Hindustan Unilever Ltd. announced that the Board of Directors of the company at its meeting held on January 22, 2013 has considered and approved a proposal to enter into a fresh agreement with Unilever plc for the continued provision of technology, trademark licenses and other services. In the context of the huge growth opportunity in India, as well as increasing intensity of competition, particularly from global players, Unilever is committed to ensuring that the support in terms of new products, innovations, technologies and services is commensurate with the needs of Hindustan Unilever to win in the market place and continue to generate significant value for all shareholders of Hindustan Unilever. Given the need for increased levels of service and the consequent additional costs, Unilever asked for a review of the royalty arrangements in order to ensure a fair recovery of costs.

The Hindustan Unilever's Board has deliberated on the proposal and has approved the following new arrangements. Hindustan Unilever will enter into a new agreement, effective 1st February 2013, with Unilever for the provision of technology, trade mark license and other services. The new agreement envisages that the existing royalty cost of 1.4% of turnover will increase, in a phased manner, to a royalty cost of 3.15% of turnover no later than the financial year ending 31st March 2018, i.e. a total estimated increase of 1.75% of turnover.

The increase in royalty cost, in the period from 1st February 2013 to 31st March 2014 is estimated to be 0.5% of turnover, and thereafter in a range of 0.3% to 0.7% of turnover in each financial year, leading up to a total estimated royalty cost increase of 1.75% of turnover compared to existing arrangements, no later than the financial year ending 31st March 2018.