The Company accounts for inventories using both the first-in, first-out (“FIFO”) method (75% of

inventories) and the LIFO method (25% of inventories). There would have been no material impact
on reported earnings for 2017, 2016 or 2015 had all inventories been accounted for under the FIFO
method. –CONSISTENCY

The recognition and measurement of uncertain tax positions involves consideration of the amounts
and probabilities of various outcomes that could be realized upon ultimate resolution.

MATERIALITY

We conducted our audits in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud, and whether
effective internal control over financial reporting was maintained in all material respects.

The figures of the last quarter are the balancing figures between audited figures in respect of the full
financial year and the published year to date figures upto the third quarter of the respective
financial year, which were subjected to limited review.

Revenue Recognition

Sales are recorded at the time products are shipped to trade customers and when risk of ownership
transfers. Net sales reflect units shipped at selling list prices reduced by sales returns and the cost of
current and continuing promotional programs. Current promotional programs, such as product
listing allowances and co-operative advertising arrangements, are recorded in the period incurred.
Continuing promotional programs are predominantly consumer coupons and volumebased sales
incentive arrangements with trade customers. The redemption cost of consumer coupons is based
on historical redemption experience and is recorded when coupons are distributed. Volume-based
incentives offered to trade customers are based on the estimated cost of the program and are
recorded as products are sold.

Marketing Costs

The Company markets its products through advertising and other promotional activities. Advertising
costs are included in Selling, general and administrative expenses and are expensed as incurred.
Certain consumer and trade promotional programs, such as consumer coupons, are recorded as a
reduction of sales.

Property, Plant and Equipment

Land, buildings and machinery and equipment are stated at cost. Depreciation is provided, primarily
using the straightline method, over estimated useful lives ranging from 3 to 15 years for machinery
and equipment and up to 40 years for buildings. Depreciation attributable to manufacturing
operations is included in Cost of sales. The remaining component of depreciation is included in
Selling, general and administrative expenses.

Goodwill and Other Intangibles

Goodwill and indefinite life intangible assets, such as the Company’s global brands, are subject to
impairment tests at least annually. These tests were performed and did not result in an impairment
charge. Other intangible assets with finite lives, such as local brands and trademarks, customer
relationships and non-compete agreements, are amortized over their estimated useful lives,
generally ranging from 5 to 40 years. Amortization expense related to intangible assets is included in
Other (income) expense, net, which is included in Operating profit