Godrej Consumer Products Ltd

To The Shareholders,

Your Directors have pleasure in presenting their Report along with the Audited Accountsfor the year ended on March 31, 2011.

Financial Highlights

Your Company’s financial performance for the year under review has beenencouraging and is summarised below:

Appropriation

Your Directors recommend appropriation as under:

Dividend

For the year 2010-11, three interim dividends were paid on shares of face value Rs. 1/-each – as follows: Rs. 1/- per share on July 24, 2010, Rs. 1/- per share on October30, 2010 and Rs. 1/- per share on January 22, 2011.

In addition to the above, the Board of Directors has also declared a fourth interimdividend on May 2, 2011 at the rate of Rs. 1.50 per share on equity shares of nominalvalue Rs. 1/- each. The record date for the same has been fixed as May 10, 2011.

The total dividend payout for the year ended March 31, 2011 stands at Rs. 4.50 pershare (450 % on shares of the face value of Rs. 1/- each). The erstwhile Godrej HouseholdProducts Ltd. had declared an interim dividend of Rs. 13.50 per share in May 2010. Theinterim dividend amount of Rs. 163.2 crore includes dividend of Rs. 17.5 crore paid byerstwhile Godrej Household Products Limited to its JV shareholder in May 2010.

Your Directors recommend that the aforesaid interim dividends aggregating to Rs. 4.50per share on shares of face value Rs. 1/- each and the interim dividend of Rs. 13.50 pershare paid by the erstwhile Godrej Household Products Ltd. on its shares of face value Rs.4/- each, be declared as final dividend for the year ended on March 31, 2011.

Issue of Shares to Qualified Institutional Buyers

During the year your Company issued 15,400,100 equity shares of face value Rs. 1/- eachat a premium of Rs. 344 per equity share to Qualified Institutional Buyers (QIB’s).The pricing was equal to the floor price of Rs. 345 calculated in accordance with SEBIguidelines. The issue proceeds aggregating to Rs. 531.30 crore has been utilized to retiredebt and for general corporate purpose.

Issue of Non-Convertible Debentures

During the year your Company had issued a series of unsecured non convertibledebentures on a private placement basis upto a maximum outstanding amount of Rs. 760crore. The said debentures had a credit rating of "A1+" (pronounced as A oneplus) by ICRA. As at March 31, 2011, non-convertible debentures aggregating to Rs. 200crore are outstanding. Out of these, Debentures amounting to Rs. 45 crore is redeemable inDecember 2011 and the balance Rs. 155 crore is redeemable in January 2012.

Mergers and Acquisitions

During the year under review, your Company has consolidated its presence in thedomestic market by acquiring the remaining 51% stake in Godrej Sara Lee from the erstwhileJV partner Sara Lee Corp. After the acquisition, GSLL was renamed Godrej HouseholdProducts Limited (GHPL). Subsequently GHPL was legally merged into Godrej ConsumerProducts Ltd. (GCPL) pursuant to a scheme of arrangement sanctioned by the High Court ofJudicature at Bombay. The appointed date for the merger is April 1, 2010 and the effectivedate is March 31, 2011.

The merger consolidates your Company’s position in the Indian FMCG space, givingGCPL the largest home grown home and personal care portfolio in India and making GCPL thesecond largest household insecticides market in Asia excluding Japan. As far as thesynergies for the integration of both companies are concerned, GCPL’s focus is onvalue synergy improvement rather than preplanned cost synergies. Because of thedistribution reach of the Companies, GCPL can now capitalize on GHPL’s reachthroughout urban and rural India, giving your Company significant opportunities.

Towards the second half of FY11 your Company, acquired two brands, Genteel and Swastik,owned by Essence Consumer Care Products Pvt. Limited (ECCPL) and Naturesse Consumer CareProducts Pvt. Limited (NCCPL) respectively. The acquisition extends our leadershippresence specifically in the liquid detergents category and reaffirms its position as adomestic leader in the Personal Wash category. The Board of Directors of your Company,ECCPL and NCCPL have approved the merger of ECCPL and NCCPL with GCPL subject to theapproval of Hon’ble High Court of Judicature at Bombay. The appointed date for themerger is December 3, 2010.

In the International front, your Company acquired PT. Megasari Makmur in Indonesia.Megasari is in the manufacturing and distribution of Household Insecticides, Wet Tissuesand Air Freshners.

Your Company also acquired two businesses in Latin America viz., Issue Group andArgencos. Both companies are focused on hair colours and the acquisitions havecomplemented each other.

During the financial year, your Company also concluded the acquisition of Tura fromTura Group in Nigeria. Tura is a household name in Nigeria and leading personal carecompany.

Review of Operations

During the year under review your Company earned Profit After Tax (PAT) of Rs. 434.9crore.

Net Sales have increased by 89% from Rs. 1267.8 crore in 2009-10 to Rs. 2395.2 crore in2010-11. Current year Sales includes sales of Godrej Household Products Limited which wasmerged with your Company with appointed date being April 1, 2010.

A detailed analysis of your Company’s performance is contained in the ManagementDiscussion and Analysis Report.

Table 1: Comparison of Current year sales with the previous year

The Company has commenced commercial production of Personal care products at itsfactory at Plot No. 52, Brahmaputra Industrial Park, Dol Gobinda Mandir Road, VillageSila, Guwahati on March 23, 2011.

The license for the Kiwi Shoe Care and Kiwi Kleen Brands in India and Sri Lanka by theersthwhile Godrej Household Products Ltd. with Sara Lee Corporation has been terminatedwith effect from April 3, 2011 for which the Company has received a consideration of Rs.158.80 crore and its wholly owned subsidiary Godrej Household Products Lanka (Private)Ltd. has received Rs. 18.20 crore as a one time exit compensation in the financial year2011-12.

Subsidiaries

Your Company has enhanced its global presence through its various subsidiaries.

The details of business of the subsidiaries are given in Management Discussion andAnalysis section which forms part of this Annual Report, under the heading‘International Businesses’.

In line with the General Circular No. 2 /2011 dated February 8, 2011 issued by theMinistry of Corporate affairs, the Board of Directors of your Company has passed aresolution for giving its consent for not attaching the financial statements ofsubsidiaries of the Company to the Balance sheet of the Company for the year ended March31, 2011.

The Consolidated Financial Statements of the Company and its subsidiaries, prepared inaccordance with Accounting Standard 21 issued by the Institute of Chartered Accountants ofIndia, also forms part of the Annual Report and accounts of your Company. A one pagefinancial summary for all the subsidiaries giving the required information is disclosed inthe consolidated balance sheet.

As directed by the aforesaid circular the accounts of the subsidiary companies and therelated detailed information will be made available to any shareholder seeking suchinformation at any point of time. The accounts of the subsidiary companies are alsoavailable for inspection by any shareholder at the registered office of the Company or atthe registered offices of the subsidiary companies.

Employee Stock Option Plan

The shareholders of the Company vide special resolution passed on March 14, 2007approved the setting up of Godrej Consumer Products Ltd. Employee Stock Option Plan (GCPLESOP). Pursuant to the approvals received in the above meeting and in the meeting datedApril 24, 2008, the Company can grant 4,500,000 stock options convertible into 4,500,000equity shares of the nominal value Rs. 1/- each to the eligible employees/directors of theCompany and of the Company’s subsidiaries.

The GCPL ESOP is administered by a trust set up for this purpose viz. Godrej ConsumerProducts Ltd. Employee Stock Option Trust.

As on March 31, 2011, 1,903,500 options convertible into 1,903,500 shares of nominalvalue of Rs. 1/- each are outstanding in respect of options granted under the GCPL ESOP toemployees of the Company.

The details of the Options allotted under GCPL ESOP, as also the disclosures incompliance with Clause 12 of the Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in AnnexureA to this report.

Since the exercise price of GCPL options is the last closing price on the stockexchange, there is no compensation cost in Financial Year 2010-11 based on the intrinsicvalue of the options.

Under the Scheme of Amalgamation between your Company and Godrej Household ProductsLimited(GHPL), the Employee Stock Option Scheme of the erstwhile unlisted GHPL has nowbecome part of your Company. The equity shares of ‘Godrej Industries Limited’are the underlying equity shares for the stock option scheme. As at March 31, 2011,21,29,000 options convertible into 21,29,000 equity shares of Godrej Industries Ltd areoutstanding.

Employee Stock Purchase Plan

The Board of Directors at its meeting held on January 22, 2011 had approved an EmployeeStock Purchase Plan (GCPL ESPL) under the provisions of Section 77 of the Companies Act,1956. The GCPL ESPL is administered by the GCPL ESOP Trust. Employees in the cadre of VicePresidents and above, are eligible to be covered under the plan.

Under the GCPL ESPL, the Company provides loan to the GCPL ESOP Trust at an interestrate which is not less than the bank rate, to enable the GCPL ESOP trust to acquire upto1,000,000 shares of the Company from the secondary market.

Under the GCPL ESPL, 980,000 shares have been granted till March 31, 2011 and thebalance 20,000 shares have been granted after the close of the financial year.

The shares so granted are held by the trust for the benefit of the employee. The sharesshall vest with the employee on March 30, 2012. Thereafter within the exercise period oftwo years, the employee shall compulsorily exercise the shares by acquiring the sharesfrom the GCPL ESOP trust. The exercise price shall be the market price on the day prior tothe date of grant plus interest at a rate not less than the bank rate till the date ofexercise.

Employee Stock Grant Scheme

The shareholders have on March 18, 2011, approved a new Employee Stock Grant Scheme(ESGS 2011). The Scheme envisages the issue of up to 25,00,000 fully paid equity shares ata nominal value of Rs. 1 each in the Company to certain eligible employees of the Companyand / or its subsidiaries. In terms of the ESGS 2011, the HR & Compensation Committeehas approved the granting of 1,09,632 Stock Grants to eligible employees of the Companywith effect from June 1, 2011. In terms of the above scheme, one stock grant representsone equity share of the Company.

The equity shares shall vest in the employees on the dates as given hereunder.

The eligible employees shall be entitled to exercise the options vested in them, withinone month from the date of vesting or such dates as may be determined by the HR &Compensation Committee. The exercise price shall be Rs. 1/- per equity share. The equityshares vested in the eligible employees shall be allotted on payment of the exerciseprice. Since the options have been allotted after the financial year to which this reportrelates, the details of the options allotted under ESGS 2011, as also the disclosures incompliance with clause 12 of the Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are not applicable forthe financial year 2010-11.

Directors

Ms. Rama Bijapurkar resigned from the Board of your Company with effect from close ofbusiness hours on October 30, 2010. The Board places on record her extra-ordinary serviceto the Board and Company over a period of nine years.

In accordance with Article 130 and 131 of the Articles of Association of your Company,Dr. Omkar Goswami and Mr. Jamshyd Godrej retire by rotation and being eligible, offerthemselves for re-appointment.

Ms Tanya Dubash, Ms Nisaba Godrej and Mr Narendra Ambwani were appointed additionaldirectors with effect from May 2, 2011 and will hold office upto the date of the AnnualGeneral Meeting pursuant to Section 260 of the Companies Act, 1956. Pursuant to Section257 of the Companies Act, 1956, the Company has received a notice from a member signifyinghis intention to propose the candidature of Ms Tanya Dubash, Ms Nisaba Godrej and Mr.Narendra Ambwani as directors in the ensuing Annual General Meeting. Accordinglyresolutions for all the aforesaid reappointments/appointments are included in the noticeof the Annual General Meeting.

Listing

The shares of your Company are listed at The Bombay Stock Exchange Limited and TheNational Stock Exchange of India Ltd. The annual listing fee has been paid to each of theabove exchanges before the due date.

Auditors

The Auditors, Kalyaniwalla & Mistry, Chartered Accountants, Mumbai, retire andoffer themselves for reappointment.

Pursuant to directions from the Department of Company Affairs, M/s. P. M. Nanabhoy& Co., Cost Accountants have been appointed as Cost Auditors for the year 2010-11.They are required to submit the report to the Central Government within 180 days from theend of the accounting year.

Directors’ Responsibility Statement

Pursuant to the provisions contained in section 217 (2AA) of the Companies Act, 1956,your Directors, based on the representation received from the Operating Management, andafter due enquiry, confirm:

a) that in the preparation of the annual accounts, the applicable accounting standardshave been followed and no material departures have been made from the same;

b) that they have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

c) that they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company for preventing and detecting fraud and other irregularities;

d) that they have prepared the annual accounts on a going concern basis.

Additional Information

Annexure B to this Report gives the information in respect of conservation ofEnergy, Technology absorption and Foreign Exchange earnings and outgo, required underSection 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure ofParticulars in the Report of the Board of Directors) Rules, 1988 and forms a part of theDirectors’ Report.

Information as per Section 217(2A) of the Companies Act,1956 read with the Companies (Particular of Employees) Rules, 1975 forms part of this Report. As per provisions ofSection 219(1)(b)(iv) of the Companies Act,1956, the Report and Accounts are being sent tothe Shareholders of the Company, excluding the statement of particulars of the employeeunder Section 217(2A) of the Companies Act,1956. Any shareholder interested in obtaining acopy of the statement may write to the Company Secretary at the Registered Office of theCompany.

The notes to the Accounts referred to in the Auditors’ Report are self-explanatoryand therefore do not call for any further explanation.

Group for Interse Transfer of Shares

As required under Clause 3(1)(e) of the Securities and Exchange Board ofIndia(Substantial Acquisition of Shares and Takeovers) Regulations, 1997 personsconstituting "Group" (within the meaning as defined in the Monopolies andRestrictive Trade Practices Act, 1969) for the purpose of availing exemption fromapplicability of the provisions of Regulation 10 to 12 of the aforesaid Regulations, aregiven in the Annexure C attached herewith and forms part of this Annual Report.

Corporate Governance

The Company continues to enjoy a Corporate Governance Rating of CGR2+ (pronounced asCGR2 plus) and a Stakeholder Value Creation and Governance Rating of SVG1 (pronounced asSVG 1). The + sign indicates relatively higher standing within the category indicated bythe rating. The above ratings are on a rating scale of 1 to 6, where 1 is the highestrating.

The two ratings evaluate whether a Company is being run on the principles of CorporateGovernance and whether the practices followed by the Company lead to value creation forall its shareholders.

The CGR2 rating is on a rating scale of CGR1 to CGR6 where CGR1 denotes the highestrating. The CGR2+ rating implies that in ICRA’s current opinion, the rated Companyhas adopted and follows such practices, conventions and codes as would provide itsfinancial stakeholders a high level of assurance on the quality of corporate governance.

The SVG1 rating is on a rating scale of SVG1 to SVG6 where SVG1 denotes the highestrating. The SVG1 rating implies that in ICRA’s current opinion, the Company belongsto the highest category on the composite parameters of stakeholder value creation andmanagement as also corporate governance practices

Pursuant to Clause 49 of the Listing Agreements, the Management Discussion and AnalysisReport and the Report on Corporate Governance are included in the Annual Report. TheAuditors Certificate certifying the Company’s compliance with the requirements ofCorporate Governance in terms of Clause 49 of the Listing Agreement, is attached as AnnexureD and forms part of this Annual Report.

Acknowledgement

Your Directors wish to place their sincere thanks to the Union Government and theGovernments of Maharashtra, Madhya Pradesh, Tamil Nadu, Pondicherry, Jammu & Kashmir,Himachal Pradesh, Assam, Meghalaya and Sikkim, as also to all the Government agencies,banks, customers, shareholders, vendors and other related organisations who, through theircontinued support and co-operation, have helped, as partners, in your Company’sprogress.

For and on behalf of the Board of Directors

Adi Godrej

Chairman

Mumbai, May 2, 2011

Annexure A forming part of the Directors’ Report

As per the Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines, 1999, following information is disclosed inrespect of Godrej Consumer Products Limited Employee Stock Option Plan:

Note - Employee wise details of outstanding options

Annexure B forming part of the Directors’ Report

INFORMATION PURSUANT TO SECTION 217(1) (e) OF THE COMPANIES ACT, 1956, READ WITH THECOMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO.

A. Conservation of Energy

I. (A) Energy Conservation measures undertaken:

1. Provided Air Pre-heater in TP-25 (Thermic fluid heater) of Cp # 2 to recover wasteheat. This has resulted in a fuel saving of Rs. 3 Lac during FY 10-11 (Equivalent to 17MT).

2. Right sizing of pumps and motors in Chemical Plant # 3. This has resulted in asaving of Rs. 7.5 Lac / annum (1.5 Lac KWH/ annum).

3. Provided LED lights in place of conventional lights for street light and in QA laband canteen building resulting in a saving of Rs. 600 / day (120 KWH / day).

4. Provided energy saver for lighting load in CP# 3 and allied tank farm and utilitysections. This has resulted in a saving of Rs. 800 / day (160 KWH /day).

5. Provided condensate heat recovery system to raise the boiler feed water temperature.This has resulted in a fuel saving of 100 Kg / day (Rs. 1800 / day).

(B) Proposed energy conservation measures:

1. Provision of Air Pre-heater for waste heat recovery in TP-10 (Thermic Fluid Heater)of FADP # 1.

2. Unification of high pressure steam network of High Pressure steam generators inorder to reduce fuel consumptions in Fat splitting plants.

3. Provision of Energy efficient motors in place of low efficiency motors.

4. Provision of LED lights in place of conventional lights in plant Area and streetlights.

5. Provision of Energy efficient air compressors equipped with VFD.

6. Provision of waste heat recovery system for process condensate.

II. Impact of measures on reduction of energy consumption and consequent impact on thecost of production of goods:

Saving in energy costs during the period under consideration.

B. Technology Absorption

Research and development(R & D)

Research and Development plays an integral role for GCPL. Your Company has integratedits R & D practices to operate in tandem with the long-term strategy and cater to thedemands of the market-place. The focus of the R & D team is to implement knowledgemanagement and drive quality assurance while maintaining customer centricity in the entireprocess.

I. Specific areas in which R & D was carried out by the Company -

1. Hair Care

2. Skin Care

3. Household Insectide

4. Customer Centricity

5. Packaging Development

6. Fabric care

7. Hygiene Products

II. Benefits derived as a result of the above R & D efforts -

On the back of strong R & D initiatives, a number of new products were launchedsuccessfully in the market in the current financial year.

1. Godrej No.1 ‘Saffron and Milk Cream" soap.

2. FairGlow soap relaunched.

3. Ten new shades in Renew Hair colour range – launched in South Africa

4. Three new shades in Inecto powder hair colour for Black hair launched in SouthAfrica.

5. Abha Herbal Black Henna launched in Sri Lanka.

III. Future Plan of Action:

1. Focus on new categories.

2. Explore new technologies in existing categories.

3. Explore a variety of fashion hair colours with added benefits, hair colourhighlights and newer formats for hair colouring.

IV. Expenditure on R & D

1. Efforts, in brief, made towards technology absorption, adaptation andinnovation:

Commercialization of new product formats such as Abha Herbal Black henna.

2. Benefits derived as a result of the above efforts, e.g. product improvement,cost reduction, product development, import substitution, etc.

The above efforts helped in cost reduction, customer satisfaction and top line andbottom line improvements

3. Imported Technology:

The Company has not imported any technology since incorporation.

C. Foreign Exchange earnings and outgo:

"Group" for interse transfer of shares under clause 3(1)(e)of the Securities& Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations,1997.

1 Godrej & Boyce Mfg. Co. Ltd.

2 Godrej Industries Ltd.

3 Cartini India Ltd.

4 Godrej Investments Pvt. Ltd.

5 Godrej Efacec Automation & Robotics Ltd.

6 Godrej Holdings Pvt. Ltd.

7 Godrej Infotech Ltd.

8 Geometric Ltd.

9 Mercury Manufacturing Co. Ltd.

10 Godrej (Malaysia) Sdn. Bhd.

11 Godrej (Singapore) Pte. Ltd.

12 J. T. Dragon Pte. Ltd.

13 Godrej Vietnam Company Ltd

14 Veromatic International BV

15 Veromatic Services BV

16 Water Wonder Benelux BV

17 Ensemble Holdings & Finance Ltd.

18 Swadeshi Detergents Ltd.

19 Vora Soaps Ltd.

20 Godrej International Ltd.

21 Godrej Properties Ltd.

22 Godrej Reality Pvt. Ltd.

23 Godrej Waterside Properties Pvt. Ltd.

24 Godrej Real Estate Pvt. Ltd.

25 Godrej Developers Pvt. Ltd.

26 Godrej Seaview Properties Pvt. Ltd.

27 Godrej Estate Developers Pvt. Ltd.

28 Happy Highrises Ltd.

29 Godrej Buildwell Pvt. Ltd.

30 Godrej Buildcon Pvt. Ltd.

31 Godrej Garden City Properties Pvt. Ltd.

32 Tahir Properties Ltd.

33 Godrej Projects Development Pvt. Ltd.

34 Godrej Premium Builders Pvt. Ltd.

35 Udhay-GK Realty Private Ltd.

36 Godrej Agrovet Ltd.

37 Bahar Agro Chem & Feeds Pvt. Ltd.

38 Golden Feed Products Ltd.

39 Godrej Oil Palm Ltd.

40 Cauvery Palmoil Ltd.

41 Natures Basket Ltd.

42 Godrej Tyson Foods Limited

43 Aadhaar Retailing Limited

44 Godrej IJM Palm Oil Ltd.

45 Polychem Hygiene Laboratories Pvt. Ltd.

46 Creamline Dairy Products Ltd.

47 ACI Godrej Agrovet Pvt. Ltd.

48 Wadala Commodities Ltd.

49 Godrej Hershey Limited

50 Mr. Adi Godrej

51 Mrs. Parmeshwar Godrej

52 Ms. Nisaba Godrej

53 Mr. Pirojsha Godrej

54 Mrs. Tanya Dubash

55 Mr. Jamshyd Godrej

56 Mrs. Pheroza Godrej

57 Ms. Raika Godrej

58 Mr. Navroze Godrej

59 Mr. Nadir Godrej

60 Mrs. Rati Godrej

61 Master Burjis Godrej thru father and natural guardian Mr. Nadir Godrej

62 Master Sohrab Godrej thru mother and natural guardian Mrs. Rati Godrej

63 Master Hormuzd Godrej

64 Mr. Vijay Crishna

65 Mrs. Smita Crishna

66 Ms. Freyan Crishna

67 Ms. Nyrika Crishna

68 Mr. Rishad Naoroji

69 Godrej & Boyce Enterprise LLP

70 ABG Enterprise LLP

71 JNG Enterprise LLP

72 SVC Enterpirse LLP

73 RKN Enterprise LLP

74 NBG Enterprise LLP

Annexure D forming part of the Directors’ Report

Auditors’ Certificate on Corporate Governance

To the Members of

Godrej Consumer Products Limited,

Mumbai.

We have examined the compliance of conditions of Corporate Governance by GodrejConsumer Products Limited (the Company) for the year ended on March 31, 2011, asstipulated in Clause 49 of the Listing Agreements of the said Company with the StockExchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of theManagement. Our examination was limited to procedures and implementation thereof, adoptedby the Company for ensuring compliance with the conditions of Corporate Governance. It isneither 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 explanationsgiven to us and the representations made by the Directors and the Management, we certifythat the Company has complied with the conditions of Corporate Governance as stipulated inthe above-mentioned Listing Agreement.

As per the records of the Company, there were no investor grievances remainingunattended for a period exceeding one month against the Company.

We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the Management hasconducted the affairs of the Company.

For and on behalf of

Kalyaniwalla & Mistry

Firm Registration No. 104607W

Chartered Accountants

Daraius Z. Fraser

Partner

Membership No.: 42454

Mumbai, May 2, 2011