We have audited the attached Balance Sheet of henkel india Limited. as
 at 31st December 2010, the Profit and Loss account and also the Cash
 Flow Statement for the year 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 12th June 2003 and as amended
 under notification dated 25th november 2004 in terms of sub-section
 4(a) of section 227 of the Companies act, 1956, we enclose in the
 annexure, a statement on the matters specified in paragraphs 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 the purpose of the
 audit;
 
 ii) in our opinion, proper books of account 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 the books of account;
 
 iv) in our opinion, the 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 the Directors,
 as on 31st December 2010 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st
 December 2010 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 explanations 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 31st December, 2010,
 
 b) in the case of Profit and Loss account, of the Profit for the year
 ended on that date and
 
 c) in the case of Cash Flow Statement of the cash flows for the year
 ended on that date.
 
 Annexure to the auditors'' report
 
 annexure referred to in paragraph 3 of the report of even date of the
 auditor''s to the members of henkel india Limited on the accounts for
 the year ended 31 st December 2010.
 
 i) 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 year.
 
 ii) Physical verification of inventory was conducted at reasonable
 intervals by the management during the year.
 
 a) 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.
 
 b) the Company is maintaining proper records of inventory and the
 discrepancies noticed on verification were not material.
 
 iii) the Company has neither taken nor given loans, secured or
 unsecured from/to Companies, firm or other parties listed in the
 register maintained under Section 301 of the Companies act, 1956.
 
 iv) in our opinion and according to the information and explanations
 given to us, there are adequate internal control systems 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 rs. 5 lakhs 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 year 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 there under does not arise.
 
 vii) in our opinion, the Company has an adequate internal audit System
 commensurate with its size and nature of its business.
 
 viii) the cost accounts and the records described 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 year with the appropriate authorities.
 
 according to the information and explanation given to us, there are no
 undisputed amounts payable which are outstanding as on 31st December
 2010 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.
 
                                 amount      forum where 
 statute            year
                                   (rs.)     pending
 
                 1990-2000 to                Commissioner
 
 income  tax                    32,82,050
                 2001–2002                    (appeal)
 
 income tax total               32,82,050
 
 Central excise  1996-1997 to
 
                                15,52,086     Cestat 
 
 Karaikal        2002-2003
 
 ambattur        2003-2004       4,36,187     Cestat 
 
 excise total                   19,88,273
 
                 2000-2001 to
 
 Sales  tax-mp                  18,47,888     CTO
 
                 2002-2003
 
 grand total                  1,18,45,119
 
 x) at the end of the financial year, the accumulated loss of the
 Company is less than 50% of its net Worth. the Company has not incurred
 cash loss during the financial year but has incurred cash loss in the
 immediately preceding financial year.
 
 xi) the Company has not defaulted in repayment of dues to Banks during
 the year.
 
 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 year.
 
 xvi) the Company has not received any Long term Loan during the year
 and therefore the question of application for the purpose for which
 they were obtained does not arise.
 
 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 year 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 year and
 therefore the question of creation of security or charge does not
 arise.
 
 xx) During the year, 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 informations and explanations given to us, no
 fraud on or by the Company was noticed or reported during the course of
 our audit.
 
 
                                             For cngsn & associates
 
                                             Chartered  accountants
 
                                       Firm registration no. 04915S
 
                                                    c.n. gangadaran
 
                                                            Partner
 
                                                membership no.11205
 
 Place : Chennai 
 
 Dated : 08th Feb''11