A day in the life of Jyothy…

Jyothy Laboratories Limited
43, Shivshakti Industrial Estate, Andheri-Kurla Road, Marol, Mumbai-400 059 Tel: 2850 2470 / 2852 0283, Fax: 2850 1734 www.jyothylaboratories.com

Annual Report 2005-6

Cautionary statement
Statements in this report relating to the Company’s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based upon certain assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include global and domestic demandsupply conditions, selling prices, raw material costs and availability, changes in government regulations and tax structure, general economic developments in India and abroad, factors such as litigation, industrial relations and other unforeseen events. The Company assumes no responsibility in respect of forwardlooking statements made herein which may undergo changes in future on the basis of subsequent developments, information or events.

Corporate information
Board of Directors
M. P. Ramachandran
Chairman & Managing Director

Internal Auditors
Vasu & Shivram A.R. Sodha & Co.
Chartered Accountants

K. Ullas Kamath
Deputy Managing Director

Legal Advisors
Law & Prudence V Lakshmikumaran Vaish Associates

M. G. Shanthakumari M. P. Divakaran Jyotindra M. Trivedi Josephine Price Nilesh B. Mehta

Bankers
The Federal Bank Ltd. ICICI Bank Ltd.

Company Secretary
M. L. Bansal

Statutory Auditors
S. R. Batliboi & Associates Chartered Accountants

What this annual report contains Corporate identity 2 Highlights 2005-6 5 Chairman and Managing Director’s overview 7 Management’s discussion and analysis 16 Jyothy’s performance analysis, 2005-6 26 Risk management 30 Directors’ report 32 Auditors’ report 37 Balance sheet 40 Profit and loss account 41 Cash flow statement 42 Schedules 44 Balance sheet abstract 64
A PRODUCT info@trisyscom.com

…is a day in your life as well!

Annual Report 2005-6

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Bangladesh. Wayanad. Pondicherry. Mauritius. Employing more than 3. and 18001 certifications 2 Jyothy Laboratories Limited Annual Report 2005-6 3 . UAE. Silvassa.Profile Founded in 1983 Headquartered in Mumbai One of the fastest growing fast moving consumer goods companies in India Engaged in the complete FMCG life cycle of research. Bhubaneshwar. Bangalore. Bankura. Chennai. Hong Kong and Saudi Arabia).500 distributors Motivated team of more than 1500 market intelligence agents Prominent brands Ujala (flagship): Liquid fabric whitener and fabric care brand Maxo: Mosquito repellent coils Jeeva: Ayurvedic toilet soap Exo: Dish washing soap and dish washing scrubber Vanamala: Oil-based washing soap Nebula: Anti-bacterial washing soap Maya: Incense sticks Speed: Detergent washing powder Penetration Present in 37% of Indian households Products accessible across more than 25 lac Indian retail outlets Products also available in 14 countries (including Sri Lanka.000 enthusiastic individuals. Malaysia. Baddi. Guwahati. Marketing a range of daily household and personal care products. manufacture. Hyderabad. 14001 People Nationwide network staffed by over 3000 employees 32 depots service customer requirements Network of more than 2. Salem and Pithampur. marketing and branding Product segments Fabric care Mosquito repellent and household insecticides Air care (incense sticks/aroma sticks) Surface cleaning preparations Personal care products Plants Thirteen manufacturing facilities in proximity to consumer locations Units in Trichur. Plants with ISO 9001.

54 cr Just a feeling of happiness at the end of the day… Just why Jyothy Laboratories performed exceedingly well.3%. 54 cr 86% increase in profit after tax to Rs. Highlights. 2005-6 Another year in the life of the Company 14% increase in revenues to Rs./thousands) EBIDTA (Rs./thousands) 4 Jyothy Laboratories Limited Annual Report 2005-6 5 . Net sales (Rs. The bottomline grew 85. The topline grew 15.7%. Just another reason for Jyothy in your life.Just another day. 302 cr 64% increase in EBIDTA to Rs. 40 cr 63% increase in cash profit to Rs.

Chairman and Managing Director’s overview EPS PAT (Rs. reviews the Company’s performance in 2005-6 ROGB (%) EBIDTA (%) Debt-equity ratio 6 Jyothy Laboratories Limited Annual Report 2005-6 7 . Chairman and Managing Director.” Mr. M P Ramachandran./thousands) ROACE (%) “Our sharp focus on our existing products’ portfolio coincided with the industry momentum– this was the Company’s success rationale. Jyothy Laboratories Limited.

We undertook a painstaking market survey (by outsourcing the service to a reputed brand management firm) for most of our successful brands. and outperform your industry average by a factor of three. our GDP grew 8. We evolved from a reactive response to a proactive We hope to achieve revenues of Rs.4% in 2005-6. However. We conducted an exhaustive audit of our errors. preserving the mother brand and making growth sustainable for all seasons.3 per cent (as we did in 2005-6). We entered attractive markets with a soft launch and 8 Jyothy Laboratories Limited Annual Report 2005-6 9 . We hope to achieve revenues of Rs. I believe that we possess the ability to respond to dynamic industry changes: replicated the strategy across familiar terrain before embarking on a pan-Indian presence with our new product portfolio. all regions and all years. advertising spend by more than half with doubled visibility. 600 cr by 2009-10. preserving the mother brand and making growth sustainable for all seasons. approach. These conditions are ideal for Jyothy. we believe that our price-value is compelling for consumers. we believe that we possess brands that can accommodate extensions. This is more bullish for the company than it may appear: India is one of the most under-penetrated FMCG markets in the world. leading to a rationalisation in our overheads. It represents an assurance that our business model is scalable and that we can indeed outperform the industry growth not just in one year but over the foreseeable future.We believe we possess the right portfolio of everyday-use products. We believe we possess the right portfolio of everyday-use products. 440 cr in 2006-7 and Rs. insight prompted a timely implementation of corrective action. this We catered to a market for whiteness (that was on the decline as consumers were shifting to coloureds from whites) by promoting the post-wash fabric quality. growing literacy is enhancing a consciousness for quality products. we believe that our products are superior over competing alternatives. we believe that we can provide products just where and when consumers want them. driving our growth through a phased spin-off of sub brands. 440 cr in 2006-7 and Rs. we grew the category and captured a 70% share of it. increase market shares across most product categories of our presence. When you grow your topline by 15. we believe that our products are superior over competing alternatives. surface cleaning and home insecticides). target-centric advertising and result-oriented spending. our performance means more to us than mere financial growth. the implementation of VAT has helped curb unorganised competition. fabric wash. More importantly. you have every reason to conclude that it was a year well spent. driving our growth through a phased spin-off of sub brands. all regions and all years. We invested in our people through training. rather than our product. there is an increased prosperity among people that is translating into an enhanced FMCG offtake. we reengineered our product packaging to control inflation in packaging and bottling costs. Signed M P Ramachandran arrived at a judicious media mix and reduced our We focused on four major segments (fabric care. 600 cr by 2009-10. We introduced a greater science in our advertisement spending with precise media profiling.

10 Jyothy Laboratories Limited Annual Report 2005-6 11 .Once upon a time there was a family… Our products are essential in the life of its users and the company.

12 Jyothy Laboratories Limited To be happy. Annual Report 2005-6 13 .Who had only one wish.

To be contented. 14 Jyothy Laboratories Limited That’s all. Annual Report 2005-6 15 .

500 crore which increased 16% to Rs 55. base of an estimated 300 million people. India has implemented a number of policies like the lifting of quantitative restrictions. According to projected growth rates. In 2003-4. Besides. it worked as a subset of the global FMCG industry as well. ensuring a continuous pipeline of new product launches.Management’s discussion and analysis The FMCG industry Global overview Even as the Indian FMCG was governed by local. six per cent of central excise and seven per cent of state tax). Over the decades. the top five global markets reported negative or nominal growth. The global FMCG market In 2003-4. Almost 70% of the global FMCG market (by value) was accounted for by developed geographies like the USA. the main industry driver was the attractive growth emerging from the developing markets. This has encouraged a number of multi-nationals to set up large production bases in India to outsource for the Indian and export markets. the FMCG size stood at Rs. India’s FMCG industry contributed eight per cent of the country’s corporate tax. India is expected to emerge as the tenth largest economy in 2007 and the fifth largest in purchasing power parity. the fourth largest sector in the economy creating employment for three million people in downstream activities. consumer spending in developing and emerging markets is expected to overtake the growth in developed countries in terms of purchasing power parity (PPP). It is this growth – apart from the country being the second largest population in the world – that interests global analysts and investors. 47. raw material availability and low labour costs have resulted in a lower cost of production. 71% of its sales are derived from agro-based products. By 2010. 47. the fourth largest sector in the economy. regional and national undercurrents.000 crore in 2004-5. it has also intensified competition and shut out most product categories for intending entrepreneurs. reduced excise duties. the Indian FMCG industry has prospered for a number of reasons: Raw material availability and low cost labour: Easy The industry enjoys strong links with agriculture. A distinct feature of India’s FMCG industry is the presence of most global players through their local subsidiaries. The global FMCG market was valued at USD 230 bn.500 crore which increased 16% to Rs 55. both in the personal care products and in the food processing sector. the FMCG size stood at Rs.000 crore in 2004-5. The Indian FMCG advantage The competition and relative consumer austerity notwithstanding. Presence across the value chain: Indian firms also enjoy a presence across the entire value chain of the FMCG industry from the supply of raw material to final processed and packaged goods. Interestingly. Europe and Australia. while this feature has helped provide the Indian FMCG space with globally relevant products. FDI policy: Over the last decade. automatic foreign investment and food laws resulting Indian overview India is one of the largest economies in the world in terms of purchasing power with a strong middle-class 16 Jyothy Laboratories Limited Annual Report 2005-6 17 . it is a significant value creator with a large market capitalization and a key contributor to the exchequer (towards the late Nineties.

2-trillion market. Change in the Indian consumer profile Rapid urbanisation. rural India’s spending on non-food items is on the rise The sensitivity of rural demand to rainfall or agricultural production is weakening due to a steady 18 Jyothy Laboratories Limited Annual Report 2005-6 19 . The base of the economic pyramid (BOP) in India in a vibrant FMCG industry environment. the disposable income of the latter is higher According to latest data released by the National Sample Survey Organization (NSSO). low penetration indicates significant market potential.20. especially India’s rural markets are processed into value-added products. indicating adequate room for an increase in penetration India’s rural FMCG market is characterised by the following: Frequent product sales. wide and deep presence. liberating itself from a dependence on agricultural income The annual consumption of FMCG products in a rural Indian household is Rs. the young population is set to grow further. Aspiration levels in this age group have been fuelled by greater media exposure. The removal of quantitative restrictions and reservations coupled with central and state initiatives have made this industry potentially attractive. making up the biggest chunk of the global $5-trillion BOP market excluding China.a large consumer goods spender A large share of fast moving consumer goods (FMCG) in an individual’s total spending along with a large population base make India one of the largest FMCG markets. 13000. India’s rural FMCG market There are a number of consumption features that enhance the attractiveness of India’s rural market for an FMCG company: It is estimated that if the per capita income of the An average Indian spends around 40 per cent of his income on grocery and 8 per cent on personal care products. about $1. leaving room for correction. The BOP market in India. leaving a considerable room to be explored In the personal care segment. Around 45 per cent of the population in India is below representing the masses is an over $1.10. makes up 84.An average Indian spends around 40 per cent of his income on grocery and eight per cent on personal care products. Demand-supply gap Only a small percentage of the raw materials in India rise in the share of non-farm income The younger generation has been deriving income from the service and manufacturing sectors.42-trillion national household market.8% of the total $1. FMCG industry features India’s FMCG industry is characterized by the following features: A defensive sector with relative inelastic demand Time-lag between contraction/expansion of income and impact on industry Low technological barriers in terms of technology or investments Imagery and price premium central to FMCG marketing New customer acquisition through smaller-sized packaging and low unit prices High competition at various price points especially at the regional levels Indian FMCG market expansion India .000 and the per capita income of the rural household is Rs. The term ‘bottom of the pyramid’ was coined by management guru CK Prahalad to describe the poor and the underserved section of the market. Enhanced ‘bribing’ of customers through freebies Focus on increasing reach. urban Indian household is Rs.205 trillion in purchasing power parity terms. while in the urban household it is estimated at Rs.000. says a study by IFC and World Resources Institute (WRI). increased literacy and rising per capita income have all caused a rapid growth and change in demand patterns. 20 years of age. leading to an explosion of new opportunities. increasing preference for value-for-money products (as opposed to cheap products) and lower inter-brand rivalry on account of a lower brand presence compared to urban India. 9400.

driving the consumption of effective. Companies that are able to influence consumers are likely to grow faster.5 31. housing ($332billion). improving Indian infrastructure.000 and $20.5 trillion market globally. China was not part of the study. health ($158-billion). In India.001-215000 22001-45000 16001-22000 16000 and below 1995-96 (%) 0.8% of household goods expenditure and 52.2% of energy expenditure. Usage pattern of population: Consumers becoming more health conscious. Products with superior price-value based on efficacy will continue to grow.6% of the country’s spend on information and communication technology.6 31.4 100 2006-7E (%) 0. Opportunities hidden in seemingly insignificant behavioral patterns. food is the biggest BOP market ($2. Outlook The outlook for India’s FMCG industry is optimistic for the following reasons: Increasing focus on branded products Improving Indian infrastructure leading to faster transportation and communication Increased possibility of using Indian units for manufacturing international brands A reduction in tax ambiguity.3% of health spend. Key FMCG market drivers Income levels/purchasing power: Increased disposable incomes. followed by energy ($433 billion).represent a $12. following the introduction of VAT Growth in rural incomes indicate a growing opportunity Fragmentation of the industry: Higher advertisement and promotional spending.2 23. transportation ($179 billion). Companies with consistent product innovation and ability to spot trends early are better placed. hygiene and quality products Increasing disposable incomes Increasingly younger population profile Strengths Well-established distribution network extending to rural Weaknesses Low export levels Small scale sector reservations limit ability to invest in technology and achieve economies of scale Several ‘me-too’ products Opportunities Large domestic market Export potential Increasing income levels will result in faster revenue growth Threats Imports Tax and regulatory structure Slowdown in rural demand Consuming class Very rich Consuming class Climbers Aspirants Destitutes Total Source: NCAER Annual income Above 215000 45. those with incomes between $3. taxation corrections and growth in rural income. 85. BOP accounts for 88. ICT ($51-billion) and water ($20 billion). the BOP was defined as all those with incomes below $3. Increasing consciousness around health.000.3 13. the mid-market segment. safe and quality products. 87. Compared to the BOP.1 million people — 78% of them in rural areas— makes up about 95% of the country’s population. Sector-wise. In the IFC-WRI study that used data from national household surveys in 110 countries.The BOP population of 924. 78.000 in local purchasing power.1% of the total national household expenditure on food.9 25 49 14 11 100 SWOT analysis areas Strong brands in the FMCG sector Low cost operations 20 Jyothy Laboratories Limited Annual Report 2005-6 21 . which are likely to open up new opportunities for the brand The outlook for India’s FMCG industry is optimistic due to the rise of the Indian middle class.8trillion).

More than 80 1992 Total retail (US$ billion) Organised retail (US$ billion) % share of organised Retail Source: CSO.2 Indian overview India is the fourth largest economy in the world in terms Organised retail as a percentage of FMCG sales by city Source: AC Nielsen 2005 Organised retail as a percentage of FMCG sales Source: KPMG in India Retail Survey 2005 22 Jyothy Laboratories Limited Annual Report 2005-6 23 . of purchasing power parity (PPP) after USA. The reasons for this regional variation range from differences in consumer buying behavior to cost of real estate and taxation laws. The retail industry Global overview Retail has played a major role the world over in increasing economic activity with its impact most easily visible in USA. which has a marked impact on the earning power and FMCG spending. healthcare and retail sectors.8 3. MGI Study Characteristics Food and apparel retailing likely to drive growth: Food and grocery are expected to see the highest growth.1 3. India has one of the world’s highest retail densities at six percent (12 million retail shops for about 209 million households). more so in the south and west of India. India’s peers like China and Brazil took 10-15 years to raise the share of the organized retail sectors from five percent (when they began) to 20 percent and 38 percent respectively. retail is the second-largest industry in the United States in terms of the number of establishments and employees. There are about 12 million retail outlets across India. it is also one of the largest world-wide. India’s retail sector is fragmented. Fastest growing retail segments in India Source: KPMG in India Retail Survey 2005 150 180 225 1. realty.3 7 0. Consequently. the quicker could be the growth of its FMCG sector. telecommunication. India is accelerating towards retail maturity and the proportion of organised retail is expected to touch 10 per cent by 2015. with clothing emerging as the next fastest growing segment. India’s services shift has been marked by a growth in its IT. Urban-centric: A distinctive feature of organized retailing in India is that it is largely an urban phenomenon.India has one of the world’s highest retail densities at six percent (12 million retail shops for about 209 million households). Organized retail has been more successful in cities. More than 80 percent of the respondents in the KPMG in India Retail Survey 2005 Global retail 2002 2005 percent of these are run by small family businesses that employ household labour. which accounts for almost 50 percent of the country’s gross domestic product. The faster this happens. One of the key developments has been a shift from agricultural and industrial growth towards services. its organized formats are only at a nascent stage of development.7 1. The retail industry employs more than 22 million Americans and generates more than $3 trillion in retail sales annually. UK and other developed countries. China and Japan. For instance.

Shifting mindset: Positive macro-trends are resulting in expected to be derived from changing lifestyles. revenues from the sector are expected to triple to US$ 24 billion by 2010. Annual Report 2005-6 25 Drivers of growth India’s consumer demand is being driven by the following factors: Credit availability: Retail loans have doubled to USD 38. it is expected to grow 400 percent to over USD$ 30. AT Kearney has estimated India’s total retail market at US$ 202. is expected to increase to spend USD$ 150 billion over the next few years to develop world-class infrastructure.7 bn in three years by 2005. Infrastructure spends: The Indian government is likely Income growth: India’s middle-class. However. Much of the growth in India’s organised retail is rural segment has been underestimated. Disposable incomes are expected to rise at an average of 8. ‘well-off’ and affluent classes and the growing number of double-income households. 8. feel analysts. The KPMG report estimates the annual growth of department stores at 24 per cent. This optimism is reflected in a KPMG report where India ranks first (ahead of Russia) in terms of emerging market potential in retail. a number of Indian companies are focusing on rural prospects as well. currently 22 percent of the total population.5 percent per annum till 2015. faster than overall retail. the GDP grew by 9. However. Demographics: More than 50 percent of India’s population is less than 25 years. India has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. Disposable incomes remain concentrated in urban areas. Different formats: Organized retailers are implementing a variety of formats ranging from discount stores to supermarkets to hypermarkets to specialty chains. 24 Jyothy Laboratories Limited . The GDP grew in the first quarter of FY05-06 by 8. indicated that the largest opportunity for modern retail is in the urban centers. The structure of Indian retail is developing rapidly with shopping malls becoming increasingly common in large cities. With the organised retail segment growing at the rate of 25-30 per cent per annum. the list developed as a response to requests from retail chains facing saturated demand in most western markets. Outlook Although the organized sector constitutes only three percent of the Indian retail market. India was ranked second in a Global Retail Development Index of 30 developing countries by AT Kearney following the observation that retail chains faced a saturated demand in most western markets.The Indian government is likely to spend USD$ 150 billion over the next few years to develop worldclass infrastructure. changing preferences in the demand for lifestyle goods. AT Kearney has estimated India’s total retail market at US$ 202. driving the offtake of FMCG products.5% in the third quarter. specifically metros.0 bn by 2010.6 billion which is expected to grow at a compounded 30 per cent over the next five years.4% in the second quarter and 7. deemed a ‘Priority 1’ market for international retail. Urbanisation: India’s urban population is projected to increase from 28 percent to 40 percent of the total population by 2020.3% in the fourth quarter of ’05-06 compared to 8. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade.6 billion which is expected to grow at a compounded 30 per cent over the next five years.5%. driving retail growth. to 32 percent by 2010. robust income growth and favourable demographics. Mall growth: The number of malls is expected to rise from 158 in 2005 to 600 by 2010. accelerating the relevance of organized retail. the report reveals that the sheer size and potential of the GDP growth: According to the Central Statistical Organisation’s latest estimate. India has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney.6% growth in the corresponding period of the previous year. driving retail and FMCG prospects. driving retail growth.

quality of packaging and chips (for soap cakes) 4 Distribution Widening of the distribution network (2500 direct distributors) Reduction of the incidence of counterfeit products in certain states through direct patrolling by the field force Increase in direct retail outlets to one million in 2005-6 The ‘bundling’ of stockists (five to six in each workgroup).5 gms Setting up of two plastic blow-moulding units in Pondicherry to manufacture bottles for Ujala Substitution of raw material used to make Maxo mosquito coils from pynamin to EBT. supplying stocks in accordance with a prespecified inventory schedule per stockist/dealer The development of a scientific distribution evaluation Sourcing cheaper substitutes like EBT (in place of pynamin) in the manufacture of Maxo. minimising leakage Concentration on the scientific construction of the 3 Quality Inspection of vendor sites to ensure that the raw material complied with all process specifications. 2005-6 1 Material management Introduction of a second line of vendors to serve as an effective and itemised supply backup system Introduction of a system of monthly schedules to define raw material requirements before any shortfall 2 Research and development Reduction in HDPE consumption. saving freight 26 Jyothy Laboratories Limited Annual Report 2005-6 27 . reducing costs and working capital outlay. besides. reducing packaging grammage from 16 gms to 8. reducing HDPE consumption Ujala bottle. plant automation ensured negligible quality variation between batches Scrutiny of end products for leakage. based on the index of investment capacity. coverage. all incoming material was tested by the R&D department across stringent parameters Initiation of a number of in-process parameters to ensure that the operational process adhered to quality specifications. introduction of Ujala ‘Stiff ‘n Shine’ and Exo liquid dishwash in select markets All manufacturing facilities operated under the purview of ISO 14001 and ISO 9001 certification mandates system.Jyothy’s performance analysis. saving Rs 2 cr Introduction of a 9 ml bottle of Ujala to tap the untapped LUP market Substitution of caps on Ujala bottles with flip covers. Reduction in the grammage of Ujala packaging bottles. saving raw material cost Product differentiation. stock keeping and service leading to better performance evaluation Increase in batch sizes following the introduction of direct stocking.

liberating Rs 6. widening of the product basket 28 Jyothy Laboratories Limited Annual Report 2005-6 29 . HR. resulting in healthy interworker and inter-plant competition Effective ‘growing from within’. introduction of an ERP system for the advertising. concentrated on mono-focus on specific target groups Figured among principal sponsors of the nationally acclaimed KBC-2 aired on prime time Star Plus on weekdays Reduction in the total advertising spend from 9% of gross sales in 2004-5 to 7% in 2005-6. Ujala positioned as an aspirational brand Scientific advertising and promotion.2 cr of precious resources Introduction of a greater science in advertisement spending comprising precise media profiling. the managerial structure comprising executives who started as market intelligence assistants and evolved into decision-makers Speedy responsiveness to market developments following a neat demarcation of hierarchical responsibilities Enhanced people effectiveness through the introduction of a disaster recovery system 6 Marketing Distinctive brand positioning to avoid positioning overlaps.5 Human resource Evolution to a systems-driven environment. targetcentric advertising and result-oriented spending Brand revamp plan for Jeeva and the development of a line of new products Promotion of a new commercial for Maxo based on the ‘encounter specialist’ theme on national channels across prime time slots Redefining and repositioning of the Company’s personal care brands. finance and inventory modules Introduction of periodic accounting and profit reporting. aided by the recommendation of a reputed brand consultants and media-planning agencies Resisted from advertising spillovers or overlaps. making it possible to correct strategy in real-time as opposed to retrospective action Responsible grading of the company’s facilities based on production cost.

Risk mitigation The products were extensively promoted through above-the-line and below-the line initiatives. off take and market share. Risk mitigation The Company follows a structured approach in new product selection. Jyothy introduced Ujala ‘Stiff ‘n Shine’. raw material availability. Mitigation measurement The company increased its material cost by 5% from Rs 136. Risk mitigation Jyothy follows a total quality approach – compliance with quality norms across every area of operation from raw material purchase to packaging and the delivery of finished goods. There is always the fear of a new product being drowned in the clutter. It conducts an exhaustive research into consumer needs. In 2005-6.9 cr in 2004-5 to Rs 143. Mitigation measurement During the year under review. affordability and differentiation. which helped differentiate them from same-category brands.Risk management 1 Risk identification New product risk Risk explanation The company’s new products may not perform well in the marketplace. The Company enjoys a successful track record in the introduction of differentiated products in niche categories. Jyothy brand managers focused on the following: Greater visibility through timely brand extensions of popular brands Updated packaging and promotional campaigns that made them look contemporary Introduced attractive consumer schemes Customised brands and promotions according to local preference in local languages Introduced value-added products Mitigation measurement All brands were marketed aggressively. This is supported by a pilot study in select markets replicated in mass promotions across the country. 2 Risk identification Quality risk Risk explanation Even a marginal drop in quality could affect consumer perception. The company’s raw material cost as a proportion of net sales declined from 52% in 2004-5 to 47% in 2005-6 4 Risk identification Brand awareness risk Risk explanation The FMCG industry is crowded by an increasing number of brands. 3 Risk identification Costs risk Risk explanation Any increase in the price of raw materials and packaging materials could affect profitability. They were also differentiated in terms of offerings. advertising and promotional as a percentage of net sales was 9% compared to 11% in 2004-5. 30 Jyothy Laboratories Limited Annual Report 2005-6 31 . Risk mitigation The Company procures raw material through stable sourcing contracts. Mitigation measurement All the company’s units are ISO 9001 and 14001 certified. product efficacy. operations and research and development team.2 cr in 2005-6. Ujala Detergent powder and Maxo liquidator. effective substitution towards lower cost alternatives and a reduction in the grammage of packaging bottles. The ground reality is closely assessed by the Company’s marketing.

with well knit New business Your Company (a) successfully launched the 9ml 32 Jyothy Laboratories Limited Annual Report 2005-6 33 .885 1.965 6. (d) is in an advanced stage of distribution system all over the country.333 5. technical and general education with high degree of specialization.387 155. services.000/. crispness and shine to all types of fabric and with the objective of ushering in a revolution in the postwash product category.50 for rural market. With extremely buoyant economy poised for overall growth in every sector such as agricultural.500 30. dividend tax Transfer to General Reserve Balance carried forward (Profit and Loss Account) For the year ended 30 June 2006 3.142 2.880 equity shares.3662 million as against Rs.997 22.527 250. Ujala priced at Rs.50 per equity share. The profit after tax grew 86% over the profit of the previous year.569 10. surface transport and aviation sectors.714 525. discussions to market pure instant coffee and other coffee blends to mark the company’s entry into the food and beverages segment by the the first quarter of 2007. health services.The dividend pay out ratio works out 22. The total dividend for 2005-6 is thus @ 125% per equity share. With increased managerial.178 18. 9.375 35349 – 490. industrial.889 10.26.56. in thousands) Financial results Gross sales Profit before depreciation Depreciation Profit before taxation and prior period items Prior period item Provision for diminution in investments Profit before tax Provision for tax – Short provision for the earlier years – Current tax – Deferred tax reversal/(charge) – Fringe benefit tax – Wealth tax Net profit after tax Balance as per the last Balance Sheet – Brought forward Balance available for appropriations Appropriations: Interim dividend on equity share capital Corp. The Board has now proposed a final dividend @ Rs. with rural economy also keeping pace with all round progress on account of Performance During the year ended 30th June 2006.046 44. home care.07. the gross sale of the Company was Rs.514 391. It is only a beginning and the growth is expected to sustain for years to come.3175 million in 2004-5. household insecticide and personal care products.Directors’ report Your Directors have pleasure in presenting the Annual Report and the audited accounts for the year ended 30th June 2006 together with the Auditor’s Report.544 300. (e) expects to undertake expansion of marketing territories of Exo in the cleaning segment in 2007 Outlook Jyothy is operating in FMCG sector with fabric care.502 370.1.175.423 10.Sales increased by 15% over the previous year. (Rs.661.500 40. 7.000 286. telecommunication.804 For the year ended 30 June 2005 3. the GDP and per capita income has commenced showing extremely healthy growth.67%. the growth of the economy and purchasing power is expected to be augmented multifold. Profit before taxation showed a significant increase of 71% to Rs. 2.000 92.490 million compared to Rs.965 – 60.237 72. rewarding investors with Rs. dividend tax Final dividend on equity share capital Corp.169 Dividend The Company declared an interim dividend of Rs 10 per equity share (face value Rs 10 each) on 72. (c) test-launched Ujala Stiff and Shine in Kerala for post-wash application with the objective to impart stiffness.081 346.68.000 96. strategically located manufacturing facilities and sales depots spread across the country.11.800 112 215.538 577.700 425 400.089 51. With more than 100 crores of population for consumption at home and financially empowering youth bubling with high aspirations.on an equity capital of Rs.286 million in 2004-5.169 1.800/-.026 – 53. (b) Ujala detergent powder is doing well in Kerala. shipping.169 496.885 1.068 96. IT.

Directors of the Company. M. the disposable income in rural.Trivedi. 1. P. Chairman Ms. the date of forthcoming Annual General Meeting of the Company. 1956. The Board proposes at the forthcoming Annual General Meeting of the Company. 1956. 1988. R. 2. Nilesh B. in Kerala. The retail in the organized sector spreading its wings is poised to grow faster from urban to semiurban to rural destinations. The result is seen in the spending habit of common man of India. Batliboi & Associates. attached thereto. for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. being measures of conservation of energy are not applicable as our company does not fall within the ambit of any of the industries listed under the schedule to the rules. and b) ensure payment of all statutory dues including TDS of Income tax on or before due dates. Directors’ responsibility statement In compliance with the provisions of Section 217(2AA) of the Companies Act. the Directors have taken proper Particulars of conservation of energy. As required under Section 212 of the Companies Act. would be within the prescribed limits under Section 224 (1-B) of the Companies Act. well packaged commodities are bound to penetrate and reach the consumers at their doorsteps.000 – 2. R. Mehta.in the preparation of the annual accounts. technology absorption and foreign exchange In accordance with the requirements of Section 217(1)(e) of the Companies Act. Here lies our ever increasing business opportunity – the bright future for FMCG product companies. if made. retire by rotation. Ms Josephine Price and Mr. namely. contract foarming etc. offer for reappointment. Nilesh B. The Board proposes their appointment as Directors of the Company at its forthcoming Annual General Meeting. the Directors have prepared the annual accounts on a going concern basis. the opportunities in front of your Company are plenty. Member Mr. With quality assured. read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules. Thrissur. 1956. G. 4. the Company Directors Mr. the applicable accounting standards have been followed. Ms. being eligible . 3. is engaged in the manufacture of mosquito repellant coils. ISO certification Your Company was awarded the 34 Jyothy Laboratories Limited Annual Report 2005-6 35 . Jyothy was appointed as Whole Time Director of the Company at the Annual General Meeting of the Company held on 8th December 2005. Auditors and their observations M/s S. has initiated effective steps to: a) enter into written agreements with all major Super Distributors. ISO-14001 Certificate and a ISO 9001 certification for all of its manufacturing facilities & R & D Centre situated at Pannissery at Koonammoochy. Sri Sai Homecare Products Private Limited. Mr.000/. Statutory Auditors of the Company. Sriram Hariharan.00.000 pm plus perquisites as per details given in the Notice of the Annual General Meeting and the Explanatory Statement pursuant to section 173(1) of the Companies Act. semi urban and urban India is growing fast. Mehta. Ltd. 1. With regards to the observation by the Auditors in ‘CARO’. Chartered Accountants. the Directors of your Company confirm that: 1. Member and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act. and fixation & monitoring of credit limits. The Audit Committee meeting was held on 8th November 2006 and the outcome of the said meeting was noted by the Board at its meeting held on 8th November 2006. M. United Kingdom were appointed as Additional Director on the Board of the Company at the Board meeting held on this day (8th November 2006) to hold office up to Audit Committee The Audit Committee of the Company comprised the following members: Mr. Your Company has extremely loyal personnel who dream high for fastest growth by making the organization grow faster. the Audited Statement of Accounts of the Subsidiary Company along with the Report of the Auditors for the year ended 31st March 2006 are attached herewith.K. representing ICICI Bank. Jyotindra M.per month in the time scale of Rs. representing ICICI Bank U. her reappointment as Whole-timeDirector of the Company for 5years with effect from 1st December 2006 to 30th November 2011 at a salary of Rs. Canada and Mr.rural employment guarantee schemes and expenditure on infrastructural developments. Srinivas. The Company has received a letter from them to the effect that their appointment. Subsidiary company The wholly owned subsidiary of the Company. 1956.00. Ramachandran. Fixed deposits The Company did not take any fixed deposits from the public during the period under review. Yes. 1956. M/s.00. Josephine Price. Once upon a time almost 70% of the total earnings used to be spent on food which is now between 35-40% which means substantial expenditure on non food products aimed at enhancement of the standard of living. the Directors had 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 on 30th June 2006 and of the profit of the Company for the financial year ended 30th June 2006. 1956. Employee relations Employee relations remained cordial during the period under review. The outlook for the Company appears bright.000 – 20. hold office until conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

These financial statements are the responsibility of the Company’s management. 2006. Ramachandran Mr. we report that: i. 2006. of the cash flows for the year ended on that date. 1956. K.03. Our responsibility is to express an opinion on these financial statements based on our audit. In our opinion. Ullas Kamath Mr. Particulars of employees The information required to be published under the provisions of Section 217(2A) of the Companies Act. M. For and on behalf of the Board of Directors 4. We have audited the attached Balance Sheet of JYOTHY LABORATORIES LIMITED (‘the Company’) as at June 30. For S. bankers.325 2004-5 54. in the case of the Profit and Loss account.478 73. we report that none of the directors is disqualified as on June 30. Name of Directors/Employees Mr. the said accounts read together with the notes thereon.87. 2006 Chairman and Managing Director Annual Report 2005-6 37 . We conducted our audit in accordance with auditing standards generally accepted in India. read with Companies (Particulars of Employees) Rules. 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act. iii. regarding the employees is given below.622 19. profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act. 30. 1956.53. v. as on June 30. we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. We have obtained all the information and explanations. service providers. of the profit for the year ended on that date. On the basis of the written representations received from the directors. 1956.555 1. 1. We believe that our audit provides a reasonable basis for our opinion. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. as well as evaluating the overall financial statement presentation. profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account. R.43. In our opinion. Acknowledgement The Board of Directors express their appreciation and gratitude for the services rendered by all employees. in thousands) 2005-6 Foreign exchange earnings Foreign exchange outgo 68.P. give information required by the Companies Act. Mumbai November 8. evidence supporting the amounts and disclosures in the financial statements. translating into attractive growth for the company. and in the case of Cash Flow Statement. 2006 and also the Profit and Loss account and the Cash Flow Statement (‘the financial statements’) for the year ended on that date annexed thereto.P.00. Batliboi & Associates Chartered Accountants Per Sudhir Soni Partner Membership No. proper books of account as required by law have been kept by the Company so far as appears from our examination of those books. media and shareholders during the year under review.L. as amended. The balance sheet. on a test basis. distributors. of the state of affairs of the Company as at June 30.688 Rs.Finance and Company Secretary Total remuneration Rs. 1975. An audit also includes assessing the accounting principles used and significant estimates made by management. Ramachandran Mumbai. Jyothy Laboratories Limited S/d M.000 Experience 32 years 21 years 36 years 3. In our opinion and to the best of our information and according to the explanations given to us. As required by the Companies (Auditor’s Report) Order. Further to our comments in the Annexure referred to above. 2006 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act. and taken on record by the Board of Directors. in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a) b) c) in the case of the Balance Sheet. 8 November 2006 36 Jyothy Laboratories Limited ii. An audit includes examining. 1.792 Rs. vi. the balance sheet. which to the best of our knowledge and belief were necessary for the purposes of our audit. 1956 (‘the Act’).AUDITORS’ REPORT To The Members of Jyothy Laboratories Limited Foreign exchange earnings and outgo (Rs. M. 2. 1956. suppliers. Bansal Age in years 60 43 58 Designation Managing Director Deputy Managing Director Vice President .: 41870 iv.

are as follows: (Rs in million) Name of Statute (Nature of Dues) Sales Tax (Tax / Penalty/ Interest) Period to which the amount Relates 2000-01 2001-02 2004-05 2005-06 2001-02 2004-05 2005-06 Commissionarate Forum where dispute is pending Appellate High Court Total Amount authorities & Tribunal 0. the Company has an internal audit system commensurate with the size and nature of its business. at the year end. excise duty and cess on account of any dispute. we report that no funds raised on short-term basis have been used for long-term investment. b) According to the information and explanations given to us. The internal control system for sale of goods needs to be further strengthened to make it commensurate with the size of the Company and the nature of its business. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. the Company has not given any guarantee for loans taken by others from banks or financial institutions. the Company has not granted loans and advances on the basis of security by way of pledge of shares. where the Company has been generally regular. (d). for a period of more than six months from the date they became payable. is reasonable having regard to the size of the Company and the nature of its assets. debentures and other investments. wealth tax.67 – 0.65 – – 15.22 to 0. xix) The Company did not have any outstanding debentures during the year. wealth tax. employees’ state insurance.98 21. the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order. the Company is not a chit fund or a nidhi / mutual benefit fund / society. 58AA or any other relevant provisions of the Act and the rules framed there under apply. no material discrepancies were noticed on such verification. firms or other parties covered in the register maintained under section 301 of the Companies Act. In our opinion and according to the information and explanations given to us. provisions of paragraphs 4(iii) (b). the Company has not taken/granted any loans. xiv) In our opinion. 1944 The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A.15 2. All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which. the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time. 2006 Per Sudhir Soni Partner Membership No. Accordingly.99 0. xiii) In our opinion. service tax. There was no substantial disposal of fixed assets during the year. for the purchase of inventory and for the sale of services. service tax and professional tax. though the delays in deposit have not been serious. the prescribed accounts and records have been made and maintained. sales tax.JYOTHY LABORATORIES LIMITED ANNEXURE TO THE AUDITORS’ REPORT Annexure referred to in paragraph 3 of our report of even date Re: Jyothy Laboratories Limited i) a) The Company has maintained proper records showing full particulars. we are of the opinion that the particulars of contracts or arrangements referred to in xii) According to the information and explanations given to us and based on the documents and records produced to us. Batliboi & Associates Chartered Accountants c) xi) iii) As informed. in our opinion. the dues outstanding of income tax. 1956. including quantitative details and situation of fixed assets. securities. cess and other undisputed statutory dues were outstanding. Therefore. excise duty and cess except provident fund. For S. no undisputed amounts payable in respect of provident fund. ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including wealth tax. xv) According to the information and explanations given to us. the Company has not generally been regular. xviii)The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. R.10 b) c) ii) a) b) Sub-total (a) The Central Excise Act. In case of income tax.43 18. xvi) Based on information and explanations given to us by the management.21 0. The management has conducted physical verification of inventory at reasonable intervals during the year. xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management.22 – 0. viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act for the manufacture of soaps and detergents and are of the opinion that prima facie. sales tax. we report that no fraud on or by the Company has been noticed or reported during the course of our audit.98 22. 2003 (as amended) are not applicable to the Company.92 2. there is an adequate internal control system commensurate with the size of the Company and the nature of its business. (f) and (g) of the Companies (Auditor’s Report) Order. customs duty. we are of the opinion that the Company has not defaulted in repayment of dues to a bank. custom duty.22 – 0. employees’ state insurance. investor education and protection fund. vii) In our opinion. the Company is not dealing in or trading in shares. (c). service tax.98 1. excise duty. customs duty. Based on our audit procedures and as per the information and explanations given by the management. Subsequent to year end.92 15.: 41870 Annual Report 2005-6 39 38 Jyothy Laboratories Limited .77 0. In our opinion and according to the information and explanations given to us. the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order. x) Sub-total (b) Total (a+b) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.12 – 0. xx) The Company has not raised money through public issues during the year. secured or unsecured from/to companies. debentures and other securities. c) According to the records of the Company. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.10 to 2. income tax. 2003 (as amended) are not applicable to the Company.77 – 4. xvii) According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company. vi) b) section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered. As informed. sales tax. Accordingly. 2003 (as amended) are not applicable to the Company. term loans were applied for the purpose for iv) v) Mumbai November 8. which the loans were obtained. We have however not made a detailed examination of the records with a view to determine whether they are accurate.65 17.21 0.13 2.21 – – 0. the Company has initiated steps to strengthen the internal control system for sale of goods. a) According to the information and explanations provided by the management.

106) 759.525.541.500 6. R.592 2. 41870 Mumbai.Rs Nil pertaining to previous year sales) Net sales Other income 15 EXPENDITURE Material costs (Increase)/ decrease in inventories Excise duty Employee costs Other expenses Miscellaneous expenditure written off Depreciation Interest and finance charges 2005–06 3.852 229.569 10.480 1.948.880 1 2 72.965 – – 60.137 17.000 286.579 (244.885 1. 2006 M. beginning of the year Profit available for Appropriation Appropriations Interim dividend to equity shareholders Dividend tax on interim dividend Proposed dividend to equity shareholders Dividend tax on proposed dividend Transfer to general reserves Profit and Loss Account.452.800 112 215.154) 3.375 28. L.934 1. 2005 .653.178 18.166 1.184 61.585 2.714 1.718 3 4 5 16 17 18 19 14 6 20 6 1.103 44.295 121.207 249.244 267.850 2.544 300.390 26. exceptional item and Tax Prior period item .900 291.431. 2006 40 Jyothy Laboratories Limited Profit before prior period item.175.252.000 96.291 909. 41870 Mumbai.Sales promotion items Loans and advances Less: Current Liabilities and Provisions Current liabilities Provisions Net Current Assets Notes to accounts PROFIT AND LOSS ACCOUNT For the year ended June 30. end of the year Earnings per share (EPS) Basic and Diluted (Rs) Nominal value per share (Rs) Weighted average number of shares outstanding for calculation of Basic and Diluted EPS Notes to accounts 22 For Jyothy Laboratories Limited The schedules referred to above and notes to accounts form an integral part of the financial statements. Ullas Kamath Deputy Managing Director M.718 7 8 9 10 11 12 13 22 The schedules referred to above and notes to accounts form an integral part of the financial statements.680 294.997) – Deferred tax charge – Fringe benefit tax – Wealth Tax Profit after Tax Profit and Loss Account. November 8.078. 2005 .423 10.140.026 53.569 2.142 2.885 1.846 75.802 346.919 – 51.649.020 294.252. Batliboi & Associates Chartered Accountants Per Sudhir Soni Partner Membership No.374 2. R.Rs 6. As per our report of even date For S.062 26.68 10 7.225.379 40.965 29. Ullas Kamath Deputy Managing Director M.623 1.889 10.700 425 400.532 (197.387 155.434 1. As per our report of even date For S.636 845.441) (58. 2005 .256.000 92.849 – 490.538 (194.733) 833.064 180. P.497 40.527 250.169 29. Ramchandran Chairman and Managing Director K.985 806.019.393 334.615.849 240.368.645 661.661.290 1.000) (refer note 9 in schedule 22) Less: Sales tax recovered Less: Excise Duty recovered Less: Trade discount (includes Rs 17.177 57. Ramchandran Chairman and Managing Director For Jyothy Laboratories Limited K.041 2.768 2.569 2.139 3.059 525.873 1. November 8. Loans and Advances Inventories Sundry debtors Cash and bank balances Other current assets . 2006 (Amounts in thousands of Indian Rupees) SOURCES OF FUNDS Shareholders’ Funds Share capital Reserves and surplus Loan Funds Secured loans Unsecured loans Deferred Tax Liability.657.215 227.289 2.500) (45.478 60. Net APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated depreciation and impairment Net Block Capital work-in-progress (including capital advances) Investments Current Assets.249 137.256.901 16.Advertisement expenses Prior period item . P. Bansal Company Secretary Annual Report 2005-6 41 .437 2.13 10 7.Trade discount expenses Exceptional item .046 25.134) 2.169 1.Provision for dimunition in investments (refer note under schedule 7) Profit before Tax Provision for tax – Current tax (including short provision for current tax of earlier years Rs Nil.JYOTHY LABORATORIES LIMITED BALANCE SHEET As at June 30.970 956.500 30.026 1.098 891.169 496.339 10 328 338 27.767 1.648) (389.081 793 2.419 11 1.333 5. L.502 370.713.804 55.277.237 72.Rs 80. 2006 Schedule 2006 2005 (Amounts in thousands of Indian Rupees) Schedule INCOME Sales (gross) (net of returns pertaining to earlier years Rs Nil.880 2004–05 3.065 236.068 96.770 2.366.381. Batliboi & Associates Chartered Accountants Per Sudhir Soni Partner Membership No.402) (273. Bansal Company Secretary M.084 1.583.426 85.152.514 (203.583.970 72.230 3.

728) (94.410) 292.327 891.382 1.230 (47.524) – (87) 1.451 CASH FLOW STATEMENT (Contd.757) 385. CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES Purchase of fixed assets including capital work-in-progress and capital advances Receipt of investment subsidy Proceeds from sale of fixed assets Purchase of investments Proceeds from sale of investments Interest received Dividend received Net cash used in investing activities 2005–06 490.589 31.277.623 558.091 389. P.565 12.964) 3.705) (95.645 891.585 1.089) (33.585 * Includes deposits provided as securities against bank guarantees .000 – 660 539.285 891.856 75.203) 51.277.026 51.200 2.761 (24.383 847.194. November 8.258 599.852) 1. Ullas Kamath Deputy Managing Director M.081 (817) 60.637) – 328 (793) (10. L.476) 4.100) 511.714 3.Rs 2. loans and advances Inventories (including sales promotion items) Trade receivables Loans and advances Increase in current liabilities / provisions Cash generated from operations Taxes (paid) / refund Net cash generated from operating activities B.000 – 1. R.Rs 4.541 (100) – 30.076 17.103 (117) 793 (37.674 1.253) (10. 2005 .118. 2006 M. CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES Repayment of loan funds Accrued interest on loan funds Deferred sales tax loans Interest paid Dividend paid Dividend tax paid Net cash used in financing activities Net increase in cash and cash equivalents (A+B+C) Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Components of cash and cash equivalents Cash in hand Balance with scheduled banks – Current account – Deposit account * 2005–06 – 1 838 (1.523 72.230 1.437 (72.042) 93.253 87 (29. Bansal Company Secretary 42 Jyothy Laboratories Limited Annual Report 2005-6 43 . (121.885) (1.251 398.928 – 13. 41870 Mumbai.437) (83. CASH FLOWS PROVIDED BY/(USED IN) OPERATING ACTIVITIES Net profit before taxation Adjustments for: Depreciation (Profit) / Loss on discarded/sale of fixed assets. Ramchandran Chairman and Managing Director For Jyothy Laboratories Limited K. net Provision for dimunition in the value of investments Profit on sale of investment Miscellaneous expenditure written off Dividend received Interest expense Interest income Excess provision written back Sundry advances written off (net of provision) Bad debts written off (net of provision) Provision for doubtful advances Provision for doubtful debts Operating profit before working capital changes (Increase) /Decrease in current assets.783) As per our report of even date For S.247 – (4.454) (11.174 81.585 917 43.445 2. 2006 (Amounts in thousands of Indian Rupees) C.423) (46.230 2004–05 (33.067 3.444 117 (59.JYOTHY LABORATORIES LIMITED CASH FLOW STATEMENT For the year ended June 30.027) (36. 2006 (Amounts in thousands of Indian Rupees) A.166 396.130 2004–05 286.633) (249) 759 – 3. Batliboi & Associates Chartered Accountants Per Sudhir Soni Partner Membership No.) For the year ended June 30.600 (56.665.965 44.

214 – 4.690 11.144 764.108 3.846 759.532 1.589 988.145 158.255 351 – 39.077 1. 2006 54.070 57.714 44. end of the year General reserves Balance.166 1.053 7.226 – 62. 2006 – 1.426 3 SECURED LOANS Term loan from bank # Accrued Interest 10 1 11 10 – 10 Furniture and fixture Office equipments Vehicle Trademark # Term loan from bank is secured against first charge on standing crops on land.569 100.065.144 92.335 21.137 (11.608 48.682 311.174 418.770 6 FIXED ASSETS Gross Block Particulars Depreciation and Amortisation For the Year – 117 14. receivables.257 5.677 3.569 a) Deferred tax liability Depreciation b) Deferred tax assets Technical royalty Gratuity Provision for doubtful debts Provision for doubtful advances Provision for leave encashment Provision for impairment losses Others 73. Net 100.444 84.000 26.333 84.569 72.569 72.840 62.109 – – – 3.288.000) equity shares of Rs 10 each Issued.209 1.780 12.157 85.106 114.000 (25.259 19.532 754.809 10.872) 988.452 33.688 18.256.569 51.067 18.067 3.524) 30.543 9.452.374 Charge/(Credit) for the year 2006 2 RESERVES AND SURPLUS Share premium Investment subsidy Balance.426 24.169 2.065.324 24.256.804 2.313 2.456 2.144 3.116 13.056 7. 2005 – 455 44.635 2.260 22.229 – 100 1.988 31.128 271 46.317 23.503 1.037 14.515 18.566 372.000 100.106 1.144 300. beginning of the year Add: Transfer from profit and loss account Less: Impairment loss (net of deferred tax of Rs Nil.308 3.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS As at June 30.058 759.282 7.078.880 (2005 . 2006 – 572 59. beginning of the year Add: Subsidy received during the year Balance. 2005 52.255 351 – 39.335 21.000 – Impairment Net Block As at July.000.426 30.272 8.000 72.016 250.787 31.618 4.714 205.037 14.099 1.000.000 100.7.445 6.102 340.341 15.128 – 27.953 30.000 72. 2006 54.349 14.563 22.431 11.638 10. 2006 (Amounts in thousands of Indian Rupees) 1 SHARE CAPITAL Authorised Capital 10.361) 860 – (271) (19.166 328 328 *Includes land acquired in current year from customer at agreed value of Rs 1.817 1.258 23.985 388. 2006 (Amounts in thousands of Indian Rupees) 2005 5 DEFERRED TAX LIABILITY.594 399.541 2.698 23. investments and other movable assets Total Previous year 4 UNSECURED LOANS Deferred sales tax loan 1.474 300 132.000 – 1.309 205.120 36.503 For the As at June As at June As at June Year – – – – – – – – – – 39.391 288.000 30.Rs 13.000 39.000 30. 2005 – 1.761 1.502 – 520 1.087 478 Deletions As at June As at July 30.041 10.594 462.809 (514) 1.000 against recovery of dues and is held for disposal.850 1.313 3.375) (9. (Also refer note under schedule 9) 44 Jyothy Laboratories Limited Annual Report 2005-6 45 .846 3.152.193 4.444 1. Subscribed and Paid up capital 7. 2005 .081 – – – 935 – 57 881 2.666 1.10.043 28. 2005 Freehold land* Leasehold land Building Plant and machinery Dies and moulds 52.594 27.568 263 1.733 158.256 13.000 (2005 .087 14.048 3.232 5.579 956.502 – 520 1.128) (refer note 12 in schedule 22) Balance.736 – 10. Additions Deletions As at June As at July 1.197 5.376 2. end of the year Balance in profit and loss account 1.539 8.262 2.203 956.282 5.056 6.880) equity shares of Rs 10 each 2006 2005 SCHEDULE TO THE FINANCIAL STATEMENTS As at June 30.635 73.499 9.789 833.144 96.862 7.

* Punjab Tractor * Zee Telefilm Ltd. * Deposit includes Rs 384.277.500 400 3.000 bonus shares received during the year) Sub Total Less: Provision for dimunition in the value of investments Total No investments have been purchased during the year. were received for 25.245) 18.174 81.000 (30.326) Work in progress Finished goods (including goods in-transit Rs 3.064 Sundry debtors include receivables of Rs 15.256).000) 9.274 (63.253 7. 2005 . * Tata Motors Ltd. During the previous year.500 658.* Wipro Ltd.Rs 8059) (refer note 9 in schedule 22) Stores and spare parts 99.466 80.059. 2000 shares in Tata Motors Ltd. 46 Jyothy Laboratories Limited Annual Report 2005-6 47 .281 113.285 891.259 1.217 236.Rs 10.141 2. Indira Vikas Patra National Saving Certificates (Market value of quoted shares .178 – – – 70. * All the shares are sold during the year.030 (63.020 82.030 505 81.098 334.070 from a customer with whom transactions has been discontinued.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS As at June 30.Rs 9. at cost) Trade Investments (Unquoted) Investment in Sri Sai Home Care Products Private Limited .086 322 307 1.000 – – – – – 1. 2005 . * (Includes 4.257 – 10 2 2 10 10 5.382 1.000 shares in Tata Finance Ltd.393 2006 2005 10 5 10 1 2 27. Rs 13.480 – 4.852 1.777. 2005 .Rs 71.575) – 334.813 279.985 (2005 .Rs 19.852 (2005 .000 500 300 27. on evaluation of its investment in SAB.257 is considered as secured against the market value of land acquired from the customer.Rs 1.656.410 294. considered good Outstanding for more than six months* Unsecured a) Outstanding for more than six months Considered good* Considered doubtful Less: Provision for doubtful debts b) Other debts Considered good Considered doubtful Less: Provision for doubtful debts 13.029 * 2 132 17.* Sab Nife Power Ltd.000) 334.985 shares were received on split of shares in the ratio 1:5.098 30. of which 4.065 2 132 26. Of the total outstanding.504) unutilised out of issue of 2% Fully Convertible Debentures converted into 1.) Mphasis-BFL SW Ltd. 2005 .901 7. 2006 the market value was Rs 8.194 1.500 2. The management has in past considered this investment as strategic and long term in nature.Rs 390.000 2.540 71.* (During the year on account of merger.901 Face Value (Rs) Number of Shares 2006 2005 SCHEDULE TO THE FINANCIAL STATEMENTS As at June 30. The market value of SAB over past few years has been substantially lower (as of June 30. 2006 (Amounts in thousands of Indian Rupees) 7 INVESTMENTS (Long term.269 16.791 shares are sold during the year) MTNL* Satyam Computers Ltd.42 per share on October 1.550 7.000. the management had recognised the dimunition in value to be other than temporary and has provided Rs 60. (Refer note under schedule 6) 10 CASH AND BANK BALANCES Cash in hand Balance with scheduled banks – Current account – Deposit account * 1.383 847.368) in the equity shares of Shri Adhikari Brothers Limited (SAB).039.575 (4.727 180.421 8.194.734) 10 1.779 8.098 10 8.000 – 72. # (662. Management has filed litigation against the party.813 782 (782) 1.585 # The Company has an investment of Rs 70.* Shri Adhikari Brothers Ltd. 2003.230 917 43. 2006 (Amounts in thousands of Indian Rupees) 8 INVENTORIES Raw and packing materials (including goods in-transit Rs 442.674 1.919.178 856 712 1.410 – – 279.368 9 SUNDRY DEBTORS Secured.a wholly owned subsidiary Non Trade Investments (Quoted) Investment in Shares Contech Soft Limited Infosys Technologies Ltd.880 equity shares of Rs 10 each at a premium of Rs 572.

260.290 2006 2005 SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.874 625.961 240.137) 240.Rs 1.035 5.069 7.248 4.466 46.189 3.285 425 7.Rs 7.885 1.Rs Nil for sales promotion) Sales tax incentives Credit balances written back Profit on sale of fixed assets (net) Miscellaneous income 87 72.184 16.327 – (4.498 229.163 52. 2005 .429 3.103 (1.281 46.295 99.453 6.155 4.892 1.046 49 14 MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Software development expenses Balance.189 ) Export incentives Processing income Profit on sale of investment Excess provision written back (includes Rs 10.633 1.103) – 48 Jyothy Laboratories Limited Annual Report 2005-6 .821 5.731 112 – 1.476 13.544 25.762 4.972 38.910 1.668 17.826)) Less: Closing stock Sub-total (A) Cost of trading goods Opening stock Add: Cost of purchases Less: Closing stock Sub-total (B) Total (A+B) 17 (INCREASE)/DECREASE IN INVENTORIES 82.630 5.477 934.578 905.Rs 14.431.042 42.873 4.800 40.422.926 60.773 979.512 4.873 43.269 20.098 4.082 8.991 40.000.421 476.934 84.590 559. 2005 .289 2005–06 2004–05 16 MATERIAL COSTS Raw and packing materials consumed Opening stock Add: Cost of purchases (including freight.412 82.379 13 PROVISIONS Proposed dividend Dividend tax on proposed dividend Provision for gratuity Provision for leave encashment Provision for wealth tax Provision for income tax (net of advance tax) Provision for fringe benefit tax 18.139 117 37.055 11.524 10.991 12.327) 137.431 – 249 6.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS As at June 30.583 142.867 4.390 38.446 534 16.466 46.166 49.470 73.551 1.549 121.697 891.900 10.500 61.901 12 CURRENT LIABILITIES Sundry creditors – Small scale industries – Others Other current liabilities Security deposits Advances from customers 3.548 (424) 3.814 1. 2006 (Amounts in thousands of Indian Rupees) 15 OTHER INCOME Dividend received Interest on fixed deposit (tax deducted at source .142 2.421 542. end of the year – – – 1.244 (Increase)/ decrease in inventories Closing stock Finished goods (refer note 9 in schedule 22) Work in progress Opening stock Finished goods Work in progress Sub-total (A) (Increase)/ decrease in excise duty Excise duty on closing stock Excise duty on opening stock Sub-total (B) Total (A+B) 39. beginning of the year Less: Written off during the year Balance.313 – 817 4.122 11.527 22.253 3.822 474.883 9.290 31.520 47.607 42. 2006 (Amounts in thousands of Indian Rupees) 11 LOANS AND ADVANCES Unsecured considered good Advances to wholly owned subsidiary Deposits Advances recoverable in cash or in kind Quantity discount receivable Advance to suppliers (refer note 10 in schedule 22) Balance with excise authorities Staff loans Advance tax (net of provisions) Unsecured and considered doubtful Advance to suppliers Loans to employees Less: Provision for doubtful advances/ loans 35.000 62.060 15.035 12.691 7.504 – 6.082 8. 2005 . net of freight subsidy (Rs 3.733 158.912 5.130 894.368.060 10.752 5.543 227.331 806 (32.803 8.697 936.048 144.283 – 137.548 52.183 10.253 526.912 1.

Background Jyothy Laboratories Limited ('the Company') was incorporated on January 15.919 14.985 182.453 34.690 2.474 3. wages and bonus Contribution to provident and other funds Gratuity Staff welfare expenses Directors' remuneration 220.772 849 3.258 806.478 20. net Provision for doubtful debts Provision for doubtful advances Sundry advances written off Less: Provision written back Bad debts written off Less: Provision written back Exchange loss.404 9. The Company is principally engaged in manufacturing and marketing of soaps. incentives and awards Travelling and conveyance Brokerage on sales Miscellaneous expenses 7.669 428 12.279 50.665 2.523 18.886 9. Cost of shares of Co-operative society has been added to the cost of office building.026 22 NOTES TO THE FINANCIAL STATEMENTS 1. and in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India and referred to in Section 211(3C) of the Act and generally accepted accounting principles in India.814 – 31.196 5.matter under appeal iii) Claims against the Company not acknowledged as debt 2.889 51. Basis of preparation of Financial Statements The financial statements of the Company are prepared under the historical cost convention on accrual basis of accounting.436 37.906 1.Rs 708) Field staff expenses.000 106 266.336 13.941 17. 3.017 11.381 31.334 109.512 1.838 148 7.195 19 OTHER EXPENSES Conversion charges Power and fuel expenses Rent Insurance Repairs and maintenance – Building – Plant and machinery – Others Research and development Printing and stationery Communication costs Legal and professional fees Rates and taxes Commission to directors Directors' sitting fees Vehicle maintenance Donation Loss on discarded/sale of fixed assets.555 370 3.087 2.000 38.419 294.093 17.010 25.410 22.648 21.matters under appeal c) Disputed excise duty and service tax demand .356 8.1992.559 56.438 15.matters under appeal b) Disputed sales tax demands . 2.270 49.467 3.589 759 – 337 292. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.171 2.388 131 5.847 – 9. net Advertisement and publicity Sales promotion and schemes Carriage outwards (net of freight subsidy Rs 775.163 9.629 46.881 1.945 1. detergents.565 8.856 75.247 660 – 32. mosquito coils and incense sticks. 2006 (Amounts in thousands of Indian Rupees) 20 INTEREST AND FINANCE CHARGES Interest on loans from banks Bank charges and commission 271 1.091 3.979 1.368 13.431 15.821 5.268 3. 50 Jyothy Laboratories Limited Annual Report 2005-6 51 . 2006 (Amounts in thousands of Indian Rupees) 18 EMPLOYEE COSTS Salaries.437 3 790 793 2005–06 2004–05 21 CONTINGENT LIABILITIES Contingent liabilities not provided for in respect of: i) Amount outstanding in respect of guarantees given by the Company to banks ii) Tax matters a) Disputed liability in respect of income-tax demands .190 27.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. 2005 .343 70.907 18.525 1.893 7.822 83. less accumulated depreciation and impairment losses if any.214 30.414 19.166 1.101 249.432 26.239 30.453 4.296 661.645 2005–06 2004–05 SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.824 4.437 9. Summary of Accounting Policies The significant accounting policies are as follows: a) Fixed assets Fixed assets are stated at cost.

over the lease term. or reported in previous financial statements. Software development expenses are amortised over a period of three years. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Foreign currency translation i) Initial Recognition Foreign currency transactions are recorded in the reporting currency. ii) Conversion Foreign currency monetary items are reported using the closing rate. Sale of Goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. 2004 are added to the cost of such assets in line with Old Accounting Standard 11 (1994). In assessing value in use. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd. or at the rates prescribed under schedule XIV of the Companies Act. k) iii) Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year. whichever is lower. iii. where necessary. are recognised as income or as expenses in the year in which they arise. ii. the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Cost is ascertained on First-in-First out ('FIFO') basis and includes all applicable costs incurred in bringing goods to their present location and condition. and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. work-in-progress. Income-tax Tax expense comprises of current. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income f) Investment Long term investments are stated at cost. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. h) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Cost of work in progress and finished goods includes materials and all applicable manufacturing overheads. which it is intended to compensate. The estimated useful life of the assets is as follows: Category Buildings Plant and machinery Electrical installations Furniture and fixtures Dies and moulds Computers Office equipments Vehicles Trademarks Leasehold land is amortised over the period of the lease on a straight-line basis. An impairment loss is recognised wherever the carrying amount of an asset exceed its recoverable amount The recoverable amount is the greater of the assets net selling price and value in use. it is recognised as income over the periods necessary to match them on a systematic basis to the costs. depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Provision. Excise Duty. other than temporary. After impairment. deferred and fringe benefit tax. its value is deducted in arriving at the carrying amount of the related asset. Exchange differences on liability relating to fixed assets acquired within India arising out of transactions entered on or before March 31. in the value of investments. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Where the grant or subsidy relates to an asset. j) d) e) Operating Leases Lease payments on operating leases are recognised as expense on a straight-line basis. Exchange differences arising in respect of fixed assets acquired from outside India are capitalised as a part of fixed asset. 1956 whichever is higher. stores and consumables items are valued at g) 52 Jyothy Laboratories Limited Annual Report 2005-6 53 . Estimated useful life (in years) 30-60 3-21 20 12 1-3 6 20 8-10 9 SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30. finished goods.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.) cost or net realisable value. i) Miscellaneous Expenditure Miscellaneous expenditure comprises preliminary expenses for software development expenses for the in-house developed software package. c) Impairment i. is made to recognise a diminution. Inventories Inventories of raw materials. When the grant or subsidy relates to an expense item. Government grants and subsidies Grants and subsidies from the government are recognised when there is reasonable assurance that the grant/ subsidy will be received and all attaching conditions will be complied with. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. packing materials. Sales Tax and VAT deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability arised during the year.) b) Depreciation Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd. The Company accrues for excise duty liability in respect of manufactured finished goods/intermediary inventories lying in the factory. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors.

Cost is ascertained on First-in-First out ('FIFO') basis and includes all applicable costs incurred in bringing goods to their present location and condition. net Add: Provision for dimunition in value of Investments Add: Remuneration debited to Profit and loss account Remuneration Commission Net profit as per Section 198 of the Act 490.722 30.101 9.999 48. B) Earnings in foreign currency FOB value of exports C) Expenditure in foreign currency (cash basis) a) CIF value of imports i) ii) b) c) Raw material/components Capital goods 2. Excise duty Excise duty on turnover is reduced form turnover.838 529.026 3. 2006 Number of non-resident shareholders Number of equity shares held on which dividend was due Amount remitted * * Remitted in equivalent United States Dollars 3 2.388 375.) 2006 Calculation of net profit in accordance with Section 349 of the Act Profit before tax Add: (Profit) / Loss on discarded/sale of fixed assets. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date.148 20.838 36. l) Retirement and other employee benefits Retirement benefits to employees comprise payments for gratuity. Export of goods Advance for Capital goods 13. Use of estimates The preparation of financial statements.) A) Managerial remuneration* (Contd.474 July 1. Contributions to provident fund are charged to the profit and loss account as incurred.215.323 4.419 13. separately in the Profit and Loss account. actual results could differ from these estimates. leave encashment and provident fund.419 13. Unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realised.622 m) Sales promotion items Sales promotion items are valued at cost or net realisable value.965 (817) 60.327 54.273 22. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd.130 3. n) Provisions A provision is recognised when an enterprise has a present obligation as a result of past event.130 25.247 – 493. 2004 to June 30. 2005 to June 30.215. in 000’ Amount in Foreign Currency 324. it is probable that an outflow of resources will be required to settle the obligation.257 2005 20.489 E) Amount receivable in foreign currency on account of the following Particulars Rs. Professional fees/expenses Membership & subscription o) p) D) Net Dividend remitted in foreign currency Period to which it relates July 1.388 29.000 Foreign Currency US $ US $ * Exclusive of provision for future liabilities in respect of retirement benefits (which are based on actuarial valuation done on overall Company basis). If the company has carry forward of unabsorbed depreciation and tax losses. the said asset is created by way of credit to the Profit & Loss Account and shown as MAT Credit Entitlement.101 9. Supplementary Information A) Managerial remuneration* Salaries Commission 2006 22. In the year in which the Minimum Alternate tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India. The liability for gratuity and leave encashment is provided for based on valuation by an independent actuary at the year end. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the results of operations during the year end. Although these estimates are based upon management's best knowledge of current events and actions.000 346.161 54 Jyothy Laboratories Limited Annual Report 2005-6 55 .479 14.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Excise duty relating to the difference between the opening stock and closing stock is recognised as income/expense as the case may be. in conformity with generally accepted accounting principles.707 215 111 73.722 2.) will be available against which such deferred tax assets can be realised. whichever is lower. SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.650 – 5.637 Total remuneration paid to the directors is within the limits specified in schedule XIII of the Act. in respect of which a reliable estimate can be made. deferred tax assets are recognised only if there is virtual certainty that such deferred tax assets can be realised against future taxable profits. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the period. 2005 3 2.530 2005 286. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd.199 10.

001.759 2. diswash bar and soaps including ayurvedic soaps.457 63.295 2. Ltd.066 1.901 4.644 172. 3. Sales quanties are netted off for sales promotion items and other adjustments 5.899 6.431 Amount 118.396 – – 201. Installed Capacity and Actual Production Unit Detergents & Soaps Home Care Tons/Ltrs No (1000's) Licenced Capacity* 2006 NA NA 2005 NA NA Installed Capacity* 2006 151.402 6.842 996.477 Sales Quantity 3.628 1. Segment revenue and result The income/ expense that are not directly attributable to the business segments are shown as unallocated corporate costs.814 794.394 2.918 952.019.) F) List of Small Scale Industrial undertakings to whom amounts are outstanding for more than 30 days as on June 30.487 115.788 87.522 25.303 – – 30.299. The above Raw and Packing materials are all indigeneously purchased.011 23. The export turnover is not significant in the context of total turnover. Segments have been identified taking into account the nature of the products.446 27..901 Value 2006 64.046 1.058 1.309 65.661 1.518 972. Latest Packaging.541 80.086 1.151 – – 66.592 – 3. K) It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature. the organisation structure and the internal reporting system.360 156.717 9. Dynamic Material Handling Systems. Opening and Closing Inventories.462 38.462 6.162.042 2005 61.426 1.269 80. there are no reportable geographical segments.866 38.541 Amount 6.107 9. purchases and sales in respect of each class of goods manufactured and traded Item Traded / Mfg Units Opening Inventory Quantity Home Care Traded Dozen 212 288 Traded Nos 23. inventories.755 11.006 167.899 30.991 Segment Reporting Business segments The primary segment of the Company has been determined on the basis of business segment. each being less than 10% in value of the total. 2006. Swan Packaging.229 156.771 526.635 183.984 882 1053 119 4.Soaps and Detergents and Home Care.823) 1.870 49.699 Purchases Quantity 4.894 2005 1. Kavitha Offset Printers.187 Others – – I) Licensed Capacity.208 28.953 476.302 Traded Kgs 27 76 Manufactured Kgs 1.000 2005 162.478 Closing Inventory Quantity 510 212 67. All Figures are in 1000's Total 34.038 SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.229 2005 16. The Company is organised into two business segments .804.866 11. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd.783 34.084.081.065 52.525 5.303 1.000 Actual Capacity 2006 26.008 171.415 174.216 15.219 1.699 180.083 27 302 30. production.252 60.850 – 113.497 – – – 19.962 2.215 Amount 129.216 – 1.027 25..310 34.884 936.641 2005 914 2.118 – – 80.776 1.728 12.009 180.057 2. advances and fixed All values are in 1000's Annual Report 2005-6 57 Jyothy Laboratories Limited . Gogia Chemical Industries Pvt.829 751.092 34. Safety Poly Sacks.497 509 – 1.027 3.309 Amount 13.867 1. * As certified by the management J) Consumption of Raw and packing material Units Group Synthetic Dye Dyes & Chemicals Fatty Oils & Perfumes Plastic Others Packing materials Tons Tons Tons Tons Tons Tons Rolls (1000s) No (1000s) Total 1.319 167.476 107 4.336 – – – 253 – – 618 – 1.779 H) Donations to political parties Name of the Party Communist Party of India (Marxist) DMK Others Amount 22 3 7 32 Soaps & Detergents Manufactured Nos 9. Parbhat Industries.880 152 54 100.176 31.652 61.771 54. NMT Packaging Pvt.605 17.976 775 84 62 99.771 6.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.033 96.) 2.185 44.779 92. Allied Electrical Services.364 28.773 894.406 27.086 109 – 74. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd. Wheel Packaging.274 148.096. Figures in italics are in respect of the previous year 3.418 – 936. Segment assets and liabilities Segment assets include all operating assets used by a segment and consist principally of debtors. As such.383 1. Secondary segment The Company mainly caters to the needs of the domestic market. Home Care products include incense sticks and mosquito coils. 56 Consumption Quantity 2006 985 2.653.245 1. G) Payment to auditors 2006 Statutory audit fees Tax audit fees Other services Out of pocket expenses 2. fabric detergents.928 2. the differing risks and returns.524.531 9.768 (10. Ltd.835 11.190 Production Quantity – – – – 171. Soaps and Detergents includes fabric whiteners.522 – 27 1.834 1.

000) 286.772 8.949 2.392.085. P.180) 60. Travancore Trading Corp.557) – – (11) (1.783) (73.965 1.913 18. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liability.Rs 80.220 78.725 13.341 1.068 (60.515. P.130 378. Assets at corporate level are not allocable to segments on a reasonable basis and thus the same have not been allocated.661 – 13.151 1.095 41.287 6.387 (6.582 3.290 – 18.894 71. Related party Disclosures a) Parties where control exists Individual having control M. Sree Guruvayurappan Agencies M. Divakaran (Director) M.349 93.964 51.520.590 – 490.367 32.544 461.719 106.643 102.152 454.203) 525.375 346.875.763 – 62.e. M.152.500) – (103.Provision for dimunition in investments Profit before tax Provision for tax Profit after tax Other Information Segment assets Segment liabilities Addition to fixed assets including capital work in progress Depreciation Impairment loss Non cash expenses other than depreciation 48.807) 41.f.578) 215. October 24. R.724) (182.255 – 121.349 1.484 133. Jyothy (Director w.169 (113.026 (89.137.000 1.434 (182.293 1.653. P.714 – 94.845 972.807) 41.094) 81. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd.054 328.806.801 – – 1. 58 Jyothy Laboratories Limited Annual Report 2005-6 59 .000) (net of trade discount of Rs 17.Rs Nil pertaining to previous year sales) Results Unallocated expenditure Income Interest & finance expenses (Loss)/ Profit before prior period item.308) 2.833 59. exceptional item and tax Prior period item Advertisement expenses Prior period item Trade discount expenses Exceptional item . Sidharthan M. Agencies Tamil Nadu Distributors Proprietor .160 11. Ramachandran Wholly Owned Subsidiary Sri Sai Home Care Products (P) Limited b) Related party relationships where transactions have taken place during the year Relatives of individual having control are partners in the firm Beena Agencies Quilon Trading Co.965 (71. P.308) – – (113.343 (1.Relative of individual having control Deepthy Agencies Sahyadri Agencies Sreehari Stock Suppliers Sujatha Agencies Shanti Industries Relative of individual having control Sahyadri Agencies Ltd. Ullas Kamath.090 30.522 – – – – – – – 38.304 39.) assets.958) 400.215 2.312 (709) 3.463 164.) 6.849) – (28.094) 81.312 (709) 2005 Home care 2006 2005 Others 2006 2005 Unallocated 2006 2005 Total 2006 2005 SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.478 102.081 39.422 1. 2005 .934 (41.295 627.478 420.019.616 – 83.544 621. Information about Business Segments Soaps and Detergents 2006 Revenue (net of returns pertaining to earlier years Rs Nil.341 282. Santhakumari Key management personnel (includes directors of the Company) K. 2005) Ananth Rao T M.602 (3.852 44. 2005 .JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.000 12. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd. G.175 21.245 17.343 (1.541.713 3.938 70. Deputy Managing Director As the Managing Director of the Company is an individual having control and hence not separately disclosed as a Key management personnel.093.

which expire at various dates.Lease rental expense for the year ended June 30.979 (2005 .101 3. Advance to suppliers include Rs 8. the Company had issued credit notes aggregating Rs 80.525). the advances given are considered good and no provision has been made against these advances.200 1.502 1.755 capital account and not provided for 69.295 66 10.883 341 44. to parties in which the directors are interested.459 669 1.135 59. Considering the nature of transactions.) d) Related party balances 2006 Amounts receivable 114.931 50.200 51 15. Santhakumari Purchase of Fixed Assets M.200 – 2.986 9.408 6. Capital Commitments (Net of Advances) 2006 Estimated amount of contracts remaining to be executed on 2005 11.659 10.122 43. the payments in respect of which were received on the following day or on the next day (maximum outstanding at any point of time was Rs 1.510 23.371 7.399 7.341 55.814 7. Santhakumari Key management personnel Remuneration Commission 98.010 2005 SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd.819 39.943 5.910 – 64.805 59. aggregating Rs 85.) c) Transactions with related parties during the year 2006 Wholly owned subsidiary Purchase of finished goods Individual having control Remuneration Commission Assignment of premises under construction (at book value) Purchase of Fixed Assets Dividend Enterprises in which relatives are interested Sale of finished goods Beena Agencies Sree Guruvayurappan Agencies Sreehari Stock Suppliers Sujatha Agencies Tamil Nadu Distributors Others Claims for reimbursement for sales promotion expenses Sreehari Stock Suppliers Sujatha Agencies Tamil Nadu Distributors Beena Agencies Others Write off of old outstanding Shanti Industries Relatives of individuals having control Remuneration M.648 600 1.654 155. 2006 was Rs 11.633 – – 5.295 300 1.854 20.618 3. P. Sidharthan M. Divakaran Ananth Rao T Dividend Assignment of premises under construction (at book value) M.058 35.800 7.350 2005 8.180 10.122 – 35.251 Subsidiary Company Enterprises in which relatives of individual having control are interested Amounts payable Individual having control Key management personnel Relatives of individual having control Enterprises in which relatives of individual having control are interested 7.500 (2005 .947 69.487. Accordingly.633 3. The recalled stocks were destroyed.394 1. 5.943 7.947 9.902 59.566 58.321 35.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30.800 5.311 – – 8.069 10. R.790 1. During the previous year.073 47.049 44.648 11.000 for returns pertaining to sales of earlier years.Rs 8. 10. 11. P. 2006 Future lease payment under operating leases are as follows Payable not later than one year Payable later than one year and not later than five years Payable later than five years 8. the Company had initiated voluntary withdrawal of one of its product. the Company believes that this is sufficient compliance with Section 297 of the Companies Act.834 42.017 60.966 168.469 2.081 284 Operating Leases The Company has entered into lease agreements for premises. Consequently.705 1.224 2005 67.472).050 5.043 48.886 2. Jyothy M. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd.755 – 7.843 1.500) for which the Company is in the process of entering into an arrangement for the recovery of advances. During the year.200 1.Rs 9. the Company has made sale of goods.008 5. G. Annual Report 2005-6 61 60 Jyothy Laboratories Limited .670 17. 1956. G.

Capital Raised during the year (Amount in Rs. 0 1 1 0 F A B R I C I W H T O P I T E N E R L A N T I O N S M O S Q U W A S H I R E P E L N G R E P A R A T 62 Jyothy Laboratories Limited Annual Report 2005-6 63 . 3 2 1 4 6 3 Total Expenditure Profit/Loss after Tax Dividend Rate (%) 2 6 4 1 0 5 0 0 0 1 5 6 2 9 8 5 V. The pre-tax discount rate used for evaluation of the present value was 8% per annum. Product Description N A 3 3 4 0 8 2 0 2 8 0 9 0 0 0 . Registration Details Registration No.) 12. Ramchandran Chairman and Managing Director K. Batliboi & Associates Chartered Accountants For Jyothy Laboratories Limited III. the Company has recorded accumulated impairment loss of Rs 25. L.128) as an adjustment to the general reserves. November 8.JYOTHY LABORATORIES LIMITED SCHEDULE TO THE FINANCIAL STATEMENTS For the year ended June 30. Position of mobilisation and deployment of Funds (Amount in Rs. Generic Names of Principal Products/Services of Company Item Code No. R. During the previous year. Thousands) Turnover/Gross Receipt (including other incomes) Profit/Loss before Tax Basic earning per share (Rs. P.) 3 1 4 4 9 5 0 0 5 4 0 . SCHEDULE TO THE FINANCIAL STATEMENTS Balance Sheet Abstract and Company’s General Business Profile I. Such impairment losses were due to adverse market conditions for the one of its Cash Generating Unit pertaining to the 'Soaps and Detergents' segment. In accordance with the transitional provisions of the new Accounting Standard (AS 28) relating to 'Impairment of Assets' that became effective from April 1. Bansal Company Secretary Application of Funds Net Fixed Assets Net Current Assets Accumulated Losses IV. Thousands) Sources of Funds Paid-up Capital Reserves & Surplus Share application pending allotement 2 4 7 5 2 2 5 8 N 6 5 I 9 0 L Secured Loans Unsecured Loans Deffered Tax Liability 5 1 7 1 3 1 6 7 1 6 4 Per Sudhir Soni Partner Membership No. Thousands) Public Issue Bonus Issue N N I I L L Rights Issue Private Placement N N I I L L Signatures to Schedules 1 to 22 As per our report of even date For S. The prior year figures have been reclassified where necessary to confirm with current year's presentation. . Ullas Kamath Deputy Managing Director M. 1 9 6 0 5 9 7 1 7 N 3 6 I 7 8 L Investments Misc. 13. Expenditure 1 7 0 N 6 I 5 L Performance of Company (Amount in Rs. 2006 22 NOTES TO THE FINANCIAL STATEMENTS (Contd. Balance Sheet Date 3 1 Date 1 0 2 6 8 2 6 0 5 0 1 6 State Code 1 1 Month Year II. 41870 Mumbai. 2004. depreciation/ impairment on assets includes impairment losses representing the amount by which the carrying amount of the asset exceeds its recoverable amount. 2006 M.872 (net of deferred tax credit of Rs 13.

L. 2006 Mumbai K. Ramchandran Chairman and Managing Director November 8.127 (2. Financial Year of the Subsidiary Company ended on 3.JYOTHY LABORATORIES LIMITED Statement Pursuant To Section 212 of Companies Act.2006 ii) For the previous financial years of subsidiary since it became subsidiary of Jyothy Laboratories Limited Changes in the interest of Jyothy Laboratories Ltd between the end of the subsidiary's Financial Year and 30th June 2006 Nos Of Shares acquired Material changes between the end of the subsidiary's financial year and 30th June 2006 I) Fixed asset II) Investments III) Moneys lent by the subsidiary IV) Moneys borrowed by the subsidiary company other then for meeting current liabilities Nil 11 Nil Nil Nil M.039.580) Nil Nil 2.2006 ii) For the previous financial years of subsidiary since it became subsidiary of Jyothy Laboratories Limited b) Dealt with in the accounts of Jyothy Laboratories Limited i) For the subsidiary's financial year ended March 31.550 100% Rs Thousands 1. Net aggregate amount of profits/(losses) of subsidiary's company so far it concerns the members of Jyothy Laboratories Limited a) Not dealt with in the accounts of Jyothy Laboratories Limited i) For the subsidiary's financial year ended March 31. Ullas Kamath Deputy Managing Director M. 1956 1. Bansal Company Secretary 64 Jyothy Laboratories Limited . Name of the Subsidiary Company Sri Sai Homecare Products Private Limited 31st March 2006 1. Extent of the holdings 4. P. Numbers of shares in the subsidiary company held by Jyothy Laboratories Ltd at above date.

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