AGM speech

Mr. Subodh Bhargava ’s SPEECH FOR THE FIFTY SEVENTH ANNUAL GENERAL MEETING

Dear Shareholders, Ladies & Gentlemen

On behalf of the Board of Directors and myself I am delighted to welcome all the shareholders to the 57th Annual General Meeting of GlaxoSmithKline Consumer Healthcare Limited

Let me first share with you the highlights of company’s performance and other significant developments during FY 15-16.

SIGNIFICANT DEVELOPMENTS

As you are aware, in March 2015, GlaxoSmithKline plc announced completion of the three-part transaction with Novartis. The company has successfully completed the integration across people, culture and brands of Novartis, making GSK world’s number 1 OTC player.

In India, your company is continuously strengthening the innovation pipeline and bringing new products to the market based on consumer insights. The company’s R&D division developed high-science based products including the new variant of Horlicks & new products like Growth+ and Cardia+.

The new Horlicks variant, with promise of immunity, addresses the nutritional needs of consumers. Packed with 2X Immuno-Nutrients, it ensures that daily consumption of two cups provides 100% RDA of immunity nutrients and thereby making the child stronger from inside and to grow taller, sharper and stronger from outside.

Horlicks Growth + is your company’s maiden foray into the super premium category. This is designed to support catch up growth in children who have fallen off the growth curve.

Horlicks Cardia+ is a breakthrough product backed by extensive scientific research. This is specifically meant for healthy adults and supports overall wellness in the area of metabolic health.

FINANCIAL

A strong consumer and product innovation focus, despite a challenging year enabled the company achieve a double digit profitable growth for the 11th consecutive year. Your Company recorded a profit growth of 19% in the financial year ending March 31, 2016. The year witnessed an increase in gross sales by 4% to Rs. 4,107 crores while profits before tax stood at Rs. 1,055 Crores compared to last year’s Rs. 889 Crores for the same period.

Your Company’s stock value has remained positive and is currently trading at Rs. 6250/-.

The health drink portfolio of GSK continues to be a market leader with 66.2% volume market share. Horlicks and Boost remained amongst the top three HFD brands in the country.

Your company remains committed to growing the category by bringing in products based on high science and innovations.

DIVIDEND

Based on company’s financial performance, the Directors have recommended for the year ended March 31, 2016 a final dividend at the rate of Rs. 70 per equity share of Rs. 10 each which is being placed for your approval at today’s meeting.

DISTRIBUTION GROWTH

GSK has been consistently growing the number of stores and its reach in the country thereby improving the distribution network. The company has increased the distribution reach by 2 Lakhs 43 Thousand outlets during FY 2015-16 and today reaches approximately 20 Thousand villages. For three years in a row, the company has been No. 1 player in the industry in terms of stores addition and store growth.

GSK’s Village Level Entrepreneur program provides livelihood to under privileged women while enhancing access of GSK products directly to homes in small villages. The program now reaches more than 1000 villages of Bihar, West Bengal and Tamil Nadu.

RESPONSIBILITY TOWARDS SOCIETY

This year the initiatives undertaken by the Company focused primarily towards disaster relief, women, children and the aged, directed in the areas of Health, Education and Livelihood.

GSK provided disaster relief support to the victims of the 2015 Chennai Floods. The company also supported multiple community and rural development focussed projects in the areas of healthcare, nutrition, vocational training, income generation and support to the elderly. The company supported 16 grass root projects in nine states across India addressing important issues such as poverty, malnutrition, support to widows and differently-abled, infant & maternal mortality, and curative healthcare, among others. The company undertook malnutrition and rural development projects focussed in Tamil Nadu and West Bengal. In line with our global commitment, we supported the World Health Organization (WHO) for eradicating Lymphatic Filariasis (elephantiasis) through Albendazole contribution.

These efforts are the real differentiators that make GSK committed to not just its own people, but community and society as a whole, thereby living its vision of do more, feel better, live longer.

ACCOLADES & RECOGNITION

In the year 2015, GSK has been ranked No 1 in the Hot Beverages Category by Brand Equity survey. Horlicks also won the Silver Pent Award for the “Chevron Graphics” on the EVO jar. GSK also featured in Forbes’ “Super 50” companies.

In 2016, GSK won the ‘Golden Peacock Environment Management Award’. The company’s Rural Campaign also won 6 awards at the 10th Annual Flame Asia Awards in 2016.

ACKNOWLEDGEMENT

I would like to recognise the efforts by the Management Team for initiating policies to encourage greater diversity and inclusion. Partnership for Prevention is another great new initiative launched to ensure preventive health measures for employees and their dependants at no cost to them.

On behalf of the Board, I take the opportunity to acknowledge the efforts, commitment and constructive cooperation of all the employees and workmen representatives in the operations of the Company.

Thanks are due to all our business associates and all other stakeholders for their continued support.

Before I conclude, on behalf of the Board of Directors of your Company, I wish to thank you all for your continued support and trust in us. This motivates us to excel in all our pursuits and constant endeavour to create value for you.

I would also like to appreciate and thank on my and Board’s behalf Mr Manoj Kumar , Managing Director and his team for their leadership, efforts, the excellent results and taking the Company to higher levels of achievement.

Thank you and best wishes.