Notes to Accounts of Jyothy Labs Ltd.

Mar 31, 2025

l. Provisions, Contingent liability and commitment

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects
some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating
to a provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the
time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their
existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the company or where any present obligation cannot be measured in terms of
future outflow of resources or where a reliable estimate of the obligation cannot be made. Provisions are

l. Provisions, Contingent liability and commitment (Contd.)

recognised when the company has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably
estimated.

Provisions are not recognised for future operating losses. Provisions are measured at the present value of
management''s best estimate of the expenditure required to settle the present obligation at the end of the
reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as interest expense. Where there are a number of similar
obligations, the likelihood that an outflow will be required in settlement is determined by considering the class
of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one
item included in the same class of obligations may be small. A contingent asset is disclosed, where an inflow of
economic benefits is probable. An entity shall not recognise a contingent asset unless the recovery is virtually
certain.

Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

(i) estimated amount of contracts remaining to be executed on capital account and not provided for;

(ii) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the
opinion of management.

Other commitments related to sales/procurements made in the normal course of business are not disclosed to
avoid excessive details.

m. Retirement and other employee benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no
obligation, other than the contribution payable to the provident fund. The Company recognizes contribution
payable to the provident fund scheme as an expense, when an employee renders the related service. If the
contribution payable to the scheme for service received before the balance sheet date exceeds the contribution
already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution
already paid. If the contribution already paid exceeds the contribution due for services received before the
balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for
example, a decrease in future payment or a cash refund.

The Company operates a defined benefit gratuity plan in India, The cost of providing benefits under the defined
benefit plan is determined at the period end by an independent actuary using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses, are recognised immediately in the balance sheet
with a corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company
recognises the following changes in the net defined benefit obligation as an expense in the statement of profit
and loss:

• Service costs comprising current service costs, past-service costs, gains and losses on curtailments and
non- routine settlements; and

• Net interest expense or income

m. Retirement and other employee benefits (Contd.)

Short-term employee benefits

Liabilities for wages and salaries including non-monetary benefits that are expected to be settled wholly within
twelve months after the end of the period in which the employees render the related service are classified as
short term employee benefits and are recognized as an expense in the Statement of Profit and Loss as the
related service is provided. A liability is recognised for the amount expected to be paid if the company has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee
and the obligation can be estimated reliably.

Other Long-term employee benefits

The liabilities for earned leaves are not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service. They are therefore measured as the present value of
expected future payments to be made in respect of services provided by the employees upto the end of the
reporting period using the projected unit credit method based on actuarial valuation.

Re-measurement are recognised in profit or loss in the period in which they arise including actuarial gains and
losses.

n. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the
financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the
date that the Company commits to purchase or sell the asset. However, trade receivables that do not contain a
significant financing component are measured at transaction price.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories -

1 Debt instruments at amortised cost

2 Debt instruments at fair value through other comprehensive income (FVTOCI)

3 Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

4 Equity instruments measured at fair value through other comprehensive income (FVTOCI)

The Company does not have any financial assets falling under category 2 and 4 above.

Debt instruments at amortised cost

A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is

n. Financial instruments (Contd.)

calculated by taking into account any discoun The EIR amortisation is included in finance income in the profit
or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies
to trade and other receivables.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect
to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL.

However, such election is allowed only if doing so reduces or eliminates a measurement or recognition
inconsistency (referred to as ''accounting mismatch''). The Company has not designated any debt instrument
as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes
recognized in the P&L.

Equity investments

Investment in subsidiaries are carried at cost less accumulated impairment losses, if any.

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for
trading classified as at FVTPL and are measured at fair value with all changes recognised in the profit or loss. For
all other equity instruments, the Company may make an irrevocable election to present in other comprehensive
income subsequent changes in the fair value. The Company makes such election on an instrument- by¬
instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on
sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets)
is primarily derecognised (i.e. removed from the Company''s balance sheet) when :

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ''pass-through''
arrangement; and either

(a) The Company has transferred substantially all the risks and rewards of the asset, or

(b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s
continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that reflects the rights and obligations that the Company
has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Company could
be required to repay.

n. Financial instruments (Contd.)

Impairment of financial assets

I n accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and
recognition of impairment loss.

Loss allowances for trade receivable are always measured at an amount equal to life time ECL.

Life time expected credit losses are the expected credit losses that result from all possible default events over
the expected life of a financial instruments

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the
basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable
significant increases in credit risk to be identified on a timely basis.

I nvestment in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication
of impairment exists, the carrying amount of the investment is assessed and written down immediately to its
recoverable amount. On disposal of investments in subsidiaries and associates, the difference between net
disposal proceeds and the carrying amounts are recognised in the Statement of Profit and Loss.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified as measured at amortised cost or FVTPL. Financial liabilities at FVTPL are
measured at fair value and net gains and losses, including any interest expense, are recognised in profit or
loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below :

Loans and borrowings

This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or
loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.

This category generally applies to borrowings.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as
a liability at fair value, adjusted for Subsequently, the liability is measured at the higher of the amount of
loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less
cumulative amortisation.

The Company does not have any financial liabilities at fair value through profit or loss.

n. Financial instruments (Contd.)

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit or loss.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities.
For financial assets which are debt instruments, a reclassification is made only if there is a change in the business
model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s
senior management determines which are significant to the Company''s operations. Such changes are evident
to external parties. A change in the business model occurs when the Company either begins or ceases to
perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the
reclassification prospectively from the reclassification date which is the first day of the or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is
a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.

o. Trade Receivables

Trade receivables are recognised initially at transaction price and subsequently measured at cost less provision
made for doubtful trade receivables as per expected credit loss method over the life of the asset depending
on the customer ageing, customer category, specific credit circumstances and the historical experience of the
Company.

p. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

q. Cash dividend to equity holders of the Company

The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent when
the distribution is authorised and the distribution is no longer at the discretion of the Company, a corresponding
amount is recognised directly in equity.

r. Earnings Per Share:

(i) Basic earnings per share:

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the company

• by the weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the year and excluding treasury shares.

r. Earnings Per Share: (Contd.)

(ii) Diluted earnings per share:

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account:

• the after income tax effect of interest and other financing costs associated with dilutive potential
equity shares, and

• the weighted average number of additional equity shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.

2.3 Recent Indian Accounting Standards (Ind AS)

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31,
2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to
sale and leaseback transactions, applicable to the Company w.e.f. April 1, 2024. The Company has reviewed the
new pronouncements and based on its evaluation has determined that it does not have any significant impact
in its financial statements.

IMPAIRMENT

Goodwill is tested for impairment annually as at March 31st. No impairment charges were identified as at March 31,
2025.

Goodwill of '' 10,038 lacs relates to the acquisition of erstwhile business of Henkel India Limited. For the purpose of
impairment testing, the Company considers this as a CGU and compares the recoverable amount of CGU with the
carrying value.

Further, an amount of '' 250 lacs relates to the acquisition of Fabric Care segment and has been entirely allocated to
this reportable segment.

Goodwill of ''236 lacs relates to the merger of laundry services segment and has been entirely allocated to this
segment.

Impairment assessment was done by comparing carrying value vs recoverable amount. Recoverable amount is value
in use or realisable value whichever is higher. Value in use is calculated basis Discounted Cash Flow (DCF) Method.

NOTE 3d - GOODWILL AND OTHER INTANGIBLE ASSETS (Contd.)

For DCF, following key assumptions were considered while performing impairment testing :

Terminal value growth rate : 5% (2024 : 5%)

Growth rate : 1% - 20% (2024 : 1% - 20%)

Weighted Average Cost of Capital % (WACC) (Discount rate before tax) : 13% (2024 : 13%)

The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to
review and consider annual performances, before applying a fixed terminal value growth rate to the final year cash
flows. The growth rates used to estimate future performance (revenue, cost of services, expenses etc) are based on
the estimates after considering past performance and after considering financial budgets/forecasts.

The recoverable amounts of the above CGU''s have been assessed using a value-in-use model. Value in use is generally
calculated as the net present value of the projected pre-tax cash flows plus a terminal value of the cash generating
unit to which the goodwill is allocated. Initially a pre-tax discount rate is applied to calculate the net present value
of the pre-tax cash flows.

The Company has performed sensitivity analysis around the base assumptions and have concluded that no reasonably
possible change in key assumptions would result in the recoverable amount of CGU to be less than the carrying value.

NOTE 13 - SHARE CAPITAL (Contd.)

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of '' 1 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. 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.

During the year ended March 31, 2025, the Company has issued 5,867 equity shares of face value of '' 1 each,
upon exercise of stock options granted under the Company''s Employees Stock Unit Plan - 2023 (RSU 2023/
Plan) upon exercise of options. Consequent to this allotment, the paid-up Equity Share Capital of the Company
stands Increased to 36,72,14,511 equity shares of face value of '' 1 each i.e. '' 3,672 lacs.

These defined benefit plan exposed to actuarial risk, such as longevity risk, currency risk, interest rate risk and
market risk.

Fund is Managed by LIC as per Insurance Regulatory and Development Authority guidelines. The plan assets
of the defined benefit plan have been primarily invested in insurer managed funds and the asset allocation for
plan assets is determined based on the investment criteria prescribed under the relevant regulations applicable
to pension funds and the insurer managers. The insurers'' investment are well diversified and also provide for
guaranteed interest rates arrangements.

(H) Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate,
expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably
possible changes of the assumptions occurring at the end of the reporting period, while holding all other
assumptions constant.

Terms and conditions of transactions with related parties

Transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and
outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been
no guarantees provided or received for any related party receivables or payables.

NOTE 33 - LEASES

a) In case of assets taken on lease

The Company has lease contracts for leasehold land and building used in its operations.

The Company also has certain leases of machinery with lease terms of 12 months or less and leases of office
equipment with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition
exemptions for these leases.

Carrying amounts of right-of-use assets recognised and the movements during the period:

Refer note : 3c

The claims against the Company comprise of pending litigations / proceedings pertaining to demands raised
by Income tax, Excise and service tax, Custom, Sales tax / VAT tax and other authorities / bodies. The Company
has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are
required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does
not expect the outcome of these proceedings to have a materially adverse effect on its profitability and financial
position.

It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above
pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions
pending with various forums or authorities.

The Company does not expect any reimbursements in respect of the above contingent liabilities. The above
disclosure does not cover matters where the exposure has been assessed to be remote.

NOTE 36 - EARNING PER SHARE (?)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by
the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average
number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would
be issued on conversion of all the dilutive potential Equity shares into Equity shares.

NOTE 37 - SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company''s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future
periods.

a) Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements,
which have the most significant effect on the amounts recognised in the financial statements:

Balance with government authorities and protest payment

The Company has significant receivable from government authorities in respect of payment made under
protest in earlier years towards VAT matters. The Company has received favourable orders from the Honourable
Supreme Court / High Court in these matters and accordingly Company believes that all the amounts are fully
recoverable.

Taxes

Refer Note 28 (d)

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are described below. The Company based its assumptions and estimates on
parameters available when the financial statements were prepared. Existing circumstances and assumptions
about future developments, however, may change due to market changes or circumstances arising that are
beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

NOTE 37 - SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (Contd.)

Impairment of non-financial assets and Goodwill

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal
calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar
assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation
is based on a Discounted cash flow (DCF) model. The cash flows are derived from the budget and do not
include restructuring activities that the Company is not yet committed to or significant future investments
that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the
discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for
extrapolation purposes.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques.
The inputs for these valuations are taken from observable sources where possible, but where this is not feasible,
a degree of judgement is required in establishing fair values. Judgements include considerations of various
inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgements about these factors
could affect the reported fair value of financial instruments.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other long term leave benefits and the present value of the
gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation
and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables . Those mortality tables tend to change only
at interval in response to demographic changes. Future salary increases and gratuity increases are based on
expected future inflation rates.

Taxes

Deferred tax assets and liability are recognised for deductible temperary differeance for which there is probability
of utilisation against future taxable profit. The Company uess judgement to determine the amount of deferred
tax liability /assets that can be recognised, based upon the likely timing and level of future taxable profit and
business developments.

Further, the Company has recognised Minimum Alternate tax Credit (MAT) which can utilised for a period of 15
years from the assessment year to which it relates to. Based on future projections of taxable profit and MAT, the
Company has assessed that the entire MAT credit can be utilised.

The management assessed that fair value of cash and cash equivalents, Bank balances other than cash and cash
equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their
carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates
and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the
expected credit losses of these receivables.

NOTE 40 - FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit
risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s
risk management framework. The Company has constituted a core Management Committee, which is responsible
for developing and monitoring the Company''s risk management policies. The Company''s risk management policies
are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and
controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The
key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial
liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet
its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended
March 31, 2025 and March 31, 2024. Cash flow from operating activities provides the funds to service the
financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it
has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated,
over and above the amount required for working capital management and other operational requirements, is
retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term
deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns
on investments while ensuring sufficient liquidity to meet its liabilities.

For long term borrowings, the Company also focuses on maintaining / improving its credit ratings to ensure
that appropriate financing options are available as and when required.

NOTE 40 - FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Contd.)

B. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises two types of risk: currency risk and other price risk.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company is not exposed to significant foreign currency risk as at the
respective reporting dates.

Price risk

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises
due to uncertainties about the future market values of these investments.

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables) and other financial assets including bank balances. Bank balances are maintained with banks
with high credit rating.

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures
and control relating to customer credit risk management. An impairment analysis is performed at each reporting
date on an individual basis for major trade receivables. (Note 11)

Other financial assets

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with
the Company''s policy. Investments of surplus funds are made only in highly marketable debt instruments with
appropriate maturities to optimise the cash return on instruments while ensuring sufficient liquidity to meet
its liabilities. The Company maximum exposure to credit risk as at March 31, 2025 and March 31, 2024 is the
carrying value of each class of financial assets.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities
in the same geographical region, or have economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic, political or other conditions. Concentrations
indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

NOTE 40 - FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Contd.)

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific
guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are
controlled and managed accordingly.

Refer Note 42( d )

NOTE 41 - CAPITAL MANAGEMENT

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company''s capital management is
to maximise the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise
returns to shareholders. The capital structure of the Company is based on management''s judgement of its strategic
and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Company monitors capital using a gearing ratio, which is net debt divided by total equity plus net debt which is
calculated as borrowing less cash and cash equivalent, other bank balances and mutual funds investments.

d. Revenue from one customer which contributed more than 10% of company''s total revenue during the year
ended March 31, 2025 amounted to ''39,387 lacs (2024 - ''35,118 lacs) arising from sales in various segments.

e. Revenue from sale of goods is recognised at a point in time, when control of the products being sold is transferred
to our customer and when there are no longer any unfulfilled obligations. The Performance Obligations in our
contracts are fulfilled at the time of dispatch or delivery depending on terms with customers

NOTE 43

There are no significant subsequent events that would require adjustments or disclosures in the financial statements
as on the balance sheet date.

NOTE 44

The Board of Directors, at its meeting held on March 25, 2025, had approved the sale of the Company''s entire equity
stake in Jyothy Kallol Bangladesh Limited (''JKBL'' or ''the Subsidiary'') to Kallol Enterprise Limited (''KEL'' or ''the Buyer''),
for an aggregate consideration of '' 210 Lacs. This sale of investment has resulted into a loss of '' 370 Lacs and the
said loss is shown under "Exceptional Items" in the Standalone statement of profit and loss.

JKBL ceased to be a subsidiary of the Company from March 25, 2025.

(b) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments
under the Income Tax Act, 1961, that has not been recorded in the books of account.

(c) Utilisation of borrowings availed from banks

There are no borrowings availed by the Company from banks and financials institutions during the year.

(d) Details of benami property held

No proceedings have been initiated on or are pending against the company for holding benami property under
the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(e) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.

(f) Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

(g) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous
year.

(h) Utilisation of borrowed funds and share premium

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary
shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has
not received any fund from any party(s) (Funding Party) with the understanding that the company shall whether,
directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company
(Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) Valuation of PP&E, Intangible asset and Investment property

The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets or both during the current or revious year.

(j) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the
statutory period.

(k) The quarterly returns or statements filed by the Company with banks or financial institutions are in
agreement with the books of account of the Company.

(l) Information with regards to other matters as required by Schedule III of Companies Act, 2013 are either
NIL or Not applicable to the Company.

The Board of Director''s and Shareholders of the Company had approved the grant Employee Stock Units Plan 2023
("RSU Plan 2023") on June 9, 2023 and July 25, 2023 respectively, in accordance with the terms and conditions of the
Jyothy Labs Employees "RSU Plan 2023".

NOTE 47

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the
company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules
for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are
under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules
are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code
becomes effective and the related rules to determine the financial impact are published.

Signatures to Notes 1 to 47

As per our report of even date

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Jyothy Labs Limited

Firm''s Registration No: 101248W/W-100022 CIN: L24240MH1992PLC128651

Vikas R Kasat M. R. Jyothy

Partner Chairperson and Managing Director

Membership No: 105317 DIN: 00571828

Shreyas Trivedi Pawan Agarwal

Company Secretary Chief Financial Officer

Membership No: A12739

Mumbai Mumbai

Date: May 12, 2025 Date: May 12, 2025

---

Mar 31, 2024

IMPAIRMENT

Goodwill is tested for impairment annually as at March 31st. No impairment charges were identified as at March 31, 2024.

Goodwill of '' 10,038 lacs relates to the acquisition of erstwhile business of Henkel India Limited consisting of multiple brands. For the purpose of impairment testing, the Company considers each brand as a separate CGU and compares the recoverable amount of each CGU with the carrying value of the respective CGU. Further, an amount of '' 250 lacs relates to the acquisition of Fabric Care segment and has been entirely allocated to this reportable segment. Goodwill of ''236 lacs relates to the merger of laundry services segment and has been entirely allocated to this segment.

Impairment assessment was done by comparing carrying value vs fair value. Fair value is value in use or realisable value whichever is higher. Value in use is calculated basis Discounted Cash Flow (DCF) Method.

For DCF, following key assumptions were considered while performing impairment testing:

Terminal value growth rate: 5% (2023: 5%)

Growth rate: 1% - 20% (2023: 1% - 15%)

Weighted Average Cost of Capital % (WACC) (Discount rate after tax): 13% (2023: 13%)

The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to review and consider annual performances, before applying a fixed terminal value growth rate to the final year cash flows. The growth rates used to estimate future performance (revenue, cost of services, expenses etc) are based on the estimates after considering past performance and after considering financial budgets/forecasts.

The recoverable amounts of the above CGU''s have been assessed using a value-in-use model. Value in use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the cash generating unit to which the goodwill is allocated. Initially a post-tax discount rate is applied to calculate the net present value of the post-tax cash flows.

The Company has performed sensitivity analysis around the base assumptions and have concluded that no reasonable possible change in key assumptions would result in the recoverable amount of CGU to be less than the carrying value.

The above balance of trade receivable includes balance receivable from related party. (Note 32)

Trade receivable are non interest bearing and are generally on advance term or for a credit term of 15-60 days.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person, nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

For terms and conditions relating to related party receivables,(Note 32)

The Company''s exposure to credit and currency risk, and loss allowance related to trade receivables are disclosed in Note 40.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Re.1 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. 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.

During the year the Company has received orders of ''15,616 lacs under Section 147 read with Section 143(3) of the Income Tax Act, 1961 from AY 2016-2017 to AY 2022-2023. These demand notices are due to computational errors and recurring issues in which the Company has received favorable orders from the Hon''ble Income Tax Appellate Tribunal (ITAT) during earlier years. The Company has filed an application for rectification of the computational errors and an appeal against the said demands. The Company does not foresee any material impact on its financials consequent to the said orders.

LVOllJklMl GRATUITY_

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 Ceiling limit of gratuity is '' 20 lacs. The scheme is funded with Life Insurance Corporation of India (LIC).

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.

These defined benefit plan exposed to actuarial risk, such as longevity risk, currency risk, interest rate risk and market risk.

Fund is Managed by LIC as per Insurance Regulatory and Development Authority guidelines. The plan assets of the defined benefit plan have been primarily invested in insurer managed funds and the asset allocation for plan assets is determined based on the investment criteria prescribed under the relevant regulations applicable to pension funds and the insurer managers. The insurers'' investment are well diversified and also provide for guaranteed interest rates arrangements.

(H) Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

(I) Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

(J) Effect of Plan on Entity''s Future Cash Flows a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to meet the liabilities on account of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

LNOTEI29NH1 superannuation_

The Company Contributed '' 12 lacs and '' 14 lacs to the superannuation plan during the years ended March 31, 2024 and March 31, 2023, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

IMOTEI29MI(B provident fund and other funds_

The Company Contributed '' 1,532 lacs and '' 1,371 lacs to the employee provident fund and other funds during the years ended March 31, 2024 and March 31, 2023, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

INOTEI3M SEGMENT REPORTING_

The Company has presented segment information in the consolidated financial statements which are presented in the same annual report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in this standalone financial statements.

Terms and conditions of transactions with related parties

Transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

LVOTdfcm LEASES_

a In case of assets taken on lease

The Company has lease contracts for leasehold land and building used in its operations.

The Company also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases.

Carrying amounts of right-of-use assets recognised and the movements during the period:

Refer note: 3c

c Total cash outflow

The Company has a total cash outflow (including short term and low value assets) for leases of '' 2,662 lacs in 2023-24 (2022-23 - '' 2,525 lacs). The Company also had non cash additions to right to use assets and lease liabilities of '' 2,445 lacs in 2023-24 (2022-23 - '' 2,158 lacs).

d Lease commitments for leases accounted as short term lease and low value assets.

The company is committed to short term lease of '' 197 lacs (2023 - '' 179 lacs) and lower value assets '' Nil lacs (2023 - '' Nil lacs).

| COMMITMENTS AND CONTINGENCIES
A) Capital Commitments (Net of Advances)
Particulars	Year ended March 31, 2024	Year ended March 31, 2023
Estimated amount of contracts remaining to be executed on capital account and not provided for	490	585
Other Commitments (Refer note 33d)	197	179
	687	764
B) Contingent Liabilities In respect of the following, the Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required:
Particulars	Year ended March 31, 2024	Year ended March 31, 2023
Claims against the Company not acknowledge as debt:
(I) Tax matters
(a) Disputed sales tax demands - matters under appeal	682	1,445
(b) Disputed excise duty and service tax demand - matter under appeal	4	481
(c) Disputed income tax demand - matter under appeal	279	279

Company believes that all these matters have a strong possibility of being dismissed in favour of the Company and accordingly no provisions has been considered necessary.

The above disclosure does not cover matters where the exposure has been assessed to be remote.

The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

INfflUEEM earning per share ('')_

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Balance with Government Authorities and Protest Payment

The Company has significant receivable from government authorities in respect of payment made under protest in earlier years towards VAT matters. The Company has received favourable orders from the Honourable Supreme Court / High Court in these matters and accordingly Company believes that all the amounts are fully recoverable.

Taxes

Refer Note 28 (d)

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets, Investment in subsidiaries and Goodwill

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted cash flow (DCF) model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other long term leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Further, the Company has recognised Minimum Alternate tax Credit (MAT) which can utilised for a period of 15 years from the assessment year to which it relates to. Based on future projections of taxable profit and MAT, the Company has assessed that the entire MAT credit can be utilised.

The management assessed that fair value of cash and cash equivalents, Bank balances other than cash and cash equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company has constituted a core Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2024 and March 31, 2023. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

For long term borrowings, the Company also focuses on maintaining / improving its credit ratings to ensure that appropriate financing options are available as and when required.

In addition, the Company maintains the following lines of credit.

• '' 50,500 lacs facility that is unsecured and can be drawn down to meet short-term financing needs.

The facility has a yearly maturity that renews automatically at the option of the Company Interest would be payable at a rate of 7 % - 8% (March 31, 2023: 7% - 8%).

The company has cash and cash equivalents or '' 8,434 (Note 12a) and investments in mutual funds '' 19,152 (Note 10).

B. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This risk exist mainly on account of borrowings of the Company. However, all these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is not exposed to significant foreign currency risk as at the respective reporting dates.

Price risk

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other financial assets including bank balances. Bank balances are maintained with banks with high credit rating.

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major trade receivables. (Note 11)

Other financial assets

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with the Company''s policy. Investments of surplus funds are made only in highly marketable debt instruments with appropriate maturities to optimise the cash return on instruments while ensuring sufficient liquidity to meet its liabilities. The Company maximum exposure to credit risk as at March 31, 2024 and March 31, 2023 is the carrying value of each class of financial assets.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Refer Note 42(d)

INOTEEf CAPITAL MANAGEMENT_

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Company monitors capital using a gearing ratio, which is net debt divided by total equity plus net debt which is calculated as borrowing less cash and cash equivalent, other bank balances and mutual funds investments.

d. Revenue from one customer which contributed more than 10% of company''s total revenue amounted to '' 35,118 lacs (2023 - '' 30,244 lacs) arising from sales in various segments.

e. Revenue from sale of goods is recognised on point in time basis, when control of the products being sold is transferred to our customer and when there are no longer any unfulfilled obligations. The Performance Obligations in our contracts are fulfilled at the time of dispatch or delivery depending on terms with customers

There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.

INOTEEEB EXCEPTIONAL ITEM_

During the year ended March 31, 2023 the Company has received a one-time settlement for extinguishing indemnity pertaining to an erstwhile business transaction of '' 1,642 lacs provided earlier which has been written back and an amount of '' 939 lacs has been provided towards litigation settlement under VAT amnesty scheme.

(b) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(c) Utilisation of borrowings availed from banks

There are no borrowings availed by the Company from banks and financials institutions during the year.

(d) Details of benami property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(e) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(f) Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

(g) Compliance with approved scheme(s) of arrangements

The effect of scheme of merger have been accounted in the books of accounts of the Company in accordance with Accounting Standard

(h) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(i) Utilisation of borrowed funds and share premium

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(j) Valuation of PP&E, intangible asset and investment property

The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(k) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(l) The quarterly returns or statements filed by the Company with banks or financial institutions are in agreement with the books of account of the Company.

INOTEEU SHARE-BASED PAYMENTS_

The Board of Director''s and Shareholders of the Company had approved the grant Employee Stock Units Plan 2023 ("RSU Plan 2023") on June 9, 2023 and July 25, 2023 respectively, in accordance with the terms and conditions of the Jyothy Labs Employees "RSU Plan 2023".

During the previous year, the National Company Law Tribunal vide its Order dated March 02, 2023, approved the Scheme of Merger of Jyothy Fabricare Services Limited "JFSL" with the Company with effect from the Appointed date of October 1,2022. The merger has been accounted in accordance with the ''Business combinations of entities under common control'' as described in (Ind AS) 103 "Business Combinations" and accordingly as per approved scheme, the said merger has been accounted retrospectively from April 1, 2021. Pursuant to the above merger, JFSL-JLL(JV) (a partnership firm of Jyothy Fabricare Services Limited and Jyothy Labs Limited) have been also merged with the Company. Accordingly, the financial results of the Company restated from April 1, 2021 to include the financial information of JFSL and JFSL-JLL(JV).

There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

---

Mar 31, 2023

IMPAIRMENT

Goodwill is tested for impairment annually as at March 31st. No impairment charges were identified as at March 31, 2023.

Goodwill of '' 10,037.59 lacs relates to the acquisition of erstwhile business of Henkel India Limited. Based on the purchase price allocation at the time of acquisition, brands were identified and recognised in the books and accordingly goodwill was determined. Since it is not practicable to allocate the goodwill to various reportable segments, the recoverable amount has been determined collectively for all brands acquired and compared with the carrying value of goodwill and brands together. Further, an amount of '' 250.78 lacs relates to the acquisition of Fabric Care segment and has been entirely allocated to this reportable segment.

Goodwill of ''236.78 lacs relates to the merger of ''JFSL'' laundry services segment and has been entirely allocated to this segment. (Note 46)

Impairment assessment was done by comparing carrying value vs fair value. Fair value is value in use or realisable value whichever is higher. Value in use is calculated basis Discounted Cash Flow (DCF) Method.

For DCF, following key assumptions were considered while performing impairment testing : -Terminal value growth rate - 5% -8% (2022 - 5%)

Growth rate - 1% - 15% (2022 - 1% - 15%)

Weighted Average Cost of Capital % (WACC) (Discount rate) - 13% - 16% (2022 - 13%)

The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to review and consider annual performances, before applying a fixed terminal value growth rate to the final year cash flows. The growth rates used to estimate future performance (revenue, cost of goods sold, expenses etc) are based on the conservative estimates after considering past performance.

The recoverable amounts of the above CGU''s have been assessed using a value-in-use model. Value in use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the cash generating unit to which the goodwill is allocated. Initially a post-tax discount rate is applied to calculate the net present value of the post-tax cash flows.

The Company has performed sensitivity analysis around the base assumptions and has concluded that no reasonable change in key assumptions would result in the recoverable amount of the CGU to be less than the carrying value.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person, nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

For terms and conditions relating to related party receivables, refer Note 32.

The Company''s exposure to credit and currency risk, and loss allowance related to trade receivables are disclosed in Note 40.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of ''1 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. 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.

a.The Company had taken secured term loan of ''10,000 lacs at interest which were linked to external bench mark plus spread. The interest rate were in range of 4.00%-8.00% p.a. payable monthly. These loans have been repaid during the year. The terms of the Loan also had quarterly call / put option. These loans were secured by first pari passu charge on the movable fixed assets and negative lien on fixed assets and second pari passu charge on stock and book debts of the Company. The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.

The term loan from bank of '' 7,642.35 lacs taken by JFSL at interest which were linked to bank base rate plus spread. The interest rate were in range of 6.00% - 9.00% p.a. payable half yearly. The loans have been repaid during the year. The Terms of the Loan also had first call/put option after 12 months and then half yearly thereafter. The loan was secured by corporate guarantee given by the Company.

The term loan from bank consists of '' 2,500.49 lacs (2021: ''Nil lacs) taken by JFSL at interest which are linked to bank base rate plus spread. The interest rate are in range of 6.00% - 9.00% p.a. payable half yearly. The loan is repayable after 1 years in March, 2023. The Terms of the Loan also has first call /put option after 12 months and then half yearly thereafter. The loan is secured by corporate guarantee given by the Company.

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 (LIC).

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.

These defined benefit plan exposed to actuarial risk, such as longevity risk, currency risk, interest rate risk and market risk.

Fund is Managed by LIC as per Insurance Regulatory and Development Authority guidelines, category-wise composition of the plan assets is not available.

(H) Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

(I) Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

(J) Effect of Plan on Entity''s Future Cash Flows

a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to meet the liabilities on account of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

INOuJ2JuH SUPERANNUATION_

The Company Contributed '' 14.17 lacs and '' 37.39 lacs to the superannuation plan during the years ended March 31, 2023 and March 31, 2022, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

lNPTEI29f(I51 PROVIDENT FUND AND OTHER FUNDS_

The Company Contributed '' 1,370.45 lacs and ''1,309.67 lacs to the employee provident fund and other funds during the years ended March 31, 2023 and March 31, 2022, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

Terms and conditions of transactions with related parties

The Sales to / purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions and outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

1NBTB3M leases_

a) In case of assets taken on lease

The Company has lease contracts for leasehold land and building used in its operations.

The Company also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases.

Carrying amounts of right-of-use assets recognised and the movements during the period:

Refer note : 3c

c) Total cash outflow

The Company has a total cash outflow (including short term and low value assets) for leases of '' 2,524.73 lacs in 2022-23 (2021-22 - '' 2,433.65 lacs). The Company also had non cash additions to right to use assets and lease liabilities of '' 2,157.85 lacs in 2022-23 (2021-22 - '' 1,361.16 lacs).

d) Lease commitments for leases accounted as short term lease and low value assets.

The company is committed to short term lease of ''178.59 lacs (2022 - ''189.17 lacs) and lower value assets '' Nil lacs (2022 - '' 0.20 lacs).

In case of assets given on lease

The Company has leased out few of its premises on operating lease for part of the year. Lease rent income for the year ended March 31, 2023 was ''5.70 lacs (2022 - ''6.72 lacs).

LNOTEfcH COMMITMENTS AND CONTINGENCIES	'' in Lacs
A) Capital Commitments (Net of Advances)
Particulars	As at March 31, 2023	As at March 31, 2022 (Restated)
Estimated amount of contracts remaining to be executed on capital account
and not provided for	584.66	25.20
Other Commitments (Refer note 33d)	178.59	189.17
	763.25	214.37
B) Contingent Liabilities In respect of the following, the Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required :
Particulars	As at March 31, 2023	As at March 31, 2022 (Restated)
(I) Tax matters
(a) Disputed sales tax demands - matters under appeal	1,445.44	1,435.90
(b) Disputed GST demands - matters under appeal	-	2,235.17
(c) Disputed excise duty and service tax demand - matter under appeal	480.95	2,217.42
(d) Disputed income tax demand - matter under appeal *	278.87	278.87
* 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. Company believes that all these matters have a strong possibility of being dismissed in favour of the Company and accordingly no provisions has been considered necessary. The above disclosure does not cover matters where the exposure has been assessed to be remote.

1NOTJ3J EARNING PER SHARE ('')_

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

The Company does not have any potentially dilutive equity shares and therefore basic and dilutive EPS are the same.

1NOUEUJ SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS_

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Balance with government authorities and protest payment

The Company has significant receivable from government authorities in respect of payment made under protest in earlier years towards VAT matters. The Company has received favourable orders from the Honourable Supreme Court / High Court in this matters and accordingly Company believes that all the amounts are fully recoverable.

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets, Investment in subsidiaries and Goodwill

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted cash flow (DCF) model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other long term leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Further, the Company has recognised Minimum Alternate tax Credit (MAT) which can utilised for a period of 15 years from the assessment year to which it relates to. Based on future projections of taxable profit and MAT, the Company has assessed that the entire MAT credit can be utilised.

The management assessed that fair value of cash and cash equivalents, Bank balances other than cash and cash equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of borrowings and financial guarantee contracts is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The same would be sensitive to a reasonably possible change in the forecast cash flows or the discount rate.

1NOTEEU FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES_

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company has constituted a core Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2023 and March 31, 2022. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

B. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This risk exist mainly on account of borrowings of the Company. However, all these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is not exposed to significant foreign currency risk as at the respective reporting dates.

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other financial assets.

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major trade receivables. (Note 10)

Other financial assets

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with the Company''s policy. Investments of surplus funds are made only in highly marketable debt instruments with appropriate maturities to optimise the cash return on instruments while ensuring sufficient liquidity to meet its liabilities. The Company maximum exposure to credit risk as at March 31, 2023 and March 31, 2022 is the carrying value of each class of financial assets.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

1NQTEEM CAPITAL MANAGEMENT_

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.

INOTEEU EXCEPTIONAL ITEM_

During the current year Company has received a one-time settlement for extinguishing indemnity pertaining to an erstwhile business transaction of '' 1,641.91 lacs provided earlier which has been written back and an amount of '' 938.66 lacs has been provided towards litigation settlement under VAT amnesty scheme.

(b) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(c) Utilisation of borrowings availed from banks

The borrowings obtained by the company from banks have been applied for the purposes for which such loans were taken.

(d) Details of benami property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(e) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(f) Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

(g) Compliance with approved scheme(s) of arrangements

The effect of scheme of merger have been accounted in the books of accounts of the Company in accordance with Accounting Standard (Note 46)

1NOTEEU ADDITIONAL REGULATORY INFORMATION (CONTD.)_

(h) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(i) Utilisation of borrowed funds and share premium

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(j) Valuation of PP&E, intangible asset and investment property

The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(k) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

BNOnEPM scheme of merger_

During the year, the National Company Law Tribunal vide its Order dated March 02, 2023, approved the Scheme of Merger of Jyothy Fabricare Services Limited (JFSL) (a wholly owned subsidiary) with the Company with effect from the Appointed date of October 1, 2022. The merger has been accounted in accordance with the ''Business combinations of entities under common control'' as described in (Ind AS) 103 "Business Combinations" and accordingly as per approved scheme, the said merger has been accounted retrospectively for all periods beginning April 1, 2021. Pursuant to the above merger JFSL-JLL(JV), the partnership firm of Jyothy Fabricare Services Ltd and Jyothy Labs Ltd has also been merged with the Company. Accordingly, the financial statements for the year ended March 31, 2022 have been restated so as to include the financial information of JFSL and JFSL-JLL(JV).

The amalgamation of the JFSL and JFSL-JLL(JV) with the Company would have, inter alia, the following benefits:

(a) Consolidation of business - Standazation and simplification of business process and productivity improvements.

(b) Elimination of a multi layered structure and more clinical utilisation of capital.

(c) Reduction in administrative, compliance and other operational costs and optimal utilisation of variour reserves. As per Appendix C of Ind AS 103:-

a. The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combinations is accounted with effect from April 1 2021.

b. The Company has recorded the asset and liabilities of the Merged Undertaking vested in it pursuant to this Scheme at the respective book values appearing in the books of the Merged Undertaking.

c. The value of investment in the Merged Undertaking in the books of the Company shall be cancelled.

d. No adjustments are made to reflect fair values, or recognise any new assets or liabilities

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

---

Mar 31, 2022

IMPAIRMENT

Goodwill is tested for impairment annually as at March 31st. No impairment charges were identified as at March 31, 2022.

Goodwill of Rs 10,037.59 Lacs relates to the acquisition of erstwhile business of Henkel India Limited. Based on the purchase price allocation at the time of acquisition, brands were identified and recognised in the books and accordingly goodwill was determined. Since it is not practicable to allocate the goodwill to various reportable segments, the recoverable amount has been determined collectively for all brands acquired and compared with the carrying value of goodwill and brands together. Further, an amount of Rs 250.10 Lacs relates to the acquisition of Fabric Care segment and has been entirely allocated to this reportable segment.

Following key assumptions were considered while performing impairment testing : -Terminal value growth rate - 5% (2021 - 5%)

Growth rate - 1% - 15% (2021 - 1% - 15%)

Weighted Average Cost of Capital % (WACC) (Discount rate) - 13% (2021 - 13%)

The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to review and consider annual performances, before applying a fixed terminal value growth rate to the final year cash flows. The growth rates used to estimate future performance (revenue, cost of goods sold, expenses etc) are based on the conservative estimates after considering past performance.

The recoverable amounts of the above CGU''s have been assessed using a value-in-use model. Value in use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the cash generating unit to which the goodwill is allocated. Initially a post-tax discount rate is applied to calculate the net present value of the post-tax cash flows.

The Company has performed sensitivity analysis around the base assumptions and has concluded that no reasonable change in key assumptions would result in the recoverable amount of the CGU to be less than the carrying value.

The above balance of trade receivable includes balance receivable from related party. (Refer note 33)

Trade receivable are non interest bearing and are generally on advance term or for a credit term of 15-60 days.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person, nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

For terms and conditions relating to related party receivables, refer note 33.

The company''s exposure to credit and currency risk, and loss allowance related to trade receivables are disclosed in note 42.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Re.1 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. 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.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

In addition the company had issued 43,91,061 equity shares during the period of five years immediately preceding the reporting date on exercise of option granted under the employee stock option plan (ESOP) wherein part consideration was received in form of employee services.

The Company had taken secured term loan of ''10,000 Lacs at interest which are linked to external bench mark plus spread. The interest rate are in range of 4.00% - 8.00% p.a. payable monthly. These loans are repayable in multiple half yearly instalments every year till February, 2023. The terms of the Loan also has quarterly call/put option. These loans are secured by first pari passu charge on the movable fixed assets and negative lien on fixed assets and second pari passu charge on stock and book debts of the Company.

The quarterly returns or statement of current assets filed by the company with the banks are in agreement with the books of accounts.

INOlldfcMlil GRATUITY_

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 (LIC).

(H) Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

(I) Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset)

(J) Effect of Plan on Entity''s Future Cash Flows

a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to meet the liabilities on account of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

liOlTEfcMIlljl SUPERANNUATION_

The Company Contributed ''37.39 Lacs and ''41.25 Lacs to the superannuation plan during the years ended March 31, 2022 and March 31, 2021, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

INOTEEffiTfll PROVIDENT FUND and other funds_

The Company Contributed ''1256.38 Lacs and ''1081.60 Lacs to the employee provident fund and other funds during the years ended March 31, 2022 and March 31, 2021, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

INOTJ3M SEGMENT REPORTING_

The Company has presented segment information in the consolidated financial statements which are presented in the same annual report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in this standalone financial statements.

Terms and conditions of transactions with related parties

The Sales to / purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions and outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

UMTEfclB LEASES_

a In case of assets taken on lease

The Company has lease contracts for leasehold land and building used in its operations.

The Company also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases.

Carrying amounts of right-of-use assets recognised and the movements during the period:

Refer note : 3c

c Total cash outflow

The Company has a total cash outflow (including short term and low value assets) for leases of '' 2,098.14 Lacs in 2021-22 (2020-21 - ''1,972.84 Lacs). The Company also had non cash additions to right to use assets and lease liabilities of '' 1,054.34 Lacs in 2021-22 (2020-21 - ''1,340.98 Lacs).

d Lease commitments for leases accounted as short term lease and low value assets.

The company is committed to short term lease of ''146.62 Lacs (2021 - ''155.91 Lacs) and lower value assets Rs 0.20 Lacs (2021 - ''0.70 Lacs).

In case of assets given on lease

The Company has leased out few of its premises on operating lease for part of the year. Lease rent income for the year ended March 31, 2022 was ''17.23 Lacs (2021 - ''10.51 Lacs).

INOTJ3M EARNING PER SHARE ('')_

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

INOflEHM SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS_

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Balance with government authorities and protest payment

The Company has significant receivable from government authorities in respect of payment made under protest in earlier years towards VAT matters. The Company has received favourable orders from the Honourable Supreme Court / High Court in this matters and accordingly Company believes that all the amounts are fully recoverable.

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within

liOlTEfc^ SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (CONTD.)

the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets, Investment in subsidiaries and Goodwill

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted cash flow (DCF) model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other long term leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables . Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Further, the Company has recognised Minimum Alternate tax Credit (MAT) which can utilised for a period of 15 years from the assessment year to which it relates to. Based on future projections of taxable profit and MAT, the Company has assessed that the entire MAT credit can be utilised.

The management assessed that fair value of cash and cash equivalents, Bank balances other than cash and cash equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of borrowings and financial guarantee contracts is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The same would be sensitive to a reasonably possible change in the forecast cash flows or the discount rate.

UO1TJU FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES_

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company has constituted a core Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2022 and March 31,2021. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

'' in Lacs

UOITJIM FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)_

B. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This risk exist mainly on account of borrowings of the Company. However, all these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is not exposed to significant foreign currency risk as at the respective reporting dates.

Price risk

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other financial assets.

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major trade receivables. (refer note 5)

Other financial assets

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with the Company''s policy. Investments of surplus funds are made only in highly marketable debt instruments with appropriate maturities to optimise the cash return on instruments while ensuring sufficient liquidity to meet its liabilities. The Company maximum exposure to credit risk as at March 31, 2022 and March 31, 2021 is the carrying value of each class of financial assets.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

IMOTJU CAPITAL MANAGEMENT_

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Company monitors capital using a gearing ratio, which is net debt divided by total equity plus net debt which is calculated as borrowing less cash and cash equivalent, other bank balances and mutual funds investments.

There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.

Details of Investments made are disclosed under Note 4 and details of corporate guarantees given to banks on behalf of other body corporates are disclosed under Note 35(B).

INOJEEIr! ADDITIONAL REGULATORY INFORMATION_

(a) Relationship with struck off company

The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act,1956

(b) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(c) Utilisation of borrowings availed from banks

The borrowings obtained by the company from banks have been applied for the purposes for which such loans were was taken.

(d) Details of benami property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(e) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(f) Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

(g) Compliance with approved scheme(s) of arrangements

The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(h) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(i) Utilisation of borrowed funds and share premium

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

UO1TE4J ADDITIONAL REGULATORY INFORMATION (CONTD.)_

(j) Valuation of PP&E, intangible asset and investment property

The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(k) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

IJOITEW:! EXCEPTIONAL ITEM_

The Company had set up its manufacturing units in Guwahati and Jammu to avail certain fiscal benefits. One of the benefits as per the Notification no. 32/99-CE dated July 8, 1999 availed by the Company included excise duty refunds wherein the Company was entitled to hundred percent refund of excise duty to the extent of duty paid through Personal Ledger Account (''PLA''). Subsequently, the Government issued notifications no.17/2008-CE and 19/2008-CE dated March 27, 2008 restricting the refund to a maximum percentage specified in the notification based on value added method. The said notification was challenged by the Company and the matter was ruled in the favour of the Company by the High Court of Guwahati and the High court of Jammu and Kashmir in earlier years. Accordingly, the amount due from the government based on the earlier Notification no 32/99-CE was accrued in the respective years in the books of account. This was Subsequently challenged and the matter was ruled in favour of the revenue authorities by the Honorable Supreme Court thereby restricting the refund to the specified percentage. The review petition filed by the Company was rejected by the Honorable Supreme Court during the quarter ended March 31, 2021. Accordingly, the Company has charged off ''2,350.41 Lacs recognized as excise duty refund receivable in the previous years as an exceptional item.

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

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Mar 31, 2019

1 CORPORATE INFORMATION

Jyothy Laboratories Limited (‘the Company’) is a public company domiciled in India. Its shares are listed on two stock exchanges in India. The registered office of the company is located at Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri (E) Mumbai. The Company is principally engaged in manufacturing and marketing of fabric care, dishwashing, personal care and household insecticides products. These Financial statements were authorised for issue in accordance with a resolution passed by the Board of Directors on May 07, 2019.

@ Freehold land and building includes asset which are not transferred in the name of the company amounting to Rs. 678.01 (2018 - Rs.643.38) in Gross block.

These are held in the name of the entities which have been merged with the company in earlier years.

# Includes Rs.374.31 (2018 Rs.374.31) represented by unquoted fully paid shares at cost in various co-operative societies.

a. The Company has not capitalised any borrowing cost in the current and previous year.

b. Refer note16 for details of property, plant and equipment pledged as security for loans obtained.

c. Refer note 35 for details of assets given on lease.

2 A CAPITAL WORK IN PROGRESS

Capital work in progress as at March 31, 2019 is Rs.1,415.85 (March 31, 2018 Rs.1,527.40).

For contractual commitment with respect to property, plant and equipment refer note 35 B.

IMPAIRMENT

Goodwill is tested for impairment annually as at March 31st. No impairment charges were identified as at March 31, 2019.

Goodwill of Rs. 10,037.59 relates to the acquisition of erstwhile business of Henkel India Limited. Based on the purchase price allocation at the time of acquisition, brands were identified and recognised in the books and accordingly goodwill was determined. Since it is not practicable to allocate the goodwill to various reportable segments, the recoverable amount has been determined collectively for all brands acquired and compared with the carrying value of goodwill and brands together. Further, an amount of Rs. 250.10 pertains to Fabric Care segment and has been entirely allocated to this reportable segment.

Following key assumptions were considered while performing impairment testing : -

Terminal value growth rate - 5%

Growth rate - 9% - 17%

Weighted Average Cost of Capital % (WACC) (Discount rate) - 13%

The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to review and consider annual performances, before applying a fixed terminal value growth rate to the final year cash flows. The growth rates used to estimate future performance (revenue, cost of goods sold, expenses etc) are based on the conservative estimates from past performance.

The recoverable amounts of the above CGU’s have been assessed using a value-in-use model. Value in use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the cash generating unit to which the goodwill is allocated. Initially a post-tax discount rate is applied to calculate the net present value of the post-tax cash flows.

We have performed sensitivity analysis around the base assumptions and have concluded that no reasonable change in key assumptions would cause the recoverable amount of CGU to be less than the carrying value.

# Optionally convertible preference shares are considered as financial asset valued through profit or loss as the contractual terms of the asset do not give rise on specific dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

* Investment at fair value through profit or loss reflect investment in unquoted equity securities. Since the amount is not material, the fair value disclosure have not been made. For others, Refer Note 41 and 42.

The above balance of trade receivable includes balance receivable from related party.(Refer Note 34)

Trade receivable are non interest bearing and are generally on advance term or for a term of 15-30 days.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person, nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

For terms and conditions relating to related party receivables, refer Note 34.

The Company’s exposure to credit and currency risk, and loss allowance related to trade receivables are disclose in note 43.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Re 1 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. 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.

Note :

a. Company had issued 4,000 unlisted, non-convertible debentures of Rs. 10 lacs each aggregating to Rs. 40,000 lacs. These debentures carry an interest of 7.2% p.a upto March 31, 2017, 7.5% p.a from April 1, 2017 to November 30, 2017 and 8% p.a from December 1, 2017 to November 9, 2018. 25% of the debenture amount is repaid on February 1,2018 and 25% on February 8, 2018, while the balance 50% is repaid during the year at par. The debenture terms give call option / put option to the issuer / holder, the exercise price being at par. However, these are embedded derivative which are closely related to the host contract and accordingly under IND AS 109, they have not been separately accounted for. These debenture are secured by negative lien on fixed assets of the Company and do not carry any debt covenant.

b. Deferred payment liability represent amount payable under the memorandum of understanding (MOU) entered into with the DRDE/DRDO of the Ministry of Defence, Government of India for transfer of technology for certain products. These are due for payment as per the Agreement.

c. Company had taken secured term loan of Rs. 10,000 lacs at interest at 7.80% and repayable on February 05, 2023. The term loan terms give call option / put option to the issuer / holder and are secured by lien on fixed assets of the Company.

d. Company had taken secured short term loan of Rs. 10,000 lacs at interest at 7.64% and repaid on August 20, 2018. These loan were secured by stock and book debt of the Company.

e. Company had taken secured short term loan of Rs. 7,500 lac at interest at 7.9% p.a. and same was repaid on July 26, 2018. These loan were secured by stock and book debt of the Company.

f. During the year Company has taken secured term loan of Rs. 2,000 lacs at interest at 8.95% and out of which Rs. 100 lac repaid on January 24, 2019 and balance repayable on October 24, 2023. The term loan terms give call option / put option to the issuer / holder and are secured by stock and book debt of the Company.

g. During the year Company has taken secured short term loan of Rs. 7,500 lacs at interest at 8.65% and repayable on May 17, 2019. These loan are secured by stock and book debt of the Company.

h. During the year Company has taken secured term loan of Rs. 2,000 lacs at interest at 8.95% and repayable on October 24, 2023. The term loan terms give call option / put option to the issuer / holder and are secured by stock and book debt of the Company.

* Payable to employees includes balance payable to related party (Refer Note 34).

** Money received from customer on behalf of bank in respect of factored debts.

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

# As the holder of debentures have a put option at the end of 12 months from the date of allotment i.e. December 9, 2016 and on the last day of every calendar month thereafter, the entire amount of debentures have been disclosed as current maturities.

For explanation on the Companies credit risk management processes, refer Note 43 Terms and conditions of the above financial liabilities:

1) Trade payables are non-interest bearing and are normally settled on 07-60 days term.

2) Other payable are non interest bearing and are settled within a year.

3) Interest payable is settled as per the term of the borrowings.

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 (LIC).

These defined benefit plan exposed to acturial risk, such as longerity risk, currency risk, interest rate risk and market risk.

Fund is Managed by LIC as per Insurance Regulatory and Development Authority guidelines, category-wise composition of the plan assets is not available.

(A) Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

(B) Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

(C) Effect of Plan on Entity’s Future Cash Flows a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to meet the liabilities on account of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

3 (ii) Superannuation

The Company Contributed Rs. 39.79 lacs and Rs. 41.73 lacs to the superannuation plan during the years ended March 31 ,2019 and March 31, 2018, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

3.1 (iii) Provident fund and other funds

The Company Contributed Rs. 1,030.47 lacs and Rs. 943.84 lacs to the employee provident fund and other funds during the years ended March 31, 2019 and March 31, 2018, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

The Company has presented segment information in the consolidated financial statements which are presented in the same annual report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ‘Operating Segments’, no disclosures related to segments are presented in this standalone financial statements.

Terms and conditions of transactions with related parties

The Sales to / purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions and outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

4. COMMITMENTS AND CONTINGENCIES

A) Operating Lease

In case of assets taken on lease

The Company has entered into Lease agreements for premises, which expire at various dates. Certain agreements provide for increase in rent. Lease rental expense for the year ended March 31, 2019 was Rs. 1613.45 (2018 - Rs. 1645.72). 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 for part of the year. The Gross carrying amount and accumulated depreciation as at March 31, 2019 is Rs. Nil and Rs. Nil (2018 - Rs. 149.67 and Rs. 27.42) respectively. Lease rent income for the year ended March 31, 2019 was Rs. 11.60 (2018 - Rs. 13.79). There is no escalation clause in the lease agreement and the lease is cancellable. There are no restrictions imposed by lease arrangements.

The Hon’ble Supreme Court of India (“SC”) by their order dated February 28, 2019, in the case of Surya Roshani Limited & others v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal.

In view of the management, the liability on account of this for the period from date of the SC order to 31 March 2019 is not significant. Further, pending decision on the subject review petition and directions from the EPFO, the impact for the past period, if any, is not reliably ascertainable and consequently no effect has been given in the accounts.

Company believes that all these matters have a strong possibility of being dismissed in favour of the Company and accordingly no provisions has been considered necessary.

The above disclosure does not cover matters where the exposure has been assessed to be remote.

5. As per the Notification no. 32/99-CE dated July 8, 1999, the Company was entitled to refund of excise duty in its 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 and the Company has accrued only the specified amount. 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 Rs. Nil (2018 Rs. 95.17) in the current year.

6. EARNING PER SHARE (Rs.)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

7. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Balance with government authorities and protest payment

The Company has significant receivable from government authorities in respect of protest payment made in earlier years towards Vat/Excise duty matters. The Company has received favourable orders from the Honourable Supreme Court / High Court in these matters and accordingly assessed that all the amounts are fully recoverable.

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted cash flow (DCF) model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk , volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other long term leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables . Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 45

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Futher, the Company has recognised Minimum Alternate tax Credit (MAT) which can utilised for a period of 15 years from the assessment year to which it relates to. Based on future projections of taxable profit and MAT, the Company has assessed that the entire MAT credit can be utilised.

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

The management assessed that fair value of cash and cash equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of borrowings and financial guarantee contracts is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The same would be sensitive to a reasonably possible change in the forecast cash flows or the discount rate. There are no unobservable inputs that impact fair value.

There are no financial instruments which require recurring fair value measurements and are classified as Level 3 of the fair value hierarchy.

The Company’s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company’s senior management has the overall responsibility for establishing and governing the Company’s risk management framework. The Company has constituted a core Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2019 and 31st March, 2018. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

* The above disclosure has been made as per the contractual due dates of the borrowings, however, due to put option available to the holder ( Note 16), the same has been presented as current maturity in the financial statements.

B. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This risk exist mainly on account of borrowings of the Company. However, all these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is not exposed to significant foreign currency risk as at the respective reporting dates.

Price risk

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other financial assets.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major trade receivables.

Other financial assets

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with the Company’s policy. Investments of surplus funds are made only in highly marketable debt instruments with appropriate maturities to optimise the cash return on instruments while ensuring sufficient liquidity to meet its liabilities. The Company maximum exposure to credit risk as at March 31, 2019 and March 31, 2018 is the carrying value of each class of financial assets.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

8. CAPITAL MANAGEMENT

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on management’s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

9. SHARE-BASED PAYMENTS

On August 16, 2014 the Remuneration and Compensation Committee of the Board of Directors of the Company approved the Employee Stock Option Scheme 2014 (“ESOS-2014”) for issue of stock options to the key employees and Employee Stock Option Scheme 2014-A (“ESOS- 2014-A”) for issue of stock options to Whole Time Director & CEO of the Company. According to the scheme, whole time Director and CEO and eligible employees selected by the Remuneration and Compensation Committee will be entitled to options from time to time, subject to satisfaction of prescribed vesting conditions. The relevant terms of the grant are as below : -

10. The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made in these financial statements since the requirement does not pertain to financial year ended 31 March 2019

11. PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED / RECLASSIFIED , WHERE NECESSARY, TO CONFORM TO THIS YEAR CLASSIFICATION.

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Mar 31, 2018

V III LOV.J

1 OTHER EQUITY (Continued)

B. Nature and purpose of reserves

(a) Retained earnings - Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(b) Capital reserves - During amalgamation, the excess of net assets taken, over the cost of consideration paid is treated as capital reserve.

(c) Securities premium - The amount received in excess of face value of the equity shares is recognized in Securities Premium Reserve. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium reserve

(d) Debenture redemption reserve (DRR) - The money set aside can be used for payment of interest or redeemable debentures maturing during the year.

(e) General reserves -The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

(f) Employee stock option outstanding - The fair value of the equity settled share based payment transactions with employees is recognized in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding Account.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognized as as liability ( including DDT thereon ) as at March 31.

* The Board of Directors recommended issue of Bonus shares to the members of the Company by capitalization of the securities premium in the ratio of 1 (One) bonus equity shares of '' 1 each fully paid for every 1 (one) existing equity shares of '' 1 fully paid up, held by the members as on record date to be fixed later for the same. This Bonus issue is subject to approval of the shareholders. The proposed dividend, as disclosed above, includes dividend on such bonus shares.

Note :

1) Company had issued 4,000 unlisted, non-convertible debentures of Rs, 10 lacs each aggregating to Rs, 40,000 lacs. These debentures carry an interest of 7.2% p.a upto March 31, 2017, 7.5% p.a from April 1, 2017 to November 30, 2017 and 8% p.a from December 1, 2017 to November 9, 2018. 25% of the debenture amount is repaid on February 1,2018 and 25% on February 8, 2018, while the balance 50% is repayable at par at the end of 23rd month from the date of allotment. The debenture terms give call option / put option to the issuer / holder, the exercise price being at par. However, these are embedded derivative which are closely related to the host contract and accordingly under IND AS 109, they have not been separately accounted for. These debenture are secured by negative lien on fixed assets of the Company and do not carry any debt covenant.

2) Deferred payment liability represent amount payable under the memorandum of understanding (MOU) entered into with the DRDE/DRDO of the Ministry of Defence, Government of India for transfer of technology for certain products. These are due for payment as per the Agreement.

3) During the previous year, Company has taken commercial paper at 6.75% and same is repaid on June 28, 2017.

4) During the year, Company taken secured term loan of Rs, 10,000 lacs at interest at 7.64% and repayable on February 05, 2023. The term loan terms give call option / put option to the issuer / holder and are secured by negative lien on fixed assets of the Company.

5) During the year, Company taken secured short term loan of Rs, 10,000 lacs at interest at 7.64% and repayable on August 20, 2018. These loan are secured by stock and book debt of the Company.

6) During the year, Company taken unsecured short term loan of Rs, 7,500 lacs at interest at 7.9% p.a. and same is repayable on July 26, 2018.

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

# Refer Note 16 above. As the holder of debentures have a put option at the end of 12 months from the date of allotment i.e. December 9, 2016 and on the last day of every calendar month thereafter, the entire amount of debentures have been disclosed as current maturities.

For explanation on the Companies credit risk management processes, refer Note 44 Terms and conditions of the above financial liabilities:

1) Trade payables are non-interest bearing and are normally settled on 30-60 days term.

2) Other payable are non interest bearing and are settled within a year.

3) Interest payable is settled as per the term of the borrowings.

These defined benefit plan exposed to acturial risk, such as longerity risk, currency risk, interest rate risk and market risk.

Fund is Managed by LIC as per Insurance Regulatory and Development Authority guidelines, category-wise composition of the plan assets is not available.

(H) Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

(I) Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

(J) Effect of Plan on Entity''s Future Cash Flows a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to meet the liabilities on account of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

2. GRATUITY (Continued) 31(II) SUPERANNUATION

The Company Contributed Rs,41.73 lacs and Rs,31.93 lacs to the superannuation plan during the years ended March 31, 2018 and March 31, 2017, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

3.(III) PROVIDENT FUND

The Company Contributed Rs,924.83 lacs and Rs,806.30 lacs to the employee provident fund during the years ended March 31, 2018 and March 31, 2017, respectively and same has been recognized in the Statement of Profit and Loss under the head employee benefit expense.

4. SEGMENT REPORTING

The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in this standalone financial statements.

5. RELATED PARTY DISCLOSURES

a) Parties where control exists Individual having control

M.P. Ramachandran Chairman and Managing Director

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

Other Subsidiaries

Jyothy Kallol Bangladesh Limited

Four Seasons Drycleaning Company Private Limited

Snoways Laundrers & Drycleaners Private Limited

Jyothy Fabricare Services Limited

M/S JFSL-JLL (JV) - Partnership firm

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

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.

Jaya Trust w.e.f. September 22, 2016

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 upto May 23, 2016

Rajnikant Sabnavis Chief Operating Officer w.e.f. May 23, 2016

Bipin R. Shah Independent Director upto August 11, 2016

Nilesh B. Mehta Independent Director

R. Lakshminarayanan Independent Director

K. P. Padmakumar Independent Director

M.R. Jyothy Director

Additional related party as per Companies Act, 2013.

M.L. Bansal Company Secretary up to May 23, 2016

Shreyas Trivedi Company Secretary from May 23, 2016

* As the future liabilities for gratuity is provided on an actuarial basis for the Company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.

# In the earlier years, the Company had applied to the Central Government for approval of grant of ESOP''s to a whole time director and CEO as the value of the ESOP''s granted were expected to be in excess of the eligible limits under the Companies Act, as applicable. During financial year 2016-17, certain ESOP''s have been exercised by the Director and as managerial remuneration includes the perquisite value of ESOP''s in the year in which it is exercised, the overall value of Managerial Remuneration for the year ended March 31, 2017 is in excess of the limits to the extent of ''783.64. The Company has received an approval from the Central Government on May 1, 2017 for an amount that can be paid to the director for the three years ending May 2017, however, the said ESOP''s have not been considered separately. The Company has made a representation seeking approval of grant of ESOP''s. On January 3, 2018, the provisions of the Section 197 of the Companies Act, 2013 is amended and accordingly all the pending applications with the Central Government shall abate, and the Company shall obtain the approval in accordance with the revised provision of the Act, within a period of one year and pay remuneration to managerial personnel. Pending notification of the said amendment and necessary approval, the shares issued to the managerial personnel are held by him in trust.

Investment in subsidiaries (Note 4)

Terms and conditions of transactions with related parties

The Sales to / purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions and outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

The fair value of option granted is estimated at the grant date using Black Scholes valuation model, taking into account the term and conditions upon which the share options were granted.

The following table illustrates the number and movements in share options during the year,

V 11 1 LUV.J

6. SHARE-BASED PAYMENTS (Continued)

For option exercised during the period, Weighted Average Exercise price of ''1 (2017- Re - 1) and for weighted average share price at the exercise date was ''393.75 per share (2017 - '' 324.38).

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

The following table list inputs to the model used for the year ended March 31, 2018 and March 31, 2017 :

The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

Expenses recognized in statement of profit and loss.

For details on employee benefit expenses refer Note 26

7. EARNING PER SHARE O

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

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 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 and the Company has accrued only the specified amount. The Company has received a favorable order from the High Court of Guwahati & Jammu and Kashmir in earlier years. Accordingly, the Company has accrued an additional benefit of Rs, 95.17 (2017 Rs, 958.87) in the current year.

9. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgments

In the process of applying the Company''s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:

Balance with government authorities and protest payment

The Company has significant receivable from government authorities in respect of protest payment made in earlier years towards Vat/Excise duty matters. The Company has received favorable orders from the Honorable Supreme Court / High Court in these matters and accordingly assessed that all the amounts are fully recoverable.

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing

10. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (Continued)

circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgments about these factors could affect the reported fair value of financial instruments.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other long term leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 37

Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Further, the Company has recognized Minimum Alternate tax Credit (MAT) which can utilized for a period of 15 years from the assessment year to which it relates to. Based on future projections of taxable profit and MAT, the Company has assessed that the entire MAT credit can be utilized.

The management assessed that fair value of cash and cash equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of borrowings and financial guarantee contracts is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The same would be sensitive to a reasonably possible change in the forecast cash flows or the discount rate. There are no unobservable inputs that impact fair value.

There are no financial instruments which require recurring fair value measurements and are classified as Level 3 of the fair value hierarchy.

11. FAIR VALUES HIERARCHY

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities:

There have been no transfers between Level 1 and Level 2 during the period. Significant unobservable inputs used in level 3 fair values:

12.FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company has constituted a core Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2018 and 31st March, 2017. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

For long term borrowings, the Company also focuses on maintaining / improving its credit ratings to ensure that appropriate refinancing options are available on the respective due dates

* The above disclosure has been made as per the contractual due dates of the borrowings, however, due to put option available to the holder ( Note 16), the same has been presented as current maturity in the financial statements.

13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

B. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This risk exist mainly on account of borrowings of the Company. However, all these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is not exposed to significant foreign currency risk as at the respective reporting dates.

Price risk

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other financial assets.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major trade receivables.

Other financial assets

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with the Company''s policy. Investments of surplus funds are made only in highly marketable debt instruments with appropriate maturities to optimize the cash return on instruments while ensuring sufficient liquidity to meet its liabilities. The Company maximum exposure to credit risk as at March 31, 2018 and March 31, 2017 is the carrying value of each class of financial assets.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

14. CAPITAL MANAGEMENT

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimize returns to shareholders. The capital structure of the Company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt is calculated as borrowing less cash and cash equivalent, other bank balances and mutual funds investments.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

15. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying Ind AS 115, ''Revenue from Contracts with Customers''. The Standard is applicable to the Company with effect from 1st April, 2018.

a) Ind AS 115 Revenue from Contracts with Customers

b) Ind AS 21 The Effect of Changes in Foreign Exchange Rates

a) Ind AS 115 Revenue from Contracts with Customers :

Revenue from Contracts with Customers Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 Revenue, Ind AS 11 Construction Contracts when it becomes effective. The core principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

- Step 1: Identify the contract(s) with a customer

- Step 2: Identify the performance obligation in contract

- Step 3: Determine the transaction price

- Step 4: Allocate the transaction price to the performance obligations in the contract

- Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e. when ''control'' of the goods or services underlying the particular performance obligation is transferred to the customer. The Company is evaluating the impact of Ind AS 115 on its financial statement.

16. RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

b) Ind AS 21 The Effect of Changes in Foreign Exchange Rates :

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statement

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Mar 31, 2017

1. IMPAIRMENT

The goodwill is tested for impairment annually as at March 31st and accordingly no impairment charges were identified for FY 2016-17 (Nil for FY2015-16).

Goodwill of Rs.10,037.59 relates to the acquisition of erstwhile business of Henkel India Limited. Based on the purchase price allocation done at the time of acquisition, brands were identified and recognized in the books and accordingly goodwill was determined. Since it is not practicable to allocate the goodwill to various reportable segments, the recoverable amount has been determined collectively for all brands acquired and compared with the carrying value of goodwill plus brands. Further an amount of Rs.250.10 pertains to Fabric Care segment and has been entirely allocated to this reportable segment.

Following key assumptions were considered while performing impairment testing : -Terminal Value growth rate - 5%

Weighted Average Cost of Capital % (WACC) (Discount rate) - 13%

The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to review and consider annual performances, before applying a fixed terminal value growth rate to the final year cash flows. The growth rates used to estimate future performance (revenue, cost of goods sold, expenses etc) are based on the conservative estimates from past performance.

We have performed sensitivity analysis around the base assumptions and have concluded that no reasonable change in key assumptions would cause the recoverable amount of CGU to be less than the carrying value.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Re 1 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.

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.

1 4,000 Zero coupon non convertible redeemable debentures of Rs.10,00,000 each has been repaid in current year.

2) During the year Company has issued 4,000 unlisted, non-convertible debentures of '' 10 lacs each aggregating to Rs. 40,000 lacs. These debentures carry a interest of 7.2% p.a upto March 31, 2017, 7.5% p.a from April 1, 2017 to November 30, 2017 and 8% p.a from December 1, 2017 to November 9, 2018. 50% of the debenture amount is repayable at par at the end of the 14th month from the date of allotment, while the balance 50% is repayable at par at the end of 23rd month from the date of allotment. The debenture terms give call option / put option to the issuer / holder, the exercise price being at par. However, these are embedded derivative which are closely related to the host contract and accordingly under IND AS 109, they have not been separately accounted for. These debenture are secured by negative lien on fixed assets of the Company and do not carry any debt covenant.

3) Deferred payment liability represent amount payable under the memorandum of understanding (MOU) entered into with the DRDE/DRDO of the Ministry of Defense, Government of India for transfer of technology for certain products. These are due for payment as per the Agreement.

4) Commercial paper carries interest rate of 6.75 % and is repayable on June 28, 2017.

Terms and conditions of the above financial liabilities:

5) Trade payables are non-interest bearing and are normally settled on 30-60 days term

6) Other payable are non interest bearing and are settled within a year.

7) Interest payable is settled as per the term of the borrowings.

Based on the “management approach" as defined in Ind AS 108 - ''Operating Segments'', the Chief Operating Decision Maker evaluates the Company''s performance and allocate resources based on an analysis of various performance indicators by business segments and segment information is presented accordingly as follows :

8. Dishwashing includes dish wash scrubber and scrubber steel, dish wash bar, liquid and powder.

9. Fabric Care includes fabric whitener, fabric enhancer, bar soap and detergent powder.

10. Household Insecticides includes mosquito repellent coil, liquid and card and insect repellents.

11. Personal Care includes body soap, face wash, toothpaste, deodorants, talcum powder, after shave and moisturizer.

12. Others includes incense sticks and floor shine.

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.

Goodwill identifiable to operating segments are included in segment assets. However, where goodwill relates to multiple operating segments and it is not practicable to allocate between segments, it is included in unallocated assets. Finance cost, finance income and fair value gains and loss on financial assets are not allocated to any operating segments as the Company reviews the treasury and finance cost at the group level. Accordingly, borrowings are also considered in unallocated liabilities.

Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to segments as they are also managed on group basis.

Capital expenditure consists of addition of property, plant and equipment and intangible assets.

Transfer pricing between operating segments are on as arm length basis in a manner similar to transaction with third parties.

Intersegment revenue are eliminated upon consolidation and reflected in the ''adjustment and eliminations'' colomn. All other adjustment and eliminations are part of detailed reconciliation presented further below.

13. Related Party Disclosures

14. 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.

Other Subsidiaries

Jyothy Kallol Bangladesh Limited

Four Seasons Drycleaning Company Private Limited

Snoways Laundrers & Drycleaners Private Limited

Jyothy Fabricare Services Limited

M/S JFSL-JLL (JV) - Partnership firm

15. Related party relationships where transactions have taken place during the year

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 upto May 23, 2016

Rajnikant Sabnavis Chief Operating Officer w.e.f. May 23, 2016

Bipin R. Shah Independent Director upto August 11, 2016

Nilesh B. Mehta Independent Director

R. Lakshminarayanan Independent Director K. P. Padmakumar Independent Director

M.R. Jyothy Director

Additional related party as per Companies Act, 2013.

M.L. Bansal Company Secretary upto May 23, 2016

Shreyas Trivedi Company Secretary from May 23, 2016

16. Commitments and Contingencies

17. Operating Lease

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, 2017 was Rs.1,418.94 (2016 – Rs.1,278.25). 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, 2017 is Rs. 178.06 and Rs. 22.83 (2016 - Rs. 178.06 and Rs. 11.44) respectively. Lease rent income for the year ended March 31, 2017 was '' 5.37 (2016 - Rs. 8.52). There is no escalation clause in the lease agreement and the lease is cancellable in nature. There are no restrictions imposed by lease arrangements.

On August 16, 2014 the Remuneration and Compensation Committee of the Board of Directors of the Company approved the Employee Stock Option Scheme 2014 (“ESOS-2014") for issue of stock options to the key employees and Employee Stock Option Scheme 2014-A (“ESOS- 2014-A") for issue of stock options to Whole Time Director & CEO of the Company. According to the scheme, whole time Director and CEO and eligible employees selected by the Remuneration and Compensation Committee will be entitled to options from time to time, subject to satisfaction of prescribed vesting conditions. The relevant terms of the grant are as below: -

18. During the year, the National Company Law Tribunal vide its Order dated March 01, 2017, approved the Scheme of Merger of Jyothy Consumer Products Marketing Limited (JCPML) with the Company with effect from the Appointed date of April 1, 2016. The merger has been accounted in accordance with the ''Business combinations of entities under common control'' as described in (Ind AS) 103 “Business Combinations" and accordingly as per approved scheme, the said merger has been accounted retrospectively for all periods presented including as at April 1, 2015. Accordingly, the financial statements for the year ended March 31, 2016 have also been restated so as to include the financial information of JCPML.

As per Appendix C of Ind AS 103:-

19. All assets and liabilities of JCPML as at April 1, 2015 have been taken over at their existing book values.

20. The debit balance of reserves of Rs. 43,667.85 as appearing in the financial statements of JCPML as on April 1,2015 is aggregated with the corresponding balance appearing in the financial statements of the Company.

21. The difference between the amount recorded as investment in JCPML in the books of the Company and the amount of share capital of JCPML, being a surplus has been transferred to capital reserve (Rs. 994.00) as per the scheme.

22. 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. The Board of Directors have vide their meeting held on March 31,2017 extended this option up to October 31, 2017. The transaction will take place at the prevailing market price on the relevant date and accordingly the fair value of option is considered to be nil.

23. Significant accounting judgments, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

24. Judgments

In the process of applying the Company''s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:

Balance with government authorities and protest payment

The Company has significant receivable from government authorities in respect of protest payment made in earlier years towards Vat/Excise duty matters. The Company has received favourable orders from the Hounorable Supreme Court / High Court in these matters and accordingly assessed that all the amounts are fully recoverable.

25. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of various inputs including liquidity risk, credit risk , volatility etc. Changes in assumptions/judgments about these factors could affect the reported fair value of financial instruments.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 38 Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Further, the Company has recognized Minimum Alternate Credit (MAT) which can utilized for a period of 15 years from the assessment year to which it relates to. Based on future projections of taxable profit and MAT, the Company has assessed that the entire MAT credit can be utilized. Also refer footnote number 10 in Note 50.

The management assessed that fair value of cash and cash equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of borrowings and financial guarantee contracts is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The same would be sensitive to a reasonably possible change in the forecast cash flows or the discount rate. There are no unobservable inputs that impact fair value.

There are no financial instruments which require recurring fair value measurements and are classified as Level 3 of the fair value hierarchy.

26. Fair values hierarchy

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities: Quantitative disclosures fair value measurement hierarchy for assets :

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company has constituted a core Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyze the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

27. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2017 and 31st March, 2016. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

For long term borrowings, the Company also focuses on maintaining / improving its credit ratings to ensure that appropriate refinancing options are available on the respective due dates

28. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This risk exist mainly on account of borrowings of the Company. However, all these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is not exposed to significant foreign currency risk as at the respective reporting dates.

Price risk

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

29. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other financial assets.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major trade receivables.

Other financial assets

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with the Company''s policy. Investments of surplus funds are made only in highly marketable debt instruments with appropriate maturities to optimize the cash return on instruments while ensuring sufficient liquidity to meet its liabilities.

30. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

31. Capital management

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimize returns to shareholders. The capital structure of the Company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) and amended thereafter. Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2015, the Company date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

- Ind AS 103 Business Combinations has not been applied to acquisitions, which are considered businesses under Ind AS that occurred before 1 April 2015. The carrying amounts of assets and liabilities in accordance with previous GAAP are considered as their deemed cost at the date of acquisition. After the date of the acquisition, measurements is in accordance with Ind AS. The carrying amount of goodwill in the opening Ind AS balance sheet is its carrying amount in accordance with the previous GAAP.

- The Company has elected to continue with the carrying value for all of its property, plant and equipment including intangibles as recognized in its Indian GAAP financials as deemed cost at the transition date.

- Ind AS 102 Share based payment has not been applied to equity instruments in share based payment transactions that vested before April 1, 2015.

- Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition. There were no embedded leases.

- Investment in subsidiaries that are subsequently measured at cost have been measured at the deemed cost (Fair value) / for one subsidiary and Indian GAAP carring amount at all other Subsidiaries.

Estimates

The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies).

Footnotes to the reconciliation of equity as at April 1, 2015 and March 31, 2016 and profit and loss for the year ended March 31, 2016 is as given below:-

32. FVTPL Financial assets

Under Indian GAAP, the Company accounted for investments in mutual funds as investments measured at quoted cost or market value whichever is lower. Under IND AS, investment in mutual funds are considered as financial assets fair valued through profit and loss account. At the date of transition to IND AS, difference between the fair value and Indian GAAP carrying amount has been adjusted to retained earnings. Further, the difference between the fair value and the Indian GAAP carrying amount as at March 31, 2016 has been considered in the profit and loss account.

33. Zero Coupon Non convertible debentures

The Company had issued zero coupon non-convertible debentures redeemable at premium, which were outstanding as on April 1, 2015. Under Indian GAAP, the Company had as per the provisions of the erstwhile Companies Act, 1956 debited the securities premium account with the entire redemption premium and credited the related liability. Under IND AS, these non-convertible redeemable debentures are measured at amortized cost. The Company has retrospectively applied the effective interest method (EIM) and arrived at amortized cost at the date of transition. Accordingly, in terms of the FAQ issued by the ICAI on the said matter, the excess of the carrying value of the financial liability as per Indian GAAP over the amortized cost amount arrived at by using EIM as per IND AS 109 as on the transition date has been reversed by crediting the securities premium account with corresponding debit to the liability account which was credited earlier. For the year ended March 31, 2016, Company has recognized finance cost of Rs. 5,160.38 in the profit and loss.

34. Financial guarantee

The Company had issued financial guarantee on behalf of its subsidiary for the borrowings taken by the latter. As on the date of transition to IND AS, the Company has recognized financial guarantee obligation at fair value of Rs. 82.09 with corresponding debit to investment in the subsidiary. For the year ended March 31, 2016, the change in the financial guarantee obligation based on amortized cost has been taken to the profit or loss.

35. Proposed dividend

Under Indian GAAP, proposed dividends including dividend distribution tax are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under IND AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of Rs. 8,715.02 for the year ended on March 31, 2015 recorded for dividend has been derecognized against retained earnings on April 1, 2015. The proposed dividend for the year ended on March 31, 2016 of Rs. 2,179.92 recognized under Indian GAAP was reduced from other payables with a corresponding impact in the retained earnings.

36. Defined benefit obligation

Both under Indian GAAP and IND AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under IND AS, pre measurements comprising of actuarial gains and losses on the net defined benefit liability and the return on plan assets are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus, the employee benefits expense is reduced by Rs. 93.33 and is recognized in other comprehensive income (net of tax of Rs. 33.64) for the year ended March 31, 2016.

37. Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. IND AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of IND AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to different temporary differences on which deferred tax adjustments have been recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. For the year ended March 31, 2016, the change in the deferred tax based on the above approach has been considered in the profit or loss.

38. Sale of goods

Under Indian GAAP, sale of goods was presented net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus, sale of goods under Ind AS has increased by Rs. 5,965.53 with a corresponding increase in excise duty expense.

Further, under Indian GAAP, certain sale promotion expenses amounting was recognized as other expenses. Under Ind AS, revenue shall be measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity. Thus, other expenses has decreased by Rs. 8,360.94 with corresponding increase in purchase of traded goods of Rs. 3,738.21 and decrease in sale of goods by Rs. 4,622.66.

39. Share-based payments

Under Indian GAAP, the Company recognized the intrinsic value of the employee stock option plans as an expense. Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognized over the vesting period. Accordingly, an expense of Rs. 122.43 has been reversed in Statement of profit and loss for the year ended 31 March 2016 and adjusted in separate component of equity.

40. Investment subsidy

The Company had received certain capital grants in the nature of promoter''s contribution which was credited to investment subsidy reserve under Indian GAAP. Under Ind AS, this will be considered as a capital grant. However, as the corresponding assets to which the grant pertain to have been fully depreciated, the balance in the investment subsidy on the transition date has been transferred to retained earnings.

41. Investment in subsidiaries and optionally convertible redeemable preference share

Under Indian GAAP, investment in subsidiaries are measured at cost less any allowance for diminution, other than temporary. Under Ind AS, the Company has on the transition date, in respect of one subsidiary measured the same at its fair value and considered this as the deemed cost as per Ind AS 101. Accordingly, the value of the investments has been reduced by Rs. 8,147.96 to reflect the fair values and the corresponding impact has been considered in retained earnings. The Company has not recognized any deferred tax assets on the transition date in the absence of reasonable certainty that long term capital gains will be available against which such deferred tax assets can be utilized.

Further, the Company had invested in optionally convertible redeemable preference shares of a subsidiary. Under Indian GAAP, the preference shares were classified as investment in subsidiaries and carried at cost. Under Ind AS, they have been considered as financial assets fair valued through profit and loss account and accordingly a reduction in value of this investments amounting to Rs. 2,314.00 has been considered on the transition date. The Company has not recognized any deferred tax assets on the transition date in the absence of reasonable certainty that long term capital gains will be available against which such deferred tax assets can be utilized. For the year ended March 31, 2016, the Company has recognized a fair value gain of Rs. 400.

42. Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

43. Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

44. Goodwill amortization

Based on the business combination exemption availed by the Company on the transition date, the Indian GAAP carrying amount of goodwill has been used in the opening Ind AS balance sheet. Under Ind-AS, goodwill is only tested for impairment annually and not amortized. Accordingly, the goodwill amortized in Indian GAAP for the year ended March 31, 2016 has been reversed.

45. Loans (Deposits)

Under Indian GAAP, deposits given under lease are recorded at transaction value, whereas under Ind AS, these are financial assets to be measured at amortized cost at the effective interest rate and the difference is recognized as deferred lease asset. The carrying amount of the asset increases in each period to reflect the passage of time which is recognized as interest income. The carrying amount of the deferred lease asset reduces in each period by way of transfer to lease expense on a straight-line basis over the contract period. This led to a decrease in asset on the date of transition and increase in deferred lease asset.

46. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

47. Previous GAAP figures have been reclassified / regrouped wherever necessary to confirm with financial statements prepared under IND AS.

48. Recent accounting pronouncements

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ''Statement of cash flows'' and Ind AS 102, ''Share-based payment.'' The amendments are applicable to the Company from April 1, 2017.

49. Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment and the effect on the financial statements.

50. Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of tax deductible at source. The Company does not have any cash settled award as at March 31,2017.

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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.

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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.

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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.

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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.

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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.

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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.