ANNUAL REPORT 2012

JYOTHY CONSUMER PRODUCTS LIMITED

[Formerly known as Henkel India Limited]

BOARD OF DIRECTORS Mr. M.P. RAMACHANDRAN Mr. K. ULLAS KAMATH Ms. M.R. JYOTHY Mr. NILESH B. MEHTA Mr. K.P. PADMAKUMAR Mr. BIPIN R. SHAH Mr. R. LAKSHMINARAYANAN CHAIRMAN DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR

REGISTERED OFFICE UJALA HouSe, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai - 400 059

AUDITORS M/s. CNGSN & Associates Chartered Accountants Chennai - 600 017.

REGISTRARS & SHARE TRANSFER AGENTS Cameo Corporate Services Ltd., Subramaniam Building, V Floor, 1, Club House Road, Chennai - 600 002. Tel : (044) 2846 0390 (5 Lines) Fax : (044) 2846 0129

CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. 9. Notice......................................................................................................................3-6 Directors Report. .................................................................................................7-10 Corporate Governance Report.........................................................................11-20 Management Discussion and Analysis Report...............................................21-22 Auditors Report. ................................................................................................23-25 Balance Sheet.........................................................................................................26 Statement of Profit and Loss................................................................................. 27 Statement of Cash Flow ...................................................................................46-47 Auditors Report Consolidated Financial Statements......................................... 48

10. Consolidated Financial Statements.................................................................49-66 11. Consolidated Statement of Cash Flow ...........................................................67-68

NOTICE FOR THE NINETY-FIRST ANNUAL GENERAL MEETING

Notice is hereby given that the 91st Annual General Meeting of Jyothy Consumer Products Limited (Formerly Henkel India Limited) will be held at M. C. Ghia Hall, Indian Textile Accessories & Machinery Manufacturers Association, Bhogilal Hargovindas Building, 4th Floor, 18/20, K. Dubhash Marg, Kala Ghoda, Mumbai 400 001 on Thursday, the 22nd day of November, 2012 at 12.00 p.m. to transact the following business: ORDINARY BUSINESS: 1. 2. 3. 4. 5. To consider and adopt the audited Balance Sheet as at 31st March, 2012, Statement of Profit and Loss for the year ended on that date and the Reports of Auditors and Directors thereon. To appoint a Director in place of Mr. M. P. Ramachandran, who retires by rotation and being eligible offers himself for re-appointment. To appoint a Director in place of Mr. K. Ullas Kamath, who retires by rotation and being eligible offers himself for re-appointment. To appoint a Director in place of Ms. M. R. Jyothy, who retires by rotation and being eligible offers herself for re-appointment. To consider and if thought fit, to pass with or without modifications, the following resolution as an ORDINARY RESOLUTION: RESOLVED THAT M/s. CNGSN & Associates, Chartered Accountants (Firm Registration No. 004915S), Chennai, the retiring auditors and M/s. S. R. Batliboi & Associates, Chartered Accountants (Firm Registration No. 101049W) Mumbai, be and are hereby appointed as Statutory Auditors of the Company to hold office, from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting and the Board of Directors be and are hereby authorized to fix the terms of appointment including the remuneration of the Statutory Auditors, as they deem fit. By order of the Board For Jyothy Consumer Products Ltd. (Formerly known as Henkel India Ltd.) M. P. Ramachandran Chairman

Regd. Off: UJALA HOUSE, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai 400 059 Date :15th September, 2012 Place: Mumbai Notes: 1.

A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING MAY APPOINT A PROXY TO ATTEND, AND, ON A POLL, VOTE INSTEAD OF HIMSELF / HERSELF. A PROXY NEED NOT BE A MEMBER. Proxies in order to be effective must be received at the Registered Office of the Company not less than 48 hours before the commencement of Annual General Meeting. The documents referred to in the Notice and Explanatory Statement are open for inspection at the Registered Office of the Company between 11.00 a.m. to 1.00 p.m. on all days, except Saturdays, Sundays and holidays, up to the date of the Annual General Meeting. The Book Closure Date for the purpose of Annual General Meeting will be from 23rd October, 2012 to 31st October, 2012 (both days inclusive).

2.

3.

4.

Members holding shares in physical form and desirous of making a nomination in respect of their shareholdings in the Company, as permitted under Section 109A of the Companies Act, 1956, may fill Form 2B (in duplicate) and send the same to the office of the Registrars and Share Transfer Agents of the Company. In case of shares held in dematerialized form, the nomination / change in nomination should be lodged with their DPs. Members are requested to correspond with Registrars and Share Transfer Agents of the Company for all matters relating to shareholding in the Company. Corporate Members are requested to send to the Companys Registrars and Share Transfer Agents, a duly certified copy of the Board Resolution authorizing their representative to attend and vote at the AGM. Members are requested to hand over the enclosed Attendance Slip, duly filled in and signed in accordance with their specimen signature(s) registered with the Company for admission to the AGM hall. Members who hold shares in dematerialized form are requested to fill in their client ID and DP ID Numbers for identification. Members desiring any information on the accounts are requested to write to the Company at least seven days in advance of the AGM. Green Initiative Ministry of Corporate Affairs (MCA) has launched a Green Initiative in the Corporate Governance by allowing paperless compliances by the companies. MCA has issued circular nos. 17/2011 dated 21.04.2011 & 18/2011 dated 29.04.2011 stating that the service of a notice / documents by a company to its shareholders can now be made through electronic mode. In view of the above, the Company proposes to henceforth send Annual Report (Audited Financial Statements, Directors Report, Auditors Report, etc.,) and documents such as the Notice of the Annual General Meeting, to the shareholders in Electronic Form to the email address registered with their Depository Participants. Shareholders are requested to furnish their e-mail ids to enable the Company forward all the requisite information in electronic mode. In case of shareholders holding shares in demat form, the email ids of the shareholders, registered with the DP and made available to the Company, shall be the registered email IDs unless communication is received to the contrary. Shareholders requiring a printed copy of the Annual Report, should inform the details like name, PAN, DP ID and Client ID through an email at henkel@cameoindia.com. or a letter to Registrars and Share Transfer Agents of the Company.

5. 6. 7.

8. 9.

10. As required under Clause 49 of the Listing Agreement, executed with the stock exchanges, the details of Directors retiring by rotation and seeking re-appointment at the ensuing AGM are as below: Item No.2 of the Notice: Re-appointment of Mr.M. P. Ramachandran Age Qualification Expertise Date of appointment : 66 years : Post Graduate degree in Financial Management : Industrialist : 31/5/2011

Mr. M. P. Ramachandran is the Chairman and Managing Director of Jyothy Laboratories Limited (JLL). He holds a postgraduate degree in Financial Management from University of Mumbai and began his career as an accountant in 1971 in Mumbai. He set up Jyothy Laboratories business in 1983. He has over 38 years of experience in sales, production and general management. In 2003 and 2004, he was nominated by The Economics Times for Entrepreneur of the Year Award.

He is holding Directorship in the following Indian companies. This list does not include Directorship in Companies excluded as per Section 278 of the Companies Act, 1956. Sl. No. Company 1. Jyothy Laboratories Limited Position Chairman & Managing Director Committee Membership Chairman Member Shareholders Grievance Committee -

2. 3. 4.

Jyothy Fabricare Services Limited Jyothy Consumer Products Marketing Limited

Chairman & Managing Director Audit Committee Chairman

Sivasakthi Ayurvedic Research Centre Limited Director

Item No.3 of the Notice: Re-appointment of Mr.K.Ullas Kamath Age : 49 years Chartered Accountant, Company Secretary Bachelors Degree in Law & Masters Degree in Commerce Finance, Sales & General Management 31/5/2011 Qualification : Expertise Date of appointment : :

Mr. K. Ullas Kamath is the Joint Managing Director of Jyothy Laboratories Limited (JLL). He is a qualified Chartered Accountant and Company Secretary and holds a bachelors degree in Law and masters degree in Commerce. He has also participated in the Advanced Management Programme at Wharton Business School and at Harvard Business School. His responsibilities include business development, new projects, sales, financial management and supervision of day-to-day operations. He has been on Board of JLL since 1997. Prior to that, he was practicing as a chartered accountant. The Institute of Chartered Accountants of India gave him an Award CA BUSINESS ACHIEVER SME at a function held on January 25, 2009. He is holding Directorship in the following Indian companies. This list does not include Directorship in Companies excluded as per Section 278 of the Companies Act, 1956. Sl. No. 1. Company Jyothy Laboratories Limited Position Joint Managing Director Committee Membership Chairman Member Audit Committee & Shareholders Grievance Committee Audit Committee -

2. 3.

Jyothy Fabricare Services Limited Jyothy Consumer Products Marketing Limited

Director Director

Item No.4 of the Notice: Re-appointment of Ms. M. R. Jyothy Age : 34 years Bachelors Degree in Commerce MBA from Wellingkers Management Institute Management, Marketing 31/5/2011

Qualification : Expertise : Date of appointment :

Ms. M. R. Jyothy is Whole-Time Director of Jyothy Laboratories Limited. She holds a bachelors degree in Commerce from the University of Mumbai and an MBA from Wellingkers Management Institute, Mumbai. She has undertaken a course in Family Managed Business Administration from S. P. Jain Institute of Management, Mumbai. She has recently completed Owner / President Management Programme from Harvard University. She has been on the Board of the Company since October 2005 and handles sales administration, marketing and brand communication. She is holding Directorship in the following Indian companies. This list does not include Directorship in Companies excluded as per Section 278 of the Companies Act, 1956. Sl. No. Company 1. 2. 3. 4. Jyothy Laboratories Limited Jyothy Fabricare Services Limited Sahyadri Agencies Limited Jyothy Consumer Products Marketing Limited Position Executive Director Director Director Director Committee Membership Chairman Member

DIRECTORS REPORT
To, The Shareholders Your Directors have pleasure in presenting the 91st Annual Report of the Company together with the Audited Accounts for the 15 months financial period ended 31st March, 2012. FINANCIALS The financial period under review commenced from 1st January, 2011 and ended on 31st March, 2012 comprised of 15 months while the financial year 2010 comprised of 12 months commencing from 1st January, 2010 to 31st December, 2010. The closure of the financial year was deferred to match the financial year of Jyothy Laboratories Ltd. (JLL), holding company of the Company. The Company sold its Hair-Care Division SKP in the month of April, 2011 (before the take-over of the Company by JLL). Therefore, the figures for the previous financial year 2010 included the Sales generated under Hair-Care Division whereas, except for the period upto April, 2011, the figures for period under review does not include the figures in respect of Hair-Care Division. Hence, the absolute figures for financial performance for the year under review are not comparable with that of previous financial year. The Financial highlights of the period under review are as below: Stand alone: (` in lac) From 1st January, From 1st January, 2011 to 31st 2010 to 31st March, 2012 December, 2010 (15 Months) (12 Months) 44,800.85 45,017.15 163.05 381.25 3,146.74 2,412.22 1,958.16 1,696.14 780.01 603.39 408.57 112.69 2,534.77 (9,000.00) -

Particulars Sales (net) Other Income EBITDA Financial Expense Depreciation and Amortizations Profit before tax and Exceptional items Exceptional items - Sale of Division - Bad debt written off

Profit Before Tax Tax expense - Current tax - MAT credit entitlement Profit After Tax Balance in Profit and Loss Account as per last Balance Sheet Brought Forward Add: Balance transferred from General Reserve Balance at the end of the period Carried Forward (Profit and Loss Account) Earnings Per Share (Basic and Diluted)

(6,056.66) (6,056.66) 808.49 1,047.38 (4,200.79) (5.20)

112.69 20.28 (20.28) 112.69 695.80 808.49 0.10

Consolidated results (` in lac) Particulars From 1st January, From 1st January, 2011 to 31st 2010 to 31st March, 2012 December, 2010 (15 Months) (12 Months) 52,733.56 53,390.35 2,514.83 (1,748.26) 5,822.61 2,832.61 780.01 603.39 (4,087.79) (5,184.27) 2,534.77 (1,553.02) (5,184.27) (1,553.02) (5,184.27)

Sales (Net) EBITDA Financial Expense Depreciation and Amortisations Loss before Tax and Exceptional items Exceptional items Loss before tax Loss after tax

The Net Sales for the period under review was ` 52,733.56 lacs as against ` 53,390.35 lacs during the previous year 2010. EBITDA margin for the period under review was 4.77% as against negative EBITDA margin of 3.27% in the year 2010. The Company incurred Net Loss after tax of ` 1,553.02 lacs as against ` 5,184.27 lacs during the year 2010. HUMAN RESOURCES During the year under review, the production at the Karaikal factory was affected due to interruptions, labour unrest and shut-down for a period of 61 days which affected the performance of the Company during the respective quarter. Your Company supports the Employees with tools, systems, standards and individualized training programs to create an environment in which individual performance and teamwork can thrive. The Company believes in maintaining cordial relationship with all employees. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO With regard to the requirements of Section 217(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Company has nothing specific to report. Foreign Exchange Earnings and Outgo: (` in lac) Particulars From 1st January, From 1st January, 2011 to 31st 2010 to 31st March, 2012 December, 2010 1,217.29 436.00 2,331.58 3153.91

Foreign exchange earnings Foreign exchange outgo SUBSIDIARY COMPANY

At the end of the Financial year, the Company had 1 (one) subsidiary viz., Henkel Marketing India Ltd. As per General Circular No. 2/2012 dated 8th February, 2011, issued by the Ministry of Corporate Affairs, Govt. of India in terms of provisions of Section 212 of the Companies Act, 1956, the Central Government granted general exemption under Section 212(8) of the said Act from attaching to its Annual Report, the copies of the Balance Sheets, Statements of Profit & Loss, Directors Reports and Auditors Reports and other documents of all its subsidiary companies that are required to be attached under Section 212(1) of the said Act. Accordingly, your Directors have pleasure in attaching the consolidated financial statements prepared in accordance with the Accounting Standard AS-21 on consolidated financial statements, which form part of this Annual Report. These consolidated financial reports provide financial information about your Company and its subsidiaries as a single entity. In view of the same, financial statements of subsidiary are not attached to the financial statements of the Company. A gist of the financial performance of the subsidiary is given in 8

this Annual Report. The annual accounts of the subsidiary are open for inspection by any member and the Company will make available these documents/details upon request by any member of the Company interested in obtaining the same. AUDIT REPORT The Audit Report does not contain any qualification. However it has been observed under point No. vii) of the Report that the Company does not have an adequate Internal Audit commensurate with size and nature of business. After the take-over of the Company by JLL, the Audit Committee reviewed the same and recommended for appointment of Internal Auditors in its meeting held on 9th November, 2011. Accordingly, the Board, on recommendation by the Audit Committee, appointed M/s. Mahajan & Aibara, Chartered Accountants, Mumbai as Internal Auditors of the Company for the financial year 2012-13 in its meeting held on 22nd May, 2012. DIVIDEND For the year under review, your Directors have not recommended dividend due to loss incurred by the Company. PUBLIC DEPOSITS Your Company has not accepted any deposit from the public during the year. DIRECTORS In accordance with the requirements of the Companies Act, 1956, and the Articles of Association of the Company, Mr. M. P. Ramachandran, Mr. K. Ullas Kamath and Ms. M. R. Jyothy, Directors of the Company are due to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment. The Board recommends their re-appointment. DIRECTORS RESPONSIBILITY STATEMENT In compliance with the provisions of Section 217(2AA) of the Companies Act, 1956 (the Act), your Directors confirm that: i) ii) iii) iv) in the preparation of the annual accounts for the 15 months period ended 31st March, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures; accounting policies were adopted and applied consistently and judgments and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit or loss of the Company for the 15 months period ended on that date; proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and the Annual Accounts have been prepared on a `going concern basis.

CORPORATE GOVERNANCE As per Clause-49 of the Listing Agreement with the Stock Exchanges, a section on corporate governance is presented separately and forms part of this Report. PARTICULARS OF EMPLOYEES The particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are attached to this report. AUDITORS M/s. CNGSN & Associates, Chartered Accountants, Chennai, the Statutory Auditors of the Company will retire at the conclusion of ensuing Annual General Meeting and are eligible for re-appointment as Auditors of the Company. It is proposed to jointly appoint M/s. CNGSN & Associates, Chennai, and M/s. S.R. Batliboi & Associates, Chartered Accountants, Mumbai as statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till the conclusion of the subsequent Annual General Meeting to be held in the year 2013. The Company has received eligibility certificate from both the proposed Auditors in terms of Section 224(1B) of the Companies Act, 1956. The Directors recommend the appointment of Statutory Auditors as proposed above.

ACKNOWLEDGEMENT Your Directors take this opportunity to express their gratitude to all the employees for the significant personal efforts and their collective contribution. Your Directors wish to thank the shareholders for their continued support, encouragement and the confidence reposed in the Management. Place : Mumbai Date : 22nd May, 2012 For and on behalf of the Board of Directors HENKEL INDIA LTD M. P. Ramachandran Chairman

PARTICULARS OF EMPLOYEES The information pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, regarding the employees is given below: Name of the employee Designation Qualification Age in years 39 Date of joining 31/03/2009 Experience Gross Previous Employment, Remuneration Designation paid (` in lac) 29.15 Chairman and Managing Director for GSK Consumer Healthcare, Sri Lanka

Mr. Jayant K. Singh Managing Director MBA from up to 31st May, IIM, Lucknow 2011 Notes: 1. 2.

15 years

The remuneration shown above is the monthly remuneration paid upto 31st May, 2011 which included salary, allowances, companys contributions to Provident Fund and other perquisites valued as per Income Tax Rules, 1962. Mr. Singh was also paid a compensation of ` 1.38 crores for breach of contract on mutual consent for terminating the contract of employment without requisite notice.

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CORPORATE GOVERNANCE REPORT

Your Company is committed to pursue growth by adhering to the high standards of Corporate Governance. The key elements of Corporate Governance are transparency, disclosure, supervision, internal controls, risk management, internal and external communications and high standards of safety and product quality. The Company believes that practice of each of these creates the right corporate culture that fulfils the true purpose of the Corporate Governance. 1. companys PHILOSOPHY ON CORPORATE GOVERNANCE The Company endeavors to achieve high level of transparency, integrity and equity in all its operations by implementing best practices for Corporate Governance. Your Company also ensures high disclosure standards through continuous monitoring of its operations. BOARD OF DIRECTORS Composition The Company is managed by the Board of Directors, which formulates strategies, policies, and procedures and reviews its performance periodically. The Board comprises of 7 (seven) Directors (all are Non-executive Directors) of whom 4(four) are Independent Directors. Mr. M. P. Ramachandran, Mr. K. Ullas Kamath, Ms. M.R. Jyothy belong to promoters group of Jyothy Laboratories Ltd, the holding company. The composition of Board of Directors is in compliance with the requirement of the Listing Agreement. The Composition of Board and Attendance of Directors Name Status Attendance in Board Meetings Attendance in last AGM held on 14/9/2011 Yes/No/NA NA NA NA NA NA NA NA NA NA NA NA NA Yes NA NA NA NA NA NA NA NA NA NA NA NA 3 NA NA NA NA NA NA NA NA NA NA NA NA 1(1) Other Directorships held Other Committee Memberships (Chairman) held

2. a.

b.

Held Attended Dr. A. C. Muthiah Mr. Patrick Kaminski Mr. Ben Ho Mr. Thomas Jungmann Dr. A. Besant C. Raj Mr. Sukhendu Ray Mr. Rm. Muthukaruppan Mr. A. Satish Kumar Dr. Uddesh Kohli Non-executive Chairman % Non- executive Director % Non- executive Director % Non-executive Director % Independent Director % Independent Director % Independent Director ^ Non-executive Director % Independent Director % 7 7 7 7 7 7 7 7 7 7 7 7 7 2 1 2 2 3 3 2 2 1 1 3 2 4

Prof. Debashis Chatterjee Independent Director % Mr. V. Selvaraj Mr. Jayant K. Singh Mr. M. P. Ramachandran Independent Director % Managing Director % Non-Executive Director $

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Name

Status

Attendance in Board Meetings

Attendance in last AGM held on 14/9/2011 Yes/No/NA Yes Yes No No No Yes

Other Directorships held

Other Committee Memberships (Chairman) held 2 5(1) 3(1) 2(1)

Held Attended Mr. K. Ullas Kamath Ms. M. R. Jyothy Mr. Bipin R. Shah Mr. K. P. Padmakumar Mr. Nilesh B. Mehta Non-executive Director $ Non-exectutive Director $ Independent Director $ Independent Director $ Independent Director $ 7 7 7 7 7 7 4 4 4 2 3 2

2 3 4 5 1 8

Mr. R. Lakshminarayanan Independent Director $ NA Not Applicable $ Appointed as Additional Directors w.e.f 31/5/11 c.

^ Resigned as a Director w.e.f 4/5/11 % Resigned as Directors w.e.f. 31/5/11

All Independent Directors of the Company furnish a declaration at the time of their appointment as also annually that they qualify the conditions of their being independent. These declarations are placed before the Board. Number of Board Meetings The Board Meetings are held atleast once in a quarter. Board of Directors met 7 (seven) times during the period from 1st January, 2011 to 31st March, 2012 i.e. on 8th February, 2011, 4th May, 2011, 31st May, 2011(two meetings), 27th July, 2011, 9th November, 2011 and on 23rd January, 2012. The period between two Board meetings was well within the maximum gap of four months as prescribed under Clause-49. The annual calendar of meetings is broadly determined at the beginning of each year. COMMITTEES OF THE BOARD The Board has constituted various committees for smooth and efficient operation of the Company viz., Audit Committee; Remuneration Committee; Share Transfer and Investors Grievance Redressal Committee. The terms of reference of the Committees are laid down by the Board from time to time. Meetings of each Board Committees are convened by the Chairman of the respective Committees. The minutes of the meetings of the Committee are placed before the subsequent meeting of the Board. The role, composition of the Committees and other information of the Committees are provided below:

3.

A. AUDIT COMMITTEE The Audit Committee primarily oversees the Companys financial reporting process and disclosure of its financial information to ensure the correctness and adequacy. The Committee provides reassurance to the Board on the existence of effective internal control system. Terms of Reference The Committee was constituted by the Board of Directors and its scope interalia includes the following : Overseeing of the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and fixation of audit fees. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems. Discussion with internal auditors any significant findings and follow up there on.

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Composition The Audit Committee was reconstituted with new Members being Mr. Nilesh Mehta, Mr. K. P. Padmakumar, Mr. Bipin R. Shah, Mr. R. Lakshinarayanan and Mr. K. Ullas Kamath on 31st May, 2011 consequent to the resignation of Dr. A. Besant C. Raj, Mr. Ben Ho, Mr. Sukhendu Ray and Mr. A. Satish Kumar with effect from that date. The reconstituted Audit Committee comprises of four independent Directors and one Non-executive Director. Mr. Nilesh Mehta is the Chairman of the Committee. All members have financial management expertise. Prior to aforesaid re-constitution, the Audit Committee comprised of 4 (four) members, all being Non-executive Directors of which 2 (two) were Independent. All members of Audit Committee had financial management expertise. During the year, the Committee met on five occasions on 2nd February, 2011, 5th May, 2011, 27th July, 2011, 9th November, 2011 and on 23rd January, 2012. The meetings of audit committee were attended by the auditors and other senior personnel of the Company. The recommendations of the Audit Committee were accepted and implemented by the Board. Attendance Name Dr. Besant C. Raj (Chairman till 31-05-2011) Mr. Sukhendu Ray Mr. A. Satish Kumar Mr. Ben Ho Mr. Nilesh Mehta (Chairman since 31-05-2011) Mr. Bipin R. Shah Mr. R. Lakshminarayanan Mr. K. Ullas Kamath Mr. K. P. Padmakumar Meetings held 5 5 5 5 5 5 5 5 5 Meetings attended 2 2 1 0 2 3 2 3 2

C. REMUNERATION COMMITTEE The Committee was constituted to decide the Companys policy on specific remuneration packages for executive and nonexecutive Directors on the Board. The Committee has also been empowered to recommend the periodic increments in salary and annual incentives of the Executive Directors. The Committee has not met during 2011-12. Composition The Remuneration Committee has been reconstituted with new Members being Mr. Nilesh Mehta, Mr. K. P. Padmakumar, Mr. R. Lakshminarayan and Mr. K. Ullas Kamath on 31st May, 2011, consequent to the resignation of Dr. A. Besant C. Raj, Mr. Sukhendu Ray and Mr. V. Selvaraj.

D. SHARE TRANSFER AND INVESTORS GRIEVANCE REDRESSAL COMMITTEE Terms of Reference The terms of reference of the Share Transfer and Investors Grievance Redressal Committee includes monitoring the work related to transfer, transmission, dematerialization, rematerialisation, sub-division and consolidation of shares of the Company and also to ensure that all investors grievances and complaints are redressed expeditiously to strengthen the Investor relations. Composition The Committee has been reconstituted with new Members being Mr. M. P. Ramachandran, Mr. K. Ullas Kamath, Ms. M. R. Jyothy and Mr. Nilesh Mehta on 31st May, 2011 consequent to the resignation of Dr. A. Besant C. Raj, Mr. A. Satish Kumar & Mr. Rm. Muthukaruppan with effect from that date. Mr. M. P. Ramachandran is the Chairman of the Committee.

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4.

REMUNERATION TO DIRECTORS: Remuneration Non-executive Directors are paid sitting fees for every meeting of the Board and the Committees attended by them. The details whereof are as below: Directors Dr. A. Besant C. Raj Mr. Satish Kumar A. Mr. Sukhendu Ray Mr. V. Selvaraj Mr. R. m. Muthukaruppan Dr. A. C. Muthiah Dr. Uddesh Kohli Prof. Debashis Chatterjee Mr. Bipin R Shah Mr. R. Laxminarayanan Mr. K. P. Padmakumar Mr. Nilesh Mehta Mr. K. Ullas Kamath Mr. M. P. Ramachandran Mr. M. R. Jyothy Grand Total Total 47,500.00 32,500.00 27,000.00 18,000.00 15,500.00 6,000.00 6,000.00 6,000.00 36,000.00 26,000.00 23,000.00 23,000.00 3,000.00 3,000.00 3,000.00 275,500.00

None of the above Directors have been paid any Commission during the year. During the previous financial year, Mr. Jayant K. Singh was paid a total remuneration of Rs.29.15 lacs up to May 31, 2011 and Rs.1.38 crores was paid as compensation for breach of contract on mutual agreement against pre-mature termination of his contract. GENERAL BODY MEETING Details of last three Annual General Meetings: Year 2008 2009 2010 Date 11th September, 2009 16th September, 2010 14th September, 2011 Time 10.15 am 10.30 am 11.00 am Special Resolutions passed None None None

5.

* All AGMs were held in Rajah Annamalai Hall, Esplanade, Near High Court, Chennai 600 108. Postal Ballot: During the year under review, 2 (two) Special and 2 (two) Ordinary Resolutions were passed through postal ballot process. Details of voting conducted through postal ballot process for the business stated in the Notice dated November 9, 2011 in respect of aforesaid resolutions were as below: Sr. No. 1 Particulars Valid Postal Votes in Ballot forms favour of the received resolution 1696 9,83,79,110 Votes against the Resolution 28,219 Invalid Postal Forms received 86 Results

Special Resolution for shifting of registered office from State of Tamilnadu to the State of Maharashtra (within jurisdiction of Registrar of Maharashtra, Mumbai):

Approved with requisite majority

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Sr. No. 2

Particulars

Valid Postal Votes in Ballot forms favour of the received resolution 1625 9,83,32,640

Votes against the Resolution 52,726

Invalid Postal Forms received 157

Results

Special Resolution for making loan, investment, guarantee or provide security beyond the prescribed limits under Section 372A of the Companies Act, 1956: Ordinary Resolution for enhancing the power of Board of Directors of the Company to borrow funds under Section 293(1)(d) of the Companies Act, 1956 Ordinary Resolution for empowering the Board of Directors of the Company to create charge over the assets of the Company in terms of Section 293(1)(a) of the Companies Act, 1956

Approved with requisite majority Approved with requisite majority Approved with requisite majority

1622

9,83,52,667

33,386

160

1619

9,83,49,875

35,754

163

Procedure for Postal Ballot: Ms. Lalitha Kannan, Partner of M/s K. Padmanabhan & Associates, Practising Company Secretaries, Chennai, was appointed as scrutinizer to conduct postal ballot proceedings in a fair and transparent manner by the Board of Directors at the meeting held on November 9, 2011. The postal ballot notice containing the draft proposed resolutions along with the explanatory statements thereto, postal ballot forms and postage pre-paid envelope were sent to all the members as on the cut-off date (i.e. January 20, 2012). The Company published advertisement in requisite newspapers specifying date of completion of dispatch of postal ballot notice, date of end of voting and other matters as specified under Rule 3 of the Postal ballot Rules on 26th January, 2012. The Company did not avail e-voting facility. The members were required to read the instructions printed in the postal ballot forms and give their assent/dissent on the Resolutions and at the end of the form sign the same as per the specimen signatures available with the Company or Depository Participants, as the case may be, and return the form duly completed in the self-addressed postage pre-paid envelope by or before the close of the working hours of the last date fixed for the purpose i.e. 20th February, 2012. Postal ballot forms received after that date were treated as if the forms had not been received from the members. Voting rights were reckoned on the basis of number of shares and paid-up value of shares registered in the name of the respective shareholders as on the cut-off date mentioned in the postal ballot notice. The Scrutinizer, appointed for the purpose, had scrutinized the postal ballot forms received and submitted the report dated 22nd February, 2012 to the Company. Resolutions were deemed to have been passed as Special Resolution if the votes cast in favour are atleast three times the votes cast against and in case of Ordinary Resolution, the resolution were deemed to have been passed, if votes cast in favour were more than the votes cast against. The results of the postal ballot process were declared on February 29, 2012 at 3.00 p.m. UJALA HOUSE, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai 400059 and thereafter the results were displayed on the website of the Company and the stock exchanges were informed on March 2, 2012 in accordance with Clause 35A of the Listing Agreement. DISCLOSURES Related party transactions during the year have been disclosed elsewhere in the annual report as required under Accounting Standard-18 notified by the Companies (Accounting Standards) Rules, 2006. There has been no non-compliance by the Company or penalty or strictures imposed on the Company by the Stock exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last 3 years. In the preparation of the financial statements, the Company has followed the Accounting Standards notified by the Companies (Accounting Standards) Rules 2006, as amended from time to time. The significant accounting policies which are consistently applied are set out in the Note 1 & 2 to the Accounts. None of the Directors held any shares in the Company as on 31st March, 2012:

6.

15

7.

MEANS OF COMMUNICATION The Financial results of the Company were published in compliance with the requirements of Clause-41 of the Listing Agreement. The financial results and the press releases were posted on the website of Jyothy Laboratories Ltd. i.e. www.jyothylaboratories.com under the section provided for Henkel India Ltd. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report forms part of this Report and given separately elsewhere in this Annual Report. SUBSIDIARY COMPANY The Company has one unlisted subsidiary Company namely Henkel Marketing India Limited with its Registered Office at Chennai. The minutes of the Board Meetings of unlisted Subsidiary Company are considered and taken on record in the Board Meetings of the Holding Company.

8. 9.

10. RISK MANAGEMENT PROCEDURE: The Company has laid down procedures and apprised the Board of Directors regarding key risk assessment and risk mitigation mechanisms.

11. GENERAL SHAREHOLDER INFORMATION Registered Office of the Company Regd. Off: 43A, T. H. Road, KKD Nagar, Kodungaiyur, Chennai 600 118 Forthcoming Annual General Meeting will be held on Thursday, November 22, 2012 at 12.00 p.m. at M.C. Ghia Hall, Indian Textile Accessories & Machinery Manufacturers Association, Bhogilal Hargovindas Building, 4th Floor, 18/20. K. Dubhash Marg, Kala Ghoda, Mumbai 400 001 Financial Calendar -2012-13 (Proposed) First quarter results Second quarter results Third quarter results Fourth quarter and Annual results Book Closure Dates From 23rd October, 2012 to 31st October, 2012 (both days inclusive) Listing on Stock Exchanges The shares of the Company are listed on Bombay, Madras & Calcutta Stock Exchanges. The Annual Listing fees in respect of the shares of the Company for the financial year 2012-2013 has been paid by the Company promptly. Stock Code Stock Exchange Madras Stock Exchange Limited, 11, Second Lane Beach, Chennai -600 001. Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001. The Calcutta Stock Exchange Ltd. Lyons Range, Kolkata 700 001 Stock Code HIL 532671 July/August 2012 Oct/Nov 2012 Jan/Feb 2012 May 2013

37210 & 10037210

16

Depository Connectivity National Securities Depository Limited (NSDL) Central Depository Services (India) Limited (CDSL) ISIN : INE099H01019 Stock Market price data in BSE Month January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 Monthly High (`) 48.20 37.65 49.95 43.90 40.00 40.70 41.40 41.00 39.75 32.00 31.00 26.95 27.60 36.45 29.60 Monthly Low (`) 36.05 28.00 32.70 32.90 32.60 38.45 38.00 32.55 30.75 25.55 21.90 20.00 21.40 24.60 22.05

9.

Share Transfer System A Committee constituted for this purpose interalia approves transfers in the physical form. As per the directions of SEBI, the Company immediately on transfer of shares, sends letters to the investors in the prescribed format informing them about the simultaneous transfer and dematerialisation option available for the shares transferred in their names.

10. Shareholding Pattern / Distribution as on 31/03/2012 Number of Shares slab 1 100 100 500 501 1000 1001 2000 2001 3000 3001 4000 4001 5000 5001 and 10000 > 10001 TOTAL No. of Shareowners 24,371 26,038 2,775 1,063 288 142 130 162 130 55,099 % of shareowners 44.23 47.26 5.04 1.93 0.52 0.26 0.24 0.29 0.23 100.00 No. of Shares 16,57,894 64,92,019 22,35,801 16,32,724 7,39,760 5,09,243 6,21,976 12,12,010 10,13,52,844 11,64,54,271* % to Total 1.42 5.58 1.92 1.40 0.64 0.44 0.53 1.04 87.03 100.00

* 10,200 shares have been kept in abeyance pending settlement of disputes over title. 17

11. CATEGORIES OF SHAREOWNERS AS ON 31/03/2012 Category Promoters, Relatives & Associates Bodies Corporate (Domestic) Banks, Mutual Funds & Financial Institutions Foreign Institutional Investors (FIIs) NRI /OCBs/ Foreign Nationals Clearing Member, Trust, Resident (Public & others) Total No. of Share Owners 1 562 10 1 386 54,139 55,099 No. of Shares Held 9,74,26,487 19,12,000 10,795 10,000 4,63,395 1,66,31,594 11,64,54,271* Voting Strength (%) 83.66 1.64 0.01 0.01 0.40 14.28 100.00

* 10,200 shares have been kept in abeyance pending sattlement of disputes over title.

12. Top 10 Shareholders as on 31/03/2012 Name Jyothy Laboratories Limited Mangal Keshav Securities Limited Lal Tolani Smarniya Properties Pvt. Ltd. Lumesh T Sanghavi Sainath Roopesh Kumar S. Roopesh Kumar Divyesh Bharat Shah Tara Chand Jain Dr. Anil Gupta 13. HIL Performance Composition v/s BSE Index Category Promoter Public Public Public Public Public Public Public Public Public Shares 9,74,26,487 5,50,000 2,75,671 1,02,229 1,00,000 1,00,000 99,830 92,289 82,534 65,400 % 83.65 0.47 0.24 0.09 0.09 0.09 0.09 0.08 0.07 0.06

18

14. Dematerialisation/Rematerialisation SEBI mandated compulsory dematerialisation of shares for all purpose of trading through registered channels. As on 31st March, 2012, 11,26,26,478 shares of the Company held by the Shareholders are in demat form aggregating 96.71% of the total equity Paid Up Capital. The Company has signed agreements with both National Securities Depository Limited (NSDL) and with Central Depository Services (India) Limited (CDSL) to provide the facility of holding equity shares in dematerialised form. 15. Outstanding GDRs/ADRs etc. The Company has not issued any Global Depository Receipt/American Depository Receipt/Warrant or any convertible instruments pending conversion or any other instrument likely to impact the equity share capital of the Company.

16. COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE Certificate from the Practicing Company Secretary Mrs. B. Chandra, Chennai confirming compliance certificate with the conditions of corporate governance as stipulated under clause 49 of the listing agreement forms part of the Annual Report.

17. COMPLIANCE OFFICER Mr. P. Sampath Officer (Secretarial) Henkel India Limited 43A, T. H. Road, KKD Nagar, Kodungaiyur, Chennai 600 118 Ph: 044-39196871/ 862 Email ID : Sampath.PS@jyothy.com

18. ADDRESS FOR COMMUNICATION - REGISTRARS AND SHARE TRANSFER AGENTS M/s. Cameo Corporate Services Limited Unit Henkel India Fifth Floor, Subramaniam Building, No.1, Club House Road, Chennai - 600 002. Tel: (044) 28460390 (5 lines) Fax: (044) - 28460129 Email: investor@cameoindia.com

19

PRACTISING COMPANY SECRETARIES CERTIFICATE ON CORPORATE GOVERNANCE To: The Shareholders of Henkel India Ltd We have examined the compliance of conditions of corporate governance by Henkel India Ltd, for the period ended on 31st March, 2012 as stipulated in clause-49 of the Listing Agreement of the Company with Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been limited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the Management, I certify that the Company has complied in all material respects with the conditions of Corporate Governance as stipulated in clause-49 of the above-mentioned Listing Agreement. We state that no investor grievances are pending for a period exceeding one month against the Company as per the records maintained by the Shareholder Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. CHANDRA. B Practising Company Secretary CP No.7859 Place : Chennai Dated : 22nd May, 2012

CONFIRMATION ON CODE OF CONDUCT To, The Shareholders of Henkel India Ltd. Pursuant to Clause 49 (1) (D) (ii), I hereby confirm that, for the 15 month financial period ended 31st March, 2012, all the Members of the Board of Directors and the Senior Management Personnel have affirmed compliance with the Code of Conduct framed by the Company. Place : Mumbai Dated : 22nd May, 2012 M. P. Ramachandran Chairman

20

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. RevenueAnalysis Net Sales for the fifteen month period from 1st January, 2011 to 31st March, 2012 was ` 448.01 crores as against ` 450.17 crores for twelve month period from 1st January, 2010 to 31st December, 2010. Whereas on consolidated basis, the net sales was ` 527.34 crores as against ` 533.90 crores for the previous year. Detergents & Cleansers business was driven by Henko, Pril & Mr. White while the Body Care business was driven mainly by Fa, Margo and Neem. At the group level, the Detergents & Cleansers business accounted for ` 363.72 crores, while Body Care business clocked ` 163.61 crores, contributing 69% and 31% of net sales respectively. Cost Analysis Our strong performance is reflected through the comparison of the following numbers. ` in crores Particulars Income Net Sales Other income Total income Expenditure Decrease in stock-in-trade and work-in-progress Consumption of raw materials Purchase of traded goods Employee cost Other expenditure Total expenditure EBIDTA Depreciation Profit/(loss) before Exceptional items and Interest Interest Profit/(loss) before Exceptional items Exceptional items - Sale of SKP-Hair-care Division Profit/(loss) before tax Tax Expense Net Profit/(loss) for the period 3. January to March (fifteen months) 31.03.2012 31.03.2011 Growth % 527.34 653.11 -19% 7.66 5.93 29% 535.00 659.04 -19% 4.46 2.57 73% 93.07 169.82 -45% 203.41 187.32 9% 38.55 45.27 -15% 172.57 278.55 -38% 512.05 683.53 -25% 22.95 (24.49) 194% 7.80 7.51 4% 15.14 (32.00) 147% 56.02 38.17 47% (40.88) (70.17) 42% 25.35 (15.53) (70.17) 78% (15.53) (70.17) 78%

2.

Total cost as proportion to total income reduced from 104% of total income to 96% of total income. Although the total cost (excluding depreciation and interest) in absolute terms decreased from ` 683.53 crores to ` 512.05 crores. EBIDTA Margin increased from negative 4% to positive 4%. Depreciation for the period increased from ` 7.51 crores to ` 7.80 crores. Interest cost for the period increased from ` 38.17 crores to ` 56.02 crores. Exceptional items (Sale of SKP-Hair-care Division) reflect sale of its Hair care division on Profit of ` 25.35 crores. Financial Position On consolidated basis, Trade receivables increased from ` 27.41 crores to ` 32.83 crores, inventory decreased from ` 55.47 crores to ` 42.43 crores, cash and bank balance increased from ` 4.2 crores to ` 9.03 crores during the period. 21

4.

Management Responsibility Statement The Directors confirm that the financial statements are prepared and presented in conformity with the Indian Generally Accepted Accounting Principles (GAAP) . The statements complies with accounting standards notified by the Central Government of India under Section 211 (3C) of the Companies Act, 1956, other pronouncements of the Institute of Chartered Accountants of India., provision of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). The Management of Henkel India Ltd. accepts responsibility for the integrity and objectivity of these financial statements, as well as for estimates and judgement. The management believes that the financial statements reflect fairly the form and substance of transactions and reasonably present the Companys financial conditions and results of operations. To ensure the above, the Company has established internal control system across the organisation commensurate with its size and nature of business. The internal control manual defines detailed procedures and guidelines, authorisation and approval procedures. Periodic internal audits have been conducted to ensure that the Companys established systems, policies and procedures have been followed. The Audit Committee periodically meets the in-charge of Finance Department and Auditors to review the manner in which they are performing their responsibilities and to discuss audit programme and progress therein. The internal audit report is tabled before the audit committee and the issues, plan for implementing corrective actions and recommendation of the audit report are discussed. To ensure complete independence, Statutory Auditors, Internal Auditors/representatives of Internal Audit Department have full and free access to the members of the Audit Committee to discuss any matter of substance. M/s. CNGSN & Associates, Chartered Accountants, Chennai have audited the Financial Statements enclosed.

22

AUDITORS REPORT TO THE MEMBERS OF HENKEL INDIA LIMITED

We have audited the attached Balance Sheet of Henkel India Limited as at March 31, 2012, the Profit and Loss Account and also the Cash Flow Statement for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order 2003, issued by the Department of Company Affairs on June 12, 2003 and as amended under Notification dated November 25, 2004 in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. Further to our comments in the annexure referred to above, we report that: i. We have obtained all the information and explanations which, to the best of our knowledge and belief were necessary for purpose of the audit; In our opinion, proper books of accounts have been kept as required by law so far as appears from our examination of those books; iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with books of account; iv. In our opinion, Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable. v. On the basis of written representations received from Directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that, none of the Directors are disqualified as on March 31, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. vi. In our opinion and to the best of our information and according to the explanation given to us, the said accounts together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India a. in the case of Balance Sheet, the state of affairs of the Company as at March 31, 2012. b. in the case of Profit and Loss Account, of the Loss for the period ended on that date and c. in the case of Cash Flow Statement, of the cash flows for the period ended on that date.

ii.

For CNGSN & ASSOCIATES Chartered Accountants F.R. No. 04915S Place : Chennai Date : May 22, 2012 23 C.N. GANGADARAN Partner Memb. No. 11205

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in paragraph 3 of the report of even date of the Auditors to the Members of Henkel India Limited on the accounts for the period ended March 31, 2012 i) a) The Company is maintaining proper records, showing full particulars including quantitative details and situation of fixed assets. The Company has a programme of physical verification of fixed assets, which in our opinion is reasonable having regard to the size of the Company and the nature of its business. None of the fixed assets have been revalued during the period. A substantial part of the fixed assets have not been disposed of during the period. Physical verification of inventory was conducted at reasonable intervals by the management during the period. In our opinion, procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory and the discrepancies noticed on verification were not material. The Company has taken unsecured loan of ` 26,395/lacs during the year from a party listed in the Register maintained under Section 301 of the Companies Act, 1956. The year end balance is `14,204/- lacs and the maximum outstanding amount during the year is `26,395/-. No loans have been granted to any such parties. In our opinion rates of interest and other terms and conditions are not prejudicial to the interest of the Company. The repayment of the principal amounts and interest wherever applicable are regular. The loans taken by the Company are repayable on demand and therefore the question of overdue amounts does not arise. b) iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchase of inventories and fixed assets and for the sale of goods. During the course of audit no continuing failure to correct major weaknesses in internal control system was observed. a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into a Register in pursuance of Section 301 of the Companies Act, 1956 have been duly entered. In our opinion and according to the information and explanation given to us, transactions exceeding ` 5 lacs in respect of each party which have been made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable, having regard to the prevailing market prices at the relevant time.

b)

v)

ii)

c) d) a)

b)

vi)

c)

The Company has not accepted any Fixed Deposits from the public during the period and therefore, the question of compliance with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder does not arise.

iii)

a)

vii) The Company does not have an adequate Internal Audit commensurate with the size and nature of its business. viii) The cost accounts and the records prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 have been made and maintained. ix) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Employees State Insurance Fund, Income-tax, Wealth tax, Service tax, Sales tax, Customs duty, Excise duty, Cess and other statutory dues have been deposited regularly during the period with the appropriate authorities. According to the information and explanation given to us, there are no undisputed

b)

c) d)

24

amounts payable which are outstanding as on March 31, 2012 for a period of more than six months from the date they became payable. b) The following amounts have not been deposited with respective authorities because of disputes. Year 1990-2000 to 2001-02 1996-1997 to 2002-2003 2003-2004 2000-2001 to 2002-03 Amount (`) 32,82,050 32,82,050 15,52,086 4,36,187 19,88,273 18,47,888 1,18,45,119 CTO CESTAT CESTAT Forum where pending Commissioner (Appeal)

xiii) The Company is not a chit fund or a nidhi mutual benefit fund/society. xiv) The Company is not dealing in or trading in Shares, Securities, Debentures and other instruments. xv) According to the information and explanation given to us, the Company has not given any Corporate Guarantee during the period. xvi) The Company has received long term loan during the period and has applied it for the purpose for which it has been raised. xvii) According to the information and explanations given to us by the management, the funds raised on short term basis have not been used for long term investment. xviii) During the period the Company has not made any preferential allotment to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. xix) The Company has not issued any debentures during the period and therefore the question of creation of security or charge does not arise. xx) During the period, the Company has not raised any money by way of public issue and the question of disclosing the end use of money by the management does not arise. xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the course of our audit.

Statute Income Tax

Income Tax Total Central ExciseKKL Ambattur Excise Total Sales Tax-MP Grand Total x)

At the end of the financial period, the accumulated loss of the Company is less than 50% of its Net worth. The Company has incurred cash loss during the financial period but not in the immediately preceding financial period. The Company has not defaulted in repayment of dues to Banks during the period.

xi)

xii) No loans or advances have been granted by the Company against pledge of Shares and Debentures and other securities.

For CNGSN & ASSOCIATES Chartered Accountants F.R. No. 04915S Place : Chennai Date : May 22, 2012 25 C.N. GANGADARAN Partner Memb. No. 11205

BALANCE SHEET AS AT MARCH 31, 2012

Note EQUITY AND LIABILITIES Shareholders funds Share capital Reserves and surplus Non-current liabilities Borrowings Provisions Current liabilities Borrowings Trade payables Other liabilities Provisions TOTAL ASSETS Non-current assets Fixed assets (i) Tangible assets (ii) Intangible assets Investments Loans and advances Other assets Current assets Inventories Trade receivables Cash and bank balances Loans and advances Other assets TOTAL Summary of significant accounting policies The accompanying notes are an integral part of the financial statements. As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C. N. Gangadaran Partner Membership No. 11205 Place : Mumbai Date : May 22, 2012 For and on behalf of the Board of Directors of HENKEL INDIA LIMITED 2 As at March 31, 2012 ` In Lacs As at December 31, 2010

3 4

18,446.45 (3,120.52) 15,325.93 13,000.00 117.22 13,117.22 1,204.40 5,175.25 435.74 24.88 6,840.27 35,283.42

18,446.45 2,806.03 21,252.48 18,507.91 12.10 18,520.01 5,125.53 651.21 15.00 5,791.74 45,564.23

5 6

5 7 8 6

9 7,296.62 17,720.13 2.30 736.92 0.40 25,756.37 3,556.37 3,679.38 398.16 1,866.37 26.77 9,527.05 35,283.42 8,108.01 17,720.13 2.30 701.95 26,532.39 4,901.15 9,747.08 38.29 4,345.32 19,031.84 45,564.23

10 11 12

13 14 15 11 12

M.P. Ramachandran Chairman Place : Mumbai Date : May 22, 2012 26

K. Ullas Kamath Director

STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012 ` In Lacs
Note REVENUE Sales Less: Excise duty Net sales Other operating income Revenue from operations Other income Total Revenue EXPENDITURE Cost of raw material and components consumed Purchase of traded goods (Increase)/decrease in inventories of finished goods, work-in-progress and traded goods Employee benefits expense Other expenses Depreciation and amortisation Interest and finance charges Total Expense Profit before tax and Exceptional items Exceptional items Sale of Division Bad debt written off Profit/(Loss) before tax Current tax Less: MAT Credit entitlement Profit/(Loss) after tax EARNINGS PER SHARE (EPS) Basic and Diluted (`) Nominal value per share (`) Weighted average number of shares outstanding for calculation of Basic and Diluted EPS Summary of significant accounting policies The accompanying notes are an integral part of the financial statements. As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C. N. Gangadaran Partner Membership No. 11205 Place : Mumbai Date : May 22, 2012 For and on behalf of the Board of Directors of HENKEL INDIA LIMITED January 1, 2011 to March 31, 2012 (15 Months) 45,967.70 (1,166.85) 44,800.85 274.94 45,075.79 163.05 45,238.84 9,306.76 19,970.45 563.72 2,833.98 9,417.19 780.01 1,958.16 44,830.27 408.57 2,534.77 (9,000.00) (6,056.66) (6,056.66) January 1, 2010 to December 31, 2010 (12 Months) 46,772.31 (1,755.16) 45,017.15 157.71 45,174.86 381.25 45,556.11 13,847.86 15,290.68 186.15 1,693.82 12,125.38 603.39 1,696.14 45,443.42 112.69 112.69 20.28 (20.28) 112.69

16 17

18 19 20 21 9 22

(5.20) 10 116,464,471 2

0.10 10 116,464,471

M.P. Ramachandran Chairman Place : Mumbai Date : May 22, 2012 27

K. Ullas Kamath Director

Notes to financial statements for the fifteen months period ended March 31, 2012
Note 1 - 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. Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies are as follows: a) Change in accounting policy i) During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year. During the year, the Company has changed valuation of inventory from weighted-average cost method to First-in-First-out method to align with the group accounting policy of inventory valuation. Accordingly, the impact of the change was not material to the financial statements for the financial year.

ii)

b)

Use of estimate The preparation of financial statements, in conformity with Indian GAAP requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Fixed assets Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost of acquisition is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In case of projects involving construction, related pre-operational expenses form part of value of fixed asset capitalized. Expenses capitalized also include applicable borrowing costs and adjustments arising from foreign exchange rate variations relating to borrowings attributable to the fixed assets. Fixed assets acquired on the merger of Henkel SPIC India Limited into the Company during 2004 have been taken into the books at fair value as per the scheme of amalgamation, as approved by the Honble High Court of Madras. In case of revaluation of Fixed Assets, the original cost as written up to the extent certified by the valuer is considered in the accounts and the differential amount is transferred to Revaluation Reserve. Depreciation and amortisation Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher. The estimated useful life of the assets is as follows: Category Factory Buildings Building (Other then Factory Building) Plant and machinery Furniture and fixtures Office equipments Vehicles Estimated useful life (in years) 30 60 21 16 21 8-10 28

c)

d)

e)

Impairment i. The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. An impairment loss is recognized wherever the carrying amount of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the pre-tax discount rate. A previously recognized impairment loss is increased or reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

ii.

f)

Operating Leases Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Lease payments on operating leases are recognized as an expense in the Profit and Loss Account on a straight-line basis, over the lease term. Government grants and subsidies Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with. When the grant or subsidy relates to revenue item, it is recognized as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted from the gross value in arriving at the carrying amount of the related asset. Government grant in the nature of promoters contribution is credited to the investment subsidy reserve. Investment On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties and other costs that arise on acquisition of investment. Investments that are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. Inventories Inventories of raw materials, packing materials, work-in-progress, finished goods, stores and consumables items are valued at cost or net realizable value, whichever is lower. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is ascertained on First-in-First-out (FIFO) basis and includes all applicable costs incurred in bringing goods to their present location and condition. Cost of work-in-progress, manufactured packing material and finished goods includes materials and all applicable manufacturing overheads. The Company accrues for excise duty liability in respect of manufactured finished goods/intermediary inventories lying in the factory. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale. Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

g)

h)

i)

j)

29

Sale of Goods Revenue is recognized when all the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Excise Duty, Sales Tax and VAT deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability arised during the year. Revenue includes the amount of excise duty refund received/due in accordance with incentive scheme. Revenue is net of trade discount given. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Foreign currency translation (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion Foreign currency monetary items are reported using the exchange rate prevailing at the reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. Exchange differences arising on the settlement of monetary items or on reporting Companys monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. Retirement benefits in the form of Provident Fund and Superannuation Fund are defined contribution schemes and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective fund. Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

k)

(ii)

(iii) Exchange Differences

l)

Retirement and other employee benefits (i)

(ii)

m) Sales promotion items Sales promotion items are valued at cost. Cost is ascertained on First-in-First-out (FIFO) basis and includes all applicable costs incurred in bringing goods to their present location and condition. n) Income-tax Income-tax expense comprises of current tax and deferred tax charge or release. Provision for current income-tax is based on the assessable profits computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized. Provisions A provision is recognized when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Excise duty Excise duty on turnover is reduced from turnover. Excise duty relating to the difference between the opening stock and closing stock is recognized as income/expense as the case may be, separately in the Profit and Loss Account.

o)

p)

30

q)

Segment Reporting Identification of segments: The Companys operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate. Segment accounting policies: The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole. Intersegment transfer: The Company generally accounts for intersegment sales and transfers as if the sales or transfer were to third parties at market price. Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Unallocated items: It includes general corporate income and expense items which are not allocated to any business segment. Earnings per Share Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for event of bonus issue, bonus element in a rights issue to existing shareholders, share split, and reverse share split that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements. Cash and Cash equivalents Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

r)

s)

t)

Note - 2.1 In view of accumulated carry forward loss, the net worth of Henkel Marketing India Limited has been eroded and necessary provision has been made in the accounts in the earlier impacting the investments made in Henkel Marketing India Limited.

31

Notes to financial statements for the fifteen months period ended March 31, 2012
As at March 31, 2012 NOTE 3 SHARE CAPITAL AUTHORISED CAPITAL 172,000,000 (2010 - 172,000,000) equity shares of ` 10 (2010 - ` 10) each 68,000,000 (2010 - 68,000,000) redeemable non-cumulative / cumulative preference shares of ` 10 (2010 - ` 10) each ISSUED, SUBSCRIBED AND PAID UP CAPITAL 116,464,471 (2010 - 116,464,471) equity shares of ` 10 (2010 - ` 10) each fully paid 28,000,000 (2010 - 28,000,000) 9% redeemable non-cumulative preference shares of ` 10 (2010 - ` 10) each 40,000,000 (2010 - 40,000,000) 4% redeemable cumulative preference shares of ` 10 (2010 - `10) each ` In Lacs As at December 31, 2010

17,200.00 6,800.00 24,000.00 11,646.45 2,800.00 4,000.00 18,446.45

17,200.00 6,800.00 24,000.00 11,646.45 2,800.00 4,000.00 18,446.45

a.

Out of the total shares issued by Henkel SPIC India Limited during 1999 on Rights basis, 10,200 shares have been kept in abeyance pending settlement of disputes on title. Henkel India Limited shares will be issued to these shareholders on settlement of disputes.

b.

Details of shareholders holding more than 5% shares in the Company As at March 31, 2012 No. of shares % Holding in the class 97,426,487 83.66% As at December 31, 2010 No. of shares % Holding in the class 59,360,203 19,395,900 50.97% 16.66%

Name of Shareholder Equity Shares Henkel Ag & Co. KGaA Tamilnadu Petroproducts Limited Jyothy Laboratories Limited Non-cumulative Preference Shares Henkel Ag & Co. KGaA Jyothy Laboratories Limited Cumulative Preference Shares Henkel Ag & Co. KGaA Jyothy Laboratories Limited

28,000,000

100.00%

28,000,000

100.00%

40,000,000

100.00%

40,000,000

100.00%

32

c.

Reconciliation of the shares outstanding at the beginning and at the end of the reporting period As at March 31, 2012 No. of shares Amount

` In Lacs

As at December 31, 2010 No. of shares Amount 116,464,471 116,464,471 11,646.45 11,646.45

Equity Shares At the beginning of the period/year Issued during the period/year Outstanding at the end of the period/year Non-cumulative Preference Shares At the beginning of the period/year Issued during the period/year Outstanding at the end of the period/year Cumulative Preference Shares At the beginning of the period/year Issued during the period/year Outstanding at the end of the period/year

116,464,471 116,464,471

11,646.45 11,646.45

28,000,000 28,000,000

2,800.00 2,800.00

28,000,000 28,000,000

2,800.00 2,800.00

40,000,000 40,000,000

4,000.00 4,000.00

40,000,000 40,000,000

4,000.00 4,000.00

NOTE 4 RESERVES AND SURPLUS Capital reserve General reserves Balance, beginning of the period/year Add: Amount transferred to surplus/(deficit) balance in the Profit and Loss Balance, end of the period/year Preference Share Redemption Reserve Revaluation reserve Balance, beginning of the period/year Add: Addition pursuant to revaluation of Land Less: Reversal pursuant to sale of Land Balance, end of the period/year Share premium account Surplus/(Deficit) in the Profit and Loss Account Balance, beginning of the period/year Add: Amount transferred from general reserves Profit/(Loss) for the period/year Balance, end of the period/year

As at As at March 31, 2012 December 31, 2010 843.19 843.19 1,047.38 (1,047.38) 10.95 95.73 205.61 (75.50) 225.84 0.29 808.49 1,047.38 (6,056.66) (4,200.79) (3,120.52) 1,047.38 1,047.38 10.95 95.73 95.73 0.29 695.80 112.69 808.49 2,806.03

NOTE 5 BORROWINGS Loan from Holding company The above amount includes Unsecured borrowings

Non-Current As at As at March 31, 2012 December 31, 2010 13,000.00 18,507.91 13,000.00 18,507.91 13,000.00 18,507.91

Current As at As at March 31, 2012 December 31, 2010 1,204.40 1,204.40 1,204.40

33

NOTE 6 PROVISIONS Provision for gratuity Provision for leave encashment

As at As at March 31, 2012 December 31, 2010 117.22 12.10 117.22 12.10

LONG-TERM

As at As at March 31, 2012 December 31, 2010 13.31 11.57 15.00 24.88 15.00 As at March 31, 2012 As at December 31, 2010

SHORT-TERM

` In Lacs

NOTE 7 TRADE PAYABLE Trade Payable - Micro and Small Enterprises - Others Sundry Creditors for expenses

1,431.76 1,467.08 1,340.67 2,276.41 3,784.86 5,175.25 5,125.53 Trade payables includes ` 1431.76 Lacs due to small scale and ancillary undertakings to the extent such parties have been identified from the available documents/information. NOTE 8 OTHER LIABILITIES Other current liabilities Security deposits Advances from customers

372.99 15.38 47.37 435.74

524.69 19.88 106.64 651.21

NOTE 9 FIXED ASSETS

Gross Block Particulars Intangible assets Goodwill Tangible assets Freehold land Building Plant and machinery Furniture and fixture Office equipments Vehicle Total Previous period 1,150.76 1,080.20 8,428.98 239.11 1,043.17 196.97 30,083.32 29,941.68 205.61 15.33 20.81 19.87 261.62 187.77 75.80 31.01 36.93 30.34 141.61 73.67 389.36 46.13 1,280.57 1,049.19 8,407.38 229.58 921.43 123.30 29,955.58 30,083.32 251.66 2,969.59 96.88 647.39 65.66 4,255.18 3,662.66 39.83 621.72 30.04 72.19 16.23 780.01 603.39 11.73 13.71 5.58 45.14 20.20 96.36 10.89 279.76 3,577.60 121.34 674.44 61.69 4,938.83 4,255.18 1,280.57 769.43 4,829.78 108.24 246.99 61.61 25,016.75 25,828.14 1,150.76 828.54 5,459.39 142.23 395.78 131.31 25,828.14 17,944.13 17,944.13 224.00 224.00 17,720.13 17,720.13 Depreciation and Amortisation Net Block

As at Deletions/ As at As at Jan. 1, 2011 Additions Adjustment Mar. 31, 2012 Jan. 1, 2011

For the As at As at As at Deletions year Mar. 31, 2012 Mar. 31, 2012 Dec. 31, 2010

34

NOTE 10 NON-CURRENT INVESTMENTS Trade Investments (Unquoted) Henkel SPIC Employees Co-operative Thrift and Credit Society Limited 2,000 (2010 - 2,000) equity shares of ` 100 (2010 - ` 100) each fully paid up Henkel Marketing India Limited* 825,550 (2010 - 825,550) equity shares of ` 10 (2010 - ` 10) each fully paid up Capexil (Agencies) Ltd. 5 (2010 - 5) equity shares of ` 10,000 (2010 - ` 10,000) each fully paid up Madras Industrial Cooperative Analytical Laboratory Limited 2 (2010 - 2) equity shares of ` 500 (2010 - ` 500) each fully paid up Ambattur Industrial Estate Manufacturers Service Industrial Cooperative Society Ltd. 1 (2010 - 100) equity shares of ` 1 (2010 - ` 100) each fully paid up Less: Provision for diminution in the value of investments Total (A) Investment in Government Securities (Unquoted) 3% Government of India conversion loan, 1946 National Saving Certificates (Pledged with Government authorities) Less: Provision for diminution in the value of investments Total (B) Total (A+B)

As at March 31, 2012

` In Lacs As at December 31, 2010

2.00 421.03 0.05 0.01 423.09 421.09 2.00

2.00 421.03 0.05 0.01 423.09 421.09 2.00

0.01 0.30 0.31 (0.01) 0.30 2.30 2.30

0.01 0.30 0.31 (0.01) 0.30 2.30 2.30

Aggregate amount of unquoted investments *Refer note 2.1 NOTE 11 LOANS AND ADVANCES Unsecured, considered good Deposits Advances recoverable in cash or in kind or for value to be received Advance to suppliers Balance with Govt. authorities Staff loans Advance Income Tax Mat Credit

Non-Current As at As at March 31, 2012 December 31, 2010 564.33 172.59 736.92 545.64 156.31 701.95

Current As at As at March 31, 2012 December 31, 2010 61.48 714.43 947.08 7.48 36.79 99.11 1,866.37 97.86 3,122.31 1,004.33 21.71 99.11 4,345.32

NOTE 12 OTHER ASSETS Fixed Deposit with Bank (Refer note 15) Other assets

Non-Current 0.40 0.40

Current 26.77 26.77

35

NOTE 13 INVENTORIES Raw and packing materials (includes goods in transit - ` Nil (2010 - ` 131.6) Work-in-progress Finished goods Stores and spare parts

` In Lacs As at As at March 31, 2012 December 31, 2010 1,235.85 2,024.20 90.16 77.48 2,114.94 2,691.34 115.42 108.13 3,556.37 4,901.15

NOTE 14 TRADE RECEIVABLES Unsecured a) Debt outstanding for period exceeding six months Considered doubtful Less: Provision for doubtful debts b) Other debts Considered good Considered doubtful Less: Provision for doubtful debts

35.17 (35.17) 3,679.38 3,679.38 3,679.38

50.69 (50.69) 9,747.08 35.03 (35.03) 9,747.08 9,747.08

NOTE 15 CASH AND BANK BALANCES Cash and cash equivalents Cash in hand Balance with banks - Current account Other bank balances Deposits with original maturity for more than 12 months Amount disclosed under other assets (refer note 12)

Non-Current As at As at March 31, 2012 December 31, 2010 0.40 (0.40)

Current As at As at March 31, 2012 December 31, 2010 0.27 116.07 281.82 0.22 2.99 35.08

398.16

38.29

36

NOTE 16 OTHER OPERATING INCOME Other Operating Income

` In Lacs January 1, 2011 to January 1, 2010 to March 31, 2012 December 31, 2010 (15 Months) (12 Months) 274.94 157.71 274.94 157.71

NOTE 17 OTHER INCOME Interest on fixed deposit Foreign exchange fluctuation gain (net) Profit on sale of fixed assets (net of loss)

12.27 92.46 58.32 163.05

0.15 102.37 278.73 381.25

NOTE 18 MATERIAL COSTS Raw and packing materials consumed Opening stock Add: Cost of purchases (net) Less: Closing stock

2,024.20 8,518.41 10,542.61 1,235.85 9,306.76

2,291.93 13,580.13 15,872.06 2,024.20 13,847.86

NOTE 19 (INCREASE)/ DECREASE IN INVENTORIES (Increase)/ decrease in inventories Closing stock Finished goods Work in progress Opening stock Finished goods Work in progress

2,114.94 90.16 2,205.10 2,691.34 77.48 2,768.82 563.72

2,691.34 77.48 2,768.82 2,899.57 55.40 2,954.97 186.15

NOTE 20 EMPLOYEE BENEFITS EXPENSES Salaries, wages and bonus Contribution to provident and other funds Gratuity Staff welfare expenses

2,500.37 94.50 123.44 115.67 2,833.98

1,415.37 73.23 54.38 150.84 1,693.82

37

NOTE 21 OTHER EXPENSES Conversion charges Power and fuel expenses Rent Insurance Repairs and maintenance - Building - Plant and machinery - Others Consumption of stores and spares Research and development Bank charges and commission Printing and stationery Communication costs Legal and professional fees Rates and taxes Directors sitting fees Vehicle maintenance Donation Loss on discarded of fixed assets Bad debt written off Advertisement and publicity Sales promotion and schemes Freight, handling and forwarding charges Travelling and conveyance Brokerage on sales Royalty Miscellaneous expenses

` In Lacs January 1, 2011 to January 1, 2010 to March 31, 2012 December 31, 2010 (15 months) (12 months) 172.09 253.83 350.79 394.47 467.33 399.60 77.17 51.99 6.66 53.01 36.53 41.84 0.95 31.12 10.58 127.08 525.75 234.60 3.17 43.11 0.04 3.49 423.79 2,911.69 2,131.96 556.50 369.68 421.28 416.98 9,417.19 15.00 123.04 66.37 20.46 14.79 13.95 76.27 884.37 210.20 4.26 7.00 2,219.71 3,318.71 2,076.28 413.90 389.18 770.13 401.87 12,125.38

NOTE 22 INTEREST AND FINANCE CHARGES Interest expense Other borrowing cost

1,737.56 220.60 1,958.16

1,696.14 1,696.14

38

NOTE 23 EMPLOYEE BENEFIT As per Accounting Standard 15 (Revised 2005) Employee Benefits the disclosures of employee benefits as defined in the Accounting Standard are given below: ` In Lacs January 1, 2011 to January 1, 2010 to March 31, 2012 December 31, 2010 (15 Months) (12 Months) Employers contribution to Provident Fund 94.50 73.23 As per the Companys leave policy all the leave entitlement needs to be utilised in the same calendar year. The leave balances do not get encashed or carry forward to the next year and hence no actuarial liability has been considered as at the year end. Gratuity: Reconciliation of opening and closing balances of defined benefit plan: Opening Defined Benefit obligation Current service cost Interest costs Actuarial (gain)/loss Benefits paid Closing Defined Benefit obligation Reconciliation of opening and closing balances of fair value of plan assets: Opening fair value of plan assets Expected returns on plan assets Actuarial (gain)/loss Employer contribution Benefits paid Closing fair value of plan assets Reconciliation of fair value of assets and obligations: Fair value of plan assets Present value of obligation Difference Expenses recognised during the year: Current Service Cost Interest Cost Expected returns on plan assets Actuarial (gain)/loss Net Cost Actuarial assumptions Funds with LIC LIC 1994-96 Ultimate Table applied for service mortality rate Discount rate p.a. Expected rate of return on plan assets p.a. Rate of escalation in salary p.a. 151.70 9.63 (40.44) 2.04 (120.36) 2.57 154.61 13.38 (4.49) 39.58 (51.38) 151.70 As at As at March 31, 2012 December 31, 2010 160.82 148.93 25.51 21.89 16.69 11.87 50.44 29.51 (120.36) (51.38) 133.10 160.82

2.57 133.10 130.53

151.70 160.82 9.12

25.51 16.69 (9.63) 90.87 123.44

21.89 11.87 (13.38) 34.00 54.38

Yes 8.30% 8.15% 8.00%

Yes 8.25% 9.00% 5.00%

39

NOTE 24 RELATED PARTY DISCLOSURES a) Names of the related parties Subsidiary Company Promoters

40

Henkel Marketing India Limited, India Henkel AG & Co KGaA, Germany (up to 31-05-2011) Tamilnadu Petroproducts Limited, India (up to 31-05-2011) Key Management Personnel Jayant K. Singh, Managing Director (up to 31-05-2011) Holding Company Jyothy Laboratories Limited (w.e.f. 01-06-2011) Enterprises under common control with reporting enterprises: Associated Industries Consumer Products Private Limited (w.e.f. 01-06-2011) Jyothy Fabricare Services Limited (w.e.f. 01-06-2011) b) Aggregate related party disclosures for the fifteen months ended March 31, 2012 ` In Lacs Holding Company Subsidiary of Holding Subsidiary of Subsidiary Promoter Key Management Company Holding Company Personnel Jyothy Associated Industries Jyothy Fabricare Henkel Tamilnadu Henkel Jayant K. Singh, Laboratories Consumer Products Services Limited Marketing India Petroproducts AG&Co KGaA Managing Director Limited Private Limited (w.e.f. 01-06-2011) Limited Limited, India (up to (up to 31-05-2011). (w.e.f. 01-06-2011) (w.e.f. 01-06-2011) (up to 31-05-2011) 31-05-2011) Purchase of goods 1,086.84 21.28 30.12 1,061.62 39.15 (627.83) (1,388.12) Sale of goods 519.50 0.22 0.23 29,763.01 (26,823.85) Interest Expenses 1,190.88 7.30 Royalty payable 258.59 (770.18) Rent paid 72.63 (172.13) Services 15.78 215.42 (37.09) (630.12) Loan taken 26,617.74 12,110.00 Repayment of loan taken 12,685.00 12,110.00 Reimbursement of expenses to Jyothy 608.78 Bad debts written off 9,000.00 Receivables 0.23 2,241.03 (8,724.12) (1,990.30) Payables 14,204.40 (720.47) Remuneration 29.15 (111.81) Note: Figures in brackets represents previous year numbers.

` In Lacs NOTE 25 DEFERRED TAX As a matter of prudence, the Company has recognized deferred tax asset amounting to ` 1,677.33 Lacs to the extent of the deferred tax liability, resulting in nil net deferred taxes for the current year. The break-up of deferred tax assets is as follows: As at March 31, 2012 A. B. Deferred tax assets Expenses allowable against taxable income in future years Carry forward business loss and depreciation Deferred tax liabilities Timing difference in depreciable assets Net deferred tax assets (A - B) 1,677.33 1,677.33 8,097.32 1,321.44 1,321.44 8,842.67 9,774.65 9,774.65 31.60 10,132.51 10,164.11 As at December 31, 2010

NOTE 26 CONTINGENT LIABILITIES (a) (b) (c) Sales tax related matters Excise duty related matters Counter guarantees to bank in respect of guarantees to: Sales Tax/Central Excise authorities Others (d) (e) (f) (g) Income tax demands against which the Company has preferred appeal before appropriate authorities Claims filed by an ex-employee of the Company pending in a court of law Letter of credit outstanding Dividend on Preference Shares 32.82 478.84 0.48 52.12 32.82 1.49 23.28 18.48 19.88 19.88

41

NOTE 27 SEGMENT REPORTING Information about business segments ` In Lacs

Body Care Detergents & Cleansers Total January 1, 2011 January 1, 2010 January 1, 2011 January 1, 2010 January 1, 2011 January 1, 2010 to to December to to December to to December March 31, 2012 31, 2010 March 31, 2012 31, 2010 March 31, 2012 31, 2010 (15 Months) (12 Months) (15 Months) (12 Months) (15 Months) (12 Months) Segment revenue (net of Excise duty) 13,191.02 1,6111.15 31,609.83 28,906.00 44,800.85 45,017.15 Segment results (Profit before interest 577.09 568.76 1,131.05 788.70 1,708.14 1,357.46 and unallocated income) Unallocated income (net) 437.99 466.00 Interest expenses (1,737.56) (1,710.77) Operating profit 408.57 112.69 Exception Item Sale of SKP-Hair-care Division 2,534.77 Bad debt written off (9,000.00) Net profit (6,056.66) 112.69 7,685.73 7,685.73 12,378.56 2,107.51 2,107.51 5,564.47 5,564.47 15.33 1,393.02 1,393.02 27,595.39 12,378.56 27,595.39 33,183.37 33,183.37 3,696.33 3,696.33 187.77

42 780.01

Other information Segment assets Unallocated corporate assets Total Assets

35,281.12 2.30 35,283.42 6,957.49 13,000.00 19,957.49

45,561.93 2.30 45,564.23 5,803.84 18,507.91 24,311.75

Segment Liabilities Unallocated Corporate Liabilities Total Liabilities

Capital expenditure Unallocated Capital expenditure Total Capital expenditure Depreciation/amortisation for the year

603.39

15.33 40.68 56.01 780.01

187.77 187.77 603.39

Business segment: The business segments have been identified on the basis of the products of the Company. The Company has identified two different segments namely Body Care comprising of Soaps, Cosmetics, Hair Oil, Deodorant, Toothpaste etc., Detergents & Cleansers as the operating segments. All the segments are engaged in manufacturing and selling products to customers.

NOTE 28 SUPPLEMENTARY INFORMATION I) Information pursuant to provisions of Paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act, 1956 OPENING AND CLOSING INVENTORIES, PRODUCTION, PURCHASES AND SALES IN RESPECT OF EACH CLASS OF GOODS MANUFACTURED AND TRADED January 1, 2011 to March 31, 2012 Tonnes 877 3,659 1,246 132 53 35 ` in Lacs January 1, 2010 to December 31, 2010 Tonnes Value 637 488.34 6,396 1,198.43 1,091 470.74 99 135.62 85 284.13 31 29.38 292.92 2,899.56

a)

Opening stock Soaps Detergents Cleansers Cosmetics, toiletries, hair oil and perfumes Deodorant Toothpaste Others

Value 670.52 933.04 462.16 422.62 164.00 39.00

2,691.34 b) Purchase of trading goods Soaps Detergents Cleansers Cosmetics, toiletries, hair oil and perfumes Deodorants Toothpaste Others

6,556 45,835 2,028 192 299 544

5,604.35 10,669.52 1,938.99 293.81 976.62 487.17 19,970.45

7,122 24,957 6,416 267 318 490

5,012.11 6,774.23 1,863.59 306.42 887.71 446.62 15,290.68

c)

Closing stock Soaps Detergents Cleansers Cosmetics, toiletries, hair oil and perfumes Deodorant Toothpaste Others

415 5,038 401 134 129 64

272.77 1,153.76 198.31 138.46 288.84 30.13 32.67 2,114.94

877 3,659 1,246 132 53 35

670.52 933.04 462.16 422.62 164.00 39.00 2,691.34

d)

Turnover (net of excise duty) Soaps Detergents Cleansers Cosmetics, toiletries, hair oil and perfumes Deodorant Toothpaste Others

7,018 54,809 4,739 191 223 515

8,181.04 23,669.69 4,717.08 470.83 1,187.37 885.42 5,689.42 44,800.85

7,265 45,139 12,238 237 325 437

7,882.29 17,853.00 5,714.66 5,873.37 1,587.15 660.77 5,445.60 45,016.84

43

` In Lacs II) Raw and packing materials consumed January 1, 2011 to March 31, 2012 Tonnes Value i) Raw materials Acid slurry Soda ash Other raw materials (individual item does not exceed 10% of the total consumption) ii) Packing materials* Wrapper and stiffener Carton Other packing materials (individual item does not exceed 10% of the total consumption) 2,998.23 5,779.52 2,367.55 934.05 4,986.33 January 1, 2010 to December 31, 2010 Tonnes Value 4,794 6,739 3,267.34 993.98 8,523.25

8,287.93 154.63 199.17 665.03

12,784.57 173.54 221.80 667.95

1,018.83 9,306.76 *In view of the nature of trade and numerous inventory items it is not practicable to furnish quantitative details. III) Payment to auditors January 1, 2011 to March 31, 2012 (15 Months) 12.64 1.00 0.17 13.81

1,063.29 13,847.86

Audit fees Tax audit/certificates etc. Reimbursement of expenses

January 1, 2010 to December 31, 2010 (12 Months) 9.00 1.00 0.50 10.50

IV)

Value of imports (CIF basis) Raw materials Expenditure in Foreign Currency Royalty Other Services Travelling

1,506.59

3,102.24

V)

329.10 396.79 99.09

51.67

44

VI)

Value of imported and indigenous raw materials and packing materials consumed January 1, 2011 to March 31, 2012 (15 Months) INR % Raw materials Imported 546.38 6% Indigenous 8,760.38 94% 9,306.76 100% Stores, spare parts, etc. Imported Indigenous

` In Lacs January 1, 2010 to December 31, 2010 (12 Months) INR % 1,710.32 12,137.54 13,847.86 12% 88% 100%

41.84 41.84

100% 100%

20.46 20.46

100% 100% ` In Lacs January 1, 2010 to December 31, 2010 (12 Months) 436.00

VII) Earnings in foreign exchange January 1, 2011 to March 31, 2012 (15 Months) 1,217.29

Export of goods on FOB basis

NOTE 29 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 years classification. Signatures to Notes 1 to 29
As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C. N. GANGADARAN Partner Membership No. 11205 Place : Mumbai Date : May 22, 2012 For and on behalf of the Board of Directors of HENKEL INDIA LIMITED

M.P. Ramachandran Chairman Place : Mumbai Date : May 22, 2012

K. Ullas Kamath Director

45

CASH FLOW STATEMENT FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012
January 1, 2011 to March 31, 2012 (15 Months) A. Cash Flows Provided by/(Used in) Operating Activities: Profit/(loss) before Tax Adjustments for: Depreciation and amortisation Profit on sale of fixed assets (net of loss) Loss on discarded of fixed assets Interest and finance charges Interest on fixed deposit Foreign exchange fluctuation gain (net) Bad debt written off Operating profit before working capital changes Increase/ (decrease) in Trade Payable Increase/ (decrease) in other current liabilities and Provisions Decrease / (increase) Inventories Decrease / (increase) Trade receivables Decrease / (increase) Loans and advances Decrease / (increase) other assets Cash generated from operations Taxes paid (net) Net cash generated from operating activities 780.01 (58.32) 3.49 1,958.16 (12.27) (92.46) 9,000.00 5,521.95 142.18 (100.47) 1,344.79 (2,932.30) 2,459.06 (27.17) 6,408.04 (15.08) 6,392.96 603.39 (278.73) 1,696.14 (0.15) (102.37) 7.00 2,037.97 (4,832.90) (182.12) 448.67 7,119.29 (1,604.97) 2,985.94 (21.71) 2,964.23 (6,056.66) 112.69 ` In Lacs January 1, 2010 to December 31, 2010 (12 Months)

B.

CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES: Purchase of fixed assets including capital work-in-progress and capital advances Proceeds from sale of fixed assets Investment in Fixed deposit Interest on fixed deposit Net cash generated/(used) in investing activities (56.01) 272.32 (246.74) 12.27 (18.16) (174.85) 313.99 (5.62) 0.15 133.67

46

January 1, 2011 to March 31, 2012 (15 Months) C. CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES: Interest and finance charges paid Repayment of borrowing Net cash used in financing activities Net increase / (decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the period / year Cash and cash equivalents at the end of the period / year Components of cash and cash equivalents Cash in hand Balance with banks - Current account Cash and cash equivalents considered for cash flows
As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C. N. Gangadaran Partner Membership No. 11205 Place : Mumbai Date : May 22, 2012

` In Lacs January 1, 2010 to December 31, 2010 (12 Months) (1,696.14) (1,427.11) (3,123.25) (25.35) 28.56 3.21

(1,958.16) (4,303.51) (6,261.67) 113.13 3.21 116.34

0.27 116.07 116.34

For and on behalf of the Board of Directors of HENKEL INDIA LIMITED

0.22 2.99 3.21

M.P. Ramachandran Chairman Place : Mumbai Date : May 22, 2012

K. Ullas Kamath Director

47

AUDITORS REPORT TO THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS OF HENKEL INDIA LIMITED
1. We have audited the attached consolidated Balance Sheet of Henkel India Limited and its subsidiary, as at March 31, 2012 and also the consolidated Profit and Loss Account and the consolidated Cash Flow Statement for the period ended on that date annexed thereto. These statements are the responsibility of the Henkel India Limiteds management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, c. In the case of the consolidated cash flow statement, of the cash flows for the period ended on that date. b. In the case of the consolidated Profit and Loss Account, of the loss for the period ended on that date; and We are of the opinion that a. In the case of consolidated Balance Sheet of the state of affairs of the Henkel India Limiteds and its subsidiary, as at March 31, 2012. 3. We report that the consolidated financial statements have been prepared by the Henkel India Ltds management in accordance with the requirements of Accounting Standard (AS-21) Consolidated Financial Statement, issued by the Institute of Chartered Accountants of India. as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

For CNGSN & ASSOCIATES Chartered Accountants F.R. No. 04915S Place : Chennai Date : May 22, 2012 C.N. GANGADARAN Partner Memb. No. 11205

48

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2012

Note EQUITY AND LIABILITIES Shareholders funds Share capital Reserves and surplus Non-current liabilities Borrowings Provisions Current liabilities Borrowings Trade payables Other current liabilities Provisions
TOTAL

As at March 31, 2012 18,446.45 (36,002.53) (17,556.08) 43,000.00 119.25 43,119.25 1,204.40 8,644.63 780.68 26.16 10,655.87 36,219.04

` In Lacs As at Dec. 31, 2010 18,446.45 (34,579.62) (16,133.17) 45,431.58 12.10 45,443.68 9,151.32 1,563.40 15.04 10,729.76 40,040.27

3 4 5 6 5 7 8 6

ASSETS Non-current assets Fixed assets (i) Tangible assets (ii) Intangible assets Goodwill on consolidation Investments Loans and advances Other assets Current assets Inventories Trade receivables Cash and bank balances Loans and advances Other assets
TOTAL

10 11 12 13 14 15 11 12

7,296.62 17,720.13 49.42 2.30 736.92 0.40 25,805.79 4,242.68 3,283.19 903.40 1,954.24 29.74 10,413.25 36,219.04

8,108.01 17,720.13 49.42 2.30 701.95 26,581.81 5,547.10 2,741.07 41.64 5,127.65 1.00 13,458.46 40,040.27

Summary of significant accounting policies The accompanying notes are an integral part of the financial statements. As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C. N. Gangadaran Partner Membership No. 11205 Place : Mumbai Date : May 22, 2012

For and on behalf of the Board of Directors of HENKEL INDIA LIMITED

M.P. Ramachandran Chairman Place : Mumbai Date : May 22, 2012 49

K. Ullas Kamath Director

CONSOLIDATED STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012 ` In Lacs
NOTE January 1, 2011 to March 31, 2012 (15 Months) 53,900.41 (1,166.85) 52,733.56 274.94 53,008.50 490.69 53,499.19 January 1, 2010 to Dec 31, 2010 (12 Months) 55,145.51 (1,755.16) 53,390.35 157.71 53,548.06 381.48 53,929.54 REVENUE Sales Less: Excise duty Net sales Other operating income Revenue from operations Other income Total Revenue EXPENDITURE Cost of raw material and components consumed Purchase of traded goods (Increase)/ decrease in inventories of finished goods, work-in-progress and traded goods Employee benefits expense Other expenses Depreciation and amortisation Finance Costs Total Expense Profit/(Loss) before tax and Exceptional items Exceptional items Sale of Division Profit/(Loss) before tax and after Exceptional items Current tax Profit/(Loss) after tax

16 17

18 19 20 21 9 22

9,306.76 20,340.62 445.52 3,854.74 17,036.72 780.01 5,822.61 57,586.98 (4,087.79) 2,534.77 (1,553.02) (1,553.02)

13,847.86 14,997.65 485.33 4,162.39 22,184.58 603.39 2,832.61 59,113.81 (5,184.27) (5,184.27) (5,184.27)

EARNINGS PER SHARE (EPS) Basic and Diluted (`) Nominal value per share (`) Weighted average number of shares outstanding for calculation of Basic and Diluted EPS Summary of significant accounting policies The accompanying notes are an integral part of the financial statements. As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C. N. Gangadaran Partner Membership No. 11205 Place : Mumbai Date : May 22, 2012

(1.33) 1.00 116,464,471 2

(4.45) 1.00 116,464,471

For and on behalf of the Board of Directors of HENKEL INDIA LIMITED

M.P. Ramachandran Chairman Place : Mumbai Date : May 22, 2012 50

K. Ullas Kamath Director

Notes to Consolidated financial statements for the fifteen months period ended March 31, 2012
Note 1 - BASIS OF PREPARATION a) Principles of consolidation The Consolidated Financial Statements relates to Henkel India Limited (the Company) and its subsidiary Henkel Marketing India Limited. The Financial statements of the Company and its subsidiary company are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions in accordance with Accounting Standard (AS) 21 - "Consolidated Financial Statements". The difference between the cost of investment in the subsidiary, over the net assets at the time of acquisition of shares in the subsidiary is recognised in the financial statements as Goodwill or Capital Reserve as the case may be. As far as possible, the Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company's separate financial statements. Investment other than in subsidiaries and associates have been accounted as per Accounting Standard (AS) 13 on "Accounting for Investments". 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.

b)

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies are as follows: a) Change in accounting policy i) During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year. During the year, the Company has changed valuation of inventory from weighted-average cost method to First-in-First-out method to align with the group accounting policy of inventory valuation. Accordingly, the impact of the change was not material to the financial statements for the financial year.

ii)

b)

Use of estimate The preparation of financial statements, in conformity with Indian GAAP requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Fixed assets Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost of acquisition is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In case of projects involving construction, related pre operational expenses form part of value of fixed asset capitalised. Expenses capitalised, also include applicable borrowing costs and adjustments arising from foreign exchange rate variations relating to borrowings attributable to the fixed assets. Fixed assets acquired on the merger of Henkel SPIC India Limited into the Company during 2004 have been taken into the books at fair value 51

c)

as per the scheme of amalgamation, as approved by the Hon'ble High Court of Madras. In case of revaluation of Fixed Assets, the original cost as written up to the extent certified by the valuer is considered in the accounts and the differential amount is transferred to Revaluation Reserve. d) Depreciation and amortisation Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher. The estimated useful life of the assets is as follows: Category Factory Buildings Building (Other then Factory Building) Plant and machinery Furniture and fixtures Office equipments Vehicles e) Impairment i. The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. An impairment loss is recognized wherever the carrying amount of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the pre-tax discount rate. A previously recognized impairment loss is increased or reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Estimated useful life (in years) 30 60 21 16 21 8-10

ii.

f)

Operating Leases Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Lease payments on operating leases are recognized as an expense in the Profit and Loss Account on a straight-line basis, over the lease term. Government grants and subsidies Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with. When the grant or subsidy relates to revenue item, it is recognized as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted from the gross value in arriving at the carrying amount of the related asset. Government grant in the nature of promoters' contribution is credited to the investment subsidy reserve. Investment On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties and other costs that arise on acquisition of investment. Investments that are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. 52

g)

h)

i)

Inventories Inventories of raw materials, packing materials, work-in-progress, finished goods, stores and consumables items are valued at cost or net realizable value, whichever is lower. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is ascertained on First-in-First out ('FIFO') basis and includes all applicable costs incurred in bringing goods to their present location and condition. Cost of work-in-progress, manufactured packing material and finished goods includes materials and all applicable manufacturing overheads. The Company accrues for excise duty liability in respect of manufactured finished goods/intermediary inventories lying in the factory. Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale. Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Sale of Goods Revenue is recognized when all the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Excise Duty, Sales Tax and VAT deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability arised during the year. Revenue includes the amount of excise duty refund received/due in accordance with incentive scheme. Revenue is net of trade discount given. Interest Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Foreign currency translation (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion Foreign currency monetary items are reported using the exchange rate prevailing at the reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. Retirement benefits in the form of Provident Fund and Superannuation Fund are defined contribution schemes and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective fund. Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

j)

k)

(ii)

(iii) Exchange Differences

l)

Retirement and other employee benefits (i)

m)

(ii)

Sales promotion items

Sales promotion items are valued at cost. Cost is ascertained on First-in-First out ('FIFO') basis and includes all applicable costs incurred in bringing goods to their present location and condition. n) Income-tax Income-tax expense comprises of current tax and deferred tax charge or release. Provision for current income tax is based on the assessable profits computed in accordance with the provisions of the Income Tax Act, 1961, Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that 53

originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized unless there is 'virtual certainty' that sufficient future taxable income will be available against which such deferred tax assets will be realised. o) Provisions A provision is recognized when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Excise duty Excise duty on turnover is reduced from turnover. Excise duty relating to the difference between the opening stock and closing stock is recognized as income/expense as the case may be, separately in the Profit and Loss Account. Segment Reporting Identification of segments: The Companys operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate. Segment accounting policies: The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole. Intersegment transfer: The Company generally accounts for intersegment sales and transfers as if the sales or transfer were to third parties at market price. Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Unallocated items: It includes general corporate income and expense items which are not allocated to any business segment. Earnings per Share Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for event of bonus issue, bonus element in a rights issue to existing shareholders, share split, and reverse share split that have changed the number of equity shares outstanding,without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements. Cash and Cash equivalents Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

p) q)

r)

s)

t)

54

Notes to consolidated financial statement for the fifteen months period ended March 31, 2012
NOTE 3 SHARE CAPITAL AUTHORISED CAPITAL 172,000,000 (2010 - 172,000,000) equity shares of ` 10 (2010 - ` 10) each 68,000,000 (2010 - 68,000,000) redeemable non-cumulative/ cumulative of ` 10 (2010 - ` 10 ) each ISSUED, SUBSCRIBED AND PAID-UP CAPITAL 116,464,471 (2010 - 116,464,471) equity shares of `10 (2010 - `10) each fully paid 28,000,000 (2010 - 28,000,000) 9% redeemable Non-cumulative preference shares of `10 (2010 - `10) each 40,000,000 (2010 - 40,000,000) 4% redeemable Cumulative preference shares of `10 (2010 - `10) each 4,000.00 18,446.45 a) 4,000.00 18,446.45 2,800.00 2,800.00 11,646.45 11,646.45 17,200.00 6,800.00 24,000.00 17,200.00 6,800.00 24,000.00 As at March 31, 2012 ` In Lacs As at December 31, 2010

Out of the total shares issued by Henkel SPIC India Limited during 1999 on Rights basis, 10,200 shares have been kept in abeyance pending settlement of disputes on title. Henkel India Limited shares will be issued to these shareholders on settlement of disputes. Details of shareholders holding more than 5% shares in the Company - As at March 31, 2012 As at December 31, 2010 % Holding in the % Holding in the No. of shares class class 97,426,487 83.66% 59,360,203 19,395,900 50.97% 16.66%

b)

Name of Shareholder Henkel Ag & Co. KGaA Tamilnadu Petroproducts Limited Jyothy Laboratories Limited Non-cumulative Preference Shares Henkel Ag & Co.KGaA Jyothy Laboratories Limited Cumulative Preference Shares Henkel Ag & Co.KGaA Jyothy Laboratories Limited

No. of shares

28,000,000

100.00%

28,000,000

100.00%

40,000,000

100.00%

40,000,000

100.00%

55

` In Lacs NOTE 4 RESERVES AND SURPLUS Capital reserve General reserves Balance, beginning of the year/period Add: amount transferred to deficit balance in the statement of profit and loss Balance, end of the year/period Preference Share Redemption Reserve Revaluation reserve Balance, beginning of the year/period Add: Addition pursuant to revaluation of land Add: Reversal pursuant to sale of land Balance, end of the year/period Share premium account Deficit in the statement of profit and loss Balance, beginning of the year/period Add: amount transferred from general reserves Profit/(Loss) for the year/period Net deficit in the statement of profit and loss As at March 31, 2012 843.19 1,047.38 (1,047.38) 10.95 95.73 205.61 (75.50) 225.84 0.29 As at Dec. 31, 2010 843.19 1,047.38 1,047.38 10.95 95.73 95.73 0.29

(36,577.16) 1,047.38 (1,553.02) (37,082.80) (36,002.53)

(31,392.89) (5,184.27) (36,577.16) (34, 579.62)

NOTE 5 BORROWINGS Loan from banks Loan from Holding Company

Non-Current As at March 31, 2012 43,000.00 43,000.00 As at December 31, 2010 26,923.67 18,507.91 45,431.58 45,431.58

Current As at March 31, 2012 1,204.40 1,204.40 1,204.40 As at December 31, 2010

The above amount includes Unsecured borrowings 43,000.00

NOTE 6 PROVISIONS Provision for gratuity Provision for leave encashment

Long-Term

Short-Term

119.25 119.25

12.10 12.10

14.55 11.61 26.16

15.04 15.04

56

` In Lacs NOTE 7 TRADE PAYABLE Trade Payable - Micro and Small Enterprises - Others Sundry Creditors for expenses As at March 31, 2012 As at December 31, 2010

1,649.41 1,570.91 2,191.85 5,424.31 6,959.47 8,644.63 9,151.32 Trade payables includes `1,649.41 Lacs due to small scale and ancillary undertakings to the extent such parties have been identified from the available documents / information. NOTE 8 OTHER CURRENT LIABILITIES Interest accrued but not due on loans Other current liabilities Security deposits Advances from customers 467.39 85.86 227.43 780.68 9.21 1,086.93 139.35 327.91 1,563.40

NOTE 9 FIXED ASSETS

Gross Block Particulars Intangible assets Goodwill Tangible assets Freehold land Building Plant and machinery Furniture and fixture Office equipments Vehicle Total Previous period 1,150.76 1,080.20 8,428.98 239.11 1,043.17 196.97 30,083.32 29,941.68 205.61 15.33 20.81 19.87 261.62 187.77 75.80 31.01 36.93 30.34 141.61 73.67 389.36 46.13 1,280.57 1,049.19 8,407.38 229.58 921.43 123.30 29,955.58 30,083.32 251.66 39.83 11.73 13.71 5.58 45.14 20.20 96.36 10.89 279.76 3,577.60 121.34 674.44 61.69 4,938.83 4,255.18 1,280.57 769.43 4,829.78 108.24 246.99 61.61 25,016.75 25,828.14 1,150.76 828.54 5,459.39 142.23 395.78 131.31 25,828.14 17,944.13 17,944.13 224.00 224.00 17,720.13 17,720.13 As at Jan. 1, 2011 Additions Depreciation and Amortisation Net Block

Deletions/ As at As at For the As at As at As at Deletions Adjustment Mar. 31, 2012 Jan. 1, 2011 year Mar. 31, 2012 Mar. 31, 2012 Dec. 31, 2010

2,969.59 621.72 96.88 647.39 65.66 30.04 72.19 16.23

4,255.18 780.01 3,662.66 603.39

57

` In Lacs NOTE 10 INVESTMENTS Trade Investments (Unquoted) Henkel SPIC Employees Co-operative Thrift and Credit Society Limited 2,000 (2010 - 2,000) equity shares of ` 100 (2010 - ` 100) each fully paid-up Capexil (Agencies) Ltd. 5 (2010 - 5) equity shares of ` 1000 (2010 - ` 1000) each fully paid-up Madras Industrial Cooperative Analytical Laboratory Limited 2 (2010 - 2) equity shares of ` 500 (2010 - ` 500) each fully paid-up Ambattur Industrial Estate Manufacturers Service Industrial Cooperative Society Ltd. 1 (2010 - 100) equity shares of ` 1 (2010 - ` 100) each fully paid-up Less: Provision for diminution in the value of investments Investment in Government Securities (Unquoted) 3% Government of India conversion loan , 1946 National Saving Certificates (Pledged with Government authorities) Less: Provision for diminution in the value of investments Aggregate amount of unquoted investments Total (B) Total (A-B) 0.01 0.30 0.31 (0.01) 0.30 2.30 2.30 0.01 0.30 0.31 (0.01) 0.30 2.30 2.30 Total (A) 2.06 0.06 2.00 2.06 0.06 2.00 0.01 0.01 0.05 0.05 2.00 2.00 As at March 31, 2012 As at December 31, 2010

NOTE 11 LOANS AND ADVANCES Unsecured, considered good Deposits Advances recoverable in cash or in kind or for value to be received Advance to suppliers Balance with Govt. authorities Staff loans Mat Credit Advance tax (net of provision)

Non-Current As at March 31, 2012 564.33 172.59 736.92 As at December 31, 2010 545.64 156.31 701.95

Current As at March 31, 2012 7.41 70.73 768.82 962.18 7.81 99.11 38.18 1,954.24 As at December 31, 2010 4.85 121.93 3,172.89 1,707.16 99.11 21.71 5,127.65

58

` In Lacs NOTE 12 OTHER ASSETS Fixed Deposit with Bank (Note 15) Other assets Non-Current As at March 31, 2012 0.40 0.40 NOTE 13 INVENTORIES Raw and packing materials (includes goods in transit - ` Nil (2010 - ` 131.6) Work-in-progress Finished goods Stores and spare parts As at December 31, 2010 Current As at March 31, 2012 2.97 26.77 29.74 As at March 31, 2012 1,370.45 90.16 2,666.65 115.42 4,242.68 NOTE 14 TRADE RECEIVABLES Unsecured a) b) Debt outstanding for period exceeding six months Considered doubtful Less: Provision for doubtful debts Other debts Considered good Considered doubtful Less: Provision for doubtful debts 3,283.19 3,283.19 3,283. 19 2,741.07 35.03 (35.03) 2,741.07 2,741.07 902.75 (902.75) 790.73 (790.73) As at December 31, 2010 1.00 1.00 As at December 31, 2010 2,236.64 77.48 3,124.85 108.13 5,547.10

NOTE 15 CASH AND BANK BALANCES Cash and cash equivalents Cash in hand Balance with banks - Current account Other bank balances Deposits with original maturity for more than 12 months Amount Disclosed under other assets (refer Note 12)

Non-Current Current As at As at As at As at March 31, 2012 December 31, 2010 March 31, 2012 December 31, 2010 3.37 (3.37) 3.20 618.38 281.82 903.40 2.23 4.33 1.00 34.08 41.64

59

` In Lacs NOTE 16 OTHER OPERATING INCOME Miscellaneous income January 1, 2011 to March 31, 2012 (15 Months) 274.94 274.94 NOTE 17 OTHER INCOME Interest Income Foreign exchange fluctuation gain (net) Profit on sale of assets (net of loss) Miscellaneous income January 1, 2010 to Dec. 31, 2010 (12 Months) 157.71 157.71

14.12 92.46 58.32 325.79 490.69

0.15 102.37 278.73 0.23 381.48

NOTE 18 MATERIAL COSTS Raw and packing materials consumed Opening stock Add: Cost of purchases (net) Less: Closing stock 2,024.20 8,518.41 10,542.61 1,235.85 9,306.76 NOTE 19 (INCREASE)/DECREASE IN INVENTORIES (Increase)/ decrease in inventories Closing stock Finished goods Work-in-progress Opening stock Finished goods Work-in-progress 3,124.85 77.48 3,202.33 445.52 NOTE 20 EMPLOYEE BENEFIT EXPENSES Salaries, wages and bonus Contribution to provident and other funds Gratuity Staff welfare expenses 3,632.26 55.40 3,687.66 485.33 2,666.65 90.16 2,756.81 3,124.85 77.48 3,202.33 2,291.93 13,580.13 15,872.06 2,024.20 13,847.86

3,387.90 138.32 141.45 187.07 3,854.74

3,679.68 133.07 54.83 294.81 4,162.39

60

` In Lacs NOTE 21 OTHER EXPENSES Conversion charges Power and fuel expenses Rent Insurance Repairs and maintenance - - - Building Plant and machinery Others 6.66 53.01 48.02 41.84 0.95 62.71 19.41 185.81 567.10 350.76 3.21 69.79 0.04 3.49 851.96 8,212.59 3,385.64 732.07 369.68 421.28 0.04 76.99 476.25 17,036.72 15.00 123.04 91.21 20.46 56.33 36.24 168.67 1,002.21 429.44 4.56 57.10 7.00 3,402.47 9,465.04 3,178.78 977.85 389.18 770.13 0.11 266.78 527.03 22,184.58 January 1, 2011 to March 31, 2012 (15 Months) 172.09 372.18 467.33 85.82 January 1, 2010 to December 31, 2010 (12 Months) 253.83 445.63 399.60 96.89

Consumption of stores and spares Research and development Bank charges and commission Printing and stationery Communication costs Legal and professional fees Rates and taxes Directors' sitting fees Vehicle maintenance Donation Fixed assets discarded Bad debt expenses Advertisement and publicity Sales promotion and schemes Freight, handling and forwarding charges Travelling and conveyance Brokerage on sales Royalty Exchange rate fluctuation Provision for bad and doubtful debts Miscellaneous expenses

NOTE 22 INTEREST AND FINANCE CHARGES Interest expense Other borrowing cost 5,602.01 220.60 5,822.61 2,832.61 2,832.61

61

NOTE 23 EMPLOYEE BENEFIT As per Accounting Standard 15 (Revised 2005) "Employee Benefits" the disclosures of employee benefits as defined in the Accounting Standard are given below: ` In Lacs January 1, 2011 to January 1, 2010 March 31, 2012 to December 31, 2012 (15 Months) (12 Months) Employer's contribution to Provident fund and other funds 138.32 133.07

The Company has changed its leave policy during the current year, where in all the leave entitlement needs to be utilised in the same calendar year. The leave balances do not get encashed or carry forward to the next year and hence no actuarial liability has been considered as at the year end. Particulars Reconciliation of opening and closing balances of defined benefit plan: Opening Defined Benefit obligation Current service cost Interest costs Actuarial (gain)/loss Benefits paid Closing Defined Benefit obligation Reconciliation of opening and closing balances of fair value of plan assets: Opening fair value of plan assets Expected returns on plan assets Actuarial (gain)/loss Employer contribution Benefits paid Closing fair value of plan assets Reconciliation of fair value of assets and obligations: Fair value of plan assets Present value of obligation Difference Expenses recognised during the year: Current Service cost Interest Cost Expected returns on plan assets Actuarial (gain)/loss Net Cost Investment details Funds with LIC Actuarial assumptions LIC 1994-96 Ultimate Table applied for service mortality rate Discount rate p.a. Expected rate of return on plan assets p.a. Rate of escalation in salary p.a. As at March 31, 2012 186.11 26.75 17.58 67.00 (151.90) 145.54 174.01 10.32 (40.44) 3.00 (135.15) 11.74 11.74 145.54 133.80 26.75 17.58 (10.32) 107.44 141.45 100% Yes 8.30% 8.15% 8.00% As at December 31, 2010 160.06 22.70 12.73 30.49 (39.87) 186.11 173.89 15.15 (4.06) 45.65 (56.62) 174.01 174.01 186.11 12.10 22.70 12.73 (15.15) 34.55 54.83 100% Yes 8.25% 9.00% 5.00%

62

NOTE 24 RELATED PARTY DISCLOSURES a) Names of the related parties Henkel AG&Co. KGaA, Germany (upto 31-05-2011) Tamilnadu Petroproducts Limited, India (upto 31-05-2011) Jayant K. Singh, Managing Director (upto 31-05-2011)

Promoters Key Management Personnel

Holding Company Jyothy Laboratories Limited (w.e.f. 01-06-2011) Enterprises under common control with reporting enterprises: Associated Industries Consumer Products Private Limited (w.e.f. 01-06-2011) Jyothy Fabricare Services Limited (w.e.f. 01-06-2011) ` In Lacs

b) Aggregate related party disclosures for the fifteen month period ended March 31, 2012 Holding Company Jyothy Laboratories Limited (w.e.f. 01-06-2011)

Purchase of goods

Sale of goods

63 608.78 14,204.40

Interest Expenses

Royalty payable

Rent paid

Services

Loan Taken

Repayment of loan Taken Reimbursement of expenses to Jyothy Receivables

1,086.84 519.50 1,190.88 26,617.74 12,685.00

Payables

Remuneration

Subsidiary of Subsidiary of Promoter Key Management Holding Company Holding Company Personnel Associated Industries Jyothy Fabricare Tamilnadu Henkel AG&Co. Jayant K Singh, Consumer Products Services Limited Petroproducts KGaA Managing Director Private Limited (w.e.f. 01-06-2011) Limited, India (upto 31-05-2011) (upto 31-05-2011) (w.e.f. 01-06-2011) (upto 31-05-2011) 21.28 1,061.62 39.15 (627.83) (1,388.12) 0.22 0.23 7.30 258.59 (770.18) 72.63 (172.13) 15.78 215.42 (37.09) (630.12) 12,110.00 12,110.00 0.23 (1,990.30) (720.47) 29.15 (111.81)

Note: Figures in brackets represents previous year numbers.

NOTE 25 DEFERRED TAX As a matter of prudence, the Company has recognised deferred tax asset amounting to `1,677.33 to the extent of the deferred tax liability, resulting in nil net deferred taxes for the current year. The break-up of deferred tax assets is as follows : ` In Lacs As at March 31, 2012 A. Deferred tax assets Expenses allowable against taxable income in future years Carry forward business loss and depreciation B. Deferred tax liabilities Timing difference in depreciable assets Net deferred tax assets (A - B) NOTE 26 CONTINGENT LIABILITIES (a) (b) (c) (d) (e) Sales tax related matters Excise duty related matters Income tax related matters Others Counter guarantees to bank in respect of guarantees to: Sales Tax/Central Excise authorities Others (f) (g) (h) (i) Income tax demands against which the Company has preferred appeal before appropriate authorities Claims filed by an ex-employee of the Company pending in a court of law Letter of credit outstanding Dividend on Preference Shares 478.84 1.49 23.28 32.82 32.82 0.48 52.12 78.31 19.88 59.83 44.27 40.00 1,677.33 1,677.33 18,490.92 1,321.44 1,321.44 18,576.11 20,168.25 20,168.25 135.60 19,761.95 19,897.55 As at December 31, 2010

64

NOTE 27 SEGMENT REPORTING ` In Lacs

Body Care As at December 31, 2010 18,262.00 (787.00) 765.63 (5,602.01) (4,087.79) 2,534.77 (1,553.02) 8,110.87 8,110.87 10,425.00 3,127.00 3,127.00 15.33 8,401.60 8,401.60 2,373.52 2,373.52 28,105.87 10,425.00 28,105.87 29,563.27 29,563.27 7,614.86 7,614.86 187.77 36,216.74 2.30 36,219.04 10,775.12 43,000.00 53,775.12 234.59 (1,974.27) 748.59 Total As at December 31, 2010 53,390.35 (2,761.27) 466.00 (2,889.00) (5,184.27) (5,184.27) 39,988.27 52.00 40,040.27 10,741.86 45,431.58 56,173.44

Information about business segments

Segment revenue (net of Excise duty) 514.00

As at March 31, 2012 16,361.41

Detergents & Cleansers As at As at March 31, 2012 December 31, 2010 36,372.15 35,128.35 As at March 31, 2012 52,733.56

Segment results (Profit before interest and unallocated income)

Unallocated income (net) Interest expenses Operating profit Exception Item Sale of SKP-Hair-care Division Net profit

Other information Segment assets Unallocated corporate assets Total Assets

65
780.01

Segment Liabilities Unallocated Corporate Liabilities Total Liabilities

Capital expenditure Unallocated Capital expenditure Total Capital expenditure Depreciation / amortisation for the year

603.39

15.33 40.68 56.01 780.01

187.77 187.77 603.39

i)

Business segment : The business segments have been identified on the basis of the products of the Company. The Company has identified three different segments namely Body Care comprising of Soaps, Cosmetics, Hair Oil, Deodorant, Toothpaste etc., Detergents & Cleansers and other products comprising of zeolites etc. as the operating segments. All the segments are engaged in manufacturing and selling products to customers.

NOTE 28 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 years classification. Signatures to Notes 1 to 28 As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C N GANGADARAN Partner Membership No. 11205 Place : Mumbai Dated : May 22, 2012

For and on behalf of the Board of Directors of HENKEL INDIA LIMITED

M.P. Ramachandran Chairman Place : Mumbai Dated : May 22, 2012

K. Ullas Kamath Director

66

CONSOLIDATED CASH FLOW FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012
` In Lacs
January 1, 2011 to March 31, 2012 (15 Months) A. CASH FLOWS PROVIDED BY/(USED IN) OPERATING ACTIVITIES: Profit / (Loss) before Tax Adjustments for: Depreciation and amortisation Profit on sale of assets (net of loss) Fixed assets discarded Interest and finance charges Interest Income Foreign exchange fluctuation gain (net) Bad debt expenses Provision for doubtful debts Operating profit before working capital changes Increase /(Decrease) Inventories Increase /(Decrease) trade receivables Increase /(Decrease) loans and advances Increase /(Decrease) in other assets Increase /(Decrease) in current liabilities / provisions Cash generated from operations Taxes paid (net) Net cash generated from operating activities 780.01 (58.32) 3.49 5,822.61 (14.12) (92.46) 76.99 4,965.18 1,304.42 (619.12) 3,154.92 (26.77) (1,078.66) 7,699.97 (16.47) 7,683.50 603.39 (278.73) 2,832.61 (0.15) (102.37) 7.00 266.78 (1,855.74) 695.94 2,211.94 (1,847.90) (3,474.02) (4,269.78) (21.71) (4,291.49) (1,553.02) (5,184.27) January 1, 2010 to December 31, 2010 (12 Months)

B. CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES: Purchase of fixed assets including capital work-in-progress and capital advances Proceeds from sale of fixed assets Investment in fixed deposits (net) Interest Income Net cash used in investing activities (56.01) 272.32 (249.12) 14.12 (18.69) (174.85) 313.99 (6.61) 0.15 132.68

67

` In Lacs
January 1, 2011 to March 31, 2012 (15 Months) C. CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES: Interest and finance charges paid Repayment of borrowing Net cash used in financing activities (5,822.61) (1,227.18) (7,049.79) (2,832.61) 6,861.65 4,029.04 January 1, 2010 to December 31, 2010 (12 Months)

Net increase / (decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the period / year Cash and cash equivalents at the end of the period / year

615.02 6.56 621.58

(129.77) 136.33 6.56

Components of cash and cash equivalents Cash in hand Balance with banks - Current account Cash and cash equivalents considered for cash flows As per our report of even date For M/s. CNGSN & Associates Chartered Accountants Firm registration number: 04915S C N GANGADARAN Partner Membership No. 11205 Place : Mumbai Dated : May 22, 2012 Place : Mumbai Dated : May 22, 2012 M.P. Ramachandran Chairman K. Ullas Kamath Director 3.20 618.38 621.58 For and on behalf of the Board of Directors of HENKEL INDIA LIMITED 2.23 4.33 6.56

68

Notes

69

Notes

70

Notes

71

Notes

72

(Regd. Office : Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai - 400 059.)

Jyothy Consumer Products Limited

ATTENDANCE SLIP

PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL Folio No. / Client ID No. ......................................................
DP ID No. ............................................................................

Name ................................................................................... .............................................................................................. Address ............................................................................... .............................................................................................. ..............................................................................................

I hereby record my presence at the 91st Annual General meeting to be held on 22nd November, 2012 Venue : M. C. Ghia Hall, Inidian Textile Accessories & Machinery Manufacturers Association, Bhogilal Hargovindas Building, 4th Floor, 18/20, K. Dubhash Marg, Kala Ghoda, Mumbai 400 001. 12.00 P.M.

Signature of the Shareholder ............................................... Signature of the Proxy .........................................................

Time

(Regd. Office : Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai - 400 059.)

Jyothy Consumer Products Limited

PROXY FORM

I/We ........................................................................................................................................................................................ of ............................................................ in the district of ........................................................... being a Member/Members of Jyothy Consumer Products Ltd., hereby appoint ................................................................................................................... of .................................................... in the district of ................................................... or failing him .................................... of .................................................... in the district of ................................................ as my/our Proxy in my/our absence to attend and vote for me / us and on my / our behalf at the 91st Annual General Meeting of the Company to be held on 22nd November, 2012 at 12.00 P.M. and at any adjournment thereof.

Signed this ......................................... day of ......................................... 2012. Signed by the said .........................................
One Rupee Revenue Stamp

Note: The Proxy must be deposited at the Registered Office of the Company at Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai - 400 059, not less than 48 hours before the time for holding the Meeting. The Proxy need not be a member of the Company.

BOOK-POST

If undelivered please return to: Jyothy Consumer Products Limited Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai - 400 059.