Dear shareholders,
 
 The Directors have pleasure in presenting the 90th annual report of
 the Company together with the audited accounts for the year ended 31
 st December 2010.
 
 Economic Scenario
 
 Despite the indian economy sustaining its growth levels, food inflation
 remained high. this coupled with increase in commodity costs have
 resulted in a high inflationary trend which affected the FmCG sector.
 the Government has taken measures including reduction in the liquidity
 from the system, which resulted in higher interest rates. index of
 industrial production grew by 10.4.% while services grew by 9% and
 agricultural sector grew at almost same levels compared to the previous
 year.
 
 financials                                          (rs in crores)
 
                                           year 2010       year 2009
 
 Sales                                        467.72          509.46
 
 Profit before interest & depreciation         24.27           46.43
 
 interest                                      17.11           19.29
 
 Depreciation                                   6.03            6.25
 
 Profit before tax and extraordinary items      1.13           20.89
 
 extraordinary items – restructuring costs         -           33.49
 
 Profit / (Loss) before tax                     1.13          (12.60)
 
 During the year under review, the sales of the Company declined from
 rs.509 crores to rs.468 crores while the profit before tax and
 extraordinary items declined from rs.20.89 crores to rs.1.13 crores.
 the consolidated group sales declined from rs.592 crores to rs.534
 crores and the Group Losses before tax and extraordinary items
 increased from rs.24 crores to rs 51.8 crores the decline in sales and
 profitability came from a combination of several factors including
 significant competitive pressures with predatory price reductions and
 increased promotional and advertising activities by the key
 competitors. During the year, the Company took necessary steps to
 restrict the profit losses by focusing on higher margin brands and more
 profitable customers.
 
 consolidated results                                 (rs in crores)
 
                                           year 2010        year 2009
 
 Sales                                        533.90           592.28
 
 Profit / (Loss) before interest & 
 depreciation                                 (16.92)            8.05
 
 interest                                      28.89            25.92
 
 Depreciation                                   6.03             6.25
 
 loss before tax and extraordinary items      (51.84)          (24.11)
 
 extraordinary items - restructuring costs         -            33.49
 
 loss before tax                              (51.84)          (57.60)
 
 Marketing
 
 laundry and home care
 
 in the first half of 2010, the detergent powder category grew by 16% in
 volume terms largely driven by economy and mid-range segments. the
 value growth at 4% was far lower indicating the price deflation in the
 market. the year 2010 witnessed an unprecedented price war amongst the
 key competitors in the detergent market.
 
 pril - Pril Liquid witnessed 28% growth in value backed by initiatives
 like the new thematic campaign, launch of a new 150ml SKU at the price
 of a bar and a new limited edition pack for the summer season. Pril Bar
 also grew due to various marketing initiatives including introduction
 of improved packaging design. Focus on 2011 will be to drive trials by
 converting bar users to liquid.
 
 henko - a new campaign was rolled out strengthening the innovative
 benefit of Germ Kill with irfan Khan as the brand ambassador. however,
 the price war in the segment and high media spend by the competitors
 resulted in a decline of volumes.
 
 Mr. White – mr. White volumes were impacted by the significant price
 reductions in the mid-price segment. mr. White was able to maintain its
 prices and margins by investing on innovative promotions rather than
 participating in the direct price reductions. By end of 2010, an
 innovative consumer promotion Sure Shot offer was rolled out and the
 initial response has been encouraging.
 
 cosmetics & toiletries
 
 toilet soaps
 
 the toilet Soap market witnessed a growth of 5% in volume and 6% in
 value. the category was highly active with intense promotional
 activations coupled with heavy media investments. the Deodorant
 category grew faster at 52% in value and 45% in volume with a number of
 new entrants in the female deodorant category.
 
 Margo – a slowdown has been witnessed across margo''s focus markets with
 entry from key competitors, aggressive marketing spend by competitors
 and pressure from low price products. the market share stands at 1.3%
 in value and 1.08% in volume on all india basis.
 
 fa range - Fa Deo Classic has recorded growth of around 23% in 2010
 backed by promotional activities as well as trade initiatives. major
 promotions for the year included Fa Pass Your heart on, Fa Friendship
 campaign and the launch of mystic moments and exotic Garden variants,
 backed by tV campaigns.
 
 hair care division - schwarzkopf professionals (skp)
 
 the hair Care Division - SChWarZKoPF ProFeSSionaLS (SKP)- has been sold
 by the Company for rs.25.35 crores in accordance with the members
 resolution passed vide postal ballot conducted vide notice dated 8th
 February 2011 conducted in pursuance of section 192a of the Companies
 act, 1956
 
 production
 
 Karaikal - the plant was operated to meet the market requirements of
 our branded products viz., henko Stain Champion, henkomatic, mr.White,
 Chek, Bref, Pril, Zeolite and export requirements.  the Zeolite plant
 was operated to cater to the captive, domestic and export market
 requirements. the performance level of both the plants has been
 satisfactory.  neem extract, margo and Chek perfume production
 continued in Karaikal. these units are operated to cater to the captive
 consumption.
 
 human resources
 
 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.
 
 conservation of energy, technology absorption, foreign exchange
 earnings and outgo
 
 the particulars relating to the Conservation of energy, technology
 observation, Foreign exchange earnings, outgo as required u/s 217
 (1)(e) of the Companies act, 1956 are enclosed as part of this report.
 
 subsidiary company
 
 the audited statements of accounts of the subsidiary company viz.,
 henkel marketing india Ltd for the year ended 31 st Dec''10 together
 with the reports of Directors and the auditors, are annexed as required
 u/s. 212 of the Companies act, 1956. the turnover of the Company during
 the year under review was rs.352 crores as against rs.459 crores in the
 previous year while the loss has increased from rs.44.99 crores to
 rs.52.96 crores.
 
 dividend
 
 For the year under review, your Directors have not recommended dividend
 due to inadequate profit.
 
 deposits
 
 Your Company has not accepted any deposit from the public during the
 year.
 
 directors
 
 Jyothy Laboratories Limited (JLL) has acquired controlling stake in
 the Company from henkel aG & Co. KGaa (henkel) as per the Share
 Purchase agreement dated 5th may 2011 (the agreement) executed
 between henkel and JLL. Consequently, mr. m. P. ramachandran, mr. K.
 Ullas Kamath, ms. m. r. Jyothy, mr.  nilesh mehta, mr. Bipin r. Shah,
 mr. K. P. Padmakumar and mr.  r. Laxminarayanan, appointed as
 additional Directors with effect from 31st may 2011 in accordance with
 the provisions of the articles of association.
 
 Dr. a.C.muthiah, mr. Patrick Kaminski, mr. Ben ho, mr. thomas Jungmann,
 Dr. a.Besant C raj, mr.Sukhendu ray, mr. rm. muthukaruppan, mr.
 a.Satish Kumar, Dr. Uddesh Kohli, Prof. Debashis Chatterjee, mr. V.
 Selvaraj, Directors and mr. Jayant K Singh, managing Director have
 resigned from the Board.  the Board places on record its appreciation
 for the valuable support and guidance rendered by the above resigned
 Directors during their tenure.
 
 the Company has received the notices under Section 257 of the Companies
 act, 1956 in respect of appointment of mr.  m. P.  ramachandran, mr. K.
 Ullas Kamath, ms.  m.  r. Jyothy, mr.  nilesh mehta, mr. Bipin r. Shah,
 mr. K. P. Padmakumar and mr. r. Laxminarayanan as Directors of the
 Company in the ensuing annual General meeting of the Company.
 
 the Board recommends the appointments of aforesaid Directors in the
 ensuing annual General meeting.
 
 directors'' responsibility statement
 
 in compliance with the provisions of Section 217(2aa) of the Companies
 act, 1956 (the act), your Directors hereby confirm that:
 
 i) in the preparation of the annual accounts for the year ended 31 st
 December 2010, all the applicable accounting standards had been
 followed along with proper explanation relating to material departures;
 
 ii) accounting policies were adopted and applied consistently and made
 judgments and estimates 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
 December, 2010 and of the profit or loss of the Company for the year
 ended on that date;
 
 iii) the Directors had taken proper and sufficient care 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 have been
 taken; and
 
 iv) the annual accounts have been prepared on a ''going concern'' basis.
 
 corporate governance
 
 Pursuant to Clause-49 of the Listing agreement with the Stock
 exchanges, a report on Corporate Governance together with the
 certificate from mrs. B. Chandra, Practising Company Secretary, on the
 compliance with the conditions of the Corporate Governance and
 management Discussion & analysis report are attached to this report.
 the audited Consolidated Financial Statements are provided in the
 annual report.
 
 particulars of employees
 
 a statement giving information and particulars of the employees as
 required u/s 217 (2a) of the Companies act, 1956 forms part of this
 report.  however, the annual report excluding the aforesaid information
 is being sent to all the members of the Company and others entitled
 thereto. any member interested in obtaining such particulars may write
 to the Compliance officer at the registered office of the Company.
 
 auditors
 
 m/s Cngsn & associates, Chartered accountants, Chennai, the Statutory
 auditors of the Company, retire at the conclusion of forth coming
 annual General meeting and are eligible for re-appointment as auditors
 of the Company for the financial year 2011. regarding the observations
 made by the auditors in their report, the notes forming part of
 accounts are self-explanatory.
 
 environment and safety Measures
 
 in line with the global trend and henkel''s policy, the thrust for
 Safety, health and environmental issues (She) was sustained. having
 established iSo 9001 Quality management System, since 1994, an
 integrated management system comprising environment management System
 (iSo 14001) and occupational health & Safety management System (BS
 ohSaS 18001) are in place. Various environmental programs and risk
 reduction programs have been implemented.  internal audits had been
 initiated in respect of third party manufacturing units as well as
 Depots across india, to assess and improve She performance.
 
 cost audit
 
 as per the requirement of the Central Government and pursuant to
 Section 233B of the Companies act, 1956 the Company carries out an
 audit of cost accounts relating to the products every year. Subject to
 the approval of the Central Government, the Company has appointed mr.
 a. madhavan, Cost accountants, as the Cost auditor of the Company for
 the year 2011.
 
 cautionary note
 
 the Directors'' report and annexure thereof had been previously approved
 by the Board of Directors of the Company in their meeting held on 8th
 February, 2011. however, in view of the change of management consequent
 to the sale of controlling stake by henkel aG & Co, KGaa to Jyothy
 Laboratories Ltd, the Board of Directors approved the revised draft of
 Directors'' report with necessary changes in the meeting held on 27th
 July, 2011.  the present Board of Directors have relied upon the
 Directors'' report dated 8th February, 2011 as approved by the erstwhile
 Board of Directors while stating the various facts mentioned in this
 report in respect of the Company and other related matters.
 
 Certain statements contained in this report and management Discussion
 and analysis may be ''forward looking''. Such ''forward-looking''
 statements are subject to risks and uncertainties and therefore actual
 results could be different from what the Directors envisage in terms of
 future performance and outlook.
 
 acknowledgement
 
 the Board of Directors express their sincere appreciation for the
 contribution and commitment of the employees of the Company and for the
 excellent support provided by the Shareholders, Customers,
 Distributors, Suppliers, Bankers, media and other Service Providers
 during the financial year under review.
 
                             For and on behalf of the Board of Directors
 
                                                    For henkel india ltd
 
                                                                    sd/-
 
 Place : mumbai                                         M.p.ramachandran
 
 Date : 27thJuly''11                                             Director