Placement Document

Not for Circulation

Serial No.______

JYOTHY LABORATORIES LIMITED

(Jyothy Laboratories Limited (the Company), with CIN L24240MH1992PLC128651, incorporated in the Republic of India with limited liability under the
Companies Act, 1956, as amended (the Companies Act))
Issue of up to 8,063,200 Equity Shares of face value Re. 1 each at a price of Rs. 282.62 each (Issue Price) including a premium of Rs. 281.62 per Equity
Share, aggregating up to Rs. 22,788.22 lakhs (the Issue).
The Equity Shares of our Company are listed on the Bombay Stock Exchange Limited (the BSE) and The National Stock Exchange of India Limited (the
NSE). The closing prices of the Equity Shares on the BSE and the NSE on August 9, 2010 were Rs. 279.25 and Rs. 279.85 per Equity Share, respectively. Inprinciple approvals under Clause 24(a) of the Listing Agreements for listing of Equity Shares have been received. Applications will be made for obtaining listing
and trading approvals of the Equity Shares offered through this Placement Document to the BSE and the NSE (collectively, the Stock Exchanges). The Stock
Exchanges assume no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the Equity Shares
to trading on the Stock Exchanges should not be taken as an indication of the merits of the business of our Company or the Equity Shares.
A copy of this Placement Document has been delivered to the Stock Exchanges. This Placement Document has not been reviewed by the Securities and
Exchange Board of India (the SEBI), the Reserve Bank of India (the RBI), the Stock Exchanges or any other regulatory or listing authority and is intended
only for use by Qualified Institutional Buyers (the QIBs), as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended (the ICDR Regulations). The Placement Document will be filed with the Stock Exchanges and delivered to the
SEBI for record purposes. This Placement Document has not been and will not be registered as a prospectus with the Registrar of Companies in India, will not
be circulated or distributed to the public in India or any other jurisdiction, and will not constitute a public offer in India or any other jurisdiction.
INVESTMENTS IN EQUITY SHARES INVOLVE A DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THIS
ISSUE UNLESS THEY ARE PREPARED TO TAKE THE RISK OF LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE
INVESTORS ARE ADVISED TO CAREFULLY READ THE SECTION RISK FACTORS BEFORE TAKING AN INVESTMENT DECISION IN
THIS ISSUE. EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT ITS OWN ADVISORS ABOUT THE PARTICULAR
CONSEQUENCES OF AN INVESTMENT IN THE EQUITY SHARES BEING ISSUED PURSUANT TO THIS PLACEMENT DOCUMENT.
ISSUE IN RELIANCE UPON CHAPTER VIII OF THE ICDR REGULATIONS
THIS ISSUE AND THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING DONE IN RELIANCE ON CHAPTER VIII THE ICDR
REGULATIONS. THIS PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR AND DOES NOT CONSTITUTE AN
OFFER OR INVITATION OR SOLICITATION OF AN OFFER TO THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS
WITHIN OR OUTSIDE INDIA.
YOU ARE NOT AUTHORIZED TO AND MAY NOT (1) DELIVER THIS PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2)
REPRODUCE THIS PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER. ANY DISTRIBUTION OR REPRODUCTION OF THIS
PLACEMENT DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY WITH THIS INSTRUCTION MAY
RESULT IN A VIOLATION OF THE ICDR REGULATIONS OR OTHER APPLICABLE LAWS OF INDIA AND OTHER JURISDICTIONS.
Invitations, offers and sales of Equity Shares shall only be made pursuant to this Placement Document together with the respective Application Form and
Confirmation of Allocation Note. See Issue Procedure. The distribution of this Placement Document or the disclosure of its contents without the prior consent
of our Company to any person, other than QIBs and persons retained by QIBs to advise them with respect to their purchase of Equity Shares is unauthorized and
prohibited. Each prospective investor, by accepting delivery of this Placement Document, agrees to observe the foregoing restrictions and make no copies of this
Placement Document or any documents referred to in this Placement Document.
The information on the website of our Company or any website directly or indirectly linked to the website of our Company does not form part of this Placement
Document and prospective investors should not rely on such information contained in, or available through, any such website.
The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold within the United States (as defined in Regulation S ("Regulation S") under the Securities Act). The Equity Shares are only being
offered and sold outside the United States in offshore transactions in reliance on Regulation S. For further details, please see "Distribution
Restrictions" and "Transfer Restrictions" in this Placement Document.
This Placement Document is dated August 13, 2010.
Book Running Lead Managers

Kotak Mahindra Capital Company Limited

1st Floor Bakhtawar
229, Nariman Point
Mumbai 400 021

Enam Securities Private Limited

801/ 802, Dalamal Towers
Nariman Point
Mumbai 400 021

TABLE OF CONTENTS

NOTICE TO INVESTORS ......................................................................................................................................... 3

REPRESENTATIONS BY INVESTORS ................................................................................................................. 5
OFFSHORE DERIVATIVE INSTRUMENTS ......................................................................................................... 9
DISCLAIMER CLAUSE OF THE STOCK EXCHANGES ................................................................................. 10
PRESENTATION OF FINANCIAL AND OTHER INFORMATION ................................................................ 11
INDUSTRY AND MARKET DATA........................................................................................................................ 12
FORWARD-LOOKING STATEMENTS ............................................................................................................... 13
ENFORCEMENT OF CIVIL LIABILITIES ......................................................................................................... 14
EXCHANGE RATES ................................................................................................................................................ 15
DEFINITIONS AND ABBREVIATIONS ............................................................................................................... 16
SUMMARY OF BUSINESS ..................................................................................................................................... 19
SUMMARY OF THE ISSUE ................................................................................................................................... 24
SUMMARY FINANCIAL INFORMATION .......................................................................................................... 26
RISK FACTORS ....................................................................................................................................................... 32
MARKET PRICE INFORMATION AND OTHER INFORMATION CONCERNING THE EQUITY
SHARES ..................................................................................................................................................................... 48
USE OF PROCEEDS ................................................................................................................................................ 50
CAPITALIZATION STATEMENT ........................................................................................................................ 51
DIVIDENDS ............................................................................................................................................................... 52
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS ........................................................................................................................................................... 53
INDUSTRY ................................................................................................................................................................ 71
BUSINESS .................................................................................................................................................................. 74
BOARD OF DIRECTORS AND KEY MANAGEMENT PERSONNEL ............................................................ 88
ORGANIZATIONAL STRUCTURE AND MAJOR SHAREHOLDERS ........................................................... 97
ISSUE PROCEDURE ............................................................................................................................................. 100
PLACEMENT .......................................................................................................................................................... 108
DISTRIBUTION AND SOLICITATION RESTRICTIONS .............................................................................. 110
TRANSFER RESTRICTIONS ............................................................................................................................... 118
THE SECURITIES MARKET OF INDIA............................................................................................................ 119
DESCRIPTION OF THE SHARES ....................................................................................................................... 122
TAXATION.............................................................................................................................................................. 125
INDEPENDENT ACCOUNTANTS ...................................................................................................................... 129
LEGAL MATTERS ................................................................................................................................................ 130
LIMITED REVIEW REPORT .............................................................................................................................. 131
FINANCIAL STATEMENTS ................................................................................................................................ 135
GENERAL INFORMATION ................................................................................................................................. 188
DECLARATION ..................................................................................................................................................... 189

NOTICE TO INVESTORS
We have furnished and accept full responsibility for all of the information contained in this Placement
Document and confirm that to our best knowledge and belief, having made all reasonable enquiries, this
Placement Document contains all information with respect to us and the Equity Shares that is material in the
context of the Issue. The statements contained in this Placement Document relating to us and the Equity Shares
are, in every material respect, true and accurate and not misleading. The opinions and intentions expressed in
this Placement Document with regard to us and the Equity Shares are honestly held, have been reached after
considering all relevant circumstances, are based on information presently available to us and based on
reasonable assumptions. There are no other facts in relation to us and the Equity Shares, the omission of which
would, in the context of the Issue, make any statement in this Placement Document misleading in any material
respect. Further, all reasonable enquiries have been made by us to ascertain such facts and to verify the accuracy
of all such information and statements. Kotak Mahindra Capital Company Limited and Enam Securities Private
Limited (the Book Running Lead Managers) have not separately verified the information contained in this
Placement Document (financial, legal or otherwise). Accordingly, neither the Book Running Lead Managers nor
any of their respective shareholders, employees, counsel, officers, directors, representatives, agents or affiliates
make any express or implied representation, warranty or undertaking, and no responsibility or liability is
accepted by the Book Running Lead Managers as to the accuracy or completeness of the information contained
in this Placement Document or any other information supplied in connection with the Equity Shares. Each
person receiving this Placement Document acknowledges that such person has not relied on either the Book
Running Lead Managers or on any of their shareholders, employees, counsel, officers, directors, representatives,
agents or affiliates in connection with its investigation of the accuracy of such information or its investment
decision, and each such person must rely on its own examination of our Company and the merits and risks
involved in investing in the Equity Shares.
No person is authorized to give any information or to make any representation not contained in this Placement
Document and any information or representation not so contained must not be relied upon as having been
authorized by us or on our behalf or by or on behalf of the Book Running Lead Managers. The delivery of this
Placement Document at any time does not imply that the information contained in it is correct as of any time
subsequent to its date.
The Equity Shares issued pursuant to the Issue have not been approved, disapproved or recommended by
the U.S. Securities and Exchange Commission, any state securities commission in the U.S. or the securities
commission of any non-U.S. jurisdiction or any other U.S. or non-U.S. regulatory authority. No authority
has passed on or endorsed the merits of the Issue or the accuracy or adequacy of this Placement
Document. Any representation to the contrary is a criminal offence in the U.S. and may be a criminal
offence in other jurisdictions.
The distribution of this Placement Document and the offering of the Equity Shares may be restricted by law in
certain countries or jurisdictions. As such, this Placement Document does not constitute, and may not be used
for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized, or to any person to whom it is unlawful to make such offer or solicitation. In particular, no
action has been taken by our Company and the Book Running Lead Managers which would permit an offering
of the Equity Shares or distribution of this Placement Document in any country or jurisdiction, other than India,
where action for that purpose is required. Accordingly, the Equity Shares may not be offered or sold, directly or
indirectly, and neither this Placement Document nor any offering material in connection with the Equity Shares
may be distributed or published in or from any country or jurisdiction except under circumstances that will
result in compliance with any applicable rules and regulations of any such country or jurisdiction.
In making an investment decision, investors must rely on their own examination of our Company and the terms
of the Issue, including the merits and risks involved. Investors should not construe the contents of this
Placement Document as legal, tax, accounting or investment advice. Investors should consult their own counsel
and advisors as to business, legal, tax, accounting and related matters concerning the Issue. In addition, neither
our Company nor the Book Running Lead Managers are making any representation to any offeree or purchaser
of the Equity Shares regarding the legality of an investment in the Equity Shares by such offeree or purchaser
under applicable laws or regulations.
Each purchaser of the Equity Shares in the Issue is deemed to have acknowledged, represented and
agreed that it is eligible to invest in India and in our Company under Indian law, including Chapter VIII
of the ICDR Regulations, and is not prohibited by SEBI or any other statutory authority from buying,

selling or dealing in securities.

The information on our Companys website or the respective websites of each of the Book Running Lead
Managers does not constitute nor form part of this Placement Document. Prospective investors should not rely
on the information contained in, or available through such websites. This Placement Document contains
summaries of terms of certain documents, which are qualified in their entirety by the terms and conditions of
such documents.
Each purchaser of Equity Shares in the Issue also acknowledges that it has been afforded an opportunity to
request from us, and review information relating to us and the Equity Shares.
References herein to you or your is to the prospective investors in the Issue.

REPRESENTATIONS BY INVESTORS
By subscribing to any Equity Shares in the Issue, you are deemed to have represented, warranted, acknowledged
and agreed to our Company and the Book Running Lead Managers, as follows:
You are a Qualified Institutional Buyer as defined in Regulation 2(1)(zd) of the ICDR Regulations,
having a valid and existing registration under applicable laws and regulations of India, and undertake to
acquire, hold, manage or dispose of any Equity Shares that are Allocated to you in accordance with
Chapter VIII of the ICDR Regulations;
If you are not a resident of India, but are a QIB (other than a multilateral and bilateral financial
institution), you are a FII (including a sub-account other than a sub-account which is a foreign
corporate or a foreign individual) or a FVCI, and have a valid and existing registration with the SEBI
under the applicable laws in India;
If you are Allotted (as defined herein) Equity Shares pursuant to the Issue, you shall not, for a period of
one year from the date of Allotment (as defined herein), sell the Equity Shares so acquired except on
the Stock Exchanges;
You have made, or been deemed to have made, as applicable, the representations and warranties as set
forth under the section Transfer Restrictions;
You are aware that the Equity Shares have not been and will not be registered under the Companies
Act, the ICDR Regulations or under any other law in force in India. The Placement Document has not
been reviewed by the SEBI, the RBI, the Stock Exchanges or any other regulatory authority and is
intended only for use by QIBs. Further, the Placement Document has not been verified or affirmed by
the SEBI or the Stock Exchanges and will not be filed or registered with the Registrar of Companies.
The Placement Document has been filed with the Stock Exchanges and will be displayed on the
websites of our Company and the Stock Exchanges. The Placement Document will be filed with the
Stock Exchanges and the SEBI for record purposes only;
You are entitled to subscribe for and acquire the Equity Shares under the laws of all relevant
jurisdictions that apply to you and you have necessary capacity, have obtained all necessary consents,
governmental or otherwise, and authorities and complied with all necessary formalities, to enable you
to commit to participation in the Issue and to perform your obligations in relation thereto (including,
without limitation, in the case of any person on whose behalf you are acting, all necessary consents and
authorizations to agree to the terms set out or referred to in the Placement Document), and will honour
such obligations;
You confirm that, either: (i) you have not participated in or attended any investor meetings or
presentations by our Company or its agents (Company Presentations) with regard to our Company or
the Issue; or (ii) if you have participated in or attended any Company Presentations: (a) you understand
and acknowledge that the Book Running Lead Managers may not have knowledge of the statements
that our Company or its agents may have made at such Company Presentations and are therefore unable
to determine whether the information provided to you at such Company Presentations may have
included any material misstatements or omissions, and, accordingly you acknowledge that the Book
Running Lead Managers have advised you not to rely in any way on any information that was provided
to you at such Company Presentations; and (b) you confirm that, to the best of your knowledge, you
have not been provided any material information relating to our Company and the Issue that was not
publicly available;
Neither our Company nor the Book Running Lead Managers or any of their respective shareholders,
directors, officers, employees, counsel, representatives, agents or affiliates are making any
recommendations to you or advising you regarding the suitability of any transactions it may enter into
in connection with the Issue and your participation in the Issue is on the basis that you are not, and will
not, up to the Allotment of the Equity Shares, be a client of the Book Running Lead Managers. The
Book Running Lead Managers or any of their respective shareholders, directors, officers, employees,
counsel, representatives, agents or affiliates do not have duties or responsibilities to you for providing
the protection afforded to their clients or customers or for providing advice in relation to the Issue and
are not in any way acting in any fiduciary capacity;

All statements other than statements of historical fact included in the Placement Document, including
those regarding our Companys financial position, business strategy, plans and objectives of
management for future operations (including development plans and objectives relating to our
Companys business), are forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other important factors that could cause actual results to
be materially different from future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on numerous assumptions
regarding our Companys present and future business strategies and environment in which our
Company will operate in the future. You should not place undue reliance on forward-looking
statements, which speak only as on the date of the Placement Document. Our Company assumes no
responsibility to update any forward-looking statements contained in the Placement Document;
You are aware of and understand that the Equity Shares are being offered only to QIBs and are not
being offered to the general public and that Allotment shall be on a discretionary basis;
You have been provided a serially numbered copy of the Preliminary Placement Document, and you
have read it in its entirety, including in particular, the section Risk Factors;
In making your investment decision, you have (i) relied on your own examination of our Company and
the terms of the Issue, including the merits and risks involved, (ii) made your own assessment of our
Company and its subsidiaries, the Equity Shares and the terms of the Issue based solely on the
information contained in the Placement Document and no other disclosure or representation by our
Company or any other party, (iii) consulted your own independent counsel and advisors or otherwise
have satisfied yourself concerning, the effects of local laws, (iv) received all information that you
believe is necessary or appropriate in order to make an investment decision in respect of our Company
and the Equity Shares, and (v) relied upon your own investigation and resources in deciding to invest in
the Issue;
Neither the Book Running Lead Managers nor any of their respective shareholders, directors, officers,
employees, counsel, representatives, agents or affiliates, have provided you with any tax advice or
otherwise made any representations regarding the tax consequences of purchase, ownership and
disposal of the Equity Shares (including the Issue and the use of proceeds from the Equity Shares). You
will obtain your own independent tax advice from a reputable service provider and will not rely on the
Book Running Lead Managers or any of their respective shareholders, directors, officers, employees,
counsel, representatives, agents or affiliates, when evaluating the tax consequences in relation to the
Equity Shares (including, in relation to the Issue and the use of proceeds from the Equity Shares). You
waive, and agree not to assert any claim against, any of our Company or the Book Running Lead
Managers or any of their respective shareholders, directors, officers, employees, counsel,
representatives, agents or affiliates, with respect to the tax aspects of the Equity Shares or as a result of
any tax audits by tax authorities, wherever situated;
You are a sophisticated investor and have such knowledge and experience in financial, business and
investments as to be capable of evaluating the merits and risks of the investment in the Equity
Shares. You are experienced in investing in private placement transactions of securities of companies
in a similar stage of development and in similar jurisdictions. You and any accounts for which you are
subscribing to the Equity Shares (i) are each able to bear the economic risk of the investment in the
Equity Shares, (ii) will not look to our Company and / or any of the Book Running Lead Managers or
any of their respective shareholders, directors, officers, employees, counsel, representatives, agents or
affiliates for all or part of any such loss or losses that may be suffered, (iii) are able to sustain a
complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect to the
investment in the Equity Shares, and (v) have no reason to anticipate any change in your or their
circumstances, financial or otherwise, which may cause or require any sale or distribution by you or
them of all or any part of the Equity Shares. You acknowledge that an investment in the Equity Shares
involves a high degree of risk and that the Equity Shares are, therefore, a speculative investment. You
are seeking to subscribe to the Equity Shares in this Issue for your own investment and not with a view
to distribution;
Where you are acquiring the Equity Shares pursuant to the Issue, for one or more managed accounts,
you represent and warrant that you are authorized in writing, by each such managed account to acquire

the Equity Shares for each managed account and make the representations, warranties,
acknowledgements and agreements herein for and on behalf of each such account, reading the
reference to you to include such accounts;
You have no rights under a shareholders agreement, no veto rights or right to appoint any nominee
director on the Board of Directors of our Company, other than the rights, if any, acquired in the
capacity of a lender not holding any Equity Shares;
You have no right to withdraw your Application after the Issue Closing Date (as defined herein);
You are eligible to apply and hold Equity Shares so Allotted together with any Equity Shares held by
you prior to the Issue. You confirm that your aggregate holding after the Allotment of the Equity
Shares shall not exceed the level permissible as per any applicable regulation;
The Application made by you would not result in triggering a tender offer under the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997, as amended (the Takeover Code);
To the best of your knowledge and belief, your aggregate holding, together with other QIBs in the Issue
that belong to the same group or are under common control as you, pursuant to the Allotment under the
Issue shall not exceed 50% of the Equity Shares Allotted. For the purposes of this representation:
a.

The expression belong to the same group shall derive meaning from the concept of
companies under the same group as provided in sub-section (11) of Section 372 of the
Companies Act.

b.

Control shall have the same meaning as is assigned to it by Regulation 2(1) (c) of the
Takeover Code.

You shall not undertake any trade in the Equity Shares credited to your Depository Participant account
until such time that the final listing and trading approvals for the Equity Shares are issued by the Stock
Exchanges;
You are aware that (i) applications for in-principle approval, in terms of clause 24(a) of the Listing
Agreement, for listing and admission of the Equity Shares and for trading on the Stock Exchanges,
were made and approval has been received from each of the Stock Exchanges; and (ii) the application
for the final listing and trading approval will be made only after Allotment of the Equity Shares in the
Issue. There can be no assurance that the final approvals for listing of the Equity Shares will be
obtained on time or at all. Our Company shall not be responsible for any delay or non-receipt of such
final approvals or any loss arising from such delay or non-receipt;
You are aware that if you are Allotted more than 5% of the Equity Shares in this Issue, our Company is
required to disclose your name and the number of Equity Shares Allotted to the Stock Exchanges and
the Stock Exchanges will make the same available on their websites and you consent to such
disclosures;
You are aware and understand that the Book Running Lead Managers have entered into a placement
agreement with our Company, whereby the Book Running Lead Managers have, subject to the
satisfaction of certain conditions set out there in severally and not jointly, undertaken to use their
reasonable efforts as placement agents of our Company, to procure subscription for the Equity Shares;
The contents of this Placement Document are exclusively the responsibility of our Company and that
neither the Book Running Lead Managers nor any person acting on their behalf has or shall have any
liability for any information, representation or statement contained in this Placement Document or any
information previously published by or on behalf of our Company and will not be liable for your
decision to participate in the Issue based on any information, representation or statement contained in
this Placement Document or otherwise. By accepting participation in the Issue, you agree to the same
and confirm that the only information you are entitled to rely on, and on which you have relied in
committing yourself to acquire the Equity Shares is contained in this Placement Document, such
information being all that you deem necessary to make an investment decision in respect of the Equity
Shares, you have neither received nor relied on any other information, representation, warranty or

statement made by, or on behalf of, the Book Running Lead Managers or our Company or any of their
respective affiliates or any other person and neither the Book Running Lead Managers nor our
Company nor any other person will be liable for your decision to participate in the Issue based on any
other information, representation, warranty or statement that you may have obtained or received;
None of the Book Running Lead Managers has any obligation to purchase or acquire all or any part of
the Equity Shares purchased by you in the Issue or to support any losses directly or indirectly sustained
or incurred by you for any reason whatsoever in connection with the Issue, including non-performance
by our Company of any of its obligations or any breach of any representations and warranties by our
Company, whether to you or otherwise;
You are eligible to invest in India under applicable law, including the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, as amended, and
any notifications, circulars or clarifications issued there under, and have not been prohibited by the
SEBI or any other regulatory authority, from buying, selling or dealing in securities;
You are a sophisticated investor seeking to purchase the Equity Shares for your own investment and
not with a view to distribution;
That (i) an investment in the Equity Shares involves a high degree of risk and that the Equity Shares
are, therefore, a speculative investment and (ii) you have sufficient knowledge, sophistication and
experience in financial and business matters so as to be capable of evaluating the merits and risk of the
purchase of the Equity Shares;
You understand that the Equity Shares have not been and will not be registered under the Securities Act
or with any securities regulatory authority of any state of the United States and accordingly, may not be
offered or sold within the United States, except in reliance on an exemption from the registration
requirements of the Securities Act;
You are, at the time the Equity Shares are purchased pursuant to Regulation S, located outside the
United States (within the meaning of Regulation S) and you are not an affiliate of our Company or a
person acting on behalf of such an affiliate;
You agree that any dispute arising in connection with the Issue will be governed by and construed in
accordance with the laws of Republic of India, and the courts in Mumbai, India shall have exclusive
jurisdiction to settle any disputes which may arise out of or in connection with the Preliminary
Placement Document and the Placement Document;
Each of the representations, warranties, acknowledgements and agreements set out above shall continue
to be true and accurate at all times up to and including the Allotment, listing and trading of the Equity
Shares in the Issue;
You agree to indemnify and hold our Company and the Book Running Lead Managers harmless from
any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in
connection with any breach of the foregoing representations, warranties, acknowledgements and
undertakings made by you in this Placement Document. You agree that the indemnity set forth in this
paragraph shall survive the resale of the Equity Shares by, or on behalf of, the managed accounts; and
Our Company, the Book Running Lead Managers, their respective affiliates and others will rely on the
truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings,
which are given to the Book Running Lead Managers on their own behalf and on behalf of our
Company, and are irrevocable.

OFFSHORE DERIVATIVE INSTRUMENTS

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 15A(1) of the SEBI (Foreign Institutional Investors) Regulations, 1995, as amended, a Foreign
Institutional Investor (FII) may issue or otherwise deal in offshore derivative instruments such as participatory
notes, equity-linked notes or any other similar instruments against underlying securities, listed or proposed to be
listed on any stock exchange in India, such as the Equity Shares in the Issue (all such offshore derivative
instruments are referred to herein as P-Notes), for which they may receive compensation from the purchasers
of such instruments. P-Notes may be issued only in favour of those entities which are regulated by any
appropriate foreign regulatory authorities in the countries of their incorporation or establishment subject to
compliance of know your client requirements. An FII shall also ensure that no further issue or transfer of any
instrument referred to above is made to any person other than such entities regulated by an appropriate foreign
regulatory authority. P-Notes have not been and are not being offered or sold pursuant to this Placement
Document. This Placement Document does not contain any information concerning P-Notes or the issuer(s) of
any P-notes, including any information regarding any risk factors relating thereto.
Any P-Notes that may be issued are not securities of our Company and do not constitute any obligation of,
claims on or interests in our Company. Our Company has not participated in any offer of any P-Notes, or in the
establishment of the terms of any P-Notes, or in the preparation of any disclosure related to the P-Notes. Any PNotes that may be offered are issued by, and are the sole obligations of, third parties that are unrelated to our
Company. Our Company and the Book Running Lead Managers do not make any recommendation as to any
investment in P-Notes and do not accept any responsibility whatsoever in connection with the P-Notes. Any PNotes that may be issued are not securities of the Book Running Lead Managers and do not constitute any
obligations of or claims on the Book Running Lead Managers. Affiliates of the Book Running Lead Managers
that are registered as FIIs may purchase, to the extent permissible under law, Equity Shares in the Issue, and
may issue P-Notes in respect thereof.
Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate
disclosures as to the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes from the
issuer(s) of such P-Notes. Neither the SEBI nor any other regulatory authority has reviewed or approved
any P-Notes or any disclosure related thereto. Prospective investors are urged to consult their own
financial, legal, accounting and tax advisors regarding any contemplated investment in P-Notes, including
whether P-Notes are issued in compliance with applicable laws and regulations.

DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

As required, a copy of the Preliminary Placement Document has been submitted to the Stock Exchanges. The
Stock Exchanges do not in any manner:
(1)

Warrant, certify or endorse the correctness or completeness of the contents of the Preliminary
Placement Document;

(2)

Warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges; or

(3)

Take any responsibility for the financial or other soundness of our Company, our Promoter, our
management or any scheme or project of our Company,

and it should not for any reason be deemed or construed to mean that the Preliminary Placement Document has
been cleared or approved by the Stock Exchanges. Every person who desires to apply for or otherwise acquire
any Equity Shares of our Company may do so pursuant to an independent inquiry, investigation and analysis
and shall not have any claim against the Stock Exchanges whatsoever, by reason of any loss which may be
suffered by such person consequent to or in connection with, such subscription/acquisition, whether by reason of
anything stated or omitted to be stated herein, or for any other reason whatsoever.

10

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this Placement Document, unless the context otherwise indicates or implies, references to you, offeree,
purchaser, subscriber, recipient, investors and potential investor are to the prospective investors in the
Issue, references to Jyothy Laboratories, the Company, our Company or the Issuer are to Jyothy
Laboratories Limited, and references to we, our or us are to Jyothy Laboratories Limited together with its
subsidiaries, joint ventures and associates.
In this Placement Document, references to U.S.$ and U.S. dollars are to the legal currency of the United
States of America, and references to Rs., Indian Rupees and Rupees are to the legal currency of India. All
references herein to the U.S. or the United States are to the United States of America and its territories and
possessions and all references to India are to the Republic of India and its territories and possessions.
The reformatted consolidated financial statements of our Company as of and for the financial years ended
March 31, 2010, March 31, 2009 and June 30, 2008, included in this Placement Document (collectively, the
Financial Statements), have been extracted from the audited consolidated financial statements, which have
been prepared in accordance with the Indian GAAP, the relevant provisions of the Companies Act and the
accounting standards prescribed by the ICAI. Indian GAAP differs in certain significant respects from
International Financial Reporting Standards (IFRS) and U.S. GAAP. Accordingly, the degree to which the
financial statements prepared in accordance with Indian GAAP included in this Placement Document will
provide meaningful information is entirely dependent on the readers level of familiarity with the respective
accounting practices.
In this Placement Document, certain monetary thresholds have been subject to rounding adjustments;
accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which
precede them.
We changed our financial year ending from June 30 to March 31 from financial year 2009. Thus, our financial
year 2009 includes nine months instead of 12 months. All references in relation to financial year 2008 shall refer
to the 12 months period ended June 30, 2008. Our financial year now ends on March 31 of each year, so all
references to the financial year 2009 are to the nine month period ended March 31, 2009 and all references to
the financial year 2010 are to the 12 months period ended March 31, 2010.

11

INDUSTRY AND MARKET DATA

Information regarding market position, growth rates and other industry data pertaining to our business contained
in this Placement Document consists of estimates based on data reports compiled by government bodies,
professional organizations and analysts, data from other external sources and knowledge of the markets in which
we compete. Unless stated otherwise, the statistical information included in this Placement Document relating to
the industry in which we operate has been reproduced from various trade, industry and government publications
and websites.
This data is subject to change and cannot be verified with certainty due to limits on the availability and
reliability of the raw data and other limitations and uncertainties inherent in any statistical survey. Neither we
nor the Book Running Lead Managers have independently verified this data and do not make any representation
regarding the accuracy of such data. We take responsibility for accurately reproducing such information but
accept no further responsibility in respect of such information and data. In many cases, there is no readily
available external information (whether from trade or industry associations, government bodies or other
organizations) to validate market-related analysis and estimates, so we have relied on internally developed
estimates. Similarly, while we believe our internal estimates to be reasonable, such estimates have not been
verified by any independent sources and neither we nor the Book Running Lead Managers can assure potential
investors as to their accuracy.

12

FORWARD-LOOKING STATEMENTS
Certain statements contained in this Placement Document that are not statements of historical fact constitute
forward-looking statements. Investors can generally identify forward-looking statements by terminology such
as aim, anticipate, believe, continue, could, estimate, expect, intend, may, objective, plan,
potential, project, pursue, should, will, would, or other words or phrases of similar import. Similarly,
statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All
statements regarding our expected financial conditions, results of operations, cash flows, business plans and
prospects are forward-looking statements. These forward-looking statements include statements as to our
business strategy, revenue and profitability, new business and other matters discussed in this Placement
Document that are not historical facts. These forward-looking statements contained in this Placement Document
(whether made by our Company or any third party), are predictions and involve known and unknown risks,
uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements expressed or implied by such
forward-looking statements or other projections. All forward-looking statements are subject to risks,
uncertainties and assumptions about us that could cause actual results to differ materially from those
contemplated by the relevant forward-looking statement. Important factors that could cause actual results to
differ materially from our expectations include, among others:
Dependence on Ujala and Maxo;
Competition;
Unfair competition;
Supermarket and hypermarket chains in India;
Raw Materials Availability;
Seasonality and monsoons in India;
Regulatory changes;
Indirect Taxation on our products;
Macroeconomic factors;
Success of our new products and services; and
other factors discussed in this Placement Document, including under the section Risk Factors and
Managements Discussion and Analysis of Financial Condition and Results of Operations.
Additional factors that could cause actual results, performance or achievements to differ materially include, but
are not limited to, those discussed under the sections, Industry and Business. The forward-looking
statements contained in this Placement Document are based on the beliefs of management, as well as the
assumptions made by, and information currently available to, management. Although we believe that the
expectations reflected in such forward-looking statements are reasonable at this time, we cannot assure investors
that such expectations will prove to be correct. Given these uncertainties, investors are cautioned not to place
undue reliance on such forward-looking statements. If any of these risks and uncertainties materialize, or if any
of our underlying assumptions prove to be incorrect, our actual results of operations or financial condition could
differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent
forward-looking statements attributable to us are expressly qualified in their entirety by reference to these
cautionary statements.

13

ENFORCEMENT OF CIVIL LIABILITIES

Our Company is a public company incorporated with limited liability under the laws of India. All of our
Companys Directors and key management personnel named herein are residents of India and all or a substantial
portion of assets of our Company are located in India. As a result, it may be difficult for investors outside India
to effect service of process upon our Company or such persons in India, or to enforce judgments obtained
against such parties outside India.
Recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the
Code of Civil Procedure, 1908, as amended (the Civil Procedure Code), on a statutory basis. Section 13 of the
Civil Procedure Code provides that a foreign judgment shall be conclusive regarding any matter directly
adjudicated upon, except: (i) where the judgment has not been pronounced by a court of competent jurisdiction;
(ii) where the judgment has not been given on the merits of the case; (iii) where it appears on the face of the
proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the
law of India in cases in which such law is applicable; (iv) where the proceedings in which the judgment was
obtained were opposed to natural justice; (v) where the judgment has been obtained by fraud, and (vi) where the
judgment sustains a claim founded on a breach of any law then in force in India.
India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments.
However, Section 44A of the Civil Procedure Code provides that a foreign judgment rendered by a superior
court (within the meaning of that section) in any jurisdiction outside India which the Government of India (the
GoI or the Government) has by notification declared to be a reciprocating territory, may be enforced in
India by proceedings in execution as if the judgment had been rendered by a competent court in India. However,
Section 44A of the Civil Procedure Code is applicable only to monetary decrees not being in the nature of any
amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalties and
does not include arbitration awards.
Each of the United Kingdom, Singapore and Hong Kong has been declared by the GoI to be a reciprocating
territory for the purposes of Section 44A of the Civil Procedure Code, but the United States of America has not
been so declared. A judgment of a court in a jurisdiction which is not a reciprocating territory may be enforced
only by a fresh suit upon the judgment and not by proceedings in execution. The suit must be brought in India
within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil
liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if
an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if
it viewed the amount of damages awarded as excessive or inconsistent with public policy. Further, any judgment
or award in a foreign currency would be converted into Rupees on the date of such judgment or award and not
on the date of payment. A party seeking to enforce a foreign judgment in India is required to obtain approval
from the RBI to repatriate outside India any amount recovered, and any such amount may be subject to income
tax in accordance with applicable laws.

14

EXCHANGE RATES
Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent
of the Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the
conversion into U.S. Dollars of any cash dividends paid in Rupees on the Equity Shares.
The following table sets forth information concerning exchange rates between the Rupee and the U.S. dollar for
the periods indicated. Exchange rates are based on the reference rates released by the RBI, which are available
on the website of the RBI. No representation is made that any Rupee amounts could have been, or could be,
converted into U.S. dollars at any particular rate, the rates stated below, or at all. On June 30, 2010, the
exchange rate was Rs. 46.60 to US$ 1.00.
Period End
Year Ended March 31:
2008
2009
2010

39.97
50.95
45.14

Quarter Ended:
June 30, 2010
March 31, 2010
December 31, 2009
September 30, 2009

46.60
45.14
46.68
48.04

(1)

Average(1)
(Rs. Per US$1.00)
40.13
46.45
47.36

45.83
34.43
46.71
48.52

High

Low

43.15
52.06
50.53

39.27
39.89
44.94

47.57
46.81
47.86
49.40

44.33
44.94
45.91
47.54

Represents the average of the reference rates released by the RBI on the last day of each month during
the period for each year and quarter presented.

(Source: www.rbi.org.in)

15

DEFINITIONS AND ABBREVIATIONS

This Placement Document uses the definitions and abbreviations set forth below which you should consider
when reading the information contained herein. References to any legislation, act or regulation shall be to such
term as amended from time to time.
Company Related Terms
Term
Jyothy Laboratories, our
Company or the Company
We or us, our or the Group
Articles/ Articles of Association
Auditors
Board
Equity Shares
JFSL
Associated Industries
Sri Sai Home Care
Memorandum / Memorandum of
Association
Registered Office
RoC

Description
Jyothy Laboratories Limited
Jyothy Laboratories Limited and its subsidiaries and joint ventures, unless the
context indicates or implies otherwise
Articles of Association of our Company
S.R. Batliboi & Associates, Chartered Accountants
Board of Directors of our Company
Equity Shares of our Company of face value Re. 1 each
Jyothy Fabricare Services Limited
Associated Industries Consumer Products Private Limited
Sri Sai Home Care Products Private Limited
Memorandum of Association of our Company
The registered office of our Company situated at Ujala House, Ramakrishna Mandir
Road, Kondivita, Andheri (East), Mumbai 400 059
The Registrar of Companies for Maharashtra situated at Everest Building, 100
Marine Drive, Mumbai 400 002

Issue Related Terms

Term
Allocated /Allocation

Allotment /Allotted
Allottees
Application
Application Form
Book Running Lead Managers/
BRLMs
CAN/Confirmation of Allocation
Note
Closing Date
Enam
Escrow Agent
Escrow Cash Account
Floor Price
Issue
Issue Price
Issue Closing Date
Issue Opening Date
Issue Size
Kotak
Pay-in Date
Placement Agreement
Placement Document

Description
The allocation of Equity Shares following the determination of the Issue Price to QIBs
on the basis of the Application Forms submitted by them, in consultation with the Book
Running Lead Managers and in compliance with Chapter VIII of the ICDR Regulations
The allotment and issue of Equity Shares pursuant to the Issue
Persons to whom Equity Shares of our Company are issued pursuant to the Issue
Indication of interest by a QIB to subscribe to the Equity Shares of our Company under
the Issue
Form (including any revisions thereof) pursuant to which a QIB indicates its interest to
subscribe for the Equity Shares of our Company under the Issue
Kotak and Enam
Note, advice or intimation confirming the Allocation of Equity Shares to QIBs after
determination of the Issue Price, and requiring such QIBs to pay the entire applicable
Issue Price for all the Equity Shares Allocated to such QIBs
On or about August 13, 2010
Enam Securities Private Limited
Axis Bank Limited
The account, Jyothy Laboratories Limited QIP Escrow Account opened with the
Escrow Agent, subject to the terms of the Escrow Agreement
The floor price of Rs. 282.61 per Equity Share, calculated in accordance with Chapter
VIII of the ICDR Regulations.
The offer and issuance of the Equity Shares to QIBs, pursuant to Chapter VIII of the
ICDR Regulations
A price per Equity Share of Rs. 282.62
August 13, 2010, the last date up to which the Application Forms shall be accepted
August 10, 2010, the date on which acceptance of the Application Forms shall be
commenced
The aggregate size of the Issue, which is Rs. 22,788.22 lakhs
Kotak Mahindra Capital Company Limited
The last date specified in the CAN for payment of application monies by the QIBs
Agreement dated July 31, 2010 among our Company and the Book Running Lead
Managers
This Placement Document, dated August 13, 2010, issued in accordance with Chapter

16

Term
Preliminary Placement Document
QIB or Qualified Institutional
Buyer
QIP
Relevant Date
Stock Exchanges

Description
VIII of the ICDR Regulations
The preliminary placement document, dated August 10, 2010, issued in accordance with
Chapter VIII of the ICDR Regulations
A qualified institutional buyer, as defined under Regulation 2(1)(zd) of the ICDR
Regulations
Qualified Institutions Placement under Chapter VIII of the ICDR Regulations
August 10, 2010, which is the date of the meeting of our Board where our Board
decided to open the Issue
The BSE and the NSE

Conventional and General Terms or Abbreviations

Term/Abbreviation
Act
AGM
AS
BOLT
BSE
CAGR
CDSL
Civil Procedure Code
Companies Act
Competition Act
Delisting Regulations
Depositories Act
Depository

Description/ Full Form

Income Tax Act, 1961, unless the context requires otherwise
Annual General Meeting
Accounting Standards issued by the ICAI
BSE On-line Trading
Bombay Stock Exchange Limited
Compounded Annual Growth Rate
Central Depository Services (India) Limited
Code of Civil Procedure, 1908
Companies Act, 1956
Competition Act, 2002
SEBI (Delisting of Equity Shares) Regulations, 2009
Depositories Act, 1996
A depository registered with the SEBI under the SEBI (Depositories and Participants)
Regulations, 1996
DP/Depository Participant D Depository Participant as defined under the Depositories Act, 1996
FDI
Foreign Direct Investment
FEMA
Foreign Exchange Management Act, 1999
FII
Foreign Institutional Investor (as defined under the SEBI (Foreign Institutional Investors)
Regulations,1995), registered with the SEBI under applicable laws in India
Financial Year/Fiscal/FY
Period of 12 months ended March 31 of that particular year, unless the context otherwise
requires
GDP
Gross Domestic Product
GoI or Government
Government of India
ICAI
Institute of Chartered Accountants of India
ICDR Regulations
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009
IFRS
International Financial Reporting Standards
India
Republic of India
Indian GAAP
Generally accepted accounting principles followed in India
Insider Trading Regulations
SEBI (Prohibition of Insider Trading) Regulations, 1992
IT
Information technology
MoU
Memorandum of Understanding
Mutual Fund
Mutual fund registered with the SEBI under the SEBI (Mutual Funds) Regulations, 1996
NBFC
Non Banking Finance Company, as defined under applicable RBI guidelines
NECS
National Electronic Clearing Service
NSDL
National Securities Depository Limited
NSE
National Stock Exchange of India Limited
p.a.
Per annum
PAN
Permanent Account Number
PAT
Profit After Tax
RBI
Reserve Bank of India
Regulation S
Regulation S under the Securities Act
Rs. or Rupees or Indian Rupees The lawful currency of India
SAT
Securities Appellate Tribunal
SCRA
Securities Contracts (Regulation) Act, 1956
SCRR
Securities Contracts (Regulation) Rules, 1957
SEBI
Securities and Exchange Board of India
SEBI Act
SEBI Act, 1992
Securities Act
U.S. Securities Act of 1933
STT
Securities Transaction Tax
Takeover Code
SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997

17

Term/Abbreviation
U.S. GAAP
U.S. Person

Description/ Full Form

Generally accepted accounting principles followed in the U.S.
U.S. person as defined in Regulation S

Technical and Industry Related Terms

Term/Abbreviation
DEPA
FMCG
HDPE
MRP
RSP

Description/ Full Form

Di-ethyly phenyl acetamide
Fast moving consumer goods
High density polyethylene, which we use in packaging
Maximum retail price
Retail selling price

18

SUMMARY OF BUSINESS
Overview
We are a FMCG company in the fabric care, household insecticide, surface cleaning, personal care and air care
segments of the Indian market and offer branded products including fabric whitener, fabric stiffener and washing
powder, mosquito repellent, dishwashing, bath and incense products. We also offer laundry and fabric care services
through our 75.00% owned subsidiary, JFSL. Our flagship brand Ujala liquid fabric whitener had a 72.00% market
share by value in the Indian organized segment for the year ended 2010 according to A.C. Nielsen and, as per
estimates from Marketpulse-IMRBs Household Purchase Panel, it is likely that Ujala was purchased at least once
by 732.00 lakhs households during the period April 1, 2009 to March 31, 2010. This represents 33.00% of Indian
households. We believe that our brands enjoy strong association with our core values including offering value-formoney products and services to the common man.
Our key brands are Ujala, Maxo, Exo, Jeeva, Maya, Fabric Spa and Snoways. The product line for Ujala (a 27 year
old brand, used prior to the incorporation of our Company) consists of fabric whitener, fabric stiffener and washing
powder. Our Maxo product line consists of mosquito repellent coils, liquid vaporizers, aerosol sprays, creams and
wet wipes. Exos product line includes dishwashing bars and dishwashing liquid with an anti-bacterial agent,
dishwashing powder, and dish scrubbers. We produce personal care products under the Jeeva brand and market air
freshening incense sticks or agarbatti under our Maya brand. We provide laundry and fabric care services through
JFSL.
Our Ujala fabric whitener and Maxo mosquito repellent coils occupy leading positions and have significant market
shares in their respective product segments. Ujalas success led us to be ranked first in fabric whitener with a
70.70% market share in India by value for the month ended March 31, 2010. (Source A.C. Nielsen). Additionally,
Ujala fabric whitener had a retail penetration of 70.70% for the month ended March 31, 2010. (Source A.C. Nielsen).
Our Maxo mosquito repellent coils achieved a 22.20% market share in India by value for the month ended March
31, 2010. (Source A.C. Nielsen) In addition, our Exo dishwashing bar, which was launched at a national level in
October 2009, achieved a 24.10% market share in southern India by value for the month ended March 31, 2010.
(Source A.C. Nielsen)
Our branded products are present throughout urban and rural India. We have focused on the marketing and
distribution of our products in various states in India and in both rural and urban areas, targeting our various brands
and specific products and services to suit consumer needs and tastes. We have extended most of our brands
nationally. Our brands are particularly strong in southern India. For example, in rural Kerala, our Ujala fabric
whitener achieved a 98% market share by value in the year ended March 31, 2010 (Source A.C. Nielsen).
Market share information for our Ujala fabric whitener and Maxo coils in India and Exo dishwashing bar in southern
India is set forth below.

Product Categories

Year ended March 31, 2010

Value
Volume
Ujala Fabric Whitener
72.00
57.10
Maxo Coils
21.20
21.70
Exo Dishwashing Bar*
23.00
21.30
*For southern India only (Source A.C. Nielsen )

Market Share (%)

Quarter ended March 31, 2010
Value
Volume
71.00
57.50
19.90
21.00
23.10
20.70

Month ended March 31, 2010

Value
Volume
70.70
57.10
22.20
23.70
24.10
21.50

We have established a distribution network across India with a sales staff of approximately 1,400 people servicing
approximately 3,500 distributors. According to A.C. Nielsen, our Ujala fabric whitener was available in
approximately 27.00 lakhs outlets in India as on March 31, 2010. We believe that our field staff have a direct reach
of approximately 10 lakhs retail outlets.
We manufacture our products through 28 manufacturing facilities in 16 locations across India, some of which are tax
efficient units.

19

Our total consolidated net sales was Rs. 59,810.21 lakhs and Rs. 36,348.75 lakhs for the financial years ended
March 31, 2010 and 2009, respectively. Our consolidated profit after tax was Rs. 7,434.11 lakhs and Rs.3,835.97
lakhs for the financial years ended March 31, 2010 and 2009, respectively.
Strengths
We believe that we are well positioned to sustain and strengthen our position in the markets in which we compete as
well as to explore significant growth opportunities that exist in the expanding household goods sector, in both urban
and rural India. In particular, we believe that the following strengths help differentiate us from our competitors and
enable us to compete successfully in our industry:
Well-known brand identity
We believe that our portfolio of brands, including the brand images and consumer associations those brands enjoy, is
well established in Indian households and provides us with a strong platform to maintain and grow our revenues
from those brands, including through our present products, product improvements and new products under our
existing brands. In particular, we believe that our brands enjoy strong association with our core values like offering
value-for-money products and service to the common man.
The success of our Ujala fabric whitener led us to be ranked first in fabric whitener with a 72.00% market share in
India by value for the year ended March 31, 2010. (Source A.C. Nielsen). Additionally, Ujala fabric whitener had a
retail penetration of 70.70% for the month ended March 31, 2010. (Source A.C. Nielsen). In rural Kerala, our Ujala
fabric whitener achieved a 98% market share by value in the year ended March 31, 2010 (Source A.C. Nielsen). Our
Maxo mosquito repellent coils achieved a 21.20% market share in India by value for the year ended March 31, 2010.
(Source A.C. Nielsen) and received the AAA Brand Performance Award from All India Advertisers Association in
2003. In addition, our Exo dishwashing bar, (which was launched at a national level in October 2009), achieved a
24.10% market share in southern India by value for the month ended March 31, 2010. (Source A.C. Nielsen)
As our business is driven by consumer spending, we believe that our presence across India and wide customer base
ensure that we are well positioned to grow our income and extend our market share.
Local presence and wide distribution reach
We have established a distribution network across India with a sales staff of approximately 1,400 people servicing
approximately 3,500 distributors as of June 30, 2010. According to A.C. Nielsen, our Ujala fabric whitener was
available in approximately 27.00 lakhs outlets in India as on March 31, 2010. We believe that our field staff have a
direct reach of approximately 10 lakhs retail outlets.
We have a strong local focus to the production, sales and distribution of our products. Our 28 manufacturing
facilities are located in 16 locations across India while our sales offices in over 54 locations are strategically located
to ensure our local presence in key markets across India and to enable us to reduce transportation costs to the extent
possible. We also hire local production, sales and distribution employees with knowledge of local languages and
customs. We believe that our local presence and local focus give us an advantage in understanding and
communicating with our customers. Our local presence and infrastructure enhance our ability to launch new
products and extensions at the local level (on shop shelves) in a short time. We have a presence in both the urban
and rural markets, enabling us to benefit from opportunities in both markets.
Focus on the rural markets
We believe that our focus on rural markets for our products will allow us to benefit from this growing sector where,
as a result of difficulties with distribution, penetration of branded household care products has been slow. Maxo
mosquito repellent coils were marketed to Indias rural markets and became a leading coil brand in rural India where
coils are more popular than other methods as a result of unreliable electricity supply. Maxo mosquito coils ranked
first in rural India with a market share of 30.90% by volume for the month ended March 31, 2010. (Source A.C.
Nielsen). The market for FMCG in rural India is growing due to a monetary trickle-down effect from increased
urbanization. Improved rural economic conditions have resulted in consumers shifting to branded and packaged

20

products from unbranded products. For example, washing bars, detergents, household antiseptics/disinfectants and
dishwashing liquid have benefited notably from this trend.
Product Development Capabilities and Ability to Launch New Products
We believe that a key factor in our ability to succeed and to continue to sustain and strengthen our business has been
and will continue to be our ability to innovate and develop improvements to existing products and to create and
introduce new products that will meet or create customer demands that are not presently being satisfied by available
products. Towards this end, we have established an internal culture encouraging innovation and development.
Members of our product development teams undergo competency-building training programs to gain better insight
into consumer needs. In developing new products, they follow a structured process for identifying project ideas,
testing hypotheses, establishing prospects, implementing improvements and sustaining benefits. We have a research
and development (R&D) team comprising of scientists and technicians from various disciplines. We have a
product and formulation R&D centre and our R&D team aims at formulating innovative products and packaging
concepts into aesthetically appealing product offerings for the benefit of consumers. This has enabled us
successfully to identify and implement new products and product improvements and will help us to further expand
our product offerings and improve our product quality and sales.
Since incorporation, we have expanded from the manufacture and sale of Ujala fabric whitener and launched Ujala
Stiff & Shine nationally in 2008 and Exo dishwashing bar nationally in October 2009. We have launched Ujala
washing powder nationally in a phased manner.
In 2009, we expanded into providing laundry and fabric care services through JFSL, a 75.00% subsidiary of our
Company in Bengaluru and are currently exploring opportunities to expand into other cities across India.
We have acquired from the DRDO the DEPA technology, a multi-insect repellant molecule, developed by the
DRDO. We launched Maxo Military and Maxo Safe and Soft nationally in cream and wet- wipe formats using this
technology in July 2010.
We have also acquired from the DRDO a license to manufacture products based on the wool care technology
developed by the DRDO which a ready-to-use safe insecticidal spray for moth proofing to protect carpets and
woolen textiles.
Strong employee base and experienced management team
We believe that our employee base is a key competitive advantage. As of June 30, 2010, we employed a work force
of approximately 4,000 employees in India. Our senior management team has a breadth of experience in the FMCG
industry and has contributed to the growth of our business through their commitment and experience. The skills and
diversity of our employees gives us the flexibility to respond to the needs of our customers and consumers. We are
dedicated to the development of expertise and know-how of our employees and continue to invest in them through
training and skills.
Our well-qualified and experienced management team has played a key role in the development of good corporate
governance, effective internal controls and accounting policies, strong employee relations, and stable supply chain
relationships.
Our Strategy
We are driven by our vision to develop innovative brands, to tap high growth categories and to reach
underdeveloped markets and emerging categories to meet the day-to-day requirement of every Indian household. We
also seek to promote our core values that include offering value for money products to the common man. We aim to
enhance our brand identity, while at the same time pursuing growth opportunities in both the domestic and select
international markets. We intend to work toward achieving our vision and to grow our business by implementing the
following key strategies.
Leverage our established brands

21

We plan to continue to leverage the dominant market leadership of the Ujala brand with our Ujala Stiff & Shine and
Ujala washing powder products. Ujala Stiff & Shine was launched nationally in 2008 and Ujala washing powder
was launched nationally in a phased manner. We believe that the well-known brand equity of Ujala and our wide
distribution reach will help us successfully develop Ujala washing powder and Ujala Stiff & Shine as national
brands and provide scalability to both these products.
Maxo mosquito coils ranked first in rural India with a market share of 30.90% by volume for the month ended
March 31, 2010. (Source A.C. Nielsen). We plan to increase the market share and presence of our Maxo products
through urban India markets by focusing on liquid vaporizers and aerosol spray products. We have also launched
Maxo Military and Maxo Safe and Soft in cream and wet-wipe formats nationally in July 2010. In addition to Exo
dishwashing bar, we have also expanded into Exo dishwashing liquid.
Improve efficiencies and manage our costs
We seek to improve efficiencies and costs from the sourcing of the raw materials to the supply of products to
consumers. Certain areas identified by us for cost reduction include packaging design, raw material management,
improving yields and tax structuring. We set cost improvement targets each year and offer performance based
incentives to key managers to meet such targets. We believe that by aggressively seeking to cut costs throughout our
production, distribution and sales processes, we are able to sustain innovation and development and to compete
more effectively with our competitors. Additionally, we manufacture most products in-house and are in the process
of reducing our dependence on outsourcing to a minimum as we believe this helps us to reduce production costs and
manage material costs better.
Increase focus on supermarket and hypermarket sales
India has in the recent past witnessed the emergence of new supermarket and hypermarket chains. While the current
share of our revenues through these chains is not significant, it is expected that this may rise significantly in the next
few years, especially in the larger cities. In general, the trade margins and discounts expected by supermarket chains
in India are higher than traditional retail outlets. However, we believe that new supermarket and hypermarket chains
generally provide an opportunity for better merchandising and visibility and cost savings through direct sales rather
than through intermediaries and rationalization of packaging. In addition, as supermarkets and hypermarkets and
new large format retail stores seek to establish their presence across smaller cities and towns across India, we may
benefit from an increased focus on supermarket and hypermarket sales. We intend to benefit from this by this
strategy. As the presence and importance of new supermarket and hypermarket chains increases, we intend to adapt
our distribution and selling strategies to take advantage of new benefits and seek to maintain and strengthen our
brands and our sales.
Pursue selective acquisitions
We intend to make acquisitions in the future and expand inorganically by identifying acquisition opportunities as
part of our growth strategy in India. We intend to target acquisitions which will strengthen our market position in our
key product areas or our manufacturing capabilities. For example, we acquired a local fabric whitener brand called
Ruby Liquid Blue on April 19, 2007 from Messrs. Bangalore Detergents and Plastic Company for a consideration
of Rs. 100.00 lakhs. We also acquired a fabric whitener brand called More Light on May 31, 2007 from Modern
Chemical (India) & Mod Chem (India) Private Limited for a consideration of Rs. 95.00 lakhs. Additionally, through
our subsidiary JFSL, we have acquired all business undertaken in the name of Snoways Laundrers and
Drycleaners and Snoways Drycleaners from its sole proprietor, Suresh Babu by a business purchase agreement
dated December 20, 2008. We continuously evaluate acquisition opportunities that may arise from time to time.
Grow our laundry and fabric care services
We entered the laundry and fabric care services by incorporating JFSL, a 75.00% subsidiary of our Company, to
provide laundry and fabric care services at an affordable price with door-to-door facilities. We have acquired
Snoways, a chain of outlets providing laundry services, in Bengaluru with eight outlets and opened an additional 22
outlets in Bengaluru. We are currently exploring opportunities to expand into other cities across India. We presently

22

offer services to retail consumers under the brand Snoways as well as premium services under the brand Fabric Spa
and also offer services to institutional consumers such as hotels, railways, health clubs and airlines. We have a total
of five outlets under the brand Fabric Spa across Bengaluru. We also propose to own and rent uniforms to certain
institutions under the brand JFSL Rentals. We may undertake this business solely through JFSL or through JFSL in
alliance with our Company.
We expect to expand our laundry and fabric care services by using a model that involves lower investments and
capital expenditures and involves partnering with third parties. We propose to partner with third parties that provide
initial funding and utilize our technology. We believe that this will allow us scalability and enable our expansion in
different cities without excessive capital expenditure and allow us to focus on technology.

23

SUMMARY OF THE ISSUE

This summary should be read in conjunction with, and is qualified in its entirety by, the more detailed information
appearing elsewhere in this Placement Document, including the sections Risk Factors, Use of Proceeds,
Placement, Issue Procedure and Description of the Shares.
The following is a general summary of the terms of the Issue:
Issuer
Issue size
Issue Price
Eligible Investors

Equity Shares issued and

outstanding immediately
prior to the Issue
Equity Shares issued and
outstanding immediately
after the Issue
Listing

Lock-up

Jyothy Laboratories Limited

Rs. 22,788.22 lakhs comprising 8,063,200 Equity Shares
Rs. 282.62 per Equity Share
QIBs, as defined in Regulation 2(1)(zd) of the ICDR Regulations, who are outside the
U.S. and not a U.S. Person. Please see the sections Issue Procedure - Qualified
Institutional Buyers and Transfer Restrictions.
7,25,68,800 Equity Shares

8,06,32,000 Equity Shares

Applications for in-principle approval, in terms of clause 24(a) of the Listing

Agreement, for listing and admission of the Equity Shares and for trading on the Stock
Exchanges, were made and approvals have been received from each of the Stock
Exchanges. Pursuant to receipt of approval, the application for the final listing and
trading approval will be made only after Allotment of the Equity Shares in the Issue.
Our Company and the Promoter agree not to, for a period of 120 after the date of
allotment of equity shares under the Issue, (a) directly or indirectly, offer, lend, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, any Promoter Equity Shares or any securities convertible into or
exercisable for Promoter Equity Shares (including, without limitation, securities
convertible into or exercisable or exchangeable for Promoter Equity Shares which may
be deemed to be beneficially owned by the Promoter), or file any registration statement
under the U.S. Securities Act of 1933, as amended, with respect to any of the
foregoing or (b) enter into any swap or other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, any of the economic consequences
associated with the ownership of any of the Promoter Equity Shares or any securities
convertible into or exercisable or exchangeable for Promoter Equity Shares (regardless
of whether any of the transactions described in clause (a) or (b) is to be settled by the
delivery of Promoter Equity Shares or such other securities, in cash or otherwise), or
(c) deposit Promoter Equity Shares with any other depositary in connection with a
depositary receipt facility or enter into any transaction (including a transaction
involving derivatives) having an economic effect similar to that of a sale or deposit of
Promoter Equity Shares in any depositary receipt facility or publicly announce any
intention to enter into any transaction falling within (a) to (c) above; provided,
however, that the foregoing restrictions do not apply to any sale, transfer or disposition
of Promoter Equity Shares by the Promoter to the extent such sale, transfer or
disposition is required by Indian law; and
(ii)
authorizes the transfer agent to decline to transfer and/or to note stop transfer
restrictions on the transfer books and records of our Company with respect to any
Promoter Equity Shares for which the Promoter is the record holder and, in the case of
any such shares or securities for which the Promoter is the beneficial but not the record
holder, agrees to cause the record holder to cause the transfer agent to decline to
transfer and/or to note stop transfer restrictions on such books and records with respect

24

Transferability
Restrictions
Use of Proceeds

Risk Factors
Closing
Ranking

Security Codes for the

Equity Shares

to such shares or securities.

Equity Shares being Allotted pursuant to the Issue shall not be sold for a period of one
year from the date of Allotment, except on the Stock Exchanges. Please see the section
Transfer Restrictions
Net proceeds of the Issue (after deduction of fees, commissions and expenses) are
expected to total approximately Rs. 22,094.39 lakhs. Please see the section Use of
Proceeds
Please see the section Risk Factors for a discussion of factors you should consider
before deciding whether to buy the Equity Shares.
Allotment of the Equity Shares offered pursuant to the Issue is expected to be made on
or about August 13, 2010 (the Closing Date)
Equity Shares being issued shall be subject to the provisions of our Companys
Memorandum and Articles of Association and shall rank pari passu in all respects with
the existing Equity Shares, including rights in respect of dividends. The shareholders
will be entitled to participate in dividends and other corporate benefits, if any, declared
by our Company after the Closing Date, in compliance with the Companies Act, the
Listing Agreement and other applicable laws and regulations. Shareholders may attend
and vote in shareholders meetings on the basis of one vote for every Equity Share
held. Please see the section Description of the Shares.
ISIN : INE668F01031
BSE Code : 532926
NSE Code : JYOTHYLAB

25

SUMMARY FINANCIAL INFORMATION

The following summary financial information as of and for the last three financial years ended March 31, 2010,
March 31, 2009 and June 30, 2008 has been derived from our reformatted consolidated financial statements included
elsewhere in this Placement Document.
You should read the following summary financial information in conjunction with our reformatted consolidated
financial statements and the related notes and the section Managements Discussion and Analysis of Financial
Condition and Results of Operations included elsewhere in this Placement Document. Our financial statements
have been prepared in accordance with Indian GAAP and are presented in Rupees in lakhs.
REFORMATTED CONSOLIDATED BALANCE SHEET

As at March 31,
2010

As at March 31,
2009

Rs In Lacs
As at June 30,
2008

725.69
38,050.29
38,775.98
49.69

725.69
33,961.43
34,687.12
26.13

725.69
31,823.50
32,549.19
-

1,287.46
17.45
1,304.91
1,328.18

51.74
51.74
1,048.14

51.74
51.74
831.81

41,458.76

35,813.13

33,432.74

29,303.81
(5,942.44)

24,760.59
(4,723.13)

23,501.61
(4,006.92)

23,361.37
413.10

20,037.46
1,103.60

19,494.69
938.58

23,774.47
1.29

21,141.06
23.28

20,433.27
51.64

7,303.56
7,072.95
12,271.60
114.48
3,397.73
30,160.32

4,702.41
4,289.82
10,193.30
30.84
2,181.55
21,397.92

4,785.98
2,540.16
9,600.28
22.20
1,888.20
18,836.82

7,860.80
4,616.52
12,477.32

4,222.84
2,533.51
6,756.35

3,680.68
2,215.53
5,896.21

SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital
Reserves and surplus
MINORITY INTEREST
LOAN FUNDS
Secured Loans
Unsecured loans
DEFERRED TAX LIABILITY, NET

APPLICATION OF FUNDS
FIXED ASSETS
Gross Block
Less: Accumulated depreciation, amortisation
and impairment
Net Block
Capital work-in-progress (including capital
advances)
INVESTMENTS
CURRENT
ASSETS,
LOANS
AND
ADVANCES
Inventories
Sundry debtors
Cash and bank balances
Other current assets - Sales promotion items
Loans and advances
Less:
CURRENT
PROVISIONS
Current liabilities
Provisions

LIABILITIES

AND

NET CURRENT ASSETS

26

MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)

As at March 31,
2010
17,683.00
-

As at March 31,
2009
14,641.57
7.22

As at June 30,
2008
12,940.61
7.22

41,458.76

35,813.13

33,432.74

Notes to accounts

27

JYOTHY LABORATORIES LIMITED

REFORMATTED CONSOLIDATED PROFIT AND LOSS ACCOUNT

INCOME
Sales (Net of trade discount)
Less: Sales tax
Less: Excise duty
Net sales
Income from Services
Other income
EXPENDITURE
Material costs
(Increase)/ decrease in inventories
Excise duty
Employee costs
Other expenses
Depreciation, amortisation and impairment
Interest and finance charges
PROFIT BEFORE EXCEPTIONAL ITEMS AND
TAX
Exceptional Items
- Other Exceptional Income (refer note 15 of schedule 21)
PROFIT BEFORE TAX
Provision for tax
- Current tax
- Current tax - Share of Joint Ventures
- Deferred tax charge
- Deferred tax charge - Share of Joint Ventures
- Fringe benefit tax
- (Excess) / Short provision for current tax and deferred
tax of earlier year
PROFIT AFTER TAX AND BEFORE MINORITY
INTEREST
Minority Interest (share in loss)
NET PROFIT FOR THE YEAR / PERIOD
PROFIT AND LOSS ACCOUNT, beginning of the
year / period
PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATIONS:
Proposed dividend
Dividend tax on proposed dividend
Transfer to general reserves
PROFIT AND LOSS ACCOUNT, end of the year /

28

April 1, 2009
to March 31,
2010

July 1, 2008 to
March 31, 2009
(9

Rs In Lacs
July 1, 2007 to
June 30, 2008
(12

(12 Months)

Months)

Months)

64,579.10
(4,167.52)
(1,017.26)
59,394.32
415.89
1,780.23
61,590.44

39,527.87
(2,317.92)
(987.15)
36,222.80
125.95
761.01
37,109.76

41,064.56
(2,149.80)
(959.00)
37,955.76
789.75
38,745.51

32,254.40
(534.78)
178.53
7,538.40
11,192.83
1,236.55
169.54
52,035.47
9,554.97

19,596.17
269.97
158.25
4,729.96
6,718.70
748.31
70.93
32,292.29
4,817.47

18,918.12
(652.81)
331.32
5,074.00
8,187.18
797.54
68.47
32,723.82
6,021.69

9,554.97

4,817.47

632.61
6,654.30

1,886.60
280.04
(19.11)

709.61
216.33
77.14
77.29

1,208.00
0.20
217.41
2.78
91.86
146.52

7,407.44

3,737.10

4,987.53

26.67

98.87

7,434.11
401.93

3,835.97
264.00

4,987.53
974.51

7,836.04

4,099.97

5,962.04

2,902.75
482.11
4,000.00

1,451.38
246.66
2,000.00

1,451.38
246.66
4,000.00

April 1, 2009
to March 31,
2010

July 1, 2008 to
March 31, 2009
(9

July 1, 2007 to
June 30, 2008
(12

451.18

401.93

264.00

10.24

5.29

6.87

1
72,568,800

1
72,568,800

1
72,568,800

period
EARNINGS PER SHARE (EPS)
Basic and Diluted (Rs)
(2009 period is for nine months - not annualised)
Nominal value per share (Rs)
Weighted average number of shares outstanding for
calculation of Basic and Diluted EPS
(refer note 16 of schedule 21)
Notes to accounts

29

JYOTHY LABORATORIES LIMITED

REFORMATTED CONSOLIDATED CASH FLOWS
Rs In Lacs
April 1, 2009 to July 1, 2008 to July 1, 2007 to
March 31, 2010 March 31, 2009 June 30, 2008
(12 Months)
(9 Months)
(12 Months)
A.
CASH
FLOWS
PROVIDED
BY/(USED
IN)
OPERATING ACTIVITIES:
Profit before Tax
Adjustments for:
Depreciation, amortisation and impairment
Refund received from selling shareholders (refer note 15 of
schedule 21)
Loss on discarded/sale of fixed assets, net
Provision for dimunition in the value of investments
Dividend Income
Interest and finance charges
Interest income
Excess provision written back
Excise duty provision written back (refer note 13 of schedule 21)
Miscellaneous expenses written off
Sundry advances written off (net of provision)
Profit on sale of share in Joint Venture Companies
Provision for doubtful debts
Provision for doubtful advances
Operating profit before working capital changes
(Increase) /Decrease in current assets, loans and advances
Inventories (including sales promotion items)
Trade receivables
Loans and advances
Increase in current liabilities / provisions
Cash generated from operations
Taxes paid (net)
Net cash generated from operating activities
B. CASH FLOWS PROVIDED BY/(USED IN) INVESTING
ACTIVITIES:
Purchase of fixed assets including capital work-in-progress and
capital advances
Proceeds from sale of fixed assets
Subsidy received against purchase of fixed assets
Receipt of investment subsidy
Purchase of investments
Acquisition of new subsidary/ business (Refer note 2(e) of
Schedule 21)
Proceeds from Sale of interest in Joint venture companies (Refer
note 2(e) of Schedule 21)
Proceeds from Sale of long term investment
Advances given
Investment in fixed deposits (net)
Interest received
Dividend received

30

9,554.97

4,817.47

6,654.30

1,236.55
-

748.31
-

797.54
(632.61)

27.73
(19.96)
(0.79)
169.54
(917.39)
(64.98)
(475.26)
0.59
(17.68)
5.51
9,498.83

9.63
30.00
(0.79)
70.93
(620.61)
22.96
19.80
5,097.70

40.33
40.00
(0.79)
68.47
(610.21)
(8.37)
0.37
8.50
6,357.53

(2,684.79)
(2,788.64)
(1,218.21)
3,775.07
6,582.26
(1,567.17)
5,015.09

74.93
(1,909.92)
(313.15)
836.26
3,785.82
(796.71)
2,989.11

(642.48)
1,535.82
(425.36)
137.07
6,962.58
(1,301.32)
5,661.26

(3,478.13)

(1,381.43)

(4,650.36)

208.44
19.95
39.61
(94.73)

9.55
(1.64)
-

43.23
-

3.00

40.31
(1,271.07)
897.89
0.79

404.23
748.30
0.79

(87.01)
(2,155.32)
609.03
0.79

April 1, 2009 to July 1, 2008 to July 1, 2007 to

March 31, 2010 March 31, 2009 June 30, 2008
(12 Months)
(9 Months)
(12 Months)
Net cash used in investing activities
C. CASH FLOWS PROVIDED BY/(USED IN) FINANCING
ACTIVITIES:
Refund received from selling shareholders (refer note 15 of
schedule 21)
Proceeds from equity share capital issued in subsidiary company
to minority shareholders
(Repayment) / Proceeds of loan fund
(Repayment) / Proceeds of Deferred sales tax loan
Interest and finance charges paid
Dividend paid
Dividend tax paid
Net cash generated from / (used in) financing activities
Net increase / (decrease) in cash and cash equivalents (A+B+C)
Cash and cash equivalents of a subsidiary acquired during the
year
Cash and cash equivalents of joint ventures sold during the year
Cash and cash equivalents at the beginning of the year / period
Cash and cash equivalents at the end of the year / period *

(3,633.94)

(220.20)

(6,239.64)

632.61

125.00

1,287.46
(13.88)
(169.54)
(1,451.38)
(246.66)
(594.00)
787.15
1.22

(70.93)
(1,451.38)
(246.66)
(1,643.97)
1,124.94
-

(29.01)
3.08
(68.47)
(181.42)
(30.83)
325.96
(252.42)
-

(0.64)
2,239.77
3,027.50

1,114.83
2,239.77

1,367.25
1,114.83

Cash and bank balances as per Balance Sheet

Less, Long term deposits considered in investing activities
Cash and cash equivalents considered for cashflows

12,271.60
9,244.10
3,027.50

10,193.30
7,953.53
2,239.77

9,600.28
8,485.45
1,114.83

* Includes deposits provided as securities against bank guarantees / letter of credit - Rs. Nil , (2009 - Rs. 70.11)
(2008 - Rs. Nil ) and balance in unclaimed dividend of Rs 2.85 (2009 - Rs 1.51) (2008 - Rs. Nil)

31

RISK FACTORS
An investment in equity shares involves a high degree of risk. You should carefully consider all of the information in
this Placement Document, including the risks and uncertainties described below, and in the sections Our
Business and Managements Discussion and Analysis of Results of Operations and Financial Conditions as well
as the financial statements contained in this Placement Document, before making an investment in the Equity
Shares. The risks and uncertainties described in this section are not the only risks that we currently face. Additional
risks and uncertainties not known to us or that we currently believe to be immaterial may also have an adverse
effect on our business, results of operations and financial condition. If any of the following or any other risks
actually occur, our business, prospects, results of operations and financial condition could be adversely affected
and the price of, and the value of your investment in, the Equity Shares could decline and you may lose all or part of
your investment.
We changed our financial year ending from June 30 to March 31 from financial year 2009. Thus, our financial year
2009 includes nine months instead of 12 months. Further, discussions below in relation to financial year 2008 shall
refer to the 12 months period ending June 30, 2008. Our financial year now ends on March 31 of each year, so all
references to the financial year 2009 are to the nine month period ended March 31, 2009 and all references to the
financial year 2010 are to the 12 month period ending March 31, 2010.
Unless otherwise stated, our financial information used in this section is derived from our reformatted consolidated
financial statements under Indian GAAP. You should not invest in this Issue unless you are prepared to accept the
risk of losing all or part of your investment, and you should consult your tax, financial and legal advisors about the
particular consequences to you of an investment in the Equity Shares.
Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the
financial or other implications of any of the risks mentioned herein.
Risks Related to our Business and Industry
We depend heavily on our flagship brand Ujala. Any factor adversely affecting this product may negatively
impact our profitability and cash flows.
For the financial years ended March 31, 2010 and 2009, our flagship brand Ujala contributed 30.64% and 34.63% of
our net sales, respectively. Our dependence over the last two financial years on Ujala has been steadily declining
with increasing sales contributions from other products, primarily Maxo which contributed 30.43% and 31.69% of
our net sales in the financial years ended March 31, 2010 and March 31, 2009, respectively. Notwithstanding the
contribution of Maxo, our net sales of Ujala continue to represent a significant portion of our operating profit in the
financial years ended March 31, 2010 and March 31, 2009. Any decline in the net sales of Ujala or Maxo or any
other factor that negatively affects these products may adversely affect our market share, business and financial
performance.
We face significant competition that may adversely affect our competitive position and financial performance.
We operate in a competitive retail environment. In particular, the FMCG industry is characterised by the high
volume of new product introductions by multiple companies. We compete against a number of manufacturers and
marketers, some of which are larger and have substantially greater resources than us, including the ability to spend
more on advertising and marketing and have more flexibility to respond to changing business and economic
conditions. We also face competition from new entrants who may have more flexibility in responding to changing
business and economic conditions than us. Competition in our industry is based on several factors including the
pricing of products, innovation, perceived value, brand recognition, promotional activities, advertising, special
events, new product introductions and other activities. It is difficult for us to predict the timing and scale of our
competitors actions in these areas. In addition to products sold through the mass retail channel, our products also
compete with similar products sold through other channels, including department stores, supermarkets and
hypermarkets and other distribution outlets. Our competitors may also adopt different strategies from time to time to

32

increase their market shares through advertising, pricing, channel discounts, quality, service, multi-location
operations, new product introductions and distribution reach, among others.
In order to protect our existing market share or capture market share in this highly competitive retail environment,
we may be required to increase expenditure for advertising and promotions and to anticipate and respond to various
competitive factors, including our ability to improve our manufacturing process, protect our manufacturing
technique and intellectual property, introduce new products and respond to pricing strategies by competitors,
changes in technology and changes in customer preferences. Due to inherent risks in the marketplace associated with
advertising and new product introductions, including uncertainties about trade and consumer acceptance, increased
expenditure may not prove successful in maintaining or enhancing our market share and could result in lower
profitability. In addition, we may incur increased credit and other business risks as a result of competing for
customers in a highly competitive retail environment.
We expect competition to continue to be intense as our existing competitors expand their operations and introduce
new products. Failure by us to compete effectively, including any delay in responding to changes in the industry and
market, together with increased spending on advertising, may affect the competitiveness of our products, which may
result in a decline in our revenues, profitability and cash flows.
The value of our brands, and our sales, could be adversely impacted if they are associated with negative publicity.
Our success in part depends on our ability to maintain the brand image of our existing products and effectively build
up brand image for new products and services and brand extensions. This is particularly relevant for Ujala and Maxo
products, which for the financial year ended March 31, 2010 and the financial year ended March 31, 2009
constituted 61.07% and 66.32% of our net sales, respectively. Product or service quality issues, real or imagined, or
allegations of product defects, even when false or unfounded, could tarnish the image of the affected brands and
may cause consumers to choose other products. In addition, because of changing government regulations or
implementation thereof, allegations of product contamination or lack of consumer interest in certain products, we
may be required from time to time to recall products entirely or from specific markets. Any negative publicity
regarding us, our brands or our products or services, including those arising from concerns regarding quality, or any
other event affecting product or service quality, could adversely affect our reputation, results of operations, cash
flows and financial condition.
We are subject to unfair competition from counterfeit, cloned and pass-off products, which may reduce our sales
and harm our brands.
Companies in the Indian FMCG industry face pressures from various forms of unfair competition, such as the sale of
counterfeit, cloned and pass-off products. Counterfeit and cloned products are products manufactured and sold
illegally as our products, whereas pass-off products are manufactured and packaged to resemble our products. In the
past few years, the advancement of technology has contributed to the ease at which our products could be
counterfeited. We have in the past encountered incidences of passing-off and the sale of counterfeit products. This is
exacerbated by the fact that such products are often cheaper and of lower quality than genuine products. The sale of
counterfeit, cloned and pass-off products has led and if left uncurbed, will continue to lead to lower sales in our
products. In addition, we may not be able to recover our initial development costs and such products may be harmful
to consumers or are less effective than our products, which could harm our brand image and reputation. The
proliferation of unauthorized copies of our products, and the time lost in pursuing claims and complaints about
spurious products could have an adverse effect on our reputation, business, financial condition, results of operations
and cash flows.
The launch of new products and laundry and fabric care services could prove to be unsuccessful which would
impact our growth plans and adversely affect our business, prospects and results of operations.
We believe that the introduction of new products and services in our business categories is one of our avenues for
our growth. We entered the laundry and fabric care services by incorporating JFSL, a 75% subsidiary of our
Company, to provide laundry and fabric care services at an affordable price with door-to-door facilities. We
presently offer services to retail consumers under the brand Snoways as well as premium services under the brand
Fabric Spa and also offer services to institutional consumers such as hotels, railways, health clubs and airlines. We

33

have a total of five outlets under the brand Fabric Spa across Bengaluru. We also propose to own and rent uniforms
to certain institutions under the brand JFSL Rentals.
Similarly, we have launched Maxo Military and Maxo Safe and Soft in cream and wet-wipes format in July 2010.
This has been developed on the basis of DEPA technology licensed to us by the Defence Research and Development
Organisation, Ministry of Defence (DRDO). For more details see in relation to our laundry and fabric care
services and Maxo Military and Maxo Safe and Soft please see Business
Each of the elements of new product and services initiatives entails significant risks, as well as the possibility of
unexpected consequences, including:
acceptance of our products and services by our customers may not be as high as we anticipate;
our marketing strategies for the new products and services may be less effective than planned and may fail
to effectively reach the targeted consumer base;
we may incur costs exceeding our expectations as a result of the continued development and launch of the
new products and services or experience the desired consumption;
we may experience a decrease in sales or usage of certain of our existing products or services as a result of
the introduction of related new products; or
any delays or other difficulties impacting our ability, or the ability of our third party manufacturers and
suppliers, to manufacture, distribute and ship products in a timely manner in connection with launching the
new products and services.
We spend considerable time and financial resources in the development and launch of new products and services.
Each of the above risks could delay or impede our ability to achieve our growth objectives or we may not be
successful in achieving our growth objectives at all through these means. In addition, we would not be able to
recover our costs of developing the products and services. If any of our new products or services is unsuccessful, our
business, prospects, results of operations and cash flows could be adversely affected.
We may not be successful in implementing our business strategies.
The success of our business depends substantially on our ability to implement our business strategies effectively.
Even if we have successfully executed our business strategies in the past, there is no guarantee that we will be able
to implement future business strategies on time and within the estimated budget, or that we may be able to meet the
expectations of our targeted customers. We expect our strategies to place significant demands on our management
and other resources and require us to continue developing and improving our operational, financial and other
internal controls. Our inability to manage our business and strategies may have an adverse effect on our business,
financial condition, profitability and cash flows.
We may experience difficulties in conducting the operations of and in realizing expected synergies from our
proposed joint venture in Bangladesh.
Our Company has entered into a MoU dated May 20, 2010 with Kallol Enterprises Limited to set up a joint venture
company in Bangladesh (the Bangladesh JV) for the manufacture and distribution of its products in Bangladesh.
The capital contribution and shareholding of our Company and Kallol Enterprises Limited in the Bangladesh JV
shall be in the ratio of 3:1.
Our Companys ability to achieve the benefits it anticipates from the Bangladesh JV will depend in large part upon
whether it is able to conduct the operations of the Bangladesh JV in an efficient and effective manner. The
Bangladesh JVs business operations will be located in Bangladesh and any difficulties encountered in operations in
Bangladesh could result in higher costs and lower savings than expected. The setting up of the Bangladesh JV will
also require the dedication of significant management resources and time and costs devoted to the entire process
may divert the managements attention from day to day business. Also, our Company will be required to appoint a
new management team to run the operations of the Bangladesh JV. There can be no assurance that this new
management team of the Bangladesh JV will remain with us or continue to operate Bangladesh JV successfully. Any
adverse development in relation to the Bangladesh JV may affect our business, financial condition, results of
operations and cash flows.

34

We have obtained licenses to use DEPA technology and Wool Care technology. In the event that the licenses are
terminated or not renewed, our business may be adversely affected.
We have entered into a MoU with the Defence Research and Development Organisation for the transfer of
technology and know-how in relation to DEPA (Di-ethyl phenyl acetamide) technology, a multi-insect repellent and
Wool Care technology for insecticidal spray for moth proofing carpets on November 5, 2009 and January 25, 2010
respectively. Our Company has an exclusive license to the technology and its improvements with respect to Asia for
a period of five years subsequent to which our Company will be entitled to the exclusive license along with royalty
free use of the technology subject to the satisfactory performance of our Company under this MoU. The DRDO has
reserved its right to grant additional licenses for the technology to other parties for commercial exploitation in
Africa. We might not be able to profitably exploit the technology and might not achieve the requisite thresholds
mentioned in the MoU leading to the cancellation of the license. Additionally, there can be no assurance that the
license will be renewed on the expiry of the five year term. This might lead to the loss of the consideration paid by
us for purchasing the technology and other investments made for their development and improvement. This may
materially affect our business and financial results.
We may not be successful in completing the acquisition of Snoways Laundrers and Drycleaners Private Limited.
In furtherance of our acquisition plans, JFSL has acquired 49% of the shareholding in Snoways Laundrers and
Drycleaners Private Limited (Snoways) by a share purchase agreement dated May 8, 2009. The remaining 51% of
the shareholding is held by Suresh Babu and he is required to maintain his holding in Snoways at a minimum of
51% to be in compliance with the Karnataka Industrial Area Development Board (KIADB) Regulation. The
restriction is applicable for a period of 10 years expiring on August 1, 2018 (Disability Period). On the expiry of
the Disability Period, JFSL shall acquire the remaining 51% of the shareholding from Suresh Babu and make it a
wholly owned subsidiary of JFSL. For this purpose an agreement dated August 12, 2009 has been entered into with
Suresh Babu. The legal and beneficial title of the equity shares constituting 51% of Snoways share capital continues
to be with Suresh Babu during the Disability Period and in event the equity shares are not transferred to JFSL at the
end of the Disability Period, we may be unable to acquire the remainder of the shareholding and hence complete the
acquisition of Snoways. This may affect the business strategy and financial position of our Company.
We may need to close loss making units and may be subject to liabilities and obligations arising out of this.
We have closed down our unit located at Pannissery, Kerala with effect from August 1, 2007 as this unit has been
making losses. In the future we may have to close down units that are making losses. The main activity at this unit
was the manufacture of an oil-based soap which was marketed in Kerala only. Further to the closure of the unit we
expect to terminate the services of 71 workmen. However, the closure has been challenged by the workers and the
matter has been referred to the Industrial Tribunal, Palakkad. For further details on the litigation please see
Business - Legal Proceedings. Any further instances could divert management time and we may not be able to
utilize machines and workmen at such units and may be subject to further liabilities and obligations.
If we are not able to manage our growth, our business and financial results could be adversely affected.
Our growth strategy involves expansion through organic and inorganic methods of our current businesses. Such a
growth strategy will place significant demands on our management as well as our financial, accounting and
operating systems. Further, as we expand the scope of and diversify our operations, we may not be able to manage
our business efficiently, which could result in delays, increased costs and affect the quality of our products, and may
adversely affect our reputation. Such expansion also increases the challenges involved in preserving a uniform
culture, set of values and work environment across our businesses, developing and improving our internal
administrative infrastructure, particularly our financial, operational, communications, internal control and other
internal systems, recruiting, training and retaining management, technical and marketing personnel, maintaining
high levels of client satisfaction, and adhering to health, safety, and environmental standards. If we are unable to
manage our growth, it could have an adverse effect on our business, financial condition, results of operations and
cash flows.
Failure to successfully identify and conclude joint ventures and acquisitions or manage the integration or the
performance of the same being below expectations may cause profitability and operations to suffer.

35

We have identified acquisitions as one of the avenues for our growth and have undertaken the acquisition of fabric
whitener brands called Ruby Liquid Blue and More Light and of a laundry chain called Snoways in
Bengaluru. We intend to make acquisitions in the future as part of our strategy to grow inorganically in India. We
may not be able to identify or conclude appropriate or viable acquisitions in a timely manner. Further, the
acquisitions may not necessarily contribute to our profitability and may divert management attention or require us to
assume debt or contingent liabilities. In addition, we may experience difficulty in integrating operations and
harmonizing cultures leading to a non-realisation of anticipated synergies or efficiencies from such acquisitions.
These difficulties could disrupt our ongoing business.
We had established joint ventures or entered into agreements for distribution of third party products in the past and
have discontinued our association with these third parties for strategic reasons. These include Continental Speciale
(India) Private Limited established for the marketing and distribution of coffee, Balaji Teleproducts Limited for the
marketing and distribution of spiritual dhoop and Godrej Tea Limited for the distribution of tea. Whilst at present we
do not intend to continue with distribution of third party brands through our network, we may in the future be unable
to integrate and operate successful joint venture or distribution arrangements with other parties. This may limit our
scope of expansion and adversely affect our business operations, profitability and cash flows.
If we fail to keep pace with the rapid changes in the industry and market it may result in a decline in demand for
our products and a decline in sales.
The markets in which we operate are characterised by rapid change and frequent new product introductions.
Customer preferences in this market may be difficult to predict, and changes in those preferences, the introduction of
new products by our competitors or existing alternatives becoming affordable could put our products at a
competitive disadvantage. We are vulnerable to reduced consumer demand for our products due to changes in
consumer preferences. Any delay in our reactions to changes in market conditions may affect the competitiveness of
our products, thereby reducing our market share, which would result in a decline in our sales.
We are heavily dependent on our brands and their brand equity and the intellectual property rights related to our
brands.
We are heavily dependent on our brands and their brand image and equity. The brands that we presently use in our
business such as Ujala, Maxo, Exo, Jeeva, Maya, Fabric Spa and Snoways have been registered in India under the
Trade Marks Act, 1999 in our name. However, we have not yet obtained overseas trademark registration for some of
our brands, under which we sell products abroad. In respect of our unregistered trademarks, we may not be able to
prevent infringement of our trademarks and a passing off action may not provide sufficient protection. Additionally,
we may be required to litigate to protect our brands, which may adversely affect our business operations. Further,
there can be no guarantee that we will be able to obtain registration in respect of trademarks for which our
applications are pending.
In addition, although we believe that we do not infringe upon the intellectual property rights of others and that we
have all the rights necessary to use the intellectual property employed in our business, there can be no assurance that
we have not inadvertently infringed a third partys intellectual property rights or that, whether founded or not,
infringement claims will not be asserted against us in the future. Assertion of such claims against us could result in
litigation. Any such claims, regardless of their outcome, could result in substantial costs to us and divert
managements attention from our operations and require us to pay damages as well as cease operations using the
intellectual property.
Growing penetration of emerging retail formats such as supermarket and hypermarket chains in India may
adversely impact our margins.
India has witnessed the emergence of new supermarket and hypermarket chains in the recent past. While the current
share of our revenues through these chains is not significant, it is expected that we will become increasingly reliant
on supermarket and hypermarket chains for sales, especially in the larger cities. In general, the trade
margins/discounts expected by supermarket chains is higher than traditional retail outlets. With the growth of these

36

retail formats in India, we may need to increase the marketing of our products through this channel and possibly at
lower margins, which may adversely impact our margins.
We depend heavily on our channel partners such as distributors and retailers and failure to manage the
distribution network efficiently may adversely affect our performance.
We have developed an effective network of distributors and retailers. We are dependent on these channel partners
for the distribution of our products. While relationships with them have been good, we have no standing contracts
with any of these channel partners and most of these distributors and retailers function independently. Many of our
distributors and channel partners also distribute other consumer products. There can be no assurance that we will be
successful in continuing to receive uninterrupted, high quality service from these channel partners for all our current
and future products.
Our business is dependant on our manufacturing facilities and the loss of or shutdown of operations of any of
these facilities could adversely affect our business.
Our own and outsourced manufacturing facilities are subject to operating risks, such as the breakdown or failure of
equipment, power supply or processes, performance below expected levels of output or efficiency, labour disputes,
natural disasters, industrial accidents and the need to comply with the directives of relevant government authorities.
Any significant operational problems, the loss of one or more of our facilities or a shutdown of one or more of our
facilities for an extended period of time could adversely affect our business, results of operation, financial condition
and cash flows.
Shortfall in supply and increased costs of input materials may affect our business and financial performance.
Our business is significantly affected by the availability, supply, cost and quality of the materials which expose us to
market demand and supply fluctuations. Raw materials are subject to price volatility caused by factors including
regulatory control and changes in governmental agricultural programs, commodity market fluctuations, the quality
and availability of supply, currency fluctuations and consumer demand.
Substantially all our raw materials are purchased from third parties. We source HDPE, which constitutes our largest
raw material expenditure, from four local suppliers. Sumi 1, an insecticide used in our Maxo coils and Tranafluthrin,
an insecticide used in Maxo liquid vaporizers, are sourced from a single supplier, an Indian subsidiary of a Japanese
manufacturer. Supplies of brown sawdust are seasonal, and we stockpile these when available for the manufacture of
Maxo coils.
We do not have any long-term supply contracts with respect to raw material used in the manufacture of our
products. If, for any reason, our primary materials suppliers should curtail or discontinue their delivery of such
materials to us in the quantities we need or at prices that are competitive or expected by us, our ability to meet our
production levels could be impaired, our production schedules could be disrupted or our earnings and business could
suffer. In addition, extreme weather conditions, strikes, inadequacies in the road infrastructure and port facilities,
shipping delays or other events could impair our procurement of materials and our ability to supply our products to
our customers. For instance, the supply of insecticides used to manufacture mosquito coils is heavily regulated. We
use a single supplier to obtain the chemicals and very few suppliers have the requisite permission to supply them in
India. If these suppliers are, temporarily or permanently, unable to supply us with these raw materials, our business
would be adversely affected. Any increase in raw material cost may have an adverse impact on our financial
performance.
We rely on the adequate and timely availability of key input materials. Any significant change in the cost structure
or disruption in supply may affect the pricing and supply of products. If we are not able to increase our product
prices to significantly offset increased raw material costs, or if unit volume sales are significantly reduced, it could
have a negative impact on our profitability. This may adversely affect our business and financial performance.
As a manufacturing business, our success depends on the continuous supply and transportation of our products
from our manufacturing units to our distributors and customers, which are subject to various uncertainties and
risks.

37

We depend on trucking (domestically) and sea borne freight (for exports) to deliver our products from our
manufacturing facilities to our distributors and customers and rely on third parties to provide such services.
Transportation costs have been steadily increasing particularly due to rising oil and gas prices, which escalate our
costs. In addition, extreme weather conditions, strikes, inadequacies in the road infrastructure and port facilities,
shipping delays or other events could impair procurement of materials and our ability to supply our products to our
customers. Disruptions or other problems related to transportation and deliveries of products may adversely affect
our results of operations. Any material increase in transportation costs may adversely impact our margins as we may
not be able to increase our prices to fully recover these costs increases.
We are dependent in part on production we outsource to third parties and any significant loss or disruption of
production from our third party manufacturers for any reason could adversely affect our market position for
such products and our results of operations.
For the financial year ended March 31, 2010 70.00%, 100.00 %, 86.08%, 15.56% and 100.00 % of our net sales,
respectively, were from sales of our Maxo products, Maya, Exo dishwashing bar, Ujala washing powder and Exo
Safai products that were produced by third parties. Production at our outsourced facilities is beyond our control. Any
increase in production costs of such products, termination or adverse change in their manufacturing contracts or
disruption in their availability or operations will affect the sales of such products, our market position for those
products, our results of operations and cash flows.
Our success depends on our management team and an inability to retain and attract talented staff may adversely
affect our business.
Our success is substantially dependent on the expertise and services of our management team. The skills and
diversity of our management team gives us the flexibility to respond to the needs of our customers and consumers.
The loss of the services of our key management personnel may have an adverse effect on our business, financial
condition and results of operations. Further, an increase in the rate of attrition of experienced employees would
adversely affect our ability to implement our business strategies. We operate in a highly dynamic industry and there
can be no assurance that we will be successful in recruiting and retaining a sufficient number of personnel with
requisite skills to replace those personnel who leave. Further, our inability to attract and retain fresh talent could also
hamper our ability to grow.
We may face labour disruptions that would interfere with our operations.
We are exposed to the risk of strikes and other industrial actions. As June 30, 2010, we employed over 4,000 fulltime employees. Further, as on June 30, 2010, 316 of our employees were members of unions and we have entered
into wage settlement agreements with them. If we were unable to renew those wage settlement agreements or
negotiate favorable terms, we could experience a material adverse affect on our business. While we believe our
relationship with our employees is currently good, we could experience strike, work stoppage or other industrial
action in the future. Any such strike, work stoppage or industrial action by our own employees or the employees of
our suppliers, transportation providers or manufacturers could disrupt our operations, possibly for a significant
period of time, result in increased wages and other costs and otherwise have a material adverse effect on our
business, results of operations, cash flows or financial condition.
We rely on our information technology systems in managing our supply chain, production process, logistics and
other integral parts of our business and any failure in our information technology systems could have a material
adverse effect on our financial condition and results of operations.
Information technology systems are important to our business. We rely heavily on our information technology
systems in connection with order booking, procurement of raw materials, accounting, production, distribution and
our disaster recovery systems. Any failure in our information technology systems could result in business
interruption, adversely impacting our reputation and weakening of our competitive position and could have a
material adverse effect on our financial condition, results of operations and cash flows.

38

Sales of our Maxo products are seasonal and during periods of lower sales activity, our revenues may be delayed
or reduced and may adversely impact our results of operations.
Sales of our Maxo products are seasonal with a substantial part of our revenues from Maxo products typically
coming in the months of January to April and August and September. During periods of lower sales activity, we may
continue to incur operating expenses, but our revenues may be delayed or reduced. This may adversely impact our
results of operations and cash flows during certain reporting periods.
Contamination of our products and raw materials could hurt our reputation and decrease our sales.
Our business could be harmed in the event of actual or alleged contamination or deterioration of our products and
raw materials. A risk of contamination or deterioration exists at each stage of the production cycle, including the
production and delivery of raw materials, the manufacturing and packaging of our products, the stocking and
delivery of our products to distributors and retailers, and the storage and shelving of products at the points of final
sale. Moreover, any incidents of this kind, even those involving only products manufactured by others, could also
have a negative impact on our business, results of operations, cash flows, financial condition and prospects.
The pesticides industry in India is highly regulated and our failure to obtain and renew regulatory approvals and
our inability to meet with the quality norms prescribed by the Government may be detrimental for our household
insecticides business.
The pesticides industry in India and other countries in which we operate is highly regulated. The quality of
pesticides products manufactured is independently verified by government agencies by carrying out sample checks
on our products and facilities. In the event that the contents of the samples do not comply with the prescribed quality
norms, it could lead to the initiation of proceedings against us. Any deficiencies in quality could lead to suspension
of sales of those batches and/or product in that particular state or our products being banned for sales across the
country. In the past we have not faced any suspension or ban on sale of any products. However, there can be no
assurance that we would not be subject to suspensions or proceedings in the future. Any such event is likely to
adversely affect our household insecticides business and our results of operations. Further, in the event that the
proposed Pesticide Management Bill, 2008 is enacted by the Central Government, we might be subjected to
additional quality and process related conditions.
In addition, we are required to maintain licenses and approvals for the manufacture of our insecticide products that
are required to be periodically renewed. These renewals are required in the ordinary course of business and are
subject to our compliances with certain stipulated conditions. In the event that we are unable to get our licenses and
approvals renewed on a timely basis, our productions may be hampered, which could affect our results of
operations, cash flows and financial condition.
Our current insecticide products may not continue to be effective in the long term.
Tests and data have indicated that over a period of time insects, pests and bacteria develop immunity to the
chemicals and the products that are constantly used to counter insect and bacteria proliferation. Therefore, we are
required to develop new, improved and additional products and formulas on a regular basis in order to keep our
products effective in the market. This constant development and modification of our existing and new products
incurs significant capital expenditure, time and effort and expenses towards marketing the products. There can be no
assurance that these new products will be effective or well received in the market, which may adversely affect our
business and the viability of some of our products in the long term.
We face the risk of potential liabilities from lawsuits or claims by consumers and this may result in liabilities
and/or financial claims against us as well as loss of business and reputation.
We face the risk of legal proceedings and claims being brought against us by various entities including consumers
and government agencies for various reasons including for defective products sold. Responding to complaints and
dealing with claims takes time and can divert managements attention away from our operations. If some or all of
these lawsuits or claims succeed it could adversely affect our business and financial performance. This may result in
liabilities and/or financial claims against us as well as loss of business and reputation.

39

Our Promoter and promoter group will continue to retain majority shareholding in us after this Issue, which will
allow them to exercise significant influence over us.
The majority of our issued and outstanding Equity Shares are currently beneficially owned by our Promoter and
promoter group. Upon completion of this Issue, our Promoter and promoter group will own 5,08,92,440 lakhs
Equity Shares, or 63.12% of our post-Issue Equity Share capital. Accordingly, our Promoter and promoter group
will continue to exercise significant influence over our business policies and affairs and all matters requiring
shareholders approval, including the composition of our Board of Directors, the adoption of amendments to our
certificate of incorporation, the approval of mergers, strategic acquisitions or joint ventures or the sales of
substantially all of our assets, and the policies for dividends, lending, investments and capital expenditures. This
concentration of ownership also may delay, defer or even prevent a change in control of our Company and may
make some transactions more difficult or impossible without the support of these shareholders. The interests of the
Promoter and the promoter group as our controlling shareholders could conflict with our interests or the interests of
our other shareholders.
Our future operating results are difficult to predict and may differ from our past performance.
Our results of operations during any financial year and from period to period are difficult to predict. Our business,
results of operations and financial condition may be adversely affected by:
a decreased demand for our products;
a decrease in prices for our products;
an increase in duties and taxes;
increasing transportation costs, including freight to key export markets, or the non-availability of
transportation due to strikes, shortages or for any other reason;
strikes or work stoppages by our employees;
changes in government policies affecting the FMCG industry or sales in India or globally;
industrial accidents arising from improper handling of combustible or explosive materials, improper
operations of machines, human errors or other reasons at our manufacturing facilities or during
transportation; and
natural disasters, outbreaks of diseases or heavy rains.
Due to these factors, our past performance should not be relied upon to predict our future performance.
Legal and regulatory changes may adversely affect our performance or financial conditions.
Regulatory changes relating to business segments in which we operate, including tax incentives that are available to
us, can have a bearing on our business. Each state in India has different local taxes and levies which may include
sales tax and octroi. Further, changes in these local taxes and levies may impact our profits and profitability. Any
legal or regulatory changes in our markets could adversely affect our business operations, cash flows or financial
conditions.
Changes in technology may render the current technologies obsolete or require us to make substantial capital
investments.
Our business largely depends upon the technology adopted by us to innovate on our products. We have in the past
manufactured certain machines and if we are unable to innovate and develop these further, the machines could
become less effective. The manufacturing and processing operations of our businesses are prone to technological
and process changes and may render our current processes obsolete. We may be required to make substantial capital
investments to adopt advance technologies and processes which may increase our costs and expenses.
Environmental, health, employee and safety laws and regulations may expose us to liability and result in an
increase of our costs and a decrease in our profits.
We are subject to significant national and state environmental laws and regulations in our businesses. These laws
govern the discharge of pollutants into the air and water and establish standards for the treatment, storage and

40

disposal of solid and hazardous substances and waste and the extent of employee exposure to hazardous substances
that may be used in or result from our businesses. Compliance with these laws and regulations require significant
capital and other expenditures that we have incurred in the past and will continue to incur in the future. In addition,
we may discover currently unknown environmental problems or conditions.
The environmental laws in India and other jurisdictions we operate in have been increasing in stringency and it is
possible that they will become significantly more stringent in the future. Operating facilities such as ours that
manufacture chemical based products entails an inherent risk of environmental damage and we may incur liabilities
in the future arising from the discharge of pollutants into the environment or our waste disposal or hazardous
material handling practices. If any of our facilities are shut down, we will continue to incur costs in complying with
environmental regulations, appealing any decision to close our facilities, increasing production levels at our
operational facilities and paying labour and other costs, while not generating any revenues or products from such
facilities. As a result, our overall operation expenses will increase and our profits and cash flows will decrease.
We are also subject to laws and regulations governing relationships with employees for minimum wage and
maximum working hours, overtime, working conditions, hiring and terminating of employees, contract labour and
work permits. Furthermore, the success of our business is contingent upon, among other things, receipt of all
required licenses, permits and authorisations, including local land use permits, building and zoning permits and
environmental, health and safety permits. Changes or concessions required by regulatory authorities could also
involve significant costs and delay or prevent completion of the construction or opening or operations of a plant or
research centre or could result in the loss of an existing license.
Some of our operations are hazardous and could expose us to the risk of liabilities, lost revenues and increased
expenses.
Some of our operations such as the manufacture of Maxo products are subject to various hazards associated with the
production of chemical products, such as the use, handling, processing, storage and transportation of
hazardous/explosive materials such as, as well as accidents such as leakage or spillages of chemicals. Any
mishandling of hazardous chemical and poisonous substances could also lead to fatal accidents. In addition, our
employees also operate heavy machinery at some of our manufacturing facilities and accidents may occur while
operating such machinery.
These hazards can cause personal injury and loss of life, severe damage to and destruction of property and
equipment, environmental damage and may result in the suspension of operations and the imposition of civil and
criminal liabilities. As a result of past or future operations, there may be claims of injury by employees or members
of the public due to exposure, or alleged exposure, to the hazardous materials involved in our business. In addition,
we may be subject to claims of injury from indirect exposure to hazardous materials that are incorporated into our
products. Liabilities incurred as a result of these events have the potential to adversely impact our cash flows and
financial position. Events like these could also adversely affect our perception with suppliers, customers, regulators,
employees and the public, which could in turn affect our financial condition and business performance. While we
maintain general insurance against these liabilities, the insurance proceeds may not be adequate to fully cover the
substantial liabilities, lost revenues or increased expenses that we might incur.
Most of our manufacturing facilities for Maxo products and Ujala Stiff & Shine are insured but our insurance
coverage may not adequately protect us against possible risk of loss.
Most of our manufacturing facilities for Maxo products and Ujala Stiff & Shine are insured and we maintain
insurance for certain risks including insurance against standard fire and shock which covers loss and damage due to
fire. We also obtain insurance for stocks in godowns across India. These insurance policies do not cover all risks and
are subject to exclusions and deductibles. If any or all of our production facilities are damaged in whole or in part
and our operations are interrupted for a sustained period, we may not be adequately insured to cover the losses that
may be incurred as a result of such interruption or the costs of repairing or replacing the damaged facilities. If we
suffer a large uninsured loss or any insured loss suffered by us significantly exceeds our insurance coverage, our
business, financial condition, results of operations and cash flows may be materially and adversely affected. For
details, please see Our BusinessInsurance.

41

We require certain approvals or licenses in the ordinary course of business, and the failure to obtain and retain
them in a timely manner or at all may adversely affect our operations.
We require certain approvals, licenses, registrations and permissions for operating our business, some of which have
expired and for which we may have either made or are in the process of making an application for obtaining the
approval or its renewal. If we fail to obtain or retain any of these approvals or licenses, or renewals thereof, in a
timely manner, or at all, our business may be adversely affected. Furthermore, some of our government approvals or
licenses may be subject to onerous conditions and require us to make substantial expenditure. If we fail to comply or
a regulator claims we have not complied with these conditions, our business, prospects, financial condition, results
of operations and cash flows would be materially adversely affected.
Additional issuances of Equity Shares may dilute your holdings and any future sale of Equity Shares by our
Promoter and the promoter group may adversely affect the market price of our Equity Shares.
Any future issuance of our Equity Shares may dilute the positions of investors in our Equity Shares, which could
adversely affect the market price of our Equity Shares. Additionally, sales of a large number of our Equity Shares by
our Promoter and the promoter group or by any other future principal shareholder could adversely affect the market
price of our Equity Shares. The perception that any such primary or secondary sale may occur could also adversely
affect the market price of our Equity Shares.
Income tax and other tax exemptions may not be available in future and will affect our post-tax profits
Certain tax deductions are available to us in various states including the states of Assam, Himachal Pradesh, Kerala
Uttarakhand and Jammu &Kashmir under the I.T. Act. Under section 80-IB and 80-IC of the Act, the amount of
deduction in the case of an industrial undertaking set up in an industrial backward state, is 100 % of the profits and
gains derived from such industrial undertaking for the first five assessment years and 30 % for the next five years if
the undertaking is owned by a company. There can be no assurance that similar tax benefits will be available to us in
future. When our tax benefits expire or terminate, our tax expense could materially increase, reducing our
profitability.
There are various legal proceedings and disputes against us.
We are party to various legal proceedings before judicial, tax, statutory and quasi-judicial authorities. Some of these
proceedings involve potential substantial liability for us. Such legal proceedings could divert management time and
attention, and consume financial resources in their defence or prosecution. Further, an adverse judgment in any of
these legal proceedings could have an adverse impact on our financial condition, results of operations, cash flows
and our ability to meet our obligations in respect of this Issue. For further details concerning the legal proceedings
which could have an adverse effect on our business, please see Business - Legal Proceedings.
Some of our promoter group entities are engaged in the distribution of our products and may engage in business
activities similar to ours and this could be a potential source of conflict of interest.
Some of our promoter group entities are engaged in the distribution of our products and may engage in business
activities similar to those undertaken by our Company and this could be a potential source of conflict of interest. For
example, a number of our distributors in southern India are owned or controlled by our promoter group entities.
While we have not in the past faced any actual conflict, we cannot assure you that no such conflict will arise in the
future that may affect our financial conditions and prospects. Further, we cannot assure you that if any actual
conflict of interest does arise, we will be able to resolve the conflict of interest in our favour.
We cannot guarantee the accuracy of certain market and industry data contained in this Placement Document.
Certain statistical data relating to the Indian economy and the Indian FMCG industry have been extracted from
reports prepared by independent third parties. Neither we nor the Book Running Lead Managers have independently
verified the accuracy of the data derived from such reports. In addition, we have compiled certain industry
information, including our information with respect to our market-position, especially with respect to markets
outside India based on our internal studies and based on information provided to us by third-party service providers

42

engaged by us or by our counter-parties with respect to our recent acquisitions. We make no representation as to the
accuracy of such data and you should not place undue reliance on such data as a basis for making an investment in
our Equity Shares.
Risk Related to Investments in Indian Companies
Political instability could adversely affect business and economic conditions in India and other jurisdictions we
operate in and our business, results of operations, cash flows and financial condition in particular.
During the past decade, the Indian Government has generally pursued policies of economic liberalization, including
significantly relaxing restrictions on the private sector. There can be no assurance that these liberalization policies
will continue in the future. Moreover, the role of the Indian central and state governments in the Indian economy as
producers, consumers and regulators has remained significant. Government corruption, scandals, delays,
irregularities and protests against privatization could slow down the pace of liberalization and deregulation in the
jurisdictions we operate in. The rate of economic liberalization could change, and specific laws and policies
affecting foreign investment, currency exchange rates and other matters affecting investment in our Equity Shares
could change as well. A significant change in economic liberalization and deregulation policies could adversely
affect business and economic conditions in the jurisdictions we operate in and our business, results of operations,
cash flows and financial condition in particular.
Natural or man-made disasters in India could have a negative impact on the Indian economy and cause our
business to suffer.
The occurrence of natural disasters, including hurricanes, floods, earthquakes, tornadoes, fires, explosions, pandemic
diseases, such as the H5N1 avian flu virus and the H1N1 swine flu virus, and man-made disasters, including acts of
terrorism and military actions, could adversely affect our results of operations, cash flows or financial condition.
Military activity or terrorist attacks in India as well as other acts of violence or war may adversely affect our
operations, revenues and profitability. We may not be able to foresee events that could have an adverse effect on our
business, results of operations and cash flows.
Volatile conditions in the Indian securities market may affect the price or liquidity of the Equity Shares.
The Indian securities markets are smaller and can be more volatile than securities markets in more- developed
economies. The Indian Stock Exchanges have in the past experienced substantial fluctuations in the prices of listed
securities and the price of our shares has been volatile.
In addition, the Indian stock exchanges have from time to time imposed restrictions on trading in certain securities,
limitations on price movements and margin requirements. Further, from time to time, disputes have occurred
between listed companies and stock exchanges and other regulatory bodies, which in some cases may have had an
adverse effect on market sentiment. Similar problems could happen in the future and, if they do, they could affect
the market price and liquidity of the Equity Shares.
You may not be able to enforce a judgment of a foreign court against us.
Our Company is a limited liability company incorporated under the laws of India. All of the Directors and the
executive officers of our Company are residents of India and nearly all of the assets of our Company are located in
India.
India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments;
however, Section 44A of the Civil Procedure Code provides for execution of decrees passed by courts in
reciprocating territories, such territories having been declared by the Government by notification in the Indian
Official Gazette. However, Section 44A of the Code of Civil Procedure, 1908 is applicable only to decrees or
judgments under which sums of money are payable, not being of the nature of a sum payable in respect of taxes,
other charges of a similar nature or in respect of a fine or other penalties. If a decree is passed by a court of a nonreciprocating country, then that foreign judgment if conclusive under Section 13 of the Civil Procedure Code can

43

only be enforced by filing a suit upon that judgment. Section 13 of the Civil Procedure Code governs the recognition
and enforcement of foreign judgments. Section 13 lists certain exceptions where foreign judgment cannot be held to
be conclusive.
This provision provides that foreign judgments shall be conclusive regarding any matter directly adjudicated upon
except where:
the judgment has not been pronounced by a court of competent jurisdiction;
the judgment has not been given on the merits of the case;
it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal
to recognize the law of India in cases where such law is applicable;
the proceedings in which the judgment was obtained were opposed to natural justice;
the judgment has been obtained by fraud; or
the judgment sustains a claim founded on a breach of any law in force in India.
The suit must be brought in India within three years from the date of the judgment in the same manner as any other
suit filed to enforce a civil liability in India. Generally, there are considerable delays in the disposal of suits by
Indian courts. It is unlikely that a court in India would award damages on the same basis as a foreign court if an
action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it
viewed the amount of damages awarded as excessive or inconsistent with Indian practice. A party seeking to enforce
a foreign judgment in India is required to obtain prior approval of the RBI to repatriate any amount recovered and
any such amount may be subject to income tax in accordance with applicable laws and regulations.
Significant differences exist between Indian GAAP and IFRS, which may be material to investors assessment of
our financial condition and results of operations. Our failure to successfully adopt IFRS required effective April
2014 could have a material adverse effect on our stock price.
Our reformatted financial statements included in this Placement Document have been extracted from the audited
consolidated financial statements, which have been prepared in accordance with the Indian GAAP, the relevant
provisions of the Companies Act and the accounting standards prescribed by the ICAI. We have not attempted to
explain in a quantitative manner the impact of IFRS on the financial data included in this Placement Document, nor
do we provide a reconciliation of our financial statements to those of IFRS. IFRS differs in significant respects from
Indian GAAP.
The Ministry of Corporate Affairs has announced a road map for the convergence of the Indian Accounting
Standards with IFRS. As a result, certain companies in India, including our Company, will be required to convert
their opening balance sheet as of April 1, 2014 in compliance with IFRS. There is currently a significant lack of
clarity on the convergence of the Indian Accounting Standards with IFRS. We also do not have a set of established
practices on which to draw in forming judgments regarding the convergence of IFRS with India GAAP. As such, we
have not determined the impact that implementation of IFRS will have on our financial reporting. There can be no
assurance that our financial condition, results of operations, cash flows or changes in shareholders equity will not
appear materially different under IFRS than under Indian GAAP.
If inflation were to rise in India, we may not be able to increase the prices of our products in order to pass costs
on to our customers and our profits might decline.
India has experienced very high levels of inflation during the recent years. In the event of a high rate of inflation, our
costs, such as salaries, price of transportation, wages, raw materials or any other of our expenses may increase.
Further, we will not be able to adjust our costs or pass our costs which have been fixed during periods of lower
inflation to our customers. Accordingly, high rates of inflation in India could increase our costs, which could have
an adverse effect on our profitability, cash flows and, if significant, on our financial condition.
Our business and activities will be regulated by the Competition Act, 2002.

44

The Indian Parliament has enacted the Competition Act, 2002, as amended (the Competition Act) for the purpose
of preventing business practices that have an appreciable adverse effect on competition in India under the auspices
of the Competition Commission of India, which (other than for certain provisions relating to the regulation of
combinations) has recently become effective. Under the Competition Act, any arrangement, understanding or action
in concert between enterprises or persons, whether or not formal or informal, which causes or is likely to cause an
appreciable adverse effect on competition in India is void and attracts substantial monetary penalties. Any
agreement which directly or indirectly determines purchase or sale prices, limits or controls production, shares the
market by way of geographical area or market or number of customers in the market is presumed to have an
appreciable adverse effect on competition. The effect of the Competition Act and the Competition Commission of
India on the business environment in India is as yet unclear. Any application of the Competition Act to us may be
unfavourable and may have a material adverse effect on our business, financial condition, results of operations and
cash flows.
Rights of shareholders under Indian law may be more limited than under the laws of other jurisdictions.
The Companies Act and related regulations, our Companys Articles of Association and the Listing Agreements
with the Stock Exchanges govern the corporate affairs of our Company. Legal principles relating to these matters
and the validity of corporate procedures, directors fiduciary duties and liabilities, and shareholders rights may
differ from those that would apply to a company in another jurisdiction. Shareholders rights under Indian law may
not be as extensive as shareholders rights under the laws of other countries or jurisdictions. Investors may have
more difficulty in asserting their rights as a shareholder than as a shareholder of a corporation in another jurisdiction.
You may be restricted in your ability to exercise pre-emptive rights under Indian law and be diluted in your
ownership position.
Under the Companies Act a company incorporated in India must offer holders of its equity shares pre-emptive rights
to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages before
the issuance of any new equity shares, unless the pre-emptive rights have been waived by the adoption of a special
resolution by the holders of three-fourths of the equity shares which would be affected, unless the company has
obtained government approval to issue without such rights. If the law of the jurisdiction you are in does not permit
you to exercise your pre-emptive rights without us filing an offering document or registration statement with the
applicable authority of such jurisdiction, you will be unable to exercise your pre-emptive rights unless we make such
a filing. To the extent that you are unable to exercise pre-emptive rights granted in respect of the Equity Shares, your
proportional interest in us may be reduced.
Foreign investors are subject to foreign investment restrictions under Indian law that limits our ability to attract
foreign investors, which may adversely impact the market price of the Equity Shares.
Under the foreign exchange regulations currently in force in India, transfers of shares between non-residents and
residents are freely permitted (subject to certain exceptions) if they comply with the pricing guidelines and reporting
requirements specified by the RBI. If the transfer of shares, which are sought to be transferred, is not in compliance
with such pricing guidelines or reporting requirements or fall under any of the exceptions referred to above, then the
prior approval of the RBI will be required. Additionally, shareholders who seek to convert the Rupee proceeds from
a sale of shares in India into foreign currency and repatriate that foreign currency from India will require a no
objection/ tax clearance certificate from the income tax authority. There can be no assurance that any approval
required from the RBI or any other government agency can be obtained on any particular terms or at all.
Risks Related to the Equity Shares and Our Trading Market
An investor will not be able to sell any of the Equity Shares subscribed in this Issue other than on a recognized
Indian stock exchange for a period of 12 months from the date of this Issue of the Equity Shares.
Pursuant to the SEBI Regulations, for a period of 12 months from the date of this Issue, investors subscribing to the
Equity Shares in this Issue may only sell their Equity Shares on the BSE or the NSE and may not enter into any offmarket trading in respect of these Equity Shares. There can be no assurance that these restrictions will not have an
impact on the price or liquidity of the Equity Shares.

45

Economic developments and volatility in securities markets in the global market, including emerging markets,
may cause the price of the Equity Shares to decline.
The global financial crisis and economic downturn that occurred in 2008 or similar financial crisis in the future may
materially adversely impact our business, financial condition, results of operations and prospects in a number of
ways, including:
decreased demand for our export of FMCG products to overseas markets during the global financial crisis
and economic downturn;
an economic slowdown or recession, or the risk of potential economic slowdown or recession, may cause
our distributors to delay, defer or cancel their purchases from us;
under difficult economic conditions, consumers may seek to reduce discretionary spending by foregoing
purchases of FMCG products;
government actions to control the rate of economic recovery and curb inflation by raising interest rates,
statutory-liquidity ratio of financial institutions or by other fiscal or monetary policies;
financing and other sources of liquidity may not be available on reasonable terms or at all; and
fall in price of the Equity Shares.
These risks may be exacerbated in the event of any prolonged economic downturn or financial crisis.
The Indian economy and its securities markets are influenced by economic developments and volatility in securities
markets in other countries. Investors reactions to developments in one country may have adverse effects on the
market price of securities of companies located in other countries, including India. For instance, the economic
downturn globally has adversely affected market prices in the worlds securities markets, including the Indian
securities markets. Negative economic developments, such as rising fiscal or trade deficits, or a default on sovereign
debt, in other emerging market countries may affect investor confidence and cause increased volatility in Indian
securities markets and indirectly affect the Indian economy in general.
In addition, the markets bearing emerging market risks, such as risks relating to India, are, to varying degrees,
influenced by economic and securities market conditions in other emerging market countries. Although economic
conditions differ in each country, investors reactions to developments in one country may affect securities of issuers
in other countries, including India. Accordingly, the price and liquidity of the Equity Shares may be subject to
significant fluctuations, which may not necessarily be directly or indirectly related to our financial performance.
There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a
shareholders ability to sell, or the price at which it can sell, the Equity Shares at a particular point in time.
We are subject to a daily circuit breaker imposed by all stock exchanges in India, which does not allow
transactions beyond specified increases or decreases in the price of the Equity Shares. This circuit breaker operates
independently of the index/based market/wide circuit breakers generally imposed by SEBI on Indian stock
exchanges. The percentage limit on our circuit breakers is set by the stock exchanges based on the historical
volatility in the price and trading volume of our shares. The stock exchanges do not inform us of the percentage limit
of the circuit breaker in effect from time to time and may change without our knowledge. This circuit breaker limits
the upward and downward movements in the price of the Equity Shares. As a result of this circuit breaker, there is
no assurance regarding your ability to sell, or the price at which you can sell, the Equity Shares at any particular
point in time.
Any trading closures at the BSE and the NSE may adversely affect the trading price of our Equity Shares or a
shareholders ability to transfer its Equity Shares.
The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other
participants differ, in some cases significantly, from those in Europe and the U.S. The BSE and the NSE have in the
past experienced problems, including temporary exchange closures, broker defaults, settlements delays and strikes
by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidity of the
securities of Indian companies, including the Equity Shares, in both domestic and international markets. For

46

example, on May 18, 2009, following an unprecedented rise of over 17% in the Sensex and Nifty as a reaction to the
success of the new coalition government, the BSE and the NSE closed at noon and resumed trading the next day. A
closure of, or trading stoppage on, either of the BSE and the NSE could adversely affect the trading price of the
Equity Shares or a shareholders ability to transfer its Equity Shares. Historical trading prices, therefore, may not be
indicative of the prices at which the Equity Shares will trade in the future.

47

MARKET PRICE INFORMATION AND OTHER INFORMATION CONCERNING THE EQUITY

SHARES
7,25,68,800 Equity Shares of our Company were issued and outstanding as at July 31, 2010. The Equity Shares of
our Company have been listed on the BSE and the NSE since December 19, 2007.
On August 9, 2010 the closing price of the Equity Shares of our Company on the BSE and the NSE was Rs. 279.25
and Rs. 279.85 per Equity Share, respectively.
The tables below provide certain market price and other information of the Equity Shares of our Company,
including the high and low prices and the trading volume for the specified periods. The Equity Shares are actively
traded on the BSE and NSE and hence the market price and other information for each of the BSE and the NSE has
been given separately.
Bombay Stock Exchange(1)
High Closing Price
Low Closing Price(2)
Date
Closing
Volume
Date
Closing Volume on
Price
on Date of
Price
Date of
(Rs.)
High (No.
(Rs.)
Low (No.
of Equity
of Equity
Shares)(3)
Shares) (3)
(2)

Financial Year:
2008

January 17,
2008
April 1, 2008

901.85

22,524

746.25

953

March 8,2010

195.55

5,14,039

Month:
April 2010

April 8, 2010

174.35

6,447

May 2010

May 31, 2010

205.25

36,638

June 2010
July 2010

June 23, 2010

July 30, 2010

272.40
283.15

2,20,714
12,931

2009 (December
19, 2008*)
2010

Average
(4)
(Rs.)

March 17,
2008
February 20,
2009
April 1, 2009

557.40

7,178

795.31

51.50

419

301.49

60

330

133.53

April 28,
2010
May 12,
2010
June 1, 2010
July 1, 2010

162.90

17,987

168.90

175.15

8,663

182.39

208.60
256.10

55,309
56,501

238.68
269.45

* Effective date for the split of the face value of the equity shares from Rs. 5 each to Re. 1 each approved by way of the resolution of the Board of
Directors dated August 27, 2008 and the resolution of the shareholders dated November 11, 2008

(1)
(2)
(3)
(4)

Source: www.bseindia.com.
High and low closing prices are based on the daily closing prices.
In case of two days with the same closing price, the date with the higher volume has been chosen.
In the case of a year, represents the average of the closing prices on the last day of each month of each year presented.
In the case of a month, represents the average of the closing prices of each day of each month presented.

National Stock Exchange(1)

High Closing Price
Low Closing Price(2)
Date
Closing
Volume on
Date
Closin Volume on
Price
Date of
g Price
Date of
(Rs.)
High (No.
(Rs.)
Low (No.
of Equity
of Equity
Shares) (3)
Shares) (3)
(2)

Financial Year:
2008
2009 (December 19,
2008*)

January 18,
2008
April 1,
2008

903.05

61,961

767.65

5,689

48

March 17,
2008
February
20, 2009

Average (4)
(Rs.)

564.40

39,763

800.1

51.15

1,689

297.68

National Stock Exchange(1)

High Closing Price
Low Closing Price(2)
Date
Closing
Volume on
Date
Closin Volume on
Price
Date of
g Price
Date of
(Rs.)
High (No.
(Rs.)
Low (No.
of Equity
of Equity
Shares) (3)
Shares) (3)
March 8,
194.70
7,92,807 April 1,
60.00
4,578
2010
2009
(2)

2010
Month:
April 2010
May 2010
June 2010
July 2010

April 8,
2010
May, 31,
2010
June 23,
2010
July 30,
2010

174.80

22,806

205.25

44,019

273.30

5,20,175

283.65

2,22,951

April 28,
2010
May 12,
2010
June 1,
2010
July 5,
2010

Average (4)
(Rs.)

133.61

162.95

3,02,481

169.02

175.95

26,800

182.64

208.80

1,35,772

238.89

256.30

29,408

269.56

* Effective date for the split of the face value of the equity shares from Rs. 5 each to Re. 1 each approved by way of the resolution of the Board of
Directors dated August 27, 2008 and the resolution of the shareholders dated November 11, 2008

(1)
(2)
(3)
(4)

Source: www.nseindia.com.
High and low prices are based on the daily closing prices.
In case of two days with the same closing price, the date with the higher volume has been chosen.
In the case of a year, represents the average of the closing prices on the last day of each month of each year presented.
In the case of a month, represents the average of the closing prices of each day of each month presented.

The following table provides the aggregate volume of our Equity Shares transacted during each month presented.
Volume (No. of Equity Shares)
Bombay Stock Exchange(1)
National Stock Exchange of India(2)
Month:
January 2010
February 2010
March 2010
April 2010
May 2010
June 2010
July 2010
(1)
(2)

5,04,699
8,54,254
10,55,579
11,23,437
10,75,407
35,52,743
5,89,231

11,50,242
15,71,413
23,74,678
21,16,602
24,48,755
71,21,679
20,66,338

Source: www.bseindia.com.
Source: www.nseindia.com.

The following table provides certain market price and other information of the Equity Shares for June 22, 2010, the
first working day immediately following our Board meeting approving the Issue.

June
22,
2010
(1)
(2)

Open
(Rs.)
249.65

Bombay Stock Exchange(1)

High
Low
Close
(Rs.)
(Rs.)
(Rs.)
259.00 249.40
254.50

Volume
1,12,651

Source: www.bseindia.com.
Source: www.nseindia.com.

49

National Stock Exchange of India(2)

Open
High
Low
Close
(Rs.)
(Rs.)
(Rs.)
(Rs.)
Volume
249.00
259.20
248.60
254.80
3,40,870

USE OF PROCEEDS
The total proceeds of the Issue will be Rs. 22,788.22 lakhs. After deducting fees and expenses of approximately Rs.
6,93,81,649, the net proceeds of the Issue will be approximately Rs. 22,094.39 lakhs.
Subject to compliance with applicable laws and regulations, our Company intends to use the net proceeds of the
Issue primarily for acquisition in the future and to expand inorganically by identifying acquisition opportunities as
part of our growth strategy in India and, if required, for general corporate purposes as well.
In accordance with the decision of our Board, our management will have flexibility in deploying the proceeds
received by our Company from the Issue.

50

CAPITALIZATION STATEMENT
The following table sets forth our Companys capitalization and total debt as on March 31, 2010, and as adjusted to
give effect to the Issue, based on our Companys audited consolidated financial statements. This table should be read
in conjunction with the section Managements Discussion and Analysis of Financial Condition and Results of
Operations and other financial information contained in the section Financial Statements.
(Rs. in lakhs)

As of March 31, 2010

(audited and consolidated)
Shareholders funds
Equity share capital
Preference share capital
Share application money
Reserves and surplus
Total shareholders funds (A)

As adjusted for the Issue

725.69
Nil
Nil
38,050.29
38,775.98

806.32
Nil
Nil
60,757.87
61,564.19

Secured loans
Unsecured loans
Total Loan Funds(B)

1,287.46
17.45
1,304.91

1,287.46
17.45
1,304.91

Minority interest (C)

49.69

49.69

1,328.18

1,328.18

41,458.76

64,246.97

Deferred tax liability (D)

Total (A+B+C+D)

51

DIVIDENDS
The following table sets forth certain details regarding the dividends paid by our Company on the Equity Shares for
financial years ended March 31, 2010, March 31, 2009 and June 30, 2008. We changed our financial year ending
from June 30 to March 31 from financial year 2009. Thus our financial year 2009 includes nine months instead of 12
months. Our financial year 2008 was a 12 months period ended June 30, 2008. Our financial year now ends on
March 31 of each year, so all references to the financial year 2009 are to the nine month period ended March 31,
2009 and all references to the financial year 2010 are to the 12 months period ended March 31, 2010:
(In Rs. lakhs, except per share data)

Particulars
Face value of Equity Shares (Rs. per share)
Final dividend of Equity Shares (Rs. per share)
% Rate of dividend
Total dividend on Equity Shares
Dividend tax (gross)

Fiscal 2010
1
4
400
2,902.75
482.11

Fiscal 2009
1
2
200
1,451.38
246.66

Fiscal 2008
5
10
200
1,451.38
246.66

Amounts paid as dividends in the past are not reflective of any future dividends, which are subject to the
recommendation of our Board of Directors based on various factors and the approval of our shareholders. Investors
are cautioned not to rely on past dividends as an indication of our future performance or for an investment in our
Equity Shares.

52

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together
with our reformatted consolidated financial statements and the notes to those statements included in this Placement
Document. This discussion contains forward-looking statements and reflects our managements current views with
respect to future events and financial performance. Actual results may differ materially from those anticipated in
these forward looking statements as a result of certain factors such as those set forth in the sections Risk Factors
and Forward Looking Statements included in this Placement Document.
The following discussion relates to our Company, its Subsidiaries and its interest in Balaji Teleproducts Limited and
Continental Speciale (India) Private Limited and unless otherwise stated, is based on our reformatted consolidated
financial statements, which have been extracted from the audited consolidated financial statement which are in
accordance with Indian GAAP, the accounting standards prescribed by the ICAI and the relevant provisions of the
Companies Act. Indian GAAP differs in certain significant respects from IFRS and other accounting principles with
which prospective investors may be familiar with in other countries. We do not provide a reconciliation of our
financial statements to IFRS. Furthermore, we have not quantified or identified the impact of the differences between
Indian GAAP and IFRS as applied to our reformatted consolidated financial statements.
We changed our financial year ending from June 30 to March 31 from financial year 2009. Thus, our financial year
2009 includes nine months instead of 12 months. Further, discussions below in relation to financial year 2008 shall
refer to the 12 months period ending June 30, 2008. Our financial year now ends on March 31 of each year, so all
references to the financial year 2009 are to the nine month period ended March 31, 2009 and all references to the
financial year 2010 are to the 12 month period ending March 31, 2010.
Certain financial information set forth in the following discussion, including, volume and value growth of products
and other analyses is based on internal management reports and information and is not based on or derived from
the reformatted financial statements. All other financial information is, unless stated otherwise, based on our
reformatted consolidated financial statements.
Overview
We are a FMCG company in the fabric care, household insecticide, surface cleaning, personal care and air care
segments of the Indian market and offer branded products including fabric whitener, fabric stiffener and washing
powder, mosquito repellent, dishwashing, bath and incense products. We also offer laundry and fabric care services
through our 75.00% owned subsidiary, JFSL. Our flagship brand Ujala liquid fabric whitener had a 72.00% market
share by value in the Indian organized segment for the year ended 2010 according to A.C. Nielsen and, as per
estimates from Marketpulse-IMRBs Household Purchase Panel, it is likely that Ujala was purchased at least once
by 732.00 lakhs households during the period April 1, 2009 to March 31, 2010. This represents 33.00% of Indian
households. We believe that our brands enjoy strong association with our core values including offering value-formoney products and services to the common man.
Our key brands are Ujala, Maxo, Exo, Jeeva, Maya, Fabric Spa and Snoways. The product line for Ujala (a 27 year
old brand, used prior to the incorporation of our Company) consists of fabric whitener, fabric stiffener and washing
powder. Our Maxo product line consists of mosquito repellent coils, liquid vaporizers, aerosol sprays, creams and
wet wipes. Exos product line includes dishwashing bars and dishwashing liquid with an anti-bacterial agent,
dishwashing powder, and dish scrubbers. We produce personal care products under the Jeeva brand and market air
freshening incense sticks or agarbatti under our Maya brand. We provide laundry and fabric care services through
Fabric Spa and Snoways.
Our Ujala fabric whitener and Maxo mosquito repellent coils occupy leading positions and have significant market
shares in their respective product segments. Ujalas success led us to be ranked first in fabric whitener with a
70.70% market share in India by value for the month ended March 31, 2010. (Source A.C. Nielsen). Additionally,
Ujala fabric whitener had a retail penetration of 70.70% for the month ended March 31, 2010. (Source A.C. Nielsen).
Our Maxo mosquito repellent coils achieved a 22.20% market share in India by value for the month ended March
31, 2010. (Source A.C. Nielsen) In addition, our Exo dishwashing bar, which was launched at a national level in
53

October 2009, achieved a 24.10% market share in southern India by value for the month ended March 31, 2010.
(Source A.C. Nielsen)
Our branded products are present throughout urban and rural India. We have focused on the marketing and
distribution of our products in various states in India and in both rural and urban areas, targeting our various brands
and specific products and services to suit consumer needs and tastes. We have extended most of our brands
nationally. Our brands are particularly strong in southern India. For example, in rural Kerala, our Ujala fabric
whitener achieved a 98% market share by value in the year ended March 31, 2010 (Source A.C. Nielsen).
Market share information for our Ujala fabric whitener and Maxo coils in India and Exo dishwashing bar in southern
India is set forth below.

Product Categories

Year ended March 31, 2010

Value
Volume
Ujala Fabric Whitener
72.00
57.10
Maxo Coils
21.20
21.70
Exo Dishwashing Bar*
23.00
21.30
*For southern India only (Source A.C. Nielsen)

Market Share (%)

Quarter ended March 31, 2010
Value
Volume
71.00
57.50
19.90
21.00
23.10
20.70

Month ended March 31, 2010

Value
Volume
70.70
57.10
22.20
23.70
24.10
21.50

We have established a distribution network across India with a sales staff of approximately 1,400 people servicing
approximately 3,500 distributors. According to A.C. Nielsen, our Ujala fabric whitener was available in
approximately 27.00 lakhs outlets in India as on March 31, 2010. We believe that our field staff have a direct reach
of approximately 10 lakhs retail outlets.
We manufacture our products through 28 manufacturing facilities in 16 locations across India, some of which are tax
efficient units.
Our total consolidated net sales was Rs. 59,810.21 lakhs and Rs. 36,348.75 lakhs for the financial years ended
March 31, 2010 and 2009, respectively. Our consolidated profit after tax was Rs. 7,434.11 lakhs and Rs.3,835.97
lakhs for the financial years ended March 31, 2010 and 2009, respectively.
Comparison of Financial Periods
Our most recent financial reporting period for the purposes of this section was for the financial year ended March
31, 2010. Our financial year ends on March 31 of each year. Our financial year ended March 31, 2009 was a nine
months accounting period. Prior to our financial year (nine months) ended March 31, 2009, our financial year ended
on June 30, 2008. Accordingly, due to the different periods covered by our financial reporting periods, it is difficult
to compare our financial results period-on-period and any such comparison may be misleading due to seasonality
and other factors.
In this document, the term financial year refers to the 12 month periods ended March 31, 2010 and June 30, 2008
and the nine months period ended March 31, 2009, as the context may require.
Basis of Consolidation
a) The reformatted consolidated financial statements are as they were produced in the respective years or periods
audited consolidated financial statements after making adjustments for reclassifications. Those financial
statements had been prepared to comply in all material respects with the notified accounting standards by the
Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies
Act. The financial statements had been prepared under historical cost convention on an accrual basis except in
case of assets for which provision for impairment is made. The accounting policies had been consistently
applied by our Company and are consistent with those used in the previous year or period.
b) The consolidated financial statements of our Company has been consolidated on a line-by-line basis by adding
together the book values of our Subsidiaries like items of assets, liabilities, income and expenses, after
54

eliminating intra-group balances and the unrealised profits or losses on intra-group transactions as per
Accounting Standard 21(AS 21) Consolidated Financial Statement. The results of Subsidiaries are included
from the date of acquisition of a controlling interest.
The excess or shortfall of the cost to our Company of its investments in our Subsidiaries is recognised in the
financial statements as goodwill or capital reserves, as the case may be. The goodwill amount which so arises is
written off in the same year.
c)

Minority interest in the net assets of consolidated Subsidiaries consists of the amount of equity attributable to
the minority shareholders at the dates on which investments are made by our Company in our Subsidiaries and
further movement in their share in equity, subsequent to the dates of investment.

d) Investment in joint ventures is dealt with in accordance with Accounting Standard (AS) 27 Financial Reporting
of interest in Joint Ventures and our Companys interest in joint venture is accounted for using the
proportionate consolidation method.
e)

The consolidated financial statements includes the financial statements of the following Subsidiaries and Joint
venture companies :

Name of the company

Country
of
incorporation

(a) Subsidiaries
1.
Sri Sai Homecare Products Private
Limited
2.
Associated Industries Consumer Products
Private Limited#
3.
Jyothy Fabricare Services Limited ##
4.
Snoways Laundrers and Drycleaners
Private Limited*
(b) Joint Venture Companies (refer Note (f) below)**
1.
Balaji Teleproducts Limited
2.
Continental Speciale (India) Private
Limited
#

##
*
**

f)

Percentage of voting power as on

March 31, 2010 March 31, 2009
June 30, 2008

India

100

100

100

India

100

100

100

India
India

75
49

75
-

India
India

50
50

50
50

On September 12, 2007, our Company has acquired 100% share capital of Associated Industries Consumer Products Private Limited,
engaged in business of manufacturing and selling of soaps, detergents etc. Accordingly, the accounts of the same has been
consolidated from September 12, 2007.
The JFSL was incorporated on March 18, 2008 and being the first year of incorporation, the financial statements have been prepared
for a period from March 18, 2008 to March 31, 2009 and the same has been considered for the purpose of Consolidation.
JFSL has acquired 49% share in Snoways Laundrers and Drycleaners Private Limited and has entered in to agreement which enable it
to control the management of our Company, making it a subsidiary of JFSL.
During the year ended March 31, 2010, our Company has sold its interest in both the joint venture companies, Balaji Teleproducts
Limited and Continental Speciale (India) Private Limited.

The audited financial statement of the joint venture companies, Balaji Teleproducts Limited and Continental
Speciale (India) Private Limited for the nine months period ended March 31, 2009, and of Continental Speciale
(India) Private Limited for the year ended June 30, 2008, were not available and thus, have been consolidated
on the basis of unaudited accounts drawn upto their respective dates.
There was no material transaction in the joint venture companies during the period ended March 31, 2009 and
during the year ended March 31, 2010 upto the date of sale of interest in them, and these joint venture
companies were individually and collectively, not material to our Companys activity and are consolidated
based on accounts prepared by the management.

Factors Affecting Our Results of Operations

Various factors have affected the results of our operations in the past and may continue to do so in the future,
including:

55

Dependence on Ujala and Maxo

For the financial year ended March 31, 2010, and the financial year ended March 31, 2009, our flagship brand Ujala
contributed 30.64% and 34.63% of our net sales, respectively. Our dependence over the last two financial years on
Ujala has been steadily declining with increasing sales contributions from other products, primarily Maxo which
contributed 30.43% and 31.69% of our net sales in the financial year ended March 31, 2010 and the financial year
ended March 31, 2009, respectively. Notwithstanding, the contribution of Maxo, net sales of Ujala continue to
represent a substantial portion of our operating profits in the financial year ended March 31, 2010 and the financial
year ended March 31, 2009.
Competition
There is generally increasing competitive pressure in most segments of the industry in which we operate, which
makes our goals of increasing market shares and broadening our consumer base a continuing challenge. Increasing
competitive pressures may also impact our ability to improve realisations from our products. We need to respond to
competitive business strategies adopted by other players and consequently our costs, including advertising and sales
promotion expenses may be impacted.
Unfair Competition
We, like other players in the branded FMCG segment, face various forms of unfair competition, including sale of
duplicates, clones and pass-offs.
Supermarket and Hypermarket Chains in India
The FMCG industry in India has been witnessing the emergence of newer channels of distribution, such as direct
marketing and new supermarket and hypermarket chains. With urban consumers becoming more affluent, younger
on average and more aspirational, and with supermarkets emerging in cities across the country, penetration of
supermarkets is likely to continue to increase. This provides the opportunity to improve supply chain efficiencies
and the visibility of our brands, however it also puts pressure on our margins as volume purchases from large
supermarket chains increases their bargaining position.
Raw Materials Availability
Adequate availability of key raw materials at the right prices and throughout the year is crucial for our operations.
Any disruption in the supply, or increase in the costs, of such materials could affect our ability to reach our
consumers with a successful value proposition and satisfy existing demand. Any increase in the prices of crude oil
could affect the availability and prices of raw materials like HDPE and acid slurry.
Seasonality
Sales of our Maxo products are seasonal with a substantial part of our revenues from this product typically coming
in the period of January to April and the months of August and September. During periods of lower sales activity, we
may continue to incur operating expenses, but our revenues may be delayed or reduced. This may adversely impact
our results of operations and cash flows during certain reporting periods. We also purchase some of our raw
materials on a bulk basis at certain times during the year due to seasonality like saw dust and price considerations
like HDPE and acid slurry. These bulk purchases may increase our inventory in certain reporting periods.
Regulatory Changes
Regulatory changes, especially fiscal changes and changes related to food and cosmetics laws in India and overseas,
can have a bearing on our business especially in respect of new business lines and new business opportunities.
Changes in tax incentives in our markets could affect our results or operations.
Indirect Taxation on our Products

56

Our products are subject to indirect taxation such as sales tax, value added tax and excise duty. Our current indirect
taxation profile is based on current tariff classifications and the current tariff rates. Classifications or tariff rates or
both may change from time to time. If such revision is adverse, our results of operations may be correspondingly
affected. A dual Goods and Services Tax (GST) has been proposed whereby a Central Goods and Services Tax and
a State Goods and Services Tax will be levied on the taxable value of every transaction of supply of goods and
services. We cannot predict the consequences of the implementation of GST in the future as proposed by the Central
Government.
Macroeconomic Factors
Macroeconomic factors such as a recession or any other economic instability, political uncertainty, social upheavals
or acts of God affecting our markets could influence our performance. Further, fluctuations in crude oil prices, rising
interest rates and inflation could affect our margins.
Monsoon
Rainfall may continue to affect us and our performance. While a mild monsoon season can help set the tone for a
good year, a bad monsoon season could impact the purchasing power of consumers, particularly in rural areas.
Success of our new products and services
Our new products and services entail significant risks and the possibility of unexpected consequences arising from
several factors.
For more information on these and other factors that have affected or may affect our results of operations, financial
condition or business, please see Risk Factors.
Results of OperationsOverview
Total Income
Our total income for the financial years ended March 31, 2010, March 31, 2009 and June 30, 2008 was Rs.
61,590.44 lakhs, Rs. 37,109.76 lakhs and Rs. 38,745.51 lakhs respectively.
Sales (net of trade discount) during the last three financial years consists of our sales from our branded products
including Ujala, Maxo, Exo, Maya, Jeeva, revenues from our laundry and fabric care services under the brands
Fabric Spa and Snoways and from distributed products like Godrej Tea and Continental Speciale coffee. Sales
revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.
Net sales are sales less sales tax and excise duty.
Products

Fabric Care
Mosquito Repellent
Dishwashing
Other Products
Laundry and Fabric Care
Services
Joint Venture and Third Party
Products
Total

Financial year ended March

31, 2010
Amount
Percentage
(Rs.
in (%)
lakhs)
27,602.11
46.15%
18,199.12
30.43%
9,437.49
15.78%
4,175.99
6.98%

Financial
year
ended
March 31, 2009
Amount
Percentage
(Rs. in (%)
lakhs)
16,585.59
45.63%
11,517.18
31.69%
5,256.75
14.46%
2,821.00
7.76%

Financial year ended

June 30, 2008
Amount
Percentage
(Rs.
in (%)
lakhs)
20,333.43
53.57%
11,086.81
29.21%
3,634.69
9.58%
2,525.46
6.65%

415.89

0.70%

125.95

0.35%

0.00%

(20.39)
59,810.21

(0.03)%

42.29
36,348.75

0.12%

375.37
37,955.76

0.99%

57

Sales tax or value added tax (VAT) is imposed by the State Governments and central excise duty is imposed by the
Central Government. Sales tax, VAT and excise duty are directly related to our gross sales booked in any particular
region during a reporting period.
Trade discounts are discounts in addition to the regular margin given to the wholesalers and the retailers to promote
our Companys products to combat competition. This trade discount is passed from our Company to the superstockist and down the chain to benefit the wholesalers and the retailers.
Other income includes interest on fixed deposits, lease rent income, write-back of provisions no longer required,
export incentives, profits from the sales of investment, differential excise duty benefit, and other miscellaneous
income.
Expenditure
The following table sets out our expenditure as a percentage of our net sales for the periods indicated:

Particulars

Net Sales
Expenditure:
Materials costs
(Increase)/Decrease
in
finished goods/work in
progress
Excise Duty
Employee costs
Operating
and
administrative expenses
Advertisement
and
publicity
Sales
and
promotion
schemes
Provision for doubtful
debts/Bad debts written off
Total
Expenditure
(excluding depreciation,
Interest
and
finance
charges)

Financial Year 2010

April 1, 2009 to March
31, 2010 (12 months)
Amount
(Rs.
in Percentage
lakhs)
of net sales
59,810.21

Financial Year 2009

July 1, 2008 to March 31,
2009 (nine months)
Amount
(Rs.
in Percentage
lakhs)
of net sales
36,348.75

Financial Year 2008

July 1, 2007 to June 30,
2008 (12 months)
Amount
(Rs.
in Percentage
lakhs)
of net sales
37,955.76

32,254.40

53.93

19,596.17

53.91

18,918.12

49.84

(534.78)

(0.89)

269.97

0.74

(652.81)

(1.72)

178.53
7,538.40

0.30
12.60

158.25
4,729.96

0.44
13.01

331.32
5,074.00

0.87
13.37

7,392.30

12.36

4,850.33

13.34

5,165.18

13.61

2,661.84

4.45

1,506.00

4.14

2,867.42

7.55

1,133.18

1.89

339.41

0.93

154.58

0.41

5.51

0.01

22.96

0.06

Nil

Nil

50,629.38

84.65

31,473.05

86.59

31,857.81

83.93

Materials costs
Cost of materials costs includes consumption of raw materials, packing material, and the cost of trading goods
(includes the purchase of outsourced products). In addition, material costs includes the cost of our Companys own
products which are given free as part of consumer offers.
We outsource the production (in whole or in part) of certain products like Maxo, Maya, Exo, Ujala washing powder
and Exo Safai that are manufactured to our specifications. We purchase these products from our third party
manufacturers. The purchase price of these finished goods is determined on a cost-plus basis.
(Increase)/Decrease in inventories

58

(Increase)/Decrease in inventories includes the differences between opening and closing stock values related to
materials consumed plus manufacturing expenses. This includes the (increase)/decrease in excise duty on closing
stocks.
Employees Costs
Our employees costs include salaries, wages, bonus and gratuity, contributions to provident and other funds and
staff welfare scheme expenses in respect of our employees and Directors, Directors remuneration, commission to
Directors and field staff incentives.
Operating and administrative expenses
Operating and administrative expenses include, among other things, carriage outwards expenses (net of freight
subsidy), power and fuel expenses, field staff expenses and awards, repairs and maintenance expenses, legal and
professional fees, rent and travelling and conveyance expenses. This is arrived by reducing advertisement, publicity,
sales promotion, schemes and provisions for doubtful or bad debts written off from Other Expenses.
Advertisement and Publicity
Advertisement and publicity includes the production cost of television and radio commercials and press
advertisements, media buying (television, press and radio), commissions and fees to advertising agencies and costs
related to publicity campaigns (including brand endorsement fees, if any).
Sales Promotion and Schemes
Sales promotion and schemes includes the special offers to the distributors, cost of loyalty programmes, incentives
and awards to distributors and the cost of items (other than our Companys own products) that are given free as part
of consumer and trade offers.
Interest and Finance Charges
Finance charges include interest on loans and other financial charges. Our subsidiary, JFSL, received sanction of a
loan of Rs. 1,800 lakhs from the Bank of India on June 8, 2009 out of which Rs. 1,287.46 lakhs has been
outstanding as at March 31, 2010. We had unsecured loans of Rs. 17.45 lakhs at March 31, 2010 in the nature of
deferred sales tax loan.
Taxes
Taxes include Income Tax, Fringe Benefit Tax and Deferred Taxes. During the financial year ending March 31,
2010, our effective tax rate (being calculated as a percentage of provision for tax to the profit before tax) was
22.48%. Our manufacturing facilities located at Baddi, Wayanad, Roorkee, Bari Brahmana and Guwahati are
eligible for deduction under Section 80IA/80IB/80IC of the I.T. Act. We however cannot assure you that such fiscal
incentives would not be withdrawn or reduced in the future.
The table below sets forth the extent of profits exempt from Income Tax at each of our factories eligible for
exemption under Section 80IA/80IB/80IC of the I.T. Act as applicable at present.
Financial
Year

Eligibility for Deduction under Section 80IA / 80IB / 80IC of the I.T. Act (in %)
Himachal
Pondy
Silvassa
Wayanad
Guwahati
Guwahati
Bishnupur
Ujala
Personal
(Ujala)
Maxo
Care

Himachal
Pradesh
Stiff &
Shine

Himachal
PVE

Uttaranchal
Ujala

Jammu
Maxo

HIMACHAL
(DETERGENT
UNIT)

UTTRANCHAL
II

2007 - 08

30

30

30

30

30

30

30

100

100

2008 - 09

30

30

30

30

30

30

30

100

100

100

100

2009 - 10

30

30

30

30

30

100

100

100

100

100

100

2010 - 11

30

30

30

30

30

100

100

100

100

100

2011 - 12

30

30

30

30

100

100

100

100

100

59

2012 - 13

30

30

100

100

100

100

2013 - 14

30

30

30

30

100

100

2014 - 15

30

30

30

30

30

30

2015 - 16

30

30

30

30

30

2016 - 17

30

30

30

30

30

30

30

30

30

30

30

2017 - 18
2018 - 19

The financial year ended March 31, 2010 compared with the financial year ended March 31, 2009
Income
Our total income for the financial years ended March 31, 2010 and March 31, 2009 was Rs. 61,590.44 lakhs and Rs.
37,109.76 lakhs, respectively.
Expenditure
Materials costs
Materials costs was Rs. 32,254.40 lakhs for the financial year ended March 31, 2010 and Rs. 19,596.17 lakhs for the
financial year ended March 31, 2009. As a percentage of revenue, materials costs increased marginally to 53.93%
for the financial year ended March 31, 2010 from 53.91% in the year ended March 31, 2009.
(Increase)/Decrease in Inventories
There was an increase of Rs. 534.78 lakhs in inventory in the financial year ended March 31, 2010 and Rs. 269.97
lakhs decrease in inventory in the financial year ended March 31, 2009.
Employees Costs
Employees costs was Rs. 7,538.40 lakhs for the financial year ended March 31, 2010 and Rs. 4,729.96 lakhs for the
financial year ended March 31, 2009. As a percentage of net sales, employees costs decreased to 12.60% in the
financial year ended March 31, 2010 from 13.01% in the financial year ended March 31, 2009.
Operating and administrative expenses
Operating and administrative expenses was Rs. 7,392.30 lakhs for the financial year ended March 31, 2010 and Rs.
4,850.33 lakhs for the financial year ended March 31, 2009. As a percentage of net sales, operating and
administrative expenses decreased in the financial year ended March 31, 2010 to 12.36. % from 13.34% in the
financial year ended March 31, 2009.
Advertisement and Publicity
Advertisement and publicity expenditure was Rs. 2,661.84 lakhs for the financial year ended March 31, 2010 and
Rs. 1,506.00 lakhs for the financial year ended March 31, 2009. As a percentage of net sales, advertisement and
publicity expenditure increased in the financial year ended March 31, 2010 to 4.45 % from 4.14% in the financial
year ended March 31, 2009. This increase was principally due to the new campaign for Maxo and the national
campaign for Exo dishwashing bar.
Sales Promotion and Schemes
Sales promotion and schemes was Rs. 1,133.18 lakhs for the financial year ended March 31, 2010 and Rs. 339.41
lakhs for the financial year ended March 31, 2009. As a percentage of net sales, expenditure for sales promotion and
schemes increased in the financial year ended March 31, 2010 to 1.89% from 0.93% in the financial year ended
60

March 31, 2009. This increase was principally due to a greater spend in the financial year ended March 31, 2010 for
the promotion of Ujala washing powder pursuant to its expansion in southern states outside Kerala.
Profit Before Interest, Depreciation and Tax
Profit before interest, depreciation and tax was Rs. 10,961.06 lakhs for the financial year ended March 31, 2010 and
Rs. 5,636.71 lakhs for the financial year ended March 31, 2009. As a percentage of net sales, the profit before
interest, depreciation and tax increased to 18.33% for the financial year ended March 31, 2010 from 15.51% for the
financial year ended March 31, 2009. This increase was principally due to increase in other income.
Interest and Finance Charges
Interest and finance charges was Rs. 169.54 lakhs for the financial year ended March 31, 2010 and Rs. 70.93 lakhs
for the financial year ended March 31, 2009. As a percentage of net sales, the interest and finance charges increased
to 0.28 % for the financial year ended March 31, 2010 from 0.20 % for the financial year ended March 31, 2009 due
to the secured term loan taken by JFSL.
Depreciation, Amortization and Impairment
Depreciation and amortization was Rs. 1,236.55 lakhs for the financial year ended March 31, 2010 and Rs. 748.31
lakhs for the financial year ended March 31, 2009. As a percentage of net sales, depreciation and amortization
increased to 2.07 % for the financial year ended March 31, 2010 from 2.06 % for the financial year ended March 31,
2009. This increase was on account of the expansion at our manufacturing facilities at Roorkee and Salem for Ujala
washing powder and soap and Pondicherry for Maxo liquids as well as the capital expenditure incurred by JFSL.
Profit before Taxation
Profit before taxation was Rs. 9,554.97 lakhs for the financial year ended March 31, 2010 and Rs. 4,817.47 lakhs for
the financial year ended March 31, 2009. As a percentage of net sales, profit before taxation increased to 15.98% for
the financial year ended March 31, 2010 from 13.25% for the financial year ended March 31, 2009. This increase
was principally due to increase in other income.
Provision for Tax
Provision for tax was Rs. 2,147.53 lakhs for the financial year ended March 31, 2010 and Rs. 1,080.37 lakhs for the
financial year ended March 31, 2009. As a percentage of profit before tax, the provision for tax increased to 22.48 %
from Rs. 22.43% for the financial year ended March 31, 2009.
The financial year ended March 31, 2009 compared with the financial year ended June 30, 2008
Income
Our total income for the financial years ended March 31, 2009 and June 30, 2008 was Rs. 37,109.76 lakhs and
Rs.38,745.51 lakhs respectively.
Expenditure
Materials consumed
Materials cost was Rs. 19,596.17 lakhs for the financial year ended March 31, 2009 and Rs. 18,918.12 lakhs for the
financial year ended June 30, 2008. As a percentage of net sales, materials costs increased to 53.91 % for the
financial year ended March 31, 2009 from 49.84% in the financial year ended June 30, 2008. This increase was due
to rise in prices of HDPE and acid slurry which are closely linked to crude oil prices.
(Increase)/Decrease in Inventories

61

There was an decrease of Rs. 269.97 lakhs in inventories for the financial year ended March 31, 2009 and Rs.
652.81 lakhs increase in the financial year ended June 30, 2008.
Employees Costs
Employees costs was Rs. 4,729.96 lakhs for the financial year ended March 31, 2009 and Rs. 5,074.00 lakhs for the
financial year ended June 30, 2008. As a percentage of net sales, employees costs decreased to 13.01% in the
financial year ended March 31, 2009 from 13.37% in the financial year ended June 30, 2008.
Operating and administrative expenses
Operating and administrative expenses was Rs. 4,850.33 lakhs for the financial year ended March 31, 2009 and Rs.
5165.18 lakhs for the financial year ended June 30, 2008. As a percentage of net sales, operating and administrative
expenses decreased in the financial year ended March 31, 2009 to 13.34 % from 13.61% in the financial year ended
June 30, 2008.
Advertisement and Publicity
Advertisement and publicity expenditure was Rs. 1,506.00 lakhs for the financial year ended March 31, 2009 and
Rs. 2,867.42 lakhs for the financial year ended June 30, 2008. As a percentage of net sales, advertisement and
publicity expenditure decreased in the financial year ended March 31, 2009 to 4.14 % from 7.55% in the financial
year ended June 30, 2008. This decrease was due to a reduction in advertisements by our Company for Maxo
products.
Sales Promotion and Schemes
Sales promotion and schemes was Rs. 339.41 lakhs for the financial year ended March 31, 2009 and Rs.154.58 lakhs
for the financial year ended June 30, 2008. As a percentage of net sales, expenditure for sales promotion and
schemes increased in the financial year ended March 31, 2009 to 0.93% from 0.41% in the financial year ended June
30, 2008.
Profit Before Interest, Depreciation, Tax and Exceptional Items
Profit before interest, depreciation, tax and exceptional items was Rs. 5,636.71 lakhs for the financial year ended
March 31, 2009 and Rs. 6,887.70 lakhs for the financial year ended June 30, 2008. As a percentage of net sales, the
profit before interest, depreciation, tax and exceptional items decreased to 15.51% for the financial year ended
March 31, 2009 from 18.15% for the financial year ended June 30, 2008. This decrease was on account of an
increase in material costs.
Interest and Finance Charges
Interest and finance charges was Rs. 70.93 lakhs for the financial year ended March 31, 2009 and Rs.68.47 lakhs for
the financial year ended June 30, 2008. As a percentage of net sales, the interest and finance charges increased to
0.20 % for the financial year ended March 31, 2009 from 0.18% for the financial year ended June 30, 2008.
Depreciation, Amortization and Impairment
Depreciation and amortization was Rs. 748.31 lakhs for the financial year ended March 31, 2009 and Rs. 797.54
lakhs for the financial year ended June 30, 2008. As a percentage of net sales, depreciation and amortization
decreased to 2.06 % for the financial year ended March 31, 2009 from 2.10% for the financial year ended June 30,
2008.
Exceptional Items

62

Exceptional items was Rs. 632.61 lakhs for the financial year ended June 30, 2008 being the amount received by our
Company in terms of the investment agreement entered into with certain shareholders who exited our Company
pursuant to the initial public offering by way of an offer for sale in December 2007.
Profit before Taxation
Profit before taxation was Rs. 4,817.47 lakhs for the financial year ended March 31, 2009 and Rs. 6,654.30 lakhs for
the financial year ended June 30, 2008. As a percentage of net sales, profit before taxation decreased to 13.25% for
the financial year ended March 31, 2009 from 17.53% for the financial year ended June 30, 2008.
Provision for Tax
Provision for tax was Rs. 1,080.37 lakhs for the financial year ended March 31, 2009 and Rs. 1,666.77 lakhs for the
financial year ended June 30, 2008. As a percentage of profit before taxation, the provision for tax decreased to
22.43 % for the financial year ended March 31, 2009 from 25.05% for the financial year ended June 30, 2008.
Liquidity and Capital Resources
We broadly define liquidity as our ability to generate sufficient funds from both internal and external sources to meet
our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate equity and debt
financing and loans and to convert into cash those assets that are no longer required to meet existing strategic and
financial objectives. Therefore, liquidity cannot be considered as separate from capital resources that consist of
current or potentially available funds for use in achieving long-range business objectives and meeting any debt
service and other commitments. At present, we have no significant interest bearing long-term debt except a term
loan availed by our subsidiary, JFSL, of Rs. 1,800 lakhs from the Bank of India by way of a sanction letter dated
June 8, 2009. As of March 31, 2010, we had Rs. 1,287.46 lakhs of indebtedness outstanding.
We have historically financed our working capital and capital expenditure primarily through funds generated from
our operations and do not have working capital facilities at this time. Our business requires a significant amount of
working capital. In many cases, significant amounts of our working capital are required to finance the purchase of
materials. We believe that we will have sufficient capital resources from our operations to meet our capital
requirements for at least the next 12 months.
Cash flows
The table below summarizes our cash flows for the financial years ended March 31, 2010, March 31, 2009 and June
30, 2008:
For financial years ended
March 31, 2009
(Rs. lakhs)

March 31, 2010

Net Cash Inflow/(Outflow)
from Operating Activities
Net Cash Inflow/(Outflow)
from Investing Activities
Net Cash Inflow/(Outflow)
from Financing Activities
Net Increase/(Decrease) in
Cash and Cash equivalents

June 30, 2008

5,015.09

2,989.11

5,661.26

(3,633.94)

(220.20)

(6,239.64)

(594.00)

(1,643.97)

325.96

787.15

1124.94

(252.42)

Operating Activities
Net cash generated from operating activities for the financial year ended March 31, 2010 was Rs. 5,015.09 lakhs,
consisting of profit before tax of Rs. 9,554.97 lakhs, as adjusted by non cash items, primarily, depreciation,
amortization and impairment, interest income and excise duty provision write back. Our operating profit before
63

working capital changes was Rs. 9,498.83 lakhs. Working capital changes consisted of increase in inventories, trade
receivables, loans and advances partially offset by increase in current liabilities and provisions.
Net cash generated from operating activities for the financial year ended March 31, 2009 was Rs. 2,989.11 lakhs,
consisting of profit before tax of Rs. 4,817.47 lakhs, as adjusted by non cash items, primarily, depreciation,
amortization and impairment and interest income. Our operating profit before working capital changes was Rs.
5,097.70 lakhs. Working capital changes consisted of increase in trade receivables, loans and advances partially
offset by increase in current liabilities and provisions.
Net cash generated from operating activities for the financial year ended June 30, 2008 was Rs. 5,661.26 lakhs,
consisting of profit before tax of Rs. 6,654.30 lakhs, as adjusted by non cash items, primarily, depreciation,
amortization and impairment, interest income and amounts received from certain shareholders who exited our
Company pursuant to the initial public offering by way of an offer for sale in December 2007. Our operating profit
before working capital changes was Rs. 6,357.53 lakhs. Working capital changes consisted of increase in inventories
and loans and advances, offset by increase in current liabilities and decrease in trade receivables.
Investing Activities
Net cash outflow from investing activities for the financial year ended March 31, 2010 was Rs. 3,633.94 lakhs,
primarily consisting of purchase of fixed assets, investments for the acquisition of a new subsidiary or business,
investments in fixed deposits, partially offset by sale of fixed assets and interests received.
Net cash outflow from investing activities for the financial year ended March 31, 2009 was Rs. 220.20 lakhs,
primarily consisting of purchase of fixed assets offset by sale of fixed assets and encashment of fixed deposits.
Net cash outflow from investing activities for the financial year ended June 30, 2008 was Rs. 6,239.64 lakhs,
primarily consisting of purchase of fixed assets, advances given and investments in fixed deposits, partially offset by
interest received.
Financing Activities
Net cash outflow from financing activities for the financial year ended March 31, 2010 was Rs. 594.00 lakhs
primarily on account of payment of dividends and dividend distribution tax and payment of interest and finance
charges partially offset by the proceeds of the secured term loan of Rs. 1,287.46 lakhs availed by our subsidiary,
JFSL, from the Bank of India.
Net cash outflow from financing activities for the financial year ended March 31, 2009 was Rs. 1,643.97 lakhs
primarily on account of payment of dividends and dividend distribution tax and payment of interest and finance
charges partially offset by proceeds of issue of equity shares to minority shareholders in JFSL.
Net cash inflow from financing activities for the financial year ended June 30, 2008 was Rs. 325.96 lakhs primarily
on account of amounts received from certain shareholders who exited our Company pursuant to the initial public
offering by way of an offer for sale in December 2007 partially offset by the payment of dividends and dividend
distribution tax and payment of interest and finance charges.
Working Capital
We have historically financed our working capital and capital expenditure primarily through funds generated from
our operations. The major component of working capital is inventories. The raw materials inventory varies based on
seasonality and certain items such as saw dust, HDPE and acid slurry have to be stocked based on availability during
the seasons. We also build up inventory positions from time-to-time based on price expectation of various
commodities. The rest of the components of working capital, including trade debtors and creditors are relatively
stable.
Indebtedness

64

Our subsidiary JFSL received sanction of a loan of Rs. 1,800 lakhs from the Bank of India dated June 8, 2009 out of
which Rs. 1,287.46 lakhs has been outstanding as at March 31, 2010.We also have unsecured loans of Rs. 17.45
lakhs at March 31, 2010 in the nature of deferred sales tax loan. Except as disclosed here, we have no other
indebtedness.
Capital Expenditures
Our capital expenditure includes expenditure on new facilities and fixed assets. In the past three financial years,
capital expenditure has been funded through our internal cash accruals.
Contingent Liabilities
As at March 31, 2010, we had the following contingent liabilities that have not been provided for:
(i)
(ii)
a.
b.
c.
(iii)
(iv)

Amount outstanding in respect of guarantees given by our Company to banks

Tax matters
Disputed liability in respect of income-tax demands matters under appeal
Disputed sales tax demands matters under appeal
Disputed excise duty and service tax demand - matter under appeal
Others
Claims against our Company not acknowledged as debt

(Rs. lakhs)
1,389.90
154.82
1,443.20
1,058.02
15.82
120.00

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements.
Sundry Debtors
Our sundry debtors for the financial years ended March 31, 2010 and March 31, 2009 were Rs. 7072.95 lakhs and
Rs. 4289.82 lakhs respectively.
Summary of Significant Accounting Policies
The significant accounting policies are as follows:
a)

Fixed assets

Fixed assets are stated at cost, less accumulated depreciation, amortization and impairment losses, if any. Cost
comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended
use. Cost of shares of Co-operative society has been added to the cost of office building. 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.
b)

Depreciation and amortization

Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the
management, or at the rates prescribed under schedule XIV of the Companies Act whichever is higher.

The estimated useful life of the assets is as follows:

Category
Factory Buildings

Estimated useful life (in years)

30
65

Building (Other then Factory Building)

Plant and machinery
Furniture and fixtures
Dies and moulds
Computers
Office equipments
Vehicles
Knowhow
Trademarks and Copyrights

60
21
16
3
6
21
8-10
3-5
9-10

Assets that cost less than Rs. 5,000 are depreciated at the rate of 100 %.
Leasehold land is amortized over the period of the lease on a straight-line basis. The Goodwill purchased is tested
for impairment purposes every year.
c)

Impairment

i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment
based on internal/external factors. An impairment loss is recognized 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.
In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted
average cost of capital.
ii. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful
life.
iii. A previously recognized impairment loss is increased or reversed depending on changes in circumstances.
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.
d)

Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the leased term,
are classified as operating leases. Lease payments on operating leases are recognized as expense in the Profit and
Loss account on a straight-line basis, over the lease term.
e)

Government grants and subsidies

Grants and subsidies from the Government are recognized when there is reasonable assurance that the grant/subsidy
will be received and all attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match
them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an
asset, its value is deducted from the gross value in arriving at the carrying amount of the related asset. Government
grant in the nature of promoters' contribution is credited to the investment subsidy reserve.
f)

Investment

Investments that are readily realisable and intended to be held for not more than a year are classified as current
investments. All other investments are classified as long-term investments. Current investments are carried at lower
of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost.
However, provision for diminution in value is made to recognise a decline other than temporary decline in the value
of the investments.
g)

Inventories

66

Inventories of raw materials, packing materials, work-in-progress, finished goods, stores and consumables items are
valued at cost or net realizable value, whichever is lower. However, materials and other items held for use in the
production of inventories are not written down below cost if the finished products in which they will be incorporated
are expected to be sold at or above cost.
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. Cost of work in progress and finished goods includes materials and all
applicable manufacturing overheads. Our Company accrues for excise duty liability in respect of manufactured
finished goods/intermediary inventories lying in the factory.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of
completion and estimated cost necessary to make the sale.
h)

Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to our Company and the
revenue can be reliably measured.
Sale of Goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.
Excise Duty, 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 that arose during the year. Revenue includes the amount of
excise duty refund received / due in accordance with incentive scheme. Revenue is net of trade discount given.
Sale of Services
Service revenue is recognised on completion of services. Service revenue includes income from washing and dry
cleaning of garments. Revenue is recognised on completion of the significant part of the act involved in rendering of
service and when no significant uncertainty exists regarding realisation of consideration.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
i)

Foreign currency translation

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate. 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; 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.
(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, or reported in previous financial
statements, are recognised as income or as expenses in the year in which they arise.
j)

Retirement and other employee benefits

67

(i) Retirement benefits in the form of Provident Fund and Superannuation Fund are defined contribution schemes
and the contributions are charged to the profit and loss account of the year when the contributions to the respective
funds are due. There are no other obligations other than the contribution payable to the funds.
(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation
projected unit credit method made at the end of each financial year.

on

(iii) Short term compensated absences are provided for based on estimates at the year end. Long term compensated
absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit
method.
(iv) Actuarial gains/losses are immediately taken to the profit and loss account and are not deferred.
k)

Sales promotion items

Sales promotion items are valued at cost or net realizable value, whichever is lower. Cost is ascertained on FIFO
basis and includes all applicable costs incurred in bringing goods to their present location and condition.
l)

Income-tax

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be
paid to the tax authorities in accordance with the Indian I.T. Act. 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.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance
sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax assets can be realised. In situations where
the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognizes unrecognised
deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that
sufficient future taxable income will be available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. Our Company writes-down the
carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the
case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised.
Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may
be, that sufficient future taxable income will be available.
m)

Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an
outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
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. These are reviewed at each balance sheet date and adjusted to reflect the current
best estimates.
n)

Excise duty

Excise duty on turnover is reduced from turnover. Excise duty relating to the difference between the opening stock
and closing stock is recognized as income/expense as the case may be, separately in the Profit and Loss account.
o)

Segment Reporting Policies

68

Identification of segments:
Our Companys operating businesses are organized and managed separately according to the nature of products,
with each segment representing a strategic business unit that offers different products and serves different markets.
The analysis of geographical segments is based on the areas in which major operating divisions of our Company
operate.
Segment policies :
Our Company prepares its segment information in conformity with the accounting policies adopted for preparing
and presenting the financial statements of our Company as a whole.
Intersegment transfer:
Our Company generally accounts for inter segment sales and transfers as if the sales or transfer were to third parties
at market price.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the
total common costs.
Unallocated items:
It includes general corporate income and expense items which are not allocated to any business segment.
p)

Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year which are adjusted for the
event of share split.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of
all dilutive potential equity shares.
q)

Use of estimates

The preparation of financial statements, in conformity with generally accepted accounting principles, requires the
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 the management's best knowledge of current events
and actions, actual results could differ from these estimates.
r)

Cash and Cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.
s)

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale are capitalized as part of the respective asset. All
other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of funds.

69

Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk and
commodities risk. We are exposed to commodity risk and foreign exchange risk in the normal course of our
business.
Seasonality
Our Maxo products exhibit seasonality. This is as a result of increased consumption of such products or derivatives
of such products in certain months. However, overall, our results of operations do not exhibit any significant
seasonality.
Inflation
Although India has experienced minor fluctuation in inflation rates in recent years, inflation has not had a material
impact on our business and results of operations.
Commodity Risk
In the normal course of business, we purchase our raw materials such as HDPE, saw dust and acid slurry either on a
purchase order basis or pursuant to supply agreements. As a result, we are exposed to market risk with respect to the
prices of these raw materials. We currently do not have any hedging mechanisms in place in respect of any of the
commodities we purchase.
Exchange Rate Risk
We face exchange rate risk owing to our income from exports in currencies other than Indian Rupee, which are
subject to fluctuations against the Rupee depending on market conditions. In addition, local prices for HDPE may
reflect US dollar exchange rate fluctuations against the Rupee.
Significant Developments after March 31, 2010
In July 2010, we have launched two products under our Maxo Brand. We have launched Maxo Military and Maxo
Safe and Soft in cream and wet-wipes format. For details of the unaudited financial results of our Company for the
quarter ended June 30, 2010, please see Limited Review Report.

70

INDUSTRY
The information in this section has been extracted from publicly available documents and industry sources. It has
not been independently verified by our Company or the Book Running Lead Managers, and no representation is
made as to the accuracy of this information, which may be inconsistent with information available or compiled from
other sources. Industry sources and publications generally state that the information contained therein has been
obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying
assumptions are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions
should not be based on such information. The information from the external sources may have been re-classified by
us for the purpose of presentation.
Introduction
With rising incomes, the creation of a massive middle class and a growing population, India is expected to become
one of the worlds largest consumer markets by 2025, just behind the United States, Japan, China and the United
Kingdom. Consumption is expected to increase at an aggregate annual rate of 7.30% from 2005 to 2025 to reach
more than Rs. 69.50 trillion, or U.S.$ 1.50 trillion by 2025. In terms of purchasing power parity, Indias consumer
market is expected to grow to a size of $8.20 trillion by 2025, surpassing the size of the present United States market
of $7.80 trillion. In addition, the proportion of people dwelling in urban areas in India is expected to increase from
29.00% in 2005 to 37.00% in 2025. (Source: McKinsey Global Institute, The Bird of Gold: The Rise of Indias
Consumer Market, May 2007)
The FMCG sector in India has a market size of US$ 25.00 billion (2007-08) and constitutes 2.15% of Indias GDP. It
is a significant direct and indirect employer for the Indian population, both in urban and rural India. (Source
www.ibef.org; FMCG Sector presentation April 2010)
The Indian FMCG industry is characterized by a fragmented distribution network and intense competition between
the organized and unorganized sectors. The FMCG market is expected to grow by 10-12% annually from US$ 25.00
billion in 2008 to US$ 74.00 billion in 2018. (Source www.ibef.org; FMCG Sector presentation April 2010)
The current distribution network is concentrated in urban areas and is spreading to the rural market. Currently two
million retail outlets are present in 5,160 towns and four million retail outlets are present in 6,27,000 villages.
Penetration level as well as per capital consumption in most popular categories in India is low indicating a large
untapped market potential. (Source www.ibef.org; FMCG Sector presentation April 2010)
FMCG space in India
The main categories of the FMCG sector comprise:
1. Personal care: This category includes oral care, hair care, skin care, cosmetics, toiletries and paper
products.
2. Home Care: The category includes household cleaners, air fresheners, insecticides and metal polish.
3. Packaged Food and Beverages: This category includes health beverages, soft drinks, staples, cereals,
bakery products, snack foods and dairy products.
Key Drivers and Trends in the FMCG Industry
Large Untapped Rural market
The Indian growth story is being driven by Indias hinterlands. Rural India, which accounts for more than 70 % of
the countrys one billion population (according to the Census of India 2001), is not just witnessing an increase in its
income but also in consumption and production. The Union Budget for 2010-11 has hiked the allocation under the
National Rural Employment Guarantee Act (NREGA) to US$ 8.71 billion in 2010-11, giving a boost to the rural
economy. According to a study on the impact of the slowdown on rural markets commissioned by the Rural
Marketing Association of India (RMAI) and conducted by MART, the rural economy has not been impacted by
the global economic slowdown. Moreover, the rural consumer market, which grew 25% in 2008 when demand in
urban areas slowed due to the global recession, is expected to reach US$ 425.00 billion in 2010-11 with 720-790
71

million customers, according to a white paper prepared by CII-Technopak. That will be double the 2004-05 market
size of US$ 220.00 billion. According to the study, the rural market is seeing a 15% growth rate. FMCG sales are up
to 23%. (Source http://www.ibef.org/economy/ruralmarket.aspx; Last update March 2010)
Economic Growth
According to the estimates by the Ministry of Statistics and Program Implementation, the Indian economy has
registered a growth of 7.4% in 2009-10 with 8.6 % year-on-year growth in its fourth quarter. The growth is driven
by robust performance of the manufacturing sector on the back of government and consumer spending. GDP growth
rate of 7.4% in 2009-10 has exceeded the government forecast of 7.2% for the full year. According to government
data, the manufacturing sector witnessed a growth of 16.3% in January-March 2010 from a year earlier. (Source
http://www.ibef.org/economy/economyoverview.aspx ; Last update July 2010)
The FMCG sector continues its impressive growth path benefitting from the economic growth and improvement in
spending power of the Indian consumer
Retail Expansion
The Indian retail market size is estimated at US$ 350.20 billion and is projected to grow by 13% per annum to reach
US$ 590 billion in 2011-12. Retailing has experienced a revolution over the last few years. On the one hand there
are chains, which are focused on greater affordability delivered through squeezing efficiencies from supply chain
and on the other hand the large modern retailers, including supermarkets and hypermarkets that have established
themselves. The retail market is also split between the organized retail and the unorganized retail. Organized retail
i.e. the modern retail formats which are 4-5% of the current market size is expected to be 14-15% of the market by
2014-15. (Source www.ibef.org; FMCG Sector presentation April 2010)
Rising middle class
Indias demographics have been favourable to consumption growth with an increase in proportion of consuming
population, both in terms of age and income. According to a study published by the Institute of Economic Growth,
New Delhi, Indias population of the consuming age bracket (defined as consumers in the 15-64 years age group) is
poised to grow from 604 million in 2000 to 747 million in 2010.This increase in the proportion of the consuming
population coupled with an overall population growth of 1.46% per annum is likely to create sustained growth in
demand for the FMCG industry.
Increasing urbanization and untapped rural markets
According to the Indian Readership Survey 2009 (Round 2), the proportion of people dwelling in urban areas has
increased from 29.60% in 2005 to 30.30% in 2009. Immigration accounted for nearly half of the overall growth in
urban population. This rise in urbanization along with the rise in travel and communication is likely to result in
increasing exposure to western lifestyles, which will, in turn, drive aspirational shifts in lifestyle to more
sophisticated products and services. In terms of brand choices, rural India has access to roughly half the branded
products that are available to the urban consumer. However, despite the prospect of a large untapped market, a
variety of factors have hindered its full exploitation. With the Governments push to improve rural infrastructure
coupled with the increased focus on rural distribution networks by FMCG companies, the potential for these markets
to be tapped by the FMCG sector may improve in the near future.
The urban market is, however, expected to continue growing. The National Council of Applied Economic
Researchs (NCAER) projected that the top 20 cities accounted for approximately 31.00% of the country's
disposable income. NCAER also notes that the annual household income grew at a rate of 11.20% in these 20 cities
during 2005-08 and is expected to maintain a growth of 10.20% till 2016. This growth, coupled with the growth of
middle class households, should lead to greater FMCG consumption.
Household Care: Product Segment Profiles and Outlook
The household care segment consists of laundry care, insecticides, dishwashing, air care, toilette care and surface
cleaning. In these segments laundry care is the largest segment consisting approximately 68.00% (2009) of the total
72

household care sales in the country. The second largest category is insecticides commanding 16.00% (2009) of the
household care pie (Source: Euromonitor International: Home Care India, May 2010)
Laundry Care
The laundry care product segment of the household has sales totaling 1,06,199.70 in 2009, accounting to
approximately 68.82 % of all sales in the household care sector. Laundry care comprises laundry detergents, laundry
aids, fabric softeners and carpet cleaners. Of these laundry detergents, comprised sales of Rs 99,348.50 million in
2009 accounted for 93.54 % of laundry care sales. The second largest category accounting for sales of Rs 6,851.20
million of 6.45 % of the laundry care category in 2009 was laundry aids. (Source Euromonitor International: Home
Care India, May 2010) Laundry aids comprises laundry boosters such as fabric whiteners, spot and stain removers,
starch and ironing aids and other products used in laundry.
Over the last five years, laundry detergents and laundry aids have grown at a CAGR of 8.4% and 8.6% respectively.
The overall laundry care market has grown 8.4%. The laundry care market is expected to be Rs. 1,27,462.20 million
by 2013 growing at a CAGR of 3.6%. Of this the laundry detergent market is expected to be Rs. 1,18,666.80 million
and laundry aid is expected to be Rs. 8,795.4 million by 2014 growing at a CAGR of 3.6% and 5.1% respectively.
(Source Euromonitor International: Home Care India, May 2010)
Insecticides
Insecticides comprise various products for the elimination of insects. The principal types of insecticides in India
include insecticide coils, electric insecticides (which are plugged into an electrical outlet and slowly release
repellent), spray and aerosol insecticides and other forms of insecticides. Insecticide coils are very popular in rural
India due to the deficiency in and erratic supply of power which makes the usage of electric insecticides unfeasible.
For 2009, insecticide sales totaled Rs 24,667.90 million or 15.99 % of household product category sales. Sales of
insecticide coils and electric insecticides accounted for Rs. 13,960.60 million or 56.59% and Rs. 8,021.30 million or
32.52 %, of insecticide sales respectively for the same period. The insecticide segment sales have grown at a CAGR
of 7.50% over 2004-2009. This segment is expected to be Rs. 29,049.70 million by 2014 of which the insecticide
coil and electric insecticide markets are expected to be Rs. 15,623.30 million and Rs. 9,876.10 million respectively
(Source Euromonitor International: Home Care India, May 2010)
Dishwashing Products
Dishwashing products comprise various products for washing dishes. Presently, the vast majority of sales are for
hand dishwashing products as automatic dishwashing is negligible, while the penetration of dishwashers remained at
below 1% in India as a whole and 2% in urban India. Household labour is relatively inexpensive and abundant with
housemaids cleaning dishes for most consumers who are interested in purchasing branded dishwashing products.
Hand dishwashing products come in various forms, including powders, bar soaps and liquids. At present bar soaps is
the dominant form in most parts of India.
In 2009, dishwashing product sales totaled Rs. 14,597.90 million or 9.46 % of total household product sales. They
had a CAGR growth of 15.70 % in the 2004-2009 and are expected to grow to Rs. 23,257.40 million by 2014
growing at a CAGR of 9.80%. (Source Euromonitor International: Home Care India, May 2010)
Laundry business
According to KPMG in its report on the 2007-12 outlook for dry cleaning and laundry services, the present demand
for laundry services comprising people who are already outsourcing their laundry is estimated at Rs. 52 billion. The
additional demand that can arise out of people who are currently doing laundry at home for the lack of a better
option is estimated at an additional Rs. 13 billion to Rs.26 billion. Most of this market is focused in the metros.
(Source The 2007-12 Outlook for Dry Cleaning and Laundry Services; INSEAD and KPMG analysis)

73

BUSINESS
Overview
We are a FMCG company in the fabric care, household insecticide, surface cleaning, personal care and air care
segments of the Indian market and offer branded products including fabric whitener, fabric stiffner and washing
powder, mosquito repellent, dishwashing, bath and incense products. We also offer laundry and fabric care services
through our 75% owned subsidiary, JFSL. Our flagship brand Ujala liquid fabric whitener had a 72% market share
by value in the Indian organized segment for the year ended 2010 according to A.C. Nielsen and, as per estimates
from Marketpulse-IMRBs Household Purchase Panel, it is likely that Ujala was purchased at least once by 732.0
lakhs households during the period April 1, 2009 to March 31, 2010. This represents 33% of Indian households. We
believe that our brands enjoy strong association with our core values including offering value-for-money products
and services to the common man.
Our key brands are Ujala, Maxo, Exo, Jeeva, Maya, Fabric Spa and Snoways. The product line for Ujala (a 27 year
old brand, used prior to the incorporation of our Company) consists of fabric whitener, fabric stiffener and washing
powder. Our Maxo product line consists of mosquito repellent coils, liquid vaporizers, aerosol sprays, creams and
wet wipes. Exos product line includes dishwashing bars and dishwashing liquid with an anti-bacterial agent,
dishwashing powder, and dish scrubbers. We produce personal care products under the Jeeva brand and market air
freshening incense sticks or agarbatti under our Maya brand. We provide laundry and fabric care services through
JFSL.
Our Ujala fabric whitener and Maxo mosquito repellent coils occupy leading positions and have significant market
shares in their respective product segments. Ujalas success led us to be ranked first in fabric whitener with a 70.7%
market share in India by value for the month ended March 31, 2010. (Source A.C. Nielsen). Additionally, Ujala
fabric whitener had a retail penetration of 70.70% for the month ended March 31, 2010. (Source A.C. Nielsen). Our
Maxo mosquito repellent coils achieved a 22.2% market share in India by value for the month ended March 31,
2010. (Source A.C. Nielsen) In addition, our Exo dishwashing bar, which was launched at a national level in October
2009, achieved a 24.10% market share in southern India by value for the month ended March 31, 2010. (Source A.C.
Nielsen)
Our branded products are present throughout urban and rural India. We have focused on the marketing and
distribution of our products in various states in India and in both rural and urban areas, targeting our various brands
and specific products and services to suit consumer needs and tastes. We have extended most of our brands
nationally. Our brands are particularly strong in southern India. For example, in rural Kerala, our Ujala fabric
whitener achieved a 98% market share by value in the year ended March 31, 2010 (Source A.C. Nielsen).
Market share information for our Ujala fabric whitener and Maxo coils in India and Exo dishwashing bar in southern
India is set forth below.

Product Categories
Ujala Fabric Whitener
Maxo Coils
Exo Dishwashing Bar*

Year ended March 31, 2010

Value
Volume
72.00
57.10
21.20
21.70
23.00
21.30

Market Share (%)

Quarter ended March 31, 2010
Value
Volume
71.00
57.50
19.90
21.00
23.10
20.70

Month ended March 31, 2010

Value
Volume
70.70
57.10
22.20
23.70
24.10
21.50

*For southern India only (Source A.C. Nielsen )

We have established a distribution network across India with a sales staff of approximately 1,400 people servicing
approximately 3,500 distributors. According to A.C. Nielsen, our Ujala fabric whitener was available in
approximately 27 lakhs outlets in India as on March 31, 2010. We believe that our field staff have a direct reach of
approximately 10 lakhs retail outlets.
We manufacture our products through 28 manufacturing facilities in 16 locations across India, some of which are tax
efficient units.

74

Our total consolidated net sales were Rs. 59,810.21 lakhs and Rs. 36,348.75 lakhs for the financial years ended
March 31, 2010 and 2009, respectively. Our consolidated profit after tax was Rs. 7,434.11 lakhs and Rs.3,835.97
lakhs for the financial years ended March 31, 2010 and 2009, respectively.
Strengths
We believe that we are well positioned to sustain and strengthen our position in the markets in which we compete as
well as to explore significant growth opportunities that exist in the expanding household goods sector, in both urban
and rural India. In particular, we believe that the following strengths help differentiate us from our competitors and
enable us to compete successfully in our industry:
Well-known brand identity
We believe that our portfolio of brands, including the brand images and consumer associations those brands enjoy, is
well established in Indian households and provides us with a strong platform to maintain and grow our revenues
from those brands, including through our present products, product improvements and new products under our
existing brands. In particular, we believe that our brands enjoy strong association with our core values like offering
value-for-money products and service to the common man.
The success of our Ujala fabric whitener led us to be ranked first in fabric whitener with a 72.00% market share in
India by value for the year ended March 31, 2010. (Source A.C. Nielsen). Additionally, Ujala fabric whitener had a
retail penetration of 70.70% for the month ended March 31, 2010. (Source A.C. Nielsen). In rural Kerala, our Ujala
fabric whitener achieved a 98% market share by value in the year ended March 31, 2010 (Source A.C. Nielsen). Our
Maxo mosquito repellent coils achieved a 21.20% market share in India by value for the year ended March 31, 2010.
(Source A.C. Nielsen) and received the AAA Brand Performance Award from All India Advertisers Association in
2003. In addition, our Exo dishwashing bar, (which was launched at a national level in October 2009), achieved a
24.10% market share in southern India by value for the month ended March 31, 2010. (Source A.C. Nielsen)
As our business is driven by consumer spending, we believe that our presence across India and wide customer base
ensure that we are well positioned to grow our income and extend our market share.
Local presence and wide distribution reach
We have established a distribution network across India with a sales staff of approximately 1,400 people servicing
approximately 3,500 distributors as of June 30, 2010. According to A.C. Nielsen, our Ujala fabric whitener was
available in approximately 27 lakhs outlets in India as on March 31, 2010. We believe that our field staff have a
direct reach of approximately 10 lakhs retail outlets.
We have a strong local focus to the production, sales and distribution of our products. Our 28 manufacturing
facilities are located in 16 locations across India while our sales offices in over 54 locations are strategically located
to ensure our local presence in key markets across India and to enable us to reduce transportation costs to the extent
possible. We also hire local production, sales and distribution employees with knowledge of local languages and
customs. We believe that our local presence and local focus give us an advantage in understanding and
communicating with our customers. Our local presence and infrastructure enhance our ability to launch new
products and extensions at the local level (on shop shelves) in a short time. We have a presence in both the urban
and rural markets, enabling us to benefit from opportunities in both markets.
Focus on the rural markets
We believe that our focus on rural markets for our products will allow us to benefit from this growing sector where,
as a result of difficulties with distribution, penetration of branded household care products has been slow. Maxo
mosquito repellent coils were marketed to Indias rural markets and became a leading coil brand in rural India where
coils are more popular than other methods as a result of unreliable electricity supply. Maxo mosquito coils ranked
first in rural India with a market share of 30.90% by volume for the month ended March 31, 2010. (Source A.C.
Nielsen). The market for FMCG in rural India is growing due to a monetary trickle-down effect from increased
urbanization. Improved rural economic conditions have resulted in consumers shifting to branded and packaged
75

products from unbranded products. For example, washing bars, detergents, household antiseptics/disinfectants and
dishwashing liquid have benefited notably from this trend.
Product Development Capabilities and Ability to Launch New Products
We believe that a key factor in our ability to succeed and to continue to sustain and strengthen our business has been
and will continue to be our ability to innovate and develop improvements to existing products and to create and
introduce new products that will meet or create customer demands that are not presently being satisfied by available
products. Towards this end, we have established an internal culture encouraging innovation and development.
Members of our product development teams undergo competency-building training programs to gain better insight
into consumer needs. In developing new products, they follow a structured process for identifying project ideas,
testing hypotheses, establishing prospects, implementing improvements and sustaining benefits. We have a research
and development (R&D) team comprising of scientists and technicians from various disciplines. We have a
product and formulation R&D centre and our R&D team aims at formulating innovative products and packaging
concepts into aesthetically appealing product offerings for the benefit of consumers. This has enabled us
successfully to identify and implement new products and product improvements and will help us to further expand
our product offerings and improve our product quality and sales.
Since incorporation, we have expanded from the manufacture and sale of Ujala fabric whitener and launched Ujala
Stiff & Shine nationally in 2008 and Exo dishwashing bar nationally in October 2009. We have launched Ujala
washing powder nationally in a phased manner.
In 2009, we expanded into providing laundry and fabric care services through JFSL, a 75.00% subsidiary of our
Company in Bengaluru and are currently exploring opportunities to expand into other cities across India.
We have acquired from the DRDO the DEPA technology, a multi-insect repellant molecule, developed by the
DRDO. We launched Maxo Military and Maxo Safe and Soft nationally in cream and wet- wipe formats using this
technology in July 2010.
We have also acquired from the DRDO a license to manufacture products based on the wool care technology
developed by the DRDO which a ready-to-use safe insecticidal spray for moth proofing to protect carpets and
woolen textiles.
Strong employee base and experienced management team
We believe that our employee base is a key competitive advantage. As of June 30, 2010, we employed a work force
of approximately 4,000 employees in India. Our senior management team has a breadth of experience in the FMCG
industry and has contributed to the growth of our business through their commitment and experience. The skills and
diversity of our employees gives us the flexibility to respond to the needs of our customers and consumers. We are
dedicated to the development of expertise and know-how of our employees and continue to invest in them through
training and skills.
Our well-qualified and experienced management team has played a key role in the development of good corporate
governance, effective internal controls and accounting policies, strong employee relations, and stable supply chain
relationships.
Our Strategy
We are driven by our vision to develop innovative brands, to tap high growth categories and to reach
underdeveloped markets and emerging categories to meet the day-to-day requirement of every Indian household. We
also seek to promote our core values that include offering value for money products to the common man. We aim to
enhance our brand identity, while at the same time pursuing growth opportunities in both the domestic and select
international markets. We intend to work toward achieving our vision and to grow our business by implementing the
following key strategies.
Leverage our established brands
76

We plan to continue to leverage the dominant market leadership of the Ujala brand with our Ujala Stiff & Shine and
Ujala washing powder products. Ujala Stiff & Shine was launched nationally in 2008 and Ujala washing powder
was launched nationally in a phased manner. We believe that the well-known brand equity of Ujala and our wide
distribution reach will help us successfully develop Ujala washing powder and Ujala Stiff & Shine as national
brands and provide scalability to both these products.
Maxo mosquito coils ranked first in rural India with a market share of 30.90% by volume for the month ended
March 31, 2010. (Source A.C. Nielsen). We plan to increase the market share and presence of our Maxo products
through urban India markets by focusing on liquid vaporizers and aerosol spray products. We have also launched
Maxo Military and Maxo Safe and Soft in cream and wet-wipe formats nationally in July 2010. In addition to Exo
dishwashing bar, we have also expanded into Exo dishwashing liquid.
Improve efficiencies and manage our costs
We seek to improve efficiencies and costs from the sourcing of the raw materials to the supply of products to
consumers. Certain areas identified by us for cost reduction include packaging design, raw material management,
improving yields and tax structuring. We set cost improvement targets each year and offer performance based
incentives to key managers to meet such targets. We believe that by aggressively seeking to cut costs throughout our
production, distribution and sales processes, we are able to sustain innovation and development and to compete
more effectively with our competitors. Additionally, we manufacture most products in-house and are in the process
of reducing our dependence on outsourcing to a minimum as we believe this helps us to reduce production costs and
manage material costs better.
Increase focus on supermarket and hypermarket sales
India has in the recent past witnessed the emergence of new supermarket and hypermarket chains. While the current
share of our revenues through these chains is not significant, it is expected that this may rise significantly in the next
few years, especially in the larger cities. In general, the trade margins and discounts expected by supermarket chains
in India are higher than traditional retail outlets. However, we believe that new supermarket and hypermarket chains
generally provide an opportunity for better merchandising and visibility and cost savings through direct sales rather
than through intermediaries and rationalization of packaging. In addition, as supermarkets and hypermarkets and
new large format retail stores seek to establish their presence across smaller cities and towns across India, we may
benefit from an increased focus on supermarket and hypermarket sales. We intend to benefit from this by this
strategy.As the presence and importance of new supermarket and hypermarket chains increases, we intend to adapt
our distribution and selling strategies to take advantage of new benefits and seek to maintain and strengthen our
brands and our sales.
Pursue selective acquisitions
We intend to make acquisitions in the future and expand inorganically by identifying acquisition opportunities as
part of our growth strategy in India. We intend to target acquisitions which will strengthen our market position in our
key product areas or our manufacturing capabilities. For example, we acquired a local fabric whitener brand called
Ruby Liquid Blue on April 19, 2007 from Messrs. Bangalore Detergents and Plastic Company for a consideration
of Rs. 100.00 lakhs. We also acquired a fabric whitener brand called More Light on May 31, 2007 from Modern
Chemical (India) & Mod Chem (India) Private Limited for a consideration of Rs. 95.00 lakhs. Additionally, through
our subsidiary JFSL, we have acquired all business undertaken in the name of Snoways Laundrers and
Drycleaners and Snoways Drycleaners from its sole proprietor, Suresh Babu by a business purchase agreement
dated December 20, 2008. We continuously evaluate acquisition opportunities that may arise from time to time.
Grow our laundry and fabric care services
We entered the laundry and fabric care services by incorporating JFSL, a 75% subsidiary of our Company, to
provide laundry and fabric care services at an affordable price with door-to-door facilities. We have acquired
Snoways, a chain of outlets providing laundry services, in Bengaluru with eight outlets and opened an additional 22
outlets in Bengaluru. We are currently exploring opportunities to expand into other cities across India. We presently
77

offer services to retail consumers under the brand Snoways as well as premium services under the brand Fabric Spa
and also offer services to institutional consumers such as hotels, railways, health clubs and airlines. We have a total
of five outlets under the brand Fabric Spa across Bengaluru. We also propose to own and rent uniforms to certain
institutions under the brand JFSL Rentals. We may undertake this business solely through JFSL or through JFSL in
alliance with our Company.
We expect to expand our laundry and fabric care services by using a model that involves lower investments and
capital expenditures and involves partnering with third parties. We propose to partner with third parties that provide
initial funding and utilize our technology. We believe that this will allow us scalability and enable our expansion in
different cities without excessive capital expenditure and allow us to focus on technology.
Our Products
We focus on providing branded household goods in fabric care, mosquito repellent, dishwashing, ayurvedic bath and
incense.
The following table sets forth the net sales from our major product categories.
Products

Fabric Care
Mosquito Repellent
Dishwashing
Other Products
Laundry and Fabric Care
Services
Joint Venture and Third Party
Products
Total

Financial year ended March

31, 2010
Number
Percentage
(%)
27,602.11
46.15%
18,199.12
30.43%
9,437.49
15.78%
4,175.99
6.98%

(Rs. In lakhs except percentages)

Financial
year
ended Financial year ended
March 31, 2009
June 30, 2008
Number
Percentage
Number
Percentage
(%)
(%)
16,585.59
45.63% 20,333.43
53.57%
11,517.18
31.69% 11,086.81
29.21%
5,256.75
14.46%
3,634.69
9.58%
2,821.00
7.76%
2,525.46
6.65%

415.89

0.70%

125.95

0.35%

0.00%

(20.39)
59,810.21

(0.03)%

42.29
36,348.75

0.12%

375.37
37,955.76

0.99%

Fabric care: Ujala

We market fabric care products through our Ujala brand. Branded fabric care products have historically produced
the greatest proportion of our revenue and Ujala, a leading fabric care brand, has been the flagship of our business.
In particular, our first fabric care product, Ujala fabric whitener, was launched in 1983 (prior to our Companys
incorporation). Ujala fabric whitener has a national presence and ranked first in fabric whiteners with a 72% market
share in India by value for the year ended March 31, 2010. (Source A.C. Nielsen). We believe Ujala fabric whitener
created a market for fabric whiteners because it was formulated for ease of customer use and provided uniform
whitening that does not cause clothes to blue or appear patchy. We believe that these product advantages, along
with our aggressive and informative advertising campaigns have built our Ujala brand.

78

In addition to fabric whitener, the Ujala brand also extends to washing powder with opti-brighteners, a formula
developed by us to improve brightness of clothing. Ujala washing powder was launched in 2003. We launched Ujala
washing powder in the southern states apart from Kerala in early 2009. In 2010, Ujala washing powder has been
ranked first in sales in Kerala mid segment. (Source A.C. Nielsen) We also introduced Ujala Stiff & Shine in Kerala
in 2005 to stiffen and brighten clothes as a value added replacement for starch and launched Ujala Stiff & Shine
nationally in 2008. We also plan to roll out other Ujala extensions such as stain removers, softeners and
conditioners, and liquid detergent.
We believe that Ujala fabric care products enjoy well-known brand equity with consumers, which enables the
products to be sold at a higher margin than they might be otherwise.
The following table sets forth the competitive position of our Ujala fabric whitener in India.
Market share for Fabric Whitener in India

Period
Year ended March 31, 2010
Year ended March 31, 2009
Year ended March 31, 2008
(Source A.C. Nielsen)

Percentage of market
share of Ujala by sales
value
Value
Volume
72.00
57.10
74.80
59.60
74.30
60.00

Percentage of market
share of brand 1

Percentage of market
share of brand 2

Value

Value

4.10
3.50
3.90

Volume
3.00
2.90
3.30

1.70
1.70
1.80

Volume
2.20
2.20
2.30

Mosquito Repellent: Maxo

We entered the mosquito repellent sector in 2000 under the brand name Maxo to capitalize on the distribution
network already established for our Ujala fabric whitener. Our principal product is Maxo mosquito coils, which are a
spiraled insecticide that slowly burns when ignited. Maxo coils were launched in 2000 and are marketed nationally
with a special focus on rural markets, where mosquitoes are rampant and coils enjoy popularity over electrical
insecticides due to interruptions in the supply of electricity. Maxo mosquito repellent coils achieved a 21.2% market
share in India by value for the year ended March 31, 2010 and a 22.2% market share by value for March 2010.
(Source A.C. Nielsen). Maxos retail penetration reached 8.74 lakhs retail outlets in March 31, 2010 according to
A.C. Nielsen.

We extended the Maxo mosquito repellent brand into liquids in 2006 and aerosol sprays in 2007. Both liquids and
aerosol sprays are marketed nationally. We have strategically linked all brand extensions with the common
proposition of corner to corner protection. In order to differentiate our brand from our competitors, we launched
Red Giant, the largest-sized distributed coil in India, to carve out a niche in the market. Moreover, we have
developed new packaging with distinct brand identity to promote our coils. The following table sets forth the
competitive position of our Maxo mosquito repellent coils in India.
79

Market share for Mosquito Coils in India

Percentage
market share
Maxo
Period
Year ended March 31, 2010
Year ended March 31, 2009
Year ended March 31, 2008
(Source A.C. Nielsen)

Value
21.20
20.90
20.30

of
of

Volume
21.70
24.20
23.30

Percentage of market
share of Competitor
brand 1

Percentage of market
share of Competitor
brand 2

Value
32.00
33.60
36.00

Value
21.40
22.80
21.30

Volume
29.10
29.90
32.20

Volume
19.20
20.60
20.20

Acquisition of DEPA Technology

The DRDO has developed a multi-insect repellent known as DEPA technology to be utilised by the defence
personnel. Pursuant to a MoU for transfer of technology dated November 5, 2009, the DRDO has transferred the
technical know-how of DEPA technology to our Company for commercial production of the repellent in the form of
DEPA creams and DEPA sprays. Our Company has an exclusive license to the technology and its improvements
with respect to Asia for a period of five years subsequent to which our Company will be entitled to the exclusive
license along with royalty free use of the technology subject to the satisfactory performance of our Company under
this MoU. The DRDO has reserved its right to grant additional licenses to the technology to other parties for
commercial exploitation in Africa. We have launched Maxo Military and Maxo Safe and Soft creams and wet-wipes
nationally in July 2010.
We have also acquired a license for the wool care technology developed by the DRDO, a ready-to-use safe
insecticidal spray for moth proofing of carpets and woolen textiles.
Dishwashing Products: Exo
We entered the dishwashing products segments with Exo dishwashing bar to capitalize on the distribution strength of
Ujala. Exos brand platform is Exo family, healthy family. We launched our dishwashing bar in 2000 when Exo
dishwashing bar was among Indias first few anti-bacterial dishwashing bars. Exo dishwashing bar features 2,4,4
Trichloro-2 Hydroxy Diphenyl-Ether (Cyclozan), which contains an anti-bacterial agent that is designed to give
a protective cover against bacterial contamination of utensils. Exo dishwashing product brand has been extended
into a dishwashing liquid detergent product named Exo liquid and dishwashing scrubber products named Exo Safai.
We have positioned the Exo brand as giving consumers protection against bacterial contamination of utensils in
addition to the promise of clean and shiny utensils. Exo dishwashing bar was initially sold only in southern India
and was launched at at a national level in October 2009.

The following table set forth the competitive position of our Exo dishwashing bar in southern India.

80

Market share for the dishwashing bars in southern India

Percentage of market
share of Exo
Period
Year ended March 31, 2010
Year ended March 31, 2009
Year ended March 31, 2008

Value
23.00
20.70
17.60

Volume
21.30
21.00
17.50

Percentage
share
of
brand 1
Value
61.60
66.90
69.50

of market
Competitor
Volume
59.60
63.50
66.60

Percentage of market
share of Competitor
brand 2
Value
Volume
3.80
4.10
4.20
5.10
4.50
5.50

(Source A.C. Nielsen)

Other Products: Maya and Jeeva

Maya incense sticks were launched on a national level in November 2001. To cater to the tastes of different
consumer groups, Maya has been manufactured and distributed in different fragrances. The production of Maya
incense sticks is outsourced.

We have introduced ayurvedic and natural bath soap products under the brand Jeeva. The Jeeva brand was launched
nationally in 2002, however, it achieved only a limited market penetration after an extensive advertising, publicity
and promotional campaigns. Accordingly, we determined to reposition Jeeva and now have focused marketing of our
Jeeva products primarily in Kerala for a few years.
Laundry Services: Fabric Spa and Snoways
We have incorporated JFSL, a 75.00% subsidiary of our Company, to provide laundry and fabric care services at an
affordable price with door-to-door facilities. We have acquired Snoways, a chain of outlets providing laundry
services, in Bengaluru with eight outlets and opened an additional 22 outlets in Bengaluru aggregating to 30 stores.
We have set up a laundry facility over two acres of land at Apparel Park at Dodaballapur, Bengaluru with 70,000 sq.
feet built-up area which commenced operations in November 2009. We presently offer services to retail consumers
under the brand Snoways as well as premium services under the brand Fabric Spa and also offer services to
institutional consumers such as hotels, railways, health clubs and airlines. We have a total of five outlets under the
brand Fabric Spa across Bengaluru. We also propose to own and rent uniforms to certain institutions under the brand
JFSL Rentals. Additionally, JFSL has been selected the official laundrers at the Commonwealth Games, New Delhi
2010.
Acquisition of Snoways
By a business purchase agreement dated December 20, 2008, JFSL, our 75.00% subsidiary, has acquired all business
undertaken in the name of Snoways Laundrers and Drycleaners and Snoways Drycleaners along with assets,
including presently operating outlets, and goodwill attached to the business from its sole proprietor, Suresh Babu.
Further, Suresh Babu shall enter into a deed of assignment with JFSL assigning the trademark to JFSL. Suresh Babu
is restricted from conducting, partnering or advising any business that may compete with the business acquired from
Snoways for a period of 10 years.

81

In furtherance of our acquisitions plans, JFSL has acquired 49% of the shareholding in Snoways by a share purchase
agreement dated May 8, 2009. The remaining 51% of the shareholding is held by Suresh Babu. Snoways holds the
title for certain portions of land located in the industrial area regulated by KIADB and Suresh Babu is restricted
from transferring the title to the land for a period of 10 years expiring on August 1, 2018 (Disability Period) under
the KIADB regulations. Therefore, in order to be compliant with KIADB regulation, he is required to maintain his
holding in Snoways at a minimum of 51%. On the expiry of the Disability Period, JFSL shall acquire the remaining
51% of the shareholding from Suresh Babu and make it a wholly owned subsidiary of JFSL. For this purpose an
agreement dated August 12, 2009 has been entered into with Suresh Babu. However, the managing control of
Snoways shall be with JFSL during the continuance of the Disability Period and Suresh Babu shall act in a manner
consistent with the decisions and business plans of JFSL. Any loss to our Company arising consequent to a breach
by Suresh Babu or his affiliates of the obligations, covenants, undertakings or other agreements contained in this
agreement, shall be indemnified by Suresh Babu.
Operations outside India
In addition to the manufacture and distribution of our products in India, we export our products to 14 countries in
southeast Asia and the Gulf peninsula, including Sri Lanka, Bangladesh, Mauritius, Malaysia, United Arab Emirates,
Hong Kong and Saudi Arabia.
We have entered into a MoU dated May 20, 2010 with Kallol Enterprises Limited to establish a joint venture in
Bangladesh to manufacture and market FMCG products in Bangladesh. Our Company will hold 75% of the joint
venture company to be incorporated and will contribute 75% of the capital. The joint venture agreement
encompassing the terms laid down in the MoU shall be entered into with 90 days from the date of the MoU.
Manufacturing
We manufacture our products through 28 manufacturing facilities in 16 locations across India, some of which are tax
efficient units. Tax efficient facilities are set up to take advantage of certain tax breaks offered by the central and
state governments. Manufacturing facilities located in these geographical locations are granted the following fiscal
exemptions and concessions:
1.
exemptions from income tax on profits made from these facilities;
2.
exemptions and refunds of excise duty on products manufactured at those units; and
3.
exemption/deferral from payment of VAT or Sales tax payable on sale of products of these units within
specified areas by the concerned state governments.
For more information on the tax benefits afforded to our facilities, please see Taxation.
As part of our efforts to expand, we have commissioned two factories in Bari Brahmana (Jammu & Kashmir) and
Roorkee (Uttarakhand) for the manufacture of Maxo and Ujala products, respectively. We also maintain an in-house
engineering research and development and machinery manufacturing facility at Pondicherry.
Our various manufacturing facilities, and the products manufactured at these facilities are as follows:
Sr.
No.
1

Location

State

Products manufactured

Bhubaneshwar

Orissa

Fabric Whitener (Ujala)

Year
Commencement
1997

Bishnupur

West Bengal

Fabric Whitener (Ujala)

1999

Chennai

Tamil Nadu

Fabric Whitener (Ujala)

1993

Guwahati
(Subsidiary)

Assam

Mosquito Repellant Coils (Maxo) and 2002

Fabric Whitener (Ujala)

Baddi

Himachal Pradesh Fabric Whitener (Ujala),

Conditioner (Stiff & Shine)
82

Fabric 2005

of

Kandanassery

Kerala

Fabric Whitener (Ujala)

1983

Mehboobnagar

Andhra Pradesh

Fabric Whitener (Ujala)

1999

Pitampur

Madhya Pradesh

Washing powder(Ujala)

2004

Bangalore

Karnataka

Laundry Facility

2009

10

Pondicherry

Pondicherry

Fabric Whitener (Ujala), Dishwashing 2002

(Exo Bar), Personal Care (Jeeva)

11

Salem

Tamil Nadu

Exo Dishwashing
Detergent

12

Silvassa

Daman & Diu

Fabric Whitener (Ujala)

1999

13

Hyderabad*
(Subsidiary)

Andhra Pradesh

Mosquito Repellant Coils (Maxo)

1999

14

Wayanad

Kerala

Fabric Whitener
Detergent (Ujala)

(Ujala),

Fabric 2001

15

Roorkee

Uttanchal

Fabric Whitener
Detergent (Ujala)

(Ujala),

Fabric 2008

16

Bari Brahmana

Jammu

Mosquito Repellant Coils (Maxo)

powder,

Ujala 2003

2008

*The subsidiary Sri Sai Home Care is under the process of being amalgamated with our Company. For further details please see disclosure below

Our wholly owned subsidiary, Sri Sai Home Care, has a facility for the production of mosquito repellent coils
located at Hyderabad. On June 5, 2009, our Company decided to amalgamate Sri Sai Home Care with our Company
and by a resolution dated May 25, 2010 the Board has approved the scheme of amalgamation of Sri Sai Home Care
(Scheme) with our Company. The effective date has been fixed as April 1, 2010 and the Scheme has been filed
with the High Court of Bombay on July 19, 2010. Further, the amalgamation has been approved by the BSE and the
NSE by their letters dated August 6, 2009 and August 4, 2009 respectively. According to the Scheme, all assets and
liabilities of Sri Sai Home Care shall stand transferred to our Company. Since Sri Sai Home Care is a wholly owned
subsidiary of our Company, pursuant to this amalgamation, all shares of Sri Sai Home Care shall stand cancelled and
no further shares are to be issued. Also, the authorised share capital of our Company shall be increased to Rs.
120,000,000 comprising of 120,000,000 Equity Shares. The Scheme shall become null and void if the requisite
approvals or similar orders are not received from the High Court of Mumbai High Court by December 31, 2010.
Our wholly owned subsidiary Associated Industries has a facility for the production of soaps and detergents located
in Guwahati (Assam) and the union territory of Silvassa.
Whilst we outsource the manufacture of a portion of our Maxo products, we have invested Rs. 127.00 lakhs and Rs.
110 lakhs in two plants located at Bari Brahmana (Jammu & Kashmir) and Guwahati, respectively, to produce Maxo
products that are currently outsourced.
We have entered into four agreements with third party manufacturers for the manufacture of Maxo mosquito coils in
Samba (Jammu), Ludhiana (Punjab), Hyderabad (Andhra Pradesh) and Kollar (KGF) (Karnataka) and one for Exo
in Salem (Tamil Nadu). Typically, the agreements provide that the manufacturer will manufacture and we will
purchase the product, on a principal-to-principal basis, in such quantities and at such prices as shall be determined.
The product is manufactured with the approved raw material composition and specification and approved packing
material sourced from our approved suppliers at approved rates. Generally, the manufacturer is responsible for
manufacturing the products in accordance with the standards and specifications. The agreements provide that the
manufacturer shall not have any right over any trademark, trade name etc. used by us or to which we are entitled and
that all such intellectual property remains with us. Further, the manufacturers have undertaken to only use the
information and data disclosed by us to manufacture the product and not to disclose it to any third party without our
prior written consent. The agreements are on a non-exclusive basis and we are entitled to manufacture and buy the
83

product or any similar goods from other parties, and to sell the product to any person in any territory in any manner
and at any price. The agreements are typically for a period of three to five years and may be renewed for further
periods by mutual consent.
Below is a map of our manufacturing facilities across India:

An important part of our manufacturing processes includes production of significant portions of the packaging and
labeling of our products. In particular, we engage in low wastage of HDPE packaging. HDPE packaging is low cost,
flexible, durable, and has the ability to withstand the sterilising process, and resistance to many chemicals.
Our Company has filed a notice dated May 31, 2007 under the Industrial Disputes Act, 1947 to close down our unit
located at Pannissery, Kerala with effect from August 1, 2007 as this unit has been making losses. The main activity
at this unit was the manufacture of an oil-based soap which was marketed in Kerala only. Further to the closure of
the unit we expect to terminate the services of 71 workmen. However, the closure has been challenged by the
workers and the matter has been referred to the Industrial Tribunal, Palakkad.
Materials Consumed
Expenditure for materials consumed comprised 63.71%, 62.26% and 59.38% of our total expenses (excludes
depreciation, interest and finance charges) for the financial years ended March 31, 2010, 2009 and June 30, 2008
respectively. Our raw materials include various chemicals and other materials used in our products as well as the
materials for packaging of our products. We source our raw materials from various suppliers. We do not have longterm supply contracts. Important raw materials for production of our products include HDPE, acid slurry, synthetic
organic dye, Koylene, LABSA (sulphuric acid), Sumi 1 and Transfluthrin (insecticide) and brown sawdust.
We source HDPE, our largest raw material expenditure, from four local suppliers. Sumi 1, an insecticide used in our
Maxo coils and Tranafluthrin, an insecticide in Maxo liquid vaporizer are sourced from a single supplier, an Indian
84

subsidiary of a Japanese manufacturer. Supplies of brown sawdust are seasonal, and we stockpile these when
available for the manufacture of Maxo coils.
Research and Development
Our R&D team comprises scientists, engineers and technicians from various disciplines. We have a product and
formulation R&D centre and our R&D team aims at formulating innovative products and packaging concepts into
aesthetically appealing product offerings for the benefit of end consumers. This has enabled us to successfully
diversify into various new product categories such as fabric washing powder, fabric stiffener, mosquito repellent coil
and aerosol, ayurvedic soap, dishwashing detergent with 2,4,4 Trichloro-2 Hydroxy Diphenyl-Ether
(Cyclozan), dish scrubber, and incense sticks. We intend to continue promoting strong R&D to formulate innovative
products throughout different market sectors.
Marketing
Our marketing is a key factor in developing brand awareness and stimulating consumer demand. Over a period of
time we have built substantial brand equity for our products and services as a result of the efforts of our marketing
team.
We invest in advertisements and sales promotion (ASP) to build awareness and loyalty for our brands in the minds
of our consumers. During the financial year ended March 31, 2010, ASP expenditure constituted 6.16% of our
consolidated total income and during the financial year ended March 31, 2009 it was 4.97% of our consolidated total
income. ASP is incurred both on strengthening established brands and nurturing new ones. We use various media
such as television, radio, press, outdoor hoarding, and the Internet to communicate with our consumers. We also
focus on marketing to retailers to increase brand awareness and generate positive placement of our products in retail
outlets. Further, we have entered into an endorsement agreement with Sachin Tendulkar to promote our products in
the sector of fabric detergent, optical fabric whitener, fabric stiffener, softener and conditioner.
Distribution
We have established a distribution network across India with a sales staff of approximately 1,400 people servicing
approximately 3,500 distributors as at June 30, 2010. According to A.C. Nielsen, our Ujala fabric whitener was
available in approximately 27.0 lakhs outlets in India as of March 31, 2010. We believe that our field staff have a
direct reach of approximately 10 lakhs retail outlets.
We have a sales force headed by three assistant vice presidents. Our sales force at June 30, 2010 included 22 state
managers, 220 area officers and 1,070 market intelligence assistants. We have 54 sales depots across India.
Our products are sold through supermarkets and hypermarkets as well as smaller, independent stores that have close
proximity to residential areas (called kiranas). We sell our products to distributors in Kerala and Tamil Nadu, to
stockists in Karnataka and Maharashtra and to super-stockists in the rest of India, who in turn resell down the
distribution chain at a sales price as set by our Company.
Payment terms for our products typically range from 30-60 days depending on the market and the season. No credit
terms are extended to related parties.
We have focused on improving the productivity of our sales and distribution system. We have made investments in
information technology to help connectivity and ensure speedier processing of information. We have two-level
disaster recovery systems. Our information technology infrastructure connects 120 locations on line.
Human Resources
We are a professionally managed company that has sought to build for itself a stimulating work culture that
empowers people, promotes team building, encourages new ideas and motivates performance. We believe in
meritocracy and this policy commences with hiring individuals with the right expertise and experience while
ensuring that progress in the organisation is not dependent solely on tenure.
85

As at June 30, 2010, we had over 4,000 employees in India. The number of employees in each of our divisions as of
that date is as follows:
Sales (All India)1,396 employees;
Production (21 Factories)2,512 employees;
Machine Designing & Fabrication87 employees;
Information Technology11 employees;
Research & Development21 employees; and
Administration (Registered office and regional offices)177 employees.

As at June 30, 2010, approximately 316 of our employees at two locations were members of trade unions and we
have entered into wage settlement agreements with them. We have had no recent strikes or work stoppages and we
have a good relationship with our workforce.
Insurance
We maintain insurance for certain risks including insurance against standard fire and shock in respect of two
manufacturing locations, which covers loss and damage due to fire. In addition, we have obtained insurance for
vehicles owned by us. We have, further, taken insurance policies securing the gratuity amount and pension amounts
payable to our employees. Most of our manufacturing units for Maxo products and Ujala Stiff & Shine are insured.
We obtain insurance for stocks in godowns across India.
Intellectual Property
We maintain the ownership of, and control the use of, our brands and products by means of intellectual property
rights, including, but not limited to, the use of patents, trademarks, limited licenses, trade secrets and contractual
language placed on packaging.
Pursuant to the investment agreement with CDC Financial Services (Mauritius) Limited, SARF and Canzone, our
Promoter, M. P. Ramachandran, has transferred the whole of his right, title and interest in the intellectual property
rights registered in, or pending registration in the name of our Promoter, and his sole proprietorship firm, Jyothy
Laboratories. This transfer was done by way of assignment of trademarks and copyrights. While the key items of
intellectual property are now registered in our name, some of the intellectual property used by us is still registered in
our Promoters name and the formalities of registration in our name have not yet been completed.
Legal Proceedings
Our Company is involved in the following litigation which might materially affect its business and financial
condition.
1.

The unit inside Pannisserry factory, Kerala, owned by our Company, manufacturing Nebula and Vanamala
Soap were closed down with effect from August 1, 2007 as this unit had been making losses. Our Company
had issued both, general as well as individual notices, to government departments and to all workers in
relation to the closure and intimating the workers to collect their closure compensation along with other
statutory dues. The workers have challenged the closure before the Labour Officer, Thrissur. The State
government of Kerala (State Government) vide its order bearing No. GO (Rt) 1457/2008/LBR dated May
28, 2008 (Referral Order) referred the matter to the Industrial Tribunal, Thrissur (ID No: 21 of 2008) for
adjudication. Further the Referral Order has been amended by the State Government through its order
bearing No. GO (Rt) 1056 / 2009 / LBR dated July 24, 2009 seeking the Industrial Tribunal to analyse the
legality of the closure of the unit and to grant adequate compensation to the workers. The matter is
currently pending.

2.

Our Company has filed two writ petition no. W.P.(C) No. 1789 of 2010 and OWP No. 373 of 2009 before
the Guwahati High Court and the Jammu and Kashmir High Court, respectively, against the notifications
No. 32/99-CE dated July 8, 1999 and 56/02-CE dated November 14, 2002 along with the amendment
86

notifications No. 17/2008-CE and 19/2008-CE dated March 27, 2008. As per original the notification No.
32/99-CE dated July 8, 1999 and 56/02-CE dated November 14, 2002, our Company is entitled to full
refund of excise duty equivalent to the amount of the duty paid through personal ledger accounts in the
Guwahati and Jammu manufacturing units. The Government issued notifications No. 17/2008-CE and
19/2008-CE dated March 27, 2008 restricting the refund amount to a maximum percentage. The Guwahati
High Court has quashed the amendment notification limiting the quantum of refund against which the
Department has filed an appeal before the Division Bench of Guwahati High Court and the Jammu and
Kashmir High Court has stayed the operation of the amendment notification. The matter is currently
pending.
3.

There are 51 legal proceedings pending against our Company before various fora in relation to sales tax
matters. The disputes are primarily in relation to the applicable rate of tax based on the classification of the
products and the exemptions that may be availed by our Company. The aggregate amount involved is Rs.
1,489.49 lakhs. This amount includes certain payments already made by our Company to the concerned
authorities. We may or may not be successful in our claim for refund of the amount paid, pursuant to the
conclusion of the litigation.

4.

There are 16 legal proceedings pending against our Company before various fora in relation to excise and
service tax matters. The aggregate amount involved is Rs. 69.88 lakhs. This amount includes certain
payments already made by our Company to the concerned authorities. We may or may not be successful in
our claim for refund of the amount paid, pursuant to the conclusion of the litigation.

In addition to the litigation disclosed in this section, our Company and our Subsidiaries may, from time to time, be
involved in legal disputes in relation to taxation and intellectual property rights due to the nature of our business.
Properties and Facilities
Our Registered and Corporate Office is located at Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri
(East), Mumbai 400 059. We purchased this premises by a deed of conveyance dated December 6, 2006 from Arena
Developers. The property was purchased for a total consideration of Rs. 41,51,00,000.
We have manufacturing units which are located across the country. While we own some of the land on which our
manufacturing facilities are located, we have also taken land on lease in certain instances, both from private parties
as well as from the government. We usually lease land on a long term basis.

87

BOARD OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

Board of Directors
Under our Articles of Association, unless otherwise determined at a general meeting, we cannot have more than 12
Directors and our Board presently has six Directors.
The following table sets forth details regarding our Board as on the date of this Placement Document:
Name
M.P. Ramachandran
K. Ullas Kamath
M.R. Jyothy
Nilesh B. Mehta
K.P. Padmakumar
Bipin R. Shah

Designation
Chairman and Managing Director
Deputy Managing Director
Executive Director
Non-Executive Independent Director
Non-Executive Independent Director
Non-Executive Independent Director

Brief Profiles
M. P. Ramachandran, aged 63 years, is our Chairman and the Managing Director. He holds a postgraduate degree
in financial management from the University of Mumbai and began his career as an accountant in 1971 in Mumbai.
He set up the Jyothy Laboratories business in 1983. He has over 36 years of experience in sales, production and
general management. In 2003 and 2004, he was nominated by The Economics Times for the Entrepreneur of the
Year Award.
K. Ullas Kamath, aged 47 years, is our Deputy Managing Director. He is a qualified chartered accountant and
company secretary. He holds a bachelors degrees in commerce and law, both from the University of Mysore and
postgraduate degree in commerce from Kakatiya University from Warangal. He has also participated in the
advanced management programmes at Wharton Business School and Harvard Business School. His responsibilities
include business development, new projects, sales, financial management and supervision of day-to-day operations.
He has been associated with us since incorporation and has been on our Board since 1997. Prior to joining us he
practiced as a chartered accountant. He was awarded the CA Business Achiever Award SME Category in
January 2009 by the Institute of Chartered Accountants of India.
M. R. Jyothy, aged 32 years, is an Executive Director of our Company. She holds a bachelors degree in commerce
from the University of Mumbai and a postgraduate degree in business administration from Wellingkers
Management Institute, Mumbai and has undertaken a course in family managed business administration from S. P.
Jain Institute of Management, Mumbai. Presently she is pursuing the owners/presidents management programme
from Harvard University. She has been on our Board since 2005 and handles sales administration, marketing and
brand communication.
Nilesh B. Mehta, aged 48 years, is a Non-Executive, Independent Director. He is a qualified chartered accountant
and holds a postgraduate diploma in management from the Indian Institute of Management, Ahmedabad. He is a
managing partner of Aureos Capital and a general partner of eIndia Venture Fund/Infinity II. He has over 20 years
of experience in investment banking, private equity and fund-related activities, during which he occupied the
position of managing director of Meghraj Financial Services (India) Private Limited and executive director of
Anagram Finance Limited. He has been on our Board since 2003.
K. P. Padmakumar, aged 66 years, is a Non-Executive, Independent Director. He holds a bachelors degree in
agricultural science and is a certified accountant from the Indian Institute of Bankers. He has over 36 years of
experience in the commercial banking sector. He started his career with the State Bank of India and has served as the
chairman and chief executive officer of the Federal Bank. He is currently associated with the Muthoot group. He has
been on our Board since 2007.

88

Bipin R. Shah, aged 78 years, is a Non-Executive, Independent Director. He holds a bachelors degree from the
University of Mumbai and is a qualified chartered accountant. He was previously a director with Hindustan Lever
Limited and Lipton India Limited. He has been on our Board since 2007.
Relationship with Other Directors
Name of the Director
M.P. Ramachandran
M.R. Jyothy

Relationship
Father of M.R. Jyothy
Daughter of M.P. Ramachandran

Borrowing Powers of our Directors

Under our Articles, our Board may, from time to time, at its discretion by a resolution passed at its meeting, raise or
borrow or secure the payment of any sum or sums of money for the purposes of our Company.
By a special resolution passed by our shareholders at the AGM held on September 7, 2002, our Board has been
authorized to borrow money from time to time up to a limit not exceeding Rs. 1,5000 lakhs, notwithstanding that the
money to be borrowed together with the money already borrowed by our Company (apart from the temporary loans
obtained from our Companys bankers in the ordinary course of business) will exceed the aggregate of the paid-up
capital of our Company and its free reserves.
Interests of our Directors
All our Directors, including our Independent Directors, may be deemed to be interested to the extent of fees, if any,
payable to them for attending meetings of the Board or a committee thereof, as well as to the extent of other
remuneration and reimbursement of expenses payable to them under our Articles of Association. All our NonExecutive Directors are entitled to sitting fees. For details of the sitting fees paid to our Non-Executive Director in
the financial year ended March 31, 2010, please see Remuneration of the Directors and Terms of Appointment
Non-Executive Director.
The executive Directors may also be regarded as interested to the extent that they hold Equity Shares and to the
extent of any dividend payable on such Equity Shares. Our Directors, including Independent Directors, may also be
regarded as interested in our Equity Shares held by the companies, firms and trusts, in which they are interested as
directors, members, partners or trustees.
Our Directors, including Independent Directors, may also be regarded as interested, to the extent the entities in
which they are interested as directors, members, partners or trustees, are Allotted Equity Shares.
All Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered
into by our Company with any company in which they hold directorships or any partnership firm in which they are
partners as declared in their respective declarations.
Except as otherwise stated in Financial Statements Related Party Transactions, our Company has not entered
into any contract, agreements or arrangements during the two years preceding the date of this Placement Document,
in which our Directors are interested directly or indirectly and no payments have been made to them in respect of
such contracts, agreements or arrangements.
Shareholding of Directors
The following table sets forth the shareholding of the Executive Directors in our Company:
Name
M.P. Ramachandran
M.R. Jyothy
K Ullas Kamath

Number of Equity Shares

3,47,57,550
22,67,800
7,25,690
89

Percentage (%)
47.90
3.10
1.00

Name

Number of Equity Shares

100

Bipin R. Shah

Percentage (%)
Negligible

Remuneration of the Directors and Terms of Appointment

A.

Executive Directors

M. P. Ramachandran
Under the terms of an agreement dated April 24, 2009, M. P. Ramachandran has been reappointed as our Chairman
and the Managing Director with effect from April 1, 2009 for a term of five years, which expires on March 31, 2014.
The remuneration payable to him with effect from April 1, 2009 has been approved by a special resolution of the
shareholders passed at an AGM held on November 11, 2008.
Details of his remuneration are provided below:
Salary

At the rate of Rs. 18,00,000 per month from April 1, 2009 for a period of five years.

Commission

The amount of commission shall be 2.00% of the net profits of our Company and the commission,
salary and perquisites are subject to the overall ceiling laid down in sections 198 and 309 of the
Companies Act and computed in accordance with the Companies Act with effect from April 1,
2004.

Perquisites

Rent free unfurnished accommodation owned, hired or leased by our Company.

Reimbursement of all expenses, on actual basis, pertaining to gas, fuel, water, electricity
and telephones as also reasonable reimbursement to upkeep and maintain the
accommodation.

Reimbursement of all medical expenses incurred for self and family, including
hospitalization, membership of any hospital and/or doctors scheme.

Leave travel allowance for self and members of family every year, up to a maximum of
one months salary.

Personal accident insurance coverage for self as per the rules of our Company

Use of Company car with driver and telephones at the residence. Use of car with driver and
telephones for office purposes shall not be considered as perquisites.

Company contribution towards provident fund, superannuation fund and gratuity as per the
rules as applicable.

Leave and encashment of leave.

Any other perquisites/benefits as may become applicable in the future

K. Ullas Kamath
Under the terms of an agreement dated August 13, 2009, K. Ullas Kamath has been reappointed as a Whole Time
Director with effect from April 1, 2010 for a term of five years, which expires on March 31, 2015. The remuneration
payable to him with effect from April 1, 2010 has been approved by a special resolution of the shareholders passed
at an AGM held on July 30, 2009.
Details of his remuneration are provided below:

90

Salary

At the rate of Rs. 12,51,000 per month from April 1, 2010 for a period of five years.

Commission

The amount of commission shall be 1.50% of the net profits of our Company and the commission,
salary and perquisites will be subject to the overall ceiling laid down in section 198 and 309 of the
Companies Act and computed in accordance with the Companies Act with effect from April 1,
2005.

Perquisites

Rent free unfurnished accommodation owned, hired or leased by our Company.

Reimbursement of all expenses, on actual basis, pertaining to gas, fuel, water, electricity
and telephones as also reasonable reimbursement to upkeep and maintain the
accommodation.

Reimbursement of all medical expenses incurred for self and family, including
hospitalization, membership of any hospital and/or doctors scheme.

Leave travel allowance for self and members of family every year, up to a maximum of
one months salary.

Personal accident insurance coverage for self as per the rules of our Company

Use of Company car with driver and telephones at the residence. Use of car with driver and
telephones for office purposes shall not be considered as perquisites.

Company contribution towards provident fund, superannuation fund and gratuity as per the
rules as applicable.

Leave and encashment of leave.

Any other perquisites/benefits as may become applicable in the future

M. R. Jyothy
Under the terms of an agreement dated February 22, 2007, M. R. Jyothy has been reappointed as a Whole Time
Director with effect from December 1, 2006 for a term of five years, which expires on November 30, 2011. The
remuneration payable to her with effect from December 1, 2006 has been approved by a special resolution of the
shareholders passed at an AGM held on December 6, 2006.
Details of her remuneration are provided below:
Salary

Perquisites

At the rate of Rs. 100,000 per month from December 1, 2006, with an increase of Rs. 20,000 per month
on April 1 every year with the first such increase to take place on April 1, 2007.

Rent free furnished accommodation with free use of all the facilities and amenities, such as airconditioners, stove, geysers, gas, electricity, water etc.

Reimbursement of all medical expenses incurred for self and family, including hospitalization,
membership of any hospital and/or doctors scheme.

Leave travel allowance for self and members of family every year, up to a maximum of one
months salary.

Use of Company car with driver and telephones at the residence. Use of car with driver and
telephones for office purposes shall not be considered as perquisites.

Club membership.
91

Entitled to the benefits of our Companys personal accident insurance scheme.

Contribution to provident fund, superannuation fund and annuity fund, gratuity and encashment
of leave at the end of her tenure.

Any other perquisites as may become applicable in the future

Other Directors
In relation to other Directors of our Company, apart from sitting fees and reimbursement of expenses, no
remuneration is payable by our Company.
The following table sets forth the details of remuneration paid to the Executive Directors during the financial year
ended March 31, 2010:
(In Rs.)
Name
Salary and
Contribution to
Superannu
Commission
Total
Perquisites
provident fund and ation Fund
other funds
M.P. Ramachandran
2,19,12,695
4,32,000
2,16,63,080
4,40,07,775
K. Ullas Kamath
1,00,08,000
12,00,960
10,00,800
1,08,31,540
2,30,41,300
M.R. Jyothy
19,20,000
2,30,400
1,92,000
23,42,400
As the future liabilities for gratuity is provided on an acturial basis for our Company as a whole, the amount pertaining to
individual basis is not ascertainable and therefore not included above.

B.

Non-Executive Directors

In relation to other Directors of our Company, apart from sitting fees and reimbursement of expenses, no
remuneration is payable by our Company. The following table sets forth the details of sitting fees and commission
paid to the Non Executive Directors for the financial year ended March 31 2010:
Name
Nilesh B. Mehta
K. P. Padmakumar
Bipin R. Shah

Sitting Fees
1,45,000
75,000
1,45,000

Commission and others

7,00,000
7,00,000
7,00,000

Total
8,45,000
7,75,000
8,45,000

Corporate Governance
Our Company is in compliance with the applicable corporate governance requirements, including under the Listing
Agreements, the Companies Act and the ICDR Regulations. The corporate governance framework is based on an
effective independent Board, separation of the Boards supervisory role from the executive management team and
constitution of committees of the Board, as required under law.
Committees of the Board of Directors
Our Board has constituted committees of Directors, each of which functions in accordance with the relevant
provisions of the Companies Act and the Listing Agreements. These include (i) Audit Committee; and (ii)
Shareholders and Investors Grievance Committee. The details of these committees are as follows:
A.

Audit committee

The members of the Audit Committee are:

1.
2.
3.

Nilesh B. Mehta
Bipin R. Shah
K.P. Padmakumar
92

4.

K. Ullas Kamath

The terms of reference of the Audit Committee are as provided in Clause 49 of the Listing Agreements, as well as
Section 292A of the Companies Act, and include oversight of our Companys financial process, reviewing the
financial statements and adequacy of internal audit.
Shareholders and Investors Grievance Committee

B.

The members of the Shareholders and Investors Grievance Committee are:

1.
2.
3.

Nilesh B. Mehta
Bipin R. Shah
M.P. Ramachandran

The terms of reference of the Investors Grievance Committee include review and consideration of the report
regarding number of various types of complaints/requests received handled and balances, if any.

93

Organization chart
Our Companys management organization structure is set forth below:

Board of Directors

Chairman & Managing

Director
(M P Ramachandran)

Deputy Managing
Director
(K. Ullas Kamath)

Sales

AVP-Sales
(K N Jagdishan)

AVP-Sales
(P R Jagdeeshan
Nair)

Finance &
Accounts

Information
Technology

CFO
(M L Bansal)

Marketing

Operations

Director
(M.R.Jyothy)

GM-Finance
(Neetu Kashiramka)

R&D

VP-R&D
(T V Sunith Babu)
GM-Operations
(T Krishnan)

AGM- Marketing
(Raghavendra K)

AGM- HR
(S Diwakar)

AVP- Sales
(Ajith Kumar)
Manager-Finance
(M R Deepthi)

Human
Resources

Head-HI Division
(Ananth Rao - T)

IT- Head
(Ravi Razdan)

Manager- FC Division
(Pradosh T G)

Key Management Personnel

Apart from our Directors, the following are our Key Management Personnel. All of the Key Management Personnel
below are permanent employees of our Company. Some of these Key Management Personnel are related to each
other or to our Directors.
M. L. Bansal, aged 62 years, Chief Financial Officer and Company Secretary, holds a bachelors degree in
commerce from the Agra University. He is a qualified chartered accountant and company secretary. He has over 37
years of experience in the field of finance, accounts and secretarial and was associated with Asian Paints Limited
prior to joining our Company in May 2002. His current responsibilities include supervision of accounts, finance,
treasury and secretarial.
K. N. Jagdeeshan, aged 53 years, Assistant Vice President - Sales, holds a postgraduate degree in arts from Calicut
University. He has over 33 years of experience in the field of sales and marketing and joined our Company in
November 1988. His current responsibilities include sales and marketing for the Kerala region.
P. R. Jagdeeshan, aged 53 years, Assistant Vice President - Sales, holds a bachelors degree in commerce from the
the University of Kerala and a postgraduate diploma in business administration from Magnus School of Business,
Bhubaneswar. He has over 23 years of experience in the field of marketing and was associated with Godrej Limited
prior to joining our Company in November 1986. His current responsibilities include sales and marketing for the
eastern region.

94

Ajith Kumar, aged 48 years, Assistant Vice President - Sales, holds a postgraduate degree in economics from the
University of Kerala. He has over 18 years of experience in the field of marketing and joined our Company in
January 1988. His current responsibilities include sales and marketing for the regions of New Delhi and Tamil Nadu.
T. Krishnan, aged 55 years, General Manager - Operations, holds a bachelors degree in commerce from Osmania
University and is a certified accountant from the Indian Institute of Bankers. He has over 32 years of experience and
was associated with the Bank of India and Development Credit Bank prior to joining our Company in July 2002. His
current responsibilities include production, procurement and logistics.
T. V. Sunith Babu, aged 41 years, Head - Engineering Research and Development, has been with our Company
since July 2002. His current responsibilities include designing and development of machinery, new project
implementation and expansion.
Neetu Kashiramka, aged 36 years, General Manager - Finance, holds a bachelors degree in commerce from the
University of Mumbai and is a qualified chartered accountant. She has over 12 years of experience in the field of
finance and accounts and was associated with Kewal Kiran Clothing Limited prior to joining our Company in
November 2000. Her current responsibilities include supervision of accounts, finance, statutory audit, internal audit
and investment relations.
S. Diwakar, aged 58 years, Assistant General Manager - Human Relations Development, holds a bachelors degree
in commerce from Madras University and is a certified accountant from the Indian Institute of Bankers. He has over
35 years of experience and was associated with Bank of India and Development Credit Bank prior to joining our
Company in April 2003. His current responsibilities include handling our human relations department.
Raghvendra K., aged 40 years, Assistant General Manager - Marketing Services, holds a postgraduate degree in
business administration from Kuvempu University and holds a postgraduate diploma in advertising and public
relations from Symbiosis College, Pune. He has over 10 years of experience in the field of media planning and
buying and was associated with Lintas Mudra OMS prior to joining our Company in April 2004. His current
responsibilities include media planning and buying, and coordinating creative agencies and marketing initiatives.
Ravi Razdan, aged 29 years, IT-Head, holds a bachelors degree in engineering in information technology from
University of Marathwada and a postgraduate degree in business administration systems from the University of
Mumbai. He has four years of experience and was associated with Kotak Mahindra Bank prior to joining our
Company in April 2010. His current responsibilities include IT services and implementation.
T. Ananth Rao, aged 36 years, Head - Household Insecticide division, holds a bachelors degree in business
administration from Mangalore University and is a chartered accountant (Inter). Currently he is pursuing the
owners/presidents management programme from Harvard University. He has 10 years of experience. Prior to
joining our Company he was working with a chartered accountants firm. He has been with our Company since
December 2003. His current responsibilities include procurement, production and logistics.
T. G. Pradosh, aged 36 years, Manager - Sales Administration, holds a bachelors degree in commerce from Calicut
University. He has over 11 years of experience in the field of planning, costing, inventory control and was
associated with Dominion (UB Group) prior to joining our Company in August 2001. His current responsibilities
include sales administration and operations.
M.R.Deepthi, aged 26 years, Manager - Finance, holds a post graduate degree in business administration from
Mumbai University. She joined our Company in October 2006. Her current responsibilities include overview and
supervision of management information systems.
Shareholding of key management personnel
Except as disclosed below and the Equity Shares held by our Directors as disclosed in this Placement Document,
none of our Key Management Personnel hold any Equity Shares in our Company:

95

Name

Number of Equity Shares

320
50
8

Raghavendra K.
T. G. Pradosh
Ravi Razdan

Percentage (%)
Negligible
Negligible
Negligible

Interest of Key Management Personnel

Except as stated in Financial Statements Related Party Transactions, and to the extent of their shareholding (and
holding of stock options, as may be applicable) in our Company, and remuneration or benefits to which they are
entitled as per the terms of their appointment and reimbursement of expenses incurred by them in the ordinary
course of business, our Companys key management personnel do not have any other interest in our Company.
Sr. No.
1.
2.
3.
4.
5.
6.

Name

Amount of Loan Obtained

.P. R. Jagdeeshan
.K. N. Jagdeeshan
.T. Krishnan
.T. V. Sunith Babu
.T. G. Pradosh
.M. L. Bansal

11,35,200
50,000
9,20,000
10,00,000
3,00,000
15,00,000

Amount Outstanding as on
June 30, 2010
1,84,089
50,000
2,80,000
10,00,000
65,000
3,50,000

Payment or Benefit to Officers of our Company

No officer or other employee of our Company is entitled to any benefit upon termination of his employment in our
Company, other than statutory benefits such as provident fund and gratuity.

96

ORGANIZATIONAL STRUCTURE AND MAJOR SHAREHOLDERS

In 1983, our Promoter, M. P. Ramachandran, started Jyothy Laboratories, a sole proprietorship firm, in Kerala,
which was involved in the business of manufacturing and selling fabric whitener under the name Ujala. We were
incorporated as Jyothi Laboratories Private Limited on January 15, 1992. We used certain intellectual property on
license from our Promoter. On September 13, 2002, our Promoter agreed to transfer his rights, and the rights of
Jyothy Laboratories, in the intellectual property to us. Pursuant to Board and Shareholders resolutions dated
October 6, 1995, we became a public limited company and our name was changed to Jyothi Laboratories Limited on
October 6, 1995. We further changed our name to Jyothy Laboratories Limited on August 12, 1996.
Our Registered Office is located at Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai
400 059.
Our Equity Shares have been listed on the BSE and the NSE since December 19, 2007.
Shareholding Pattern
(a)

The shareholding pattern of our Company as on June 30, 2010 is set forth below:
No. of
shareholders

Category of shareholder

Total No. of Total No. of Equity Total Shareholding

Equity
Shares held in
as a % of total No. of
Shares
Dematerialized Form
Shares
As a % As a % of
of (A+B) (A+B+C)

Shares pledged or
otherwise
encumbered
Number
of shares

As a
% of
Total No.
of Shares

(A)
Shareholding
of
Promoter and Promoter
Group
(1) Indian
Individual/HUF
(2) Foreign
Total shareholding of
Promoter and Promoter
Group (A)

12

5,08,92,440

5,08,92,440

70.13

70.13

12

5,08,92,440

5,08,92,440

70.13

70.13

12

58,11,049

58,11,049

8.01

8.01

3,37,829

3,37,829

0.47

0.47

64,73,155

64,73,155

8.92

8.92

14

30,24,887

30,24,887

4.17

4.17

32

1,56,46,920

1,56,46,920

21.56

21.56

417

13,84,724

13,84,724

1.91

1.91

(B) Public Shareholding

(1) Institutions
Mutual Funds / UTI
Financial
Banks

Institutions

Insurance Companies
Foreign
Investors

Institutional

Sub Total (B1)

(2) Non-Institutions
Bodies Corporate

97

Category of shareholder

No. of
shareholders

Total No. of Total No. of Equity Total Shareholding

Equity
Shares held in
as a % of total No. of
Shares
Dematerialized Form
Shares

Shares pledged or
otherwise
encumbered

Individuals
Individual
shareholders
holding nominal share
capital up to Rs. 1 lakh

45,579

40,99,909

40,99,894

5.65

5.65

Individual
shareholders
holding nominal share
capital in excess of Rs. 1
lakh

2,63,200

2,63,200

0.36

0.36

621

2,81,607

2,81,607

0.39

0.39

1,200

1,200

153

80,880

80,880

0.11

0.11

11

1,700

1,700

449

1,97,727

1,97,727

0.27

0.27

100

100

Sub Total (B2)

46,618

60,29,440

60,29,425

8.31

8.31

Total
Public
shareholding (B1 + B2)

46,650

2,16,76,360

2,16,76,345

29.87

29.87

Total (A)+(B)

46,662

7,25,68,800

7,25,68,785

100.00

100.00

46,662

7,25,68,800

7,25,68,785

100.00

100.00

Any Others (Specify)

Trusts
Clearing Members
Office Bearers
Non-Resident Indians
Directors
and
relatives and friends

their

(C) Shares held by

Custodians and against
which
Depository
Receipts have been issued
Total (A)+(B)+(C)

The shareholding of our Companys Promoters and Promoter Group as on June 30, 2010:

(b)
S. No.

(I)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Name of shareholder

(II)
M.P. Ramachandran
M.P.Ramachandran(HUF)
M.P. Divakaran
M.P. Sidharthan
M.R. Deepthy
M.R. Jyothy
U.B. Beena
M.G. Shanthakumari
M.P. Divakaran (HUF)
K. Ullas Kamath
Sidharthan M. P. (HUF)
K.K. Sujatha
Total

Total Shares held

Number
As a % of
grand total
(A)+(B)+(C)
(III)
2,02,43,785
27.90
1,45,13,765
20.00
34,20,900
4.71
25,13,000
3.46
22,70,000
3.13
22,67,800
3.13
17,23,300
2.37
15,61,700
2.15
9,52,000
1.31
7,25,690
1.00
6,60,000
0.91
40,500
0.06
5,08,92,440
70.13

98

Shares Pledged or Otherwise Encumbered

Number
As a %
As a % of
Grand
Total
(V)
(VI)=(V)/(III)*100
(VII)
-

(c)

The following table sets forth the shareholding of those shareholders, other than those belonging to our
Promoter and Promoter Group, holding more than 1% of our paid-up capital as on June 30, 2010:

Sr. No.
1
2
3
4
5

Name of the shareholder

No. of Shares

ICICI Prudential Life Insurance Company Limited

FIL Trustee Company Private Limited
India Capital Fund Limited
DSP Blackrock Small and Mid Cap Fund
FIL Trustee Company Private Limited
Total

59,73,155
23,25,633
11,62,690
9,09,105
8,79,378
1,12,49,961

99

Shares as % of Total No.

of Shares
8.23
3.20
1.60
1.25
1.21
15.50

ISSUE PROCEDURE
The following is a summary intended to present a general outline of the procedure relating to the application
process, Allocation and Allotment of the Equity Shares. The procedure followed in the Issue may differ from the one
mentioned below and the investors are assumed to have apprised themselves of the same from our Company or the
Book Running Lead Managers. The investors are advised to inform themselves of any restrictions or limitations that
may be applicable to them. Also see the sections Selling Restrictions and Transfer Restrictions.
This Issue was authorized and approved by our Board of Directors on June 21, 2010 and approved by our
Shareholders at their meeting held on July 27, 2010.
Our Company has applied for in-principle approvals from each of the Stock Exchanges under Clause 24(a) of the
Listing Agreement for the listing of the Equity Shares on the Stock Exchanges and approval has been received from
each of the Stock Exchanges. Our Company has also filed a copy of the Preliminary Placement Document with the
Stock Exchanges.
Qualified Institutions Placements
The Issue is being made to QIBs in reliance upon Chapter VIII of the ICDR Regulations through the mechanism of a
QIP. Under Chapter VIII of the ICDR Regulations, a listed company in India may issue equity shares/fully
convertible debentures/partly convertible debentures/non-convertible debentures with warrants or any other security
(other than warrants) which are convertible into or exchangeable with equity shares at a later date to QIBs, provided
that:
the shareholders of the issuer have adopted a special resolution approving such QIP. Such special
resolution must specify: (a) that the allotment of securities is proposed to be made pursuant to a QIP; and
(b) the relevant date;
equity shares of the same class of such issuer, which are proposed to be allotted through the QIP or
pursuant to conversion or exchange of eligible securities, are listed on a stock exchange in India that has
nation-wide trading terminals for a period of at least one year as on the date of issuance of notice to its
shareholders for convening the meeting to adopt the above-mentioned special resolution; and
such issuer complies with the minimum public shareholding requirements set out in the relevant listing
agreements with the stock exchanges referred to above.
Additionally, there is a minimum pricing requirement under the ICDR Regulations. The issue price of the equity
shares issued under a QIP shall not be less than the average of the weekly high and low of the closing prices of the
related equity shares of such issuer quoted on the stock exchange during the two weeks preceding the relevant date.
The relevant date referred to above means, in the case of an allotment of equity shares, the date of the meeting at
which the board or the committee of directors duly authorized by the board of such issuer decides to open the
proposed issue and stock exchange means any of the recognized stock exchanges on which the equity shares of
the issuer of the same class are listed and on which the highest trading volume in such equity shares has been
recorded during the two weeks immediately preceding the relevant date.
Equity shares must be allotted within 12 months from the date of the shareholders resolution approving the QIP.
The securities issued pursuant to a QIP must be issued on the basis of a placement document that contain all material
information including the information specified in Schedule XVIII of the ICDR Regulations. The placement
document is a private document provided to the investors through serially numbered copies and is required to be
placed on the website of the concerned stock exchange and of the issuer with a disclaimer to the effect that it is in
connection with an issue to QIBs and no offer is being made to the public or to any other category of investors. A
copy of the placement document is required to be filed with the SEBI for record purposes within 30 days of the
allotment of the securities.
The aggregate of the proposed QIP and all previous QIPs made in the same financial year shall not exceed five times
100

the net worth of the issuer as per its audited balance sheet from the previous financial year. The issuer shall furnish a
copy of the placement document to each stock exchange on which its equity shares are listed.
Equity shares allotted to a QIB pursuant to a QIP shall not be sold for a period of one year from the date of
allotment, except on a recognised stock exchange in India.
Issue Procedure
1.

Our Company and the Book Running Lead Managers shall circulate serially numbered copies of the
Preliminary Placement Document and the Application Form, either in electronic form or physical form.

2.

The list of QIBs to whom the Application Form is delivered shall be determined by the Book Running Lead
Managers in consultation with our Company. Unless a serially numbered Preliminary Placement
Document along with the Application Form is addressed to a particular QIB, no invitation to
subscribe shall be deemed to have been made to such QIB. Even if such documentation were to come
into the possession of any person other than the intended recipient, no offer or invitation to offer shall be
deemed to have been made to such person.

3.

QIBs may submit an Application Form, including any revisions thereof, until the Issue Closing Date to the
Book Running Lead Managers.

4.

Application Form
QIBs will be required to indicate the following in the Application Form:
a.

name of the QIB to whom the Equity Shares are to be Allotted;

b.

number of the Equity Shares applied for;

c.

price at which they are agreeable to subscribe for the Equity Shares, provided that QIBs may also
indicate that they are agreeable to submit an Application Form at cut-off price (i.e. the Issue Price
which shall be finalized by our Company in consultation with the Book Running Lead Managers at
or above the Floor Price); and

d.

the details of the depository account(s) to which the Equity Shares should be credited.

Note: Each sub-account of an FII, other than a sub-account which is a foreign corporate or foreign
individual, will be considered as an individual QIB and separate Application Forms would be required from
each such sub-account. FIIs or sub-accounts of FIIs, are required to indicate the SEBI FII/sub-account
registration number in the Application Form.
5.

Once a duly filled in Application Form is submitted by a QIB, such Application Form constitutes an
irrevocable offer and cannot be withdrawn after the Issue Closing Date.

6.

The Issue Closing Date shall be notified to the Stock Exchanges and the QIBs shall be deemed to have been
given notice of such date after the receipt of the Application Form.

7.

Upon the receipt of the Application Forms, our Company shall determine the Issue Price and the number of
Equity Shares to be issued in consultation with the Book Running Lead Managers. Upon determination of
the Issue Price and the QIBs to whom Allocation shall be made, the Book Running Lead Managers will
send CANs to the QIBs who have been Allocated Equity Shares. The dispatch of the CANs shall be
deemed a valid, binding and irrevocable contract for the QIBs to pay the entire Issue Price for all the Equity
Shares Allocated to such QIB. The CAN shall contain details such as the number of Equity Shares
Allocated to the QIB and payment instructions, including the details of the amounts payable by the QIB for
Allotment of the Equity Shares in its name and the Pay-In Date as applicable to the respective QIB.

101

Following the receipt of a CAN, each QIB shall be required to make the payment of the entire application
monies for the Equity Shares indicated in the CAN at the applicable Issue Price through electronic transfer
to the designated bank account of our Company by the Pay-In Date as specified in the CAN sent to the
respective QIBs.
Upon receipt of the Application monies from the QIBs, our Company shall Allot Equity Shares as per the
details in the CAN to the QIBs. Our Company will intimate to the Stock Exchanges the details of the
Allotment and apply for approvals for listing and trading on the Stock Exchanges prior to crediting the
Equity Shares into the Depository Participant accounts of the QIBs.
8.

After receipt of listing approvals from the Stock Exchanges, our Company shall credit the Equity Shares
into the Depository Participant accounts of the respective QIBs.

9.

Our Company shall then apply for the trading permissions from the Stock Exchanges.

10.

The Equity Shares that have been credited to the Depository Participant accounts of the QIBs shall be
eligible for trading on the Stock Exchanges only upon the receipt of final listing and trading approvals from
the Stock Exchanges.

11.

Upon receipt of final listing and trading approvals from the Stock Exchanges, our Company may inform the
QIBs, who have received an Allotment, of the receipt of such approval. Our Company shall not be
responsible for any delay or non-receipt of the communication of the final listing and trading permissions
from the Stock Exchanges or any loss arising from such delay or non-receipt. Final listing and trading
approvals granted by the Stock Exchanges are also placed on their respective websites. QIBs are advised to
apprise themselves of the status of the receipt of the permissions from the Stock Exchanges or our
Company.

Qualified Institutional Buyers

Only QIBs, as defined in Regulation 2(1)(zd) of the ICDR Regulations, are eligible to invest. These include:
public financial institutions, as defined in section 4A of the Companies Act;
scheduled commercial banks;
mutual funds, venture capital funds and foreign venture capital investors registered with the SEBI;
foreign institutional investors and sub-accounts registered with the SEBI, other than a sub-account which is
a foreign corporate or foreign individual;
multilateral and bilateral development financial institutions;
state industrial development corporations;
insurance companies registered with the Insurance Regulatory and Development Authority;
provident funds with a minimum corpus of Rs. 250 million;
pension funds with a minimum corpus of Rs. 250 million;
National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the
GoI published in the Gazette of India; and
insurance funds set up and managed by the army, navy or air force of the Union of India.
FIIs are permitted to participate through the portfolio investment scheme in the Issue. FIIs are permitted to
participate in this Issue subject to compliance with all applicable laws and such that the shareholding of the
FIIs does not exceed specified limits as prescribed under applicable laws in this regard.
No single FII can hold more than 10% of the post Issue paid-up capital of our Company. In respect of an FII
investing in our Equity Shares on behalf of its eligible sub accounts, the investment on behalf of each eligible sub
account shall not exceed 10% of our Companys total issued capital. Currently, the aggregate FII holding in our
Company cannot exceed 40% of the total issued capital of our Company.

102

No Allotment shall be made pursuant to the Issue, either directly or indirectly, to any QIB being a promoter or any
person related to the promoter(s). QIBs which have all or any of the following rights shall be deemed to be persons
related to promoter(s):
a)
b)
c)

rights under a shareholders agreement;

veto rights; or
right to appoint any nominee director on the Board.

Provided that a QIB who does not hold any shares in our Company and who has acquired any or all of the above
rights in the capacity of a lender shall not be deemed to be person related to Promoters.
Our Company and the Book Running Lead Managers are not liable for any amendment or modification or
change to applicable laws or regulations, which may occur after the date of the Preliminary Placement
Document. QIBs are advised to make their independent investigations and satisfy themselves that they are
eligible to apply. QIBs are advised to ensure that any single Application From them does not exceed the
investment limits or maximum number of Equity Shares that can be held by them under applicable law or
regulation or as specified in the Preliminary Placement Document. Further, QIBs are required to satisfy
themselves that their Application Forms would not result in triggering a tender offer under the Takeover
Code.
A minimum of 10% of the Equity Shares offered in the Issue shall be Allotted to Mutual Funds. If no Mutual
Fund is agreeable to take up the minimum portion as specified above, such minimum portion or part thereof
may be Allotted to other QIBs.
Note: Affiliates or associates of the Book Running Lead Managers who are QIBs may participate in the Issue in
compliance with applicable laws.
Application Process
Application Form
QIBs shall only use the serially numbered Application Forms supplied by the Book Running Lead Managers in
either electronic form or by physical delivery for the purpose of making an Application in terms of the Placement
Document.
By making an Application for Equity Shares through an Application Form, a QIB will be deemed to have made the
following representations and warranties and the representations, warranties and agreements made under Notice to
Investors- Representations by Investors, Selling Restrictions and Transfer Restrictions and the representations
listed in the section Transfer Restrictions shall be included in the Application Form:
1.

It is a QIB in terms of Regulation 2(1)(zd) of the ICDR Regulations, has a valid and existing registration
under the applicable laws of India and is eligible to participate in the Issue;

2.

It is not a promoter and is not a person related to the promoters, either directly or indirectly and its
Application Form does not directly or indirectly represent the promoters or promoter group of our
Company;

3.

It does not holds any equity shares and has rights under a shareholders agreement, veto rights or right to
appoint any nominee director on the Board, if any, acquired only in the capacity of a lender;

4.

It has no right to withdraw its Application after the Issue Closing Date;

5.

If Equity Shares are Allotted through the Issue, it shall not, for a period of one year from Allotment, sell
such Equity Shares otherwise than on the Stock Exchanges;

103

6.

The QIB confirms that the QIB is eligible to make an Application and hold any of the Equity Shares so
Allotted. The QIB further confirms that the holding of the QIB, does not and shall not, exceed the level
permissible as per any applicable regulations applicable to the QIB;

7.

The Application would not result in triggering a tender offer under the Takeover Code;

8.

To the best of its knowledge, together with other QIBs in the Issue that belong to the same group or are
under common control, the Allotment to the QIB shall not exceed 50% of the Equity Shares Allotted in the
Issue. For the purposes of this statement:

9.

a.

The expression belongs to the same group shall derive meaning from the concept of companies
under the same group as provided in sub-section (11) of Section 372 of the Companies Act;

b.

Control shall have the same meaning as is assigned to it Regulation 2(1)(c) of the Takeover Code;
and

It shall not undertake any trades in the Equity Shares credited to its Depository Participant account until
such time that the final listing and trading approvals for the Equity Shares are issued by the Stock
Exchanges.

QIBS WOULD NEED TO PROVIDE THEIR DEPOSITORY ACCOUNT DETAILS, THEIR

DEPOSITORY PARTICIPANTS NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER
AND BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION FORM. QIBS MUST ENSURE
THAT THE NAME GIVEN IN THE APPLICATION FORM IS EXACTLY THE SAME AS THE NAME
IN WHICH THE DEPOSITORY ACCOUNT IS HELD.
Demographic details such as address and bank account will be obtained from the Depositories as per the Depository
Participant account details given above. The submission of an Application Form by the QIBs shall be deemed a
valid, binding and irrevocable offer for the QIB to pay the entire Issue Price for its share of the Allotment (as
indicated by the CAN), and becomes a binding contract on the QIB, upon issuance of the CAN by our Company in
favour of the QIB.
Submission of Application Forms
All Application Forms must be duly completed with the requisite information (including the name of the QIB, the
price and the number of Equity Shares applied for). The Application Form shall be submitted to the Book Running
Lead Managers either through electronic form or through physical delivery at any of the following addresses:
Kotak Mahindra Capital Company Limited
1st Floor Bakhtawar
229, Nariman Point
Mumbai 400 021
Contact Person: Karl Sahukar
Email: Jyothy.QIP@kotak.com
Tel: +91 22 6634 1100
Fax:+91 22 6632 5129

Enam Securities Private Limited

801/ 802, Dalamal Towers
Nariman Point
Mumbai 400 021
Contact Person: G. Venkatesh
Email: venkatesh@enam.com
Tel: +91 22 6638 1800
Fax: +91 22 2284 6824

The Book Running Lead Managers shall not be required to provide any written acknowledgement of the same.
Permanent Account Number or PAN
A copy of each QIBs PAN card is required to be submitted with the Application Form. Applications without this
information will be considered incomplete and are liable to be rejected. QIBs should not submit the GIR number
instead of the PAN as the Application Form is liable to be rejected on this ground.
Pricing and Allocation
104

Build up of the book

The QIBs shall submit their Applications within the Issue period to the Book Running Lead Managers.
Price discovery and Allocation
Our Company, in consultation with the Book Running Lead Managers, shall determine the Issue Price. After
finalization of the Issue Price, our Company shall update the Preliminary Placement Document with the Issue details
and file the Placement Document with the Stock Exchanges.
Method of Allocation
Our Company shall determine the Allocation of Equity Shares in consultation with the Book Running Lead
Managers on a discretionary basis and in compliance with Chapter VIII of the ICDR Regulations.
Application Forms received from the QIBs at or above the Issue Price shall be grouped together to determine the
total demand. The Allocation to all such QIBs will be made at the Issue Price. Allocation to Mutual Funds for up to
a minimum of 10% of the Issue Size shall be undertaken subject to valid Applications being received at or above the
Issue Price.
THE DECISION OF OUR COMPANY AND THE BOOK RUNNING LEAD MANAGERS IN RESPECT
OF ALLOCATION SHALL BE BINDING ON ALL QIBs. QIBs MAY NOTE THAT ALLOCATION OF
EQUITY SHARES IS AT THE SOLE AND ABSOLUTE DISCRETION OF OUR COMPANY IN
CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND QIBs MAY NOT RECEIVE
ANY ALLOCATION EVEN IF THEY HAVE SUBMITTED VALID APPLICATION FORMS AT OR
ABOVE THE ISSUE PRICE. NEITHER OUR COMPANY NOR THE BOOK RUNNING LEAD
MANAGERS ARE OBLIGED TO ASSIGN ANY REASONS FOR SUCH NON-ALLOCATION.
Number of Allottees
The Equity Shares would not be Allotted to less than:
two Allottes, where the Issue Size is less than or equal to Rs. 25,000.00 lakhs; or
five Allottees, where the Issue Size is greater than Rs. 25,000.00 lakhs
Provided that no single Allottee shall be Allotted more than 50.00% of the aggregate amount of the Equity Shares in
the Issue.
Provided further that QIBs belonging to the same group or those who are under common control shall be deemed to
be a single Allottee for the purpose of this clause. For details of what constitutes same group or control, please
see - Application Process - Application Form.
The maximum number of Allottees of Equity Shares shall not be greater than 49. Further the Equity Shares
will be Allotted within 12 months from the date of the shareholders resolution approving the Issue.
CAN
Based on the Application Forms received, our Company and the Book Running Lead Managers, in their sole and
absolute discretion, will decide the list of QIBs to whom the serially numbered CAN shall be sent, pursuant to which
the details of the Equity Shares Allocated to them and the details of the amounts payable by them by the Pay-in-Date
for Allotment of such Equity Shares in their respective names shall be notified to such QIBs. Additionally, the CAN
will include details of the bank account(s) for transfer of funds electronically, the Pay-In Date, as well as the
probable designated date, being the date of credit of the Equity Shares to the QIBs account, as applicable to the
respective QIBs (the Designated Date).

105

The eligible QIBs would also be sent a serially numbered Placement Document either in electronic form or by
physical delivery along with the serially numbered CAN.
The dispatch of the serially numbered Placement Document and the CAN to the QIB shall be deemed a valid,
binding and irrevocable contract for the QIB to furnish all details that may be required by the Book Running Lead
Managers and to pay the entire Issue Price for all the Equity Shares Allocated to such QIB.
QIBs are advised to instruct their Depository Participant to accept the Equity Shares that may be Allocated/Allotted
to them pursuant to the Issue.
Bank Account for Payment of Application Money
Our Company has opened the Jyothy Laboratories Limited QIP Escrow Account ( the Escrow Cash Account)
with Axis Bank Limited, acting as the Escrow Agent in terms of the arrangement between our Company, the Book
Running Lead Managers and Axis Bank Limited. The QIBs will be required to deposit the entire amount payable for
the Equity Shares Allocated to it by the Pay-In Date as mentioned in the respective CANs.
If the payment is not made favouring the Escrow Cash Account within the time stipulated in the CAN, the
Application Form and the CAN of the QIB are liable to be cancelled.
In case of cancellations or default by the QIBs, our Company, in consultation with the Book Running Lead
Managers, has the right to re-Allocate the Equity Shares at the Issue Price among existing or new QIBs at its sole
and absolute discretion.
Payment Instructions
The payment of application money in relation to the Equity Shares shall be made by the QIBs in the name of
Jyothy Laboratories Limited QIP Escrow Account as per the payment instructions provided in the CAN.
QIBs may make payment only through electronic fund transfer and payments through cheques are liable to be
rejected.
Designated Date and Allotment of Equity Shares
1.

The Equity Shares will not be Allotted unless the QIBs pay the full Issue Price to the Jyothy Laboratories
Limited QIP Escrow Account as stated above.

2.

Subject to the satisfaction of the terms and conditions of the Placement Agreement, our Company will
ensure that Allotment of the Equity Shares is completed by the Designated Date provided in the CAN for
the QIBs who have paid the aggregate subscription amounts as provided in the CANs.

3.

In accordance with the ICDR Regulations, Equity Shares will be issued and Allotment shall be made only
in the dematerialized form to the Allotees. Allotees will have the option to re-materialize the Equity Shares,
if they so desire, as per the provisions of the Companies Act and the Depositories Act.

4.

Our Company reserves the right to cancel the Issue at any time up to Allotment without assigning any
reasons whatsoever.

5.

Following Allotment and credit of Equity Shares into the QIBs Depository Participant account, our
Company will apply for final listing and admission of the Equity Shares to trading on the Stock Exchanges.

6.

In the event of any delay in the Allotment or credit of Equity Shares, or receipt of trading or listing
approvals or cancellation of the Issue, no interest or penalty would be payable by our Company or the Book
Running Lead Managers.

7.

The Escrow Agent shall not release the monies lying to the credit of the Escrow Cash Accounts to our
106

Company, until such time as our Company delivers to the Escrow Agent documentation regarding the final
approvals of the Stock Exchanges for the listing and admission of the Equity Shares to trading on the Stock
Exchanges.
Pursuant to a circular dated March 5, 2010 issued by the SEBI, Stock Exchanges are required to make available on
their websites the details of those Allotees who have been Allotted more than 5% of the Equity Shares offered in any
QIP, viz. names of the Allotees and number of securities allotted to each of them, pre- and post- Issue shareholding
pattern of our Company in the format specified in Clause 35 of the Listing Agreement along with the Placement
Document.
Submission to the SEBI
Our Company shall submit the Placement Document to the SEBI within 30 days of the date of Allotment for record
purposes.
Other Instructions
Right to Reject Applications
Our Company, in consultation with the Book Running Lead Managers, may reject Applications, in part or in full,
without assigning any reasons whatsoever. The decision of our Company and the Book Running Lead Managers in
relation to the rejection of Applications shall be final and binding.

Securities in dematerialized form with NSDL or CDSL

The Allotment of the Equity Shares in the Issue shall be only in dematerialized form (i.e., not in the form of physical
certificates but be fungible and be represented by the statement issued through the electronic mode).
1.

A QIB applying for Equity Shares must have at least one beneficiary account with a Depository Participant
of either NSDL or CDSL prior to making the Application.

2.

Allotment to a successful QIB will be credited in electronic form directly to the beneficiary account (with
the Depository Participant) of the QIB.

3.

Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity
with NSDL and CDSL. The Stock Exchanges have electronic connectivity with CDSL and NSDL.

4.

The trading of the Equity Shares would be in dematerialized form only for all QIBs in the demat segment
of the respective Stock Exchanges.

5.

Our Company will not be responsible or liable for the delay in the credit of Equity Shares due to errors in
the Application Forms or otherwise on part of the QIBs.

107

PLACEMENT
Placement Agreement
The Book Running Lead Managers have entered into a Placement Agreement with our Company (the Placement
Agreement), pursuant to which the Book Running Lead Managers have agreed to place, on a reasonable efforts
basis, up to such number of Equity Shares, the aggregate subscription amount of which shall be up to Rs. 22,788.22
lakhs, to QIBs, pursuant to Chapter VIII of the ICDR Regulations.
The Placement Agreement contains customary representations and warranties, as well as indemnities from our
Company and is subject to termination in accordance with the terms contained therein.
Applications shall be made to list the Equity Shares issued pursuant to the Issue and admit them to trading on the
Stock Exchanges. No assurance can be given as to the liquidity or sustainability of the trading market for such
Equity Shares, the ability of holders of the Equity Shares to sell their Equity Shares or the price at which holders of
the Equity Shares will be able to sell their Equity Shares.
This Placement Document has not been, and will not be, registered as a prospectus with the Registrar of Companies
and, no Equity Shares will be offered in India or overseas to the public or any members of the public in India or any
other class of investors, other than QIBs.
In connection with the Issue, the Book Running Lead Managers (or their affiliates) may, for their own accounts,
enter into asset swaps, credit derivatives or other derivative transactions relating to the Equity Shares at the same
time as the offer and sale of the Equity Shares, or in secondary market transactions. As a result of such transactions,
the Book Running Lead Managers may hold long or short positions in such Equity Shares. These transactions may
comprise a substantial portion of the Issue and no specific disclosure will be made of such positions. Affiliates of the
Book Running Lead Managers may purchase Equity Shares and be Allocated Equity Shares for proprietary purposes
and not with a view to distribution. Affiliates of the Book Running Lead Managers that are registered as FIIs may
purchase, to the extent permissible under law, Equity Shares in the Issue, and may issue P-Notes in respect thereof.
See the section Offshore Derivative Instruments.
The Book Running Lead Managers and their affiliates may engage in transactions with and perform services for, our
Company and our Subsidiaries, group companies or affiliates in the ordinary course of business and have engaged,
or may in the future engage, in commercial banking and investment banking transactions with our Company and our
Subsidiaries, group companies or affiliates, for which they have received and may in the future receive,
compensation.
Lock-up
Our Company will not, for a period of 120 days from the date of the final Placement Document, without the prior
written consent of the Book Runners, directly or indirectly, (a) agrees not to, (a) directly or indirectly, offer, lend,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of, any Promoter Equity Shares or any
securities convertible into or exercisable for Promoter Equity Shares (including, without limitation, securities
convertible into or exercisable or exchangeable for Promoter Equity Shares which may be deemed to be beneficially
owned by the undersigned), or file any registration statement under the U.S. Securities Act of 1933, as amended,
with respect to any of the foregoing or (b) enter into any swap or other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, any of the economic consequences associated with the ownership of any of
the Promoter Equity Shares or any securities convertible into or exercisable or exchangeable for Promoter Equity
Shares (regardless of whether any of the transactions described in clause (a) or (b) is to be settled by the delivery of
Promoter Equity Shares or such other securities, in cash or otherwise), or (c) deposit Promoter Equity Shares with
any other depositary in connection with a depositary receipt facility or enter into any transaction (including a
transaction involving derivatives) having an economic effect similar to that of a sale or deposit of Promoter Equity
Shares in any depositary receipt facility or publicly announce any intention to enter into any transaction falling
within (a) to (c) above; provided, however, that the foregoing restrictions do not apply to any sale, transfer or
disposition of Promoter Equity Shares by the undersigned to the extent such sale, transfer or disposition is required
108

by Indian law and (ii) authorizes our Company to cause the transfer agent to decline to transfer and/or to note stop
transfer restrictions on the transfer books and records of our Company with respect to any Promoter Equity Shares
for which the undersigned is the record holder and, in the case of any such shares or securities for which the
undersigned is the beneficial but not the record holder, agrees to cause the record holder to cause the transfer agent
to decline to transfer and/or to note stop transfer restrictions on such books and records with respect to such shares
or securities.

109

DISTRIBUTION AND SOLICITATION RESTRICTIONS

The distribution of this Placement Document or any offering material and the offering, sale or delivery of the Equity Shares
is restricted by law in certain jurisdictions. Therefore, persons who may come into possession of this Placement Document
or any offering material are advised to consult with their own legal advisors as to what restrictions may be applicable to
them and to observe such restrictions. This Placement Document may not be used for the purpose of an offer or invitation in
any circumstances in which such offer or invitation is not authorised.
General
No action has been taken or will be taken that would permit a public offering of the Equity Shares to occur in any jurisdiction
other than India, or the possession, circulation or distribution of this Placement Document or any other material relating to
the Company, the Selling Shareholder or the Equity Shares in any jurisdiction where action for such purpose is required.
Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and neither this Placement Document nor
any offering materials or advertisements in connection with the Equity Shares may be distributed or published in or from any
country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of
any such country or jurisdiction. The Issue will be made in compliance with the applicable SEBI Guidelines. Each purchaser
of the Equity Shares in this Issue will be deemed to have made acknowledgments and agreements as described under
Transfer Restrictions in this Placement Document.
Australia
This Placement Document is not a disclosure document under Chapter 6D of the Corporations Act 2001 (Cth) (the
Australian Corporations Act), and has not been lodged with the Australian Securities & Investments Commission and does
not purport to include the information required of a disclosure document under the Australian Corporations Act. (i) The offer
of the Equity Shares under this Placement Document is only made to persons to whom it is lawful to offer the Equity Shares
without disclosure to investors under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in
Section 708 of the Australian Corporations Act; (ii) this Placement Document is made available in Australia to persons as set
forth in clause (i) above; and (iii) by accepting this offer, the offeree represents that the offeree is such a person as set forth in
clause (ii) above and agrees not to sell or offer for sale within Australia any Equity Share sold to the offeree within 12
months after their transfer to the offeree under this Placement Document.
Bahrain
No approval has been sought or received from the regulatory authorities of Bahrain for the sale of the Equity Shares in
Bahrain. All applications for investment in the Company should be received, and any allotments should be made, in each
case from outside Bahrain. This Placement Document has been prepared for private information purposes of intended
investors only who will be high net worth individuals and institutions. It may not be used for and shall not be deemed a
public offering of the Equity Shares and the Equity Shares may not be offered or sold in Bahrain or to residents thereof
except as permitted by Bahrain law.
The Central Bank of Bahrain assumes no responsibility for the accuracy and completeness of the statements and information
contained in this document and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance
upon the whole or any part of the contents of this document.
Canada
Equity Shares have not been sold in Canada or to residents of Canada other than in compliance with Canadian securities
laws. Without limiting the foregoing, offers and sales of the Equity Shares included in the Issue in Canada or to residents of
Canada will be made only through an appropriately registered securities dealer or in accordance with an available exemption
from the applicable registered securities dealer requirements under the Canadian securities laws and pursuant to an
exemption from the prospectus requirements under Canadian securities laws.
Cayman Islands
No invitation, direct or indirect, has been made to the public for subscription to the Equity Shares.
110

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a
Relevant Member State), with effect from and including the date on which the Prospectus Directive is or was implemented
in that Relevant Member State (the Relevant Implementation Date), the Equity Shares may not be offered or sold to the
public in that Relevant Member State prior to the publication of a prospectus in relation to the Equity Shares which has been
approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant
Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that the Equity Shares, with effect from and including the Relevant Implementation Date, may be offered to
the public in that Relevant Member State at any time:
to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or
regulated, whose corporate purpose is solely to invest in securities;
to any legal entity which has two or more of: (1) an average of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000; and (3) an annual net turnover of more than 50,000,000, in the
case of (2) and (3) as shown in its last annual or consolidated accounts;
to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive)
subject to obtaining the prior consent of the Underwriters; or
in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offering of Equity Shares shall result in a requirement for the publication by the Company or the
Underwriters of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an offer of Equity Shares to the public in relation to any Equity Shares in
any Relevant Member State means the communication in any form and by any means of sufficient information on the terms
of the offer and the Equity Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Equit y
Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that
Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
France
This Placement Document has not been prepared in the context of a public offering of securities in France (appel public
l'pargne) within the meaning of Article L.411-1 of the French Code montaire et financier and Articles 211-1 and seq. of
the Autorit des marchs financiers (AMF) Regulations and has therefore not been submitted to the AMF for prior
approval or otherwise.
The Equity Shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France
and neither this Placement Document nor any other offering material relating to the securities has been distributed or caused
to be distributed or will be distributed or caused to be distributed to the public in France, except only to qualified investors
(as defined in Article L.411-2 of the French Code montaire et financier) on the conditions that no such Placement
Document nor other offering material relating to the securities shall be passed by them onto any person nor reproduced (in
whole or in part). Such qualified investors are notified that they must act in that connection for their own account in
accordance with the terms set out by Article L.411-2 of the French Code montaire et financier and by Article 211-4 of the
AMF Regulations and may not re-transfer, directly or indirectly, the securities in France, other than in compliance with
applicable laws and regulations and in particular those relating to public offering (which are in particular embodied in
Articles L.411-1, L.412-1 and L.621-8 and seq. of the French Code montaire et financier).
Germany
This Placement Document has not been prepared in accordance with the requirements for a sales prospectus under the
German Securities Prospectus Act (Wertpapierprospektgesetz), the German Sales Prospectus Act (Verkaufsprospektgesetz),
or the German Investment Act (Investmentgesetz). Neither the German Federal Financial Supervisory Authority
(Bundesanstalt fr FinanzdienstleistungsaufsichtBaFin) nor any other German authority has been notified of the intention
to distribute the Equity Shares in Germany. The Equity Shares may therefore not be distributed in the Federal Republic of
111

Germany by way of public offering, public advertising or in a similar manner. The Equity Shares will not be admitted to
trading on an organised market situated or operating in the Federal Republic of Germany. Any resale of the Equity Shares in
the Federal Republic of Germany may only be made in accordance with the provisions of the Securities Prospectus Act and
any other laws applicable in the Federal Republic of Germany concerning the sale and offering of securities. The Equity
Shares are being offered and sold in Germany only to (i) qualified investors in the meaning of Section 3, paragraph 2 no. 1,
in connection with Section 2, no. 6, of the German Securities Prospectus Act, or (ii) a limited number (less than 100) of
individualised, unqualified investors that are being pre-selected and specifically addressed. This Placement Document is
strictly for use of the person who has received it. It may not be forwarded to other persons or published in Germany.
Hong Kong
No Equity Shares have been offered or sold, and no Equity Shares may be offered or sold, in Hong Kong, by means of any
document, other than to professional investors as defined in the Securities and Futures Ordinance, Chapter. 571 of the laws
of Hong Kong (Securities and Futures Ordinance) and any rules made under that Ordinance; or in other circumstances
which do not result in the document being a prospectus as defined in the Companies Ordinance, Chapter. 32 of the laws of
Hong Kong (Companies Ordinance) or which do not constitute an offer to the public within the meaning of the Companies
Ordinance. No document, invitation or advertisement relating to the Equity Shares has been issued or may be issued, which
is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted
under the securities laws of Hong Kong) other than with respect to Equity Shares which are intended to be disposed of only
to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance and any
rules made under that Ordinance. This Placement Document and the Equity Shares have not been and will not be registered
with the Securities and Futures Commission of Hong Kong and/or the Stock Exchange of Hong Kong. There are no public
markets or platforms in Hong Kong for the purchase or disposal of the Equity Shares. If you are in doubt as to the contents of
this Placement Document, you must immediately seek legal and investment advice from your solicitor, accountant and/or
professional advisors.
Ireland
The Equity Shares may be publicly offered and sold in Ireland only in accordance with the European Communities
(Transferable Securities and Stock Exchange) Regulations 1992, if applicable, the Investment Intermediaries Act 1995, as
amended, the Companies Acts 1963 to 2003 and all other applicable Irish laws and regulations. This Placement Document
does not constitute an offer to the public in Ireland by virtue of the fact that it shall only be made to persons in Ireland whose
ordinary business is to buy or sell shares or debentures (whether as principal or agent) and, accordingly, has not been
registered with the Registrar for Companies in Ireland. By accepting delivery of this Placement Document, the addressee in
Ireland warrants that it is a person whose ordinary business, whether as principal or agent, is to buy and sell shares and
debentures. This Placement Document does not and shall not be deemed to constitute an invitation to individuals (i.e. natural
persons) in Ireland to purchase Equity Shares. There will be no offering to the public in Ireland of the Equity Shares and this
Placement Document does not constitute a prospectus within the meaning of the Irish Companies Acts 1963 to 2003.
Italy
The offering of the Equity Shares has not been registered with the Commissione Nazionale per la societ e la Borsa
(CONSOB) (the Italian securities and exchange commission) pursuant to the Italian securities legislation and each
Underwriter has represented and agreed that it has not offered, sold or delivered any Equity Shares nor distributed any copies
of this Placement Document or any other document relating to the Equity Shares, and will not offer, sell or deliver any
Equity Shares nor distribute any copies of this Placement Document or any other document relating to the Equity Shares in
the Republic of Italy in a solicitation to the public at large (sollecitazione all'investimento), and that the Shares in Italy shall
only be:
offered and sold to professional investors (operatori qualificati) as defined in Article 31, second paragraph of
CONSOB Regulation No 11522 of 1 July 1998 (the "Regulation No 11522"), as amended; or
offered or sold in circumstances where an exemption from the rules governing solicitations to the public at large
applies, pursuant to Article 100 of Legislative Decree No. 58 of 24 February 1998 (the Financial Services Act)
and Article 33, first paragraph, of CONSOB Regulation No 11971 of 14 May 1999 (the Regulation No 11971), as
amended, and shall in any event be effected in accordance with all relevant Italian securities, tax and exchange
control and other applicable laws and regulations.
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Moreover and subject to the foregoing, each Underwriter has represented and agreed that the Equity Shares may not
be offered, sold or delivered and neither this Placement Document nor any other material relating to the Equity
Shares may be distributed or made available in Italy unless such offer, sale or delivery of Equity Shares or
distribution or availability of copies of this Placement Document or any other material relating to the Equity Shares
in Italy:
is in compliance with Article 129 of Legislative Decree No 385 of 1 September 1993 (the "Italian Banking Act")
and the implementing guidelines of the Bank of Italy, pursuant to which the issue or the offer of Equity Shares in
Italy may need to be followed by an appropriate notice to be filed with the Bank of Italy depending, inter alia, on the
aggregate value of the securities issued or offered in Italy and their characteristics; and
is made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in
accordance with the Financial Services Act, the Italian Banking Act, the Regulation No 11522, the Regulation No
11971 and any other applicable laws and regulations.
Japan
The Equity Shares have not been and will not be registered under the Securities and Exchange Law of Japan (Law. No. 25 of
1948 as amended) (the SEL). The Equity Shares may not be offered or sold, directly or indirectly, in Japan or to, or for the
benefit of, any resident of Japan or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit
of any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance
with, the SEL and any other applicable laws, regulations and ministerial guidelines of Japan. As used in this paragraph, a
"resident of Japan" means any natural person residing in Japan and business offices located in Japan, including any
corporation or other entity organized under the laws of Japan.
Jordan
The Equity Shares are being offered in Jordan on a cross border basis based on one-on-one contacts to no more than thirty
potential investors and accordingly the Equity Shares will not be registered with the Jordanian Securities Commission and a
local prospectus is not required.
Korea
The Equity Shares have not been registered under the Korean Securities and Exchange Law, and the Equity Shares acquired
in connection with the distribution contemplated hereby may not be offered or sold, directly or indirectly, in Korea or to or
for the account of any resident thereof, except as otherwise permitted by applicable Korean law and regulations, including,
without limitation, the Korean Securities and Exchange Law and Foreign Exchange Transactions Laws.
Kuwait
This Placement Document is being provided solely for informational purposes upon the request of the recipient and for its
convenience, receipt of this Placement Document does not constitute an offer to sell the securities referred to herein. No
private or public offering of the securities mentioned herein is being made in Kuwait, and no agreement relating to the sale of
securities will be conducted in Kuwait. No mass-media means of contact are being used to market the securities. The
securities are being offered for sale only to qualified institutional investors and sophisticated, high-net-worth individuals.
Neither the securities nor the placement have been licensed by the Kuwait Ministry of Commerce and Industry.
Luxembourg
The Equity Shares offered in this Placement Document may not be offered, sold or delivered to the public within the Grand
Duchy of Luxembourg. This document is only intended for institutional investors. It is personal to each offeree and does not
constitute an offer to any other person or to the public generally in Luxembourg to subscribe for or otherwise acquire the
Equity Shares. Distribution of this Placement Document to any person other than the offeree and those persons, if any,
retained to advise such offeree with respect thereto is unauthorized and any disclosure of any of its contents, without prior
written consent of the Company, is prohibited.

113

Malaysia
No prospectus or other offering material or document in connection with the offer and sale of the Equity Shares has been or
will be registered with the Securities Commission of Malaysia pursuant to the Securities Commission Act, 1993 as the offer
for purchase of, or invitation to purchase the Equity Shares is meant to qualify as an excluded offer or excluded invitation
within the meaning of Section 38 of the Securities Commission Act, 1993. Each initial purchaser has severally represented,
warranted or agreed that the Equity Shares will not be offered, sold, transferred or otherwise disposed, directly or indirectly,
nor any document or other material in connection therewith distributed, in Malaysia, other than to persons falling within any
one of the categories or person specified in Schedule 2 and/or Schedule 3 of the Securities Commission Act, 1993 who are
also persons to whom any offer or invitation to purchase or sell would be an excluded offer or invitation within the meaning
of Section 38 of the Securities Commission Act, 1993.
The Netherlands
The Equity Shares may only be offered, sold or delivered in or from The Netherlands as part of their initial distribution or at
any time thereafter, directly or indirectly, to individuals or legal entities who or which trade or invest in securities in the
conduct of a profession or trade (which includes, but is not limited to, banks, investment banks, securities firms, insurance
companies, pension funds, other institutional investors and treasury departments and finance companies of large enterprises).
New Zealand
This Placement Document is not a prospectus. It has not been prepared or registered in accordance with the Securities Act
1978 of New Zealand (the New Zealand Securities Act). This Placement Document is being distributed in New Zealand
only to persons whose principal business is the investment of money or who, in the course of and for the purposes of their
business, habitually invest money, within the meaning of section 3(2)(a)(ii) of the New Zealand Securities Act (Habitual
Investors). By accepting this Placement Document, you represent and warrant that if you receive this Placement Document
in New Zealand you are a Habitual Investor and you will not disclose this Placement Document to any person who is not also
a Habitual Investor.
Norway
This Placement Document has not been approved by or registered with any Norwegian securities regulators pursuant to the
Norwegian Securities Trading Act 1997. Accordingly, neither this Placement Document nor any other offering material
relating to the Equity Shares constitutes, or shall be deemed to constitute, an offer to the public in Norway within the
meaning of the Norwegian Securities Trading Act 1997 and is only made to qualified professional investors pursuant to the
Norwegian Regulation of December 9, 2005 regarding exemption from the obligation to publish a prospectus or otherwise
only in circumstances where an exemption from the obligation to publish a prospectus under the Norwegian Securities
Trading Act 1997 is available.
Oman
This Placement Document has not been registered or approved by the Central Bank of Oman, the Oman Ministry of
Commerce and Industry, the Oman Capital Market Authority or any other regulatory authority in the Sultanate of Oman, nor
are the BRLMs or Underwriters authorised or licensed by the Central Bank of Oman, the Oman Ministry of Commerce and
Industry, the Oman Capital Market Authority or any other authority in the Sultanate of Oman, to market or sell the Equity
Shares within the Sultanate of Oman.
The Equity Shares sold under this Placement Document have not and will not be listed on any stock exchange in the
Sultanate of Oman. No marketing of the Equity Shares has been or will be made from within the Sultanate of Oman and no
subscription to the Equity Shares may or will be consummated within the Sultanate of Oman.
The BRLMs and the Underwriters are not brokers, dealers, financial advisors or investment advisors licensed under the laws
applicable in the Sultanate of Oman, and, as such, do not advise individuals resident in the Sultanate of Oman as to the
appropriateness of investing in or purchasing or selling securities or other financial products.
Qatar

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The Equity Shares have not been offered, sold or delivered, and will not be offered, sold or delivered at any time, directly or
indirectly, in the State of Qatar in a manner that would constitute a public offering. This Placement Document has not been
reviewed or registered with Qatari Government Authorities, whether under Law No. 25 (2002) concerning investment funds,
central bank resolution No. 15 (1997), as amended, or any associated regulations. Therefore, this Placement Document is
strictly private and confidential, and is being issued to a limited number of sophisticated investors, and may not be
reproduced or used for any other purposes, nor provided to any person other than recipient thereof.

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Saudi Arabia
This Placement Document may not be distributed in Saudi Arabia except to the extent permitted under the rules governing
exempt offers as set forth in the offers of securities regulations. It should not be distributed to any other person, or relied
upon by any other person.
Singapore
The Placement Document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly,
the Placement Document and any other document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the Equity Shares may not be circulated or distributed, nor may the Equity Shares be offered or
sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in
Singapore other than (i) to an institutional investor pursuant to Section 274 of the Securities and Future Act (Chapter 289) of
Singapore (the SFA), (ii) to a relevant person, or any person pursuant to Section 275(1A) of the SFA, and in accordance
with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions
of, any other applicable provision of the SFA.
Unless otherwise permitted under the SFA, where the Equity Shares are acquired by a person pursuant to Section 274 or 275
of the SFA, such Equity Shares shall not be transferable for six months after that person has acquired the Equity Shares,
except (i) to another person who is an institutional investor or a relevant person, or (ii) pursuant to Section 275(1A) of the
SFA.
Unless otherwise permitted under the SFA, where the Equity Shares are subscribed or purchased pursuant to Section 275 of
the SFA by a relevant person which is:
a corporation which is not an accredited investor (as defined in Section 4A of the SFA) the sole business of which is
to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an
accredited investor; or
a trust (where the trustee is not an accredited investor) the sole purpose of which is to hold investments and each
beneficiary of the trust is an individual who is an accredited investor,
shares, debentures and units of shares and debentures of that corporation or the beneficiaries rights and interest in that trust
shall not be transferable for six months after that corporation or that trust has acquired the Equity Shares pursuant to an offer
made under Section 275 of the SFA except: (i) to an institutional investor or to a relevant person defined in Section 275(2) of
the SFA, or to any person pursuant to an offer that is made on the terms that such Equity Shares, debentures and units of
Equity Shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not
less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in
cash or by exchange of securities or other assets, in accordance with the conditions, specified in Section 275 of the SFA as
applicable; (ii) where no consideration is given for the transfer; or (iii) by operation of law.
Spain
This Placement Document has not been registered with the Comisin National del Mercado de Valores, and therefore a
public offer for sale of the Equity Shares will not be promoted in the Kingdom of Spain. The Equity Shares may not be
offered or sold in the Kingdom of Spain, except in accordance with the requirements of the Spanish securities market law
(ley 24/1998, de 28 de julio, del Mercado de valores), as amended, and Royal Decree 1310/2005, which partially develops
the Securities Market Law, on admission to trading, public offerings and prospectus (RD 1310/2005, por el que se desarrolla
parcialmente la Ley del Mercado de Valores en materia de admisin a negociacin de valores en mercados secundarios
oficiales, de ofertas pblicas de venta o suscripcin y del folleto exigible a tales efectos), as amended, and the decrees and
regulations issued thereunder.
Switzerland
This Placement Document does not constitute a prospectus within the meaning of Article 652a or Article 1156 of the Swiss
Code of Obligations (Schweizerisches Obligationenrecht) and is for the use of the direct recipient as addressed only, and is to
be treated confidentially. The recipient must not forward this Placement Document to any third party.

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United Arab Emirates

This Placement Document does not, and shall not, constitute an invitation, offer, sale or delivery of Equity Shares or other
securities under the laws of the United Arab Emirates (the UAE) (including the laws of the Dubai International Financial
Centre (the DIFC)) and accordingly shall not be construed as such. Neither the Issue, Equity Shares nor interests therein
offered are regulated under the laws of the UAE (including the laws of the DIFC) relating to securities, investments or
otherwise. Neither the Issue nor the Placement Document is approved or licensed by, or registered with, the UAE Central
Bank, the Dubai Financial Services Authority (DFSA), or any other relevant licensing or regulatory authorities or
governmental agencies in the UAE (including in the DIFC). The Equity Shares have not been and will not be registered
under Federal Law No. 4 of 2000 Concerning the Emirates Securities and Commodities Authority and the Emirates Security
and Commodity Exchange, or with the UAE Central Bank, the Dubai Financial Market, the Abu Dhabi Securities market or
with any other UAE or DIFC exchange.
The Issue, the Equity Shares and interests therein do not constitute a public offer of securities or an advertisement or
solicitation to the general public in the UAE in accordance with the Commercial Companies Law, Federal Law No. 8 of
1984 (as amended) or otherwise, or an offer of securities in the DIFC in accordance with the Markets Law, DIFC Law No.
12 of 2004. This Placement Document is strictly private and confidential and is being distributed to a limited number of
selected institutional and/or sophisticated investors and must not be provided to any person other than the original recipient,
and may not be reproduced or used for any other purpose. The interests in the Equity Shares may not be offered or sold
directly or indirectly to retail investors or the public in the UAE (including in the DIFC) and no sale of securities or other
investment products is intended to be consummated within the UAE or the DIFC. The BRLMs are not licensed brokers,
dealers, financial advisors or investment advisors under the laws applicable in UAE and the DIFC, and do not advise
individuals resident in the UAE or the DIFC as to the appropriateness of investing in or purchasing or selling securities or
other financial products. Nothing contained in this Placement Document is intended to constitute investment, legal, tax,
accounting or other professional advice in, or in respect of, the UAE or the DIFC. This document is confidential and for your
information only and nothing in this Placement Document is intended to endorse or recommend a particular course of action.
Prospective investors should conduct their own due diligence on the Issue and the Equity Shares. You should consult an
appropriate professional for specific advice rendered on the basis of your situation.
United Kingdom
The Equity Shares cannot be promoted in the United Kingdom to the general public. The contents of this Placement
Document have not been approved by an authorised person within the meaning of FSMA. The BRLMs (a) may only
communicate or caused to be communicated and will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act
2000, as amended (the FSMA), to persons who (i) are investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Financial Promotion Order), or (ii) fall
within any of the categories of persons described in article 49(2)(a) to (d) of the Financial Promotion Order or otherwise in
circumstances in which section 21(1) of the FSMA does not apply to the Company; and (b) has complied and will comply
with all applicable provisions of the FSMA with respect to anything done by it in relation to the Equity Shares in, from or
otherwise involving the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning
of Section 21 of FSMA) in connection with, or relating to, the sale or purchase of any Equity Shares, may only be
communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply. It is the
responsibility of all persons under whose control or into whose possession this document comes to inform themselves about
and to ensure observance of all applicable provisions of FSMA in respect of anything done in relation to an investment in
Equity Shares in, from or otherwise involving, the United Kingdom.
United States
The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws. The
Equity Shares are being offered and sold in the Placement outside the United States pursuant to Regulation S. The Equity
Shares are not being offered or sold in the United States and you may not purchase Equity Shares if you are in the United
States.

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TRANSFER RESTRICTIONS
Because of the following restrictions, investors are advised to consult legal counsel prior to making any offer, resale, pledge
or transfer of the Equity Shares offered hereby.
Purchasers are not permitted to sell the Equity Shares for a period of one year from the date of allotment except through the
Stock Exchanges. Subject to the foregoing:
Each purchaser of the Equity Shares in the Placement will be deemed to have represented and agreed as follows:
It is authorized to consummate the purchase of the Equity Shares in compliance with all applicable laws and
regulations.
It acknowledges (or if it is a broker-dealer acting on behalf of a customer, its customer has confirmed to it that such
customer acknowledges) that such Equity Shares have not been and will not be registered under the U.S. Securities
Act.
It certifies that either (A) it is, or at the time the Equity Shares are purchased will be, the beneficial owner of the
Equity Shares and is located outside the United States (within the meaning of Regulation S) or (B) it is a brokerdealer acting on behalf of its customer and its customer has confirmed to it that (i) such customer is, or at the time
the Equity Shares are purchased will be, the beneficial owner of the Equity Shares, and (ii) such customer is located
outside the United States (within the meaning of Regulation S).
It agrees that it will not offer, sell, pledge or otherwise transfer such Equity Shares except in an offshore transaction
complying with Rule 903 or Rule 904 of Regulation S or pursuant to any other available exemption from
registration under the U.S. Securities Act and in accordance with all applicable securities laws of the States of the
United States and any other jurisdiction, including India.
It acknowledges that we, the BRLMs and our affiliates, and others will rely upon the truth and accuracy of the foregoing
acknowledgements, representations and agreements and agrees that, if any of such acknowledgements, representations or
agreements deemed to have been made by virtue of its purchase of the Equity Shares are no longer accurate, it will promptly
notify us. Any resale or other transfer, or attempted resale or other transfer, made other than in compliance with the abovestated restrictions will not be recognized by us.

118

THE SECURITIES MARKET OF INDIA

The information in this section has been extracted from publicly available documents from various sources,
including officially prepared materials from the SEBI, the BSE and the NSE, and has not been prepared or
independently verified by our Company or the Book Running Lead Managers or any of their respective affiliates or
advisors.
India has a long history of organized securities trading. In 1875, the first stock exchange was established in Mumbai.
Indian Stock Exchanges
Indian stock exchanges are regulated primarily by the SEBI, as well as by the Government acting through the
Ministry of Finance, Stock Exchange Division, under the SCRA and the SCRR. Various rules, bye-laws and
regulations of the respective stock exchanges regulate the recognition of stock exchanges, the qualifications for
membership thereof and the manner in which contracts are entered into, settled and enforced between members.
SEBI is empowered to regulate the Indian securities markets, including stock exchanges and other intermediaries,
promote and monitor self-regulatory organizations and prohibit fraudulent and unfair trade practices. Regulations
concerning minimum disclosure requirements by public companies, rules and regulations concerning investor
protection, insider trading, substantial acquisitions of shares and takeovers of companies, buybacks of securities,
employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds, foreign institutional
investors, credit rating agencies and other capital market participants have been notified by the relevant regulatory
authority.
There are currently 19 recognized stock exchanges in India. Most of the stock exchanges have their own governing
boards for self regulation. The BSE and the NSE together hold a dominant position among the stock exchanges in
terms of the number of listed companies, market capitalization and trading activity.
With effect from April 1, 2003, the stock exchanges in India operate on a trading day plus two, or T+2, rolling
settlement system. At the end of the T+2 period, obligations are settled with buyers of securities paying for and
receiving securities, while sellers transfer and receive payment for securities. For example, trades executed on a
Monday would typically be settled on a Wednesday. In order to contain the risk arising out of the transactions
entered into by the members of various stock exchanges either on their own account or on behalf of their clients, the
stock exchanges have designed risk management procedures, which include compulsory prescribed margins on the
individual broker members, based on their outstanding exposure in the market, as well as stock-specific margins
from the members.
Listing
The listing of securities on a recognised Indian stock exchange is regulated by the applicable Indian laws including
the Companies Act, the SCRA, the SCRR, the SEBI Act and various guidelines and regulations issued by SEBI and
the listing agreements of the respective stock exchanges. The governing body of each recognised stock exchange is
empowered to suspend or withdraw admission to dealings in a listed security for breach of or non compliance with
any conditions under such listing agreement or for any other reason, subject to the issuer receiving prior written
notice of the intent of the exchange and upon granting of a hearing in the matter. The Securities Appellate Tribunal,
after giving the stock exchange an opportunity of being heard, has the power to vary or set aside the decision of
stock exchange in this regard. SEBI also has the power to amend such listing agreements and the bye-laws of the
stock exchanges in India.
SEBI has notified the SEBI (Delisting of Equity Shares) Regulations, 2009 in relation to the voluntary and
compulsory delisting of securities from the stock exchanges. In addition, certain amendments to the SCRR have also
been notified in relation to delisting.
Pursuant to a recent amendment of the SCRR, all listed companies are required to maintain a minimum public
shareholding of 25% and have been given a period of three years to comply with such requirement. We are in
compliance with the minimum public shareholding requirement.
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Index-Based Market-Wide Circuit Breaker System

In order to restrict abnormal price volatility in any particular stock, the SEBI has instructed stock exchanges to apply
daily circuit breakers which do not allow transactions beyond a certain level of price volatility. The index-based
market-wide circuit breaker system (equity and equity derivatives) applies at three stages of the index movement, at
10%, 15% and 20%. These circuit breakers, when triggered, bring about a co-ordinated trading halt in all equity and
equity derivative markets nationwide. The market-wide circuit breakers are triggered by the movement of either the
SENSEX of the BSE or the S&P CNX NIFTY of the NSE, whichever is breached earlier.
In addition to the market-wide index-based circuit breakers, there are currently in place individual scrip-wise price
bands of 20% movements either up or down. However, no price bands are applicable on scrips on which derivative
products are available or scrips included in indices on which derivative products are available.
The stock exchanges in India can also exercise the power to suspend trading during periods of market volatility.
Margin requirements are imposed by stock exchanges that are required to be paid by the stockbrokers.
BSE
Established in 1875, it is the oldest stock exchange in India. In 1956, it became the first stock exchange in India to
obtain permanent recognition from the Government under the SCRA. It has evolved over the years into its present
status as one of the premier stock exchanges of India.
As of May 2010, the BSE had 1,029 members, comprising 173 individual members, 833 Indian companies and 23
FIIs. Only a member of the BSE has the right to trade in the stocks listed on the BSE. As of May 2010, there were
4,978 listed companies trading on the BSE (excluding permitted companies) and the estimated market capitalisation
of stocks trading on the BSE was Rs. 60,896.8 billion. In May 2010, the average daily turnover on the BSE was Rs.
39.4 billion. As of May 2010, the BSE had 15,547 trader work stations spread over 318 cities.
NSE
The NSE was established by financial institutions and banks to serve as a national exchange and to provide
nationwide on-line satellite-linked screen-based trading facilities with electronic clearing and settlement for
securities including government securities, debentures, public sector bonds and units. It has evolved over the years
into its present status as one of the premier stock exchanges of India. The NSE was recognised as a stock exchange
under the SCRA in April 1993 and commenced operations in the wholesale debt market segment in June 1994.
As of May 2010, the average daily traded value of the capital market segment was Rs. 1293.7 lakhs. The NSE
launched the NSE 50 index, now known as S&P CNX NIFTY, on April 22, 1996 and the Mid-cap Index on January
1, 1996. As of May 2010, the market capitalisation of the NSE was approximately Rs. 59,325.78 billion. NSE has a
wide network in major metropolitan cities, screen based trading and a central monitoring system.
Internet-based Securities Trading and Services
Internet trading takes place through order routing systems, which route client orders to exchange trading systems for
execution. Stockbrokers interested in providing this service are required to apply for permission to the relevant stock
exchange and also have to comply with certain minimum conditions stipulated under applicable law. The NSE
became the first exchange to grant approval to its members for providing internet-based trading services. Internet
trading is possible on both the equities as well as the derivatives segments of the NSE.
Trading Hours
Trading on both the BSE and the NSE occurs from Monday through Friday, from 9.00 a.m. to 3.30 p.m. The BSE
and the NSE are closed on public holidays. The recognised stock exchanges have been permitted to set their own
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trading hours (in cash and derivatives segments) subject to the condition that (i) the trading hours are between 9 a.m.
and 5 p.m.; and (ii) the stock exchange has in place risk management system and infrastructure commensurate to the
trading hours.
Trading Procedure
In order to facilitate smooth transactions, the BSE replaced its open outcry system with BOLT facility in 1995. This
totally automated screen based trading in securities was put into practice nation-wide. This has enhanced
transparency in dealings and has assisted considerably in smoothening settlement cycles and improving efficiency in
back-office work. NSE also provides on-line trading facilities.
Takeover Code
Disclosure and mandatory bid obligations for listed Indian companies under Indian law are governed by the specific
regulations in relation to substantial acquisition of shares and takeover. Since our Company is an Indian listed
company, the provisions of the Takeover Code apply to our Company.
Insider Trading Regulations
Specific regulations have been notified by SEBI to prohibit and penalize insider trading in India. An insider is, inter
alia, prohibited from dealing in the securities of a listed company when in possession of unpublished price sensitive
information.
Depositories
The Depositories Act provides a legal framework for the establishment of depositories to record ownership details
and effect transfers in book-entry form. Further, SEBI framed regulations in relation to, inter alia, the formation and
registration of such depositories, the registration of participants as well as the rights and obligations of the
depositories, participants, companies and beneficial owners. The depository system has significantly improved the
operation of the Indian securities markets.

121

DESCRIPTION OF THE SHARES

Set forth below is certain information relating to our share capital, including a brief summary of some of the
provisions of our Memorandum and Articles of Association, the Companies Act and certain related legislation of
India, all as currently in effect.
General
The authorized share capital of our Company is Rs. 1,000 lakhs, divided into 1,000 lakhs Equity Shares of face
value of Re. 1 each and our issued subscribed and paid up capital as at June 30, 2010 was Rs. 725.6 lakhs divided
into 725.6 lakhs Equity Shares.
Dividends
Under the Companies Act, an Indian company pays dividend upon a recommendation by its board of directors and
subject to approval by a majority of the members, who have the right to decrease but not to increase the amount of
the dividend recommended by the board of directors. However, the board of directors is not obligated to recommend
a dividend. The decision of the board of directors and shareholders of our Company may depend on a number of
factors, including but not limited to, our Companys profits, capital requirements and overall financial condition.
No unpaid or unclaimed dividend shall be forfeited unless the claim thereto becomes barred by law. Our Company
shall comply with the provisions of section 205A read with section 205C of the Companies Act in respect of unpaid
or unclaimed dividend.
Subject to applicable provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations
issued thereunder, as amended, all dividends and other distributions declared and payable on the Equity Shares may
be paid by our Company to the holder thereof in Indian Rupees and may be converted into foreign currency and
freely transferred out of the Republic of India without the necessity of obtaining any governmental or regulatory
authorisation or approval in the Republic of India or any political subdivision or taxing authority thereof.
Capitalization of Profits
Our Company may capitalize any moneys, investments, or other assets forming part of the undivided profits of our
Company standing to the credit of the reserve fund or any capital redemption reserve accounts or in the hands of our
Company and available for dividend or representing premium received on the issue of shares and standing to the
credit of the share premium account, and any part of such capitalized fund can be applied in paying up in full either
at par or premium, any unissued shares or debentures or debenture stock or towards payment of uncalled liability on
any issued shares or debenture stock.
In addition, a bonus issue by our Company shall also be subject to the ICDR Regulations.
Alteration of Share Capital
The Articles of our Company provide that our Company may in general meeting, by a special resolution, increase
the share capital by the creation of new shares. Subject to the provisions of the Companies Act, any shares of the
original or increased share capital shall be issued upon such terms and conditions and with such rights and privileges
annexed thereto, as the general meeting shall direct, and if no direction are given, then as determined by the
Directors. In particular, such Shares may be issued with a preferential or qualified right to dividends, and in the
distribution of assets of our Company in conformity with sections 87 and 88 of the Companies Act. Whenever the
share capital of our Company has been increased under the provisions of this Article, the Directors shall comply
with the provisions of section 97 of the Companies Act.
Our Company may (subject to the provisions of sections 78, 80 and 100 to 105 inclusive of the Companies Act) by
special resolution reduce its share capital and any capital redemption reserve account or share premium account in
any manner for the time being authorised by law, and in particular share capital may be paid off on the footing that it

122

may be called upon again or otherwise. This Article is not to derogate from any power our Company would have, if
these Articles were omitted.
Preference Shares
Our Company may, subject to the provisions of section 80 of the Companies Act, issue preference shares on the
terms that they are liable to be redeemed on such terms and in such manner as our Company may before the issue of
preference shares determine.
General Meetings of Shareholders
A company must hold its annual general meeting each year within 15 months of the previous annual general meeting
or within six months after the end of each accounting year, whichever is earlier, unless extended by the Registrar of
Companies at the request of the company for any special reason.
Written notices convening a meeting setting out the date, place and agenda of the meeting must be given to members
at least 21 days prior to the date of the proposed meeting in accordance with Section 171 of the Companies Act. A
general meeting may be called after giving shorter notice if consent is received from all shareholders at an annual
general meeting, or from shareholders holding not less than 95% of the paid-up capital of the company, at any other
general meeting.
Voting Rights
Every member present in person and entitled to vote shall have one vote on a show of hands and on a poll, the
voting rights shall be as specified in section 87 of the Companies Act, subject to any rights or restrictions for the
time being attached to any class or classes of shares. Except as conferred by section 87 of the Companies Act, the
holders of preference shares shall have no voting rights.
The instrument appointing a proxy is required to be lodged with the company at least 48 hours before the time of the
meeting. A vote given in accordance with the terms of an instrument appointing a proxy shall be valid
notwithstanding the prior death or insanity of the principal, or revocation of the instrument, or transfer of the share
in respect of which the vote is given, provided no intimation in writing of the death, insanity, revocation or transfer
of the share shall have been received by the company at the office before the vote is given. Further no member shall
be entitled to exercise any voting right personally or by proxy at any meeting of our Company in respect of any
shares registered in his name on which any calls or other sums presently payable by him have not been paid in
regard to which our Company has exercised any right of lien.
Register of Members
Our Company is required to maintain a register of members wherein the particulars of the members of our Company
are entered. For the purpose of determining the shareholders the register may be closed for such period not
exceeding 45 days in any one year or 30 days at any one time at such times, as the board of directors may deem
expedient
Annual Report and Financial Results
The annual report must be laid before the annual general meeting of the shareholders of a company. This includes
financial information about our Company such as the audited financial statements as of the date of closing of the
financial year, directors report, managements discussion and analysis and a corporate governance section, and is
sent to the shareholders of our Company.
Transfer of shares
Shares held through depositories are transferred in the form of book entries or in electronic form in accordance with
the regulations laid down by SEBI. These regulations provide the regime for the functioning of the depositories and
the participants and set out the manner in which the records are to be kept and maintained and the safeguards to be
123

followed in this system. Transfers of beneficial ownership of shares held through a depository are exempt from
stamp duty. Our Company has entered into agreements for such depository services with the National Securities
Depository Limited and the Central Depository Services (India) Limited.
Liquidation Rights
If our Company is wound up and the assets available for distribution among the members are insufficient to pay the
whole of the paid up capital, such assets shall be distributed in such a way so that as nearly as may be possible the
losses shall be borne by the members in proportion to the capital paid up at the commencement of the winding up
and if the assets for distribution among the members on winding up are more than sufficient to repay the whole of
the capital paid up at the commencement of the winding up, the excess shall be distributed among the members in
proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively. If
our Company shall be wound up whether, voluntarily or otherwise, the liquidators may with the sanction of a special
resolution divide amongst the constituents in species or kind, any part of the
Company.
Subject to applicable provisions of the FEMA and the rules and regulations issued thereunder, as amended, all
amounts payable with respect to Equity Shares upon liquidation of our Company may be paid by our Company to
the holder thereof in Indian Rupees and may be converted into foreign currency and freely transferred out of the
Republic of India without the necessity of obtaining any governmental or regulatory authorisation or approval in the
Republic of India or any political subdivision or taxing authority thereof.

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TAXATION
The information provided below sets out the possible tax benefits available to the shareholders in a summary manner
only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and
disposal of equity shares, under the current tax laws presently in force in India. It is not exhaustive or comprehensive
and is not intended to be a substitute for professional advice. Investors are advised to consult their own tax
consultant with respect to the tax implications of an investment in the Equity Shares particularly in view of the fact
that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation
on the benefits which an investor can avail.
You should consult your own tax advisors concerning the Indian tax implications and consequences of
purchasing, owning and disposing of Equity Shares in your particular situation.
As per the taxation laws in force, the tax benefits / consequences as applicable, to the Qualified Institutional
Investors (not being individuals or HUFs) investing in the Equity Shares of our Company (on the assumption that
the Equity Shares are not held as stock-in-trade) are stated as follows:

I.

Benefits available to the company under the Income-tax Act, 1961 (Act):

(A)

Special tax benefits

1.

The company has the following units which qualifies for deduction under sections 80-IB and 80-IC:
Sr No
1
2
3
4
5
6
7
8
9
10

Unit
Guwahati (Ujala)
Wayanad
Guwahati (Maxo)
Pondicherry PCD
Himachal Ujala
Himachal Stiff & Shine
Himachal PVE
Uttaranchal I Ujala
Jammu Maxo
Uttaranchal II Ujala

Date of commencement of
production
28 September 2000
23 May 2001
9 May 2002
13 June 2002
25 August 2002
6 October 2005
1 November 2007
2 April 2008
17 June 2008
30 March 2010

Deduction
80IB
80IB
80IB
80IB
80IB
80IC
80IC
80IC
80IC
80IC

As per the provisions of section 80-IA and 80-IC the company will be entitled to claim deduction under these
sections subject to compliance with conditions specified therein. The company has started claiming deduction
in respect of units at Wayanad, Himachal (Ujala),and Uttaranchal (Ujala) . Further, the units at Pondicherry
PCD, Himachal Stiff and Shine, Himachal Poly Vinyl Emulsion, Jammu Maxo and Uttaranchal II Ujala have
incurred losses and therefore no deduction is being claimed. The company has set up a new unit Uttaranchal
II (Ujala) which has commenced production on 30 March 2010 and is eligible to claim deduction under section
80 IC of the Act.
(B)
(i)

General tax benefits

The Company will be entitled to claim depreciation allowance at the prescribed rates on assets under
section 32 of the IT Act. Further, subject to fulfillment of conditions prescribed in section 32(1)(iia) of the
IT Act, the Company will be entitled to claim accelerated depreciation of 20 per cent of the actual cost of
certain new machinery or plant which has been acquired and installed after 31 st March, 2005 . If, however,
the assets are put to use for less than 180 days in the year in which they are acquired, the rate of accelerated
depreciation will be 10 per cent.

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(ii)

Dividend income referred to in section 115-O earned by the Company from domestic companies, will be
exempt under section 10(34) of the IT Act. Similarly income received by the Company in respect of units
of Mutual Funds specified under section 10(23D) will be exempt under section 10(35) of the IT Act.
Section 14A of the Act restricts claim for deduction of expenses incurred in relation to income which does
not form part of the total income under the Act. Thus, any expenditure incurred to earn the said income will
not be a tax deductible expenditure.

(iii)

Income arising on transfer of equity shares or units of an equity oriented fund held by the Company will be
exempt under section 10(38) of the IT Act if the said asset is a long-term capital asset and such transaction
is chargeable to securities transaction tax..These assets turn long term if they are held for more than 12
months However, the said exemption will not be available to the Company while computing the book profit
and income tax payable under section 115JB.

(iv)

The long-term capital gains arising to the Company from the transfer of listed securities or units of an
equity oriented fund, not covered under point (iii) above shall at the option of the company be chargeable to
tax at the rate of 20% (plus applicable surcharge and education cess) of the capital gains computed after
indexing the cost of acquisition/ improvement or at the rate of 10% (plus applicable surcharge and
education cess) of the capital gains computed before indexing the cost of acquisition/ improvement.

(v)

The long-term capital gains not covered under points (iii) and (iv) above shall be chargeable to tax at the
rate of 20% (plus applicable surcharge and education cess) of the capital gains computed after indexing the
cost of acquisition / improvement.

(vi)

Short-term capital gains arising on transfer of equity shares or units of an equity oriented fund held by the
Company will be chargeable to tax at the rate of 15% (plus applicable surcharge and education cess) as per
the provisions of section 111A of the IT Act if such transaction is chargeable to securities transaction tax.

(vii)

In accordance with, and subject to the conditions, including the limit of investment of Rs. 50 lacs, and to
the extent specified in section 54EC of the IT Act, capital gains arising on transfer of long-term capital
assets of the Company not covered under point (iii) above shall be exempt from capital gains tax if the
gains are invested within six months from the date of transfer in the purchase of long-term specified assets.

(viii)

As per section 74 of the Act short-term capital loss suffered during the year is allowed to be set-off against
short-term as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward
for eight years for claiming set-off against subsequent years short term as well as long term capital gains.
Long-term capital loss suffered during the year is allowed to be set-off against long-term capital gains.
Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years
long-term capital gains.

II.

Benefits available to QIB shareholders of Jyothy Laboratories Limited ( the company)

a)

Shareholders being Foreign Institutional Investors (FIIs)

1.

As per section 10(34) of the Act, any income by way of dividend received from domestic companies referred
to in section 115-O of the Act (i.e. dividends declared, distributed or paid on or after 1st April, 2003 by
domestic companies) will be exempt from tax in the hands of shareholders.

2.

Income arising on transfer of the shares of the company will be exempt under section 10(38) of the Act if the
said shares are long-term capital assets and securities transaction tax has been charged on the said transaction.

3.

Under section 115AD(1)(b)(iii) of the Act, income by way of long-term capital gains arising from the transfer
of shares held in the company not covered under point (2) above will be chargeable to tax at the rate of 10%
(plus applicable surcharge and education cess).

126

4.

Under section 115AD(1)(b)(ii) of the Act, income by way of short-term capital gains arising on transfer of the
shares of the company will be chargeable to tax at the rate of 15% (plus applicable surcharge and education
cess) as per the provisions of section 111A of the Act if securities transaction tax has been charged on the said
transaction.

5.

Under section 115AD(1)(b)(ii) of the Act, income by way of short-term capital gains arising from the transfer
of shares held in the company not covered under point (4) above will be chargeable to tax at the rate of 30%
(plus applicable surcharge and education cess).

6.

The benefit of indexation and foreign currency fluctuation protection as provided by section 48 of the Incometax Act is not applicable to FIIs while computing capital gains. Further, if gross total income of FIIs includes
any short-term capital gains referred to above, deduction under chapter VI-A of the Income-tax Act shall be
allowed from the gross total income as reduced by such short-term capital gains.

7.

Under the provisions of section 90(2) of the Act, a FII will be governed by the provisions of the Agreement for
Avoidance of Double Taxation (AADT) between India and the country of residence of the FII if the said
provisions are more beneficial than the provisions under the Act.

8.

Where the business income of shareholder includes profits and gains arising from transactions on which
securities transaction tax has been charged, such securities transaction tax shall be a deductible expense from
business income as per the provisions of section 36(1)(xv) of the Act.

b)

Shareholders being Mutual Funds

1.

Under section 10(23D) of the Act, any income earned by a Mutual Fund registered under the Securities and
Exchange Board of India Act, 1992, or a Mutual Fund set up by a public sector bank or a public financial
institution, or a Mutual Fund authorised by the Reserve Bank of India would be exempt from income-tax,
subject to such conditions as the Central Government may by notification in the Official Gazette specify in this
behalf.

c)

Shareholders being Provident funds

1.

Under section 10(25) of the Act any income received by the trustees on behalf of a recognised provident fund
or on behalf of an approved superannuation fund or on behalf of an approved gratuity fund will be exempt
from income tax. Further, the interest earned on securities by provident fund to which the Provident Funds Act,
1925 applies, and any capital gains of the fund arising from the sale, exchange or transfer of securities will also
be exempt from tax.

d)

Benefits available to QIB resident shareholders other than those discussed above

1.

As per section 10(34) of the Act, any income by way of dividend received from domestic companies referred
to in section 115-O of the Act (i.e. dividend declared, distributed or paid on or after 1 st April, 2003 by domestic
companies) will be exempt from tax in the hands of shareholders.

2.

As per section 14A of the Act expenses incurred in relation to income which does not form part of the total
income under the Act will not be allowed as a deduction.

3.

Income arising on transfer of the shares of the company will be exempt under section 10(38) of the Act if the
said shares are long-term capital assets and securities transaction tax has been charged on the said transaction.

4.

The long-term capital gains accruing to the shareholders of the company from the transfer of the shares of the
company otherwise than as mentioned in point (3) above shall be chargeable to tax at the rate of 20% (plus
applicable surcharge and education cess) of the capital gains computed after indexing the cost of acquisition or
at the rate of 10% (plus applicable surcharge and education cess) of the capital gains computed before indexing
the cost of acquisition, whichever is lower.

127

5.

Short-term capital gains arising on transfer of the shares of the company will be chargeable to tax at the rate of
15% (plus applicable surcharge and education cess) as per the provisions of section 111A of the Act if
securities transaction tax has been charged on the said transaction.

6.

Short-term capital gains arising from the transfer of shares held in the company not covered under point (4)
above will be chargeable to tax at the rate of 30% (plus applicable surcharge and education cess).

7.

In accordance with, and subject to the conditions, including the limit of investment of Rs. 50 lacs, and to the
extent specified in section 54EC of the Act, long-term capital gains arising on transfer of the shares of the
company not covered under point (3) above will be exempt from capital gains tax if the gains are invested
within six months from the date of transfer in the purchase of long-term specified assets.

8.

Where the business income of shareholder includes profits and gains from transactions on which securities
transaction tax has been charged, such securities transaction tax shall be a deductible expense from business
income as per the provisions of section 36(1)(xv) of the Act.

e)

Benefits available to QIB resident shareholders being Insurance Company.

1.

As per section 10(34) of the Act, any income by way of dividend received from domestic companies referred
to in section 115-O of the Act (i.e. dividend declared, distributed or paid on or after 1st April, 2003 by domestic
companies) will be exempt from tax in the hands of shareholders.

2.

As per provisions of section 44 of the Act, notwithstanding anything to the contrary contained in the provisions
of the Act, while computing total income of Insurance Company, Capital Gains arising shall be computed in
accordance with the rules contained in the First Schedule of the Act.

III. Benefits available under the Wealth tax Act,1957 and Gift tax Act, 1958:
1.

Asset as defined under Section 2(ea) of the Wealth-tax Act, 1957 does not include shares in companies and
hence, the shares of the Company held by a shareholder are not liable to wealth-tax.

2.

Gift-tax is not levied on gift of shares in the hands of the donor as well as the donee because the provisions of
the Gift-tax Act, 1958 have ceased to apply in respect of gifts made on or after 1 st October, 1998. However, as
per section 56(viia), if a firm or a closely held company receives shares of a closely held company without
consideration or inadequate consideration and if the fair market value (FMV) of such shares is in excess of Rs
50,000 , then the excess of FMV over the consideration will be taxable as income from other sources.

Notes:
(i)

All the above benefits are as per the current tax law and will be available only to the sole/ first named
holder in case the shares are held by joint holders.

(ii)

In view of the individual nature of tax consequences, each investor is advised to consult their own tax
advisor with respect to specific tax consequences of his/her participation in the scheme.

(iii)

The above statement of possible direct tax benefits set out the provisions of law in a summary manner only
and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and
disposal of equity shares.

The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only
and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and
disposal of Equity Shares held as investment (and not as stock in trade). The statements made above are
based on the tax laws in force and as interpreted by the relevant taxation authorities as of date. Investors are
advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and
disposal of Equity Shares.

128

INDEPENDENT ACCOUNTANTS
Our Companys reformatted consolidated financial statements as on and for each of the financial years ended March
31, 2010, March 31, 2009 and June 30, 2008, included in this Placement Document, have been examined by S.R.
Batliboi & Associates, Chartered Accountants (Registration no.: 101049W). Please see the section Financial
Statements for further information.

129

LEGAL MATTERS
Certain legal matters in connection with the Issue will be passed upon for us by Amarchand & Mangaldas & Suresh
A. Shroff & Co. with respect to matters of Indian law.
Amarchand & Mangaldas & Suresh A. Shroff & Co. does not make, or purport to make, any statement in this
document and is not aware of any statement in this document which purports to be based on a statement made by it
and each of them makes no representation, express or implied, regarding, and takes no responsibility for, any
statement in or omission from this document.

130

LIMITED REVIEW REPORT

Review Report to the Board of Directors
Jyothy Laboratories Limited
1.

We have reviewed the accompanying statement of unaudited financial results of Jyothy Laboratories Limited
(the Company) for the quarter ended June 30, 2010 (the Statement), except for the disclosures regarding
Public Shareholding and Promoter and Promoter Group Shareholding which have been traced from
disclosures made by the management and have not been reviewed by us. This Statement is the responsibility of
the Company's management and has been approved by the Board of Directors. Our responsibility is to issue a
report on the Statement based on our review.

2.

We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, Review of
Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Institute of
Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate
assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries
of company personnel and analytical procedures applied to financial data and thus provides less assurance than
an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

3.

Based on our review conducted as above, nothing has come to our attention that causes us to believe that the
accompanying Statement of unaudited financial results prepared in accordance with recognition and
measurement principles laid down in Accounting Standard 25 Interim Financial Reporting, notified pursuant
to the Companies (Accounting Standards) Rules, 2006, (as amended) and other recognised accounting practices
and policies has not disclosed the information required to be disclosed in terms of Clause 41 of the Listing
Agreement including the manner in which it is to be disclosed, or that it contains any material misstatement.

For S.R. Batliboi & Associates

Firm registration number: 101049W
Chartered Accountants

per Vikram Mehta

Partner
Membership No.: 105938
Place: Mumbai
Date: July 27, 2010

131

JYOTHY LABORATORIES LIMITED

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2010

April 1, 2010 to June

30, 2010 (3 Months)
15,131.83
204.01
15,335.84

April 1, 2009 to June

30, 2009 (3 Months)
11,949.16
17.96
11,967.12

Amount (Rs. in lacs)

April 1, 2009 to March
31, 2010 (12 Months)
57,476.16
683.79
58,159.95

(747.40)

(608.65)

(438.78)

3,424.16
4,665.85
47.52
1,949.19
960.26

2,913.58
3,007.23
34.28
1,660.07
742.46

11,618.15
19,923.97
173.25
6,830.97
3,686.34

286.75
3.44
1,687.02
12,276.79
3,059.05

231.82
3.51
1,324.29
9,308.59
2,658.53

1,046.30
12.62
6,288.11
49,140.93
9,019.02

Other Income
Profit / (Loss) before Interest and
Tax

195.79
3,254.84

281.24
2,939.77

1,134.99
10,154.01

Interest
Profit/(Loss)
from
activities before tax

0.88
3,253.96

2,939.77

48.54
10,105.47

Tax expense
Net Profit/(Loss) for the year /
period

682.55
2,571.41

741.54
2,198.23

2,100.77
8,004.70

Paid up equity share capital

Reserves excluding Revaluation
Reserves as per the balance sheet
of previous accounting year
Basic and diluted earnings per share
(Rs)

725.69

725.69

725.69

3.54

3.03

39,165.77
11.03

(Not Annualised)

(Not Annualised)

21,676,360

21,993,302

21,676,360

29.87%

30.31%

29.87%

Nil

Nil

Nil

Particulars
Net Sales
Other Operating Income
Total Income
Expenditure
(a) (Increase)/ Decrease in stock in
trade and work in progress
(b) Consumption of raw materials
(c) Purchase of traded goods
(d) Excise duty
(e) Employee cost
(f) Advertisement and Sales
Promotion expense
(g) Depreciation
(h) Finance charges
(i) Other expenditure
Total expenditure
Profit / (Loss) from Operations
before Other Income, Interest and
Tax

ordinary

Public Shareholding
-Number of shares (face value of Re
1 each)
-Percentage of share holding
Promoter and Promoter group
Shareholding
a) Pledged/ Encumbered
- Number of Shares
- Percentage of Shares (as a % of the

132

Particulars
total shareholding of promoter
and promoter group)
- Percentage of Shares (as a % of the
total share capital of the Company)
b) Non-encumbered
- Number of Shares
- Percentage of Shares (as a % of the
total shareholding of promoter
and promoter group)
- Percentage of Shares (as a % of the
total share capital of the Company)
Notes :

April 1, 2010 to June

30, 2010 (3 Months)

April 1, 2009 to June

30, 2009 (3 Months)

April 1, 2009 to March

31, 2010 (12 Months)

Nil
Nil

Nil
Nil

Nil
Nil

50,892,440

50,575,498

50,892,440

100.00%
70.13%

100.00%
69.69%

100.00%
70.13%

Notes:
1.

Information on investor complaints pursuant to clause 41 of the Listing Agreement for the three months
period ended June 30, 2010: Pending at the beginning - Nil; Received - Nil; Resolved / Replied - Nil;
Pending at the end - Nil.

2.

The Statutory Auditors have carried out a "Limited Review" of the financial results of the Company. The
same were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held
on July 27, 2010.

3.

The Board of Directors of the Company had, in its meeting held on June 5, 2009, approved the scheme of
amalgamation of its wholly owned subsidiary, Sri Sai Homecare Products Private Limited with the
Company. Subsequent to the quarter ended June 30, 2010, the Company has filed the scheme of
amalgamation with the Honourable High Court of Mumbai and the appointed date for the proposed
amalgamation will be April 1, 2010 or such other date as may be fixed or approved by the High Court.
Pending such approval, no impact of the said amalgamation is given in these results.

4.

During the quarter ended June 30, 2010, the Board of Directors of the Company have approved the issue of
equity shares of face value of Re 1 each through Qualified Institutions Placement to raise aggregate
proceeds upto Rs 300 crores.

5.

Other operating income and the results of Home care segment includes an income of Rs 189.68 Lacs
towards differential excise duty benefit pertaining to previous years.

6.

The Company has presented its financial results on standalone basis.

7.

Previous period's/year's figures have been regrouped/rearranged wherever necessary.

For and on behalf of the board

Place: Mumbai
Date: July 27, 2010

M. P. Ramachandran
Chairman and Managing Director

133

JYOTHY LABORATORIES LIMITED

REPORTING OF SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

Particulars

April 1, 2010 to
June 30, 2010
(3 Months)

Segment Revenue :
A. Soaps and Detergent
B. Home care
C. Others
Total
Less: Inter Segment Revenue
Net Sales
Segment Results:
A. Soaps and Detergent
B. Home care
C. Others
Total
Less: (i) Interest
(ii) Other unallocable expenditure
Add: Unallocable Income
Profit Before Tax
Capital Employed :
(Segment Assets - Segment Liabilities)
A. Soaps and Detergent
B. Home care
C. Others
D. Unallocated assets/(liabilities) (net)
Total

April 1, 2009 to
June 30, 2009
(3 Months)

Amount (Rs.in lacs)

April 1, 2009 to
March 31, 2010
(12 Months)

10,252.06
5,021.97
33.89
15,307.92
(176.09)
15,131.83

8,318.58
3,669.28
(0.66)
11,987.20
(38.04)
11,949.16

34,002.23
24,108.94
42.97
58,154.14
(677.98)
57,476.16

2,751.69
711.86
10.04
3,473.59
(4.32)
(416.22)
200.91
3,253.96

2,821.03
244.39
(1.25)
3,064.17
(3.51)
(409.79)
288.90
2,939.77

9,360.29
1,365.31
(30.41)
10,695.19
(61.16)
(1,694.45)
1,165.89
10,105.47

18,616.31
8,859.05
37.34
14,950.18
42,462.88

13,038.75
4,842.42
63.17
19,485.89
37,430.23

16,888.59
5,927.60
67.55
17,007.72
39,891.46

Note : Soaps and detergents includes fabric whitener, fabric detergent, dishwash bar and soaps including ayurvedic
soaps. Home care products includes incence sticks and mosquito coils.
For and on behalf of the board

Place: Mumbai
Date: July 27, 2010

M. P. Ramachandran
Chairman and Managing Director

134

FINANCIAL STATEMENTS
Auditors Report
To
The Board of Directors
Jyothy Laboratories Limited
Ujala House, Ramkrishna Mandir Road,
Kondivita, Andheri (East),
Mumbai 400 059
Dear Sirs,
1.

We have examined the reformatted consolidated balance sheet and schedules forming part thereof,
reformatted consolidated profit and loss account and schedules forming part thereof, reformatted
consolidated cash flow statement and notes thereon (together referred as Reformatted Consolidated
Statements) of Jyothy Laboratories Limited (the Company) and its subsidiaries and joint venture
companies (together referred to as 'the Group'), as at and for the year ended March 31, 2010, nine months
period ended March 31, 2009 and the year ended June 30, 2008, annexed to this report, prepared by the
Company and approved by the authorized delegated committee of the Board of Directors for the purposes
of inclusion in the Preliminary Placement Document and the Placement Document (together referred to as
the Placement Documents) prepared by the Company in connection with the proposed Qualified
Institutions Placement of its equity shares having a face value of Re 1 each in accordance with the
provisions of Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 (the ICDR Regulations) (the Proposed QIP). Our responsibility is to
report on such statements based on our procedures.

2.

We have examined such reformatted consolidated statements taking into consideration:

a.

the terms of reference dated July 23, 2010 received from the Company, requesting us to carry out
the assignment, in connection with the Placement Documents being issued by the Company for its
Proposed QIP of its equity shares; and

b.

the Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of
Chartered Accountants of India.

3.

We report that the figures disclosed in the reformatted consolidated statements of the Group have been
extracted by the management from the consolidated financial statements as at and for the year ended March
31, 2010, nine months period ended March 31, 2009 and the year ended June 30, 2008, which were
prepared in accordance with accounting principles generally accepted in India and were approved by the
Board of Directors. The consolidated financial statements of the Group as at and for the year ended March
31, 2010, nine months period ended March 31, 2009 and the year ended June 30, 2008 have been audited
by us and in respect of which we have issued audit opinions dated May 25, 2010, June 5, 2009 and August
27, 2008 respectively.

4.

We did not audit the financial statements of the subsidiary companies, Sri Sai Homecare Products Private
Limited and Associated Industries Consumer Products Private Limited and the joint venture companies,
Balaji Teleproducts Limited and Continental Speciale (India) Private Limited, as at and for the year ended
March 31, 2010, nine months period ended March 31, 2009 and the year ended June 30, 2008, and a
subsidiary company, Snoways Laundrers and Drycleaners Private Limited as at and for the year ended
March 31, 2010, whose financial statements reflect total assets of Rs 2,335.89 lacs, Rs 2,002.24 lacs and Rs
2,106.74 lacs as at March 31, 2010, March 31, 2009 and June 30, 2008 respectively, and total revenue of
Rs 5,320.70 lacs, Rs 2,808.45 lacs and Rs 1,714.10 lacs for the year ended March 31, 2010, nine month
period ended March 31, 2009 and the year ended June 30, 2008, respectively and the net cash inflows of Rs
8.15 lacs, Rs 12.46 lacs and Rs 25.37 lacs for the year ended March 31, 2010, nine month period ended
March 31, 2009 and the year ended June 30, 2008, respectively. The financial statements of Sri Sai
135

Homecare Products Private Limited, Associated Industries Consumer Products Private Limited and
Snoways Laundrers and Drycleaners Private Limited have been audited by other firms of Chartered
Accountants, Namboodiri Associates, K. P. Sarda & Co. and Pandurang Shenoy & Co., respectively and
the financial statements of Balaji Teleproducts Limited for the year ended June 30, 2008 by A.R. Sodha &
Co., whose reports for the respective years/period have been furnished to us and our opinion in so far as it
relates to the amounts included in the consolidated financial statements are based solely on the report of the
other auditors. The audited financial statements of Continental Speciale (India) Private Limited for the year
ended June 30, 2008 and of the Balaji Teleproducts Limited and Continental Speciale (India) Private
Limited for the nine months period ended March 31, 2009 and for the period from April 1, 2009 to the date
of sale of interest in them, were not available and thus, have been consolidated on the basis of the unaudited
accounts, prepared by the management.
5.

As stated in our audit reports referred to in paragraph 3 above, we conducted our audit in accordance with
the auditing standards generally accepted in India to enable us to issue an opinion on the General Purpose
Financial Statements. Those Standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

6.

The reformatted consolidated statements are as they were produced in the respective years/ periods
audited consolidated financial statements after making adjustments for reclassifications, as considered
appropriate and has been prepared in accordance with paragraph 2 above.

7.

In the presentation of the reformatted consolidated statements based on audited financial statements as
referred to in paragraphs 3 and 4 above, no adjustments have been made for any events occurring
subsequent to the dates of the audit reports specified herein.

8.

Our audits referred to in paragraph 3 above were carried out for the purpose of examining the General
Purpose Financial Statements. For none of the period referred to in paragraph 3 above, did we perform
audit tests for the purpose of expressing an opinion on individual balances of account or summaries of
selected transactions, and accordingly, we express no such opinion thereon.

9.

We have not audited any financial statements of the Company or the subsidiaries as of any date or for any
period subsequent to March 31, 2010. Accordingly, we express no opinion on the financial position, results
of operations or cash flows of the Company as of any date or for any period subsequent to March 31, 2010.

10. This report should not be in any way construed as a reissuance or redating of any of the previous audit
reports issued by us nor should this report be construed as a new opinion on any of the financial statements
referred to herein.
11. We have no responsibility to update our report for events and circumstances occurring after the date of this
report.
12. This report is intended solely for your information and for inclusion in the placement documents in
connection with the Proposed QIP by the Company and is not to be used, referred to or distributed for any
other purpose without our prior written consent.
For S.R. Batliboi & Associates
Firm Registration No. 101049W
Chartered Accountants

per Vikram Mehta

136

Partner
Membership No: 105938
Place: Mumbai
Date: July 27, 2010

137

JYOTHY LABORATORIES LIMITED

REFORMATTED CONSOLIDATED BALANCE SHEET

SCHEDULE

As at March
31, 2010

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital
Reserves and surplus

1
2

MINORITY INTEREST
LOAN FUNDS
Secured Loans
Unsecured loans

725.69
38,050.29
38,775.98
49.69

725.69
33,961.43
34,687.12
26.13

725.69
31,823.50
32,549.19
-

3
4

DEFERRED TAX LIABILITY, NET

1,287.46
17.45
1,304.91
1,328.18

51.74
51.74
1,048.14

51.74
51.74
831.81

41,458.76

35,813.13

33,432.74

29,303.81
(5,942.44)

24,760.59
(4,723.13)

23,501.61
(4,006.92)

23,361.37
413.10

20,037.46
1,103.60

19,494.69
938.58

23,774.47
1.29

21,141.06
23.28

20,433.27
51.64

8
9
10

7,303.56
7,072.95
12,271.60
114.48

4,702.41
4,289.82
10,193.30
30.84

4,785.98
2,540.16
9,600.28
22.20

11

3,397.73
30,160.32

2,181.55
21,397.92

1,888.20
18,836.82

12
13

7,860.80
4,616.52
12,477.32

4,222.84
2,533.51
6,756.35

3,680.68
2,215.53
5,896.21

17,683.00
-

14,641.57
7.22

12,940.61
7.22

41,458.76

35,813.13

33,432.74

APPLICATION OF FUNDS
FIXED ASSETS
Gross Block
Less: Accumulated depreciation,
amortisation and impairment
Net Block
Capital work-in-progress (including
capital advances)
INVESTMENTS
CURRENT ASSETS, LOANS AND
ADVANCES
Inventories
Sundry debtors
Cash and bank balances
Other current assets - Sales promotion
items
Loans and advances
Less: CURRENT LIABILITIES AND
PROVISIONS
Current liabilities
Provisions

NET CURRENT ASSETS

MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)

14

Notes to accounts

21

The schedules referred to above and notes to accounts form an integral part of the Reformatted Consolidated
Balance Sheet.

138

As per our report of even date

For S.R. Batliboi & Associates
Firm Registration No. 101049W
Chartered Accountants

For and on behalf of the Board of Director

of Jyothy Laboratories Limited

per Vikram Mehta

Partner
Membership No.: 105938

M.P. Ramachandran
Chairman and Managing Director

Place: Mumbai
Date: July 27, 2010

M.L. Bansal
Company Secretary
Place: Mumbai
Date: July 27, 2010

139

K. Ullas Kamath
Deputy Managing Director

JYOTHY LABORATORIES LIMITED

REFORMATTED CONSOLIDATED PROFIT AND LOSS ACCOUNT

SCHEDULE

INCOME
Sales (Net of trade discount)
Less: Sales tax
Less: Excise duty
Net sales
Income from Services
Other income
EXPENDITURE
Material costs
(Increase)/ decrease in inventories
Excise duty
Employee costs
Other expenses
Depreciation, amortisation and impairment
Interest and finance charges

15

16
17
18
19
6
20

PROFIT BEFORE EXCEPTIONAL ITEMS

AND TAX
Exceptional Items
- Other Exceptional Income (refer note 15 of
schedule 21)
PROFIT BEFORE TAX
Provision for tax
- Current tax
- Current tax - Share of Joint Ventures
- Deferred tax charge
- Deferred tax charge - Share of Joint Ventures
- Fringe benefit tax
- (Excess) / Short provision for current tax and
deferred tax of earlier year
PROFIT AFTER TAX AND BEFORE
MINORITY INTEREST
Minority Interest (share in loss)
NET PROFIT FOR THE YEAR / PERIOD
PROFIT AND LOSS ACCOUNT, beginning of
the year / period
PROFIT AVAILABLE FOR
APPROPRIATION
APPROPRIATIONS:
Proposed dividend
Dividend tax on proposed dividend
Transfer to general reserves
140

April 1,
2009 to
March 31,
2010
(12 Months)

July 1, 2008
to March 31,
2009 (9

Rs In Lacs
July 1, 2007
to June 30,
2008 (12

Months)

Months)

64,579.10
(4,167.52)
(1,017.26)
59,394.32
415.89
1,780.23
61,590.44

39,527.87
(2,317.92)
(987.15)
36,222.80
125.95
761.01
37,109.76

41,064.56
(2,149.80)
(959.00)
37,955.76
789.75
38,745.51

32,254.40
(534.78)
178.53
7,538.40
11,192.83
1,236.55
169.54
52,035.47
9,554.97

19,596.17
269.97
158.25
4,729.96
6,718.70
748.31
70.93
32,292.29
4,817.47

18,918.12
(652.81)
331.32
5,074.00
8,187.18
797.54
68.47
32,723.82
6,021.69

632.61

9,554.97

4,817.47

6,654.30

1,886.60
280.04
(19.11)

709.61
216.33
77.14
77.29

1,208.00
0.20
217.41
2.78
91.86
146.52

7,407.44

3,737.10

4,987.53

26.67

98.87

7,434.11
401.93

3,835.97
264.00

4,987.53
974.51

7,836.04

4,099.97

5,962.04

2,902.75
482.11
4,000.00

1,451.38
246.66
2,000.00

1,451.38
246.66
4,000.00

SCHEDULE

April 1,
2009 to
March 31,
2010

July 1, 2008
to March 31,
2009 (9

July 1, 2007
to June 30,
2008 (12

PROFIT AND LOSS ACCOUNT, end of the

year / period
EARNINGS PER SHARE (EPS)
Basic and Diluted (Rs)
(2009 period is for nine months - not annualised)
Nominal value per share (Rs)
Weighted average number of shares outstanding
for calculation of Basic and Diluted EPS
(refer note 16 of schedule 21)
Notes to accounts

451.18

401.93

264.00

10.24

5.29

6.87

1
72,568,800

1
72,568,800

1
72,568,800

21

The schedules referred to above and notes to accounts form an integral part of the Reformatted Consolidated Profit
and Loss Account.
As per our report of even date
For S.R. Batliboi & Associates
Firm Registration No. 101049W
Chartered Accountants

For and on behalf of the Board of Director

of Jyothy Laboratories Limited

per Vikram Mehta

Partner
Membership No.: 105938

M.P. Ramachandran
Chairman and Managing Director

Place: Mumbai
Date: July 27, 2010

M.L. Bansal
Company Secretary
Place: Mumbai
Date: July 27, 2010

141

K. Ullas Kamath
Deputy Managing Director

JYOTHY LABORATORIES LIMITED

REFORMATTED CONSOLIDATED CASH FLOWS
Rs In Lacs
April 1, 2009 to July 1, 2008 to July 1, 2007 to
March 31, 2010 March 31, 2009 June 30, 2008
(12 Months)
(9 Months)
(12 Months)
A. CASH FLOWS PROVIDED BY/(USED IN)
OPERATING ACTIVITIES:
Profit before Tax
Adjustments for:
Depreciation, amortisation and impairment
Refund received from selling shareholders (refer note 15 of
schedule 21)
Loss on discarded/sale of fixed assets, net
Provision for dimunition in the value of investments
Dividend Income
Interest and finance charges
Interest income
Excess provision written back
Excise duty provision written back (refer note 13 of schedule 21)
Miscellaneous expenses written off
Sundry advances written off (net of provision)
Profit on sale of share in Joint Venture Companies
Provision for doubtful debts
Provision for doubtful advances
Operating profit before working capital changes
(Increase) /Decrease in current assets, loans and advances
Inventories (including sales promotion items)
Trade receivables
Loans and advances
Increase in current liabilities / provisions
Cash generated from operations
Taxes paid (net)
Net cash generated from operating activities
B. CASH FLOWS PROVIDED BY/(USED IN) INVESTING
ACTIVITIES:
Purchase of fixed assets including capital work-in-progress and
capital advances
Proceeds from sale of fixed assets
Subsidy received against purchase of fixed assets
Receipt of investment subsidy
Purchase of investments
Acquisition of new subsidary/ business (Refer note 2(e) of
Schedule 21)
Proceeds from Sale of interest in Joint venture companies (Refer
note 2(e) of Schedule 21)
Proceeds from Sale of long term investment
Advances given
Investment in fixed deposits (net)
Interest received
Dividend received
Net cash used in investing activities
142

9,554.97

4,817.47

6,654.30

1,236.55
-

748.31
-

797.54
(632.61)

27.73
(19.96)
(0.79)
169.54
(917.39)
(64.98)
(475.26)
0.59
(17.68)
5.51
9,498.83

9.63
30.00
(0.79)
70.93
(620.61)
22.96
19.80
5,097.70

40.33
40.00
(0.79)
68.47
(610.21)
(8.37)
0.37
8.50
6,357.53

(2,684.79)
(2,788.64)
(1,218.21)
3,775.07
6,582.26
(1,567.17)
5,015.09

74.93
(1,909.92)
(313.15)
836.26
3,785.82
(796.71)
2,989.11

(642.48)
1,535.82
(425.36)
137.07
6,962.58
(1,301.32)
5,661.26

(3,478.13)

(1,381.43)

(4,650.36)

208.44
19.95
39.61
(94.73)

9.55
(1.64)
-

43.23
-

3.00

40.31
(1,271.07)
897.89
0.79
(3,633.94)

404.23
748.30
0.79
(220.20)

(87.01)
(2,155.32)
609.03
0.79
(6,239.64)

April 1, 2009 to July 1, 2008 to July 1, 2007 to

March 31, 2010 March 31, 2009 June 30, 2008
(12 Months)
(9 Months)
(12 Months)
C. CASH FLOWS PROVIDED BY/(USED IN) FINANCING
ACTIVITIES:
Refund received from selling shareholders (refer note 15 of
schedule 21)
Proceeds from equity share capital issued in subsidiary company
to minority shareholders
(Repayment) / Proceeds of loan fund
(Repayment) / Proceeds of Deferred sales tax loan
Interest and finance charges paid
Dividend paid
Dividend tax paid
Net cash generated from / (used in) financing activities
Net increase / (decrease) in cash and cash equivalents (A+B+C)
Cash and cash equivalents of a subsidiary acquired during the
year
Cash and cash equivalents of joint ventures sold during the year
Cash and cash equivalents at the beginning of the year / period
Cash and cash equivalents at the end of the year / period *
Cash and bank balances as per Balance Sheet
Less, Long term deposits considered in investing activities
Cash and cash equivalents considered for cashflows

632.61

125.00

1,287.46
(13.88)
(169.54)
(1,451.38)
(246.66)
(594.00)
787.15
1.22

(70.93)
(1,451.38)
(246.66)
(1,643.97)
1,124.94
-

(29.01)
3.08
(68.47)
(181.42)
(30.83)
325.96
(252.42)
-

(0.64)
2,239.77
3,027.50

1,114.83
2,239.77

1,367.25
1,114.83

12,271.60
9,244.10
3,027.50

10,193.30
7,953.53
2,239.77

9,600.28
8,485.45
1,114.83

* Includes deposits provided as securities against bank guarantees / letter of credit - Rs. Nil , (2009 - Rs. 70.11)
(2008 - Rs. Nil ) and balance in unclaimed dividend of Rs 2.85 (2009 - Rs 1.51) (2008 - Rs. Nil)
As per our report of even date
For S.R. Batliboi & Associates
Firm Registration No. 101049W
Chartered Accountants

For and on behalf of the Board of Director of

Jyothy Laboratories Limited

per Vikram Mehta

Partner
Membership No.: 105938

M.P. Ramachandran
Chairman and Managing Director

Place: Mumbai
Date: July 27, 2010

M.L. Bansal
Company Secretary
Place: Mumbai
Date: July 27, 2010

143

K. Ullas Kamath
Deputy Managing Director

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 1
SHARE CAPITAL
AUTHORISED CAPITAL
100,000,000 (2009 - 100,000,000 ) (2008 - 20,000,000 )
equity shares of Re 1 (2009 - Re 1) (2008 - Rs. 5) each
ISSUED, SUBSCRIBED AND PAID UP CAPITAL
72,568,800 (2009 - 72,568,800) (2008 - 14,513,760 ) equity
shares of Re 1 (2009 - Re 1) (2008 - Rs. 5) each fully paid

144

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

1,000.00

1,000.00

1,000.00

1,000.00

1,000.00

1,000.00

725.69

725.69

725.69

725.69

725.69

725.69

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 2
RESERVES AND SURPLUS
Securities premium
Investment subsidy
Add: Subsidy received during the year / period
Balance, end of the year / period
General reserves
Balance, beginning of the year / period
Add: Transferred from Profit and Loss Account
Balance, end of the year / period
Balance in Profit and Loss Account
Share of Joint Ventures

145

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

10,653.13
67.29
39.61
106.90

10,653.13
67.29
67.29

10,653.13
67.29
67.29

22,839.08
4,000.00
26,839.08
451.18
451.18
38,050.29

20,839.08
2,000.00
22,839.08
436.76
(34.83)
401.93
33,961.43

16,839.08
4,000.00
20,839.08
298.67
(34.67)
264.00
31,823.50

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 3
SECURED LOANS
Term Loan from Bank
(Secured against mortgage of land and building and
hypothecation of plant and machineries and other assets.)
(Payable within one year Rs 225 (2009 Rs Nil) (2008 Rs
Nil))

146

Rs In Lacs
As at June 30,
2008

As at March
31, 2009

1,287.46

1,287.46

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

SCHEDULE 4
UNSECURED LOANS
Deferred sales tax loan
(Repayable within 1 year Rs Nil, 2009 - Rs Nil, 2008 - Rs
Nil)

17.45

34.62

34.62

Share of Joint Ventures

17.45
17.45

34.62
17.12
51.74

34.62
17.12
51.74

147

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 5
DEFERRED TAX LIABILITY, Net
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
Disallowance u/s 40 a (ia) of the Income tax Act
Disallowance u/s 43B of the Income tax Act
Business Loss

148

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

1,876.28

1,560.53

1,254.43

1,876.28

1,560.53

1,254.43

5.25
112.82
13.56
5.65
86.13
161.89
8.10
19.65
135.05
548.10

7.00
112.62
11.74
17.66
67.35
146.16
20.30
25.22
104.34
512.39

8.74
89.07
4.33
4.76
42.20
146.16
9.16
118.20
422.62

1,328.18

1,048.14

831.81

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet
SCHEDULE 6
FIXED ASSETS ( April 1, 2009 to March 31, 2010)

Particulars

Gross Block
As at
April 1,
2009

Intangible
assets
Goodwill
Goodwill
arising on
consolidation
Software
Trademarks
and
Copyrights$
Knowhow
Tangible
assets
Freehold land

Leasehold
land*
Building #^
Plant and
machinery
Dies and
moulds
Furniture and
fixture
Office

Depreciation and Amortisation

Additions
+

Deletions /
Adjustments
**

As at
March
31, 2010

As at
April 1,
2009

For the
Year

429.76
101.43

48.11

429.76
149.54

101.43

580.31

50.00
0.50

50.00
580.81

47.12

600.00

1,865.50

10.07

279.24

Rs In Lacs
Net
Block
As at
As at
March March
31,
31, 2010
2010

Impairment

Deletions

As at
March
31, 2010

48.11

149.54

429.76
-

157.93

3.89
61.59

3.89
219.52

46.11
361.29

647.12

11.96

64.03

75.99

571.13

1,875.57

1,875.57

97.26

376.50

14.81

3.68

18.49

10.37

10.37

347.64

11,235.52
7,861.58

1,781.74
1,720.64

37.01

13,017.26
9,545.21

1,162.84
1,959.32

306.96
512.96

5.21

1,469.80
2,467.07

143.35
255.02

42.94

143.35
297.96

11,404.11
6,780.18

326.76

57.51

1.24

383.03

290.42

23.64

0.18

313.88

69.15

510.18

166.38

0.21

676.35

143.46

48.20

0.21

191.45

5.20

1.07

6.27

478.63

668.76

108.85

0.82

776.79

297.29

61.27

0.61

357.95

12.55

2.27

14.82

404.02

149

As at
April
1,
2009

For
the
Year

Particulars

Gross Block
As at
April 1,
2009

equipments
Vehicle
Assets held
for disposal
Freehold land
Building
Total

Depreciation and Amortisation

Additions
+

Deletions /
Adjustments
**

As at
March
31, 2010

As at
April 1,
2009

For the
Year

496.28

175.52

23.23

648.57

153.67

147.30
210.85

210.85

147.30
-

24,760.59

4,816.58

273.36

29,303.81

Impairment

Deletions

As at
March
31, 2010

55.94

11.03

198.58

3.51

3.51

446.48

147.30
-

4,293.13

1,190.27

17.24

5,466.16

430.00

46.28

476.28

23,361.37

150

As at
April
1,
2009

For
the
Year

Net
Block
As at
March
31, 2010

As at
March
31,
2010

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet
SCHEDULE 6
FIXED ASSETS ( July 1, 2008 to March 31, 2009)

Particulars

Gross Block
As at
July 1,
2008

Intangible
assets
Goodwill
Goodwill
arising on
consolidation
Trademarks
and
Copyrights$
Knowhow
Tangible
assets
Freehold land

Leasehold
land
Building #
Plant and
machinery
Dies and
moulds
Furniture and
fixture
Office
equipments

Depreciation and Amortisation

Additions

Deletions
/Adjustments

As at
March
31, 2009

301.60
101.43

128.16
-

429.76
101.43

580.31

47.12

1,862.01

As at
July 1,
2008

For
the
Period

Deletions

101.43

580.31

112.41

45.52

47.12

3.49

1,865.50

279.24

10,974.60
7,353.18

260.92
542.04

301.37

Impairment
As at
July 1,
2008

For
the
Period

101.43

429.76
-

157.93

422.38

11.96

11.96

35.16

1,865.50

279.24

12.05

2.76

14.81

10.37

10.37

254.06

33.64

11,235.52
7,861.58

945.01
1,623.68

217.83
353.79

18.15

1,162.84
1,959.32

143.35
255.02

143.35
255.02

9,929.33
5,647.24

25.39

326.76

279.43

10.99

290.42

36.34

473.73

36.62

0.17

510.18

115.39

28.21

0.14

143.46

5.20

5.20

361.52

633.40

43.02

7.66

668.76

259.00

44.77

6.48

297.29

12.55

12.55

358.92

151

As at
March
31, 2009

Rs In Lacs
Net
Block
As at
As at
March
March
31, 2009 31, 2009

Particulars

Vehicle
Assets held
for disposal
Freehold land
Building
Total

Gross Block

Depreciation and Amortisation

As at
July 1,
2008
372.77

Additions

Deletions
/Adjustments

133.32

10.00
210.85
23,501.61

7.33

As at
March
31, 2009
153.67

As at
July 1,
2008
3.51

For
the
Period
-

As at
March
31, 2009
3.51

Net
Block
As at
March
31, 2009
339.10

147.30
210.85

748.31

32.10

4,293.13

430.00

430.00

20,037.46

As at
July 1,
2008
128.52

For
the
Period
32.48

Deletions

9.81

As at
March
31, 2009
496.28

137.30
-

147.30
210.85

1,310.26

51.28

24,760.59

3,576.92

152

Impairment

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet
SCHEDULE 6
FIXED ASSETS ( July 1, 2007 to June 30, 2008)

Particulars

Gross Block
As at
July 1,
2007

Intangible
assets
Goodwill
Goodwill
arising on
consolidatio
n
Trademarks
and
Copyrights
$
Knowhow
Tangible
assets
Freehold
land
Leasehold
land @
Building #
Plant and
machinery
Dies and
moulds
Furniture
and fixture
@

Depreciation and Amortisation

As at
July 1,
2007

Adjustment
s

Deletion
s

As at
June
30,
2008

As at
July
1,
2007

For
the
Yea
r

Rs In Lacs
Net
Block
As at As at
June
June 30,
30,
2008
2008

Addition
s ##

Deletions /
Adjustment
s

As at
June 30,
2008

75.00
99.63

226.60
1.80

301.60
101.43

99.63

1.80

101.43

301.60
-

264.68

315.63

580.31

64.60

47.81

112.41

467.90

47.12

47.12

47.12

1,828.78

33.23

1,862.01

1,862.01

278.81

0.43

279.24

8.37

3.68

12.05

10.37

10.37

256.82

5,040.56

5,934.04

745.87

0.08
0.05

41.17

263.72

43.25

5.60

301.37

1,276.4
9
255.09

1,623.6
8
279.43

143.3
5
255.0
2
-

9,886.24

79.04

143.3
5
255.0
2
-

2,268.11

199.0
6
388.3
1
24.34

945.01

5,164.11

10,974.6
0
7,353.18

291.90

181.83

473.73

73.64

41.75

115.39

5.20

5.20

353.14

153

For
the
Year
*

Impairment

5,474.48
21.94

Particulars

Gross Block
As at
July 1,
2007

Office
equipments
@
Vehicle @
Assets held
for disposal
Freehold
land
Building
Total

Depreciation and Amortisation

Addition
s ##

Deletions /
Adjustment
s

As at
June 30,
2008

As at
July 1,
2007

Adjustment
s

416.09

217.31

633.40

201.15

382.91

61.01

71.15

372.77

10.00

210.85

14,327.0
4

9,330.36

Impairment
Deletion
s

For
the
Year
*
57.85

126.64

10.00

210.85

155.79

23,501.6
1

Net
Block
As at
June 30,
2008

As at
June
30,
2008
259.00

As at
July
1,
2007
12.55

For
the
Yea
r
-

As at
June
30,
2008
12.55

35.81

33.93

128.52

3.51

3.51

240.74

10.00

210.85

2,851.4
8

0.13

800.4
1

75.10

3,576.9
2

430.0
0

430.0
0

19,494.6
9

361.85

$ Includes trademarks and copyrights of Rs 315.63 (2009 - Rs. 315.63) (2008 - Rs. 315.63) pending for registration in the name of the Company.
* Addition to Leasehold land in the year 2009-10 consist of asset of subsidiary company acquired during the year.
# Includes Rs 452.19 (2009 Rs 452.19) (2008 Rs 452.19) represented by unquoted fully paid shares at cost in various co-operative societies.
Includes Land Rs 33.22 (2009 Rs 33.22) (2008 Rs 33.22) and Building Rs 183.01 (2009 Rs 183.01) (2010 Rs 183.01) of subsidiary company for which legal
formalities relating to registration are pending completion.
^ Addition to Building in the year 2009-10 includes interest of Rs 38.55 capitalised as borrowing cost.
** Adjustment in plant and machinery in the year 2009-10 includes Rs 19.95 for the government grant received for the installation of fixed assets in the previous
year.
+ Includes Rs 15.63 partaing to pre operative expenses capitalised (Building Rs 6.90, Plant and machinary Rs 8.66, Dies and moulds Rs 0.04, Office equipment
Rs 0.04)
## Includes fixed assets of Rs 303.27 pertaining to subsidiary acquired during the year. Out of which legal formalities relating to registration of land & building
are pending completion.
@ Depreciation for the year ended June 30, 2008 includes depreciation on furniture and fixtures Rs 0.44, vehicles Rs 0.17, office equipment Rs 0.11, leasehold
land Rs 2.16 pertaining to assets used for projects in progress and is capitalised.

154

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 7
INVESTMENTS (Long term, at cost)
Trade Investments (Unquoted)
Snoways Laundrers and Drycleaners Pvt. Ltd.,
(2009 16,373) equity shares of (2009 - Rs 10)
(refer note 2(e) of schedule 21)
Total
Non Trade Investments
Investment in Shares (Quoted)
Contech Soft Limited
Nil (2009 - 27,500) (2008 - 27,500) equity shares of Rs Nil
(2009 - Rs 10) (2008 - Rs 10) each fully paid up
Shri Adhikari Brothers Ltd.
Nil (2009 - 131,638) (2008 - 131,638) equity shares of Rs Nil
(2009 - Rs 10) (2008 - Rs 10) each fully paid up
Sub Total
Less: Provision for dimunition in the value of investments
Total
Investment in Government Securities (Unquoted)
Indira Vikas Patra
National Saving Certificates
(Pledged with government authorities)

Aggregate amount of unquoted investments

Aggregate amount of quoted investments
Market Value of quoted investments
There are no investments which were purchased and sold
during the years/ periods presented

155

As at March
31, 2009

Rs In Lacs
As at June
30, 2008

1.64

1.64

11.78

11.78

708.52

708.52

720.30
(700.00)
20.30

720.30
(670.00)
50.30

0.02
1.27
1.29

0.02
1.32
1.34

0.02
1.32
1.34

1.29
1.29
-

23.28
2.98
720.30
19.62

51.64
1.34
720.30
53.42

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 8
INVENTORIES
Raw and packing materials (including goods in transit Rs
52.41 (2009 - Rs Nil) (2008 - Rs 11.99))
Work in progress
Finished goods (including goods in-transit Rs 424.63 (2009
- Rs 128.21) (2008 - Rs 42.24))
Stores and spare parts

156

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

2,388.54

1,849.83

1,773.17

186.65
4,471.22

139.66
2,527.89

87.82
2,770.14

257.15

185.03

154.85

7,303.56

4,702.41

4,785.98

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 9
SUNDRY DEBTORS
Secured, 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

157

Rs In Lacs
As at June 30,
2008

As at March
31, 2009

132.57

13.70
40.15
(40.15)
13.70
7,059.25

34.64
(34.64)
4,289.82

18.13
12.74
(12.74)
18.13
2,389.46

7,072.95

4,289.82

2,540.16

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 10
CASH AND BANK BALANCES
Cash in hand
Balance with scheduled banks - Current account
- Deposit account*
- Unclaimed dividend accounts

29.52
2,995.13
9,244.10
2.85
12,271.60
12,271.60

Share of Joint Ventures

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

33.64
2,133.87
8,023.64
1.51
10,192.66
0.64
10,193.30

* Includes deposits provided as securities against bank guarantees/Bank Overdraft - Rs 1,742.38, (2009 - Rs
1,370.00) (2008 - Rs 1,262.39)

158

27.10
1,087.09
8,485.45
9,599.64
0.64
9,600.28

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 11
LOANS AND ADVANCES
Unsecured, considered good
Advances to joint venture company
Deposits
Advances recoverable in cash or in kind or for value to be
received
Quantity discount receivable
Advance to suppliers
Balance with excise authorities
Staff loans
Unsecured and considered doubtful
Advance to joint venture company
Advance to suppliers
Less: Provision for doubtful advances
Share of Joint Ventures

159

As at March
31, 2009

Rs In Lacs
As at June 30,
2008

523.18
1,818.99

410.13
758.47

17.17
251.57
730.21

39.90
597.49
312.44
105.73
3,397.73

22.00
650.34
237.40
101.18
2,179.52

28.20
643.40
136.71
78.91
1,886.17

16.63
(16.63)
3,397.73
3,397.73

17.17
16.63
(33.80)
2,179.52
2.03
2,181.55

14.00
(14.00)
1,886.17
2.03
1,888.20

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 12
CURRENT LIABILITIES
Sundry creditors
- Micro and Small Enterprises (refer note 8 of schedule 21)
- Others
Other current liabilities
Unclaimed dividend (refer note 14 of schedule 21)
Security deposits
Advances from customers
Share of Joint Ventures

160

536.57
2,502.82
4,466.77
2.85
43.11
308.68
7,860.80
7,860.80

As at March
31, 2009

274.66
795.08
2,951.61
1.55
97.00
95.50
4,215.40
7.44
4,222.84

Rs In Lacs
As at June 30,
2008

167.52
967.15
2,356.48
38.20
144.06
3,673.41
7.27
3,680.68

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 13
PROVISIONS
Provision for income tax (net of advance tax)
Provision for wealth tax
Provision for gratuity
Provision for leave encashment
Proposed dividend
Dividend tax on proposed dividend

493.36
3.79
473.72
260.79
2,902.75
482.11
4,616.52

161

As at March
31, 2009

193.04
3.00
433.15
206.28
1,451.38
246.66
2,533.51

Rs In Lacs
As at June 30,
2008

125.69
3.00
263.60
125.20
1,451.38
246.66
2,215.53

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Balance Sheet

As at March
31, 2010
SCHEDULE 14
MISCELLANEOUS EXPENDITURE (to the extent not
written off or adjusted)
Preliminary Expenses
Share of Joint Ventures

162

As at March
31, 2009

7.22
7.22

Rs In Lacs
As at June 30,
2008

7.22
7.22

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Profit and Loss Account

April 1, 2009
to March 31,
2010 (12
Months)
SCHEDULE 15
OTHER INCOME
Dividend received on long term non-trade investments
Interest on fixed deposit (tax deducted at source - Rs 127.38,
2009 - Rs 179.53 , 2008 - Rs 133.90)
Export incentives
Power Subsidy
Lease Rent Income
Excess provision written back
Foreign exchange fluctuation gain (net)
Profit on sale of interest in Joint Ventures
Differential Excise duty benefit (refer note 13 of schedule 21 )
Provision for Dimunition in Value of Investments written back
(net of loss on sale of long term investments of Rs 680.04)
Miscellaneous income

163

July 1, 2008
to March 31,
2009 (9
Months)

Rs In Lacs
July 1, 2007
to June 30,
2008 (12
Months)

0.79
917.39

0.79
620.61

0.79
610.21

6.64
5.00
107.50
64.98
1.70
17.68
475.26
19.96

11.28
62.33
12.66
-

17.37
109.37
4.89
-

163.33
1,780.23

53.34
761.01

47.12
789.75

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Profit and Loss Account

April 1, 2009
to March 31,
2010 (12
Months)
SCHEDULE 16
MATERIAL COSTS
Raw and packing materials consumed
Opening stock
Add : Opening stock of the subsidiary
acquired during the year
Add: Cost of purchases (net)

Rs In Lacs
July 1, 2007
to June 30,
2008 (12
Months)

1,849.83
-

1,773.17
-

1,350.91
31.45

Sub-total (A)

14,527.87
16,377.70
2,388.54
13,989.16

9,450.70
11,223.87
1,849.83
9,374.04

9,672.86
11,055.22
1,773.17
9,282.05

Sub-total (B)

1,426.73
19,706.73
21,133.46
2,868.22
18,265.24

1,341.42
10,307.44
11,648.86
1,426.73
10,222.13

1,787.81
9,184.65
10,972.46
1,341.42
9,631.04

(C)
Total (A+B+C)

32,254.40
32,254.40

19,596.17
19,596.17

18,913.09
5.03
18,918.12

Less: Closing stock

Cost of trading goods
Opening stock
Add: Cost of purchases (net)
Less: Closing stock

Share of Joint Ventures

July 1, 2008
to March 31,
2009 (9
Months)

164

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Profit and Loss Account

April 1, 2009
to March 31,
2010 (12
Months)
SCHEDULE 17
(INCREASE)/ DECREASE IN
INVENTORIES
(Increase)/ decrease in inventories
Closing stock
Finished goods
Work in progress
Opening stock
Finished goods
Work in progress
Add : Stock of the subsidiary acquired
during the year
Sub-total
(A)
(Increase)/ decrease in excise duty
Excise duty on closing stock
Excise duty on opening stock
Sub-total
(B)
(A-B)
Total

165

July 1, 2008 to
March 31,
2009 (9
Months)

Rs In Lacs
July 1, 2007 to
June 30, 2008
(12 Months)

1,603.00
186.65
1,789.65

1,101.16
139.66
1,240.82

1,428.72
87.82
1,516.54

1,101.16
139.66
1,240.82
-

1,428.72
87.82
1,516.54
-

766.45
71.62
838.07
13.59

1,240.82
(548.83)

1,516.54
275.72

851.66
(664.88)

52.12
38.07
(14.05)

38.07
43.82
5.75

43.82
31.75
(12.07)

(534.78)

269.97

(652.81)

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Profit and Loss Account

April 1, 2009
to March 31,
2010 (12
Months)
SCHEDULE 18
EMPLOYEE COSTS
Salaries, wages and bonus
Contribution to provident and other funds (refer note 5 of
schedule 21)
Gratuity (refer note 5 of schedule 21)
Staff welfare expenses
Directors' remuneration
Commission to directors
Field staff incentives

166

July 1, 2008
to March 31,
2009 (9
Months)

Rs In Lacs
July 1, 2007
to June 30,
2008 (12
Months)

5,425.21
437.44

3,213.15
298.02

3,801.96
382.58

135.61
474.62
338.41
324.95
402.16
7,538.40

208.58
307.74
168.66
137.58
396.23
4,729.96

136.68
314.79
223.08
178.61
36.30
5,074.00

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Profit and Loss Account

April 1, 2009
to March 31,
2010 (12
Months)
SCHEDULE 19
OTHER EXPENSES
Conversion charges
Power and fuel expenses
Rent
Insurance
Repairs and maintenance
- Building
- Plant and machinery
- Others
Consumption of stores and spares
Research and development
Printing and stationery
Communication costs
Legal and professional fees
Rates and taxes
Directors' sitting fees
Vehicle maintenance
Donation
Loss on discarded/sale of fixed assets, net
Provision for doubtful debts
Provision for doubtful advances
Provision for dimunition in value of investments
Sundry advances written off
Advertisement and publicity
Sales promotion and schemes
Carriage outwards
Field staff expenses
Travelling and conveyance
Brokerage on sales
Miscellaneous expenses
Share of Joint Ventures

167

July 1, 2008
to March 31,
2009 (9
Months)

Rs In Lacs
July 1, 2007
to June 30,
2008 (12
Months)

35.65
1,599.45
500.51
15.15

44.48
1,042.88
303.60
14.22

92.04
1,097.79
234.33
12.46

66.28
53.97
127.83
299.53
16.95
70.06
142.23
577.48
326.48
3.65
133.68
12.15
27.73
5.51
2,661.84
1,133.18
1,486.92
849.72
284.13
200.70
562.05
11,192.83
11,192.83

21.36
44.38
84.31
147.22
8.05
37.03
102.43
458.49
387.46
2.85
76.19
2.81
9.63
22.96
19.80
30.00
1,506.00
339.41
867.24
547.83
151.48
116.84
329.59
6,718.54
0.16
6,718.70

56.04
105.68
106.43
27.76
17.17
50.78
101.03
380.79
257.37
2.10
72.36
8.31
40.33
40.00
8.50
2,867.42
154.58
1,008.85
736.73
228.10
111.26
340.19
8,158.40
28.78
8,187.18

JYOTHY LABORATORIES LIMITED

Schedules Forming Part of the Reformatted Consolidated Profit and Loss Account

April 1, 2009
to March 31,
2010 (12
Months)
SCHEDULE 20
INTEREST AND FINANCE CHARGES
Interest expense
- on banks
- others
Finance charges and commission

60.72
44.21
64.61
169.54

168

July 1, 2008
to March 31,
2009 (9
Months)

5.94
21.28
43.71
70.93

Rs In Lacs
July 1, 2007
to June 30,
2008 (12
Months)

0.94
55.00
12.53
68.47

JYOTHY LABORATORIES LIMITED

SCHEDULE 21 - NOTES TO REFORMATTED CONSOLIDATED ACCOUNTS
1. A. BACKGROUND
The Reformatted Consolidated financials statement comprise the financial statements of Jyothy Laboratories
Limited ('the Company') and its subsidiaries and joint venture companies hereinafter referred to as a 'Group'. The
Reformatted Consolidated financials statement are prepared by the Company for the purposes of inclusion in the
Preliminary Placement Document and the Placement Document prepared by the Company in connection with the
proposed Qualified Institutions Placement of its equity shares in accordance with the provisions of Chapter VIII of
the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. The
group is principally engaged in manufacturing and marketing of fabric whiteners, soaps, detergents, mosquito coils
and incense sticks.
1. B. BASIS OF PREPARATION OF REFORMATTED CONSOLIDATED FINANCIAL STATEMENTS
The reformatted consolidated financial statements are as they were produced in the respective years/ periods
audited consolidated financial statements after making adjustments for reclassifications.
2.

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) Those financial statements in the respective years/period were prepared to comply in all material respects
with the notified accounting standards by the Companies (Accounting Standards) Rules, 2006 (as amended)
and the relevant provisions of the Companies Act, 1956, as applicable to them at the end of each
year/period . The financial statements were prepared under the historical cost convention on an accrual
basis except in case of assets for which provision for impairment is made. The accounting policies were
consistently applied by the Group for all the previous years/period presented.
b) The consolidated financial statements of the Group had been consolidated on a line-by-line basis by adding
together the book values of subsidiary companies like items of assets, liabilities, income and expenses, after
eliminating intra-group balances and the unrealised profits / losses on intra-group transactions as per
Accounting Standard 21(AS 21) "Consolidated Financial Statement". The results of subsidiaries are
included from the date of acquisition of a controlling interest.
The excess/shortfall of cost to the Company of its investments in the subsidiary companies is recognised in
the financial statement as goodwill/capital reserves, as the case may be. The goodwill amount so arised is
written off in the same year.
c)

Minority interest in net asset of consolidated subsidiary consist of the amount of equity attributable to the
minority shareholders at the dates on which investments are made by the Company in subsidiary companies
and further movement in their share in equity, subsequent to the dates of investment.

d) Investment in Joint venture is dealt with in accordance with Accounting Standard (AS) 27 "Financial
Reporting of interest in Joint Ventures" and the Group's interest in Joint Venture is accounted for using the
proportionate consolidation method.
e)

The Consolidated Financial Statements includes the financial statements of the following subsidiary
companies and Joint venture Companies :

Name of the Company

(a)

Subsidiaries
1. Sri Sai Homecare Products (P)
Ltd

Country
incorporation

India

of

Percentage of voting power as on

March 31, March 31, June
2010
2009
2008
100

169

100

30,

100

Name of the Company

Country
incorporation

2.

Associated Industries Consumer India

Products Pvt Ltd ^
3. Jyothy Fabricare Services Ltd ^^ India
4. Snoways
Laundrers
and India
Drycleaners Pvt. Ltd #
Joint Venture Companies (refer Note (f) below)*
1. Balaji Teleproducts Limited
India
2. Continental Speciale (India) India
Private Limited

(b)

of

Percentage of voting power as on

March 31, March 31, June 30,
2010
2009
2008
100
100
100
75
49

75
-

50
50

50
50

On September 12, 2007, the Company has acquired 100% share capital of Associated Industries Consumer
Products Pvt. Ltd., engaged in business of manufacturing and selling of Soaps, Detergents etc.
Accordingly, the accounts of the same has been consolidated from September 12, 2007.

^^ The Jyothy Fabricare Services Limited was incorporated on March 18, 2008 and being the first year of
incorporation, the financial statements have been prepared for a period from March 18, 2008 to March 31,
2009 and the same has been considered for the purpose of Consolidation.
#

The Jyothy Fabricare Services Ltd has acquired 49% Share in Snoways Laundrers & Drycleaners Pvt. Ltd
and has entered in to an agreement which enable it to control the Management of the Company, making it
subsidiary company of Jyothy Fabricare Services Ltd

During the year ended March 31, 2010 the Company has sold its interest in both the Joint Venture
companies, Balaji Teleproducts Limited and Continental Speciale (India) Private Limited.

f)

The audited financial statement of the joint venture companies, Balaji Teleproducts Limited and
Continental Speciale (India) Private Limited for the nine months period ended March 31, 2009, and of
Continental Speciale (India) Private Limited for the year ended June 30, 2008, were not available and thus,
have been consolidated on the basis of unaudited accounts drawn upto their respective dates.

There were no material transactions in the joint venture companies during the period ended March 31, 2009 and
during the year ended March 31, 2010 upto the date of sale of interest in them, and these joint venture companies
were individually and collectively, not material to the Group's activity. and are consolidated based on accounts
prepared by the management
3.

SUMMARY OF ACCOUNTING POLICIES

The significant accounting policies adopted by the Group, in respect of the consolidated financial statements are as
follows:
a)

Fixed assets

Fixed assets are stated at cost, less accumulated depreciation amortisation and impairment losses if any. Cost
comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended
use. Cost of shares of Co-operative society has been added to the cost of office building. 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.
b)

Depreciation and amortisation

Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the
management, or at the rates prescribed under schedule XIV of the Companies Act, 1956 whichever is higher.
170

The estimated useful life of the assets is as follows:

Category

Estimated useful life (in years)

Factory Buildings
Building (Other then Factory Building)
Software
Plant and machinery
Electrical installations
Furniture and fixtures
Dies and moulds
Computers
Office equipments
Vehicles
Knowhow
Trademarks and Copyrights

30
60
5
21
20
16
3
6
21
8-10
3-5
9-10

Assets costing less then Rs 5,000 are depreciated at the rate of 100 %.
Leasehold land is amortised over the period of the lease on a straight-line basis. The Goodwill purchased is tested
for impairment purposes every year.
c)

Impairment
i.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal/external factors. An impairment loss is recognized 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. In assessing value in use, the estimated future cash flows are discounted to
their present value at the weighted average cost of capital.

ii.

After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining
useful life.

iii. A previously recognized impairment loss is increased or reversed depending on changes in circumstances.
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.
d)

Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are
classified as operating leases. Lease payments on operating leases are recognized as expense in the Profit and Loss
account on a straight-line basis, over the lease term.
e)

Government grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/ subsidy
will be received and all attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match
them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an
asset, its value is deducted from the gross value in arriving at the carrying amount of the related asset. Government
grant in the nature of promoters' contribution is credited to the investment subsidy reserve.
f)

Investment
171

Investments that are readily realisable and intended to be held for not more than a year are classified as current
investments. All other investments are classified as long-term investments. Current investments are carried at lower
of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost.
However, provision for diminution in value is made to recognise a decline other than temporary in the value of the
investments.
g)

Inventories

Inventories of raw materials, packing materials, work-in-progress, finished goods, stores and consumables items are
valued at cost or net realizable value, whichever is lower. However, materials and other items held for use in the
production of inventories are not written down below cost if the finished products in which they will be incorporated
are expected to be sold at or above cost.
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. Cost of work in progress and finished goods includes materials and all
applicable manufacturing overheads. The Company accrues for excise duty liability in respect of manufactured
finished goods/intermediary inventories lying in the factory.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of
completion and estimated cost necessary to make the sale.
h)

Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured.
Sale of Goods :
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.
Excise Duty, 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. Revenue includes the amount of excise
duty refund received / due in accordance with incentive scheme. Revenue is net of trade discount given.
Sale of Services :
Service revenue is recognised on completion of services. Service revenue includes income from washing and dry
cleaning of garments. Revenue is recognised on completion of the significant part of act involved in rendering of
service and when no significant uncertainty exist regarding realisation of consideration.
Interest :
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
i)

Foreign currency translation

(i)

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(ii)

Conversion

Foreign currency monetary items are reported using the closing rate. 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

172

transaction; 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.
(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, or reported in previous financial
statements, are recognised as income or as expenses in the year in which they arise.
j)

Retirement and other employee benefits

(i) Retirement benefits in the form of Provident Fund and Superannuation Fund are defined contribution
schemes and the contributions are charged to the profit and loss account of the year when the contributions
to the respective funds are due. There are no other obligations other than the contribution payable to the
respective fund.
(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on
projected unit credit method made at the end of each financial year.
(iii) Short term compensated absences are provided for based on estimates at the year end. Long term
compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per
projected unit credit method.
(iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

k)

Sales promotion items

Sales promotion items are valued at cost or net realizable value, whichever is lower. Cost is ascertained on First-inFirst out ('FIFO') basis and includes all applicable costs incurred in bringing goods to their present location and
condition.
l)

Income-tax

Tax expense comprises of current and deferred Tax and fringe benefit tax. Current income 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.
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.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance
sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax assets can be realised. In situations where
the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
At each balance sheet date the Group re-assesses unrecognised deferred tax assets. It recognises unrecognised
deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that
sufficient future taxable income will be available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the
carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the
case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised.
Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may
be, that sufficient future taxable income will be available
m)

Provisions

173

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an
outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
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. These are reviewed at each balance sheet date and adjusted to reflect the current
best estimates.
n)

Excise duty

Excise duty on turnover is reduced from turnover. Excise duty relating to the difference between the opening stock
and closing stock is recognized as income/expense as the case may be, separately in the Profit and Loss account.
o)

Segment Reporting Policies

Identification of segments:
The Companys operating businesses are organized and managed separately according to the nature of products,
with each segment representing a strategic business unit that offers different products and serves different markets.
The analysis of geographical segments is based on the areas in which major operating divisions of the Company
operate.
Segment policies :
The Company prepares its segment information in conformity with the accounting policies adopted for preparing
and presenting the financial statements of the company as a whole.
Intersegment transfer :
The company generally accounts for inter segment sales and transfers as if the sales or transfer were to third parties
at market price.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the
total common costs.
Unallocated items:
It includes general corporate income and expense items which are not allocated to any business segment.
p)

Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year. The weighted average
number of equity shares outstanding during the year are adjusted for event of share split.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.
q)

Use of estimates

The preparation of financial statements, in conformity with generally accepted accounting principles, 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, actual results could differ from these estimates.
174

r)

Cash and Cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.
s)

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale are capitalized as part of the respective asset. All
other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of funds.
4.

Unhedged foreign currency exposure:

Particulars

Foreign
Currency

Export debtors
Advance
for
import of Raw
Material
Advance
from
export debtors
Advance
for
capital goods
Advance
for
expenses

US $
US $

As at March 31, 2010

Rs in Amount in
Lacs
Foreign
Currency

18,246
95,840

52.26
-

121,698
-

US $

23.82

46,816

17.48

40,831

Euro

11.56

17,083

US $

27.98

55,000

Employee Benefit:

(i)

Defined Benefit Plans -

155,282

Rs in Lacs
As at June 30, 2008
Rs in Amount
in
Lacs
Foreign
Currency

9.28
48.75

5.

70.09

As at March 31, 2009

Rs in Amount
in
Lacs
Foreign
Currency

The Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service
gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is
funded with an insurance company. The Group has provided for gratuity and leave encashment based on actuarial
valuation done as per Projected Unit Credit Method.
The following tables summarise the components of net benefit expense recognised in the profit and loss account and
the funded status and amounts recognised in the balance sheet for the respective plans.
Rs in Lacs
April 1, 2009 to March July 1, 2008 to March July 1, 2007 to June 30,
31, 2010 (12 Months) 31, 2009 (9 Months) 2008 (12 Months)

Gratuity
(A) Summary of the Actuarial Funded
Assumptions
Mortality
LIC (1994-96) Ult
Discount rate
7.75%
Rate of increase in compensation
8-10%
175

Gratuity
Funded

Gratuity
Funded

LIC (1994-96) Ult

7-7.25%
8-10%

LIC (1994-96) Ult

8%
8-10%

Withdrawal rates
1-10%
Rate of return (expected) on plan assets 9.25%
The estimates of future salary increases,
considered in actuarial valuation, take
account
of
inflation,
seniority,
promotion and other relevant factors,
such as supply and demand in the
employment market.
The overall expected rate of return on
assets is determined based on the
market price prevailing on that date,
applicable to the period over which the
obligation is to be settled.
(B) Changes in present value of
obligations (PVO)
PVO at beginning of year / period
Interest cost
Current Service Cost
Benefits Paid
Actuarial (gain) / loss on obligation
PVO at end of year / period
(C) Changes in fair value of plan assets
Fair value of plan assets at the
beginning of year / period
Expected return on plan assets
Contributions
Benefit paid
Actuarial gain / (loss) on plan assets
Fair value of plan assets at end of year /
period
(D) Net Assets/(Liabilities) recognised
in the Consolidated balance sheet
PVO at end of year / period
Fair value of plan assets at end of year /
period
Funded status (deficit in plan assets
over fair value of PVO)
Unrecognised Actuarial Gain / (Loss)
Net assets / (Liability) recognised in the
balance sheet
(E) Expenses recognised in the
Consolidated profit and loss account
Current service cost
Interest cost
Expected return on plan assets
Net Actuarial (Gain)/Loss recognised
for the year / period
Expense recognised in the Consolidated
profit and loss account
(F) Experience adjustments
On plan liabilities
On plan assets
(G) The major categories of plan assets

1-10%
9.25%

1-10%
9.25%

729.30
52.24
111.23
(19.57)
7.03
880.23

517.64
30.35
100.81
(22.15)
102.65
729.30

397.36
30.55
81.49
(30.94)
39.18
517.64

296.15

254.04

270.36

30.88
94.94
(19.57)
4.01
406.41

12.80
39.03
(22.15)
12.43
296.15

13.24
(30.94)
1.30
253.96

(880.23)
406.50

(729.30)
296.15

(517.64)
254.04

(473.73)

(433.15)

(263.60)

(473.73)

(433.15)

(263.60)

111.23
52.24
(30.88)
3.02

100.81
30.35
(12.80)
90.22

81.49
30.55
(13.24)
37.88

135.61

208.58

136.68

17.27
4.01

57.26
12.43

128.92
1.30

176

as a percentage of the fair value of total

plan assets are as follows:
Investment with insurer
(ii)

100.00%

100.00%

100.00%

Defined Contribution Plans -

Amount of Rs. 437.44 (2009 - Rs 298.02) (2008 - Rs 382.58) is recognised as an expense and included in schedule
18 - "Contribution to provident and other funds" in the Profit and Loss account.
(iii)
The Company expects to contribute Rs 213.57 to gratuity fund in 2010-11 and Rs 28.06 to Superannuation
fund in 2010-11.

6.

SEGMENT REPORTING

Business segments:
The primary segment of the Group has been determined on the basis of business segment. The Group is organized
into two business segments - Soaps and Detergents and Home Care. Segments have been identified taking into
account the nature of the products, the differing risks and returns, the organization structure and the internal
reporting system.
Soaps and Detergents includes fabric whiteners, fabric detergents, dishwash bar and soaps including ayurvedic
soaps. Home Care products include incense sticks, dhoop and mosquito coils and scrubber. Others includes Tea and
coffee.
Secondary segment:
The Group mainly caters to the needs of the domestic market. The export turnover is not significant in the context of
total turnover. As such, there is only one reportable geographical segment.
Segment revenue and result:
The income/ expense that are not directly attributable to the business segments are shown as unallocated corporate
costs.
Segment assets and liabilities:
Segment assets include all operating assets used by a segment and consist principally of debtors, inventories,
advances and fixed assets. Assets at corporate level are not allocable to segments on a reasonable basis and thus the
same have not been allocated. Segment liabilities include all operating liabilities and consist principally of creditors
and accrued liability.
Information about Business Segments

177

Rs In Lacs
Soaps and Detergents
April
July 1, July 1,
1,
2008
2007
2009
to
to
to
March June
March 31,
30,
31,
2009 9 2008
2010
Month 12
12
s
Month
Month
s
s

Home care
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

External
Revenue
Inter
Segment
Revenue
Net
Revenue

35,491.0
4
19.58

20,927.8
4
41.86

23,134.8
8
-

23,860.3
2
658.40

15,259.1
9
165.13

14,469.2
7
-

35,510.6
2

20,969.7
0

23,134.8
8

24,518.7
2

15,424.3
2

Results

9,493.67

5,214.03

6,666.24

1,345.14

378.65

Others
April
1,
2009
to
March
31,
2010
12
Month
s

Eliminations
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Total
April
1, 2009
to
March
31,
2010
12
Month
s

July 1,
2008
to
March
31,
2009 9
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

59,810.2
1
-

36,348.7
5
-

37,955.7
6
-

July 1,
2008
to
March
31,
2009 9
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

458.85

161.72

351.61

(677.98)

(206.99)

14,469.2
7

458.85

161.72

351.61

(677.98)

(206.99)

59,810.2
1

36,348.7
5

37,955.7
6

72.81

(488.21)

(260.13)

31.99

10,350.6
0
(1,694.8
0)
1,068.71
(169.54)

5,332.55

6,771.04

(1,136.2
4)
692.09
(70.93)

(1,403.0
4)
722.16
(68.47)

9,554.97

4,817.47

6,021.69

632.61

9,554.97

4,817.47

6,654.30

(2,147.5

(1,080.3

(1,666.7

Revenue

Unallocated
expenditure
Income
Interest &
finance
expenses
Profit
before
exceptional
items and
tax
Exceptiona
l Items
Other
Exceptional
Income
(refer note
15
in
schedule 21
)
Profit
before tax
Provision

178

Soaps and Detergents

April
July 1, July 1,
1,
2008
2007
2009
to
to
to
March June
March 31,
30,
31,
2009 9 2008
2010
Month 12
12
s
Month
Month
s
s

Home care
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Others
April
1,
2009
to
March
31,
2010
12
Month
s

July 1,
2008
to
March
31,
2009 9
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Eliminations
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

for tax
Profit after
tax before
Minority
Interest
Minority
Interest
Net Profit
for
the
year
/
period

Total
April
1, 2009
to
March
31,
2010
12
Month
s

July 1,
2008
to
March
31,
2009 9
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

3)
7,407.44

7)
3,737.10

7)
4,987.53

26.67

98.87

7,434.11

3,835.97

4,987.53

Other
Informatio
n
Segment
assets
Unallocated
assets
Total
assets

21,861.5
6

17,055.9
8

16,492.7
2

9,801.02

6,968.50

6,425.46

2,965.70

1,336.50

132.76

34,628.2
8
19,307.8
0
53,936.0
8

25,360.9
8
17,208.5
0
42,569.4
8

23,050.9
4
16,278.0
1
39,328.9
5

Segment
liabilities
Unallocated
liabilities
Total
liabilities

3,925.28

2,201.36

2,515.14

4,022.83

1,905.91

1,139.03

154.60

204.39

131.51

8,102.71

4,311.66

3,785.68

5,720.24

3,544.57

2,994.08

13,822.9
5

7,856.23

6,779.76

Segment
Capital
expenditure
(including
capital
work
in

1,424.72

3,947.39

1,245.63

3,293.40

488.01

2,669.32

770.20

31.98

624.08

1,752.47

179

725.64

Soaps and Detergents

April
July 1, July 1,
1,
2008
2007
2009
to
to
to
March June
March 31,
30,
31,
2009 9 2008
2010
Month 12
12
s
Month
Month
s
s

Home care
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Others
April
1,
2009
to
March
31,
2010
12
Month
s

July 1,
2008
to
March
31,
2009 9
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Eliminations
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

progress)
Unallocated
capital
expenditure
(including
capital
work
in
progress)
Total
capital
expenditur
e
(including
capital
work
in
progress)
Segment
depreciatio
n
and
amortisatio
n
Unallocated
depreciatio
n
and
amortisatio
n
Total
depreciatio
n
and
amortisatio
n
Segment
impairment
loss

678.66

46.28

452.76

546.85

226.05

133.20

136.35

106.98

3.90

180

Total
April
1, 2009
to
March
31,
2010
12
Month
s

July 1,
2008
to
March
31,
2009 9
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

178.69

229.65

1,244.92

4,126.08

1,475.28

4,538.32

1,011.69

589.86

683.20

178.58

158.45

114.34

1,190.27

748.31

797.54

46.28

Soaps and Detergents

April
July 1, July 1,
1,
2008
2007
2009
to
to
to
March June
March 31,
30,
31,
2009 9 2008
2010
Month 12
12
s
Month
Month
s
s

Home care
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Others
April
1,
2009
to
March
31,
2010
12
Month
s

July 1,
2008
to
March
31,
2009 9
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Eliminations
April
July 1,
1,
2008
2009
to
to
March
March 31,
31,
2009 9
2010
Month
12
s
Month
s

July 1,
2007
to
June
30,
2008
12
Month
s

Unallocated
impairment
loss
Total
impairmen
t loss
Segment
non
cash
expenses
other than
depreciatio
n
Unallocated
non
cash
expenses
other than
depreciatio
n
Total non
cash
expenses
other than
depreciatio
n

4.09

20.47

1.41

0.92

21.94

4.19

181

0.03

0.10

Total
April
1, 2009
to
March
31,
2010
12
Month
s

July 1,
2008
to
March
31,
2009 9
Month
s

46.28

5.01

42.44

5.70

68.48

48.50

5.01

110.92

54.20

July 1,
2007
to
June
30,
2008
12
Month
s

7.

RELATED PARTY DISCLOSURES

a)

Parties where control exists

Individual having control

M.P. Ramachandran

Chairman and Managing Director

As the Managing Director of the Company is an individual having control and hence not separately disclosed as a
Key management personnel.
b)

Related party relationships where transactions have taken place during the year / period

Joint venture companies

Balaji Teleproducts Limited (upto February 24, 2010)
Continental Speciale (India) Private Limited (upto March 18, 2010)
Firm / HUF in which the relatives of individual having control are partners / members / proprietor.
Beena Agencies
Quilon Trading Co.
Travancore Trading Corp.
Sree Guruvayurappan Agencies
M.P. Agencies
Tamil Nadu Distributors
Deepthy Agencies
Sahyadri Agencies
Sreehari Stock Suppliers
Sujatha Agencies
M.P. Divakaran - H.U.F.
M.P. Sidharthan - H.U.F.
Relative of individual having control
M.P. Sidharthan
M.R. Jyothy (Director)
M.R. Deepthy
Ananth Rao T
M. G. Santhakumari
M.P. Divakaran
Enterprises significantly influenced by key management personnel or their relatives
Sahyadri Agencies Ltd.
Jyothy Fabricare Services Limited (up to September 9, 2008)
Key management personnel (includes directors of the Company)
K. Ullas Kamath
Deputy Managing Director
Relative of key management personnel
Gayatri Kamath
c)

Transactions with related parties during the year

182

April 1, 2009 to March

31, 2010 (12 Months)

July 1, 2008 to March

31, 2009 (9 Months)

Rs in Lacs
July 1, 2007 to June
30, 2008 (12 Months)

223.45
216.63
688.81
-

90.72
82.55
688.60
1.00

120.96
103.56
685.68
-

17.17

5.39
0.70
-

17.17

April 1, 2009 to
March 31, 2010 (12
Months)

July 1, 2008 to March

31, 2009 (9 Months)

Rs in Lacs
July 1, 2007 to June
30, 2008 (12 Months)

1,258.15
1,493.75
1,151.80
2,385.75
818.72
(3.80)
(4.66)
(3.14)

830.60
1,029.53
737.91
1,207.75
544.44
332.33
263.51
111.63

874.09
558.81
661.76
643.43
616.51
1,226.13
1,055.71
533.22
915.38

0.33
23.83
50.87
12.10
11.44
12.52

19.15
10.28
8.97
8.24
5.54
3.08
11.28

29.64
23.68
4.70
4.94
9.10
9.49
36.88

22.90
20.16
6.05

9.76
9.03
3.06

0.95
32.24

32.24

32.24

Individual having control

Remuneration*
Commission
Dividend
Purchase of equity shares of Jyothy
Fabricare Services Limited
Joint venture companies
Balaji Teleproducts Limited
Purchase of Finished Goods
Supply of sales promotion material
Provision made for doubtful
advances
Advance written off
8.

RELATED PARTY DISCLOSURES

Enterprises in which relatives are

interested
Sale /(sales return) of finished
goods
Beena Agencies
Sahyadri Agencies Ltd.
Deepthy Agencies
Travancore Trading Corporation
M.P.Agencies
Sree hari stock suppliers
Sujatha Agencies
Sree Guruvayurappan Agencies
Others
Claims for reimbursement for sales
promotion expenses / discounts
given
Sreehari Stock Suppliers
Sujatha Agencies
Travancore Trading Corporation
Sahyadri Agencies
Deepthy Agencies
M.P.Agencies
Others
Commission paid
Sreehari Stock Suppliers
Sujatha Agencies
Tamil Nadu Distributors
Rent Paid
Quilon Trading Company
Dividend

183

Enterprises
significantly
influenced by key management
personnel or their relatives
Advance given to Jyothy Fabricare
Services Limited
Relative of key management
personnel
Allotment of Equity shares in
Jyothy Fabricare Services Limited
Gayatri Kamath
Relatives of individuals having
control
Remuneration*
M R Jyothy
M P Sidharthan
M R Deepthy
Ananth Rao T
Allotment of Equity shares in
Jyothy Fabricare Services Limited
M. G. Santhakumari
M R Jyothy
M R Deepthy
Ananth Rao T
Sale Of Services
Dividend
Contribution to Superannuation
fund
M R Jyothy
Ananth Rao T

April 1, 2009 to
March 31, 2010 (12
Months)

July 1, 2008 to March

31, 2009 (9 Months)

July 1, 2007 to June

30, 2008 (12 Months)

87.01

1.00

21.50
12.00
5.99
13.44

14.11
5.94
3.50
7.56

16.80
7.92
5.99
6.51

0.06
275.94

1.00
1.00
1.00
1.00
275.94

275.91

1.92
1.20

1.26
0.68

1.44
0.23

Purchase of equity shares of Jyothy

Fabricare Services Limited
M. G. Santhakumari
1.00
M R Jyothy
1.00
M R Deepthy
1.00
Ananth Rao T
1.00
Key management personnel
Remuneration*
112.09
84.07
112.09
Commission
108.32
55.03
69.04
Dividend
14.51
14.51
14.51
Contribution to Superannuation
10.01
7.51
10.01
fund
Allotment of Equity shares in
124.00
Jyothy Fabricare Services Limited
Sale Of Services
0.33
* As the future liabilities for gratuity is provided on an acturial basis for the company as a whole, the amount
pertaining to individual basis is not ascertainable and therefore not included above.
d)

Related party balances

184

April 1, 2009 to
March 31, 2010 (12
Months)

July 1, 2008 to March

31, 2009 (9 Months)

July 1, 2007 to June

30, 2008 (12 Months)

17.17
-

17.17
87.01

216.63
108.32
0.06

82.55
55.03
0.50

103.56
69.04
0.50

0.13

30.74
40.97
112.88
32.66
8.57
19.27

10.70
0.63
1.43
2.33
3.57
4.25

7.44
37.88
1.29
0.71
11.39
9.21

6.20
576.43
-

6.20
167.19
17.17

6.20
247.22
-

Amounts receivable
Joint venture company
Enterprises significantly influenced
by key management personnel or
their relatives
Amounts payable
Individual having control
Key management personnel
Relatives of individual having
control
Amount receivable from key
management personnel
Enterprises in which relatives of
individual having control are
interested
Beena Agencies
Deepthy Agencies
Travancore Trading Corporation
M.P.Agencies
Tamil Nadu Distributors
Others
Enterprises significantly influenced
by key management personnel or
their relatives
Sahyadri Agencies Ltd.
Provision for advance to Joint
venture company
9.

There are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under
Micro, Small and Medium Enterprises Development Act, 2006.

The above information and the details given in Schedule 12- Current liabilities as required to be disclosed under the
Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have
been identified on the basis of information available with the Company. This has been relied upon by the Auditors.
10.

OPERATING LEASES

The Group has entered into Lease agreements for premises, which expire at various dates over the next five to six
years. Certain agreements provide for increase in rent. Lease rental expense for the year ended March 31, 2010 was
Rs 500.51 (nine months period ended 2009 - Rs. 293.20, for the year ended 2008 - Rs. 234.33)

As at March
31, 2010
Future lease payment under non cancellable operating leases are as
follows:
Payable not later than one year
Payable later than one year and not
later than five years

As at March 31,
2009

28.95
25.29

185

As at June 30,
2008

63.71
26.28

26.67
43.60

As at March
31, 2010
Payable later than five years

As at March 31,
2009
54.24

As at June 30,
2008
89.99

70.27

In case of assets given on lease

The Group has leased out few of its premises on operating lease during the year which have been terminated at the
year end.
Lease rent income for the year ended March 31, 2010 was Rs 107.50 (2009 Rs. 62.33, 2008 - Rs. Nil ). There is no
escalation clause in the lease agreement and the lease is cancellable in nature. There are no restrictions imposed by
lease arrangements.
11.

CONTINGENT LIABILITIES
As at March
31, 2010

Contingent liabilities not provided

for in respect of:
(i) Amount outstanding in respect
of guarantees given by the
Companies to Banks
(a) as securities provided to NSE for
filling of prospectus for its Initial
Public Offering.
(b) Others
(ii) Tax matters
(a) Disputed liability in respect of
income-tax demands matters under
appeal
(b) Disputed sales tax demands
matters under appeal
(c) Disputed excise duty and service
tax demand - matter under appeal
(iii) Others
(iv) Claims against the Company
not acknowledged as debt
12.

As at March 31, As at June 30,

2009
2008

152.84

1,389.90

69.68

35.78

154.82

154.82

171.30

1,443.20

356.43

641.93

1,058.02

31.56

31.56

15.82
120.00

120.00

147.60

CAPITAL COMMITMENTS (NET OF ADVANCES)

As at March
31, 2010

Estimated amount of contracts

remaining to be executed on capital
account and not provided for

13.

As at March 31, As at June 30,

2009
2008

210.77
210.77

658.88
658.88

166.61
166.61

During the earlier years, depreciation/ impairment on assets include impairment losses representing the
amount by which the carrying amount of the asset exceeds its recoverable amount. Such impairment losses
were due to adverse market conditions for one of its Cash Generating Unit pertaining to the 'Soaps and
Detergents' segment. The pre-tax discount rate used for evaluation of the present value was 8% per annum.
During the year ended March 31, 2010 the Company has made an additional impairment provision of Rs
46.28 for the cash generating unit.

186

14.

As per the Notification no. 32/99-CE dated July 8, 1999, the Company is entitled to refund of excise duty
in Guwahati and Jammu units equivalent to the amount of the duty paid through Personal Ledger Account
(PLA). The Government issued notifications no. 17/2008-CE and 19/2008-CE dated March 27, 2008
restricting the refund amount to a maximum percentage specified in the notification. The Company has
filed a writ petition in the Guwahati High Court and the Jammu and Kashmir High Court against the
respective notifications and obtained stay orders from both the High Courts. During the year ended March
31, 2010 the Guwahati High Court has given a favourable order in case of a similar matter against which
the Department has filed an appeal in the Supreme Court. Based on the orders of High Court, the Company
has accrued Rs 475.26 lacs as excise duty receivable pertaining to the previous year ended March 31, 2009
and an additional benefit of Rs 478.58 lacs for the year ended March 31, 2010.

15.

There are no amounts payable / due to Investor Education and Protection Fund.

16.

Pursuant to the completion of the Initial Public Offering in year ended June 30, 2008 , the Company has
received an amount of Rs 544.54 and interest of Rs 88.07 thereon in accordance with the terms of
Investment Agreement entered with some of the selling shareholders. As per the expert advice obtained, the
amount of Rs 544.54 has been treated as capital receipt and accordingly, no provision for tax has been
made for the same.

17.

The shareholders of the Company have, in the Annual General Meeting held on November 11, 2008,
approved the sub-division of the face value of the equity share of Rs. 5 each into equity shares of face value
of Re. 1 each. Accordingly, the basic and diluted earning per share and number of shares disclosed have
been computed for the period July 1, 2008 to March 31, 2009, and recomputed for the year ended June 30,
2008 based on the revised face value of Re. 1 each.

18.

During the period ended March 31, 2009, the Company had changed its accounting year from July-June to
April-March. Accordingly, the figures of consolidated financial statements for period ended March 31,
2009 are for a period of 9 months from July 01, 2008 to March 31, 2009 and are therefore not comparable
with the figures for the year ended March 31, 2010 & the year ended June 30, 2008

19.

The prior period / year figures have been reclassified where necessary to conform with current year's
presentation.
Signatures to Schedules 1 to 21

As per our report of even date

For S.R. Batliboi & Associates

For and on behalf of the Board of Director of

Firm Registration No. 101049W

Chartered Accountants
per Vikram Mehta

Jyothy Laboratories Limited

M.P. Ramachandran

K. Ullas Kamath

Partner
Membership No.: 105938

Chairman and Managing Director

Deputy Managing Director

M.L. Bansal

Place: Mumbai

Company Secretary
Place: Mumbai

Date: July 27, 2010

Date: July 27, 2010

187

GENERAL INFORMATION
1.

Jyothy Laboratories Limited was incorporated on January 15, 1992 with its registered office at Ward 2,
Door No. 211, Kandanassery, Thrissur, Kerala.

2.

The authorized share capital of our Company is Rs. 1,000 lakhs, divided into 1,000 lakhs Equity Shares of
face value of Re. 1 each.

3.

The Issue was authorized and approved by our Board of Directors on June 21, 2010 and approved by our
shareholders in their meeting held on July 27, 2010.

4.

Our Company has received in-principle approvals under Clause 24(a) of the Listing Agreement to list the
Equity Shares on the BSE and the NSE.

5.

Copies of the Memorandum and Articles of Association of our Company will be available for inspection
during usual business hours on any weekday between 10.00 A.M. to 1.00 P.M. (except public holidays),
during the Issue period, at our Registered Office.

6.

Except as disclosed in this Placement Document, our Company has obtained necessary consents, approvals
and authorizations required in connection with the Issue.

7.

Except as disclosed in the Placement Document, there has been no material change in our Companys
financial condition since March 31, 2010, the date of the latest reformatted consolidated financial
statements, included herein.

8.

Except as disclosed in this Placement Document, there are no legal or arbitration proceedings against or
affecting our Company or its assets or revenues, nor is our Company aware of any pending or threatened
legal or arbitration proceedings, which are, or might be, material in the context of the Issue.

9.

Our Companys statutory auditors, S.R. Batliboi & Associates, Chartered Accountants (Registration no.:
101049W), have examined the reformatted consolidated financial statements as of and for the financial
years ended March 31, 2010, March 31, 2009 and June 30, 2008, and have consented to the inclusion of
their report in relation thereto in this Placement Document.

10.

Our Company confirms that it is in compliance with the minimum public shareholding requirements as
required under the terms of the Listing Agreements with the Stock Exchanges.

11.

The Floor Price for the Issue is Rs. 282.61 per Equity Share. The Floor Price has been calculated in
accordance with Chapter VIII of the ICDR Regulations.

188

DECLARATION
Our Company certifies that all relevant provisions of the Companies Act and Chapter VIII read with Schedule XVIII
of the ICDR Regulations have been complied with. Our Company further certifies that all the statements in this
Placement Document are true and correct.
Signed by:

Deputy Managing Director

Chief Financial Officer

Date: August 13, 2010
Place: Mumbai

189

JYOTHY LABORATORIES LIMITED

Registered Office
Ujala House
Ramakrishna Mandir Road
Kondivita, Andheri (East)
Mumbai 400 059

BOOK RUNNING LEAD MANAGERS

Kotak Mahindra Capital Company Limited
1st Floor Bakhtawar
229, Nariman Point
Mumbai 400 021
Tel: +91 22 6634 1100
Fax:+91 22 6632 5129

Enam Securities Private Limited

801/ 802, Dalamal Towers
Nariman Point
Mumbai 400 021
Tel: +91 22 6638 1800
Fax: +91 22 2284 6824

DOMESTIC LEGAL ADVISOR TO THE ISSUE

Amarchand & Mangaldas & Suresh A. Shroff & Co.
Peninsula Chambers, Peninsula Corporate Park
Ganpatrao Kadam Marg, Lower Parel
Mumbai 110 020

AUDITORS TO OUR COMPANY

S. R. Batliboi & Associates
(Registration no.: 101049W)
Jalan Mill Compound, 95, Ganpatrao Kadam Marg,
Lower Parel,
Mumbai 400 013
Tel: +91 22 4035 6300
Fax: +91 22 4035 6400