01_FMCG SECTOR

An

Online Summer Report (501)

On

Nestle India Limited

Marico Limited

ITC Limited

For,

Submitted in partial Fulfillment of

The requirement for the Degree of

Bachelor of Business Administration (BBA)

Submitted By:

Ms. Archana Choudhary (020)

Mr. Arunab Bhatia (212)
Ms. Drishti Dagaliya (221)

Under the Guidance of:

Dr. Sanjay Joshi

SDJ INTERNATIONAL COLLEGE,

VEER NARMAD SOUTH GUJARAT UNIVERSITY, SURAT

OCT - 2021

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01_FMCG SECTOR

Declaration
We, the undersigned students of TYBBA (Sem. V), hereby declare that Online

Summer Report (OSR - 501) prepared by us on below mentioned companies are

the result of original investigation carried out by us and also is the result of our

hard work and compliance of all the policies and guidelines framed by the

University as well as our College. We also declare that this report has been created

by us and has not been published anywhere else other than submitted to our SDJ

International College, Surat.

Rol Name of
Name of Student Name of Company Signature
l No Sector

020 Archana Choudhary Nestle India Limited

212 Arunab Bhatia FMCG ITC Limited

221 Drishti Dagaliya Marico Limited

Date:

Place: Surat

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01_FMCG SECTOR

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01_FMCG SECTOR

Acknowledgements
We express our deep sense of gratitude to Director Mr. Deepak Vaidya, the
director of SDJ International College and Veer Narmad South Gujarat
University, Surat for allowing us to carry out such Online Summer Report as part
of curriculum for the betterment of our knowledge enhancement.

Next, we wish my heartfelt thanks to I/c. Principal of this college Dr. Aditi
Bhatt, who always motivate us to fulfil our dreams and lead us in the direction of
growth. She has given her valuable inputs for effective completion of this project

We also thank to our teacher and mentor Dr. Sanjay Joshi, who guided us in
preparing throughout the project journey. His constant help, guidance and
continuous teaching has given us so many inputs on academic as well as non-
academic front.

We would also like to thank Mr. Sanjay Bhatt, Librarian, with the effort of
whom, we could get the insights and learning from past years reports.

Lastly, we would like to thank all of them who has directly or indirectly helped us
in making our Summer Internship Report possible.

Date:

Place: Surat

Archana Choudhary (020)

Arunab Bhatia (212)

Drishti Dagaliya (221)

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01_FMCG SECTOR

INDEX
Chapter 1: Industry Overview.........................................................................................................6
1.1 History and Evolution of FMCG Sector................................................................................6

1.2 COVID-19 & Key Challenges...............................................................................................7

1.3 SWOT Analysis of FMCG.....................................................................................................8

1.4 Major Players in the Sector:...................................................................................................8

1.5 Growth of FMCG...................................................................................................................9

1.6 Investments/ Developments...................................................................................................9

1.7 Global FMCG Sector...........................................................................................................10

1.8 Summary..............................................................................................................................10

Chapter 2: Company Profile..........................................................................................................11

2.1 Nestle India Limited.............................................................................................................11

2.1.2 SWOT Analysis of Nestle India Ltd.............................................................................12

2.1.2 SWOT Analysis of Nestle India Limited......................................................................12
2.2 Marico Limited....................................................................................................................14

2.2.1 SWOT Analysis of Marico India Limited.....................................................................15

2.3 ITC Limited..........................................................................................................................16

2.3.1 SWOT analysis of ITC Limited....................................................................................17

Chapter 3: Finance department......................................................................................................19
3.1 Consolidated Profit & Loss A/c...........................................................................................19

3.2 Consolidated Balance sheet.................................................................................................20

3.3 Ratios...................................................................................................................................21

3.3.1 Ratio Analysis:..............................................................................................................21

3.4 Graphical Representation of data:........................................................................................22

3.5 Accounting Procedure..........................................................................................................23

3.6 CSR AND EXPENSE..........................................................................................................24

3.6.1 Nestle India Limited......................................................................................................24

3.6.2 Marico Limited........................................................................................................24
3.6.3 ITC Limited.............................................................................................................24

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01_FMCG SECTOR

3.7 Listing on National Stock Exchange...............................................................................25

Chapter 4: Marketing department..................................................................................................26

Chapter 5:Human Resource Department (HRM)..........................................................................32
Chapter 6: Production / Operations Department...........................................................................39
Chapter 7: Risk Management Department....................................................................................42
7.1 Nestle India Limited.............................................................................................................42

7.2 Marico Limited....................................................................................................................42

7.2.1 Risk Management Committee.......................................................................................42

7.2.3 Risk Management Framework......................................................................................42
7.2.3 Risk Management..........................................................................................................42
7.3 ITC Limited..........................................................................................................................43

7.3.1 Risk management strategy.............................................................................................43

Chapter 8: Conclusion...................................................................................................................45

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01_FMCG SECTOR

Chapter 1: Industry Overview

1.1 History and Evolution of FMCG Sector

The fast-moving consumer goods (FMCG) industry or consumer packaged goods (CPG) industry
is mainly responsible for producing, distributing and marketing fast-moving consumer goods.
The FMCG industry is the fourth largest sector in the Indian economy. Household and personal
care products accounts for 50% of the sales in the industry, healthcare accounts for 31-32% and
food and beverage accounts for the remaining 18-19%.

Segments of FMCG

31%
50%

19%

Household & Personal Care Food and Beverages

Healthcare

Between 1950 and 1980, there was limited investment in the FMCG sector. Local people had
lower purchasing power, which meant that people opted for necessity products rather than
premium products. Indian government was inclined towards favoring the local shops and
retailers. Between 1980 and 1990, people wanted more variety of products which encouraged
FMCG companies to increase the availability of products. FMCG Industry started getting
traction and other companies started entering the industry. Media industry in India also boomed
during the same time which gave new companies even more incentive to make their business
profitable. Prior to 1991, when globalization and liberalization occurred in India, western
apparels and foreign food products were not available to local customers. Common people
weren’t very aware of brand recognition. After 1991, FMCG industry was inspired by the
international companies which also allowed government intervention to incentivize foreign
FMCG companies to operate in India.
The Indian FMCG industry generates massive employment opportunities and currently
employees more than 3 million people. Departmental stores, grocery stores, and supermarkets

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01_FMCG SECTOR

are the places where consumers buy the necessary products for daily consumption. In the 21 st
century, people don’t want to move across different stores to acquire the common household
goods. Hence, the introduction of supermarkets, where customers have a variety of choices for
different household products, into localities are proving to be extremely convenient to the
customers. Some of the most common stores in India are: Reliance Retail, Big Bazaar, D-Mart,
Easy day, MORE, Spencer’s, Spar, Hyper City, and Star Bazaar.

1.2 COVID-19 & Key Challenges

Consumption Trends
 Consumption shifted to inside
Supply Chain
the home and lower demand  Pandemic exposed weakness of
for discretionary goods global supply chains to risk of

 Evolving trends like disruption

sustainability, health and  Corporates had to fund increased

digital accelerated by crisis working capital needs whilst

 Shift from ‘premium’ supporting key suppliers

categories to ‘value’ as  Shift to e-commerce and local

customers trade down albeit supply requires review of trade-off
temporarily between lower working capital
needs vs. margin dilution

P&L Headwinds Sustainability Focus

 Higher near-term one-off costs  Customers expect even greater
and negative portfolio mix are transparency to vet goods are safe and
likely to be margin dilutive ethically sourced
 Further efficiencies harder to  Investors are more ESG conscious
find as margin widening has across waste reduction, emissions and
been driven by cost control as recyclability which underpin the need
organic, top-line growth has for investment
been sluggish

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01_FMCG SECTOR

1.3 SWOT Analysis of FMCG

Strength
 Cost Cutting Strategies
 Increase in Price
 Introduction to lower SKUs
 Restructuring to leverage Synergies

Opportunities
 Eating the Local Goodness
 Health and Wellness
 Online Marketing Leads the ways
 The Customized Approach

Weakness
 Big Data
 Environment and Sustainability
 Online Grocery Shopping
 Social Media

Threats
 Bargaining Power of Buyers
 Bargaining Power of Suppliers
 Competitive Rivalry
 Threats of New Entrants

1.4 Major Players in the Sector:

 Hindustan Unilever Ltd.
 ITC Ltd.
 Nestle India Ltd.
 Britannia Industries Ltd.
 Godrej Consumer Products Ltd.
 Patanjali Ayurveda Limited.

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01_FMCG SECTOR

 Dabur India Ltd.
 Marico Ltd.

1.5 Growth of FMCG

The Indian FMCG industry has recorded a 9.4 per cent growth in the January-March quarter of
2021, helped by a consumption-led growth and value growth by increased prices of products,
especially of staples.
The rural market continued to perform with strong growth of 14.6 per cent during the period and
the metro markets have registered a positive growth after two quarters.
Fast Moving Consumer Goods (FMCG) industry sales growth from the traditional trade channels
jumped to double digits, while growth in e-commerce normalized down to single digits in the
January-March quarter.
FMCG industry in India has built growth momentum by growing at 9.4 per cent in the quarter
ending March 2021 after growing at 7.3 per cent in the previous quarter (October-December
2020), over the same quarter of the previous year.

1.6 Investments/ Developments

The Government has allowed 100% Foreign Direct Investment (FDI) in food processing and
single-brand retail and 51% in multi-brand retail. This would bolster employment, supply chain
and high visibility for FMCG brands across organized retail markets thereby bolstering consumer
spending and encouraging more product launches. The sector witnessed healthy FDI inflows of
US$ 17.8 billion from April 2000 to September 2020.
Some of the recent developments in the FMCG sector are as follows:
 In March 2021, ITC Ltd. launched milkshakes and cakes to expand in categories such as
chocolates and staples.
 In March 2021, Sanjay Ghodawat Group launched RIDER, an energy drink. It is available
across all modern retail formats such as supermarkets, general stores and e-commerce
platforms.
 In January 2021, Tata Consumer Products introduced two new products, TATA Tea Tulsi
Green and TATA Tea Gold Care, and reformulated its existing Tetley Green Tea, with
added Vitamin C.

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1.7 Global FMCG Sector

Amid the COVID-19 crisis, the global market for FMCG Packaging estimated at US$514.4
Billion in the year 2020, is projected to reach a revised size of US$622.5 Billion by 2027,
growing at a CAGR of 2.8% over the analysis period 2020-2027. Food, one of the segments
analyzed in the report, is projected to record a 2.9% CAGR and reach US$160.3 Billion by the
end of the analysis period. After an early analysis of the business implications of the pandemic
and its induced economic crisis, growth in the Healthcare segment is readjusted to a revised
3.3% CAGR for the next 7-year period.

The FMCG Packaging market in the

Global MARKET OF FMCG U.S. is estimated at US$139.1 Billion
700 622.5
600 514.4 in the year 2020. China, the world's
500
400 second largest economy, is forecast to
300
200 reach a projected market size of
100 1 1 2 2
0 US$125.5 Billion by the year 2027
2020 2027
trailing a CAGR of 5.1% over the
analysis period 2020 to 2027. Among
the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 0.7%
and2% respectively over the 2020-2027 period. In the global Personal Care segment, USA,
Canada, Japan, China and Europe will drive the 2.5% CAGR estimated for this segment. These
regional markets accounting for a combined market size of US$50.3 Billion in the year 2020 will
reach a projected size of US$59.7 Billion by the close of the analysis period. China will remain
among the fastest growing in this cluster of regional markets.

1.8 Summary
Rural consumption has increased, led by a combination of increasing income and higher
aspiration levels. There is an increased demand for branded products in rural India. The rural
FMCG market in India is expected to grow to US$ 220 billion by 2025 from US$ 23.6 billion in
FY18.

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 01_FMCG SECTOR

Chapter 2: Company Profile

 Alimentana S.A. via a wholly owned

2.1 Nestle India Limited
subsidiary, Nestle Holdings Ltd., Nassau,
Location of Company: Gurgaon,Haryana. Bahama Islands. The company built their
first production facility in 1961 at Moga,
Name of the branches: NESTLÉ India has
in the Indian state of Punjab.
presence across India with 8 manufacturing
 Nestlé's second plant was set up at Choladi
facilities and 4 branch offices.
in Tamil Nadu, the plant was built
1. Moga, Punjab. primarily to process the tea grown in the

2. Samalkha, Haryana. area.

 In 1989, the company established a factory
3. Nanjangud, Karnataka at Nanjangud in Karnataka

4. Choladi, Tamil Nadu.  In April 2000 they entered the

5. Ponda, Goa. liquid milk and iced tea markets.

 2006 marked the year when the company
6. Bicholim, Goa.
set up its 7th factory
7. Pantnagar, Uttarakhand. at Pantnagar in Uttarakhand.
 The company another plant in Karnataka in
8. Tahliwal, Himachal Pradesh.
2011 bringing up its total plants in India to
The 4 Branch Offices located at Delhi, eight.
Mumbai, Chennai and Kolkata help facilitatethe
sales and marketing activities. 

Year of Establishment: 1959.

Brief History: Nestlé India is one of the largest

players in India's Fast-moving consumer

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 01_FMCG SECTOR

Name of the Founder and Promoter: Mr. Suresh Narayanan.

Vision Statement: Nestlé's purpose is enhancing quality of life and contributing to a healthier
2.1.2SWOT Analysis of Nestle India Ltd
future. We want to help shape a better and healthier world. We also want to inspire people to live
healthier lives. This is how we contribute to society while ensuring the long-term success of our
company.
Values statement: Nestle core values are “full legal compliance, honesty, fair dealings, integrity,
and respect.”
Mission Statement: Our mission of "Good Food, Good Life" is to provide consumers with the best
tasting, most nutritious choices in a wide range of food and beverage categories and eating
occasions, from morning to night.
Organizational Structure:  It’s a matrix organizational structure in which the reporting
relationship is setup as a matrix, rather than tradition hierarchy.

2.1.2 SWOT Analysis of Nestle India Limited

Strength:
 Consumer has developed strong brand loyalty to Nestle.
 Strong Brands Like Nescafe, Maggie and Kitkat..
 Nestlé is less likely to be forced into bankruptcy because it can sell some of its assets to
pay off debt (if necessary) without impairing the whole operation.   

Weakness:
 Water and Maggie related controversies: In past Nestle has faced several controversies
over its use of water in various corners of the world. Apart from that the Maggie
controversy in India also tainted its image. These factors can affect sales and profits too
both in the short and the long run.
 Contaminated food recalls: Nestle is a huge food company selling tens of thousands of
different food products daily. Even with strict quality control measures the company often
has to recall its products in various markets due to some form of contamination.

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01_FMCG SECTOR

Opportunities:
 The Company has the option to expand its product folio by introducing more brand.
 Nestlé has enjoyed strong sales for its health & science product , therefore it should
increase investment in specialized nutrition that can help consumers with certain
conditions.
 Recently Nestle partnered Starbucks to sell its premium coffee. It can partner with more
brands and get into mutually beneficial relationships to increase its sales and revenue.

Threats:
 Rising costs of labor and raw materials.
 Competitive pressures.
 Regulatory threats and Water Supply.

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2.2 Marico Limited

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 01_FMCG SECTOR

Location of Company: Mumbai

Location of other branches: Pondicherry, Perundurai, Jalgaon, Guwahati, Baddi, Paonta
Sahib and Sanand.
Year of Establishment: 1990
History:
 1971-Harsh Mariwala, a young graduate joins, the family business-Bombay Oil
Industries.
 1974-Harsh envision a branded FMCG market for coconut and refined edible oils in
small consumer packs and setups a national distribution network for Parachute.
 1990-Marico is born.
 1992-94-Marico goes from being an exporter to an international marketer-setups its
first overseas office in Dubai.
 1996-Marico lists on the Indian stock exchanges.
 1999-The Company expands with its first overseas manufacturing facility in
Bangladesh. Marico acquires Mediker in the same year.
 2002-Marico ventures into kaya skin care solutions from FMCG.
 2010-India wakes up to a Saffola breakfast. Masala oats-yet another innovation from
Marico.
Founder and Promoter:Harsh C. Mariwala
Mission &Vision Statements: If the world today is moving, slowly but consistently, towards
conscious and responsible action, it's because of one simple idea: everyone can be a change-
maker.

Values: Consumer centric, Excellence, Opportunity Seeking, Innovation, Transparency

Bias for Action, Global Outlook.

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01_FMCG SECTOR

2.2.1 SWOT Analysis of Marico India Limited

Strength
 Excellent distribution network and product availability
 The product portfolio of Marico has brands covering Edible Oil, Hair Oils, Skin
Care, Fabric Care, etc.
 Popular brands, good brand visibility and excellent advertising of products has led to
strong brand loyalty
 Experience management and good R&D.

Weakness
 Market share is limited due to presence of other strong FMCG brands
 Marico products has stiff competition from big domestic players and international
brands

Opportunities
 Tap rural markets and increase penetration in urban areas
 Mergers and acquisitions to strengthen the brand
 Increasing purchasing power of people thereby increasing demand

Threats
 Intense and increasing competition amongst other FMCG companies
 2.FDI in retail thereby allowing international brands
 Competition from unbranded and local products

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01_FMCG SECTOR

2.3 ITC Limited

Headquarters: Kolkata, West Bengal

Year of establishment: 1910

History:

The Company was incorporated on August 24, 1910 under the name Imperial Tobacco
Company of India Limited.

1925: Packaging and Printing: Backward Integration was set up as a strategic backward

integration for ITC's Cigarettes business.

1975: Entry into the Hospitality Sector - A 'Welcome' Move the Company launched
its hotels business with the acquisition of a hotel in Chennai which was
rechristened 'ITC-Welcome group Hotel Chola'.

1979: Paperboards & Specialty Papers - Development of a Backward Area entered

the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited.

1985: Nepal Subsidiary - First Steps beyond National Borders set up Surya Tobacco
Co. in Nepal as an Indo-Nepal and British joint venture.
1990: Paperboards & Specialty Papers - Consolidation and Expansion, ITC acquired
Tribeni Tissues Limited, a Specialty paper manufacturing company and a major
supplier of tissue paper to the cigarette industry.

1990: Agri Business - Strengthening Farmer Linkages leveraging its agri-sourcing

competency, ITC set up the Agri Business Division for export of agri-commodities.

2002: Education & Stationery Products - Offering the Greenest products launched line
of premium range of notebooks under brand Paperkraft.

2005: Personal Care Products - Expert Solutions for Discerning Consumers entered the
entered the Personal Care Business in 2005 and the portfolio has grown under 'Essenza
Di Wills', 'Fiama', 'Vivel' 'Superia' brands which have received encouraging consumer
response and have been progressively extended nationally.

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01_FMCG SECTOR

2010: Expanding the Tobacco Portfolio ITC launched its hand rolled cigar, Armenteros,
in the Indian market. Armenteros cigars are available exclusively at tobacco selling
outlets in select hotels, fine dining restaurants and exclusive clubs.
Strengths
Mission statement:
 ITC owns some of the most famous cigarette brands, such as the Gold Flake and
To Classic.
enhance Itthealso
wealth
ownsgenerating capacity
Sunfeast, one of enterprise
of India’s in a globalize
highest-selling biscuits. environment,
Similarly, the
delivering superior and sustainable stakeholder value.
Aashirvaad Chaki Fresh Ata, the Yippee!, Engage, John Players, and Bingo are all
Vision statement:
among the industry leaders in their respective groups.
 ITC has introduced initiatives such as E-Choupal, Choupal Pradarshan Khet (CPK)
that support grass-roots people.

Weaknesses

 High Proportion of Tobacco Product Revenues: ITC has made continuous efforts to
separate the FMCG sector from over-dependence on tobacco products and has been
successful in doing so to some degree. Nonetheless, tobacco products remain the
biggest source of revenue contributing more than 60 percent to FMCG’s overall
revenue.

 ITC is still dependent on its tobacco sales, and people have cheaper alternatives and
other brands.

2.3.1 SWOT analysis of ITC Limited

Opportunities
 Growth in purchasing power and changing lifestyles: ITC can tap into rising buying
power and changing customers’ lifestyles in India. It will help to raise sales for all of
Threatsits companies.
 ITC is facinguse
should intense competition
its distribution in its FMCG
channel market from
in the Personal majorand
Hygiene MNCs such
Food as HUL
Processing
and P&Gtoand
Industry Indian FMCGs
capitalize such as
on the growth ofPatanjali and
categories Dabur.
and It limits revenue.
thus increase the market share of
the ITC.
 Increasing health awareness: there has been an increase in health awareness, which has
19
resulted in a decrease in the demand for tobacco products in India.
01_FMCG SECTOR

Chapter 3: Finance department

3.1 Consolidated Profit & Loss A/c

Particulars Nestle Marico ITC

(2019-2020) (2019-2020) (2019-2020)
Sales 13350 7315 49388

Expenses 10149 5846 30044

Operating profit 3202 1469 19344

Other income 146 95 2417

Interest 164 50 81

Depreciation 370 140 1645

Profit before tax 2813 1374 20035

Tax 731.38(26%) 329.76(24%) 4407.7(22%)

Net profit 2082 1021 15306

Earnings per share 215.98 7.91 12.45

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01_FMCG SECTOR

Dividend payout 93% 85% 82%

3.2 Consolidated Balance sheet

Particulars Nestle Marico ITC
(2019-2020) (2019-2020) (2019-2020)
Share capitals 96 129 1229

Reserves 1923 2921 64044

Borrowings 147 338 277

Other liabilities 5733 1608 11760

Total liabilities 7900 4996 77311

Fixed assets 2179 1396 21713

CWIP 633 58 3256

Investment 1464 733 28663

Other assets 3618 2809 23678

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01_FMCG SECTOR

Total assets 7900 4996 77311

Note: Consolidated Figures in Rs. Crores

3.3 Ratios
Figures in Rs. Crores

Particulars Nestle Marico ITC

(Dec 2020) (March 2020) (March 2020)
ROE (%) 105.76 35.04 25.89

ROCE (%) 147.88 42.59 32.32

PE Ratio(x) 85.47 34.73 13.81

Total Debt/Equity(x) 0.02 0.11 0.00

Current Ratio(x) 1.68 1.78 4.13

Interest Cover(x) 18.13 28.48 247.08

Asset Turnover(x) 1.83 1.69 0.69

3.3.1 Ratio Analysis:

 Nestle has recorded a higher Return on Equity comparatively, which means that the
company is utilizing the shareholders’ investment efficiently. Marico and ITC has also
higher ROE than other peers, and hence need for external funding is less indicated in
Debt-to-Equity ratio.
 Nestle and Marico is able to generate good return on capital (Equity and Debt) compare
to ITC Limited. As in the FMCG industry, the investments in assets are more; the ratio is
quite good.

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01_FMCG SECTOR

 As the P/E ratio is high for Nestle, the stock is expensive as compared to ITC Limited.
 ITC Limited has Rs 4.13 of Current Assets for each Rs 1.0 of its liabilities. ITCLimitedis
more liquid and is apparently in a better position to pay off its liabilities.
 Nestle India Limited is able to utilize its assets better to generate revenue than Marico
Limited and ITC Limited.

3.4 Graphical Representation of data:

Note: Consolidated Figures in Rs. Crores

As we can see in the graph, the revenue

Revenue,Operating Profit & Net Profit
(2019-2020) for the ITC Limited is very high as
60000
compared to Nestle India Limited and
50000
Marico Limited. ITC generates 45% of
40000
the revenue by selling cigarettes in the
30000
domestic market. Whereas the other two
20000
companies have not performed well in
10000
terms of revenue comparatively. The
0
Nestle India Limited Marico Limited ITC Limited operating profit and net profit are also
high for ITC Limited compare to Nestle
Revenue Operating Profit Net Profit
and Marico, which states that ITC has
efficient management performance.
Nestle India Limited has performed better thanMarico Limited though the expenses are high
which resulted in low level of profits.

As we can see in the graph, all the

Fixed asstes and Borrowings(2019-2020)
companies are almost debt free and
25000
have high number of fixed assets as an
20000
investment. ITC Limited has invested
15000 in fixed assets more as compared to
10000 other two companies. Hence, ITC
Limited has performed better
5000
comparatively in majority of the areas.
0
Nestle India Limited Marico Limited ITC Limited

Fixed Assets Borrowings

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01_FMCG SECTOR

3.5 Accounting Procedure

Particulars Nestle India Limited Marico Limited ITC Limited

Financial Statement The financial The financial The financial

Preparation statements have been statements have been statements are
prepared on accrual prepared on a prepared in accordance
and going concern historical cost basis, with the historical cost
basis under the except certain financial convention, except for
historical cost instruments and certain items that are
convention except for contingent measured at fair
certain class of consideration that are values.
financial assets/ measured at fair value.
liabilities, share based
payments and net
liability for defined
benefit plans that are
measured at fair value.

Depreciation Method Straight Line Method Straight Line Method Straight Line Method

Derecognized Fixed Assets On derecognition, Financial assets are The company retains
cumulative gain or loss derecognized when the the contractual rights
previously recognized right to receive cash to receive the cash
in OCI is reclassified flows from the assets flows of the financial
to the statement of has expired, or has asset, but assumes a
profit and loss. been transferred, and contractual obligation
the Company has to pay the cash flows
transferred so received to one or
substantially all of the more recipients.
risks and rewards.

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01_FMCG SECTOR

3.6 CSR AND EXPENSE

3.6.1 Nestle India Limited

 Nestlé Healthy Kids Programme
 Project Jagriti
 Clean drinking water projects and water awareness programme
 Sanitation projects
 Water conservation & Environment
 Plastic Waste Management Awareness
 Livelihood enhancement for street food vendors (Project Serve Safe Food)
 Village Adoption (Project Vriddhi)
 Employee Volunteering
 Relief Efforts (Cyclone)
 Relief Efforts (Covid-19)
3.6.2 Marico Limited
 Education
1) Nihar Shanti Paathshala Funwala
2) Partnering with Educate Girls
 Community Sustenance
1) Parachute Kalpavriksha program
2) Water Stewardship
 Healthcare
1) SNF@ School
2) Eat Right Movement- Campuses and Street Hubs
 National Disaster Relief
 Fostering Innovation
3.6.3 ITC Limited
 Create sustainable livelihoods and alleviate poverty
 Build capabilities for tomorrow
 Promote healthcare, including preventive healthcare
 Protect national heritage, art & culture
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01_FMCG SECTOR

 Provide relief and assistance to victims of disasters and calamities.

3.7 Listing on National Stock Exchange

 Nestle India Limited:8th Jan 2010.
 Marico Limited: 1996
 ITC Limited: 23rd August,1995.

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 01_FMCG SECTOR

Chapter 4: Marketing department

Particulars Nestle India Marico Limited ITC Limited
Limited
List of products and Milk Production and Male grooming – Set Wet. Foods
services Nutrition:- Nestle Milk, Hair Care – Parachute,  Aashirvaad
Nestle Slim Milk,Nestle Parachute Advanced, Nihar  Sunfeast
Dahi, Nestle Bhuna Naturals Coconut Oil.  Bingo
Jeera Raita, Nestea, Naturals Uttam, Hair & Care  Kitchens of
Nestle Milkmaid, Nestle Fruit Oils, Mediker, Livon. India
Everyday Whitener. Edible Oils – Saffola.  Sunfeast Yippee
Beverages:- Nestle Skin Care – Parachute
 B Natural
Classic, Nestle Sunrise Advansed Body Lotion.
 mint-o
Premium, Nescafe Fabric Care – Revive.
 Candyman
Cappuccino, Nescafe Healthy Foods – Saffola
 GumOn
Sunrise, Nestea Iced Masala Oats &SaffolaFittify.
 Fabelle
Tea. Skin care services-Kaya
 Sunbean
Prepared Dishes and Clinic, Sundari
Cooking Aids:-  Sunfeast

MAGGIE 2-MINUTES Wonderz Milk

Noodles, Maggie Imli  ITC Master

Pichkoo, Maggie Sauce, Chef

Maggie Healthy Soups,  Farmland

Maggie Cuppa Mania, Personal Care

Maggie Vegetable Ata  Essenza Di
Noodles, Maggie Pazzta. Wills
Chocolates and  Dermafique
Confictionary: Nestle  Fiama
Kit Kat, Nestle Munch,  Vivel
Nestle Bar One, Nestle  Engage
Milky Bar, Nestle Polo,  Superia

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 01_FMCG SECTOR

Nestle Eclairs.  Nimyle

 Nimwash
 Savlon
Education
 Classmate
 Paperkraft
Matches & Agarbatti
 AIM
 Mangaldeep
 Homelites
Body Oil
 Fiama
Shower Gel
 Vivel
 Fiama
Body Wash
 Vivel
Number of - 130 million -
customers

Specific Distribution Single Tier Distribution The distribution network Company hub factory
channel Network: Producer– comprises of 5 regional
-->distributors
Retailer – Consumer offices, 30 company depots
and 6 consignment sales -->wholesale dealers
Two-Tier Distribution
agents that supply to 850
Network: Producer-- - ->Retailers
distributors in the urban areas
Distributor–Retailer–
and 11 super distributors in -->Consumers
Consumer
the rural areas. The super
Multi-Channel distributors service more than
Distribution Network: 2600 stockists.
Producer – Distributor–
Regional--Distributor –

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 01_FMCG SECTOR
Wholesaler/Retailer –
Consumer 
Marketing Geographic area
Segmentation Nestle promotes a given
product, like its Nescafe
Ice when the weather is
hot in the summer. Nestle
suggests that they take its
cold beverage through its
marketing campaign.
Demographic area
Age: nestle never offers
same product for
different age groups. For
example it offers milo
for children and coffee
for adults.
Income: nestle produces
the products that save
money even an ordinary
man can buy nestle
products, they produce
the products in small
quantities so that
everyone can buy.
Occupation:  Nestle
also manufactures its
products based on
consumers occupations.
Psychographic area
Nestle segments its
ITC as a brand caters to
the needs of a diverse
range of consumer
- segments which is done
by segmenting the
population based on
similar sorts of
characteristics. ITC
uses a mix
of geographic demogra
phic and psychographic 
segmentation variables
such as profession,
income class, gender,
age, region, behavior
etc. ITC uses selective
and
differentiated targeting 
strategy is used by the
company for offerings
of the different group of
companies.
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 01_FMCG SECTOR

products based on life

style and personality, for
example nestle kit kat is
for people who want to
taste the real chocolate
and nescafe 3 in 1 for
people who dont have
time to eat.
Behavioral area-
The behavioral
segmentation of nestle is
mainly based on
knowledge, awareness,
attitude of an consumer.

Positioning strategies By creating product, The main market segment for -

service, channel, people Parachute brand is people who
and image firmly believe in nutritious
differentiation Nestle value of the product.
arrives the consumer Demographic –
touch point more easily, • Females
effectively & efficiently • Early teens to old age
in comparing with other Geographic –
competitors in the • Urban & Rural (Metros and
highly competitive food tier 1)
processing market. Psychographic –
• Working and Non-working
women
• Believes in age old tradition
that parachute oil actually
nourishes
hair rather than going for

30
 01_FMCG SECTOR

chemical products & looking

beautiful.
• Has mainly targeted the
women of all age category of
rural and urban market. The
main reason behind targeting
the women is that the male
segment has no particular
choice in hair oil.
Behavioral-
• Hair oils are typically used
before taking a hair wash (2-3
times in a week)
Promotional tools The company is using Marico uses different
competitions, strategies to promote its
advertising, and products like:
sponsorships as its main  Marico is promoted
marketing initiatives. through television,
The most visible print, outdoor, digital
marketing campaigns radio
by Nestle have been  It also promoted by
prize giveaways, whose endorsing celebrities
impact has been the  By putting campaigns
increase in sales for  By door to door selling
selected products involv
ed or targeted in those
campaigns.
ITC has been
Surrogate Advertising f
or its Wills brand of
Cigarettes. For Food
products, Engage in
Personal care segment
and education
stationary segment
Classmate ITC has been
using both Above the
Line (ATL) and Below
the
Line (BTL) advertising
strategies with the
frequent advertisement
appearing on
Televisions and
Newspapers

31
 01_FMCG SECTOR

respectively.

Pricing methods Nestle relies on price Value Added Pricing The basic concept by
promotions to make its ITC is:
“PRICE IS
products more affordable
SOMETHING
than the competitors. WHICH CUSTOMER
With price promotions IS READY TO PAY
FOR YOUR
such as buy-one-get-one-
PRODUCT”
free, the company is able
to offer consumers more Hence it is a majority
function of
of its product at an
-Consumer purchasing
equivalent retail price to power
the competitors without -Market condition
appearing as anti- created by the
competitor in terms of
competitive. the price.

List of products Maggie varieties, - -

exported and in Nescafe
which country? Sunrise Premium,
Nestea instant Green
Tea
USA, Canada, UK,
Australia, Singapore and
Africa

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 01_FMCG SECTOR

Chapter 5: Human Resource Department (HRM)

Particulars Nestle India Limited Marico Limited ITC Limited
Recruitment – People with qualities like Hiring through referrals, Methods of
& Selection dynamism, realism, loyalty, internal job postings, rehires, recruitment: -
process
pragmatism, hard work, and through alternate media 1.Internal: -
honesty and reliable. such as social media like Promotions and
– Match between candidate’s LinkedIn and Facebook & job transfers, employee
values & company’s culture. portals like Naukri and IIMs referrals, job position
– Recruitment for Jobs. 2.Direct: Campus
management levels takes recruitment
place in the head office and 3.Indirect:
all others at the branch level. Advertisements
The existing employees are Selection process:
promoted to higher posts as 1.Screening of
per the requirements. There application
are no lateral recruitments. 2.Test
Another source of 3.Interview
recruitment is campus 4.Final selection and
placements and human appointment
resource consultancies. 5.Joining formalities
1.Application:
2.Selection:
3.Assessment and Testing:
Certain positions may
require assessments such as:
Psychometric testing
Case studies
Medical assessment
4.Referance/background
Check

33
 01_FMCG SECTOR

5.Job Offer
6.Induction
Number of around 7,649 employees 1,631 employees 27,279 employees
employees

Training Training on Nestlé Corporate STAMP (Summer Training at On the job:

methodology/ Business Principles (NCBP) Marico’s Place), Ignite, 1.Job instruction
approach
and Code of Business Graduate Leadership 2.Coaching
Conduct (COBC) are Programme are putting the Off the job:
mandatorily conducted for all trainees through a journey that 1.Vestibule training
new joiners across all on not only assesses them, but also method
boarding programmes either enhances their skills and readies 2.role playing method
in person or through online them for future challenges. 3.Computer based
module. The training on training
COBC also includes a 4.Discussions
session on anti-corruption.
Nutrition Quotient training
helps employees develop a
sound understanding of
nutrition, food groups and
stay up to date on public
health priorities, empowering
them to use this knowledge
in their daily lives, both
professionally and
personally.

Employee Nestlé India provided regular
safety safety and skill up-gradation
mechanisms trainings to the employees
where required. Company
has been consistently
Physical Wellness:
A comprehensive medical
check-up facility was set up at
corporate locations. On-site
nutritionist and a general
-To instill a sense of
duty in every employee
towards personal
safety, as well as that
of others who may be

34
 01_FMCG SECTOR
focusing on the machinery
Safety, Lockout & Tag out,
Behavioral feedback system,
Tool Box Talks,
Management GEMBA and
other aspects of industrial
safety.
Specific HR Nestle human resources
policies policy- This policy
encompasses those
guidelines which constitute a
sound basis for efficient and
effective HR Management in
the Nestlé Group around the
world.
Performance Being a remarkable company,
physician consultation on a
fortnightly basis were also
included.
Emotional Wellness:
The Marico Member Assistance equipment, operations
Program (MAP) is a
counselling service available
for the members and their
immediate family.
Financial Wellness:
Educate members with
financial security and financial
management along with
Financial Planning Expert.
Same Sex’ partner benefits
across all applicable policies of
Marico
Specific need based Mediclaim
policy for differently abled
members
Parenthood benefits for LGBT+
members
Flexi-work options post
maternity break
Internal social recognition
affected by the
employee's actions.
-To provide and
maintain facilities,
and working conditions
which are safe for
employees, visitors and
contractors at the
Company's premises.
-To ensure safe
handling, storage, use
and disposal of all
substances and
materials that are
classified as hazardous
to health and
environment.
Policy of prevention of
discrimination in
employees.
Policy on securing
human rights in the
company
Policy on child labor
Balance scorecard for
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 01_FMCG SECTOR
Appraisal nestle use some effective
process performance appraisal method members in Bangladesh, Egypt
that alien the employee to
achieve strategic goal. Nestle
HR management fallow self-
rating, appraisal by
subordinates, ratting
committees (nestle academy)
and mostly use 360-
degreefeedback.
Wages & It set out the different level
Salary of pay for different types of
administratio
employees. It may mean the
n
structure of the total wage of
a worker or group of workers
is composed;
– Nestle strives to offer fair
remuneration. Remuneration
level is above the average in
industry.
– The variable component of
the salary is comparatively
big to reward individual
Performance.
– In case of higher
management level, the
variable part is linked to
platform, Maricognize, to
and South Africa, as well.
Long service recognition for ten system helps for
and five years - Club X and
High 5 respectively, has been
instituted.
_ remuneration
performance evolution
and improvement
Integrated management
systematic evaluation
and improvement of
key processes.
IQRS7(internal quality
rating system) for
greater organizational
focus on continual
improvement in all
aspects of operations
and procedures.
To ensure that its
supportsand encourage
meritocracy.
To ensure remuneration
is market led and takes
into account the
competitive context of
each business.
To leverage
remuneration as an
effective instrument to
enhance performance
& potential therefore ,
to link a significant
component of
remuneration to both
36
 01_FMCG SECTOR
individual &team target
achievements.
Grievance Nestlé Integrity Reporting
handling System (NIRS)
procedure
The Nestlé Integrity
Reporting System enables our reach out to multiple members
employees to report
anonymously, via phone or
an online form, any non-
compliant behavior they
observe or endure. The
system also helps employees
seek advice or information
on our practices. NIRS has
been communicated to all
Nestlé employees using
various modes of
communication, including
local intranet, magazines,
leaflets and videos.
‘Tell us’ is a communication
channel managed externally
individual and
collective performance
outcomes.
To adopt a
comprehensive
approach to
remuneration in order
to support quality of
personal and work life,
combining both cash
and non-cash benefits .
If associates have a question or
concern about legal or ethical _
standards, they can choose to
in the Company who will be
equipped to help them resolve
their concern. Members have
the following options for
reaching out.
1) CoC Website -
marico.ethicspoint.com
2) Call on toll free number
3) CoC Mobile Helpline-
maricomobile.ethicspoint.com
4) In case of a concern on
sexual harassment, in addition
to the above touch points,
associates also have the option
of contacting the Internal
Committee or any member
37
 01_FMCG SECTOR

but run by Nestlé, to support thereof as per the details

the reporting of compliance annexed. If associate observes
and non-compliance issues any behavior that is concerning
against the Nestlé Corporate or that may represent a
Business Principles or violation of the Code, or any
applicable laws by external law, they should raise the issue
stakeholders as well. This promptly. Doing so allows the
portal can also be used by Company an opportunity to
customers to raise deal with the issue and correct
compliance issues and it, ideally before it becomes a
irregularities they face while violation of law, security or the
dealing with our product. Company’s reputation.
Consumer surveys to
understand consumer
feedback, product
satisfaction and preference
while measuring consumer
response and satisfaction
regularly through the
Company’s continuous and
periodic tracking studies.

Strategic Nestlé is convinced that - -

HRM (if nestle employees is the
adopted)
strength of the Company and
it is impossible to achieved
without their energy and their
commitment, which makes
people its most important
asset. Involvement of people
and also showing their

38
 01_FMCG SECTOR

interest at all levels starts

with the basic and
appropriate information on
the Company’s activities and
also on the specific aspects
of their work. Through
shared their views, ideas and
communication and focused
vision, everyone is invited to
share and contribute their
opinions and views to
improvements enhancing
Company personal
development and results.

Any other Career Management Philosophy

- The Personal Development -

Planning process, assesses
member aspirations.
Coaching, in-time feedback and
guidance from supervisors.

Chapter 6: Production / Operations Department

Particulars Nestle India Limited Marico Limited ITC Limited

Raw Coffee, Cocoa, Dairy,  Raw Materials- 86% Agro- Agro products
materials Palm Oil, based (Edible oils & Natural
used Extract (Copra, saffola , (Wheat flour, Coffee beans,
Pulp and Paper, Soya, Sunflower)
Sugar, Cereals and Grains, Soya seeds, soya oil, raw sugar,
Hazelnuts, Non Agro Based- Additives

39
 01_FMCG SECTOR

Meat, Poultry and Eggs, & Mineral oils rice purchased)

Fish and Seafood,
Vegetables, Spices and Hardwood for books
Coconut.

Turnover ₹13,350.0crore. Rs.7,315crore. Rs.45,845crore

Plant Moga (Punjab), Samalkha Pondicherry, Perundurai, Hyderabad, Mumbai,

Location (Haryana), Nanjangud Jalgaon, Guwahati, Baddi,
Kolkata, Bangalore,
(Karnataka), Choladi Paonta Sahib and Sanand
Saharanpur,
(Tamil Nadu), Ponda &
Bicholim (Goa), Pantnagar Coimbatore and many other
(Uttarakhand) and locations in India.
Tahliwal (Himachal
Pradesh).

Products  Beverages  Coconut Oil  Foods

Used  Breakfast cereals  Hair Oil  Personal Care
 Chocolates and  Edible Oil  Matches & Agarbatti
(Brands)
Confectionery  Skin Care
 Dairy  Hygiene
 FoodsNutrition  Male Grooming

Machines / - SAP Manufacturing Paperboard machine,

Equipment Integration and Intelligence Vending machines
used (SAP MII) software
Sensors and analytics
dashboards
Process used Comply with all internal - -
(Process in and external food safety,
brief) regulatory and quality
requirements.

40
 01_FMCG SECTOR
 Gain a zero-defect,
no-waste.

Quality Target of recycling or
Maintenanc reusing its entire
e packaging by 2025. ...
Globally, it has set an aim
of being net zero by 2050
through reduced use of
water at farms, sustainable
packaging, and use of
green energy at all its 800
plants and warehousing
locations.
Specific - Operate business in an
Operations
policies
The procurement and central
quality assurance
team at Marico jointly drives Executives, through the
the Supplier Quality
Assurance (SQE)
programme, which aims at
identifying specific training
and development needs at
suppliers’ end.
Improvement projects are
then identified and executed
by ascertaining the right
degree of ‘responsibility’
and ‘accountability’, both at
Marico and the supplier’s
end.
efficient and financially
sustainable manner while
satisfying our customers
through value added
products / solutions and
creating value for
stakeholders
Reduce the green-house gas
emissions, enhance energy
efficiency, promote
renewable energy use and
It is the overall responsibility of
the Divisional/SBU Chief
members of their Divisional
Management Committees,
General Managers and Unit
Heads, to ensure that all ITC
products and services are in
accordance with the stated
policy and principles, including
designating individuals for
specific responsibilities in
respect of their Divisions/SBUs.
ITC continuously endeavours to
provide its consumers products
that are benchmarked to
international quality.
Expertise in
product/Marketing/supply/
Process.
Short term period- fast entry
growth in manufacturing
Product flexibility- garment
manufacturing
Line(lifestyle)
Low-cost process- labour
intensive jobs
Product variety- different
variety in portfolio
41
 01_FMCG SECTOR

reduce waste at our Quality-Product quality and

operations product performance
Ensure good governance,
ethics and transparency in
engagements with
stakeholders while
promoting & advocating
responsible business practice
Services Nutrition, Health & Kaya clinic provides skin  Apparel, Education,
provided Wellness knowledge and beauty care services. Hotels and Resorts, Paperboards
& Specialty papers,
Agribusiness
 Packaging

Chapter 7: Risk Management Department

7.1 Nestle India Limited

The Board of Directors had constituted Risk Management Committee (RMC) to identify
elements of risk in different areas of operations and to develop policy for actions associated to
mitigate the risks. The RMC on timely basis informed members of board of directors about risk
assessment and minimization procedures. In the opinion of the RMC, there are no such risks,
which may threaten the existence of the Company.

7.2 Marico Limited

7.2.1 Risk Management Committee
 Comprises Chairman of the Board, Managing Director and CEO
 Assists the Board and Audit Committee
 Material risks are reviewed annually by the RMC

42
01_FMCG SECTOR

 Manages risk, both at strategic and operational level

7.2.3 Risk Management Framework

7.2.3 Risk Management

Strategic Risk
 Investment in consumer insight to adapt to changing consumer preferences
 Actively monitor social media trends to spot early trends
 Protect volumes in preference to short-term profitability

Financial Risk
 Maintain a liquidity chest for immediate working capital requirements
 Well-defined framework for capital gearing
Operational Risk
 A comprehensive insurance programme to hedge all insurable risks
 Well-defined performance tracking systems to for monitoring progress periodically
Environmental Risk
 Promote scientific farming practices that are resilient to climate-related adverse impacts

43
01_FMCG SECTOR

 Investment in low-carbon technologies and equipment, and renewable and clean energy
sources
Compliance and Governance Risk
 Robust vigil mechanism, which enables the stakeholders to report concerns about
unethical behavior, fraud or violation of code
 Invest in IT-enabled compliance systems and processes

7.3 ITC Limited

7.3.1 Risk management strategy
As a diversified enterprise, ITC continues to focus on a system-based approach to business risk
management. Risk management has always been an integral part of the Company's 'Strategy of
Organization' and straddles its planning, execution and reporting processes and systems. Backed
by strong internal control systems, the current Risk Management Framework consists of the
following key elements: The Corporate Governance Policy approved by the Board clearly lays
down the roles and responsibilities of the various entities in relation to risk management covering
a range of responsibilities, from the strategic to the operational. The Risk Management
Committee, constituted by the Board, presently comprises all Executive Directors and some
senior members of management. The Chairman and Managing Director of the Company is the
Chairman of the Committee with the Chief Risk Officer serving as Secretary to the said
Committee. It monitors and reviews the strategic risk management plans of the Company as a
whole and provides necessary directions on the same. The Corporate Risk Management Cell,
through focused interactions with the businesses, facilitates the identification and prioritization
of strategic and operational risks, the development of appropriate mitigation strategies and
conducts periodic reviews of the progress on management of identified risks. The annual
planning exercise requires all businesses to clearly identify their top risks and set out a mitigation
plan with agreed timelines and accountability. The senior management of the Company also
periodically reviews the risk management framework in order to ensure that the risks identified
across businesses are aggregated at the organization level and are effectively addressed and
managed.
Risk Management System

ITC endeavours to continually sharpen its Risk Management systems and processes in line with a
rapidly changing business environment. In this regard, it is pertinent to note that some of the key

44
01_FMCG SECTOR

businesses of the Company have adopted the ISO 31000 Standard and accordingly, the Risk
Management systems and processes prevalent in these businesses have been independently
assessed to be compliant with the said global Standard on Risk Management.

Chapter 8: Conclusion

Due to extreme turnover rate, the market of FMCGs in India is both large as well as competitive.
FMCGs typically have low-profit margins, but still account for 50% of consumer spending in
India. Being the fourth largest sector in the country, FMCG stocks in India can be profitable
investments. Most of the consumer goods products are moving to Online platforms and most of
the major super markets have their own online ordering portals and mobile apps making it
convenient for the consumers to order online with just a click of a button during their busy
schedules. Owing to lack of awareness and security issues Cash on Delivery (CoD) remains the

45
01_FMCG SECTOR

most preferred method of payment among the Indian consumers. As per the analysis, FMCG
sector is booming with all the factors favoring it. It has a revenue of $103.7 billion in 2020 and
projected revenue for 2025 is $220 billion. Retailing in India is one of the pillars of its economy
and accounts for about 10 percent of its GDP. Government initiatives are helping the FMCG
sector in every way possible like government has allowed 100% FDI in food processing and
single-brand retail and 51% in multi-brand retail which would generate employment and supply
chain and also implementation of GST will help the FMCG sector to grow.
Nestle India Limited, Marico Limited & ITC Limited are large cap & mid cap companies
performing well overall. Mostly, the companies are almost debt free and has an optimum return
on equity. Moreover, companies are actively engaged in risk mitigation strategies.
In the fundamental analysis we have provide overview of finance department, marketing
department, human resource management, production operation department and elucidate each
and every aspect and characteristics of each company. Among them ITC Limited and Nestle
India Limited is top most and auspicious company because of its market capitalization. This
analysis fetch you general and detail overview company with their respective department which
facilitates and mitigates investors to study the future growth of the company.

46