FINANCIAL REPORTING

BMT2020

CA SREERAMAN

J-COMPENENT REPORT
REVIEW – 1

“HINDUSTAN UNILEVER LIMITED”

06-09-19

17BBA0077 – Akash Nakkiran

17BBA0002 – Gunuganti Pradeep
17BBA0127 – Vishnu JB
17BBA0039 – Harika K
17BBA0129 – Harini M
17BBA0016 – Mounika M
Name of the company in full with Company Identification Number (CIN),
Address of registered office
• Name of the company in full: Hindustan Unilever Limited
• Company Identification Number: L15140MHU1933PLC002030
• Address of the registered office: Unilever House, B.D Sawant Marg, Chakala, Andheri
(East), Mumbai -400 099

Is the company’s equity shares listed in BSE or NSE or both?

HUL stock is listed on both the exchanges - NSE and BSE

When did the company get incorporated and what was the initial activity?
From then, till now, what have been the major achievements? What have been
the major changes in its product or service portfolio? Also mention the
promoters of the company with a brief background of the key management
personnel. Mention details of the major brands owned by the company.

Year of incorporation: 1933

Initial activity:

William Hesketh Lever, 1st Viscount Leverhulme (19 September 1851 – 7 May 1925) was an
English industrialist, philanthropist, and politician. Having been educated at a small private school
until the age of nine, then at church schools until he was fifteen; a somewhat privileged education
for that time, he started work at his father's wholesale grocery business in Bolton. Following an
apprenticeship and a series of appointments in the family business, which he successfully
expanded, he began manufacturing Sunlight Soap, building a substantial business empire with
many well-known brands such as Lux and Lifebuoy. In 1886, together with his brother, James, he
established Lever Brothers, which was one of the first companies to manufacture soap from
vegetable oils, and which is now part of the Anglo-Dutch transnational business Unilever. In
politics, Lever briefly sat as a Liberal MP for Wirral and later, as Lord Leverhulme, in the House
of Lords as a Peer. He was an advocate for expansion of the British Empire, particularly in Africa
and Asia, which supplied palm oil, a key ingredient in Lever's product line.
Major achievements:

▪ HUL adjudged the Most Innovative Company in India, in Forbes’ list of The World’s Most
Innovative Companies, 2017.
▪ Six brands of HUL notched up annual sales in excess of 2000 crores in 2018-19 (Surf excel,
Brooke bond, Wheel, Lifebuoy, Rin and Fair and Lovely) thereby constituting an enormous
amount of share in total revenue of the company.
▪ HUL’s beverage factory in Kolkata received the prestigious CII National Food Safety
Award 2017 for outstanding achievements in food safety.
▪ HUL is the 4th largest company in India in terms of Market Capitalization

Major changes in its product portfolio:

▪ In 1947 it launched Ponds cold cream

▪ In 1964 HUL launched Sun silk shampoo
▪ In 1965 they came up with a tooth paste
▪ In 1966 HUL entered into the foods and refreshment section by introducing Lever’s baby
food. They also launched Taj Mahal tea in the same year.
▪ In 1969 HUL launched Rin bar for household purposes and they also launched Bru coffee
and in 1971 they came up with Clinic shampoo
▪ In 1975 HUL came up with a modernization plan for soaps and detergent plans and
introduced with Close-up toothpaste
▪ In 1976, Construction work of Haldia chemicals complex started Taloja chemicals unit
begins functioning.
▪ In 1978 Fair & Lovely skin cream launched.
▪ In 1986 Agri-products unit at Hyderabad started functioning - first range of hybrid seeds
comes out
▪ In 1988 HUL launches Lipton Taaza tea
▪ In 2002 HUL enters Ayurvedic health & beauty centre category with the Ayush range and
Ayush Therapy Centres.

Key Managerial Personnel and their background

Chairman and Managing Director

Mr. Sanjiv Mehta (58) is the Chairman & Managing Director of Hindustan Unilever Limited. He
also leads Unilever’s South Asia business as President, Unilever, South Asia and is a member of
the Unilever Leadership Executive.

Sanjiv Mehta is the Chairman and Managing Director of HUL since 30th June, 2018. He has been
leading Unilever’s business in India and South Asia since October 2013 as CEO and Managing
Director, HUL and Executive Vice President, Unilever, South Asia. Sanjiv was appointed as
President, Unilever, South Asia and member of the Unilever Leadership Executive, effective May
2019.

Sanjiv has been with Unilever for 26 years and during the last 17 years has led businesses in
different parts of the world. He has been the Chairman and Managing Director of Unilever
Bangladesh Limited (2002-06), Chairman and CEO of Unilever Philippines Inc. (2007-08) and
Chairman of Unilever - North Africa & Middle East (2008 – September 2013).

Sanjiv chairs the FMCG Committee of FICCI as well as the national committee on MNCs of CII.
Sanjiv also chairs Xynteo's 'India 2022', a purpose-driven business coalition of top Indian and
MNC companies formed with an intention to solve some of the intractable environmental and
social issues, and is working to create a new model of growth. He co-chairs the Advisory Network
to the High-Level Panel for a Sustainable Ocean Economy. Sanjiv is a member of the India
Advisory Board of Harvard Business School and is a Director on the Board of The Indian School
of Business. He is also a member of the Board of Directors of Breach Candy Hospital Trust,
Mumbai.

Sanjiv is a Chartered Accountant from The Institute of Chartered Accountants of India. He has
also completed the Advanced Management Program at Harvard Business School.

Chief Financial Officer, Executive Director of Finance & IT

Mr Srinivas Phatak (48) is the Executive Director, Finance and IT and Chief Financial Officer
of Hindustan Unilever Limited (HUL). He is also the Vice President Finance for Unilever, South
Asia. Srinivas has been with Unilever for 20 years and worked extensively in India and different
parts of the world. His experiences cover all aspects of the finance function. He has been Vice
President Category Finance for Deodorants and Oral Care (2012-2013), Vice President Supply
Chain finance Americas (2014-2016) and Head of Financial Shared Services for Unilever (2017).
Srinivas is a Chartered Accountant (ICAI – 1996) and Cost & Works Accountant (ICWAI – 1996).

Executive Director Supply Chain

Mr Pradeep Banerjee (60) joined the Company as a Management Trainee in 1980. Pradeep has
held a series of assignments in Supply Chain, Research & Development and Categories at
Hindustan Unilever Limited (HUL). He became the Vice President - Technical (Home and
Personal Care) in 2003 and later moved to the United Kingdom in 2005 as Vice President, Global
Supply Chain for Personal Care Category. He has also served as the Vice President for Global
Procurement in Singapore.
He was appointed as Executive Director, Supply Chain of the Company in March 2010. Pradeep
leads Unilever Nepal Limited as the Chairman. He is also a member of the HUL Risk Management
Committee. Pradeep holds a Bachelor’s Degree in Engineering (Chemical) from IIT Delhi.

Independent Director

Mr Aditya Narayan (62) began his career as a Management Trainee with ICI India Limited (now
Akzo Nobel India Limited) in 1973. He grew through diverse functions and businesses including
a role as a Corporate Planning Manager at ICI Group HQ in London. He served as the Managing
Director of ICI India during 1996 - 2003 and then as its Non-Executive Chairman over 2003 -
2010. He also served as the President and CEO of BHP Billiton India during 2005 - 2009. Mr
Narayan is a B. Tech. from IIT Kanpur and also has formal qualifications in Law. He was a Fellow
in Interdisciplinary Sciences at the University of Rochester, USA. He was a Commonwealth
Scholar at the Manchester Business School in 1991 and a Fellow at the Aspen Institute, Colorado,
USA in 1998. Mr Narayan joined the Board of the Company as an Independent Director in 2001.
He is the Chairman of the Audit Committee and a Member of the Nomination and Remuneration
Committee and Corporate Social Responsibility Committee of the Company.

Independent Director

Mr S. Ramadorai (69) is currently acting as Chairman of National Skill Development Agency

(NSDA) in the rank of a Cabinet Minister. Mr S. Ramadorai (69) has been in public service since
February 2011, currently acting as Chairman of National Skill Development Agency (NSDA) in
the rank of a Cabinet Minister. The NSDA is a newly formed autonomous body which will
coordinate and harmonise the skill development efforts of the Government and the private sector
to achieve the skilling targets of the nation. He is also Chairman of the National Skill Development
Corporation (NSDC), a Public Private Partnership arm of the Government of India for creating
large, for-profit vocational institutions. Mr Ramadorai continues as the Vice Chairman of Tata
Consultancy Services Limited.

In recognition of Mr Ramadorai’s commitment and dedication to the IT industry he was awarded

the Padma Bhushan, India’s third highest civilian honour, in January 2006. In April 2009, he was
awarded the CBE (Commander of the Order of the British Empire) by Her Majesty Queen
Elizabeth II for his contribution to the Indo - British economic relations. Mr Ramadorai’s academic
credentials include a Bachelor degree in Physics from Delhi University, a Bachelor of Engineering,
degree in Electronics and Telecommunications from Indian Institute of Science, Bengaluru and a
Master degree in Computer Science from the University of California, USA. Mr Ramadorai
attended the MIT Sloan School of Management’s highly acclaimed Senior Executive Development
Programme in 1993. Mr Ramadorai joined the Board of the Company as an Independent Director
in May 2002. He is a Member of the Audit Committee and the Chairman of the Nomination and
Remuneration Committee of the Company.
Independent Director

Mr O. P. Bhatt (63) is the former Chairman of SBI (State Bank of India). Mr O. P. Bhatt (63) is
the former Chairman of SBI (State Bank of India). In the 36 years that Mr. Bhatt served at SBI, he
worked on several important national and international assignments. Mr. Bhatt led SBI through
challenging times by capitalising on the bank’s strengths. As Chairman of SBI, he was heading
the largest financial group in India, comprising, in addition to SBI, seven associate banks, five
international banking subsidiaries and nine financial services companies in India. Under his
leadership, SBI rose on the Global List rankings of Fortune 500.

Mr Bhatt was nominated ‘Banker of the Year’ by Business Standard and CNN – IBN Indian of the
Year for Business in 2007. Mr Bhatt was Chairman of the Indian Banks’ Association. He has Mr
Bhatt was Chairman of the Indian Banks’ Association. He has also been a part of India’s eco-
diplomacy as member of the Indo - US, Indo - Russia and Indo-French CEOs Forum. Presently,
he is the Governor on the Board of Centre for Creative Leadership, USA. Mr Bhatt holds a
Graduate degree in Physics and a Post Graduate degree in English literature (Gold Medal). Mr
Bhatt was appointed as an Independent Director on the Board of the Company in December 2011.
He is a Member of the Audit Committee and Nomination and Remuneration Committee of the
Company. He is the Chairman of the Stakeholders’ Relationship Committee and Corporate Social
Responsibility Committee of the Company.

Independent Director

Dr Sanjiv Misra (66) is a retired Indian Administrative Services (IAS) officer and a former
member of the 13th Finance Commission, a constitutional position with the rank of a Minister of
State. Prior to joining the Finance Commission, Dr Misra has served in a wide range of key
positions in the Federal and State Governments, including as Managing Director of the Gujarat
Industrial Development Corporation and stints at senior levels in the Government of India in the
Cabinet Office, the Ministry of Petroleum, the Ministry of Health & Family Welfare and the
Ministry of Finance. He served as a Secretary in the Ministry of Finance till his superannuation.

Dr Misra has represented India in various international conferences, seminars and negotiations.
Till recently, Dr Misra was a Member of the Advisory Council of the Asian Development Bank
Institute, Tokyo. He was also a member of the Committee on Fiscal Consolidation (Kelkar
Committee) set up by the Finance Minister in August 2012 to chart out a road map for fiscal
consolidation for the Indian economy. Dr Misra graduated in Economics from St. Stephen’s
College, Delhi. He has a Master’s degree in Economics from the Delhi School of Economics, a
Master’s degree in Public Administration from John F Kennedy School of Government, Harvard
University, USA and a Ph. D. from the Jawaharlal Nehru University, New Delhi. In recognition
of exceptional academic strengths and leadership qualities, Dr Misra was designated as Lucius N
Littauer Fellow of 1987 at Harvard University.
Dr Misra was appointed as an Independent Director on the Board of the Company in April 2013.
He is a Member of the Audit Committee and Nomination and Remuneration Committee and
Corporate Social Responsibility Committee of the Company.

Independent Director

Ms Kalpana Morparia was appointed as an Independent Director on the Board of the Company
with effect from 9th October, 2014. She is also a member of the Corporate Social Responsibility
Committee of the Company. She also has the responsibility for Service Groups operating in India,
including Global Research, Finance, Technology and Operations. Internationally, Ms Morparia is
a member of JP Morgan’s Asia Pacific Management Committee. Prior to joining JP Morgan India,
Ms Morparia served as Vice Chair on the Boards of ICICI Group Companies. She was a Joint
Managing Director of ICICI Group from 2001 to 2007. She had been with the ICICI Group since
1975. A graduate in law from Bombay University, Ms Morparia has served on several Committees
constituted by the Government of India. She has been recognized by several International and
National media for her role as one of the leading women professionals. She is also a Member of
the Governing Board of Bharti Foundation.

Brands owned by the company

Annapurna salt Rin detergent

Bru coffee Surf excel detergent and washing powder
Lipton tea Vim dish wash
Knorr soups Aviance beauty solutions
Kwality Wall’s Axe deodorant
Magnum icecream Lever Ayush
Active Wheel detergent Brylcreem hair cream
Cif cream cleaner Clear -hair product
Comfort fabric softeners Clinic plus shampoo
Closeup tooth paste Dove skin cleansing
Fair & Lovely- face cream Hamam
Indulekha hair oil Lakme beauty products
Lifebuoy soaps Liril soap
Lux soap Pears soap
Pepsodent toothpaste Ponds talcs and creams
Rexona Domex toilet cleaner
Sunsilk shampoo Vaseline skin lotion
Denim shaving products TRESemme
Pureit water purifier Kissan ketchups
Last three years segment results

2016-17

SEGMENTS Revenue % Profit %

Home care 33 21
Personal care 48 65
Foods 3 1
Refreshments 14 13
Others 2 0

2017-18

SEGMENTS Revenue % Profit %

Home care 33 25
Personal care 47 61
Foods 3 1
Refreshments 15 13
Others 2 0

2018-19

SEGMENTS Revenue % Profit %

Home care 34 27
Personal care 46 58
Foods & Refreshments 19 15
Others 1 0

Analysis with regard to the top 3 competing brands of HUL:

Surf excel & Ariel

Surf excel comes up with the tagline of removing toughest stain from cloths. Its strength lies in
discovering new markets. Revolutionary campaigns. Ariel has been the immediate competitor for
Surf excel. Ariel is the flagship brand of Proctor and Gamble. Ariel’s uniqueness lies in compact
technology, enzyme technology, fragrance etc. Ariel relies more on product innovation. Surf excel
is the top brand in HUL which together with other detergent brands comprises about 40% of market
share in 2017. Ariel is also a top brand but it lacks behind Surf excel because of the presence of
HUL in rural segments as well. But now Ghari detergent is leading the detergent industry.
Brooke Bond & Tata Tea:

When we compare between the two brands it is observed that HUL has got more share in the
market. It took eight long years for HUL to beat Tata tea in terms of market share. The difference
in their market share is very slight as according to the industry sources. HUL share is 21% and that
of Tata tea is 20.6 %. But in terms of volume Tata tea is higher than Brooke bond. Brooke bond
has been the flagship brand in HUL which is one among the brands contributing to 2000 crores.

Lifebuoy & Dettol:

Both the products are known for protecting from the diseases. In terms of variants Dettol has got
more variants than lifebuoy. This is the competitive edge of Dettol. But when it comes to
affordability lifebuoy is more affordable. Recently lifebuoy has slashed its price to increase the
market share. Currently Dettol is leading the hygiene segment with market share close to 56%.
This states how Dettol is dominating over lifebuoy. It is also because of the diverse uses of Dettol
products. Each product in Dettol can be used for various purposes which makes it more valuable.

References for the analysis above

https://timesofindia.indiatimes.com/business/india-business/after-8-years-hul-brew-beats-tata-
tea/articleshow/63672253.cms

https://indiraayudhiaaa.wordpress.com/2018/03/01/comparison-text-lifebuoy-vs-dettol/

https://m.economictimes.com/industry/cons-products/fmcg/no-wheels-enough-to-catch-up-with-ghari-
detergent-maker-maintains-market-share/articleshow/62060828.cms

https://m.economictimes.com/industry/cons-products/fmcg/hul-pg-nirma-lose-market-share-to-small-
local-brands/articleshow/57761589.cms
ANNAPURNA SALT

Annapurna Iodised Salt:

Annapurna Salt was launched in early 1995. When iodine deficiency was identified as a serious
health issue in India and iodised salt became a government directive, Annapurna played a critical
role by launching Annapurna Iodized salt. Annapurna salt continues to provide right level of iodine
while being pure, free flowing salt.

Annapurna Crystal Salt:

In order to cater the needs of the South Indian consumers, Annapurna Crystal Salt was launched.

BRU COFFEE

Bru has always been known to make relationships stronger. The warm aura, coupled with an
indulgent richness, brings people closer together. Whether it’s among friends or family members,
at home or outside, every moment is perfect for a cup of Bru!

Instant Coffee

Bru Instant

Launched in 1968, Bru Instant is India’s first coffee- chicory mix instant coffee. Our processes
ensure that the fresh coffee taste and aroma is preserved so that you get the best coffee experience,
instantly.

Bru Gold

Launched in 2011, Bru Gold is 100% pure coffee, a fine blend of the best Arabica and Robusta
beans carefully selected from the best South Indian plantations that are roasted to perfection to
give you a cup of coffee which is truly authentic.

Filter Coffee

Bru Green Label

Bru Roast & Ground is India’s first packaged filter coffee with carefully selected and freshly
roasted coffee beans that offer a great cup of aromatic filter coffee.
Bru Select

Bru Select offers the ultimate taste of premium filter coffee with its rich blend of 85% coffee and
15% chicory. It is the perfect indulgence when you want to slow down and enjoy a cup of coffee
with your loved ones.

LIPTON

Lipton is a British brand of tea, owned by Unilever. Lipton was also a supermarket chain in the
United Kingdom before it was sold off to Argyll Foods, to allow the company to focus solely on
tea. The company is named after its founder Thomas Lipton. The Lipton ready-to-drink beverages
are sold by Pepsi Lipton International, a company jointly owned by Unilever and PepsiCo, the
owners of the namesake product Pepsi. Lipton teas are a blend selected from many different
plantations around the world, from well-known producing countries such as Sri Lanka, India,
Kenya, and China. Lipton Yellow Label is blended from as many as 20 different teas.

KNOOR SOUPS

Knorr is a German food and beverage brand. It has been owned by the British-Dutch company
Unilever since 2000, when Unilever acquired Best Foods, excluding Japan, where it is made under
licence by Ajinomoto. It produces dehydrated soup and meal mixes, bouillon cubes and
condiments. It was known as Royco in Indonesia and the Netherlands and also in the Philippines,
and as Continental in Australia.

Knorr is available around the world. In 1957, flagship Knorr brands, like bouillon and soups, were
sold in eight countries and by 2000, Knorr products were sold in nearly 90 countries around the
globe. In Japan, Knorr is owned by ajnomoto.

KWALITY WALLS

Kwality Wall's is a frozen desserts brand owned by the India based British-Dutch consumer goods
company Hindustan Unilever. It is a major producer and distributor of frozen dessert products in
India, Bhutan, Brunei, Nepal, Sri Lanka and Malaysia.Kwality Wall's is a company of Hindustan
Unilever, the arm of Unilever in India. It is an amalgamated brand name created out of two
previously separate independent companies that Unilever took over: Kwality of India and Wall's
of Great Britain. Kwality Wall's frozen desserts do not contain milk products, but vegetable fat/oil,
and hence cannot be termed as "ice-cream".

MAGNUM ICECREAM

Magnum is an ice cream brand owned by the British/Dutch Unilever company and sold as part of
the Heartbrand line of products in most countries. In Greece, the Magnum brand name is owned
by Nestlé since 2005-2006 following the acquisition of Delta Ice Cream, so the Unilever ice cream
uses the name Magic.
ACTIVE WHEEL DETERGENT

Wheel is a brand of laundry detergent manufactured by Hindustan Unilever Ltd. This product was
created specifically by Hindustan Unilever to counter Nirma, the low cost detergent, which had
taken the ground away from Surf, the top selling detergent at that time from Hindustan Unilever.
Salman Khan, a Bollywood superstar, endorsed it. It was introduced in 1987.

CIF CREAM CLEANER

The Cif product is sold under the names Jif, Vim, Viss and Handy Andy, depending on which of
the 51 countries it is sold in, Sweden, the United Kingdom and South Africa, the products were
sold under the name Vim before this was changed to Jif, the launch name in Ireland, the
Netherlands and Hong Kong. In January 2001, the name in most of these countries was changed
to Cif, in order to harmonise marketing and product inventories across the continent. The name
change from Jif to Cif was confirmed in December 2000.

COMFORT FABRIC SOFTNESS

Comfort is a brand name for fabric softener sold by Unilever in the UK and around the world. The
range includes Comfort Pure (for delicate skin) and Comfort Crème (a premium brand). Scents
include Passion Flower and Ylang Ylang, Lily and Riceflower, Wild Pear and Ginkgo and the
Original Comfort Blue. The product is sold as Soft in Chile , Badin in Israel and Molto in Indonesia
and has similar variants to Comfort.

CLOSE UP TOOTH PASTE

Close-up is a brand of toothpaste launched in 1967 by Unilever as the first gel toothpaste. The
brand is marketed worldwide by Unileverand licensed since 2003 for North America to Church &
Dwight. Close-Up toothpaste is also available in the Philippines, Peru, Argentina, Indonesia, Sri
Lanka, India, Brazil, Russia and Bangladesh. It is one of the top brands in terms of sales in
India.The brand is positioned to target the youth segment with a lifestyle appeal in its advertising
campaigns.According to an August 2016 report in The Economic Times, Close-Up was in the
second spot in market share of toothpaste in India during January-June 2015 as well as January-
June 2016.

FAIR AND LOVELY FACE CREAM

Fair & Lovely is a skin-lightening cosmetic product of Hindustan Unilever introduced to the
market in India in 1975. Fair & Lovely is available in India, Bangladesh, Malaysia, Indonesia,
Singapore, Brunei, Thailand, Sri Lanka, Pakistan and other parts of Asia and is also exported to
other parts of the world such as the West, where it is sold in Asian supermarkets.Unilever patented
the brand Fair & Lovely in 1971 after the patenting of niacinamide, a melanin suppressor,which is
the cream's main active ingredient. As of 2012 the brand occupied 80% of the fairness cream
market in India, and is one of Hindustan Unilever's most successful cosmetics lines.
LUX SOAP

LUX is a global brand developed by Unilever. The range of products includes beauty soaps,
shower gels, bath additives, hair shampoos and conditioners. Lux started as "Sunlight Flakes"
laundry soap in 1899. with market shares spread out to more than 100 countries around the
globe.Today, Lux is the market leader in countries like Bangladesh, Brazil, India, Pakistan, South
Africa and Thailand.Developed by Unilever, Lux (soap) is now headquartered in Singapore. It
celebrated its 90th anniversary in 2018.

LIFEBOUY SOAP

Lifebuoy is a brand of soap marketed by Unilever. Lifebuoy was originally, and for much of its
history, a carbolic soap containing phenol (carbolic acid, a compound extracted from coal tar). The
soaps manufactured today under the Lifebuoy brand do not contain phenol. Currently there are
many variants of Lifebuoy. Lifebuoy was introduced by Lever Brothers in 1895 in England.
Originally a carbolic soap containing phenol, different varieties were later introduced without the
medicinal carbolic smell, such as the coral-colored Lifebuoy during the late 1950s and Lifebuoy
Minty Refresher in 1966

PEPSIDENT TOOTH PASTE

Pepsodent is an American brand of toothpaste with the minty flavor derived from sassafras. It has
been owned by Unilever since 1942, except in the United States and Canada, where since 2003, it
has been owned by Church & Dwight. Pepsodent toothpaste was introduced in the United States
in 1915 by the Pepsodent Company of Chicago. The original formula for the paste contained
pepsin, a digestive agent designed to break down and digest food deposits on the teeth, hence the
brand and company name.

REXONA

Rexona is a deodorant and antiperspirant brand created in Australia and manufactured by Unilever.
While marketed under the Rexona name in most countries, it is known as Sure in the United
Kingdom and Ireland, Degree in the United States and Canada, Rexena in Japan and South Korea
and Shield in South Africa. In Norway, Lilleborg produces Sterilan using a similar formula. It was
developed in 1908 by an Australian pharmacist, Samuel Fuller Sheffer and his wife, Alice.The
products are available in varying forms including as aerosols, pumps, roll-ons, sticks and creams.

SUNSLIK SAMPOO

Sunsilk is a hair care brand produced by the Unilever group. The brand was introduced in 1954 in
the UK, available in most global countries. It is the number one hair care brand in Malaysia, the
Philippines, Brazil, Argentina, Bolivia, Sri Lanka, Pakistan, Indonesia, and Thailand. Sunsilk was
launched in the UK in 1954, and by 1959 it was available in 18 different countries worldwide. At
the time, Sunsilk had an advantage over other shampoos in the market as it only needed one
application, and so meant washing less natural oils from the hair. Sunsilk cream shampoo for dry
hair was launched in 1956.

DENIM SHAVING CREAM

Shaving cream, shave cream, or shaving foam is a frothy cosmetic cream applied to body hair,
usually facial hair, to facilitate shaving. The use of cream achieves three effects: lubricates the
cutting process; swells keratin; and desensitizes skin. Shaving creams commonly consist of an
emulsion of oils, soaps or surfactants, and water. Blades with polymeric coating reduce the need
for shaving creams.

PURIET WATER PURIFIER

Pureit is the world’s most advanced range of in-home water purifiers. Pureit is breakthrough
innovation designed by Hindustan Unilever and it provides complete protection from all water-
borne diseases, unmatched convenience and affordability. In the developing world, most of all
diseases are water-related - a major cause for this is the poor quality of drinking water.

RIN DETERGENT

Sparkling bright clothes not only help form great impressions, but also provides confidence to
realize ones ambitions. Rin understands this need and strives to deliver best in class whiteness and
brightness through continuous innovation and products improvement. Rin detergent powder was
launched in 1994. This was the first product extension from the iconic brand that stood for
whiteness in laundry.

SURF EXCEL DETERGENT AND WASHING POWDER

Surf Excel is a Unilever brand that is currently marketed as the counterpart brand of OMO
detergent in the India, Pakistan, Bangladesh and Sri Lanka markets. The Surf brand was the first
detergent powder introduced in Pakistan (1948) and India (1959). Initially, Surf was positioned on
the clean proposition of “washes whitest”. However, with the emergence of numerous local
detergent manufacturers and the entry of other global brands, Surf underwent various changes in
its brand communication and was replaced by Surf Excel in 1996.

VIM DISH WASH

Vim is the name of a range of household cleaning products originally produced by Lever Brothers.
The Vim brand is currently owned by European multi national Spotless Group. Vim was produced
at Port Sunlight near Liverpool, England. The name Vim remained solely associated with the
scouring powder until 1993, when a range of associated products were released. Vim was also the
name of a detergent tablet manufactured by Lever Brothers, and sold in the United States during
the 1960s.
AXE

Axe or Lynx is a brand of male grooming products, owned by the British-Dutch company Unilever
and marketed towards the young male demographic. It is known as Lynx in the United Kingdom,
Ireland, Australia, New Zealand and China. In other countries it is known as Axe. Axe was
launched in France in 1983 by Unilever. It was inspired by another of Unilever's brands, Impulse.
Unilever introduced many products in the range, but were forced to use the name Lynx in the
United Kingdom, Ireland, Australia, and New Zealand due to trademark issues with the Axe name.

LEVER AUYSH

Our hectic lifestyles affect us. Increasing stress levels, lack of sleep and other modern lifestyle
habits have severe implications on our skin and hair.Lever ayush’s exclusive range of personal
care products have been carefully curated with authentic recipes from the age old Granthas. Each
product is formulated with Ayurvedic ingredients consciously picked to create effective Ayurvedic
solutions.

BRYLCREAM

Brylcreem is a British brand of hair styling products for men. The first Brylcreem product was a
hair cream created in 1928, by County Chemicals at the Chemico Works in Bradford Street,
Birmingham, England. The cream is an emulsion of water and mineral oil stabilised with beeswax.

CLEAR HAIR PRODUCTS

Clear is a brand of anti-dandruff shampoo produced by the Unilever group. The brand was
launched in 1981 and sold under the Clear name in most certain global countries, it is known as
Ultrex in Greece, Linic in Portugal and Clear in India. Until 2010, the product is sold in Thailand
under the name Clinic Clear, and Clinic before the early 2000s.

CLINIC SAMPOO

New Clinic Plus makes sure that – No matter what your daughter does with her hair, she won’t
face hairfall.Clinic Plus knows that as mothers nurture their child, it is as important to nurture their
hair as well. Clinic Plus helps them do exactly that. Clinic Plus gives mothers the confidence to
give their pre-teen daughters the freedom to experiment with their hair, without mothers worrying
about their daughters’ hairfall, since Clinic Plus has Milk Protein Formula which reduces hairfall
by 98%.

DOVE

Dove is a personal care brand owned by Unilever originating in the United Kingdom. The products
are sold in more than 150 countries and are offered for both women, men and babies.[1] Dove's
logo is a silhouette profile of the brand's namesake bird. Vincent Lamberti was granted the original
patents related to the manufacturing of Dove in the 1950s, while he worked for the Lever brothers.
HAMAM

Hamam is a brand of soap made in India and marketed by the Indian unit of Unilever. The brand
was previously owned by Tata Sons. The name comes from the Arabic/Persian word hammam,
which refers to a public-bathing establishment in the Middle Eastern countries. It was once a
leading bath soap brand in India. A 100-gm bar costs 30 ₹. Hamam soap was established in 1931
as a mild soap that could be used by families. Hamam used natural ingredients in its products long
before using all-natural ingredients was a trend.

LAKME

Lakmé is an Indian cosmetics brand which is owned by Hindustan Unilever. Having Kareena
Kapoor and Ananya Pandey as the ambassador, it ranked at number 1 among the cosmetics brands
in India. Lakme started as a 100% subsidiary of Tata Oil Mills . It was named after the French
opera Lakmé, which itself is the French form of Lakshmi (the goddess of wealth) who is renowned
for her beauty. It was started in 1952 famously, because then Prime Minister Jawaharlal Nehru
was concerned that Indian women were spending precious foreign exchange on beauty products
and personally requested JRD Tata to manufacture them in India.

LIRIL

Liril is a popular soap brand sold, to a large degree, in India, and Asia, as well as a few places in
Europe. The soap is currently manufactured by Hindustan UniLever Limited in India. Liril
launched a blue variant called Icy Cool Mint in 2002. It also tried launching an Orange variant,
called Liril Orange Splash in India in 2004. Neither of these variants created much splash in the
market. The company even changed agencies handling the brand, from Lowe to McCann Erickson
before going back to Lowe.

PEARS

Pears transparent soap is a brand of soap first produced and sold in 1807 by Andrew Pears, at a
factory just off Oxford Street in London, England. It was the world's first mass-market translucent
soap. Under the stewardship of Thomas J. Barratt, A. & F. Pears initiated a number of innovations
in sales and marketing. A. & F. Pears was acquired by Lever Brothers, now Unilever, in 1917, and
products under the Pears brand are currently sold in India, Sri Lanka and Nigeria.

PONDS

Pond's is a brand of beauty and health care products, currently owned by parent company the
multinational corporation Unilever. Pond's Cream was invented in the United States as a patent
medicine by pharmacist Theron T. Pond (1800–1852) of Utica, New York, in 1846. Mr. Pond
extracted a healing tea from witch hazel which he discovered could heal small cuts and other
ailments. The product was named "Golden Treasure." After Theron died, it would be known as
"Pond's Extract."
DOMEX

Protecting families for nearly 100 years. Ever since 1929, Domex has been providing effective
sanitation to people across the globe. Over the years, Domex has provided families with protection
from harmful germs. The sheer power of Domex gives you the confidence you need in eradicating
all known germs. Domex is committed to raising hygiene standards by improving general hygiene
and health standards in communities around the world.

VASLINE

Vaseline is an American brand of petroleum jelly-based products owned by British-Dutch

company Unilever. Products include plain petroleum jelly and a selection of skin creams, soaps,
lotions, cleansers, and deodorants. In many languages, the word "Vaseline" is used as generic for
petroleum jelly; in Portuguese and some Spanish-speaking countries, the Unilever products are
called Vasenol.

TRESMEE

TRESemmé is an American multi-national brand of hair care products first manufactured in 1947
by the Godefroy Manufacturing Company in St. Louis, Missouri, United States. It was named after
the renowned hair care expert Edna L. Emme. The brand name is a phonetic respelling of "well-
loved" that includes the surname of its namesake. The TRESemmé product line was initially
marketed only to beauty salons. The TRESemmé brand was purchased by Alberto-Culver in 1968,
and then acquired by Unilever in 2010.

AVAINCE

Aviance is a beauty brand, primarily aimed at women, produced by the Unilever group.Aviance is
sold under a variety of different markets around the world including Asia, Latin America and the
Middle East and is also sold via Hindustan Unilever's Multi-level marketing division Hindustan
Unilever Network in India, Bangladesh, and Sri Lanka.
Is the company operating only within India or outside India too? If so, what
kind of activities are they engaging in countries outside India?
HUL operates outside India too. The key activities of HUL in various countries other than India
are,

• Raw material procurement

• Manufacturing
• Distribution
• Marketing
• Sales
• Import and export

What is the nature of the business the company is operating as of now and from
its inception, what have been the major changes in that context so far?
HUL has been operating only in the FMCG manufacturing segment from its inception till now.

What is the present situation of the company – Standing or position in the

market, Challenges faced, competitors and their situation, Government policies
that influence the business, opportunities for growth and company’s plan to use
the same, etc. (Collect at least three recent articles from newspapers or
magazines related to these).
Market position:

HUL’s market cap: 396019 crores – The fourth largest in India

Challenges faced by HUL:

▪ Due to the note ban and by the implementation of GST, HUL has faced more challenges in
terms of sales turnover.
▪ Market share is limited due to presence of other strong FMCG players.
▪ Intense and increasing competition amongst other FMCG companies can affect business
of HUL
▪ Forced to increase product prices due to consistent increase in the production cost.
▪ Competition from unbranded and local products can very much affect the market share of
Hindustan Lever.
 ▪ There is every possibility of foreign brands coming to India and can decrease the sales of
HUL
▪ There is a slowdown in the FMCG sector which poses a critical challenge to the FMCG
market leader.
▪ There has been a substantial increase in input costs and operations of HUL and there is also
intense competition among the market players which is affecting the business of HUL
▪ Due to the reason of having excessive product portfolio it is getting difficult for HUL to
manage.
▪ There is every possibility of threat from the MNC companies as well
▪ One of the major challenges faced by HUL is the imitation of products by the local
manufacturers which affects the brand equity of HUL in a great way. There are lot of fake
products resembling HUL’s products.
▪ Inflation has also been one of the challenges for HUL since the raw materials cost has been
significantly raised.

Major competitors of HUL:

L'Oréal

▪ Market Cap 136.632B

▪ Revenue - Increase €26.93 billion (2018)
▪ Operating income - Increase €4.92 billion (2018)
▪ Net income - Increase €3.98 billion (2018)
▪ Total assets - Increase €38.45 billion (2018)
▪ Total equity - Increase €26.92 billion (2018)

Nirma Ltd.

▪ Mkt Cap (₹ Cr.) - 4066.88

▪ Revenue - Increase ₹5524 crore (US$ 842 million) (2017)
▪ Operating income - Decrease ₹632 crore (US$ 96 million) (2017)
▪ Net income - Decrease ₹440 crore (US$ 67 million) (2017)

ITC Limited

▪ Mkt Cap (₹ Cr.) - 298988.02

▪ Revenue - Increase₹52,035 crore (US$7.5 billion) (2019)
▪ Operating income - Increase₹19,138 crore (US$2.8 billion) (2019)
▪ Net income - Increase₹12,824 crore (US$1.9 billion) (2019)
▪ Total assets - Increase₹71,798 crore (US$10 billion) (2019)
▪ Total equity - Increase₹59,484 crore (US$8.6 billion) (2019)
Colgate-Palmolive

▪ Mkt Cap (₹ Cr.) - 33863.57

▪ Revenue - Increase US$15.5 billion (2018)
▪ Operating income - Decrease US$3.589 billion (2017)
▪ Net income - Decrease US$2.024 billion (2017)
▪ Total assets - Increase US$12.676 billion (2017)
▪ Total equity - Increase US$-60 million (2017)

Procter and Gamble (P&G)

• Market Cap 307.223B

• Revenue - Increase US$67.684 billion (2019)
• Operating income - Decrease US$5.487 billion (2019)
• Net income - Decrease US$3.897 billion (2019)
• Total assets - Decrease US$115.1 billion (2019)
• Total equity - Decrease US$47.58 billion (2019)

Dabur India

• Mkt Cap (₹ Cr.) - 77573.74

• Revenue - ₹76.80 billion (US$1.1 billion) (2016-2017)
• Net income - ₹12.77 billion (US$180 million) (2017-17)

Government policies affecting business

▪ The demonetization brought in by the Govt of India has affected the business of HUL. The
sales of HUL in the quarter of December (2016) has declined by 4% because of low
liquidity in the economy and sales rised by 7% as economy warmed later.
▪ Also, the decision of implementing GST by the central government had an adverse impact
on HUL. GST which has been implemented suddenly has got a long-term impact on HUL.
It takes some time to recover from this downfall due to the decisions taken by
Government.
▪ Recent budget also had its impact on HUL. Budget hasn’t given due importance to
consumption category which is the major driving factor in our economy. Even though
there is growth in FMCG sector which benefits HUL the growth is not satisfactory.
▪ Also, the minimum shareholding by public in a company has been increased from 25% to
35% in the budget. Govt in the annual budget has raised the minimum public shareholding
which requires HUL to sell billions of worth of shares
HUL’s opportunities for growth:

▪ There has been significant amount of change in the lifestyle of the consumers and the
income levels has been increased which generally gives a very good opportunity for HUL
to expand their operations and for further market expansion.
▪ The rural markets are the best source for generating more amount of revenue compared to
the urban areas.
▪ Mergers and acquisitions can also be quoted as important opportunity for HUL which can
help it to diversify their business.

HUL’s planning to make use of the opportunities available:

HUL has been trying to make the best use of its available resources and the BOD of HUL has
framed a four pillar strategy to grab the opportunities available.

▪ Winning with brands and innovation

HUL tries to meet the constantly changing needs of consumers by harnessing our global scale
and local expertise.

▪ Winning in the Market place

HUL tries to know the demand requirements of the consumers and they drive high on quality
always

▪ Winning through Continuous Improvement

Company’s Supply Chain is continuously upgrading itself with future ready technologies that
support the entire value chain. Smart use of these technologies is driving efficiency in the Supply
Chain by delivering cost savings, better customer service through enhanced availability and
opportunities for strategic partnerships.

▪ Winning with People

HUL tries to work towards making an organisation that is simpler, diverse and agile and therefore
will move faster, innovate better and leverage Unilever’s global scale.

The concept what HUL believes in is “Only brands with purpose grow” and “Companies with
Purpose Last”
Challenges faced by HUL (Based on the articles)

The recent budget introduced by the central government has failed in boosting the FMCG sector.
As the economy is moving towards the consumption driven sector many expected that budget
will boost the FMCG sector. But it has failed in doing so. The consumption which is very
important for a country like India. But government didn’t give much importance to consumption
in the budget. This affects FMCG players like HUL. HUL is 4th largest in terms of market
capitalization and first in FMCG sector. Given the slowness in sales during the starting of the
year, this will make investors to stop from investing in HUL company. Due to no proper steps
being taken for demand revival, HUL shares can very much be affected.

Company’s plan to tackle the problem

HUL has planned to increase the price of the selected products to revive from the market
slowdown. This is done by the company in order to meet the increasing crude oil costs and also
due to increase in commodity changes. This needs to be done effectively by the company since it
may hamper the growth of the company if not planned properly. Actually, HUL came up with
this plan even before of the budget by anticipating the economy in advance

One article state about the anti profiteering loss that need to be faced by HUL. According to the
GST rules if a company gets benefitted by reduction in tax or by way of input tax credit it needs
to passed on to the consumer. But according to the article given the government authorities are
not satisfied with the methodology followed by HUL in calculating anti profiteering. Previously
HUL has been fined by National Anti profiteering Authority for not complying with the rules. So
HUL now has to submit documents to the government authority showing the procedure adopted
for calculating the anti profiteering benefits acquired. It has been stated that HUL has failed in
depositing this benefit money into consumer welfare funds since the GST rate cut. So now HUL
has submitted the necessary documents. Being a giant company like HUL this could very much
affect the good will of the company since it hasn’t done what it is supposed to do according to
the government regulations.

To tackle this HUL slashed the price of few of its categories recently with a view to pass the
benefit to the consumers
Visit the website of the company and look out for section where information to
shareholders (investors) is posted. List down the details (just the title) of the
information provided therein.
Information for the shareholders will be present under the section Investors Relations in the
company’s website

The contents of the section includes

• Corporate governance
• AGM and shareholding information
• Share price
• Quarterly results
• Annual reports
• Financial calendar
• Company presentations
• FAQ’s and Forms
• Investor contacts
• Unclaimed and unpaid dividend
• Recent news

Download the latest “Annual report”. Check as to which period’s financial

statement it contains. Do you only stand alone statement or stand alone &
consolidated statement. If both are there, give a list of subsidiary companies
together with the major business they are into. If any subsidiary is located
outside India mention the same.
The latest annual report of HUL contains financial statements for the period of 2018-19. The report
has both the standalone and consolidated statements. The subsidiaries of HUL within and outside
India and their nature of business are as given below.

Subsidiaries of HUL within Indian Major Business

Unilever India Exports Limited Manufacturing
Lakme Lever Private Ltd Manufacturing
Ponds Exports Ltd Manufacturing
Daverashola Estates Pvt Ltd Manufacturing
Levers Associated Trust Ltd Financial inter-mediation
Levindra Trust Ltd Financial inter-mediation
Hindlever Trust Ltd Financial inter-mediation
Jamnagar Properties Pvt Ltd Real estate
Hindustan Unilever Foundation Social service – CSR
Bhavisya Alliance Child Nutrition Initiatives Social service – CSR
 Subsidiaries of HUL outside India Major Business
Unilever Nepal Ltd Manufacturing

Unilever Nepal Ltd has established itself as the largest FMCG manufacturer in Nepal. In 2017
UNL marked 25 years of existence in the country.It is the market leader across categories for the
brands manufactured in Nepal. It has actually penetrated the Nepal market to the full extent.

Comment on whether the company has followed the Schedule III of the
Companies Act, 2013 and mention any deviations in the format suggested under
the Act.
The Integrated Annual Report was prepared in accordance with the guiding principles of the
Integrated Reporting Framework recommended by International Integrated Reporting Council
(IIRC). Statutory Reports, including the Report of Board of Directors, Management Discussion
and Analysis and the Corporate Governance Report, are as per the regulatory requirements
mandated by the Companies Act 2013, listing regulations and the secretarial standards.

List down the contents of the annual report

• Chairman’s letter
• Mission and vision statements
• Corporate Information
• Financial highlights
• Directors Report
• Management Analysis & Discussion
• Financial Statements
• Notes to accounts
• Auditors Report
• Business Responsibility Report
• CSR
• Strategies followed
Each student in the group must take one section of the annual report, read
through and give a brief summary of the same. Also explain as to what is the
significance of the section from the point of view of people to whom such reports
are normally targeted at.

17BBA0077 – Akash Nakkiran

Content Chosen: Annual Report on Corporate Social Responsibility

Corporate social responsibility (CSR) is a company's obligation towards the community and
environment (both ecological and social) in which it operates. A self regulated CSR system in a
company helps to comply with the obligations. A CSR report is a periodical (usually annual) report
published by companies to report their corporate social responsibility actions and results

Significance of CSR

• It helps to comply with legal regulations

• It helps to build brand image
• It helps to differentiate among competitor
• It helps to show how accountable the company is
• It helps to balance the flow of benefit between the environment and the company
• It helps stakeholders to understand that the company goes beyond just business to give a
better meaning to their business by adding more value through CSR activities
• It helps to build trust among the stakeholders
• It helps to boost sales and market size
• It helps to reduce the chances of misdirection
• It helps to get funds from the financial institutions as they would feel secure about their
money if they are funding companies with responsibility in all aspects.
Significance of CSR Report

• CSR reports aim to enable companies to measure the impact of their activities on the
environment, on society and on the economy to get insightful data to improve their
processes and have a more positive effect on the above mentioned three factors.
• CSR reports helps companies to communicate externally to the stakeholders about their
goals regarding CSR.
The annual report on CSR of HUL contains the following information,

• Brief outline of the company’s CSR policy

• Overview of projects/ programmes undertaken
• Composition of the CSR Committee and details of CSR spend
The importance of the CSR report information provided by HUL in understanding and analyzing
the performance of the business

• CSR Policy
o The CSR policy information in the CSR report is one of the very important and
critical ones. The HUL CSR policy is called as Unilever Sustainable Living Plan
(USLP).
o The USLP has three global goals, namely: (i) help more than a billion people take
action to improve their health and well-being; (ii) halve the environmental footprint
of the making and use of products; and (iii) enhance the livelihoods of millions of
people while growing the business.
o CSR of a company has a direct impact on the performance of the company as we
are living in times where the society has started to give importance to a sustainable
growth and hence the right CSR policy formation would help the company to gain
acceptance among its consumers.
o An analyst would look into the quality of such a policy to determine the acceptance
it would gain among its stakeholders which would have a direct effect on its
performance
• Overview of projects/ programmes undertaken
o The Overview of projects in the HUL CSR report is divided into two components.
One lists the projects that are according to the schedule VII of the companies act
and are considered to calculate the CSR spending. The other part lists the projects
undertaken to achieve HUL’s CSR goals but is not considered for the calculation
of CSR spending as it involves non schedule VII activities.
o Information regarding different CSR projects would help an analyst to understand
the amount of benefits it had given to the society and environment.
o It would also help an analyst to see the amount of effort HUL is putting in to honor
its commitment of CSR goals even if it’s required to go an extra mile beyond the
minimum requirements of the law. This would help the analyst place trust in the
company at all times as they would put in similar commitment in their business
activities which affects the business performance.
• Composition of the CSR Committee
o The CSR report of HUL lists and provides a detailed background of each member
of the CSR Committee. The information provided also includes the other roles of
the members in the company. For example, CFO can also be on the CSR Committee
and his performance in the dual roles can be correlated.
o The analyst would look into the profiles of the CSR committee members to
understand their achievements and performance and correlate it with the
performance of the other aspects of the business they overlook to understand the
overall performance of the business.
 • Details of CSR spend
o The details of the CSR spend would help an analyst to understand the performance
of the company as the amount spent is a defined percentage of the profit of HUL.
Hence the spending pattern will also help to understand the profit over the years
and the analyst also finds how responsible is the company with the CSR fund which
could help him to place trust in the company with his own money.

17BBA0002 – Gunuganti Pradeep

Topic chosen: Corporate Governance Report

Corporate governance report is one of the most significant things that needs to be observed in
an annual report. It contains the information relating to the set of rules and processes followed by
a business organization. Corporate governance is required to maintain a right balance between the
stakeholders of a company. Corporate governance is designed by the management for having
accountability.

Significance of Corporate Governance report:

▪ It tries to reduce the conflicts between the stakeholders of a company.

▪ Having a systematic corporate governance enhances the growth of company
▪ It makes the shareholders believe that the company is adhering to the process laid in its
corporate governances and it develops a positive image about the company.
▪ It always makes the management to work to fulfill the interests of the shareholders and to
achieve the goals of the organization.
▪ It tries to minimize the risk element in the business as everything needs to be in order.
▪ The element of transparency gains a lot of importance as the stakeholders would be able to
know what the management is actually doing.
▪ In recent times the number of scams that are being taken place in the corporate world is
very high due to lack of proper governance within an organization. So, by having a proper
corporate governance the scams can be reduced.
▪ Also, the good governance in organization attracts the foreign investors as well.
▪ It can help the companies to get funds from the financial institutions. Financial institutions
can feel secured about their money if they are funding companies with good corporate
governance.
Corporate governance in hul (major highlights)

▪ There is a separate meeting for the independent directors once in a quarter without the
executive directors to discuss certain issues.
▪ There is a board evaluation meeting conducted formally.
▪ The company has assigned the responsibilities to its Board of Directors according to
their expertise.
▪ There are separate responsibility committees for stakeholder relationship management,
risk management, CSR committee.
▪ The details about the complaints of the shareholders (Non receipt of dividend)
have been highlighted in this report and it is also stated how those complaints have
been addressed.
▪ The whistle blowing mechanism has also been given due importance which is one
more attractive thing about the HUL. The employees can feel free to report to the
management in case of any violation of significant matters and HUL has provided an
email address for reporting such concerns.
▪ The corporate governance report includes all the details relating the remuneration,
attendance, of the board.
How critical is whistle blowing in affecting the business of HUL:

In a large organization like HUL there is a definite need of whistle blowing. There is a high chance
of misconduct on the part of employees which can eventually affect the business. One such
example could be embezzlement of cash. If we recall what has happened in case of Satyam
Computers, we can understand how significant whistle blowing is. It can have an enormous effect
on business if not reviewed properly. Only by having honest management and employees the
interests of the stakeholders can be protected and the company can achieve its objectives defined.
The fraudulent things being done can be found out and there can be transparency and
accountability.

In HUL there is a separate committee headed by the Company Secretary to take care of this. All
the complaints brought under the purview of this committee will be examined and proper action
could be taken immediately without delaying which otherwise could impact the business of HUL.
Then the complaint registered will be taken to the internal audit committee. So, this whistle
blowing policy directly affects the company with regard to the internal governance.

Also the complaint solving mechanism in HUL impact the shareholders much as their rights are
being protected and thus it also has its effects on the business.
17BBA0127 – Vishnu J
Mission & vision of HUL:

Mission:

Deep roots in local cultures and markets around the world give the strong relationship with
consumers and the foundation for the future growth. They will bring the wealth of knowledge and
international expertise to the service of local consumers - a truly multi-local multinational.

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, they believe, the highest standards of corporate behavior towards
everyone they work with, the communities touch, and the environment on which they have an
impact.

This is their road to sustainable, profitable growth, creating long-term value for their shareholders,
to the people, and their business partners.

Vision:

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

HUL has earned a reputation for conducting its business with integrity. This reputation is an asset,
just as valuable as our people and brands.

To maintain this reputation they requires the highest standards of behaviour – consistently
observed by all. The Code of Business Principles sets out these standards and they expect all their
employees to adhere to them.

This Code is to be more than a collection of high sounding statements. It must have practical value
in day-to-day business lives and each one of them is must follow those principles in the spirit and
the letter.
17BBA0039 - Harika
Auditors Report:

Companies in which the public are interested will get their accounts audited. Generally, the limited
companies will get their financial statements audited which will be an important factor in
understanding the accounting compliance requirements of a company. An auditor’s report is an
opinion given by an independent authority stating whether the financial statements are true and
fair and procedures have been followed properly. The internal audit report examines the internal
control systems and procedures whereas an external audit report is an opinion given by a third
party about the fairness of such statements.

Importance of Auditors report:

• The audit report by an external authority would be present in the annual report of the
company to which all the users can have access.
• Financial institutions and creditors would be looking at auditor’s report to lend them.
• It is also important from the regulatory authority perspective as well since it is related to
the interest of shareholders
• A company with an unqualified report would be able to attract more investors.
• The opinion paragraph in the auditor report is the key element which the investors would
look for.
• It provides the assurance on the financial statements.
• Because of the inherent limitations present in the financial statements itself the audit has
got its drawbacks.
• The audit would even give the details of the subsidiary companies as well which helps
the users of a parent company financial statements in a large way.
• Just by looking at the audit report normal shareholders would be able to know how
company is operating which would otherwise be difficult.
Major highlights in HUL auditors report:

▪ The auditors gave an unqualified report stating that financial statements are true and
fair
▪ All the key audit matters have been considered.
▪ Substantive testing has been done by selecting samples of revenue transactions by verifying
the documents.
▪ Inspection of key customer contracts has been done.
▪ A retrospective review of management decisions has been done.
▪ Systems regarding the control of contingent liabilities has been performed.
▪ The auditors also have given their opinion on legal and regulatory requirements.
▪ It is stated in the auditor’s report that one subsidiary whose assets are worth 389
crores is audited by another local auditor.
The impact of local auditor’s report on the auditor report:

(Aspect that needs to be considered and which will have an impact on the business)

▪ Here one of the subsidiaries has been audited by a local auditor.

▪ The local auditor report has been submitted to the main auditor by the management.
▪ Now the reliability of the main audit report depends on how the local auditor has done the
auditing.
▪ As it is a huge company even if one of the subsidiaries audits has not been conducted
properly it will have an impact on the overall audit procedures of the company since the
assets of that subsidiary is nearly 400 crores which is significant.
▪ Thus, the local auditors report will certainly affect the business of the company.
HUL company is audited by BSR & Co. LLP (101248W/W-100022)

17BBA0016 - Mounika
Directors Report:

This has been one of the important aspects in the annual report. The information provided in the
director’s report helps the shareholders to know about the future prospects of the business. It talks
about how well the company is performing and it also tells how the company has been complying
with the regulations and the accounting standards. All the large-scale companies require to have a
director’s report in their annual reports.

The contents of the director’s report include:

• State of company’s affairs

• Number of board meetings
• Related party transactions
• Inter-corporate loans and investments
• Details of the directors
• Risk management policies
Significance:

▪ Acts as a communication medium with the investors, creditors and other users of the
financial statements.
▪ It emphasizes the transparency policy of the organization
▪ Very much useful for shareholders
▪ It tells whether the company would be able to expand in future.
▪ It also emphasizes the financial availability for the organization.
▪ It acts as an important source of public information
 ▪ It is also known as Board Report.
▪ It includes all the summary of initiative activities taken by the board and the perspective of
company’s future.
Major Highlights in HUL Board Report:

▪ The main strategy of by Board of Directors of HUL is growing to the core, bringing in
innovations along with the market development and channels development and thereby
value creation.

The four pillars that are integrated with the plan

▪ Winning with brands and innovation

▪ Winning in the Market place
▪ Winning through Continuous Improvement
▪ Winning with People

The concept what HUL believes in is “Only brands with purpose grow” and “Companies with
Purpose Last”.

They are also talking about the Risks and opportunities present and how they are actually trying
to mitigate it. Making R & D more powerful by bringing new technologies to attract the customers.
Also, more importance has been given to digital communication strategies.

How it affects company’s performance:

▪ Without proper strategic plans regarding both the normal operating plan and digital
marketing, the business couldn’t survive in the competitive world which tells how
important the directors report is for HUL.
▪ The HUL has been facing a lot of threat from its competitors which it can tackle only
through proper decisions taken by directors.

17BBA0129 – Harini
FINANCIAL HIGHLIGHTS :

The amount of gross sales for the year amounted to 37,660 crores which was 35,000 crores in the
previous year with an increase of 2660 crores.

The CAGR over the past ten years is 9%.

The EBITDA amounted to 8637 crores which is 22.9% in the year 2018-19 . Comparable Earning
Before Interest Tax Depreciation and Amortisation (EBITDA) improved by 130 bps.
The net profit during the year was 6036 crores , there is an increase of 936 crores from the previous
year net profit which amounted to 5100 crores.

The amount of cash generated from operations amounted to 8413 crores. During the previous year
the same amounted to 8000 crores , with an increase of 4130crores.

The segmental profit from the foods & refreshment segment was about 15% , 27% from home
care segment and 58% from beauty and personal care segment.

The net revenue was 38224 crores which on a comparable domestic consumer business grew by
12% with 10% underlying volume growth.

The EPS earnings per share was 27.89 rupees , which in the last year was 24.20 rupees per share.

The cash from operations was 8413 crores . Cash from operations was up by 312 crores on a
comparable basis.