Jyothy Laboratories

The Board of Directors is pleased to present the 17th Annual Report of
 your Company for the year ended June 30, 2008 together with the
 Auditors Report. The financial highlights for the year as well as the
 previous year are as follows:
 
                                                        (Rs. in lacs)
 
 Financial results              For the year ended For the year ended 
                                      June 30,2008       June 30,2007
 
 Gross sales                             46,553.53          43,388.34
 
 Other income                               790.52             872.09
 
 Profit before depreciation 
 and interest                              7715.52           6,532.31
 
 Interest                                    68.24              17.80
 
 Depreciation, amortisation and impairment  740.78             616.90
 
 Profit before tax                         6906.50           5,897.61
 
 Provision for tax
 
 -Current tax                              1208.00             660.00
 
 - Deferred tax (reversal)/charge           223.80             (26.14)
 
 - Fringe benefit tax                        88.00             100.00
 
 - Wealth tax                                 1.69               2.74
 
 - Short provision for current tax and
    deferred tax of earlier year            144.32                -
 
 Net profit after tax                     5,240.69           5,161.01
 
 Balance as per the last Balance Sheet
 
 - Brought forward                        1,049.33             928.04
 
 Balance available for appropriations     6,290.02           6,089.05
 
 Appropriations:
 
 Interim dividend on equity shares            -                725.69
 
 Corp. dividend tax                           -                101.78
 
 Final dividend on equity shares 
 {inclusive of special dividend for
 Silver Jubilee Year)                       1451.38            181.42
 
 Corp. dividend tax                          246.66             30.83
 
 Transfer to general reserve                4000.00           4000.00
 
 Balance carried forward (Profit & Loss A/c) 591.98          1,049.33
 
 Earning per share (face value Rs.5)          36.11             35.56
 
 Dividend (inclusive of special
 dividend for Silver Jubilee Year) per share  10.00              6.25
 
 During the year ended June 30, 2008, the Companys gross sales
 increased to Rs. 46,553.53 lacs from Rs.43,388.34 lacs in 2006-07,
 i.e., an increase of 7.30% over the previous year. All the products of
 the Company recorded an increase in sales; Ujala, Maya and Exo recorded
 the maximum growth. The profit before taxation showed a significant
 increase of 17.11% to Rs. 6,906.50 lacs, compared to Rs. 5,897.61 lacs
 in 2006- 07. Profit after tax grew marginally by 1.50% over the
 previous year, to Rs.5,240.69 lacs, due to an increase in effective tax
 rate of 24.12% as against 12.50% in the previous financial year.
 
 Net revenue for soaps and detergents segment grew by 13.35% to
 Rs.22,691.58 lacs. Homecare segment reduced by 6.51% to Rs.14,469.27
 lacs. The reduction in homecare segment was mainly due to the decrease
 in sales of mosquito repellent coils because of extended winter and
 summer, category did not grow, we maintained our market share.
 
 The Board is pleased to recommend a dividend at the rate of 150%, i.e.,
 Rs.7.50 per equity share of face value of Rs.5 each; aggregating to
 Rs.1088.53 lacs. Besides, the Board proposes a special dividend for the
 silver jubilee year-2008 at 50% i.e., Rs.2.50 per equity share of face
 value of Rs.5 each; aggregating to Rs.362.85 lacs.
 
 Total dividend for the year under review work out to be 200%, i.e.,
 Rs.10 per equity share of face value of Rs.5 each; aggregating to
 Rs.1451.38 lacs. The dividend will be paid to eligible members after
 its approval by the members in the Annual General Meeting.
 
 Capital expenditure
 
 During the year, your Company has commenced production in new
 manufacturing facilities at,
 
 - Jammu in Jammu & Kashmir for making mosquito repellent coils
 
 - Roorkee in Uttarakhand for making Ujala fabric whitener
 
 - Baddi in Himachal Pradesh for Ujala Stiff and Shine.
 
 The above units will be eligible for excise and income-tax concessions.
 
 In 2007-08, the Company has shifted its registered office to its new
 building Ujala House in Mumbai.  New business
 
 Your Company ventured into new business, which are as follows
 
 a) Launched Ujala Stiff & Shine nationally in March 2008, and,
 
 b) Decided to enter into service sector through its new venture Jyothy
 Fabricare Services Limited to provide world-class laundry at
 affordable price.
 
 Initial public offer (IPO)
 
 Initial public offer of the Companys 44,30,260 equity shares of Rs.5
 each at a premium of Rs.685 per share, aggregating to Rs.690 per share,
 through an offer for sale by existing shareholders was held in November
 2007. IPO was oversubscribed by 45.83 times and the Companys shares
 were listed on December 19, 2007 on The National Stock Exchange of
 India Limited and The Bombay Stock Exchange Limited.
 
 Management discussion and analysis report is attached and forms part of
 this Directors Report 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.
 
 In compliance with the provisions of Section 212 of the Companies Act,
 1956, the audited statement of accounts along with the Directors and
 Auditors Reports for the year ended March 31, 2008 of Sri Sai Homecare
 Products Private Limited and Associated Industries Consumer Products
 Private Limited, the wholly-owned subsidiaries of the Company, are
 annexed hereto and form part of the Directors Report.
 
 Employee relations remained cordial during the period under review.
 
 The Company did not take any fixed deposits from the public during the
 period under review.
 
 Directors
 
 Mr. Nilesh B. Mehta and Ms. M. R. Jyothy, Directors of the Company will
 be retiring at the ensuing Annual General Meeting and being eligible
 offer 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, hold office until conclusion of the
 forthcoming Annual General Meeting and are eligible for re-appointment.
 The Company has received a letter from them to the effect that their
 appointment, if made, would be within the prescribed limits under
 Section 224 (1-B) of the Companies Act, 1956.
 
 Directors responsibility statement
 
 Pursuant to an amendment to Section 217 of the Companies Act, 1956,
 your Directors provide hereunder the Directors responsibility
 statement pertaining to the accounts of the Company;
 
 1.  that in the preparation of the annual accounts for the year ended
 June 30, 2008, the applicable accounting standards have been followed;
 
 2.  that the Directors have selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as at June 30, 2008 and of the profit of the
 Company for the year ended on that date;
 
 3.  that 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.  that Directors have prepared the annual accounts for the year ended
 June 30, 2008 on a going concern basis.
 
 Statements
 
 In accordance with the 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 a part of this Annual Report.
 
 
 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.
 
                                                   (Rs. in lacs)
 
 Particular                               2007-08      2006-07
 
 Foreign exchange earnings                 516.27       475.37
 
 Foreign exchange outgo                    412.93       497.39
 
 Particulars of employees
 
 The information required to be published under the provisions of
 Section 217(2A) of the Companies Act, 1956, read with Companies
 (Particulars of Employees) Rules, 1975, as amended, regarding the
 employees is given in Annexure - A attached herewith.
 
 Risks and concerns
 
 Despite expected slow down, the Indian Economy is still expected to
 grow by about 8.5% in 2008-09. The Company operates in certain segments
 of FMCG space. The Companys products are consumed more by lower and
 lower middle income groups. The demand for Companys products may not
 get impacted so much by the slower growth of economy as may be affected
 by the inflation and income levels of the said consumer groups, weather
 conditions, usage of white clothing and vagaries of weather. The
 Company is, in its own way, promoting the usage of white clothings.
 
 The ongoing disruptions in global financial markets, volatility in
 foreign exchange and rise interest rates is unlikely to have any
 significant impact on the performance of the Company as the Company
 does not borrow and has never had any involvement in derivatives etc.
 
 The sharp increases in crude oil prices in world market could, however,
 adversely impact its performance as it is a big consumer of plastics
 whose costs are directly linked to crude oil prices. The impact of
 these unprecedented price hikes may impact the profitability if the
 Company fails to pass on the cost increases to the consumer. Though the
 sale and consumption of the Company products is need based still any
 stiff price rise in its products could impact the performance.
 
 The performance of the Company, Turnover and Profits, is dependent on a
 few products. Any adverse movement in sale or profitability of these
 products, could compromise the performance of the Company. In this
 connection, the Company would try to cushion its cost increases by
 greater efficiency of operations and judicious and balance increase in
 prices. The Company is consciously widening its product range and has
 introduced in new products like Ujala Stiff & Shine which appear
 promising.
 
 The Company has set up plants in several areas where fiscal benefits
 like concession in excise duty, exemption of income tax on business
 profits are available. Any change in such schemes or laws may have an
 adverse bearing on the profits of the Company.
 
 The management continue to monitor the risks concerning the Company and
 take actions as appropriate to the situation.
 
 Internal control systems and its adequacy
 
 The Company has adequate internal control systems and procedures 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 Companys policies and practices, governmental regulations and
 statutes.
 
 Internal Audit is conducted by independent firms 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 the future
 performance and outlook.
 
 Acknowledgement
 
 The Board of Directors express their appreciation and gratitude for the
 services rendered by all employees, bankers, distributors, suppliers,
 service providers, media and shareholders during the year under review.
 
 
                            For and on behalf of the Board of Directors
                                        For Jyothy Laboratories Limited
 
 Place: Mumbai                                       M. P. Ramachandran
 Date : August 27, 2008                    Chairman & Managing Director