Marico

Marico Limited

Logo
Type Public (BSE: 531642)
Industry FMCG
Founded 1987
Headquarters Bandra, Mumbai, India
Edible Oil, Hair Oils, Skin Care,
Products
Fabric Care, etc.
2,046.35 crore (US$454.29 million)
Revenue [1]

Employees 1000 (2010)

Website www.marico.com

Marico (BSE: 531642) is a leading Indian group providing consumer products and
services in the areas of Health and Beauty based in Mumbai.[2]

During 2009-10, the company generated a Turnover of about Rs.26.6 billion (USD 600
Million)[3] , in respect of its food, hair care and skin care related activities. Marico's own
manufacturing facilities are located at Goa, Kanjikode, Jalgaon, Pondicherry, Dehradun,
Baddi, Paonta Sahib and Daman.

In Bangladesh, Marico operates through Marico Bangladesh Limited, a wholly owned

subsidiary Manufacturing facility at Mouchak, near Gazipur.

Brands
The organisation holds a number of brands viz. Parachute, Saffola, Sweekar, Hair&Care,
Nihar, Shanti, Mediker, Revive, Manjal, Kaya Skin Clinic, Aromatic, Fiancee, HairCode,
Caivil, Code 10 and Black Chic.

Marico’s brands and their extensions occupy leadership positions[citation needed] with
significant market shares[citation needed] in a number of health and beauty areas.

The major brands of Marico holding significant market share are Parachute and Saffola.
Parachute is essentially edible coconut oil. The other sub brands of Parachute are Nihar,
Uttam and Oil of Malabar which are also edible coconut oils. Saffola is essentially
blended refined edible oil which is claimed to be beneficial for Heart health. It is
marketed under the names of New Saffola, Tasty and Active. All of them contain blended
vegetable oils in various proportion. The main type of oils which are blended include
Rice Bran oil, Kardi oil or Safflower oil, Corn oil and Soya oil.

In addition to being a producer of consumer products the organisation also operates Kaya
Skin Clinic (of which (as of 2010) 81 exist in India, 13 in UAE) and 2 in Bangladesh.
Marico recently acquired the aesthetics business, of the Singapore based Derma Rx Asia
Pacific Pte. Ltd. (Derma Rx), under the Kaya portfolio. All the services offered at Kaya
Skin Clinic are designed and supervised by a team of over 250 dermatologists and carried
out by certified skin practitioners who have undergone more than 300 hours of training.
The services are US FDA approved and tested in-house, and conform to the highest
international quality standards. Kaya Skin Clinic has over 600,000 satisfied customers.

Harsh Mariwala is the Chairman and MD of this organisation. The company has 3
divisions the Consumer Products Group(CPB), The International Business Group and
Kaya Skin Clinic. CPB is headed by Saugata Gupta. Kaya Skin Clinic is headed by Ajay
Pahwa.

The company in recent years has been known for its foreign acquistions in countries such
as South Africa, Egypt and Singapore.

Auditor's Report
TO THE MEMBERS OF MARICO LIMITED

1. We have audited the attached Balance Sheet of Marico Limited (the"Company") as at March 31,2010, and the
related Profit and Loss account and CashFlow Statement for the year ended on that date (all together referred to
as‘financial statements’) annexed thereto, which we have signed under reference tothis report. These financial
statements are the responsibility of the Company’sManagement. Our responsibility is to express an opinion on
these financial statementsbased on our audit.

2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards
require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements
are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts
and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and
significant estimates made by Management, as well as evaluating the overallfinancial statement presentation. We
believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, as amended by theCompanies (Auditor’s Report)
(Amendment) Order, 2004 (together the"Order"), issued by the Central Government of India in terms of sub-
section (4A)of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) andon the basis of such checks of the
books and records of the Company as we consideredappropriate and according to the information and
explanations given to us, we give in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of
the Order.

4. As detailed in Note 24 of Schedule R to the financial statements and for reasonsstated therein, the Company
has made a provision of Rs. 29.35 crores towards contingencieson account of possible excise obligations which
may arise in the event of unfavourableoutcome of the matter, which is assessed by the management to be ‘less
thanprobable’. The said provisioning is not in accordance with the requirements ofAccounting Standard 29 on
"Provisions, Contingent liabilities and Contingentassets", as per which, the provision should be recognised only in
the event,unfavourable outcome is assessed to be ‘more than likely’. The resultant excessprovision is in the nature
of reserves as defined in part III of Schedule VI of the Act.

Had the Company not recognised the said contingency provision, the "Manufacturingand Other expenses" for the
year would have been lower by Rs. 29.35 Crore, Profitbefore tax for the year would have been higher by Rs. 29.35
Crore, Profit after tax for theyear and balances in Reserves and Surplus as at the year end would have been
higher by Rs19.60 Crore respectively and contingent liability as at the year end would have beenhigher by Rs.
29.35 Crore.

5. Further to our comments in the Annexure referred to in paragraph 3 above, we reportthat:

(a) We have obtained all the information and explanations which, to the best of ourknowledge and belief, were
necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by theCompany so far as appears
from our examination of those books;

(c) The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with bythis report are in agreement
with the books of account;

(d) Subject to the matter referred in paragraph 4 above, in our opinion, the BalanceSheet, Profit and Loss account
and Cash Flow statement dealt with by this report complywith the accounting standards referred to in sub-section
(3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March31,2010 and taken on record
by the Board of Directors, none of the directors isdisqualified as on March 31,2010 from being appointed as a
director in terms of clause (g)of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanationsgiven to us and subject to the
matter referred in paragraph 4 above the said financialstatements together with the notes thereon and attached
thereto give, in the prescribedmanner, the information required by the Act, and give a true and fair view in
conformitywith the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the company as atMarch 31, 2010;

(ii) in the case of the Profit and Loss account, of the profit for the year ended onthat date; and

(iii) in the case of the Cash Flow statement, of the cash flows for the year ended onthat date.

For Price Waterhouse

Chartered Accountants

Firm Registration No. 301112E

VILAS Y. RANE
Partner

Membership No: F-33220

Mumbai

April 28, 2010

ANNEXURE TO AUDITORS’ REPORT

Referred to in Paragraph 3 of the Auditors’ Report of even date to the members ofMarico Limited on the
financial statements for the year ended March 31, 2010.

1. (a) The Company is maintaining proper records showing full particulars, includingquantitative details and
situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to
cover all the items over a period of two years which, in ouropinion, is reasonable having regard to the size of the
Company and the nature of itsassets. Pursuant to the programme, a portion of the fixed assets has been
physicallyverified by the Management during the year and no material discrepancies between the bookrecords and
the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, asubstantial part of fixed assets
has not been disposed of by the Company during the year.

2. (a) The inventory has been physically verified by the Management during the year. Inrespect of inventory lying
with third parties, these have substantially been confirmed bythem. In our opinion, the frequency of verification is
reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed bythe Management are reasonable
and adequate in relation to the size of the Company and thenature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, theCompany is maintaining proper
records of inventory. The discrepancies noticed on physicalverification of inventory as compared to book records
were not material.

3. The Company has neither granted nor taken any loans, secured or unsecured, to / fromcompanies, firms or
other parties covered in the register maintained under Section 301 ofthe Act. Accordingly, paragraph 4(iii) (b), 4(iii)
(c), 4(iii) (d), 4(iii) (f) and (iii)(g) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, thereis an adequate internal
control system commensurate with the size of the Company and thenature of its business for the purchase of
inventory, fixed assets and for the sale ofgoods and services. Further, on the basis of our examination of the books
and records ofthe Company, and according to the information and explanations given to us, we haveneither come
across nor have been informed of any continuing failure to correct majorweaknesses in the aforesaid internal
control system.

5. According to the information and explanations given to us, there have been nocontracts or arrangements
referred to in Section 301 of the Act during the year to beentered in the register required to be maintained under
that Section. Accordingly, thequestion of commenting on transactions made in pursuance of such contracts or
arrangementsdoes not arise.

6. The Company has not accepted any deposits from the public within the meaning ofSections 58A and 58AA of
the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its sizeand the nature of its
business.

8. We have broadly reviewed the books of account maintained by the Company in respectof products where,
pursuant to the Rules made by the Central Government of India, themaintenance of cost records has been
prescribed under clause (d) of sub-section (1) ofSection 209 of the Act, and are of the opinion that prima facie, the
prescribed accountsand records have been made and maintained. We have not, however, made a
detailedexamination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of theCompany examined by us,
in our opinion, the Company is regular in depositing theundisputed statutory dues including provident fund, investor
education and protectionfund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax,customs
duty, excise duty, cess and other material statutory dues as applicable with theappropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us, the
particulars of dues of sales-tax, customs duty and cess as atMarch 31, 2010 which have not been deposited on
account of a dispute are as follows:

Period to
Forum where the
Name of the Statute Nature of dues Amount which amount
dispute is pending
related
(Rs.
Crore)
Sales tax including
The Central Sales Tax Act and 1999 to 2004,
interest and penalty as 1.82 Sales Tax Tribunal
local sales tax Acts 2006, 2007
applicable
1996, 2000 to
2.31 Commissioner of Appeals
2010
Superintendent of Sales
0.17 2007
Tax
Maharashtra Agricultural
Produce Marketing
Supervision charges 1.13 2006 to 2010 Mumbai High Court
(Development & Regulation)
Act, 1963
Maharashtra Agricultural
Agricultural Produce
Produce Marketing Mumbai High Court
Marketing committee 7.93 1997 to 2010
(Development & Regulation) (Panji Bench)
cess – Goa Bench
Act, 1963
Deputy Commissioner of
The Indian Customs Act,1962 Export cess 0.09 2004
Customs
Customs Excise and
Redemption fine and
The Indian Customs Act,1962 0.3 2002 to 2004 Service Tax Appellate
penalty
Tribunal
 Assistant Commissioner
The Indian Customs Act,1962 Custom duty 0.01 2008
of Customs

10. The Company has no accumulated losses as at March 31, 2010 and it has not incurredany cash losses in the
financial year ended on that date or in the immediately precedingfinancial year.

11. According to the records of the Company examined by us and the information andexplanations given to us, the
Company has not defaulted in repayment of dues to anyfinancial institution or bank or debenture holders as at the
balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by wayof pledge of shares,
debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutualbenefit fund/ societies are not
applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities,debentures and other investments.

15. In our opinion and according to the information and explanations given to us, theterms and conditions of the
guarantees given by the Company for loans taken bysubsidiaries from banks during the year are not prejudicial to
the interest of theCompany.

16. In our opinion, and according to the information and explanations given to us, onan overall basis, the term
loans have been applied for the purposes for which they wereobtained.

17. On the basis of an overall examination of the balance sheet of the Company, in ouropinion and according to
the information and explanations given to us, there are no fundsraised on a short-term basis which have been
used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties andcompanies covered in the
register maintained under Section 301 of the Act during the year.

19. The Company has created security or charge in respect of debentures issued andoutstanding at the year-end.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company,carried out in accordance with
the generally accepted auditing practices in India, andaccording to the information and explanations given to us,
we have neither come across anyinstance of fraud on or by the Company, noticed or reported during the year, nor
have webeen informed of such case by the Management.

For Price Waterhouse

Chartered Accountants

Firm Registration No. 301112E

VILAS Y. RANE
Partner

Membership No: F-33220

Mumbai

April 28, 2010

India Infoline Research

• Company
• |
• Sector

Marico Ltd (Q4 FY10) – BUY (Target Rs124, Upside 10.7%)

Marico (Q3 FY10) – BUY (Target Price Rs116, Upside 17.8%)
Marico Ltd – BUY (Target Price Rs121, Upside 13.1%)

Related News
• Company
• |
• Sector
• |
• Latest

03-Mar-11 Marico advances most in 2 weeks after block share

21-Feb-11 Marico allots equity shares
18-Feb-11 Marico acquires 85% stake in ICP
18-Feb-11 Marico acquires stake in International Consumer Products Corporation
18-Feb-11 Marico gains on buzz of portfolio restructuring
18-Feb-11 Marico stock rises on brand sale reports

oppourtunity
CAREERS@MARICO
 Right people take the organization in the Right Direction. Marico truly
believes that recruitment is the key process of helping Marico achieves its
business direction through the right talent.

We look at Talent, not just from a short-term perspective, but also from a
long-term perspective - where people can be groomed for different roles.
We look for people with the right attitude and rigor.
Meritocracy is the guiding principle and our recruitment is based on an
objective assessment criteria. The recruitment process is thus looked upon
as an opportunity to explore the possibility of a mutually
beneficial relationship between the individual and the organization.

At Marico, spotting, exploring and inviting talent is not the sole

responsibility of the HR Team, but a line function as well. With this intent,
the HR function coaches the line - in terms of Identifying Recruitment and
Sourcing Avenues and Competency-Based Interviewing Skills.

Marico Furla Eco Friendly Tote

In the fall of 2007, Furla launched their Talent Hub project, designed to support promising young designers
and give them an opportunity to design for the world-renowned brand. Sisters Alice & Lisa Ferrari comprise
the Talent Hub design team of Marico, whose eco-friendly bags were inspired by Japanese textiles

Political analysis

Egypt turmoil hurt production by up to 70%: Marico

FMCG major Marico Industries today said the recent political turmoil in Egypt has
affected production at its two plants in the North African country by up to 70% and will
impact revenue for at least one quarter. In 2006, Marico had acquired Egyptian hair care
brand Fiancee.Regarding price rise, Mariwala said inflationary pressure has affected
commodities like edible oil. He also added the company finds the international market more lucrative
for acquisitions.
Marico had last month strengthened its presence in the male grooming segment by acquiring 85% stake in
the Vietnamese company International Consumer Products Corporation (ICP)

COMPANY OVERVIEW:
Marico is leading player in the Indian FMCG space. Marico product and services in Hair
care, Skin care and Healthy Food reach out to more than 20 countries in the Middle East,
Asian sub-continent, Australia and USA.
The company’s key management strategies are built around differentiation and a way of
thinking called ‘uncommon sense’. These form the strongest pillar of growth in all walks
of Marico`s business-be it a line or a staff function, consumer centricity or pioneer ship.

Management Structure:
Marico has flat organizational structure, with just five levels between the Managing
Director and the Shop floor operator.

Distribution Network:
Distribution network of more than 2.5 million outlets in India and overseas, one in every
eight Indian and six Egyptian is Marico consumer, while over 70 million consumer packs
from Marico reach approximately 130 million consumers in about 23 million household
every month.

Product Line:

1.Parachute
2.Nihar
3.Maha Thanda
4.Silk n Shine
5.Parachute Advansed Starz
6.Parachute Night Repair Crème
7.Safflola (Edible Oil)
8.Saffola (Functional Food)

Marico Strategic Business unit:

The Marico Group business organization is structured into three Strategic Business Units
(SBU).
Consumer Product Business (India)
Personal & Natural Care.
Wellness New Product.
International Business Group.
International FMCG Business.
Sundari Business.
Kaya (Branched out to form separate company Kaya Ltd. A wholly owned subsidiary of
Marico)
Kaya Skin Clinics.
Kaya Life.

INVESTMENT LOGIC:
Recession proof sector.
Good and consistent growth shown by the company over a period of time.
Inorganic approach to grow.
Strong brand and good product mix in the company portfolio.
KAYA clinic doing good business and is in high profit margin segment.

SHAREHOLDING PATTERN:

NO. OF SHARES % OF TOTAL

PROMOTER 386406520 63.45%
INSTITUTION 169636333 27.85%
GENERAL
PUBLIC 52957147 8.70%
GRAND TOTAL 609000000 100%

Promoter holding remained same for last 3 quarters.