Fast Moving Consumer Goods (FMCG) FMCG are products that have a quick shelf turnover, at relatively low

cost and don't require a lot of thought, time and financial investment to purchase !he margin of profit on every individual FMCG product is less "owever the huge num#er of goods sold is what makes the difference "ence profit in FMCG goods always translates to num#er of goods sold Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including$ toiletries, soaps, cosmetics, teeth cleaning products, shaving products, detergents, other non%dura#les such as glassware, #ul#s, #atteries, paper products and plastic goods, such as #uckets &Fast Moving' is in opposition to consumer dura#les such as kitchen appliances that are generally replaced less than once a year !he category may include pharmaceuticals, consumer electronics and packaged food products and drinks, although these are often categori(ed separately !he term Consumer )ackaged Goods (C)G) is used interchangea#ly with Fast Moving Consumer Goods (FMCG) !hree of the largest and #est known e*amples of Fast Moving Consumer Goods companies are +estl,, -nilever and )rocter . Gam#le /*amples of FMCGs are soft drinks, tissue paper, and chocolate #ars /*amples of FMCG #rands are Coca%Cola, 0leene*, )epsi and 1elieve !he FMCG sector represents consumer goods required for daily or frequent use !he main segments of this sector are personal care (oral care, hair care, soaps, cosmetics, toiletries), household care (fa#ric wash and household cleaners), #randed and packaged food, #everages (health #everages, soft drinks, staples, cereals, dairy products, chocolates, #akery products) and to#acco

!he 2ndian FMCG sector is an important contri#utor to the country's G3) 2t is the fourth largest sector in the economy and is responsi#le for 45 of the total factory employment in 2ndia !he industry also creates employment for 6 m people in downstream activities, much of which is dis#ursed in small towns and rural 2ndia !his industry has witnessed strong growth in the past decade !his has #een due to li#erali(ation, ur#ani(ation, increase in the disposa#le incomes and altered lifestyle Furthermore, the #oom has also #een fuelled #y the reduction in e*cise duties, de%reservation from the small%scale sector and the concerted efforts of personal care companies to attract the #urgeoning affluent segment in the middle%class through product and packaging innovations -nlike the perception that the FMCG sector is a producer of lu*ury items targeted at the elite, in reality, the sector meets the every day needs of the masses !he lower%middle income group accounts for over 785 of the sector's sales 9ural markets account for 475 of the total domestic FMCG demand Many of the glo#al FMCG ma:ors have #een present in the country for many decades 1ut in the last ten years, many of the smaller rung 2ndian FMCG companies have gained in scale ;s a result, the unorgani(ed and regional players have witnessed erosion in market share History of FMCG in India 2n 2ndia, companies like 2!C, "<<, Colgate, Cad#ury and +estle have #een a dominant force in the FMCG sector well supported #y relatively less competition and high entry #arriers (import duty was high) !hese companies were, therefore, a#le to charge a premium for their products 2n this conte*t, the margins were also on the higher side =ith the gradual opening up of the economy over the last decade, FMCG companies have #een forced to fight for a market share 2n the process, margins have #een compromised, more so in the last si* years (FMCG sector witnessed decline in demand)

Current Scenario !he growth potential for FMCG companies looks promising over the long% term hori(on, as the per%capita consumption of almost all products in the country is amongst the lowest in the world ;s per the Consumer >urvey #y 0>;% !echnopak, of the total consumption e*penditure, almost ?85 and @5 was accounted #y groceries and personal care products respectively 9apid ur#ani(ation, increased literacy and rising per capita income are the key growth drivers for the sector ;round ?45 of the population in 2ndia is #elow A8 years of age and the proportion of the young population is e*pected to increase in the ne*t five years ;spiration levels in this age group have #een fuelled #y greater media e*posure, unleashing a latent demand with more money and a new mindset 2n this #ackdrop, industry estimates suggest that the industry could triple in value #y A8B4 (#y some estimates, the industry could dou#le in si(e #y A8B8) 2n our view, testing times for the FMCG sector are over and driving rural penetration will #e the key going forward 3ue to infrastructure constraints (this influences the cost%effectiveness of the supply chain), companies were una#le to grow faster ;lthough companies like "<< and 2!C have dedicated initiatives targeted at the rural market, these are still at a relatively nascent stage !he #ottlenecks of the conventional distri#ution system are likely to #e removed once organi(ed retailing gains in scale Currently, organi(ed retailing accounts for :ust 65 of total retail sales and is likely to touch B85 over the ne*t 6%4 years 2n our view, organi(ed retailing results in discounted prices, forced%#uying #y offering many choices and also opens up new avenues for growth for the FMCG sector Given the aggressive e*pansion plans of players like )antaloon, !rent, >hopper's >top and >hoprite, we are confident that the FMCG sector has a #right future Budget Measures to Promote FMCG Sector A5 education cess corporation ta*, e*cise duties and custom duties

Concessional rate of 45 custom duty on tea and coffee plantation machinery

Budget Impact !he education cess will add marginally to the ta* #urden of all FMCG companies !he dividend distri#ution ta* on de#t funds is likely to adversely effect the other income components of companies like 1ritannia, +estle and "<< !he measure to a#olish e*cise duty on dairy machinery is a positive for companies like +estle Concessional rate for tea and coffee plantation machinery is a positive for !ata !ea, "<<, !ata Coffee and other such companies 3uty reduction in food grade he*ane will have a marginally positive impact on companies like Marico and "<< ;rea specific e*cise e*emptions for +orth /ast, C.0, "imachal )radesh will continue to encourage FMCG companies to relocate to these areas Budget over the years Budget 2001 02 From 64%445 to D45 for crude edi#le oil From ?4%745 to @45 for refined edi#le oil From 645 to D85 for copra, coconut, tea and coffee From A45 to 445 for crude palm oil 3evelopment allowance of tea industry raised to ?85 from A85 ;ll food preparations #ased on fruits Budget 2002 0! 2ncreased focus on agricultural reforms with an aim to integrate the countrywide food market 3eregulation of the milk processing capacity /*cise duty structure largely untouched Enly for tea, the duty was reduced from 9s A per 0g to 9e B Customs duty on tea and coffee Budget 200! 0" /*cise on #iscuits reduced to @5 from B75 /*cise on soft drinks and sugar #oiled confectionery also reduced ;ll states to switch to F;! in FG8? (deadline now has #een e*tended till end FG84) <oans to agriculture and to small%scale sector will now #e availa#le at ma*imu A5

and vegeta#les (pickles, sauces, ketchup, :uices, :ams etc ) made completely e*empt from e*cise duty

dou#led to B885 3uty on imported pulses upped to @85 2mport duty on wine and liquor slashed from AB85 to B@85

a#ove prime lending rate ()<9) 3evelopment plans for roads, ports, railways and airports

/*cise on Customs duty on cosmetics and alcoholic toiletries halved to #everages B75 reduced 2ndia offers a large and growing market of B #illion people of which 688 million are middle class consumers 2ndia offers a vi#rant market of youth and vigor with 4?5 of population #elow the age of A4 years !hese young people work harder, earn more, spend more and demand more from the market, making 2ndia a dynamic and aspirational society 3omestic demand is e*pected to dou#le over the ten%year period from BHH@ to A88D !he num#er of households with Ihigh incomeI is e*pected to increase #y 785 in the ne*t four years to ?? million households 2ndia is rated as the fifth most attractive emerging retail market 2t has #een ranked second in a Glo#al 9etail 3evelopment 2nde* of 68 developing countries drawn up #y ; ! 0earney ; ! 0earney has estimated 2ndia's total retail market at JA8A 7 #illion, is e*pected to grow at a compounded 68 per cent over the ne*t five years !he share of modern retail is likely to grow from its current A per cent to B4%A8 percent over the ne*t decade, analysts feel !he 2ndian FMCG sector is the fourth largest sector in the economy with a total market si(e in e*cess of ->J B6 B #illion !he FMCG market is set to tre#le from ->J BB 7 #illion in A886 to ->J 66 ? #illion in A8B4 )enetration level as well as per capita consumption in most product categories like :ams, toothpaste, skin care, hair wash etc in 2ndia is low indicating the untapped market potential 1urgeoning 2ndian population, particularly the middle class and the

rural segments, presents an opportunity to makers of #randed products to convert consumers to #randed products 2ndia is one of the world's largest producers for a num#er of FMCG products #ut its FMCG e*ports are languishing at around 9s B,888 crore only !here is significant potential for increasing e*ports #ut there are certain factors inhi#iting this >mall%scale sector reservations limit a#ility to invest in technology and quality up gradation to achieve economies of scale Moreover, lower volume of higher value added products reduce scope for e*port to developing countries !he FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry Ever the last one year, however the rate of growth has slowed down and the sector has recorded sales growth of :ust five per cent in the last four quarters !he outlook in the short term does not appear to #e very positive for the sector 9ural demand is on the decline and the Centre for Monitoring 2ndian /conomy (CM2/) has already downscaled its pro:ection for agriculture growth in the current fiscal )oor monsoon in some states, too, is unlikely to help matters Moreover, the general slowdown in the economy is also likely to have an adverse impact on disposa#le income and purchasing power as a whole !he growth of imports constitutes another pro#lem area and while so far imports in this sector have #een confined to the premium segment, FMCG companies estimate they have already cornered a four to si* per cent market share !he high #urden of local ta*es is another reason attri#uted for the slowdown in the industry ;t the same time, the long term outlook for revenue growth is positive Give the large market and the requirement for continuous repurchase of these products, FMCG companies should continue to do well in the long run Moreover, most of the companies are concentrating on cost reduction and supply chain management !his should yield positive results for them !he profile of ma:or leading FMCG Market )layers is as follows$

1#

$%S&'% I$(I)

+estl, 2ndia is a su#sidiary of +estl, S#)# of >wit(erland =ith si* factories and a large num#er of co%packers, +estl, 2ndia is a vi#rant Company that provides consumers in 2ndia with products of glo#al standards and is committed to long% term sustaina#le growth and shareholder satisfaction !he Company insists on honesty, integrity and fairness in all aspects of its #usiness and e*pects the same in its relationships !his has earned it the trust and respect of every strata of society that it comes in contact with and is acknowledged amongst 2ndia's 'Most 9espected Companies' and amongst the '!op =ealth Creators of 2ndia' +estl,'s relationship with 2ndia dates #ack to BHBA, when it #egan trading as !he +estl, ;nglo%>wiss Condensed Milk Company (/*port) <imited, importing and selling finished products in the 2ndian market Brief History ;fter 2ndia's independence in BH?D, the economic policies of the 2ndian Government empha(ised the need for local production +estl, responded to 2ndia's aspirations #y forming a company in 2ndia and set up its first factory in BH7B at Moga, )un:a#, where the Government wanted +estl, to develop the milk economy )rogress in Moga required the introduction of +estl,'s ;gricultural >ervices to educate, advise and help the farmer in a variety of aspects From increasing the milk yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of #ank loans +estl, set up milk collection centres that would not only ensure prompt collection and pay fair prices, #ut also instil amongst the community, a confidence in the dairy #usiness )rogress involved the creation of prosperity on an on%going and sustaina#le #asis that has resulted in not :ust the transformation of Moga into a prosperous and vi#rant milk district today, #ut a thriving hu# of industrial activity, as well For more on +estl, ;gricultural >ervices, +estl, has #een a partner in 2ndia's growth for over nine decades now and has #uilt a very special relationship of trust and commitment with the people of 2ndia !he Company's activities in 2ndia have facilitated direct and indirect employment and provides livelihood to a#out one million people including farmers, suppliers of packaging materials, services and other goods !he Company continuously focuses its efforts to #etter understand the changing lifestyles of 2ndia and anticipate consumer needs in order to provide !aste, +utrition, "ealth and =ellness through its product offerings !he culture of innovation and renovation within the Company and access to the +estl, Group's

proprietary technologyK1rands e*pertise and the e*tensive centrali(ed 9esearch and 3evelopment facilities gives it a distinct advantage in these efforts 2t helps the Company to create value that can #e sustained over the long term #y offering consumers a wide variety of high quality, safe food products at afforda#le prices +estl, 2ndia is a responsi#le organi(ation and facilitates initiatives that help to improve the quality of life in the communities where it operates 1eginning with its first investment in Moga in BH7B, +estl,'s regular and su#stantial investments esta#lished that it was here to stay 2n BH7D, +estl, set up its ne*t factory at Choladi (!amil +adu) as a pilot plant to process the tea grown in the area into solu#le tea !he +an:angud factory (0arnataka), #ecame operational in BH@H, the >amalkha factory ("aryana), in BHH6 and in BHH4 and BHHD, +estl, commissioned two factories in Goa at )onda and 1icholim respectively +estl, 2ndia is now putting up the Dth factory at )ant +agar in -ttaranchal Products Product Category Brands +/>!<L /F/9G3;G 3airy =hitener +/>!<L /F/9G3;G Ghee +/>!<L Curds +/>!<L C/9/M/;< Mi*+ Products +/>!<L Ceera 9aita +/>!<L Fresh 'n' +atural 3ahi +/>!<L Fruit '+ 3ahi +/>!<L Milk +/>!<L >lim Milk +/>C;FL C<;>>2C +/>C;FL >-+92>/ Beverages +/>!<L M2<E +/>C;FL 6 in B +/>C;FL 0ooler( Prepared (ishes M;GG2 A%M2+-!/ +oodles

M;GG2 "ealthy >oups M;GG2 3al ;tta +oodles Choco*ates , Confectionaries M;GG2 M;G2C Cu#es +/>!<L Milk Chocolate +/>!<L 02! 0;! +/>!<L M-+C" +/>!<L M2<0G1;9 +/>!<L M2<0G1;9 C"EE +/>!<L 1;9%E+/ )E<E +/>!<L /clairs +/>!<L ;C!2%F )E<E )owermint Financia* &rends 9upees in Millions 2001 Gross Sa*es 3omestic >ales M /*port >ales %BI&() 3 Ether 2ncome 2mpairment loss on fi*ed assets )rovision for contingencies Profit 4efore ta5ation and e5ceptiona* item 2002 200! 200" 2001./210#0 20/"02#0 22/0.1#! 2!/021#2 22/"!1#. B7,BB8 H B@,B8H @ A8,AA7 H AB,AHA @ A6,@?D B 6,8HH B A,67A A A,4DB ? A,?64 ? A,4HB @ !/1"!#2 !/.1-#! "/""2#1 "/-0.#. -/220#B7A 6 B6 H B@8 H A@? 8 ABA 4 6B6 7 AD@ 6 AA A AAH 7 B?? 4 A6 6 A77 H A6D ? A7 ? AA6 A

2/-00#0 !/111#" !/..1#- !/12"#. "/2.0#2

$et Profit 4efore e5ceptiona* 1/0!1#- 2/02.#1 2/2!0#1 2/-1.#2 !/0.-#0 item /*ceptional item % net of ta* $et Profit after e5ceptiona* item %arnings per Share 67s#8 (ividends per Share 67s#8 % 46 H % % %

1/0!1#- 2/01-#2 2/2!0#1 2/-1.#2 !/0.-#0 10#.2 1"#00 20#.0 11#00 20#2. 20#00 22#1! 2"#-0 !2#11 2-#00

M 3omestic >ales include e*cise duty also N /12!3; % /arnings #efore 2nterest, !a*, 3epreciation and ;morti(ation

1#

Hindustan 'ever 'imited 6H''8

!he Glo#al arm of "industan <evers <imited is -nilever's and its mission is to add Fitality to life !heir products meet everyday needs for nutrition, hygiene, and personal care with #rands that help people feel good, look good and get more out of life "<< has deep roots in local cultures and markets around the world which gives them a strong relationship with their consumers, which are the foundation for their future growth !hey #enefit from there wealth of knowledge and international e*pertise to the service the local consumers % a truly multi%local multinational Brief History 2n the summer of B@@@, visitors to the 0olkata har#our noticed crates full of >unlight soap #ars, em#ossed with the words IMade in /ngland #y <ever 1rothersI =ith it, #egan an era of marketing #randed Fast Moving Consumer Goods (FMCG) 2n BH6B, -nilever set up its first 2ndian su#sidiary, "industan Fanaspati Manufacturing Company, followed #y <ever 1rothers 2ndia <imited (BH66) and -nited !raders <imited (BH64) !hese three companies merged to form "<< in +ovem#er BH47O "<< offered B85 of its equity to the 2ndian pu#lic, #eing the first among the foreign su#sidiaries to do so -nilever now holds 4B 445 equity in the company !he rest of the shareholding is distri#uted among a#out 6@8,888 individual shareholders and financial institutions )ond's (2ndia) <imited had #een present in 2ndia since BH?D 2t :oined the -nilever fold through an international acquisition of Chese#rough )ond's ->; in BH@7 !he li#erali(ation of the 2ndian economy, started in BHHB, clearly marked an infle*ion in "<<'s and the Group's growth curve 9emoval of the regulatory framework allowed the company to e*plore every single product and opportunity segment, without any constraints on production capacity >imultaneously, deregulation permitted alliances, acquisitions and mergers 2n one of the most visi#le and talked a#out events of 2ndia's corporate history, the erstwhile !ata Eil Mills Company (!EMCE) merged with "<<, effective from ;pril B, BHH6 2n BHH4, "<< and yet another !ata company, <akme <imited, formed a 48$48 :oint venture, <akme <ever <imited, to market <akme's market%leading cosmetics and other appropriate products of #oth the companies >u#sequently in BHH@, <akme <imited sold its #rands to "<< and divested its 485 stake in the :oint venture to the company "<< formed a 48$48 :oint venture with the ->%#ased 0im#erly Clark Corporation in BHH?, which markets "uggies 3iapers and 0ote* >anitary )ads "<< has also

set up a su#sidiary in +epal, +epal <ever <imited (+<<), and its factory represents the largest manufacturing investment in the "imalayan kingdom !he +<< factory manufactures "<<'s products like >oaps, 3etergents and )ersonal )roducts #oth for the domestic market and e*ports to 2ndia !he BHH8s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and 1everages front 2n BHHA, the erstwhile 1rooke 1ond acquired 0othari General Foods, with significant interests in 2nstant Coffee 2n BHH6, it acquired the 0issan #usiness from the -1 Group and the 3ollops 2cecream #usiness from Cad#ury 2ndia ;s a measure of #ackward integration, !ea /states and 3oom 3ooma, two plantation companies of -nilever, were merged with 1rooke 1ond !hen in Culy BHH6, 1rooke 1ond 2ndia and <ipton 2ndia merged to form 1rooke 1ond <ipton 2ndia <imited (11<2<), ena#ling greater focus and ensuring synergy in the traditional 1everages #usiness BHH? witnessed 11<2< launching the =all's range of Fro(en 3esserts 1y the end of the year, the company entered into a strategic alliance with the 0wality 2cecream Group families and in BHH4 the Milkfood B885 2cecream marketing and distri#ution rights too were acquired 2n Canuary A888, in a historic step, the government decided to award D? per cent equity in Modern Foods to "<<, there#y #eginning the divestment of government equity in pu#lic sector undertakings ()>-) to private sector partners "<<'s entry into 1read is a strategic e*tension of the company's wheat #usiness 2n A88A, "<< acquired the government's remaining stake in Modern Foods 2n A886, "<< acquired the Cooked >hrimp and )asteurised Cra#meat #usiness of the ;malgam Group of Companies, a leader in value added Marine )roducts e*ports Present Stature "industan <ever <imited ("<<) is 2ndia's largest Fast Moving Consumer Goods company, touching the lives of two out of three 2ndians with over A8 distinct categories in "ome . )ersonal Care )roducts and Foods . 1everages !hey endow the company with a scale of com#ined volumes of a#out ? million tonnes and sales of 9s B8,888 crores "<< is also one of the country's largest e*portersO it has #een recognised as a Golden >uper >tar !rading "ouse #y the Government of 2ndia "<<'s #rands % like <ife#uoy, <u*, >urf /*cel, 9in, =heel, Fair . <ovely, )ond's, >unsilk, Clinic, )epsodent, Close%up, <akme, 1rooke 1ond, 0issan, 0norr% ;nnapurna, 0wality =all's P are household names across the country and span many categories % soaps, detergents, personal products, tea, coffee, #randed staples, ice cream and culinary products !hey are manufactured in close to @8 factories !he operations involve over A,888 suppliers and associates "<<'s distri#ution network, comprising a#out D,888 redistri#ution stockists, directly

covers the entire ur#an population, and a#out A48 million rural consumers "<< #elieves that an organi(ation's worth is also in the service it renders to the community "<< is focusing on health . hygiene education, women empowerment, and water management 2t is also involved in education and reha#ilitation of special or underprivileged children, care for the destitute and "2F%positive, and rural development "<< has also responded in case of national calamities K adversities and contri#utes through various welfare measures, most recent #eing the village #uilt #y "<< in earthquake affected Gu:arat, and relief . reha#ilitation after the !sunami caused devastation in >outh 2ndia

Products Product Category Product $ame <u* Brands

>oap

Persona* Care

>kin Care "air Care$ Eral Care 3eodorant Color Cosmetics ;yurvedic "ealthcare

)ears <ife#uoy <iril "amam 1ree(e 3ove 9e*ona )ond's Fair . <ovely >unsilk +aturals Clinic )epsodent Close-p ;*e 9e*ona <akme ;ysh >urf /*cel 9in =heel 1rooke 1ond <ipton 1ru

Fa4ric Care

<aundry

Beverages

!ea Coffee

Foods

>alt >auces 2ce Creams

0nnor ;nnapurna 0issan 0wality =alls

3.

GLAXO SMITHKLINE

GlaxoSmithKline is a leader in the worldwide consumer healthcare market. With nearly $5 billion in sales, over ten $100 million brands and resent in 1!0 markets, the consumer healthcare business brin"s an added dynamic dimension to GSK.

# eratin" in the $iercely com etitive environment o$ retail and consumer marketin" GlaxoSmithKline %onsumer &ealthcare brin"s oral healthcare, over'the'counter medicines and nutritional healthcare roducts to millions o$ eo le. (rand names such as Panadol the anal"esic, Aquafresh tooth aste, Lucozade the nutritional and Nicorette/ Niquitin smokin" cessation roducts are household names around the world. )n one year GSK %onsumer &ealthcare roduces ' amon" many others ' nine billion tablets to relieve stomach u sets, six billion tablets $or ain relie$ tablets and *00 million tubes o$ tooth aste. (ut the drivin" $orce behind GlaxoSmithKline+s consumer healthcare business is science. With $our dedicated consumer healthcare ,-. centres and consumer healthcare re"ulatory a$$airs, the business takes scienti$ic innovation as seriously as marketin" excellence and o$$ers leadin"'ed"e ca ability in both.

The Company
/he com any has a challen"in" and ins irin" mission0 to im rove the 1uality o$ human li$e by enablin" eo le to do more, $eel better and live lon"er. /his mission "ives them the ur ose to develo innovative medicines and roducts that hel millions o$ eo le around the world. )n $act, they are the only harmaceutical com any to tackle the World &ealth #r"ani2ation3s three 4 riority3 diseases 5 &)678).S, tuberculosis and malaria. &ead1uartered in the 9K and with o erations based in the 9S, it is one o$ the industry leaders, with an estimated :; o$ the world+s harmaceutical market. 8s a com any has a em hasi2ed more on research - develo ment, estimated every hour they s end more than <!00,000 =9S$5*>,000? to $ind new medicines. /he medicines roduced are mainly in six ma@or disease areas 5 asthma, virus control, in$ections, mental health, diabetes and di"estive conditions. )n addition, it is a leader in the im ortant area o$ vaccines and are develo in" new treatments $or cancer.

GSK at a glance
Aission is to im rove the 1uality o$ human li$e by enablin" eo le to do more, $eel better and live lon"er ,esearch'based harmaceutical com any )t is the only harmaceutical com any to tackle the three B riorityB diseases identi$ied by the World &ealth #r"ani2ation0 &)678).S, tuberculosis and malaria )ts business em loys over 100,000 eo le in 11* countries /hey make a roximately $our billion acks o$ medicines and healthcare roducts every year #ver 15,000 eo le work in the research teams to discover new medicines

We su ly one 1uarter o$ the world+s vaccines and by the end o$ >005 we had >5 vaccines in clinical develo ment )n >005 we donated 1!* million albenda2ole tablets to hel elimitate lym hatic $ilariasis =ele hantiasis? )n >005 we shi ed 1>* million tablets o$ re$erentially' riced Combivir and Epivir =our &)6 treatments? to develo in" countries 8lmost 100 countries bene$itted $rom our humanitarian roduct donations in >005 We sold >! million bottle o$ Lucozade Sport Hydro Active in >005

Histo y
!"#$ /he &> blocker a!amet =cimetidine? is introduced in the 9K by the SmithKline %or oration, and in the 9S in the $ollowin" year. /he treatment will revolutionise e tic ulcer thera y. !"#% /hrou"h the ac1uisition o$ Aeyer Caboratories )nc, Glaxo3s business in the 9S is started, to become Glaxo )nc $rom 1DE0. /he broad's ectrum in@ectable antibiotic "inacef =ce$uroxime? is introduced by Glaxo. !"%! /he anti'ulcer treatment "antac =ranitidine? is launched by Glaxo and is to become the world3s to 'sellin" medicine by 1DE*. Au!mentin =amoxicillin 7 clavulanate otassium?, to combat a wide ran"e o$ bacterial in$ections in children and adults, is launched by (eecham. /he antiviral "ovira# =aciclovir? is launched by Wellcome $or her es in$ections !"%& SmithKline ac1uires 8ller"an, an eye and skincare business, and mer"es with (eckman )nstruments )nc, a com any s ecialisin" in dia"nostics and measurement instruments and su lies. /he com any is renamed SmithKline (eckman. Fohn 6ane o$ the Wellcome ,esearch Caboratories is awarded the Gobel Hri2e, with two other scientists, B$or their discoveries concernin" rosta"landins and related biolo"ically active substances.B !"%3 Glaxo )nc moves to new $acilities in ,esearch /rian"le Hark and Iebulon, Gorth %arolina. /he broad's ectrum in@ectable antibiotic $ortum =ce$ta2idime? is launched.

 Wellcome launches $lolan =e o rostenol? $or use in renal dialysis. !"%$ (eecham ac1uires the 9S $irm Gorcli$$ /hayer, addin" ums antacid tablets and #xy skin care to its ort$olio. !"%# /he 8).S treatment %etrovir =2idovudine? is launched by Wellcome. Glaxo introduces the oral antibiotic "innat =ce$uroxime axetil?. !"%% SmithKline (ioScience Caboratories ac1uires one o$ its lar"est com etitors, )nternational %linical Caboratories, )nc, increasin" the com any+s si2e by hal$ and establishin" SmithKline (ioScience Caboratories as the industry leader. /he Gobel Hri2e $or medicine is awarded to Geor"e &itchin"s and Gertrude Jlion, o$ (urrou"hs Wellcome )nc, and to Sir Fames (lack, who had worked at the Wellcome Koundation and Smith Kline and Krench Caboratories, B$or their discoveries o$ im ortant rinci les $or dru" treatment.B !"%" SmithKline (eckman and /he (eecham Grou lc mer"e to $orm SmithKline (eecham lc. En!eri#&' he atitis ( vaccine =recombinant?, a "enetically en"ineered he atitis ( vaccine, is launched in the 9S and Krance. !""' /he synthetic lun" sur$actant E#osurf and the anti'e ile tic dru" Camictal =lamotri"ine? are launched by Wellcome. Glaxo introduces lon"'actin" Serevent =salmeterol? $or asthma, the inhaled corticosteroid $li#otide =$luticasone ro ionate? and "ofran =ondansetron? anti' emetic $or cancer atients. !""! Glaxo launches its novel treatment $or mi"raine, )mi"ran =sumatri tan?, Lacipil =lacidi ine? $or hi"h blood ressure, and Cutivate =$luticasone ro ionate? in the 9S $or skin diseases. SmithKline (eecham moves its "lobal head1uarters to Gew &ori2ons %ourt at (rent$ord, Jn"land. SmithKline (eecham3s Sero#at7Pa#il = aroxetine hydrochloride? is launched in the 9K, its $irst market. !""& (epron =atova1uone? $or 8).S'related neumonia is introduced by (urrou"hs Wellcome in the 9S. SmithKline (eecham3s Havri# he atitis 8 vaccine, inactivated, the world3s $irst he atitis 8 vaccine, is launched in six Juro ean markets.

!""3 SmithKline (eecham and &uman Genome Science ne"otiate a multi'million' dollar research collaboration a"reement $or identi$yin" and describin" the $unctions o$ the "enes in the human body. Glaxo introduces $li#otide =$luticasone ro ionate? $or bronchial conditions. !""( SmithKline (eecham urchases .iversi$ied Hharmaceutical Services, )nc, a harmaceutical bene$its mana"er. Sterlin" &ealth also is ac1uired, makin" SmithKline (eecham the third'lar"est over'the'counter medicines com any in the world and number one in Juro e and the international markets. With the intention o$ $ocusin" on human healthcare, SmithKline (eecham sells its animal health business. !"") Glaxo and Wellcome mer"e to $orm Glaxo Wellcome. Glaxo Wellcome ac1uires %ali$ornia'based 8$$ymax, a leader in the $ield o$ combinatorial chemistry. Glaxo Wellcome3s Aedicines ,esearch %entre o ened at Stevena"e in Jn"land. )altre# =valaciclovir? is launched by Glaxo Wellcome as an anti'her es successor to "ovira# =acyclovir?. SmithKline (eecham ac1uires Sterlin" Winthro +s site in 9 er Hrovidence, Hennsylvania, to $ul$il 9S ,-. ex ansion needs. !""$ %ommunity Hartnershi is established by SmithKline (eecham to $ocus hilanthro y on community'based healthcare. SmithKline (eecham &ealthcare Services is $ormed by combinin" the clinical laboratories, disease mana"ement and .iversi$ied Hharmaceutical Services businesses. !""# SmithKline (eecham3s research centre, Gew Krontiers Science Hark, o ens at &arlow in Jn"land. SmithKline (eecham and )ncyte Hharmaceuticals create a @oint venture ' dia.exus ' to discover and market novel molecular dia"nostics based on the use o$ "enomics. !""% SmithKline (eecham and the World &ealth #r"ani2ation announce a collaboration to eliminate lym hatic $ilariasis =ele hantiasis? by the year >0>0. /he lar"est harmaceutical com any in Holand is created with the ac1uisition o$ Hol$a Ho2nan by Glaxo Wellcome.

!""" /he !0th anniversary o$ the launch o$ )entolin =albuterol? is marked as res iratory becomes Glaxo Wellcome3s lar"est thera eutic area. Shar enin" its $ocus on harmaceuticals and consumer healthcare, SmithKline (eecham divests SmithKline (eecham %linical Caboratories and .iversi$ied Hharmaceutical Services. GS9 Products )roduct name$ Ma:or Mar+ets +orth and >outh ;merica /urope /ast and >outh ;frica Middle /ast ;sia ;ustralia and +ew Qealand

Aquafresh

Aquafresh is one of the world's largest and fastest growing toothpaste and tooth#rush #rands !he unique red, white and #lue stripes of the toothpaste make the product not only visually attractive, #ut also underline the triple #enefits of strong teeth, healthy gums and fresh #reath P whole mouth protection !he Aquafresh range of manual and electric tooth#rushes not only clean teeth effectively, they are also gentle on gums #ecause of their fle*i#le necks !heir fle*i#le heads and #rush tips have #een designed for cleaning even the hardest% to%reach parts of the mouth !he Aquafresh range also includes whitening, sensitive, tartar control and children's toothpaste, children's tooth#rushes, dental lo(enges and dental gum )roduct name$ Ma:or Mar+ets

ENO

2ndia 1ra(il >outh ;frica and !hailand

ENO is the most glo#al of G>0's gastrointestinal #rands with sales of RAH million !he fast%acting effervescent fruit salts, used as an antacid and reliever of #loatedness, was invented in the B@48s #y Cames Crossley ENO

)roduct name$ Ma:or Mar+ets 2ndia and -0

Horlicks

Horlicks, '!he Great Family +ourisher,' is a nutritional drink made from wheat, milk and malted #arley and is sold in powdered form !he #rand is such an enormous success in its key market, 2ndia, that alongside the traditional family formula, there is a special formulation for children #etween one and three years of age and another for #reast%feeding mothers Financia* revie; <perating profit and earnings per share Eperating profit of RB,HBB million grew #y B65, which was a#ove the turnover growth of H5, reflecting an improved cost of sales margin and higher other operating income partly offset #y increased 9.3 e*penditure >G.; grew @5 /*cluding costs for legal matters, >G.; grew #y A5, well #elow turnover growth 2n the quarter, gains from asset disposals were RHB million (RB8 million in A884), costs for legal matters were RBA6 million (R66 million in A884), the fair value movements on the Suest collar and !heravance options were unfavora#le R7H million (RH million unfavora#le in A884) and net income related to restructuring programmes was R? million (RA? million charge in A884) !he total operating profit impact of these items was a RHD million charge in A887, compared with a R47 million charge in A884, resulting in a A percentage point reduction in operating profit growth for the quarter )rofit after ta*ation grew #y B?5 which was marginally higher than the growth in operating profit and reflected lower net interest costs, partially offset #y a higher e*pected ta* rate for the year /)> of A6 6 pence increased B45 in C/9 terms (B?5 in sterling terms) compared with SA A884 !he adverse currency impact of B5 on /)> reflected e*change losses on settlement of foreign currency #alances in the quarter partly offset #y a stronger dollar

FI$)$CI)' 7%=I%> ? I$C<M% S&)&%M%$& <perating profit @2 2002 SA Growth

Am !urnover Cost of sales >elling, general and administration 9esearch and development Ether operating income Eperating profit PPPPPP -/111 61/20.8 61/11!8 61-!8 "1/.11 PPPPPP

B of turnover PPPPPP 100#0 620#18 6!2#"8 61"#08 0#1 !2#. PPPPPP

Rm PPPPPP 4,A?7 (B,B44) (B,7@B) (D8A) 6 B,DBB PPPPPP

A884 5 of turnove r PPPPPP B88 8 (AA 8) (6A 8) (B6 ?) % 6A 7 PPPPPP

C/9 5 PPPPP P H 6 @ A8 B6 PPPPP P

R5 PPPP P BB 4 BA AA BA PPPP

"# C<'G)&% P)M<'I=% I$(I) 'IMI&%( From a modest start in BH6D, when hand%carts were used to distri#ute Colgate 3ental Cream, Colgate%)almolive (2ndia) today has one of the widest

distri#ution networks in 2ndia P a logistical marvel that spans around 6 4 million retail outlets across the country, of which the Company services H ?8,888 outlets directly !he Company has grown to a 9s H788 million plus with an outstanding record of enhancing value for its strong shareholder #ase Colgate's tight focus in Eral Care in 2ndia while #uilding its )ersonal Care #usiness coupled with a simple, #ut sound worldwide financial strategy, has helped deliver consistent shareholder value Colgate consistently increases gross margin while at the same time reducing overhead e*penses !he increase in gross margin and the reduction in overhead e*penses provide the money to invest in advertising to support the launch of new products, while at the same time increasing operating profit !oday, Colgate is a household name in 2ndia with one out of two consumers using a modern dentifrice Consistently superior quality, innovation and value for money products emerging out of advanced technology employed, has ena#led Colgate to #e voted &!he Most !rusted 1rand' in 2ndia across all #rands and categories for the third consecutive year in the 1rand /quity ;C +ielson E9G% M;9G A884 survey Colgate has #een the only #rand to #e ranked in the top three for all the five surveys and to hold the premier position for three consecutive years !his is a true measure of the trust and confidence that generations of consumers have placed in Colgate for their oral care needs History 1.0Caprice hair care launches in Me*ico !oday, hair care products are sold in over D8 countries, with variants to suit every type of hair need 1.02 Colgate%)almolive acquires "ill's )et +utrition !oday "ill's is the glo#al leader in pet nutrition and veterinary recommendations 1.1! Colgate )lus tooth#rush is introduced !oday over B 7 #illion Colgate tooth#rushes are sold annually worldwide 2f you lined them up end to end, they would circle the glo#e B7 times 1.1)rote* #ar soap is introduced, and today offers all%family anti#acterial protection in over 47 countries Colgate%)almolive enters into a :oint venture with "ong

0ong%#ased "awley . "a(el, a leading oral care company, which adds strength in key ;sian markets 1.12 !he Chairman's Gou Can Make ; 3ifference )rogram is launched, recogni(ing innovation and e*ecutional e*cellence #y Colgate people 1.10 Colgate acquires >oftsoap liquid soap #usiness from the Minnetonka Corporation !oday, Colgate is the glo#al leader in liquid hand soap 1.1. ;nnual Company sales surpass the J4 #illion mark 1..1 Colgate acquires Murphy Eil >oap, the leading wood cleaner in the - > !oday, its product portfolio has e*panded to include all%purpose cleaners, sprays and wipes 1..2 Colgate acquires the Mennen Company !oday, Mennen products are sold in over 4A countries 1..Colgate enters Central /urope and 9ussia, e*panding into fast%growing markets Colgate acquires 0olynos Eral Care #usiness in <atin ;merica and launches market%leading >orriso toothpaste 1..2 1right >miles, 1right Futures oral health education program e*pands to reach 48 countries with in%school programs and mo#ile dental clinics 1..0 Colgate !otal toothpaste is introduced and quickly #ecomes the market leader in the - > Enly Colgate !otal, with its BA%hour protection, fights a complete range of oral health pro#lems 200" Colgate acquires the G;1; oral care #usiness in /urope, with its strength in the important /uropean pharmacy channel and its ties with the dental community 2002 !oday, with sales surpassing JB8 #illion, Colgate focuses on four core #usinesses$ Eral Care, )ersonal Care, "ome Care and )et +utrition Colgate now sells its products in AAA countries and territories worldwide

Products <ra* CareC Colgate P !oothpaste, !ooth )owder, =hitening )roducts )amolive % >hower Gel, >hower Cream, 1ar >oap, <iquid "and =ash, >have )reps, >kin Care

Househo*d CareC ;*ion >urface Clean

-#

B7I&)$I)

!he story of one of 2ndia's favorite #rands reads almost like a fairy tale Ence upon a time, in B@HA to #e precise, a #iscuit company was started in a nondescript house in Calcutta (now 0olkata) with an initial investment of 9s AH4 !he company we all know as Britannia today

!he #eginnings might have #een hum#le%the dreams were anything #ut 1y BHB8, with the advent of electricity, 1ritannia mechani(ed its operations, and in BHAB, it #ecame the first company east of the >ue( Canal to use imported gas ovens 1ritannia's #usiness was flourishing 1ut, more importantly, 1ritannia was acquiring a reputation for quality and value ;s a result, during the tragic =orld =ar 22, the Government reposed its trust in 1ritannia #y contracting it to supply large quantities of Iservice #iscuitsI to the armed forces ;s time moved on, the #iscuit market continued to grow and 1ritannia grew along with it 2n BHD4, the 1ritannia 1iscuit Company took over the distri#ution of #iscuits from )arry's who till now distri#uted 1ritannia #iscuits in 2ndia 2n the su#sequent pu#lic issue of BHD@, 2ndian shareholding crossed 785, firmly esta#lishing the 2ndianness of the firm !he following year, 1ritannia 1iscuit Company was re%christened 1ritannia 2ndustries <imited (12<) Four years later in BH@6, it crossed the 9s B88 crores revenue mark En the operations front, the company was making equally dynamic strides 2n BHHA, it cele#rated its )latinum Cu#ilee !he =adia Group acquired a stake in the company and #ecame an equal partner with Groupe 3anone in 1ritannia !he su#sequent year saw sales cross landmark B88,888 tones of #iscuits or B #illion packs of B88g 1ritannia strode into the ABst Century as one of 2ndia's #iggest #rands and the pre%eminent food #rand of the country 2t was equally recogni(ed for its innovative approach to products and marketing$ the <agaan Match was voted 2ndia's most successful promotional activity of the year A88B while the delicious 1ritannia 48% 48 Maska%Chaska #ecame 2ndia's most successful product launch 2n A88A, 1ritannia's +ew 1usiness 3ivision formed a :oint venture with Fonterra, the world's second largest 3airy Company, and 1ritannia +ew Qealand Foods )vt <td was #orn 2n recognition of its vision and accelerating graph, For#es Glo#al rated 1ritannia 'Ene amongst the !op A88 >mall Companies of the =orld', and !he /conomic !imes pegged 1ritannia 2ndia's And Most !rusted 1rand !oday, more than a century after those tentative first steps, 1ritannia's fairy tale is not only going strong #ut #la(ing new standards, and that miniscule initial investment has grown #y leaps and #ounds to crores of rupees in wealth for 1ritannia's shareholders !he company's offerings are spread across the spectrum with products ranging from the healthy and economical !iger #iscuits to the more lifestyle%oriented Milkman Cheese "aving succeeded in garnering the trust of almost one%third of 2ndia's one #illion population and a strong management at the helm means 1ritannia will continue to dream #ig on its path of innovation and quality ;nd millions of consumers will savour the results, happily ever after 1.0 1ritannia 1iscuit Company takes over #iscuit distri#ution from )arry's

1.0. 1.1! 1.1. 1..2 1..!

9e%christened 1ritannia 2ndustries <td (12<) >ales cross 9s B88 crore !he /*ecutive Effice relocated to 1angalore 12< cele#rates its )latinum Cu#ilee =adia Group acquires stake in ;12<, -0 and #ecomes an equal partner with Groupe 3anone in 12< 9e%#irth % new corporate identity '/at "ealthy, !hink 1etter' leads to new mission$ 'Make every third 2ndian a 1ritannia consumer' 12< enters the dairy products market I1ritannia 0hao =orld Cup CaoI % a ma:or successT )rofit up #y 6D5 For#es Glo#al 9anking % 1ritannia among !op 688 small companies 12< ranked one of 2ndia's #iggest #rands +o B food #rand of the country 1ritannia <agaan Match$ 2ndia's most successful promotional activity of the year Maska Chaska$ 2ndia's most successful FMCG launch 12< launches :oint venture with Fonterra, the world's second largest dairy company 1ritannia +ew Qealand Foods )vt <td is #orn 9ated as 'Ene amongst the !op A88 >mall Companies of the =orld' #y For#es Glo#al /conomic !imes ranks 12< 2ndia's And Most !rusted 1rand )ure Magic %=inner of the =orldstar, ;siastar and 2ndiastar award for packaging '!reat 3uet'% most successful launch of the year 1ritannia 0hao =orld Cup Cao rocks the consumer lives yet again 1ritannia accorded the status of #eing a '>uper#rand' Folumes cross 6,88,888 tons of #iscuits Good 3ay adds a new variant % Choconut % in its range 9e%#irth of !iger % '>wasth 0hao, !iger 1an Cao' #ecomes the popular chantT 1ritannia launched 'Greetings' range of premium assorted gift packs

1..0

1...

2000 2001

2002

200!

200"
200

!he new plant in -ttaranchal, commissioned ahead of schedule !he launch of yet another e*citing snacking option % 1ritannia 48%48 )epper Chakkar

P7<(DC&S 1ritannia !reat proffers a wide variety of flavours, such as the classic favourites 1our#on . /laichi, the Fruit Flavoured Creams such as Erange, )ineapple, Mango, and >traw#erry, the Cam Filled Centres under the Cim Cam range, and the 3uet 9ange !iger, launched in BHHD, #ecame the largest #rand in 1ritannia's portfolio in the very first year of its launch and continues to #e so till today !iger has grown from strength to strength and the re%invigoration 1ritannia Good 3ay was launched in BH@7 in two delecta#le avatars % Good 3ay Cashew and 1utter Ever the years, new variants were introduced % Good 3ay )ista 1adam in BH@H, Good 3ay Chocochips in A888 and Good 3ay Choconut in A88? 1ritannia 48%48 is the leader in its category with more than one%third of market share !he versatile and youthful #rand constantly aims to provide a novel and e*citing taste e*perience to the consumer 1ritannia's oldest #rand en:oys a heritage that spans the last 48 years % and going strong , 1ritannia Marie Gold has maintained its stronghold 2t is the MB #rand in its category #y a long shot 2n BHH7, Milk 1ikis launched a variant called Milk Cream !hese round #iscuits come with smiley faces and are full of milk cream that makes them very popular with children !o offer something to consumers who cherish healthy living, 1ritannia introduced +utri%Choice #iscuits 2n BHH@, +utri%Choice !hin ;rrowroot was morphed from Caco#'s !hin ;rrowroot (a popular #rand in /ast 2ndia) 1efore !imepass, 1ritannia's offering in the salted cracker category was >na* <aunched in BHHH, >na* was promoted as a tastier #ase for toppings through edgy advertising <ittle "earts was launched in BHH6 and targeted the growing youth segment ; completely unique product, it was the first time #iscuits were retailed in pouch packs like potato wafers 1ritannia +ice !ime was the pioneer of sugar sprinkled #iscuits in 2ndia !his unique product managed to create such a strong consumer pull that soon there was a rush of pretender products in the market, clearly indicative of the success of the concept !ill BH4@, there were no #reads in the organised sector and #read consumption was a ha#it typified #y the 1ritish !hen, a mechanised #read unit was set up in 3elhi with the name I3el#isI which produced sliced

#read and packed it under the 1ritannia name !hus, 1ritannia was not only the pioneer, #ut also inculcated in the people of 3elhi the ha#it of eating white sliced #read !he Mum#ai unit came up in BH76, and there again 1ritannia was the first #randed #read in the city Financia* Performance ;nnual 9eport A88?%A884 &%$ E%)7 FI$)$CI)' S&)&IS&ICSC 1..2 200Gear ended 6Bst March )ssets emp*oyed Fi*ed assets less depreciation . amortisation 2nvestments +et current assets Miscellaneous /*penditure BHH7 BHHD BHH@ BHHH A888 A88B A88A A886 A88? 200-

DB? @46 BADD B646 B687 B4@@ B76A B?@B BA@6 1200 @DB D6B HBA BAH6 B?D8 AB47 6B8? AH7H AHB6 !!00 7@ D@ D B@ 74 A4D 4HA D?D ?6 6"2!8 BAA B76 ABD A78 ?76 !"2 B746 B77A ABH7 A77? AH76 ?B7? 44?4 4?4D ?D8A "".2

Financed 4y /quity shares 9eserves . >urplus <oan funds

B@7 B@7 B@7 B@7 ADH ADH A7H A4H A4B 2!. D?B @6@ B8A7 B68@ B4@7 ABA6 6?68 6746 ?84H "1.2 DA7 76@ H@? BBD8 B8H@ BD7A B@?7 B4?4 6HA 21 B746 B77A ABH7 A77? AH76 ?B7? 44?4 4?4D ?D8A "".2

Profits and appropriations >ales 78A? D4A6 @?D@B868B BB7H@B66A4B?4B8B6?HBB?D84121-" )rofit #efore 6A? 67@ 4?A D64 H7A BABB B?76 B7H8 AB@D 2210 3epreciation,;mortisation and 4? D6 BB@ B4H BDA B@H A?8 A7B AA? 1.0 ta* AD8 AH4 ?A? 4D7 DH8 B8AA BAA6 B?AH BH76 2"20 3epreciation and ;mortisation BH BBD B67@ ?? (BBH) 62108 )rofit #efore ta* and AD8 AH4 ?A? 4D7 DDB BB6H A4HB B?D6 B@?? 220! /*ceptional items BB8 BB7 B64 B@8 A7B ?6? 44H ?@A 747 01/*ceptional 2tems B78 BDH A@H 6H7 4B8 D84 A86A HHB BB@@ 1"11 )rofit #efore ta*N D? D? H6 B8A BA4 B46 A8B A4B ADA !!" !a*ation D H BB B? B7 6A 64 "0 )rofit after ta* ?D B? B@ 3ividends @7 H@ B@D A@6 6DB ?@H B47? 7HA HB8 1110 !a* on dividend

3e#enture 9edemption 9eserve 9etained earnings

2#

()BD7 I$(I)

3a#ur 2ndia <imited is a leading 2ndian consumer goods company with interests in health care, )ersonal care and foods Ever more than B88 years we have #een dedicated to providing nature%#ased solutions for a healthy and holistic lifestyle !hrough our comprehensive range of products we touch the lives of all consumers, in all age groups, across all social #oundaries ;nd this legacy has helped us develop a #ond of trust with us

1.0. 1.12 1..2 1..! 1.." 1..1..2 1..0 1..1 2000 200! 2002002 2002

>ahi#a#ad factory K 3a#ur 9esearch Foundation )u#lic <imited Company Coint venture with ;grolimen of >pain Cancer treatment )u#lic issues Coint Fentures 6 separate divisions Foods 3ivision K )ro:ect >!;9> )rofessionals to manage the Company !urnover of 9s B,888 crores 3a#ur demerges )harma 1usiness 3a#ur aquires 1alsara 3a#ur announces 1onus after BA years 3a#ur crosses JA 1in market Cap, adopts -> G;;)

(a4ur Hea*th Care Product 7ange 3a#ur "a:mola Gumstick % Chyawanprash% "a:mola Mast 3a#ur Masala % Chyawanshakti% ;nardana % Glucose 3% "a:mola % 3a#ur <al tail% "a:mola candy % 3a#ur 1a#y olive "a:mola Candy oil% FunA % 3a#ur Canma )udin hara % Ghunti% (<iquid and pearls) )udin hara G % 3a#ur "ingoli % >hila:it Gold % +ature Care % >at 2sa#gol % >hila:it % 9ing 9ing % 2tch Care % 1ack%aid % >hankha )ushpi % 3a#ur 1alm % >ar#yna >trong %

(a4ur Persona* Care Product 7ange ;mla "air Eil % ;mla <ite "air Eil % % ;nmol >ilky 1lack >hampoo % Fatika "enna Conditioning >hampoo

Fatika "air Eil % ;nmol >arson ;mla % Gula#ari % Fatika Fairness Face )ack %

% Fatika ;nti%3andruff >hampoo % ;nmol +atural >hine >hampoo % 3a#ur 9ed Gel % 3a#ur 9ed !oothpaste % 1a#ool !oothpaste % Meswakl !oothpaste % )romise !oothpaste % 3a#ur <al 3ant Man:an % 3a#ur 1inaca !ooth#rush

(a4ur Foods Product 7ange !astes like eating a fruit B885 +atural Fruit Cuice )ure natural "oney

"ommade % a range <emonee( is a +atural <emon Capsico % a fiery red%pepper of Cuice sauce culinary ingredients giving you '!he taste of 2ndian 0itchen'

FI$)$CI)' P%7F<7M)$C% 67s# in Cr#8 FMCG 67%C)S&8 3 02 0! FMCG standa*on e 0! 0" FMCG standa*on e 0" 0FMCG standa*one 0- 02

B8?@ 4 ?H

BB?@ 8 BB B

BA7@ D BB 4

B67H D 4?

B8H 7 @8 8 DA 8 A4

B67 B BB6 ? B8B A 64

B@D H B74 8 B?@ 8 4A

A?6 6 AB? ? B@H B 6 6NNN

B?@ H ?D A BBA 6 A@ 7 BH7 6 AAA H @B D

B4? H BDB A %B7 H A@ 7 A?8 8 A7A B 6H @

BHB 7 AD8 H %D8 A A@ 7 68H 4 66A 6 ?@ 7

BH@ @ AD4 B %AA H 4D 6 6H8 4 ?B4 8 A8 7

0#

G<(F7%E PHI''IPS

Godfrey )hillips is a company driven #y passion % the passion to e*cel, innovate and win, a passion to #e the leader, to emerge as the most respected company in the to#acco industry, not :ust in 2ndia #ut all over the world Godfrey )hillips is today the second largest player in the 2ndian cigarette industry with an annual turnover of over ->J A74 million 2ncorporated in 2ndia in BH67, the Company esta#lished its own manufacturing facilities in BH?? !oday, the operations span the entire northern and western part of the country, with two manufacturing facilities located in Gha(ia#ad (near 3elhi) and in ;ndheri (Mum#ai), a state of the art 9.3 centre in Mum#ai and a to#acco%

#uying unit in Guntur (;ndhra )radesh) "eadquartered in 3elhi, the Company has its sales offices across the country at ;hmeda#ad, Mum#ai, 3elhi, Chandigarh and "ydera#ad !he Company today is the proud owner of some of the most popular cigarette #rands in the country like 9ed and =hite, Four >quare, Caisalmer, Cavanders, !ipper and )rince 2ts products are distri#uted through an e*tensive 2ndia wide network comprising ?@? e*clusive distri#utors and over @88,888 retail outlets Ever the years, Godfrey )hillips has emerged as a professionally managed, highly efficient corporate entity !oday, the Company has one of the highest productivity rates of workers in the entire country and an envia#le organisational structure Ever the years the Company has also #ecome an active player in overseas markets, with significant e*port volumes Godfrey )hillips has two ma:or stakeholders, one of 2ndia's leading industrial houses % the 0 0 Modi Group and one of the =orld's largest to#acco companies, )hilip Morris Godfrey )hillips has the strong #acking of over B4,888 shareholders in the Country and is today, through the sheer determination . passion of every employee of the organi(ation, growing from strength to strength From its modest #eginning in <ondon way #ack in B@??, Godfrey )hillips, a ma:or player in the 2ndian to#acco industry, has come a long way !he history of the Company reflects the strong determination and passion amongst the founders . the employees of the Company to esta#lish itself as a leader of the to#acco industry in the Country Mr Godfrey )hillips, founder of Godfrey )hillips . >ons commenced #usiness in the 1ar#ican (<ondon), as a Cigar manufacturer in B@?? From the 1ar#ican he moved to )rimrose >treet and after that to Commercial >treet <ondon 1 3 F, the packet to#acco with which the name of Godfrey )hillips was intricately connected, is practically contemporary with Mr )hillips em#arkation in to#acco cutting in the year B@@D ;t that time packet to#accos were in their infancy ;fter 1 3 F came IMarigoldI and Guinea Gold Mr )hillips, a splendid :udge of to#acco himself, looked for appreciation of quality in his customers and stuck to his #elief that quality will ultimately determine success, something that is still the strongest #elief in the Company Messrs Godfrey )hillips, 3 " =ilmer and " C =ater incorporated GE3F9/G )"2<<2)> 2+32; as a )rivate <td Co on 6rd 3ecem#er BH67 !he Company imported cigarettes from Godfrey )hillips <td - 0 2n the year BH?A, plans for setting up a manufacturing facility in Calcutta were made, however it got shelved due to =orld =ar 22 2n BH??, after the war, GE3F9/G )"2<<2)> #ought Master !o#acco Co , Chakala, ;ndheri (Mum#ai)

there#y esta#lishing its first factory in the Country 2n Ecto#er BH?7, GE3F9/G )"2<<2)> #ecame a )u#lic <td Co with its manufacturing operations in Mum#ai GE3F9/G )"2<<2)> was then primarily a manufacturing company and made cigarette #rands like Cavanders, ;#dulla +o D, 3/9/>0/, Marcovich, 9ed . =hite 2n BH4BK4A Godfrey )hillips -0 #ought out George 3o#ie . >on's, famous Four >quare #rand 2n BH7D, 3 Macropolo . Co , which was the sole selling agent for GE3F9/G )"2<<2)>, opened a su#sidiary company called I2nternational !o#acco Co I, with its manufacturing facility in Gha(ia#ad (near 3elhi) to manufacture cigarettes for GE3F9/G )"2<<2)> 2n BH7D%7@, )hilip Morris acquired su#stantial holding in Godfrey )hillips <td , - 0 and Godfrey )hillips 2nvestment Corporation which was holding su#stantial shares of Godfrey )hillips 2ndia <td 2t also acquired a large share holding interest in George 3o#ie . >ons !hus in BH7@, Godfrey )hillips <td , - 0 , George 3o#ie . >ons, and GE3F9/G )"2<<2)> #ecame affiliates of )hilip Morris )hilip Morris is a large professionally managed multinational with diversified #usiness interests 2t has a wide range of to#acco and other products, with IMarl#oroI #eing its leading #rand in the world 2t took ma:or initiatives in BH7@ for GE3F9/G )"2<<2)> to re%organise its operations ; ma:or thrust was given to marketing . sales and it was decided to merge 3 Marcopolo . Co with Godfrey )hillips, a process, which #egan in BH7H !he merger was finally completed on 6Bst 3ecem#er BHD4, #ringing the four sales #ranches and I2nternational !o#acco Co I under its fold 2n BHD6 GE3F9/G )"2<<2)>, successfully launched Four >quare 0ings, 2ndia 's first 0ing >i(e filter cigarette 2t was the sheer passion to #e close to the consumer that helped the Company recogni(e the demands of the emerging consumer long #efore anyone in the cigarette industry 2n BHDH, Phi*ip Morris :oined hands with the 9#9# Modi Group and in the following year the Modi /nterprises took over the management of GE3F9/G )"2<<2)> with a su#stantial financial stake Modi enterprise was new to the cigarette #usiness, #ut an area in which they saw a huge potential for growth !hey took on this new challenge with a lot of passion, vigour and confidence !he #usiness was given a fresh look in all its areas of operation )rofessional managers were inducted to head the various functions to #ring a#out change and vigor in the organi(ation to meet the challenges of the eighties !he e*isting #rand franchises were re:uvenated, each #rand was moderni(ed with the prime o#:ective of growing their #rand equity Moderni(ation of the factories was initiatedO product development and research activities were stepped up

;ggressive marketing and sales strategies were drawn up and implemented and each employee was empowered to #ring a#out the desired change /verything was restarted with renewed passion and determination Godfrey )hillips is #est known #y the #rands it manufactures and today the Company is the proud owner of some of the #est FMCG #rands of the country ;t least 6 of our cigarette #rands today feature in the top 48 FMCG list !hey are$ Four >quare >pecial, 9ed . =hite and Cavanders ;part from these champions, the Company also has other cigarette #rands that cater to a large and varied range of consumer segments !he year A88A also saw the Company re%launch some of its #rands, #y giving them an entirely new look . positioning, while some new, innovative products were also introduced !hese #rands are already making their presence felt in the industry !hey are$ Caisalmer (re%launched in A886), !ipper . )iper (new innovative products introduced in A88A) and )rince (another re%launch for the year A88A) )repared with utmost dedication and passion, to deliver the customer with the most satisfying smoke, each cigarette going out into the market #ears the Godfrey )hillips stamp of quality and assurance Cigarette

Four >quare Caisalmer 9ed . =hite Cavanders !ipper +orth )ole )rince

Cigars % Brands

3on 3iego "av%a%tampa )hillies >anta 3amiana "%A888 9othschild

1#

G<(7%F

!he foods division of Godre: 2ndustries produces and markets edi#le oils, vanaspati, fruit drinks, fruit nectar and #akery fats !he division has two state%of%the%art manufacturing facilities$ at =adala in Mum#ai, the capital of the western 2ndian state of MaharashtraO and at Mandideep near 1hopal in the northern 2ndian state of Madhya )radesh 2t has a national distri#ution network consisting of @88 distri#utors and A? consignment agents !he plants are equipped with the #est of modern equipment for the processing and packaging of a wide variety of food products !hese include$

!he 'Cumpin' range of fruit drinks, which come in flavors such as mango, apple, pineapple and orange !he 'Us' range of fruit nectar (mango, litchi, and sweet orange and pineapple flavors) !omato )uree (under the Godre: #rand) Fruit pulps and :uices in #ulk aseptic packaging "ealth and dietetic foods 9efined edi#le oils of low color in different varieties of groundnut, sunflower and soya#ean )rocessed hydrogenated fats for edi#le purposes such as vanaspati and #akery shortenings Godre: 2ndustries, in keeping with the philosophy of the Godre: Group, #elieves that quality is the product of a com#ination of man and machine !he foods division has people of outstanding cali#er to go with the modern technologies it uses !he result$ the a#ility to deliver outstanding products >oymilk is the rich creamy milk of whole soy#eans =ith its unique nutty flavor and rich nutrition, soymilk can #e used in a variety of ways )lain, unfortified soymilk is an e*cellent source of high%quality protein, 1%vitamins and iron >ome #rands of soymilk are fortified with vitamins and minerals and are good sources of calcium, vitamin 3 and vitamin 1%BA >oymilk is free of the milk sugar lactose and is a good choice for people who are lactose intolerant ;lso, it is a good alternative for those who are allergic to cow's milk Children can en:oy homemade or commercially prepared soymilk after the age of B year 2nfants under B year of age should #e fed #reast milk, commercially prepared infant formula or commercial soymilk infant formula >oymilk is availa#le as a plain, unflavored #everage or in a variety of flavors including apple, mango, malt and plain >oymilk can #e used in almost any way that cow's milk is used Godre: 2ndustries <imited is 2ndia's leading manufacturer of oleochemicals and makes more than a hundred chemicals for use in over two do(en industries 2t also manufactures edi#le oils, vanaspati and #akery fats 1esides, it operates #usinesses in medical diagnostics and real estate

G2< is a mem#er of the Godre: Group, which was esta#lished in B@HD and has since grown into a 9s 7,888 crore conglomerate !he company was called Godre: >oaps <imited until March 6B, A88B !hereafter, the consumer products division got de%merged into Godre: Consumer )roducts <imited, and the residual Godre: >oaps #ecame Godre: 2ndustries <imited !his led to the formation of two separate corporate entities$ Godre: Consumer )roducts and Godre: 2ndustries 1esides its three #usinesses, Godre: 2ndustries also runs four divisions V Corporate Finance, Corporate "9, Corporate ;udit and ;ssurance and 9esearch and 3evelopment V which operate on #ehalf of the entire Godre: Group G2< has #uilt a strong manufacturing #ase capa#le of delivering international quality products at competitive prices 2t operates two plants, one at Falia in the 2ndian state of Gu:arat and a second at Fikhroli in su#ur#an Mum#ai !he company's products are e*ported to ?8 countries in +orth and >outh ;merica, ;sia, /urope, ;ustralia and ;frica, and it leads the 2ndian market in the production of fatty acids, fatty alcohols and ;E>

.#

$I7M)

+irma is one of the few names % which is instantly recogni(ed as a true 2ndian #rand, which took on mighty multinationals and rewrote the marketing rules to win the heart of princess, i e the consumer +irma, the prover#ial &9ags to 9iches' saga of 3r 0arsan#hai )atel, is a classic e*ample of the success of 2ndian entrepreneurship in the face of stiff competition >tarting as a one%man operation in BH7H, today, it has a#out B?, 888 employee% #ase and annual turnover is a#ove 9s A4, 88 crores 2ndia is a one of the largest consumer economy, with #urgeoning middle class pie 2n such a widespread, diverse marketplace, +irma aptly concentrated all its efforts towards creating and #uilding a strong consumer preference towards its &value%for%money' products

2t was way #ack in &78s and &D8s, where the domestic detergent market had only premium segment, with very few players and was dominated #y M+Cs 2t was BH7H, when 0arsan#hai )atel started door%to%door selling of his detergent powder, priced at an astonishing 9s 6 per kg, when the availa#le cheapest #rand in the market was 9s B6 per kg 2t was really an innovative, quality product P with indigenous process, packaging and low%profiled marketing, which changed the ha#it of 2ndian housewives' for washing their clothes 2n a short span, +irma created an entirely new market segment in domestic marketplace, which is, eventually the largest consumer pocket and quickly emerged as dominating market player P a position it has never since relinquished 9ewriting the marketing rules, +irma #ecame a one of the widely discussed success stories #etween the four%walls of the 1%school classrooms across the world !he performance of +irma during the decade of BH@8s has #een la#eled as &Marketing Miracle' of an era 3uring this period, the #rand surged well ahead its nearest rival P >urf, which was well%esta#lished detergent product #y "industan <ever 2t was a severing #attering for M+C as it recorded a sharp drop in its market share +irma literally captured the market share #y offering value%#ased marketing mi* of four )'s, i e a perfect match of product, price, place and promotion +ow, the year A88? sees +irma's annual sales touch @88,888 tones, making it one of the largest volume sales with a single #rand name in the world <ooking at the FMCG synergies, +irma stepped into toilet soaps relatively late in BHH8 #ut this did not deter it to achieve a volume of B88,888 per annum !his makes +irma the largest detergent and the second largest toilet soap #rand in 2ndia with market share of 6@5 and A85 respectively 2t has #een persistent effort of +irma to make consumer products availa#le to masses at an afforda#le price "ence, it takes utmost care to provide finest products at the most afforda#le prices !o leverage this effort, +irma has gone for massive #ackward integration along with e*pansion and moderni(ation of the manufacturing facilities !he focal o#:ective #ehind moderni(ation plan is of up gradation with resource% savvy technology to optimi(e capa#ilities +irma's si* production facilities, located at different places, are well equipped with state%of%art technologies !o ensure regular supply of ma:or raw materials, +irma had opted for #ackward integration strategies !hese strategic moves allowed +irma to manage effective and efficient supply%chain

+irma has always #een practiced &value%for%money' plank +irma plans to e*tend the same philosophy in categories as commodity food products, personal care products and packaged food 3istinct market vision and ro#ust infrastructure allowed +irma to have cost leadership ;part from this, lean distri#ution network, um#rella #randing and low profile media promotions allowed it to offer quality products, at afforda#le prices 2n present scenario, an inspiring 4H%year%old persona, 3r 0arsan#hai 0 )atel, leads +irma, playing role of key strategic decision%maker, whereas his ne*t generation has already skilled management capa#ilities >hri 9akesh 0 )atel P a qualified management graduate, is spearheading the procurement, production and logistic functions, whereas >hri "iren 0 )atel P a qualified Chemical engineer and management graduate, heads the marketing and finance functions of the organi(ation >hri 0alpesh )atel, /*ecutive 3irector, leads the professional organi(ational structure

Products +irma 1ath >oap +irma 1eauty >oap +irma <ime Fresh >oap +ima 9ose +ima >andal +irma =ashing )owder +irma 3etergent Cake >uper +irma =ashing )owder >uper +irma 3etergent Cake +irma )opular 3etergent )owder +irma )opular 3etergent Cake +irma >hudh 2odi(ed >alt +irma Clean 3ish =ash 1ar +ima 1artan 1ar

10#

I&C

2!C is one of 2ndia's foremost private sector companies with a market capitali(ation of over -> J B6 #illion and a turnover of -> J 6 4 #illion 9ated among the =orld's 1est 1ig Companies #y For#es maga(ine and among 2ndia's Most 9espected Companies #y 1usiness =orld, 2!C ranks third in pre%ta* profit among 2ndia's private sector corporations 2!C has a diversified presence in Cigarettes, "otels, )aper#oards . >pecialty )apers, )ackaging, ;gri%1usiness, )ackaged Foods . Confectionery, 2nformation !echnology, 1randed ;pparel, Greeting Cards, >afety Matches and

other FMCG products =hile 2!C is an outstanding market leader in its traditional #usinesses of Cigarettes, "otels, )aper#oards, )ackaging and ;gri%/*ports, it is rapidly gaining market share even in its nascent #usinesses of )ackaged Foods . Confectionery, 1randed ;pparel and Greeting Cards ;s one of 2ndia's most valua#le and respected corporations, 2!C is widely perceived to #e dedicatedly nation%oriented Chairman G C 3eveshwar calls this source of inspiration Ia commitment #eyond the marketI 2n his own words$ I2!C #elieves that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value 2!C practices this philosophy #y not only driving each of its #usinesses towards international competitiveness #ut #y also consciously contri#uting to enhancing the competitiveness of the larger value chain of which it is a part I 2!C's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time%tested core competencies$ unmatched distri#ution reach, superior #rand%#uilding capa#ilities, effective supply chain management and acknowledged service skills in hoteliering Ever time, the strategic forays into new #usinesses are e*pected to garner a significant share of these emerging high%growth markets in 2ndia Products Cigarettes

2!C is the market leader in cigarettes in 2ndia =ith its wide range of invalua#le #rands, it has a leadership position in every segment of the market 2ts high*y popu*ar portfo*io of 4rands inc*udes >i**s/ Insignia/ India 9ings/ Go*d F*a+e/ $avy Cut/ Scissors/ Capstan/ Ber+e*ey/ Bristo* and F*a+e# Foods

2!C made its entry into the #randed . packaged Foods #usiness in ;ugust A88B with the launch of the 9itchens of India #rand ; more #road%#ased entry has #een made since Cune A88A with #rand launches in the Confectionery, >taples and >nack Foods segments

!he packaged foods #usiness is an ideal avenue to leverage 2!C's proven strengths in the areas of hospitality and #randed cuisine, contemporary packaging and sourcing of agricultural commodities 2!C's world famous restaurants like the Bu+hara and the (um Pu+ht, nurtured #y the Company's "otels #usiness, demonstrate that 2!C has a deep understanding of the 2ndian palate and the e*pertise required to translate this knowledge into delightful dining e*periences for the consumer !he Foods #usiness is today represented in ? categories in the market !hese are$ 9eady !o /at Foods >taples Confectionery >nack Foods 'ifesty*e 7etai*ing

Ever the last si* years, 2!C's <ifestyle 9etailing 1usiness 3ivision has esta#lished a nationwide retailing presence through its =ills <ifestyle chain of e*clusive specialty stores 1eginning with its initial offering of =ills >port rela*ed wear from the first store at >outh /*tension, +ew 3elhi in Culy A888, it has e*panded its #asket of offerings to the premium consumer with =ills Classic work wear, =ills Clu#life evening wear and a tempting range of designer accessories that complete the <ook Greeting/ Gifting , Stationery

2!C's stationery #rands )aper 0raft . Classmate are the most widely distri#uted #rands across 2ndia 2!C's Greeting . Gifting products include %5pressions greeting cards and gifting products like autograph #ooks, slam #ooks, party invitations, pop up . mini #ooks !he #usiness also markets %5pressions 7ega*ia, a collection of premium greeting cards . social cause cards . desk calendars in association with S<S Chi*drenGs =i**ages of India# %5pressions "reetin"s - "i$tin" roducts are available in multi brand retail outlets across )ndia. (9s in Crores) 1..2 1..0 1..1 1... G7<SS I$C<M% /*cise 3uties etc +et 2ncome Cost of >ales 4B@@ 4HHB 7HA? DD8B A4@8 68D@ 67H? ?876 A78@ AHB6 6A68 676@ A8A? AB?6 AADB A??6 2000 @87H ?B6? 6H64 A?D4 2001 @@AD ??D4 ?646 A4B7 2002 200! 200" 200-

HH@A BBBH? BA8?8 1!-1?D@B 4A8A 6B47 4B4H 7864 6DBA 46?4 77H4 ?BB8 -010 010"1"0

PB(I& PB(& 3epreciation PBI& P7<FI& B%F<7% &)H !a* P7<FI& )F&%7 &)H B%F<7% %HC%P&I<$)' I&%MS /UC/)!2E+;< 2!/M> (+/! EF !;U) P7<FI& )F&%7 &)H)&I<$ 3ividends 9etained )rofits 1asic (9s ) ;d:usted W (9s ) 1asic (9s ) ;d:usted W (9s ) 3ividend )er >hare (9s )

4@? -00 ?@ 467 ?4A BHB

DD8 2-0 76 D8D 4@D A?8

H4@ @7

BBH? B8A

B?78 1!"0 BBH B6?A BAAH ?6D

B@67 10"0 B?8 B7H7 B788 4H?

A8?7 1.0. BH@ B@?D BD@8 4HB

A6A6 22." A6D A8@7 A847 7@4

A4@4 2-21 A?A A6?? A6BH DA7

!021 2.12 !1! 2012 220! 1!2

100 10"0 @D6 B8HA DHB A74 H6@ 6B4

221

!"0

-22

22!

0.2

1002

11.0

1!01

1-.!

11!0

!-"

221

!"0

-22 BABN ?84

22! B48N ?D?

0.2 AA4N 47@

1002 AD8N D67

11.0 66? @47

1!01 ?BHN H46

1-.! 44HN B86?

21.1 1123 1!10 0!#0"

7B B8@N A88 A6H

%arnings Per Share on profit after ta5 4efore e5ceptiona* items B8 7? B? B? AB ?? A4 ?8 6A AH ?B 88 ?@ 8D 44 ?B 7? 6?

6? 84 ?4 A4 7@ 7B @B A@ B86 66 B6B A8 B44 B? BD@ @B A8D 7H 2!.#-"

%arnings Per Share on profit after ta5ation B8 7? B? B? AB ?? A4 ?8 6A AH ?B 88 ?@ 8D 44 ?B 7? 6? 10#.0

6? 84 ?4 A4 7@ 7B @B A@ B86 66 B6B A8 B44 B? BD@ @B A8D 7H 21-#0" A 48 ? 88 ? 48 4 48 D 48 B8 88 B6 48 B4 88 A8 88 !1#00

Market 44DB @DHA BD4A6 A6766 B@86@ BHH@D BDA?6 B44@B A4DH6 !!"!! Capitalisation NN Foreign /*change /arnings 7BH 764 D4H 748 7@@ 7HD H?@ BAH? B8D@ 122.

)n )ssignment on FMCG Industry

Submitted (y0 Shi*ani Mohan Nip+n ,halla Ay+ ,hatia A-hishe. A o a A.ansha Agga /al E3& E!% E$( E'! E'3