y 5. General Strategy Product Differentiation Strategy Renovation and Innovation of products and brands.

. Their portfolio ranges from baby foods, bottled water, coffee, chocolate, drinks, ice cream, and petcare Mergers and Acquisitions with Peter, Cailler, Kohler Chocolats Suisses S.A and joint ventures with LOreal, Coca-Cola, and General Mills Low Cost Strategy Majority of products are produced in-house Operational Effectiveness Nestl Continuous Excellence (NCE) program addresses increasing efficiency in standard operating procedures, consistency and manufacturing management y 6. Current Strategy Premiumisation Promoting premium products like high-end coffee and chocolate brands Launched a new tea-brewing system called Tpresso Emerging Markets 45% of sales by 2020, $7 billion over 2 years Asia, Latin America and Africa Growing population, rising disposable income y 7. Current Strategy (Cont.) Health Science & Nutrition Concerned with health problems, obesity and aging $500 million over 10 years Nestl Institute of Health and Science y 8. Organizational Structure y 9. Organizational Structure Divisional Structure in senior management Matrix Structure in levels below senior management Senior members of Nestl are of diverse origins and backgrounds Corporate HQ in Vevey, Switzerland, offices around the world y 10. Organizational Chart y 11. Corporate Culture y 12. Creating and Pursuing Shared Values Sustainable Agriculture Initiative of Nestl (SAIN) Creating Shared Value key performance indicator 2009 2010 Rural Development: Farmers trained through capacity-building programs
y

10. Packaging Manufacturing comprises all unit operations necessary to transform perishable raw materials into finished products, with the aim to make them safe and convenient for the consumers. The manufacturing activities of the Nestl Group: respect natural resources by efficient use of raw materials and energy minimize waste generation and emissions ensure environmentally safe disposal of all waste which cannot be recycled. Regular assessments of processing practices are carried out. These assessments include: evaluation of individual plant performance with regard to operations which have an impact on the environment definition of targets for improvement review of plant compliance with local government regulations, company environmental standards, as well as results achieved in comparison with targets for improvement full investigation of incidents which may affect the environment. Information on developments in environmental protection technology and practices is disseminated as required to ensure that all plants are using the most effective environmental practices for their type of processing. This applies also for co packers. Marketing and distribution Submitted by SUHAS S DHAGE. 10 11. Marketing is based on the principle of satisfying consumer needs. This is the foundation also for the environmental marketing approach of Nestl. Environmental product claims in advertising, promotional material and on packaging are in accordance with legal requirements, based on solid scientific evidence and used in a serious and reasonable manner. Our aim is to minimize wastage in communication, publicity and promotional material, in particular through more precise targeting of marketing activities. Consumer promotions and merchandising material such as consumer offers, instore

promotions, display material, leaflets, printed matter, etc. take environmental aspects into account. This means due consideration of environmental impact in selecting both materials and printing methods. In distribution, energy efficient and pollution controlled methods are encouraged wherever possible. Information, communication and education Nestl's policy is designed to provide correct and coherent information on the activities of the Group. Activities related to the environment benefit from the same treatment and their communication is secured through all currently available means inside and outside the Group. Submitted by SUHAS S DHAGE. 11 12. It is furthermore Nestl's duty to create awareness, to train and motivate employees on their personal responsibility with regard to the protection of the environment. Legislation and regulations It is the policy of the Nestl Group to strictly comply with all laws and regulations relevant to our activities. We participate in discussions on food legislation and regulations between international organizations, government representatives, industry, the scientific world and consumer associations. We also apply this policy to environment related matters. In doing so, we cooperate with legislators through local industry associations in order to promote laws and regulations in the field of environment which are reasonable, rational, realistic, applicable and enforceable. We oppose unjustified bans and any other discriminatory measures. We favor the harmonization of food regulations in order to remove existing trade barriers and to avoid the creation of new ones. This applies also to environmental issues. We favor the exchange of information, of experience and of knowledge between the various interested parties. Thanks to all these synergies, we can contribute to valuable discussions and be recognized as an active partner in helping authorities to formulate comprehensive strategies in the field of the environment. THE NESTL POLICY ON THE ENVIRONMENT Submitted by SUHAS S DHAGE. 12 13. Nestl respects the environment and is committed to environmentally sound business practices throughout the world, thus taking into account the need to preserve natural resources and save energy. This commitment is put into practice by considering local legal requirements as a minimum standard. If these do not exist, our internal rules, adjusted to local conditions, apply. Research and Development and new investments include an evaluation to ensure environmentally appropriate products, packaging and processes. Management and personnel within the Nestl organization worldwide are encouraged to help resolve environmental problems within their own sphere of influence. NESTLES BRANDS Quality and nutritional value are the essential ingredients in all of the nestles brands. Millions of people prefer Nestl products every day, happy with the addition to their wellness that they bring. If you are looking for a Submitted by SUHAS S DHAGE. 13 14. specific brand our product, just use the alphabetical index below to jump straight to a listing. Or you can explore by category. Baby Foods Submitted by SUHAS S DHAGE. 14 15. The production of infant food goes right back to the origins of the Nestl Company. Henri Nestl's 'Farine Lacte' was the first product to bear the Nestl name. In 1867 a physician persuaded Henri Nestl to give his product to an infant who was very ill he had been born prematurely and was refusing his mother's milk and all other types of nourishment. Nestl's new food worked, and the boy survived. From the very beginning, Nestl's product was never intended as a competitor for mother's milk. In 1869, he wrote:

"During the first months, the mother's milk will always be the most natural nutrient, and every mother able to do so should herself suckle her children." The factors that made baby foods success in the early days of the Nestl company quality and superior nutritional value are still as valid today for the wide range of infant formula, cereals and baby food made by Nestl. The World Health Organization (WHO) recognizes that there is a legitimate market for infant formula, when a mother cannot or chooses not to breast feed her child. Nestl markets infant formula according to the principles and aims of the WHO International Code of Marketing Breast Milk Substitutes, and seeks dialogue and cooperation with the international health community and in particular with the WHO and UNICEF, to identify problems and their solution. Nestl's expertise as the world's leading infant food manufacturer, Submitted by SUHAS S DHAGE. 15 16. gained over more than 125 years, is put at the disposal of health authorities, the medical profession and mothers and children everywhere. Chocolate & Confectionery The story of chocolate began in the New World with the Mayans, who drank a dark brew called cacahuaquchtl. Later, the Aztecs consumed chacahoua and used the cocoa bean for currency. In 1523, they offered cocoa beans to Cortez, who introduced chocolate to the Old World, where it swiftly became a favorite food among the rich and noble of Europe. Nestle forayed into chocolates & confectionery in 1990 and has cornered a fourth share of the chocolate market in the country.. It has expanded its products range to all segments of the market The Kitkat brand is the largest selling chocolate brand in the world. Other brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One, Munch etc. The sugar confectionery portfolio consists of Polo, Soothers, Frootos and Milkybar Eclairs. All sugar confectionery products are sold under the umbrella brand Allen's. Nestle has also markets some of its imported brands like Quality Street, Lions and After Eight. New launches such as Nestle Choco Stick and Milky Bar Choo at attractive price points to woo new consumers. Chocolate confectionery sales registered a strong 21.5% yoy growth in 2001 aided by good volume growth in Munch, Kitkat and Classic sales. Nestle relaunched Bar-One during the year. Submitted by SUHAS S DHAGE. 16 17. From the beginning, turning raw, bitter cocoa beans into what one 17th century writer called "the only true food of the gods" has been a fine art, a delicate mixture of alchemy and science. Ice Cream There are many myths and stories as to the invention of ice cream: was it Marco Polo who brought it back from China (along with pasta)? Probably not, considering he most likely never visited China. The story of its popularity is however connected with the invention of technology to make it on an industrial scale, and to keep it cold once made. Before refrigeration techniques, food was frozen with the aid of ice, mixed with salt, which was either stored in ice houses or shipped from cold countries. But then at the end of the 19th century, both making and freezing it became easier, and together with the invention of the ice cream cone, made the product boom. Today, the United States is the absolute leader in terms of volume consumed, but the highest per head consumers are in New Zealand. Flavors you'd never have thought of and yet they're commercially available: Submitted by SUHAS S DHAGE. 17 18. Sorbets - Smoked Salmon, Tomato, Cucumber Ice Creams - Garlic, Avocado, Sweet corn. The ice cream cone is the most environmentally friendly form of packaging. A Syrian from Damascus, Ernest E Hamwi is credited with its invention. Apparently, during the 1904 St Louis World's Fair, his waffle booth was next to an ice cream vendor who ran short of dishes. Hamwi rolled a waffle to contain ice cream and the cone was

born. Prepared Foods Convenience foods packaged soups, frozen meals, prepared sauces and flavorings date back more than a century. With the Industrial Revolution came factory jobs for women and less time to prepare meals. The problem was so widespread that it became the object of intense study in 1882 by the Swiss Public Welfare Society, which offered a series of recommendations, including an increase in the consumption of vegetables. The Society commissioned Julius Maggi, a miller with a reputation as an inventive and capable businessman, to create a vegetable food product that would be quick to prepare and easy to digest. The results two instant pea Submitted by SUHAS S DHAGE. 18 19. soups and an instant bean soup helped launch one of the best known brands in the history of the food industry. By the turn of the century, Maggi & Company was producing not only powdered soups, but bouillon cubes, sauces and flavorings. .Maggi merged with Nestl in 1947. Buitoni, the authentic Italian brand, which has been producing pasta and sauces in Italy since 1827, became part of the Nestl Group in 1988. Beverages Beverages like coffee, tea and health drinks contribute to about 30% of Nestles turnover. Beverage sales registered a 15% yoy growth during 2001. While about 14% of sales come from domestic market, exports contribute to about 16% of sales. Submitted by SUHAS S DHAGE. 19 20. Nestle's Nescafe dominates the premium instant coffee segment. Nestles other coffee brand Sunrise has also been relaunched under the Nescafe franchise to leverage on the existing equity of the brand. Nestle has focused on expanding the domestic market through price cuts and product repositioning. However it has been losing share in the domestic market, where it has a 37% market share. Milo, a brown-malted beverage was launched in 1996. It has an estimated volume share of about 3% in the malted food drink segment. Nestle has launched non-carbonated cold beverages such as Nestea Iced Tea and Nescafe Frappe during 2001. Nestle is one of the largest coffee exporter in the country. Key export market is Russia, besides Hungary, Poland and Taiwan. Nestle has received an award for highest export of instant coffee and highest export of coffee to Russia and CIS for FY00 and FY01. Turnover contribution from exports registered a 17.5% volume growth in F12/01. Nescafe sales to Russia accounts for 80% (Rs2.5bn) of Nestls Rs3bn export turnover. Submitted by SUHAS S DHAGE. 20 21. QUALITY Everyday, millions of people all over the world show their confidence in us by choosing Nestl products. This confidence is based on our quality image and a reputation for high standards that has been built up over many years. Quality is the cornerstone of our success Every product on the shelf, every service and every customer contact helps to shape this image. A Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets high standards of quality. Customers expect us to keep this promise every time. Under no circumstances will we compromise on the safety of a product and every effort must be made to avoid hazards to health. Likewise, compliance with all relevant laws and regulations is a must and is not negotiable. People, equipment and instruments are made available to ensure safety and conformity of Nestl products at all times. The effort is worth it. Companies with huge quality standards make fewer mistakes, waste less time and money and are more productive. They also make higher profits. Quality is their most successful product. It is the key to their success, today and tomorrow. The customer comes first Nestle want to win and keep customers: distributors, supermarkets, hotels,

shopkeepers and the final consumers. They have very different requirements. Trade customers expect excellent service, correct information and timely delivery. Consumers consider taste, appearance and price when they make Submitted by SUHAS S DHAGE. 21 22. their choice. Its task is to understand what customers want and respond to their expectations rapidly and effectively. We serve various groups of consumers and there is demand for products at different levels of perceived quality and price. All customers, however, expect value for their money good quality at a reasonable price. When offering quality to customers we also mean environmental quality. Nestl shares societys concern for the environment and is committed to environmentally sound business practices throughout the world. Customers are central to their business and they always respect their needs and preferences. Competition Baby food and Instant coffee are categories where brand loyalties are very strong and Nestle is the market leader. HLL is a significant competitor to Nestle in instant coffee; while Heinz is the main competitor in the baby foods market. The market for culinary products, semi-processed foods such Submitted by SUHAS S DHAGE. 22 23. as noodles, ready mixes for Indian ethnic breakfast and sweets, is largely an urban market. HLL and Indo Nissin Foods are the main competitors in these product segments. Nestle has also achieved a significant 25% share in the chocolate/confectionery market. The company has recently expanded its dairy products portfolio to include, milk, curd and butter. The company also forayed into the bottled water segment with the launch of its Perrier brand in the premium mineral segment and Pure Life in the purified water segment. Quality is a competitive advantage We live in a competitive world and must never forget that their customers have a choice. If they are not satisfied with a Nestl product, they will switch to another brand. Their goal, therefore, is to provide superior value in every product category and market sector in which we compete. The pursuit of highest quality at any price is no guarantee for success, nor is a single- minded costcutting approach. Lasting competitive advantage is gained from a balanced search for optimal value to customers, by simultaneous improvement of quality and reduction cost. Success can never be taken for granted. We must watch and learn from our competitors. If they do something better, we must improve our own performance. We can achieve competitive advantage through Quality. Quality is a joint effort Operating companies are fully responsible for maintaining agreed quality standards. Not only Production units, but also Marketing, Purchasing, Distribution and Sales have a vital role to play in providing quality to Submitted by SUHAS S DHAGE. 23 24. customers. This implies a thorough knowledge of the products and services we offer. Quality units at different levels of the organization provide specific support, promote quality awareness, assume guardianship and audit the system. Quality departments monitor operations against agreed standards and must intervene in case of nonconformity. Quality policy and principles, the mandatory standards and the recommended tools for implementation are laid down in the Nestl Quality System which is applicable throughout the group. Further directions are given through instructions, norms and guidelines, often specific to a product. Our business products, such as raw material producers, packaging suppliers, contract manufacturers and distributors are expected to share our concern for Quality. They too must set up an adequate quality system, so as to meet our requirements consistently. The quality efforts must be shared by every function

and department in the company as well as our business partners. Quality is made by people Adequate equipment, procedures and systems are needed to make Quality; so are involved and dedicated people. Each and every Nestl employee must do his best to provide quality products and services. Training and teamwork are crucial to the successful implementation of high quality standards. Continuous training ensures that everyone understands his tasks and has the necessary skills to carry them out. Teamwork allows us to achieve results that are greater than the sum of individual efforts. We motivate employees by demonstrating management commitment to Quality, by setting challenging goals and by giving them responsibility and recognition. It is Submitted by SUHAS S DHAGE. 24 25. through employee involvement that goals and targets can be achieved in the shortest time. Quality must be a way of life for everyone in the company. Quality is action Quality is the result of deliberate action. It is the responsibility of senior managers to communicate the quality objectives and to provide the resources necessary for their implementation. It is then up to all employees to make Quality happen throughout the company. Progress is followed by listening to our customers and by measuring our performance. Shortcomings and mistakes must be analyzed and corrected. Problems must be anticipated and prevented before they occur. We also must identify and take advantage of opportunities.To stand still is to fall behind. So we must strive for continuous improvement in every area. It is through many small improvements as well as through major breakthroughs that we will achieve excellence. At Nestl, Quality is our first priority. Let us practice it every day. Consumer Services At Nestl, we are committed to offering consumers high-quality food products that are safe, tasty and affordable. The Nestl Seal of Guarantee is a symbol of this commitment. Submitted by SUHAS S DHAGE. 25 26. We also believe in maintaining regular contact with our consumers. This applies both to how we present our products and to how we address our consumers' questions and concerns. When Henri Nestl prepared his first boxes of infant formula for sale, he put his address on the packages so people would know where to go if they had questions. Today, our Consumer Relationship Panel with the words "Talk to Nestl" expresses the same commitment. This is why we have a worldwide Nestl Consumer Services network devoted to caring for our consumers. Our people have expertise in a wide range of areas such as nutrition, food science, food safety and culinary expertise. They provide the prompt, efficient and high quality service that consumers expect from Nestl. In addition, we teach them talk with consumers and above all, to listen. Listening helps us to understand what people want. Nestl uses the insights gained from relationships with consumers to drive product development. At Nestl, we care for our consumers because our success depends on meeting their needs and expectations. Through listening and understanding, we can make products that they will want to use all through their lives. Submitted by SUHAS S DHAGE. 26 27. FUTURE PROSPECTS Nestle is focused on product expansion and improvement of distribution efficiency. The Dairy business is being expanded and is expected to drive growth in the long run, although short-term profitability may be impacted in the investment stage. The companys entry into the mineral water segment is a concern, as the segment is already overcrowded and the company faces stiff competition especially from the Cola manufacturers. Acquisition of an established brand could catapult Nestls

position in the segment. In categories like beverages, culinary products and chocolate confectionery, the company is looking at driving growth through launch of smaller SKUs, thus enabling affordability to a wide section of the population. Submitted by SUHAS S DHAGE. 27 estl is setting up its first coffee demonstration farm in India to help farmers improve quality, productivity and sustainability. The company is helping coffee farmers in the states of Karnataka, Kerala and Tamil Nadu to develop their agricultural practices as demand for Nescaf soluble coffee grows in the country. Nestl aims to provide farmers with high-yielding, disease resistant plantlets developed by its research and development teams. Through the initiative, the company seeks to source coffee sustainably by working closely with Indian coffee farmers and ensuring competitive prices, transparency and traceability.

Nescaf Plan Nestls work with Indian farmers is part of the companys Nescaf Plan, a CHF 350 million investment in coffee projects over ten years. The plan has already been established in China, Colombia, Cte dIvoire, Indonesia, Mexico, Philippines, Thailand and Vietnam. It promotes responsible and sustainable practices across Nestls coffee supply chain. The plans objectives include doubling direct coffee purchases by 2015 and delivering 220 million higher quality coffee plantlets to farmers by 2020.

HIGH QUALITY: Nestl will help farmers develop their agricultural practices.

Worlds leading coffee brand Nescaf is the worlds leading coffee brand, said Nandu Nandkishore, Nestl Executive Vice President and Zone Director for Asia, Oceania, Africa and the Middle East. As a leader, we have a responsibility to continue to supply good quality coffee to consumers, while ensuring that coffee farming remains attractive for farmers and is sustainable across the value chain.

The Nescaf Plan demonstrates our commitment to working with thousands of farmers around the world, including in India, to provide training and technical assistance, he continued. By working with farmers in this way, we know where the coffee comes from, and they know they have a partner who will give them competitive prices for high quality produce. There is a mutual interest, he added. If we want to be successful in the long-term we need to create value for our shareholders at the same time as for the communities in which we operate.

One million Facebook fans Nescaf coffee was launched in India in 1963. It is the leading soluble coffee brand in the country. Products are available in different sizes and at different price points, from affordable single serve sachets to premium blends. Nescafs popularity has led to it becoming one of the most followed consumer brands on social media in India. Its Indian Facebook page, created in August last year, already has more than one million fans. The page is linked to the brands national television advertising campaign 'Know Your Neighbours', starring Indian actress Deepika Padukone. The TV commercials direct consumers to Facebook. There, they can join conversations and take part in competitions, as well as watch previous episodes. Related information: Nestl India website Nescaf website Nescaf India Facebook page Nescaf Plan global launch Read more stories about Nescaf: Nestl invests GBP 110 million in United Kingdom creating 300 jobs and tripling coffee capsule production Nestl expands its largest soluble coffee factory in Europe Nescaf Dolce Gusto boosts Nestls exports in Spain by more than 40%