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Ladies and Gentlemen:

It gives me great pleasure to welcome you to this Fifty Fifth Annual General meeting of your Company.

I am conscious that standing here, attempting to step in and fit into the shoes of Mr. Simon Scarff is a challenge- during his association of 63 years, Simon took the Company and the brand ‘Horlicks’ to new heights. On behalf of the Board and all the stakeholders in GSK CH, I would like to put on record our sincere appreciation and thanks for his stewardship of your Company- he has been a true mentor to many.

2013 was one of the toughest years for the India economy with India recording the lowest GDP growth in the last 10 years. It also witnessed significant depreciation and volatility in the currency market. The Industrial and the Services sector went through a tough phase- agriculture was the only silver lining. Slow economic growth and sustained high inflation adversely impacted the consumer sentiment and private consumption; consequently the FMCG sector saw its growth being sliced to half in 2013. Despite these challenges, your Company has performed well. Our robust go to Market Strategy, our constant focus on innovation, cost and talent management processes have protected us from the headwinds that the industry witnessed. We continued to dial up Science as our key differentiator to make our customers do more, feel better and live longer.

As a result, your Company recorded yet another year of strong performance, with each of the 5 quarters during the current financial year recording double digit profitable growth. Sales and PAT for the 15 months ended March 31, 2014 were Rs. 4,683 crores and Rs. 675 crores respectively.

The stock markets recognized our performance. The Company’s shares have been performing very well over the last couple of years and were being traded at around 3,825 at the beginning of the year 2013. The share is now being traded at Rs. 4925.

In line with the excellent performance of your Company during the year, the Directors of your Company have recommended a dividend of Rs. 45 per equity share of Rs. 10 each for the fifteen month period ended March 2014.

Your Company’s increased shareholder value is backed by consistent and competitive robust business performance of its product portfolio. Today we command a volume market share of 65.1 % – standing head and shoulders ahead of its nearest competitor.

Over the year, brand Horlicks and its extensions showcased an exceptional performance. There have been significant new launches across other products that were brought to the market that have aided in bringing up the Company connect with the consumer.

As Indian consumers become global in their aspirations and desires and are exposed to global products, their appetite to consume newer products in their home market will only increase. At the same time, product lifecycles are shrinking.

During the year, your Company focused on innovations and consumer insights to further build relevance for the consumers. GSK CH R&D undertook some remarkable programmes that enabled Company’s improved commitment to the environment, as well as the health and safety of our teams- at work and in our everyday lives! My compliments to the GSK CH R&D teams for their commitment and achievements.

You will be pleased to know that your Company’s rural business continued to grow strongly on the back of strong activation, including sachet drives, across the nutritional category. Today this programme has reached more than 16,000 villages. Two key growth drivers remain Horlicks Swasthya Abhiyan and Village level Entrepreneurs programme. Your Company has opened up new frontier with the launch of a programme for the urban Emerging Consumer Class for slums in Mumbai and Chennai.

We are growing- in the marketplace, in the shelf space and in the hearts of the consumers. Your Company is also making strong inroads in markets in the North and West, strengthening distribution and adding more stores during the year 2014.

Information Technology is integral to the success of our business. IT focus on cost management and working capital optimization program has delivered strong results in mitigating inflation and supporting profitable growth.

Reducing operating costs, increasing focus on capital optimization programs, maximizing returns from surplus cash and effective deployment of marketing spends have enabled delivering profitable results.

As a socially aware and socially conscious Company, we remain focused in making a real difference to the lives that we touch. The Company’s CSR initiatives aim to address the root cause of the problem and in the long run help in the creation of healthy, inclusive and progressive communities.

Our key focus areas for helping the community lie in education-including special education, leading to sustainable livelihood, especially that of women, health and nutrition- towards eradicating malnutrition leading to good health for children and mothers and awareness about hygiene, safe food and water.

We are proud of our diverse workforce- be it in terms of gender, culture or geographies. This talented and inspired human asset in partnership with leading NGOs works to bring about real change. The GSK ‘spirit’ inspires employee volunteering under Corporate Social Responsibility. The ‘PULSE’ program, an integral part of GSK’s commitment to serve communities around the world, empowers employees to volunteer their professional expertise towards sustainable change. Your Company also organized ‘Orange Day’ events, where employees spent quality time with marginalized sections of the society. These true examples of socially committed partnerships, differentiates your Company from many others.

Your Company has undertaken several environment friendly measures including substitution of conventional fuel with biofuel in factories in Nabha, Sonepat and Rajahmundry. This is helping to reduce carbon footprint and is creating a better environment.


To conclude, on behalf of my fellow Board Members, I would like to extend our appreciation to all our stakeholders, particularly the shareholders and the Business Partners for their continued support.

Last, but not the least, I would like to thank all GSK CH employees for their hard work and contribution towards growth of the Company and compliment Mr. Zubair Ahmed, Managing Director and his team to the excellent performance in 2013-14.

Thank you and best wishes.