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 - 2.1

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.

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.

NOTE 3

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.