jyothy consumer products limited

Jyothy consumeR pRoducts limited[Formerly known as Henkel India Limited]

AnnuAl RepoRt 2012

BOARD OF DIRECTORS

Mr. M.P. RAMACHANDRAN CHAIRMAN

Mr. K. ULLAS KAMATH DIRECTOR

Ms. M.R. JYOTHY DIRECTOR

Mr. NILESH B. MEHTA DIRECTOR

Mr. K.P. PADMAKUMAR DIRECTOR

Mr. BIPIN R. SHAH DIRECTOR

Mr. R. LAKSHMINARAYANAN DIRECTOR

REGISTERED OFFICE

UJALA HOUsE,Ramakrishna Mandir Road, Kondivita,

Andheri (East), Mumbai - 400 059

AUDITORS

M/s. CNGsN & AssociatesChartered 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. Notice .....................................................................................................................3-6

2. Directors’ Report .................................................................................................7-10

3. Corporate Governance Report.........................................................................11-20

4. Management Discussion and Analysis Report ..............................................21-22

5. Auditors’ Report ................................................................................................23-25

6. Balance Sheet.........................................................................................................26

7. StatementofProfitandLoss ................................................................................27

8. Statement of Cash Flow ..................................................................................46-47

9. Auditors’ Report Consolidated Financial Statements ........................................48

10. Consolidated Financial Statements ................................................................49-66

11. Consolidated Statement of Cash Flow ...........................................................67-68

3

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. 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.

2. To appoint a Director in place of Mr. M. P. Ramachandran, who retires by rotation and being eligible offers himself for re-appointment.

3. To appoint a Director in place of Mr. K. Ullas Kamath, who retires by rotation and being eligible offers himself for re-appointment.

4. To appoint a Director in place of Ms. M. R. Jyothy, who retires by rotation and being eligible offers herself for re-appointment.

5. 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, 2012Place: 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.

2. 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.

3. The Book Closure Date for the purpose of Annual General Meeting will be from 23rd October, 2012 to 31st October, 2012 (both days inclusive).

4

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.

5. Members are requested to correspond with Registrars and share Transfer Agents of the Company for all matters relating to shareholding in the Company.

6. Corporate Members are requested to send to the Company’s Registrars and Share Transfer Agents, a duly certified copy of the Board Resolution authorizing their representative to attend and vote at the AGM.

7. 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.

8. Members desiring any information on the accounts are requested to write to the Company at least seven days in advance of the AGM.

9. 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 [email protected]. or a letter to Registrars and share Transfer Agents of the Company.

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 : 66 years

Qualification : Post Graduate degree in Financial Management

Expertise : Industrialist

Date of appointment : 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”.

5

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 PositionCommittee Membership

Chairman Member

1. Jyothy Laboratories Limited Chairman & Managing Director - shareholders Grievance Committee

2. Jyothy Fabricare services Limited Chairman & Managing Director Audit Committee -

3. sivasakthi Ayurvedic Research Centre Limited Director - -

4. Jyothy Consumer Products Marketing Limited Chairman - -

Item No.3 of the Notice: Re-appointment of Mr.K.Ullas Kamath

Age : 49 years

Qualification : Chartered Accountant, Company Secretary Bachelor’s Degree in Law & Master’s Degree in Commerce

Expertise : Finance, sales & General Management


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 bachelor’s degree in Law and master’s 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.


Chairman Member

1. Jyothy Laboratories Limited Joint Managing Director - Audit Committee & shareholders’ Grievance

Committee

2. Jyothy Fabricare services Limited Director - Audit Committee

3. Jyothy Consumer Products Marketing Limited Director - -

Item No.4 of the Notice: Re-appointment of Ms. M. R. Jyothy

Age : 34 years

Qualification : Bachelor’s Degree in Commerce MBA from Wellingker’s Management Institute Expertise : Management, Marketing


6

Ms. M. R. Jyothy is Whole-Time Director of Jyothy Laboratories Limited. she holds a bachelor’s degree in Commerce from the University of Mumbai and an MBA from Wellingker’s 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.


Chairman Member

1. Jyothy Laboratories Limited Executive Director -

2. Jyothy Fabricare services Limited Director - -

3. sahyadri Agencies Limited Director - -

4. Jyothy Consumer Products Marketing Limited Director - -

7

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)

Particulars

From 1st January, 2011 to 31st March, 2012 (15 Months)

From 1st January, 2010 to 31st

December, 2010 (12 Months)

sales (net) 44,800.85 45,017.15Other Income 163.05 381.25EBITDA 3,146.74 2,412.22Financial Expense 1,958.16 1,696.14Depreciation and Amortizations 780.01 603.39Profit before Tax and Exceptional items 408.57 112.69Exceptional items

- sale of Division 2,534.77 -- Bad debt written off (9,000.00) -

Profit Before Tax (6,056.66) 112.69Tax expense

- Current tax - 20.28- MAT credit entitlement - (20.28)

Profit After Tax (6,056.66) 112.69Balance in Profit and Loss Account as per last Balance Sheet Brought Forward 808.49 695.80Add: Balance transferred from General Reserve 1,047.38 -Balance at the end of the period Carried Forward (Profit and Loss Account) (4,200.79) 808.49Earnings Per share (Basic and Diluted) (5.20) 0.10

8

Consolidated results

(` in lac)

Particulars From 1st January, 2011 to 31st March, 2012 (15 Months)


December, 2010 (12 Months)

sales (Net) 52,733.56 53,390.35EBITDA 2,514.83 (1,748.26)Financial Expense 5,822.61 2,832.61Depreciation and Amortisations 780.01 603.39Loss before Tax and Exceptional items (4,087.79) (5,184.27)Exceptional items 2,534.77 -Loss before tax (1,553.02) (5,184.27)Loss after tax (1,553.02) (5,184.27)

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, 2011 to 31st March, 2012


December, 2010Foreign exchange earnings 1,217.29 436.00Foreign exchange outgo 2,331.58 3153.91

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

9

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) 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;

ii) 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;

iii) 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

iv) 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.

10

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.

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

Place : Mumbai M. P. RamachandranDate : 22nd May, 2012 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

Date of joining

Experience Gross Remuneration paid (` in lac)

Previous Employment, Designation

Mr. Jayant K. singh Managing Director up to 31st May, 2011

MBA from IIM, Lucknow

39 31/03/2009 15 years 29.15 Chairman and Managing Director for GsK Consumer Healthcare, sri Lanka

Notes:

1. The remuneration shown above is the monthly remuneration paid upto 31st May, 2011 which included salary, allowances, company’s contributions to Provident Fund and other perquisites valued as per Income Tax Rules, 1962.

2. 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.

11

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. COMPANY’S 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 it’s operations.

2. BOARD OF DIRECTORS

a. 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.

b. The Composition of Board and Attendance of Directors

Name Status Attendance in Board Meetings

Attendance in last AGM

held on 14/9/2011

Other Directorships

held

OtherCommittee

Memberships (Chairman)

held

Held Attended Yes/No/NA

Dr. A. C. Muthiah Non-executive Chairman % 7 2 NA NA NA

Mr. Patrick Kaminski Non- executive Director % 7 1 NA NA NA

Mr. Ben Ho Non- executive Director % 7 2 NA NA NA

Mr. Thomas Jungmann Non-executive Director % 7 2 NA NA NA

Dr. A. Besant C. Raj Independent Director % 7 3 NA NA NA

Mr. sukhendu Ray Independent Director % 7 3 NA NA NA

Mr. RM. Muthukaruppan Independent Director ^ 7 2 NA NA NA

Mr. A. satish Kumar Non-executive Director % 7 2 NA NA NA

Dr. Uddesh Kohli Independent Director % 7 1 NA NA NA

Prof. Debashis Chatterjee Independent Director % 7 1 NA NA NA

Mr. V. selvaraj Independent Director % 7 3 NA NA NA

Mr. Jayant K. singh Managing Director % 7 2 NA NA NA

Mr. M. P. Ramachandran Non-Executive Director $ 7 4 Yes 3 1(1)

12

Name Status Attendance in Board Meetings

Attendance in last AGM

held on 14/9/2011

Other Directorships

held

OtherCommittee

Memberships (Chairman)

held

Held Attended Yes/No/NA

Mr. K. Ullas Kamath Non-executive Director $ 7 4 Yes 2 2

Ms. M. R. Jyothy Non-exectutive Director $ 7 4 Yes 3 -

Mr. Bipin R. shah Independent Director $ 7 4 No 4 5(1)

Mr. K. P. Padmakumar Independent Director $ 7 2 No 5 3(1)

Mr. R. Lakshminarayanan Independent Director $ 7 3 No 1 -

Mr. Nilesh B. Mehta Independent Director $ 7 2 Yes 8 2(1)

NA – Not Applicable$ Appointed as Additional Directors w.e.f 31/5/11

^ 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.

c. 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.

3. 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:

A. AUDIT COMMITTEE

The Audit Committee primarily oversees the Company’s 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 Company’s 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.

13

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 Meetings held Meetings attended

Dr. Besant C. Raj (Chairman till 31-05-2011) 5 2

Mr. sukhendu Ray 5 2

Mr. A. satish Kumar 5 1

Mr. Ben Ho 5 0

Mr. Nilesh Mehta (Chairman since 31-05-2011) 5 2

Mr. Bipin R. shah 5 3

Mr. R. Lakshminarayanan 5 2

Mr. K. Ullas Kamath 5 3

Mr. K. P. Padmakumar 5 2

C. REMUNERATION COMMITTEE

The Committee was constituted to decide the Company’s policy on specific remuneration packages for Executive and Non-executive 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.

14

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 Total Dr. A. Besant C. Raj 47,500.00

Mr. satish Kumar A. 32,500.00

Mr. sukhendu Ray 27,000.00

Mr. V. selvaraj 18,000.00

Mr. R. M. Muthukaruppan 15,500.00

Dr. A. C. Muthiah 6,000.00

Dr. Uddesh Kohli 6,000.00

Prof. Debashis Chatterjee 6,000.00

Mr. Bipin R shah 36,000.00

Mr. R. Laxminarayanan 26,000.00

Mr. K. P. Padmakumar 23,000.00

Mr. Nilesh Mehta 23,000.00

Mr. K. Ullas Kamath 3,000.00

Mr. M. P. Ramachandran 3,000.00

Mr. M. R. Jyothy 3,000.00

Grand Total 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.

5. GENERAL BODY MEETING

Details of last three Annual General Meetings:

Year Date Time Special Resolutions passed2008 11th september, 2009 10.15 am None

2009 16th september, 2010 10.30 am None

2010 14th september, 2011 11.00 am None

* 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.

Particulars Valid Postal Ballot forms

received

Votes in favour of the resolution

Votes against the Resolution

Invalid Postal Forms

received

Results

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

1696 9,83,79,110 28,219 86 Approved with requisite majority

15

Sr. No.

Particulars Valid Postal Ballot forms

received

Votes in favour of the resolution

Votes against the Resolution

Invalid Postal Forms

received

Results

2 special Resolution for making loan, investment, guarantee or provide security beyond the prescribed limits under section 372A of the Companies Act, 1956:


3 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


4 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


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.

6. 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:

16

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.

8. MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report forms part of this Report and given separately elsewhere in this Annual Report.

9. 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.

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 July/August 2012

second quarter results Oct/Nov 2012

Third quarter results Jan/Feb 2012

Fourth quarter and Annual results May 2013

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 Stock Code

Madras stock Exchange Limited,11, second Lane Beach, Chennai -600 001.

HIL

Bombay stock Exchange LimitedPhiroze Jeejeebhoy Towers, Dalal street,Mumbai – 400 001.

532671

The Calcutta stock Exchange Ltd.Lyons Range, Kolkata – 700 001

37210 & 10037210

17

Depository Connectivity

National securities Depository Limited (NsDL) Central Depository services (India) Limited (CDsL) IsIN : INE099H01019

Stock Market price data in BSE

Month Monthly High(`)

Monthly Low(`)

January 2011 48.20 36.05

February 2011 37.65 28.00

March 2011 49.95 32.70

April 2011 43.90 32.90

May 2011 40.00 32.60

June 2011 40.70 38.45

July 2011 41.40 38.00

August 2011 41.00 32.55

september 2011 39.75 30.75

October 2011 32.00 25.55

November 2011 31.00 21.90

December 2011 26.95 20.00

January 2012 27.60 21.40

February 2012 36.45 24.60

March 2012 29.60 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 ofShares slab

No. ofShareowners

% of shareowners No. of Shares % to Total

1 – 100 24,371 44.23 16,57,894 1.42

100 – 500 26,038 47.26 64,92,019 5.58

501 – 1000 2,775 5.04 22,35,801 1.92

1001 – 2000 1,063 1.93 16,32,724 1.40

2001 – 3000 288 0.52 7,39,760 0.64

3001 – 4000 142 0.26 5,09,243 0.44

4001 – 5000 130 0.24 6,21,976 0.53

5001 and 10000 162 0.29 12,12,010 1.04

> 10001 130 0.23 10,13,52,844 87.03

TOTAL 55,099 100.00 11,64,54,271* 100.00

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

18

11. CATEGORIES OF SHAREOWNERS AS ON 31/03/2012

Category No. of ShareOwners

No. of SharesHeld

VotingStrength (%)

Promoters, Relatives & Associates 1 9,74,26,487 83.66

Bodies Corporate (Domestic) 562 19,12,000 1.64

Banks, Mutual Funds & Financial Institutions 10 10,795 0.01

Foreign Institutional Investors (FIIs) 1 10,000 0.01

NRI /OCBs/ Foreign Nationals 386 4,63,395 0.40

Clearing Member, Trust, Resident (Public & others) 54,139 1,66,31,594 14.28

Total 55,099 11,64,54,271* 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 Category Shares %Jyothy Laboratories Limited Promoter 9,74,26,487 83.65Mangal Keshav securities Limited Public 5,50,000 0.47Lal Tolani Public 2,75,671 0.24smarniya Properties Pvt. Ltd. Public 1,02,229 0.09Lumesh T sanghavi Public 1,00,000 0.09sainath Roopesh Kumar Public 1,00,000 0.09s. Roopesh Kumar Public 99,830 0.09Divyesh Bharat shah Public 92,289 0.08Tara Chand Jain Public 82,534 0.07Dr. Anil Gupta Public 65,400 0.06

13. HIL Performance Composition v/s BSE Index

19

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 : [email protected]

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: [email protected]

20

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. BPractising 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.

M. P. Ramachandran Chairman

Place : MumbaiDated : 22nd May, 2012

21

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.

2. Cost Analysis

Our strong performance is reflected through the comparison of the following numbers.

` in croresParticulars JanuarytoMarch(fifteenmonths)

31.03.2012 31.03.2011 Growth %Income Net sales 527.34 653.11 -19%Other income 7.66 5.93 29%Total income 535.00 659.04 -19%Expenditure Decrease in stock-in-trade and work-in-progress 4.46 2.57 73%Consumption of raw materials 93.07 169.82 -45%Purchase of traded goods 203.41 187.32 9%Employee cost 38.55 45.27 -15%Other expenditure 172.57 278.55 -38%Total expenditure 512.05 683.53 -25%EBIDTA 22.95 (24.49) 194%Depreciation 7.80 7.51 4%Profit/(loss) before Exceptional items and Interest 15.14 (32.00) 147%Interest 56.02 38.17 47%Profit/(loss)beforeExceptionalitems (40.88) (70.17) 42%Exceptional items - sale of sKP-Hair-care Division 25.35 – Profit/(loss) before tax (15.53) (70.17) 78%Tax Expense – – NetProfit/(loss)fortheperiod (15.53) (70.17) 78%

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.

3. 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.

22

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 Company’s 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 Company’s 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.

23

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 Company’s 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 (Auditor’s 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;

ii. 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.

AUDITORS’ REPORT TO THE MEMBERS OF HENKEL INDIA LIMITED

For CNGSN & ASSOCIATESChartered Accountants

F.R. No. 04915s

C.N. GANGADARANPartner

Memb. No. 11205

Place : ChennaiDate : May 22, 2012

24

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.

b) 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.

c) None of the fixed assets have been revalued during the period.

d) A substantial part of the fixed assets have not been disposed of during the period.

ii) a) Physical verification of inventory was conducted at reasonable intervals by the management during the period.

b) 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.

c) The Company is maintaining proper records of inventory and the discrepancies noticed on verification were not material.

iii) a) 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.

b) In our opinion rates of interest and other terms and conditions are not prejudicial to the interest of the Company.

c) The repayment of the principal amounts and interest wherever applicable are regular.

d) The loans taken by the Company are repayable on demand and therefore the question of overdue amounts does not arise.

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.

v) 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.

b) 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.

vi) 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.

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

ANNEXURE TO THE AUDITORS’ REPORT

25

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.

Statute Year Amount (`) Forum where pending

Income Tax 1990-2000 to 2001-02 32,82,050 Commissioner

(Appeal)

Income Tax Total 32,82,050

Central Excise-KKL

1996-1997 to 2002-2003 15,52,086 CEsTAT

Ambattur 2003-2004 4,36,187 CEsTAT

Excise Total 19,88,273

sales Tax-MP 2000-2001 to 2002-03 18,47,888 CTO

Grand Total 1,18,45,119

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.

xi) The Company has not defaulted in repayment of dues to Banks during the period.

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

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.



F.R. No. 04915s


Memb. No. 11205

26

BALANCE SHEET AS AT MARCH 31, 2012

The accompanying notes are an integral part of the financial statements.

As per our report of even date For and on behalf of the Board of Directors of For M/s. CNGSN & Associates HENKEL INDIA LIMITED Chartered Accountants Firm registration number: 04915s

C. N. Gangadaran Partner M.P. Ramachandran K. Ullas Kamath Membership No. 11205 Chairman Director

Place : Mumbai Place : MumbaiDate : May 22, 2012 Date : May 22, 2012

` In LacsNote As at

March 31, 2012As at

December 31, 2010EQUITY AND LIABILITIESShareholders’ fundsshare capital 3 18,446.45 18,446.45 Reserves and surplus 4 (3,120.52) 2,806.03

15,325.93 21,252.48 Non-current liabilitiesBorrowings 5 13,000.00 18,507.91 Provisions 6 117.22 12.10

13,117.22 18,520.01 Current liabilitiesBorrowings 5 1,204.40 –Trade payables 7 5,175.25 5,125.53 Other liabilities 8 435.74 651.21 Provisions 6 24.88 15.00

6,840.27 5,791.74 TOTAL 35,283.42 45,564.23

ASSETSNon-current assetsFixed assets 9 (i) Tangible assets 7,296.62 8,108.01 (ii) Intangible assets 17,720.13 17,720.13 Investments 10 2.30 2.30 Loans and advances 11 736.92 701.95 Other assets 12 0.40 –

25,756.37 26,532.39 Current assetsInventories 13 3,556.37 4,901.15 Trade receivables 14 3,679.38 9,747.08 Cash and bank balances 15 398.16 38.29 Loans and advances 11 1,866.37 4,345.32 Other assets 12 26.77 –

9,527.05 19,031.84 TOTAL 35,283.42 45,564.23

Summary of significant accounting policies 2

27


As per our report of even date For and on behalf of the Board of Directors of For M/s. CNGSN & Associates HENKEL INDIA LIMITED Chartered Accountants Firm registration number: 04915s

C. N. Gangadaran Partner M.P. Ramachandran K. Ullas Kamath Membership No. 11205 Chairman Director


STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012

` In LacsNote January 1, 2011 to

March 31, 2012January 1, 2010 to December 31, 2010

(15 Months) (12 Months)REVENUE sales 45,967.70 46,772.31 Less: Excise duty (1,166.85) (1,755.16)Net sales 44,800.85 45,017.15 Other operating income 16 274.94 157.71 Revenue from operations 45,075.79 45,174.86 Other income 17 163.05 381.25 Total Revenue 45,238.84 45,556.11

EXPENDITURECost of raw material and components consumed 18 9,306.76 13,847.86 Purchase of traded goods 19,970.45 15,290.68 (Increase)/decrease in inventories of finished goods, work-in-progress and traded goods

19 563.72 186.15

Employee benefits expense 20 2,833.98 1,693.82 Other expenses 21 9,417.19 12,125.38 Depreciation and amortisation 9 780.01 603.39 Interest and finance charges 22 1,958.16 1,696.14 Total Expense 44,830.27 45,443.42

ProfitbeforetaxandExceptionalitems 408.57 112.69 Exceptional itemssale of Division 2,534.77 –Bad debt written off (9,000.00) –Profit/(Loss)beforetax (6,056.66) 112.69 Current tax – 20.28 Less: MAT Credit entitlement – (20.28)Profit/(Loss)aftertax (6,056.66) 112.69

EARNINGs PER sHARE (EPs)Basic and Diluted (`) (5.20) 0.10 Nominal value per share (`) 10 10 Weighted average number of shares outstanding for calculation 116,464,471 116,464,471 of Basic and Diluted EPsSummary of significant accounting policies 2

28

NOTES TO FINANCIAL STATEMENTS FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012NOTE 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.

ii) 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.

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.

c) 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 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 Estimated useful life (in years)

Factory Buildings 30Building (Other then Factory Building) 60Plant and machinery 21Furniture and fixtures 16Office equipments 21Vehicles 8-10

29

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 asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (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.

ii. A previously recognized impairment loss is increased or reversed only if there has been a change in the assumptions used to determine the asset’s 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.

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.

g) 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.

h) 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.

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 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.

j) 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.

30

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.

k) Foreign currency translation

(i) Initial Recognition

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

(ii) Conversion

Foreign currency monetary items are reported using the 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.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

l) Retirementandotheremployeebenefits

(i) Retirement benefits in the form of Provident Fund and Superannuation Fund are defined contribution schemes and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective fund.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

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.

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.

p) 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.

31

q) Segment Reporting

Identification of segments:

The Company’s 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.

r) 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.

s) 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.

t) 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.

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.

32

NOTES TO FINANCIAL STATEMENTS FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012

` In Lacs As at

March 31, 2012 As at

December 31, 2010 NOTE 3SHARE CAPITALAUTHORISED CAPITAL172,000,000 (2010 - 172,000,000) equity shares of ` 10 (2010 - ` 10) each 17,200.00 17,200.00 68,000,000 (2010 - 68,000,000) redeemable non-cumulative / cumulativepreference shares of ` 10 (2010 - ` 10) each 6,800.00 6,800.00

24,000.00 24,000.00 ISSUED, SUBSCRIBED AND PAID UP CAPITAL116,464,471 (2010 - 116,464,471) equity shares of ` 10 (2010 - ` 10) each fully paid 11,646.45 11,646.45 28,000,000 (2010 - 28,000,000) 9% redeemablenon-cumulative preference shares of ` 10 (2010 - ` 10) each 2,800.00 2,800.00 40,000,000 (2010 - 40,000,000) 4% redeemable cumulative preference shares of ` 10 (2010 - `10) each 4,000.00 4,000.00

18,446.45 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 As at December 31, 2010 Name of Shareholder No. of shares % Holding in the

class No. of shares % Holding in the

classEquity SharesHenkel Ag & Co. KGaA – – 59,360,203 50.97%Tamilnadu Petroproducts Limited – – 19,395,900 16.66%Jyothy Laboratories Limited 97,426,487 83.66% – –

Non-cumulative Preference SharesHenkel Ag & Co. KGaA – – 28,000,000 100.00%Jyothy Laboratories Limited 28,000,000 100.00% – –

Cumulative Preference SharesHenkel Ag & Co. KGaA – – 40,000,000 100.00%Jyothy Laboratories Limited 40,000,000 100.00% – –

33

c. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period` In Lacs

As at March 31, 2012 As at December 31, 2010 No. of shares Amount No. of shares Amount

Equity SharesAt the beginning of the period/year 116,464,471 11,646.45 116,464,471 11,646.45 Issued during the period/year – – – –Outstanding at the end of the period/year 116,464,471 11,646.45 116,464,471 11,646.45

Non-cumulative Preference SharesAt the beginning of the period/year 28,000,000 2,800.00 28,000,000 2,800.00 Issued during the period/year – – – –Outstanding at the end of the period/year 28,000,000 2,800.00 28,000,000 2,800.00

Cumulative Preference SharesAt the beginning of the period/year 40,000,000 4,000.00 40,000,000 4,000.00 Issued during the period/year – – – –Outstanding at the end of the period/year 40,000,000 4,000.00 40,000,000 4,000.00

NOTE 4RESERVES AND SURPLUS

As at March 31, 2012

As at December 31, 2010

Capital reserve 843.19 843.19 General reservesBalance, beginning of the period/year 1,047.38 1,047.38 Add: Amount transferred to surplus/(deficit) balance in the Profit and Loss (1,047.38) –Balance, end of the period/year – 1,047.38 Preference share Redemption Reserve 10.95 10.95 Revaluation reserve Balance, beginning of the period/year 95.73 95.73 Add: Addition pursuant to revaluation of Land 205.61 –Less: Reversal pursuant to sale of Land (75.50) –Balance, end of the period/year 225.84 95.73 share premium account 0.29 0.29 Surplus/(Deficit)intheProfitandLossAccountBalance, beginning of the period/year 808.49 695.80 Add: Amount transferred from general reserves 1,047.38 –Profit/(Loss) for the period/year (6,056.66) 112.69 Balance, end of the period/year (4,200.79) 808.49

(3,120.52) 2,806.03

NOTE 5 Non-Current Current BORROWINGS As at


December 31, 2010 As at


December 31, 2010 Loan from Holding company 13,000.00 18,507.91 1,204.40 –

13,000.00 18,507.91 1,204.40 –The above amount includesUnsecured borrowings 13,000.00 18,507.91 1,204.40 –

34

NOTE 7TRADE PAYABLE



Trade Payable- Micro and small Enterprises 1,431.76 –- Others 1,467.08 1,340.67 sundry Creditors for expenses 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 8OTHER LIABILITIESOther current liabilities 372.99 524.69 security deposits 15.38 19.88 Advances from customers 47.37 106.64

435.74 651.21

` In LacsNOTE 6 LONG-TERM SHORT-TERM PROVISIONS As at




December 31, 2010 Provision for gratuity 117.22 12.10 13.31 –Provision for leave encashment – – 11.57 15.00

117.22 12.10 24.88 15.00

NOTE 9FIXED ASSETS

Gross Block Depreciation and Amortisation Net Block

Particulars As atJan. 1, 2011

Additions

Deletions/ Adjustment

As atMar. 31, 2012

As atJan. 1, 2011

For the year Deletions As at

Mar. 31, 2012 As at

Mar. 31, 2012 As at

Dec. 31, 2010

Intangible assets

Goodwill 17,944.13 – – 17,944.13 224.00 – – 224.00 17,720.13 17,720.13

Tangible assets

Freehold land 1,150.76 205.61 75.80 1,280.57 – – – – 1,280.57 1,150.76

Building 1,080.20 – 31.01 1,049.19 251.66 39.83 11.73 279.76 769.43 828.54

Plant and machinery 8,428.98 15.33 36.93 8,407.38 2,969.59 621.72 13.71 3,577.60 4,829.78 5,459.39

Furniture and fixture 239.11 20.81 30.34 229.58 96.88 30.04 5.58 121.34 108.24 142.23

Office equipments 1,043.17 19.87 141.61 921.43 647.39 72.19 45.14 674.44 246.99 395.78

Vehicle 196.97 – 73.67 123.30 65.66 16.23 20.20 61.69 61.61 131.31

Total 30,083.32 261.62 389.36 29,955.58 4,255.18 780.01 96.36 4,938.83 25,016.75 25,828.14

Previous period 29,941.68 187.77 46.13 30,083.32 3,662.66 603.39 10.89 4,255.18 25,828.14

35

` In LacsNOTE 10 NON-CURRENT INVESTMENTS



Trade Investments (Unquoted)Henkel sPIC Employees Co-operative Thrift and Credit society Limited2,000 (2010 - 2,000) equity shares of ` 100 (2010 - ` 100) each fully paid up 2.00 2.00 Henkel Marketing India Limited*825,550 (2010 - 825,550) equity shares of ` 10 (2010 - ` 10) each fully paid up 421.03 421.03 Capexil (Agencies) Ltd.5 (2010 - 5) equity shares of ` 10,000 (2010 - ` 10,000) each fully paid up 0.05 0.05 Madras Industrial Cooperative Analytical Laboratory Limited2 (2010 - 2) equity shares of ` 500 (2010 - ` 500) each fully paid up 0.01 0.01 Ambattur Industrial Estate Manufacturers service Industrial Cooperative society Ltd.1 (2010 - 100) equity shares of ` 1 (2010 - ` 100) each fully paid up – –

423.09 423.09 Less: Provision for diminution in the value of investments 421.09 421.09

Total (A) 2.00 2.00

Investment in Government securities (Unquoted)3% Government of India conversion loan, 1946 0.01 0.01 National Saving Certificates 0.30 0.30 (Pledged with Government authorities) 0.31 0.31 Less: Provision for diminution in the value of investments (0.01) (0.01)

Total (B) 0.30 0.30

Total (A+B) 2.30 2.30 Aggregate amount of unquoted investments 2.30 2.30 *Refer note 2.1

NOTE 11LOANS AND ADVANCES

Non-Current Current As at




December 31, 2010 Unsecured, considered goodDeposits 564.33 545.64 – –Advances recoverable in cash or in kind or for value to be received

172.59 156.31 61.48 97.86

Advance to suppliers – – 714.43 3,122.31 Balance with Govt. authorities – – 947.08 1,004.33 staff loans – – 7.48 –Advance Income Tax – – 36.79 21.71 Mat Credit – – 99.11 99.11

736.92 701.95 1,866.37 4,345.32

NOTE 12OTHER ASSETS

Non-Current Current

Fixed Deposit with Bank (Refer note 15) 0.40 – – –Other assets – – 26.77 –

0.40 – 26.77 –

36

NOTE 15 Non-Current Current CASH AND BANK BALANCES As at




December 31, 2010 Cash and cash equivalentsCash in hand – – 0.27 0.22 Balance with banks - Current account – – 116.07 2.99 Other bank balances – –Deposits with original maturity for more than 12 months

0.40 – 281.82 35.08

Amount disclosed under other assets (refer note 12)

(0.40) –

– – 398.16 38.29

` In LacsNOTE 13INVENTORIES



Raw and packing materials (includes goods in transit - ` Nil (2010 - ` 131.6) 1,235.85 2,024.20 Work-in-progress 90.16 77.48 Finished goods 2,114.94 2,691.34 stores and spare parts 115.42 108.13

3,556.37 4,901.15

NOTE 14TRADE RECEIVABLESUnsecureda) Debt outstanding for period exceeding six months Considered doubtful 35.17 50.69 Less: Provision for doubtful debts (35.17) (50.69)

– –b) Other debts Considered good 3,679.38 9,747.08 Considered doubtful – 35.03 Less: Provision for doubtful debts – (35.03)

3,679.38 9,747.08 3,679.38 9,747.08

37

` In Lacs NOTE 16OTHER OPERATING INCOME

January 1, 2011 to March 31, 2012

January 1, 2010 to December 31, 2010

(15 Months) (12 Months) Other Operating Income 274.94 157.71

274.94 157.71

NOTE 17OTHER INCOMEInterest on fixed deposit 12.27 0.15 Foreign exchange fluctuation gain (net) 92.46 102.37 Profit on sale of fixed assets (net of loss) 58.32 278.73

163.05 381.25

NOTE 18MATERIAL COSTSRaw and packing materials consumedOpening stock 2,024.20 2,291.93 Add: Cost of purchases (net) 8,518.41 13,580.13

10,542.61 15,872.06 Less: Closing stock 1,235.85 2,024.20

9,306.76 13,847.86

NOTE 19(INCREASE)/ DECREASE IN INVENTORIES(Increase)/ decrease in inventoriesClosing stock Finished goods 2,114.94 2,691.34 Work in progress 90.16 77.48

2,205.10 2,768.82 Opening stock Finished goods 2,691.34 2,899.57 Work in progress 77.48 55.40

2,768.82 2,954.97 563.72 186.15

NOTE 20EMPLOYEE BENEFITS EXPENSESsalaries, wages and bonus 2,500.37 1,415.37 Contribution to provident and other funds 94.50 73.23 Gratuity 123.44 54.38 staff welfare expenses 115.67 150.84

2,833.98 1,693.82

38

` In Lacs NOTE 21 OTHER EXPENSES


(15 months)


(12 months)Conversion charges 172.09 253.83 Power and fuel expenses 350.79 394.47 Rent 467.33 399.60 Insurance 77.17 51.99 Repairs and maintenance - Building 6.66 15.00 - Plant and machinery 53.01 123.04 - Others 36.53 66.37 Consumption of stores and spares 41.84 20.46 Research and development 0.95 –Bank charges and commission 31.12 14.79 Printing and stationery 10.58 13.95 Communication costs 127.08 76.27 Legal and professional fees 525.75 884.37 Rates and taxes 234.60 210.20 Directors’ sitting fees 3.17 4.26 Vehicle maintenance 43.11 –Donation 0.04 –Loss on discarded of fixed assets 3.49 –Bad debt written off – 7.00 Advertisement and publicity 423.79 2,219.71 sales promotion and schemes 2,911.69 3,318.71 Freight, handling and forwarding charges 2,131.96 2,076.28 Travelling and conveyance 556.50 413.90 Brokerage on sales 369.68 389.18 Royalty 421.28 770.13 Miscellaneous expenses 416.98 401.87

9,417.19 12,125.38

NOTE 22INTEREST AND FINANCE CHARGESInterest expense 1,737.56 1,696.14 Other borrowing cost 220.60 –

1,958.16 1,696.14

39

NOTE 23EMPLOYEE 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

March 31, 2012 January 1, 2010 to December 31, 2010

(15 Months) (12 Months) Employer’s contribution to Provident Fund 94.50 73.23

As per the Company’s 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: Reconciliationofopeningandclosingbalancesofdefinedbenefitplan:



Opening Defined Benefit obligation 160.82 148.93 Current service cost 25.51 21.89 Interest costs 16.69 11.87 Actuarial (gain)/loss 50.44 29.51 Benefits paid (120.36) (51.38)Closing Defined Benefit obligation 133.10 160.82

Reconciliation of opening and closing balances of fair value of plan assets:

Opening fair value of plan assets 151.70 154.61 Expected returns on plan assets 9.63 13.38 Actuarial (gain)/loss (40.44) (4.49)Employer contribution 2.04 39.58 Benefits paid (120.36) (51.38)Closing fair value of plan assets 2.57 151.70

Reconciliation of fair value of assets and obligations:Fair value of plan assets 2.57 151.70 Present value of obligation 133.10 160.82 Difference 130.53 9.12

Expenses recognised during the year:Current service Cost 25.51 21.89 Interest Cost 16.69 11.87 Expected returns on plan assets (9.63) (13.38)Actuarial (gain)/loss 90.87 34.00Net Cost 123.44 54.38

Actuarial assumptionsFunds with LICLIC 1994-96 Ultimate Table applied for service mortality rate Yes Yes Discount rate p.a. 8.30% 8.25%Expected rate of return on plan assets p.a. 8.15% 9.00%Rate of escalation in salary p.a. 8.00% 5.00%

40

NO

TE 2

4R

ELA

TED

PA

RTY

DIS

CLO

SU

RE

Sa)

N

ames

of t

he re

late

d pa

rties

s

ubsi

diar

y C

ompa

nyH

enke

l Mar

ketin

g In

dia

Lim

ited,

Indi

a

Pro

mot

ers

Hen

kel A

G &

Co

KG

aA, G

erm

any

(up

to 3

1-05

-201

1)Ta

miln

adu

Pet

ropr

oduc

ts L

imite

d, In

dia

(up

to 3

1-05

-201

1)

Key

Man

agem

ent P

erso

nnel

Ja

yant

K. s

ingh

, Man

agin

g D

irect

or (u

p to

31-

05-2

011)

H

oldi

ng C

ompa

nyJy

othy

Lab

orat

orie

s Li

mite

d (w

.e.f.

01-

06-2

011)

E

nter

pris

es u

nder

com

mon

con

trol w

ith re

porti

ng e

nter

pris

es:

Ass

ocia

ted

Indu

strie

s C

onsu

mer

Pro

duct

s P

rivat

e Li

mite

d (w

.e.f.

01-

06-2

011)

Jyot

hy F

abric

are

ser

vice

s Li

mite

d (w

.e.f.

01-

06-2

011)

b)

Agg

rega

te re

late

d pa

rty d

iscl

osur

es fo

r the

fifte

en m

onth

s en

ded

Mar

ch 3

1, 2

012

`

In L

acs

Hold

ing

Com

pany

Subs

idia

ry o

f Ho

ldin

g Co

mpa

nySu

bsid

iary

of

Hold

ing

Com

pany

Subs

idia

ryPr

omot

erKe

y M

anag

emen

t Pe

rson

nel

Jyot

hy

Labo

rato

ries

Lim

ited

(w.e

.f. 0

1-06

-201

1)

Asso

ciat

ed In

dust

ries

Cons

umer

Pro

duct

s Pr

ivat

e Li

mite

d(w

.e.f.

01-

06-2

011)

Jyot

hy F

abric

are

Serv

ices

Lim

ited

(w.e

.f. 0

1-06

-201

1)

Henk

el

Mar

ketin

g In

dia

Lim

ited

Tam

ilnad

u Pe

tropr

oduc

ts

Lim

ited,

Indi

a

(up

to 3

1-05

-201

1)

Henk

el

AG&C

o K

GaA

(u

p to

31

-05-

2011

)

Jaya

nt K

. Sin

gh,

Man

agin

g Di

rect

or

(up

to 3

1-05

-201

1).

Purc

hase

of g

oods

1,08

6.84

21

.28

– 3

0.12

1

,061

.62

39.1

5 –

––

––

(627

.83)

(1,3

88.1

2)–

sale

of g

oods

519.

50

0.22

0.

23

29,7

63.0

1 –

––

––

– (2

6,82

3.85

)–

––

Inte

rest

Exp

ense

s1,

190.

88

7.30

–

––

––

––

––

––

–Ro

yalty

pay

able

––

––

–25

8.59

–

––

––

– (7

70.1

8)–

Rent

pai

d–

––

– 7

2.63

–

––

––

– (1

72.1

3)–

–se

rvice

s–

––

– 1

5.78

21

5.42

–

––

––

(37.

09)

(630

.12)

–Lo

an ta

ken

26,6

17.7

4 12

,110

.00

––

––

––

––

––

––

Repa

ymen

t of l

oan

take

n12

,685

.00

12,1

10.0

0 –

––

––

––

––

––

–Re

imbu

rsem

ent o

f exp

ense

s to

Jyo

thy

608.

78

––

––

––

––

––

––

–Ba

d de

bts

writt

en o

ff–

––

9,0

00.0

0 –

––

––

––

––

–Re

ceiva

bles

––

0.23

2

,241

.03

––

––

––

(8,7

24.1

2) (1

,990

.30)

––

Paya

bles

14,2

04.4

0 –

––

––

––

––

––

(720

.47)

–Re

mun

erat

ion

––

––

––

29.1

5–

––

––

– (1

11.8

1)No

te: F

igur

es in

bra

cket

s re

pres

ents

pre

vious

yea

r num

bers

.

41

` In Lacs

NOTE 25DEFERRED 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:



A. Deferred tax assets

Expenses allowable against taxable income in future years – 31.60

Carry forward business loss and depreciation 9,774.65 10,132.51

9,774.65 10,164.11

B. Deferred tax liabilities

Timing difference in depreciable assets 1,677.33 1,321.44

1,677.33 1,321.44

Net deferred tax assets (A - B) 8,097.32 8,842.67

NOTE 26 CONTINGENT LIABILITIES

(a) sales tax related matters 18.48 –

(b) Excise duty related matters 19.88 19.88

(c) Counter guarantees to bank in respect of guarantees to:

sales Tax/Central Excise authorities – 0.48

Others – 52.12

(d) Income tax demands against which the Companyhas preferred appeal before appropriate authorities

32.82 32.82

(e) Claims filed by an ex-employee of the Companypending in a court of law

– 1.49

(f) Letter of credit outstanding – 23.28

(g) Dividend on Preference shares 478.84 –

42

NO

TE 2

7S

EG

ME

NT

RE

PO

RTI

NG

` In

Lac

s

Info

rmat

ion

abou

t bus

ines

s se

gmen

tsB

ody

Car

eD

eter

gent

s &

Cle

anse

rsTo

tal

Janu

ary

1, 2

011

to

Mar

ch 3

1, 2

012

Janu

ary

1, 2

010

to D

ecem

ber

31, 2

010

Janu

ary

1, 2

011

to

Mar

ch 3

1, 2

012

Janu

ary

1, 2

010

to D

ecem

ber

31, 2

010

Janu

ary

1, 2

011

to

Mar

ch 3

1, 2

012

Janu

ary

1, 2

010

to D

ecem

ber

31, 2

010

(15

Mon

ths)

(12

Mon

ths)

(15

Mon

ths)

(12

Mon

ths)

(15

Mon

ths)

(12

Mon

ths)

Seg

men

t rev

enue

(net

of E

xcis

e du

ty)

13,1

91.0

21,

6111

.15

31,6

09.8

328

,906

.00

44,8

00.8

545

,017

.15

Segm

entresults(Profi

tbeforeinterest

and

unal

loca

ted

inco

me)

577.

0956

8.76

1,13

1.05

788.

701,

708.

141,

357.

46

Una

lloca

ted

inco

me

(net

)43

7.99

466.

00In

tere

st e

xpen

ses

(1,7

37.5

6) (1

,710

.77)

Ope

ratin

g pr

ofit

408.

5711

2.69

Exc

eptio

n Ite

ms

ale

of s

KP

-Hai

r-ca

re D

ivis

ion

2,53

4.77

–B

ad d

ebt w

ritte

n of

f (9

,000

.00)

–Netprofit

(6,0

56.6

6)11

2.69

Oth

er in

form

atio

ns

egm

ent a

sset

s7,

685.

7312

,378

.56

27,5

95.3

933

,183

.37

35,2

81.1

245

,561

.93

Una

lloca

ted

corp

orat

e as

sets

2.30

2.30

Tota

l Ass

ets

7,68

5.73

12,3

78.5

627

,595

.39

33,1

83.3

735

,283

.42

45,5

64.2

3

seg

men

t Lia

bilit

ies

1,39

3.02

2,10

7.51

5,56

4.47

3,69

6.33

6,95

7.49

5,80

3.84

Una

lloca

ted

Cor

pora

te L

iabi

litie

s13

,000

.00

18,5

07.9

1To

tal L

iabi

litie

s1,

393.

022,

107.

515,

564.

473,

696.

3319

,957

.49

24,3

11.7

5

Cap

ital e

xpen

ditu

re–

–15

.33

187.

7715

.33

187.

77U

nallo

cate

d C

apita

l exp

endi

ture

40.6

8–

Tota

l Cap

ital e

xpen

ditu

re56

.01

187.

77D

epre

ciat

ion/

amor

tisat

ion

for

the

year

––

780.

0160

3.39

780.

0160

3.39

Bus

ines

s se

gmen

t: T

he b

usin

ess

segm

ents

hav

e be

en id

entifi

ed o

n th

e ba

sis

of th

e pr

oduc

ts o

f the

Com

pany

. Th

e C

ompa

ny h

as id

entifi

ed tw

o di

ffere

nt

segm

ents

nam

ely

Bod

y C

are

com

pris

ing

of s

oaps

, Cos

met

ics,

Hai

r Oil,

Deo

dora

nt, T

ooth

past

e et

c., D

eter

gent

s &

Cle

anse

rs a

s th

e op

erat

ing

segm

ents

. A

ll th

e se

gmen

ts a

re e

ngag

ed in

man

ufac

turin

g an

d se

lling

pro

duct

s to

cus

tom

ers.

43

NOTE 28SUPPLEMENTARY INFORMATIONI) 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

` in LacsJanuary 1, 2011 to


a ) Opening stock Tonnes Value Tonnes Valuesoaps 877 670.52 637 488.34 Detergents 3,659 933.04 6,396 1,198.43 Cleansers 1,246 462.16 1,091 470.74 Cosmetics, toiletries, hair oil and perfumes 132 422.62 99 135.62 Deodorant 53 164.00 85 284.13 Toothpaste 35 39.00 31 29.38 Others – 292.92

2,691.34 2,899.56

b) Purchase of trading goodssoaps 6,556 5,604.35 7,122 5,012.11 Detergents 45,835 10,669.52 24,957 6,774.23 Cleansers 2,028 1,938.99 6,416 1,863.59 Cosmetics, toiletries, hair oil and perfumes 192 293.81 267 306.42 Deodorants 299 976.62 318 887.71 Toothpaste 544 487.17 490 446.62 Others – – – –

19,970.45 15,290.68

c) Closing stocksoaps 415 272.77 877 670.52 Detergents 5,038 1,153.76 3,659 933.04 Cleansers 401 198.31 1,246 462.16 Cosmetics, toiletries, hair oil and perfumes 134 138.46 132 422.62 Deodorant 129 288.84 53 164.00 Toothpaste 64 30.13 35 39.00 Others – 32.67 – –

2,114.94 2,691.34

d) Turnover (net of excise duty)soaps 7,018 8,181.04 7,265 7,882.29 Detergents 54,809 23,669.69 45,139 17,853.00 Cleansers 4,739 4,717.08 12,238 5,714.66 Cosmetics, toiletries, hair oil and perfumes 191 470.83 237 5,873.37 Deodorant 223 1,187.37 325 1,587.15 Toothpaste 515 885.42 437 660.77 Others – 5,689.42 – 5,445.60

44,800.85 45,016.84

44

` In LacsII) Raw and packing materials consumed



Tonnes Value Tonnes Valuei) Raw materials Acid slurry 2,998.23 2,367.55 4,794 3,267.34 soda ash 5,779.52 934.05 6,739 993.98 Other raw materials 4,986.33 8,523.25 (individual item does not exceed 10% of the total consumption)

8,287.93 12,784.57 ii) Packing materials* Wrapper and stiffener 154.63 173.54 Carton 199.17 221.80 Other packing materials 665.03 667.95 (individual item does not exceed 10% of the total consumption)

1,018.83 1,063.29 9,306.76 13,847.86

*In view of the nature of trade and numerous inventory items it is not practicable to furnish quantitative details.

III) Payment to auditorsJanuary 1,

2011 to March 31, 2012

January 1, 2010 to December

31, 2010 (15 Months) (12 Months)

Audit fees 12.64 9.00 Tax audit/certificates etc. 1.00 1.00 Reimbursement of expenses 0.17 0.50

13.81 10.50

IV) Value of imports (CIF basis)Raw materials 1,506.59 3,102.24

V) Expenditure in Foreign CurrencyRoyalty 329.10 –Other services 396.79 –Travelling 99.09 51.67

45

Signatures to Notes 1 to 29

As per our report of even date For and on behalf of the Board of Directors of For M/s. CNGSN & Associates HENKEL INDIA LIMITED Chartered Accountants Firm registration number: 04915s C. N. GANGADARAN M.P. Ramachandran K. Ullas Kamath Partner Chairman Director Membership No. 11205 Place : Mumbai Place : Mumbai Date : May 22, 2012 Date : May 22, 2012

VI) Value of imported and indigenous raw materials and packing materials consumed ` In LacsJanuary 1, 2011 to

March 31, 2012 (15 Months)January 1, 2010 to

December 31, 2010 (12 Months)INR % INR %

Raw materialsImported 546.38 6% 1,710.32 12%Indigenous 8,760.38 94% 12,137.54 88%

9,306.76 100% 13,847.86 100%

Stores, spare parts, etc. Imported – – – –Indigenous 41.84 100% 20.46 100%

41.84 100% 20.46 100%

VII) Earnings in foreign exchange ` In LacsJanuary 1,

2011 to March 31, 2012

January 1, 2010 to December

31, 2010 (15 Months) (12 Months)

Export of goods on FOB basis 1,217.29 436.00

NOTE 29Till the year ended March 31, 2011, the Company was using pre-revised schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year’s classification.

46

` In LacsJanuary 1, 2011 to


(15 Months) (12 Months)

A. CASH FLOWS PROVIDED BY/(USED IN) OPERATING ACTIVITIES:

Profit/(loss) before Tax (6,056.66) 112.69

Adjustments for:

Depreciation and amortisation 780.01 603.39

Profit on sale of fixed assets (net of loss) (58.32) (278.73)

Loss on discarded of fixed assets 3.49 –

Interest and finance charges 1,958.16 1,696.14

Interest on fixed deposit (12.27) (0.15)

Foreign exchange fluctuation gain (net) (92.46) (102.37)

Bad debt written off 9,000.00 7.00

Operatingprofitbeforeworkingcapitalchanges 5,521.95 2,037.97

Increase/ (decrease) in Trade Payable 142.18 (4,832.90)

Increase/ (decrease) in other current liabilities and Provisions (100.47) (182.12)

Decrease / (increase) Inventories 1,344.79 448.67

Decrease / (increase) Trade receivables (2,932.30) 7,119.29

Decrease / (increase) Loans and advances 2,459.06 (1,604.97)

Decrease / (increase) other assets (27.17) –

Cash generated from operations 6,408.04 2,985.94

Taxes paid (net) (15.08) (21.71)

Net cash generated from operating activities 6,392.96 2,964.23

B. CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES:

Purchase of fixed assets including capital work-in-progress and capital advances (56.01) (174.85)

Proceeds from sale of fixed assets 272.32 313.99

Investment in Fixed deposit (246.74) (5.62)

Interest on fixed deposit 12.27 0.15

Net cash generated/(used) in investing activities (18.16) 133.67

CASH FLOW STATEMENT FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012

47

` In LacsJanuary 1, 2011 to


(15 Months) (12 Months)

C. CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES:

Interest and finance charges paid (1,958.16) (1,696.14)

Repayment of borrowing (4,303.51) (1,427.11)

Netcashusedinfinancingactivities (6,261.67) (3,123.25)

Net increase / (decrease) in cash and cash equivalents (A+B+C) 113.13 (25.35)

Cash and cash equivalents at the beginning of the period / year 3.21 28.56

Cash and cash equivalents at the end of the period / year 116.34 3.21

Components of cash and cash equivalents

Cash in hand 0.27 0.22

Balance with banks - Current account 116.07 2.99

Cashandcashequivalentsconsideredforcashflows 116.34 3.21

As per our report of even date For and on behalf of the Board of Directors of For M/s. CNGSN & Associates HENKEL INDIA LIMITED Chartered Accountants Firm registration number: 04915s C. N. Gangadaran Partner M.P. Ramachandran K. Ullas Kamath Membership No. 11205 Chairman Director Place : Mumbai Place : MumbaiDate : May 22, 2012 Date : May 22, 2012

48

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

Limited’s 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,

as well as evaluating the overall financial statement

presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. We report that the consolidated financial statements have

been prepared by the Henkel India Ltd’s management in

accordance with the requirements of Accounting standard

(AS-21) “Consolidated Financial Statement”, issued by the

Institute of Chartered Accountants of India.

We are of the opinion that

a. In the case of consolidated Balance sheet of the state of

affairs of the Henkel India Limited’s and its subsidiary, as

at March 31, 2012.

b. In the case of the consolidated Profit and Loss Account, of

the loss for the period ended on that date; and

c. In the case of the consolidated cash flow statement, of the

cash flows for the period ended on that date.


F.R. No. 04915s


Memb. No. 11205

49

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2012

Note As at March 31, 2012

As atDec. 31, 2010

EQUITY AND LIABILITIESShareholders’ fundsshare capital 3 18,446.45 18,446.45Reserves and surplus 4 (36,002.53) (34,579.62)

(17,556.08) (16,133.17)Non-current liabilitiesBorrowings 5 43,000.00 45,431.58Provisions 6 119.25 12.10

43,119.25 45,443.68Current liabilitiesBorrowings 5 1,204.40 – Trade payables 7 8,644.63 9,151.32Other current liabilities 8 780.68 1,563.40Provisions 6 26.16 15.04

10,655.87 10,729.76

TOTAL 36,219.04 40,040.27ASSETSNon-current assetsFixed assets 9 (i) Tangible assets 7,296.62 8,108.01 (ii) Intangible assets 17,720.13 17,720.13Goodwill on consolidation 49.42 49.42Investments 10 2.30 2.30Loans and advances 11 736.92 701.95Other assets 12 0.40 –

25,805.79 26,581.81Current assetsInventories 13 4,242.68 5,547.10Trade receivables 14 3,283.19 2,741.07Cash and bank balances 15 903.40 41.64Loans and advances 11 1,954.24 5,127.65Other assets 12 29.74 1.00

10,413.25 13,458.46

TOTAL 36,219.04 40,040.27Summary of significant accounting policies 2


As per our report of even date For and on behalf of the Board of Directors of For M/s. CNGSN & Associates HENKEL INDIA LIMITED Chartered Accountants Firm registration number: 04915s C. N. Gangadaran Partner M.P. Ramachandran K. Ullas Kamath Membership No. 11205 Chairman Director


` In Lacs

50

NOTE January 1, 2011 to March 31, 2012

January 1, 2010 to Dec 31, 2010

(15 Months) (12 Months)REVENUE sales 53,900.41 55,145.51Less: Excise duty (1,166.85) (1,755.16)Net sales 52,733.56 53,390.35Other operating income 16 274.94 157.71Revenue from operations 53,008.50 53,548.06Other income 17 490.69 381.48Total Revenue 53,499.19 53,929.54

EXPENDITURECost of raw material and components consumed 18 9,306.76 13,847.86Purchase of traded goods 20,340.62 14,997.65(Increase)/ decrease in inventories of finished goods, work-in-progress and traded goods

19 445.52 485.33

Employee benefits expense 20 3,854.74 4,162.39Other expenses 21 17,036.72 22,184.58Depreciation and amortisation 9 780.01 603.39Finance Costs 22 5,822.61 2,832.61Total Expense 57,586.98 59,113.81

Profit/(Loss)beforetaxandExceptionalitems (4,087.79) (5,184.27)Exceptional itemssale of Division 2,534.77 –Profit/(Loss)beforetaxandafterExceptionalitems (1,553.02) (5,184.27)Current tax – –Profit/(Loss)aftertax (1,553.02) (5,184.27)

EARNINGs PER sHARE (EPs)Basic and Diluted (`) (1.33) (4.45)Nominal value per share (`) 1.00 1.00Weighted average number of shares outstanding forcalculation of Basic and Diluted EPs 116,464,471 116,464,471Summary of significant accounting policies 2

CONSOLIDATED STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012

` In Lacs


As per our report of even date For and on behalf of the Board of Directors of For M/s. CNGSN & Associates HENKEL INDIA LIMITED Chartered Accountants Firm registration number: 04915s C. N. Gangadaran Partner M.P. Ramachandran K. Ullas Kamath Membership No. 11205 Chairman Director


51

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".

b) 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.

ii) 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.

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.

c) 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012

52

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 Estimated useful life(in years)

Factory Buildings 30Building (Other then Factory Building) 60Plant and machinery 21Furniture and fixtures 16Office equipments 21Vehicles 8-10

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 asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (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.

ii. A previously recognized impairment loss is increased or reversed only if there has been a change in the assumptions used to determine the asset’s 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.

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.

g) 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.

h) 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.

53

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.

j) 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.

k) Foreign currency translation (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the

exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion Foreign currency monetary items are reported using the 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.

(iii) Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items at rates

different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

l) Retirementandotheremployeebenefits (i) Retirement benefits in the form of Provident Fund and Superannuation Fund are defined contribution schemes and the

contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective fund.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

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 recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that

54

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.

p) 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.

q) Segment Reporting Identification of segments: The Company’s 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.

r) 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.

s) 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.

t) 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.

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENT FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012

` In LacsNOTE 3SHARE CAPITAL

As atMarch 31, 2012

As atDecember 31, 2010

AUTHORISED CAPITAL

172,000,000 (2010 - 172,000,000) equity shares of ` 10 (2010 - ` 10) each 17,200.00 17,200.00

68,000,000 (2010 - 68,000,000) redeemable non-cumulative/ cumulative of` 10 (2010 - ` 10 ) each

6,800.00 6,800.00

24,000.00 24,000.00

ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

116,464,471 (2010 - 116,464,471) equity shares of `10 (2010 - `10) each fully paid 11,646.45 11,646.45

28,000,000 (2010 - 28,000,000) 9% redeemable

Non-cumulative preference shares of `10 (2010 - `10) each 2,800.00 2,800.00

40,000,000 (2010 - 40,000,000) 4% redeemable

Cumulative preference shares of `10 (2010 - `10) each 4,000.00 4,000.00

18,446.45 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 settle-ment of disputes.

b) Details of shareholders holding more than 5% shares in the Company - As at March 31, 2012 As at December 31, 2010

Name of Shareholder No. of shares % Holding in the class No. of shares % Holding in the

classHenkel Ag & Co. KGaA – – 59,360,203 50.97%

Tamilnadu Petroproducts Limited – – 19,395,900 16.66%

Jyothy Laboratories Limited 97,426,487 83.66% – –

Non-cumulative Preference SharesHenkel Ag & Co.KGaA – – 28,000,000 100.00%


Cumulative Preference SharesHenkel Ag & Co.KGaA – – 40,000,000 100.00%


56

NOTE 4RESERVES AND SURPLUS


As at Dec. 31, 2010

Capital reserve 843.19 843.19General reservesBalance, beginning of the year/period 1,047.38 1,047.38Add: amount transferred to deficit balance in the statement of profit and loss (1,047.38) –Balance, end of the year/period – 1,047.38

Preference share Redemption Reserve 10.95 10.95Revaluation reserve Balance, beginning of the year/period 95.73 95.73Add: Addition pursuant to revaluation of land 205.61 –Add: Reversal pursuant to sale of land (75.50) –Balance, end of the year/period 225.84 95.73share premium account 0.29 0.29

Deficitinthestatementofprofitandloss-Balance, beginning of the year/period (36,577.16) (31,392.89)Add: amount transferred from general reserves 1,047.38 –Profit/(Loss) for the year/period (1,553.02) (5,184.27)Net deficit in the statement of profit and loss (37,082.80) (36,577.16)

(36,002.53) (34, 579.62)

NOTE 5 Non-Current CurrentBORROWINGS As at

March 31, 2012As at

December 31, 2010As at

March 31, 2012As at

December 31, 2010Loan from banks – 26,923.67 – –

Loan from Holding Company 43,000.00 18,507.91 1,204.40 –

43,000.00 45,431.58 1,204.40 –

The above amount includesUnsecured borrowings 43,000.00 45,431.58 1,204.40 –

NOTE 6 Long-Term Short-TermPROVISIONS

Provision for gratuity 119.25 12.10 14.55 –

Provision for leave encashment – – 11.61 15.04

119.25 12.10 26.16 15.04

` In Lacs

57

NOTE 7TRADE PAYABLE

As atMarch 31, 2012


Trade Payable- Micro and small Enterprises 1,649.41 –- Others 1,570.91 2,191.85sundry Creditors for expenses 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 8OTHER CURRENT LIABILITIESInterest accrued but not due on loans – 9.21

Other current liabilities 467.39 1,086.93

security deposits 85.86 139.35

Advances from customers 227.43 327.91

780.68 1,563.40

` In Lacs

NOTE 9FIXED ASSETS

Particulars

Gross Block Depreciation and Amortisation Net Block

As atJan. 1, 2011

Addi-tions

Deletions/ Adjustment

As atMar. 31, 2012

As atJan. 1, 2011

For the year Deletions As at

Mar. 31, 2012 As at

Mar. 31, 2012 As at

Dec. 31, 2010

Intangible assets

Goodwill 17,944.13 – – 17,944.13 224.00 – – 224.00 17,720.13 17,720.13

Tangible assets

Freehold land 1,150.76 205.61 75.80 1,280.57 – – – – 1,280.57 1,150.76

Building 1,080.20 – 31.01 1,049.19 251.66 39.83 11.73 279.76 769.43 828.54

Plant and machinery

8,428.98 15.33 36.93 8,407.38 2,969.59 621.72 13.71 3,577.60 4,829.78 5,459.39

Furniture and fixture

239.11 20.81 30.34 229.58 96.88 30.04 5.58 121.34 108.24 142.23

Office equipments

1,043.17 19.87 141.61 921.43 647.39 72.19 45.14 674.44 246.99 395.78

Vehicle 196.97 – 73.67 123.30 65.66 16.23 20.20 61.69 61.61 131.31

Total 30,083.32 261.62 389.36 29,955.58 4,255.18 780.01 96.36 4,938.83 25,016.75 25,828.14

Previous period 29,941.68 187.77 46.13 30,083.32 3,662.66 603.39 10.89 4,255.18 25,828.14

58

NOTE 10INVESTMENTS

As atMarch 31, 2012


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 2.00 2.00

Capexil (Agencies) Ltd.

5 (2010 - 5) equity shares of ` 1000 (2010 - ` 1000) each fully paid-up 0.05 0.05

Madras Industrial Cooperative Analytical Laboratory Limited

2 (2010 - 2) equity shares of ` 500 (2010 - ` 500) each fully paid-up 0.01 0.01

Ambattur Industrial Estate Manufacturers service Industrial Cooperative society Ltd.

1 (2010 - 100) equity shares of ` 1 (2010 - ` 100) each fully paid-up – –

2.06 2.06 Less: Provision for diminution in the value of investments 0.06 0.06

Total (A) 2.00 2.00

Investment in Government securities (Unquoted)

3% Government of India conversion loan , 1946 0.01 0.01

National Saving Certificates 0.30 0.30

(Pledged with Government authorities) 0.31 0.31 Less: Provision for diminution in the value of investments (0.01) (0.01)

Total (B) 0.30 0.30

Total (A-B) 2.30 2.30 Aggregate amount of unquoted investments 2.30 2.30

` In Lacs

NOTE 11 Non-Current CurrentLOANS AND ADVANCES As at

March 31, 2012As at


March 31, 2012As at

December 31, 2010Unsecured, considered good

Deposits 564.33 545.64 7.41 4.85

Advances recoverable in cash or in kind or for value to be received

172.59 156.31 70.73 121.93

Advance to suppliers – – 768.82 3,172.89

Balance with Govt. authorities – – 962.18 1,707.16

staff loans – – 7.81 –

Mat Credit – – 99.11 99.11

Advance tax (net of provision) – – 38.18 21.71

736.92 701.95 1,954.24 5,127.65

59

NOTE 13INVENTORIES

As atMarch 31, 2012


Raw and packing materials (includes goods in transit - ` Nil (2010 - ` 131.6) 1,370.45 2,236.64

Work-in-progress 90.16 77.48

Finished goods 2,666.65 3,124.85

stores and spare parts 115.42 108.13

4,242.68 5,547.10

NOTE 14TRADE RECEIVABLESUnsecured

a) Debt outstanding for period exceeding six months

Considered doubtful 902.75 790.73

Less: Provision for doubtful debts (902.75) (790.73)

– –

b) Other debts

Considered good 3,283.19 2,741.07

Considered doubtful – 35.03

Less: Provision for doubtful debts – (35.03)

3,283.19 2,741.07

3,283. 19 2,741.07

` In Lacs

NOTE 15CASH AND BANK BALANCES

Non-Current CurrentAs at

March 31, 2012As at


March 31, 2012As at

December 31, 2010Cash and cash equivalentsCash in hand – – 3.20 2.23

Balance with banks - Current account – – 618.38 4.33

Other bank balancesDeposits with original maturity for more than 12 months 3.37 – 281.82 1.00

Amount Disclosed under other assets (refer Note 12) (3.37) – – 34.08

– – 903.40 41.64

NOTE 12 Non-Current CurrentOTHER ASSETS As at

March 31, 2012As at


March 31, 2012As at

December 31, 2010Fixed Deposit with Bank (Note 15) 0.40 – 2.97 1.00

Other assets – – 26.77 –

0.40 – 29.74 1.00

60

NOTE 16OTHER OPERATING INCOME

January 1, 2011to March 31, 2012

(15 Months)

January 1, 2010 to Dec. 31, 2010

(12 Months)Miscellaneous income 274.94 157.71

274.94 157.71

NOTE 17OTHER INCOMEInterest Income 14.12 0.15 Foreign exchange fluctuation gain (net) 92.46 102.37

Profit on sale of assets (net of loss) 58.32 278.73 Miscellaneous income 325.79 0.23

490.69 381.48

NOTE 18MATERIAL COSTSRaw and packing materials consumedOpening stock 2,024.20 2,291.93

Add: Cost of purchases (net) 8,518.41 13,580.13

10,542.61 15,872.06

Less: Closing stock 1,235.85 2,024.20

9,306.76 13,847.86

NOTE 19(INCREASE)/DECREASE IN INVENTORIES(Increase)/ decrease in inventoriesClosing stock

Finished goods 2,666.65 3,124.85


2,756.81 3,202.33

Opening stock Finished goods 3,124.85 3,632.26


3,202.33 3,687.66

445.52 485.33

` In Lacs

NOTE 20EMPLOYEE BENEFIT EXPENSESsalaries, wages and bonus 3,387.90 3,679.68 Contribution to provident and other funds 138.32 133.07 Gratuity 141.45 54.83 staff welfare expenses 187.07 294.81

3,854.74 4,162.39

61

NOTE 21OTHER EXPENSES

January 1, 2011to March 31, 2012

(15 Months)


(12 Months)Conversion charges 172.09 253.83

Power and fuel expenses 372.18 445.63

Rent 467.33 399.60

Insurance 85.82 96.89

Repairs and maintenance

- Building 6.66 15.00

- Plant and machinery 53.01 123.04

- Others 48.02 91.21

Consumption of stores and spares 41.84 20.46

Research and development 0.95 –

Bank charges and commission 62.71 56.33

Printing and stationery 19.41 36.24

Communication costs 185.81 168.67

Legal and professional fees 567.10 1,002.21

Rates and taxes 350.76 429.44

Directors' sitting fees 3.21 4.56

Vehicle maintenance 69.79 57.10

Donation 0.04 –

Fixed assets discarded 3.49 –

Bad debt expenses – 7.00

Advertisement and publicity 851.96 3,402.47

sales promotion and schemes 8,212.59 9,465.04

Freight, handling and forwarding charges 3,385.64 3,178.78

Travelling and conveyance 732.07 977.85

Brokerage on sales 369.68 389.18

Royalty 421.28 770.13

Exchange rate fluctuation 0.04 0.11

Provision for bad and doubtful debts 76.99 266.78

Miscellaneous expenses 476.25 527.03

17,036.72 22,184.58

NOTE 22INTEREST AND FINANCE CHARGESInterest expense 5,602.01 2,832.61

Other borrowing cost 220.60 –

5,822.61 2,832.61

` In Lacs

62

NOTE 23EMPLOYEE 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


(15 Months)

January 1, 2010to December 31, 2012

(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 As atMarch 31, 2012


Reconciliationofopeningandclosingbalancesofdefinedbenefitplan:Opening Defined Benefit obligation 186.11 160.06 Current service cost 26.75 22.70 Interest costs 17.58 12.73 Actuarial (gain)/loss 67.00 30.49 Benefits paid (151.90) (39.87)Closing Defined Benefit obligation 145.54 186.11

Reconciliation of opening and closing balances of fair value of plan assets:Opening fair value of plan assets 174.01 173.89 Expected returns on plan assets 10.32 15.15 Actuarial (gain)/loss (40.44) (4.06)Employer contribution 3.00 45.65 Benefits paid (135.15) (56.62)Closing fair value of plan assets 11.74 174.01

Reconciliation of fair value of assets and obligations:Fair value of plan assets 11.74 174.01 Present value of obligation 145.54 186.11 Difference 133.80 12.10

Expenses recognised during the year:Current service cost 26.75 22.70 Interest Cost 17.58 12.73 Expected returns on plan assets (10.32) (15.15)Actuarial (gain)/loss 107.44 34.55Net Cost 141.45 54.83

Investment detailsFunds with LIC 100% 100%

Actuarial assumptionsLIC 1994-96 Ultimate Table applied for service mortality rate Yes Yes Discount rate p.a. 8.30% 8.25%Expected rate of return on plan assets p.a. 8.15% 9.00%Rate of escalation in salary p.a. 8.00% 5.00%

63

NO

TE 2

4R

ELA

TED

PA

RTY

DIS

CLO

SU

RE

Sa)

N

ames

of t

he re

late

d pa

rties

P

rom

oter

s H

enke

l AG

&C

o. K

GaA

, Ger

man

y (u

pto

31-0

5-20

11)

Tam

ilnad

u P

etro

prod

ucts

Lim

ited,

Indi

a (u

pto

31-0

5-20

11)

K

ey M

anag

emen

t Per

sonn

el

Jaya

nt K

. sin

gh, M

anag

ing

Dire

ctor

(upt

o 31

-05-

2011

)

H

oldi

ng C

ompa

ny

Jyot

hy L

abor

ator

ies

Lim

ited

(w.e

.f. 0

1-06

-201

1)

Ent

erpr

ises

und

er c

omm

on c

ontro

l with

repo

rting

ent

erpr

ises

: A

ssoc

iate

d In

dust

ries

Con

sum

er P

rodu

cts

Priv

ate

Lim

ited

(w.e

.f. 0

1-06

-201

1)

Jy

othy

Fab

ricar

e s

ervi

ces

Lim

ited

(w.e

.f. 0

1-06

-201

1)

b)

Agg

rega

te re

late

d pa

rty d

iscl

osur

es fo

r the

fifte

en m

onth

per

iod

ende

d M

arch

31,

201

2

Hol

ding

Com

pany

Sub

sidi

ary

of

Hol

ding

Com

pany

Sub

sidi

ary

of

Hol

ding

Com

pany

Pro

mot

erK

ey M

anag

emen

t P

erso

nnel

Jyot

hy L

abor

ator

ies

Lim

ited

(w.e

.f. 0

1-06

-201

1)

Ass

ocia

ted

Indu

strie

s C

onsu

mer

Pro

duct

s P

riva

te L

imite

d(w

.e.f.

01-

06-2

011)

Jyot

hy F

abri

care

Ser

vice

s Li

mite

d(w

.e.f.

01-

06-2

011)

Tam

ilnad

u P

etro

prod

ucts

Lim

ited,

Indi

a(u

pto

31-0

5-20

11)

Hen

kel A

G&

Co.

K

GaA

(upt

o 31

-05-

2011

)

Jaya

nt K

Sin

gh,

Man

agin

g D

irec

tor

(upt

o 31

-05-

2011

)

Pur

chas

e of

goo

ds1,

086.

84 –

21.2

8 –– –

1,0

61.6

2 (6

27.8

3)39

.15

(1,3

88.1

2)– –

sal

e of

goo

ds51

9.50

–0.

22

–0.

23 –

– –– –

– –In

tere

st E

xpen

ses

1,19

0.88

–7.

30 –

– –– –

– –– –

Roy

alty

pay

able

– –– –

– –– –

258.

59

(770

.18)

– –R

ent p

aid

– –– –

– – 7

2.63

(1

72.1

3)– –

– –s

ervi

ces

– –– –

– – 1

5.78

(3

7.09

)21

5.42

(6

30.1

2)– –

Loan

Tak

en26

,617

.74 -

12,1

10.0

0 –– –

– –– –

– –R

epay

men

t of l

oan

Take

n12

,685

.00

12,1

10.0

0 – –

– –– –

– –R

eim

burs

emen

t of

expe

nses

to J

yoth

y60

8.78

–– –

– –– –

– –– –

Rec

eiva

bles

– –– –

0.23

– –

(1

,990

.30)

– –– –

Pay

able

s14

,204

.40 –

– –– –

– –

(720

.47)

– –R

emun

erat

ion

– –– –

– –– –

– –29

.15

(111

.81)

Not

e: F

igur

es in

bra

cket

s re

pres

ents

pre

viou

s ye

ar n

umbe

rs.

` In

Lac

s

64

NOTE 25DEFERRED 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 :

As atMarch 31, 2012


A . Deferred tax assetsExpenses allowable against taxable income in future years – 135.60

Carry forward business loss and depreciation 20,168.25 19,761.95

20,168.25 19,897.55 B . Deferred tax liabilities

Timing difference in depreciable assets 1,677.33 1,321.44

1,677.33 1,321.44 Net deferred tax assets (A - B) 18,490.92 18,576.11

NOTE 26CONTINGENT LIABILITIES(a) sales tax related matters 78.31 59.83

(b) Excise duty related matters 19.88 44.27

(c) Income tax related matters – 40.00

(d) Others – –

(e) Counter guarantees to bank in respect of guarantees to:

sales Tax/Central Excise authorities – 0.48

Others – 52.12

(f) Income tax demands against which the Company

has preferred appeal before appropriate authorities 32.82 32.82

(g) Claims filed by an ex-employee of the Company

pending in a court of law – 1.49

(h) Letter of credit outstanding – 23.28

(i) Dividend on Preference shares 478.84 –

` In Lacs

65

NO

TE 2

7S

EG

ME

NT

RE

PO

RTI

NG

Info

rmat

ion

abou

t bus

ines

s se

gmen

ts

Bod

y C

are

Det

erge

nts

& C

lean

sers

Tota

lA

s at

Mar

ch 3

1, 2

012

As

atD

ecem

ber 3

1, 2

010

As

atM

arch

31,

201

2A

s at

Dec

embe

r 31

, 201

0A

s at

Mar

ch 3

1, 2

012

As

atD

ecem

ber

31, 2

010

Segm

ent r

even

ue (n

et o

f Exc

ise

duty

)16

,361

.41

18,2

62.0

0 36

,372

.15

35,1

28.3

5 52

,733

.56

53,3

90.3

5

Segmentresults(P

rofitbeforeinterest

and

unal

loca

ted

inco

me)

514.

00

(787

.00)

234.

59

(1,9

74.2

7) 7

48.5

9 (2

,761

.27)

Una

lloca

ted

inco

me

(net

) 7

65.6

3 4

66.0

0 In

tere

st e

xpen

ses

(5,6

02.0

1) (2

,889

.00)

Ope

ratin

g pr

ofit

(4,0

87.7

9) (5

,184

.27)

Exc

eptio

n Ite

ms

ale

of s

KP

-Hai

r-ca

re D

ivis

ion

2,53

4.77

–

Netprofit

(1,5

53.0

2) (5

,184

.27)

Oth

er in

form

atio

ns

egm

ent a

sset

s8,

110.

87

10,4

25.0

0 28

,105

.87

29,5

63.2

7 36

,216

.74

39,9

88.2

7 U

nallo

cate

d co

rpor

ate

asse

ts2.

30

52.0

0 To

tal A

sset

s8,

110.

87

10,4

25.0

0 28

,105

.87

29,5

63.2

7 36

,219

.04

40,0

40.2

7

seg

men

t Lia

bilit

ies

2,37

3.52

3,

127.

00

8,40

1.60

7,

614.

86

10,7

75.1

2 10

,741

.86

Una

lloca

ted

Cor

pora

te L

iabi

litie

s43

,000

.00

45,4

31.5

8 To

tal L

iabi

litie

s2,

373.

52

3,12

7.00

8,

401.

60

7,61

4.86

53

,775

.12

56,1

73.4

4

Cap

ital e

xpen

ditu

re–

15.3

3 18

7.77

15

.33

187.

77

Una

lloca

ted

Cap

ital e

xpen

ditu

re 4

0.68

–

Tota

l Cap

ital e

xpen

ditu

re 5

6.01

1

87.7

7 D

epre

ciat

ion

/ am

ortis

atio

n fo

r th

e ye

ar–

780.

01

603.

39

780.

01

603.

39

i) B

usin

ess

segm

ent :

The

bus

ines

s se

gmen

ts h

ave

been

iden

tified

on

the

basi

s of

the

prod

ucts

of t

he C

ompa

ny. T

he C

ompa

ny h

as id

entifi

ed th

ree

diffe

rent

seg

men

ts n

amel

y B

ody

Car

e co

mpr

isin

g of

soa

ps,

Cos

met

ics,

Hai

r O

il, D

eodo

rant

, To

othp

aste

etc

., D

eter

gent

s &

Cle

anse

rs a

nd o

ther

pr

oduc

ts c

ompr

isin

g of

zeo

lites

etc

. as

the

oper

atin

g se

gmen

ts. A

ll th

e se

gmen

ts a

re e

ngag

ed in

man

ufac

turin

g an

d se

lling

pro

duct

s to

cus

tom

ers.

` In

Lac

s

66

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 year’s classification.

Signatures to Notes 1 to 28 As per our report of even date For and on behalf of the Board of Directors of For M/s. CNGSN & Associates HENKEL INDIA LIMITED Chartered Accountants Firm registration number: 04915s C N GANGADARAN M.P. Ramachandran K. Ullas Kamath Partner Chairman Director Membership No. 11205 Place : Mumbai Place : Mumbai Dated : May 22, 2012 Dated : May 22, 2012

67


(15 Months)


(12 Months)

A. CASH FLOWS PROVIDED BY/(USED IN) OPERATING ACTIVITIES:

Profit / (Loss) before Tax (1,553.02) (5,184.27)

Adjustments for:

Depreciation and amortisation 780.01 603.39

Profit on sale of assets (net of loss) (58.32) (278.73)

Fixed assets discarded 3.49 –

Interest and finance charges 5,822.61 2,832.61

Interest Income (14.12) (0.15)

Foreign exchange fluctuation gain (net) (92.46) (102.37)

Bad debt expenses – 7.00

Provision for doubtful debts 76.99 266.78

Operatingprofitbeforeworkingcapitalchanges 4,965.18 (1,855.74)

Increase /(Decrease) Inventories 1,304.42 695.94

Increase /(Decrease) trade receivables (619.12) 2,211.94

Increase /(Decrease) loans and advances 3,154.92 (1,847.90)

Increase /(Decrease) in other assets (26.77) –

Increase /(Decrease) in current liabilities / provisions (1,078.66) (3,474.02)

Cash generated from operations 7,699.97 (4,269.78)

Taxes paid (net) (16.47) (21.71)

Net cash generated from operating activities 7,683.50 (4,291.49)

B. CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES:

Purchase of fixed assets including capital work-in-progress and capital advances (56.01) (174.85)

Proceeds from sale of fixed assets 272.32 313.99

Investment in fixed deposits (net) (249.12) (6.61)

Interest Income 14.12 0.15

Net cash used in investing activities (18.69) 132.68

CONSOLIDATED CASH FLOW FOR THE FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2012

` In Lacs

68

As per our report of even date For and on behalf of the Board of Directors of

For M/s. CNGSN & Associates HENKEL INDIA LIMITED

Chartered Accountants

Firm registration number: 04915s

C N GANGADARAN M.P. Ramachandran K. Ullas Kamath

Partner Chairman Director

Membership No. 11205

Place : Mumbai Place : Mumbai

Dated : May 22, 2012 Dated : May 22, 2012

` In Lacs


(15 Months)


(12 Months)

C. CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES:

Interest and finance charges paid (5,822.61) (2,832.61)

Repayment of borrowing (1,227.18) 6,861.65

Netcashusedinfinancingactivities (7,049.79) 4,029.04

Net increase / (decrease) in cash and cash equivalents (A+B+C) 615.02 (129.77)

Cash and cash equivalents at the beginning of the period / year 6.56 136.33

Cash and cash equivalents at the end of the period / year 621.58 6.56

Components of cash and cash equivalents

Cash in hand 3.20 2.23

Balance with banks - Current account 618.38 4.33

Cashandcashequivalentsconsideredforcashflows 621.58 6.56

69

Notes

70

Notes

71

Notes

72

Notes

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

ATTENDANCE SLIPPlEASE COMPlETE THIS ATTEndAnCE SlIP And HAnd IT OvER

AT THE EnTRAnCE Of THE MEETIng HAll

folio no. / Client Id no. ...................................................... name ...................................................................................

dP Id no. ............................................................................ ..............................................................................................

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, Signature of the Shareholder ............................................... Mumbai – 400 001.

Time : 12.00 P.M. Signature of the Proxy .........................................................

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

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 .........................................

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.

One Rupee Revenue Stamp

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

BOOK-POST

jyothy consumer products limited

Documents