BRIEF HISTORY

Over 100 years' link with India. In the summer of 1888, visitors to the Kolkata harbor & 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 in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati

was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company,

followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three

companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian

public, being the first among the foreign subsidiaries to do so. Unilever now holds 51.55% equity

in the company. The rest of the shareholding is distributed among about 380,000 individual

shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had

launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.

Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile

Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977

Lipton Tea (India) Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an

international acquisition of Chesebrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic growth.

The growth process has been accompanied by judicious diversification, always in line with Indian

opinions and aspirations.

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The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in HUL's

and the Group's growth curve. Removal of the regulatory framework allowed the company to

explore every single product and opportunity segment, without any constraints on production

capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most

visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company

(TOMCO) merged with HUL, effective from April 1, 1993. In 1995, HUL and yet another Tata

company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever Limited, to market Lakme's

market-leading cosmetics and other appropriate products of both the companies. Subsequently in

1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the

company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994,

Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has

also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory represents the largest

manufacturing investment in the Himalayan kingdom. The NLL factory manufactures HUL's

products like Soaps, Detergents and Personal Products both for the domestic market and exports to

India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and

Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with

significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group

and the Dollops Icecream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies

of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond India and Lipton

India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and

ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the

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Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic

alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream

marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring

culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies

had significant overlaps in Personal Products, Specialty Chemicals and Exports businesses, besides

a common distribution system since 1993 for Personal Products. The two also had a common

management pool and a technology base. The amalgamation was done to ensure for the Group,

benefits from scale economies both in domestic and export markets and enable it to fund

investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern

Foods to HUL, thereby beginning the divestment of government equity in public sector

undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of

the company's wheat business. In 2002, HUL acquired the government's remaining stake in

Modern Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam

Group of Companies, a leader in value added Marine Products exports.

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COMPANY PROFILE

Hindustan Unilever Limited

Type Public

Founded 1933

Headquarters Mumbai, India

Key peopleHarish Manwani ChairmanNitin Paranjpe, CEO

Industry Fast moving consumer goods

Products tea, soap, detergents

Employees 41,000

Parent Unilever

Website www.HUL.com

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited , is

India's largest consumer products company and was formed in 1933 as Lever Brothers India

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Limited. It is currently headquartered in Mumbai, India and its 41,000 employees are headed by

Harish Manwani, the non-executive chairman of the board. HUL is the market leader in Indian

products such as tea, soaps, detergents, as its products have become daily household name in India.

The Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever Limited.

Unilever's mission is to add “Vitality to life”. HUL meets everyday needs for nutrition, hygiene,

and personal care with brands that help people feel good, look good and get more out of life. It is a

mission HUL shares with its parent company, Unilever, which holds 51.55% of the equity. The

rest of the shareholding is distributed among 380,000 individual shareholders and financial

institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic,

Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's – are

household names across the country and span many categories - soaps, detergents, personal

products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured in

close to 80 factories. The operations involve over 2,000 suppliers and associates. HUL's

distribution network, comprising about 7,000 redistribution stockists, directly covers the entire

urban population, and about 250 million rural consumers.

HUL has traditionally been a company, which incorporates latest technology in all its operations.

The Hindustan Lever Research Centre (HLRC) was set up in 1958, and now has facilities in

Mumbai and Bangalore. HLRC and the Global Technology Centres in India have over 200 highly

qualified scientists and technologists, many with post-doctoral experience acquired in the US and

Europe.

HUL believes that an organisation's worth is also in the service it renders to the community. HUL

is focusing on health & hygiene education, women empowerment, and water management. It is

also involved in education and rehabilitation of special or underprivileged children, care for the

destitute and HIV-positive, and rural development. HUL has also responded in case of national

calamities / adversities and contributes through various welfare measures, most recent being the

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village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami

caused devastation in South India.

Over the last three years the company has embarked on an ambitious programme, Shakti. Through

Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their

livelihood and the standard of living in rural communities. Shakti also includes health and hygiene

education through the Shakti Vani Programme, and creating access to relevant information through

the iShakti community portal. The programme now covers about 50,000 villages in 12 states.

HUL's vision is to take this programme to 100,000 villages impacting the lives of over a 100

million rural Indians.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme

endeavtheirs to induce adoption of hygienic practices among rural Indians and aims to bring down

the incidence of diarrhoea. It has already touched 70 million people in approximately 15000

villages of 8 states. The vision is to make a billion Indians feel safe and secure. If Hindustan Lever

straddles the Indian corporate world, it is because of being single-minded in identifying itself with

Indian aspirations and needs in every walk of life.

CORPORATE PURPOSE

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Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition , hygiene and

personal care with brands that help people feel good, look good and get more out of life.

Our deep roots in local cultures and markets around the world give us our strong relationship with

consumers and are the foundation for our future growth. We will bring our wealth of knowledge

and international expertise to the service of local consumers - a truly multi-local multinational.

Our long-term success requires a total commitment to exceptional standards of performance and

productivity, to working together effectively, and to a willingness to embrace new ideas and learn

continuously.

To succeed also requires, we believe, the highest standards of corporate behaviour towards

everyone we work with, the communities we touch, and the environment on which we have an

impact.

This is our road to sustainable, profitable growth, creating long-term value for our shareholders,

our people, and our business partners.

MANAGEMENT STRUCTURE

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Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) Company. It

is present in Home & Personal Care and Foods & Beverages categories. HUL and Group

companies have about 16,000 employees, including 1200 managers.

The fundamental principle determining the organization structure is to infuse speed and flexibility

in decision-making and implementation, with empowered managers across the company’s

nationwide operations.

BOARD

The Board of Directors as repositories of the corporate powers act as a guardian to the Company as

also the protectors of shareholder’s interest.

This Apex body comprises of a Non- Executive Chairman, four whole time Directors and five

independent Non – Executive Directors. The Board of the Company represents the optimum mix

of professionalism, knowledge and experience.

MANAGEMENT STRUCTURE

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Mr Harish Manwani Chairman

Mr. Douglas Baillie - Mr. D Sundaram – Mr. Nitin Paranjpe –

Chief Executive Officer Director Finance Executive Director and Managing Director and IT Home & Personal Care

Mr. Shreejit Mishra – Mr. Sanjiv Kakkar – Mr. Dhaval Buch – Executive Director Executive Director Executive Director Foods Sales and Customer Development Supply Chain

Mr. Ashok Gupta – Ms Leena Nair – Executive Director Executive Director Legal HR.

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HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCG

COMPANY

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Hindustan Lever Limited Shareholding Pattern

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Unilever 51.6

Flls 13.7

Domestic Fls

14.8

Individual 19.9

HUL Equity Capital - 50 Mn $

Market Capitalisation - 7,300 Mn $

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CODE OF BUSINESS PRINCIPLES

MISSION:

Hindustan Unilever Limited mission is to add strength to life. We meet everyday needs for

nutrition, hygiene, and personal care with brands that help people feel good, look good and get

more out of life.

INTRODUCTION

HUL has earned a reputation for conducting its business with integrity and with respect for the

interests of those their activities can affect. This reputation is an asset, just as real as their people

and brands.

Their first priority is to be a successful business and that means investing for growth and balancing

short-term and long-term interests. It also means caring about their consumers, employees and

shareholders, their business partners and the world in which we live.

From HUL Spokesperson “To succeed requires the highest standards of behavior from all of us.

The general principles contained in this Code set out those standards. More detailed guidance

tailored to the needs of different countries and companies will build on these principles as

appropriate, but will not include any standards less rigorous than those contained in this Code.

We want this Code to be more than a collection of high-sounding statements. It must have practical

value in their day-to-day business and each one of us must follow these principles in the spirit as

well as the letter”.ref: business world magazine.

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CODE OF BUSINESS PRINCIPLES

STANDARD OF CONDUCT

We conduct our operations with honesty, integrity and openness, and with respect for the human

rights and interests of our employees.

We shall similarly respect the legitimate interests of those with whom we have relationships.

OBEYING THE LAW

HUL companies and employees are required to comply with the laws and regulations of the

countries in which they operate.

EMPLOYEES

HUL is committed to diversity in a working environment where there is mutual trust and

respect and where everyone feels responsible for the performance and reputation of the

company. HUL will recruit, employ and promote employees on the sole basis of the

qualifications and abilities needed for the work to be performed.

HUL are committed to safe and healthy working conditions for all employees. We will not use

any form of forced, compulsory or child labour.

HUL are committed to working with employees to develop and enhance each individual's skills

and capabilities.

HUL respect the dignity of the individual and the right of employees to freedom of association.

HUL will maintain good communications with employees through company based information

and consultation procedures.

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CONSUMERS

HUL is committed to providing branded products and services which consistently offer value in

terms of price and quality, and which are safe for their intended use. Products and services will be

accurately and properly labelled, advertised and communicated.

SHAREHOLDERS

HUL will conduct its operations in accordance with internationally accepted principles of good

corporate governance. They will provide timely, regular and reliable information on their

activities, structure, financial situation and performance to all shareholders.

BUSINESS PARTNERS

HUL is committed to establishing mutually beneficial relations with their suppliers, customers and

business partners.

In their business dealings they expect their partners to adhere to business principles consistent with

their own.

COMMUNITY INVOLVEMENT

HUL strives to be a trusted corporate citizen and, as an integral part of society, to fulfill their

responsibilities to the societies and communities in which they operate.

PUBLIC ACTIVITIES

HUL companies are encouraged to promote and defend their legitimate business interests. HUL

will co-operate with governments and other organizations, both directly and through bodies such

as trade associations, in the development of proposed legislation and other regulations which may

affect legitimate business interests.

HUL neither supports political parties nor contributes to the funds of groups whose activities are

calculated to promote party interests.

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THE ENVIRONMENT

HUL is committed to making continuous improvements in the management of their environmental

impact and to the longer-term goal of developing a sustainable business.

HUL will work in partnership with others to promote environmental care, increase understanding

of environmental issues and disseminate good practice.

INNOVATION

In their scientific innovation to meet consumer needs they will respect the concerns of their

consumers and of society. They will work on the basis of sound science, applying rigorous

standards of product safety.

COMPETITION

HUL believes in vigorous yet fair competition and supports the development of appropriate

competition laws. Their companies and employees will conduct their operations in accordance

with the principles of fair competition and all applicable regulations.

BUSINESS INTEGRITY

HUL does not give or receive, whether directly or indirectly, bribes or other improper advantages

for business or financial gain. No employee may offer, give or receive any gift or payment which

is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe must be rejected

immediately and reported to management.

HUL accounting records and supporting documents must accurately describe and reflect the nature

of the underlying transactions. No undisclosed or unrecorded account, fund or asset will be

established or maintained.

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CONFLICTS OF INTERESTS

All HUL employees are expected to avoid personal activities and financial interests which could

conflict with their responsibilities to the company.

HUL employees must not seek gain for themselves or others through misuse of their positions.

COMPLIANCE – MONITORING – REPORTING

Compliance with these principles is an essential element in their business success. The Unilever

Board is responsible for ensuring these principles are communicated to, and understood and

observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions and operating

companies. They are responsible for implementing these principles, if necessary through more

detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the Code is subject

to review by the Board supported by the Audit Committee of the Board and the Corporate Risk

Committee.

Any breaches of the Code must be reported in accordance with the procedures specified by the

Joint Secretaries. The Board of Unilever will not criticize management for any loss of business

resulting from adherence to these principles and other mandatory policies and instructions.

The Board of Unilever expects employees to bring to their attention, or to that of senior

management, any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and no employee will

suffer as a consequence of doing so.

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ENVIRONMENT POLICY

Hindustan Lever Limited (HUL) supplies high quality goods and services to meet the daily needs

of consumers and industry. In doing so, the Company is committed to exhibit the highest standards

of corporate behavior towards its consumers, employees, the societies and the world in which we

live.

The company recognizes its joint responsibility with the Government and the Public to protect

environment and is committed to regulate all its activities so as to follow best practicable means

for minimizing adverse environmental impact arising out of its operations.

The company is committed to making its products environmentally acceptable, on a scientifically

established basis, while fulfilling consumers' requirements for excellent quality, performance and

safety.

The aim of the Policy is to do all that is reasonably practicable to prevent or minimize,

encompassing all available knowledge and information, the risk of an adverse environmental

impact arising from processing of the product, its use or foreseeable misuse.

This Policy document reflects the continuing commitment of the Board for sound Environment

Management of its operations. The Policy applies to development of a process, product and

services, from research to full-scale operation. It is applicable to all company operations covering

its plantations, manufacturing, sales and distribution, research & innovation centers and offices.

This document defines the aims and scope of the Policy as well as responsibilities for the

achievement of the objectives laid down.

THE VISION

Their vision is to continue to be an environmentally responsible organization making continuous

improvements in the management of the environmental impact of their operations.

HUL will achieve this through an Integrated Environment Management approach, which focuses

on People, Technology and Facilities, supported by Management Commitment as the prime driver.

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INVESTMENT BEHIND BRANDS

Innovation & Superior Quality

Family – safe Petalsoft Water & effort saving Quick wash - 50% No mud Rin

Advance from germs

Perfect Radiance “5 in 1” hair Total Care Whiter teeth Fresher breath

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BRANDS

PRODUCTS

HOME AND PERSONAL CARE

PERSONAL WASH

Lux

Lifebuoy

Liril

Hamam

Breeze

Dove

Pears

Rexona

LAUNDRY

Surf Excel

Rin

Wheel

SKIN CARE

Fair & Lovely

Pond’s

Vaseline

HAIR CARE

Sunsilk Naturals

Clinic

ORAL CARE

Pepsodent

Close-up

DEODRANTS

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Axe

Rexona

COLOUR COSMETICS

Lakme

AYURVEDIC PERSONAL AND HEALTH CARE

AYUSH

FOODS

TEA

Brooke Bond

Lipton

COFEE

Brooke Bond Bru

FOODS

Kissan

Annapurna

Knorr

ICE-CREAM

Kwality Wall’s

DIRECT SELLING:

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PRODUCT RANGE

• Lever home range

• Male grooming

• Oral Care

• Ayurveda

• Personal Wash

• Foods

Reach - 1400 towns (Largest in India)

Consultant base - 330,000

ACCORDINGLY,

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HUL'S AIMS ARE TO:

Ensure safety of its products and operations for the environment by using standards of

environmental safety, which are scientifically sustainable and commonly acceptable.

Develop, introduce and maintain environmental management systems across the company to meet

the company standards as well as statutory requirements for environment. Verify compliance with

these standards through regular auditing.

Assess environmental impact of all its activities and set annual improvement objectives and targets

and review these to ensure that these are being met at the individual unit and corporate levels.

Reduce Waste, conserve Energy and explore opportunities for reuse and recycle.

Involve all employees in the implementation of this Policy and provide appropriate training.

Provide for dissemination of information to employees on environmental objectives and

performance through suitable communication networks.

Enctheirage suppliers and co-packers to develop and employ environmentally superior processes

and ingredients and co-operate with other members of the supply chain to improve overall

environmental performance.

Work in partnership with external bodies and Government agencies to promote environmental

care, increase understanding of environmental issues and disseminate good practice.

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RESPONSIBILITIES

Corporate

The Board and the Management Committee of HUL is committed to conduct the company

operations in an environmentally sound manner. The Management Committee will:

Set mandatory standards and establish environmental improvement objectives and targets for HUL

as a whole and for individual units, and ensure these are included in the annual operating plans.

Formally review environment performance of the company once every quarter.

Review environment performance when visiting units and recognise exemplary performance.

NOMINATE:

- A senior line manager responsible for environmental performance at the individual HUL site.

- HUL environmental coordinator.

The Management Committee, through the nominated environmental coordinator will:

Ensure implementation of HUL Policy on environment and compliance with Unilever and HUL

environmental standards and the standards stipulated under relevant national / local legislation.

When believed to be appropriate, apply more stringent criteria than those required by law.

Assess environmental impact of HUL operations and establish strategies for sound environment

management and key implementation steps.

Enctheirage development of inherently safer and cleaner manufacturing processes to further raise

the standards of environment performance.

Establish appropriate management systems for environment management and ensure regular

auditing to verify compliance.

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Establish systems for appropriate training in implementation of Environment Management

Systems at work.

Ensure that all employees are made aware of individual and collective responsibilities towards

environment.

Arrange for expert advice on all aspects of environment management.

Participate, wherever possible, with appropriate industry and Government bodies advising on

environmental legislation and interact with national and local authorities concerned with protection

of environment.

INDIVIDUAL UNITS

The overall responsibility for environment management at each unit will rest with the Unit Head,

who will ensure implementation of HUL Policy on environment at unit level. Concerned line

managers / heads of departments are responsible for environmental performance at department

levels.

In order to fulfill the requirements of the Environment Policy at each site, the Unit Head will:

Designate a unit environment coordinator who will be responsible for co-ordinating environmental

activities at unit, collating environmental statistics and providing / arranging for expert advice.

Agree with the Management Committee Member responsible for the unit, specific environmental

improvement objectives and targets for the unit and ensure that these are incorporated in the annual

objectives of the concerned managers and officers and are reviewed periodically.

Ensure that the unit complies with Unilever and HUL mandatory standards and the relevant

national and state regulations with respect to environment.

Ensure formal environmental risk assessment to identify associated environmental aspects and take

appropriate steps to control risks at acceptable levels.

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Ensure that all new operations are subjected to a systematic and formal analysis to assess

environmental impact. Findings of such exercises should be implemented prior to commencement

of the activity.

Manage change in People, Technology and Facilities through a planned approach based on

training, risk assessment, pre-commissioning audits and adherence to design codes.

Regularly review environment performance of the unit against set objectives and targets and strive

for continual improvement.

Sustain a high degree of environmental awareness through regular promotional campaigns and

employee participation through training, safety committees, emergency drills etc.

Ensure dissemination of relevant information on environment within the unit and to outside bodies,

and regularly interact with Government authorities concerned for protection of environment.

Maintain appropriate emergency procedures consistent with available technologies to prevent /

control environmental incidents.

Provide appropriate training to all employees.

Ensure periodic audits to verify compliance with environment management systems and personally

carry out sample environment audits to check efficacy of the systems.

Report environmental statistics to HUL Corporate Safety & Environment Group on a monthly

basis.

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RESEARCH AND INNOVATION CENTERS

Since most new products and processes are developed in these Units, certain additional

responsibilities devolve on them to ensure implementation of the Environment Policy of the

company. In addition to the Unit Head's responsibilities outlined above, the heads of these units

will:

Ensure that a formal and systematic risk assessment exercise is undertaken during the

process/product development stage with specific reference to environmental impact.

Transfer technology to the pilot plant and main production through a properly documented process

specification which will clearly define environmental impact and risks associated with processes,

products, raw material and finished product handling, transport and storage.

Ensure that treatment techniques are developed for any wastes generated as a result of the new

product/process and is incorporated into the process specifications.

QUALITY POLICY:

Hindustan Lever Limited considers quality as one of the principal strategic objectives to guarantee

its growth and leadership in the markets in which it operates.

The company is committed to respond creatively and competitively to the changing needs and

aspirations of their consumers through relentless pursuit of technological excellence, innovation

and quality management across their businesses, and offer superior quality products and services

that are appropriate to the various price points in the market as well as to their commitment to

building shareholder value.

The company recognizes that its employees are the primary stheirce of success in its operations

and is committed to training and providing them the necessary tools and techniques as well as

empowering them to ensure broad base compliance of this policy in the organization at all levels.

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The company is committed to fulfill its legal and statutory obligations and international standards

of product safety and hygiene and will not knowingly sell product that is harmful to consumers or

their belongings. It will institute systems and measures to monitor compliance in order to meet its

responsibilities to consumers.

The company will maintain an open communication channel with its consumers and customers and

will carefully monitor the feedback to continuously improve its products and services and set

quality standards to fulfill them. The company is committed to extend its quality standards to its

contract manufacturers, key suppliers and service providers and by entering into alliances with

them, to jointly improve the quality of its products and services. This policy is applicable to

production from its own facilities as well as to production that is outsourced.

The company will periodically review this quality policy for its effectiveness and consistency with

business objectives.

The company delegates authority and responsibility for dissemination and implementation of this

policy to each Business and Unit Head.

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SAFETY AND HEALTH POLICY

INTRODUCTION

Hindustan Lever Limited (HUL) supplies high quality goods and services to meet the daily needs

of consumers and customers. In doing so, the Company is committed to exhibit the highest

standards of corporate behavior towards its consumers, employees, the societies and the

environment in which we operate.

Towards this, the Company recognizes its responsibility to ensure safety and protection of health

of its employees, contractors and visitors in all its operating sites, which include manufacturing,

sales and distribution, research laboratories and offices during work and work related travel.

This Policy document defines the vision, principles, aim, required actions and scope of the policy

application as well as the responsibility for execution.

THEIR VISION

Their vision is to be an injury free organization.

HUL NEWS:”We will bring safety on top of mind for all employees and will integrate it with all

business processes. We will realize their Vision through an Integrated Safety Management

approach, which focuses on People, Processes, Systems, Technology and Facilities, supported by

demonstrated leadership and employee commitment at all levels as the prime drivers for ensuring a

safe and healthy work environment”.

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SAFETY PRINCIPLES:

HUL's Occupational Safety and Health Policy is based on and supported by the following eight

Principles.

These Principles have the same status as the Company's Code of Business Principles:

All injuries and occupational illnesses are preventable

All operational exposures can be safeguarded

Safety evaluation of all business processes is vital

Working safely is a condition of employment

Training all employees to work safely is essential

Management audits are a must

Employee involvement is essential

All deficiencies must be reported and corrected promptly

In order to facilitate operationalisation of the Safety Principles, a separate document has been

prepared, which covers:

a) Safety Principles

b) Success Criteria

c) Illustrative KPI

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Consumer satisfaction

Indira is 20 years old, a tribal woman at Kondegaon village in Bastar district. She is just back from

the nearby jungles, collecting firewood. After attending to her baby son, she will go to the village

well to take a quick wash. Yesterday her husband brought her a white soap, with pink petals in it.

Indira had requested him to buy one, for the festival later this evening.

Indira is among millions of consumers in rural India who use Hindustan Lever's products. She

came to know about Lux through the TV set at the community centre. It is not very costly, and also

available nearby.

Home to over 700 million people, rural India comprises not only over 70% of India's billion-strong

population, but also over 12% of the world's population. The rural population already accounts for

substantial consumption of Fast Moving Consumer Goods and also consumer durables. About 50%

of the sales of soaps & detergents are generated in rural India. Similarly, almost half the demand

for black & white television sets, pressure cookers, table fans, sewing machines also comes from

there.

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COST MANAGEMENT:

But the potential is even larger, both in terms of consumption and penetration. The fact that 70% of

the population accounts for only 50% of even relatively well-penetrated categories, like soaps &

detergents, indicates the enormous scope of consumption-led growth in these categories. Therefore

such categories will derive growth out of increased usage. In categories, which are relatively less

penetrated, like personal products, rural India offers an even bigger growth opportunity through

greater penetration and then consumption. For example only three out of 10 consumers in rural

markets use shampoo or skin care products. Therefore growth in such categories will emerge, as

more consumers purchase these products, and then continue to use them regularly.

Hindustan Lever has taken many initiatives over the decades to create markets in the rural

hinterlands. By marketing relevant products, at affordable prices.

At the same time, if products have to come up the order in the rural purchase hierarchy, they have

to be affordable. If rural India today accounts for about half of detergents sales, it is because HUL

has developed low-cost value-for-money branded products, like Wheel. The company has also

taken initiatives to create markets even for apparently premium products, by offering them in pack

sizes, like sachets, whose unit prices are within the reach of rural consumers. For example,

initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paise) today constitute about 55% of Hindustan

Lever's shampoo sales. With media reach gradually increasing, rural consumers today, where the

media has its footprints, share the same aspirations with their urban counterparts. HUL has

responded to the trend with low unit price packs of even other products - Lux at Rs.5, Lifebuoy at

Rs.2, Surf Excel sachet at Rs.1.50, Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair &

Lovely Skin Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond Taaza tea at Rs.5.

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OTHER MARKETING STRATEGIES:

For decades now, Hindustan Lever has also taken initiatives to circumvent the limitation in

communication channels, by innovatively leveraging non-conventional media. Among them are

wall paintings, cinema vans, weekly markets (haat), fairs and festivals. Given the rural consumer's

fascination for cinema, the cinema vans show popular movies, interspersed with products

advertisements. Weekly markets, fairs and festivals are parts and parcel of rural life. They give an

opportunity to address consumers, spread over many tiny hamlets, at one location. The occasions

are used to demonstrate product benefits and also sell such products. Such demonstrations have

played a significant role in creating, for example, the detergents market in rural India. In recent

times, such demonstrations are being deployed to illustrate how visible clean is not hygienic clean,

and how using soap is essential to prevent easily avoidable infections.

Communication through fairs and festivals are backed by direct consumer contact. For example, in

1998-99, Hindustan Lever implemented a major direct consumer contact, called Project Bharat,

which covered 2.2 crore homes. Each home was given a box, at a special price of Rs.15,

comprising a low unit price pack of shampoo, talcum powder, toothpaste and skin cream, along

with educational leaflets and audio-visual demonstrations. The project has helped eliminate

barriers to trial, and has strengthened salience of both particular categories and brands. Similarly in

2002, Hindustan Lever has launched a similar large-scale direct contact, called Lifebuoy Swasthya

Chetana, which already covers 70 million people in 18,000 villages of 8 states. The project is

intended at generating awareness about good health and hygiene practices, and specifically how a

simple habit of washing hands is essential to maintaining good health. The initiative will involve

interaction with students and senior citizens, who act as change agents.

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AVAILABILITY OF HUL’S PRODUCT:

Generating awareness pays dividends only when steps are taken to ensure constant availability of

products. In rural India particularly, availability determines volumes and market share, because the

consumer usually purchases what is available at the outlet, influenced very largely by the retailer.

Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reach

in rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Lever

began with the coverage of villages adjacent to small towns. The company's stockists in these

towns were made to use their infrastructure to distribute products to outlets in these villages. But

this distribution mode could only be extended to villages connected with motorable roads, and it

could cover about 25% of the rural population by 1995.

Therefore in 1998, Hindustan Lever launched Project Streamline to further extend its distribution

reach. Under this initiative, the company identifies sub-stockists in a large village, connected by

motorable road to a small town. This sub-stockist in turn distributes the company's products to

outlets in adjacent smaller villages using transportation suitable to interconnecting roads, like

cycles, scooters or the age-old bullock cart. Hindustan Lever is thus trying to circumvent the

barrier of motorable roads. As a result, the distribution network, as of now, directly covers about

50,000 villages, reaching about 250 million consumers. The company simultaneously uses the

wholesale channel, suitably incentivising them to distribute company products.

HUL has in the recent past established a common distribution system in rural areas for all its

products. Given the number of brands and their packs the rural retailer usually requires, one HUL

39

representative can take all the products from the company portfolio that he needs. This common

distribution system is now fully operational, under one Regional Sales Manager exclusively

dedicated to rural markets of each region of the country.

Over time, Hindustan Lever will further strengthen its rural distribution through mutually

beneficial alliances with rural Self Help Groups (SHGs). Over the last five years, financial

institutions, NGOs and government organizations are working closely to establish SHGs, whose

objective is to alleviate poverty through sustainable income-generating activities. Since 2001,

Hindustan Lever is implementing Project Shakti, whereby SHGs are being offered the option of

distributing relevant products of the company as a sustainable income-generating activity. The

model hinges on a powerful win-win relationship; the SHG engages in an activity which brings

sustainable income, while Hindustan Lever gets an interface to interact and transact with the rural

consumer. HUL's vision for Project Shakti is to scale it up across the country by 2005, creating

about 25000 Shakti entrepreneurs, covering 100,000 villages, and touching the lives of 100 million

rural consumers. Begun with 50 groups in Nalgonda district of Andhra Pradesh, with the support

of local authorities, the project has been extended, as of now, to about 50,000 villages in 12 states.

A typical Shakti entrepreneur conducts business of around Rs.10,000 - Rs 15,000 per month,

which gives her an income of about Rs 700 - Rs.1000 per month on a sustainable basis. As most of

these women are from below the poverty line, and live in extremely small villages (less than 2000

population), this earning is very significant, and is almost double of their past household income.

The full benefit of Project Shakti will be realised after some years.

40

GROWTH AND ACHIEVEMENTS:

1930

1888, less than four years after William Hesketh Lever launched Sunlight Soap in England, his newly-founded company, Lever Brothers, started exporting the revolutionary laundry soap to India. By the time the company merged with the Netherlands-based Margarine Unie in 1930 to form Unilever, it had already carved a niche for itself in the Indian market. Coincidentally, Margarine Unie also had a strong presence in India, to which it exported Vanaspati (hydrogenated edible fat).

1933

- Incorporated on 17th October, under the name of a Lever Brothers (India) Pvt., Ltd. (LBIL) was the wholly owned subsidiary of Unilever Ltd. London, UK.

- 1933 Lever Brothers India Limited (LBIL) incorporated in India to manufacture Soaps.

1935

- On 11th May a subsidiary Co. was incorporated under the name United Traders Pvt. Ltd. for marketing the products of the Co. or imported from the parent Co.

1956 -

- On 27th October, the Company was converted into a Public Ltd. Co.

- On 1st November, Hindustan Vanaspati Mfg. Co. Pvt. Ltd., William Gossage & Sons (India) Pvt. Ltd. and Joseph Crosfield & Sons Unilever Ltd. were amalgamated with LBIL and the name was changed to Hindustan Lever Ltd. From 23rd october onwards activities of subsidiary Co. were taken over by its holding Co.

- On 17th November Unilever Ltd. Offered to the public 557,000 No. of equity shares of Rs.10 each.

1976

- The company had set up plants at Taloja in Maharshtra for the manufacture of ossein and di-calcium phosphate. In August these plants were commissioned.

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1980

- In order to reduce the non-resident holding in the Co. to 51%, Uniliver Ltd. offered for sale during Feb. out of its shareholding in the Co. 4239523 No. of equity shares of Rs.10 each at a premium of Rs.9.50 per share in the following manner;

- i) 10,00,000 shares to public financial institutions. - ii) 25,12,702 shares to the existing resident Indian shareholders on a pro-rata basis in the ratio of 1:4.

- iii) 726,821 shares to employees and Indian directors.

1983

- A new fine chemical unit was commissioned.

- As consideration, Indian shareholders of HL Ltd. were offered 62,20,576 No. of equity shares of Rs.10 each of Lipton India Ltd., at par in proportion of 2:8. ie 2 Lipt:8 HL equity. 1985

- A project for the manufacture of 500 tonnes per day of diammonium phosphate was commissioned.

1986

- Lux toilet soap was launched.

1987

Lifebouy Personal and Breez soaps launched.

1989

- Synthetic Detergent plant at Sumerpur in UP & Tiolet soap plant in Orai in UP were commissioned.

- Cracking catalyst plant at Haldia commissioned.

- Vegetable oil plant commissioned at Kandla free trade zone.

1991

- Company proposed to set up a 17,000 tpa. film sulphonation plant at Taloja to manufacture a range of detergent actives.

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1992

- Entered in dental product market by introducing Pepsodent, Mentadent G etc.

- A factory to manufacture leather garments and other leather based products including wool-on-leather garments and wool-on-leather was set up in Chennai.

- The Company undertook to set up a large scale acquaculture centre at Tanjavur in Tamil Nadu for farming and processing catfish for the U.S. markets in technical collaboration with FFDA, Florida, USA who also provide a full buy-back guarantee.

1993

- Tata Oil Mills Co. Ltd. (TOMCO) was merged with Hindustan Lever Ltd with effect from 1st April. As per the scheme of amalgamation, shareholders of TOMCO were allotted without Payment in cash 2 equity shares of Rs.10 each of HL for 15 equity shares of Rs.10 each held in TOMCO. After the amalgamation Unilever PLC London were allotted on a preferencial basis 29,84,347 equity shares of Rs.10 each at a premimium of Rs.95 per share for maintain their share holding at 51% in the Co.

- The Company entered into joint venture agreement with Lakme Lever Ltd. to undertake the manufacturing and distribution of colour cosmetics and other personal care products.

- The Company received the President's Award for Outstanding performance in Agri Commodities for the year 1994-95.

1995

HUL and Indian cosmetics major, Lakme Ltd, form 50:50 joint venture, Lakme Lever Ltd. HUL acquires Kwality and Milkfood 100% brandnames and distribution assets. - HUL and US-based S.C. Johnson & Son Inc. form 50:50 joint venture, Lever Johnson (Consumer Products) Pvt. Ltd.HUL Soaps and Detergent sales cross one million tonnes.

1996

- Brooke Bond India Ltd. was amalgamated with the Company. As per the scheme of amlgamation, the Company allotted 533,28,713 equity shares to the share holders of Brooke Bond India Ltd. in the proportion 9 shares of the company for 20 shares held in Brooke Bond India Ltd.

- The Company entered into joint venture S C Johnson & Son USA. The Joint Venture named Lever Johnson Consumer products Pvt. Ltd.

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1998

- The Directors of Hindustan Lever Limited at their meeting held on 16th March, considered and approved the proposal for amalgamation of Ponds India Limited with Hindustan Lever Limited. HUL's tea business is among the biggest in the world.

- HUL has signed a memorandum of understanding with Tata Housing Development Company for developing some of its properties into residential and commercial complexes.

- HUL has a world-class information technology infrastructure to enable the businesses to respond faster and perform better.

- Hindustan Lever Limited's Bangalore factory has received National Productivity Award for the fourth year in a row from National Productivity Council. The factor has also received ISO 9002 certification.

1999

- Hindustan Lever Ltd (HUL), has joined hands with the Institute for Social and Economic Change (Isec) for a rural development programme in Karnataka.

- Hindustan lever Ltd, has decided to merge its subsidiary Industrial Perfumes Ltd with the company. The merger would be effective from January 1.

- Hindustan Lever Limited (HUL) has decided to dispose of its dairy business to Nutricia (India) Pvt Ltd and spin off its animal and poultry feeds into a separate subsidiary.

2000

- The Company will be the largest e-tailer in the next two years.

- The Company has launched a new brand of toopaste -- Aim.

- The Company launched the International Lux Skincare range, "Sunscreen Formula".

- The Company has launched a cooking medium New Dalda Active.

- Kwality Wall's, a division of Hindustan Lever Ltd., has launched softy ice cream and has positioned it as a mass market product and Head of the ice cream business.

- Hindustan Lever Ltd's Pepsodent toothpaste has introduced games at McDonald's outlets.

- The Company has launched the new Nutririch Fair & Lovely fairness reviving lotion.

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2001

- HUL has over 36,000 employees, and has created 2 lakh indirect jobs. Its operations are spread across 70 locations in India. There are over 50 factories, of which 28 are in backward areas. The operations involve 2000 suppliers and aassociates and 7000 stockists and agents. HUL has emerged as a major Exporter.

- Hindustan Lever has entered into a joint venture with Godrej Agrovet a subsidiary of Godrej Soaps.

- In October 2000 HUL acting in concert with Unilever made an open tender offer for the remaining 24.62%of the IBL equity at price Rs 173.00 per share.

2001

- The Board of Hindustan Lever Ltd (HUL) had approved the transfer of its undertaking engaged in seeds business to its subsidiary Paras Extra Growth Seeds Ltd.

- The company has signed an agreement with ICI India, a subsidiary of ICI plc, UK, for sale of Nickel Catalyst business and Adhesives business, a sub-unit of Specialty Chemicals Division of the company's Chemicals and Agri operations for a consideration of Rs.21 crore and Rs 9 crores respectively.

2002

-Opto Circuits enters into an agreement with HUL to buy the business line of Digital Thermometers.

- Comes out from the premium (prestige) fragrances segment by stopping distribution of Calvin Klein in the country

2003

- Ties up with Pepsi for distribution, signs a memorandum of understanding with Pepsi, to leverage each other's strengths in distribution. The agreement provides Pepsi access to the HUL's institutional accounts.

-HUL extended its Knorr Annapurna range into soup powders at Rs 5. Sporting flavours such as Tomato Tease, Spicy Vegetable, Chicken Punch and Peppery Chicken

-The companty has introduced a new mango drink 'Mr Fruit'.

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2004

-Relaunches Rin Shakti Powder and Rin Shakti Bar

-Mr. Harish Manwani appointed president, home and personal care, North America , a business worth 5bn euros in sales turnover for '02

-HUL unveils new schemes to lure customers in Tamil Nadu

-Hindustan Lever Ltd has introduced its new active Gel Close Up in the market

-Hindustan Unilever launches `Perfect Radiance', range of 12 premium skincare products under brand name Fair & Lovely on May 26, 2004

-HUL enters into kids' personal care market

-Unilever, the parent company of Hindustan Lever and one of the world's largest consumer products companies, has set up a global sourcing arm, that will have a large presence in India to buy products and raw materials from low-cost locations for its subsidiaries across the world

-Launches Dove Ultra Moisturizing Body Wash

-HUL inks pact with Pepsi in beverage segment

2005

-HUL introduce iced tea in glass bottles

-HUL rolls out Brooke Bond brand variation

-Mcleod Russel & HUL signs MoU

2007

-Hindustan Unilever Ltd. has appointed Mr. Ashok K. Gupta as "Officer who is in default" for the purposes of Compliance with section 5(f) of the Companies Act, 1956.

46

HUL DISTRIBUTION NETWORK

This is the whole Distribution Chain of HUL to cover the Rural market. The company have

remarkably worked upon to make the supply chain from manufacturers to retailers simple with

very few number of mediators and jobbers. It has helped them to maintain the transparency in the

cycle and also have let them established a prompt delivery process. The products are manufactured

in the factories all across India and then is supplied from there to the various Carriage and

Forwarding (C&F) units which are 5-10 per state depending on the area they have to cover and are

established by the company. These C&F units then supply the products to the various Wholesalers

confined to their area only and according to the wholesalers demand. The wholesalers then supply

the products to the semi-wholesalers and the retailers as per the volume of their order. Then the

semi-wholesalers deliver the products to the retailers and customers.

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MANUFACTURING UNITS ALL ACROSS INDIA

C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7

STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS

WHOLESALERS

RETAILERS

CUSTOMERS

STAGE 1-

In this stage the products reach to the Carriage and Forwarding unit from various manufacturing

units established all across India. The volume of the delivery depends upon the quantity

required/ordered by the C&F unit. The depot sends the request of the volume of the products to the

Head Office, which then order the various factories to supply the products to the mentioned depot.

The supply is met within a week. HUL has 45 C&F’s with 7000 stockists and 2000+ suppliers and

associates to target the market.

STAGE 2-

The C&F then supplies the products according to the demand of various wholesalers. Each of the

depot cover a region assigned to them.

Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supply products everyday.

They work on the concept of advance payment by DD by the wholesalers and deposit them in the

bank which is transferred to the head office.

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MANUFACTURER

C&F

C&F

WHOLESALERS

HUL DISTRIBUTION NETWORK IN RURAL MARKET

IN Rural Geographic Regions of India the product which should be made by the manufactures can

be delivered through by C & F unit and these unit provide stock in the hand of the merchant

wholesalers. Wholesaler delivers the product or stock to the different retailers (who sales stock in

breaking bulk) through by agents. The main difference in urban and rural areas distribution

networks are the agent who made relation between merchant wholesalers to retailers. Retailers can

sell stock in small quantity to the ultimate consumers.

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MANUFACTURING UNITS ALL ACROSS INDIA

C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7

STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS

WHOLESALERS

RETAILERS

CUSTOMERS

AGENTS

50

51

NATION WIDE MANUFACTURING:

80 factories, across India

The year was 1923. Lord Leverhulme, the legendary founder of Lever Brothers, was visiting India.

The nationalist sentiment in India was for locally manufactured products. Lord Leverhulme, who

believed that what is good for a country is equally good for the company, responded to that

aspiration because he too shared that dream.

His dream ultimately was realised in 1934. In September 1934, after more than a decade of

discussions in London and in India, a Lever factory was allowed to sprout on the land that had

been reclaimed by the Bombay Port Trust at Sewri. From here, a month later rolled out the first

cake of Sunlight soap to be manufactured in India. The same year, Lever Brothers took over the

Garden Reach Factory in Kolkata.

These two factories were the first in a manufacturing base, which today literally dots the length

and breadth of India. From Assam to Gujarat, from Uttaranchal to Kerala.

Hindustan Unilever's diverse product range is today manufactured in about 80 factories. In

addition, the company outsources from 150 other units. The operations involve 2,000 suppliers and

associates.

DEVELOPING BACKWARD AREAS

Several HUL factories are situated in backward areas. The company has consciously responded to

the national policy of development of backward areas by setting up manufacturing units in these

places, which provide several direct and indirect employment opportunities for these areas, and

leads to general economic development of these regions through industrialization. In fact, all major

investments of HUL, in recent years, have been either in A-Category backward areas or No-

Industry Districts. These include factories in Khamgaon and Yavatmal (Maharashtra), Chhindwara

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(Madhya Pradesh), Orai, Sumerpur and Khalilabad (Uttar Pradesh), Haldia (West Bengal),

Silvassa (Dadra & Nagar Haveli), Pondicherry, Goa, Doom Dooma (Assam), Haridwar

(Uttaranchal) and Barotiwala (Himachal Pradesh). Since 2001 itself, HUL has set up nine new

factories in backward areas.

Equally, HUL has an enviable track record in taking over sick enterprises, in response to requests

from Government, and converting them into viable operations. The company's units at Mangalore

and Rajpura all bear testimony to this achievement. In the process, HUL has saved precious jobs

and developed local economies.

HUL's manufacturing facilities, like the Khamgaon soap plant and the Sumerpur detergent bar

unit, are recognized as among the best in the Unilever world.

HUL has adopted Total Productive Maintenance (TPM) for achieving manufacturing excellence

since 1994. As on date, TPM is in different stages of implementation in 28 factories. Four HUL

factories have already received the TPM Consistency Award, and 14 factories have been awarded

with the TPM Excellence Award.

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MEETINGS NEEDS EVERY WHERE

How do you ensure that Mr. Ramesh in Kanyakumari gets his Lifebuoy soap and Mrs. Kulkarni in

Jammu gets to know how Bru coffee tastes even before she has bought it? Well, you need to have

a cutting edge distribution network in place.

Hindustan Lever's distribution network is recognized as one of its key strengths. Its focus is not

only to enable easy access to our brands, but also to touch consumers with a three-way

convergence - of product availability, brand communication, and higher levels of brand

experience.

HUL's products, manufactured across the country, are distributed through a network of about 7,000

redistribution stockists covering about one million retail outlets. The distribution network directly

covers the entire urban population.

The general trade comprises grocery stores, chemists, wholesale, kiosks and general stores.

Hindustan Lever services each with a tailor-made mix of services. The emphasis is equally on

using stores for direct contact with consumers, as much as is possible through in-store facilitators.

AT THE SUPERMARKETS

Self-service stores and supermarkets are fast emerging in metros and large towns. To service

modern retailing outlets in the metros, HUL has set up a full-scale sales organization, exclusively

for this channel. The business system delivers excellent customer service, while driving growth for

the company and the store. At the same time, innovative marketing initiatives are taken to provide

consumers with experience of our brands at the store itself, through product tests and in-store

sampling.

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IN THE VILLAGES

HUL has also revamped its sales organization in the rural markets to fully meet the emerging

needs and increased purchasing power of the rural population. The company has brought all

markets with populations of below 50,000 under one rural sales organization. The team comprises

an exclusive sales force and exclusive redistribution stockists, under the charge of dedicated

managers. The team focuses on building superior availability, while enabling brand building in the

deepest interiors. HUL's distribution network in rural India already directly covers about 50,000

villages, reaching about 250 million consumers, through about 6000 sub-stockists.

HARNESSING INFORMATION TECHNOLOGY

An IT-powered system has been implemented to supply stocks to redistribution stockists on a

continuous replenishment basis. The objective is to catalyze HUL's growth by ensuring that the

right product is available at the right place in right quantities, in the most cost-effective manner.

For this, stockists have been connected with the company through an Internet-based network,

called RSNet, for online interaction on orders, dispatches, information sharing and monitoring. RS

Net covers about 80% of the company's turnover. Today, the sales system gets to know every day

what HUL stockists have sold to almost a million outlets across the country. RS Net is part of

Project Leap, HUL's end-to-end supply chain, which also includes a back-end system connecting

suppliers, all company sites and stretching right upon stockists.

PIONEERING NEW CHANNELS

Hindustan Unilever is simultaneously creating new channels, designed on the same principle of

holistic contact with consumers.

Project Shakti, HUL's partnership with Self Help Groups of rural women, is becoming an

extended arm of the company's operation in rural hinterlands. Started in 2001, Project Shakti has

already been extended to about 50,000 villages in 12 states - Andhra Pradesh, Karnataka, Gujarat,

Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtra

and West Bengal. The respective state governments and several NGOs are actively involved in the

55

initiative. The SHGs have chosen to partner with HUL as a business venture, armed with training

from HUL and support from government agencies concerned and NGOs.

Hindustan Unilever Network (HUN) is the company's arm in the Direct Selling channel, one of

the fastest growing in India today. It already has about 3.5 lakh consultants - all independent

entrepreneurs, trained and guided by HLN's expert managers. HLN has already spread to over

1500 towns and cities, covering 80% of the urban population, backed by 42 offices and 240 service

centres across the country. It presents a range of customized offerings in Home & Personal Care

and Foods.

Out-of-Home consumption of products and services is a growing opportunity in India, as

elsewhere in the world. Hindustan Unilever is already the largest player in the hot beverages out-

of-home segment, with over 15000 tea and coffee vending points. The company is expanding the

network aggressively, in the education, entertainment, leisure and travel segments. HUL's alliance

with Pepsi will significantly strengthen this channel.

Health & Beauty Services are Hindustan Unilever's simultaneous foray to meet the increasing

consumer need for such products and services. Lakme Salons provide specialized beauty services

and solutions, under the recognized authority of the Lakme brand. The Ayush Therapy Centers

provide easy access to authentic Ayurvedic treatments and products.

Hindustan Unilever, which once pioneered distribution in India, is today reinventing distribution -

creating new channels, and redefining the way current channels are serviced. In the process it is

converging product availability, with brand communication and brand experience.

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SHAKTI - CHANGING LIVES IN RURAL INDIA

Shakti is HUL's rural initiative, which targets small villages with population of less than 2000

people or less. It seeks to empower underprivileged rural women by providing income-generating

opportunities, health and hygiene education through the Shakti Vani programme, and creating

access to relevant information through the iShakti community portal.

In general, rural women in India are underprivileged and need a sustainable source of income.

NGOs, governmental bodies and other institutions have been working to improve the status of

rural women. Shakti is a pioneering effort in creating livelihoods for rural women, organized in

Self-Help Groups (SHGs), and improving living standards in rural India. Shakti provides critically

needed additional income to these women and their families, by equipping and training them to

become an extended arm of the company's operation.

Started in 2001, Shakti has already been extended to about 80,000 villages in 15 states - Andhra

Pradesh, Karnataka, Tamilnadu, Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Uttar

Pradesh, Rajasthan, Punjab, Haryana, West Bengal, Orissa, Bihar & Jharkhand. The respective

state governments and several NGOs are actively involved in the initiative.

Shakti already has about 25,000 women entrepreneurs in its fold. A typical Shakti entrepreneur

earns a sustainable income of about Rs.700 -Rs.1,000 per month, which is double their average

household income. Shakti is thus creating opportunities for rural women to live in improved

conditions and with dignity, while improving the overall standard of living in their families. In

addition, it involves health and hygiene programmes, which help to improve the standard of living

of the rural community.

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Shakti's ambit already covers about 15 million rural population.

Plans are also being drawn up to bring in partners involved in agriculture, health, insurance and

education to catalyze overall rural development.

HUL's vision for Shakti is to scale it up across the country, covering 100,000 villages and touching

the lives of 100 million rural consumers by 2005.

Shakti Vani is a social communication programme. Women, trained in health and hygiene issues,

address village communities through meetings at schools, village baithaks, SHG meetings and

other social fora. In 204, Shakti Vani has covered 10,000 villages in Madhya Pradesh, Chattisgarh

and Karnataka. The vision is to cover 80,000 villages in 2005.

iShakti, the Internet-based rural information service, has been launched  in Andhra Pradesh, in

association with the Andhra Pradesh Government's Rajiv Internet Village Programme. The service

is now available in Nalgonda, Vishakapatnam, West Godavari and East Godavari districts. iShakti

has been developed to provide information and services to meet rural needs in medical health and

hygiene, agriculture, animal husbandry, education, vocational training and employment and

women's empowerment. The vision is to have 3,500 kiosks across the state by 2005.

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59

60

LIFEBUOY SWASTHYA CHETNA

HEALTH & HYGIENE EDUCATION

Lifebuoy Swastya Chetna (LBSC) is a rural health and hygiene initiative which was started in

2002. LBSC was initiated in media dark villages (in UP, MP, Bihar, West Bengal, Maharashtra,

Orissa) with the objective of spreading awareness about the importance of washing hands with

soap.

The need for a program of this nature arose from the fact that diarrhoeal diseases are a major cause

of death in the world today. It is estimated that diarrhoea claims the life of a child every 10

seconds and one third of these deaths are in India. According to a study done by the London

School of Hygiene and Tropical Medicine, the simple practice of washing hands with soap and

water can reduce diarrhoea by as much as 47%. However, ignorance of such basic hygiene

practices leads to high mortality rates in rural India.

Being India’s leading personal wash health brand, Lifebuoy saw a role for itself in propagating the

message of hygiene and health in villages. We launched our Lifebuoy Swasthya Chetna initiative

keeping this rationale in mind.

LBSC is a multi-phased activity which works towards effecting behaviour change amongst the

rural population it touches. It demonstrates that “visible clean is not really clean” thereby proving

the importance of washing hands with soap. It targets children as they are the harbingers of change

in society and mothers since they are the custodians of health.

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As stated above, the campaign has been divided into various phases. In the initial phase, a Health

Development Facilitator (HDF) and an assistant initiates contact and interacts with students and

influencers of the community, i.e. village community representatives, medical practitioners, school

teachers etc. A number of tools such as a pictorial story in a flip chart format, a "Glo-germ

demonstration" and a quiz with attractive prizes to reinforce the message are used. The "Glo-Germ

demonstration" is a unique tool to make unseen germs visible and emphasize the need to use soap

to wash hands and kill germs. The first interaction with students is then replicated with the women

and finally the rest of the community. The various stages reinforce the message and learnings,

which is crucial in order to effect awareness and behaviour change in favour of hand wash

hygiene.

The programme has touched 27000 villages and 80 mn people over the last four years. In 2006

alone LBSC contacted 10,000 villages in UP, MP, Jharkhand and Bihar. This on-going project is

committed to spreading the message of health and hygiene and touching more lives in rural India

over 2007.

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FAIR & LOVELY FOUNDATION

Economic Empowerment of Women

The Fair & Lovely Foundation is HUL's initiative which aims at economic empowerment of

women across India. It aims to achieve this through providing information, resources, inputs and

support in the areas of education, career and enterprise. It specifically targets women from low-

income groups in rural as well as urban India. Fair & Lovely, as a brand, stands on the economic

empowerment platform and the Foundation is an extension of this promise. The Foundation has

renowned Indian women, from various walks of life, as its advisors. Among them are

educationists, NGO activists, physicians. The Foundation is implementing its activities in

association with state governments.

In India, low-income families, albeit unwillingly, tend to discriminate against girl children, in

providing opportunities for education and enterprise, because of resource constraints. The support

provided by Fair & Lovely Foundation will help girl children avail opportunities of higher

education and acquire skills in appropriate professions. The series of projects that have been drawn

up to achieve the vision include the following:

Careers:

Career guidance is provided by organising career fairs. About 500,000 students have benefited

from these career fairs in 150 towns and cities in till 2004, getting acquainted with over 200 career

options. The programme offers workshops for career guidance, resume-writing skills, personality

development. A career guidance programme has also been specially designed for television, and is

running on three TV channels. Career columns are being written and sponsored in different

magazines.

63

Education:

Scholarships for education such that it opens career avenues, specifically targeting low-income

groups are being provided. 2003 was the first year of scholarships - 147 students have received

scholarships in 2003. The 2004 scholarships for urban students have been announced; 72 women

have received the scholarships. The scholarships for rural students are yet to be announced.

Enterprise:

Vocational training

a. a three-month Home Health Care Nursing Assistant's Course

b. skill development in the areas of embroidery and garment designing

c. professional course for aspiring beauticians.

In all, 400 women have been trained till 2004.

The Foundation has also begun to train "Balwadi" teachers. About 1000 teachers have been trained

in Maharashtra and a pilot has begun in Bihar.

Launched in 2003, Fair & Lovely Foundation seeks to impact the lives of about 5000 women by

2005. This will be done through scholarships and enterprise initiatives. For career guidance, it

seeks to touch millions of aspiring women and students in an ongoing programme.

64

ORDER/ PRODUCT FLOW THROUGH SUPPLY CHAIN MANAGEMENT

IN HINDUSTAN UNILEVER LIMITED

65

Parts

Orders

Products

ProductsProducts

Orders

Products

Production plans

Component Requirement

Demand Forecast

Orders

ORDER/ PRODUCT FLOW THROUGH SUPPLY CHAIN FUNCTIONS

DATA MANAGEMENT

MANUFACTURING

PART SUPPLY

PRODUCT DISTRIBUTION

DEMAND PLANNING

CUSTOMER

CHANNEL A

CHANNEL B

CHANNEL C

SUPPLY PLANNING

LIST OF COMPETITORS:

1. Procter & Gamble

2. ITC Ltd.

3. Nirma

4. Colgate Palmolive Company

5. Nestle

6. Britannia

7. Dabur

8. Wal-Mart

9. Marico

10. Tata tea

11. GSK

12. GCPL

13. Gillette

RESEARCH METHODOLOGY

66

Research in common parlance prefers to a search for knowledge. Once can also define research as

a scientific and systematic search for pertinent information on a specific topic. In fact research is

an art of scientific investigation. Research is an academic activity and as such the term should be

used in a technical sense.

Research Problem:

In every organization “Distribution channel” makes its own place. All Business organizations are

using Distribution Channel to provide its goods to manufactures to the end users. Because of

which our study is going on to describe the “Distribution Channel of Hindustan Unilever Limited

in rural market”.

Research Objective:

The purpose of the research is to discover answers to question through the application of scientific

procedures. The main aim of the research is to find out the truth which is hidden and which has not

been discovered as yet. Though each research study has its own specific purpose we may think of

research objectives as falling into a number of following broad grouping:

Study of Distribution channel of “Hindustan Unilever Limited” in rural market .

Market survey of different retailers who provided the Hindustan Unilever Limited

products to the end consumers in Rural Market.

67

RESEARCH PLAN:

Research Design:

“Research design is the arrangement of conditions for collection and analysis of data in a manner

that aims to combine relevance to the research purpose with economy in procedure”.

In this research project we can take Descriptive Research for collection and analysis of Data.

Descriptive Research:

Descriptive research includes surveys and fact-finding enquiries of different kinds. The major

purpose of descriptive research is description of the state of affairs as it exists at present. The main

characteristics of this method are that the researcher has no control over the variables; he can only

report what has happened or what is happening.

SAMPLE DESIGN:

A sample is only a portion of the universe or population. A sample design is a definite plan for

obtaining a sample from a given population. It refers to the technique or procedure or the

researchers adopts in selective items of the sample so that the data collected may be the

representative of the population.

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Method of Sampling:

Probability Sampling:-

It is also known as random sampling. Here, every item of the universe has an equal chance or

probability of being chosen for sample.

Probability sampling may be taken in form of:

Simple Random Sampling

Systematic Random Sampling

Stratified Random Sampling

Cluster and area Sampling

Sequential Random Sampling

Non-Probability Sampling:-

It is also known as deliberate or purposive or judge mental sampling. In this type of sampling,

every item in the universe does not have an equal, chance of being included in a sample.

Non- Probability sampling may be taken in form of:

Convenience Sampling.

Quota Sampling.

Judgement Sampling.

We choose Simple Random Sampling method here for analysis of data.

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Simple Random Sampling: - As it is very difficult to meet each and every respondent. So, we

randomly select the sample and in this type of sampling every member has an equal chance of

selection so that data has been collected randomly.

Sample Size:

This refers to the number of items to be selected from the universe to constitute a sample. The size

of the sample should not be too larger or too smaller. It should be optimum. An optimum sample is

one which fulfills the requirements of efficiency, representatives, reliability and flexibility

100 retail units or outlets are the SAMPLE SIZE.

Sample Universe:

Lucknow City, Barabanki etc.

RESEARCH INSTRUMENT:

Questionnaire:

Questionnaire are formal set of question prepare to collect the required information. This is one of

the most effective and popular techniques used in surveys. However one has to be careful while

drawing up questionnaire before deciding on the questions it is important to understand the exact

nature of the information required and who should be interviewed.

The content, phrasing and the sequence of the questionnaire should also be clear and unambiguous.

The knowledge levels of the target of respondent should also be kept in mind while drawing up the

questions.

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Data Collection Methods:

In dealing with any problem, once the sample has been selected data must be collected from the

sample population. There are several ways of collecting the appropriate data, which defer

considerably in the context of cost, time and other resources.

Questionnaires, Personnel Interview, Open ended, Close ended & multiple Questions in the

questionnaire have been asked from the sample to draw a useful conclusion.

They can be broadly divided into two into two categories:

Primary Source

Secondary Source

Primary Data:

Primary data is a data which is collected from a fresh for the first time. There are several methods

of collecting the primary data are as follows:

Observation Method

Interview Method

Questionnaire Method

Depth Interview Method

Content Analysis Method

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The data collected in this project is primary data and they could be made through by Questionnaire

and Observation method.

Secondary Data:

There are those data which have already been collected by someone else and have panel through

statistical power. When the researcher utilizes secondary data, he has to look into various sources

from where he can obtain data usually published data is available in:

Technical and trade journals.

Books, Magazines & newspapers.

Public records & statistics.

Historical Documents and other resources.

Website journals, etc.

72

Do you keep products of HUL in your outlet/shop?

88

12

0

10

20

30

40

50

60

70

80

90

100

Yes No

ANALYSIS OF DATA:

1. (A) Do you keep products of HUL in your outlet/shop?

a).Yes 88 b). No 12 .

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Why don’t you keep the products of HUL in your shop?

4

2 2

3

1

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1

erratic supply

lack of demand

low margin

no supplier

don’t know about thecompany

1 B) Why don’t you keep the products of HUL in your shop or why did you stop keeping its products?

a). erratic supply 4b). lack of demand 2c). low margin 2d). no supplier 3e). don’t know about the company 1

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From whom do you purchase your product?

25

40

18

17

Distributor

Dealer/ Agent

Agency

Wholesaler

2. From whom do you purchase your product?

1). Distributor 252). Dealer/ Agent 403). Agency 184). Wholesaler 17

3.

How do you rate the delivery process of the distributor/dealer?

75

How do you rate the delivery process of the distributor/dealer?

25

33

38

4 0

  Excellent

Above Average 

Average 

Below Average 

Extremely Poor 

a) Excellent 25

b) Above Average  33

c) Average  38

d) Below Average  4

e) Extremely Poor  0

4. Are you satisfied with the distributor/dealer behavior?

Yes 68No 32

76

Are you satisfied with the distributor/dealer behavior?

68

32

0

10

20

30

40

50

60

70

80

1

Yes

No

5. Are you satisfied with the delivery of the goods supplied by distributor/ dealer?

Yes 71

No 29

77

Are you satisfied with the delivery of the goods supplied by distributor/ dealer?

71

29

Yes

No

6. Are they providing you adequate supply of goods?

Yes 76

No 24

78

Are they providing you adequate supply of goods?

76

24

0

10

20

30

40

50

60

70

80

1

Yes

No

7. Is the distributor taking the damages/ compensation regularly?

Yes 78

No 22

79

Is the distributor taking the damages/ compensation regularly?

78

22

0

10

20

30

40

50

60

70

80

90

1

Yes

No

8. What is the mode of payment to the distributor/ Dealer by Retailer?

Cash 62

Credit 24

Cheque 14

80

What is the mode of payment to the distributor/ Dealer by Retailer?

62

24

14

Cash

Credit

Cheque

9. Are they providing you any discount on cash payment?

Yes 52

No 48

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In the case of Hindustan Unilever Limited the company is providing Rs.800 per month for a

Windows display along with 1% cash discount and 2% on the sales amount on quarterly basis

given to his retailers.

10. Any extra benefit for the increment of the sales given by them?

Windows Display 75

Long term sales plan 20

Canopy 5

82

11. Can agents regularly make aware you about the new products of HUL regular or not?

Yes 72

No 28

83

Can agents regularly make aware you about the new products of HUL regular or not?

72

28

0

10

20

30

40

50

60

70

80

1

Yes

No

FINDINGS

1. In case of sales agent behaviors the HUL agents are more efficient and focused.

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2. Due to 4 Distributors in Lucknow it is easier for the retailers to give orders because of small

payments.

3. There are many schemes given by the HUL in small quantity to his retailers i.e., Cash

discount on every sales order.

4. Experience salesman easily influences the super value store.

5. HUL are providing much benefit to the retailer to increase their sales i.e., windows display,

canopy etc.

RECOMMENDATION

These are some of the recommendation which can be given in case of Hindustan Unilever

Limited:-

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1. Sales agent who is in rural market should be experience person because they are easily made

relationship with her retailers.

2. HUL can provide a various new schemes to his retailers for making potential retailers.

3. There should be some visit of the Area Manager from time to time arrange by the company.

4. The employee should be given uniforms in which the name of the company should be

printed, by doing this the sales people get motivated. These shops should be opened for 24

hours. They should offer 24 hours free home delivery system.

5. The delivery vehicle should be attractive the name of the company should be printed in that

so that it becomes the sources of advertisement.

6. The companies should emphasis on its advertisement; there should be BRAND FIT in that.

For example when lux launch its advertisement with sharukh khan with girls. It was heavily

criticized because it was not fit with the brand. It adversely affects the opinion of the

customer and it results in decrease in sales.

7. Company should emphasis on their business areas. They should penetrate their business in

the rural areas. 69% of the Indian population lives in rural areas. There is huge market there

and very less market has been penetrated.

CONCLUSION

With the study of the topic we can know about the distributor relationship with the retailers of the

largest firm in retail Sector are:

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HINDUSTAN UNILEVER LIMITED.

With the study it can be easily known how the retailers are been selected HINDUSTAN

UNILEVER LIMITED (Super value store) and what the terms and conditions regarding the

selection of the retailers and what are the benefits being provided to the retailers and what are the

various benefits being provided to the retailers in order to increase their sales.

The company is making there strategies regarding the customer and the various product assortment

being provided to the retailers and whether the distributor is helping the retailers in managing the

demand of the retailers and also the sales agent behavior and delivery man behavior affects the sale

of the retailers as well as the distributor.

So, my study is visualize the distribution channel of the HINDUSTAN UNILEVER LIMITED in

rural areas and they say that retailers liked

LIMITATIONS

Everything in this world has its own advantages and disadvantages which shows ‘nothing is

perfect’.

Following are the problems faced but it’s a part of game:

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1. TIME CONSUMING: It is very much obvious that it is a time consuming process. So much

time has been spent for this purpose.

2. LOW PARTICIPATION: Obviously many respondents have not participated in this and have

also created some problems which simply shows that they were not interested.

3. BIASNESS: Sometimes interested customers were also biased so the collected figures involve

both positive and negative figures.

4. It does not cover all the aspects of the company.

5. SUBJECTIVE: This project only tells you what it is all about.

BIBLOGRAPHY

Books:-

C R Kothari (Research Methodology)

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Websites:-

www.hul.comwww.google.com

Magazines & Newspapers:-

Business WorldEconomic TimesThe Times of India

89