Investor Presentation

June’ 2010

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DisclaimerDisclaimer This Confidential Presentation (“CP”) contains proprietary and confidential information regarding

Emami Limited (or “EMAMI”).( )

The CP is prepared by Emami Limited based on the published information available and has notindependently verified any of the information contained herein.

The sole purpose of the CP is to enable the recipients to evaluate the Company for anyinvestment decisions. The CP may not contain all the information that recipients may desire orneed. Recipients must rely solely on its own judgment, review and business analysis ininvestigating and evaluating the information contained herein. Consequently, Emami Limited andinvestigating and evaluating the information contained herein. Consequently, Emami Limited andany of their directors, employees, shareholders, affiliates or agents shall not be liable for any lossor damage (direct or indirect) suffered as a result of reliance upon any statements contained in, orany omission from the CP and any such liability is expressly disclaimed.

The CP does not constitute an offer for sale of or an invitation to purchase the equity interest inthe Company and the information contained herein will not form the basis of any contract. It ismerely a solicitation of interest with respect to the investment in the Company.

The CP is furnished strictly on confidential basis to the recipient and the circulation and copying ofthe information embodied herein is restricted. Emami Limited reserves the right to request thereturn of the CP and any other information made available either along with it or separately at itsown discretion and will.

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Company OverviewCompany Overview

Emami Limited the flagship company of the Emami Group is a leading FMCG player in India Emami Limited, the flagship company of the Emami Group, is a leading FMCG player in India

The Company is promoted by Kolkata-based industrialists, Mr. R.S. Agarwal and Mr. R.S.Goenka

Emami has been in the health, beauty and personal care products space since the last 30 yearsand has sustained its prominent position in Ayurvedic products

Aided by state-of-the-art R&D cell, it has developed strong brands like ‘Navratna’, ‘BoroPlus’ and ‘Fair and Handsome’

Around 80% of the Company’s production is in tax exempt zones Around 80% of the Company s production is in tax exempt zones

Listed on BSE and NSE with a market capitalization of over Rs 50 bn (USD 1 bn)

Gross revenue of over Rs 10 bn ($221mn) in FY 2010 with a CAGR of 27% over last 5 years

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Business StrategyBusiness Strategy

Aggressive promotion through celebrities Expand distribution – reach rural Differentiated ‘Value For Money’ products Product innovation to enter new categories Brand extensions

Drive Revenue

Brand extensions Entry in new geographies – drive exports Leveraging existing distribution network

Benchmark A&P spends to industry Stabilization of new launches and brands Grow Net Continuous Cost control initiatives Fiscal efficiency for manufacturing facilities in

tax exempt zones

Grow Net profit

Foray into new categories and International businessto drive revenue growth

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g

Snapshot of power brandsSnapshot of power brands

Power Brand SegmentMarket

SizeMarket

SizeEmami’s Market Share in %

2005 2009Power Brand Segment(INR in

Millions)(USD in Millions)

2005 2009

Navratna Oil Cooling oil 5,507 117.2 48 48

Boroplus Cream Antiseptic Cr. 2,694 57.3 65 74

Zandu & MenthoPlus Balm

Balm 3,507 74.6 13 61*Plus BalmFair & Handsome Men's fairness

cream1,367 29.1 -- 84

Boroplus Powder Prickly heat 2 070 44 0 23 17Boroplus Powder Prickly heat powder

2,070 44.0 23 17

Navratna Cool Talc Cool Talc 2,396 51.0 -- 10F t R li f P i li 2 027 43 1 7 13Fast Relief Pain reliever 2,027 43.1 7 13Sona Chandi & Zandu

Chyawanprash 2,117 45.0 10 15*

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Source: Industry Reports * With Zandu

Domestic reachDomestic reach Strong foothold in rural India

N ti id d ti di t ib ti t k Nation-wide domestic distribution network • 2800+ distributors, • 400,000+ retail outlets, • Brand reach 2.6mn outlets

Sales channels are divided into rural and urban salesterritories

With the acquisition ofZandu the network hasfurther strengthened inwestern Indiawestern India

Domestic Sales on Cashbasis

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Project Swadesh …… a Rural Initiative

Launching Project Swadesh, an exclusive initiative for rural markets :

Project Swadesh …… a Rural Initiative

Launching Project Swadesh, an exclusive initiative for rural markets :

More focus on rural markets in states having high rural potential

E t i l di t ib ti th h S t ki t d l Extensive rural distribution through Super stockiest model

More coverage through Van Operations

Reduce dependency on wholesale / Indirect Distribution

Considerable increase in Rural sales through LUPs

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Global reachGlobal reach

CISEUROPE

CIS

GULFAFRICA ASIA GULF AFRICA

AMERICA

AUSTRALIA

Internationally, products available in 60 countries – strong growth coming from Middle East CIS and SAARC

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growth coming from Middle East, CIS and SAARC

International business contributes around14% of the total revenue

Growing at a CAGR of 38% over last 5 years

Next focus area include setting up manufacturing facility in Egypt and Bangaldesh

FY10 Growth

Middle East +58%

CIS

SAARC

+57%

+27%SAARC

Africa 

+27%

+23%REGION SHARE

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REGION SHARE

Research capabilitiesResearch capabilities

Focus: Product innovation, product differentiation, cost control and maintaining excellentFocus: Product innovation, product differentiation, cost control and maintaining excellentproduct quality

Team comprises qualified Ayurvedacharyas and specialized Ayurveda scientists; advisorypanel comprising top Ayurvedic experts

A modern fully equipped laboratory with cGMP practicesA modern fully equipped laboratory with cGMP practices State-of-the-art Himani Ayurvedic Science Foundation in Kolkata Setting up a 30,000 sq. ft. State-of-the-art ultra modern R&D centre in Kolkata

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The Zandu turnaround

Various strategic initiatives undertaken to enhance value

The Zandu turnaround

Production commenced at the Pantnagar unit, located in the tax free zone of Uttaranchal

Sales realizations increased by over 10%

Hired consulting firm E&Y to recommend synergetic benefits in Supply Chain

Zandu Balm introduced in new pack to counterfeit duplicates Zandu Balm introduced in new pack to counterfeit duplicates

An aggressive electronic media campaign launched

Post acquisition integration process undertaken

• Streamlining of sales channels – North, East and West Zone integrated

• New marketing strategies to drive penetration and consumption

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Promote Zandu Ethical and Generic / OTC businesso ote a du t ca a d Ge e c / O C bus ess

Strategic Direction Build a strong Ayurvedic Ethical / Generics portfolio promoted through Doctors and strong

consumer marketing driven OTC Business.

Parallelly focus on both business streams – Ethical through doctor coverage and Genericsthrough trade push and consumer pullthrough trade push and consumer pull

Some Ethical/ Generic products can be moved to OTC business after attaining a critical mass.We can build brands initially at a low cost and subsequently scale them through advertising.

Marketing: Providing OTC/ Pharma marketing inputs to build brand visibility and

Critical Success FactorsMarketing: Providing OTC/ Pharma marketing inputs to build brand visibility andawareness

Sales: Significantly increasing distribution coverage and penetration by ramping upsales force numbers. Ensuring adequate sales and product training for field force

Channels: Focusing on incremental sales from alternate channels like stategovernments, PSUs and institutions

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Navratna Oil (N l l i i d d i Navratna Oil (Navratna tel lagaiye aur sirdard, tension aur thakaan bhool jaiye)

o Market size of Rs. 5507 mn ($117 mn)($ )o Market leader with 48% market shareo Grew by 11% in FY0o Grown at CAGR of 14% in last 5 years

o Rated as one of the most trusted brands by ORG Margo Commissioned some of the most visible brand ambassadors (Amitabh Bachchan Shahrukh Khan and Mahesh Babu(Amitabh Bachchan, Shahrukh Khan, and Mahesh Babu, Chiranjeevi and Upendra for South) o Two major line extensions of Navratna, Navratna Extra ThandaOil and Navratna Cool Talc are receiving encouraging marketOil and Navratna Cool Talc are receiving encouraging market response.

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Boroplus Antiseptic Cream (Twacha ka suraksha kawach )

o Market size of Rs. 2694 mn ($57 mn)o Leader in the antiseptic cream market with a 74% share s a eo Largest selling antiseptic cream not only in India but also in Ukraine, Russia and Nepal

o Sales grew by 15% in FY 10o Growing at CAGR of 18% in last 5 yearso Boroplus Brand has been ranked 77th in the Brand Equity S d t d b Th E i Ti I diSurvey conducted by The Economic Times, India

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Fair and Handsome Cream

o Launched in October 2005; first fairness cream for men in IndiaM k t i t R 1367 ($ 29 ) ith k t h f 84%

(Hi handsome, hi handsome )

o Market size at Rs. 1367 mn ($ 29 mn) with a market share of 84%o Contributing significantly to the toplineo Sales grew by 27% in FY10o Launched Rs. 6/- spout pack of 7ml and Rs. 12/- pack of 12ml. o au c ed s 6/ spout pac o a d s / pac o

Received very good response for the same.

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Z d B l & M th Pl B l Zandu Balm & Mentho Plus Balm (Desh ka Balm) (Dus siron ka dard bhagaye)

o Market size of Rs. 3507 mn ($75 mn)

o Sales grew by 17% in FY10

o Market share of 61%

o CAGR of 21% over the last 5 years in Menthoplus

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Zandu and Sona Chandi Chyawanprash(Surakshit tan aur tez dimag)

o Market size of Rs. 2117 mn ($45 mn)

f %o Market share of 15%

o Sona Chandi Endorsed by Shah Rukh Khan, Sunny Deol and DharmendraDharmendra.

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l kl dBoroplus Prickly Heat Powder (Aag bujha de thandak la de )

o Market size of Rs. 2070 mn ($44 mn) o Market share at 17%o Grew by 34% in FY10o Grew by 34% in FY10o Grown at a CAGR of 13% in Last 3 years

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Fast Relief Fast Relief (Dard mitaye chutki mein )

o Market size of Rs. 2027 mn ($43 mn)o Market share increased from 11% to 13%o Grew by 6% in FY10.

H th B d h t CAGR f 20% i l t 5o However, the Brand has grown at a CAGR of 20% in last 5 years.

o Brand revamped with enhanced formulation in new packaging as Himani Fast Relief ultra fast formulao New TVCs got wide appreciation and won 3 awards, including Silvers for Best film and best direction and Bronze for Music in Goa Fest 2009o Amitabh Bachchan is the Brand Ambassadoro Widely accepted in the states of Delhi, UP and Punjab

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New launchesNew launches

Navratna Cool Talc grew by 121%

Boroplus Body Lotion grew by 29%

Malai Kesar Cold Cream grew by 17%g y

Other new launches like Pure Skin Glycerine Soap and Vasocare Petroleum Jelly alsoperformed very well in FY 10

Strong pipeline of new products

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g

Summarised Balance Sheet ………ConsolidatedSummarised Balance Sheet ………Consolidated

Rs. in MillionsLIABILITIES As at 31st 

March' 2010

As at 31st March' 2009

ASSETS As at 31st March' 2010

As at 31st March' 2009

Share Capital & Reserves 6,253.9        3,011.2     Net Fixed Assets 2,000.4        1,801.2    

Deferred Tax 69.6              59.6           Goodwill 3,672.5        4,693.4    

Loan Funds 2,590.7        4,482.2     Investments 66.2              66.7          Less : Liquid Invest & Cashand Bank Balances (2,164.3)   (467.8)    Net Current Assets 1,010.8      523.9      

6,749.9        7,085.2     6,749.9        7,085.2    

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Working Capital Inventory reduced from 35 days to 29 days

Receivables improved from 34 days to 27 days

Debts Net Debt reduced from Rs. 4014 mn to Rs. 426 mn

Emerging Debt free in FY 2010-11

Fixed AssetsNet Fi ed Assets increased from Rs 1801 mn to Rs 2000 mn Net Fixed Assets increased from Rs. 1801 mn to Rs. 2000 mn

Net Fixed Assets turnover at 5.2

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Ratios

Valuation(x) FY10 FY09EPS R

Growth (%) FY10 FY09

Ratios

EPS - Rs. 23.3        14.5        BVPS - Rs. 82.7        47.4        Market Price (Rs.) 615.0     210.0    

Net Sales 35.7% 32.1%EBIDTA 87.2% 47.2%PAT 84 8% ‐1 3% PER 26.4        14.5        

Pr/Cash EPS 25.1        13.8        Pr/BV 7.4          4.4          

PAT 84.8% ‐1.3%Gross Fixed Assets 10.1% 121.4%Capital Employed 18.0% 128.9%

EV/EBITDA 19.4        13.5        EV/Net Sales 4.7            2.4           

Profitability (%) FY10 FY09Net Profit Margin 16.4% 12.0%

Financial Ratios FY10 FY09Total Loans to Equity 0.4          1.5          Current Ratio 2 7 1 5

g 16.4% 12.0%EBIDTA Margin 24.4% 17.7%COGS 36.7% 40.6%A&P Current Ratio 2.7          1.5          

Quick Ratio 2.2          1.1          Interest Cover 9.2            2.7           

A&P 18.7% 18.8%ROE 27.1% 30.5%ROCE 19.2% 12.3%

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% %

23

Aggressive Growth continuesAggressive Growth continues

Net Sales

10,380 60.3%

34.2% 30 0%35.8%10,000 

12,000 

5 881

7,646 

36.2%

4.8%

19.4%6.3%

1.4%

34.2%

22.2%12.7%

30.0%

8,000 

2 951 3,137  3,180 

4,269 

5,217 5,881 

4,000 

6,000 

1,472 

2,360  2,473 2,951 

2,000 

Consolidated

Growing at CAGR of 27% over last 5 years

‐

1999‐2000 2000‐01 2001‐02 2002‐03 2003‐04 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10

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Growing at CAGR of 27% over last 5 years

Aggressive Growth continuesEBIDTA

85 1%3,000 

Aggressive Growth continues

EBIDTA margins 

2,535 67.2%

35 7%

53.7%45.0% 38 1%

85.1%

2,500 

3,000  gat 24.4%, 

margins before A&P at 43.1%

1 369

35.7%

‐0.2%

12 1%

3.1%

33.2% 29.0%38.1%

1 500

2,000 

A&P at 43.1%

684

992 

1,369 ‐12.1%

1,000 

1,500 

211 286  286  251  259 

345 

530 684 

500 

Consolidated

Growing at CAGR of 48% over last 5 years

‐

1999‐2000 2000‐01 2001‐02 2002‐03 2003‐04 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10

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Growing at CAGR of 48% over last 5 years

Aggressive Growth continues

PAT

Aggressive Growth continues

1,697 72.0%

66.3%

84.8%

1,600 

1,800 

2,000 

21.3% 19.3%

7.6%

35.2% 34.0% 36.2%

1.9%1,200 

1,400 

494 

662 

902 

919 ‐17.3%

600 

800 

1,000 

171  207  171  204  220 297 

200 

400 

Consolidated

Growing at CAGR of 43% over last 5 years

‐

1999‐2000 2000‐01 2001‐02 2002‐03 2003‐04 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10

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Growing at CAGR of 43% over last 5 years

A&P Expenses

26%2000A&P Expenses

A&P Expenses

194423.8% 23.5%

21 2% 22%

24%

26%

1600

2000 A&P Expenses as a % of Sales

1214 1250

144121.2%

19.3%18%

20%

22%

1200

in M

illions

97318.7%

14%

16%

18%

800

Rs i

10%

12%

14%

0

400

10%0

2005‐6 2006‐7 2007‐8 2008‐9 2009‐10

Higher A&P spends well reflecting in revenue growth

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g p g g

DividendDividend

300%50%300% Dividend % Pay‐Out %

225%

300%

43.1%

36 3%

43.4%40%

45%

200%

225%

225%

28.2%

36.3%

31 3%30%

35%200%

end (%

) Pay‐Ou

100%

31.3%

20%

25%100%

Divideut (%

)

10%

15%

0% 10%0%

2005‐06 2006‐07 2007‐08 2008‐09 2009‐10

Announced Stock Split of Rs. 2/- per share to Rs. 1/- per share

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Awards and AccoladesAwards and Accolades Financial

Rated (by CARE) PR1+ (highest rating)for Short Term borrowings signifying highestRated (by CARE) PR1 (highest rating)for Short Term borrowings signifying highestsafety. Upgraded to AA+ for Long Term borrowings.

Ranked 179th among BT-500 Most Valuable Companies of India in private Sector(Business Today – Nov’ 2009)

B d Brands Zandu balm and Boroplus ranked 62nd and 77th among India’s most trusted brands

across all categories by Brand Equity Survey, 2009 Himani Fast Relief advertisement won the Goafest 2009 awards, the Oscars of Indian

advertising Navratna was awarded the best packaging award by Paper Film & Foil Converters

Association

Operations Operations Abhoypur unit also accredited with ISO 14001:2004 and ISO 18001:2007 accreditation

signifying compliance with Environment management system and Occupational healthand safety management systemI t l A dit Di i i d d ISO 9001 2008 dit ti Internal Audit Division awarded ISO 9001:2008 accreditation

Zandu-Emami IT integration Project is selected as one of the Top 10 IT Innovations doneby CIO’s in May’10

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Key investment highlightsKey investment highlights

One of the fastest growing FMCG company

Niche category player + innovator – in Therapeutic and Ayurvedic segment - strong entrybarriers for the competition

Key brands are strong market leaders in their respective categories

With the acquisition of Zandu, we have one the strongest Ayurvedic Brand in our portfolio

Bigger basket of power brands and entry in new segments

Over 80% of the business comes from Wellness categories.

Focus on each Brand with patience and continuous investment.

Superior gross margins in the industry – EBITDA margin before A & P at 43%Superior gross margins in the industry EBITDA margin before A & P at 43%

Scaling up production from tax free zones

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Th k YThank You

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