marketing - hul final (3)

8/3/2019 Marketing - HUL Final (3)

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RESEARCH REPORT

ON

MarketingStrategies

of

REPORT SUBMITTED TO THE REQUIREMENTOF THE DEGREE OF MBA PROGRAMME

(UNDER U.P.T.U. LUCKNOW)

(2006-2008)

SUBMITTED TO SUBMITTED BY

DR. MUKUL GUPTA

(H.O.D. MBA Deptt.)

GLBITM, Gr. Noida

PRAVEEN KUMAR TIWARIMBA (4TH SEM)

ROLL NO. 0619270038

G.L. BAJAJ INSTITUTE OF TECHNOLOGY & MANAGEMENTGR. NOIDA


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ACKNOWLEDGEMENT

Words express everything Mouth Co-ordinates,

When it comes to gratitude, Heartcomes to play.

There is always a sense of gratitude which one expresses to other

people for their helpful and needy service they render during phases of

life. I too would like to do the same as I really wish to express my

gratitude to those who have been helpful to me in getting this project

completed.

I am very thankful and express my gratitude to Dr. Mukul Gupta

(H.O.D. MBA Deptt), GLBITM, Gr. Noida.

I am also indebted to all the faculty members of center for

management technology for providing consistent encouragement and

congenial atmosphere to complete the research report

PRAVEEN KUMAR TIWARIMBA (4TH SEM)

ROLL NO. 0619270038

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EXECUTIVE SUMMARY

Hindustan Unilever Limited (HUL) is Indias largest Fast Moving

Consumer Goods Company, touching the lives of two out of three

Indians with over 20 distinct categories in Home & Personal Care

Products and Foods & Beverages. They endow the company with a

scale of combined volumes of about 4 million units and sales of Rs.10,

000 crores.

HUL is also one of the countrys largest exporters; it has been

recognized as a Golden Super Star Trading House by the Government

of India. Hence, research aims is that to study the existing marketing

practices, emerging marketing plans and understanding companies

business strategy with its profile. The main recommendations have

been made on the addressing of the advertising message to the

customers. An attempt has been made to formulate the

communication in a way to build it on a platform of the basic need for

buying HUL products. In another recommendation the suggestions

towards better dealer interest in HUL products has been given a

chance.

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The research is based primarily on primary data; however few

references to industry figures from secondary data have been made.

Data has been collected through in depth interviews and administered

questionnaires.

The study has given the researchers an inside of the Consumer

durable Industry and an opportunity to use the theoretical knowledge

in live project.

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TABLE OF CONTENTS

Executive Summary

Introduction

An Overview

Current Market Context

Exports Portfolios

Corporate Management

Research & Innovation Centre

Safety & Health Policy

Market Strategies

HLL Distribution Network

Pioneering Channels

Hindustan Unilever Ltd.

Competitors

Research Methodology

Future Scope

Findings, Data Analysis & Conclusion Recommendations

Suggestions

Limitations

Bibliography

(Annexure) Questionnaire

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INTRODUCTION

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

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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.

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 yetanother 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 ClarkCorporation 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

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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 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 anda 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.

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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

The mission that inspires HUL's 36,000 employees, including over

1,350 managers, 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

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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 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 impactingthe 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 feelsafe 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.

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HINDUSTAN UNILEVER LIMITED INDIAS LARGEST FMCG COMPANY

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FINANCIAL OVERVIEW

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Hindustan Lever Limited Shareholding

Pattern

Unilever

51.6

Flls

13.7

Domestic

Fls

14.8

Individual

19.9

14

HUL Equity Capital - 50 Mn $Market Capitalisation - 7,300 Mn $


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PRESENT MARKETING STRATEGY:

Mission:

Hindustan Unilever Limited 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.

Policy:

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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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.

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

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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 organisations, both

directly and through bodies such as trade associations, in the development ofproposed 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.

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.

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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.

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

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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 proceduresspecified by the Joint Secretaries. The Board of Unilever will not criticise

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.

In this Code the expressions 'Unilever' and 'Unilever companies' are used for

convenience and mean the Unilever Group of companies comprising Unilever

N.V., Unilever PLC and their respective subsidiary companies. The Board of

Unilever means the Directors of Unilever N.V. and Unilever PLC.ref:THE NEWS

Envoirment policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to

meet the daily needs of consumers and industry. In doing so, the Company is

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committed to exhibit the highest standards of corporate behaviour towards its

consumers, employees, the societies and the world in which we live.

The company recognises 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 minimising 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 orminimise, 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 centres 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

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Their vision is to continue to be an environmentally responsible organisation

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.

FMCG Market (HLL Categories)

Growth%

6.7

3.4

-2.5-1.1

-4

-2

0

2

4

6

8

00 01 02 03

21

FMCG MarketsSlowdown in growth & then 2 years of decline

FMCG Markets2004 - Revival after 2 years of decline


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FMCG Market (HLL Categories)

Growth%

-1.1-2.5 -2.8

0.8

2.0

6.1

-4

-2

0

2

4

6

8

02 03 Q1 '04 Q2 '04 Q3 '04 Q4 '04

Pricing action in 2004:

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Price reduction

Price reduction (Bottles) & Value improvement (Sachets)

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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

health benefits

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Current Market Context

Actions

Pricing

Laundry : Price Reduction

Shampoos: Value Improvement & Lower Price Points

Toothpaste: Value Corrections & SKU rationalization

Investments behind brands

Innovations

Quality

Higher A&P

Corrective actions in processed

Processed Foods

Corrective actions

Phased stock reduction

Withdrawl of 03 innovation

Defocus of Atta in unviable geographies

Sales decline of 26% arising from above actions

Market shares held / improved

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Growth%


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BRANDS


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PRODUCTS

Lux Breeze

Lifebuoy DoveLiril PearsHamam Rexona

Surf Excel Fair & Lovely Rin Pond's Wheel

Sunsilk Naturals Pepsodent

Clinic Close-up

Axe Lakme

Rexona

Ayush

Brooke Bond Bru

Lipton

Kissan Kwality Wall'sKnorr Annapurna

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http://www.hll.com/brands/lux.asphttp://www.hll.com/brands/breeze.asphttp://www.hll.com/brands/lifebuoy.asphttp://www.hll.com/brands/dove.asphttp://www.hll.com/brands/liril.asphttp://www.hll.com/brands/pears.asphttp://www.hll.com/brands/hamam.asphttp://www.hll.com/brands/rexona.asphttp://www.hll.com/brands/surf_excel.asphttp://www.hll.com/brands/fairnlovely.asphttp://www.hll.com/brands/rin.asphttp://www.hll.com/brands/ponds.asphttp://www.hll.com/brands/wheel.asphttp://www.hll.com/brands/sunsilk.asphttp://www.hll.com/brands/pepsodent.asphttp://www.hll.com/brands/clinicallclear.asphttp://www.hll.com/brands/close_up.asphttp://www.hll.com/brands/axe_magnet.asphttp://www.hll.com/brands/lakme.asphttp://www.hll.com/brands/rexona_deo.asphttp://www.hll.com/brands/ayush_range.asphttp://www.hll.com/brands/brook_bond.asphttp://www.hll.com/brands/bru.asphttp://www.hll.com/brands/lipton.asphttp://www.hll.com/brands/kissan.asphttp://www.hll.com/brands/kwality_walls.asphttp://www.hll.com/brands/annapurna.asphttp://www.hll.com/brands/lux.asphttp://www.hll.com/brands/breeze.asphttp://www.hll.com/brands/lifebuoy.asphttp://www.hll.com/brands/dove.asphttp://www.hll.com/brands/liril.asphttp://www.hll.com/brands/pears.asphttp://www.hll.com/brands/hamam.asphttp://www.hll.com/brands/rexona.asphttp://www.hll.com/brands/surf_excel.asphttp://www.hll.com/brands/fairnlovely.asphttp://www.hll.com/brands/rin.asphttp://www.hll.com/brands/ponds.asphttp://www.hll.com/brands/wheel.asphttp://www.hll.com/brands/sunsilk.asphttp://www.hll.com/brands/pepsodent.asphttp://www.hll.com/brands/clinicallclear.asphttp://www.hll.com/brands/close_up.asphttp://www.hll.com/brands/axe_magnet.asphttp://www.hll.com/brands/lakme.asphttp://www.hll.com/brands/rexona_deo.asphttp://www.hll.com/brands/ayush_range.asphttp://www.hll.com/brands/brook_bond.asphttp://www.hll.com/brands/bru.asphttp://www.hll.com/brands/lipton.asphttp://www.hll.com/brands/kissan.asphttp://www.hll.com/brands/kwality_walls.asphttp://www.hll.com/brands/annapurna.asp


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India's Largest Branded FMCG Exporter

It was 1962. The reality of India then was very different from what it is today.

India's economy then suffered from foreign exchange shortage. Hindustan

Lever voluntarily decided to take up Exports to support the country's economy.

Today, HUL is India's largest exporter of branded Fast Moving Consumer Goods.

It has been recognized by the Government of India as a Golden Super Star

Trading House.

Over time, HUL has developed appropriate capabilities to be globally

competitive in cost and quality for a viable Exports business.

Focus Areas

HUL's Exports focuses on two broad areas. It is a sourcing base for Unilever

brands in Home & Personal Care (HPC) and Tea for supplies to other Unilever

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companies. It also focuses on becoming a preferred supplier to both non-

Unilever and Unilever clients in three categories in which India, as a country,

has competitive advantage - Marine Products, Castor and its Derivatives and

Rice. HUL enjoys international recognition within Unilever and outside for its

quality, reliability and speed of customer service.

HUL's Exports geography comprises, at present, countries in Asia, Australia,

Africa, North America and Europe.

HUL's Exports portfolio

HPC:

The categories are soaps, skin care products and oral care products. The brands

are Lux, Lifebuoy, Pears, Fair & Lovely, Dove, Vaseline, Close-Up, Pepsodent,

Signal. HUL is the only source of Pears soap across the world.

Tea:

The categories are branded packet tea, and instant tea for Unilever's ready-to-

drink tea business. The branded teas are Brooke Bond, Brooke Bond Red label,

Brooke Bond Taj Mahal, Lipton, Lipton Yellow Label, Lipton Green Label, Lipton

Brisk, Lipton 3-in-1 premix, Chinese Rickshaw.

Marine Products:

HUL offers a comprehensive portfolio, ranging from Surimi, Crabsticks to

Shrimps and several value-added products. Among its customers is Icelandic,

the world's third largest seafood company. In addition, HUL has also become a

part of Unilever's supply chain in seafoods for Europe too. HUL's Marine

Products brands are Ocean Diamond, Ocean Excellence, Shogun, Hima, Gold

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Seal, Tara and Prima.

Rice:

The categories are Basmati Rice and Basmati Rice-based ready-to-eat rice

meals. The brands are Gold Seal Indus Valley, Rozana and Annapurna.

Castor:

The categories are Castor Oil, Castor-oil based products, like hydrogenated

castor oil, 12 - Hydroxy Stearic Acid, Ricinoleic Acid (used in grease and

lubricant industry, paints and surface coatings, cosmetics, emulsifiers), and

Speciality Castor Oils (USP grade, BP grade, DAB 10) etc used in

pharmaceutical preparations. HUL's Castor brand is Topsol.

Today, Exports is a substantial business in HUL, accounting for about 12% of

the company's turnover. HUL believes that its competitive advantages of cost

competitiveness, process competitiveness and economies of scale both at the

company and country level, hold it in good stead. They position the company to

become one of the hubs for sourcing by Unilever companies in HPC and Tea,

and also simultaneously become a preferred partner to global customers in

Marine Products, Castor and Rice.Direct Selling:

Product Range

Lever home range

Male grooming

Oral Care

Ayurveda

Personal Wash

Foods

Reach - 1400 towns (Largest in India)

Consultant base - 330,000

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Accordingly, 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.

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Work in partnership with external bodies and Government

agencies to promote environmental care, increase understanding

of environmental issues and disseminate good practice.

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:

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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 ofenvironment performance.

Establish appropriate management systems for environment

management and ensure regular auditing to verify compliance.

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

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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 forexpert 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.

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.

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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.

Research and Innovation Centres

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

certain additional

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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 Unilever 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.

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The company recognises 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 organisation at

all levels.

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 andservice 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 Unilever 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.

A unique example is Hindustan Lever's Lifebuoy soap. In rural India,

health is of paramount importance, because indisposition is very directlyrelated to loss of income. Lifebuoy, whose core equity is health and

hygiene , has for decades now been synonymous with soap in rural

India.

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

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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 otherproducts - 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.

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 directconsumer 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,

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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 haslaunched 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.

Availability of HULs 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

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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-oldbullock 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 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

organisations 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

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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 ofaround 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.

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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 chainfrom manufacturers to retailers simple with very few number ofmediators and jobbers. It has helped them to maintain the transparencyin the cycle and also have let them established a prompt deliveryprocess. The products are manufactured in the factories all across Indiaand 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 haveto cover and are established by the company. These C&F units thensupply the products to the various Wholesalers confined to their areaonly and according to the wholesalers demand. The wholesalers thensupply the products to the semi-wholesalers and the retailers as per thevolume of their order. Then the semi-wholesalers deliver the products tothe 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

STOCKISTSSTOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS

WHOLESALERS

RETAILERS

CUSTOMERS


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STAGE 1-

In this stage the products reach to the Carriage and Forwarding unitfrom various manufacturing units established all across India. Thevolume of the delivery depends upon the quantity required/ordered by

the C&F unit. The depot sends the request of the volume of the productsto the Head Office, which then order the various factories to supply theproducts to the mentioned depot. The supply is met within a week. HULhas 45 C&Fs with 7000 stockists and 2000+ suppliers and associates totarget the market.

STAGE 2-

The C&F then supplies the products according to the demand of variouswholesalers. Each of the depot cover a region assigned to them.Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supplyproducts everyday.They work on the concept of advance payment by DD by thewholesalers and deposit them in the bank which is transferred to thehead office.

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MANUFACTURER

C&F

C&F

WHOLESALERS


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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 Lever'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.

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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 industrialisation. 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 (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 recognised 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

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already received the TPM Consistency Award, and 14 factories have

been awarded with the TPM Excellence Award.

Marketing 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 recognised 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.

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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 organisation, 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.

In the villages

HUL has also revamped its sales organisation 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 organisation. 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 catalyse HUL's growth by ensuring that the right

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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, despatches, 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 upto stockists.

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,

organised 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,

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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. 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

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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.

Pioneering New Channels

Hindustan Lever 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 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 Lever Network (HLN) 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

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presents a range of customised 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 Lever 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 allaince with Pepsi will significantly

strengthen this channel.

Health & Beauty Services are Hindustan Lever's simultaneous foray to

meet the increasing consumer need for such products and services.

Lakme Salons provide specialised beauty services and solutions, under

the recognised authority of the Lakme brand. The Ayush Therapy

Centres provide easy access to authentic Ayurvedic treatments and

products.

Hindustan Lever, 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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NOVEL PRODUCT NEW PROCESS

Hindustan Lever's mission is to meet everyday needs for nutrition,

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

look good and get more out of life. HUL's research & development

base, one of the largest in Indian industry, helps achieve this mission,

with novel products and new processes. The company has over 380

patents, demonstrating its leading edge in consumer-relevant R&D.

The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai

and Bangalore, and global technology centres in India have over 200

highly qualified scientists and technologists, many with post-doctoral

experience acquired in the US and Europe. Set up in 1958, HLRC's aim

is to develop new products and processes, improving benefits and

quality of existing products, and optimal use of resources.

Major innovations have taken place, down the decades, in every

category in which HUL is present. From Home Care to Personal care,

Beverages to Foods.

Better cleaning, lesser water consumption

Consider for example, HUL's development of a water-saving

technology for its detergents. One of the most severe problems that

India faces today is shortage of water. Water scarcity affects one in

every three Indians. In a typical Indian home, at least 20% of the

water consumed goes behind washing of clothes. HUL decided that it

would be of immense benefit to an Indian household, if a technology

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could be developed, which would help reduce water consumed in

washing of clothes. HUL's scientists have innovated a path-breaking

technology - it reduces water consumption and time taken for rinsing

by 50%. The technology has already been introduced.

World's most advanced water purifier

People in cities and towns spend enormous amounts, either in fuel or

devices, to ensure safe drinking water. HUL's scientists have

developed a breakthrough device, called "Pureit", which purifies water

as safe as boiled water, providing 100% protection from all water-

borne diseases; it also removes pesticides that may be present in

drinking water. Its operation does not require electricity, running tap

water and plumbing or expensive maintenance. It thus provides water

at a cost of just Re.1 for every six litres - or less than 20 paise a litre.

Iodine In Salt - the vital ingredient

Iodine, it is well-known, is important for the mental development of

young children. Iodised salt is a well-accepted mode of ensuring

appropriate iodine intake. Yet Iodine added to salt is lost in transport,

storage as well as in the process of cooking. HUL scientists have

developed a patented breakthrough technology to stabilise iodine in

salt, following work on the stability of iodine under Indian conditions of

storage and cooking. The technology has made it possible to actually

realise the purpose of iodised salt - that people get appropriate iodine

intake through the food they eat.

Technology of skin lightening

Research in the biology of skin pigmentation has led to the formulation

of a product like Fair & Lovely Skin Cream and Lotion. The product has

been periodically updated through new patented actives. It has now

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become a global success through exports to over 30 countries. The

product is equally used by the local population of these countries,

apart from those of Indian origin.

HUL has equally developed new processes.

In-house machine development

The company has the capability to design and manufacture machines

in-house. This enables the company to set up plants at half the cost of

others. Such technological developments have also led to significant

improvement in productivity.

Energy conservation

In the past, one of the most significant breakthroughs of HUL's

research initiative has been the development of a technology to use

non-conventional forest seed oils for soap-making which, since the

1970s, has helped save around $1.2 billion in foreign exchange. HUL

had received the Government of India's prestigious award for importsubstitution. Development of Structurant Technology for soap

manufacturing also helped save costly conventional oils without any

compromise on product performance and quality. The latest

technology to produce Distilled Fatty Acid for soap making and the

resultant plant capacity expansion has drastically brought down

specific energy consumption while improving distillation yields. The

evolution of continuous soap processing technology has also reducedenergy consumption.

HUL believes that technology is critical to delight consumers. Creative

application of technology has made Hindustan Lever successful in

launching products and services, which raise the quality of life.

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HELPING HANDS:

HUL COMMITS Rs. 8 CRORES FOR IMMEDIATE RELIEF,

REHABILITATION TO TSUNAMI-HIT COMMUNITIES

MUMBAI, January 7, 2005: Hindustan Unilever Limited (HUL) today

announced to commit, a total outlay of Rs.8 crores for immediate relief

and helping people to rehabilitate themselves so that they can resume

their livelihood, in the tsunami-hit areas of Pondicherry, Tamil Nadu

and Kerala. Of this, Rs.5 crores (absolute value terms) is being utilized

for distribution of the Company's nutritional & personal hygiene

products for immediate relief to the needy. Another Rs.3 crores will be

raised partly by contributions from company employees and the

balance contribution from the Company to be used in collaboration

with NGOs working with the community to provide the people, notably

fishermen, with means of livelihood and help them back on their feet.

Since December 26, employees of HUL factories and offices in

Pondicherry, Tamil Nadu and Kerala have been providing necessary

relief to the tsunami-hit people. The relief operations include,

distribution of bread and biscuits to over 2000 families in Pondicherry,

12,000 cooked meals for families in Chennai, Nagapattinam, Cuddalore

and Andamans. Over 12,000 dry relief packs, comprising of Company's

dry rations and personal hygiene products have already been

distributed.

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HUL's employees are donating a day's salary, matched equally by the

Company for exclusive use in rehabilitation.

The biggest concern is, that people/ fishermen have lost their means

of livelihood. HUL plans to focus its rehabilitation efforts to restore

their means of livelihood so that the local communities can quickly get

back to their lives at the earliest.

HUL has always been a front runner in its call for national duty and

caring for the community. Its employees not only donate generously,

but volunteer to take part in relief operations by committing their time

and physical effort. This is in line with our corporate value of care

and our CSR mission which has become an integral part in our way of

doing business.

Earlier during the Gujarat earthquake, HUL had adopted and

reconstructed a new village, Yashodadham, in Bhachau Taluka of

Kutch district. Yashodadham, spread over 25 acres, comprises 289

homes, school building, an exclusive playground for children and a

multi-purpose community centre, including an anganwadi (creche),

health centre, community room and panchayat office, an underground

reservoir and an overhead tank for water. All the dwelling units have

electricity, and piped water and are now fully occupied.

HUL is India's largest Fast Moving Consumer Goods company, touching

the lives of two out of three Indians. HULs mission is to add vitality

to life" through its presence in over 20 distinct categories in Home &

Personal Care Products and Foods & Beverages. The company meets

everyday needs for nutrition, hygiene, and personal care, with brands

that help people feel good, look good and get more out of life.

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Special Education & Rehabilitation

Under the Happy Homes initiative, HUL supports special education and

rehabilitation of children with challenges.

Asha Daan:

The initiative began in 1976, when HUL supported Mother Teresa and

the Missionaries of Charity to set up Asha Daan, a home in Mumbai for

abandoned, challenged children, and the destitute. Subsequently, Asha

Daan has also become a home to the HIV-positive. The objective in

supporting Asha Daan was and continues to be to share the

organsation's prosperity in supporting the Mother's mission of serving

the "poorest of the poor". Asha Daan has been set up on a 72,500-

square feet plot belonging to HUL, in the heart of Mumbai city. HUL

bears the capital and revenue expenses for maintenance, upkeep and

security of the premises. The destitute and the HIV-positive are

provided with food, shelter and medication for the last few days of

their lives. The needs of the abandoned challenged children are also

met through special classes of basic skills, physiotherapy and, if

possible, corrective surgery. At any point of time, it takes care of over

300 infants, destitute men and women and HIV-positive patients.

Over the years, HUL has opened schools for challenged children with a

sharper objective of supporting families of such children, helping the

children become self-reliant by learning appropriate skills to be

productive members of the household.

Ankur:

In 1993, HUL's Doom Dooma Plantation Division set up Ankur, a centre

for special education of challenged children. The centre takes care of

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children with challenges, aged between 5 and 15 years. Ankur

provides educational, vocational and recreational activities to over 35

children with a range of challenges, including sight or hearing

impairment, polio related disabilities, cerebral palsy and severe

learning difficulties. These physically and mentally challenged children

are taught skills, such as cookery, painting, embroidery, bamboo

crafts, weaving, stitching, etc depending on their aptitudes. The centre

has rehabilitated 10 children, including self-employment for 6 children

by providing them with shops, and 3 girls have been provided

employment as creche attendants. It has also moved to normal

schools 18 children. Since inception it has covered about 80 children.

Ankur received the Lawrie Group Worldaware Award for Social

Progress in 1999 from HRH Princess Royal in London.

Kappagam:

Encouraged by Ankur's success, Kappagam ("shelter"), the second

centre for special education of challenged children, was set up in 1998

on HUL Plantations in South India. It has 17 children. The focus of

Kappagam is the same as that of Ankur. The centre has 17 children,

being taught self-help skills, useful vocational activities like making of

paper covers, greeting cards, wrapping papers, fancy stationery,

napkins, brooms made out of coconut leaves, candles, and also some

home care products. About 12 of the children have become relatively

self-reliant by earning through crafts learnt at the centre. Since

inception, it has covered about 28 children.

Anbagam:

Yet another day care center, Anbagam ("shelter of love"), has been

started in 2003 also in the South India Plantations. It takes care of 11

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children. Besides medical care and meals, they too are being taught

skills such that they can become self-reliant and elementary studies.

Over 20,000 individuals have benefitted from the Happy Homes

initiatives since inception. HUL is wholeheartedly involved with all four

centres and will continue to be involved in the future.

HINDUSTAN UNILEVER LIMITED DECEMBER QUARTER 2005

RESULTS

Total Sales grow by 14.4%; FMCG Sales growth at 15.8%

HPC and Foods grow by 17% and 9% respectively; Broad

based growth across categories

PBIT grows 13.5%; Net Profit increases by 56%

EPS for 2005 grows 17.6%; Final Dividend Rs 2.50 per share of

Re 1/- each; Total Dividend Rs 5.00 per share for 2005

Mumbai, February 14, 2006: Hindustan Unilever Limited (HUL)

announced its results for December Quarter 2005. Growth momentum

achieved in the last three quarters has been sustained with total sales

growing by 14.4%. Domestic FMCG sales were higher by 15.8% with

both Home and Personal Care (HPC) and Foods performing well.

HPC business grew by 17.3% driven by strong performance in all

categories. Significant sales growth was achieved in the highly

competitive categories of Laundry and Shampoo. Soaps recorded good

growth, with Lux growing handsomely reflecting in market share gains.

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All the brands in Skin category maintained their strong performance

leading to a double digit growth for the category. Consumer relevant

innovations continue to drive off-take and key innovations during the

quarter include the re-launch of Thick and Strong Sunsilk Pink, Lux

variants for the 75-year celebrations, and the national launch of

Jasmine Fresh Rin Advanced Powder.

In Foods business, Tea achieved a modest growth despite a declining

market and falling commodity prices; Coffee continued to perform

well. Processed Foods business grew strongly, albeit on a low base.

The Icecream business also achieved a 33% increase in sales, led by

the impulse category. Relaunch of Knorr soup with a superior mix and

introduction of new variants was the key Foods innovation during the

quarter.

Profit before Interest and Taxes (PBIT) increased by 13.5% after

absorbing a 50% higher spend in Advertising and Promotions. Higher

crude oil price led cost pressures continued, particularly in Laundrycategory, but were mitigated by aggressive cost effectiveness

programs. Profit after tax (PAT) grew by 22.7% due to a lower

effective tax rate and Net profit, including the impact of exceptional

items was higher by 56%.

For full year 2005, total sales were 11.4% higher than in the

previous year, with broad based growth across categories leading toboth HPC and Foods businesses growing by 14% and 8%, respectively.

Judicious price increases coupled with robust cost saving initiatives

partly neutralised the impact of both cost escalations, particularly in

the Laundry category, and the higher investments behind brands.

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Consequently, PBIT increased by 1.1%. A lower tax charge for the

year resulted in a PAT growth of 12.9%. Net Profit and Earnings Per

Share at Rs 6.40, grew by 17.6%.

Mr Harish Manwani, Chairman commented: We have sustained the

growth momentum in December quarter and it continues to be broad

based across HPC and Foods categories, particularly, in the

competitive categories of Laundry and Shampoo. This was driven by

higher investment behind our brands with exciting innovations,

excellent activation, new initiatives in Customer Management and with

significantly higher levels of A&P spends. The double digit sales

growth of over 11% for the year 2005 has been achieved after a gap

of six years.

Our strategic priority remains unchanged. We will continue to

leverage our focused portfolio of powerful brands to sustain market

leadership and grow our market position across strategic brands and

categories. In a competitive landscape, we shall continue to deliverconsumer value and invest behind our brands. We recognize the

challenge of inflationary cost pressures driven by crude oil prices and,

in the competitive context, achieving cost leadership across the

extended supply chain continues to be a key priority.

DIVIDEND

The Board of Directors at their meeting held on February 14 th, 2006

has proposed a final dividend of Rs 2.50 per share of Re 1 each,

subject to the approval of the shareholders at the annual general

meeting. This along with the interim dividend of Rs 2.50 per share

amounts to a total dividend of Rs 5.00 per share for the year 2005.

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HUL is India's largest Fast Moving Consumer Goods company, touching

the lives of two out of three Indians. HULs mission is to add vitality

to life through its presence in over 20 distinct categories in Home &

Personal Care Products and Foods & Beverages. The company meets

everyday needs for nutrition, hygiene, and personal care, with brands

that help people feel good, look good and get more out of life.

HUL TRANSFERS TEA ESTATES INDIA TO MAXWELL GOLDEN

TEA PRIVATE LIMITED

Mumbai, March 01, 2006: Hindustan Unilever Limited (HUL) has

transferred its entire shareholding in its 100% subsidiary Tea Estates

India Limited (TEIL) to Maxwell Golden Tea Private Limited (MGT), a

Woodbriar Group company on March 1, 2006. TEIL owns 8 tea estates

and 6 factories for processing tea in the high-yielding belt of

Tamilnadu with an average annual output of approx. 10,500 metric

tons.

Woodbriar Group has interests in plantations, insurance services and

real estate. The Groups gardens are spread across the premium tea

growing regions in Tamilnadu and Kerala. HUL management believes

that the proposed transfer to Woodbriar Group is in the best interest of

the tea plantation business and all its stakeholders. Existing terms and

conditions of services of all TEIL employees will be fully protected in

accordance with applicable laws and terms of their employment.

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The acquisition of TEIL by Woodbriar Group will provide scale and

bring in synergy benefits to Woodbriar Group, as a large portion of

TEIL gardens are contiguous to the existing tea gardens of Woodbriar

Group. Can

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