A COMPANY REPORT ON

Submitted by: Sumit Sharma MBA General Roll no. A0101913094

Under the supervision of J K Sharma Sir

AMITY BUSINESS SCHOOL AMITY UNIVERSITY, Noida, Uttar Pradesh

Industry Profile Fast Moving Consumer Goods (FMCG)

Hindustan Unilever Limited (HUL) is an Indian Fast Moving Consumer Goods Company. The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of time (i.e. products that are sold quickly). In simple words these are goods which are the essential items we purchase when we go shopping and used it in our everyday life. These goods are referred to as fast moving because they are the quickest items to leave the shelves. They also tend to be high volume, low cost items. FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. It is also known as consumer packaged goods industry. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. FMCG sector faces a huge demand for skilled professionals in fields like sales & marketing and leadership positions to name a few. This industry primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods, FMCG, sectors contribution to the countrys GDP now stands at 24.3 per cent. The FMCG sector has benefited the most from this young burgeoning population. The sector grew 10 per cent from 2000 until 2010 with the sectors contribution to GDP increasing from 13 per cent to 24.3 per cent over the same period. The Indian FMCG industry is over INR 1300 billion in size. It touches the life of every Indian and therefore has perhaps the widest reach among all industries in India! The industry has tripled in size over the last 10 years, growing much faster than in past decades. The industrys potential to grow further and faster is awesome, given the low penetration of most categories and rising consumer incomes. Given the inherently essential nature of the products, the sector is more or less immune to recessionary pressures.

Growth (in billion)

1400 1200 1000 800 600 400 200 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Growth (in billion)

The sector is growing at rapid pace with well-established distribution networks and intense competition between the organized and unorganized segments. It has a strong and competitive MNC presence across the entire value chain. The FMCGs promising market includes middle class and the rural segments of the Indian population, and give brand makers the opportunity to convert them to branded products.

Indian FMCG Market Share

2% 10% 15% 53% 20% Food and Bevreages Personal Care Tobacco Household Care Lightining

Introduction Hindustan Unilever Limited (HUL)

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 80 years in India. In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it began an era of marketing branded FMCG. 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. It is headquartered in Mumbai, India. HUL has eight Board of Directors of the Company comprising Non-Executive Chairman, three Executive Directors and four Non-Executive Independent Directors. HUL has produced many business leaders for corporate India, including Harish Manwani the non-executive chairman of HUL and currently the chief operating officer of Unilever. He is also a member of Unilever Leadership Executive team (ULE), which comprises the company's top management and is responsible for managing Unilever's profit and loss, and delivering growth across its regions, categories and functions Mr. Sanjiv Mehta is appointed as the Managing Director and Chief Executive Officer of HUL. He has also been appointed as Executive vice-president, South Asia, Unilever and is also the executive head of the South Asia cluster for Unilever. The Company has over 16,000 employees and 2000 managers and has an annual turnover of around Rs.25, 206 crores (financial year 2012 - 2013). HUL is a subsidiary of Unilever, one of the worlds leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of 51 billion in 2012. It is owned by Anglo-Dutch company Unilever which owns a 67% controlling share in HUL. Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. It has over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Fair & Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk, Pepsodent, Axe, Bru, Knorr, Kissan and Pureit. HUL works to create a better future every day.As per Nielsen market research data, two out of three Indians use HUL products

Sales Pattern of HUL over the years

Segment wise sales Soaps and Detergents Personal Products Beverages and Packed food Others 3% 2% 2% 2% 2% 29% 19% 30% 20% 32% 20% 31% 19% 31% 18% 2008 - 09 49% 2009 - 10 48% 2010 - 11 46% 2011 - 12 48% 2012 - 13 49%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2008 - 09 2009 - 10 2010- 11 2011 - 12 2012 - 13 Others Beverages and Packed food Personal Products Soaps and Detergents

Turnover (category wise)

Rs. Crores

Year Sales) Soaps and Detergents Personal Care Products Beverages Packed Foods Others TOTAL TURNOVER

2009
9770.26 5272.31 2272.29 1020.69 1911.70 20239.33

2010
8180.29 4969.36 2119.44 942.91 1315.65 17523.80

2011
8683.88 5750.68 2309.23 1162.28 1474.94 19381.01

2012
10488.38 6486.45 2577.02 1341.93 841.82 21735.60

2013
12460.9 7309.10 2913.67 1473.86 1048.79 25206.38

Turnover
30,000 25,000 20,000 15,000 10,000 5,000 0 2009 2010 2011 2012 2013 20,239 17523 Turnover 21735 19381 25206

Milestones Achieved
Five oh HULs leading brands LUX, DOVE, PEARS, CLINIC PLUS AND SUNSILK won the Readers Digest Trusted brand 2008 Awards. Four HUL brands featured in the top 10 list of the economic times brand equity most trusted brands 2008 survey HUL was awarded the Bombay chamber civic award 2007 in the category of sustainable environment initiatives. HUL was selected as the top Indian company in FMCG Sector for the DUN AND BRADSTREET American express corporate award 2007. Eighteen of HUL's brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2012), carried out by Brand Equity, a supplement of The Economic Times. FMCG category for its safety and health initiatives and continuous improvements on key metrics. HUL's leadership-building potential was recognized when it was ranked 4th in the Hewitt Global Leadership Survey 2007 A study conducted by Aon Hewitt, The RBL Group and Fortune in 2011, ranked the company number six in the list of 'Top Companies for Leaders 2011 Study Results'. In 2012 HUL was recognized as one of the worlds most innovative companies by forbes. With a ranking of number 6, it was the highest ranked FMCG Company. Hindustan Unilever Limited won 13 awards at the Emvies 2012 Media Awards organized by the Advertising Club Bombay in September 2012. In July, 2012 Hindustan Unilever Limited won the golden peacock occupational health and safety award for 2012 in As per the latest Nielsen Campus Track-Business School Survey released in February 2013, Hindustan Unilever Limited emerged as the No.1 employer of choice for B-School students who graduated in 2013, across functions. HUL also retained as the Dream Employer status for the 4th year running continues to be the top company considered for application by B-School student in India.

Market Share of HUL

The market share of HUL is 36.4% as compared to 30% market share of ITC, 8.2% NESTLE, 6% BRITANNIA, 4.3% DABUR and 15.1% Others(NIRMA, COLGATE etc). This shows that ITC is the biggest competitor of HUL.

market share
15% 37% 6% 8% Hindustan unilever ITC Nestle Britannia 30% Dabur Others

4%

Mergers and Acquisitions By Hindustan Unilever Limited

NAME OF THE COMPANY Kothari General Foods Corporation Limited Tea Estates India Limited Kissan products limited Lipton India Limited The Tata Oil Mills Company Limited Ponds (India) Limited International Bestfoods Limited Merryweather Food Products Limited Vashisti Detergents Limited

MERGERD WITH

YEAR

Brooke Bond India Limited

1992

Brooke Bond India Limited Brooke Bond India Limited Brooke Bond India Limited Hindustan Lever Limited

1993 1993 1994 1995

Hindustan Lever Limited Hindustan Lever Limited

1997 2001

Hindustan Lever Limited

2005

Hindustan Lever Limited

2006

Bon Limited

Hindustan Lever Limited

2010

Products
Unilever makes and sells products under more than 1,000 brand names worldwide. Two billion people use them on any given day. The products can be categorized under the following categories Food and drink Home care Personal care Water purifier

Product Share
3% 6% 13% 48% Soaps and Detergents Personal Care Products Beverages 28% Foods Ice creams Others 2%

Food brands:

Annapurna salt and atta Bru coffee Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea Kissan squashes, ketchups, juices and jams

Lipton tea Knorr soups & meal makers and soupy noodles Kwality Wall's frozen dessert Modern Bread, ready to eat chapattis and other bakery items Magnum (ice cream)

Homecare Brands

Active Wheel detergent Cif Cream Cleaner Comfort fabric softeners Domestos disinfectant/toilet cleaner Rin detergents and bleach Sunlight detergent and colour care Surf Excel detergent and gentle wash Vim dishwash Magic Water Saver

Personal Care Brands:

Aviance Beauty Solutions Axe deodorant and aftershaving lotion and soap LEVER Ayush Therapy ayurvedic health care and personal care products Breeze beauty soap Clear anti-dandruff hair products Clinic Plus shampoo and oil Close Up toothpaste Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant deodorants

Denim shaving products Fair & Lovely skin-lightening products Hamam

Lakm beauty products and salons Lifebuoy soaps and handwash range Liril 2000 soap Lux soap, body wash and deodorant Pears soap Pepsodent toothpaste Pond's talcs and creams Rexona soap Sunsilk shampoo Sure anti-perspirant Vaseline petroleum jelly, skin care lotions TRESemm TIGI

Water Purifier Brand:

Pureit Water Purifier

Analysis of Share price of Hindustan Unilever Limited

Month/Year Oct 13 High Low
630.00 607.05 23

Nov13
614.70 606.50 8

Dec13
597.40 590.40 7

Jan14
574.10 565.00 9

Feb14
573.85 565.85 8

March14
557.00 548.00 9

This data of the share price of HUL for the last six months shows that the difference between the High and Low of the HUL share price was maximum in October 13 i.e. Rs 22.95, this shows there was too much fluctuation in stock price in October13. The share price was highest in October and this shows profitable working of the company during that period.

Corporate social Responsibility

Hindustan Unilever Limited firmly believes that it has commitment to all its stakeholders consumers, employees and the community in which it operates. It can fulfil this commitment only by sustainable growth. The Vitality mission of the company aims to improve quality of life through their products and through their interventions in the community. HUL's key CSR initiatives are undertaken with a long-term view. Initiatives that are sustainable, that have longterm benefits and that have business linkage are accorded priority. Some initiatives are brand driven, some are driven by our people and some are driven by their processes. On the social front, HUL works in areas of Health & Nutrition and Empowerment of Women, their economic agenda will be driven towards Enhancing Livelihoods and the environmental agenda will focus on Water Conservation and cutting Green House Gases. They have developed specific programmes and initiatives to address each of these. HUL has a CSR committee. The Committee formulates and monitors Corporate Social Responsibility Policy and the activities to be undertaken by the Company. The Committee also regularly reviews the performance of the Company in area of Corporate Social Responsibility and works in the following areas: 1. Providing education on health and hygiene 2. Women empowerment 3. Water management 4. Rehabilitation of special or underprivileged children 5. Care for the destitute and HIV positive 6. Rural development 7. Plays active role in natural calamities

Unilever Sustainable Living Plan

The Unilever Sustainable Living Plan (USLP) sets out to decouple their growth from their environmental impact, while at the same time increasing their positive social impact. Unilever Sustainable Living Plan was launched on 15th November 2010 at London, Rotterdam, New York and New Delhi simultaneously. It has three big goals which HUL aims to achieve by 2020. They are:1. To improve health and well-being 2. To reduce environmental impact 3. To source 100% of our agricultural raw materials sustainably and enhance the livelihoods of people across our value chain. Supporting these goals are seven commitments underpinned by targets spanning HULs social, environmental and economic performance across the value chain from the sourcing of raw materials all the way through to the use of their products in the home. In the second year of their Plan, they made steady progress towards their goals. Their USLP is ambitious and they continue to strive to deliver their stretching goals.

Improved Health and Well-Being

1 Health and Hygiene By 2020 HUL wishes to help more than a billion people to improve their hygiene habits and aims to provide safe drinking water to 500 million people. This will help reduce the incidence of life-threatening diseases like diarrhea. 2 Improving Nutrition HUL will continually work to improve the taste and nutritional quality of all their products. By 2020 they will double the proportion of their portfolio that meets the highest nutritional standards, based on globally recognized dietary guidelines. This will help hundreds of millions of people to achieve a healthier diet.

 Reducing Environmental Impact

3 Greenhouse Gases HUL aims to split the greenhouse gas impact of their products across the lifecycle by 2020. To achieve this, it aims to reduce greenhouse gas emissions from skin cleansing and hair washing and greenhouse gas emissions from washing clothes.

4 Water HUL aims to halve the water associated with the consumer use of our products. Reduce water use in the laundry process by manufacturing products which can be easily rinsed and products that use less water. It also aims to reduce water use in agriculture and in manufacturing process

5 Waste HUL aims to reduce the waste associated with the disposal of their products by Recycling packaging. This will help in increasing recycling recovery rates, increasing recycling content, reusing packaging and by tackling sachet waste.

Enhancing Livelihood
6 Sustainable Sourcing By 2020 HUL will source 100% of their agricultural raw materials sustainably. They plan to achieve this by sourcing 50% by 2015; 100% by 2020.

7 Better Livelihoods By 2020 HUL will engage with at least 500,000 smallholder farmers and 75,000 smallscale distributors in their supply network. They have increased the number of tea farmers trained in sustainable practices to around 450,000. The next step is to develop a methodology to assess improvement in smallholder livelihoods. They have consolidated their small-scale distributors programme, reaching 48,000 entrepreneurs. Mentioned below are the projects that Hindustan Unilever Limited is currently active in and intends to pursue actively in the future. PROJECT SHAKTI - Changing Lives in Rural India: HLL's vision for Project Shakti is to scale it up across the country, covering 100,000 villages and touching the lives of 100 million rural consumers by 2005.

LIFEBUOY SWASTHYA CHETANA - Health & Hygiene Education Started in 2002, the programme has as of now covered about 15000 villages in 8 states -- Uttar Pradesh, Bihar, Jharkhand, West Bengal, Orissa, Madhya Pradesh, Chattisgarh and Maharashtra; it has already touched about 70 million people, imparting hygiene education to over 25 million children. The vision of this on-going project is to make a billion Indians feel safe and secure by focussing on their health and hygiene needs.

FAIR & LOVELY FOUNDATION - Economic Empowerment of Women 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, currently covering three states and all main metros in the count

 GREENING BARRENS - Water Conservation and Harvesting HLL's vision is to continuously innovate technologies to further reduce water consumption and further increase conservation in its operations. Simultaneously, HLL sites will progressively help communities, wherever required, to develop watersheds.

HAPPY HOMES - Special Education & Rehabilitation Under the Happy Homes initiative, HLL supports special education and rehabilitation of children with challenges. Other projects that HLL is involved in are Asha Daan, Ankur, Kappagam, Anbagam, Yashodadham, Rural Education Project at Khemgaon, Integrated Rural Development and Vindhya Valley. Detailed activities of these projects are mentioned in the report.