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Case Study : Hindustan Unilever

HINDUSTAN UNILEVER LIMITED

THE BEST CORPORATE COMMUNICATOR

Introduction

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, withleadership in Home & Personal Care Products and Foods & Beverages. HUL's brands, spread

across 20 distinct consumer categories, touch the lives of two out of three Indians. They endow

the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000crores. The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With

35 Power Brands, 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 shareswith its parent company, Unilever, which holds 51.55% of the equity. A Fortune 500

transnational, Unilever sells Foods and Home and Personal Care brands in about 100 countries

worldwide.

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

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

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene andpersonal care with brands that help people feel good, look good and get more out of life

Our deep roots in local cultures and markets around the world give us our strong relationshipwith consumers and are the foundation for our future growth. We will bring our wealth of

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

multinational.

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

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

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

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

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

our people, and our business partners.

Over 100 years' link with 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 ofmarketing 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.
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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 equityto the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds

51.55% equity in the company. The rest of the shareholding is distributed among about 380,000

individual shareholders and financial institutions.

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

launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile

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

Lipton Tea (India) Limited was incorporated.Pond's (India) Limited had been present in India

since 1947. It joined the Unilever fold through an international acquisition of ChesebroughPond'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 liberalisation of the Indian economy,

started in 1991, clearly marked an inflexion in HUL's and the Group's growth curve. Removal ofthe 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 thejoint venture to the company.HUL formed a 50:50 joint venture with the US-based Kimberly

Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and

Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL),and its factory represents the largest manufacturing investment in the Himalayan kingdom. The

NLL factory manufactures HUL's products like Soaps, Detergents and Personal Products both

for the domestic market and exports to India.

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

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

significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UBGroup 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 formBrooke 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 KwalityIcecream 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


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had significant overlaps in Personal Products, Speciality Chemicals and Exports businesses,

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

common management pool and a technology base. The amalgamation was done to ensure for theGroup, benefits from scale economies both in domestic and export markets and enable it to fund

investments required for aggressively building new categories.

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

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

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

YEAR

MILESTONES1888

Sunlight soap introduced in India.1895

Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai, Chennai, Kolkata, and

Karachi.

1902Pears soap introduced in India.

1903

Brooke Bond Red Label tea launched.1905

Lux flakes introduced.

1913Vim scouring powder introduced.

1914

Vinolia soap launched in India.1918

Vanaspati introduced by Dutch margarine manufacturers like Van den Berghs, Jurgens,

Verschure Creameries, and Hartogs.

1922Rinso soap powder introduced.

1924

Gibbs dental preparations launched.1925

Lever Brothers gets full control of North West Soap Company.

1926Hartogs registers Dalda Trademark.

1930

Unilever is formed on January 1 through merger of Lever Brothers and Margarine Unie.

1931


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Hindustan Vanaspati Manufacturing Company registered on November 27; Sewri factory site

bought.

1932Vanaspati manufacture starts at Sewri.

1933

Application made for setting up soap factory next to the Vanaspati factory at Sewri; LeverBrothers India Limited incorporated on October 17.

1934

Soap manufacture begins at Sewri factory in October; North West Soap Company's GardenReach Factory, Kolkata rented and expanded to produce Lever brands.

1935

United Traders incorporated on May 11 to market Personal Products.

1937Mr. Prakash Tandon, one of the first Indian covenanted managers, joins HVM.

1939

Garden Reach Factory purchased outright; concentration on building up Dalda Vanaspati as a

brand.1941

Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; company acquires own salesforce.

1942

Unilever takes firm decision to "train Indians to take over junior and senior management

positions instead of Europeans".1943

Personal Products manufacture begins in India at Garden Reach Factory.

1944Reorganisation of the three companies with common management but separate marketing

operations.

1947Pond's Cold Cream launched.

1951

Mr. Prakash Tandon becomes first Indian Director. Shamnagar, Tiruchy, and GhaziabadVanaspati factories bought.

1955

65% of managers are Indians.

1956Three companies merge to form Hindustan Lever Limited, with 10% Indian equity participation.

1957

Unilever Special Committee approves research activity by Hindustan Lever.1958

Research Unit starts functioning at Mumbai Factory.

1959Surf launched.

1961

Mr. Prakash Tandon takes over as the first Indian Chairman; 191 of the 205 managers are

Indians.


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1962

Formal Exports Department starts.

1963Head Office building at Backbay Reclamation, Mumbai, opened.

1964

Etah dairy set up, Anik ghee launched; Animal feeds plant at Ghaziabad; Sunsilk shampoolaunched.

1965

Signal toothpaste launched; Indian shareholding increases to 14%.1966

Lever's baby food, more new foods introduced; Nickel catalyst production begins; Indian

shareholding increases to 15%. Statutory price control on Vanaspati; Taj Mahal tea launched.

1967Hindustan Lever Research Centre, opens in Mumbai.

1968

Mr. V. G. Rajadhyaksha takes over as Chairman from Mr. Prakash Tandon; Fine Chemicals Unit

commissioned at Andheri; informal price control on soap begins.1969

Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched1971

Mr. V. G. Rajadhyaksha presents plan for diversification into chemicals to Unilever Special

Committee - plan approved; Clinic shampoo launched.

1973Mr. T. Thomas takes over as Chairman from Mr. V. G. Rajadhyaksha.

1974

Pilot plant for industrial chemicals at Taloja; informal price control on soaps withdrawn; Lirilmarketed.

1975

Ten-year modernisation plan for soaps and detergent plants; Jammu project work begins;statutory price control on Vanaspati and baby foods withdrawn; Close-up toothpaste launched.

1976

Construction work of Haldia chemicals complex begins; Taloja chemicals unit beginsfunctioning.

1977

Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to 18.57%.

1978Indian shareholding increases to 34%; Fair & Lovely skin cream launched.

1979

Sodium Tripolyphospate plant at Haldia commissioned.1980

Dr. A. S. Ganguly takes over as Chairman from Mr. T. Thomas; Unilever shareholding in the

company comes down to 51%.1982

Government allows 51% Unilever shareholding.

1984

Foods, Animal Feeds businesses transferred to Lipton.


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1986

Agri-products unit at Hyderabad starts functioning - first range of hybrid seeds comes out;

Khamgaon Soaps unit and Yavatmal Personal Products unit start production.1988

Launch of Lipton Taaza tea.

1990Mr. S. M. Datta takes over as Chairman from Dr. A. S. Ganguly.

1991

Surf Ultra detergent launched.1992

HLL recognised by Government of India as Star Trading House in Exports.

1993

HLL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the company witheffect from April 1, 1993, the biggest such in Indian industry till that time. Merger ultimately

accomplished in December 1994; Launch of Vim bar; Kissan acquired from the UB Group.

1994

HLL forms Nepal Lever Limited, HLL and US-based Kimberley-Clark Corporation form 50:50joint venture - Kimberley-Clark Lever Ltd. - to market Huggies diapers and Kotex feminine care

products. Factory set up at Pune in 1995; HLL acquires Kwality and Milkfood 100%brandnames and distribution assets. HLL introduces Wall's.

1995

HLL and Indian cosmetics major, Lakme Ltd., form 50:50 joint venture - Lakme Lever Ltd.;

HLL enters branded staples business with salt; HLL recognised as Super Star Trading House.1996

Mr. K. B. Dadiseth takes over as Chairman from Mr. S. M. Datta; Merger of Group company,

Brooke Bond Lipton India Limited, with HLL, with effect from January 1; HLL introducesbranded atta; Surf Excel launched.

1997

Unilever sets up International Research Laboratory in Bangalore; new Regional InnovationCentres also come up.

1998

Group company, Pond's India Ltd., merges with HLL with effect from January 1, 1998. HLLacquires Lakme brand, factories and Lakme Ltd.'s 50% equity in Lakme Lever Ltd.

2000

Mr. M. S. Banga takes over as Chairman from Mr. K. B. Dadiseth, who joins the Unilever

Board; HLL acquires 74% stake in Modern Food Industries Ltd., the first public sector companyto be disinvested by the Government of India.

2002

HLL enters Ayurvedic health & beauty centre category with the Ayush range and AyushTherapy Centres.

2003

Launch of Hindustan Lever Network; acquisition of the Amalgam Group2005

Launch of "Pureit" water purifiers

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company,


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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 tonnes and sales of Rs.10,000 crores. HUL is also one ofthe country's largest exporters; it has been recognised as a Golden Super Star Trading House by

the Government of India. The mission that inspires HUL's over 15,000 employees, including

over 1,300 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 andfinancial 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

over 40 factories across India. The operations involve over 2,000 suppliers and associates. HUL's

distribution network, comprising about 4,000 redistribution stockists, covering 6.3 million retailoutlets reaching the entire urban population, and about 250 million rural consumers. HUL has

traditionally been a company, which incorporates latest technology in all its operations. TheHindustan Unilever Research Centre (HLRC) was set up in 1958, and now has facilities in

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

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

US and Europe.

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

HUL is focusing on health & hygiene education, women empowerment, and water management.It is also involved in education and rehabilitation of special or underprivileged children, care for

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

national calamities / adversities and contributes through various welfare measures, most recentbeing the village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after

the Tsunami caused devastation in South India.

In 2001, the company 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 theiShakti community portal. The program now covers 15 states in India and has over 31,000

women entrepreneurs in its fold, reaching out to 100,000 villages and directly reaching to 150

million rural consumers. By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurscovering 500,000 villages, touching the lives of over 600 million people.

HUL is also running a rural health programme Lifebuoy Swasthya Chetana. The programmeendeavours to induce adoption of hygienic practices among rural Indians and aims to bring down

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

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


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If Hindustan Unilever 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.

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

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

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

The fundamental principle determining the organisation structure is to infuse speed and

flexibility in decision-making and implementation, with empowered managers across thecompany's nationwide operations. For this, HUL is organised into two self-sufficient divisions -

Home & Personal Care & Foods - supported by certain central functions and resources to

leverage economies of scale wherever relevant.

Board At the apex is the Board, headed by the Chairman, and comprising 5 whole time Directors

and 5 independent non-executive Directors. The day to day operations are supervised by the

National Management comprising the Vice Chairman, Managing Director (HPC), Managing

Director (Foods) and the Finance Director.

Divisions Each division is self-sufficient with dedicated resources and assets in sales, marketing,commercial, and manufacturing. The two divisions are further reorganised into categories.

Typically, each category and each function - Sales, Commercial, Manufacturing - is headed by a

Vice President. They with their respective Managing Director, comprise that Division's

Management Committee.

For managing sales operations, HUL divides the country into four regions, with regional

branches in Delhi, Kolkata, Chennai and Mumbai. Headed by a Regional Manager, theycomprise Regional Sales Managers and Area Sales Managers, assisted by dedicated field forces,

comprising Sales Officers and Territory Sales Incharges.

In Marketing, each category has a Marketing Manager who heads a team of Brand Managers

dedicated to each or a group of brands.

The commercial team of a Division is responsible for its supply chain management. There areteams dedicated to sourcing, planning and logistics.

Each Division has a nationwide manufacturing base, with each factory peopled by teams of

Production, Engineering, Quality Assurance, Commercial and Personnel Managers.

Central functions

HUL's Central Functions are Finance, Human Resources, Technology, Research,

Information Technology, Legal & Secretarial, and Corporate Affairs. Their services are sharedacross the company. But, wherever necessary, managerial resources are dedicated exclusively to

a business. For example, each Division now has dedicated HR managers. HUL believes that

while it leverages the scale of a large corporate, it must also retain the soul of a small company.Its organisation structure, which has and will continue to evolve with time, is aimed at achieving

this knitting.

BusinessesHome & Personal Care Personal Wash Fabric Wash Home Care Oral Care Skin


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Care Hair Care Deodorants & Talcs Colour Cosmetics Foods Tea Coffee Branded Staples

Culinary Products Ice Creams Modern Foods rangesNew Ventures Hindustan Unilever

Network Ayush ayurvedic products & services Sangam Pureit water purifiersExports HPCBeverages Marine Products Rice Castor

Mr.Harish ManwaniChairmanA distinguished alumnus in statistics & economics and MBA from Mumbai University, Mr.

Manwani joined HUL in 1976. Following several Sales and Marketing assignments, he became

Divisional Vice President - Marketing. Mr. Manwani joined the Board of HUL in 1995,responsible for the Personal Products business. In addition, he held regional responsibility as the

Category Leader for Personal Products for the then Central Asia and Middle East (CAME)

Business Group.

Mr. Manwani then moved to the UK as Senior Vice President for the Global Hair Care and Oral

Care Categories and in early 2001 was appointed President of the Home & Personal Care (HPC)

- Latin America Business Group

In 2004, he was appointed President and Chief Executive Officer of the HPC - North America

Business Group. In April 2005, he was elevated to the Unilever Executive as President Asia &Africa.

Mr. Manwani has attended the Advanced Management Programme (AMP) at Harvard Business

School.

Mr.Douglas BaillieCEO and Managing Director

Douglas Baillie (50) Born and educated in Zimbabwe, Mr. Baillie graduated from the University

of Natal with majors in business finance, marketing and business administration and joined

Unilever SA in 1978. His career over the years has spanned various sales and marketingpositions, culminating in a secondment to Lever Rexona in Australia in 1987.

On his return to South Africa in late 1988, he took up the position of Sales Director, which was

followed by a spell as Marketing Director. Mr. Baillie moved to London in 1994 to PersonalProducts Co-ordination where he became the Regional Liaison Member for Africa, Middle East,

Central and Eastern Europe and Turkey before moving to Vice President, Home and Personal

Care for the Africa Business Group. Mr. Baillie was appointed Managing Director Lever Ponds

South Africa in 1997 and National Manager, Unilever South Africa, in May 2000. Whilst in thisposition Mr. Baillie served on several external Boards including the Advertising Standards

Authority, the Consumer Goods Council of South Africa and was a member of Presidential Big

Business working group

Prior to assuming responsibilities as the Chief Executive Officer (CEO) of Hindustan Unilever

Limited, Mr. Baillie was Group Vice President and Head of Unilever AMET (Africa, MiddleEast and Turkey). Mr. Baillie is also the Group Vice President responsible for Unilevers

business in South Asia, which includes Sri Lanka, Pakistan and Bangladesh.

D. Sundaram


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Finance & IT Director

Mr. D. Sundaram is post-graduate from Madras University and a Fellow of the Institute of Cost

and Works Accountants of India (FICWA). He joined Hindustan Unilever in 1975 as aManagement Trainee. He has worked in various capacities as Corporate Accountant,

Commercial Manager and Treasurer.He was seconded to Unilever, London,as Commercial

Officer for Africa and Middle EastGroup between 1990 and 1993 and on return was the Financial Member of the TOMCO

Integration team from 1993 to 1994. He became the Finance Director of the erstwhile Brooke

Bond Lipton India Limited in March 1994. He was again seconded to Unilever in August 1996as Senior Vice PresidentFinance, Central Asia and Middle East Group with responsibility for

Finance, IT and business strategies for Unilever companies in the Indian sub-continent, North

Africa and the Middle East countries. He returned to India in May 1999 as Finance & IT Director

of HUL.

Mr. Nitin Paranjpe

Exectuive Director

Mr. Nitin Paranjpe after obtaining a degree in BE (Mech) and MBA in Marketing (JBIMS) fromMumbai joined the Company as a Management Trainee in 1987. In his early years in the

Company, Mr. Paranjpe worked as Area Sales Manager Detergents and then Product Manager Detergents.

In April 1996, he became the Branch Manager, Chennai and in February 1999 was appointed a

member of the Project Millennium team. In 2000, he moved to Unilever, London and was

involved in a review of the Organisation Structure. During 2001, he was Assistant to theUnilever Chairman & Executive Committee in London. On his return to India in 2002, he

became the Category Head Fabric Wash & Regional Brand Director (Asia) for some Laundry

and Household Cleaning (HHC) Brands. In 2004, he became Vice President Home Care(Laundry & HHC) India responsible for the top and bottom-line of the Homecare business.

Effective March 2006 Mr. Paranjpe is the Executive Director for the Home & Personal Care

business.

Mr. Sanjiv Kakkar

DirectorMr. Sanjiv Kakkar is BA (Economics) and PGDM from IIM Ahmedabad with 23 years work

experience. Mr. Kakkar joined the Company in June 1984 and has worked in various Sales and

Marketing assignments. His marketing experience spans across categories including Beverages,

Personal Products and Oral & Hair CareHe has also had key stints as Category Head of Oral and General Manager Sales & Customer

Management of Personal Products. He was appointed Vice President Oral & Hair Care in May

2004. In March 2006, Mr. Kakkar was appointed as Executive Director - Foods and joined theManagement Committee on 1st January 2007. Sanjiv was appointed as the Executive Director -

Sales and Customer Development in May 2007.

A.NarayanDirector

Mr. A. Narayan is the Managing Director and CEO of ICI India Limited. He is also the

Chairman of ICI India Research & Technology Centre. Mr. Narayan joined the Board as

Independent Non-Executive Director in 2001.


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V. Narayanan

Director

Mr. V. Narayanan is a post-graduate from Madras University. He was Chairman and ManagingDirector of the erstwhile Pond's (India) Ltd. He is now Chairman of the Academy of

Management Excellence. He joined the Board as Independent Non-Executive Director in 1987.

D. S. ParekhDirector

Mr. D. S. Parekh holds a FCA degree from England & Wales. Mr. Parekh has held senior

positions in Grindlays and Chase Manhattan. He is the Executive Chairman of HousingDevelopment Finance Corporation. Mr. Parekh joined the Board as Independent Non-Executive

Director in 1997.

C. K. Prahalad

Code of Business Principles

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

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

people and brands.Our 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 our consumers, employees andshareholders, our business partners and the world in which we live.

To succeed requires the highest standards of behaviour 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 notinclude 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 our day-to-day business and each one of us must follow these principles in thespirit as well as the letter.

Code of Business Principles

Standard of Conduct

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

rights and interests of our employees.

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

relationships.Obeying the LawUnilever companies and employees are required to comply with the laws and regulations of the

countries in which we operate.

EmployeesUnilever is committed to diversity in a working environment where there is mutualtrust and respect and where everyone feels responsible for the performance and reputation of our

company.

We will recruit, employ and promote employees on the sole basis of the qualifications andabilities needed for the work to be performed.

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

form of forced, compulsory or child labour.

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


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and capabilities.

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

will maintain good communications with employees through company based information andconsultation procedures.

ConsumersUnilever 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 andservices will be accurately and properly labelled, advertised and

communicated.ShareholdersUnilever will conduct its operations in accordance with

internationally accepted principles of good corporate governance. We will provide timely,regular and reliable information on our activities, structure, financial situation and performance

to all shareholders.Business Partners

Unilever is committed to establishing mutually beneficial relations with our suppliers, customers

and business partners.In our business dealings we expect our partners to adhere to business principles consistent with

our own.

Community Involvement

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

responsibilities to the societies and communities in which we operate.Public ActivitiesUnilever companies are encouraged to promote and defend their legitimate business

interests.Unilever will co-operate with governments and other organisations, both directly and

through bodies such as trade associations, in the development of proposed legislation and other

regulations which may affect legitimate business interests.Unilever neither supports politicalparties nor contributes to the funds of groups whose activities are calculated to promote party

interests.The Environment

Unilever is committed to making continuous improvements in the management of ourenvironmental impact and to the longer-term goal of developing a sustainable business.Unilever

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

environmental issues and disseminate good practice.InnovationIn our scientific innovation tomeet consumer needs we will respect the concerns of our consumers and of society. We will

work on the basis of sound science, applying rigorous standards of product safety.

CompetitionUnilever believes in vigorous yet fair competition and supports the development ofappropriate competition laws. Unilever companies and employees will conduct their operations

in accordance with the principles of fair competition and all applicable regulations.Business

Integrity

Unilever does not give or receive, whether directly or indirectly, bribes or other improperadvantages 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 bribemust be rejected immediately and reported to management.Unilever 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 ormaintained.


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Conflicts of Interests

All Unilever employees are expected to avoid personal activities and financial interests whichcould conflict with their responsibilities to the company.Unilever employees must not seek gain

for themselves or others through misuse of their positions.

Compliance Monitoring Reporting

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

Board is responsible for ensuring these principles are communicated to, and understood andobserved 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 moredetailed guidance tailored to local needs.Assurance of compliance is given and monitored each

year. Compliance with the Code is subject to review by the Board supported by the Audit

Committee of the Board and the Corporate Risk Committee.

Any breaches of the Code must be reported in accordance with the procedures specified by theJoint 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 theirrespective subsidiary companies. The Board of Unilever means the Directors of Unilever N.V.

and Unilever PLC.

Environment Policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the dailyneeds of consumers and industry. In doing so, the Company is 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 bestpracticable 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 andsafety.The aim of the Policy is to do all that is reasonably practicable to prevent or minimise,

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 Policydocument 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.


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

achievement of the objectives laid down.The Vision Our vision is to continue to be an

environmentally responsible organisation making continuous improvements in the managementof the environmental impact of our operations.We will achieve this through an Integrated

Environment Management approach, which focuses on People, Technology and Facilities,

supported by Management Commitment as the prime driver.The Environment Policy HindustanUnilever Ltd. (HUL) is committed to meeting the needs of customers and consumers in an

environmentally sound manner, through continuous improvement in environmental performance

in all our activities. Management at all levels, jointly with employees, is responsible and will beheld accountable for company's environmental performance.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 tomeet 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 corporatelevels.

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.

Encourage suppliers and co-packers to develop and employ environmentally superior processesand ingredients and co-operate with other members of the supply chain to improve overall

environmental performance.

Work in partnership with external bodies and Government agencies to promote environmentalcare, 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. TheManagement 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 operatingplans.

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 individualHUL site.- HUL environmental coordinator.The Management Committee, through the nominated

environmental coordinator will:

Ensure implementation of HUL Policy on environment and compliance with Unilever and HULenvironmental 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 environmentmanagement and key implementation steps.

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

the standards of environment performance.

Establish appropriate management systems for environment management and ensure regular


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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 UnitsThe overall responsibility for environmentmanagement at each unit will rest with the Unit Head, who will ensure implementation of HUL

Policy on environment at unit level. Concerned line managers / heads of departments are

responsible for environmental performance at department levels.In order to fulfill the

requirements of the Environment Policy at each site, the Unit Head will: Designate a unit environment coordinator who will be responsible for co-ordinating

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

expert advice.

Agree with the Management Committee Member responsible for the unit, specificenvironmental 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 reviewedperiodically.

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 andtake 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 tocommencement of the activity.

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

training, risk assessment, pre-commissioning audits and adherence to design codes. Regularly review environment performance of the unit against set objectives and targets and

strive for continual improvement.

Sustain a high degree of environmental awareness through regular promotional campaigns andemployee 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 monthlybasis.Research and Innovation Centres

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

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

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


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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 toguarantee 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 our

consumers through relentless pursuit of technological excellence, innovation and quality

management across our businesses, and offer superior quality products and services that areappropriate to the various price points in the market as well as to our commitment to building

shareholder value.The company recognises that its employees are the primary source of successin 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 obligationsand 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 thefeedback 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, keysuppliers and service providers and by entering into alliances with them, to jointly improve thequality 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 delegatesauthority and responsibility for dissemination and implementation of this policy to each Business

and Unit Head.

Safety and Health Policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the dailyneeds 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 recognises its responsibility toensure 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


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execution.Our Vision Our vision is to be an injury free organisation. Our MissionWe will bring

safety on top of mind for all employees and will integrate it with all business processes. We will

realise our 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.Safety PrinciplesHUL's Occupational Safety and Health Policy is based on andsupported 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 Note: 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 KPIThis document will form the basis for

the concerned Line / Organisations in developing KPI's for their respective functions /sites.Scope of Application This section defines the scope of application of this Policy (where,

when and to whom is this Policy applicable). Where does this policy apply?

All own/leased sites Manufacturing, Research/Innovation, Offices, Depots, Warehouses

In-house purchased services i.e. canteen, travel desk, IT implementation etc. Sites of associates with HUL holding > 24% while carrying out operations of making, handling,

using, transporting, selling or disposing off of our products Who does the policy apply to?

All employees at business anywhere Contractors and visitors while at our own sites When does it apply?

At work (our employees, contractors and visitors)

Travel between home and work of our employees Business related travel including stay out of headquarter

All Company organised business events i.e. training programmes, conferences, business related

get-togethers, annual sports etc.Implementation Responsibility HUL Management at all levels isresponsible for Policy implementation. Every site shall prepare a responsibility matrix with

respect to this Policy. Such SHE responsibilities shall form an integral part of overall job

responsibilities of all employees.All Unilever and HUL Standards, Rules and Procedures on

Occupational Safety and Health, including those that may be specific to a site are integral to thisPolicy and its implementation. All employees are required to ensure strict adherence.


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Questions:

1) If Hindustan Unilever 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, for being

single minded in identifying itself it needs to have good communication system, taking into

account the parameters given in the case study you are required to explain the communication

environment within the Organization set up of Hindustan Unilever Ltd.

2) Based on the details given with reference to Hindustan Unilever Ltd, you are required to

prepare a speech for The Chairman of Hindustan Unilever Ltd on every employee needs to be

an effective communicator.

3) Prepare a diagrammatic representation of Organization structure and explain it with relevance

to Formal Communication network.

4) Explain the relevance of informal communication network and how to use for the benefit of a

multi product company like Hindustan Unilever Ltd

Documents

Case+Study+HUL BC (1)