Introduction

Industry Overview

Business Performance : 2005-6

Operations

Financials

Outlook

Making people healthy and beautiful,

naturally

One of the most prominent Indian ayurveda product companies with revenues of Rs. 3018 mn (2005-6)

One of the fastest growing as well; 37% topline and 68% bottomlinegrowth in 2005-6

Prominent wealth creator with a market capitalisation of Rs. 18 bn as on May 15, 2006

One of the most attractive Indian ayurveda proxies in a world moving rapidly towards natural remedies

Emami

Flagship company of the Emami Group promoted by Kolkata-based industrialists Mr. R.S. Agarwal and Mr. R.S. Goenka

Manufacturer of health, beauty and personal care products for over 25 years

Kolkata-headquartered; manufacturing plants in Kolkata, Guwahati and Pondicherry

Manufacturing facilities with cGMP and ISO 9001:2000 certifications

Where we come from

Shareholding pattern

7.08%

Emami listed on the NSE, BSE and Kolkata stock exchanges

Market capitalisation in excess of Rs. 18 bn (as on May 15, 2006)

Return to investors of over 300% following its Public issue in March 2005

Promoter holding

Institutionalinvestors, FIIsOthers

88.2%

4.70%

Balanced portfolio of health, beauty and personal care products

Commercialisation of ayurveda into some of the most prominent brands in India

Power brands comprising Boroplus Antiseptic Cream, Boroplus Prickly Heat Powder, Navratna Oil, Sona Chandi Chyawanprash and Amritprash, Menthoplus Balm, Fast Relief and Fair and Handsome (fairness cream for men)

Portfolio of champion products

Headquartered at Kolkata with well spread out presence all over India

Strong rural foothold in India

Strong domestic distribution channel with 2200 distributors, 1200 sub distributors and 3.8 lac retail outlets

Emami’s presence

Internationally, products available in 58 countries - strong presence in CIS, GCC, SAARC and African countries

INDUSTRY INDUSTRY OVERVIEWOVERVIEW

Growth coming from across the sectors (agriculture, industry andservices)

Increase in disposable incomes leading to increased consumption

Growing literacy and media penetration

Developing physical and fiscal infrastructure

Growing economy and buoyant market

GDP growth

8.1%

Category Growth

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Gro

wth

Thick oil Antisepticcream

Chyawanprash Balm Rubificient Prickly heatpowder

VolumeValue

13.4%14.3%

3.9%

11.4%

0.0%

-2.4%

2.9%

6.2%7.1%

8.1%

4.8%

10.7%

Almost all Categories of Emami growing A BIG OPPORTUNITY

For 2005-6

Industry challenges …

• Increasing competition

• High input cost escalation,

particularly in petroleum products

and packaging materials

• Aggressive brand-building and innovation

• Constantly upgrading the products and introducing new launches with differentiated benefits

• Concentration on increasing market share through aggressive sales

• Cost saving initiatives and judicious price increases

…. and counter-strategy by Emami

BUSINESS BUSINESS PERFORMACEPERFORMACE20200505--66

Achieved record numbers in 2005-6

Increasing fiscal efficiency

Aggressive growth in existing categories

Growing international business

Aggressive and profitable product launches

Improving working capital management and implementing cost control measures

• 37% growth in topline to Rs. 3018 mn

• 68% growth in PAT to Rs. 493 mn

• 200 basis point increase in EBIDTA margin to 18%

• Debtors reduced from 59 days to 44 days and inventory decreased from 61 days to 44 days

• Antiseptic cream, protects skin from winter dryness, cuts and burns

Boroplus Antiseptic Cream (Twacha ka suraksha kawach )

• Market size of Rs. 1361 mn

• Leader in the antiseptic cream market with a 67% share (last year 65%)

• Category growth of 11.4%

59%

62% 62%

65%63%

65%67%

69%

54

56

58

60

62

64

66

68

70

2002-3 2003-4 2004-5 2005-6

VolumeValue

Market Share

•Outperformed the category with a sales growth of over 30%

- Thrust on rural sales

- Multipurpose positioning

- Introduction of Amitabh Bachchan and

Kareena Kapoor as brand ambassadors

• Therapeutic value-added cool oil; relieves headache, tension, insomnia and fatigue; stops greying and premature hair loss

• Enjoyed 50% market share in a market size of Rs. 2476 mn in 2005-6

• Growing at a CAGR of over 35% in four years

Navratna Oil (Thanda thanda cool cool)

46% 46%

47%46%

48%47%

50%

48%

43

44

45

46

47

48

49

50

51

2002-3 2003-4 2004-5 2005-6

VolumeValue

• Rated as one of the most trusted brands by ORG Marg

• Commissioned some of the most visible brand ambassadors (Amitabh Bachchan, ShahrukhKhan, and Chiranjeevi and Upendra for South)

Market Share

• Pain relieving balm with natural extracts; enjoys unique positioning as an effective headache reliever with a strong rural focus

• Caters to a market size of Rs. 2286 mn, market share of which has increased 6 times in last four years

• Number three in the category with 14% market share

• Growing aggressively against competitors Amrutanjan and Zandu

• CAGR of 35% over the last four years

Mentho Plus Balm (Dus siron ka dard bhagaye)

9%8%

11%10%

13%11%

14%

11%

0

2

4

6

8

10

12

14

16

2002-3 2003-4 2004-5 2005-6

VolumeValue

Market Share

• Pioneering product combining the benefits of Chyawanprash with ‘sona’ and ‘chandi’

• Available in variants of ‘Chawanprash’, ‘KesarChyawanprash’ and ‘Amritprash’

• Market size of Rs. 1540 mn

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

• Market share of 9% (number three in category) with turnover growth of 10% in a stagnant market

•Endorsed by Shah Rukh Khan, Sunny Deol and Dharmandra

12%13%

10% 10%11% 11%

9%8%

0

2

4

6

8

10

12

14

2002-3 2003-4 2004-5 2005-6

VolumeValue

Market Share

• Available in four variants, offers relief from itching, rashes, burning sensation and cures prickly heat problems

Boroplus prickly heat powder (Aag bujha de thandak la de )

• Market size of Rs. 1036 mn

• Market share of 22%, second to Nycil

• Highest ever sales growth (in the last three years) of 38% in dormant medicated prickly heat market due to:

a. Differentiated product offering

b. New commercial featuring Kareena Kapoor

24% 24% 23%

19%22%

17%

0

5

10

15

20

25

2003 2004 2005

VolumeValue

Market Share

• Pain relieving ointment, promises fast relief, combines the properties of seven herbs

• Number three in the category (market size - Rs. 1358 mn)

• Sales growth of 57% as against 10% category growth

Fast relief (Dard mitaye chutki mein )

• Widely accepted in the states of Delhi, UP and Punjab

• Market share increase from 6.6% to 8.4% in 2005-6

• Promotional campaign featuring: brand ambassador Amitabh Bachchan, Delhi Cricket Association with youth cricket stars like Virendra Sehwag and Ashish Nehra

5%

3%

6%

5%

7%

6%

8% 8%

0

1

2

3

4

5

6

7

8

9

2002-3 2003-4 2004-5 2005-6

VolumeValue

Market Share

• Launched in October 2005; first fairness cream for men in India

• Market size estimated at Rs. 206 cr

• Achieved 17% market share in only a few months of working in 2005-6

• Contributed significantly to the topline in 2005-6

• 36% market share targeted for 2006-7

Fair and Handsome Cream (Hi handsome, hi handsome )

New launches

Emami forays into the profitable OTC segment

Memo Plus Syrup

Good Morning laxative Churna

Sardi Ja Vaporub and Cough Syrup

Memory booster; rejuvenates the body (contains iron) and relieves stress

Laxative product which is more effective and tastes better than ordinary products

Syrup that cures the cough and replenishes lost energy

….and more such products in the pipeline

Emami Brand Ambassadors

International business • Export turnover of Rs. 400 mn, a growth of 44% from last year

• Presence in 58 countries and 90 distributors across the globe

• Growth coming from all countries, especially CIS, SAARC, GCC, Africa and Europe

Product range

• Boroplus is the largest selling antiseptic cream in Ukraine, Russia and Nepal

• Besides domestic brands, different product ranges have been developed based on different consumer preferences at different locations. While ‘Emita’ range is aimed at the masses in developing countries, the ‘Gold’ range and ‘Ayucare’ range is aimed at niche and premium markets.

New markets

• Pakistan, Hungary, Spain and Poland have been added to our exports market

• Our products are available in the renowned retail chains of Europe – ‘TESCO’, ‘J SAINSBURY’ and ‘ASDA’

Outlook

• Targeting aggressive growth of over 50%

• Looking for acquisitions and tie-ups to boost exports further

Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, Sri Lanka

Bahrain, Iran, Iraq, Israel, KSA, Kuwait, Oman, Palestine, Qatar, UAE, Yemen

Algeria, Ethiopia, Kenya, Libiya, Mauritius, Morocco, Nigeria, Somalia, Sudan, Tanzania, Uganda, Zambia

Armenia, Azerbaijan, Georgia, Kazakistan, Krygstan, Maldova, Russia, Turkmenistan, Ukraine, Uzbekistan

Czech, Denmark, Germany, Hungary, Italy, Lativia, Netherland, Poland, Spain, UK

USA, Canada, West Indies

Australia, Cambodia, Fiji, Myanmar, Singapore

1. SAARC

2. Middle East

3. Africa

4. CIS

5. Europe

6. America

7. Australasia

GULF AFRICA

EUROPE

AMERICA

AUSTRALIA

CIS

ASIA

OPERAOPERATIONSTIONS

Using research and development to drive Emami’s market presence

State-of-the-art Himani Ayurvedic Science Foundation in Kolkata

Focus: New product introduction, cost control and product differentiation

Team comprises: Qualified doctors and specialised ayurveda scientists; advisory panel comprising ayurvedic experts

Most modern fully equipped laboratory with cGMP practices

Distribution network to reach Emami products wider and deeper

Network of over 2200 distributors and 1200 sub-distributors

Direct coverage of over 3.8 lacs retail outlets

Products available across 2.5 million outlets in India

Five sales channels divided into rural and urban sales territories

Rural sales channels: Emami Mobile Traders, Emami small village shops, tie-up with ITC e-chaupal and Post office network

Urban channels: Modern trade channel, retail outlets

Well spread-out sales 25%

24%31%

20%eastwestnorthsouth

Rural

Channel architecture

Urban

Retail networkModern trade

channel

Coverage of 3.8 lac outlets

Coverage of 600 outlets

Rural

Tie up with ITC e-chaupal

Tie- up with district Post

office

Emami Mobile Traders and Small

village shops

Coverage of 8 states

Coverage of 280 post offices

Coverage of 7.8 lac households

Cost effective operationsOperations in excise and income tax exempt zones

Fully automated unit at Assam and third party outsourcing units at Himachal Pradesh and Uttaranchal helping leverage the fiscal benefits

About 70% of production from excise exempt zones in 2005-6 against 55% in 2004-5

Savings due to sourcing of materials through e-procurement, hedging and long term contracts for commodities

Installed ERP across all facilities, offices and depots. Now graduating to SAP across all functions and locations

Ratings and Awards“AA+” Rating for long term borrowings - by CARE

- Investments of this grade are judged to be of high quality by all

standards.

Highest rating of “PR1+” for short term borrowings – by CARE

DGFT (Director General of Foreign Trade) has recognised Emami as “ONE STAR EXPORT HOUSE”

Corporate Social Responsibility•Society is considered the most important stakeholder at Emami•Contribution to social activities always get highest priority on Emami agenda

Objective Action

•Employment for rural unemployed youth

•Women upliftment

•Rural Self employment schemes- Emami Mobile Traders (EMT)- Emami Small Village Shops (SVS)

•Can start business with Rs 300

•Scheme slogan is “ Sell worth Rs 4000 and earn guaranteed income of Rs 1000

•No deposit is taken and unsold stocks taken back, if required

•Training imparted for improving marketing & selling skills

•Uniform, raincoat, pullover, cycle, accident insurance cover and rewards given for good performance

While EMT is targeted at youth SVS is meant

for women

Corporate Social Responsibility

Objective Action

•Sponsoring medical treatments for needy

•Promoting health & happiness

•Sponsoring education

•Promoting ancient Indian art & culture

•Established “Emami National Institute for Bone Marrow Transplantation” at Bangalore under supervision of Dr. Devi Shetty

•Sponsoring free or subsidised treatment of needy at hospitals like AMRI and Shree Vishudhanand Hospital and Research Institute

•Sponsoring treatment for TB patients, heart patients and cataract operations

•Promoting one teacher schools through “Friends of Tribal Society”, NGO

•Actively associated with prominent cultural organisations

[contd.]

FINANFINANCIALSCIALS

Revenue Performance

Emami has grown by CAGR of 17% over last 3 years with current growth of 37% in 2005-6

SALES

38642 6 406

593

495 490

1 ,052

972

7687 33

443370

615

438 41 8

739

-

2 0 0

4 0 0

6 0 0

8 0 0

1 ,0 0 0

1 ,2 0 0

Q 1 Q 2 Q 3 Q 4

Rs. i

n M

illion

FY 03 FY 04

FY 05 FY 06

+15% -1

%

+13%

-13%

+13% +1

7%

-5%

+1%

+51%

-4%

+42%

+64%

Earnings Performance

Consistently rising Profits – CAGR of 46% over last 3 years with current growth of 60% in 2005-6

P B T

4 83 4

1 1 0

7 87 6

1 5 9

9 3

3 74 7 4 3 4 85 3 4 6

1 3 8

7 3

1 9 5

-

5 0

1 0 0

1 5 0

2 0 0

2 5 0

Q 1 Q 2 Q 3 Q 4

Rs. i

n M

illion

FY 03 FY 04

FY 05 FY 06

+27%

+13%

+43%

-10% +7

%

+59% +1

8%

+25%

+41%

+63%

+38%

+104

%

A&P Expenses

590556

927

19.7%

17.5%

21.6%

200

300

400

500

600

700

800

900

1000

2003-4 2004-5 2005-6

Rs

in M

illio

ns

10%

12%

14%

16%

18%

20%

22%

24%A&P Expenses A&P Expenses as a % of Sales

Including A&P of marketing company

Economic Value Added

105

142167

326

27.0%

10.6%

16.7% 17.0%

0

50

100

150

200

250

300

350

2002-3 2003-4 2004-5 2005-6

Rs.

in M

illio

n

-2.0%

2.0%

6.0%

10.0%

14.0%

18.0%

22.0%

26.0%

30.0%EVAEVA as a % of Capital Employed

Summarised Balance SheetRupees in Millions

PARTICULARS 2001-2 2002-3 2003-4 2004-5 2005-6Equity 56.2 56.2 112.3 122.3 122.3 Reserves 323.2 320.9 292.4 660.2 844.0 Revaluation Reserve 2,385.9 2,385.9 2,385.9 2,385.9 2,385.9 Deferred Tax 26.2 33.6 42.9 48.0 26.1 Debt 724.1 462.8 422.2 347.4 321.6 Total Liabilities 3,515.6 3,259.4 3,255.7 3,563.8 3,699.9

Fixed Assets 301.4 314.9 454.7 482.2 490.7 Brands - Intangibles 2,215.5 2,045.1 1,874.6 1,704.2 1,533.8 Investments

- Liquid - - - 470.0 800.0 - Others 80.6 81.2 69.1 69.1 71.0

Net Current Assets 918.1 818.2 857.3 838.3 804.4 Total Assets 3,515.6 3,259.4 3,255.7 3,563.8 3,699.9

Summarised Profit & Loss AccountRupees in Millions

PARTICULARS 2001-2 2002-3 2003-4 2004-5 2005-6Net Sales 1,823.8 1,979.4 2,161.0 2,188.0 3,008.8 Other Income 3.6 4.0 7.0 1.2 13.4 Total Income 1,827.4 1,983.4 2,168.0 2,189.2 3,022.2

Cost of Goods Sold 1,121.0 1,193.9 1,370.8 1,260.9 1,754.4 Manufacturing, Administrative and Selling Expenses

436.9 526.5 528.4 579.5 727.5

EBIDTA 269.5 263.0 268.8 348.8 540.3 Interest 75.7 31.3 (4.5) 3.8 (29.7) Depreciation - net 16.4 19.6 25.1 29.7 66.9 PBT 177.4 212.1 248.2 315.3 503.1 Provision for Taxation

- Current Tax 0.6 3.4 22.2 11.5 30.0 - Fringe Benefit Tax - - - - 1.4 - Deferred Tax 7.1 7.4 9.3 9.4 (21.9)

PAT 169.7 201.3 216.7 294.4 493.6

Key Ratios

PARTICULARS 2001-2 2002-3 2003-4 2004-5 2005-6Net Profit Margin 9.30 10.17 10.03 13.46 16.41 EBIDTA Margin 14.78 13.29 12.44 15.94 17.96 Earnings per Share ( Rs ) 3.02 3.27 3.86 5.23 8.06 Dividend per Share ( Rs ) 0.20 0.28 0.34 1.14 2.28 Dividend Pay Out (%) 6.60 7.85 8.77 23.68 28.26 Book Value per Share ( Rs ) 9.79 12.78 16.31 23.94 29.74 Debt - Equity Ratio 1.32 0.64 0.46 0.24 0.18 TOL : Net Worth 1.66 0.90 0.74 0.46 0.49 RONW (%) 30.86 28.04 23.66 20.11 27.14 ROCE (%) 13.32 17.05 16.19 16.25 23.07

OUTOUTLOOKLOOK

Corporate strategy: Emami’s blue print for success

Existing product category• Constant upgradation• Aggressive promotion through celebrities• Wider reach• Brand extensions

New launches• Differentiated ‘Value For Money’ products• Aggressive branding• Leveraging increasing network

Exports• New product categories• New markets• Aggressive promotions

Inorganic• Look out for opportunities that will complement business

ToplineGrowth

Corporate strategy: Emami’s blue print for success

Percentage of A&P to reduce to industryaverage on stabilization of new launches

and developing brands

Cost control initiatives to continue

Fiscal efficiency for units in backward areas

BottomlineGrowth

[contd.]

In summaryLeverage the power of brands through brand extensions

Enter new and profitable product segments

Timely initiatives in channel management and promotional activities

Sustain leadership in mature markets

Thank you