appointment, the Human Resource Department shall provide the job description to the Committee and justify that the qualifications, experience and expertise of the recommended candidate are satisfactory for the relevant appointment. In such circumstances, the Committee may call for an expert opinion on the appropriateness of the qualifications and experience of the candidate for the position of the Executive Director.

c) In case of appointment as a Non-Executive Director, the candidate must have a postgraduate degree, diploma or a professional qualification in the field of his practice/ profession/ service and shall have not less than five years of working experience in such field as a professional in practice, advisor, consultant or as an employee. Provided that the Board may waive the requirements of qualification and/ or experience under this paragraph for a deserving candidate.

d) The Board, while making the appointment of a Director, shall also try to assess from the information available and from the interaction with the candidate that he is a fair achiever in his chosen field and that he is a person with integrity, diligence and open mind.

(III) Board Diversity And Independence

While making appointment of directors, following principles shall be observed by the Board, as far as practicable:

a) There shall be a proper mix of Executive and Non- Executive Directors and Independent and Non- independent Directors on the Board. Your Company must always be in compliance of the provisions of Section 149 of the Companies Act, 2013 and Clause 17 of the Listing Regulations, as amended from time to time, in this regard.

b) There shall be a workable mix of directors drawn from various disciplines, like technical, finance, commercial, legal etc. The Board shall not at any time be entirely comprised of persons drawn from one discipline or field.

c) While appointing a director to fill in a casual vacancy caused by death, resignation etc. of a director, an effort shall be made, as far as possible, to appoint such a person in his place who has the relevant experience in the fields or disciplines in which the outgoing director had the experience or the person with relevant experience in the fields or disciplines which are not represented in the Board as requisite to business of your Company.

d) No preference on the basis of gender, religion or caste shall be given while considering the appointment of directors.

e) Generally, an effort shall be made to maintain the Board diversity by appointment of persons from diverse disciplines (relevant to the Company''s business), of different age groups and of both the genders (male as well as female) as Directors.

f) While appointing Independent Directors, the criteria for the Independent Directors, as laid down in Section 149 (6) of the Companies Act, 2013 and Listing Regulations are followed.

REMUNERATION POLICY

Your Company follows the Policy on Remuneration of Directors and Senior Management Employees as approved by the Nomination, Remuneration and Compensation Committee and the Board. A detailed report on the same is given in the Corporate Governance Report.

PERFORMANCE EVALUATION

In accordance with the Companies Act, 2013 and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. A questionnaire is formulated for evaluation of performance of the Board after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.

Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits and efforts for personal development. Similarly, performance evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors. Your Directors also expressed their satisfaction with the evaluation process.

TRAINING OF INDEPENDENT DIRECTORS

All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial personnel. The details of programs for familiarization of Independent Directors with your Company are available on the website of your Company at the link: http://www.jyothylaboratories.com/admin/docs/ Familiarisation%20Programme JLL.PDF

MEETING OF INDEPENDENT DIRECTORS

Your Company''s Independent Directors meet at least once in every financial year without the presence of Executive Director or Management Personnel and the meeting is conducted informally. During the year under review, one meeting of Independent Directors was held on May 25, 2015.

BOARD MEETINGS

The Board of Directors met 6 times during the financial year ended 31st March, 2016 in accordance with the provisions of the Companies Act, 2013 and Rules made thereunder.

The dates on which the Board of Directors met during the financial year under review are provided in the Corporate Governance Report.

AUDIT COMMITTEE

The Audit Committee of your Company consists of majority of Independent Directors and the detailed composition is provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company has a Vigil Mechanism in place which also includes a Whistle Blower Policy in terms of the Listing Regulations for Directors and employees of your Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.

The Vigil Mechanism/ Whistle Blower Policy of your Company can be accessed from your Company''s website at the link: http://www.jyothylaboratories.com/admin/docs/JLL Vigil%20 Mechanism%20Policy amended Final 28012016.pdf

The employees of your Company have the right/ option to report their concern/ grievance to the Chairman of the Audit Committee. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.

RISK MANAGEMENT

The Board of Directors of your Company has designed a Risk Management Policy in a structured manner taking into consideration the following factors and the same is monitored on a periodic basis by the Executive Directors of your Company.

1. The Management Approach;

2. JLL''s Vision & Mission;

3. Key Business Goals;

4. Risk Library;

5. Risk Management Focus.

Also, the Management has adopted the following 5 step approach keeping in view your Company''s Vision and Mission:

Identifying ''Key'' Business goals;

Identifying the Risk Management focus;

Identifying Business risks;

Prioritizing the identified business risks;

Rating the current risk management capability for identified risks.

Further your Company had identified Key Business Goals for a five year horizon and a library of risk events which could be bottleneck in achieving the same. After defining the key business goals and the library of risk events, your Company identified the goals on which the management would focus.

INTERNAL CONTROL SYSTEMS

Your Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. Your Company has set up Standard Operating Process (SOP), procedures and controls apart from regular Internal Audits. Roles and responsibilities have been laid down. Management Information System has been established which ensure that adequate and accurate information is available for reporting and decision making.

Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.

Your Company has also in place a ''Complaince Tool'' designed and implemented by Ernst & Young, LLP which ensures compliance with the provisions of all applicable laws to your Company adequately and efficiently.

AUDITORS & AUDIT REPORTS

Statutory Audit

M/s SRBC & Co LLP, Chartered Accountants (ICAI Registration No. 324982E/ E300003), were appointed by the members of your Company at the 23rd Annual General Meeting (AGM) held on August 13, 2014 for a period of three years i.e. for the financial years 2014-15, 2015-16 and 2016-17 subject to annual ratification by the Shareholders in the AGMs to be held for Financial year 2015-16 and 2016-17.

Members are requested to ratify the appointment of M/s SRBC & Co LLP, Chartered Accountants as Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting in 2017 and to authorize the Board to fix their remuneration for the year 2016-17.

The Notes on financial statement referred to in the Auditors'' Report are self explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

Cost Audit

As per section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audits) Rules, 2014, as amended, the Board of Directors of your Company on recommendation of the Audit Committee, appointed M/s R. Nanabhoy & Co., Cost Accountants, Mumbai (Firm Registration No. 000010) as the Cost Auditors to carry out the cost audit of its products covered under the Ministry of Corporate Affairs Order dated June 30, 2014 (as amended on December 31, 2014) for the financial year 2016-17. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice of the 25th Annual General Meeting of your Company.

The appointment of M/s R. Nanabhoy & Co., Cost Accountants, Mumbai is within the prescribed limits of Companies Act, 2013 and free from any disqualifications specified thereunder. Your Company is in receipt of the Certificate from the Cost Auditors confirming their independence and relationship on arm''s length basis.

Secretarial Audit

In terms of Section 204 of the Companies Act, 2013, the Board had appointed M/s Rathi & Associates, Company Secretaries, Mumbai to carry out Secretarial Audit for the financial year 2015-16. The report of the Secretarial Auditor is appended as annexure to this report. The report does not contain any qualification, reservation or adverse remark.

INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS

There have been no instances of any fraud reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013.

TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205C of the Companies Act, 1956, the dividend/ interest/ refund of applications which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend/ interest/ refund account was required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government and no claim shall lie against the Company.

Accordingly, the unclaimed/ unpaid dividend for the year 2007-08 which remained unpaid and unclaimed for a period of 7 years has been transferred by your Company to the IEPF.

Your Company updates the details of unclaimed/ unpaid dividend on its website viz., (www.jyothylaboratories.com) and on MCA website (www.mca.gov.in-) from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount Lying with Companies) Rules, 2012.

Further, the unpaid dividend amount pertaining to the financial year 2008-09 will be transferred to IEPF during the Financial Year 2016-17.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is appended as annexure to this Report.

EMPLOYEE RELATIONS

Your Company has always provided a congenial atmosphere for work to all employees that is free from discrimination and harassment. Employee relations remained cordial during the year under review.

PREVENTION OF SEXUAL HARASSMENT

Your Company has framed Anti - Sexual Harassment Policy'' at workplace and has constituted an Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No complaints with allegations of any sexual harassment were reported during the year under review.

FIXED DEPOSITS

Your Company did not accept/ renew any fixed deposits from public and no fixed deposits were outstanding or remained unclaimed as on March 31, 2016.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

With regard to the requirements of conservation of energy and technology absorption pursuant to provision of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, your Company has nothing specific to report.

PARTICULARS OF EMPLOYEES

Particular of employees as required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors'' Report for the year ended March 31, 2016 is given in a separate Annexure to this Report.

CAUTIONARY NOTE

Certain statements in the "Management Discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what your Directors envisage in terms of future performance and outlook.

ACKNOWLEDGEMENT

The Board of Directors express their sincere appreciation for the contribution and commitment of the employees of your Company and for the excellent support provided by the Shareholders, customers, distributors, suppliers, bankers, media and other Stakeholders, during the financial year under review.

For and on behalf of the Board of Directors

For Jyothy Laboratories Limited

M. P. Ramachandran

Chairman & Managing Director

(DIN: 00553406)

Mumbai, May 23, 2016


Mar 31, 2014

The Board of Directors is pleased to present the 23rd Annual Report together with the Audited Financial Statements for the year ended March 31, 2014 compared with previous financial year as follows:

(Rs. in lac)

Financial results Financial Financial Year ended Year ended March 31, 2014 March 31, 2013

Net Sales 1,25,510.57 1,01,737.67

Other Income 954.38 280.75

Earnings before interest, tax, depreciation, amortization and impairment 17,155.61 12,543.48

Interest & Finance Charges/ (Income) Net 134.93 1,792.67

Depreciation, Amortization and Impairment- Tangibles 1,508.08 1,516.24

Depreciation and Amortization- Intangibles 4,652.33 4,648.28

Prior year items- Expenses - 182.71

Exceptional Item 230.07 -

Profit before tax 0,630.20 4,403.58

Provision for tax

- Current tax- (MAT Payable) 2,260.00 885.00

- MAT Credit (entitlement) (2,260.00) (885.00)

- Excess provision for current tax of earlier years 18.79 -

Profit after tax 10,611.41 4,403.58

Balance as per last Balance Sheet

– Brought forward 4,543.14 6,745.54

Balance available for appropriations 15,154.55 11,149.12 Appropriations:

Interim Dividend 1,810.23 -

Tax on Interim Dividend 307.65 -

Final Dividend on Equity Shares (Proposed) 3,620.47 4,150.59

Corp. Dividend Tax 615.30 705.39

Transfer to General Reserve 1,200.00 500.00

Transfer to Debenture Redemption Reserve 5,372.51 1,250.00

Balance Carried Forward (Profit and Loss Account) 2,228.39 4,543.14

Earning Per Share (Basic and Diluted) 6.21 2.65

Cash Profit 16,771.82 10,568.10

Cash EPS 9.82 6.37

Dividend Per Share of face value of Rs. 1/- 3.00 2.50

PERFORMANCE

During the financial year ended March 31, 2014, the Company recorded Net Sales at Rs. 1,25,510.57 lac as against Rs. 1,01,737.67 lac in the previous financial year. Profit after Tax for the financial year under review vis-a-vis previous financial year is as follows:

(Rs. in lac)

Particulars 2013-14 2012-13

Profit after tax but before depreciation and amortization of Goodwill, Copyrights and Trademarks 15,081.95 8,874.12 acquired due to amalgamation of JCPL

Depreciation and amortization of Goodwill, Copyrights and Trademarks acquired due to 4,470.54 4,470.54 amalgamation of JCPL

Profit after Tax 10,611.41 4,403.58

During the year under review, the sales of soaps and detergents was Rs. 95,323.65 lac compared to Rs. 75,594.59 lac in previous year and the sales in homecare segment grew to Rs. 29,131.97 lac compared to Rs. 24,490.86 lac in previous year. The Profitability of Soaps & Detergents segment improved to Rs. 12,693.18 lac from Rs. 7,654.71 lac in the previous year. The Profitability in homecare segment improved to Rs. 833.76 lac from Rs. 794.13 lac in the previous year.

ISSUE OF CAPITAL

At the beginning of the financial year under review, the Authorised Share Capital was Rs. 17,00,00,000/- consisting of 17,00,00,000 equity shares of Rs. 1/- each and paid-up share capital was Rs. 16,12,64,000/- consisting of 16,12,64,000 equity shares of Rs. 1/- each fully paid-up.

Consequent to the Scheme of Amalgamation sanctioned by Honorable High Court of Mumbai on April 12, 2013, which came into operation on May 13, 2013, the Authorised Share Capital was increased by the Authorised Share Capital of the Transferor Company viz., Jyothy Consumer Products Ltd (JCPL) i.e. by Rs. 240 crore. On June 3, 2013, pursuant to Clause 16.2 of the said Scheme of Amalgamation, 47,59,496 (Forty Seven Lac, Fifty Nine Thousand, Four Hundred Ninety Six) Fully Paid-up Equity shares of Rs. 1/- each, were allotted to the shareholders of JCPL in the ratio of 1 Fully Paid Up Equity Share of the Company against 4 Fully Paid Up Equity Shares of JCPL held by them as on May 28, 2013 being the record date fixed for the purpose.

Further on December 3, 2013, pursuant to the Shareholders'' approval at the Extra-ordinary General Meeting of the Company held on November 19, 2013 and the In-Principle Approval granted by National Stock Exchange of India Ltd vide their letter dated November 27, 2013 and by BSE Ltd vide their letter dated November 29, 2013, Sahyadri Agencies Ltd was allotted 1,50,00,000 (One Crore Fifty Lac) equity shares of the Company of Rs. 1/- each on Preferential basis at the Issue Price of Rs. 175.15 per Equity Share (including Rs. 174.15 per share towards share premium) against receipt of entire amount payable by Sahyadri Agencies Ltd in cash aggregating to Rs. 262,72,50,000/- in terms of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Consequent to the above, at the end of financial year under review, the Authorised Share Capital of the Company was Rs. 257 crore consisting of 257,00,00,000 equity shares of Rs. 1/- each and the paid-up capital was Rs. 18,10,23,496/- comprising 18,10,23,496 equity shares of Rs. 1/- each fully paid-up.

DIVIDEND

The Board of Directors in its meeting held on January 28, 2014 declared interim dividend @100% of face value of Equity share of Rs. 1/- each (Rs. 1/- per equity share), aggregating to total cash outflow of Rs. 2,117.88 lac (including dividend distribution tax of Rs. 307.65 lac). Further, the Board is pleased to recommend a final dividend @ 200% of face Value of Equity Shares of Rs. 1/- each (i.e. Rs. 2/- per equity share), aggregating to cash outflow of Rs. 4,235.77 lac including dividend distribution tax of Rs. 615.30 lac. With this, the total dividend for the year amounts to 300% of the face value of Equity Shares of Rs. 1/- each or Rs. 3/- per Equity Share on the enlarged capital and the total cash outflow on account of dividend for the financial year under review comes to Rs. 6,353.65 lac including dividend distribution tax of Rs. 922.95 lac. In the previous financial year, the Board had recommended and paid a dividend @ 250% of face Value of Equity Shares of Rs. 1/- each (i.e. Rs. 2.50 per equity share) involving total cash outflow of Rs. 4,855.98 lac including dividend distribution tax of Rs. 705.39 lac.

The final dividend will be paid to eligible members if approved at the ensuing Annual General Meeting of the Company.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis Report is attached and forms part of this Report.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the stock exchanges, a Report on compliances with Corporate Governance is presented separately and forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Accounting Standard 21, issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements have been provided in the Annual Report. These Consolidated Financial Reports provide financial information about your Company and its subsidiary companies as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

SUBSIDIARY COMPANIES

The Central Government vide General Circular No. 2/2011 dated February 8, 2011 has exempted the holding companies from attaching Annual Accounts and other documents in respect of its subsidiaries to the Annual Report of the holding companies from the financial years ended on or after March 31, 2011. As required vide above Circular, statement in respect of each of its subsidiary, giving details of capital, reserves, total assets and liabilities, details of investments, turnover, Profit before taxation and proposed dividend is attached to the Consolidated Balance Sheet. Annual accounts of the subsidiary companies and the related detailed information will be made available to the shareholders of the Company, seeking such information and will also be made available for inspection at the Registered Office of the Company.

EMPLOYEE RELATIONS

Employee relations remained cordial during the year under review.

FIXED DEPOSITS

The Company did not accept/renew any fixed deposits from the public and no fixed deposits were outstanding or unclaimed as on March 31, 2014.

DIRECTORS

Various provisions in respect of Directors contained in the Companies Act, 2013 ("the 2013 Act") were notified with effect from April 1, 2014 repealing the corresponding provisions in the Companies Act, 1956 ("the 1956 Act").

Independent Directors

As per provisions of Section 149 of the 2013 Act, independent directors shall hold office for a term up to five consecutive years on the board of a company, but shall be eligible for re-appointment for another term up to five years on passing of a special resolution by the company and disclosure of such appointment in Board''s Report. Further Section 152 of 2013 Act provides that the independent directors shall not be liable to retire by rotation in the Annual General Meeting (''AGM'') of the Company.

As per Revised Clause 49 of the Listing Agreement (applicable from October 1, 2014), any person who has already served as independent director for five years or more in a company as on October 1, 2014 shall be eligible for appointment, on completion of the present term, for one more term of up to 5 (five) years only.

Pursuant to the extant provisions of the 1956 Act, Mr. Nilesh B. Mehta and Mr. R. Lakshminarayanan, Independent Directors would have been liable to retire by rotation in the AGM to be held in 2014 and Mr. K.P. Padmakumar and Mr. Bipin R. Shah, independent directors would have retired in the AGM to be held in 2015. However, in view of the provisions contained in 2013 Act, the Company has been advised that all independent directors are required to be appointed in the ensuing AGM.

Mr. Nilesh B. Mehta, Mr. K. P. Padmakumar, Mr. Bipin R. Shah and Mr. R. Lakshminarayanan are eligible for appointment as Independent Directors of the Company for a term up to five years in the ensuing AGM. The said Independent Directors fulfil the conditions specified in the 2013 Act and the Rules made there under and are independent of the management. The Board has conducted the performance evaluation of aforesaid Independent Directors and on the basis of the same, recommend to the shareholders the appointments of Mr. Nilesh B. Mehta, Mr. K. P. Padmakumar, Mr. Bipin R. Shah and Mr. R. Lakshminarayanan as Independent Directors of the Company for a term up to March 31, 2019.

Non-Independent Directors

In terms of Section 152 of the 2013 Act, two-third of total strength of the Board (excluding Independent Directors) shall be liable to retire by rotation. One-third of such directors who are liable to retire by rotation shall retire at every AGM.

Accordingly, in case of the Company, out of 4 non- independent directors, three directors (i.e. not less than 2/3rd) shall be liable to retire by rotation. The Board decided to continue the status of Mr. M.P. Ramachandran, Chairman & Managing Director, as ''Director not liable to retire by rotation'' and Mr. K. Ullas Kamath, Ms. M. R. Jyothy and Mr. S. Raghunandan (constituting not less than two-thirds of total non-independent directors) shall be the directors who shall be liable to retire by rotation and one of them (i.e. 1/3rd) will retire every year starting from AGM 2014. Mr. K. Ullas Kamath, being the longest serving director in this category, shall retire by rotation in the ensuing AGM of the Company. Mr. K. Ullas Kamath being eligible, offers himself for re-appointment as director and the Board recommends his re- appointment in the ensuing AGM.

Executive Directors

The Board in its meeting held on January 28, 2014 re-appointed Mr. M. P. Ramachandran as Managing Director of the Company subject to approval of shareholders in the ensuing AGM for a term of five years commencing from April 1, 2014 to March 31, 2019. He has expressed his desire to the Board that he shall be permitted to accept a nominal salary of Rs. 1/- per annum which the Board accepted. The Board had placed on record its deep appreciation for his dedication, commitment and generous gesture towards the Company.

The Board in its meeting held on May 22, 2014 approved re-appointment of Mr. S. Raghunandan as Whole Time Director & CEO for a term of three years from June 1, 2014 to May 31, 2017 subject to approval of shareholders in the ensuing AGM on terms and conditions specified in the Statement pursuant to Section 102 of the 2013 Act attached to Notice of AGM. This appointment is in supersession of existing contract dated August 16, 2012 insofar as it relates to unexpired period of that contract.

The Board in its meeting held on May 22, 2014 also approved re-appointment of Ms. M. R. Jyothy as Whole Time Director for a term of three years from June 1, 2014 to May 31, 2017 subject to approval of shareholders in the ensuing AGM on terms and conditions specified in the Statement pursuant to Section 102 of the 2013 Act attached to Notice of AGM. This appointment is in supersession of existing contract dated September 20, 2011 insofar as it relates to un-expired period of that Contract.

The Board recommends for approval of aforesaid Executive Directors in the ensuing AGM.

Woman Director

The composition of the Board of Directors of the Company includes a woman director viz., Ms. M. R. Jyothy. Accordingly, the Company is in compliance with the requirement of third proviso to Section 149 (1) of 2013 Act read with Rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014.

AUDITORS

M/s S. R. Batliboi & Associates and the present auditors, M/s S. R. Batliboi & Associates LLP, both being part of same network of audit firms, together have completed more than 10 (Ten) years as auditors of the Company. However, the provisions contained in Section 139 of the Companies Act, 2013 provide for a transition period of three years for complying with the requirement of rotation of auditors. The Company is advised that the present auditors or any audit firm associated with them or within the same network of audit firms can be appointed as auditors for a maximum period of three years i.e. for financial years 2014-15, 2015-16 and 2016-17, subject to annual ratification by the shareholders in the Annual General Meetings (AGMs) to be held in the years 2015 and 2016.

M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai, present auditors of the Company, who hold office until conclusion of the 23rd AGM, are eligible for re-appointment. However, they have expressed their unwillingness to be reappointed as Auditors of the Company. In view of the same, Audit Committee in its meeting held on May 22, 2014, recommended appointment of M/s S R B C & Co LLP, Chartered Accountants, Mumbai, a network firm of M/s. S. R. Batliboi & Associates LLP, as Auditors of the Company.

A certificate prescribed under Rule 4 of the Companies (Audit and Auditors) Rules, 2014 has been received from M/s S R B C & Co LLP to the effect that they are eligible for appointment as auditors, and are not disqualified for appointment under the Companies Act, 2013, the Chartered Accountants Act, 1949, or the rules and regulations made there-under; the proposed appointment is as per the term and within the limits laid down by or under the authority of the Companies Act, 2013 and that there are no proceedings pending against them or any of their partners with respect to professional conduct.

The Board recommends the appointment of M/s S R B C & Co LLP, Chartered Accountants, Mumbai as Auditors of the Company for three years i.e. from the conclusion of ensuing AGM till the conclusion of 26th AGM in 2017, subject to annual ratification by the members at AGMs to be held in the year 2015 and 2016.

Auditors'' Report

Auditors in their report, under heading ''Emphasis of Matter'', have observed that managerial remuneration paid/ provided by the Company for the year ended March 31, 2013 is in excess of the limits prescribed under the Companies Act, 1956. We draw your attention to Note 41 of the financial statements forming part of this Annual Report which is self-explanatory and therefore, does not require further explanation.

The Auditors'' Report does not contain any Qualification, reservation or any adverse remark.

Cost Auditors

In compliance with the Central Government''s order No. 52/26/CAB-2010 dated June 30, 2011, the Board has appointed M/s R. Nanabhoy & Co., Cost Accountants, Mumbai to carry out cost Audit in respect of various specified products of the Company for the financial year 2014-15. Cost Audit Report for the year 2012-13 was fled within due date. The due date for fling of the Cost Audit Report for the year 2013-14 is September 30, 2014.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to requirements of Section 217(2AA) of the Companies Act, 1956, your Directors conform that:

1. in the preparation of the annual accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the Profit of the Company for the financial year ended on that date;

3. the Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the Directors have prepared the annual accounts for the financial year ended March 31, 2014 on a ''going concern'' basis.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

With regard to the requirements of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Company has nothing specific to report.

PARTICULARS OF EMPLOYEES

Particular of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors'' Report for the year ended March 31, 2014 are set out as an annexure to this report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars may write to the Company Secretary at the registered office of the Company.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The internal control systems and procedures ensure reliability of financial reporting, compliance with the Company''s policies and practices, governmental regulations and statutes. Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken.

CAUTIONARY NOTE

Certain statements in the "Management discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what the Directors envisage in terms of future performance and outlook.

ACKNOWLEDGEMENT

The Board of Directors express their sincere appreciation for the contribution and commitment of the employees of the Company and for the excellent support provided by the shareholders, customers, distributors, suppliers, bankers, media and other service providers, during the financial year under review.

For and on behalf of the Board of Directors

For Jyothy Laboratories Limited

Mumbai, M. P. Ramachandran

May 22, 2014 Chairman & Managing Director


Mar 31, 2013

To, The Members,

The Board of Directors is pleased to present the 22nd Annual Report together with the Audited Financial Statements for the year ended March 31, 2013 compared with previous financial year as follows:

(Rs. in lacs)

Financial results Financial Financial Year ended Year ended March 31, 2013 March 31, 2012

Net Sales 101,737.67 66,278.15

Other Income 305.56 517.63

Earnings before interest, tax, depreciation, amortization and impairment 12,543.48 8,765.36

Interest & Finance Charges/(Income) Net 1,792.67 (3,259.35)

Depreciation, Amortization and Impairment - Tangibles 1,516.24 1,434.73

Depreciation and Amortization - Intangibles 4648.28 268.46

Prior year items- Expenses 182.71 -

Profit before tax 4,403.58 10,321.52

Provision for tax

- Current tax - (MAT Payable) 885.00 2,010.00

- MAT Credit (entitlement) (885.00) -

- Deferred tax charge/(reversal) - (40.04)

Profit after tax 4,403.58 8,351.56

Balance as per last Balance Sheet

- Brought forward 6,745.54 2,736.79

Balance available for appropriations 11,149.12 11,088.35

Appropriations:

Final Dividend on Equity Shares 4,150.59 2,015.80

Corp. Dividend Tax 705.39 327.01

Transfer to General Reserve 500.00 2,000.00

Transfer to Debenture Redemption Reserve 1,250.00 -

Balance Carried Forward (Profit and Loss Account) 4543.14 6,745.54

Earning Per Share (Basic and Diluted) 2.65# 5.18@

Cash Profit 10,568.10 10,054.75

Cash EPS 6.37# 6.23@

Dividend Per Share 2.50# 1.25@

# On post bonus and post merger equity capital.

@ On post bonus pre merger equity capital.

Amalagamation of Jyothy Consumer Products Limited (Formerly Henkel India Limited) with the Company

Your Directors are pleased to inform that the process of amalgamation of Jyothy Consumer Products Limited (Transferor Company) (formerly known as Henkel India Limited) was completed on April 12, 2013, when the Honourable judge of Bombay High Court approved the Scheme of Amalgamation. Appointed Date was April 1, 2012, whereas compliances like filing of necessary e-Forms with Registrar of Companies were completed on May 13, 2013 and the amalgamation has become effective from that date.

Your Directors had fixed May 28, 2013 as the ''Record Date'' to determine eligibility of shareholders of the Transferor Company to get shares of the Company. Process of allotment and listing of shares is expected to be completed around June end, 2013. Directors welcome the shareholders of the Transferor Company.

Performance

The financials for the current financial year are not comparable with the previous financial year. Financials for the year under review reflect the affect of merger of Jyothy Consumer Products Limited (JCPL) with the Company for the full year. Financials for the financial year 2011 -12 are in respect of the full year of the Company as it stood prior to the merger of JCPL.

During the financial year ended March 31, 2013, the Company recorded Net Sales at Rs. 1,01,737.67 lac compared to Rs. 66,278.1 5 lac in the previous financial year. In the financial year under review, Profit after Tax and Cash Profit compare as follows:

(Rs. lac)

Particulars 2012-13 2011-12

Profit after tax but before depreciation and amortization of Goodwill, Copyrights and Trademarks acquired due to amalgamation of JCPL 8,874.12 8,351.56

Depreciation and amortization of Goodwill, Copyrights and Trademarks acquired due to amalgamation of JCPL 4,470.54 Nil

Profit after Tax 4,403.58 8,351.56

During the year under review, the sales of soaps and detergents was Rs. 75,594.59 lac compared to Rs. 44,554.67 lac in previous year and the sales in homecare segment grew to Rs. 24,490.86 lac compared to Rs. 21,785.18 lac in previous year. The sales and profit in soaps and detergents reflect the effect of amalgamation of JCPL as well. The profitability in homecare segment improved considerably from a segment loss of Rs. 1,594.59 lac in previous year to profit of Rs. 794.13 lac in the current year.

Finance

The borrowings as on March 31, 2013 was at Rs. 53,720.28 lac (previous year Rs. 55,291.25 lac). Net working capital as on March 31, 2013 was at Rs. 3,820.41 lac compared to Rs. 6,700.08 lac at the end of previous year.

Issue of Bonus Shares

During the year, the Board of Directors of your Company had issued and allotted bonus shares in the ratio of one new bonus equity share of face value of Rs. 1/- each for every one equity share held by the members as on July 1 6, 2012 (Record Date decided for the purpose). After bonus issue, paid up capital of the Company was augmented and stood at Rs. 1 6,12,64,000/-.

Dividend

For the financial year under review, the Board is pleased to recommend a dividend @ 250% of face Value of Equity Shares of Rs. 1/- each (i.e. Rs. 2.50 per equity share), aggregating to cash outlay of Rs. 4,855.98 lac including dividend distribution tax of Rs. 705.39 lac. The dividend is payable on the equity capital enhanced by the issue of bonus shares in the ratio of 1:1 and also on 47,59,496 equity shares ofRs. 1/- each of the Company to be issued to the shareholders of erstwhile JCPL consequent upon its amalgamation with the Company. In the previous financial year, the Board had recommend and paid a dividend @ 250% of face Value of Equity Shares ofRs. 1/- each (i.e. Rs. 2.50 per equity share) on pre- bonus equity capital of the Company involving cash outlay of Rs. 2,342.81 lac including dividend distribution tax of Rs. 327.01 lac.

The dividend will be paid to eligible members if approved by them at the ensuing Annual General Meeting of the Company.

New Developments & Initiatives

- Creation of new and vibrant organization structure.

- Realisation of synergy with the integration of Henkel operations with the Company.

- Business model re-engineering to drive efficiency and improve profitability across entire value chain.

- Better and packaging

- Supply Chain project to improve working capital management through business planning and improvements in operating processes

- Integration of sales and distribution of Henkel with the Company

- Consolidation of distribution network and movement to C & F model

- Rationalisation of channel margins

- Consolidation of manufacturing facilities and improving cost competitiveness through improvement in operational efficiencies and capacity debottlenecking.

- New Brand Strategy.

Bangladesh

- Commercial production expected to start in second quarter of financial year 2013-14.

Management Discussion & Analysis Report:

Management''s Discussion & Analysis Report is attached and forms part of this Directors'' Report.

Corporate Governance:

As per Clause 49 of the Listing Agreement with the stock exchanges, a Section on Corporate Governance is presented separately and forms part of this Report.

Consolidated Financial Statements

In accordance with Accounting Standard 21, issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements have been provided in the Annual Report. These Consolidated Financial Reports provide financial information about your Company and its subsidiary companies as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

Subsidiary Companies

The Central Government vide General Circular No. 2/2011 dated February 8, 2011 has exempted the holding companies from attaching Annual Accounts and other documents in respect of its subsidiaries to the Annual Report of the holding companies from the financial years ended on or after March 31, 2011. As required vide above letter, statement in respect of each of its subsidiary, giving details of capital, reserves, total assets and liabilities, details of investments, turnover, profit before taxation and proposed dividend is attached to the Consolidated Balance Sheet. Annual accounts of the subsidiary companies and the related detailed information will be made available to the shareholders of the Company, seeking such information and will also be made available for inspection at the Registered Office of the Company.

Jyothy Fabricare Services Limited

Members are aware that the Company had started a new Value Added Service in fabric care segment to provide "World class laundry at affordable price at your doorstep" and other related services through its subsidiary company namely Jyothy Fabricare Services Limited (JFSL).

The Laundry Plant with 10 tons/day capacity at Ahmedabad, set up on BOOT model by JFSL - JLL (JV) for the Western Railways, has commenced its operation in the month of January, 2013. By adopting improvised methods, the JV has achieved capital utilisation at 130% of its installed capacity. Further the BOOT project at Delhi International Airport is being pursued for commencing its operation in the month of April, 2014.

During the financial year 2012-13, JFSL focused on rationalising and improving financial efficiency in its operations at all levels after its expansion drive in previous financial year 2011 -12. As a result, Loss before Interest, Tax and Depreciation & Amortization reduced by 28.24% at consolidated level and JFSL recorded a total consolidated turnover of Rs. 44.28 crore up by 16.50%, during the year under review.

For financial year 2013-14, JFSL has concrete plans for enhanced focus on retail; aligning the institutional & railway business and also concentrate to further increase volumes of the BOOT project and thereby improve profitability.

Employee Relations

Employee relations remained cordial during the year under review. Fixed Deposits

The Company did not take any fixed deposits from the public and no fixed deposits were outstanding or unclaimed as on March 31, 2013.

Directors

In accordance with the requirements of the Companies Act, 1956, and the Articles of Association of the Company, Mr. K. P. Padmakumar and Mr. Bipin R. Shah, Directors of the Company will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment. The Board recommends their re-appointment.

Auditors

During the year, they had informed the Company vide their letter dated April 2, 2013, that their firm has been converted into Limited Liability Partnership and now it would be known as "S. R. Batliboi & Associates LLP".

M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai, having registration number 101049W, Statutory Auditors of the Company, continue to hold office until conclusion of the 22nd Annual General Meeting and being eligible offer themselves for re-appointment.

A certificate has been received from the Auditors to the effect that their appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. The Auditors have advised that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Auditors'' Report

Auditors'' Report under heading ''Emphasis of Matter'' has drawn attention to Note 41 to the Financial Statements of the Company (on stand- alone basis) which form part of this annual report. It is further stated that the managerial remuneration amounting to Rs. 1,113.72 lacs is paid/ provided during the year under review of which Rs. 921.72 lac is in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956 (the said Act).

As explained in the Note 41 referred above, the maximum remuneration payable to Managerial Personnel amounts to Rs. 1025.37 lacs, i.e. 10% of the profits computed under section 198 of the said Act as against Rs. 1113.72 lacs paid/provided during the year resulting in excess payment/provision of Rs. 88.35 lacs. The Company has applied to the Central Government seeking their approval and will also seek approval of its shareholders in the ensuing Annual General Meeting for the remuneration paid/ payable to the Whole Time Directors. Pending receipt of such approval from the Central Government, the excess amount paid, if any, shall be held in trust by such Directors.

Cost Auditors

In compliance with the Central Government''s order No. 52/26/ CAB-2010 dated June 30, 2011, the Board has appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai to carry out the cost Audit in respect of various specified products of the Company for the financial year 2013-14. Cost Audit Report for the year 2011 - 12 was filed within due date. The due date for filing of the Cost Audit Report for the year 2012-13 is September 30, 2013.

Directors'' Responsibility Statement:

Pursuant to requirements of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. in the preparation of the annual accounts for the financial year ended March 31, 2013, the applicable accounting standards have been followed;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the Profit of the Company for the financial year ended on that date;

3. the Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the Directors have prepared the annual accounts for the financial year ended March 31, 2013 on a ''going concern'' basis.

Conservation of Energy & Technology Absorption

With regard to the requirements of Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Company has nothing specific to report.

Particulars of Employees

Particular of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors'' Report for the year ended March 31, 2013 are set out as an annexure to this report. However, as per provisions of Section 219(1) (b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars may write to the Company Secretary at the registered office of the Company.

Risk and Concerns

The high rate of inflation and depreciation of Rupee continue to cause anxiety about the growth of Indian economy and the performance of the Corporates including FMCG sector. The Company would continue to try to protect profitability by containing cost increases through greater efficiency in operation and judicious increase in prices. During the year, the Company increased the price of all its products including flagship brand ''Ujala'' due to increase in prices of raw materials. The Company, to some extent, is protected from pressures like slow down of economy due to small unit values of consumer packs of its products. The Company continues to promote usage of white apparels, widen its products range and product appeal, introducing new variants of its products, brand extensions, create awareness and communicate utility value of its products to consumers through mass media advertisements and increasing geographical reach of its products.

The Company was perceived to depend for Turnover and Profits on a few products and that any adverse movement in sale or profitability of such products may compromise its performance. The Company, being aware of the matter, has been continuously extending its products range and geographical reach within India and reducing cost through greater operational efficiency without any compromise in quality. In the previous year, the Company had acquired 83.66% stake in Henkel India Limited (later renamed as Jyothy Consumer Products Limited), which has since been amalgamated with the Company. The consolidated operations after amalgamation, have further broad-based its product portfolio and consumers.

The management will continue to monitor the risks concerning the Company and will respond appropriately to every situation.

Internal Control Systems and its Adequacy

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The internal control systems and procedures ensure reliability of financial reporting, compliance with the Company''s policies and practices, governmental regulations and statutes. Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken.

Cautionary Note

Certain statements in the "Management Discussion and Analysis" section may be ''forward-looking''. Such ''forward looking'' statements are subject to risks and uncertainties and therefore actual results could be different from what the Directors envisage in terms of future performance and outlook.

Acknowledgement

The Board of Directors express their sincere appreciation for the contribution and commitment of the employees of the Company and for the excellent support provided by the shareholders, customers, distributors, suppliers, bankers, media and other service providers, during the financial year under review.

For and on behalf of the Board of Directors

For Jyothy Laboratories Limited

M. P. Ramachandran

Chairman & Managing Director

Mumbai, May 22, 2013


Mar 31, 2012

The Board of Directors is pleased to present the 21st Annual Report together with the Audited Financial Statements for the year ended March 31, 2012 compared with previous financial year as follows:

(Rs in lac)

Financial Financial Year ended Year ended March 31,2012 March 31,2011

Sales (net of trade discount and sales tax) 68,835.43 61,720.67

Other Income 5,720.23 2,760.44

Profit before depreciation and interest 13,967.96 10,665.63

Interest and Finance Charges 1,943.25 30.17

Depreciation, Amortization and Impairment 1,703.19 1,078.55

Profit before tax 10,321.52 9,556.91

Provision for tax

- Current tax 2,010.00 1,295.00

- Deferred tax charge/(reversal) (40.04) 296.72

- (Excess) provision for current tax of earlier year - (61.48)

Profit after tax 8,351.56 8,026.67

Balance as per last Balance Sheet

- Brought Forward 2,736.79 1,524.30

Debit Balance of Profit and Loss Account of Sri Sai Homecare Products Private Limited pursuant to Scheme of Amalgamation - (128.55)

Balance available for appropriations 11,088.35 9,422.42

Appropriations:

Final Dividend on Equity Shares 2,015.80 4,031.60

Corp. Dividend Tax 327.01 654.03

Transfer to General Reserve 2,000.00 2,000.00

Balance Carried Forward (Profit and Loss Account) 6,745.54 2,736.79

Earning Per Share (Basic and Diluted) 10.36 10.35

Dividend Per Share 2.50 5.00

Performance

During the financial year ended March 31, 2012, the Company recorded Sales (net of trade discount and sales tax) at Rs 68,835.43 lac compared to Rs 61,720.67 lac in the previous financial year. In the financial year under review, Profit before Tax stood at Rs 10,321.52 lac compared to Rs 9,556.91 lac in previous financial year.

The Sales (net of trade discount & sales tax) in financial year under review had grown by 11.53% compared to the previous year. This increase in sales was achieved despite drastically bringing down the inventory levels (to almost one week's stocks) at super distributors in pursuance to converting three tier distribution system to two tier distribution system. Trade receivables were brought down from Rs 10,349.89 lac as at March 31, 2011 to Rs 4,251.55 lac as at March 31, 2012.

During the year under review, the sales of soaps and detergents grew to Rs 44,554.67 lac from Rs 38,599.19 lac in the previous year and the sales in homecare segment grew to Rs 21,785.18 lac from Rs 21,651.99 lac in the previous year. The profitability in homecare segment was adversely affected due to lower margins in case of mosquito repellant coils and substantial increase in raw materials and other costs.

Finance

Your Company, for the first time, has borrowed funds to finance the acquisition of Henkel India Limited. The borrowings as on March 31, 2012 stood atRs 55,291.25 lac.

Dividend

For the financial year under review, the Board is pleased to recommend a dividend @ Rs 2.50 per equity share of face value of Rs 1/- each (i.e. 250% of face value of equity shares), aggregating to Rs 2,01 5.80 lac. In the previous financial year, the Board had recommended and paid a dividend @ Rs5.00 per equity share of face value of Rs 1/- each (i.e. 500% of face value of equity share), aggregating to Rs 4,031.60 lac. The reduction in dividend was with a view to conserve cash resources of the Company for financing its increasing business activity.

The dividend on the existing equity shares of the Company will be paid to eligible members after its approval by the Members in the ensuing Annual General Meeting.

Bonus Issue

The Board of Directors of your Company declared to issue bonus shares in the ratio of one new bonus equity share of face value of Rs 1/- each to be issued for every one equity share held by the members. The approval of the members is being sought through postal ballot process. The bonus shares shall be allotted to the members as on book closure date/ record date to be announced after the approval of bonus issue by the members. The bonus shares shall be eligible for dividend that may be declared for the financial year 2012-13 and thereafter.

Increase in Authorised Share Capital

The Company has sought approval of its members through postal ballot to increase its authorized share capital to 17,00,00,000 equity shares of Rs 1/- each aggregating to Rs 17,00,00,000 (Rupees Seventeen Crore only) to accommodate issue of bonus shares.

Utilization of Qip Proceeds

During the financial year ended March 31, 2011, the Company had issued 80,63,200 equity shares of Rs1/- each at a premium of Rs281.62 per equity share to Qualified Institutional Buyers (QIP) in terms of Chapter XIII A of the Securities & Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

The Audit Committee and the Board of Directors of the Company have taken on record the following statement of utilization of the proceeds of the amounts raised by the Company:

(Rs in lac)

Particulars Amount

Gross proceeds 22,788.22

Less: Expenses incurred 644.29

Net proceeds 22,143.93

Utilization

Acquisition of Henkel India Limited 22,143.93

Total utilization 22,143.93

The funds raised through QIP proceeds have now been utilized in full. New Developments Henkel India Limited

- The Company has acquired 83.66% of paid up equity share capital and the entire preference share capital of Henkel India Limited (HIL). The equity shares of HIL are listed on Bombay, Madras and Calcutta Stock exchanges.

Jyothy Kallol Bangladesh Limited

- The Company has set up a joint venture in Bangladesh with Kallol Enterprise Limited for setting up a state-of-art manufacturing facility and marketing of all products of the Company and HIL in a phased manner.

- The commercial production is expected to start in the 2nd half of the financial year 2012-13.

Management Discussion and Analysis Report

Management Discussion and Analysis Report is attached and forms part of this Report.

Corporate Governance

As per Clause 49 of the Listing Agreement with the stock exchanges, a section on Corporate Governance is presented separately and forms part of this Report.

Consolidated Financial Statements

In accordance with Accounting Standard 21, issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements have been provided in the Annual Report. These Statements provide financial information about your Company and its subsidiary companies as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

Subsidiary Companies

The Central Government vide General Circular No. 2/2011 dated February 8, 2011 has exempted the holding companies from attaching Annual Accounts and other documents in respect of its subsidiaries to the Annual Report of the holding companies from the financial years ended on or after March 31, 2011. As required vide above circular, a statement in respect of each of its subsidiary, giving details of capital, reserves, total assets and liabilities, details of investments, turnover, profit before taxation and proposed dividend forms part of this Annual Report. Annual accounts of the subsidiary companies and the related detailed information will be made available to the shareholders of the Company, seeking such information and will also be made available for inspection at the Registered Office of the Company.

Jyothy Fabricare Services Limited

Members are aware that the Company had started a new Value Added Service in fabric care segment to provide "World-class laundry at affordable price at your door step" and other related services through its subsidiary company namely Jyothy Fabricare Services Limited (JFSL).

Major highlights of JFSL are as follows:

- Country's biggest laundry chain with 122 retail outlets which service brands like Wardrobe and Fabric Spa;

- Currently operating in Bangalore, Delhi, Mumbai, Pune and Chennai;

- Investment to the tune of Rs 100 crore committed by IL&FS for a 25% equity stake at an Enterprise Valuation of Rs 400 crore. Rs 50 crore investment have been made and the balance Rs 50 crore is expected to come in for expansion of operations at Chennai and Hyderabad;

- Bagged prestigious laundry maintenance project for Western Railways at Ahmedabad - contract for 10 years on BOOT basis;

- Bagged prestigious laundry maintenance project for DIAL (Delhi International Airport Limited) - contract for 15 years on BOOT basis;

- Total turnover of Rs 3,801 lac for the financial year ended March 31, 2012 (Previous year Rs 941 lac).

Employee Relations

Employee relations remained cordial during the year under review. Fixed Deposits

The Company did not take any fixed deposits from the public and no fixed deposits were outstanding or unclaimed as on March 31, 2012.

Directors

In accordance with the requirements of the Companies Act, 1956, and the Articles of Association of the Company, Mr. Nilesh B. Mehta and Ms. M. R. Jyothy, Directors of the Company will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment. The Board recommends their re-appointment.

Mr. K. UHas Kamath was appointed as Joint Managing Director of the Company at the Board Meeting held on January 23, 2012 with increase in remuneration payable to him. The approval to this appointment and remuneration payable to him is being sought from the members of the Company through postal ballot process.

Mr. S. Raghunandan was appointed as Whole-time Director and Chief Executive Officer of the Company and Mr. Ramakrishnan Lakshminarayanan was appointed as independent Director of the Company on May 23, 2012. In terms of Section 260 of the Companies Act, 1956, the term of Mr. Raghunandan and Mr. Laksminarayanan will expire at the conclusion of the ensuing Annual General Meeting. They being eligible offer themselves for appointment at the ensuing Annual General Meeting.

Your Company has received notice under Section 257 of the said Act along with requisite deposit, in respect of Mr. Raghunandan and Mr. Lakshminarayanan, proposing their appointments as Directors of the Company. Resolutions seeking approval of the members for their appointments have been incorporated in the Notice of the ensuing Annual General Meeting and brief details about them have been provided in the Corporate Governance Report.

Auditors

M/s. S. R. Batliboi & Associates, Chartered Accountants, Mumbai, having registration number 101049W, Statutory Auditors of the Company, continue to hold office until conclusion of the 21st Annual General Meeting and being eligible offer themselves for re-appointment.

A certificate has been received from the Auditors to the effect that their appointment, if made, would be within the limits prescribed under Section 224 (1 B) of the Companies Act, 1 956. The Auditors have advised that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Cost Auditors

In compliance with the Central Government's Order No. 52/26/ CAB-2010 dated June 30, 2011, the Board has appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai to carry out the cost audit in respect of insecticide products of the Company for the financial year 2011 -12.

The due date for filling of the Cost Audit Reports for the financial year 2011 -12 is September 30, 2012.

Directors Responsibility Statement

Pursuant to requirements of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. in the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the financial year ended on that date;

3. the Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the Directors have prepared the annual accounts for the financial year ended March 31, 2012 on a 'going concern' basis.

Conservation of Energy and Technology Absorption

With regard to the requirements of Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Company has nothing specific to report.

Foreign Exchange Earnings and Outgo (Rs in lac)

Particulars 2011-12 2010-11

Foreign exchange earnings 872.98 699.88

Foreign exchange outgo 382.16 377.86

Particulars of Employees

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are attached to this report.

Risk and Concerns

The high rate of inflation continues to cause anxiety about the growth of Indian economy and the performance of the corporates including FMCG sector.

We believe that the Company operates in certain segments of FMCG space where demand for the Company's products is driven more by needs and may be impacted more by weather conditions and color trends in wearing apparels. To some extent, the Company is protected from pressures like slow down of economy due to small unit values of consumer packs of its products. The Company continues to promote usage of white apparels, widen its products range, introducing new variants of its products, brand extensions, create awareness and communicate utility value of its products to consumers through mass media advertisements and increasing geographical reach of its products.

The Company would continue to try to protect profitability by containing cost increases through greater efficiency in operation and judicious increase in prices. During the year, the Company increased the price of all its products including flagship brand ' U j a I a' due to increase in prices of raw materials.

The Company is perceived to depend for turnover and profit on a few products and that any adverse movement in sale or profitability of such products may compromise its performance. The Company is aware of the matter and has been continuously extending its products range and geographical reach within India and reducing cost through greater operational efficiency without any compromise in quality. The Company has acquired 83.66% stake in Henkel India Limited with the objective to broad base its product portfolio and to grow inorganically as well.

The management will continue to monitor the risks concerning the Company and will respond appropriately to every situation.

Internal Control Systems and its Adequacy

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The internal control systems and procedures ensure reliability of financial reporting, compliance with the Company's policies and practices, governmental regulations and statutes. Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken.

Cautionary Note

Certain statements in the "Management Discussion and Analysis" section may be 'forward-looking'. Such 'forward looking' statements are subject to risks and uncertainties and therefore actual results could be different from what the Directors envisage in terms of future performance and outlook.

Acknowledgement

The Board of Directors express their sincere appreciation for the contribution and commitment of the employees of the Company and for the excellent support provided by the shareholders, customers, distributors, suppliers, bankers, media and other service providers during the financial year under review.

For and on behalf of the Board of Directors

For Jyothy Laboratories Limited

M. P. Ramachandran

Chairman & Managing Director

Mumbai, May 23, 2012


Mar 31, 2011

The Members,

The Board of Directors is pleased to present the 20th Annual Report together with the Audited Financial Statements for the year ended March 31, 2011 compared with previous Financial year as follows:

(Rs. in lacs)

Financial results Financial Financial Year ended Year ended March 31, 2011 March 31, 2010

Sales (net of trade discount) 66,505.14 62,622.66

Other Income 2,760.44 1,818.78

Profit before depreciation and interest 10,676.88 11,212.93

Interest and Finance Charges 41.42 61.16

Depreciation, Amortization and Impairment 1,078.55 1,046.30

Profit before tax 9,556.91 10,105.47 Provision for tax

- Current tax 1295.00 1,860.00

- Deferred tax charge 296.72 259.59

- (Excess) provision for current tax of earlier year (61.48) (18.82)

Profit after tax 8,026.67 8,004.70

Balance as per last Balance Sheet 1,524.30 904.46 – Brought forward

Debit Balance of Profit and Loss Account of Sri Sai Homecare Products Private Limited pursuant to Scheme of Amalgamation (128.55) –

Balance available for appropriations 9,422.42 8,909.16

Appropriations:

Final Dividend on Equity Shares 4031.60 2,902.75

Corp. Dividend Tax 654.03 482.11

Transfer to General Reserve 2000.00 4,000.00

Balance Carried Forward (Profit and Loss Account) 2736.79 1,524.30

Earning Per Share (Basic and Diluted) 10.35 11.03

Dividend Per Share 5.00 4.00

Performance

During the financial year ended March 31, 2011, the Company recorded Sales (net of trade discount) at Rs. 66,505.14 lac compared to Rs. 62,622.66 lac in the previous financial year. In the financial year under review, Profit before Tax stood at Rs. 9,556.91 lac compared to Rs. 10,105.47 lac in previous financial year.

The Sales (net of trade discount) in Financial Year under review had grown by 6.2% compared to the previous year. The sales of soaps and detergents grew @ 13.50%, however, the sales in homecare segment declined by 10.2% due to adverse climatic condition in Eastern Uttar Pradesh, Bihar & Jharkhand and heavy discounting at whole-sale market. The profitability was also adversely impacted due to lower margins in case of mosquito repellant category, general increase in labour and other costs and substantial increase in Advertisement and Sales Promotion Costs at Rs. 5378 lac up by Rs. 1595 lac over previous year.

During the Financial Year 2010-11, Indian economy continued to be impacted by high rate of inflation. The measures taken by the Government and the Reserve Bank of India to stem the same have impacted the rate of growth and resulted into increased cost and contraction of credit. Consequently, the growth in industrial activity and non-food demand from consumers de-accelerated while cost pressures affected the profitability. In the circumstances, the performance of the Company during the Financial Year has been satisfactory.

Dividend

For the financial year under review, the Board is pleased to recommend a dividend @ Rs. 5/- per equity share of face value of Re.1/- each, (i.e. 500% of face Value of Equity Shares), aggregating to Rs. 4031.60 lac. In the previous financial year, the Board had recommend and paid a dividend @ Rs. 4.00 per equity share of face value of Re.1/- each, (i.e.400% of face Value of Equity Share), aggregating to Rs. 2902.75 lac.

The dividend will be paid to eligible members after its approval by the Members in the ensuing Annual General Meeting

Qualified Institutional Placement

During the year, the Company has issued 80,63,200 Equity Shares of Re.1/- each at a premium of Rs. 281.62 per equity share to Qualified Institutional Buyers in terms of Chapter XIII A of the Securities & Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. Consequently, the paid-up share capital of the Company has increased from 72568800 Equity Shares of Rs. 1/- each to 80632000 equity shares of Rs. 1/- each.

Utilization of QIP Proceeds

The Audit Committee and the Board of Directors of the Company have taken on record the following statement of utilization of the proceeds of the amounts raised by the Company consequent to the issue of 8063200 Equity Shares of Re.1/- each at a premium of Rs. 281.62 per equity share to Qualified Institutional Buyers in terms of Chapter XIII A of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

(Rs. in Lac)

Sr. Particulars Amount No.

1 Gross proceeds 22,788.22 Less: Expenses incurred 644.29

2 Net Proceeds 22,143.93 Utilization

1 Investment in Henkel India Limited 6,073.09

2 Fixed Deposits / Corporate Deposits with Banks 16,070.84 Total Utilization 22,143.93

The unutilized funds are planned to be invested in acquisition of Henkel India Limited.

New Developments Henkel India Limited

- The Company has acquired 1,73,51,686 equity shares of Rs. 10/- each of Henkel India Limited (HIL) from Tamilnadu Petroproducts Limited @ Rs. 35/- per Equity Share. The Company plans to acquire all the equity and preference shares, currently, held by Henkel AG & Co., KGaA, Germany and also to make open offer to public shareholders to acquire additional 20% Equity Share Capital of HIL. The equity shares of HIL are listed on Bombay, Madras and Calcutta Stock exchanges.

Household Insecticide:

- The Company has introduced variety of products made out of technology DEPA, a repellant formulation for protection from all blood sucking insects and mosquitoes from "DRDO" (Defence Research and Development Organisation), Ministry of Defence, Government of India. This technological products enables the Company to manufacture and market the products in India including to armed forces, and to many countries abroad. The repellant cream and wipers were also launched in the market during the year.

Surface Cleaning:

- Products like dish-wash bar, liquid and scrubbers were launched at all India level in the last quarter of the previous financial year.

- Exo Dish Shine in round format was launched which was accepted well by market

Management Discussion and Analysis Report:

Management's Discussion and Analysis Report is attached and forms part of this Directors Report.

Corporate Governance:

As per Clause 49 of the Listing Agreement with the stock exchanges, a Section on Corporate Governance is presented separately and forms part of this Report.

Subsidiary Companies

The Central Government has vide its letter No. 47/45/2001 – Cl. III dated 09.02.2011 exempted the Company from attaching Annual Accounts and other documents in respect of its subsidiaries to the Annual Report of the Company for the year ended March 31, 2011. As required vide above letter, statement in respect of each of the subsidiary, giving details of capital, reserves, total assets and liabilities, details of investments, turnover, profit before taxation and proposed dividend is attached to the Consolidated Balance Sheet. Annual Accounts of the subsidiary companies and the related detailed information will be made available to the shareholders of the Company, seeking such information and will also be available for inspection at the Registered Office of the Company.

Jyothy Fabricare Services Limited

Members are aware that the Company had started a new Value Added Service in fabric care segment to provide "World class laundry at affordable price at your door step" and other related services through its subsidiary company namely Jyothy Fabricare Services Limited (JFSL). A world-class facility equipped with world class machinery and equipments most updated technology, supported by a robust IT structure and housed in an area of 70,000 square feet built on 2 acres of land at Doddaballapur, near Bengalore, Karnataka, became operational in November 2009. JFSL is providing fabric care services under various brands namely JFSL Corporate, Fabric Spa, JFSL rentals, Fabric spa busy easy and Snoways.

Subsequent to the close of the Financial Year, the Company has acquired control over following companies engaged in business of laundry and related services which would extend its presence to Delhi and Mumbai:

- Diamond Fabcare Private Limited, Delhi (Wardrobe) with 64 outlets, and

- Akash Cleaners Private Limited, Mumbai (Akash) with 4 outlets.

Tara India Fund IV Trust has consented to fund the future expansion of this business, by agreeing to provide up to Rs. 100/- Crore in Equity

/ Convertible Instrument of which the first trench of Rs. 50 Crore is likely to be received by end June 2011. This investment values JFSL business at Rs. 400 Crore.

Amalgamation

The process of amalgamation of Sri Sai Homecare Products Private Limited, a wholly owned subsidiary company with the Company with effect from April 1, 2010, was over on January 28, 2011, when Bombay High Court passed the Order approving Scheme of Amalgamation. The said Company has now merged with the Company.

Employee Relations

Employee relations remained cordial during the year under review.

Fixed Deposits

The Company did not take any fixed deposits from the public and no fixed deposits were outstanding or unclaimed as on March 31, 2011.

Directors

In accordance with the requirements of the Companies Act, 1956, and the Articles of Association of the Company, Mr. K. P. Padmakumar and Ms. Bipin R. Shah, Directors of the Company are due to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment. The Board recommends their re-appointment.

The tenure of Ms. M. R. Jyothy as Whole-Time Director will come to an end on November 30, 2011. The Board has approved her re-appointment as stated in the Notice for the 20th Annual General Meeting, scheduled to be held on August 29, 2011 and explanatory statement attached thereto.

Auditors

M/s. S. R. Batliboi & Associates, Chartered Accountants, Mumbai, having registration number 101049W, Statutory Auditors of the Company, continue to hold office until conclusion of the Twentieth Annual General Meeting and being eligible offer themselves for re-appointment.

A certificate has been received from the Auditors to the effect that their appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. The Auditors have advised that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Directors Responsibility Statement:

Pursuant to requirements of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. in the preparation of the annual accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed;

2. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the Profit of the Company for the financial year ended on that date;

3. the Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the Directors have prepared the annual accounts for the financial year ended March 31, 2011 on a 'going concern' basis.

Consolidated Financial Statements

In accordance with Accounting Standard 21, issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements have been provided in the Annual Report. These Consolidated Financial Reports provide financial information about your Company and its subsidiaries as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

Conservation of Energy and Technology Absorption

With regard to the requirements of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Company has nothing specific to report.

Foreign Exchange Earnings and Outgo

(Rs. in Lacs)

Particulars 2010-11 2009-10

Foreign exchange earnings 699.88 732.42

Foreign exchange outgo 375.56 590.89

Particulars of Employees

Particular of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors' Report for the year ended March 31, 2011 are attached to this report.

Risk and Concerns

The high rate of inflation, continue to cause anxiety about the growth of Indian economy and the performance of the Corporate including FMCG sector.

We believe that the Company operates in certain segments of FMCG space where demand for the Company's products is driven more by needs and may be impacted more by weather conditions and colour trends in wearing apparels. To some extent, the Company is protected from pressures like slow down of economy due to small unit values of consumer packs of its products. The Company continues to promote usage of white apparels, widen its products range, introducing new variants of its products, brand extensions, create awareness and communicate utility value of its products to consumers through mass media advertisements and increasing geographical reach of its products.

The Company would continue to try to protect profitability by containing cost increases through greater efficiency in operation and judicious increase in prices. During the year, the Company was forced to increase the price of its flagship brand 'Ujala' due to increase in prices of raw materials.

The Company is perceived to depend for Turnover and Profits on a few products and that any adverse movement in sale or profitability of such products may compromise its performance. The Company is alive to the matter and has been continuously extending its products range and geographical reach within India and squeezing cost through greater operational efficiency without any compromise in quality. The Company plans to acquire controlling stakes in Henkel India Limited with the objective to broad base its product range and consumers and to grow inorganically as well.

The management will continue to monitor the risks concerning the Company and will respond appropriately to every situation.

Internal Control Systems and Its Adequacy

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The internal control systems and procedures ensure reliability of financial reporting, compliance with the Company's policies and practices, governmental regulations and statutes. Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken.

Cautionary Note

Certain statements in the "Management discussion and Analysis" section may be 'forward-looking'. Such 'forward-looking' statements are subject to risks and uncertainties and therefore actual results could be different from what the Directors envisage in terms of future performance and outlook.

Acknowledgement

The Board of Directors express their sincere appreciation for the contribution and commitment of the employees of the Company and for the excellent support provided by the shareholders, customers, distributors, suppliers, bankers, media and other service providers, during the financial year under review.

For and on behalf of the Board of Directors For Jyothy Laboratories Limited

M. P. Ramachandran Chairman & Managing Director Mumbai, May 30, 2011


Mar 31, 2010

The Board of Directors is pleased to present the Nineteenth Annual Report together with the Audited Financial Statements for the year ended March 31, 2010 compared with previous period (July 1, 2008 to March 31, 2009) as follows:

Financial result (Rs. in lacs) Financial year Financial period ended ended March 31.2010 March 31.2010 (12 Months) (9 Months) Sales (net of trade discount) 62,622.66 38,416.86 Other Income 1,818.78 774.60 Profit before depreciation and interest 11,212.93 5,775.28 Interest & Finance Charges 61.16 36.63 Depreciation, Amortization & Impairment 1,046.30 681.24 Profit before tax 10,105.47 5,057.41 Provision for tax - Current tax 1,860.00 707.76 - Deferred tax charge 259.59 189.84 - Fringe benefit tax 0.00 72.00 - (Excess)/Short provision for current tax of earlier year (18.82) 77.29 Profit after tax 8,004.70 4,010.52 Balance as per the last Balance Sheet - Brought forward 904.46 591.98 Balance available for appropriations 8,909.16 4,602.50 Appropriations: Final Dividend on Equity Shares 2,902.75 1,451.38 Corp. Dividend Tax 482.11 246.66 Transfer to General Reserve 4,000.00 2,000.00 Balance Carried Forward (Profit & Loss A/c) 1,524.30 904.46

* Earning Per Share (for 12 months in the current financial year and for 9 months for the 11.03 5.53 previous financial period)

* Dividend Per Share (for 12 months in the current financial year and for 9 months for the previous financial period) 4.00 2.00

*(Based on Face Value of Re.1/- per Equity Share)

Change in the financial year

As you are aware, the Company had changed its financial year to end on March 31 to coincide the accounting year of the Company with the conventional financial year to enhance comparability with other companies. Accordingly, the previous accounting period was for nine months period from July 1, 2008 to March 31, 2009. Therefore, the attached financials which have been prepared for twelve month period/accounting year (April 1, 2009 to March 31, 2010), are not comparable with the previous period reporting which had been for nine month period i.e. July 1, 2008 to March 31, 2009.

Performance

During the financial year ended March 31, 2010, the Company recorded Sales (net of trade discount) at Rs. 62,622.66 lacs compared to Rs. 38,416.86 lacs in the previous 9-month financial period. In the financial year under review, Profit before Tax stood at Rs. 10,105.47 lacs compared to Rs. 5,057.41 lacs in previous 9-month financial period.

On a like to like basis the Sales (net of trade discount) in Financial Year under review had grown by 27.5% compared to corresponding previous twelve-months. The Sales (net of trade discount) and Profit before tax of the two periods compare as follows:

(Rs. in lacs) Particulars April 09-March 10 April 08-March 09 % (Audited) (Audited) Growth Sales (net of trade 62,622.66 49,119.68 27.5% discount) Profit before tax 10,105.47 7,297.22 38.5%

The Company has performed very well both in terms of growth in sales and profitability.

With signs of receding food inflation and hope of better weather conditions, launch of new products, leveraging and extention of existing brands both in product range and pan-India launches and acquisition of new technology in mosquito repellents should see your Company achieve still better growth in the coming years.

Dividend

For the financial year under review, the Board is pleased to recommend a dividend @ Rs. 4 per equity share of face value of Re.1/- each, (i.e. 400% of face Value of Equity Shares), aggregating to Rs. 2,902.75 lacs. In the previous financial period (9 Months), July 2008-March 2009, the Board had recommended and paid a dividend @ Rs. 2.00 per equity share of face value of Re. 1/- each, (i.e. 200% of face Value of Equity Share), aggregating to Rs. 1,451.38 lacs.

The dividend will be paid to eligible members after its approval by the Members in Annual General Meeting.

Finance

The Company continues to remain debt-free. The cash and bank balances as on March 31, 2010 amount to Rs.12,117.47 lacs.

New developments Fabric care:

- The Company has planned Brand extension to take Ujala detergent to other states in a phased manner. We are in Kerala since 2003 and achieved a significant market share in mid-segment.

- Signed up with Sachin Tendulkar as Brand Ambassador for UJALA brand.

Household Insecticide:

- The Company is expanding its reach through new products. In November, 2009, the Company bought technology DEPA, a repellent formulation for protection from all blood sucking insects and mosquitos from “DRDO” (Defence Research and Development Organisation), Ministry of Defence, Government of India which allows the Company to manufacture and market the products in India including to armed forces, and to many countries abroad. The repellent cream and wipers are in the process of being launched.

- To promote the products in this category, the Company launched a new media campaign and packaging for the brand “MAXO” – “Raat Achhi To Din Achha” which caught fancy of the viewers and has been very successful.

- The mosquito repellent coil manufacturing unit in fiscal incentive area of Jammu went into full scale production during this fiscal year. This manufacturing unit is equipped with the most updated technology in coil manufacturing.

Surface Cleaning:

- The Company achieved 24% market share in southern India and has launched the product at all India level in the last quarter of the financial year. The products in this category namely dish- wash bar, liquid and scrubbers have penetrated into all major cities in India.

Management Discussion & Analysis Report:

Management Discussion & Analysis Report is attached and forms part of this Directors’ Report.

Corporate Governance

As per Clause 49 of the Listing Agreement with the stock exchanges, a Section on Corporate Governance is presented separately and forms part of this Report.

Subsidiary Companies

The Central Government has vide its letter No. 47/4/2010 – Cl. III dated 26.03.2010 exempted the Company from attaching Annual Accounts and other documents in respect of its four subsidiaries to the Annual Report of the Company for the year ended March 31, 2010. As required vide above letter, statement in respect of each of the subsidiary, giving the details of capital, reserves, total assets and liabilities, details of investments, turnover, profit before taxation and proposed dividend is attached to the Consolidated Balance Sheet. Annual Accounts of the subsidiary companies and the related detailed information will be made available to the shareholders of the Company, seeking such information and will also be available for inspection at the Registered Office of the Company.

Jyothy Fabricare Services Limited

Members are aware that the Company had started a new Value Added Service in fabric care segment to provide “World-class laundry at affordable price at your door step” and other related services through its subsidiary company namely ‘Jyothy Fabricare Services Limited (JFSL)’. JFSL is providing fabric care services under various brands namely JFSL Corporate, Fabric Spa, JFSL rentals, Fabric Spa busy easy and Snoways.

A world-class facility equipped with world-class machinery and equipments, most updated technology, supported by a robust IT structure and housed in an area of 70,000 square feet built on 2 acres of land at Doddaballapur, near Bangalore, Karnataka, became operational in November 2009.

The Company had earlier launched “Snoways” chain of laundry through acquisition of 8 retail outlets which have now grown to 30. “Fabric Spa” a premium brand was launched on November 9, 2009 in Bangalore. Response so far from consumers is very encouraging.

During the year under report, Snoways Laundrers & Drycleaners Private Limited (Snoways) became an associate company of Jyothy Fabricare Services Limited.

Amalgamation

Your Directors have proposed amalgamation of Sri Sai Homecare Products Private Limited, a wholly-owned subsidiary company with the Company with effect from April 1, 2010.

Employee Relations

Employee relations remained cordial during the year under review.

Fixed Deposits

The Company did not take any fixed deposits from the public and no fixed deposits were outstanding or unclaimed as on March 31, 2010.

Directors

In accordance with the requirements of the Companies Act, 1956, and the Articles of Association of the Company, Mr. Nilesh B. Mehta and Ms. M. R. Jyothy, Directors of the Company are due to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment. The Board recommends their re-appointment.

Auditors

M/s. S. R. Batliboi & Associates, Chartered Accountants, Mumbai, Statutory Auditors of the Company, continue to hold office until conclusion of the Nineteenth Annual General Meeting and being eligible offer themselves for re-appointment.

A certificate has been received from the Auditors to the effect that their appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. The Auditors have advised that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Directors’ Responsibility Statement:

Pursuant to requirements of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. in the preparation of the annual accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the Profit of the Company for the financial year ended on that date;

3. the Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the Directors have prepared the annual accounts for the financial year ended March 31, 2010 on a ‘going concern’ basis.

Consolidated Financial Statements

In accordance with Accounting Standard 21, issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements have been provided in the Annual Report. These Consolidated Financial Reports provide financial information about your Company and its subsidiaries as a single economic entity. The Consolidated Financial Statements form part of this Annual Report.

Conservation of Energy & Technology Absorption

With regard to the requirements of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Company has nothing specific to report.

Particulars of Employees

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors’ Report for the year ended March 31, 2010 are not attached to this report as permitted under the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956. Members interested in obtaining the said information may write to the Company Secretary at the registered office of the Company.

Acknowledgement

The Board of Directors express their sincere appreciation for the contribution and commitment of the employees of the Company and

for the excellent support provided by the shareholders, customers, distributors, suppliers, bankers, media and other service providers, during the financial year under review.

For and on behalf of the Board of Directors For Jyothy Laboratories Limited M. P. Ramachandran Chairman & Managing Director Mumbai, May 25, 2010

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