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Notes to Accounts of Jyothy Laboratories Ltd.

Mar 31, 2016

NOTE 1 - BACKGROUND

Jyothy Laboratories Limited (''the Company'') is a public company domiciled in India. Its shares are listed on two stock exchanges in India. The Company is principally engaged in manufacturing and marketing of fabric whiteners, soaps, detergents, mosquito repellents, scrubber, bodycare and incense sticks.

NOTE 2 - BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets which has been recorded on fair value and assets for which provision for impairment is made. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

NOTE 3 - SEGMENT REPORTING

Information about Business Segments

Business segments:

The primary segment of the Company has been determined on the basis of business segment. The Company is organized into following business segments - Soaps and Detergents, Home Care and others. 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, dish wash bar and soaps including ayurvedic soaps. Home Care products include incense sticks, scrubber, dhoop and mosquito repellents. Others includes bodycare,tea and coffee.

Secondary segment:

The Company 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.

NOTE 4 - 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.

Wholly Owned Subsidiaries

Jyothy Consumer Products Marketing Limited

Other Subsidiaries

Jyothy Kallol Bangladesh Limited Four Seasons Drycleaning Company Private Limited Snoways Laundrers & Drycleaners Private Limited Jyothy Fabricare Services Limited

b) Related party relationships where transactions have taken place during the year Partnership firm

M/S JFSL-JLL (JV)

Firm / HUF in which the relatives of individual having control are partners / members / proprietor

Quilon Trading Co. M.P. Divakaran - H.U.F. M.P. Sidharthan - H.U.F.

Relative of individual having control

M.P. Sidharthan

M.R. Jyothy

M.R. Deepthi

Ananth Rao T

Ravi Razdan

M.P. Divakaran

Enterprises significantly influenced by key management personnel or their relatives

Sahyadri Agencies Ltd.

Key management personnel

K. Ullas Kamath Joint Managing Director & CFO

S.Raghunandan Whole Time Director & CEO

Additional related party as per Companies Act, 2013.

M.L. Bansal Company Secretary

NOTE 5 - CONTINGENT LIABILITIES

2016 2015

Based on management''s evaluation following contingent liabilities is not probable and hence not provided by the Company in respect of:

(i) Amount outstanding in respect of corporate guarantees 4,902.44 5,077.44

(ii) Tax matters

(a) Disputed sales tax demands-matters under appeal 1,870.13 1,843.20

(b) Disputed excise duty and service tax demand - matter under appeal 3,864.18 2,963.75

(c) Disputed income tax demand - matter under appeal * 6,733.15 3,741.60

(iii) Other statutory dues 3.83 7.72

* The amount shown above does not include contingent liability for assessment years which have been reopened (unless demand order is raised) and those pending assessments.

NOTE 6 - EMPLOYEE STOCK OPTION PLANS (''ESOP'') (contd.)

For option excercised during the period, the weighted average share price at the exercise date was X 297.44 per share (2015 - not applicable since no option were exercised).

No new stock option have been granted by the company in the current year.

The Black Scholes valuation model has been used for computing the weighted average fair value of the stock granted considering the following inputs for the year ended March 31, 2016 and March 31, 2015:-

NOTE - 7

As per the Notification no. 32/99-CE dated July 8,1999, the Company was entitled to refund of excise duty in Guwahati and Jammu units equivalent to 100% of the amount of the duty paid through Personal Ledger Account (''PLA''). During an earlier year, 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 received a favourable order from the High Court of Guwahati & Jammu and Kashmir in earlier years. Accordingly, the Company has accrued an additional benefit of X 940.48 (2015 - X 907.06) in the current year.

NOTE - 8

At its meeting held on May 23, 2016 the Board of Directors have approved the scheme of amalgamation of Jyothy Consumer Products Marketing Limited (wholly owned subsidiary) with the Company on May 23, 2016. The appointed date under the scheme will be April 1, 2016.

NOTE 9

The Company has entered into an option agreement dated May 5, 2011 with Henkel AG & Co. KGaA (Henkel AG) whereby the Company has granted Henkel AG a firm and irrevocable option, at its sole discretion at any time after the beginning of the fifth year and ending upon the expiry of the sixth year of the said agreement or such other mutually extended period, to acquire a maximum of 26% of the issued equity share capital of the Company at a price which will be mutually determined by the parties at a later date.

NOTE 10 - EXCEPTIONAL ITEM

Exceptional item relates additional payment towards retrenchment of employees for the Kandanassery unit in previous year.

NOTE 11 - PREVIOUS YEAR FIGURES

Previous year figures have been regrouped / reclassified , where necessary, to conform to this year classification.


Mar 31, 2014

NOTE : 1 EMPLOYEE BENEFIT

(i) Defined Benefit Plans -

The Company 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 Life Insurance Corporation of India.

The following tables summarises the components of net benefit expense recognised in the statement of Profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.

NOTE : 2 SEGMENT REPORTING

Business segments:

The primary segment of the Company has been determined on the basis of business segment. The Company is organized into following business segments - Soaps and Detergents, Home Care and others. 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, dish wash bar and soaps including ayurvedic soaps. Home Care products include incense sticks, scrubber, dhoop and mosquito repellents. Others includes bodycare, tea and coffee.

Secondary segment:

The Company 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.

NOTE :3 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.

Wholly Owned Subsidiaries

Associated Industries Consumer Products Pvt Ltd

Other Subsidiaries

Jyothy Kallol Bangladesh Limited

Four Seasons Drycleaning Company Private Limited

Snoways Laundrers & Drycleaners Private Limited

Jyothy Consumer Products Marketing Ltd

Jyothy Fabricare Services Limited

Diamond Fabcare Private Ltd ( Merged with Jyothy Fabricare Services Limited)

Akash Cleaners Private Limited ( Merged with Jyothy Fabricare Services Limited)

Fab Clean & Care Private Limited ( Merged with Jyothy Fabricare Services Limited)

b) Related party relationships where transactions have taken place during the year Partnership firm

M/S JFSL-JLL (JV)

Firm / HUF in which the relatives of individual having control are partners / members / proprietor

Beena Agencies

Quilon Trading Co.

Travancore Trading Corp.

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. Deepthi

Ananth Rao T

Ravi Razdan

M. G. Santhakumari

M.P. Divakaran

Enterprises significantly influenced by key management personnel or their relatives

Sahyadri Agencies Ltd.

Key management personnel

K. Ullas Kamath Joint Managing Director

S.Raghunandan Whole Time Director & CEO

NOTE : 4 OPERATING LEASES

In case of assets taken on lease

The Company has entered into Lease agreements for premises, which expire at various dates over the next five years. Certain agreements provide for increase in rent. Lease rental expense for the year ended March 31, 2014 was Rs. 1086.78 (2013 - Rs. 930.85). There are no restrictions imposed by lease arrangements.

In case of assets given on lease

The Company has leased out few of its premises on operating lease. The Gross carrying amount and accumulated depreciation as at March 31, 2014 is Rs. 97.46 and Rs. 21.03 (2013 - Rs. 105.98 and Rs. 19.94) respectively. Lease rent income for the year ended March 31, 2014 was Rs. 74.00 (2013 – Rs. 27.91). There is no escalation clause in the lease agreement and the lease is cancellable in nature. There are no restrictions imposed by lease arrangements.

NOTE : 5 CONTINGENT LIABILITIES Rs. In Lacs

2014 2013

Based on management''s evaluation following contingent liabilities is not probable and hence not provided by the Company in respect of:

(i) Amount outstanding in respect of corporate guarantees 1,596.09 1,975.75

(ii) Tax matters

(a) Disputed sales tax demands – matters under appeal 5,685.16 6,295.13

(b) Disputed excise duty and service tax demand - matter under appeal 3,121.96 2,438.36

(c) Disputed income tax demand - matter under appeal 1,282.39 79.56

(iii) Other statutory dues 7.72 8.00

NOTE : 6

In the previous year, the Honorable High Court of Mumbai had approved the scheme of amalgamation of Jyothy Consumer Products Limited with the Company with effect from April 1, 2012.

Under the Scheme, the purchase consideration was to be discharged through issue of 23,79,748 equity shares The same has been alloted in the current year along with equivalent bonus shares. Accordingly, an amount equivalent to the face value of the shares issued (Rs. 47.60 lacs) and the excess of fair value over the face value of shares (Rs. 5,480.32 lacs) has been transferred from share suspense account to equity capital and capital reserve respectively.

NOTE : 7 MANAGERIAL REMUNERATION

During the year, the Company has received the Central Government approval for three directors in respect of managerial remuneration paid for the year ended March 31, 2013. Based on such approval, the Company has paid an additional commission of Rs. 152 lacs. The Company is yet to receive the Central Government approval for managerial remuneration paid to one director for the year ended March 31, 2013. Pending receipt of such approval, the excess remuneration paid is held in trust by the said Director.

NOTE : 8

As per the Notification no. 32/99-CE dated July 8, 1999, the Company was entitled to refund of excise duty in Guwahati and Jammu units equivalent to the amount of the duty paid through Personal Ledger Account (''PLA''). During an earlier year, 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 had fled 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 previous years, the Guwahati High Court has given a favourable order in case of a similar matter against which the Department has fled an appeal in the Supreme Court. Further, the Jammu High Court has also given favourable order. Based on the orders of High Court, the Company has accrued an additional benefit of Rs. 683.95 lacs (2013 - Rs. 438.50) in the current year.

NOTE : 9

The Company has, during the year, raised Rs. 40,000 lacs thought private placement of non-convertible debenture, redeemable at a premium after 3 years from the date of allotment i.e. November 14, 2013. The redemption premium payable of Rs. 14,720.79 lacs and expenses in relation to issue of Rs. 166.50 lacs have been adjusted to the ''Securities Premium Account'' , in accordance with section 78 of Companies Act, 1956.

NOTE : 10 The Company has entered into an option agreement dated May 5, 2011 with Henkel AG & Co. KGAA (Henkel AG) whereby the Company has granted Henkel AG a firm and irrevocable option, at its sole discretion at any time after the beginning of the fifth year and ending upon the expiry of the sixth year of the said agreement or such other mutually extended period, to acquire a maximum of 26% of the issued equity share capital of the Company at a price which will be mutually determined by the parties at a later date.

NOTE : 11 EXCEPTIONAL ITEM

Exceptional item relates to additional payment towards retrenchment of employees on closure of the Bhubaneshwar and Chennai manufacturing unit.

NOTE : 12 PREVIOUS YEAR FIGURES

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2013

Note 1 BACKGROUND

Jyothy Laboratories Limited (''the Company'') is public company incorporated on January 15, 1992 under the provisions of the Companies Act, 1956. The Company is principally engaged in manufacturing and marketing of fabric whiteners, soaps, detergents, mosquito repellents, scrubber, bodycare and incense sticks.

Note 2 BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets which has been recorded on fair value and assets for which provision for impairment is made. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

Note 3 EMPLOYEE BENEFIT

(i) Defined Benefit Plans

The Company 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 Life Insurance Corporation of India.

The following tables summarises the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.

Note 4 SEGMENT REPORTING

Business segments:

The primary segment of the Company has been determined on the basis of business segment. The Company is organized into following business segments - Soaps and Detergents, Home Care and others. 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, dish wash bar and soaps including ayurvedic soaps. Home Care products include incense sticks, scrubber, dhoop and mosquito repellents. Others includes bodycare, tea and coffee.

Secondary segment:

The Company 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.

Note 5 [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.

Wholly Owned Subsidiaries

Associated Industries Consumer Products Pvt Ltd

Other Subsidiaries

Jyothy Fabricare Services Limited Jyothy Kallol Bangladesh Limited

Jyothy Consumer Products Ltd (Formerly know as Henkel India Limited) upto March 31, 2012, now merged with Jyothy

Laboratories Limited w.e.f. April 1,2012.

Jyothy Consumer Products Marketing Ltd.

(Formerly know as Henkel Marketing India Limited) w.e.f August 23, 2011

Diamond Fabcare Private Ltd w.e.f April 1, 2011

Akash Cleaners Private Limited w.e.f April 1, 2011

Four Seasons Drycleaning Company Private Limited w.e.f. February 15, 2012

Fab Clean & Care Private Limited w.e.f June 1, 2011 Snoways Laundrers & Drycleaners Private Limited

b) Related party relationships where transactions have taken place during the year Partnership firm

M/S JFSL-JLL (JV)

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. Deepthi Ananth Rao T Ravi Razdan M. G. Santhakumari M.P. Divakaran

Enterprises significantly influenced by key management personnel or their relatives

Sahyadri Agencies Ltd.

Key management personnel

K. Ullas Kamath Joint Managing Director

S.Raghunandan Whole Time Director & CEO

Note 6 OPERATING LEASES

In case of assets taken on lease

The Company has entered into Lease agreements for premises, which expire at various dates over the next five years. Certain agreements provide for increase in rent. Lease rental expense for the year ended March 31, 2013 was Rs. 930.85 (2012 - Rs. 511.90). There are no restrictions imposed by lease arrangements.

In case of assets given on lease

The Company has leased out few of its premises on operating lease. The Gross carrying amount and accumulated depreciation as at March 31, 2013 is Rs. 105.98 and Rs. 19.94 (2012 - Rs. 147.98 and Rs. 21.27) respectively. Lease rent income for the year ended March 31, 2013 was Rs. 27.91 (2012 - Rs. 6.93). There is no escalation clause in the lease agreement and the lease is cancellable in nature. There are no restrictions imposed by lease arrangements.

Note 7 CONTINGENT LIABILITIES

2013 2012

Contingent liabilities not probable and hence not provided by the Company in respect of:

(i) Amount outstanding in respect of corporate guarantees 1,975.75 1,301.35

(ii) Tax matters

(a) Disputed sales tax demands - matters under appeal 6,295.13 3,274.03

(b) Disputed excise duty and service tax demand - matter under appeal 2,438.36 1,867.85

(c) Disputed income tax demands - matters under appeal 79.56 -

(iii) Other statutory dues 8.00 20.11

(iv) Claims against the Company not acknowledged as debt - 120.00

Note 8

The Honorable High Court of Mumbai, on April 12, 2013, approved the scheme of amalgamation (the scheme) under sections 391 to 394 of the Companies Act, 1956. In accordance with the scheme, Jyothy Consumer Products Limited (transferor Company) merged with the Company with effect from 1 April 2012. The transferor Company was engaged in the business of manufacturing and sale of body care, soap and detergent. The amalgamation is expected to channelize synergies and lead to better utilization of available resources and result in greater economies of scale.

The salient features of the scheme is as given below:-

a. The Company has accounted for the amalgamation under the purchase method and recognised assets and liabilities acquired at fair value.

b. The investments held by the Company in the Transferor Company has been cancelled.

c. The inter-corporate investments and inter-corporate deposits / loans and advances outstanding between the Company and the Transferor Company has been cancelled.

d. The excess of the purchase consideration paid by the Company over the value of net assets of the Transferor Company and after giving effect to point b) and c) above has been treated as goodwill.

Goodwill arising above has been amortised over a period of 10 years from the date of amalgamation as management believes that benefits due to acquisition in form of distribution synergies, economies of scale, overheads optimisation and brand category expansion shall be available for at least 10 years.

The purchase consideration is to be discharged through issue of 23,79,748 equity shares. Pending such allotment, the fair value of the consideration of Rs. 5,504.12 lacs has been shown under ''Share capital suspense account'' in the balance sheet. Further, the shareholders of the transferor Company are also entitled to equivalent number of bonus shares. Accordingly, an amount of Rs. 23.80 lacs has been utilised from securities premium and disclosed under ''Share capital suspense account''.

Note 10 MANAGERIAL REMUNERATION

Employee benefit expenses include Rs. 1,113.72 lacs paid / payable during the year towards remuneration payable to its Whole Time Directors. The maximum remuneration payable under Para (1) (B) of Section II of Part II of Schedule XIII of the Companies Act, 1956 (''Act'') is Rs. 192 lacs. Based on the legal advice received by the Company, management has computed the maximum remuneration payable to its Whole Time Directors amounting to Rs. 1,025 lacs.

The Company has filed an application with the Central government and is in the process of obtaining necessary approval from shareholders for remuneration payable to its Whole Time Directors. Pending receipt of such approval, the excess remuneration paid to the Directors is held in trust by the said Directors.

Note 11

As per the Notification no. 32/99-CE dated July 8, 1999, the Company was entitled to refund of excise duty in Guwahati and Jammu units equivalent to the amount of the duty paid through Personal Ledger Account (''PLA''). During an earlier year, 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 had 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 previous years, 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. Further, the Jammu High Court has also given favourable order. Based on the orders of High Court, the Company has accrued an additional benefit of Rs. 438.50 lacs (2012 - Rs. 186.54) in the current year.

Note 12

In the previous year, the Company has entered into an option agreement dated May 5, 2011 with Henkel AG & Co. KGaA (Henkel AG) whereby the Company has granted Henkel AG a firm and irrevocable option, at its sole discretion at any time after the beginning of the fifth year and ending upon the expiry of the sixth year of the said agreement or such other mutually extended period, to acquire a maximum of 26% of the issued equity share capital of the Company at a price which will be mutually determined by the parties at a later date.

Note 13 PREVIOUS YEAR FIGURES

Previous year figures have been regrouped / reclassified , where necessary, to conform to this year classification.


Mar 31, 2012

Note 1 BACKGROUND

Jyothy Laboratories Limited ('the Company') is public company incorporated on January 15, 1992 under the provisions of the Companies Act, 1956. The Company is principally engaged in manufacturing and marketing of fabric whiteners, soaps, detergents, mosquito repellents, scrubber, and incense sticks.

Note 2 BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been 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 have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in accounting policy explained below.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of 1 Rs per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs 2.50 (2011: Rs 5). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Details of loan

a) Term Loan has been taken from Axis Bank during the financial year 2011-12 and carries interest @ 11.25% p.a payable monthly. Interest rate is fixed for period of one year and floating thereafter. Term loan to be repaid in 16 quarterly instalment starting from June 30, 2013. The term loan is secured against first charge on the immovable properties at Andheri, trade marks of Maxo and Exo, all the rights, title, interest, benefits, claims and demands of the Company in respect of all document, agreements, contracts, clearance, insurance contract entered both present and future and all rights, claims and benefits to all monies receivable thereunder and all other claims thereunder which description shall include all properties of the above whether presently in existence or acquired hereafter and second charge on all the inventories, current assets, all monies, securities, contractor guarantees, performance bonds, cash flows and receviables, revenues, bank accounts together with investment, fixed deposits and book debts, stock in trade and all the properties mentioned above.

b) Deferred sales tax loan is interest free and payable in financial year 2012-13 in one installment.

Note 3 [EMPLOYEE BENEFIT

(i) Defined Benefit Plans -

The Company 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 Life Insurance Corporation of India.

The following tables summarises the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.

(H) The Company expects to contribute Rs Nil (2011 - Rs 78.08) to gratuity fund and Rs 37.03 (2011 - Rs 32.77) to Superannuation fund.

(ii) Defined Contribution Plans -

Amount of Rs 553.63 (2011 - Rs 510.99) is recognised as an expense and included in Note 25 - "Contribution to provident and other funds" in the Statement of profit and loss.

Note 4 SEGMENT REPORTING Business segments:

The primary segment of the Company has been determined on the basis of business segment. The Company is organized into following business segments - Soaps and Detergents, Home Care and others. 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, dish wash bar and soaps including ayurvedic soaps. Home Care products include incense sticks, scrubber, dhoop and mosquito repellents. Others includes tea and coffee.

Secondary segment:

The Company 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 segments.

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.

Note 5 OPERATING LEASES In case of assets taken on lease

The Company has entered into Lease agreements for premises, which expire at various dates over the next five years. Certain agreements provide for increase in rent. Lease rental expense for the year ended March 31, 2012 was Rs 511.90 (2011 - Rs 489.48). There are no restrictions imposed by lease arrangements. There are no subleases.

In case of assets given on lease

The Company has leased out few of its premises on operating lease. The Gross carrying amount and accumulated depreciation as at March 31, 2012 is Rs 147.98 and Rs 21.27 (2011 - Rs 139.46 and Rs 15.92) respectively. Lease rent income for the year ended March 31, 2012 was Rs 6.93 (2011 - Rs 5.8). There is no escalation clause in the lease agreement and the lease is cancellable in nature. There are no restrictions imposed by lease arrangements.

Note 6

As per the Notification No. 32/99-CE dated July 8, 1999, the Company was entitled to refund of excise duty in Guwahati and Jammu units equivalent to the amount of the duty paid through Personal Ledger Account ('PLA'). During an earlier year, 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 had 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 previous years, 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. Further, during the previous year, the Jammu High Court has also given favourable order. Based on the orders of High Court, the Company has accrued Rs Nil (2011 - Rs 953.84) lacs as excise duty receivable pertaining to the earlier years (of which an amount of Rs Nil (2011 - Rs 478.58) Lacs adjusted from the material consumed) and an additional benefit of Rs 186.54 (2011 - Rs 413.21) Lacs accrued in the current year, of which an amount of Rs Nil (2011 - Rs 189.68) Lacs pertains to previous year.

Note 7

During the previous year, the Company had issued 8,063,200 shares of Rs 1 each to Qualified Institutional Buyers (QIBs) in terms of Chapter VIII of SEBI (ICDR) Regulations, 2009 at a premium of Rs 281.62 to generate funds for primarily for acquisition in the future and to expand inorganically by identifying acquisition opportunities as part of Company's growth strategy in India and, if required, for general corporate purposes as well. The total sum received aggregated to Rs 22,788.22 lacs (including Rs 22,707.58 Lacs towards Securities premium). In the current year, the Company has utilised the above money for the acquisition of Henkel India Limited.

Note 8

In the current year, Company has entered into a share purchase agreement with Henkel AG & Co. KGaA (Henkel AG) for acquiring 50.97% equity share capital and 100% preference share capital in Henkel India Limited. In accordance with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997, the Company had made a public announcement on May 9, 2011, to acquire 20% of the emerging voting capital of Henkel India Limited from the public at an offer price of Rs 41.20 per equity share.

The Company has completed the open offer formalities and acquired 14,035,431 equity shares from the shareholders of Henkel India Limited. Consequent to the completion of the open offer, the equity holding of the Company in Henkel India Limited as at March 31, 2012 is 83.65% and investment is treated as investment in subsidiary. Further, the Company has also entered into an option agreement dated May 5, 2011 whereby the Company has granted Henkel AG a firm and irrevocable option, at its sole discretion at any time after the beginning of the fifth year and ending upon the expiry of the sixth year of the said agreement or such other mutually extended period, to acquire a maximum of 26% of the issued equity share capital of the Company at a price which will be mutually determined by the parties at a later date.

Note 9 PREVIOUS YEAR FIGURES

Till the year ended March 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1. Background

Jyothy Laboratories Limited ('the Company') was incorporated on January 15, 1992. The Company is principally engaged in manufacturing and marketing of fabric whiteners, soaps, detergents, mosquito repellents, scrubber and incense sticks.

2. (A) Basis of preparation of Financial Statements

The financial statements have been prepared to comply in all material respects with the Notified accounting standard by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been 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 have been consistently applied by the Company and are consistent with those used in the previous year.

(B) Use of Estimate

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.

4. Employee Benefit:

(i) Defined Benefit Plans -

The Company 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 Company has provided for gratuity and leave encashment based on actuarial valuation done as per Projected Unit Credit Method.

(iii) Defined Contribution Plans -

Amount of Rs. 510.99 (2010 - Rs. 408.47) is recognised as an expense and included in Schedule 16 - "Contribution to provident and other funds" in the Profit and Loss account.

(iv) The Company expects to contribute Rs. 78.08 (2010 - Rs. 213.57) to gratuity fund and Rs. 32.77 (2010 - Rs. 28.06) to Superannuation fund.

5. Scheme of Amalgamation ('the Scheme') of Sri Sai Homecare Products Private Limited, a wholly owned subsidiary, with Jyothy Laboratories Limited (the Company)

a) Pursuant to a Scheme of Amalgamation under the provisions of Sections 391 to 394 of the Companies Act, 1956 approved by the shareholders of Sri Sai Homecare Products Private Limited and the Company, and subsequently sanctioned by the Honourable High Court at Mumbai, the entire business undertaking, assets and liabilities of Sri Sai Homecare Products Private Limited have been transferred to and vested in the Company with effect from April 1, 2010 being the 'Appointed Date'.

b) Sri Sai Homecare Products Private Limited was in the business of manufacturing of mosquito repellent coil.

c) The Amalgamation has been accounted for under the "pooling of interest" method of accounting prescribed under Accounting Standard - 14 (Accounting for amalgamation) issued by the Institute of Chartered Accountants of India which was prescribed by the Scheme. Accordingly all the assets, liabilities and reserves of Sri Sai Homecare Products Private Limited as on April 1, 2010 have been aggregated at their book value as specified in the Scheme. Further, the share capital of Sri Sai Homecare Products Private Limited has been extinguished and the excess of the value of share capital, taken over pursuant to the Scheme, over the investment of the Company in Sri Sai Homecare Products Private Limited have been adjusted to the capital reserve account.

d) Since the aforesaid Scheme of amalgamation of Sri Sai Homecare Products Private Limited with the Company, which is effective from April 1, 2010, has been given effect to in these accounts, the figures for the current year to that extent are not comparable with those of the previous year.

E) There are no delays in payments to Micro, Small and Medium Enterprises in current year as well as in previous year as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006.

The above information and the details given in Schedule 11 - 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.

7. Segment Reporting

Business segments:

The primary segment of the Company has been determined on the basis of business segment. The Company 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, dish wash bar and soaps including ayurvedic soaps. Home Care products include incense sticks, scrubber, dhoop and mosquito repellents. Others includes Tea and coffee.

Secondary segment:

The Company 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 segments.

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.

8. 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.

Wholly Owned Subsidiaries

Sri Sai Home Care Products Private Limited (refer Note 5 of Schedule 20) Associated Industries Consumer Products Pvt. Ltd.

Other Subsidiary

Jyothy Fabricare Services Limited

Jyothy Kallol Bangladesh Limited (w.e.f. October 14, 2010) (refer Note 14 of Schedule 20)

b) Related party relationships where transactions have taken place during the year

Joint venture companies

Balaji Teleproducts Limited (upto February 24, 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. Deepthi Ananth Rao T. Ravi Razdan M. G. Santhakumari M.P. Divakaran

Enterprises significantly influenced by key management personnel or their relatives Sahyadri Agencies Ltd.

Key management personnel (includes directors of the Company)

K. Ullas Kamath Deputy Managing Director

10. Contingent Liabilities

2010-11 2009-10

Contingent liabilities not provided for in respect of:

(i) Amount outstanding in respect of guarantees given by the Company to banks 1,122.96 1,389.90

(ii) Tax matters

(a) Disputed sales tax demands – matters under appeal 2,290.92 1,443.20

(b) Disputed excise duty and service tax demand – matter under appeal 1,592.72 1,050.57

(iii) Others 20.11 15.83

(iv) Claims against the Company not acknowledged as debt 120.00 120.00

12. As per the Notification No. 32/99-CE dated July 8, 1999, the Company was entitled to refund of excise duty in Guwahati and Jammu units equivalent to the amount of the duty paid through Personal Ledger Account ('PLA'). During an earlier year, 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 had 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 previous year, 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. Further, during the current year, the Jammu High Court has also given favourable order. Based on the orders of High Court, the Company has accrued Rs. 953.84 Lacs as excise duty receivable pertaining to the earlier years (of which an amount of Rs. 478.58 Lacs adjusted from the material consumed) and an additional benefit of Rs. 413.21 Lacs accrued in the current year, of which an amount of Rs. 189.68 pertaining to previous year.

14. During the current year the Company has entered in to a joint venture with Kallol Bangladesh Limited. The same has been named as Jyothy Kallol Bangladesh Limited in which the Company has subscribed 75% equity share capital leading to the Company's percentage of ownership interest in the joint venture at 75% as at the year end.

15. During the year, the Company has issued 8,063,200 shares of Rs. 1 each to Qualified Institutional Buyers (QIBs) in terms of Chapter VIII of SEBI (ICDR) Regulations, 2009 at a premium of Rs. 281.62 to generate funds for primarily for acquisition in the future and to expand inorganically by identifying acquisition opportunities as part of Company's growth strategy in India and, if required, for general corporate purposes as well. The total sum received aggregated to Rs. 22,788.22 Lacs (including Rs. 22,707.58 Lacs towards Securities premium). After investment in Henkel India Limited of Rs. 6,073.09 Lacs and share issue expenses of Rs. 644.29 Lacs pending utilization of the money for the purposes mentioned above, the Company has temporarily invested in the fixed deposit and corporate deposits with the Banks.

16. 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 two of its Cash Generating Unit pertaining to the 'Soaps and Detergents' segment. The pre-discount rate used for evaluation of the present value was 8% per annum. In the current year the Company sold a portion of the land at Pithampur washing powder unit to a third party at a rate much higher than the carrying amount. In view of prevailing market price of land at Pithampur, management believes that impairment indicators no longer exist, therefore impaiment loss earlier recognised on land & building should be reversed. Accordingly, the Company has reversed the provision for impairment loss for land of Rs. 10.37 Lacs and building of Rs. 143.35 Lacs at Pithampur washing powder unit which pertains to 'Soaps & Detergent segment'.

17. During the year, the Company acquired 14.9% equity share capital in Henkel India Limited. Further subsequent to the year end, the Company has entered in to a share purchase agreement with Henkel AG & Co. KGaA (Henkel AG) for acquiring 50.97% equity share capital and 100 % preference share capital in the Henkel India Limited. In addition, the Company made pubic announcement of its intention to make open offer for acquiring upto 20% of the equity share capital in Henkel India Limited from public at Rs. 41.20 per equity share.

18. During the year 7,500,000 0.1% Convertible Preference Shares in Jyothy Fabricare Services Limited of Rs. 10 along with redemption premium of Rs. 2 each share were converted into 6,000,000 Equity Shares (face value - Rs. 10 each) at Rs. 15 each.

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

20. The prior period figures have been reclassified where necessary to conform with current year's presentation.


Mar 31, 2010

1. Background

Jyothy Laboratories Limited (the Company) was incorporated on January 15, 1992. The Company is principally engaged in manufacturing and marketing of fabric whiteners, soaps, detergents, mosquito coils and incense sticks.

2. Basis of preparation of Financial Statements

The financial statements have been prepared to comply in all material respects with the Notified accounting standard by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been 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 have been consistently applied by the Company are consistent with those used in the previous year.

3. Employee Benefit:

(i) Defined Benefit Plans -

The Company 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 Company 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.

(ii) Defined Contribution Plans -

Amount of Rs. 408.47 (2009 - Rs. 283.98) is recognised as an expense and included in schedule 16 - "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.

E) 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 11 - “Current liabilities” as required to be disclosed under the Micro, Smal 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.

4. SEGMENT REPORTING

Business segments:

The primary segment of the Company has been determined on the basis of business segment. The Company 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 include fabric whiteners, fabric detergents, dishwash bar and soaps including ayurvedic soaps. Home Care products include incense sticks, dhoop and mosquito coils, scrubber. Others include Tea and coffee.

Secondary segment:

The Company 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.

5. Contingent Liabilities

As at As at March 31, 2010 March 31, 2009 Contingent liabilities not provided for in respect of: (i) Amount outstanding in respect of guarantees given by the Company to banks 1,389.90 69.68 (ii) Tax matters (a) Disputed sales tax demands - matters under appeal 1,443.20 356.43 (b) Disputed excise duty and service tax demand - matter under appeal 1,050.57 31.56 (iii) Others 15.83 - (iv) Claims against the Company not acknowledged as debt 120.00 120.00

6. 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’). During an earlier year, 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, 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 and an additional benefit of Rs. 478.58 lacs for the current year.

7. 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-discount rate used for evaluation of the present value was 8% per annum. During the year, the Company has made an additional impairment provision of Rs. 46.28 for the cash generating unit.

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

9. During the previous year, the Company has changed its accounting year from July-June to April-March.

Accordingly, the previous period financials are for a period of 9 months from July 01, 2008 to March 31, 2009 and the figures for the current year ended March 31, 2010 are therefore not comparable.

10. The prior period figures have been reclassified where necessary to conform with current year’s presentation.

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