Dear Shareholders
 
 The Backdrop
 
 A year ago, we set out to write a new chapter in our history. We
 embarked on our plan to reap new opportunities as we acquired
 controlling stake in Henkel India Limited and commenced the process of
 integrating newly acquired business of Henkel with our core operations.
 
 I must state here that we remained on track with our planned
 integration in the midst of an economy which was witnessing high
 inflationary pressures.
 
 In spite of the present economic turmoil, the opportunities in India is
 expected to be good and consumer spending in India is expected to grow
 phenomenally driven by rising incomes and aspirations, widespread media
 proliferation and better physical reach across the country.
 
 Hence, while the economic scenario remains volatile and uncertain
 across the globe, we believe that the impact will be relatively lesser
 in India on companies in the consumer goods space. Due to the large
 consumer base that India has, excellent opportunities lie ahead.
 
 The Outcome
 
 We continue to focus on the landscape of our business, our products and
 our consumers to determine where our biggest opportunities lie. We
 identified our strengths and where improvements could be made, we did
 that. We also developed key strategic objectives and consciously worked
 on them. Since then, the results confirm that our strategy is working.
 
 Net Sales grew by 10%, at Rs 66,278 lakhs on a standalone basis. In
 terms of profitability the operating profits stood at Rs 8,266 lakhs and
 Profit after Tax at Rs 8,352 lakhs after considering other income. If we
 account for the entire 12 month period in terms of erstwhile Henkel as
 well as Jyothy Laboratories'' Net sales would be Rs 107,091 lakhs. The
 profit growth was flat on account of restructuring of the distribution
 network from tier 3 to tier 2 model due to which inventory levels was
 brought down to almost one week stock at CSA level and receivables was
 brought down to Rs 4251.55 lakh as on March 31, 2012 from Rs 10349.89 as
 on March 31, 2011.
 
 Behind the Scenes
 
 Our integration strategy was divided into phases, which is why the
 numbers have panned out just as we had planned. We commenced with
 streamlining the management at Henkel by retaining certain select
 middle level managers handling brands and distribution.
 
 Looking at the future for the product lines that we acquired, we have
 rationalised all sales promotions and offers and brought the
 advertising under Jyothy Laboratories'' umbrella. We have and will
 continue to increase retail prices across products keeping in mind
 reasonable profitability, cost of production and other operational
 costs in line with their positioning, during the year.
 
 We have shifted erstwhile Henkel''s corporate office functions from
 Chennai to Mumbai. The Production activity has been streamlined to
 ensure procurement, production and logistics efficiencies. The Purchase
 and Supply Chain activities are centrally undertaken from Mumbai, again
 to ensure, cost efficiencies. Marketing strategies for the new products
 brought under our umbrella like Margo, Pril, Henko and Fa which have
 immense potential, new campaign will be rolled out as we attempt to
 reposition these flagship products in FY 2012-13.
 
 The trade environment in India is unique with different urban and rural
 market dynamics. With a strong presence now in urban and rural markets,
 our product visibility has improved manifold and across the board.  The
 process of having a balanced presence in small stores to modern trade
 formats is ongoing and the results will be visible over the next few
 quarters.
 
 Another important step which we have undertaken in the area of
 distribution is that we made a deliberate move from a three tier to two
 tier system by phasing out state level super stockists (CSA) resulting
 into cost savings and higher efficiencies.
 
 The year gone by was like a tightrope walk as we preserved organic
 growth of Jyothy''s product line, even while turning around erstwhile
 Henkel''s business.  Moving forward, although we will continue to focus
 on operational efficiency with expectations of further improvement in
 our key operating and financial metrics, our primary focus will be on
 accelerating the growth of our brands and expanded combined portfolio.
 
 Certain measures have already been initiated in this direction,
 including contemporary packaging, a streamlined product portfolio and
 regional focus.
 
 Notably, the efforts have been across the spectrum of our business -
 production, sales, marketing, management bandwidth, supply chain and
 finance , in a phased manner. This is also evident from our quarter on
 quarter numbers where in the first quarter of FY 2011-12 we did
 register a de-growth followed by gradual ascent in the sales figures
 and eventually turning it around to record 40% growth in the last
 quarter.
 
 A similar trend has been observed in our EBITDA growth, quarter on
 quarter. I believe that this is an indication of our integration
 process bearing fruit and we understand that while there will be some
 pain initially and the integration and turnaround process will be
 complete over the next quarters.
 
 Overcoming Challenges
 
 There have been concerns about the Debt which we have taken on our
 books on account of the Henkel acquisition. Our thought process has
 been that while we have real estate on hand to sell and pay off to
 extinguish this debt, we would do it only if required and only at the
 right price and time.
 
 We are confident that the growth and profits generated by the erstwhile
 Henkel products itself will help us service this debt. Our focus will
 be on enhancing our profitability numbers which will, in turn, take
 care of the debt servicing and repayment.
 
 We have setup a joint venture in Bangladesh with Kallol Enterprise
 Limited for setting up a state-of-the-art manufacturing facility as we
 propose to manufacture and market the entire range of our products
 portfolio in Bangladesh. Needless to say, this will be done in a phased
 manner.
 
 Growth Story Continues
 
 The Jyothy Fabric Care Services Limited is now the biggest laundry
 chain with 122 outlets and we are on track with our expansion across
 the length and breadth of the country with presence in Bangalore,
 Delhi, Mumbai, Hyderabad, Pune and Chennai. We have grown both
 organically and through inorganic route here and going forward the
 potential is immense, especially in the light of new contracts bagged
 recently.
 
 Shaping a New Future
 
 According to Confederation of Indian Industries (CM), the Indian FMCG
 sector is the fourth largest sector in the economy with a total market
 size in excess of USD 13.1 billion. Availability of key raw materials,
 cheaper labour costs and presence across the entire value chain gives
 India a competitive advantage.
 
 The FMCG market is set to treble from USD 11.6 billion in 2003 to USD
 33.4 billion in 2015. Penetration levels as well as per capita
 consumption in most product categories in India is low indicating the
 untapped market potential.
 
 The burgeoning Indian population, particularly the middle class and the
 rural segments, presents an opportunity to makers of branded products
 to convert these consumers into using branded products.
 
 With long term structural strengths in the industry, we have stepped
 forward with confidence and aligned our organisation and infrastructure
 to support our new corporate strategy. In the process, we reduced non-
 value-added costs and imposed new financial discipline across the
 company.
 
 With the acquisition of Henkel, we have emerged as Company with a suite
 of products across categories like Fabric Care, Surface Cleaning,
 Household Insect repellents and Personal care. Within each of these
 categories too we have a diversified portfolio of products across
 socio-economic categories ranging from premium to niche category
 products. This widens our presence across FMCG market categories and
 will be the key growth driver.
 
 Simultaneously, we developed the necessary capabilities to improve our
 competitiveness and today,
 
 we are better positioned to manage our business at enhanced scale and
 to allocate our resources to the most promising opportunities.
 
 A Vote of Thanks
 
 I extend my gratitude to all of you who have helped us at every step to
 march forward successfully and continue to shape our bright future
 —our employees, our consumers, our suppliers, our bankers and our
 shareholders. I am also grateful to our Executive Leadership Team for
 its exceptional management skill and commitment of our Board of
 Directors for their continuing guidance. I do ensure that we will
 strive hard to continue to earn the trust, confidence and pride of all
 our stakeholders.
 
 Signed
 
 (CMD)