hul ethics

GROUP - 8

FMCG Sector : Overview

The Indian FMCG sector is the fourth largest sector in the economy.

The FMCG sector has registered a growth rate of 16 per cent for the year 2009-10.

By 2012 it is expected to grow by more than 25 % in rural and semi-urban India

Heritage

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy soap in 1895 and other famous brands like Pears, Lux and Vim.

Vanaspati ghee was launched in 1918 and became the famous brand Dalda.

Brief History

On November 27th 1931, Unilever set up its first Indian subsidiary of ‘Hindustan Vanaspati Manufacturing Co.’

‘Lever brothers India Ltd.’ Incorporated on October 17th 1933.

‘United Traders Limited’ incorporated on May 11th 1935.

In 1956, Three companies merged to form ‘Hindustan Lever Limited’, with 10% Indian equity participation.

July 19th 2007, changed the name to Hindustan Unilever Limited.

Current Scenario

India's largest fast moving consumer goods company.

BSE Ticker:500696 and is head quartered in Mumbai

It employs 65000 people directly and indirectly

It earned USD 3.98 Billion for FY 2009-10.

It’s distribution covers over 1 million retail outlets across India directly and its products are available in over 6.3 million outlets in the country

Board of Directors

Mr. H. Manwani joined the Company in 1976. He joined the Board of the Company in 1995, as a Director responsible for the Personal Products business

Mr. Paranjape worked as Area Sales Manager – Detergents and then Product Manager-Detergents.

Mr. R. Sridhar is CFO, he is a Commerce graduate from R. A. Poddar College, Mumbai. He joined the Company in May 1989 and worked in a number of finance and commercial functions

The Board of Directors (the Board) is entrusted with:1) The ultimate responsibility of the management2) General affairs,3) Direction and performance of the Company 4) And vested with the requisite powers, authorities and duties.

Management Committee

Mr. Shreejit Mishra- Executive Director, Home & Personal Care

Ms. Leena Nair- Executive Director, Human resource

Ms. Dev Bajpai- Executive Director, Legal and Company Secretary

The day-to-day management of affairs of the Company is vested with the Management Committee which is subjected to the overall superintendence and control of the Board. It comprises of 8 members and is headed by Mr. Nitin Paranjape

Distribution at Villages…

RURAL DISTRIBUTION MODEL

New Distribution Channels…

Shakti - Operations

 HUL’s  Turnover Vs Competitors

Market  Leadership in FMCG categories

Competitors

Corporate Social Responsibility

Member of UN Global Compact Program which covers human rights, labor practices, environment commitment and prevention of corruption in the organization

CSR areas include community welfare, Disaster relief, Education, Employee welfare, Girl child, Healthcare, poverty eradication, rural development, vocational training, water, women.

Karamyog, an NGO, has given HUL 2/5 in its CSR Ratings for 2009.

No Trust/Foundation established for CSR

CSR Activities undertaken

3 main CSR activities concern water, healthcare & enhancement of livelihood.

Rain water harvesting and soil conservation projects around Silvassa, Dadra & Nagra Haveli, Maharashtra.

Lifebuoy has been conducting a sustained health education program to raise hygiene standards in rural communities.

In 2008, HUL employees volunteered more than 40,000 hrs of social work

Project Shakti

“Doing well by doing good” It is a rural initiative that targets small villages

typically with a population of less than 5000. It empowers women in rural markets while

contributing well as a sales channel Objectives of Shakti project

Reach new consumers in small rural villages Grow markets through consumer education program Empower women through creation of employment

opportunities for them Build a sustainable business model

Operational efficiency

Reduced water usage per tonne by more than 26% in its manufacturing operations since 2004

Energy consumption per unit of production has come down by 34% since 2004

Exceeded the target of 25% reduction in CO2 in manufacturing operations per tonne of production against a baseline of 2004

Corporate governance@ HUL

Two basic tenets of corporate governance @ HUL1. Transparency2. Accountability

HUL's highest executive body- Unilever Executive.

Directors’ Shareholding

Composition & directorships/Committee membership

Attendance of the Members at Shareholders / Inventors Grievance Committee Meetings

Details of Shareholders / Investors Complaints received and redressed

Committees & Policies

COMMITTEES:1) Share Transfer/ Transmission Committee2) Committee for Allotment of Shares under ESOPs

COMPANY POLICIES:1) Preventing Conflict of Interests2) Whistle Blower Policy 3) Share Dealing Code4) Affirmation And Disclosure5) Disclosure Of Pending Cases / Instances Of Non-Compliance6) Compliance With The Governance Framework7) Compliance with Sarbanes–Oxley Act

Trend of Complaints Received During Last 5 Years:

Controversies

In 2001 HUL was accused for dumping of glass contaminated with mercury in municipal dumps.

Empty mercury bottles found in the watershed forests behind the Unilever factory.

Unilever's mercury tainted glass was found at this crowded scrap yard in Kodaikanal, India

Controversies

Fair and lovely 2007 ad’s- skin lightning cream in India- Racism

HUL is using Triclosan in the products which is still under testing phase by FDA, America

Rin V/S Tide

 Rin started “Safedi ki chamkaar” advertising

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