Jyothy Laboratories

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.
 
 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, 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.
 
 4.  SEGMENT REPORTING
 
 Business segments:
 
 The primary segment of the Company has been determined on the basis of
 business segment. The Company is organised 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 organisation structure and the internal reporting system.
 
 Soaps and Detergents includes fabric whiteners, fabric detergents,
 dishwash bar and soaps including ayurvedic soaps. Home Care products
 include incense sticks, dhoop and mosquito coils.
 
 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.
 
 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
 
 Sri Sai Home Care Products (P) Limited
 Associated Industries Consumer Products Pvt. Ltd.
 
 Other Subsidiary
 
 Jyothy Fabricare Services Limited (w.e.f. September 10, 2008)
 
 b) Related party relationships where transactions have taken place
 during the period/year
 
 Joint venture companies
 Balaji Teleproducts Limited
 Continental Speciale (India) Private Limited
 
 Firm/HUF in which the relatives of individual having control are
 partners/ members/ proprietor.
 
 Beena Agencies
 Quilon Trading Co.
 Travancore Trading Corp.
 Sree Guruvayurappan Agencies
 M.P. Agencies
 Tamil Nadu Distributors
 Deepthy Agencies
 Sahyadri Agencies
 Sreehari Stock Suppliers
 Sujatha Agencies
 M.P. Divakaran - H.U.F.
 M.P. Sidharthan - H.U.F.
 Relative of individual having control
 M.P. Sidharthan 
 M.R. Jyothy (Director) 
 M.R. Deepthy Ananth Rao T.  
 M.G. Santhakumari 
 M.P. Divakaran
 
 Enterprises significantly influenced by key management personnel or
 their relatives
 
 Sahyadri Agencies Ltd.
 Jyothy Fabricare Services Limited (up to September 9, 2008)
 
 Key management personnel (includes directors of the Company)
 K. Ullas Kamath                     Deputy Managing Director
 
 6.  Contingent Liabilities
 
                                       As at             As at
                                       March 31, 2009   June 30, 2008
 
 Contingent liabilities not provided 
 for in respect of:
 
 (i) Amount outstanding in respect 
 of guarantees given
 by the Company to banks
 
 (a) as securities provided to NSE 
 for filling of prospectus for its
 Initial Public Offering.                   -             152.84
 
 (b) Others                              69.68             35.78
 
 (ii) Tax matters
 
 (a) Disputed liability in respect 
 of income-tax demands matters under
 appeal                                        -           16.48
 
 (b) Disputed sales tax demands 
 - matters under appeal                   356.43          641.93
 
 (c) Disputed excise duty and 
 service tax demand - matter under
 appeal                                     31.56           31.56
 
 (iii) Claims against the Company 
 not acknowledged as debt                  120.00          147.60
                                           577.67        1,026.19
 
 7. During the previous year ended June 30, 2008, pursuant to the
 completion of the Initial Public Offering, the Company had received an
 amount of Rs. 544.54 and interest of Rs. 88.07 thereon in accordance
 with the terms of Investment Agreement entered with some of the selling
 shareholders.
 
 8. 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.
 
 9.  There are no amounts payable/due to Investor Education and
 Protection Fund.
 
 10.  The shareholders of the Company have, in the Annual General
 Meeting held on November 11, 2008, approved the sub-division of the
 face value of the equity share of Rs. 5 each into equity shares of face
 value of Re. 1 each. Accordingly, the basic and diluted earning per
 share and number of shares disclosed above have been computed for the
 current period and recomputed for the previous year based on the
 revised face value of Re. 1 each.
 
 11.  The Company has changed its accounting year from July-June to
 April-March. Accordingly, the current period financials are for a
 period of 9 months from July 01, 2008 to March 31, 2009 and the figures
 for the previous year ended June 30, 2008 are therefore not comparable.
 
 12.  The prior year figures have been reclassified where necessary to
 conform with current periods presentation.