Cream report locks in to hindustan unilever ltd. strategic framework the compass

CREAM™ Report Locks in to HUL Strategic Framework - The Compass
CREAM™ Report Locks in to Hindustan Unilever Ltd. Strategic Framework - The Compass
An IBCM© Research Publication
IBCM© Research 2014

Copyright
Published by Jayaraman Rajah Iyer
Inactivity Based Cost Management - Copyright © REGN. NO. L-27490/2006 DATED December 1, 2006
Govt. of
India, Copyrights Office, by the Author, Jayaraman Rajah Iyer
ALL RIGHTS RESERVED. No part of this Publication may be
reproduced, stored in a retrieval systems, transmitted, in any form or by
any means – electronic, mechanical, photocopying, or otherwise without
the prior permission in writing from the Author.
Published by
Jayaraman Rajah Iyer
The information on Hindustan Unilever Ltd is from the public domain. HUL has not associated in any way for the
CREAM™ Report

Table of Contents
CREAM™ Report Locks in to Hindustan Unilever Ltd. Strategic Framework - The Compass..................................... 1
CREAM™ Report Structure:.................................................................................................................................. 5
Table 1: Profit & Loss Statement - 2007 - Q1-Q3 2013-14...................................................................................... 6
Table 2: Balance Sheet - 2007 - Q1-Q3 2013-14.................................................................................................... 7
Table 3: Profit and Loss Statement - Revenue - Rating - 2007 - Q1-Q3 2013-14......................................................8
Table 4: Profit and Loss Statement - Consumption - Rating - 2007 - Q1-Q3 2013-14...............................................9
Table 5: Profit and Loss Statement - employee Costs - Rating - 2007 - Q1-Q3 2013-14......................................... 10
Table 6: Profit and Loss Statement - Advertisement & Promotion - Rating - 2007 - Q1-Q3 2013-14......................11
Table 7: Profit and Loss Statement - Other Expenses - Rating - 2007 - Q1-Q3 2013-14.........................................12
Table 8: Profit and Loss Statement - Finance Costs - Rating - 2007 - Q1-Q3 2013-14............................................13
Table 9: Profit and Loss Statement - Net Profits - Rating - 2007 - Q1-Q3 2013-14.................................................14
Table 10: Profit and Loss Statement - Rating - 2007 - Q1-Q3 2013-14.................................................................. 15
Table 11: Balance Sheet - Trade Payables - Rating - 2007 - Q1-Q3 2013-14.......................................................... 16
Table 12: Balance Sheet - Net Assets - Rating - 2007 - Q1-Q3 2013-14................................................................. 17
Table 13: Balance Sheet - Inventories - Rating - 2007 - Q1-Q3 2013-14................................................................ 18
Table 14: Balance Sheet - Trade Receivables - Rating - 2007 - Q1-Q3 2013-14......................................................19
Table 15: Balance Sheet - Current Investments - Rating - 2007 - Q1-Q3 2013-14.................................................. 20
Table 16: Balance Sheet - Rating - 2007 - Q1-Q3 2013-14.................................................................................... 21
Table 17: P&L And Balance Sheet - Rating - 2007 - Q1-Q3 2013-14...................................................................... 22
Table 18: Business Segments - Soaps and Detergents- Revenue - Rating - 2007 - Q1-Q3 2013-14.........................23
Table 19: Business Segments - Soaps and Detergents- Operating Expenses- Rating - 2007 - Q1-Q3 2013-14.........24
Table 20: Business Segments - Personal Products - Revenue - Rating - 2007 - Q1-Q3 2013-14.............................. 25
Table 21: Business Segments - Personal Products - Operating expenses - Rating - 2007 - Q1-Q3 2013-14.............27
Table 22: Business Segments - Beverages - Revenue - Rating - 2007 - Q1-Q3 2013-14.......................................... 28
Table 23: Business Segments - Beverages - Operating Expenses - Rating - 2007 - Q1-Q3 2013-14.........................29
Table 24: Business Segments - Packaged Foods - Revenue - Rating - 2007 - Q1-Q3 2013-14.................................30
Table 25: Business Segments - Packaged Foods - Operating Expenses - Rating - 2007 - Q1-Q3 2013-14................31
Table 26: Business Segments - Others- Revenue - Rating - 2007 - Q1-Q3 2013-14................................................ 32
Table 27: Business Segments - Others- Operating expenses - Rating - 2007 - Q1-Q3 2013-14............................... 33
Table 28: Business Segments - Consolidated - Net Rating - 2007 - Q1-Q3 2013-14............................................... 35
Table 29: CREAM™ Report - Consolidated - 2007 - Q1-Q3 2013-14....................................................................... 36

CREAM™ Report Structure:

Table 1: Profit & Loss Statement - 2007 - Q1-Q3 2013-14
2007 2008-09 2009-10 2010-11 2011-12 2012-13
Net Sales 13675.43 20239.33 17523.80 19735.51 22116.37 25,810.21 6687.49 6747.20 7037.78 20472.47
Other Op. Income 431.53 589.72 349.64 272.88 278.31 606.90 121.55 145.44 185.57 452.56
14106.96 20829.05 17873.44 20008.39 22394.68 26,417.11 6809.04 6,892.64 7,223.35 20,925.03
11,935.13 17,778.61 15,159.39 17,277.95 19,043.28 22,042.48 5789.88 5,871.25 6,060.97 17,722.10
5,290.39 8,386.54 6,608.87 7,550.49 8584.89 10,284.66 2625.23 2,923.03 2,701.51 8,249.77
2,122.56 2,845.07 2,291.74 2,818.13 3024.14 3,235.31 749.82 812.27 837.44 2,399.53
c) Changes in inventories -144.40 -421.56 -22.72 -290.53 128.73 -31.13 107.75 -265.38 121.12 -36.51
Sub-Total Consumption 7268.54 10810.05 8877.89 10078.09 11737.76 13488.84 3482.80 3469.92 3660.07 10612.79
d) Employee benefits 767.81 1,152.12 936.30 961.26 1107.28 1,318.34 341.68 368.30 347.72 1,057.70
e) Depreciation.. 138.36 195.30 184.03 220.83 218.25 236.02 66.44 63.92 64.42 194.78
g) Other expenses 731.41 2,130.92 2,391.43 2764.23 2634.79 3,231.88 889.78 954.02 929.46 2,773.26
g) Other expenses 3,029.01 3,490.22 2,769.74 3,253.54 3345.20 3,767.40 1009.18 1,015.09 1,059.30 3,083.57
3. Profit from ops(1-2) 2,171.83 3,050.44 2,714.05 2,730.44 3,351.40 4,374.63 1019.16 1,021.39 1,162.38 3,202.93
4. Other Income 176.75 150.99 142.66 470.40
2,171.83 3,050.44 2,714.05 2,730.44 3,351.40 4,374.63 1195.91 1,172.38 1,305.04 3,673.33
6. Finance costs 25.50 25.32 6.98 0.24 1.24 25.15 6.22 6.28 18.20 30.70
2,146.33 3,025.12 2,707.07 2,730.20 3,350.16 4,349.48 1189.69 1,166.10 1,286.84 3,642.63
182.35 -4.26 99.35 206.83 118.87 608.40 106.25 33.43 22.97 162.65
2,328.68 3,020.86 2,806.42 2,937.03 3,469.03 4,957.88 1295.94 1,199.53 1,309.81 3,805.28
10. Tax expense 403.21 524.41 604.39 631.04 777.63 1,161.21 276.69 285.73 247.50 809.92
11. NP af Tax[9-10] 1,925.47 2,496.45 2,202.03 2,305.99 2,691.40 3,796.67 1019.25 913.80 1,062.31 2,995.36
Particulars
P&L A/c Rs. Cr.
Q1-
2013'14
Q2-
2013'14
Q3-
2013'14
Q1-3:
2013-14
1. Total Income from
operations (net)
2. Expenses [sum of (a) to
(g)]
a) Cost of materials
consumed
b) Purchases of stock-in-
trade
5. Profit from ordinary
activities (3+4)
7. Profit afer finance
costs (5-6)
8. Exceptional Items - net
credit/ (charge)
9. Profit from Ordinary
Activities Before Tax
(7+8)

Table 2: Balance Sheet - 2007 - Q1-Q3 2013-14
EQUITY AND LIABILITIES Rs. Cr
Shareholders’ funds 2007 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Q2
(a) Share capital 217.75 217.99 218.17 215.95 216.15 216.26 216.25
(b) Reserves and surplus 1221.49 1843.52 2365.35 2443.57 3296.78 4406.53 2457.77
Sub-total - Shareholders' funds 1439.23 2061.51 2583.52 2659.52 3512.93 4622.79 2674.02
Non-current liabilities
(a) Other long-term liabilities 25.52 144.65 219.20 329.69 481.41 476.25
(b) Long-term provisions 663.87 666.95 703.73 706.34
Sub-total 25.52 144.65 0.00 883.07 996.64 1185.14 1182.59
Current liabilities
(a) Trade payables 3837.09 4255.82 5291.66 5009.05 4622.96 5748.82 5167.69
(b) Other current liabilities 63.01 277.30 554.59 546.77 836.62 616.15
(c) Short-term provisions 1273.90 1527.98 1441.55 1056.43 1278.97 501.10 1872.02
Sub-total - Current liabilities 5173.99 6061.10 6733.21 6620.07 6448.70 7086.54 7655.86
TOTAL - EQUITY AND LIABILITIES 6638.75 8267.26 9316.73 10162.66 10958.27 12894.47 11512.47
ASSETS
Non-current assets
(a) Fixed assets 1708.14 2078.85 2436.07 2457.86 2362.92 2548.43 2508.54
(b) Non-current investments 1440.81 332.62 1264.08 120.58 186.31 650.15 548.03
(c) Deferred tax assets (net) 212.39 254.83 248.82 209.66 214.24 189.30 204.78
(d) Long-term loans and advances 400.31 396.18 509.98 384.29
(e) Other non-current assets 297.02 296.84
Sub-total - Non-current assets 3361.34 2666.30 3948.97 3188.41 3159.65 4194.88 3942.48
Current assets
(a) Current investments 1140.09 2251.90 2327.04 1782.63
(b) Inventories 1953.60 2528.86 2179.93 2810.77 2516.65 2623.13 2526.99
(c) Trade receivables 443.37 536.89 678.44 943.21 678.99 679.40 833.48
(d) Cash and bank balances 200.86 1777.35 1892.21 1628.47 1830.04 2445.95 1707.89
(e) Short-term loans and advances 667.18 742.12 600.56 416.35 485.79 535.80 648.26
(f) Other current assets 12.39 15.74 16.62 35.36 35.25 88.27 70.74
Sub-total - Current assets 3277.41 5600.96 5367.76 6974.25 7798.62 8699.59 7569.99
TOTAL - ASSETS 6638.75 8267.26 9316.73 10162.66 10958.27 12894.47 11512.47

Table 3: Profit and Loss Statement - Revenue - Rating - 2007 - Q1-Q3 2013-14
Rating Table for 15%
DQ2013:
Harish Manwani, Chairman
commented: “Our growth has been
competitive and profitable and the
results are a reflection of how we
dynamically managed the business
despite the headwinds in the
environment. Looking forward, we
are conscious of the uncertain
macro context but remain positive
on the mid to long term
opportunities in our sector. We are
determined to stay the course on
our strategy and will continue to
invest in the business for the long
term.”
CREAM™ Report:
1. Revenue from ops./day optimised in the year 2008-09. Current year 2013-14 JQ13 to DQ13
cum. is at 3.
2. Optimised at 5 is in the bandwidth of >15%. For 9-months DQ13 results the rating is 3 i.e.
between >7.5%< 11.25%.
3. At optimised level of 15% the Net Sales/day should have risen to Rs.79.42 crores. Such was
possible in the year 2008-09 but subsequently it has maintained a reasonable achievement in the
year 2010-11, -12, -13 but the year under scrutiny it is pretty low.
4. 'stay the course on our strategy' - staying the course may not be difficult but maintaining a
growth rate of 15% will be challenging. The last quarter daily sale should be Rs.94.61 cr. i.e.
Rs.8515 cr. as against Rs.7037 cr. of DQ13. Strategy needs a revisit on segmental growth beyond
the current segments. It takes a minimum of 5 years for the new segments to turn out results
>15% to compensate for the inadequacy of the current segments.
7. Consistency is lost, to regain it, Strategy is indeed called for.
Proft & Loss A/c: Revenue:
Rs. Cr. Rating
2007 [365] 13675.43 37.47
2008-09 [457] 20239.33 44.29 18.20% 5
2009-10 [365] 17523.80 48.01 8.41% 3
2010-11 [365] 19735.51 54.07 12.62% 4
2011-12 [366] 22116.37 60.43 11.76% 4
2012-13 [365] 25206.38 69.06 14.28% 4
Q1-2013-14 [91] 6687.49 73.49 6.42% 2
Q2-2013-14 [92] 6747.20 73.34 -0.20% 0
Q3-2013-14 [92] 7037.78 76.50 4.31% 2
Q1-Q3 2013-14 [275] 20472.47 74.45 7.80% 3
Revenue
from ops.
Per day
Rev.
Inc./(dec)
% p-to-p

Table 4: Profit and Loss Statement - Consumption - Rating - 2007 - Q1-Q3 2013-14
"DQ13: As you can see, there has
clearly been a very sharp
depreciation of the rupee that
impacted the input cost on oils, on
PFAD as well as in crude...
DQ13: Operating margins grew by
13% driven by an expansion in
operating margins of 50 basis
points. This in turn was driven by a
lower cost of goods sold, managed
through a combination of judicious
pricing, winning of some of the
promotional activities that were in
place in the previous quarter and
also aggressively driving cost
savings. R.Sridhar"
CREAM™ Report:
1.Cost savings in SQ13 a trend set by JQ13 failed to catch up with in DQ13. However 9 months
performance is better by 3.13%, over previous year.
2. From 75 years issue Our Journey: a. The crisis: The declining Market: But they [households] did
downtrade from higher quality brands to lower priced substitutes. b. A shared vision: Local R&D
operations commenced in late 1950s and had grown to a full blown research and development
centre of a scale and size by the mid-1960s that came to be the envy of any private sector
company in India.
3. HUL always highlighted the contribution of the import substitutes R&D had developed. Cost
inflation on account of imports is a bit of a surprise, in 2013.
4. Net Sale with a Rating of 3 (9-months 2013-14) and reduced consumption cost at a Rating of 1
(i.e >0% <3.75%) results in a Net Rating of 2. Both need to achieve a Rating of 5.
Proft & Loss A/c: Consumption:
Consumption Rs. Cr. Rating
2007 [365] 7268.54 19.91 53.15%
2008-09 [457] 10810.05 23.65 53.41% -0.49% 0
2009-10 [365] 8877.89 24.32 50.66% 5.15% 2
2010-11 [365] 10078.09 27.61 51.07% -0.80% 0
2011-12 [366] 11737.76 32.07 53.07% -3.93% 0
2012-13 [365] 13488.84 36.96 53.51% -0.83% 0
Q1-2013-14 [91] 3482.80 38.27 52.08% 2.68% 1
Q2-2013-14 [92] 3469.92 37.72 51.43% 1.25% 1
Q3-2013-14 [92] 3660.07 39.78 52.01% -1.12% 0
Q1-Q3 2013-14 [275] 10612.79 38.59 51.84% 3.13% 1
Consum-
ption
Per day
Consmn
% Net
Revenue
(Inc.)/dec
% p-to-p

Table 5: Profit and Loss Statement - employee Costs - Rating - 2007 - Q1-Q3 2013-14
"We had called out at the
beginning of the year that some of
the teams that were housed within
HUL and operating to global
programmes which is what we
called the Enterprise Support
Operation based out of Bangalore -
they from January 2013 moved
into a separate entity. Therefore,
you will see the other operational
income going down and you see
the staff cost also going down
because these are now being
incurred separately. So you see
there was both in the revenue line
as well as in the cost line, that will
pan out in the next quarter or so
and then, this will not be a
reconciling item. R Sridhar"
CREAM™ Report:
1. %Net Revenue refers to the Operating Revenue and does not include other operating income.
This has resulted in a higher Rating for DQ13. Also to note 2009-10 & 2010-11 had recorded
better Net Revenue turnover per employee-cost ratio.
2. There are 189 process blocks CREAM™ Report measures Employee capability that 2 out of 189
process blocks, Quarterly Report deals with. Those two process blocks are represented by P&L
a/c and Balance Sheet.
3. These two process blocks are of Quantitative elements and the other 187 of Qualitative
elements essential in figuring out why the ratings are at 1 for the period of 9-months in 2013-14.
Proft & Loss A/c: Employee Costs:
Rs. Cr. Empl Cost per day Rating
2007 [365] 767.81 2.10 5.61%
2008-09 [457] 1152.12 2.52 5.69% -1.39% 0
2009-10 [365] 936.30 2.57 5.34% 6.14% 2
2010-11 [365] 961.26 2.63 4.87% 8.84% 3
2011-12 [366] 1107.28 3.03 5.01% -2.79% 0
2012-13 [365] 1318.34 3.61 5.23% -4.47% 0
Q1-2013-14 [91] 341.68 3.75 5.11% 2.31% 1
Q2-2013-14 [92] 368.30 4.00 5.46% -6.84% 0
Q3-2013-14 [92] 347.72 3.78 4.94% 9.49% 3
Q1-Q3 2013-14 [275] 1057.70 3.85 5.17% 1.22% 1
% Net
Revenue
(Inc.)/dec
% p-to-p

Table 6: Profit and Loss Statement - Advertisement & Promotion - Rating - 2007 - Q1-Q3 2013-14
"We have said earlier also that the
level of A&P investment that we
make in any period is a function of
two things. One, the level of
competitive intensity in the market
particularly the A&P intensity that
we see. And number two, the
innovation programmes that we
bring to the market and the need to
communicate what's new to the
consumers.
And therefore, all I can say is that
including the December quarter, we
have maintained competitiveness of
our A&P spend. R Sridhar"
CREAM™ Report: It reflects so in the year 2011-12 and Q3 current year. In both the cases
reduction in A&P spend give a better Rating.
Proft & Loss A/c: Advt. & Promo:
Advt. Rating
2007 [365] 731.41 2.00 5.35%
2008-09 [457] 2130.92 4.66 10.53% -96.86% 0
2009-10 [365] 2391.43 6.55 13.65% -29.62% 0
2010-11 [365] 2764.23 7.57 14.01% -2.64% 0
2011-12 [366] 2634.79 7.20 11.91% 14.94% 4
2012-13 [365] 3231.88 8.85 12.82% -7.62% 0
Q1-2013-14 [91] 889.78 9.78 13.31% -3.77% 0
Q2-2013-14 [92] 954.02 10.37 14.14% -6.27% 0
Q3-2013-14 [92] 929.46 10.10 13.21% 6.60% 2
Q1-Q3 2013-14 [275] 2773.26 10.08 13.55% -5.65% 0
Rs. Cr. Advt. &
Promo.
Per day
Advt.
% Net
Revenue
(Inc.)/dec
% p-to-p

Table 7: Profit and Loss Statement - Other Expenses - Rating - 2007 - Q1-Q3 2013-14
"As far as other expenses are
concerned, I think, there are two
parts to it. Firstly, in terms of
philosophy, we look to drive
leverage from all elements of cost
and that’s absolutely true with the
items of cost sitting in other
expenses. R.Sridhar"
"And where it is more rural
dominated, I will certainly bring in
the experience of my working in
countries like Egypt into play -
Sanjiv Mehta"
CREAM™ Report:
1. A&P is shown separately and does not form part of Other expenses.
2. Royalty is one major expense that would be escalating each year. Driving leverage out of
Royalty should be made measurable.
3. Rating of this process block 'other expenses' brings down the ratings of other process blocks.
What is needed is to measure strategies, while adopting Cairo Model or Middle-East Model to co-
relate the efficacy of paying Royalty to a different outfit.
5. Other expenses excluding A&P are three times of employee costs.
Proft & Loss A/c: Other Expenses:
Rating
2007 [365] 3029.01 8.30 22.15%
2008-09 [457] 3490.22 7.64 17.24% 22.14% 5
2009-10 [365] 2769.74 7.59 15.81% 8.35% 3
2010-11 [365] 3253.54 8.91 16.49% -4.30% 0
2011-12 [366] 3345.20 9.14 15.13% 8.25% 3
2012-13 [365] 3767.40 10.32 14.95% 1.18% 1
Q1-2013-14 [91] 1009.18 11.09 15.09% -0.97% 0
Q2-2013-14 [92] 1015.09 11.03 15.04% 0.30% 1
Q3-2013-14 [92] 1059.30 11.51 15.05% -0.05% 0
Q1-Q3 2013-14 [275] 3083.57 11.21 15.06% -0.77% 0
Rs. Cr. Other exps. Other Exps Per day
Other
Exps
% Net
Revenue
(Inc.)/dec
% p-to-p

Table 8: Profit and Loss Statement - Finance Costs - Rating - 2007 - Q1-Q3 2013-14
CREAM™ Report:
1. Finance cost is a reflection on investment and growth in
new business segments.
2. Rating collectively arrived at for the two process blocks of
CREAM™ Report which is E representing P&L Rating and
Balance Sheet Rating reflects the growth of HUL since 2007.
3. When demand for investment and growth is waning it
reflects HUL's space in India's potential development.
"Just to talk you through the
movement between our
operating profit growth of 13%
and our net profit increase, you
will see that the lines of other
income and finance cost are
more or less similar to the
previous time except that in the
finance cost, there is the impact
of interest related to income tax
that was charged during the
quarter..
Our strategy which is outlined in
the Compass remains unchanged
and our focus remains to manage
the business for long-term
growth to deliver on our
strategic objectives of
Consistent, Competitive,
Profitable and Responsible
growth. We will do this by both
investing to strengthen our core
and at the same time investing to
lead development of emerging
categories. R.Sridhar"
Proft & Loss A/c: Finance Costs:
Rs. Cr. Fin Costs Fin Costs Rating
2007 [365] 25.50 0.07 0.19%
2008-09 [457] 25.32 0.06 0.13% 32.90% 5
2009-10 [365] 6.98 0.02 0.04% 68.16% 5
2010-11 [365] 0.24 0.00 0.00% 96.95% 5
2011-12 [366] 1.24 0.00 0.01% -361.05% 0
2012-13 [365] 25.15 0.07 0.10% -1679.59% 0
Q1-2013-14 [91] 6.22 0.07 0.09% 6.78% 2
Q2-2013-14 [92] 6.28 0.07 0.09% -0.07% 1
Q3-2013-14 [92] 18.20 0.20 0.26% -177.84% 0
Q1-Q3 2013-14 [275] 30.70 0.11 0.15% -50.29% 0
Per day
Fin Cost
% Net
Revenue
(Inc.)/dec %
p-to-p

Table 9: Profit and Loss Statement - Net Profits - Rating - 2007 - Q1-Q3 2013-14
"Net profit is more or less at the
similar level as the nine months
of the previous financial year
albeit with a huge property sale
from the Gulita property in the
financial year ending March
2013. Underlying profit afer tax,
which is PAT (bei) went up by 9%
and net profit at 1062 crores was
up 22% aided by exceptional
items. R.Sridhar"
CREAM™ Report:
1. Barring two periods DQ13 and 2012-13 when exceptional items came to the rescue the rest are
in the expected pattern over the years, considering the limited area of business segments.
2. Freshly introduced business segments pertaining to 'others' failed to stimulate growth needed
to higher CREAM™ Report ratings.
3. HUL CREAM™ Report P&L Rating, as follows, reflects HUL Growth related capability.
Denominator for HUL CREAM™ Report Rating is Capability as measured by Return on Intangible.
Proft & Loss A/c: Net Profts:
Rs. Cr. Net Profts Net Profts Rating
2007 [365] 1925.47 5.28 14.08%
2008-09 [457] 2496.45 5.46 12.33% -12.39% 0
2009-10 [365] 2202.03 6.03 12.57% 1.88% 1
2010-11 [365] 2305.99 6.32 11.68% -7.01% 0
2011-12 [366] 2691.40 7.35 12.17% 4.15% 2
2012-13 [365] 3796.67 10.40 15.06% 23.77% 5
Q1-2013-14 [91] 1019.25 11.20 15.24% 1.19% 1
Q2-2013-14 [92] 913.80 9.93 13.54% -11.14% 0
Q3-2013-14 [92] 1062.31 11.55 15.09% 11.45% 3
Q1-Q3 2013-14 [275] 2995.36 10.89 14.63% -2.86% 0
Per day
NP
% Net
Revenue
Inc./(dec)
% p-to-p

Table 10: Profit and Loss Statement - Rating - 2007 - Q1-Q3 2013-14
DQ 2013 Results Presentation – Jan
27, 2014: Safe Harbour Statement:
"This Release / Communication,
except for the historical
information, may contain
statements, including the words or
phrases such as ‘expects,
anticipates, intends, will, would,
undertakes, aims, estimates,
contemplates, seeks to, objective,
goal, projects, should’ and similar
expressions or variations of these
expressions or negatives of these
terms indicating future performance
or results, financial or otherwise,
which are forward looking
statements. These forward looking
statements are based on certain
expectations, assumptions,
anticipated developments and other factors which are not limited to, risk and uncertainties regarding
fluctuations in earnings, market growth, intense competition and the pricing environment in the market,
consumption level, ability to maintain and manage key customer relationship and supply chain sources
and those factors which may affect our ability to implement business strategies successfully, namely
changes in regulatory environments, political instability, change in international oil prices and input costs
and new or changed priorities of the trade. The Company, therefore, cannot guarantee that the forward
looking statements made herein shall be realised.
"As far as fixed cost base and operating leverage in the context of low volume growth, I think,
Jamshed, you are aware that we in Hindustan Unilever have a very well embedded process of
what we call cost effectiveness programme that you are very well embedded over many, many
years if not decades. R.Sridhar"
CREAM™ Report: CREAM™ Report encourages companies to fix the target of P&L Rating, that
HUL current year being at 0 as above, to an optimum level of 5 for any near or distant future
date.
Proft & Loss A/c: Rating
Rating P&L A & P N.P.
2007 [365]
2008-09 [457] 5 0 0 0 5 5 0 2
2009-10 [365] 3 2 2 0 3 5 1 2
2010-11 [365] 4 0 3 0 0 5 0 1
2011-12 [366] 4 0 0 4 3 0 2 1
2012-13 [365] 4 0 0 0 1 0 5 1
Q1-2013-14 [91] 2 1 1 0 0 2 1 1
Q2-2013-14 [92] 0 1 0 0 1 1 0 0
Q3-2013-14 [92] 2 0 3 2 1 0 3 1
3 1 1 0 0 0 0 0
Revenu
e
Consu
m.
Emp
Cost
Other
exps.
Fin
Cost
Rating
P&L
Q1-Q3 2013-14
[275]

Table 11: Balance Sheet - Trade Payables - Rating - 2007 - Q1-Q3 2013-14
From Annual Report 2012-13: "
8) Dues To Micro And Small
Enterprises
There are no Micro and Small
Enterprises, to whom the
Company owes dues, which are
outstanding for more than 45
days as at March 31, 2013. This
information as required to be
disclosed under the Micro, Small
and Medium Enterprises
Development Act, 2006 has
been determined to the extent
such par ties have been
identified on the basis of
information available with the
Company. "
CREAM™ Report: It is encouraging to see steady decline in number of days of consumption on
account of Trade Payables.
Year 2007 to 2009-10 were the watershed years when high Trade Payables gave an impression of
surplus disposable cash used for market speculation, time even manufacturing companies
indulged in a spot of croupier's delight.
Balance Sheet: Trade Payables
Rs. Cr. Trade Payables Rating
2007 [365] 3837.09 19.91 193
2008-09 [457] 4255.82 23.65 180 6.63% 2
2009-10 [365] 5291.66 24.32 218 -20.92% 0
2010-11 [365] 5009.05 27.61 181 16.61% 5
2011-12 [366] 4622.96 32.07 144 20.54% 5
2012-13 [365] 5748.82 36.96 156 -7.91% 0
Q1-2013-14 [91] 38.27
Q2-2013-14 [92] 5167.69 37.72 137 11.92% 4
Q3-2013-14 [92] 39.78
38.59
trade
Payables
Per day
Consumpti
on
No of days
consumpti
on
(Inc.)/dec
% p-to-p
Q1-Q3 2013-14 [275]

Table 12: Balance Sheet - Net Assets - Rating - 2007 - Q1-Q3 2013-14
"As we look ahead, the first thing
to say is that our strategy which is
outlined in the Compass remains
unchanged and our focus remains
to manage the business for long-
term growth to deliver on our
strategic objectives of Consistent,
Competitive, Profitable and
Responsible growth. We will do
this by both investing to
strengthen our core and at the
same time investing to lead
development of emerging
categories. R.Sridhar"
CREAM™ Report: CREAM™ Report has locked in to HUL Compass. Requests segment assets
published every quarter.
Balance Sheet: Net Assets
Rs. Cr. Net Assets Rating
2007 [365] 1708.14 38.65 2.26%
2008-09 [457] 2078.85 45.58 2.19% -3.10% 0
2009-10 [365] 2436.07 48.97 2.01% -8.32% 0
2010-11 [365] 2457.86 54.82 2.23% 10.95% 3
2011-12 [366] 2362.92 61.19 2.59% 16.11% 5
2012-13 [365] 2548.43 70.71 2.77% 7.15% 2
Q1-2013-14 [91] 74.82
Q2-2013-14 [92] 2508.54 74.92 2.99% 7.63% 3
Q3-2013-14 [92] 78.51
76.09
Net
Assets
Per day
Rev. from
Ops.
Net
Rev./day as
% of NA
Inc./(dec)
% p-to-p
Q1-Q3 2013-14 [275]

Table 13: Balance Sheet - Inventories - Rating - 2007 - Q1-Q3 2013-14
"So I wouldn’t call it as
inventory build-up; it’s more
about preparing in advance of a
season so that our products are
there on the shelf before our
competition is there and gives
the opportunity for us with
consumers. But this time
around, obviously, winter being
delayed, that took some time to
work its way through. There is
no issue as far as inventory
levels are concerned. R.Sridhar"
CREAM™ Report: There is a steady decline of number of days of inventory.
Balance Sheet: Inventories
Rs. Cr. Inventories Rating
2007 [365] 1953.60 19.91 98
2008-09 [457] 2528.86 23.65 107 -8.98% 0
2009-10 [365] 2179.93 24.32 90 16.17% 5
2010-11 [365] 2810.77 27.61 102 -13.58% 0
2011-12 [366] 2516.65 32.07 78 22.91% 5
2012-13 [365] 2623.13 36.96 71 9.55% 3
Q1-2013-14 [91] 38.27
Q2-2013-14 [92] 2526.99 37.72 67 5.61% 2
Q3-2013-14 [92] 39.78
38.59
Inventorie
s
Per day
Consumpti
on
No. of
days/
Inventories
(Inc.)/dec
% p-to-p
Q1-Q3 2013-14 [275]

Table 14: Balance Sheet - Trade Receivables - Rating - 2007 - Q1-Q3 2013-14
CREAM™ Report: Will be a
healthy competition between
Inventories and Receivables
towards JIT and Cash Sales,
among companies.
Balance Sheet: Trade Receivables
Rating
2007 [365] 443.37 38.65 11
2008-09 [457] 536.89 45.58 12 -2.68% 0
2009-10 [365] 678.44 48.97 14 -17.62% 0
2010-11 [365] 943.21 54.82 17 -24.19% 0
2011-12 [366] 678.99 61.19 11 35.51% 5
2012-13 [365] 679.40 70.71 10 13.42% 4
Q1-2013-14 [91] 74.82
Q2-2013-14 [92] 833.48 74.92 11 -15.79% 0
Q3-2013-14 [92] 78.51
76.09
Rs. Cr. Trade
Receivables
Trade
Receivabl
es
Per day
Rev. from
Ops.
No. of
days/ TR
(Inc.)/dec
% p-to-p
Q1-Q3 2013-14 [275]

Table 15: Balance Sheet - Current Investments - Rating - 2007 - Q1-Q3 2013-14
CREAM™ Report:
2007 was indeed a
watershed year.
189 process blocks
that CREAM™ Report
had analysed HUL for
the period 2007 to
2012-13 measures
conflicts of interests,
conflicts of personal
interests, conflicts of
conscience vis-a-vis
Share Dealing Code,
Code Of Conduct,
Code Of Business
Principles, UNGC
Global Compact etc.
Quarterly Reports are quite limited in their disclosures. Only 2 process blocks (i.e.E) in CREAM™
Report are analysed with less information. CRAM does not appear at all in the Quarterly Reports.
For the purpose of Rating for the year 2012-13 are added to Quarterly Results.
Rs. cr. 2007 2008-09 2009-10 2010-11 2011-12 2012-13
per day purchases 38.77 27.33 16.79 7.01 38.16 43.44
per day sales 41.50 29.87 14.27 43.13 35.32 44.88
Total Investments Activity 80.27 57.20 31.06 50.14 73.48 88.32
per day Net Sales 38.65 45.58 48.97 54.82 61.19 70.71
% of Investments Activity/
Net Sales
207.68% 125.49% 63.43% 91.46% 120.08% 124.90%
(Inc)/Dec. p-to-p 39.57% 49.46% -44.20% -31.29% -4.01%
Rating 5 5 0 0 0
Balance Sheet: Current Investments:
Rating
2007 [365] 15148.67 41.50 38.65 107.38%
2008-09 [457] 13649.75 29.87 45.58 65.53% 38.97% 5
2009-10 [365] 5207.15 14.27 48.97 29.13% 55.54% 5
2010-11 [365] 15743.54 43.13 54.82 78.68% -170.08% 0
2011-12 [366] 12928.31 35.32 61.19 57.73% 26.63% 5
2012-13 [365] 16382.18 44.88 70.71 63.47% -9.95% 0
Q1-2013-14 [91] 0.00 74.82
Q2-2013-14 [92] 0.00 74.92
Q3-2013-14 [92] 0.00 78.51
0.00 76.09
Rs. Cr. Current
Investments
Sale of
Investments
Rs.
per
day/sale Rs.
per day/
Net Rev.
ops Rs..
Investment
activity/Op
s
(Inc.)/dec %
p-to-p
Q1-Q3 2013-14 [275]

Table 16: Balance Sheet - Rating - 2007 - Q1-Q3 2013-14
CREAM™ Report:
The overall efficiency rate of
selected Balance Sheet items is
inversely proportional to the
Investment Activity.
DQ13 does not provide
Investment Activity figures.
Growth rate therefore is
stunted. Is less than 3.75%.
Balance Sheet: Rating
Rs. Cr.Balance Sheet
2007 [365]
2008-09 [457] 2 0 0 0 5 1
2009-10 [365] 0 0 5 0 5 2
2010-11 [365] 5 3 0 0 0 1
2011-12 [366] 5 5 5 5 0 4
2012-13 [365] 0 2 3 4 0 1
Q1-2013-14 [91]
Q2-2013-14 [92] 4 3 2 0 2
Q3-2013-14 [92]
Q1-Q3 2013-14 [275]
trade
Payables
Net
Assets
Inven-
tories
Trade
Receiv-
ables
Cur.
Investm
ents
Rating
B/S

Table 17: P&L And Balance Sheet - Rating - 2007 - Q1-Q3 2013-14
CREAM™ Report:
The overall efficiency rate of
selected Balance Sheet and P&L
result in the current rating of 1
which is below 3.75%.
The rate of growth for all activities
together including exceptional
items is below 3.75%, i.e. Rating of
1.
Rating of 1 in the scale of 1 to 5
means 80% remains to be targeted
for optimising several areas in 4Gs
compass.
80% by CREAM™ Report is known
as Index of Inactivity shared by 5
member team in each process block
consisting of Ethical Responsibility
and Fiscal Responsibility.
Since Fiscal responsibility is not yet aligned to Ethical Responsibility the Ratings as above on P&L
and B/S will further deteriorate. Process block re-engineering by a common denominator is
crucial.
CREAM™ Report integrating Fiscal and Ethical Responsibility is a prerequisite to bridge the huge
gap of 80%.
Business Segment analysis follows. CREAM™ Report final Ratings follow subsequent to the
Business Segment Ratings.
Summary: P&L And Balance Sheet: Rating
P&L:Balance Sheet P&L Rating
2007 [365]
2008-09 [457] 0 1 0
2009-10 [365] 1 2 1
2010-11 [365] 0 1 0
2011-12 [366] 2 4 3
2012-13 [365] 5 1 3
Q1-2013-14 [91] 1 1
Q2-2013-14 [92] 0 2 1
Q3-2013-14 [92] 3 3
0 0
Balance
Sheet
Q1-Q3 2013-14 [275]

Table 18: Business Segments - Soaps and Detergents- Revenue - Rating - 2007 - Q1-Q3 2013-14
"soaps and detergent business .... was managed through judicious pricing ...
It is true in soaps also that the volume growths have been coming down in the market...
the mix in our very very large segments – soaps and detergents, the mix of price and volume growth in
December quarter has been more price and less volume and that’s really the principal reason for the UVG
being about a percent lower on a sequential basis in this quarter...
We have grown ahead of the market in soaps as well. It is true in soaps also that the volume growths have
been coming down in the market.
R.Sridhar"
CREAM™ Report:
1. Segment Total Assets not available.
2. 2011-12 and 2012-13 turned out to be good and pressure is seen in Q1-Q3 2013-14, the result of
judicious pricing but less volume.
3. There is a substantial increase in Assets base during 2012-13 resulting in lesser Rating of 3. In the
absence of information for Q1-Q3 2013-14 on Assets the results obtained for this process block reflect
only Revenue not Turnover of Assets.
4. Two different process blocks, sales and turnover of assets, are combined to arrive at the Rating for this
process block.
5. Optimum Rating of 5 in the year 2011-12 followed by 3 and then 2 in the current year is indeed a
danger signal, for this process block Business Segments - HUL - Soaps and Detergents - Revenue.
Business Segments - HUL - Soaps and Detergents - Revenue
2007 [365] 6399.93 17.53 1877.93 0.93%
2008-09 [457] 9884.64 21.63 23.36% 5 2539.57 0.85% -8.78% 0 2
2009-10 [365] 8265.64 22.65 4.70% 2 2221.37 1.02% 19.70% 5 3
2010-11 [365] 8801.06 24.11 6.48% 2 2566.12 0.94% -7.83% 0 1
2011-12 [366] 10636.28 29.06 20.52% 5 2584.77 1.12% 19.65% 5 5
2012-13 [365] 12701.82 34.80 19.75% 5 2914.64 1.19% 6.19% 2 3
Q1-2013-14 [91] 3407.66 37.45 7.61% 3 ? 3
Q2-2013-14 [92] 3380.77 36.75 -1.87% 0 ? 0
Q3-2013-14 [92] 3397.86 36.93 0.51% 1 ? 1
Q1-Q3 2013-14 [275] 10186.29 37.04 6.44% 2 ? 2
Soaps & Detergents
Rs. cr.
Total
Revenue
Revenue
/day Rs.
(Dec.)/Inc.
% p-to-p
Rating
(1)
Segment
Total Assets
Rs.
% Rev.
day /Tot.
Assets
Inc./(dec.)
% p-to-p
Rating
(2)
Net
Rating
{(1)+(2)}
/2

Table 19: Business Segments - Soaps and Detergents- Operating Expenses- Rating - 2007 - Q1-Q3
2013-14
CREAM™ Report: Despite unwinding of promotions DQ13 has
been hit, with a 0 Rating.
SInce 2010-11 there has been marginal cost saving each year till
the trend broken in DQ13. This process block is a difficult area
of cost control and the marginal contribution all these years is
what the best one could anticipate.
What is important is the previous process block Business
Segments - HUL - Soaps and Detergents - Revenue, that need a
consistent optimal level of 5 Rating.
"We also had a significant
challenge in our soaps and
detergent business in terms of
the cost inflation..
Also in this quarter, as we have
seen the impact of cost inflation
going up principally driven by
the foreign exchange but also
thereafer on the hardening of
palm oil prices...
We have unwound some of our
promotional activities, which
were volume-based
promotions...
When we talked about the
unwinding of promotions that
was specific to our soaps and
detergents category and soaps
in particular which has taken
place as the cost inflation has
started to come through.
R.Sridhar"
Business Segments - HUL - Soaps and Detergents - Expenditure:
Rating
2007 [365] 5427.80 14.87 84.81%
2008-09 [457] 8317.55 18.20 84.15% 0.78% 1
2009-10 [365] 6960.72 19.07 84.21% -0.08% 0
2010-11 [365] 7994.37 21.90 90.83% -7.86% 0
2011-12 [366] 9396.37 25.67 88.34% 2.74% 1
2012-13 [365] 11088.26 30.38 87.30% 1.18% 1
Q1-2013-14 [91] 2968.34 32.62 87.11% 0.22% 1
Q2-2013-14 [92] 2906.88 31.60 85.98% 1.29% 1
Q3-2013-14 [92] 2946.97 32.03 86.73% -0.87% 0
Q1-Q3 2013-14 [275] 8822.19 32.08 86.61% 0.79% 1
Soaps & Detergents
Rs. cr.
Op Exps.
Rs.
Op exps.
/day Rs.
Op.
exps /Rev.
%
Dec./(Inc)
% p-to-p

Table 20: Business Segments - Personal Products - Revenue - Rating - 2007 - Q1-Q3 2013-14
"All of the four segments have grown well in the quarter, ahead of market and in particular
personal products and packaged food growth stepped up during the quarter..
Both the segments offered huge headroom for growth and very clear growth priorities for us...
And clearly personal products today is much larger business in terms of the volume that goes
through when you look at compared to five years back...
If you look at our own performance and just take two categories to make the point, let’s just look
at personal products category like hair care and look at beverages category like tea. In tea, all our
brands whether it is the premium or the mid-market or the mass market, all the three have gone
in double digits. Similarly, if you look at hair care, Dove as grown in double digits, as has Sunsilk,
as has Clinic Plus. So if you look at just two categories to take an example whether it is premium
or mid-market or mass, we’ve seen good performance in all parts of our portfolio. So I don’t
think there’s any conclusion at this state to say there is a very, very clear trend of downtrading...
And clearly personal products today is much larger business in terms of the volume that goes
through when you look at compared to five years back..
And in some quarters it might be that we need additional investment in a particular category. In
some other quarters, it might be some other category. As long as we are able to bring to bear the
totality of the portfolio to work for us, I think we are pleased with how it progresses.
R.Sridhar"
Business Segments - HUL - Personal Products - Revenue:
Total RevenueRevenue/day Rs. Rating Rating
2007 [365] 3686.60 10.10 898.13 1.12%
2008-09 [457] 5387.83 11.79 16.73% 5 1117.04 1.06% -6.15% 0 2
2009-10 [365] 5055.07 13.85 17.47% 5 1317.98 1.05% -0.44% 0 2
2010-11 [365] 5850.39 16.03 15.73% 5 1482.98 1.08% 2.86% 1 3
2011-12 [366] 6585.36 17.99 12.26% 4 1396.44 1.29% 19.21% 5 4
2012-13 [365] 7471.66 20.47 13.77% 4 1404.51 1.46% 13.12% 4 4
Q1-2013-14 [91] 1883.38 20.70 1.10% 1 ?
Q2-2013-14 [92] 1950.34 21.20 2.43% 1 ?
Q3-2013-14 [92] 2303.90 25.04 18.13% 5 ?
Q1-Q3 2013-14 [275] 6137.62 22.32 9.03% 3 ?
Personal Products. Rs.
cr.
(Dec.)/Inc.
% p-to-p
Segment
Total Assets
Rs.
%Rev.day
/Tot.
Assets
Inc./(dec.)
% p-to-p
Net
Rating

CREAM™ Report:
1.True for DQ13 but seems to be an exception as Revenue growth is consistently declining since
2011-12 despite a sterling performance for prior two years.
2. Clubbed with the Sales Turnover by assets the performance is a gradual increase.
3. The Ratings for the 3 Quarters of 2013-14 have been on the decline from 4 down to 3 but for
the DQ13 prop-up, it could have been worse.
4. Segment Total Assets info not available and the ultimate Ratings for this process block could
have been either way depending on the reduction or increase in asset base.

Table 21: Business Segments - Personal Products - Operating expenses - Rating - 2007 - Q1-Q3 2013-
14
"Coming to the segments, I am
particularly pleased by the
performance of personal
products and packaged foods
where growth has stepped up in
the current quarter...
All of these categories of course
are core and strategic for us. So
we will invest and we are
investing what is necessary to
ensure that are competitive
position does not get
undermined...R.Sridhar"
CREAM™ Report:
1. DQ13 is exceptional and the rest of the period is below par.
2. The growth rate for 9 months is (3+0)/2 = 1 which is below 3.75%, as against previous year
2012-13 (4+0)/2 = 2 in the range of >3.75% <7.50%.
3. Investments in the current period of 9 months could result in a better or lower rating but
incremental value addition for this process block Personal Products (Revenue, Assets and op.
expenses) is absent.
4. DQ13 is an exception but the first 2 quarters have been bad, both in Revenue and Op. exps.
5. "As long as we are able to bring to bear the totality of the portfolio to work for us, I think we
are pleased with how it progresses." Does it satisfy 4G compass principles?
Business Segments - HUL - Personal Products - Expenditure:
Rating
2007 [365] 2675.00 7.33 72.56%
2008-09 [457] 3928.92 8.60 72.92% -0.50% 0
2009-10 [365] 3767.21 10.32 74.52% -2.20% 0
2010-11 [365] 4365.32 11.96 74.62% -0.12% 0
2011-12 [366] 4838.41 13.22 73.47% 1.53% 1
2012-13 [365] 5523.95 15.13 73.93% -0.63% 0
Q1-2013-14 [91] 1415.22 15.55 75.14% -1.64% 0
Q2-2013-14 [92] 1505.43 16.36 77.19% -2.72% 0
Q3-2013-14 [92] 1644.72 17.88 71.39% 7.51% 3
Q1-Q3 2013-14 [275] 4565.37 16.60 74.38% -0.61% 0
Operating Exps. Rs.
cr.
Op Exps.
Rs.
Op
exps./da
y Rs.
Op.
exps/Rev.
%
Dec./(Inc)
% p-to-p

Table 22: Business Segments - Beverages - Revenue - Rating - 2007 - Q1-Q3 2013-14
"Beverages. Tea delivered double-digit growth in the quarter and the good news is that the
growth was sustained across all the brands in the tea portfolio..
In tea, all our brands whether it is the premium or the mid-market or the mass market, all the
three have gone in double digits.
R.Sridhar"
CREAM™ Report:
1. DQ13 is the least of the 3 quarters growth.
2. 9 months incremental efficiency is down from 4 to 3.
3. Addition in Segment Total Assets brought down the rating from 4 in 2011-12 to 2 in 2012-13.
Segment Total Assets in 2013-14 is relevant for assessing movement in Beverages.
Business Segments - HUL - Beverages - Revenue:
Beverages Rs. cr. Rating Rating
2007 [365] 1540.63 4.22 593.70 0.71%
2008-09 [457] 2299.51 5.03 19.21% 5 808.89 0.62% -12.50% 0 2
2009-10 [365] 2142.43 5.87 16.65% 5 783.74 0.75% 20.40% 5 5
2010-11 [365] 2346.50 6.43 9.53% 3 858.97 0.75% -0.07% 0 1
2011-12 [366] 2617.43 7.15 11.24% 3 755.38 0.95% 26.50% 5 4
2012-13 [365] 2974.66 8.15 13.96% 4 868.92 0.94% -0.93% 0 2
Q1-2013-14 [91] 757.37 8.32 2.12% 1 ?
Q2-2013-14 [92] 835.42 9.08 9.11% 3 ?
Q3-2013-14 [92] 850.03 9.24 1.75% 1 ?
Q1-Q3 2013-14 [275] 2442.82 8.88 9.00% 3 ?
Total
Revenue
Revenue
/day Rs.
(Dec.)/Inc.
% p-to-p
Segment
Total Assets
Rs.
%Rev.day
/Tot.
Assets
Inc./(dec.)
% p-to-p
Net
Rating

Table 23: Business Segments - Beverages - Operating Expenses - Rating - 2007 - Q1-Q3 2013-14
"Overall, across tea and coffee,
we are seeing value growth in
the market coming off as
commodity costs have been
relatively benign..
That then brings me beverage
where I am conscious that value
growth which has received a
fillip in the previous quarters
driven by the commodity
inflation has started to come off
given the benign input cost in
this season.
R. Sridhar"
CREAM™ Report:
1. Op. expenses include input cost, A&P spend and all other allocated segment expenditure.
2. JQ13 had shown improvement over the previous year but not SQ13 and DQ13.
3. There is an overall incremental efficiency for 9 months performance over the previous year.
4. The net Rating for Beverages, not taking into account Segment Assets performance, would
remain 2 i.e (3+1)/2 = 2.
5. 2 is in the range of >3.75% <7.50% growth performance.
Business Segments - HUL - Beverages - Expenditure:
Beverages Rs. cr. Rating
2007 [365] 1316.45 3.61 85.45%
2008-09 [457] 1958.58 4.29 85.17% 0.32% 1
2009-10 [365] 1821.53 4.99 85.02% 0.18% 1
2010-11 [365] 1991.51 5.46 84.87% 0.18% 1
2011-12 [366] 2239.97 6.12 85.58% -0.83% 0
2012-13 [365] 2498.25 6.84 83.98% 1.86% 1
Q1-2013-14 [91] 618.69 6.80 81.69% 2.73% 1
Q2-2013-14 [92] 693.75 7.54 83.04% -1.66% 0
Q3-2013-14 [92] 712.73 7.75 83.85% -0.97% 0
Q1-Q3 2013-14 [275] 2025.17 7.36 82.90% 1.29% 1
Op Exps.
Rs.
Op
exps./da
y Rs.
Op.
exps/Rev.
%
Dec./(Inc)
% p-to-p

Table 24: Business Segments - Packaged Foods - Revenue - Rating - 2007 - Q1-Q3 2013-14
"In packaged foods, it has been a quarter where growth has stepped up with the three key
brands Knorr, Kissan and Kwality Walls, all delivering double-digit growth during the quarter.
All of them have grown in double digits, and I think it's just about continuing to invest in
developing the market, building these categories with an appropriate mix of both innovation and
activation that will give us the results. R.Sridhar
Our focus is going to be in branded packaged goods and that’s where our efforts will be. Sanjiv
Mehta:
CREAM™ Report:
1. Packaged Foods were unpacked in JQ13 faster and in subsequent quarters part remained
packed in storage.
2. 2012-13 overall performance, Revenue and Total Segment Assets turnover, was at 4 mainly
due to reduction in latter.
3. 9 months performance by Revenue is down at 3 same as the previous year 2012-13, subject to
usage of Total Segment Assets.
Business Segments - HUL - Packaged Foods - Revenue:
Packaged Foods Rs. cr. Rating Rating
2007 [365] 701.60 1.92 275.30 0.70%
2008-09 [457] 808.30 1.77 -7.99% 0 365.65 0.48% -30.72% 0 0
2009-10 [365] 961.78 2.64 48.98% 5 362.99 0.73% 50.07% 5 5
2010-11 [365] 1178.43 3.23 22.53% 5 517.89 0.62% -14.12% 0 2
2011-12 [366] 1359.46 3.71 15.05% 5 559.20 0.66% 6.55% 2 3
2012-13 [365] 1505.74 4.13 11.06% 3 533.87 0.77% 16.33% 5 4
Q1-2013-14 [91] 457.88 5.03 21.97% 5 ?
Q2-2013-14 [92] 397.98 4.33 -14.03% 0 ?
Q3-2013-14 [92] 372.76 4.05 -6.34% 0 ?
Q1-Q3 2013-14 [275] 1228.62 4.47 8.30% 3 ?
Total
Revenue
Revenue
/day Rs.
(Dec.)/Inc.
% p-to-p
Segment
Total Assets
Rs.
%Rev.day
/Tot.
Assets
Inc./(dec.)
% p-to-p
Net
Rating

Table 25: Business Segments - Packaged Foods - Operating Expenses - Rating - 2007 - Q1-Q3 2013-14
"As far as packaged foods are
concerned, you know, this is a
very, very nascent category and
multiple times we have called
out as a fairly nascent category.
And it's less to do about market
share et cetera stuff. It is more
about the opportunity to build
the market to build habits of
consumption. R.Sridhar"
CREAM™ Report:
1. The overall Rating of P&L and Balance Sheet for the 9 months period 2013-14 resulted in 0.
[Table 17]
2. The law of diminishing returns seem to engulf this process block for a few years now.
3. The strategic framework - the Compass - the 4Gs: Consistent, Competitive, Profitable and
Responsible growth, warrants holistic approach towards Packaged Foods that is positioned at the
cottage sector.
Business Segments - HUL - Packaged Foods - Expenditure:
Rating
2007 [365] 676.35 1.85 96.40%
2008-09 [457] 793.53 1.74 98.17% -1.84% 0
2009-10 [365] 943.36 2.58 98.08% 0.09% 1
2010-11 [365] 1161.84 3.18 98.59% -0.52% 0
2011-12 [366] 1334.44 3.65 98.16% 0.44% 1
2012-13 [365] 1446.95 3.96 96.10% 2.10% 1
Q1-2013-14 [91] 419.49 4.61 91.62% 4.66% 2
Q2-2013-14 [92] 384.67 4.18 96.66% -5.50% 0
Q3-2013-14 [92] 386.16 4.20 103.59% -7.18% 0
Q1-Q3 2013-14 [275] 1190.32 4.33 96.88% -0.82% 0
Packaged Foods: Rs.
cr.
Op Exps.
Rs.
Op
exps./day
Rs.
Op.
exps/Rev.
%
Dec./(Inc)
% p-to-p

Table 26: Business Segments - Others- Revenue - Rating - 2007 - Q1-Q3 2013-14
Others (including Exports, Chemicals, Infant Care Products, Water, etc.)
Export: When it comes to Basmati, as we have been exporting Basmati in different parts of the
world for many years, so this is just a selective opportunity which is there in the trade which we
have tried to play with. And certainly, our intent is not to look at commodities; our focus is going
to be in branded packaged goods and that’s where our efforts will be. Sanjiv Mehta
Our water purifier business, Pureit, has continued to perform well, strengthening its leadership in
a challenging environment. R.Sridhar
CREAM™ Report:
1. Our focus is going to be in branded packaged goods and that’s where our efforts will be. All of
the four segments have grown well in the quarter.
2. Segment Total Assets are reducing.
3. No indicator in DQ13 as to Chemicals and Infant Care Products.
4. Overall 9 months Incremental Revenue gets a Rating of 2, as against 5 during 2012-13. With
Total Segment Assets of marginal increase during the previous year, current year addition or
reduction is unknown. This process block 'Others' is insipid.
Business Segments - HUL - Others - Revenue:
Others Rs. cr. Rating Rating
2007 [365] 1527.13 4.18 618.52 0.68%
2008-09 [457] 2424.40 5.31 26.80% 5 650.57 0.82% 20.55% 5 5
2009-10 [365] 1600.65 4.39 -17.34% 0 551.78 0.79% -2.54% 0 0
2010-11 [365] 1539.31 4.22 -3.83% 0 624.23 0.68% -14.99% 0 0
2011-12 [366] 896.86 2.45 -41.90% 0 227.81 1.08% 59.21% 5 2
2012-13 [365] 1092.78 2.99 22.18% 5 278.09 1.08% 0.09% 1 3
Q1-2013-14 [91] 279.08 3.07 2.43% 1 ?
Q2-2013-14 [92] 304.85 3.31 8.05% 3 ?
Q3-2013-14 [92] 276.58 3.01 -9.27% 0 ?
Q1-Q3 2013-14 [275] 860.51 3.13 4.52% 2 ?
Total
Revenue
Revenue
/day Rs.
(Dec.)/Inc.
% p-to-p
Segment
Total Assets
Rs.
%Rev.day
/Tot.
Assets
Inc./(dec.)
% p-to-p
Net
Rating

Table 27: Business Segments - Others- Operating expenses - Rating - 2007 - Q1-Q3 2013-14
CREAM™ Report:
There is a steady decline in this
process block, Revenue,
Segment Assets as well as
corresponding operating
expenses.
Four segments DQ13 highlights,
excludes this process block
'Others'.
'Others' is an entry and exit
point for trial & error
management. Like Innovation.
IPR created found useful join
the Tangible Assets and the
ones found useless leave
unrecognised and unnoticed.
'Others' is an area management tries to play with. When turns out to be a failure management is
lef to play with only the existing four segments, restricting the business for long-term growth to
deliver on our strategic objectives.
Rating 1 for this process block for the 9 months period is due to reduction of losses which too
deserves good rating. Collectively 'Others is rated (2+1)/2 = 1.
Other than the traditional four segments, 'Others' is an opportunity to show the managerial
capability towards enhancing profitability by new ideas and skills development. Water purifier
business Pureit, may be a success but significant find is needed to expand the business manifold,
if profitability and growth are to be enhanced. The overall Rating of all five segments shall be
seen next.
Business Segments - HUL - Others - Expenditure:
Others Rs. cr. Rating
2007 [365] 1576.20 4.32 103.21%
2008-09 [457] 2400.30 5.25 99.01% 4.08% 2
2009-10 [365] 1557.86 4.27 97.33% 1.70% 1
2010-11 [365] 1535.93 4.21 99.78% -2.52% 0
2011-12 [366] 926.03 2.53 103.25% -3.48% 0
2012-13 [365] 1131.95 3.10 103.58% -0.32% 0
Q1-2013-14 [91] 282.16 3.10 101.10% 2.39% 1
Q2-2013-14 [92] 300.23 3.26 98.48% 2.59% 1
Q3-2013-14 [92] 290.07 3.15 104.88% -6.49% 0
Q1-Q3 2013-14 [275] 872.46 3.17 101.39% 2.12% 1
Op Exps.
Rs.
Op exps./
day Rs.
Op. exps/
Rev. %
Dec./(Inc)
% p-to-p

Table 28: Business Segments - Consolidated - Net Rating - 2007 - Q1-Q3 2013-14
CREAM™ Report:
1. Revenue that includes Assets usage is at 2 Rating. Operating expenses 0 Rating.
2. Not profits but per day Revenue for expenses incurred on wages, Salaries, A&P spend etc.
must be optimised, relatively as a direct variable volume growth.
3. 2011-12 and -13 turned out reasonably well, being rated at 3, but 9 months performance is
down to Rating of 2.
4. Whereas operating expenses is 0. Not simply process re-engineering, many a product line that
turns out losses need to be discarded and fresh ones be brought in.
5. Fresh Product lines, going by experimentation of 'Others' take a minimum of 5 years.
6. Any Object under any product line is moved linearly, governed by the law of physics.
7. Any idea that springs forth to counter the current situation is that of the Subject, governed by
the concept of metaphysics.
8. CREAM™ Report establishes the managerial capability by its Rating, that we shall have a look
at next.
Business Segments - HUL - Revenue & Expenditure: Rating
2007 [365]
2008-09 [457] 2 1 2 0 2 1 0 0 5 2 2 0 1
2009-10 [365] 3 0 2 0 5 1 5 1 0 1 3 0 1
2010-11 [365] 1 0 3 0 1 1 2 0 0 0 1 0 0
2011-12 [366] 5 1 4 1 4 0 3 1 2 0 3 0 1
2012-13 [365] 3 1 4 0 2 1 4 1 3 0 3 0 1
Q1-2013-14 [91] 3 1 1 0 1 1 5 2 1 1 2 1 1
Q2-2013-14 [92] 0 1 1 0 3 0 0 0 3 1 1 0 0
Q3-2013-14 [92] 1 0 5 3 1 0 0 0 0 0 1 0 0
Q1-Q3 2013-14 [275] 2 1 3 0 3 1 3 0 2 1 2 0 1
Business Segments
Rating
Soaps &
Detergents
Rev. Exp.
Personal
Products.
Rev. Exp.
Beverages
Rev. Exp.
Packaged
Foods
Rev. Exp.
Others
Rev. Exp.
Business
Segments
Rev. Exp.
Net
Rating

Table 29: CREAM™ Report - Consolidated - 2007 - Q1-Q3 2013-14
CREAM™ Report:
Consolidated:
Quarterly Reports do not
mention about 4/5th of
CREAM™ Report. 187 of the
189 process blocks not
reported in the Quarterly
Reports are derived from the
previous figures already
published. [Refer
http://www.slideshare.net/j
ayaraman.18/hul-cream-
report-
whyratingsarefarlower]
The Impact analysis of DQ13 HUL CREAM™ Report:
1. Overall Rating for the 9 months of 2013-14 is down from 2 to 1.
2. First, the responsibility is at the doorsteps of Earnings, central to CREAM, the rest were running
at a better Rating of 2.
3. Strategic Framework - the Compass: 4Gs
3.1 Goal - Consistent Growth
• 2011-12 and 2012-13 had steadied the boat but Q1-Q3 2013-14 is rocking it.
• The maximum Growth Rating Earnings [i.e. P&L and B/S, E in CREAM] has reached is 3.
• From 3 a linear advancement to 4 was called for but never reached. Consistent Growth is
not seen in the period under review.
• The business segments in the running have reached a point of diminishing returns.
• Strategic Framework on Consistent Growth needs recalibration.
• The ratings beg to be optimised.
3.2 Goal - Competitive Growth
• CREAM™ Report in case of HUL is made up of 189 process blocks, each owned by 5
categories of people, common throughout - 4 of Fiscal Responsibility and 1 from Ethical
Responsibility.
• CREAM Ratings as above warrant optimising to 5.
• Each process block is independent yet yoked together by the 5 categories of people. The
189 process blocks cover every activity of a Company, qualitative as well as quantitative.
• Corporate tries to rule its conduct by means internal to itself that process block owners
compete with each other to reach the optimum level of performance for each block.
• Optimised CREAM™ Report Ratings are a veritable gallery of competitive advantage a
Ratings
1. Corporate Governance 2 2 2 2 2 2
2. Risk Management 3 3 3 3 3 3
4. Accounting Quality 0 1 0 2 1 1
5. Management Quality 2 2 2 2 2 2
Net Ratings 1 2 1 2 2 2
0 1 0 3 3 0
CREAM Rating 0 1 0 2 2 1
2008-
09
2009-
10
2010-
11
2011-
12
2012-
13
Q1-Q3
2013-14
Add: 3.Earnings: P&L And
Balance Sheet: (As above)

Company can show case to outside market.
• CREAM™ Report analysis of HUL identifies several lacunae detrimental to this process
block - Strategic Framework - Competitive Growth.
3.3 Goal - Profitability Growth
• CREAM™ Report looks at Sustainable profits as a factor of Sustainable Value System and
Sustainable Efficiency.
• Accounting Quality and Management Quality represent the value system whereas
Corporate Governance and Risk Management efficiency, each reflected in a Balance Sheet
and Profit & Loss Statement respectively.
• The profits ratings are lower in Q1-Q3 2013-14 compared to previous year.
• One of the main reasons is shifing of focus to investments in the year 2007 at the
expense of Trade Payables assuming thereby that there is surplus cash.
• Market Investment as an SBU is welcome but it was not done so that focus needed for the
five business segments has been lacking. With the result five segments are shrunk to
become four.
3.4 Goal - Responsible Growth
• CREAM™ Report as above comprises of measuring 189 process blocks, qualitative and
quantitative assessment of corporate management, under the principle of return on
Intangible which is action or inaction as the numerator and human energy the
denominator.
• CREAM™ Report advances the measurement to a daily basis as Governance is a dynamic
function.
• Each process block is owned by 5 categories of people with one necessarily being of
Ethical Responsibility.
• Aligning Fiscal Responsibility to Ethical Responsibility ensures Responsible Growth, a
prerequisite for this process block.
For further information on CREAM™ Report please contact:
Jayaraman Rajah Iyer
jayar.ibcm@gmail.com
23 March 2014
“It is not necessary to change. Survival is not mandatory.” ~W. Edwards Deming

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