Fast Moving Consumer Goods (FMCG), are products that are sold quickly at relatively low cost.

Though the absolute profit made on FMCG products are relatively small, they generally sell in large quantities, so the cumulative profit on such products can be large. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, teeth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, light bulbs, batteries, paper products and plastic goods. Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion. Well-established distribution networks, as well as intense competition between the organized and unorganized segments are the characteristics of this sector. FMCG in India has a strong and competitive MNC presence across the entire value chain. The Indian economy is all set for 16% growth during 2008-09, from a base of Rs. 85470 crores, as predicted by FICCI. Going forward, as anticipated by CRISIL, FMCG sector will touch around Rs. 140000 crores by 2015 (33.4B$), i.e. the FMCG market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of the Indian population are the most promising market for FMCG, and give brand makers the opportunity to convert them to branded products. Most of the product categories like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as well as low penetration level, but the potential for growth is huge. The big firms are growing bigger and small-time companies are catching up as well. According to the study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the balance by Indian companies. Fifteen companies own these 62 brands, and 27 of these are owned by Hindustan Lever. Pepsi is at number three followed by Thums Up. Britannia takes the fifth place, followed by Colgate (6), Nirma (7), Coca-Cola (8) and Parle (9). These are figures the soft drink and cigarette companies have always shied away from revealing. Personal care, cigarettes, and soft drinks are the three biggest categories in FMCG, between them, they account for 35 of the top 100 brands. The sector generates 5% of total factory employment in the country and is creating employment for three million people, especially in small towns and rural India1.

Indias FMCG Market Size (In USD Billion)

Sources: Naukri Hub, IBEF, Chennai Online Household Care Personal Care Foods & Beverages Health beverages; soft drinks; Beverages

Fabric wash (laundry soaps Oral care, hair care, skin care, and synthetic Household cleaners(dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish) personal detergents); cosmetics and toiletries; deodorants; perfumes; feminine hygiene; paper products. wash

(soaps); staples/cereals; bakery products cakes);

(biscuits,

bread,

snack food; chocolates; ice cream; tea; coffee; soft drinks; processed fruits, vegetables; dairy products; branded flour; branded bottled water;

Major Players in Each Product Category

Product Categories Major Players Household Care

Hindustan Lever, Nirma and Reckitt & Colman

Personal Care

Hindustan Lever, Godrej Soaps, ColgatePalmolive, Marico, Dabur and Procter & Gamble

Food & Beverages

Hindustan Lever, Nestle, Cadbury and Dabur

A BRIEF HISTORY OF FMCG India has a prominent role in the field of FMCG since it has a large population. At around 1980, the investors found the scope of fresh investment into FMCG. With the decline in purchase power and governments explicit support to regional players, extent of fresh investment into FMCG dried up in India. Most of the leading players like HLL had quite an urban approach to their operations with limited focus on huge rural market, which was changed with the entry of Nirma. Taking a cue from Nirma, more and more companies are launching the value for money products to target the lower strata of the society. At the same time, governments relaxation of norms encouraged companies to exploit the benefits of scale to make the FMCG products. With the onset of liberalization consumers had many products to choose from both domestic and imported goods. This phase lowered trade barriers and encouraged MNCs to invest in the country. Growth in standards of living and support from rural India prompted companies to extend their product offering all through the price-value equation. In this process, many existing customers upgraded themselves to users of premium products. Companies such as HLL, Godrej consumer, Marico, Henkel, Reckitt Benckitt Benckiser and Colgate all have tried to touch the rural consumers by expanding into the mid-sized towns and villages. Smaller players like Marico have utilized the distribution network of bigger players like P&G for their strategy. RELEVANCE IN INDIAN ECONOMY 1. Disposable Income: There is increase in disposable income, observed in both rural and urban consumers, which is giving opportunity to many rural consumers to shift from traditional unorganized unbranded products to branded FMCG products and

urban fraternity to splurge on value added and lifestyle products. The increasing salaries, along with rising trend of perks in the corporate sector at regular intervals, have increased peoples spending power. As per some research, there is a high correlation between Disposable per capita and HPC per capita. With increasing disposable income and subsequent rise in quality of living and hygiene concerns, the average Indians spending on grocery and personal care products will likely increase. Currently, the average Indian spends about 48%, also the majority, of his total income on groceries (~40%) and personal care products (~8%).

2. Organized Retail: The emergence of organized retail have lead to more variety with ease in browsing, opportunity to compare with different products in a category, one stop destination (entertainment, food and shopping) etc, which is playing an important role in bringing boom in the Indian FMCG market. Currently the modern trade is capturing 5% of the total retail space, which will increase to 10% and 25% in 2010 and 2025 respectively. Also, as the credit card and organized retail trend picks up, people wont think much while buying and buy more.

3. Distribution Depth - Rural Penetration: There are 5500 towns and 6.38 Lacs villages with 2.5Mln and 5Mln outlets respectively. Due to saturation and cut throat competition in urban India, many FMCG companies are devising strategies for targeting rural consumers in a big way. Many FMCG companies are focusing on increasing their distribution network to penetrate with a step by step plan. This is the reason that FMCG urban market size has dropped from 50% to 29% in last 5 years. Though the urban markets are growing too, the incremental addition in consumers households is much more in rural space as compared to urban markets. The planned development of roads, ports, railways and airports, will increase FMCG penetration in the long term. 180 million rural and semi-urban peoples attention has already been diverted towards FMCG products, according to latest estimates released by industry chamber, Assocham in 2008.

Many companies are deepening their penetration in the rural areas as: The FMCG sector in the urban areas is becoming quite saturated (though it will continue to dominate in the next 8 10 years4) while the penetration in the rural areas are only about 1%. The rural areas have and will continue to make up more than 50% (153 million) of Indias total households and accounting for more than its current 66% contribution to total FMCG consumption. Rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. Currently, nearly 34% of the offtake of FMCG companies come form rural areas. Companies like HUL, ITC and Colgate have already established good distribution networks in these regions. Other companies would start catering to these regions in near future. Between 2005 and 2010, the FMCG sector in the rural and semi-urban areas will experience some 50% growth, at a CAGR of 10% and increase its market size to nearly US$ 23 billion from the 2005 level of US$11.4 billion. The estimated number of households using FMCG products in rural India has grown from 131 million in 2004 to 140 million in 2007, according to market research company IMRB. Over 70% sale of FMCG products is made to middle class households and over 50% of middle class is in rural India. Rural Vs. Urban Households Growth

YEAR

RURAL (in millions)

URBAN (in millions)

2001-02 2009-10

135 153

53 69

Sources: Statistical Outline of India (2001-02), NCAER

4. Buying Pattern Shift: The crisis of declining FMCG markets during 2001-04 was driven by new avenues of expenditure for growing consumer income such as consumer durables, entertainment, mobiles, motorbikes etc. Now, as many consumers have already upgraded, their income is being directed towards pampering themselves.

5. Favorable Indian Economy & Demographics: 45% people in India are under 20 years of age. Per capita disposable income has increased from $550 to $600 in 2007 (9% increase). GDP is growing at a CAGR between 8 to 9%.In the next five years, affluent and aspirers as a total will supersede strivers and will be dominated by aspirers, as per NCAER.

FMCG CATEGORY TRENDS 1. Underpenetrated Growth Categories: Within the Indian FMCG industry, there are few categories that will grow more than 20% during 2008-2009, like shaving cream, skin/fairness cream, shampoos, skin care & cosmetics, tooth powder. Some other growth categories will be hair colour, skin care, anti-aging solution, deodorants and mens products. Most of these categories are under penetrated and there is a huge scope for growth

2. Penetrated Growth Categories: Even mainstream categories with high penetration levels such as washing detergents, soaps and hair oils have shown strong underlying volume growth, despite sharp inflation led price increases in FY08.This is partly related to the growth in organised retail (3-5% of turnover for most FMCG players) that gives more visibility to national brands with strong brand equity. Anand Shah, an FMCG research analyst at Angel Broking, says most FMCG companies are responding to the new demand by concentrating on developing a big theme and building a portfolio around it. Nestle, for example, has identified 'health and wellness' as its focus area, while Dabur is positioning itself around ayurvedic (a traditional Indian system of healthcare), natural and herbal products. At the higher price end, companies are leveraging health and wellness trends by focusing on providing 'experiential' and 'higher order' benefits rather than purely functional ones.

4. Health Food Categories: FMCG majors are widening their health food portfolio to cash in on the rich, urban, health conscious Indian. For example 4.1) Sugar free Chywanprash 4.2) Organic spices/ pulses 4.3) Multi grain pastas/ Biscuits 4.4) Processed foods particularly juices 4.5) Probiotic Ice Creams 4.6) Butter Lite (Nutralite) 4.7) Corn Flakes/ Oats 4.8) Lays (40% less saturated fats) Snack Smart 4.9) Low Calorie Sweetners

Urban India is high on health and FMCG majors are cashing in on the opportunity. Processed foods particularly juices that are based on the health platform would see stronger growth. Also, with the Indian consumer becoming increasingly health conscious, the demand for juices has witnessed rapid growth.

5. Impact of inflation in 2008: Even if consumers don't switch to cheaper substitutes during inflation, they normally switch from higher Stock Keeping Units (SKU) to lower SKUs of the same product. This is the reason the companies have come up with smaller SKUs. In line with this trend, Henkel has withdrawn its 500gm pack washing powder which was priced at Rs.46 and has replaced it with a new 400gm pack that costs INR40. A couple of months back, Amul introduced 25gm packs of butter. Not surprisingly, this pack is fetching more sales than 100gm and 500gm packs. In the first 10 months of 2007, there were 251 product launches, including 28 new brands, compared with 191 for the same period of 2006. Snacks and foodstuffs remain the category leaders, with recent launches of several health and beauty products, particularly in urban markets.

Companies are widening their health food portfolio to cash in on the rich, urban, health conscious Indian.

6. Micro Segmentation/ Niches: Companies are not leaving any opportunity to micro segment the market. Here is further segments in different categories. Here are some examples: Age a) Junior Horlicks b) Junior Chyawanprash c) Pepsodent Barbie for Kids/ Colgate Strawberry Sex a) Womens Horlicks b) Male fairness cream Specialized Household Cleaners a) Kitchen Cleaner: Mr. Muscle b) Power Cleaner (Rust): Easy Off Bang. 7. Low value SKUs - Sachetization: The category it has a sachet !! It all started in 1980's with shampoos. Nano is an interesting example of an automobile sachet. Here is a small list of sachets: 7.1) Shampoos 7.2) Butter (Munna Pack) 7.3) Hair Oils (Navratan Thanda Thanda Cool Cool) 7.4) Noodles (Chotu Maggi) 7.5) Ketchup (Pichko) 7.6) Toilet Cleaner (Harpic) 8. Jet Age Consumer Products: Becasue of changing lifestyles, busy jobs etc marketers are coming up with Jet Age consumer products. Ready to Eat a) Con Flakes/ Oats b) Pastas c) Biscuits d) Noodles

e) Pizzas f) Burgers Ready to Drink a) Energy Drinks b) Non-Cola Drinks (Juices) Ready to Cook a) Cut Vegetables b) Soups c) Paranthas/ Rotis d) Snacks There lies a huge potential in these categories. 9. Low Per Capita Consumption: Currently India is nowhere near to other developing countries in terms of per capita consumption. Be it Laundary, Skin Care, Shampoos or deodarants. Marketers have put in efforts to increase the consumption frequency or quantum of consumption per occasion. Colgate started the "twice a day" campaign few years back. Recently we have Good Night coming up with Double power pack. Per Re1 increase in per capita consumption of a category will lead to growth of more than 100 crores (with a popular base of more than 1 Billion)

10. Evolved Product Forms: 20 years back consumers had limited choices to pick from. The days of Tortoise Mosquito repellent coils are gone. This is the age of aerosols with value added functionality

For Eg. Dish Wash: Powder to Bar to Liquid Shaving: Creams to Foams/ Gels Repellents: Coils to Aerosols/ Body Creams/ Gels Air Freshners: Sprays to Electric Toilet Cleaner: Acid to Harpic to In-Cistern

COLGATE- PALMOLIVE (INDIA) LIMITED In 1806, William Colgate, himself a soap and candle maker, opened up a starch, soap, and candle factory on Dutch Street in New York City under the name of "William Colgate & Company". In the 1840s the firm began selling individual bars in uniform weights. In 1857, William Colgate died and the company was reorganized as "Colgate & Company" under the management of Samuel Colgate, his son. In 1872, Colgate introduced Cashmere Bouquet, a perfumed soap. In 1873, the firm introduced its first toothpaste, an aromatic toothpaste sold in jars. His company sold the first toothpaste in a tube, Colgate Ribbon Dental Cream, in 1896. By 1908 they initiated mass selling of toothpaste in tubes. In Milwaukee, Wisconsin, the B.J. Johnson Company was making a soap entirely of palm and olive oil, the formula of which was developed by B.J. Johnson in 1898. The soap was popular enough to rename their company after it - Palmolive. At the turn of the century Palmolive, which contained both palm and olive oils, was the world's best-selling soap. A Kansas based soap manufacturer known as the Peet Brothers merged with Palmolive to become Palmolive-Peet. In 1928, Palmolive-Peet bought the Colgate Company to create the Colgate-Palmolive-Peet Company. In 1953 "Peet" was dropped from the title, leaving only "Colgate-Palmolive Company", the current name. Colgate-Palmolive has long been in fierce competition with Procter & Gamble, the world's largest soap and detergent maker. P&G introduced its Tide laundry detergent shortly after World War II, and thousands of consumers turned from Colgate's soaps to the new product. Colgate lost its number one place in the toothpaste market when P&G started putting fluoride in its toothpaste. In the beginning of television, Colgate-Palmolive wished to compete with Procter & Gamble as a sponsor of soap operas. Although the company sponsored many shows in part, they were most famous for being the full sponsor of the serial The Doctors. George Henry Lesch was president, CEO, and chairman of the board of Colgate-Palmolive in the 1960s and 1970s, and during that time transformed it into a modern company with major restructuring. In 2006, Colgate-Palmolive announced the intended acquisition of Tom's of Maine, a leading maker of natural toothpaste, for US $100M. Tom's of Maine was founded by Tom Chappell in 1970.

Today, Colgate has numerous subsidiary organisations spanning 200 countries, but it is publicly listed in only two, the United States and India. In June 2007, phony Colgate toothpaste imported from China was found to be contaminated with diethylene glycol, and several people in eastern U.S. reported experiencing headaches and pain after using the product. The tainted products can be identified by the claim to be manufactured in South Africa by Colgate-Palmolive South Africa LTD, they are 5oz/100ml tubes (a size which Colgate does not sell in the United States) and the tubes/packaging contain numerous mis-spellings on their labels. Colgate-Palmolive claims that the they do not import their products from South Africa into the United States or Canada and that DEG is never and was never used in any of their products anywhere in the world. The counterfeit products were found in smaller "mom and pop" stores, dollar stores and discount stores in at least four states.
[3]

Recently, sales of Colgate branded toothpaste has suffered due to the

scenario that has recently occurred. At the same time, Crest's profits have risen tremendously.

a. MANAGEMENT Vision Colgate-Palmolive has a Vision Statement which includes three fundamental values Caring, Global Teamwork and Continuous Improvementare part of everything to do. They are the foundation for the business strategy and are reflected in every aspect of the work life.

Caring The Company cares about people: Colgate people, customers, shareholders and business partners. Colgate is committed to act with compassion, integrity and honesty in all situations, to listen with respect to others and to value differences. The Company is also committed to protect the global environment and to enhance the communities where Colgate people live and work.

Global Teamwork All Colgate people are part of a global team, committed to working together across countries

and throughout the world. Only by sharing ideas, technologies and talents can the Company achieve and sustain profitable growth.

Continuous Improvement Colgate is committed to getting better every day in all it does, as individuals and as teams. By better understanding consumers' and customers' expectations and continuously working to innovate and improve products, services and processes, Colgate will "become the best." Mission

To provide Colgate with a significant competitive advantage by reducing total delivered cost, extending technology resources and developing excellence in purchasing, logistics and sourcing processes.

Top management

Ian M. Cook* - Chairman, President and Chief Executive Officer

Michael J. Tangney* - Chief Operating Officer, Colgate-Europe, Greater Asia and Africa

Stephen C. Patrick* - Chief Financial Officer

Andrew D. Hendry* - Senior Vice President, General Counsel and Secretary

INSIDERS ON BOARD OF DIRECTORS AT COLGATE-PALMOLIVE INDIA LTD. (COLG)

Name (Connections)

Board Relationships

Title

Roger Calmeyer

7 Relationships

Managing Director,

Director,

Member

of

Shareholders & Investors Grievance Committee

Chief Financial Officer, Whole-Time Executive Moses Elias 7 Relationships Director and Director of Colgate-Palmolive (Nepal)

V. Mehta

7 Relationships

Whole-Time Director and Member of Audit Committee

K. Vaidyanathan

7 Relationships

Head of Legal, Compliance Officer, Company Secretary and Whole Time Executive Director

OTHER BOARD MEMBERS ON BOARD OF DIRECTORS* Name (Connections) Justin Skala Pradyot Ghosh Rajendra Shah Jamshed Setna Board Relationships Primary Company

7 Relationships Colgate-Palmolive Co. 7 Relationships Colgate-Palmolive India Ltd. 138 Relationships Clariant Chemicals India Ltd.

7 Relationships Colgate-Palmolive India Ltd.

b. PRODUCTS Colgate now markets a broadly diversified mix of products in the United States and other countries. Major product areas include household and personal care products, food products, health care and industrial supplies, and sports and leisure time equipment.

Afta Ajax Axion Colgate Crystal White Octagon Dynamo Fab Fabuloso Fresh Start (detergent) Hill's Science Diet Hill's Prescription Diet Irish Spring

Kolynos Mennen Murphy Oil Soap Palmolive Softsoap Speed Stick Suavitel Tom's of Maine Pet Nutrition

MARKRTING MIX OF COLGATE HERBAL WHITE TOOTHPASTE i. Product Product variety - Colgate Herbal White is part of the range of toothpastes offered by Colgate Palmolive in India, which is led by Its flagship brand Colgate Dental Cream (CDC). The brand was launched in 2001 and is essentially targeted at traditional consumers who seek natural ingredients (such as in semi-urban and rural towns) Quality

Being a popular segment product and an offering by Colgate-Palmolive quality parameters are thoroughly tested to ensure consumer satisfaction. Features

Herbal White promises a unique formula including a special blend of eucalyptus, calcium and minerals and ;lemon extracts. Brand Name

The use of Herbal in the brand name is self-explanatory. Herbal White has been highlighted to stress their brand proposition of ensuring pearly white teeth.

Packaging

The green-coloured packaging enhances the herbalness of the product, while the pneumonics of mint leaves, lemon and eucalyptus supplement the ingredients which lend uniqueness to the product. The colours red and the word new in blue are the two colours researched to be the most eye-catching on the shop shelf and aid the choice of the product during the purchase decision process. Standard fonts and colours of Colgate and associated pneumonics serve to maintain familiarity with the brand and capitalise on positive associations such as that of being one of the most trusted brands in the country (Brand Equity survey). Sizes

It is available in three sizes as most others in the segment - 50g, 100g and 200g.. Warranties and Returns

Are not offered on the product. ii. Price List Price

The list price of the product is Rs. 12.50 for the 50g pack, Rs. For the 100g pack, and Rs. For the 200g pack. The product is in the popular segment which is priced higher to only the economy segment and lower than the gel and premium segments in the toothpaste market. Discounts/Allowances

No promotional discounts are allowed for. Payment period/Credit terms

Being an off-the-shelf FMCG, in line with the category, no credit is allowed by the company (though the store allows credit on purchase of all items). iii. Promotion

Sales Promotion None at the retailer level apart from possible recommendation by the shopkeeper. Advertising Advertising is in the form of TVCs (television commercials) and uses the beaver gillu as a mascot of the product. Sales Force

Sales force consists of the companys distributor[s who are instrumental I ensuring that the product is stocked by the retailers, which is made easier by the range of product offerings supplied by the same distributor of Colgate Palmolive. Public Relations

PR campaigns were undertaken extensively during the launch of the brand in leading newspapers and magazines, though they were focused more directly on enhancing the image of the parent company in the eyes of stakeholders like shareholders potential investors, etc. that in consumers. Direct Marketing

Direct marketing to the consumer was not done at this retail outlet. iv. Place Channels

The products is sold in retail outlets like Kirana stores, supermarkets, medical shops, co-operative stores etc. It is distributed through the supply chain of company distributor to wholesaler to retailer to final consumers. Coverage

The product is available in the all-India market, including semi-urban and rural markets which is their primary focus. Locations

The product is placed at just below eye-level at the store surveyed among other brand

clutter, unlike at most other supermarkets, where product placement at eye level and near the payment counter is generally preferred for such relatively low-involvement products, especially in the case of small packs which might be impulse purchases on a trial basis. Inventory

The retailer stock varied by size. The store surveyed contained 15 items as turnover of the product is not very high.

On the forefront of innovation.

In the Global Fragrances category, they had multiple suppliers, high cost structures, limited innovation, average quality fragrances and long lead times. Focused partnerships were initiated with two key external suppliers. As a result, new initiatives were developed including annual Top to Top Meetings (CEO/CEO), project and savings grids, cost improvement teams and detailed supply chain maps.

Many superior fragrances have since been

developed. In the household care

category there were 7 for cleansers and 7 for light duty liquids. In personal care there were 4 for liquids and 5 for bar soaps. In fabric care, there were 7 for softeners and 5 for detergents. Growth Strategies Colgate-Palmolives strategy is to focus on global new products to drive growth. In the early 90s, they were launching an average of 256 new products a year. By the mid 90s that number grew to 469 per year. And recently that number has jumped to over 797 per year.

SWOT ANALYSIS a. STRENGTHS

Strong financial performance Focus on innovation and new product launches Colgate business planning initiative

WEAKNESSES

Product recalls Highly leveraged

OPPORTUNITIES

Emerging markets growth Deploying advance technologies Growing population Specialty pet nutrition growth

THREATS

Competitive landscape from other CPGs Private label growth Increasing commodity prices Falling consumer confidence in the US

c. Financial performance analysis i. Ratio analysis

Mar ' 08 EPS (Rs) Dividend per share Operating profit per share (Rs) Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Leverage ratios Long term debt / Equity Total debt/equity Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio Coverage ratios Adjusted cash flow time total debt Financial charges coverage ratio Fin. charges cov.ratio (post tax) Component ratios Material cost component (% earnings) Selling cost Component Exports as percent of total sales Import comp. in raw mat. consumed Long term assets / total Assets Bonus component in equity capital (%) 42.07 19.55 4.31 11.27 0.34 82.27 0.01 209.07 176.29 98.24 90.49 -4.21 4.47 0.80 0.80 0.59 22.26 0.02 0.02 3.72 18.09 16.78 15.00 17.04 13.00 20.21 10.91

Mar ' 07 11.78 9.50 18.41 10.61

Mar ' 06 10.12 7.50 15.18 9.91

Mar ' 05 8.33 7.00 13.09 8.09

Mar ' 04 7.94 6.00 11.10 7.95

18.79 17.64 11.82

17.98 15.24 11.79

18.51 16.18 11.42

16.09 13.50 11.20

0.01 0.01 3.59

0.01 0.01 3.17

0.01 0.01 3.39

0.01 0.01 3.34

0.90 0.90 0.63 18.66

0.88 0.88 0.62 17.16

0.81 0.81 0.54 14.77

1.12 1.12 0.87 17.36

92.47 84.43 29.88 34.60

84.52 68.80 16.18 31.66

95.17 79.48 7.68 22.52

85.23 69.59 12.44 28.86

0.01 52.84 34.94

0.02 52.94 40.82

0.02 45.93 30.88

0.01 45.79 35.27

43.99 18.20 2.79 13.40 0.41 82.27

46.49 19.41 1.26 12.26 0.46 82.27

51.66 16.34 2.09 13.93 0.50 82.27

52.48 18.03 2.13 11.64 0.33

ii.

Market index

Last traded Time Prev Close Mkt Cap (Rs Cr)

458.70 02 Apr 15:58:22 459.5 6238.32

Change Volume Day 's H/L (Rs) 52wk H/L (Rs)

-0.80 (-0.17%) 14176 471.0 - 455.2 480.00 - 341.00

Colgate-Palmolive (India) Ltd. vs... Action Compare Company + Hindustan Unilever L (Sensex) + Dabur India (A) + Godrej Consumer Prod (A) + Godrej Industries Lt (A) + Marico Ltd. (A) + P&G Hygiene&Health (A) + Ador Multiproduc (B) + Amar Remedies Ltd. (B) + Gillette India Ltd. (B) + J L Morison (India) (B) Close (Rs) 236.80

Compare

97.35

Compare

128.70

Compare

59.50

Compare

60.10

Compare

744.85

Compare

12.07

Compare

15.55

Compare

668.00

Compare

140.10

iii.

Overall analysis

d. Ethical, Environmental and CSR issues Ethical

At Colgate, the reputation for high ethical standards remains among the greatest business assets. They articulate their principles and values in the Colgate Code of Conduct. Their Code of Conduct reinforces their corporate culture of caring and addresses issues of law, ethics and fairness in all of their daily business relationships. They review and update it often, to remain vital and responsive to the needs of their communities, consumers, employees and shareholders. Environmental record

Colgate-Palmolive Company's environmental reporting has received the lowest rating from the Ethical Consumer Research Association. In addition, it has received a low rating for its use of animal testing. Colgate-Palmolive is one of the companies responsible for hazardous waste at the Chemsol federal Superfund site in Piscataway, New Jersey. Their involvement in this site has contributed to the contamination of an estimated 18,500 cubic yards of soil with volatile organic compounds (VOCs), polychlorinated biphenyl (PCBs), and lead off-site. A proposed $23 million agreement with the government and state of New Jersey would require ColgatePalmolive and the other involved companies to pay for the cleanup of this hazardous waste that is contaminating the soil as well as the groundwater. CSR activities:

Colgate & the Community

Colgate employees worldwide share a commitment to the three core corporate values: Caring, Global Teamwork and Continuous Improvement. These values are reflected

not just in the quality of our products and the reputation of our Company, but also in our dedication to serving the communities in which we do business. Colgate Palmolive India undertakes its corporate social responsibility through a variety of effective programs. Since 1976, the company has been delivering oral health education to children in rural and urban India in partnership with the Indian Dental Association (IDA). Colgates community outreach efforts have touched the lives of millions of children, providing the information, insight and inspiration they need for a healthy life and a healthy smile.

For the past five years, Colgate in partnership with Pratham, has set up libraries for the underprivileged children in economically backward areas in Mumbai, to encourage and inculcate the habit of reading among these children. Colgate firmly believes education will empower these children for the future and help them to explore new avenues.

Colgate in partnership with the NGO, Navnirmiti, introduced Universalizing Active Mathematics, to make learning of Math easy. This is a pioneering teaching method aimed at demolishing the mental block among school children. This programme is conducted at Municipal schools in and around Powai.

Dominic Savio Summer Camp Celebrating joy of fun for 27 years Colgate has been sponsoring the Summer Camp at the Dominic Savio since 1981. The camp is attended by students of the school as well as children from the nearby hutments. Almost 400 children between 6-16 years of age benefit from the creative workshops that are conducted at the camp. Children as they grow come back to conduct these camps as volunteers to help spread the joy.

Smiling Moments For the past four years, Colgate has been sponsoring the Inter-Mumbai Cricket Tournament for the physically challenged organized by Omkar Krida Mandal, an

NGO. This is an event that salutes the spirit of these undaunted sportsmen who despite their disability play with a fierce competitive spirit.

Running For a Good Cause This was the third year of Colgates participation in the Standard Chartered Mumbai Marathon held on 20th January 2008. This year 56 participants put on their running shoes to participate in the big event to run for a cause. This year Colgate supported Network in Thane of People living with HIV/AIDS (NTP+), an NGO. The contribution/pledges supported the education and nourishment of the children infected & affected by HIV/AIDS thus allowing them to live a life of dignity

Sharing Joys For the past several years, Colgate-Palmolive India has been supporting the Madhu Mehta Foundation, a Non-Governmental Organization, in Mumbai that hosts a Diwali Party for the less privileged children of the city of Mumbai, bringing them joy, cheer and happiness on this festive occasion. These special guests are treated to a variety entertainment program performed by professionals. Filmstars who grace the occasion add to the glitter of the evening. A talent parade for them to showcase their own dancing and singing skills is a part of the event. A sumptuous sit-down dinner is laid out and the evening comes to a close with fireworks and large gift hampers for each child.

Caring Community at Baddi Welfare of the local community is an integral part of their values around the world, and Colgate respect the contribution made by the employees. At the plant in Baddi, the employees volunteer their time and effort to support community initiatives.

Lending a Helping Hand: Volunteers demonstrated their commitment to society by creating a safe and protective environment for the children of the Government Primary and Secondary School in Jharmajari, HP. They helped in construction of the boundary wall of the school. Entry of vehicles was restricted in the area, so the children are safe from external dangers and can now play fearlessly within the school compound. The volunteers also maintain the ecology of the school premises by maintaining the

greenery. Team work of this kind is even more satisfying when the time and effort invested has made such a difference to the children. Building Environmental Awareness: Every year, our employees at Baddi invite children from the local schools in Jharmajari to celebrate the Environment Day. These children are educated to create and sustain healthy natural outdoor spaces. Oral Health programme: To create awareness and promote the importance of good oral hygiene, free dental check ups were carried out for the children at Kinnaur district. In addition about 15,000 dental health packs of toothpaste and toothbrushes were also distributed to children. Colagate Oral Health Month October 2008 Mission : Zero Tooth Cavity 1) Public Dental Check-ups In clinic check-ups Factory check-ups School dental camps Mobile Vans 2) Oral Hygiene Awareness Activities As a responsible corporate citizen, Colgate has been at the forefront in spreading awareness about good oral hygiene. Believing that the Mouth is the gateway to good oral hygiene, Colgate with its initiatives like Bright Smiles Bright Future, the School Contact Programs in practice since 1976 and with the introduction of the Oral Health Month in 2004, has left no stone unturned to contribute towards the oral health of the nation. 3) Little Dentist Program At Colgate, we believe in instilling oral hygiene habits from an early age. This year through the Little Dentist Program, Colgate seeks to make children the true ambassadors of Oral Health. An estimated 1.5 Lakh children from 190 schools across

7 cities will learn about good oral health practices and also help in spreading the message of good oral hygiene to the community.

Colgate's Bright Smiles, Bright Futures The Colgate Bright Smiles, Bright Futures oral health educational programme worldwide was developed to teach children positive oral health habits of basic hygiene, diet and physical activity. This programme also encourages dental professionals, public health officials, civic leaders and, most importantly, parents and educators to come together to emphasise the importance of oral health as part of a child's overall physical and emotional development.

Teachers Training Program Training in the basics of oral health care is imparted to school teachers. This helps them play a significant role in preventive oral care by inculcating good oral care habits in the students. The Teachers Training Program forms a vital part of the Colgate Bright Smiles, Bright Futures Program.

Till date, 2,35,000 teachers have been trained under the program.

National Oral Health Program Colgate-Palmolive India continues its march in the area of spreading oral health awareness through the School Dental Health Education Program. Under this Program, over 72 million school children in rural and urban parts of the country in the age group of 6-12 years have been reached out till date. Members of various IDA local branches and professional oral care organizations organized the Program across the country with the help of audio-visual aids, posters, charts and demonstration of right brushing techniques.

"World No Tobacco Day" observed Colgate-Palmolive India, in association with the IDA (Indian Dental Association), organized a one-day program in the cities of Bangalore & Mumbai, to observe 'World No Tobacco Day'.

In Bangalore, public awareness was raised about the ill-effects of smoking on health while discouraging smoking. A procession led by more than 550 dentists promoting the cause was also organised. A poster competition was conducted and over 38 posters with powerful sketches & statements highlighting the harmful effects of tobacco were displayed. The Bangalore Mahanagara Palika Corporator inaugurated the exhibition. Prizes were given out to the winners of the competition.

Colgate-IDA Activities

Colgate actively and closely supports the efforts of Professional Dental Associations to continuously update the knowledge and skills of dental professionals through various fora. Colgate today is the major sponsor of almost all Dental Conventions, Seminars, Conferences and specialised workshops. In collaboration with the Indian Dental Association, IDA-Colgate Continuing Dental Education Programs are regularly organised all over the country, exposing the practicing dental professional to the latest advances in dentistry.

The Colgate-IDA BDS Scholarship

In the field of academics, Colgate encourages striving for excellence by instituting Gold Medals for students topping in the BDS final examination at the university level. Additionally, IDA-Colgate scholarships are awarded at the college level to students who top in each year of the BDS course. Research grants are also provided to meritorious students undertaking post-graduate research work. The top merit holders in each of the four years receive cash prizes and certificates.

CONCLUSION The only thing that is cheering the industry are the reforms of the nineties. Post-reforms, the industry is excited about a burgeoning rural population whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. What is needed now is a change in the mindset of the mandarins. FMCG industry-friendly legislations are the needs of the hour. It does not matter whether changes are being brought about by dawning market realities or the ongoing economic reforms. One thing is certain here: the Indian FMCG industry has a promising future to look forward to. In terms of growth potential, the Indian market is a great horse to bet on. With a little help and understanding from the government, the Indian FMCG industry can realise its true potential. So far, it has been a chequered graph for the MNCs operating in the Indian FMCG industry. Domestic companies are only beginning to make their presence felt in the industry. It has taken tremendous consumer insight and market savviness for the FMCG players to reach where they are today. But, the journey has only begun.