MIRA
INFORM REPORT
|
Report Date : |
15.05.2007 |
IDENTIFICATION DETAILS
|
Name : |
HINDUSTAN LEVER
LIMITED |
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|
|
|
Registered Office : |
Hindustan Lever
House, 165/166, Backbay Reclamation, Mumbai – 400 020, |
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Country : |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
17.10.1933 |
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Com. Reg. No.: |
11-2030 |
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CIN No.: [Company
Identification No.] |
U15140MH1933PTC002030 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMHOO225B |
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PAN No.: [Permanent
Account No.] |
AAACH1004N |
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|
Legal Form : |
Public Limited
Liability Company The company’s
shares are listed in the Stock Exchanges. |
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Line of Business : |
Engaged in manufacturing and marketing of
Processed Triglycerides / Hydrogenated Oils / Vanaspati, Ghee, Soaps,
Synthetic Detergents, Personal Products, Glycerine (Refined), Fine Chemicals,
Silica, Leather Garments / Goods, Plant Growth Nutrient, Catalyst, Carpets,
Druggets and other Floor Coverings, Packed Tea, Garden Tea, Instant Tea,
Packed Coffee, Milk Powder (including baby food), Footwear, Shoe uppers and
other Components, Functionalised Biopolymers, Zeiolite, Processed Foods,
Canned and Processed Fruits and Vegetables, Frozen Desserts, Margarine and
Animal Feeding Stuffs. |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
Maximum Credit Limit : |
USD 100000000 |
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|
Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established, professionally managed and reputed company having excellent
track. Today, Hindustan Lever is the country’s largest consumer products company.
The company’s products are well received in and outside Available
information indicates very high financial responsibility of the company. Financial position of the company is good.
Payments are always correct and as per commitments. The company can
be considered good for any normal business dealings. |
LOCATIONS
|
Registered
Office : |
Hindustan Lever
House, 165/166, Backbay Reclamation, Mumbai – 400 020, |
|
Tel. No.: |
91-22-22819949 / 22886373
/ 22843987 / 22835911 / 22827219 / 217 / 218 / 222 / 221 / 210 / 205 / 211 /
214 / 215 / 212 / 209 / 208 / 250 / 216 / 206 / 207 / 22858400 / 22824641 /
22843856 / 22827467 /478 |
|
Fax No.: |
91-22-22041920/22043117/22871970/22846958 |
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E-Mail : |
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Website : |
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Telex : |
011-2323 HLHO IN |
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Overseas
Customer Service Centres: |
300, Tel. No. 01 878
5254 Fax No. 01 879
1839 Telex : 918112 303, Tel. No. 212 725
0679 Fax No. 212 725
0718 Telex : 220715 Tel. No. 03 583
1225 Fax No. 03 505
0541 Telex : 2423450 |
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Major
Operating Units At: |
Sewree, Mumbai, Andheri, Mumbai, Taloja, Garden Reach, Kolkata,
West Shamnagar, West Haldia, Plot No. 254,
Sector IV, Special Economic Zone, Kandla, Chindwara, Pondichery, Tamil
Yavatmal, Pune, |
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Branch : |
123, |
DIRECTORS
|
Name : |
Mr. M. S. Banga |
|
Designation : |
Chairman |
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|
Name : |
Mr. M. K. Sharma |
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Designation : |
Vice Chairman |
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|
Name : |
Mr. A. Narayan |
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Designation : |
Director |
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|
Name : |
Mr. V. Narayanan |
|
Designation : |
Director |
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|
Name : |
Mr. D. S.
Parekh |
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Designation : |
Director |
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|
Name : |
Mr. C. K. Prahalad |
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Designation : |
Director |
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|
Name : |
Mr.Harish
Manwani |
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Designation : |
Non-Executive
Chairman |
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Name : |
Mr. D. Sundaram |
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Designation : |
Director Finance
and IT |
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Name : |
Mr. S. Ramadorai |
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Designation : |
Director |
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|
Name : |
Mr. A. Adhikari |
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Designation : |
Managing Director |
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|
|
|
Name : |
Mr. S.
Ravindranath |
|
Designation : |
Managing Director
Foods |
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|
|
|
Name : |
Mr. Ashok Gupta |
|
Designation : |
Vice President
& Company Sectary |
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|
|
Name : |
Mr. Douglas
Baillie |
|
Designation : |
Managing Director
(CEO) |
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|
|
Name : |
Mr. M. S. Banga |
|
Designation : |
Chairman |
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Date of
Birth/Age : |
48 years |
Profile: -
|
He is the Chairman
and a Whole-time Director of the company. A gold medallist from IIT - |
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|
|
|
Name : |
Mr. M. K. Sharma |
|
Designation : |
Vice Chairman |
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Date of Birth/Age
: |
55 years |
Profile: -
|
He is the
Vice-Chairman and a Whole-time director of the company. After graduating in
Political Science, he completed his L. L. B. from the |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Unilever and its
associates |
1134849460 |
51.55 |
|
Sub total : |
1134849460 |
51.55 |
|
Foreign Banks |
50570 |
0.00 |
|
Foreign Financial
Institutions |
301097883 |
13.68 |
|
Foreign Nationals |
30870 |
0.00 |
|
Non-Resident
Indians |
6682235 |
0.30 |
|
Overseas
Corporate Bodies |
7950 |
0.00 |
|
Sub total : |
307869508 |
13.99 |
|
Bodies Corporate |
18271470 |
0.83 |
|
General Insurance
Corporation of |
134003081 |
6.09 |
|
Government
Companies |
6808406 |
0.31 |
|
Industrial
Development Bank of |
980 |
0.00 |
|
Life Insurance
Corporation of |
148788789 |
6.76 |
|
Mutual Funds |
13004776 |
0.59 |
|
Nationalised
Banks |
3224994 |
0.15 |
|
Trusts |
1096693 |
0.05 |
|
Unit Trust of |
240450 |
0.01 |
|
Sub total : |
325439639 |
14.78 |
|
Resident
Individuals |
431569302 |
19.61 |
|
Sub total : |
431569302 |
19.61 |
|
Directors and
their Relatives |
213323 |
0.01 |
|
Sub total : |
213323 |
0.01 |
|
In-transit |
1302561 |
0.06 |
|
Sub total : |
1302561 |
0.06 |
|
Total: |
2201243793 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Engaged in manufacturing
and marketing of Processed Triglycerides / Hydrogenated Oils / Vanaspati,
Ghee, Soaps, Synthetic Detergents, Personal Products, Glycerine (Refined),
Fine Chemicals, Silica, Leather Garments / Goods, Plant Growth Nutrient,
Catalyst, Carpets, Druggets and other Floor Coverings, Packed Tea, Garden
Tea, Instant Tea, Packed Coffee, Milk Powder (including baby food), Footwear,
Shoe uppers and other Components, Functionalised Biopolymers, Zeiolite,
Processed Foods, Canned and Processed Fruits and Vegetables, Frozen Desserts,
Margarine and Animal Feeding Stuffs. |
|
|
|
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Imports : |
|
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Countries : |
Europe, |
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|
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Terms : |
|
|
Purchasing : |
L/C and Credit
Terms |
PRODUCTION STATUS
|
Particulars |
|
|
Licensed
Capacity |
Installed
Capacity |
|
Processed
triglycerides/ |
|
|
|
|
|
hydrogenated
oils/vanaspati |
|
|
38,950 |
8166 |
|
Soaps |
|
|
3,77,538 |
200084 |
|
Synthetic
detergents |
|
|
4,46,580 |
307946 |
|
Reisonalprodudsth) |
|
|
2,50,898 |
74175 |
|
Glycerine |
|
|
12,324 |
5910 |
|
Finechemicals(d) |
|
|
2,417 |
1167 |
|
Organic
Spsciality Chemicals |
|
|
367 |
-- |
|
Ossein |
|
|
1,000 |
-- |
|
Di-caldum
phosphate |
|
|
2,000 |
-- |
|
Dicamba herbicide |
|
|
333 |
-- |
|
Fabricsoftener |
|
|
2,833 |
4281 |
|
Fatly acids |
|
|
94,333 |
60000 |
|
Plantgrowth
nutrient |
|
|
667 |
-- |
|
Plantgrowth
nutrient(Kiblitres) |
|
|
200 |
-- |
|
Fluid cracking
catalyst (e) |
|
|
5,000 |
-- |
|
Oilmilling –Oik |
|
|
19,438 |
-- |
|
-Oilseeds |
|
|
32,668 |
7300 |
|
-Oilcakesetc. |
|
|
14,833 |
-- |
|
Industrial
machinety(unte)(e) |
|
|
24 |
-- |
|
Perfumery and
cosmetic produds(unte)(e) |
|
|
30,00,000 |
3750000 |
|
Perfumery and
cosmetic products |
|
|
362 |
500 |
|
F&cketTea below
1 kg. and tea bags (e) |
|
|
5,000 |
-- |
|
InstantTea |
|
|
650 |
1200 |
|
Furrfonalisedbiopdymerfe) |
|
|
7,875 |
880 |
|
Zeolites (e) |
|
|
5,000 |
-- |
|
Frozen Surimi,
Fresh and Frozen fish, Mollusees, etc. |
|
|
41,481 |
40096 |
|
Edible Groundnut
Flour, Protein Foods, et. |
|
|
7,667 |
3796 |
|
Synthetic
Beverages, Processed Foods, et. |
|
|
30,635 |
15000 |
|
Canned and
Processed FruteandVegetable |
|
|
26,316 |
9216 |
|
Padogingmachinery(units) |
|
|
5 |
40 |
|
Printing machinery(units) |
|
|
8 |
-- |
|
Cravurecylindersarricomponents(units) |
|
|
875 |
-- |
|
lce-cnsanVFrozendesserts(Mln.Kgs.)(j) |
|
|
22 |
8 |
|
Instant Foods |
|
|
500 |
-- |
|
PairnayCbrnpounds |
|
|
3,106 |
-- |
|
Flavouring
Essences |
|
|
1608 |
-- |
|
Non-scheduled: |
|
|
|
|
|
PackedTea |
|
|
N.A. |
282003 |
|
GaidenTea |
|
|
N.A. |
Not Ascertainable |
|
FktedCofe |
|
|
N.A. |
7900 |
|
Margarine |
|
|
N.A. |
-- |
|
Scourers (f) |
|
|
N.A. |
6800 |
|
RefinedOils |
|
|
N.A. |
1070 |
GENERAL INFORMATION
|
No. of Employees : |
36000 |
|
|
|
|
Bankers : |
State Bank of Standard
Chartered Bank Citibank N. A. Hongkong &
Shanghai Banking
Corporation Bank of Deutsche Bank ABN-AMRO Bank Punjab National
Bank Corporation Bank HDFC Bank ICICI Bank |
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|
|
|
Facilities : |
-- |
|
|
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Banking
Relations : |
Good |
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|
|
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Auditors : |
|
|
Name : |
v
A. F.
Ferguson and Company Chartered Accountants Mumbai, v
Lovelock
and Lewes Chartered Accountants Mumbai, |
|
|
|
|
Subsidiaries : |
v
Lipton India Exports Limited v
Indexport Limited v
Bon Limited v
Nepal Lever Limited. v
Lever India Exports Limited v
Merryweather Food Products Limited v
International Fisheries Limited v
KICM ( v
14(ii) of Notes to Profit and Loss Account] v
Modern Food Industries ( v
Daverashola Tea Company Limited v
Pond's Exports Limited v
Thiashola Tea Company Limited v
Indigo Lever Shared Services Limited v
Rossell Industries Limited v
TOC Disinfectants Limited v
Modern Food and Nutrition Industries Limited v
Levers Associated Trust Limited. v
Levindra Trust Limited v
Hindlever Trust Limited Fellow
Subsidiaries : v
Brooke Bond Assam Estates Limited. v
Brooke Bond Group Limited v
Brooke Bond South India Estates Limited v
Lever Faberge v
Unilever U.K. Central Resources Limited v
Unilever Overseas Holdings Limited. v
Unilever Australia Export Pty. Limited. v
Unilever Australia Limited v
Lever Brothers Bangladesh Limited v
Unilever v
Unilever Cote d'lvoire v
Unilever Ghana Limited v
Unilever Kenya Limited v
Unilever New Zealand Limited. v
Lever Brothers Pakistan Limited v
Unilever Singapore Pte Limited v
Unilever Foods Espana, S.A - Division Frigo v
Unilever South v
Unilever Ceylon Limited v
Unilever Overseas Holdings AG v
Lever Brothers West Indies Limited. v
Unilever Uganda Limited v
Unilever Research Laboratory, Port Sunlight v
Unilever Research Laboratory, Colworth House v
BB Kenya Group v
Unilever N.V. v
Unilever Overseas Holdings B.V. v
Unilever Brasil Limiteda. v
Lever Chile S.A. v
Unilex v
Unilever France S.A. v
Unilever International v
Unilever Deutschland GmbH v
Lever Faberge Deutschland GmbH v
Unilever Hong Kong Limited v
BBL Japan K.K. v
v
Safial B.V. v
Sagit SPA, v
Unilever v
Unilever Philipines (Prc), Inc. v
PT Unilever v
Unilever Thai Holdings Limited. v
Unilever Thai Trading Limited v
Unilever Sanayi ve Ticaret Turk A.S. v
Unilever Home & Personal Care v
Lever Maroc S.A. v
Lever v
Unilever ( v
Lipton Division, v
Lever Arabia Limited v
Lever Brothers Nigeria Limited v
v
Lipton Soft Drinks ( v
Lever v
Elida P/S, v
Thani Mursid Lever LLC, v
Unilever CR, v
Unilever Polska v
Lever International Marine Supplies (LIMS) BV v
v
Unilever ( v
Lever Fattal, v
Unilever South v
Unilever Baltic LLC v
v
Unilever Tuketim Urunleri Sat Pazarlama Ticaret
A.S. v
Unilever Best Foods, v
Unilever SNG, v
Unilever Taiwan Limited v
Unilever v
Unilever Tuketim Mersin Serbest v
Unilever Dominicana S.A. v
Elida Faberge Limited v
Towells Lever LLC, v
Binzagr Lever Limited, v
Hind Lever Chemicals Limited (Also an Associate) v
(Upto 31st May, 2004) v
Unilever Industries Private Limited v
Digital Securities Private Limited. v
Lever Faberge v
Unilever Tanzania Limited v
Unilever Cambodia Limited. v
Lever Faberge v
Unilever Maghreb Export SA, v
Unilever Company v
Unilever UK & CN Holdings, v
Lipton Limited - v
Lever Faberge Europe, v
Unilever ( v
Lever Ponds v
Lever Ponds Division, v
Europalma International Insurance Services B.V. v
Fine Tea Co., v
Lipton US Group v
Unilever Asia Private Limited v
Lever Faberge Italia SPA v
Unilever United States Inc. v
Hefei Lever Detergents Co. Limited, v
Unilever v
Unilever v
Unilever v
Unilever v
Unilever v
UAL Lever Rexona v
Lipton Limited (Head Office) / Lipton Tea Supply
Limited v
Unilever Market Development SA |
|
|
|
|
Associates : |
Vashisti Detergents L |
|
|
|
|
Holding
Company : |
Unilever PLC |
|
|
|
|
Joint Venture
: |
v
SC Johnson Products Private Limited (upto June,
2003) v
Kimberly - Clark Lever Private Limited v
Quest International India Limited. v
Lever Cist Brocades Private Limited (upto September,
2003) |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2250000000 |
Equity Shares |
Re. 1/- each |
Rs. 2250.000 millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2206800000 |
Equity Shares |
Re. 1/- each |
Rs. 2206.800 Millions |
|
|
|
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
2206.800 |
2201.200 |
2201.244 |
|
2] Reserves & Surplus |
25028.100 |
20855.000 |
18725.851 |
|
NET WORTH |
27234.900 |
23056.200 |
20927.095 |
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
371.300 |
245.000 |
14530.578 |
|
2] Unsecured Loans |
354.700 |
324.400 |
180.567 |
|
TOTAL BORRWING |
726.000 |
569.400 |
14711.145 |
|
|
|
|
|
TOTAL
|
27960.900 |
23625.600 |
35638.240 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
14007.500 |
13855.000 |
14231.384 |
|
Capital work-in-progress |
1102.600 |
980.300 |
944.222 |
|
|
|
|
|
|
INVESTMENTS |
24139.300 |
20142.000 |
22295.627 |
|
DEFERRED TAX ASSETS |
0.000 |
0.000 |
2260.005 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS &
ADVANCES |
|
|
|
|
Inventories |
15510.200 |
13249.700 |
14704.426 |
|
Sundry Debtors |
4403.700 |
5228.300 |
4892.697 |
|
Cash & Bank Balances |
4169.400 |
3550.300 |
6980.480 |
|
Other Current Assets |
0.000 |
0.000 |
527.771 |
|
Loans & Advances |
11467.500 |
8988.400 |
5944.179 |
|
Total Current Assets |
35550.800 |
31016.700 |
33049.553 |
|
Less : |
|
|
|
|
Current Liabilities |
33625.100 |
30779.700 |
25907.914 |
Provisions
|
13214.200 |
11588.700 |
11234.637 |
Total Current Liabilities
|
46839.300 |
42368.400 |
37142.551 |
|
Net
Current Assets |
(11288.500) |
(11351.700) |
(4092.998) |
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
TOTAL
|
27960.900 |
23625.600 |
35638.240 |
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
Sales
Turnover |
130208.500
|
119625.400
|
108711.200
|
|
|
Other
Income |
8986.600
|
4840.300
|
6447.300
|
|
|
Stock
Adjustments |
1299.700
|
[808.700]
|
[766.900
] |
|
|
Total
Income |
140494.800 |
123657.000 |
114391.600 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
21875.100
|
16580.600 |
15053.175 |
|
|
Provision for Taxation |
3321.400
|
2499.600 |
3060.410 |
|
|
Profit/(Loss) After Tax |
18553.700
|
14081.000 |
11992.765 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
Total Earnings |
NA |
NA |
13229.010 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
Total Imports |
NA |
NA |
6771.876 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Raw
Materials |
55652.200
|
51686.700
|
45989.700
|
|
|
Excise
Duty |
9456.800
|
8822.300
|
9396.100
|
|
|
Power
& Fuel Cost |
1807.900
|
1687.400
|
1647.700
|
|
|
Other
Manufacturing Expenses |
13290.400
|
12115.400
|
10310.400
|
|
|
Employee
Cost |
6823.300
|
6140.200
|
6441.600
|
|
|
Selling
and Administration Expenses |
23367.600
|
20138.100
|
17217.800
|
|
|
Miscellaneous
Expenses |
6812.600
|
5393.100
|
6029.500
|
|
|
Interest
& Financial Charges |
107.300
|
192.000
|
1299.800
|
|
|
Depreciation
|
1301.600
|
1244.500
|
1209.000
|
|
Total Expenditure |
118619.700 |
107419.700 |
99541.600 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
31.03.2007 |
|
Type |
|
|
1st
Qtr |
|
Sales
Turnover |
|
|
31843.200 |
|
Other
Income |
|
|
1498.300 |
|
Total
Income |
|
|
33341.500 |
|
Total
Expenditure |
|
|
28223.500 |
|
Operating
Profit |
|
|
5118.000 |
|
Interest |
|
|
51.300 |
|
Gross
Profit |
|
|
5066.700 |
|
Depreciation |
|
|
329.000 |
|
Tax |
|
|
761.900 |
|
Reported
PAT |
|
|
3928.900 |
200703
Quarter 1 –
EPS is Basic & Diluted Status of Investor Complaints for
the quarter ended March 31, 2007 Complaints Pending at the beginning of the quarter
02 Complaints Received during the quarter 53 Complaints disposed off during the
quarter 53 Complaints unresolved at the end of the quarter 02 1. Total sales
grew by 13.8% during the quarter FMCG sales grew by 12.3% with a 10.0% growth
in HPC business and 22.9% growth in Foods. 2. Operating profit (Profit before
Interest and Tax) for the quarter grew by 13.7%; Profit Before Tax grew by
13.9%, while PAT grew by 13.6%. Net Profit declined by 11.3% due to the impact
of profit on sale of Nihar brand in the base (March quarter 2006). 3.
Exceptional items (net of tax) for March Quarter'07 comprise: Reduction in tax
liability arising from the amalgamation of Modern Foods India Limited, an
erstwhile subsidiary, with the Company (Rs 458 million); Profit arising from
transfer of two factory units (Jamnagar and Shamnagar) and Janmam land of the
Company to three separate subsidiaries (Rs 175 million) and other one off items
aggregating to a net expenditure of Rs 43 million. 4. The Honourable High Court
of Mumbai, approved the amalgamation of Modern Foods India Limited and its
subsidiary with the Company, effective October 01, 2006 Accordingly the results
of Modern Foods India Limited and its subsidiary for MQ'07 are included in the
above results. 5. The results for the quarter are not comparable to those of
MQ'06 to the extent of amalgamation of Modern Foods India Limited and its
subsidiary with the Company. Adjusting for the above, net sale for MQ'07 is Rs
31645.30 million (MQ 06: Rs 27980.50 million); Profit before interest and tax
is Rs 3786.50 million (MQ'06: Rs 3331.90 million); PAT is Rs 3335.80 million
(MQ'06: Rs 2939.80 million) and Net Profit is Rs 3926.20 million (MQ'06: Rs
4428.60 million). 6. Provision for Taxation includes Fringe Benefit Tax of Rs
100 million. 7. Previous period figures have been regrouped / restated wherever
necessary to conform to this period's Classification. 8. The text of the above
statement was approved by the Board of Directors at their meeting held April
30, 2007.
KEY RATIOS
|
PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
Debt-Equity Ratio |
0.03 |
0.35 |
0.75 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.30 |
0.63 |
|
Current Ratio |
0.74 |
0.82 |
0.90 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
5.38 |
5.10 |
4.88 |
|
Inventory |
9.05 |
8.53 |
7.54 |
|
Debtors |
27.04 |
23.64 |
22.65 |
|
Interest Cover Ratio |
171.39 |
87.36 |
12.57 |
|
Operating Profit Margin(%) |
15.12 |
15.06 |
16.14 |
|
Profit Before Interest And Tax Margin(%) |
14.12 |
14.02 |
15.02 |
|
Cash Profit Margin(%) |
12.85 |
12.81 |
12.13 |
|
Adjusted Net Profit Margin(%) |
11.85 |
11.77 |
11.01 |
|
Return On Capital Employed(%) |
71.32 |
56.62 |
44.11 |
|
Return On Net Worth(%) |
61.39 |
64.05 |
56.61 |
STOCK PRICES
|
Face Value |
Rs.1.00/- |
|
High |
Rs.194.15/- |
|
Low |
Rs.192.05/- |
LOCAL AGENCY FURTHER INFORMATION
History
In 1888, less than four years after William Hesketh Lever
launched Sunlight Soap in
A year after the merger, Unilever set up the Hindustan Vanaspati Manufacturing
Company, its first subsidiary in India and went on to strengthen its position
by establishing two more subsidiaries, Lever Brothers India Limited and United
Traders Limited, soon afterwards. The three companies, which marketed Soaps,
Vanaspati and Personal Products, merged in 1956 to form Hindustan Lever, in
which Unilever has a 51% stake.
1888 Lever soap, 'Sunlight', introduced in
1918 Vanaspati(hydrogenated edible fat)launched through imports
1930 Unilever created through the merger of Lever Brothers,
1931 Unilever registers company in
1933 Lever Brothers India Limited (LBIL) incorporated in
1935 United Traders Limited (UTL) incorporated in
1956 The three subsidiaries, HVM, LBIL and UTL, merge to form Hindustan Lever
Limited (HLL)
1958 Hindustan Lever Research Centre started functioning.
1979 Chemicals complex commissioned at Haldia,
1993 HLL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the
company - Erstwhile Brooke Bond India acquires Kissan Business from the UB
Group and Dollops icecream business from Cadbury - Doom Dooma and Tea Estates
Plantation divisions merged with Brooke Bond - Brooke Bond and erstwhile Lipton
India merge to form Brooke Bond Lipton India Limited 1994 HLL and US-based
Kimberley-Clark Corporation form 50:50 joint venture, Kimberley-Clark Lever
Limited
1995 HLL and Indian cosmetics major, Lakme Limited, form 50:50 joint venture,
Lakme Lever Limited HLL acquires Kwality and Milkfood 100% brandnames and
distribution assets.
HLL and US-based S.C. Johnson & Son Inc. form 50:50 joint venture, Lever
Johnson (Consumer Products) Private Limited HLL Soaps and Detergent sales cross
one million tonnes
1996 HLL and associate company, Brooke Bond Lipton India Limited, India's
biggest in Food and Beverages,merge.1997 HLL and Gist Brocades BV form 50:50
joint venture, Lever Gist Brocades, to market 'Gold Seal Fermipan Instant
Yeast' for baking industry.
1998 Group company, Pond's India Limited, merges with HLL. HLL acquires Lakme
brand, factories and Lakme Limited's 50% equity in Lakme Lever Limited HLL
acquires manufacturing rights of Kwality icecream. Appellate Authority of
Government of India absolves HLL of insider trading charges, made by SEBI in
1997, in the BBLIL merger.
During the year 2000,the company has acquired 76% stake in Modern Food
Industries Limited,a government owned company. Again in 2001 the company
acquired the balance 24% through put option,subsequent to this acquisition of
these shares MFIL became a 100% subsidiary of HLL. In the same year Rossell
Industries Limited also became a subsidiary of HLL,consequent to LIEL another
100% subsidiary of HLL,which has raised its shareholding to 59.62% of the
issued and paid up capital.
HLL has achieved market leadership in soaps and detergents as well as hair and
skin care products and is the second largest manufacturer of dental care
products. HLL is also market leader in tea, processed coffee, ice cream and
frozen desserts, tomato-based products, jams and squashes.
Joint Ventures were formed for two of its non-FMCG businesses to protect their
value - one with Godrej Agrovet for our AFS business and another with the ICI
group for our Fragrance/Flavours division. In 2001 January,HLL has exited from
JV with Godrej Agrovet.
International Bestfoods Limited (IBL) has become a subsidary of Hindustan Lever
w.e.f April 21,2001. The Board of IBL has already approved the transfer of
75.38% of the equity of IBL earlierheld by Best Foods USA in favour of HLL. In
October 2000 HLL acting in concert with Unilever made an open tender offer for
the remaining 24.62% of the IBL equity at price Rs 173.00 per share.
Consequently, the group shareholding in IBL post this offer rose to 83.36% of
which 75.38% was heldby Best Foods USA and 7.99% held by HLL. After prior
approval IBL was amalgamated with HLL and the consideration was paid in the
ratio of 2 equity shares of HLL for every 3 shares held in IBF.
Its flavours, fragrances and food ingredients business has been transferred to
Quest International India Limited, a subsidiary of the company and the joint
venture with ICI Group has also been formed.
The company has signed an agreement with ICI India, a subsidiary of ICI plc,
HLCL, a company which 50% equity being held by HLL, has decided to merge its
business with Tata Chemicals Limited The scheme of amalgamation which is being
formulated as for every 2 shares of HLCL, the shareholders of HLCL would
receive 5 shares of Tata Chemicals Limited The company also proposed to issue
Bonus Debenture in the ratio of 1 Bonus debenture of Rs.6/- for every share of
Re.1/-.
During the year 2003, HLL has acquired Marine Business from the Amalgam Group
of Companies on 28th March 2003 by way of a slump sale of Assets of the frozen
seafood's business including the facilities for cooked shrimps and pasteurised
crabmeet on a going concern basis effective 1st January 2003.
The Edible Oils and Fats Business of HLL which includes manufacturing and
marketing of Vanaspati, Refined OIl and Bakery Fats was sold to Bunge Agribusiness
India Private Limited on a going concern basis in 2003. This involved
assignment of well known brands like Dalda and its various extensions,
Masterline, Gold Seal, Silver Seal, Marvo, Biskin and Lily in
In the year 2004, The company has disposed its Mushroom business which formed
part of KICM (
During 2005, the companies subsidiaries Lever India Exports Limited, Lipton
India Exports Limited, Merryweather Food Products Limited, Toc Disinfectants
Limited, International Fisheries Limited were merged with the company as of
December 30, 2005 with effect from the respective appointed dates stipulated in
the Merger Scheme approved by the High Court of Mumbai. Vasishti Detergents
Limited (VDL)also came in to the fold of the company as a result of
amalgamation of the Tata Oil Mills Company Limited VDL was merged with the
company on February 28, 2006 pursuant to a Scheme of Arrangement sanctioned by
the High Court of Mumbai with retrospective effect from July 1, 2005. The
company transferred the soap and soap intermediate manufacturing facilities at
Sewari in Mumbai to Bon Limited on 17th July, 2005. In December 2004, the
company obtained approval from shareholders and transferred its Functionalised
biopolymer business to Riddhi Siddhi Gluco Biols Limited (RSGBL). As part of
the scheme of Arrangement for demerger and transfer of tea divisions the
companies shareholding in 100% subsidiary Doom Dooma Tea company was
transferred to McLeod Russel India Limited and the companies stake in Tea
Estates India Limited was also transferred to Maxwell Golden Tea Private
Limited. During the year the company also disposed off the Nahar Trade trade
mark along with its intellectual property rights to Marico Limited
In line with its strategy to focus on core areas, during October 2006, HLL
divested its 51% controlling stake in the Unilever India Shared Services
Limited (Previously known as Indigo Lever Shared Services Limited), a 100%
subsidiary of the company business to CapGemini SA for a consideration of
Rs.520 Millions. The business will now benefit from thesystems and processes
brought in by a leading player in the BPO space. Both parties have a put/call
option for the balance 49% stake in 2008/09.
A joint venture was entered with ICI for disposal of the perfumery and flavours
business in 2001. HLL held 49% in the JV while ICI and its associates held 51%.
As per the agreement, both parties had a call/put option at the endof 5 years
i.e post 31st March 2006. In June quarter 2006, both parties agreed to complete
the transaction as perthe agreement. Consequently, HLL exercised its put option
and exited from the JV at a consideration of Rs. 540 Millions computed on a
pre-agreed basis for valuation.
As a part of the Company's Brand/ Category rationalisation strategy, Company
decided to exit edible coconut oil market and disposed off its Nihar brand at
an attractive valuation.
The Company also disposed off its 'Cococare' trademark - a dormant brand for
last two years - alongwith related intellectual property rights in the Indian
market. Both these sales are in line with the portfolio orationalisation
strategy and the decision to exit the edible grade pure Coconut oil
business.
HLL has sought approval from the shareholders and the courts to merge Modern
Foods Industries (
The Company had also undertaken Demerger of its operational facilities in
Shamnagar,
Turnover
Turnover, net of excise, in respect of continuing businesses increased by 10.0%
over previous year. This increase arose from higher sales volume, better sales
mix, price increases effected by the Company and effects of fiscal and taxation
changes during the year.
CHANGE IN THE ORGANISATION STRUCTURE
The organisation structure of the Company was simplified during the year by
doing away with the two Divisional Management Committees for HPC and Foods headed
by respective Managing Directors and a National Management Committee comprising
Mr. M.K. Sharma, Mr. D. Sundaram, Mr. Arun Adhikari and Mr. S. Ravindranath.
The structure was replaced by the appointment of a single Management Committee
comprising Mr. M.K. Sharma, Mr. D. Sundaram, Mr. S. Ravindranath, Mr. Anoop
Mathur, Mr. Sanjay Dube, Mr. Nitin Paranjpe and Mr. Dhaval Buch under the
leadership of Mr. Douglas Baillie, as CEO and Managing Director of the Company.
In line with this, the distinct and separate structure for HPC & Foods
Divisions were merged and the relevant personnel from the Foods Division, which
had its corporate office at Brookefields in
The New Ventures structure is also being discontinued from February 1, 2007.
Shakti is being fully integrated with the Customer and Sales function to better
harness synergies in the Rural areas, and HLL Network and the Consumer Health
Care (Ayush) businesses are being incorporated with HPC. Water will continue as
an independent business reporting to the CEO.
NEW CORPORATE OFFICE
In order to leverage scale and synergies of integrated business operations, the
Board has decided to move its Corporate Offices to a new state-of-the-art
campus to be built at Andheri, Mumbai on a 12.6 acre site owned by the Company.
This move will integrate all existing business offices of the Company at both
This is a significant step forward to bring the scale and might of the Company
to win in the market place. A unified corporate office will help to further
integrate business processes and leverage scale and synergies across the
organisation. It will enable the Company to drive a single-purpose agenda to
win with its consumers and customers.
The Company's Foods and Beverages, Home and Personal Care businesses as well as
Finance, HR, Sales & Customer development, Supply Chain, Legal &
Secretarial, and the Regional Category functions and Training Centres will work
together in the proposed new campus. This co-location will also harness
synergies between Regional Category teams and the operating company. The
R&D Centre at
The transition to the new office is being done in two phases. In Phase 1, the
Bangalore Foods team was relocated in January 2007 to the Mumbai Head Office.
In Phase II, the Mumbai Head Office and Training Centre will be relocated to
the new Andheri campus during 2008.
The new campus will be built to a single purpose - of creating an inspiring
work environment. It will be a facility that will tangibly demonstrate what
Company stands for as an organisation, befitting Company's stature as
PROPOSED NAME CHANGE TO
The Board has proposed, subject to shareholders approval, the change of the
Company name from Hindustan Lever Limited to Hindustan Unilever Limited.
While the Explanatory Statement appended to the Notice of Annual General
Meeting deals with the logic and rationale elaborately, it is appropriate to
reiterate that the Company believes that the proposed name provides the optimum
balance between maintaining the heritage of the Company and the future benefits
and synergies of global alignment with the corporate name of Unilever. Most importantly,
the proposed name retains '
The proposed alignment of the corporate name with Unilever will be a source of
considerable strength and synergies to harness Unilever's global scale and size
for the benefit of the Indian business, both in domestic and export markets. It
would also assist in attracting and retaining talent both locally and
internationally - a key imperative for business success in the present day
context.
The Company has adopted and subscribed to a vision Statement: 'To earn the love
and respect of
PRODUCT CATEGORIES
This report records the business performance of the Company in a simplified
structure with a sharper focus on key brands and categories in (i) the combined
Home and Personal Care (HPC) Division and (ii) an integrated Foods Division,
comprising Beverages, Foods, and Ice Cream businesses. New Ventures and
Speciality Exports continued to operate outside these two divisions during the
year under review and have accordingly been dealt with separately.
Home and Personal Care Business
HPC markets grew well in 2006. The market continued to witness intense
competitive activity both from multinational and local players. The business
also faced severe challenges on the cost front due to higher crude oil &
commodity prices for the third year in succession.
Given this context, the Company's HPC sales on a continuing basis grew by a
robust 13.7%. In response to the competitive intensity and to further
strengthen our brands Advertisement & Promotion investments of the Company
increased by 27%. The segmental profit of the business recorded strong growth
despite the impact of higher input costs and significant increases in brand
investments.
Soaps & Detergents
In the Soaps & Detergents segment, the Company's sales grew by 12.9%.
Fabric wash, like in 2005, was intensely competitive. Higher crude oil price
resulted in cost inflation for the third consecutive year. Judicious price
increases and aggressive cost effectiveness measures taken by the Company
helped neutralise this inflation, which given the circumstances was a
significant achievement.
Against this background, Laundry achieved a double digit sales growth for the
second year in succession. During the year, Surf Excel was relaunched with a
significantly improved formulation and packaging which helped the brand grow
strongly and improve its key Mind Measure parameters. The Surf Franchise's
'Daag aache hain' (dirt is good!) campaign was extended with a new 10 / 10
(dirt removal) campaign, which further helped strengthen its emotional connect
with the consumers. In 2006, the business also took active initiatives to
migrate Rin Supreme Bar to Surf Excel Bar in Tamilnadu to simplify the Rin
brand architecture. The Company is planning to extend this across all
geographies in 2007.
Wheel driven by strong activations like 'Smart Shrimathi' (Smart Housewife) and
'Budget ka Jadoo' (magic of Budget) continued to be the biggest brand of the
Company with sales in excess of Rs. 1,0000 Millions. The path breaking Smart
Shrimathi campaign on Doordarshan backed by powerful and relevant activation in
over 30,000 villages resulted in Wheel gaining 50 bps market share and
significantly strengthening its key attributes and consumer loyalty.
In summary, in a highly competitive market and difficult cost environment, the
Company has delivered growth ahead of market. However, margins and
profitability in this category continue to be a challenge given the intensity
of the competitive scenario.
The polycoated' Vim Dishwash Bar continued to perform well during 2006 and
helped the brand retain its strong leadership position despite competition from
low cost and regional players. During the year, the Company initiated a Test
Market of Vim Dishwash Liquid. The initial results look encouraging and the
Company is planning to pursue this format across geographies.
Personal
In a growing market, the business continued to witness intense competition from
local and regional players. Despite this, 2006 was another good year for the
Company with both volume and value showing competitive growth. Advertising
& Promotion spends were increased to further strengthen the portfolio, and
the business exited the year with strong market shares. Vegetable Oil costs
remained largely stable during the year. However, they started firming up
towards the end of the year requiring price increases to offset input cost
inflation.
During the year, the Company's biggest soap brand, Lifebuoy, was relaunched
with improved formulation and packaging. Coupled with excellent activation
under the 'Health and Hygiene' platform in urban markets and 'Swasth - Chetna'
(Health Awareness) program in the rural markets, this brand grew well in 2006.
The Indian Postal Authorities recognised the contribution of the brand to society
through its Swasth - Chetna programme, by the release of a Postal Cover.
During the year 2005, Lux celebrated its 75th year of existence in
During the year, Dove bar expanded its range with the roll out of new variants.
Also, Hamam Ubtan was introduced in the southern states. Further, the entire
Breeze portfolio was relaunched during the latter half of the year and is
expected to arrest volume decline of the brand.
In 2006, the Company invested in building the liquid soap format by introducing
new variants in Lux and Dove body wash as well as new Lifebuoy hand wash
liquids. These were well accepted and promise to play a significant role in
upgrading consumers, and in driving value growth for the category in
future.
Personal Products
In the Personal Products segment, continuing sales grew by 15.7%.
Hair
In the highly competitive
The entire Sunsilk shampoo portfolio was relaunched at the beginning of 2006
followed by an outstanding activation through Sunsilk Gang of Girls
(www.sunsilkgangofgirls.com). This helped the brand to identify and uniquely
connect with its target group. During the year, Sunsilk entered the top end
segment with the launch of a range of wash-off and leave-on conditioners under
the 'Colour Shine' and 'Hair Expert' positions. This has enabled the brand to
expand its imprint from hair wash to a broader hair care position.
Clinic Plus performed strongly further consolidating its Family Health position
and overall market leadership. Sachets continued to remain a key growth driver
and are playing an important role in building category penetration and
consumption.
Clinic All Clear continued to deliver competitive growth driven largely on the
back of successful variant launches like the Ice-cool variant (with Menthol).
Also the Hair Fall defense (Black) variant introduced in 2005 continued to
perform well.
Skin Category
2006 was another good year for the skin care category with a strong all-round
performance by creams, lotions and talc.
Having relaunched in 2005 the core of the Fair & Lovely brand, 2006 was
devoted to strengthening the variants under the Fairness credentials. A new
variant, Menz, targeted at males was introduced during the year, and FAL Active
Sun block performed strongly in the sunscreen segment. Further, in 2006 the
entire Anti Marks range was relaunched as Skin Clarity with the proposition of
blemish-free skin. These launches coupled with innovative consumer activations
like the 'fairness meter' helped the brand grow well in 2006.
During the year, significant investments were made in the Ponds brand to
introduce a new top end mix, and to provide a world class buying experience for
the top end consumers. New products to address the antiageing, moisturising and
skin lightening needs were introduced. The category made significant
investments in creating the right infrastructure at the front-end for selling
top end products. These investments were both in technology and equipment for
evaluating skin type as well as in skilled manpower to recommend beauty solutions
based on skin analysis. Ponds cold cream with an improved formulation and
attractive packaging was relaunched during the year and a full range of Pond's
facial wash products was introduced with impressive results. Talcum powder had
a good year, driving category penetration in rural markets through the Rs. 5
pack.
Vaseline has continued to benefit from it's successful repositioning as an 'all
season brand' away from an 'exclusive winter brand' through the launch of Aloe
fresh in summer. Vaseline Lotion mix underwent a full packaging and formulation
relaunch at the start of winter. These innovations led to a strong double digit
growth in 2006.
Lakme Skin continued to grow strongly. The entire range has been upgraded with
a relaunch just before the start of the winter season.
Colour Cosmetics
Lakme continued to perform well driven by a steady flow of innovations and the
integrated approach in supporting the full Lakme franchise. The Lakme Fashion
platform, now twice every year, has given the brand a vibrant and contemporary
image. Lakme Salons now have a significant presence operating from 88 locations
across the major metro centres.
Deodorants
The category is small and undeveloped, and is poisted to benefit from the rise
in consumer disposable incomes.
The agenda to build the category was driven through the introduction of an
affordable and efficacious product, Rexona Deo roll-on priced at Rs.30 for 25
ml. The product launch was accompanied by a nationwide thematic campaign which
emphasised the need to capitalise on opportunities without the setback of body
odour. A large sampling programme has been instrumental in driving penetration
and usage across colleges and workplaces.
Axe saw the launch of a new variant - Click, which met with tremendous success
and resulted in strengthening the iconic character of the brand amongst its
target group. The brand also made successful forays into new communication
vehicles such as mobile application episodes, SMS activated consumer
promotions, and ownership of unique channels such as post-card distribution and
out of home clusters - cafes, malls and multiplexes.
Toothpaste
In a highly competitive year, Close Up grew ahead of the market and delivered a
double digit sales growth. This was led by the introduction of Milk Calcium
variant, which helped the Brand increase its market share in its key markets of
Kimberly Clark Lever Private Limited
Kimberly Clark Lever Private Limited (KCLL), the joint venture between the
Company and Kimberly Clark Corporation,
Huggies was re-launched during the year, and continued its leadership status.
The Fem Care category recorded a 10% volume growth, amidst competitive
pressures, primarily driven by the economy segment.
Home and Personal Care (HPC) Exports
HPC exports business grew by 23.5% recording a turnover of Rs. 4340 Millions,
despite an appreciation of the Rupee against most major currencies. Growth was
based on strong competitive business gains in Oral Care exports, which grew by
46%. The Skin Care business grew by 10%, and both these categories have been
sustaining growth momentum for the past few years.
The Company has been making a strong pitch for becoming a sourcing hub for
Unilever and is being considered for various global projects. Going forward,
there are robust growth plans based on the projects in the pipeline for
manufacturing of various high end skin care products in
Foods
The Foods Division of the Company (comprising the Beverages, Processed Foods
and Ice Cream businesses) recorded good growth in 2006, with significant
improvement in profitability. The business continues to drive operational
efficiencies and cost synergies for growing profitably.
The highlights of the product categories are given below:
Processed Foods
The Packaged Foods business delivered a robust performance during 2006. This
was on the back of a good 2005, reflecting sustained momentum in the Kissan,
Knorr and
Kissan was relaunched with a new strategic positioning, improved packaging and
a superior formulation, which significantly enhanced the quality of the
product.
Simultaneously, the Company focused on improving delivered freshness of
processed foods to consumers with an improved supply chain that led to drop in
pipe line stocks in depots and with trade. This had a positive effect on
consumer acceptance and offtake that led to share improvements and stronger
brand equity.
Knorr soups enjoy a large share in the nascent and small soup market and held that
position during 2006. A new range of international quality soups were
introduced during the year. Simultaneously, a new campaign to encourage soup
consumption at various moments in the day has been well received by consumers
and customers. This will help the business to build volumes through higher
consumption.
The staples business of
With a strong momentum behind all brands and categories, the Company looks
forward to 2007 with hope and excitement for this business.
Tea
The packet tea market continued to be extremely competitive with national,
regional and local players vying for increased share and volumes. Prices of
garden tea remained stable during the year, but have begun to firm up towards
the later part of the year.
Our strategy of investing in building Brooke Bond as a mega brand to
consolidate and strengthen the Company's leadership in the packet tea market
helped Brooke Bond maintain its leadership during the year. In 2006, Brooke
Bond Taj Mahal and Brooke Bond Taaza were successfully re-launched. Aggressive
Brand building support behind Brooke Bond Red Label Natural Care has
established Natural Care as a significant variant within the portfolio. The
focus on brand building, and innovation has helped the Company to sustain its
leadership position in the overall category and exit the year with a growth
momentum.
Lipton continued to grow strongly in the Out-of-Home, Vending Channel through
acquisition of some major regional and national clients, and by strong
activation at key consumer points.
The business continued to record sustained profitability through its focused
brand portfolio and highly streamlined supply chain and cost management.
Coffee
The Coffee business had another excellent year, led by strong growth in Instant
Coffee. Our strategy to strengthen the brand equity of Bru through clutter
breaking and highly visible communication, coupled with world class activation
led to significant share gain further consolidating its leadership position
within the branded coffee market. Bru Cappuccino continues to help Bru recruit
new consumers into its franchise and consolidate Bru's channel leadership
particularly in Modern Trade. The Re. 1 and Rs. 3 low unit price packs continue
to contribute significantly to the brand's growth and drive category
expansion.
The coffee category, particularly Instant Coffee, continued to be extremely
competitive with national players securing growth in volumes and market share.
Ground and Roasted coffee, predominantly confined to
Launch of two new flavors in Cornetto, Feast Fruit n Nut, and new flavors in
family packs led to growth in Impulse and In-Home segments. Launch of a
differentiated Rs. 5 stick, Choco Vanilla helped drive growth in kids portfolio
and support the availability expansion plans.
The 'Pleasure Up' summer communication and activation campaign helped improve
brand salience and strengthened brand imagery.
Several cost effectiveness programs implemented across manufacturing &
extended supply chain, and the scale benefits resulting from the growth rates,
helped significantly improve the profitability of the business. A new
manufacturing unit was setup at Nalagarh, HP to service North Region markets.
Business is well poised to sustain the performance into the future.
Modern Food Industries (
In 2006, the Bread business focused on profitable growth and margin
improvement. On a comparable basis, Bread sales in continuing units grew by
16.8%. Bread gross margins improved despite an unprecedented 30% rise in price
of key raw materials - Maida & Atta. Margin improvement was aided by growth
in the premium portfolio, bold price increases and cost efficiency measures -
continuing focus on energy savings, improvement in manufacturing efficiencies
and supply chain initiatives in procurement, contracting and sourcing. Modern
Foods continued to lead the market in the area of health and vitality. The two
key innovations - Atta Bread and 7 Must Bread (a multi cereal bread with
goodness of seven different cereals, pulses and nutrients) - recorded healthy
growth in 2006.
Upgradation of quality and consumer safety standards, is a key priority, and
this progressed as per plan. Three units were audited in 2006 by specialist
Unilever quality audit teams, bringing the total number of units cleared to
five. The remaining unit at
Customer Management
During the year, the Company witnessed a changing business environment with
expanding 'Modern Trade' format providing a very different consumer experience.
Many serious players entered the organised retail business, and this format
shows a promising opportunity in the years to come. The Company, in 2006, invested
behind equipping itself to face the changing market dynamics, be it building a
seamless supply chain with reduced response time or building the knowledge base
to operate in an organised retail environment. At the same time, given its
strength in general trade, the Company continued its focus on supporting and
collaborating with the traditional retail to assist them in adapting to the
changing business environment. It is the Company's endeavour to build and
nurture strong partnership with both traditional and modern trade to provide
consumers an outstanding shopping experience.
With the entry of Reliance, Walmart and aggressive expansion plans of the
existing Modern Trade players,
These investments in customer management and several new initiatives, both in
General Trade and Modern Trade, have ensured that the Company is significantly
ahead of its competition in delivering customer satisfaction.
Supply Chain
Petroleum and petrochemical prices continued to put substantial inflationary
pressure on raw materials, packaging materials and distribution costs. The
Company's sharp focus on cost reduction programmes mitigated these cost
pressures to a considerable extent with cross functional teams from buying,
manufacturing, R&D coming together to deliver substantial savings in 2006.
In this, the Company continued to benefit from Unilever's global and regional
strengths that led to significant buying cost advantages through scale and
deployment of best practices used elsewhere in Unilever.
HLL's factories turned in another great year of productivity improvement led by
the continuing excellence in TPM implementation across units. Line flexibility
has improved significantly in many units with several lines now being changed
over in minutes, thereby allowing the Company to respond nimbly to market
demand. Investments and better capacity utilisations at our newer factories at
Uttaranchal and Baddi have further ensured that the Company's volume
requirements were fully met.
In line with the changing face of the Indian customer Invironment, a greater
focus has now been put on customer service with common objectives and metrics
in place across the organisation. Information Technology has been used
extensively to allow real time data capture and reporting to ensure quick response
across the Supply Chain.
Speciality Exports
The Speciality Export Business focused on improving profitability and building
the value added portfolio during the year. The share of value added exports
increased significantly in 2006.
Marine
The Marine Division increased the share of the valueadded portfolio during the
year. The operations at the factories in Pamarru (AP) and Rabale (
The Aroor factory achieved BRC higher level certification besides receiving
awards from the Kerala State Pollution Control Board and the Safety Practice
Awards from the National Safety Council.
Rice
Rice business focused on improving profitability by simplifying the business,
enhancing operational efficiency, selective price increases and building the
value added portfolio which now amounts to over 70%. The branded business grew
by 6%, and has extended its portfolio into the largest Basmati rice market -
Castor
The Castor business focused on Value Added products i.e. Castor Derivatives and
Specialty Oils. The Value Added business registered a handsome volume growth of
60% over 2005. This was achieved through foray into new territories in the
Leather
Pond's Exports Limited (PEL)
The Leather and Leather Products industry in
During the year, the business achieved sustainable cost competitiveness through
restructuring of its two high cost upper making facilities at Tindivanam in
Tamil Nadu and Mettupalayam in Puducherry. This turned around the upper
business segment. During this phase, the business maintained customer service
levels without any disruption.
In the shoes segment, major markets continue to be price sensitive and
innovation led. The business maintained its No.1 position with its key
customers like Hush Puppies and Gabor through high product quality and
focus.
Another brand of international repute 'Caterpillar' of Wolwerine World Wide was
added as a customer. This will provide a window for growth in future.
New Ventures
Water
The Company has launched Pureit, an inhome drinking water purification system.
Pureit is the only inhome water purifier in the world that gives water that is
as safe as boiled water, without having to boil water, and without needing
electricity or continuous tap water supply. Pureit removes all harmful viruses,
bacteria, parasites, and pesticides, thereby providing complete protection from
all water borne diseases like jaundice, diarrhea, typhoid, and cholera. What's
more, Pureit is priced such that it is affordable to the common man.
Pureit was test launched in a few cities in Tamil Nadu in 2005. The market response
has been encouraging. Consequently, the water business has been building up its
overall capability with respect to manufacturing, supply chain, distribution,
and IT. As this capability has been built up in 2006, Pureit was launched
throughout Tamil Nadu, and then rolled out successively to Karnataka and Andhra
Pradesh.
Hindustan Lever Network is a multi-category business opportunity started in
2003 in the area of network marketing. While the global industry is estimated
at over $100 Bln, this industry in
During the past year, the business has given opportunities to 45,000 new
members. Hindustan Lever Network today services consultants in over 1400
towns.
With a belief that entrepreneurs need to see greater value in participating in
the opportunity, the business strengthened its compensation plan. This plan has
been well received and has served to create a benchmark in the Network
marketing business in
Additionally, the business has created a paradigm change in the conventional
network business through the creation and launch of the Privilege Consumer
Programme - a programme designed to enable consumers to avail of world class
products while earning loyalty points. Through this programme, the business has
reached out to close to 100,000 new consumers.
The business has focused on driving an execution culture amongst the
entrepreneur base - this has meant a greater focus this past year on building
entrepreneur capabilities through various training initiatives. In particular,
the business has co-created a powerful training programme with best-in-class
training providers such as NIS Sparta & City & Guilds (UK) that serves
to build leadership and selling capabilities.
In order to ensure continued excitement along with the need to build strong
brands, the business, using Unilever's world class technology, launched 6 new
products during 2006. In particular, the business launched a new range of
top-end products with a view to strengthen core brands within the Network
business portfolio.
Project Shakti
70% of Indian population lives in 627,000 villages and these markets with their
large population present a significant opportunity for the Company. Over two
thirds of these villages are not easily accessible due to poor infrastructure
and lack of business viability. Shakti' is our unique, win-win program
addressing this opportunity. Shakti' operates through 3 initiatives.
Shakti provides a micro-enterprise opportunity for women from Self-help-groups
(SHG's) making them independent women entrepreneurs as direct-to-home
distributors of the Company. This network of entrepreneurs has more than
doubled the Company's direct rural reach, with 30,800 Shakti entrepreneurs
covering 100,000 villages in fifteen states at the end of 2006. Moreover,
Shakti entrepreneurs visit and sell to around three million rural homes every
month, creating a unique rural direct-to-home channel. The Company aims to reach
600 million consumers in 500,000 villages through 100,000 entrepreneurs by
2010.
Shakti Vani is a communication initiative that seeks to improve the
standard of living in the rural community. Village women are trained as Vanis'
and disseminate information on basic hygiene practices, adoption of which will
dramatically improve the health & hygiene standards in the villages. Shakti
Vani has covered a total of 40,000 villages in seven states since 2005. The
awareness and adoption of health and hygiene practices would provide growth
opportunities in rural
IShakti is a rural community portal that provides relevant and valuable
information for the rural populace. Information is available on areas such as
agriculture, health and hygiene, education, veterinary, legal, employment, etc.
thus filling the information gap that exists in the villages and unlocking
rural productivity and prosperity. The site is in the local language with text
to voice facility enabling even the illiterate to get benefit of information.
IShakti is currently available in around 200 Kiosks in AP. Interesting pilots
to use these kiosks for providing value added services like Spoken English and
Computer tutorials have also been initiated. Ishakti also gives platforms for
advertising the products and creating awareness on the benefits of their use,
apart from generating revenue through selling spaces on the portal to other
companies.
Shakti' provides significant benefits for all its participants. For the SHG
women, it provides a stable, sustainable source of income. For villagers, this
channel has become a source of genuine and correctly priced products. Access to
basic health and hygiene information through Shakti Vani and other relevant information
through IShakti is improving living standards and unlocking rural prosperity in
the villages. For the Company this initiative provides discontinuous increase
in rural coverage.
Effective February 2007, the Shakti channel has been aligned with the
mainstream Sales and Customer Development function with appropriate changes in
reporting relationship.
Consumer Health Care (Ayush)
The Ayush range of Ayurvedic products offer health and beauty benefits by
combining ancient Ayurvedic knowledge with clinical efficacy of modern science.
These unique formulations have cleared rigorous test protocols and are backed
by endorsement from the reputed Arya Vaidya Pharmacy,
The business is being developed strongly on two legs - direct selling and
health & wellness services through a franchise operation. Ayush is the
first Ayurvedic brand to get into therapy centres. Ayush Therapy Centres have
shown positive signs of an independent business opportunity - the revenue from
centres continue to grow both through expansion and through growth from
existing centres. Customers have expressed high degree of satisfaction with the
services being offered, leading to doubling of revenues for second successive
year. The business has expanded its operations from 7 cities to 11 cities and
has increased the number of centres from 15 to 40. During 2007, the business
plans to significantly increase its reach through additional centres in
existing markets as well as new cities.
The Ayush Spa range launched in the direct selling business in 2004, has
focused on building strong credentials in the area of Health & Wellness.
During the year, the brand has seen the launch of 5 new products - all in the
area of Health & Wellness.
Effective February 2007, the consumer health care business has been aligned
with the HPC business with consequent changes in reporting relationship.
Sangam Direct -Unilever India Exports Limited
Sangam Direct, the direct to home e-tailing venture of the Company continued to
grow strongly in 2006. Revenues grew by 35% over 2005 figures.The business also
extended it's services to several outlying suburbs of Mumbai in the second half
of the year. The on-line shopping portal www.sangamdirect.com was launched, enabling
consumers to now shop on-line at any time of the day or night. This benefit
builds strongly upon Sangam's core consumer proposition of convenient
shopping.
As modern retail formats explode and consumers have more choices than ever
before, the Sangam Direct proposition of convenient shopping for daily
household products is becoming increasingly relevant. The customer base of
Sangam now stands at over 200,000 households. The Company is evaluating the
long-term strategic direction and business model of Sangam Direct for growth,
scalability and profitability in the future.
RESEARCH & DEVELOPMENT AND TECHNOLOGY
HLL's R&D commitment to fully explore technological options, and
sustainably provide true value to its consumers, continued with increased focus
and vigour in 2006. Significant progress was made in many areas, especially
water purification, skin care, laundry cleaning and beverages.
R&D on technologies for in-home water purification continued, with a focus
on developing products which are affordable for the mass market. While
continuing to refine HLL's in-home water purifier (Pureit), currently under
roll-out across many states, a series of futuristic technologies are under
development to provide costeffective solutions to eliminate other contamination,
in addition to the microbials, from drinking water.
In the area of personal wash, transparent soaps (Pears variants) with specific
performance attributes (milder variants) were developed. Several novel
processing modifications have resulted in exciting new technologies for
additional and/or superior functionalities in soaps. The research in the area
of skincare continues to focus on development of understanding the occurrence
of Acne, which in turn will lead to novel technologies to reduce its incidence
and/or intensity. Skin lightening continues to be a major area of emphasis and
new insights regarding the mechanism of pigmentation are yielding exciting
leads. In addition, understanding the role of sunscreens and antibacterial in
skin hygiene and health is underway.
Consumer excitable technology options to augment health and vitality benefits
through tea (in addition to it's own natural goodness) are under development.
Yet another important area of research is in the domain of Naturals, where the
focus is on unlocking the molecular and biochemical secrets, and add to the
inherited treasure of Ayuvedic knowledge, to benefit HLL's consumers in
Ayurvedic Therapies, Foods and Home & Personal Care. Several novel
propositions are under development.
Scientific explorations in the area of laundry cleaning have yielded a series
of options which can now be pursued to improve the cleaning performance of
laundry products.
Overall, 2006 was a year of R&D excellence, wherein the role of technology
was substantially reinforced as an important tool to ensure consumer value
creation, with significant prospects for taking HLL ahead of our
competition.
MERGERS/ACQUISITIONS & DISPOSALS
Divestment of 51% controlling stake in Unilever India Shared Services
Limited
Unilever India Shared Services Limited (previously known as Indigo Lever Shared
Services Limited) was a 100% subsidiary of the Company. It was engaged in
providing financial shared services in the area of Sales commercial,
manufacturing commercial, IT enabled services, operational control assessment
processes and Sarbanes Oxley compliance. Apart from HLL, the Company had
contracts for similar services with other Unilever companies in
In line with its strategy to focus on core areas, during October 2006, HLL
divested its 51% controlling stake in the business to CapGemini SA for a
consideration of Rs. 520 Millions. The business will now benefit from the
systems and processes brought in by a leading player in the BPO space. Both
parties have a put/call option for the balance 49% stake in 2008/09.
Divestment of balance 49% in the Quest Business
A joint venture was entered with ICI for disposal of the perfumery and flavours
business in 2001. HLL held 49% in the JV while ICI and its associates held 51%.
As per the agreement, both parties had a call/put option at the end of 5 years
i.e post 31st March 2006. In June quarter 2006, both parties agreed to complete
the transaction as per the agreement. Consequently, HLL exercised its put
optionand exited from the JV at a consideration of Rs. 540 Millions computed on
a pre-agreed basis for valuation.
Sale of NIHAR/COCOCARE Brand and related intellectual property rights As
a part of the Company's Brand/ Category rationalisation strategy, Company
decided to exit edible coconut oil market and disposed off its Nihar brand at
an attractive valuation.
The Company also disposed off its 'Cococare' trademark - a dormant brand for
last two years - along with related intellectual property rights in the Indian
market. Both these sales are in line with the portfolio rationalisation
strategy and the decision to exit the edible grade pure Coconut oil
business.
Scheme of Amalgamation of Modern Foods Industries (
Modern Foods Industries Limited was acquired by purchasing 74% of the equity
capital from the Government of India (GOI) in February 2000 and the balance 26%
in November 2002. This was in line with the Company's policy to have a
diversified Foods portfolio. MFIL's two business streams viz. Bread and
Supplementary Nutritional Foods (SNF) were not making enough margins and
various steps were taken to revive the operations of the business including
improved product mix, focus on quality initiatives, technical efficiencies
improvement and the business was brought on the path to recovery in 2002. In
2003, however, the business lost the SNF turnover in the states of UP and
Rajasthan accounting for 46% of the total company turnover with a substantial
impact on profitability even while the bread business continued to improve
performance despite steep input price increases through cost effectiveness
programmes, technical efficiencies, rationalisation of units and the like. In
2006, during a BIFR review the company was advised to rework its revival plans
including merger of the business with the parent company. In deference to the
opinion of the BIFR, the Company has agreed to implement the amalgamation.
Accordingly the Company had sought approval from the shareholders and the
courts to merge the companies with the Company as of September 30, 2006. The High
Court approvals are in progress and once granted the amalgamation will be
completed with effect from the respective appointed dates stipulated in the
Amalgamation Scheme approved by the High Courts of Mumbai and
Scheme of Arrangement for Demerger of the non-operational facilities in
Shamnagar,
The Company had undertaken Demerger of its in operational facilities in
Shamnagar, Jamnagar and Janmam lands (after disposal of its tea plantation
interests in South India predominantly located in Nilgiris District of Tamil
Nadu) into three independent and separate companies, being 100% subsidiaries of
the Company known as Shamnagar Estates Private Limited, Jamnagar Properties
Private Limited and Hindustan Kwality Walls Foods Private Limited (Since
renamed as Daverashola
EMPLOYEE STOCK OPTION PLAN (ESOP)
Details of the shares issued under ESOP, as also the disclosures in compliance
with clause 12 of the Securities and Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out
in the Annexure to this Report.
None of the management employees or wholetime director have received options
exceeding 5% of the value of the options issued for the year ending December
2006.
Likewise, no employee has been issued share options, during the year equal to
or exceeding 1% of the issued capital (excluding outstanding warrants and
conversions) of the Company at the time of grant.
Adoption of the Global Share Performance Scheme in place of ESOP
Pursuant to the approval of the members at the Annual General Meeting held on
May 29 2006,the Company adopted the '2006 HLL Performance Share Plan' in place
of the existing '2001 HLL Stock Option Plan'. The Plan has been registered with
the income tax authorities in compliance with the relevant provisions of SEBI
(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999. As per the terms of the Performance Share Plan, employees are eligible
for the award of conditional rights to receive equity shares of the Company at
the face value of Re. 1 per share. These awards will vest only on the
achievement of certain performance criteria measured over a 3 year period. 272
Employees including wholetime directors were awarded conditional rights to
receive a total of 349,750 equity shares at the face value of Re. 1 each.
The company’s fixed assets of important value include Land (Freehold and
Leasehold), Building, Railway sidings, Plant and Machinery, Furniture, fittings
and office equipments, Trademarks and Motor vehicles
AS PER WEBSITE
Unilever's mission is to add Vitality to life. They meet everyday
needs for nutrition, hygiene, and personal care with brands that help people
feel good, look good and get more out of life.
Unilever's mission is to add Vitality to life. They meet everyday
needs for nutrition, hygiene and personal care with brands that help people
feel good, look good and get more out of life.
Their deep roots in local cultures and markets around the world
give us their strong relationship with consumers and are the foundation for
their future growth. They will bring their wealth of knowledge and
international expertise to the service of local consumers - a truly multi-local
multinational.
Their 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 behaviour towards everyone they work with, the communities they
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, their people, and their business
partners.
Press release
Entries open for Project Saraswati Scholarships 2005
Graduate &
Post Graduate Scholarships from the
Fair & Lovely Foundation
Mumbai, June 27, 2005: The Fair &
Lovely Foundation invites Project
Saraswati Scholarship applications
for the year 2005. In its third year since inception, the Project Saraswati
scholarships have now been extended to graduate studies in order to benefit a
larger number of deserving women. These scholarships for graduate and
postgraduate studies are granted to deserving young women who have the
aptitude, drive and ambition to achieve their goals, but are financially
constrained. Project Saraswati is one such project undertaken by the Fair &
Lovely Foundation for the economic empowerment of
The Programme Directors for Project Saraswati are Dr. Snehalata
Deshmukh, ex-Vice Chancellor,
Under Project Saraswati, scholarships of up to Rs 0.l00 Millions will be
awarded to deserving young girls from across the country, for any graduate and
postgraduate course within
According to Padmashri Lila Poonawalla, Founder & Chairperson, Lila
Foundation and Chairperson, DeLaval, “Educating a woman is the best way to
empower her, and commitment towards higher education helps empower
underprivileged women. This initiative of the Fair & Lovely Foundation will
encourage deserving young women gain higher education and thus, will help
empower them.”
In 2004, 72 finalists were chosen by a panel of eminent personalities
from the fields of media, education and social work from applications were
received from across
BRINGING
FMCG BACK TO GROWTH
MUMBAI,
June 24, 2005: Hindustan Lever Limited (HLL) has undergone a complete
transformation in the last five years, which has returned the company to growth
and reversed the trend of down trading in the FMCG industry, HLL Chairman, Mr.
M.S. Banga, said here today. He was addressing the Annual General Meeting.
“In recent years, the FMCG sector declined due to
down trading. As the largest FMCG player, it was up to us to reverse the down
trading to realize its true growth potential. Their transformation has resulted
in a new HLL, which has successfully faced this challenge and reversed this
trend. It has done so by substantially strengthening their brands and building
capabilities. This has already begun to yield benefits and they are returning
to growth. Volume growth is being followed by value growth, which in turn will
bring profit growth,” Mr. Banga said.
Focussed
FMCG company: He said, as a result of the transformation, HLL is now a
focussed FMCG company with branded businesses accounting for over 90% of sales,
consisting of 35 brands across 20 categories. The company had disengaged from
all non-FMCG or commodity businesses, with sales of Rs.17500.000 Millions as in
1999, while deriving excellent value for these divestments.
Foods
building blocks in place: Referring particularly to the Foods business, he said the
right building blocks had been put in place. The portfolio, which was
fragmented and lacked scale, has been consolidated and gross margins have been
improved by over 13% through product mix and cost reduction. The supply chain
has been cleared of all old stock and geared up for fresh availability on
shelf. The Foods business will now invest for growth through relevant
innovation.
35
brands with better value & bigger role in consumers’ lives: HLL,
as a company, is now focussed on 35 powerful brands, covering all consumer
appeal and price segments. They have been strengthened by ensuring that they offer
better value, and play a bigger role in consumers’ lives, backed by appropriate
technology. Wherever necessary, it has reduced prices to make the brands more
affordable, and launched several low unit size and price packs to make them
more accessible.
Vitality
through nutrition, hygiene & personal care: Mr.
Banga said, “The most significant challenge has been to move their brands
beyond merely making functional claims to playing a bigger and deeper role in
the lives of consumers. They had to move from selling a soap or a detergent to
something far more important and central to the consumer’s life. Consumers
today are looking for ways to look good and feel good so that they can get much
more out of life. In short, consumers are seeking Vitality in their lives.
Their portfolio of 35 brands is uniquely positioned to offer nutrition, hygiene
and personal care benefits and thereby deliver Vitality.”
Investment
in the future: To ensure HLL’s competitiveness in the long-term, it has
made significant investments in product quality, pricing and marketing. The
investment in product quality alone has been over Rs.4000 Millions, or 5% of
sales, in the last three years. This is in addition to the cost of defending
market position, in the face of recent competition action.
“They
have been able to fully protect their market leadership and share, albeit
sacrificing short-term profit. They made this necessary trade-off as market
share is the best means of sustaining future profit. Over time, their stronger
market positions will surely lead to greater long-term profit. Despite these
significant investments to strengthen the long-term competitiveness and the
costs of defending their strong market position, they still remain one of the
most profitable companies in the country,” Mr. Banga said.
Distribution
& customer management reinvented: The company has also reinvented
the management of distribution channels and customers, who are now being
serviced on continuous replenishment. It is leveraging scale and building
expertise to service Modern Trade and Rural Markets. The sales force has been
delayered to improve response times and service levels. IT tools have been
deployed for connectivity across the extended supply chain of about 2,000
suppliers, 80 factories and 7,000 stockists. Backend processes have been
combined into a common Shared Service infrastructure.
Acorns
for the future: HLL has also begun to nurture some acorns – new businesses
and new ways of engaging with consumers -- for the future. The entry into water
purifiers, with Pureit, shows great promise. In urban
Simpler,
leaner, empowered organisation: The company, as a whole, has been
restructured. Its eight Profit Centres have been integrated into two Divisions
of Home & Personal Care and Foods. “The result is a simpler and leaner
organisation, less hierarchical with fewer levels and greater empowerment. This
has eliminated complexity and speeded up decision making. Today the company is
far more youthful in attitude and spirit. There is greater openness and
transparency,” Mr. Banga said.
He said that over the next 10 years,
“They in the new Hindustan Lever see an exciting opportunity
for growth. They have 35 powerful brands covering all segments, with leading
market positions in most. Today, these are stronger and more relevant to the
consumer than ever. Their people are energized by the scale of the opportunity
and determined to seize it. The scale of their business and operations gives us
the resources they need. They are very
confident of delivering sustainable profitable growth,” Mr. Banga concluded.
HARISH
MANWANI CO-OPTED AS DIRECTOR ON HLL BOARD
HLL BOARD PROPOSES TO ELECT HARISH
MANWANI AS
NON-EXECUTIVE CHAIRMAN POST AGM IN JUNE '05
MUMBAI, May 02, 2005: At a meeting of the Board of Directors of
Hindustan Lever Limited (HLL) held on April 29, 2005, the Board has decided to co-opt,
Mr. Harish Manwani, President - Asia & Africa of Unilever as an Additional
Director on the Board of HLL.
Consequent to him
becoming President - Foods of Unilever, Mr. M S Banga has advised the
Board that he will not seek re-election as a Non-Executive Director at the AGM
of the Company scheduled for June 24, 2005.
It is the intention of
the Board to elect Mr. Harish Manwani as the Non-Executive Chairman of HLL in
succession to Mr. MS Banga from the conclusion of the AGM on June 24, 2005.
HLL's current National
Management, comprising the Vice Chairman, Mr. M.K. Sharma, Mr. D. Sundaram
(Director - Finance & IT), Mr. Arun Adhikari (Managing Director - HPC) and
Mr. S. Ravindranath (Managing Director - Foods) continues unchanged. The
National Management committee has responsibility for HLL's performance, and
overall coordination of the Divisional Structure and Corporate Functions.
On this occasion, Mr. Banga commented "In
these last years, they have strengthened the company by focusing on their 35
FMCG Power Brands. They have improved
quality and affordability. They have
also built their core functional capabilities and created a more agile and
consumer connected company. Today they
have a vibrant and energized team that is confident of growing with
Mr. Manwani commented on the development stating
that “I feel privileged to be serving HLL as the Non-Executive Chairman.
The company has a long history of success with intrinsic
strengths in brands, technology, distribution and an enormous talent
pool. While there may be competitive challenges, HLL is strongly
placed to overcome these and will continue to play a very significant
role to serve the needs of the Indian consumers"
HLL PROPOSES TO TRANSFER DOOM DOOMA AND TEA ESTATES
MUMBAI, April 8, 2005: Hindustan Lever Limited
(HLL) has informed the stock exchanges that it proposes to transfer by way of
sale its tea plantation business, comprising both gardens and factories, in
The Board will subsequently decide the consideration and the
effective date of the transfer.
The services of permanent employees of the two Divisions will be
transferred to the subsidiaries with continuity of service and full protection
of their existing terms and conditions of service.
The Doom Dooma Division comprises seven tea estates in
The Tea Estates Division in Tamil Nadu comprises seven tea estates
(planted area of approximately 3700 hectares) and six tea processing factories,
with about 6300 permanent employees. In the last three years, the Division
produced 31,200 tonnes of tea. It posted a slender profit in 2004, but incurred
losses in 2003 and 2002, once again due to adverse weather conditions, excess
supply leading to low prices at the auctions and high social costs.
The Plantation Divisions do not fit in with the objective of HLL
to focus on FMCG businesses. The company therefore believes that it would be
prudent to transfer them into separate subsidiaries with a view to providing
clear focus to operations, both in terms of land productivity and manpower
productivity to manage costs and restore economic viability. This would also
enable HLL to explore opportunities for formation of joint ventures with lead
industry players, with expertise in international sales and marketing. The
company could also consider an outright disposal, if that is considered to be
in the best interest of the business and all stakeholders.
Both the Divisions have gardens, which enjoy considerable equity
both in the domestic and international markets. But they do not realise any
premium for these equities, from captive supplies. It is believed that these
equities can be better exploited in collaboration with an industry player,
which is able to market garden teas in both domestic and international markets
at considerable premium, while taking advantage of HLL's presence in
Also, operating experience over the last few years has
demonstrated that there are very little synergies between the Plantations
Divisions and the Packet Tea business. Besides, regulatory changes,
particularly in the Tea Marketing Control Order, have further diluted synergies
for tea packaging companies, vis-ŕ-vis own plantations.
Hindustan Lever Limited - March Quarter 2007 Results
- Continuing Sales grow by 14.7%;
FMCG growth 12.3%
- PBIT grows 13.7%; PAT grows
by 13.6%
Mumbai, April 30th 2007: Hindustan
Lever Limited (HLL) announced its results for March Quarter 2007. Total Sales grew by 13.8%, while growth in
continuing businesses i.e. after eliminating impact of disposals was higher at 14.7%. Domestic FMCG business grew by 12.3%.
Home and Personal Care Business grew at 10% with double digit growth in
the highly competitive Laundry and Shampoo categories. In Laundry, Surf and Wheel brands grew
well. All brands in Shampoo category
registered impressive growth. Fair and
Lovely led this quarter's growth in Skin category. Strong performances by Lifebuoy and Lux were
the drivers of growth in Soaps category.
The key innovations during the quarter were the launches of Ponds White
Beauty range, Sunsilk Damage Repair and anti-dandruff variants, and Lux Pinkful
soap.
Foods business grew by an impressive 23%. In Beverages, the Tea business grew strongly
with the entire range of Brooke Bond brand performing well. Bru continues to power ahead for the Coffee
business. Processed Foods had another
quarter of good growth with excellent performances by both Knorr and Kissan
brands. Ice cream continued its 20%+
growth performance and the business launched the exciting "Moo" range
for children.
The business
continued to face escalating costs during the quarter. Aggressive cost saving initiatives partly
mitigated this impact. Selective price
increases were also taken to regain gross margins. The Company's investment behind its brands
continued, resulting in the quarter's Advertising and Promotion costs
increasing by 17.5%. This quarter's
results also include costs and investments associated with scaling up of the
Water business, which is progressing well on plan. Despite these costs, Profit Before Interest
and Tax (PBIT) margin was held at the same level as last year, i.e. 11.9% of
sales, with PBIT growing by 13.7%.
Profit after Tax (PAT) had a corresponding growth of 13.6%. Net Profit for the quarter declined by 11.3%,
but is not comparable due to a significant exceptional income in the base i.e.
the profit on disposal of Nihar brand in MQ 2006.
Mr. Harish
Manwani, Chairman commented: "The year has had a good start with all our
FMCG categories growing well. We have
sustained growth momentum in the key competitive categories of Laundry and
Shampoos. All the Foods categories have
performed strongly. The all round growth
has been driven by our strengthened competitiveness in the urban markets and
sustained market development in rural. Inflationary pressures remain a cause for
concern but we continue to steer aggressive cost effectiveness programmes,
manage judicious price increases and drive for an improved portfolio mix. Our strategic priority remains
unchanged. We will continue to leverage
our focussed portfolio of powerful brands to strengthen leadership in our core
categories."
HLL is
---------
Media Contacts:
Email Id : pressqueries.hll@unilever.com
Paresh Chaudhry – 022 39832478
Prasad Pradhan - 022 39832429
R Ram - 022
39832413
Yashmi Yadav - 022 39832353
UNAUDITED
FINANCIAL RESULTS FOR THE QUARTER ENDED 31 ST MARCH 2007
|
|
Rs in millions |
|
|
As on 31.03.2007 |
|
1. Net Sales |
3,843.200 |
|
i) Domestic FMCG - HPC |
2,2516.900 |
|
ii) Domestic FMCG - Foods (including Ice Cream) |
5311.800 |
|
Domestic FMCG - Total ( i+ii) |
2,7828.700 |
|
iii) Exports |
3519.300 |
|
iv) Others |
495.200 |
|
a) Continuing Business ( i+ii+iii+iv) |
3,1843.200 |
|
b) Discontinued business |
-
|
|
2. Other Income |
908.000 |
|
a) Operational |
497.300 |
|
b) Financial |
410.700 |
|
3. Total Expenditure (d+e+f+g) |
(2,8223.500) |
|
a) Increase/(decrease) in stock in trade |
758.100 |
|
b) Consumption of raw/packing materials |
(1,2948.700) |
|
c) Purchase of goods |
(5485.700) |
|
d) Cost of Goods Sold (a+b+c) |
(1,7676.300) |
|
e) Staff Cost |
(1786.800) |
|
f) Advertising & Promotions |
(3563.700) |
|
g) Other expenditure |
(5196.700) |
|
4. Interest |
(51.300) |
|
5. Gross Profit [1+2-3-4] |
4476.400 |
|
6. Depreciation / Amortisation |
(329.000) |
|
7. Profit before interest and taxation [1+2(a)-3-6] |
3788.000 |
|
8. Profit before taxation [5-6] |
4147.400 |
|
9. Provision for taxation - current tax |
(761.900) |
|
10. Provision for taxation - deferred tax |
(46.900) |
|
11. Taxation Adjustments of Previous Periods (net) |
-
|
|
12. Profit after taxation, before exceptional items
[8-9-10-11] |
3338.600 |
|
13. Exceptional Items, net of taxes |
590.300 |
|
14. Net Profit [12+13] |
3928.900 |
|
|
|
|
Paid up Equity Share Capital ( face value Re 1 per share) |
2206.800 |
|
|
|
|
|
|
|
Reserves excluding Revaluation Reserve |
|
|
|
|
|
Basic and Diluted Earnings per Share of Re 1 (not
annualised) - Rs. |
1.78 |
|
Basic and Diluted Earnings per Share of Re 1 (annualised)
- Rs. |
7.12 |
|
|
|
|
Aggregate of Non-Promoters Holdings |
|
|
- Number of Shares |
1,071,982,517 |
|
- Percentage of Shareholding |
48.58% |
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government official
or a family member or close business associate of a Government official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on Corporate
Governance to identify management and governance. These factors often have been
predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.84 |
|
|
1 |
Rs.80.73 |
|
Euro |
1 |
Rs.55.23 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
80 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|