Company History - Godfrey Phillips India

1936

- The Company was originally established and developed by Godfrey

Philips Ltd., London, a publicly owned cigarette and tobacco
manufacturer incorporated in U.K. with extensive international
operations. The Company manufacture and sell cigarettes, smoking
tobacco and cigars.

- The brands manufactured and marketed by the Company are Black &
White
Kingsize Filter, Four Square Kingsize Filter, Four Square Regular
Filter, Cavanders Navy Cut Regular, Red & White, Anand, Leader,
Cavanders Filter and Capital. In addition, the Company
manufacturers
and sells Vergin Gold and Philip's Gold Cigarette tobacco.

1967

- The Company made an arrangement with International Tobacco Co.

who
opened a factory in Northern India to manufacture on the Company's
behalf. Upon the merger of D. Macropolo & Co. Ltd., with the
Company,
International Tobacco Co. Ltd., became a subsidiary of the Company.

- The Mumbai High Court approved a Scheme of Amalgamation of

International Tobacco Co. Ltd., with the Company.

- 2,00,000 Bonus Equity shares issued in the prop. 1:2.

1968

- Philips Morris International Financial Corporation, a wholly owned

subsidiary of Philip Morris Inc., acquired full ownership of Godfrey
Phillips Ltd. Philips Morris International, one of the five
operating
companies of P. M. Inc., manufacturers and markets cigarette
products
through affiliates and licensees throughout the world.

- The trademarks assigned to the Company by Godfrey Phillips Ltd.,

include Cavanders, Abdulla, De Reszeke, Brand Master and Pay
Master.

- The Company also entered into registered user agreement and

trademarks including Four Square and North Pole. These agreements
were with subsidiaries of Godfrey Phillips Ltd., and M.P. Inc.

1970

- A Scheme of Amalgamation of D. Macropolo & Co. Ltd., with the

Company
was approved by the Mumbai High Court on 30th June, with
retrospective
effect from the close of business on 30th June, 1969.

- The Scheme of amalgamation of D. Macropolo & Co. Ltd. envisage the

issue of 83,490 No. of equity shares of Rs 10 each of the Company to
the shareholders of D. Macropolo & Co. Ltd., in the proportion of 5
shares of the Company to every share held in D. Macropolo & Co.
Ltd.

- An application was made to the RBI for their approval for eligible
for allotment of shares for non-resident shareholders in D. Macropolo
&
Legal Disclaimer, © 2007 Godfrey Phillips India Ltd.
Privacy Statement, Terms & Conditions

About Godfrey Phillips India

"We are made wise not by the recollection of our past, but by the responsibility
for our future".
- George Bernard Shaw

We at Godfrey Phillips India believe in conscious evolution. Our guiding philosophy imbibes
the thought of ‘Making a better world for a better tomorrow’. We make earnest efforts to
fulfill the expectations of our stakeholders, employees, government and the society at
large.

K. K. Modi Group

The K. K. Modi Group is part of a US $ 2.4 billion Modi Enterprises that was founded by
Rai Bahadur Gujarmal Modi in 1933. The Group spans a diverse range of businesses
which include agro-chemicals, tobacco, tea and beverages, education, entertainment,
direct selling, network marketing and gourmet restaurants. These businesses further
include steel, sugar, textiles, chemicals, tyres, computers, copiers, cosmetics,
telecommunications, entertainment, homecare, pharmaceuticals and on line lottery.

About Godfrey Phillips India

The success of Godfrey Phillips India is the result of the Company’s commitment to innovations,
enhanced operational efficiencies and adoption of internationally acclaimed business processes.
Driven to excel, innovate and win, we intend to emerge as one of the most respected Company in
the tobacco industry.

As the second largest player in the Indian cigarette industry, our annual turnover exceeds INR 1800
crores (approx. US $369.6 million). We own some of the most popular cigarette brands in the
country like Four Square,
Red and White, Jaisalmer, Cavanders and Tipper. Over the years we have also set our own
benchmarks in innovation with revolutionary brands like Stellar, the first slim cigarette and I-gen,
the first euro norm cigarette in India.

Our products are distributed over an extensive India wide network of more than 500 distributors
and 800,000 retail outlets. With the Corporate Office in Delhi, the Company has offices all across
India in over 8 locations.

Godfrey Phillips India has two major stakeholders, one of India's leading industrial houses - the K.
K. Modi Group and one of the world's largest tobacco companies, Philip Morris. The Company also
enjoys a strong backing of over 12,000 shareholders.

Vision

To become a leading tobacco player in India and beyond.

Godfrey Phillips India empowers all its people to think and act radically, stretch relentlessly and
generate path breaking ideas and strategies to propel the Company. This helps to create and build
powerful brands with unmatched service and world class processes.

Godfrey Phillips India will rapidly grow shareholder value and achieve a commanding presence
nationally while gaining a significant presence in global markets. Godfrey Phillips India will be
amongst the most respected companies in India and in the tobacco industry worldwide.

Values

• Passion for winning.

• Innovation through Intrapreneurship.
• Winning trust internally and externally.
• Global mindset.
• Socially responsible corporate citizen.

Godfrey Phillips India is a Company committed to innovation and continuous improvement which
can be seen in the Company employees; from the top management to the factory level.

Godfrey Phillips India’s management represents the optimum mix of professionalism, knowledge
and experience. They are the guardians to the Company, and protectors of the shareholder’s
interest.

Top Management and Executive Committee

 K. K. Modi (Chairman, K. K. Modi Group of Companies)

Ram Poddar (Chief Mentor, K. K. Modi Group of Companies)

S. Seru (CEO - Domestic)

A. R. Anand (CEO - International)

Ajit Suryanarayan (EVP - New Product Development)

Arun Kumar (EVP - HR)

Bhisham Wadhera (EVP – Sales)

Nita Kapoor (EVP – Marketing & Corporate Affairs)

Pradip Mittra (EVP - Operations)

R. N. Agarwal (CFO)

S. R. Balasubramanian (EVP – IT & Corporate Development)

Partners

Philip Morris

Altria Group Inc is the parent Company of Philip Morris International, Philip Morris USA and Philip
Morris Capital Corporation. Altria Group owns 100% of the outstanding stock of Philip Morris USA,
Philip Morris International and Philip Morris Capital Corporation.

Philip Morris, the owner of some of the world's most respected brands including Marlboro, is one of
the largest shareholders in Godfrey Phillips India and has an agreement with the Company to
provide technological services and assistance in all areas of business.

In 1968 Philip Morris International Finance Corporation, a wholly owned subsidiary of Philip Morris
Inc., U.S.A. acquired full ownership of Godfrey Phillips Ltd., London, U.K., which was the Holding
Company of Godfrey Phillips India Ltd. till the issue of shares to the Indian public during 1975. As a
result of acquisition of Godfrey Phillips Ltd., London, U.K. as above, Philip Morris Inc. through its
wholly owned subsidiary, Philip Morris International Finance Corporation became the Holding
Company of Godfrey Phillips India Ltd. After the public issue in 1975, offer for sale to Indian public
in 1979 and a rights issue in 1981 the shareholding of Philip Morris International Finance
Corporation in Godfrey Phillips India Ltd. came down to the present level of 35.93%.

Philip Morris Inc. joined hands with the K. K. Modi Group in 1979.

For more information on Philip Morris and related companies, please visit:

www.altria.com
www.pmusa.com
www.philipmorrisinternational.com

Altadis

In December 2002, Godfrey Phillips India commenced as the exclusive distributor for the brands of
the world's largest cigar manufacturer, Altadis in India, Nepal and Sri Lanka.

Altadis the world’s largest cigar manufacturer has three major areas of activity, which are blond and
dark cigarettes, distribution and cigars. Blond and dark cigarettes are manufactured and marketed
by the group itself, under well-established brand names in France and Spain. It is a market leader in
its segment.

Altadis's value-added logistical expertise in tobacco and consumer-product services is extended to

retailers to new sectors. Altadis ranks 3rd in Western Europe in cigarettes and 1st in the world in
cigars.

Altadis group is the undisputed leader in three of the largest cigar markets namely United States,
Spain and France.

Some of the well known cigar brands of the Company are: Farias, Fleur de Savane, Phillies, Dutch
Master, VegaFina, Pleiades, Don Diego, Longchamp, Antonioy Cleopatra, Santa Damiana,
Meccarillos, Cruzeros, Montecristo, Partagás, Cohiba, La Gloria Cubana, H. Upmann, Picaduros,
Ducados Mini, Van Holden, Entrefinos, Tampa Nugget, Hav-a-Tampa, Backwoods and yotras marcas.

The Cigar Division of the Company consolidated its No.1 position worldwide in 2002, with a market
share of nearly 25%, a sales volume of around 3.2 billion units.

For more information on Altadis, please visit us at: www.altadis.com

Diverse Businesses

Confectionary

Tea

Cosmetics
 Retail

Funda Mint - "Mint with a twist": India has extremely diverse taste requirements. Gujaratis love a
sweet touch to their foods, whereas people from Andhra Pradesh prefer their food to be extremely
spicy. On this thought, Funda-Mint took birth to provide the Indian consumer with a mint that refreshes
them instantly and ensures it caters to India’s varied taste. A mint that is modern but is essentially "Dil
Se Desi".

Currently available in 2 flavours – Saunf Fresh & Double Thanda. While Double Thanda provides you
that extra strong mint to freshen your breath in an instant, Saunf Fresh gives you minty freshness in a
unique flavour that Indians are used to having after a meal.

India > Diverse Businesses > Funda Mint

Tea

Tea City, a diversified offering under the Godfrey Phillips India

banner, has seen a progression in all spheres including dynamic
marketing initiatives, packaging makeovers, effective Sales and
distribution, technology and product up-gradations, to define a
more contemporary culture and mission for Tea City.

With a bouquet of brands that cater to all segments of

consumers, Tea City has Swan Lake for the very privileged and
elite, Symphony, the stylish tea for the contemporary and other
popular brands like Super Cup, Super Cup Duet and Rangoli for
the consumers who know good value for their money. Available in
all pack sizes to meet the requirements, Tea City brands are
leading to a significant contribution to the Company.

Cosmetics
ColorBar

ColorBar is a brand from USA and is marketed and distributed by ColorBar Cosmetics Pvt. Ltd., a
part of the
K. K Modi Group of Companies.

ColorBar has been developed with the philosophy to provide the customers with innovative high
quality products at attractive prices and widest range of colors. Extensive research and study on the
needs and liking of the consumers globally has gone into creating the packaging for the products.

All formulations were put through the litmus test as various R&D labs in Europe and are at par with
any leading brand. The products have premium international formulation and the range consists of
lip sticks, lip glosses, retractable lip liners, long stay lipsticks, kajal etc.

Retail

24X7

24X7 Stores are 24 hour convenience chain of stores located in the central areas of the city of Delhi
offering wide variety of products and services to customers.

Convenience being the operative word, the stores caters to the new emerging consumer with a
changing lifestyle. Providing international shopping experience, the store stocks packaged foods and
beverages, personal and home care items, has a pharmacy and other service counters where one
can pay bills or courier documents.

A concept rising to the challenges and the demands of the discerning consumer, 24X7 celebrates as
it moves ahead with plans to open many more stores.

If the success of a Company is judged by the satisfaction level of its employees, then the economic
stability of a Company is judged by the satisfaction and belief levels of its shareholders.

It is their belief and faith in the system, their passion about the organization that inspires the
Company to sail through difficult period and face challenges. Godfrey Phillips India as a Company is
dedicated to the interests of all those who have invested their faith in it.

The Company strives to maximize growth in revenue while equally managing the cost of doing
business. Thereby, it continuously seeks to create greater value for the shareholders.

Annual Reports
 • Annual Report of 2007-2008
• Annual Report of 2006-2007
• Annual Report of 2005-2006

Financial results for the quarter ended

• December 31, 2008

• September 30, 2008

• June 30, 2008
• March 31, 2008
• December 31, 2007
• September 30, 2007
• June 30, 2007
• March 31, 2007
• December 31, 2006
• September 30, 2006
• June 30, 2006
• March 31, 2006

Shareholder pattern for quarter ending

• December 31, 2008

• September 30, 2008
• June 30, 2008
• March 31, 2008
• December 31, 2007
• September 30, 2007
• June 30, 2007
• March 31, 2007
• December 31, 2006
• September 30, 2006
• June 30, 2006
• March 31, 2006

Archives>>

Investor Information

In terms of a circular dated 22nd January, 2007 of Securities and Exchange Board of India, the
Company has decided to designate an exclusive Email Id of the Grievance Redressal Division at the
office of its Registrars and Transfer Agent, M/s Sharepro Services (India) Pvt. Ltd. as under:

Mr. N. Narayanan
Sharepro Services (India) Pvt. Ltd.
Address:
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Cardinal Gracious Road,
Chakala, Andheri (E),
Mumbai – 400 099

Tel: +91-022-28517377, 28215168

Email: sharepro@vsnl.com

All shareholders/investors desirous of registering their grievances for redressal may please
accordingly contact the Registrars and Transfer Agent of the Company at their address as given
above.

Stock Quotes
GODFREY PHILLIPS INDIA LT

(NSE: GODFRYPHL.NS)

Last Trade: 762.10

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Performance Indices
Production Facilities

With a rich heritage of over 60 years in the industry, Godfrey Phillips India has also incorporated the
latest technology to deliver products of the finest quality in the market. Driven by innovation and
speed to market, the two manufacturing facilities in Ghaziabad (near Delhi) and Andheri (Mumbai),
are equipped with state-of-the-art equipment and incorporate best practices like TQM, Haichi-Ban,
5S, Kaizen Teian etc. The facilities comply with international quality standards like ISO 9001:2000
and ISO 14000 and it is a matter of pride for us that our high standards of environment-friendly
manufacturing was brought about entirely due to the recommendations of motivated factory
workers who have also established an industry record by winning the INSAAN awards (given for the
best suggestions made by a factory worker in the year) for the past 11 years running.

Godfrey Phillips India views its R&D capabilities as a vital component of its business strategy that
provides a long term edge over its competition. Located along with the production facilities, the R&D
extends its competencies and together they strive to implement the best in the market.

Code of Business Conduct

Preamble

In terms of the revised Clause 49 of the Listing Agreement with the Stock Exchanges, the Board of
Directors are required to lay down a code of conduct for all its Board members as well as senior
management one level below the executive directors including all functional heads ( a list of present
directors and senior management is attached). This code of conduct has accordingly been approved
by the Board of Directors by a resolution passed by circulation which will be effective from 1st
January, 2006 and the same shall be uploaded on Company’s website for information of general
public.

Applicability

This code is applicable to the Board Members and Senior Management who are members of its core
management team one level below the executive directors including all functional heads (hereinafter
collectively referred to as “Employee(s)”). All employees must read and understand this code and
ensure to abide by it in their day-to-day activities.

Values and Expected Behaviors

1. Passion for winning

o Constantly thrive in bettering the competition in every field.
o Have a positive attitude, and restlessly seek and capture new opportunities.

2. Innovation through learning and entrepreneurship

o Be a world class innovative organization by continually developing and successfully
launching new brands.
o Encourage risk taking and learning, and create conditions for empowerment with
accountability.
 3. Winning trust internally and externally
o Build enduring relationships with all stakeholders including employees,
shareholders and trade/alliance partners, and honour all commitments.
o Encourage transparent and fair systems and policies.

4. Global mindset
o Constantly benchmark in all areas against the best globally, and strive to exceed
those benchmarks.
o Develop opportunities through a global network of distributors and alliances.

5. Socially responsible corporate citizen

o Ensure the compliance of all applicable laws and the highest standards of corporate
governance.
o Support and encourage employees to actively participate in identified social and
environmental concerns.

In addition to the above values and expected behaviors, the business will be conducted in such a
manner that it ensures the following :-

1. Safety in Worksplace
The safety of people in the workplace is a primary concern of the Company. Each of us must
comply with all applicable health and safety policies. We maintain compliance with all
applicable laws to help maintain secure and healthy work surroundings. The employees will
also ensure that there is no sexual harassment at the work place and in case any allegation
is made, it is immediately dealt with in accordance with the guidelines laid down by the
Supreme Court.

2. Conflicts of Interest
Each of us has a responsibility to the Company, our stockholders and each other. Although
this duty does not prevent us from engaging in personal transactions and investments, it
does demand that we avoid situations where a conflict of interest might occur or appear to
occur.

All employees must avoid situations involving actual or potential conflict of interest.
Personal involvement with a competitor, supplier, or subordinate employee of the Company,
which impairs an employee’s ability to exercise good judgment on behalf of the Company,
creates an actual or potential conflict of interest.

An employee involved in any of the types of relationships or situations described in this

policy should immediately and fully disclose the relevant circumstances to his or her
immediate supervisor, or any other appropriate supervisor, for a determination about
whether a potential or actual conflict exists. If an actual or potential conflict is determined,
the Company may take whatever corrective action appears appropriate according to the
circumstances. Failure to disclose facts shall constitute grounds for disciplinary actions.

3. Protecting the Company’s Confidential Information

 The Company’s confidential information is a valuable asset. This information is the property
of the Company and may be protected by patent, trademark, copyright and trade secret
laws. All confidential information must be used for Company business purposes only. Every
employee, agent and contractor must safeguard it. This responsibility includes not
disclosing the Company’s confidential information such as information regarding the
Company services or business over the internet. You are also responsible for properly
labeling any and all documentation shared with or correspondence sent to the Company’s
Legal Department or outside counsel as “Strictly Confidential”. This responsibility includes
the safeguarding,securing and proper disposal of confidential information in accordance
with the Company’s policy on maintaining and managing records. This obligation extends to
confidential information of third parties, which the Company’s has rightfully received under
Non-Disclosure Agreements.

4. Obligations Under Securities Laws “Insider” Trading

In the normal course of business, officers, directors, employees, agents, contractors and
consultants of the Company may come into possession of significant, price sensitive
information. This information is the property of the Company. You may not profit from it by
buying or selling securities yourself. Further you are not to tip others to enable them to
profit or for them to profit on your behalf. The purpose of this policy is both to inform you of
your legal responsibilities and to make clear to you that the misuse of price sensitive
information is contrary to Company policy and applicable laws.

Insider trading rules are strictly enforced, even in instances when the financial transaction
seems small.

For more details, you should read the Company’s Insider Trading Rules carefully, paying
particular attention to the specific policies and the potential criminal and civil liability and/or
disciplinary action for insider trading violations. You should comply with the Company’s
Insider Trading Rules, follow the pre-clearance procedures for trading and trade only during
a trading window.

5. Use of Company Assets

We all are perceived as Trustees of Company’s properties, funds and other assets. We owe
fiduciary duty to each stakeholder, as their agent, for protecting the Company’s assets. We,
therefore, must safeguard and protect the company’s assets against any misappropriation,
loss, damage, theft, etc. by putting in place proper internal control systems and procedures
and effectively insuring the same against any probable fire, burglary, fidelity and any other
risk.

6. Maintaining and Managing Records

The purpose of this policy is to set forth and convey the Company’s business and legal
requirements in managing records, including all recorded information regardless of medium
or characteristics. Records include paper documents, CDs, computer hard disks, e-mail,
floppy disks, microfiche, microfilm or all other media. The Company is required by
applicable laws, rules and regulations to retain certain records and to follow specific
guidelines in managing its records. Civil and criminal penalties for failure to comply with
 such guidelines can be severe for employees, agents, contractors and the Company, and
failure to comply with such guidelines may subject the employee, agent or contractor to
disciplinary action, up to and including termination of employment or business relationship.

7. Conduct ourselves in a manner that reflects credit to the company

All of us are expected to conduct ourselves, both on and off-duty, in a manner that reflects
credit to the Company. The sum total of our personal attitude and behavior has a bearing
on the standing of the Company and the way in which it is perceived within the organization
and by the public at large.

8. Equal opportunity Employer

The Company expects each employee to ensure that only meritocracy is rewarded in the
Company and that there is no discrimination based on sex, religion, creed, colour or origin.

Compliance with the Code

As employees of Company, we will uphold and promote the principles of this code

The future of the organization depends on both technical and ethical excellence. Not only is it
important for employees to adhere to the principles expressed in this Code, each employee should
encourage and support adherence by other employees.

Treat violation of this code as inconsistent association with the organization

Adherence of professionals to a code of ethics is largely a voluntary matter. However, if any of us do

not follow this code by engaging in professional misconduct, the matter would be reviewed by the
Board and its decision shall be final. The Company reserves the right to take appropriate action
against the guilty employee.

Interpretation of Code

Any question or interpretation under this Code of Business Conduct will be handled by the Board or
any person/committee authorized by the Board of Directors of the Company and their decision shall
be final and binding on all concerned.

Miscellaneous

Continual updation of code

This code is subject to continuous review and updation in line with any changes in law, changes in
Company’s philosophy, vision, business plans or otherwise as may be deemed necessary by the
Board.

Directors
(A) Executive & Not Independent Directors

1. Mr. K. K. Modi
2. Mr. S. V. Shanbhag
3. Mr. Lalit Kumar Modi
4. Mr. Samir Kumar Modi

(B) Non-Executive & Independent Directors

1. Mr. R. A. Shah
2. Mr. Lalit BHasin
3. Mr. Anup N. Kothari
4. Mr. C. M. Maniar
5. Mr. O. P. Vaish

Senior Management

Mr. S. Seru Chief Executive (Domestic Operations)

Mr. A.R. Anand Chief Executive (International Operations)
Mr. R.N. Agarwal Chief Finance Officer (Finance & Materials)
Mr. P.A. Mittra Executive Vice President (Operations)
Mr. Arun Kumar Executive Vice President (HR & Administration)
Mr. Ajit Suryanarayan Executive Vice President (New Product Development)
Mr. Bhisham Wadhera Executive Vice President (Sales)
Ms. Nita Kapoor Executive Vice President (Marketing & Corporate Affairs)
Mr. S. R. Executive Vice President (Information Technology & Corporate
Balasubramanian Development)
Mr. M.M. Yusuff Sr. Vice President (Leaf)
Mr. Sanjay Gupta Company Secretary
Brands
Brands

Godfrey Phillips India is best known for its leading brands like Four Square, Red & White, Jaisalmer
and Cavanders along with innovative brands such as Stellar, I Gen and Tipper.
 Cigarette
Brands
Stellar: The first slim cigarette to be launched in India. It has been specially
engineered to deliver low nicotine without a compromise in taste and
flavour. It is available in an elegant slim shaped 10’s and 20’s pack, aimed at
the cognitive consumer who wants to be progressive and responsible in his
habits and lifestyle.

Igen: India’s 1st Euro Norm 10-1-10 cigarette holds the promise of an
advanced cigarette quality and immense style. This progressive brand,
known for its innovation, has also introduced India’s 1st King size 5’s pack, a
convenient and stylish pack format for the young adult of today.

Four Square: The flagship brand of Godfrey Phillips, Four Square is the
market leader in the majority of its operating markets. The vibrant brand
continues to delight its loyal consumers through constant innovation and an
enriching product experience.

Jaisalmer: A Premium King Size brand. It is a luxurious blend of finest sun

dried Virginia tobaccos which deliver a smooth mellow flavour.

Red & White Flake: One of the most renowned brand names of the nation,
it has been rated in the top 50 brands in the FMCG sector. It is continuing to
build upon its iconic stature.

Northpole: Launched in the year 1958 North Pole is the largest selling
menthol cigarette in India. North Pole has recently the Golden Peacock
commendation Award for innovation in packaging.
Diverse Businesses

Confectionary

Funda Mint - "Mint with a twist": India has extremely diverse

taste requirements. Gujaratis love a sweet touch to their foods,
whereas people from Andhra Pradesh prefer their food to be
extremely spicy. On this thought, Funda-Mint took birth to
provide the Indian consumer with a mint that refreshes them
instantly and ensures it caters to India’s varied taste. A mint that
is modern but is essentially "Dil Se Desi".

Currently available in 2 flavours – Saunf Fresh & Double Thanda.

While Double Thanda provides you that extra strong mint to
freshen your breath in an instant, Saunf Fresh gives you minty
freshness in a unique flavour that Indians are used to having
after a meal.

Tea

Tea City, a diversified offering under the Godfrey Phillips India

banner, has seen a progression in all spheres including dynamic
marketing initiatives, packaging makeovers, effective Sales and
distribution, technology and product up-gradations, to define a
more contemporary culture and mission for Tea City.

With a bouquet of brands that cater to all segments of

consumers, Tea City has Swan Lake for the very privileged and
elite, Symphony, the stylish tea for the contemporary and other
popular brands like Super Cup, Super Cup Duet and Rangoli for
the consumers who know good value for their money. Available in
all pack sizes to meet the requirements, Tea City brands are
leading to a significant contribution to the Company.
Cosmetics

ColorBar is a brand from USA and is marketed and distributed

by ColorBar Cosmetics Pvt. Ltd., a part of the
K. K Modi Group of Companies.

ColorBar has been developed with the philosophy to provide the

customers with innovative high quality products at attractive
prices and widest range of colors. Extensive research and study
on the needs and liking of the consumers globally has gone into
creating the packaging for the products.

All formulations were put through the litmus test as various R&D
labs in Europe and are at par with any leading brand. The
products have premium international formulation and the range
consists of lip sticks, lip glosses, retractable lip liners, long stay
lipsticks, kajal etc.

Retail

24X7 Stores are 24 hour convenience chain of stores located in

the central areas of the city of Delhi offering wide variety of
products and services to customers.

Convenience being the operative word, the stores caters to the

new emerging consumer with a changing lifestyle. Providing
international shopping experience, the store stocks packaged
foods and beverages, personal and home care items, has a
pharmacy and other service counters where one can pay bills or
courier documents.

A concept rising to the challenges and the demands of the

discerning consumer, 24X7 celebrates as it moves ahead with
plans to open many more stores.
International Division
Striving towards it vision to become a leading tobacco player in India and beyond, Godfrey Phillips
India has forayed into international markets with successful new business ventures.

Today, Godfrey Phillips India is partnering with some of the top most players in the international
tobacco industry in marketing their products and providing various professional and expert services
which include contract manufacturing, consultancy services, cut tobacco and smoke analysis.

Already present in the Middle East, West Africa, South East Africa and South East Asia, Godfrey
Phillips India wishes to strengthen its position as an international player by entering new markets.

Understanding the needs of the India consumer, the International Division also took initiative in
recognizing the market for the cigar segment and providing for it. Today, Godfrey Phillips India can
claim to be the first and only tobacco Company to organize the fragmented cigar market in India
and secure its position as the market leader in the cigar distribution. The success can be measured
by the exclusive distribution agreements Godfrey Phillips India has with Altadis, USA who are the
world’s largest cigar Company. The other coups are Oettinger Davidoff International of Switzerland,
Promocigar from Cuba, Villiger of Switzerland, Henri Wintermann from Holland and Cibahia from
Brazil. With Davidoff – The Good Life cigars, Don Diego, Santa Damiana, Phillies, Hav-a-Tampa,
Dutch Treats etc. receiving enthusiastic response from cigar aficionados, has encouraged us to open
an exclusive cigar boutique at Hotel Park Plaza in Gurgaon where one can find the choicest of super
luxury cigars and cigar accessories.

With the vision of K. K. Modi, President and Amrish R. Anand, CEO - International Division at the
helm of it, the Company hopes to leave its footprints on the world map.

For further information on Brands, please download the e-Brochure.

Contact Us for Trade Enquiry

International Business Division

Godfrey Phillips India Ltd.,
41, Community Centre,
Friends Colony,
New Delhi - 110 025, India
Tel: +91 11 2683 2155, +91 11 2683 6468
Fax: +91 11 2684 0775, +91 11 2683 5803
E-mail: exportsdiv-gpi@modi.com

Corporate Social Responsibility

Corporate Social Responsibility

The World Business Council for Sustainable Development defines CSR as "…the continuing
commitment by business to behave ethically and contribute to economic development while
improving the quality of life of the workforce and their families as well as of the local community
and society at large.”

We, at Godfrey Phillips India not only recognize the importance of being a responsible corporate
citizen but our identity as a cigarette manufacturing Company and our success in it imposes even a
greater responsibility upon us to take it further. Being cognizant of this fact, we strive to be active
and committed participants in enhancing the community we work, live and do business in.

Besides strong internal responsible marketing policies that govern all our actions, we have
undertaken several initiatives like Godfrey Phillips Bravery Awards, Blood Donation Drive, Women
Empowerment projects,
Godfrey Phillips WHITE, various GAP (Good Agricultural Practices) and support programs for tobacco
farmers, environmental management besides many philanthropic and charitable gestures which is a
part of the Company culture.

Godfrey Phillips Bravery

There is a brave heart in every individual.

Godfrey Phillips India salutes the extraordinary courage exhibited by ordinary people in selflessly
protecting and saving others lives.

Started in 1990, Godfrey Phillips Bravery Award is the only award of its kind instituted by a
corporate house that recognises the acts of common people; irrespective of their age, gender or
faith. Over the years, the Award has grown both in terms of stature and eminence. And now with
Preity Zinta as the Bravery Ambassador, the movement takes the message of bravery to the masses
further increasing their involvement and widening its scope with two initiatives - Blood Donation and
Women Empowerment.

Godfrey Phillips Blood Donation Drive aims to educate, create awareness and sensitize the
public on voluntary blood donation and on safe blood for all. Voluntary blood donation is bravery as
it is selfless like other acts of Bravery and it saves lives. Godfrey Phillips Blood Donation Drive aims
to bring to light the issues, motivate and encourage participation, and most important of all, call
upon the conscience of the people to be selfless and caring towards others, thus creating an evolved
and compassionate society.

The second initiative – Women Empowerment Project is aimed at making women economically
self-sufficient and independent by providing them with vocational skills and training. This drive will
help promote gender equality and redress power imbalances. Reputed NGO's like Charities Aids
Foundation, Navjyoti, Vidya and others have joined hands with Godfrey Phillips India in this
endeavour.

Godfrey Phillips White

Godfrey Phillips India believes in creating and fostering harmony by respecting the choices
individuals make i.e. to smoke or not to smoke. As the popular adage states ‘with freedom comes
responsibility’, the view is echoed in the essence of WHITE - 'We Honour the Importance of
Tobacco Etiquette', responsible smoking programme by Godfrey Phillips India, a first of its kind
initiative in India.

The key focus is on cultivating smoking etiquette among smokers - to respect non-smokers' space.
Initiated internally, this is something every member of the Godfrey Phillips India family adheres to.
As a WHITE ambassador the individual actively propagates responsible smoking behaviour because
as a 'Socially Responsible Corporate Citizen' Godfrey Phillips India believes in setting examples by
practicing the change that one wants others to emulate.

Social Accountability

Social Accountability - SA 8000:2001

Our production facility M/s International Tobacco Company Limited, Ghaziabad has obtained
the
Social Accountability Certification, SA 8000: 2001 in 2006.

This certification is based on the Audit conducted by DNV as per guidelines given by
Social Accountability International. The Company had appointed Chess Management in April 2006 to
conduct a Systems Audit to check the Company complying with its Statutory Obligations which was
successful.

M/s International Tobacco Company is the second cigarette manufacturing Company in the world to
have been accredited with Social Accountability Certification.

Godfrey Phillips India is proud to extend their values of being Socially Responsible Corporate Citizen
to all aspects of their business.

Health Safety And Environmental Policy

Godfrey Phillips India Limited, Andheri Factory, is committed to work towards continually reducing risk of injury, occupa
and environmental impact of its operation.

As a part of this commitment we would work towards improving workplace safety, quality of air emission, maximis
treated water and conservation of resources.

We shall comply with applicable legal and other requirements towards health, safety & environment and strive toward
of incidences and prevention of pollution.

Life at Godfrey Phillips India

Life at Godfrey Phillips India

Work at Godfrey Phillips India

At Godfrey Phillips India, we firmly believe that good business leaders create, articulate and drive
the vision. We want to create these future leaders. This belief translates into the strong emphasis
we place on extensive employee training, focused R&D and higher efficiencies in the manufacturing
processes.

Such close attention to the bedrock of our enterprise has brought us to a position where, today, we
are reaping the benefits of making better products, enjoying sustained growth and are poised to
realize all our larger dreams.

The first stage in the making of a professional is the making of an individual, and individual
development like the development of leadership, is an ongoing process.

Godfrey Phillips India has, therefore, put in place a series of programmes and important
development schedules that enable all our employees to fully realize their potential. The Company
deploys many tools and programmes such as Leadership Development, Coaching and Mentoring,
Development, amongst many others, to assist managers in developing new competencies.

Godfrey Phillips India holds sustained employee satisfaction surveys including HR programmes
alignment, not just to gauge employee satisfaction levels, but also to involve employees in the
process of deciding and implementing change, engaging the individual line managers to implement
change processes to enhance employee satisfaction level.

To take on the challenges of the future, the Company has also taken initiatives for continuous
improvement in all its business processes and operating areas.

Under the Six Sigma initiative, many projects across the organizations have already been
successfully concluded with major contributions to Operations, Sales, Commercial, Leaf and
Marketing. The Company has additionally trained and certified large number of black belts and
extraordinary number of green belts.

It is also worthy of mention that TPM processes like Kaizen, 5S, Haichi ban etc. have long become a
part of the organizational processes.
Godfrey Phillips India believes that greater profits bring greater responsibility upon the Company. As
a leading cigarette manufacturer, our responsibility does not end at just reaching out to our
customers; it extends in making them responsible consumers. With this in mind we have
implemented WHITE – ‘We Honor the Importance of Tobacco Etiquette’. It is an internal programme
presently because we believe that we need to set example by practicing the change we hope to
bring.

Godfrey Phillips Bravery, our key social initiative, is an ode to civilian bravery. Awarding the brave
since 1990, it has metamorphosed into a national movement wherein initiatives like Blood Donation
and Women Empowerment have been added to make a difference to society. Every member of the
Godfrey Phillips family lends his support to these initiatives.

Culture at Godfrey Phillips India

Godfrey Phillips India differentiates itself through continuous innovation and a commanding
presence in both domestic and the global market.

It empowers its people to think and act radically, stretch relentlessly and generate path breaking
ideas and strategies to propel the Company.

The Company boasts of a culture of sharing knowledge, openness to change, recognizing and
celebrating success, creating conditions for empowerment and growth.

Come be a part of the vibrant, young, fun-filled and dynamic environment driven by a unifying spirit
of the "Godfrey Phillips Family".

Fun at Godfrey Phillips India

The relaxed, open, sharing and youthful atmosphere of Godfrey Phillips India ensures that everyone
has fun at work and feels like a part of the Godfrey Phillips family. Many informal activities in the
office like get-togethers and birthdays, Diwali, Christmas celebrations are held along with regular
cricket matches and picnics with lots of fun, food and games for the families.

Achievements

• Won Golden Peacock Award 2007 for excellence in Product Innovation category
 for Four Square.
• Tipper won Golden Peacock Award for the best product innovation in the year
2003 and then again in 2006 for innovative product and service. It has also won
the Silver medal at the Monde Selection Brussels, World Selection of Quality 2006.
• The Indian National Suggestion Schemes' Association (INSAAN) presented awards
to Andheri factory for its best suggestions/ideas during the various convention
held on different topics and places for the record 11th consecutive year in a row.
• The Guldhar factory won The 'Greentech Environment Excellence Awards' and
Greentech Safety Awards', in the year 2006. These awards are the most coveted
awards in corporate world for outstanding achievements in the field of
environment management.
• The pack design of Jaisalmer, the premium King Size cigarette of the Company,
won the coveted PFFCA (Paper, Film & Foil Converters Association) Star Award,
felicitating the pack for its excellence in design, development and creativity in
packaging.

• North Pole has also won the Golden Peacock award for innovative packaging in
2005.

Media Centre

Press Kit

Press Release

Recent News

Press Kit

Godfrey Phillips India is the second largest player in the Indian cigarette industry with an annual
turnover of over INR 1800 crores (approx. US $369.6 million). Incorporated in India in 1936, the
Company has two major stakeholders, the K. K. Modi Group and Philip Morris, USA and over 12,000
shareholders in the country.

Established in London in 1844, by Mr. Godfrey Phillips, a cigar manufacturer, Godfrey Phillips India
was incorporated as a Private Ltd. Co. in 1936. Over subsequent decades, Godfrey Phillips India
evolved from being purely a manufacturing Company to a sought-after tobacco marketing brand.
1968 was a landmark year with
Godfrey Phillips India becoming an affiliate of international tobacco giant, Philip Morris. In 1973
Godfrey Phillips India, successfully launched Four Square Kings, India's first King Size filter cigarette
and in 1979, the K. K. Modi Group took over the management of Godfrey Phillips India with a
substantial financial stake.
Vision

To become a leading tobacco player in India and beyond.

Key Brands

Godfrey Phillips India owns some of the most popular and premium cigarette brands in the country
like Four Square, Red & White, Jaisalmer, Cavanders and Tipper. Recent introductions include
targeted and innovative brands like Stellar, the first slim cigarette and I Gen, the first euro norm
cigarette in India.

The Godfrey Phillips India distribution network comprises of 520 exclusive distributors and over
800,000 retail outlets.

Industry Recognition

Tipper received the coveted Golden Peacock Award for the best product innovation in the year 2003
and then again in 2006 for innovative product and service. North Pole has won the Golden Peacock
award for innovative packaging in 2005. It has also won the Silver medal at the Monde Selection
Brussels, World Selection of Quality 2006. Year 2008 saw Golden Peacock Award go to Four Square
for innovative BOPP lamination.

Social Commitment

The organization has always been grounded in a strong sense of social responsibility and has
undertaken several initiatives to this end. The Godfrey Phillips Bravery Awards since its inception in
1990 has awarded over 1000 civilians in India. The Bravery Awards has since then evolved to
include two initiatives, Blood Donation Drive and Women Empowerment through financial
independence. WHITE, an acronym for We Honour the Importance of Tobacco Etiquette – is an
innovative CSR programme for responsible smoking and is one of the first to be introduced in India.
WHITE is currently an internal campaign as Godfrey Phillips believes in walking the talk.

Recent News

Headlines Publications Edition Date

Funda-Mint from Godfrey Samachar Jagat Jaipur 07/04/2008

Rajasthan Ahmedabad, Delhi,

Mouth Freshner 07/04/2008
Patrika Kolkata

Business Kolkata, Delhi,

Godfrey Phillips lends a helping hand 12/02/2008
Standard Mumbai

Rising job refusals put headhunters in

Mint-Mumbai Mumbai 12/02/2008
a bind
Other Topics
» Latest Quarterly Result
» Annual Report : FY 2007-2008
» Tobacco in India
» Machine User Club
Godfrey Phillips India and Villiger tie up for distributing
cigars news

01 September 2007

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Hyderabad: Godfrey Phillips India has tied up with Swiss cigar

maker Villiger for distributing the latter''s cigars in India.

The offerings under the tie-up would address the mid-priced segment of the cigar market,
and would help fill the space in Godfrey Phillips cigar portfolio.

Godfrey Phillips is a Rs1,600-crore company that controls 65 per cent of the cigar market
in India. Prices of the cigars it offers range from Rs5 to Rs1,540. The Villiger cigars would
be priced between Rs10 and Rs120, which puts the target market at middle class cigar
smokers.

Over the long-term, Godfrey Phillips plans to have a cigar in every pricing segment in the
Indian market. For Villiger, the alliance is its way of entering the Indian market, as it is
already present in other Asian markets such as China and Japan. Villiger plans to leverage
 About Godfrey Phillips India
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Marketing strategy of ITC for tobacco
WHO wants a ban on all tobacco
advertising to protect youth?
May 30th, 2008 - 8:14 pm ICT by admin - Send to a friend:

Geneva, May 30 (ANI): The World Health Organization (WHO) today urged
governments to protect the world’s 1.8 billion young people by imposing a ban on all
tobacco advertising, promotion and sponsorship.
The WHO call to action comes in advance of World No Tobacco Day (May 31). This
year’ s campaign focuses on the multi-billion dollar efforts of tobacco companies to
attract young people to its addictive products through sophisticated marketing.
Recent studies prove that the more young people are exposed to tobacco advertising, the
more likely they are to start smoking. Despite this, only five percent of the world’s
population is covered by comprehensive bans on tobacco advertising, promotion and
sponsorship.
Tobacco companies, meanwhile, continue targeting young people by falsely associating
use of tobacco products with qualities such as glamour, energy and sex appeal.
In order to survive, the tobacco industry needs to replace those who quit or die with new
young consumers,” said WHO Director-General, Margaret Chan.
“It does this by creating a complex tobacco marketing net that ensnares millions of young
people worldwide, with potentially devastating health consequences. A ban on all tobacco
advertising, promotion and sponsorship is a powerful tool we can use to protect the
world’s youth, the Director-General added.
Since most people start smoking before the age of 18, and almost a quarter of those
before the age of 10, tobacco companies market their products wherever youth can be
easily accessed in the movies, on the Internet, in fashion magazines and at music and
sports venues.
In a WHO world wide school-based study of 13-15 year-olds, more than 55 percent of
students reported seeing advertisements for cigarettes on billboards in the previous
month, while 20% owned an item with a cigarette brand logo on it.
But it is the developing world, home to more than 80 percent of the world’s youth, which
is most aggressively targeted by tobacco companies. Young women and girls are
particularly at risk, with tobacco companies seeking to weaken cultural opposition to
their products in countries where women have traditionally not used tobacco.
The tobacco industry employs predatory marketing strategies to get young people hooked
to their addictive drug,” said Dr Douglas Bettcher, Director of WHO’s Tobacco Free
Initiative.
“But comprehensive advertising bans do work, reducing tobacco consumption by up to
16. (ANI)

Background: Despite a recent surge in tobacco advertising and the recent advertising ban (pending
enforcement at the time of this study), there are few studies describing current cigarette marketing in India.
This study sought to assess cigarette companies’ marketing strategies in Mumbai, India.

Methods: A two week field study was conducted in Mumbai in September 2003, observing, documenting,
and collecting cigarette advertising on billboards, storefronts and at point of sale along two major
thoroughfares, and performing a content analysis of news, film industry, and women’s magazines and three
newspapers.

Results: Cigarette advertising was ubiquitous in the environment, present in news and in film magazines,
but not in women’s magazines or the newspapers. The four major advertising campaigns all associated
smoking with aspiration; the premium brands targeting the higher socioeconomic status market utilised
tangible images of westernisation and affluence whereas the "bingo" (low priced) segment advertisements
invited smokers to belong to a league of their own and "rise to the taste" using intangible images. Women
were not depicted smoking, but were present in cigarette advertisements—for example, a woman almost
always accompanied a man in "the man with the smooth edge" Four Square campaign. Advertisements and
product placements at low heights and next to candies at point of sale were easily accessible by children. In
view of the iminent enforcement of the ban on tobacco advertisements, cigarette companies are increasing
advertising for the existing brand images, launching brand extensions, and brand stretching.

Conclusion: Cigarette companies have developed sophisticated campaigns targeting men, women, and
children in different socioeconomic groups. Many of these strategies circumvent the Indian tobacco
advertising ban. Understanding these marketing strategies is critical to mimimise the exploitation of
loopholes in tobacco control legislation.

Abbreviations: BAT, British American Tobacco; GPI, Godfrey Phillips India; GTC, Golden Tobacco
Company; GYTS, Global Youth Tobacco Survey; ITC, Indian Tobacco Company; SES, socioeconomic
status; VST, Vazir Sultan Tobacco

India is now Marlboro country!

November 15, 2003

It's a battle taking place behind a smokescreen. But as the smoke clears one thing is clear -- the
biggest gunslinger in the tobacco world has just cantered into town. And a shoot-out is about to
start.

On one side is American food and tobacco giant Philip Morris which went for its gun and called a
hurried press conference in Delhi earlier this week.
The Philip Morris announcement sent a shiver down the spines of other Indian manufacturers.
Philip Morris is launching the world's bestselling cigarette Marlboro at a relatively affordable Rs 75
for a pack of 20.

If that wasn't bad enough the cigarette giant had another surprise up its sleeve that stunned local
companies.

It is abandoning long-time Indian partner Godfrey Philips India (GPI) -- owned by the K K Modi
Group -- to launch the brand. Instead, the Marlboro Man will be going it alone.

In fact, Marlboro will be making its entry in a novel fashion. Philip Morris will start by importing the
cigarettes and then sell them through non-exclusive distributors.

For starters it has signed a three-year agreement with Barakat Foods and Tobacco Pvt Ltd, to
launch Marlboro in the metro cities of western India.

Why this strategy? Philip Morris says Marlboro is too big a brand to take any chances with.

"Marlboro is a valuable international trade mark for Phillip Morris. It is company policy to manage
all aspects of the brand under direct control whenever possible and permissible, as is the case in
India," says Ajit Sahgal, general manager, India.

Sahgal makes it crystal clear that Philip Morris doesn't have management control of Godfrey
Philips, and therefore the question of entrusting the brand to it doesn't arise.

Not surprisingly, the domestic tobacco companies are already crying themselves hoarse. They
are questioning whether Philip Morris can legally import cigarettes and thus, dodge the
clearances it would have needed to start manufacturing.

Also, the local manufacturers point out that the Philip Morris move will fuel the problem of
smuggled premium cigarettes which are already flooding the Indian market. They're demanding a
level playing field against imports.

The worst hit is, of course, GPI, which is putting on a brave front even after being cut out of the
action. Sahgal insists that GPI was informed about the move way ahead of time.

Nevertheless, GPI says it will approach Philip Morris and point out that it has a better distribution
system than anyone else.

Also, GPI managing director Ram Poddar insists it didn't know about the Philip Morris move. Says
Poddar: "We were not aware of this move. We have to study it in detail."

It goes without saying that the local cigarette companies aren't about to let the Marlboro Man ride
into town without a fight.

Soon after the Philip Morris press conference, some of the country's top tobacco executives went
into a huddle to decide their course of action.

While the companies are not ready to come on record, a three-fold strategy has already been put
in place to combat the Marlboro entry.
The local companies are planning to erect roadblocks for the outsider by petitioning the
government.

For a start, they will demand that import duty on tobacco which is under OGL (which means it
faces a 30 per cent customs duty, apart from a countervailing duty equal to excise duty) be raised
to 150 per cent. That's the highest slab which can be imposed under WTO rules for the product.

Alternatively, they say, tobacco should be moved out of OGL to the restricted list with higher
duties.

Points out a tobacco executive: "After all, the government policy is to discourage cigarette
smoking and various restrictions have been put on domestic companies. So how can you
penalise us and encourage foreign brands? We want a level playing field."

They also point out that tobacco has been placed in a special category by the government (called
the sensitive watch list). Therefore, this gives the government the right to hike duties if imports
climb substantially.

If that isn't enough, the local tobacco companies are suddenly discovering the virtues of higher
taxes -- for imported cigarettes.

They say that the existing customs duty on imported cigarettes accounts for only 5 per cent of the
minimum retail price.

But for soaps and detergents the incidence is as high as 30 per cent of MRP. This, they say, is a
difference that needs to be narrowed.

The tobacco companies will also be asking the government to follow the example of the Nepalese
Government, which has fixed a minimum price at which cigarettes can be imported.

Says a senior executive of a tobacco company: "In Nepal, for instance, the government has
imposed a minimum price at which a brand can be imported. This helps in preventing under-
invoicing by importers."

One way to determine the price, say executives, is to peg it at the same rate that duty-free shops
buy the brand. At the moment, duty-free shops buy Marlboro at $40 for packs with 1,000 sticks.

Most importantly, the tobacco companies are trying to block tobacco imports.

Philip Morris has, in fact, been extremely smart. It has taken permission from the Reserve Bank
of India to set up a branch office in India which can also import and sell goods which are on the
OGL list.

Sahgal says that it has also informed various ministries in the government that it would be
importing cigarettes.

Says a tobacco industry executive: "The government has rejected proposals which entail foreign
companies coming to India either to manufacture or trade in tobacco brands. So this loophole has
to be tightened."

But why are domestic tobacco companies afraid of Marlboro using the import route? One reason
is that smuggling is taking place on a gargantuan scale.
And local companies say that the Philip Morris move to India will only push up the contraband
market which has grown by over 400 per cent in the last three years.

Local executives say the contraband market is already worth Rs 1,050 crore (Rs 10.50 billion) --
and it forms 9 per cent of the cigarette market.

Tobacco experts say that imports will encourage smuggling in two ways. Companies like Philip
Morris will advertise their brands and make point of purchase pitches. That will help to push sales
of smuggled Marlboros.

Secondly, retailers will now have an explanation about why they are stocking Marlboro. Therefore,
it will become more difficult for the authorities to book them.

For traders, selling smuggled cigarettes is quite an attractive proposition: the margins on legally
imported Marlboros are around 8 per cent to 9 per cent.

On smuggled Marlboros a trader can make as much as 25 per cent. Marlboro is available at
between Rs 60 and to Rs 65 in the smuggled market.

These aren't entirely fanciful fears. Advertising has helped to boost smuggled brands. For
instance, when 555 and Benson and Hedges were advertised, the immediate impact was a two-
to three-fold increase in smuggling of these brands into India.

But there are more serious fears. Over 48 per cent of the premium king size market is dominated
by smuggled brands and any increase would mean that domestic brands like Classic or India
Kings and foreign brands manufactured in India like 555 would get squeezed even further.

Worse, Marlboro is the hottest selling smuggled brand accounting for over 22 per cent of the
premium market.

What's more, Marlboro at Rs 75 won't be much costlier than the domestic premium brands. ITC's
India Kings, for instance, also sells for Rs 75.

Similarly, brands like Classic, the Indian-made State Express, and Benson and Hedges all sell at
between Rs 59 and Rs 72.

Says a tobacco company executive: "We have already lost a market of 2.7 billion cigarettes
annually due to contraband in the premium segment which is legitimately ours. The government
loses Rs 700 crore (Rs 7 billion) in excise."

He estimates that Indian premium brands could lose around 3 per cent to 4 per cent market share
due to the combined onslaught of imported Marlboro and its impact on increased contraband
sales.

But Phillip Morris says that the fears are unfounded. The company argues that upmarket smokers
prefer to buy the legally imported product with the MRP printed on the pack rather than smuggled
cigarettes.

So, it argues, smuggling of Marlboro will go down. Additionally the company says it will help the
law enforcement agencies fight smuggling through its "Brand Integrity group".

Some experts who have been pushing for FDI in the tobacco sector say that the fears about
Philip Morris are baseless.
Says an FDI consultant: "The premium market is very small. Indian domestic companies have
used this as a pretext to ensure that no one can enter the field and compete with them."

Where does GPI stand in all this? Tobacco industry says the message is clear: GPI won't get a
share of the big brands unless it gets a say in management.

Poddar denies that there's any tension between the two partners. Philip Morris merely says that
the launch of Marlboro through GPI had never been finalised and that it has a good working
relationship with GPI.

But tobacco watchers say that discussions between Modis and their partners have been on to
bring in more international brands into India.

But they have been stuck on the question of management control (the Modis have 32 per cent
equity, Phillip Morris has 36 per cent but the company is controlled by the Modis).

At the moment Philip Morris is determined to launch its world-famous brand through the import
route. But domestic tobacco companies are equally determined to stop it from doing so. What we
can expect in the coming weeks is more smoke and lots of fire.

An unexpected entry

It's a smart move that has left the corporate world watching in awe. Philip Morris has made its
debut in India by a route that nobody had ever considered using.

It's important to understand that foreign tobacco companies aren't exactly welcomed with open
arms these days. So, a company which wants to enter India has to face one of two hurdles.

First, it has to get a clearance from the Foreign Investment Promotion Board which isn't exactly
bending over backwards to attract tobacco companies into India.

Secondly, if the foreign company happens to have a local partner (like BAT and ITC) it has to get
a no-objection certificate (NOC) from the Indian company.

Philip Morris has bypassed both these requirements. It has taken Reserve Bank of India
permission to set up a branch office in Mumbai. The rules allow it to export and import goods
under OGL.

Philip Morris -- and one or two others like Rothmans -- have already felt the Government's cold
shoulder in recent years. Indonesian company Sampoorna, for instance, wanted to import and
undertake wholesale trading a year ago but it didn't get the Government's green signal.

Back in 1997 Philip Morris was permitted to set up a fully-owned subsidiary that would get into a
range of businesses including food processing and beverage products.

But in the face of hectic lobbying by tobacco majors, the Government clarified that the permission
didn't include cigarette manufacture.

Another attempt to get into cigarettes went up in smoke when an application by FTR Holdings, a
Philip Morris subsidiary, to process tobacco in India and export it, was kept in abeyance.
Argues a tobacco company executive: "Importing Marlboro and selling it to a distributor,
supporting the effort through advertisement all come under trading activities, which cannot be
undertaken without FIPB approval."

The need for clearance from the local partner has also stalled many companies. BAT, for instance
hasn't made a solo debut in India because ITC might have blocked it.

Similarly, FTR Holdings realised that partner GPI wouldn't give it an NOC. Rothmans also
withdrew because it was clear that ITC -- in which it had a minority stake -- wouldn't play ball.

Philip Morris seems to have found a way around all these difficulties. It argues that the
government's rule about NOCs from local partners only applies to foreign direct investment. But,
Philip Morris says its branch office will only give marketing support to legally imported Marlboro
cigarettes.

The local tobacco companies differ with that interpretation. They say it all constitutes trading
activity which in India which the government does not allow.

If Philip Morris is correct it have revealed a gaping loophole in the government's regulations.

Indian companies are planning to raise a ruckus and insist that the government stop companies
like Philip Morris. One thing is certain: there'll be a lot of companies who've been given a fright by
Philip Morris' latest moves and there will be plenty of lobbying to stop it in its tracks.

The Disappearance (and Return) of Sunil

Alagh
Posted: Feb 05, 2006 at 0000 hrs IST
SUNIL ALAGH strides in with a smile on his face and a pack of ciggies in his hand.
Just back from the Capital (and on his way to Rishi Kapoor’s daughter’s wedding),
he’s excited about I-Gen, the new brand he is helping Godfrey Phillips launch this
month in Delhi.

The cigarettes in their trendy black and silver cases are intended to appeal to Gen
Next. “Basically awesome cigarettes” says the pack on one side, while another glib
tag line reads “Dlite 4 senses 24x7”.

More than two years after being unceremoniously ousted from Britannia Industries,
Alagh is slowly moving back into the spotlight. As founder of consultancy outfit SKA
Advisors Pvt Ltd, which specializes in marketing and brand building, the 58-year-old’s
clients now range from bio-pharma company Biocon to beedi manufacturer Sarda
Group. “All my clients are challenging the leaders in their fields, he says.”

Alagh will also host The Job Show on CNBC-TV 18, which will give aspirants a chance
to win some of the best entry-level management jobs. “I want to demystify the
interview room,” he says, of his role as a moderator between companies and
candidates.

Scheduled to be aired in the second week of March, the show has attracted a number
of firms, including Satyam, Wipro, YesBank, LG Electronics and Aviva Life Insurance
among others.

VITAL STATS - He drives a Toyota Innova, enjoys Schezwan cuisine and loved The Da
Vinci Code - His favourite holiday spot in India is Rajasthan, especially Jaisalmer and
Jodhpur. He loves London, and one of his best vacations was in Prague, when it was
the capital of Czechoslovakia, and Florence, Italy - His first job was at ITC when Ajit
Haksar was the chairman. He then moved to Jagatjit Industries and ultimately to
Britannia in 1974 - His wife, Maya, is a general practitioner who also acts on TV and
in movies. His older daughter Sanvari was, till two weeks ago, with Star TV as the
executive producer of the successful Nach Baliye. Younger daughter Anjori is
studying and wants to act in theatre and television Alagh’s current exuberance is a
far cry from mid-2003, when he was dismissed as MD and CEO of Britannia
Industries in a dramatic and murky episode that raised eyebrows in the corporate
world. Widely credited with Britannia’s success in the biscuit field (it became India’s
#1 food brand during his tenure) and framing its growth strategy in the decade
before his departure, Alagh left in a huff over differences with Britannia’s promoters.

Among other accusations in the events that followed were misappropriation of funds
and Alagh’s take-it-or-leave-it style of leadership. Industry sources say his Rs 1 crore
annual salary was not sufficient to sustain his extravagant lifestyle.

Alagh says he didn’t have any plans after he left Britannia. “For a while I didn’t want
to do anything at all. I was disillusioned and felt let down by the people I trusted.”

For two months after his abrupt exit, Alagh indulged his late-riser gene and woke up
whenever he wanted. The Hindi movie buff saw a movie every afternoon—Sholay
(he’s seen it eight times) and Chalti Ka Naam Gaadi are his favourites, and he thinks
The Godfather II was better than The Godfather. He also finally got time to hit the
treadmill, something he had been meaning to do for a while.

The quiet period did not last long. While he was recuperating, Kiran Majumdar-Shaw,
the owner of Biocon, approached him to help her position her company as a retail
brand in the pharmaceuticals market. Alagh was intrigued and thus was born SKA
Advisors. With it, Alagh’s career, which had threatened to end so ignominiously, got a
new lease.
Taking on Biocon as a client was Alagh’s first step back into the world of brand
strategy and marked his return to the corner room. Within a month, Shrirang Sarda
of the Sarda Group approached him to help the company make the transition from
beedis to the snack segment. After deliberations, Alagh advised the company to
enter the dry fruit market with Vitamla.

The product, currently selling only in Mumbai, has taken off well and, according to
Alagh, is already clocking sales close to what Maska Chaska, a Britannia brand, used
to do in Mumbai—and with half the budget that the bigger brand had at its disposal.

“He is able to connect with the market through simple initiatives and by riding on the
customer’s emotional pulse,” says Satish Mane, Britannia’s former head of marketing.

Alagh says he still feels as much excitement as when he launched his first brand. He
cites the example of another client, Sapat Tea, which hit the consumers with Parivar
Chai and its “Surrrr ke piyo” campaign.

KK Modi, president of Godfrey Phillips, says he picked Alagh for his “ability to focus
on a core issue”. “Plus, he’s a very colourful personality and knows how to motivate a
team,’’ he adds.

With all his clients, Alagh cites Tom and Jerry cartoons as his marketing mantra.
What is certain is that Tom the cat will not get Jerry the mouse and the sooner
companies identify their Jerrys, the less frustrated they will be. “My clients are the
Jerrys, running circles around the Toms,” he says with a grin.

These days he’s busier than ever—but on his own terms. “As a basket, Alagh
provides it all,” he laughs, referring to his range of clients. He likes to spend two days
a month with each and work with teams on project execution. “I prefer to help turn
up companies, not just turn them around,” he says.

The former biscuit-maker is also eyeing the FMCG market for potential buyouts with
the help of private equity investors. As if that does not keep him busy, he is also on
the advisory board of companies such as express cargo firm GATI Ltd, United
Breweries, IL&FS and National Institute of Design, Ahmedabad.

All that work means he has no time to learn golf (even though he’s bought the kit
and acquired a golf club membership), but Alagh has a line for that too. “Whether in
life or with brands, one has to make one’s presence felt,” he says. “Otherwise you
end up wasting energy.” Gen Next would approve.