Godrej Consumer Products Limited

October 2002

Agenda
Background Product Profile Performance Shareholder Value Initiatives

Background

The Company

GCPL is a result of the demerger of the Consumer Products Division of Godrej Soaps Limited (now renamed Godrej Industries Ltd.) Focused FMCG company Presence in Personal, Hair, Fabric & Household care market categories Market Leadership in Hair Colour & Liquid Detergents High Standards of Corporate Governance Owns all its Brands GCPL - category-wise Revenue and Growth
Figures in parentheses refer to revenue growth rates (net of excise) over corresponding period of previous year Liq.Detergents Liq.Detergents Toiletries 66 . %
(-10%)

Toiletries
(-6%)

66 . %

(10%)

66 (54%) . %

66 . %
Soaps

Hair Care

Hair Care

6. % 66
(10%)

6. % 66
(14%)

Soaps

6. % 66
(14%)

6. % 66
(17%)

FY 2002
4

H1 FY2003

Godrej Consumer - A new focus

Godrej Soaps Limited

Godrej Consumer

Consumer business was part of the conglomerate, with core profitability of the consumer segment not being unlocked Godrej Industries focus on AOS and Fatty Alcohol along with investments in Godrej Sara Lee and Godrej Agrovet was not appreciated by the market Consequently, GCPL was de-merged from Godrej Soaps Limited (renamed as Godrej Industries Limited). GCPLs focus is the FMCG sector with emphasis on personal & household care

GCPL emerges as one of the fastest growing FMCG companies with a CAGR of 20% for past 3 years Four categories: soaps, hair colours, toiletries and detergents Focus on employee empowerment and performance linked incentives has led to this phenomenal growth Asset efficiency ratios rank among the highest amongst peers with ROCE for FY2002 at 90%

Godrej Consumer Products Ltd: A new management

Board of Directors

Qualifications M.S. (MIT) B.S. (Illinois Institute of Technology) B.S. (MIT), M.S.(Stanford), M.B.A. (Harvard) Distinguished Professor at Kellogg Faculty at IIMA, Marketing Strategist FCA, FCS, LLM, PMD (Harvard) Ex-partner, McKinsey B.Tech (IIT), PGDBM (IIM)

Adi Godrej - Chairman & Managing Director Jamshyd Godrej Nadir Godrej Bala Balachandran Rama Bijapurkar Bharat Doshi Anupam Puri Hoshedar Press -Exec.Director & President

Current Shareholding Pattern & Shareholder Information

GCPL shares are traded on The Stock Exchange, Mumbai (BSE), National Stock Exchange (NSE) & stock exchanges at Chennai, Kolkata, Delhi and Ahmedabad. Listed on BSE on 18-June-01 Listed on NSE on 20-June-01

Promoter Group 6. % 66

Individuals & Other Bodies Corporate 1. % 11

FIIs, NRIs & OCBs . % Banks, 66 Insurance Cos, MFs and FIs 66 . %

Facilities & Network

Manufacturing Facilities Branches C & F Agents Distributors Retail Outlets covered Retail Coverage of any Godrej Soap Retail Coverage of any Godrej Hair Dye 3 4 32 2000 Above 500,000 1.6 mn 1.2 mn

Product Profile

GCPL Brand Matrix

Rs mn

Categories Toilet soap Hair colour Liquid Detergent

Industry GCPL's Market Key Godrej brands size sales share (% ) 66 ,666 6666 , 66 Cinthol Lime, . Cinthol Regular, Cinthol International, FairGlow, Godrej No. 6 6666 , 66 6 6666 , 666 1 1 Godrej Hair Dye - Liquid, Powder, .1 ColourSoft, Nupur,Kesh Kala, Kali Mehndi 6 . Ezee 66

Toiletries
Skin cream Shaving cream Talcum powder 66 ,666 6666 , 6666 , 666 666 66 66 FairGlow . 66 Godrej .6 66 Cinthol .

Sources: ORG-MARG retail sales audit for FY2002

10

Key Brands Personal Care Hair Care

Fabric & Household Care

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Performance

12

GCPL Performance Highlights

GCPL outperformed its peers in the FMCG sector

Market Growth Q2 FY03 FY02 Toilet Soaps Hair Colour Liquid Detergents
66 66 66 66 66 66 66 6 66 6 66 6 66 6 6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 FY66FY66FY66FY66FY66FY66FY66FY66FY66FY66

GCPL Growth Q2 FY03 FY02 16% 18% 51%

6% 6 6% 6 6% 6 6% 6 6% 6 6 % 6 % -6 % -66 % Q6FY66 Q6FY66 Q6FY66 Q6FY66 Q6FY66 Q6FY66 GCPL Industry

-3.1% -1.5% 22.4%

-6% 10% -11%

10% 17% 10%

Total Sales (net of excise) (Rs mn)

YoY Sales Growth (%) GCPL vs FMCG Industry

Q2 FY03 figures for Industry is for July & August 02 Source: ORG MARG retail sales audit for FMCG industry

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Toilet Soaps

Contributed 63% to own branded sales in H1 FY03 (58% in FY02) Soap industry faced an extremely challenging environment in FY02. The top 10 brands contracted and overall sales for the industry was down by 6% Godrej No. 1 continues to outperform and gain market share in the sub-popular category (now available in 3 variants: Rose, Sandal & Natural) Godrej Fairglow consolidated position in the fairness soap category Increased focus in the Cinthol range to improve presence in the premium segment

66 6 66 6 66 6 66 6 66 6 66 6 66 6 6

Sale s (ne t of e xcise ) (Rs mn)

Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 FY6 6 FY6 6 FY6 6 FY6 6 FY6 6 FY6 6 FY6 6 FY6 6 FY6 6 FY6 6

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Hair Colour

Contributed 27% to own branded sales in H1 FY03 (25% in FY02) Leader in this category with a 44.5% market share in H1 FY03 (44.6% in FY02) Presence across all price points: powder, oil, liquid and high end fashion colours Low penetration suggests high growth potential Production at Guwahati to optimize fiscal benefits Launched new variants in the Godrej Colour Soft range and also Godrej Nupur in sachets

66 6 66 6 66 6 66 6 66 6 6 6 6

Sales (net of excise) (Rs mn)

Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 FY66FY66FY66FY66FY66FY66FY66FY66FY66FY66

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Liquid Detergents

Contributed 8% to own branded sales in FY02 Ezee is the market leader with a share of 83.3% in H1 FY03 (82% in FY02) Demand is seasonal in nature with application on woolens and soft clothing Plans to introduce a product targeted at other washing applications to reduce seasonality

Sales (net of excise) (Rs mn) 66 6 66 6 66 6 66 6 6 6 6

Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 FY66FY66FY66FY66FY66FY66FY66FY66FY66FY66

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Toiletries

Contributed 8% to own branded sales in H1 FY03 (9% in FY02) Presence in shaving cream, fairness cream, talcum powder and deodorant High growth category providing exciting opportunities Gaining market share in shaving creams Production at Guwahati to optimize fiscal benefits New products in deodorants and other categories to drive growth

Sales (net of excise) (Rs mn)

66 6 66 6 6 6 6 6 6 6 6 6 6
Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 Q6 FY66FY66 FY66FY66 FY66FY66 FY66FY66 FY66FY66

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Market Shares
2000-01 Toilet Soaps Hair Colour Liquid Detergents Fairness Cream Shaving Cream Talcum Powder Deodorant
Source : ORG Data All figures shown are % for All India Value Market Share

2001-02 5.8% 44.6% 81.9% 3.4% 10.5% 1.3% -

Apr-Sep02 5.8% 44.5% 83.3% 2.5% 12.1% 1.7% 1.5%

5.6% 42.1% 75.9% 2.1% 10.3% 1.7% -

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GCPLs Performance Highlights

Growth drivers for future earnings

Low incremental capex

(Rsmn) Depreciation (Rs mn) Depreciation to net revenues % Net Block

FY6666 1 H6 1 FY 66 6 % 11 1 11 6 % 11 1

Growth in revenues expected to exploit economies of scale in purchases and manufacturing, further enhancing operational efficiencies Our advertising and promotional spending to branded sales is at the higher end of the FMCG sector as we invest aggressively in the business. A&P to Sales is lower in FY03 because of efficiencies in buying media time, use of channels for rural market & efficient execution of advertising.
(Rsmn) Advertisement & Sales Promotion Total A & P to own brand sales (net of excise) % FY6666 FY1 H6 1 66 6 66 % 66 6 11 %

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H1 FY03 Performance
Power Brands:

Cinthol, Godrej FairGlow, Godrej No.1, Godrej Hair Colour, Ezee. Power Brands sales grew by 17% Godrej Brand Soaps sales grew by 14% (against degrowth of the category) from Rs.1158mn in H1 FY02 to Rs.1314mn in H1 FY03, led by Godrej No1 which grew by 96% Relaunched Godrej FairGlow Launched special trade and consumer initiatives to mark the completion of 50 years of the Cinthol Brand Hair Colour sales grew 14% from Rs.489mn in H1 FY02 to Rs.560mn in H1FY03 Launched Mehendi Power in sachets under the brand name Godrej Nupur Launched Copper Brown, Dark Mahogany & Burgundy fashion shades of Godrej Coloursoft. No.1 in volume in fashion colours Godrej HairCare Institute (GHCI) salon activity intensified PHD sachet distribution continues to grow with special focus on rural distribution crosses 1.2 million outlets
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Toilet Soaps

Hair Colour

Summary Financials
Rsmn Net sales * Operating profit Depreciation Interest & Financial charges (net) PBT PAT Networth Debt Net Fixed Assets Net Current Assets Cash & cash equivalents Operating Profit Margin (%) Net Profit Margin (%) RoCE (%) RoNW (%) Dividend payout ratio (%)
* Sales are net of excise duty

FY6666 H6FY66 6666 , 66 6 , 6 666 66 6 66 6 6 66 6 6 666 11 1 666 66 6 66 6 66 6 66 6 11 1 66 6 66 6 (111 ) (66 ) 66 6 66 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6

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Shareholder Value

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High Free Cash Flow Generation

Strong EVA growth Lower capital expenditure coupled with negative working capital enabled a high EVA of Rs301mn for FY02 (Rs.202mn for H1 FY03). EVA to capital employed at 40% for FY02 (41% in HI FY03) GCPL generates significant free cash flows, which are returned to shareholders as dividends FY 2002 1st Interim Dividend 2nd Interim Dividend (on face value of Rs.4 Share) FY 2003 1st Interim Dividend 2nd Interim Dividend 50.0% 50.0% 2.00 2.00 Div % 50.0% 87.5% Div per share 2.00 3.50

We remain committed to deliver shareholder value

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High Free Cash Flow Generation

GCPL has completed the shares buyback

Shares bought back % of share capital 2.5 0.7 Amt utilised Rs.92.6mn Rs.46.0mn Avg price Rs.64 Rs.111 Period Jan-Jun 2002 Jul-Sep 2002

Number 1,456,593 411,962

Third shares buyback

Approved by the Board of Directors on October 22, 2002 Maximum outlay - Rs.100 mn Buyback from open market (BSE & NSE) at market price Maximum price of Rs.175 per share of face value of Rs.4/Buyback for both Demat as well as physical shares

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Share Price Performance

66 6 6 66 6 66 6 66 1 11 66 6 66 66 66

B S 6 6 6 In d B S E S e n s eGx o d r e j C o n s u m e r E ex
6 66 6 66 6 66 66 66 66 66 6

G o d r e j C o n s u m eV o lu m e ( R H S ) r

6666666 6666666 6666666 6666666 666666 6

Jun-66 Jul-66 Aug-66 Sep-66 Oct-66 Nov-66 Dec-66 Jan-11 Feb-66 Mar-66 Apr-66 May-66 Jun-66 Jul-66 Aug-66 Sep-66 Oct-66
Source: Prowess

The stock outperformed the broad and narrow indices

25

Jun-66 Jul-66 Aug-66 Sep-66 Oct-66 Nov-66 Dec-66 Jan-11 Feb-66 Mar-66 Apr-66 May-66 Jun-66 Jul-66 Aug-66 Sep-66 Oct-66

Initiatives

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Initiatives

Divisionalisation of business carried out with the formation of Soap and Personal Care teams effective 1st Oct 02 with mfg, procurement and marketing under one roof Focus on Personal, Hair & Fabric care categories Consumer centricity to guide all business actions Restructuring of Distribution System - Super & Sub Stockists appointed SKU Rationalisation Implementing distributor-level inventory management systems for its key dealers Leverage group synergies such as combined purchases of raw materials and media Exploit tax benefits in backward areas; new factory in Guwahati to enhance profitability Return excess cash to the shareholders through dividend and shares buyback EVA Implementation complete across the organisation. Measurement & Remuneration based on EVA. Introduction of Individual Performance Factor (IPF) in year 2 Red & Blue Team Project - Think Tank - Young Executive Board constituted

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Thank You

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