CSR activities:

Asha Daan

HLL supports Asha Daan run in Mumbai by the Missionaries of Charity (founded by the late Mother Teresa).
Asha Daan is a home for abandoned, handicapped children, the destitute and people affected by AIDS (HIV
positive). Asha Daan had been set up on a 72,500 square feet plot, in the heart of the city leased by the
company. HLL also bears the capital and revenue expenses for maintenance, upkeep and security of the
premises

Ankur

Very similar to Asha Daan is Ankur in HLL's Doom Dooma Plantation in Assam. A centre for special
education of handicapped children aged between 5 and 15 years, it was opened in 1993. It received the
Lawrie Group Worldaware Award for Social Progress in 1999. It provides educational, vocational and
recreational activities to its 60 inmates (38 boys and 22 girls). These physically and mentally challenged
children are taught skills such as cookery, painting, embroidery, bamboo crafts, weaving, stitching,
depending on their aptitudes to make them self-reliant. A few of the children have been able to pursue
normal education in regular schools after obtaining rehabilitative support.

'Kappagam'

'Kappagam' (means 'shelter'), a second centre for special education of mentally and physically challenged
children was set up in HLL's plantations in Coimbatore district of Tamil Nadu in 1998. At present, Kappagam
takes care of seven boys and 10 girls. Apart from various rehabilitative inputs, the centre provides the
children with physiotherapy and speech therapy

Project Shakti

The objectives of Project Shakti are to create income-generating capabilities for underprivileged rural
women by providing a sustainable micro enterprise opportunity, and to improve rural living standards
through health and hygiene awareness. It has already been extended to over 5000 villages in 52 districts in
Andhra Pradesh, Karnataka, Gujarat and Madhya Pradesh. HLL's vision is to scale it up across the country
by 2010, creating about 11000 Shakti entrepreneurs, covering 100,000 villages. A typical Shakti
entrepreneur conducts business of around Rs.15,000 per month, which gives her an income in excess of
Rs.1000 per month on a sustainable basis. As most of these women are from below the poverty line, and
live in extremely small villages (less than 2000 population), this earning is very significant, and is almost
double of their past household income. For most of these families, Project Shakti is creating opportunities to
live in conditions of dignity, with real freedom from want. HLL is now in the process of piloting 'i-Shakti' an IT-
based rural information service that will provide solutions to key rural needs in the areas of agriculture,
education, vocational training, health/hygiene, etc in Nalgonda district of Andhra Pradesh.

Vindya Valley

In 2002, the company also took up a project in Madhya Pradesh, which will impact the entire state's rural
population. The mainstay of Madhya Pradesh's economy is agriculture. Prosperity thus means increasing
the income of farmers and small town and village entrepreneurs engaged in agro processing and cottage
industries. This is where HLL is contributing its expertise. It has helped the government create 'Vindhya
Valley', an umbrella brand for food products, and support software for its marketing, manufacturing and
distribution. The upgradation will generate higher sales and higher returns for rural artisan communities,
many of whom are women. To impact even larger groups, HLL is helping the government set up permanent
handicraft fairs across top cities and towns of the state. The government already operates about 15,000 fair
price shops. But there are villages still, which do not have access to such shops. Those villages have been
identified, and fair price shops will be put up, each with a cluster of villages as a catchment area. They will
be run by Self Help Groups (SHGs) and cooperatives
Khamgaon: HLL is also developing a Rural Education Programme, which aims at using audio-visual aids,
like video cassettes and CDs. These tools enable teachers to explain basic concepts in mathematics, like
operation on numbers, fractions, algebra and geometry, to primary school children in villages.
Yashodadham Village

HLL has reconstructed a village in the Bhachau Taluka of Gujarat's Kachch district. The village, which has
been named Yashodadham, was dedicated to its 1100 residents in December 2002. The residents belong to
Nani Chirai village, which was completely wrecked by the devastating earthquake of January 2001.
Yashodadham, spread over 25 acres, comprises 289 homes. HLL has also provided a school building, an
exclusive playground for children and a multi-purpose community centre, including a crèche, health centre,
community room and village administration office. All the structures are earthquake and cyclone-resistant.

Integrated rural development

Integrated Rural Development (IRD) Programme in the backward district of Etah in the state of Uttar
Pradesh (North India), was started in 1976, adjacent to the company's dairy operations. In 1976, the IRD
Programme started with 30 villages. As of now, it has been extended to about 500 villages. The basic
activity is rural development -- implementation of programmes towards activities such as farmers training,
health of villagers, infrastructure development, improvement in productivity and health of cattle in Etah. The
project is now being undertaken jointly with Nutricia India (which has acquired HLL's dairy operations) and
for certain health programmes, with government-run Primary Health Centres and through autonomous
bodies, known as Samitis.

Protecting the environment

Our Corporate Safety & Environment Protection Department ensures that all emissions from our factories
are within norms set by the respective Pollution Control Boards. To tackle the liquid effluents, gaseous
emissions and solid wastes that are generated by our factories, we follow a three-pronged Pollution Control
Strategy.

Eliminate or reduce effluent at the source of generation

Re-cycle effluent
Treat what is left

Appropriate treatment facilities are provided for balancing the effluents and are listed below.
Liquid effluents: Effluent treatment facilities are provided at all the sites that generate liquid effluents. The
treated water is used for gardening inside the factories. So far seven sites have achieved zero liquid effluent
status.
Gaseous emissions: All our factories are provided with chimneys of adequate size. Wherever necessary,
cyclones, bag filters, scrubbers and electrostatic precipitators have also been installed. To site an example,
the Haldia Chemicals complex' Sulphuric Acid Plant was the first in the country to install exotic stainless
steel heat exchangers replacing cast iron Trombone Acid Coolers, and commissioned the first start-up
Scrubber in the Eastern Region.
Solid wastes: Our factories recycle most of the solid waste either directly within the factory (e.g. use of Bio-
sludge from ETP as manure, re-use of used envelopes and computer stationary for internal
communications) or through third party contractors. We take great care to ensure that wastes are
segregated and accounted for, to facilitate recycling.
An integral part of pollution control for us is recycling of solid and liquid effluents. One of the best examples
for this is our Haldia Chemicals factory, where we produce fertilisers and industrial chemicals. The Haldia
factory does not pass on to the environment any liquid effluent or solid waste. The liquid effluent is
completely recycled in process. Similarly, solid wastes are used in the factory's process or converted into
economically useful by-products, such as soil conditioners or other industrial intermediates

CSR Activities 2006-2007 from Hindustan Lever Annual Report :

As in the earlier years, your Company continued to involve itself in social welfare initiatives across the
Country, both through charity and social investment around issues like education, health, nutrition and
initiatives for the economic upliftment of the underprivileged.
In addition to initiatives like Shakti, your Company has commenced a pilot in its tea business, in partnership
with an NGO (Partners in Change) to source tea directly from small producers and thereby improve their
livelihood.
The effort of the Company in improving water availability through soil conservation and water harvesting
methods has borne good results. In the Parkhed region (near Khamgaon factory), we have been successful
in demonstrating the effectiveness of the model which is now ready for roll out. In Kharchond, Silvassa the
area under irrigation has increased, thereby improving the economic condition of the villagers in the region.

The Company believes that brands must be at the forefront of driving social change. The extension of
theLifebuoy Swasthya Chetna programme to 43000 villages with a view to improve hygiene standards and
thereby reduce the risks of infant mortality through diarrhoea is a case in point.Your Company has
formalized a brand imprint protocol, which will help every brand to assess the opportunities for social
contribution and integrate the same in the overall brand strategy.

Promoting Women’s
Economic Empowerment:
The Learning Journey of Hindustan Unilever

“What I am most proud of is the fact that this

little idea which started with 17 women in one
state is today over 45,000 women touching
more than 100,000 villages across India.”

Nitin Paranjpe,CEO

A sari-clad woman walks confidently across the village. “When my husband left me I had
nothing.
Today everyone knows me. I am someone,” she says and smiles at the camera in the
video about
Shakti, a signature women’s empowerment initiative of Hindustan Unilever. As India’s
largest
fast-moving consumer goods company, Hindustan Unilever works to add vitality to life
and meet
everyday needs for nutrition, hygiene, and personal care. Its portfolio of brands includes
well
known products such as Dove and Sunsilk shampoos, Pond’s skincare, Lipton tea,
Lifebuoy soap
and hand wash.
The company’s work has been guided by the belief that the private sector can help create
solutions to social challenges through innovative strategies that meet both business and
social
objectives. It is this belief that led the company to develop Shakti (meaning
empowerment or
strength), a direct-to-consumer sales distribution network that relies on over 45,000
female
micro-entrepreneurs from 15 Indian states to tap into remote, rural markets in India. The
initiative
has proved a resounding success. Using an innovative distribution channel, Shakti has
helped
further rural development and has brought new business by opening previously
unexplored market.

The Business Case For Gender

Hindustan Unilever has had a long record

of market leadership in India, with market
shares of nearly 60 percent in categories
including soap, detergent, and shampoos.
But liberalization of India’s economy and
the opening up of markets to foreign
multinationals such as Procter & Gamble
led to increased pressure for Hindustan
Unilever to grow revenues and profits. By
the late 1990’s, the company still had vast
reach and was the market leader. But it was
looking for the next big opportunity, to get to
the really small villages not reached by their
distribution network.
The business case of focusing on rural
Indian markets was clear. India is the second
largest country in terms of population size
after China and over 70% of its more than
one billion people live in rural areas. While
poverty remains widespread, the consumer
potential of rural populations is growing. In the
five-year period ending in 2007, rural Indians’
consumer spending grew faster than that of
city dwellers.
While the business rationale was clear, setting
up a distribution channel to reach remote parts
of India was less straightforward. Hindustan
Unilever was tapping into some of the rural
populations through tools such as van road
shows, but a large share remained outside its
reach. Problems included poor transportation
networks, small, scattered settlements, high
illiteracy rates and poor media penetration that
made conventional advertisement methods
ineffective. Average GDP per capita in India
was $3,100 in 2009, and the per capita
consumption in rural areas is still 33% of urban
levels, even though it is growing rapidly. The
rural poor targeted by Hindustan Unilever had
little disposable income and could spend no
more than a few rupees on its products. Meeta
Singh, Hindustan Unilever’s Head of Corporate
Responsibility explains the difficulties, “The
majority of Indian villages have less than 2,000
people, and businesses don’t want to set up
there, as it’s too much of an investment.”
The company came up with an interesting
solution: build a distribution system through a
network of women micro-entrepreneurs to get
the product directly to consumers.

Focus on Empowering Women

A Differentiating Strategy
As Hindustan Unilever was contemplating
how to increase its reach, self-help groups
based on the Grameen model of microfinance
were springing up and flourishing across
India. Shakti started out by tapping into these
groups in one rural part of Andra Pradesh
in 2000. The idea was to create low-risk,
profitable micro-enterprise opportunities
for women who become direct-to-home
distributors of Hindustan Unilever’s products.
By selling directly to consumers, the women
take on a role of influencers, strengthening
their position in the local community.
The company wanted to focus on women from
the beginning. This was not only because
women tended to be its main consumers,
but also because of the belief that giving
additional income to women would result in
grater benefits for the household as a whole.
“Hindustan Unilever has always believed in
an approach to doing business which we’ve
called ‘doing well by doing good,’” Nitin
Paranjpe, the company’s CEO and Managing
Director has said. “In the Shakti initiative we
actually went to the most remote villages
and identified underprivileged families whose
household income was as low as $15 to $20
a month.”
But the idea of tapping into self-help groups
was still a departure for Hindustan Unilever.
“For a company like ours, the challenge was
to think completely out of the box. To think
of working with these rural women who had
no apparent business skills at the time was a
stretch,” explains Krishnendu Dasgupta, the
company’s Regional Brand Manager whose
portfolio includes Shakti.
Shakti is not the first project that has used
women’s self-help groups. For years, nongovernmental organizations, donors, and
government have been establishing such
groups across India. Today, eight million
Indians, 95 percent of whom are women,
benefit from microfinance, but there is still
huge unmet need. Companies like Avon or
Tupperware have used a similar distribution
model in more affluent markets. What makes
this program particularly interesting is its
focus on the country’s poorest regions to
deliver products to consumers that would
otherwise remain outside its reach.
Shakti entrepreneurs quickly became central
to the firm’s distribution network in rural
India. Over the years, the basic premise
of the program has remained the same,
but the initiative is constantly evolving to
address emerging challenges and changing
circumstances. Today, a distributor delivers
stock at the woman’s doorstep. She then
distributes it directly to consumers and to
retail outlets in her host and satellite villages.
Margins are usually higher with the direct
to consumer option than in the retail outlet
option, where maximum margins are limited to
3%. The products are packaged in quantities
small enough to be affordable to rural buyers
and often cost as little as half a rupee each. A
rural sales promoter is responsible for several
villages at a time and provides a helping hand
to the women as they grow their businesses. 3
Promoting Women’s .

Promoting Women’s Economic Empowerment

To recruit entrepreneurs, Hindustan Unilever

makes presentations at women’s self-help
group gatherings. Skakti is not a one-company
effort. The program involves a variety of other
non-state and state actors and has worked
with over 400 organizations to date to recruit
the women, provide associated training, and
roll out related initiatives.
While the women may be excited about this
income earning opportunity, turning them into
businesspeople can be challenging. “Building
the capabilities and skills of these ladies is
one of our biggest challenges. They come
from underprivileged homes and are not
very educated,” explains Hemant Bakshi, the
Executive Director of Customer Development
at Hindustan Unilever. To address this skills
gap, intensive training is required to help
the women distributors become confident
and independent. Due to this intense level of
required effort, a team of about 1,200 people
at Hindustan Unilever is involved in the initiative.
To increase the credentials of Shakti
entrepreneurs and enhance the standard of
life of the rural community, social activities
like medical camps and education programs
are run. Hindustan Unilever has also created
iShakti and Shahti Vani, which provide rural
India with access to information and social
communication. The iShakti community
portal, piloted in Andhra Pradesh, empowers
communities by creating access to relevant
information. Desktop computers are set up in
the homes of Shakti entrepreneurs, and users
can access content on categories such as
education, employment, agriculture, health,
grooming and entertainment.
These educational initiatives are so important
because lack of awareness of basic hygiene
practices is estimated to kill over 500,000
children in rural India every year. Shakti Vani
seeks to spread awareness of best practices
in health and hygiene, while also benefiting the
business. Under this scheme, a local woman
is appointed as ‘Vani’ (voice) for a cluster of
villages. She receives training on personal
and community health, and communication
materials, such as pictorial literature that
can be understood by illiterate people. She
attends meetings, organizes school contact
programs, and uses other social occasions to
clarify issues of community hygiene. The Vani
project operates in over 20,000 villages.
While the programs have been costly to set
up, increased awareness about hygiene is
expected to increase sales in the long term
while benefiting community well-being.
Shakti is Hindustan Unilever’s most visible
initiative on gender, but it is not the only
one. The company is committed to creating
equal opportunities for their staff. In 2003
they started the Fair & Lovely Foundation,
which provides information, resources, and
scholarships in the areas of education, career
and women’s enterprise. Hindustan Unilever
has also worked with the Dhan Foundation
to enhance the livelihoods of 75,000 women
by providing them with business training and
access to loans.
The company’s next frontier has been to
provide safe drinking water. Poor quality
water is a source of major disease in India.
Hindustan Unilever has worked to develop
Pureit, a relatively affordable home water
purifier. Following pilots in the south of India,
the company is now using its Shakti network
to distribute Pureit across the country.

Global Impact
By opening untapped markets through
an innovative distribution channel, Shakti
has helped further rural development
while generating business for Hindustan
Unilever. There are now over 45,000 Shakti
entrepreneurs in 135,000 villages. They
cover more than 3 million homes in India. The
company has rolled out similar initiatives in Sri
Lanka, Bangladesh and the Philippines.
Shakti has resulted in significant new
business for Hindustan Unilever. It
contributes to 15% of the company’s rural
business in India and 40% of its growth in
rural markets. In Shakti areas, the company’s
market share is about 10% better than
in non-Shakti markets. In addition to the
immediate financial benefits, the work of
Shakti entrepreneurs as brand ambassadors
has been crucial for building long-term brand
loyalty for Hindustan Unilever.
The initiative has led to increased income for
women and improved community wellbeing.
A typical entrepreneur earns about $15 to
$20 per month, often doubling household
income. In 2010, the initiative is expected
to generate an annual combined income of
over $25 million for Shakti entrepreneurs.
This additional money in the hands of women
is significant, since they have limited other
income generating opportunities and are
more likely to invest their income towards
the overall benefit of their family.
Through the program, women acquire
education, improved standing in their
communities, and greater self-esteem. They
are often treated with more respect by their
family, since they provide additional income.
One study found that the project made a
number of women aware that girls need
sufficient education to be able to generate
their own income. Shakti entrepreneurs tend
to be more confident about socializing, more
likely to take lead roles in public activities,
and they enjoy higher recognition and social
status among local people. “Until I met one
of the Shakti women, I underestimated the
potential of what multinational corporations
could do to improve the quality of life of the
underserved. By offering women opportunities
to earn income, Unilever is transforming the
lives of these women, their families and their
neighbors while also meeting the growth
aspirations of their shareholders,” said Tess
Mateo of PricewaterHouseCoopers after a
recent field visit to a Shakti village