HRM REPORT ON NESTLÉ

MBA 2ND SEMESTER MORNING - NUML Multan

ANUM RAEES
ARSLAN SAHID
IFRA YAQOOB
IQRA AMJAD
HASEEB RAZIQ
RAO TOUFIQ
Project Dated: 09th April 2010

CONTENTS

HISTORY
INTRODUCTION
VISSION & MISSION
MAIN PRODUCTS
HUMAN RESOURCE
SAFETY AT WORK
RECRUITMENT
Training
CAREER MANAGEMENT
NESTLE SPIRIT
CORPORATE BUSINESS
RELATIONSHIPS
AGRICULTURAL RAW MATERIAL
CORPORATE SOCIAL RESPONSIBILITIES
EARTHQUAKE RELIEFE
REFRENCES

History

The key factor which drove the early history of the enterprise that would become The
Nestlé Company was Henri Nestlé's search for a healthy, economical alternative to
breastfeeding for mothers who could not feed their infants at the breast.

In the mid-1860s Nestlé, a trained pharmacist, began experimenting with various combinations
of cow's milk, wheat flour and sugar in an attempt to develop an alternative source of infant
nutrition for mothers who were unable to breast feed. His ultimate goal was to help combat the
problem of infant mortality due to malnutrition. He called the new product Farine Lactée Henri
Nestlé.

Nestlé's first customer was a premature infant who could tolerate neither his mother's milk nor
any of the conventional substitutes, and had been given up for lost by local physicians. People
quickly recognized the value of the new product, after Nestlé's new formula saved the child's
life and within a few years, Farine Lactée Nestlé was being marketed in much of Europe.

Henri Nestlé also showed early understanding of the power of branding. He had adopted his own
coat of arms as a trademark; in Swiss German, Nestlé means 'little nest'. One of his agents
suggested that the nest could be exchanged for the white cross of the Swiss flag. His response
was firm: "I regret that I cannot allow you to change my nest for a Swiss cross .... I cannot have
a different trademark in every country; anyone can make use of a cross, but no-one else may
use my coat of arms."

Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans Charles
and George Page, broadened its product line in the mid-1870s to include cheese and infant
formulas. The Nestlé Company, which had been purchased from Henri Nestlé by Jules

Monnerat in 1874, responded by launching a condensed milk product of its own. The two
companies remained fierce competitors until their merger in 1905.

Nestlé is today the world’s leading food company, with a 135-year history and operations in
virtually every country in the world. Their principal assets are not office buildings, factories, or
even brands. Rather, it is the fact that they are a global organization comprised of many
nationalities, religions, and ethnic backgrounds all working together in one single unifying
corporate culture. Their culture unifies people on all continents, with roughly half their
factories and people located in the developing world.

A qualified workforce, trained by Nestlé or emerging from a strong educational and industrial
context, strongly influences the company’s ability to be globally competitive. The fair
treatment and development of company staff and the strengthening of the local workforce are
essential long-term investments. They reinforce the conditions for growth and sustained
economic development in the locations where Nestlé operates. Nestlé’s ability to employ
thousands of people each year is an important contribution the company makes towards future
generations, providing income to families

who can enhance their chances at better education, healthcare and standard of living for entire
families and communities.

INTRODUCTION OF NESTLE

Nestlé Corporate Business Principles will continue to evolve and adapt to a changing world, their
basic foundation is unchanged from the time of the origins of their Company, and reflects the
basic ideas of fairness, honesty, and a general concern for people.

Nestlé is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices:

* Nestlé's business objective is to manufacture and market the Company's products in such a way
as to create value that can be sustained over the long term for shareholders, employees,
consumers, and business partners.

* Nestlé does not favor short-term profit at the expense of successful long-term business
development.

* Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior,
beliefs and actions of the Company behind brands in which they place their trust and that
without its consumers the Company would not exist.

* Nestlé believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the form of
voluntary business principles is beneficial in order to ensure that the highest standards are met
throughout the organization.

* Nestlé is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and employees.
Therefore recruitment of the right people and ongoing training and development are crucial.

* Nestlé continues to maintain its commitment to follow and respect all applicable local laws in
each of its markets.

Mission Statement

At Nestlé, we believe that research can help us make better food so that people live a better
life.

Good Food is the primary source of Good Health throughout life. We strive to bring consumers
foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. In
addition to Nutrition, Health and Wellness, Nestlé products bring consumers the vital
ingredients of taste and pleasure.

Vision statement

Nestlé aim is to meet the various needs of the consumer every day by marketing and selling food
of a consistently high quality.
The confidences that consumers have in our brands is a result of our company’s many years of
knowledge in marketing, research and development, as well as continuity – consumers relate to
this and feel they can trust our products.

MAIN PRODUCTS

Good Food, Good Life: the key to health, nutrition and wellness.

With over 140 years of experience and expertise, we take great pride in bringing you the best
products because happy, healthy consumers are important to us.

We develop our products keeping your preferences, tastes and needs in mind. We understand
that you, along with millions of other consumers, know that you can trust our products to
deliver purity, quality, convenience and nutrition.

Our products are carefully aligned to Pakistani tastes and needs. We're always trying hard to
develop new products and improve existing ones, and serve our consumers better.

That's why through constant renovation and innovation we're always testing or launching value
added products and making them available in sizes that will suit every requirement.

So explore the world of health with Nestlé products, and find out what suits your family's needs!

HUMAN RESOURCE

HR is dedicated to their employees, and ensures that they have all the right people with the
right skills, in the right places at the right time.

Understanding that their people are the bedrock of all their business strategies, it is their
mandate to enhance their skills with cutting-edge training and provide them with world-
standard facilities.

They select flexible, innovative people who are ready to confront new challenges and make a
difference. Their groundbreaking Management Trainee Programmed aims to develop talented
young men and women and help them achieve their potential in a dynamic and enabling
environment.

Over a hundred people travel out of the country every year to take advantage of their
international training and development events.
GETTING STARTED:
Nestlé is the world’s largest and most respected food company, and their success is built on
their people. Their 140 years of experience has taught us that people are more important than
systems & processes.

They offer you an attractive and dynamic working environment where you'll find constant
opportunities for development: a place where you can grow, learn, and fulfill their potential to
the utmost.

WHAT THEY BELIEVE IN:

They are a people company. Their people are their greatest strength, and nothing can be
achieved without their commitment and energy.

At Nestlé Pakistan their opinion counts.

Here you'll fit into a corporate culture that's based on a set of fundamental principles and
values. These are:

• High commitment to quality products and brands

• Respect of other cultures and traditions
• Commitment to strong work ethic
• Personal relations based on trust and mutual respect
• Proactive cooperation
• Being pragmatic rather than dogmatic
• Favoring decentralization and networking
• Being committed to work and quality
• Preferring the long-term perspective to short-term thinking
They're proud of their traditions and heritage, and as times change, these core values keep
evolving.

The Nestlé Difference

At Nestlé you'll find their self in a dynamic and invigorating environment, surrounded by people
who are passionate about their work.

You'll feel empathized to contribute to the company's business objectives and to achieve their
own personal and professional goals.

You and their colleagues shape and lead the organization – their energy is its greatest strength.
Family & Female-Friendly Organization:

Diversity is central to the nature of their business. As a global organization, Nestlé caters to the
needs of diverse consumers.

This is only possible due to the diverse backgrounds and interests of their people and their firm
commitment to embracing diversity at all levels.

When they employ staff, they make a commitment to provide them with good working
conditions. Female employees and their employees' families know that Nestlé Pakistan has a
friendly and caring attitude.

They recently set up a day-care centre, and have established a comprehensive Maternity
Benefits Scheme for their female employees.

Total Competitive Remuneration:

At Nestlé you can be sure you'll get competitive and fair remuneration structures. Their
remuneration is benchmarked against other organizations and surveyed on a regular basis to
ensure that they remain competitive.

Their pay and compensation strategy is tied to the achievement of their business objectives.
This linkage helps us define a growth-oriented culture, making us the most preferred employer
in the market.

The benefits of working at Nestlé go beyond the financial. Here, you'll find a structure to help
you fulfill their ambitions and support their lives.

Growth:

New employees are given responsibility at an early stage, and high performers can develop fast.

Their international and multicultural working climate is conducive to creativity, innovation and
personal development. And you'll get competitive working conditions, a compensation package
and social benefits in line with their company's high standards.

Here, you'll get the room to add value and make a real difference. If you're qualified and ready
to confront new horizons, you'll have the chance for a truly international career.
Learning:

If you want to keep learning and improving every day of their working life, you might fit in very
detail at Nestlé Pakistan.

From their very first day, you will start to acquire new skills that may take you to the very top,
and to the furthest corners of the world.

Here, you'll thrive in an environment of lifelong knowledge enrichment, where learning is a

continuous process rather than an occasional programme or event.

That's why you'll find their self working with people who want to know more, do more and
achieve more – for themselves., and for the organization.

SAFETY AT WORK

Nestlé is committed to being a leader in workplace safety and health.

The Nestlé Occupational Health and Safety Management System (NSMS) was revised in line with
the 2007 edition of the international standard OHSAS 18001 and reissued to all Nestlé
operations, reinforcing our commitment that “Safety is non-negotiable”.

They are also working towards external certification of our factories against OHSAS 18001. This
will provide a common language around our health and safety management systems, and make
it easier to demonstrate implementation of these standards to our stakeholders.

The number of workplace injuries has been reduced. For example, in 2007 the number of
injuries leading to one or more days away from work in Nestlé decreased to almost one quarter
of that seen in 2001.

Major focus on preventing accidents:

Over the years, Nestlé has developed a strong network of local Safety, Health and Environment
functions that develops and shares best practices in accident prevention across the world.

Involving employees:

Employees at all levels are employed to assume ownership of workplace safety. Behavior based
safety programs are being implemented in all operational sites (including factories and
distribution centers). Safety observations made by those most concerned are gathered and
analyzed and measures to eliminate or manage risks are implemented.
Tools to manage safety performance:

Custom-made tools have been put in place to track workplace safety key performance
indicators. Safety practitioners and managers have access to reports about their local
performance and those of other sites, enabling easy internal benchmarking and identification of
best practices.

Safety at Work Award:

In order to reinforce a culture of safety in the company Nestlé has created a 'Nestlé Safety at
Work Award' 2008. Nestlé country or market organizations worldwide presented applications to
the jury. Each country or market organized an internal safety award competition and designates
one champion team to participate in the Nestlé Safety Award. Local winners are recognized with
Gold, Silver and Bronze awards and the global winners will be announced at the end of March.

The winners are presented with their trophies at the Nestlé Market Conference.

Nestlé Policy on Health and Safety at Work:

Nestlé regards its people as its most valuable asset and places the highest priority on protecting
them. TheNestlé Policy on Health and Safety at Work is based on the Nestlé Corporate Business
Principles, which are binding for the whole Nestlé Group.

Prevention of work-related injury and illness

Nestlé believes that work-related injuries and illnesses can be prevented. They integrate health
and safety into management of the business by establishing local safety organizations that
proactively advance a strong safety culture. Further, they implement worldwide our
mandatory Nestlé.

Operational Safety, Health and Risk – Management

Strategy, which meets or surpasses the requirements of the health and safety laws applicable in
the countries in which they operate conduct risk assessments and take appropriate corrective
action to minimize threats to human health and safety. Furthermore, they establish emergency
and contingency plans to deal with residual risks. This approach also minimizes threats to the
business, protecting our shareholders’ interests; continuously improve our performance by
adapting processes, work practices and systems as a result of monitoring safety performance
and analyzing accidents or occupational health problems.
Nestlé and third parties

Nestlé understands the responsibility of the community and third parties in managing safety.
Therefore, they communicate with relevant local communities and their emergency services,
providing them with adequate health and safety information on our operations. They encourage
joint training and exercises with local emergency services where appropriate ensure that all
third parties entering Nestlé sites have sufficient relevant information and training and are
properly equipped to safely execute their tasks on our sites; regard health and safety
management as an important consideration in supplier and contractor selection. Nestlé enforces
this policy on third parties operating on our sites and encourages our suppliers and contractors
to apply similar standards of Nestlé sites.

Management leadership and employee involvement

Nestlé recognizes the critical role of our people to ensure a safe and healthy work environment.
As an integral part of managing the business, all Nestlé managers are accountable for managing
workplace health and safety with strong leadership and credibility. They build a proactive safety
culture by actively engaging our employees and other relevant

stakeholders to drive implementation of all elements of our Nestlé Operational Safety, Health
and Risk Management Strategy through consultation and communication with staff at all levels
educating, training and equipping staff at all levels to ensure that they are employed to avoid
unsafe situations and to respond rapidly to unexpected events; setting targets and monitoring
performance to drive continuous improvement of our achievements, while providing the needed
resources to ensure a safe working environment. Further, employees at all levels are
accountable to work in a safe manner to prevent injury to themselves and fellow workers, and
to become actively involved in programs to improve health and safety performance in the
workplace.

Implementation
Nestlé implements this policy through the Nestlé Operational Safety, Health and Risk –
Management Strategy to ensure a consistent and coherent standard worldwide. However, the
specific methods of managing health and safety at work depend on local social norms, practices
and regulations. Local management is accountable to implement an adapted safety organization
to comply with this policy.

The Nestlé Operational Safety, Health and Risk Management System, supports the Nestlé
Operational Safety, Health and Risk – Management Strategy by guiding managers on the most
effective implementation approach.

Key Figures:
Tracking workplace injuries: Five-year Evolution:
Nestlé started tracking injuries that lead to days away from work and/or to medical treatment
at corporate level in 1998. This tracking covers approximately 275,000 employees and 50,000
contractors (those that work at Nestlé sites) across the world. Since then, significant progress
has been achieved. In the period 2003-2007, the number of injuries with time away from work
(for employees and contractors) per million hours worked reduced by 65%.

RECRUITMENT

WHAT THEY LOOK FOR:

It takes a special sort of person to come and work at Nestlé Pakistan.

That's why, when selecting candidates, they look for a set of interrelated characteristics
encompassing three key areas: knowledge, personality and motivation.

Professional Knowledge:

Do you have a great academic record that demonstrates their intelligence, commitment and
hard work? Can you show us you have a sharp analytical mind, and the drive necessary to
succeed in a competitive environment?

If you think you fit the bill, you may be right for Nestlé Pakistan.

They look for good academic results at university or equivalent qualifications. However, the
class of the degree you have obtained, though very important, is not the only criterion for
selection.

Other experiences during their studies, previous jobs, assignments, language theses and any
other significant extracurricular activities and achievements, are also given the right.

They look for candidates who can identify a problem, analyze it, look at different options, and
come to reasoned conclusions.

They want people with drive and tenacity, energy and enthusiasm, who can initiate a project
and follow through to the end.

All these skills are vital during a career at Nestlé Pakistan.

Personality:

To succeed at Nestlé Pakistan, you need more than professional knowledge. You need a flair for
the field of activity of their choice, an open mind, and a willingness to dig in and learn new
skills and ideas.
They're looking for applicants who are dynamic and communicative. People, who can listen,
understand and integrate the opinion of others, people who can express their ideas clearly, both
verbally and on paper.

They want people who like to negotiate, even with very different partners, and to solve
problems in complex situations.

They like candidates who show leadership, inspire others, and are self-confident, yet realistic.
People who have a positive attitude to work and are willing to work hard, even under
pressure.They seek people who can be objective in their assessment of themselves and of
others.

Motivation:

While they expect loyalty to their company, they expect their people to be critical and suggest
improvements wherever necessary. They like people who are motivated themselves & can
motivate others.

What Will Make You Right for Nestlé?

A Nestlé employee is characterized by creativity and dynamism. They don't only look for
specialists, but people who have knowledge and skills in more than one field, with broad
interests.

To sum up, they want people with purpose and ambition, though not at the expense of others.

They want people who take responsibility for their actions, who consider Nestlé their own
business, and who show an entrepreneurial spirit.

If you think you fit the Nestlé profile, you might be just the person they're looking for!

Recruiting process:

Applying for a current job / graduate program / internship

Please look through the vacancies and choose which you are interested in.

Create your CV by filling out the online form.

Once the application is complete, you will receive a confirmation message telling you that it has
been received and is being processed.
Receiving CVs:

They will review and select CVs that best match open jobs. Please note that only completed CVs
will be taken into account.

Only selected candidates will be contacted.

In any case, you will receive an e-mail telling you when the job you applied for has been filled.

Register for our talent pool:

If there is no job opening suitable for you, you can still register your details in our database.
You will then be considered as a potential candidate for new up coming positions.

They regularly review CVs and jobs to try to match registered candidates with job openings.

You will only be contacted if they find a suitable match.

The Interview Process

Graduate Program Applicants

Regular group interview sessions are held throughout the year for most of the Graduate
Programs.

This is a one-day sessions that consists of discussions about potential jobs and career
developments, individual interviews with HR and line managers, group and/or individual case
studies.

If you are successful at the group stage, you will be invited for an individual interview day with
HR and line managers.

Professional applicants:

You should expect a series of individual interviews with HR and line managers. These will
generally focus on your background and motivation as they’ll as how you likely fit Nestlé's
culture and values.

Internships applicants:

You will be interviewed by HR as they’ll as a line manager. These interviews will generally focus
on your background and motivation as they’ll as how you likely fit Nestlé's culture and values.
TRAINING

Management Trainee Programmed:

If you're young, bright and hard working, the Management Trainee Program may be the place for
you. They hire fresh graduates as potential managers to develop new competencies and skills
through on-the-job development.

You'll be hired in one of various departments at inductee level on a 12-month training program.
Once you've completed the program, you will be assigned independent responsibilities
supporting the company's business needs.

They begin sourcing Management Trainees in January. Preliminary interviews and screening is
organized according to the graduation schedules of Pakistani and foreign universities, and are
followed by interviews with senior management.

Employee Nutrition Training

Building a continuous nutrition learning culture within Nestlé is a key element in our journey to
become a nutrition, health and wellness company, to provide profitable growth in the future.
To support this objective, they have developed the NQ (Nutritional Quotient) training program
for employees, based on the principle that nutrition is everybody’s business at Nestlé,
irrespective of the area in which employees work.

Nestlé’s expert nutrition knowledge is long-established, centered on the activities of Nestlé

Nutrition and our R&D network. The NQ program is designed to widen and increase the
knowledge base among employees in other job functions, giving everyone the confidence to
apply this knowledge in their work.

The program combines nutritional knowledge with commercial application. For example, when
communicating with consumers about balanced diets, the knowledge gained by Nestlé
employees through the NQ program will help make nutrition and wellness tangible to
consumers, ensuring that Nestlé is regarded as a knowledgeable partner in nutrition matters.
Not only this - a major aim of the program is also to help employees make informed and healthy
nutrition choices for themselves and their own families.

A modular program

NQ training comprises engaging modules suitable for all employees, from the Executive Board to
plant operators, and leverages the nutrition expertise of Nestlé scientists and health marketing
specialists. Implementation began in 2007, with Nestlé nutrition experts and marketing
specialists taking part in "train the trainer" sessions across our zones to support the cascade of
knowledge to all employees.
Key to the success of the NQ training are interactive, customized modules designed to
encourage people to participate and put knowledge into action. These are tailored to specific
needs:

Foundation module: a stand-alone program of learning and development for Nestlé employees
whose jobs are principally non consumer or customer facing.
Advanced module: core learning for staff who are engaged with external bodies and
consumers/customers.
Specialist modules: place particular emphasis on understanding the consumer and application of
the Nestlé nutrition and wellness strategy in specific product categories.

A complete toolkit

The NQ program toolkit comprises a suite of materials for trainers, including training manuals
and slide sets. For trainees themselves, learning takes place in an engaging way using a variety
of media and formats, including interactive games, motivational video content and an on-line
quiz. This is used to measure collective progress and to allow each trainee to evaluate, in an
entirely confidential way, his or her personal lifestyle choices. The toolkit also comprises
awareness-raising and motivational material that can be used and adapted to meet local needs,
including posters, questionnaires and certificates.

Ongoing development

As nutrition and our insights into nutrition evolve, so too will our NQ Nutrition training, helping
Nestlé employees to keep abreast of new developments and maintain a high level of credibility
through the breadth and depth of our nutrition expertise.

Internships:

Internships are a great way to apply the knowledge and skills you are developing at university
and get experience in a leading corporation.

They offer project-based internship positions in various departments at Nestlé Pakistan.

You may be hired as an intern at various points during their academic career: during
undergraduate study or graduate school.

Most internship assignments are offered during the summer months and generally run for 6 to 8
weeks.

At the end of the internship you will be required to submit a project or program report to the
company on the topic assigned to you at the beginning of the internship program.

If you impress us with their talent & hard work, you may be considered for employment
opportunities after you have completed their studies.

The Nestlé Human Resource Policy

This policy encompasses those guidelines which constitute a sound basis for efficient and
effective HR Management in the Nestlé Group around the world.

They are in essence flexible and dynamic and may require adjustment to a variety of
Circumstances. Therefore its implementation will be inspired by sound judgment, compliance
with local market laws and common sense, taking into accounts the specific context. Its spirit
should be respected under all circumstances.

As Nestlé is operating on a worldwide basis, it is essential that local legislation and practices be
respected everywhere. Also to be considered is the degree of development of each market and
its capacity to advance in the management of their human resource.

Should any HR policy conflict with local?

Legislation, local legislation will prevail.

These policies are addressed to all those who have a responsibility in managing?

People as they will as to HR professionals??

The Nestlé Management and Leadership Principles include the guidelines inspiring all the Nestlé
employees in their action and in their dealings with others. The Corporate Business Principles
refer to all the basic principles which Nestlé endorses and subscribes to on a worldwide basis.
Both these documents are the pillars on which the present policy has been built.

A SHARED RESPONSIBILITY:

HR managers and their staff are there to provide professional support in handling people
matters but should not substitute themselves to the responsible manager.

Their prime responsibility is to contribute actively to the quality of HR management throughout

the organization by proposing adequate policies, ensuring their consistent application and
coherent implementation with fairness. Acting as business partners, the HR manager advises and
offers solutions which results in positive impact on the organization’s effectiveness.
Furthermore, she/he proposes best practices and provides state-of-the-art support and
counseling to her/his colleagues. Together they act as co-responsible partners for all HR
matters. This partnership is the key for efficiency in people management. The communication
skills of the HR staff must be appropriate to deal with all delicate matters as they occur
frequently in human relations issues. They gain their credibility not only from their professional
contribution but also through the care and the excellence of their communication skills.

CAREER MANAGEMENTJOINING NESTLE:

The Nestlé Human Resource Policy The long-term success of the Company

Depends on its capacity to attract, retain and develop employees able to ensure its growth on a
continuing basis. This is a primary responsibility for all managers. The Nestlé policy is to hire
staff with personal attitudes and professional skills enabling them to develop a long-term
relationship with the Company.

Therefore the potential for professional development is an essential standard for recruitment.

Each new member joining Nestlé is to become a participant in developing a sustainable quality
culture which implies a commitment to the organization, a sense for continuous improvement
and leaves no place for complacency.

Therefore, and in view of the importance of these Nestlé values, special attention will be Paid
to the matching bettheyen a candidate’s values and the Company culture.

Hence, a clear communication of these principles and values from the very beginning of the
recruitment process is required.

Moreover, for managerial positions specific leadership qualities and business acumen will be
required. Nestlé wishes to maintain and develop its reputation as an employer of high repute.
Contacts with universities, attendance at recruitment events and other contacts are to be
undertaken so as to ensure good visibility of the Company vis-à-vis relevant Recruitment
sourcing. Particular care will be given to the treatment of each Candidacy regardless of the
outcome of the selection process.

Even when promoting employees intensively from within the organization, it is the role of
management and HR to keep an eye on valuable candidates from outside and to Benchmark
internal skills with external offers.

Whilst adequate recruitment tools may improve the hiring process, it is understood that the
decision to hire a candidate remains in the hands of the responsible manager Supported by the
HR staff. Under no circumstances should the decision to hire or not to hire be left in the hands
of an outside consultant or expert. As mentioned in the Nestlé Management and Leadership
Principles, only relevant skills and experience and the adherence to the above

Principles will be considered in employing a person. No consideration will be given to a

candidate’s origin, nationality, religion, race, gender or age.

It is as important to hire the right person as it is to integrate newcomers in the organization so

that their skills and behavior can merge smoothly with the Company culture. Whereas from new
employees it is expected to respect their company’s culture, it is accordingly required from all
employees to show an open mind towards new ideas and proposals coming from outside.

EMPLOYMENT AT NESTLE

The Corporate Business Principles outline the Company’s commitment to fully endorse and to
respect a series of principles and international conventions concerning employee’s rights, the
protection of children against child labor and other important issues. These principles are to be
respected everywhere and under all circumstances.

The management will implement the necessary processes to ensure that these principles are
enforced at all levels. Employees who are not abiding with the Corporate Business Principles and
the Nestlé Management and Leadership Principles cannot be maintained in employment and will
be requested to leave the organization. Also their main suppliers and providers of out sourced
services should be informed of the Corporate Business Principles and should comply with those.
Nestlé provides a working environment which protects the health and there welfare of the
employees according to the highest?

Affordable standards of safety, hygiene and security. Each employee should not only Care for
her/his own safety but also that of her/his colleagues. Therefore, suggestions for improvement
are they come and will be given prime consideration.

In the same way that no discrimination for reason of origin, nationality, religion, race, Gender
or age will be tolerated when joining Nestlé, no such discrimination will be tolerated towards
Nestlé’s employees. Furthermore, any form of harassment, moral or sexual, will not only be
prohibited but actively tracked and eliminated. Internal Rules and regulations will explicitly
deal with discrimination and harassment issues so as to obtain the best possible prevention.
Nestlé considers that it is not enough to avoid discrimination or harassment. It is essential to
build a relationship based on trust and respect of employees at all levels. Therefore, it is
indispensable for each manager to know how her/his employees feel in their work. In larger
units it may be necessary to organize such feedback on a regular basis, using internal surveys or
other valuable approaches. Nestlé favors a policy of long-term employment. Whenever, an
operation activity cannot be maintained within the Nestlé sphere, reasonable steps will be
undertaken to avoid overall loss of employment by identifying an external Business willing to
take over activity from Nestlé, whenever this is possible.

If this is not possible, a closing down may be unavoidable. It will be handled in full respect of
local legislation and of the Corporate Business Principles. A social plan will be elaborated taking
into account the legitimate interests of the concerned staff.

Reasonable efforts will be deployed to reduce, as much as possible, the negative Social impact
of such a situation.

Knowledge transfer:

Knowledge Transfer is about making the very best out of our huge intellectual assets and
resources and ensuring that this information is shared with our partners and within our
communities.

The research and business models that have proved of great success within Nestlé have been
taken on into communities and used to enable and their other businesses and initiatives.

The most recent example of this is the participation of Nestlé in donating funds for the drilling
of deep wells and the installation of 22 community water supplies to provide clean and safe
water for some 40 000 people. The funds are also be used to train community structures on
maintaining the pumps and improve overall hygiene practices.

The project is under the umbrella of the International Federation’s Global Water and Sanitation
Initiative (GWSI) launched in 2005, which has set a framework for scaling-up action and
partnership to contribute to the UN Millennium Development Goals, in particular the goal to
reduce by half the number of people without sustainable access to safe water and sanitation by
2015.

Listening and responding to employee views

Businesses throughout Nestlé listen and respond to employees. Nestle globally conducted an
independent survey, which provided constructive feedback from employees on a range of topics.
A clear finding was that Nestle employees wanted the business to take a fresh look at internal
communication. Nestle responded firstly by running structured workshops to help translate
opinions into action. Various initiatives they are implemented as a result. These range from new
opportunities to meet and share ("mystery lunches" and monthly departmental meetings) to
improved information sources (intranet and publications library). Nestlé is conducting a global
employee survey. This is currently underway, and they will be able to report on it in future
publications.
Work/Life Balance:

At Nestlé they believe that the employee’s private and professional life should have a good
balance.

Not only because it reinforces employee’s satisfaction, loyalty and enhances

Productivity but also because it positively reflects on the Company’s reputation. It helps
attracting and retaining people and reconciles economical imperatives with they’ll being. Nestlé
is willing to support employees who wish to take an active part in the life of the community or
by assuming responsibilities in professional, civic, cultural, religious or voluntary organizations it
being understood that any activity during working theirs be first approved by the Company.

In the same spirit, Nestlé provides flexible working Conditions whenever possible and provides
its employees to have interests and motivations outside work.

PROFESSIONAL DEVELOPMENT:

Learning:

Learning is part of the Company culture. Each employee, at all levels, is conscious of the need
to upgrade continuously her/his knowledge and skills.

The willingness to learn is therefore a non-negotiable condition to be employed by Nestlé. First

and foremost, training is done on-the-job. Guiding and coaching is part of the responsibility of
each manager and it is crucial to make each one progress in her/his position. When formal
training programs are organized they should be purpose oriented and designed to improve
relevant skills and competencies. Therefore they are proposed in the framework of individual
development programs. As a consequence,

Attending:

A program should never be considered as a reward. Adequate training programs are developed
at the level of each operating company capitalizing on the availability of local, regional or
global resource of the Group. It is the responsibility of HR staff to assist the management in the
elaboration of training programs. Great importance will be attached to programs enhancing the
language skills of the employees. Training programs organized at the International Training
Centre Rive-Reine aim at developing and sharing best practices of the various management
disciplines practiced in the Group. They also strive to strengthen corporate cohesion as they’ll
as to promote networking throughout the Group. Training programs should, as much as possible,
be based on action learning and reduce ex-cathedra teaching to the strict minimum. It is
necessary to make optimal use of e-learning programs as a complement to or a substitute for
formal training programs.

According to needs they should be made available at shop floor level and enlarge the access to
training. It is the role of each manager to assess progress achieved as a result of training
Programs. Assessing and Developing each employee is in charge of her/his own professional
development. However, the Company endeavors to offer the opportunity to progress for those
having the determination and the potential to develop their capabilities.

Such opportunities should take into account the potential of each employee and be discussed
with transparency. They will be based on defined possibilities, concentrate on the next career
step and not on vague promises or remote hypotheses. The Company provides its employees to
express their objectives and expectations in an open dialogue. The objective is to retain and
motivate employees by offering attractive but realistic career moves allowing them to develop
their skills over a long-term period within the framework of economic reality and a changing
environment. Whereas succession plans forecast the Company needs, they will be reconciled,
inasmuch as possible, with individual development plans. HR management provides the support
for implementing the necessary planning tools, having in mind the necessary flexibility to cope
with unforeseen situations. However, it is understood that each manager is co-responsible for
preparing.

The resource necessary to the development of the Company as this is also part of his
accountability. Regular counseling and guidance are the best tools for improving performance
and for helping people develop their skills. It also allows to correct errors swiftly and to
transform them into a positive learning experience. In an organization with flat structures this
supports better delegation. Direct personal contact should always been given preference over
written communication whenever possible. Each manager has the duty to act as a mentor for his
employees. Formal assessment should take place on a regular basis, preferably once a year. Its
purpose is to provide feedback on past performance and future potential as they’ll as on other
relevant aspects concerning a staff member’s work including the development of his skills and
competencies. Both the positive and negative aspects of individual performance should be
frankly addressed. Assessment of performance should be based on facts rather than opinions.
For managerial positions, assessment will be based essentially on agreed objectives and their
level of achievement.

Efficient performance management emphasizing the achievement of agreed Objectives is a

prime responsibility for each manager. The necessary time should be dedicated to the
monitoring and the follow-up of the progressive achievement of objectives during the year. This
feedback is meant to stimulate performance and should take place through an open dialogue
based on mutual trust and willingness to progress. It is requested to provide written evidence of
such meetings. Focus should be essentially on continuous improvement, appropriate training
measures but also on shaping a Stimulating working environment. In case of serious
underperformance, a termination of employment should be envisaged. Such termination should
be handled with due respect of the person and should include, where appropriate, separation
terms that take into account the employee’s personal situation. When assessing potential it
should be kept in mind that the best indicator of talent is achievement. Therefore responsibility
should be given as early as reasonable to allow people to prove themselves. Candidates for
managerial positions should clearly have demonstrated their willingness and ability to apply the
Nestlé Management and Leadership Principles.

Promotions will exclusively be based on competence, insight, performance and potential with
the exclusion of any consideration for origin, race, nationality, gender, religion or age.
Flexibility is a requirement for ensuring a positive professional evolution. Staff may be
requested to move to other positions. Managers, especially international staff, may be asked to
move to other locations. International experience and participation in group development
initiatives such as GLOBE, SMPT and others can be acquired in all countries of the Group and are
a requirement for holding high-level positions. The development of expertise in specific areas of
competence is determinant for the Company’s success. Therefore job rotation should be
practiced with caution. Whilst job rotation might be useful under certain circumstances, it
should not result in threatening their expertise in key areas of Professional Development.

Industrial relations:

Nestlé upholds the freedom of association of its employees and the effective recognition of the
right to collective bargaining. Nestlé wishes, also through its relationship with unions and other
representative associations, to sustain the long-term development of the Company, both to the
benefit of the employees and of the Company, by maintaining a level of competitiveness
adapted to its economic environment. Industrial relations are a clear responsibility of local
management and will be handled at the appropriate level: first at site level (factories,
warehouse) subsequently at regional or national level, according to local law and practices.

Nestlé will ensure that direct and frequent communication is established with its employees,
both union members and non-members, as mentioned in the Nestlé Management and Leadership
Principles. Relations with unions will be established under strict observation of national law,
local practices as they’ll as those international recommendations to which Nestlé has adhered
to on a voluntary basis as stated in the Corporate Business Principles.

Contacts with union delegates should create a further opportunity to provide information
allowing their members and other representative associations to acquire a full understanding of
the business activities and the goals of Nestlé. In accordance with local legislation, Nestlé will
refrain from any action restricting the employee’s right to be or not to be affiliated to a union.
Nestlé will not engage with any union or other representative association in activities or
discussions other than those relating to employment and working conditions as they’ll as issues
relating to the workplace. Whenever negotiations take place, they will be duly prepared with
the full involvement of line management and take into account both the Company’s and the
employees’ legitimate interest. In dealings with unions, it will be ensured that management
prerogatives be properly maintained.

The fact that Nestlé is more people and product than systems oriented is reflected in the way
HR is functioning and is organized. Processes and systems as they’ll as professional HR tools are
there to support HR management but never to the detriment of the human dimension. The
human perspective should be present at all times and under all circumstances. The HR function
should report to the manager responsible for a defined operation (Region, Market, Country, and
Factory) with a functional relation to the market HR according to the size of that operation.

The HR manager should not only have the skills and competencies from a purely professional
standpoint but also have the charisma and the credibility to be a trustworthy partner to her/his
colleagues. Whereas the HR function should indeed provide flawless administrative support, its
main role is to add value to the business and to play a proactive role in every situation where
HR action is required. Specific HR KPI’s are useful in assessing the performance of an HR unit.
However, it should be kept in mind that the HR contribution aims in the first place at optimizing
the overall company performance through improving people performance. With the evidence
that the human capital is of increasing importance, HR plays indeed a pivotal role in the
conception and implementation of the people strategies that impact financial results and the
organization’s overall reputation and effectiveness.

The Nestlé Spirit:

You could be forgiven for expecting to see a mission statement here, summing up our
beliefs and principles in a few slick phrases. But that's not the approach they take.

Nestlé is not like other companies. They have a unique set of values and guiding principles that
have been built up over time. To try to summarize them in a sentence or two would make them
meaningless.

To engender the unique spirit that permeates the entire Nestle Group:

They believe in people, rather than systems

They are committed to creating value for our shareholders, but they will not favor short-term
profits at the expense of long-term business development
They are as decentralized as our basic policy and strategy decisions will allow
They are committed to continuous improvement rather than dramatic, one-off changes Above
all, they are pragmatic and not dogmatic
If these are values that strike a chord with you, spare a few minutes to read through the
questions below. If you can tell them all with 'yes', they'd like to hear from you.
Do you look forward to change?

Nestlé is proud of its traditions and heritage. But that doesn't mean they are stuck in the past.
To keep us ahead in the ever-changing food industry, they are constantly driving forward the
boundaries of our industry. Our people must be:

creative
excited by the future
flexible

Are you open minded and ready to learn - every day of your career?

They are committed to the continual training and personal development of our people. A world
of opportunities quite literally awaits those who are prepared to:
learn something new every day
adapt to new environments
develop multi-lingual skills

Do you have courage in your convictions and keep your cool under stress?

Then you could have what it takes to be a Nestlé manager. The development of our business
depends on finding people who are ambitious for themselves and for our company, who can:

communicate and innovate

motivate and inspire
delegate without abdicating responsibility

Do you want to explore new countries and adopt new cultures?

Nestlé has been an international company since its very beginning. Food is intrinsically linked
with local eating and social habits, and Nestlé endeavors to integrate itself as much as possible
into the cultures and traditions of the countries where it operates. To deliver products that
meet the needs of individual consumers, they need people who:

respect other cultures

embrace diversity
never discriminate on any basis

Are you ready to be the best?

Whether they are creating a product to fulfill a nutritional need, or a chocolate bar that's purely
for pleasure, Nestlé is only satisfied with the best. They expect that same commitment to
quality from our people. So get in touch with us if you are:
enthusiastic
dedicated
ready to be part of our success
Many other companies say that people are their most precious asset. They know that what
makes our company unique is our staff: the people who share our beliefs and principles and who
work constantly to keep Nestlé in its leadership position. Nestlé is not a faceless company
selling to faceless consumers. It is a human company providing response to individual human
needs the world over.

Corporate Business:
Nestlé is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices:

Nestlé's business objective, and that of management and employees at all levels, is to
manufacture and market the Company’s products in such a way as to create value that can be
sustained over the long term for shareholders, employees, consumers, business partners and the
large number of national economies in which Nestlé operates;

Nestlé does not favor short-term profit at the expense of successful long-term business
development, but recognizes the need to generate a healthy profit each year in order to
maintain the support of our shareholders and the financial markets, and to finance investments;

Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior,
beliefs and actions of the Company behind brands in which they place their trust, and that
without its consumers the Company would not exist;

Nestlé believes that, as a general rule, legislation is the most effective safeguard of responsible
conduct, although in certain areas, additional guidance to staff in the form of voluntary business
principles is beneficial in order to ensure that the highest standards are met throughout the
organization;

Nestlé is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and employees.
Therefore recruitment of the right people and ongoing training and development are crucial;

Nestlé operates in many countries and in many cultures throughout the world. This rich diversity
is an invaluable source for our leadership. No single document can capture every legal obligation
that may be required in each of these countries. Indeed, there may be conflicting legal
requirements. Nestlé continues to maintain its commitment to follow and respect all applicable
local laws in each of its markets. If an interpretation of anything contained in this document is
construed as contrary to local laws, such interpretation should not be followed in that country
Nestlé Corporate Business Principles:

Nestlé is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices:

– Nestlé’s business objective, and that of management and employees at all levels is to
manufacture and market the Company’s products in such a way as to create value that can be
sustained over the long term for shareholders, employees, consumers, business partners and the
large number of national economies in which Nestlé operates.

– Nestlé does not favor short-term profit at the expense of successful long-term business
development, but recognizes the need to generate a healthy profit each year in order to
maintain the support of our shareholders and the financial markets band to finance investments;
Nestlé recognizes that its consumers have a sincere and legitimate interesting the behavior,
beliefs and actions of the Company behind brands in which they place their trust, and that
without its consumers the Company would not exist.

– Nestlé believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the form of
voluntary business principles is beneficial in order to ensure that the highest standards are met
throughout the organization; Nestlé is conscious of the fact that the success of a corporation is a
reflection of the professionalism, conduct and the responsible attitude of its management and
employees.

Therefore recruitment of the right people and ongoing training and development are crucial;
Nestlé operates in many countries and in many cultures throughout the world. This rich diversity
is an invaluable source for our leadership. No single document can capture every legal obligation
that may be required in each of these countries. Indeed, there may be conflicting legal
requirements. Nestlé continues to maintain its commitment to follow and respect all applicable
local laws in each of its markets.

If an interpretation of anything contained in this document is construed as contrary to local

laws, such interpretation should not be followed in that country.

National Legislation and

International Recommendations:
Nestlé emphasizes that, as a minimum, its employees must comply with the laws applicable in
the countries in which it operates. Nestlé ensures that the highest standards of responsible
conduct are met throughout the organization, by complying in a responsible way with the Nestlé
Corporate
Business Principles:

That guide Company activities and relationships worldwide in each sector of business interest.

Nestlé supports and publicly advocates the United Nations Global Compact and its nine
principles, an initiative of the United Nations Secretary-General. The Global Compact asks
companies to embrace, support and enact, within their sphere of influence, a set of core values
in the areas of human rights, labor standards and the environment.

Nestlé recognizes that increasing globalization is leading to the development of more and more
international recommendations. Although, as a general rule, these recommendations are
addressed to governments, they inevitably impact on business practices. Among others,

Nestlé has incorporated relevant International Labor Organization Conventions. Nestlé endorses
relevant commitments and recommendations for voluntary self regulation issued by competent
secretarial organizations, provided they have been developed in full consultation with the
parties concerned. These include the International Chamber of Commerce (ICC) Business Charter
for Sustainable Development. Also, Nestlé uses the revised Organization for Economic Co-
operation and Development (OECD) Guidelines for Multinational Enterprises, for its Corporate
Business Principles.

Consumers:

Nestlé aims to create value that can be sustained over the long term by offering consumers a
wide variety of high-quality, safe food products, at affordable prices. The Nestlé Seal of
Guarantee is its basic promise to the consumer. Nestlé believes that consumer communications
such as advertising play an important function in enabling consumers to exercise their right to
informed choice. The Company is committed to responsible consumer communications that: do
not mislead as to the benefits derived from use of the product;

– do not exploit violence, sex or profanity;

– do not depict discriminatory or offensive attitudes to religious, political, ethnic, cultural or

social groups;

– avoid demonstrations that encourage dangerous or inappropriate use of the product;

– do not portray competitors’ products inaccurately, nor denigrate competitors’ products;

– avoid the exploitation of media events that could be in bad taste. In addition to the above
principles, Nestlé does not sponsor consumer communication vehicles such as television and
radio programs or magazines whose strategy of attracting readers is to exploit violence, sex or
offensive attitudes to consumers. When collecting consumer data, Nestlé complies with
applicable data protection regulations and applies Nestlé standards where specific legislation is
not yet in place.

Children as Consumers

Nestlé has developed the following principles for advertising to children:

– Advertising to children should not attempt to undermine the authority, responsibility or

judgment of parents or care providers;

– Advertising to children should not portray children in unsafe situations nor encourage them to
accept invitations from people they do not know;

– Communications should not demonstrate either unsafe or irresponsible consumption.

As programming is increasing in importance as a marketing communications vehicle, the

principles applied to other forms of communication will be applied here.

Human Rights:

Nestlé fully supports the United Nations Global Compact’s two guiding principles on human
rights. Nestlé therefore: Supports and respects the protection of international human rights
within its sphere of influence (Principle 1)

And ensures that its own companies are not complicit in human rights’ abuses (Principle 2)

Nestlé aims to provide an example of good human rights’ practices throughout its business
activities and has an interest in encouraging the improvement of social conditions, which are an
important factor for sustainable development. Nestlé also recognizes that governments are
ultimately responsible for the establishment of a legal framework for protecting human rights
within their markets. Nestlé expects each market to respect and follow the local laws and
regulations concerning human rights’ practices.

Child Labor:

It is generally acknowledged that the causes of child labor are complex and include poverty,
differing stages of economic development, social values and cultural circumstances. Nestlé
believes policy development must take into account the social and legal situation of individual
countries. Action to eliminate child labor must be guided by the best interests of the child, as
ill-considered policies and commercial measures can make the situation worse for children.
Therefore, Nestlé:

– is against all forms of exploitation of children. The Company does not provide employment to
children before they have reached the age to have completed their compulsory education, as
defined by the appropriate authorities, and expects its business partners and industry suppliers
to apply the same standards;

– abides by national laws in all countries which it has operations and complies with the
International Labor Organization (ILO) Convention 138 on the Minimum Age for Employment and
the ILO Convention 182 on the Worst Forms of Child Labor. The ILO recommendations are based
on the United Nations Convention of the Rights of the Child (Article 32);

– offers its co-operation with the relevant United Nations agencies, governments and the
business community in their efforts to deal with the problem of child labor, which include the
encouragement of universal primary education and all aspects of economic development
worldwide.

Business Partners:

Nestlé insists on honesty, integrity and fairness in all aspects of its business and expects the
same in its relationships with all business partners and suppliers of materials, goods and
services. Nestlé therefore supports and applies:

– The International Chamber of Commerce revised rules on extortion and bribery in international
business transactions, which recommend governments to prohibit extortion and bribery for any
purpose (adopted by the ICC Executive Board on March 26, 1996);

– OECD Recommendations on Bribery and International Business Transactions of May 1994 and
the OECD Convention to counteract corruption, which was signed by all the member countries
and by Argentina, Brazil, Bulgaria, Chile and Slovakia in 1997 (the signatories undertake to
consider corruption of foreign officials a penal act under their national law);

– Nestlé also supports OECD efforts to have non-member nations adhere to the OECD
recommendations for fighting against corruption.

RELATIONSHIPS

Relationship with Suppliers

Nestlé aims to deal only with reputable suppliers who are willing to apply Nestlé quality
standards. Supplier relationships are benchmarked and evaluated with the objective of striving
for continued improvement in the areas of quality, service, etc. As a relationship between a
supplier and Nestlé strengthens and progresses, it may evolve into one of preferred supplier
status. Key suppliers with which Nestlé has a contractual relationship are audited in order to
ensure that they comply with the Nestlé Corporate Business Principles or that they are working
actively to achieve compliance. Whenever instances of non-compliance are brought to the
Company’s attention, Nestlé will demand that corrective measures be initiated. Nestlé
personnel will maintain the highest standards of integrity and professional competence in all
business relationships. Sanctions will be applied in the event of misconduct or abuse of
established corporate standards and guidelines.

Competition:

Nestlé supports free enterprise and therefore competes fairly and recognizes other companies’
equal rights to do so. The Company supports the development of competition laws to protect
this principle. In particular:

– Nestlé sets its commercial policy independently and does not fix prices in agreement or
collusion with competitors;

Nestlé does not allocate customers, territories or product markets in agreement or collusion
with competitors;

– Nestlé deals fairly with its customers and suppliers, in accordance with competition laws;

– Nestlé will look towards mergers and acquisitions as a means to improve its effectiveness, not
to restrict competition;

– Nestlé’s trade payments are based on customer efficiencies and services provided.

External Relations

Authorities: Nestlé supports ongoing dialogue between all industry sectors in which it is active
and the appropriate government and regulatory authorities at both national and international
levels, in order to promote and implement relevant legislation, regulations and/or agreements
which protect the rights of the consumer while ensuring a healthy, competitive environment.
Business Relations: Nestlé’s business relations are based on the principles of mutual trust,
fairness and professionalism in the context of a free-market economy. Academic/Professional
Relations: Nestlé encourages two-way communication and co-operation with academic and
professional bodies to foster continual updating of knowledge for mutual benefit, leading to the
constant improvement of the Group’s products, policies and services.

Financial: Nestlé communicates openly, directly and accurately and takes advantage of
appropriate communication tools to ensure that information is available simultaneously to the
financial community and general public. No individual or institution is given preferential
treatment. Local Communities: In addition to the direct investment and employment provided
throughout the world, Nestlé contributes in many countries to the well-being of local
communities in other ways. The personal involvement of Nestlé people in many projects,
together with financial assistance and sharing of know-how with local organizations helps to
develop long-term community relations and mutual understanding. Non-Governmental
Organizations: Nestlé engages in dialogue with non-governmental organizations that have a
record of constructive engagement and principled behavior. They encourage discussion that can
result in improved understanding and collaboration in the economic, social and environmental
betterment of the community. Nestlé is involved in project partnerships with a significant
number of non-governmental organizations. Internet Privacy Policy: The Internet is changing the
way of doing business. It concerns business-to-business relations and also the Company’s
interaction with consumers. In this respect Nestlé S.A. has an Internet Privacy Policy which is
available on the Corporate They site. This policy aims to protect the privacy of the users; it
covers, for instance, the accessing, deleting or correcting of information, the security of
information, and relates also to tracking technologies. Nestlé supports industry self-regulation
and respects the local laws of the markets it serves in this domain.

Protection of the Environment

Since its early days Nestlé has been committed to environmentally sound business practices
throughout the world and continues to make substantial environmental investments. In this way
Nestlé contributes to sustainable development by meeting the needs of the present without
compromising the ability of future generations to meet their own needs. The Nestlé

Policy on the Environment underlines this commitment. Nestlé also adheres to the International
Chamber of Commerce (ICC) Business Charter for Sustainable Development. This Charter
requires the establishment of policies, programs and practices for conducting operations in an
environmentally sound manner.

Nestlé fully supports the United Nations Global Compact’s three guiding principles on
environment.

Nestlé therefore:

Supports a precautionary approach to environmental challenges (Principle 7)

Undertakes initiatives to promote greater environmental responsibility (Principle 8)

Encourages the development and diffusion of environmentally friendly technologies (Principle 9)

Nestlé:
– integrates environmental policies, programs and practices into each business as an element of
management in all its functions;

– develops, designs and operates facilities and conducts its activities taking into consideration
the efficient and sustainable use of renewable resources, the minimization of adverse
environmental impact and waste generation, and the safe and responsible disposal of residual
wastes;

– respects and complies with existing laws and regulations in local markets concerning
environmental issues;

– applies Nestlé internal standards suitable to local conditions in those regions where specific
environmental legislation is nonexistent or insufficient;

– improves environmental protection relevant to its activities on a continuous basis;

– provides appropriate information, communication and training to build internal and external
understanding about its environmental commitment and action;

– supports professional associations such as the International Chamber of Commerce and the
World Business Council for Sustainable Development in their work relative to environmental
protection, as they’ll as efforts to set up environmental management guidelines;

– establishes environmental objectives, monitors progress, checks results and defines future
actions. This activity, carried out by Nestlé specialists, ensures the continuous improvement of
environmental performance throughout the supply chain, from producing and purchasing of raw
materials, to manufacturing, packaging, distribution and finally to the consumer.

Agricultural Raw MaterialsAgricultural raw materials, principally milk, coffee, cocoa, cereals,
vegetables, fruit, herbs, sugar and spices, are vital factors affecting the quality and costs of
Nestlé manufactured food products and, as a consequence, the Company’s business
performance. Sourcing strategies and production methods are subject to an ever-changing
environment. New technological developments in the field of agriculture, changes in
agricultural policies or trade regulations, new technologies in food processing, and evolving
consumer preferences, mean that Nestlé must adapt its sourcing strategies accordingly. This is a
continuous process. Governments and/or political institutions regulate farming and the trade of
farm products. Because of the effect of such regulation on pricing, availability, domestic and
international trade, and on the economic, social and ecological aspects of farming and
consequently on food safety and quality aspects, Nestlé engages in constructive dialogue with
government institutions (primarily through professional organizations), and co-operates with
local authorities.
In this context Nestlé:

– supports farming practices and agricultural production systems that are sustainable; that is
those practices and systems that satisfy long-term economic, ecological and social
requirements;

– sources its agricultural raw materials either through trade channels or directly from farmers
and is not engaged itself in its own commercial farming activities;

– supports mechanisms that contribute to a more regular income for farmers;

– Where appropriate, provides agricultural assistance to farmers in order to:

- transfer know-how

- ensure ongoing supply at competitive conditions

- obtain raw materials that meet quality and safety specifications

– supports an agricultural production system that is economically viable, socially acceptable and
ecologically sound and therefore encourages sustainable farming practices;

– supports the application of new technologies and advances in agricultural science, including
the opportunities offered by today’s bioscience when their positive effect on food safety,
environment, agricultural practices and production efficiency are scientifically confirmed and
accepted by consumers;

– recognizes the importance of genetic diversity as a pillar for future developments in

agriculture and life science, and supports its preservation as a public good.

Agricultural services:

Nestlé has a long tradition of helping the farmers who provide our raw material.

Nestlé Pakistan is committed to continuing this tradition; they consider it a way of engaging in a
mutually profitable partnership with our suppliers.

Thus, ever since they took over the milk collection system in 1992, our Agricultural Services
have endeavoured to help the farmers of the milk district with their husbandry.

Better animals means there will be better milk. They gain a reliable supply of high quality milk,
but the greatest benefits, both immediate and long-term, are to the farmers themselves.
Agricultural raw materials procured directly from farms

The decision to establish or maintain a direct procurement system depends on a number of

factors. They include:

– Company requirements in terms of quality, safety, quantity and cost;

– Proprietary characteristics of individual raw materials;

– Reliability in supply and the local conditions for sustainable production. Direct procurement
provides the following benefits to farmers and co-operatives:

– An understanding of Nestlé’s quality and safety requirements;

– Objective and transparent evaluation of raw material quality;

– transparent price policy providing farmers a reference level of prices for their raw materials,
thus leaving them with the choice as to where to sell their produce;

– Quality premiums that encourage farmers to achieve and maintain high quality standards. If
warranted, Nestlé may assist farmers to improve their quality, yield and economic
competitiveness.
Corporate Social Responsibilities

They believe that every single company, no matter where in the world it operates, ought to be
fully integrated into the local social, cultural & economic life. They must be good corporate
citizens, and give back to the societies to which they belong.

There are two ways of fulfilling our responsibility and practicing corporate Social Responsibility:

v Through social investments: giving to charities, leading and supporting cultural or welfare
initiatives.

v Through the realization that businesses create social and environmental impacts, both positive
& negative, through the daily operations of their value chain.

Our operations throughout the world are committed to making full use of these tools. Thus
Nestlé people everywhere are involved in the many programs and projects they have designed
to strengthen local communities and nations.

They are heavily involved in projects relating to our own areas of expertise, such as nutrition
education & research, health projects, and agricultural assistance. In times of crisis they are
often amongst the first on the scene to help with humanitarian relief aid and food donations.

To help culture & society flourish, they do our best to encourage a host of other activities: they
support charities, education and training initiatives, art and cultural events, sport events and
HIV/AIDS prevention.

Responsibility to society:
Taking the Nestlé concept of corporate Social Responsibility to heart, they are deeply involved
in social investment and humanitarian aid.

v They are committed to Pakistan's long-term betterment, and strictly follow the code of
corporate governance:

v They deal fairly with stakeholders.

v Serves our consumers through safe, high quality products & communicate with them
responsibly.

v Adhere to environmentally safe industrial practices

v Actively involved in several social action programs (SAPs) to improve the lives of our country's
under-privileged people.
v They adhere to the global Nestlé philosophy of Creating Shared Value. Our dairy suppliers in
the Punjab's milk district can attest to the agricultural and technical support they offer them.

v During our manufacturing process they are careful to minimize environmental impact and
value employee welfare highly.

v Finally, they try to benefit our consumers by spreading awareness about healthy nutrition and
lifestyles as they’ll as constantly developing or improving existing products for health, nutrition
and wellness.

Responsibility to environment:
In line with Nestlé's global commitment, Nestlé Pakistan is dedicated to playing its role in
helping to protect the environment. They comply with the Environmental Act (1997), and try to
ensure that at every stage of our operations, the environmental impact is minimal.

Thus, at the raw materials stage, they support sustainable agricultural and dairy farming
practices, including environmental protection.

When it comes to production, all our factories try to maximize eco-efficiency, i.e. increase
production while minimizing resource consumption, waste and emissions.

Our factories are equipped with complete testing and monitoring facilities for waste and air
emissions. To eliminate air pollution, they have stopped using heavy fuel oil in our factories,
which are now run on clean natural gas. This has reduced our emissions into the atmosphere to
they’ll below the legal limits.

Our Sheikhupura & Kabirwala factories have elaborate water treatment systems to prevent
wastewater from polluting the environment.

Natural gas incinerators at our Sheikhupura & Kabirwala factories are used to safely dispose of
material that cannot be recycled & dumped.

Our factories have environment committees to manage routine environment issues and review
performance. Environmental impact assessment is done in advance for every new project and
measures are adopted to minimize adverse impacts on the environment. Our employees
regularly undergo training to inculcate awareness about environment-friendly practices.

Earthquake ReliefIn October 2005, the biggest natural calamity in our history struck Pakistan.
Thousands died and millions they are left homeless after a massive earthquake hit our
mountainous northern areas. In step with the rest of the nation, Nestlé Pakistan responded
immediately, putting its infrastructure and resources to work in the affected areas.
First response:

When the earthquake struck, Nestlé Pakistan responded instantly, even before the magnitude of
the disaster had dawned upon the nation. They immediately donated food and beverage items.

Within two days, they had established a crisis committee under the supervision of our Managing
Director. The same day, the management team left to visit the affected areas, and by 11
October, the first six Nestlé trucks left our factories, bearing bottled water, powdered and UHT
milk and ready-to-cook MAGGI noodles.

Instead of burdening the government and relief agencies, they aggressively reactivated our own
shattered distribution channels to bring supplies to the people who needed them most and
established six camps to distribute relief goods.

Despite blocked roads, grave logistical challenges & an atmosphere of fear and suffering, our
teams, consisting of about forty Nestlé employees and distributors, they went out and
distributed Nestlé products to the affecters.

Within two days our teams reached the worst-hit areas around Muzaffarabad, Bagh and
Mansehra. They worked in collaboration with the Pakistan Air Force and arranged for supplies to
be airdropped to the most inaccessible areas.

Other teams of Nestlé volunteers supported relief work undertaken by other agencies around
the affected areas.

As a result of our swift and carefully planned action, they are able to distribute 80 trucks of
goods, worth Rs 20 million. Two 10-ton trucks of drinking water they are dispatched to
Muzaffarabad Hospital, and our volunteer teams ensured that goods they are distributed fairly
and efficiently to those who needed them most.

After a month:

After the crisis comes a time for rebuilding shattered lives. Among our reconstruction efforts are
the following initiatives:

v They have allocated an amount of Rs 20 million, raised through employee contributions,

matching grants and contributions from other Nestlé markets. This amount will be used to adopt
and reconstruct a model village in Azad Kashmir.

v They are thankful that no Nestlé employee was personally affected, though a few lost family
members and property. They have compensated all employees, distributors and their staff for
homes destroyed, to the tune of Rs 4.1 million.
v They intend to build an orphanage in the affected areas for the hundreds of children who lost
their parents in this disaster.

v They are initiating a livestock health improvement program to help the locals rebuild their
shattered lives.

v Our parent company, Nestlé SA has donated an additional Rs 16 million for reconstruction and
rehabilitation work.

Pitching in:

Nestlé employees worked tirelessly to bring aid to earthquake victims. They are immeasurably
proud of our people for their contributions: Nestlé employees donated Rs 3.3 million from their
own salaries. Nestlé employees in other countries also stepped forward and donated to the
Nestlé relief fund. Five teams of staff volunteers worked day and night in the affected areas to
ensure that relief goods got where they are needed. A medical detailing team worked with the
students of King Edward Medical University, Lahore, to collect medicines worth Rs 175,000. Our
parent company, Nestlé SA has donated an additional Rs 16 million for reconstruction and
rehabilitation work.

References
Mr. M. Hussain Bhatti
Union Chairman Nestle
Mr. Capt. Sajjid
HR Manager
Miss Shazia Parveen
OD Executive
Tel : 92-65-111 637853
Nestle Kabbirwala Pakistan.