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GIC,BARINGINDIAPEINVESTING $100MNINMARICO GROUP 6 1AGENDAExecutive SummaryFMCG Industry OverviewIndian FMCG OverviewGovernment of Singapore Investment Corporation (GIC)Baring Private Equity Partners India MaricoDeal StructureInvestment RationaleValuationPre post Investment Scenario

EXECUTIVE SUMMARYFMCG INDUSTRY OVERVIEW(1/2)Asia's FMCG marketIndia's FMCG marketSoaps and cleansers: Market demand growth (% change pa)20112012201320142015Asia and Australasia5.97.05.95.85.3China12.012.79.79.37.3Hong Kong8.66.83.73.43.0India11.19.910.59.89.8Japan-0.62.41.51.41.0Food, beverages, tobacco: Market demand growth (% change pa)20112012201320142015Asia and Australasia3.02.83.63.32.7China4.22.81.61.41.0Hong Kong5.14.65.14.64.7India-0.51.60.90.70.4Japan2.72.71.52.32.3FMCG INDUSTRY OVERVIEW(2/2)FMCG industry represents 2.5% of the Indias GDPThe industry has grown at ~17%CAGR FMCG accounted for 1.9% of the total FDI inflows in April 2000- September 2012Food products and personal care together make up two-third of the sectors revenues. Rural India accounts for 70% of the Indian population and accounts for 50% of the total FMCG market. Changing lifestyle and increasing consumer demand, the Indian FMCG market is expected to cross $80 bn by 2026 in towns with population of up to 10 lakh.India's labour cost is amongst the lowest in the world, after China & Indonesia, giving it a competitive advantage over other countries.Fast Facts: Indian FMCG IndustryINDIAN FMCG INDUSTRY (1/3)With an estimated market size of Rs 2 trillion, it accounts for the fourth largest sector in India. In the last decade, the FMCG sector has grown at an average of 11% a year; in the last five years, annual growth accelerated at compounded rate of ~17.3%. The sector is characterized by strong presence of global businesses, intense competition between organized and unorganized players, well established distribution network and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage over others

6Untapped rural market India is one of the worlds biggest producers of a number of FMCG products but the countrys exports account for a very small proportion of the overall output. Food-processing Industry: With 200 mn people expected to shift to processed and packaged food, India needs around USD 30 bn of investment in the food processing industry. High inflation Rising cost of inputs Emergence of private labels Counterfeits and pass-offs Rupee depreciation may hit margins of companies Infrastructure bottlenecks

Opportunities in FMCG Sector:Key Concerns of FMCG Sector:INDIAN FMCG INDUSTRY (2/3)Considering the fact that rural india accounts for 70% of the population, it does not contribute towards the revenue in the same proportion. So, there is a huge scope hereDespite the fact that india is one of the largest producers of fmcg products, exports form a small chunk of the revenue.

Increasing cost of raw materialsPrivate labels such as Star bazar, pantaloonss fresh and pure are giving established fast moving consumer goods (FMCG) brands a run for their money. Though private labels comprise 10 to 12 per cent of the overall FMCG volumes but they could pose problems for the big players in the near future.Fake products which imitate the brands and cause great amount of loss to the revenues of these companies

7INDIAN FMCG INDUSTRY (3/3)Major segments in FMCG sector (India specific)The fabric wash market size is estimated to be ~USD 1 billion, household cleaners to be USD 239 million, with the production of synthetic detergents at 2.6 million tonnes . Maricos Revive is one of the leading products in this categoryThe personal care products (PCP) market in India is estimated to be worth ~USD 4 bn p.a. Personal hygiene products such as hair care, skin care, colour cosmetics and fragrances are the key segments of the personal care market. Parachute advanse, parachute and revive are the maricos leading products in this segmentFood processing industry is one of the largest industries in India, ranking fifth in terms of production, growth, consumption, and export. Saffola is one of the leading products offered by marico here

8Investment ApproachStrengthsABOUT GOVERNMENT OF SINGAPORE INVESTMENT CORPORATION (GIC)Investment in cross-asset opportunities with defined and clear drivers for investmentSkilled and experienced teamGlobal presence and efficient governance structureGIC has the highest corporate credit ratings by both Standard & Poor and MoodyInvestment management organization with investments over $100b30 yrs of experience with exchange traded and OTC markets in stocks, derivatives, fixed income, natural resources, cashOne of worlds top 10 real estate investment firm in terms of AUMAbout GICInvesting with a long-term horizon with exposure to equity and equity like assetsIdentifying and managing risk an integral part of management responsibilityEstablished framework for risk taking to maximize clients returns

9GIC INVESTMENT FRAMEWORKGIC co-invested in consumer products and services business with Actis in Bangalore-based Nilgiri Dairy Farms

Policy Portfolio10Investment ApproachAccoladesABOUT BARING PRIVATE EQUITY PARTNERS INDIA Pioneer in providing private equity capital in IndiaFirst fund to conclude a MBO of listed company in AsiaFirst cross-border M&A in India and first venture capital to invest in the Indian BPO sectorFounded in 1984, one of first pan-European providers of private equity capitalInvested in major markets outside USA via regional funds with $12b AUMFinalized its MBO from parent company ING Group in August 2004About Baring PEFollows top-down approach for investment decisionsSeeks significant minority stakes or control and Board position to influence key decision making Controls the exit decision and have well defined exit rights through IPO

11BARING PRIVATE EQUITY PARTNERS INDIA PORTFOLIO Source: www.bpepindia.comIndustry: Consumer goodsFounded: 1987Headquarters: Bandra, Mumbai, IndiaManagement: Harsh Mariwala (CEO)Products: Edible Oil, Hair Oils, Skin Care, Fabric Care, etc.Revenue: INR 40083 millionCAGR : 44% for the past 5 yearsMajor Brands: Parachute, Saffola, Mediker, Sil, Revive, Kaya clinic, etc

ABOUT MARICO (1/3)Shareholding PatternRevenue SegregationOverviewKey FundamentalsValueMarket Cap (Rs. Cr.):13,629.01EPS - TTM (Rs.):6.65P/E Ratio (x):31.76Latest Dividend (%):10Dividend Yield (%):0.47PeersMarket Cap (INR Cr)Marico13629Emami10664P&G Hygiene10010Godrej26229Colgate-Palmolive17851

ABOUT MARICO (2/3)Key financialsPeers ReviewKey Financial ParameterMar'04Mar'05Mar'06Mar'07Mar'08Mar'09Mar'10Mar'11Mar'12Mar'13Return on Equity (%)30.6734.7636.0443.9463.5853.1643.6732.0530.9723.9Operating Profit Margin (%)8.438.7112.6612.7512.9112.8113.7313.2112.2213.78Net Profit Margin (%)6.516.767.546.48.468.559.168.188.138.34Debt to Equity0.060.250.921.311.140.830.680.850.690.44Working Capital Days63657070777994121134143Cash Conversion Cycle1917115101925414439ABOUT MARICO (3/3)Financial trend of MaricoInvestment in 2012Acquired brands in 2012Acquired brands in 2011DEAL STRUCTURE(1/3)Deal OverviewReckitt Benckiser acquired Paras Pharmaceuticals for INR 32.6bn ($726mn) in April 2011

Marico acquired brands like Set Wet, Livon, Zatak from Reckitt via preferential allotment

Fund parass personal care brands acquisitions and other capital expenditures

Deal price (as on 06/04/2012)Current Price (as on 02/26/2014)Rs. 170Rs. 211.86th Apr, 2012Marico signed the definite agreement for the deal2nd May, 2012General meeting for shareholders approval for fresh allotment16th May, 2012Board resolution was passed for the investmentDEAL STRUCTURE(2/3)Deal DetailsAdvisorsClientsKotak Mahindra Capital Company Ltd Marico LtdCitigroup Global Markets India Pvt LtdMarico LtdAZB & Partners Indivest Pte Ltd (Legal)DEAL STRUCTURE(3/3)Final Deal Structure (Transactions)ProductsCustomersDistribution NetworkInorganic GrowthDiversified Product MixWell Recognized BrandsGlobal Presence30% of Revenue from exportsDirect Reach: Over 900,000 outlets Indirect Reach: 4 million outletsSegment Diversification via Acquisitions Incorporation of ERP and SAP toolsDisintegration of Inbound Copra supply chainSupply Chain ManagementOperational InnovationOpportunitiesStrong financial ParametersRegular Innovations to increase growthFocus on Emerging MarketsInternational Business Group CAGR 27%EBITDA 15%RoE 35%D/E 68%

Investment RationaleINVESTMENT RATIONALEVALUATION OF MARICO (1/11) Final ValueVALUATION OF MARICO (2/11)

Discounted Cash Flow (DCF)Key AssumptionsThe sales growth is expected to be sustained at a 5 year CAGR of 21%

The working capital change has been taken in proportion to the revenue increase projections, the net change arising out of the differences of the total non-cash current assets and non-debt current liabilities

CountryIndiaRisk free Rate (rf) 8.78%Market Risk Premium 8.22%Unlevered Beta 0.455Levered Beta 0.480S&P credit ratingbb-Damodaran risk spread4%After-tax Cost of Debt 9.60%Cost of Equity12.70%D/E 7.40%WACC 12.51%VALUATION OF MARICO (3/11)

DCF OutputValuesAmount in million INRPV of Cash Flows13812.10PV of Terminal Value80034.30Enterprise Value93846.40Less:Total Debt7953.5Preferred Stock0Minority Interest249Plus:Cash and Equivalents3983.6Equity Value89627.44Shares Outstanding614.93Implied Per Share Value145.75VALUATION OF MARICO (4/11)

Trading ComparablesSelection CriteriaLocation: Asia Pacific Emerging MarketsIndustry: FMCG - Household and Personal Products Product Lines: Similar product lines as MaricoCompany ShortlistedColgate-Palmolive (India) Limited (BSE:500830)Pidilite Industries Limited (BSE:500331)Dabur India Ltd. (BSE:500096)Godrej Consumer Products Limited (BSE:532424)

VALUATION OF MARICO (5/11)

Trading Comparables OutputNTM TEV/Forward Total Revenue NTM TEV/Forward EBITDA High5.02x22.15xLow2.57x14.97xMean3.54x18.49xMedian3.29x18.42xNTM TEV/Forward Total Revenue NTM TEV/Forward EBITDA High226779.65149107.47Low116100.34100773.76Mean160033.25124452.56Median148626.50123964.51ValueRevenue : 45175.229 m INREBITDA:6,731.71 m INR

VALUATION OF MARICO (6/11)

Transaction ComparablesSelection CriteriaLocation : Asia PacificIndustry : FMCG - Emerging MarketsTransaction Types : Private Placement OR Merger/AcquisitionPeriod : [4/1/2009-3/31/2012]MultipleValueMinimum TEV/Revenue:1.03x38454.95Maximum TEV/Revenue:3.83x142992.67Average TEV/Revenue:2.65x99198.83MultipleValueMinimum TEV/EBITDA:9.98x55522.73Maximum TEV/EBITDA:33.6x186930.24Average TEV/EBITDA:18.77x104425.02Revenue : 45175.229 million INREBITDA: 6,731.71 million INR

VALUATION OF MARICO (7/11)

Football Field AnalysisVALUATION OF MARICO (8/11)

Weightage Distribution Valuation TypeWeightValuation TypeMaximumMinimumAverage40.00%DCF109853778409384620.00%52 Week High/Low10974278203939727.50%Trading ComparableEV/Forward Revenue22678011610016003312.50%EV/Forward EBITDA1491071007741244537.50%Transaction ComparableEV/Revenue142993384559919912.50%EV/EBITDA18693055523104425Figures in million INRVALUATION OF MARICO (9/11)

Final Value per shareMaximumMinimumAverageDCF43941.2831135.837538.5252 Week High/Low21948.3615640.51218794.436Trading Comparable17008.47378707.525412002.493718638.433112596.7215556.5703Transaction Comparable10724.452884.1217439.912223366.286940.341513053.1273Final Value135627.2877905.02104385.06MaximumMinimumAverageFinal Equity Value135627.377905104385.1 Value per share220.56126.69169.75Number of shares : 614.93 millionValue per share through Valuation: Rs. 169.75Figures in million INRVALUATION OF MARICO (10/11)

Discounted Cash Flow (DCF) ( At present)Key AssumptionsCountryIndiaRisk free Rate (rf) 8.78%Market Risk Premium 8.22%Unlevered Beta 0.455Levered Beta 0.480S&P credit ratingbb-Damodaran risk spread4%Cost of Debt 9.60%Cost of Equity11.90%D/E 6.40%WACC 11.8%DCF OutputValuesAmount in INR MILLIONPV of Cash Flows9897.20PV of Terminal Value107575.10Enterprise Value117472.30Less:Total Debt8742.90Preferred Stock0Minority Interest351.40Plus:Cash and Equivalents3803.50Equity Value1,12,181.50 Shares Outstanding644.9 Implied Per Share Value173.96 (INR)Purchase Price in 2012Rs. 170Market Price in 2014 Rs. 211.80Gain Rs. 41.80Percentage Gain IN 2 YEARS24.59%CAGR11.67%VALUATION OF MARICO (11/11)

Investment GainsFigures in INRRevenue growth of 28% over previous yearFocused on acquisitions to pursue growthExplore opportunities in skin care, hair care, food in Asia & AfricaSmall packs led to 11% growth in parachuteInternational business contributed 24% to the revenue and growth of 30% over FY11Entered new geographies and scaled up presence in Malaysia, Bhutan & MyanmarLaunched exciting range of water gels, ice gels, rave gels & waxAcquisition of Paras in line with the strategy of strengthening in hair care, skin care & male groomingAcquisition provides an entry into growing deodorant businessAcquired portfolio gives access to chemist & cosmetic channelsPerformance Analysis ( Source: Annual Report 2011-2012)PRE INVESTMENT SCENARIORevenue growth of 15% over previous yearContributed by 12% expansion in volumes including 4% inorganic growthParachute Advanced Body Lotion achieved a market share of 7%Performance of acquired brands: 18% growth over previous yearLeadership position in hair creams & gelsDemerger of Kaya ClinicsPerformance Analysis ( Source: Annual Report 2012-2013)POST INVESTMENT SCENARIOTHANK YOU