#MDStart#
Management Discussion and Analysis
Our fast-changing world
We operate in a complex and volatile world. Our strategy is constantly
evolving to adapt to the trends and forces shaping our markets and impacting our
stakeholders.
Hindustan Unilever Limited is part of the Fast-Moving Consumer Goods
(FMCG) industry which continues to be one of the biggest long-term sustainable business
opportunities that our country offers. Despite being one of the fastest growing markets
globally for FMCG products, India?s per capita FMCG consumption is still amongst the
lowest in the world. Rural markets account for more than 60% of our country?s
population and contribute to just about 30% of FMCG consumption; thus, offering
significant headroom for growth. Rising affluence, large working population, nuclear
family structures, urbanisation and rapidly increasing adoption of technology will
positively impact the growth of FMCG industry in the country.
The operating environment this year continued to remain volatile and
challenging. India witnessed a devastating second wave of Covid-19 during the June quarter
with a significant humanitarian and economic impact. Due to the disruption in global
supply chains, inflation in many key commodities like crude oil derivatives, palm oil and
packaging rose to historic highs. The latter half of the year witnessed a marked
moderation in the FMCG market growth with volumes being impacted due to high inflation.
This was more pronounced in rural markets.
As we gradually emerged from the challenging phase of the pandemic, the
consumption of hygiene products moderated. With mobility going up, there was an increase
in demand for discretionary and out of home products. Consumers are also increasingly
choosing brands which they see as making a positive impact on the world. India is
undergoing rapid digital transformation, new-age technologies are transforming the
landscape of consumer goods market, bringing opportunities for brands, consumers, and
customers alike. E-Commerce continues to gain traction as more consumers shop online and
with more digital-first brands entering the market. With a technology-focused approach,
retailers are reinventing their business models to stay more connected in the digital
world.
The two years of pandemic has made us a stronger, better business which
is much more resilient and responsive. As the economy, consumer and channel landscapes
rapidly evolve, we continue to be agile to leverage our strengths, capture opportunities
and navigate through the challenges. Our strategy is constantly evolving in line with the
trends and forces shaping our markets and impacting our multi-stakeholders. We remain
committed to delivering 4G growth - growth that is consistent, competitive, profitable,
and responsible.
A. Stakeholder review
Our Compass and our business model are designed to create value for our
stakeholders. Understanding their changing needs helps us make informed strategic
decisions.
Our multi-stakeholder model
We have identified six stakeholder groups that are critical to our
future success: consumers, our people, customers, suppliers & business partners,
planet & society, and shareholders. The stakeholder review on pages 29 to 41 explains
how we have worked to create value for each of our stakeholders in the financial year
2021-22 as well as how our business benefits from these vital relationships. In light of
our purpose and strategy to create long-term value as set out on page no. 20, we take
steps to understand the needs and priorities of each stakeholder group through a number of
mediums, including by direct engagement or via their delegated committees and forums. We
have provided a high-level summary of how we engaged with stakeholders and had regard to
their interests, when setting our strategy and taking decisions concerning the business in
the last year. This has been provided in the Business Responsibility Report on pages 72 to
85.
Consumers
Our brands are evolving to meet the changing needs of consumers.
Value and values
As we gradually emerged from the challenging phase of the pandemic and
Covid-related restrictions, the consumer uncertainty and anxiety started receding. Driven
by high inflation and choices fuelled by digitalisation, consumers have become more
conscious and selective.
The varying impact of the pandemic has also led to some shoppers
treating themselves to more premium products while others are increasingly cost-conscious,
looking for the best-performing products they can afford. Despite the gradual easing of
restrictions and people spending more time out of their homes, online shopping and the
demand for convenience stayed strong; e-everything is here to stay. Consumers continue to
be increasingly discerning looking for highly effective and quality products, with
ingredients that are good for them and good for the environment. There is compelling
evidence that brands with purpose grow. Our own research shows a strong correlation
between brand purpose and brand attractiveness (referred to as brand power), which, in
turn, drives market share and growth. Our three Divisions anticipated and met
consumers? needs through innovative products, strong marketing capabilities including
digital and performance marketing, and purpose-driven brands. We are harnessing new
Artificial Intelligence (AI) powered innovation tools to spot trends early and test new
product concepts. Our nano-factories provide us the flexibility to manufacture on-trend
products in small batches, reducing the time from idea to shelf.
Beauty & Personal Care
We want to be the most positive beauty business for people and the
planet
We believe in beauty that not only does less harm, but also does more
good beauty that?s both inclusive and sustainable. To achieve our new Positive
Beauty vision, we are using our scale to create positive change and drive growth through
our big brands, impactful innovation and portfolio transformation.
In the Beauty & Personal Care (BPC) division, we operate in
categories that play a significant role in consumers? lives and touch a vast majority
of Indian households. The current nascent stage of evolution of many of our BPC categories
presents an excellent opportunity to boost penetration, consumption, and premiumisation,
presenting a healthy long-term potential. With a portfolio of iconic, well-loved and
purposeful brands that span the price-benefit pyramid, we ensure that our brands are
accessible and aspirational for all consumers across the country.
Growing the core
We are growing our core business by investing in our purposeful brands
and delivering superior products. India is a diverse country - with different climatic
conditions, varied skin and hair types and even differing quality of water. We are
bringing to life our product philosophy of designing for India and Winning in Many Indias
(WiMI). In our Skin Cleansing portfolio, our brands Lifebuoy and Lux have introduced
winning products by regions with consumer centricity at the heart of the product design
philosophy. We are also bringing this thinking of Design for Many Indias? into
Skin Care & Hair Care with products like Pond?s Light Moisturiser that is
specifically designed to perform in hot and humid weather. In addition, we are leveraging
our WiMI philosophy to market our products across different regions.
We continue to strengthen brand equity through consistent, purposeful
communication on our iconic brands. Clinic Plus, Dove and Sunsilk were rated as the top 3
Hair Care brands in the country as per Kantar Brand Health Check Report?.
Lifebuoy continues to build the habit of handwashing, through the H for
Handwashing? campaign. The brand is also scaling up its telemedicine initiative
through the Mobile Doctorni?. Similarly, Clinic Plus, launched a film under its
inspiring #MeriBetiStrong campaign to educate mothers on the issue of domestic violence.
We have committed to extend our reach to over one lakh women across our ecosystem and
educate them on their rights as well as provide them with appropriate resources to address
this issue.
Accelerating Premium Beauty and Market Development
We are energised by the huge opportunity to accelerate Premium Beauty
and lead Market Development in categories like hair conditioners, serums, body lotions,
body wash and sunscreen to name a few. Our priority is to drive growth in our five big
beauty master-brands, Dove,
Pond?s, TRESemm?, Lakm? and Indulekha, which span across
categories. We are doing this through on-trend and relevant innovations, solutions that
are designed for consumers and channels of the future, and by driving adoption of key
future formats. Through compelling communication, we are addressing key category triggers
and barriers, as well as scaling up education-led sampling. This year, TRESemm? launched
the Thick and Full Shampoo and Conditioner with Biotin and Wheat Protein and expanded its
hair care range. In Skin Care, Dove launched Love & Care, a new range of hand and body
moisturisers while Pond?s introduced its gold beauty range including Facewash, Serum,
Day Cr?me, Peel off Mask and a Night Cr?me. Lakm? expanded its cosmetics range with
volume mascara, highlighter and liquid concealer. The female intimate hygiene brand VWash,
which was acquired by us in the previous year, continued to gain traction with consumers.
We are also creating new capabilities for driving beauty? market development
through salons, medical marketing and online marketing, which serves as a distinct
competitive advantage.
We continue to strengthen our naturals? strategy by building
specialist brands like Indulekha and Hamam. This year, we expanded the Indulekha franchise
into relevant benefit segments like anti-dandruff, as well as e-Commerce relevant formats
like masks and serums. Another pillar of our naturals strategy involves natural variants
of our existing brands like Clinic Plus Egg Protein shampoo, TRESemm? Botanique, Glow
& Lovely Ayurvedic Care, Lifebuoy Neem and Turmeric, Pears Naturale etc.
Winning with the consumer of the future
Since the consumers? shopping journey is increasingly moving
online, e-Commerce continues to gain relevance. Last year, we had set up the Premium
Beauty Business Unit (PBBU) within the Beauty & Personal Care organisation to
strengthen our play in Masstige? beauty segment. This unit is now fully
operational with three digital-first brands Simple, Love Beauty & Planet and Baby
Dove. PBBU is not just about building brands but also about incubating organisation-wide
capabilities fit for the fast-changing digital world. We have created an agile innovation
model that enables us to pick up trends and launch the product in minimal time, scaling it
up as it succeeds. We are building nano factory setups and a flexible supply chain that
allow us to produce quickly and in small batch sizes. We have also developed Performance
Marketing, D2C and e-Commerce capabilities required to target the digital native
consumers.
Technology-driven commerce will continue to grow disproportionately,
and we are investing in it ahead of the curve. Lakm?s leading Beauty Tech Solutions
like virtual try-on and Artificial Intelligence (AI) Skin Analyser on its D2C platform
allow consumers to replicate their offline journeys online. Lakm? is the most followed
Indian beauty brand on Instagram with around 30% of its sales now through digital
channels. We continue to strengthen our content platform Be Beautiful? which
educates consumers on their Beauty & Personal Care needs, and are also creating new
ecosystems that can help us scale Influencer Marketing and lead the curve on upcoming
opportunities like Social Commerce.
Home Care
Making people?s homes a better world, and our world a better home
As we work to make the lives of our consumers easier, cleaner and
safer, we are also leading our industry towards a cleaner future through the power of
science and innovation. Last year, Get-Set-Clean?, our online platform for
housekeeping and cleaning tips, stepped up to create meaningful content to ease
consumers? worries around the pandemic. Our relentless focus on serving consumer
preferences and needs through our strong purposeful brands continue to fuel strong
competitive growth thereby extending our market leadership.
Building purpose-led brands
Putting purpose at the heart of every action and communication, our
brands continue to drive salience with consumers. Through its purposeful activations, our
biggest brand Surf excel is spreading its philosophy of Daag Acche Hain? or
Dirt is Good?. Our latest Surf excel Holi campaign encourages people to
celebrate joyous moments like a child would, with family and friends, and lead fulfilling
lives. Wheel continued to uphold the concept of equal partnership between husband and wife
through its campaign that depicted men actively participating in household chores
challenging social stereotypes. This year Rin celebrated India?s Olympic fencer
Bhavani Devi?s story of grit, determination, and hard work, inspiring millions to
keep persevering in pursuit of their dreams. Sunlight?s Pujo campaign ?Tantir
Rong? this year supported the handloom weavers of Bengal and decided to add back
colours to their lives by generating demand and awareness for their art. Our dishwash
portfolio continued its resilient performance. Vim with its well-defined purpose of
change your outlook, move beyond dishes? focussed on breaking the societal
stereotype that dishwashing is solely a woman?s responsibility. Based on a clear
consumer need, our home hygiene brand Domex launched a superior product backed by a
breakthrough patented Fresh Guard technology which fights malodour in toilets for 100
flushes.
Upgrading consumers to higher order benefits
Over the years, we have witnessed great success in upgrading consumers
and premiumising our portfolio, and we continued this strategy during the year, where our
premium products outperformed the rest of the portfolio. Through our portfolio which
straddles the price-benefit pyramid, we continue to actively engage with consumers in
their upgradation journey. For instance, Surf excel has been driving upgradation in
detergent powders, led by Surf excel Easy Wash and Surf excel Matic. Premiumisation
continues to be an important agenda for the dishwash business and with a strong and
scalable consumer contact programme, Vim liquid continues to pioneer premiumisation in the
country.
Creating categories of the future through market development
With the changing demographics in our country, urbanisation and nuclear
families, the need for more convenient ways for cleaning and laundry continue to develop.
Over the years, our Fabric Care business has developed strong expertise in seeding and
scaling new categories. Led by effective market development actions we have been able to
drive relevance for our liquid detergents, matic liquids and fabric conditioners
portfolio. We continue to invest in newer formats like Surf excel Smart shots and Smart
sprays for effective fabric care and Vim Matic range for dishwashers.
Towards a clean future
We know that consumers want sustainable products that perform just as
well as conventional ones. In 2021, we embarked on our clean future journey with Rin and
Surf excel. Rin has launched an environment-friendly and superior product. Surf
excel?s product and packaging has become environment-friendly with biodegradable
actives, 100% recyclable plastic bottles, made with 50% recycled plastic and a
portfolio-wide pipeline of water-saving products. Another example is the new Smart
Fill? machine, an in-store vending model which offers consumers option to reuse
plastic bottles by refilling our home care products through this machine.
We are committed to transition from fossil fuel-derived chemicals in
our cleaning and laundry products by 2030. During the year, we took a step forward in this
journey by partnering with Tuticorin Alkali Chemicals and Fertilizers Limited?
and Carbon Clean Solutions? for Soda Ash, one of the key raw materials for our
laundry products, using carbon capture technology.
Foods & Refreshment
Taste good, feel good, force for good
Our brands continue to provide great-tasting, nutritious and
sustainable foods for consumers using our world-class innovation and brand purpose
to inspire change.
Grow the core
Through a combination of superior products, impactful innovations and
purposeful activations, our brands continue to attract new consumers. Our market
leadership position in tea was further strengthened during the year, enabled by a very
strong portfolio that straddles the price-benefit segment serving the different needs of
consumers. Leveraging our Winning in Many Indias (WiMI) strategy, we continue to build tea
blends which are suited to the tastes and preferences of consumers. Our iconic brand Red
Label is bringing to life the taste of togetherness through its Swad Apnepan
Ka? campaign.
During the year, the Ice Cream and Frozen Desserts business recovered
strongly and was significantly ahead of pre-pandemic levels. We scaled up our in-home
consumption portfolio through innovative, delicious products like the Kwality Wall?s
Cadbury Crackle tub and the Trixy cup. Offering sweet delicacies to consumers during
festive season, Kwality Wall?s activated integrated campaigns to reach consumers
offline as well as online. ICNOW, our digital initiative for home delivery of Ice Creams
is receiving a good response from consumers. Kissan strengthened its market leadership in
ketchups and introduced new pack sizes offering more convenience and value for consumers.
Building on its credentials of restaurant-like-food? at home, Knorr activated
its campaigns on soups and Chinese gravy mixes.
Creating categories of the future through market development
Our strong brands and capabilities in the Health Food Drinks (HFD)
space continue to serve the nutritional needs of our consumers. During the year, we
expanded the reach of our Nutrition business by integrating it with HUL?s sales
systems and processes. We are now focussing on building category relevance and driving
penetration through market development. Our persuasive media campaigns and extensive
sampling programmes are reaching out to millions of consumers. To address nutrition needs
at various stages of life we have expanded the Horlicks portfolio with the high sciences
range such as Diabetes Plus, Mother?s Plus, etc. All these actions are enabling us to
gain market share and penetration in HFD.
Our new product offerings in Foods portfolio viz. Hellmann?s
Mayonnaise, Kissan Peanut Butter are gaining traction with consumers and building scale.
Strengthening our coffee portfolio we recently launched BRU Beaten Coffee, a product that
is specifically designed for taste preferences of coffee lovers in North and West of
India. Our functional tea portfolio which includes brands like Lipton Green Tea and Red
Label Natural Care continues to do well. During the year, we expanded Lipton Darjeeling
tea nationally.
Foods & Refreshment as a force for good
As one of India?s largest F&R businesses, HUL is using its
scale and reach in its efforts to encourage the wider food ecosystem to become healthier
and more sustainable. Over the last two years, we have launched several products that
offer positive nutrition foods that are rich in protein, fibre, fruits and
vegetables, Omega-3, vitamins and minerals. Our HFD portfolio is designed for macro and
micro nutrition supplementation to help alleviate childhood malnutrition. The Horlicks
Plus range addresses specific adult health issues such as protein supplementation, loss of
calcium in women, and sugar and cholesterol management for diabetics.
HUL is amongst the largest buyers of agri-commodities like tomatoes,
cereals, tea, coffee and dairy. We have partnered with Sahyadri Farms?, a
farmers? co-operative based in Maharashtra, for sustainable sourcing of tomatoes,
helping consumers experience products made from great quality tomatoes, at affordable
prices, while providing better livelihood to farmers. We are now extending this sourcing
model to other agri-commodities. We are also one of the co-founders and co-funders of
Trustea The India Sustainable Tea Programme. Trustea has played a pivotal role in
achieving sustainable sourcing and zero deforestation commitments in tea.
Our people
When we take care of our people, our people take care of the business.
This year reinforced the importance of being a safe, inclusive and
supportive place to work for all our employees. Health and safety of our employees, their
families and the people in our extended value chain remained our #1 priority. We continued
to nurture a culture in which our people can thrive, become future-fit and bring their
best selves to work.
Supporting our people through the pandemic
We have continued to help our people protect themselves from Covid-19
with enhanced timely testing and vaccinations to keep our workplaces as safe and
productive as possible. We ensured that our people and their families received medical
care through our facilities and healthcare resources, telehealth options and connections
with community resources. We increased our medical staff and infrastructure, and leveraged
our strong affiliations with 200+ hospitals to provide prompt medical support to our
people.
Our team of 130+ employee volunteers went above and beyond to support
our Covid-19 impacted employees and their families with timely medical assistance. We
created a dedicated HUL Healthcare Helpline for anytime Covid-19 assistance and also
facilitated vaccination for our employees and people in our extended value chain.
Safety at work
Safety of our employees and people in our extended value chain is at
the core of everything that we do. We launched a safety awareness programme
"BeSafe" in 2021 and trained over 12,000 employees to further strengthen our
safety culture. We have rolled out a new incident management tool to enhance faster and
easier reporting.
Our Total Recordable Frequency Rate* (TRFR) was 0.31
accidents per million hours worked (1st October 2020 to 30th September 2021) as compared
to 0.34 in the same period last year. Sadly, two of our employees were involved in a fatal
car accident. When fatalities occur, our first priority is to support the needs of the
families of the individuals involved. Road safety is one of the focus areas for us and we
have been taking several preventive measures to reduce road incidents. We have
strengthened our
* (TRFR: Employee + Contractor)
Safe Travel Policy and have been training our employees as well as our
extended driver network about safe on-road behaviours.
Wellbeing for all
Alongside safety at work, supporting our people?s physical, mental
and emotional wellbeing has never been more important. We dialled up our systematic
approach on wellbeing with customised interventions for various employee segments. We
provided our people a range of tools to help them to focus on their wellbeing.
In a wider focus on mental health across the business, we took this
conversation to our frontline teams, training 45 blue-collar Mental Health Champions
(MHCs) across 10 factory locations and we have over 850+ trained MHCs. As a result of our
sustained efforts, we saw the reflections in our annual employee survey, UniVoice, with
85% office based employees and 96% factory employees sharing their belief that the Company
cares for their wellbeing.
Attracting and retaining talent
In an highly competitive talent market, we made concerted efforts to
attract and retain talent. We continued to build meaningful and deep engagements with
students, digitally as well as on campus, to strengthen our employer brand and attract the
best talent for the Company. Our purpose-led and future-fit vision and culture ensured
that we cemented our position as the No. 1 Employer of Choice? across
industries in 2021. In a resurgent talent market, our voluntary attrition continued to be
well below the FMCG industry benchmarks.
Preparing for the Future of Work
The world of work is changing. Our 2021 employee survey showed that 91%
of our people believe we have become simpler, faster and more agile in the last 12 months.
Covid-19 has been a catalyst to expand flexible and more inclusive ways of working. We
also continue to build organisational capabilities with a clear focus on functional
learning to enable our people to upskill and reskill for their roles and help them prepare
for the changing landscape of work. In our latest employee survey, 87% of our people in
offices and 94% of our people in factories believe that the Company provides opportunities
for skill development to advance them towards a successful future.
a) Becoming more agile
We are transforming how we work at HUL by introducing more flexible and
agile ways of working that unlock capacity and help individuals find a meaningful and
balanced way of working. Our AI-powered internal talent marketplace allows us to match
people with specific skills to projects that require them. This helped us assign resources
to over 500 business critical projects when teams faced capacity constraints.
b) Nurturing our growth culture
Our endeavour is to shape a Growth Culture based on three tenets:
Human, Purposeful and Accountable. Using our future-fit plans, our people are shaping
development and career plans based on their purpose. We sustained very high engagement
levels 85% in offices and 95% in factories which places us in the top
quartile for employee engagement compared to industry benchmark.
c) New ways of working
We implemented a best-in-class Return to Workplace programme and
co-created our hybrid ways of working, keeping employee context and flexibility at the
heart. We continue to create flexible working options for our people and have launched new
employment models, U-Work and Open2U, built on the premise of providing flexibility
combined with security.
d) A beacon for equity, diversity & inclusion
We also want to be a workplace where everyone feels they belong and are
able to thrive. This means creating an inclusive culture free from the barriers that limit
people in reaching their true potential. We have identified our equity, diversity and
inclusion priorities gender, people with disabilities and LGBTQI+ communities. We
are building the capabilities of our business leaders and HR practitioners to support
equity advocacy, diversity awareness and psychological safety in their teams.
We continue to make progress in our commitment to be gender balanced
across our managerial levels within the next few years. In calendar year 2021, we improved
our gender balance from 42% to 44%*at managerial levels. Another step in our
diversity journey has been the introduction of 250+ women in our extended sales ecosystem
and the addition of 186 women on our shopfloor. In 2021, we also launched the HUL ProUd
network as an employee resource group for LGBTQI+ employees and allies. To support the
agenda of ending the silence on domestic violence, in March 2021, we launched the #UnMute
campaign. We aim to address the issues related to women safety by enabling our employees
and extended value chain, to become the voice of allyship on women?s safety and
domestic violence. As part of this campaign, we have raised awareness among employees and
over 100,000 women in our extended value chain on safety at work, safety in public spaces
and safety at home. We aim to continue this journey and reach 500,000 women by the end of
2022.
Customers
We work with our many retail partners to help them grow sustainably
alongside the Company.
We have a long-standing relationship with our customers that is based
on trust and mutuality of interest. We continue to work with all our partners including
small family-owned stores to large organised retail and e-Commerce to serve the evolving
needs of our shoppers. Our endeavour is and has always been to ensure that our brands are
easily available wherever shoppers choose to shop.
Our brands are present in over 9 million retail outlets spread across
the country through a network of 3500+ distributors, who are the backbone of our retail
reach. We also reach our consumers through large, organised retailers, e-Commerce and
omnichannel customers as well as our own D2C platforms. As a gateway to the people who buy
and use our products, these customer partners are critical to our success.
Selling with purpose
Protecting lives and livelihoods of our people and of those in our
extended value chain became even more important during the pandemic. During the second
wave of Covid-19, we extended medical assistance via our Medical and Occupational health
team as well as through Covid-19 warriors working on ground across the country. We
continued to follow appropriate safety protocols while also using our learning from the
previous year to ensure the smooth running of operations.
Through our Shakti initiative, which helps enhance livelihoods and
financially empower rural Indian women, we have now reached over 1.6 lakh Shakti
entrepreneurs. We are now working to create a larger social impact by making these Shakti
entrepreneurs future-fit through sessions on nutrition awareness, waste recycling, women
empowerment etc. With these inputs, they could truly become vehicles of social change and
impact in their villages.
A shifting retail landscape
India?s retail landscape is rapidly evolving as technology
continues to influence consumer behaviour, with shoppers? path to purchase now
spanning various channels and devices. The fast-evolving shoppers of today move seamlessly
between online and offline channels, seeking convenience, value and premiumisation across
categories. To service the needs of these discerning digital shoppers, we have adapted a
D4C (Design for Channel) approach in launching brands and SKUs. At the same time, we also
have a few premium brands going D2C through digital means.
Traditional Kirana stores, which continue to be the largest ecosystem
for consumers to access their favourite brands, is witnessing the evolution of e-B2B and
eB2C offerings. At the same time, organised retail is undergoing consolidation and
customers are expanding with omnichannel offerings. We are seeing the rise of new models
like social commerce, where people shop through social media platforms, and quick
commerce, where people expect to receive their orders in less than an hour, often, within
15 minutes of the orders being placed.
Partnering for growth
As the customer landscape continues to evolve, we have been taking
several steps to ensure that our partners and distributors remain future-fit. We are
supporting traditional trade in their efforts to embrace technology. Shikhar our
e-B2B solution for online ordering - to give our retailers a safe, non-contact way of
interacting with us at convenient times to place orders, track stock and shipments, and
see prices and promotions. With a large number of our traditional trade business having
access to Shikhar app, our ability to accept their orders allowed us to service the needs
even during Covid-led lockdowns. This solves two main challenges that a retailer faces:
capital and space, by empowering them to order online at their convenience, getting fast
and reliable service and improving assortment. Not only does this create a better
experience for our customers, but it also helps them increase sales. We have scaled up
Shikhar by onboarding over 8 lakhs stores.
We are increasingly designing products and organising our business to
suit the requirements of our Modern Trade and e-Commerce channel partners. We are
collaboratively working with them to create growth plans based on shopper centric
innovations and activations. We continue to enhance our capabilities such as performance
marketing, deploying advanced analytical tools and executing Market Development
initiatives at scale to engage shoppers both online and in-stores.
The Pharma channel offers a strategic growth opportunity and an
essential platform for operating in the more premium and specialised Health & Beauty
segment. This year, we piloted various initiatives to understand the product portfolio,
content and in-store execution, and the route-to-market interventions needed to win in
this channel. We are also engaging with medical professionals and pharmacists to educate
them on products and their benefits, through our Expert? channel.
Suppliers & business partners
We are working more closely with our many suppliers and partners to
deliver our strategy.
Our supplier ecosystem is an integral part of our business delivery
helping us to innovate our products and drive mutual and sustainable growth. Involving
lakhs of people in India as well as around the world - from small local producers to large
multinationals, we partner with around 1,300 suppliers who provide us with goods and
services such as raw materials, logistics, advertising, professional services and much
more.
Strengthening agility and resilience
The pandemic-induced restrictions continued to challenge supply chains,
with lockdowns affecting our suppliers? businesses in many parts of the world.
Commodities, packaging and transport, all experienced significantly high levels of
inflation. We also experienced a marked increase in supply volatilities from the pandemic
as well as by supply-demand imbalances, energy crisis, production curbs, cross border
restrictions and geopolitical challenges. To ensure business continuity, our teams acted
fast by securing material supplies, onboarding many new suppliers, making strategic
interventions and designing to value. We operated in a dynamic manner, shortened our
planning cycles to ensure we responded quickly to the changing environment. Our R&D
and Supply Chain teams worked closely with local suppliers for capability development to
improve supply reliability, while also increasing value chain transparency and cost
competitiveness. We localised sourcing of many of our chemicals by developing alternative
supplier capacity in India and leveraged the growing domestic chemicals industry, to
reduce our import dependency. We have developed manufacturing capabilities for small
quantities, making the production process more agile and responsive. We worked closely
with our supply partners and made strategic interventions to manage prices and demand
spikes/supply shocks, utilising multi-modal logistics. We looked at all cost lines of our
P&L with a sharp focus to cut costs and minimise the impact of inflation. Further, we
extended our efficiency improvement programme to our suppliers to reduce inefficiencies
and wastage from their processes, thereby reducing cost and enabling growth.
Collaborative and intelligent growth
We worked alongside our suppliers to respond to the demand variations
across product categories during the current volatile environment. The value of data
insights, smarter sourcing and more real-time visibility of goods and logistics became
clearer. This is a key focus for us - we are using increasingly sophisticated digital
tools to identify new potential innovation partners, onboarding new suppliers by
conducting virtual audits, monitoring and reviewing quality performance online, and
tracking logistics and supply risks in real time.
Partnering with purpose
The support of our suppliers, who are the gateway to the lakhs of
people in our wider supply chain, is critical to our progress towards key aims such as
reducing carbon emissions, protecting nature, and improving diversity and inclusion. We
can only achieve our ambitious goals by bringing our supply partners with us in
doing so, we believe we are positioning both our business and theirs for growth. Our
Partner with Purpose? programme aims at building an open, inclusive supplier
ecosystem to deliver growth, while doing good for the people and planet. We worked
extensively with our supply partners on integrating better with our supply chain. For
instance, producing packaging materials closer to our factories helps us improve material
availability while reducing carbon footprint. For agricultural commodities like Tea,
Coffee, Tomato, Dairy and Cereals, we are developing integrated local partnerships across
the value chain to help drive transparency, sustainability, competitiveness and
resilience, while creating a positive social impact on smallholder farmers. Partnerships
based on clear standards of responsible sourcing strengthen our supply chain and the
businesses within it. Our Responsible Sourcing & Business Partner Policy (RSBPP) sets
out our commitment to conduct business with integrity, and with respect for universal
human and labour rights as well as environmental sustainability. It?s a crucial part
of the due diligence we undertake to identify and encourage remediation of issues by
suppliers. We are launching a refreshed RSBPP in 2022 with an expanded focus on climate
and nature and a new requirement for suppliers to pay a living wage instead of a
minimum wage, which will be introduced progressively covering all by 2030.
Planet & society
Our Business will not prosper without a healthy planet and society.
Our approach to sustainability continues to recognise the
interconnection of the planet and society and that sustainability can be a driver
of business performance.
Improving the health of our planet
India has seen several incidents linked to global warming in 2021
alone, from a glacier collapse in the Himalayas, to a sweltering heat wave and three
cyclones that occurred within a few days of each other causing considerable damage to
lives and livelihoods. The urgency to tackle climate change, reduce plastic waste and
protect nature has never been greater.
Climate action
Climate Action is at the heart of our business strategy. We are
committed to the Unilever Climate Transition Action Plan that sets out the steps that will
be taken to reduce emissions and achieve net zero in our operations by 2030.
A waste-free world
Your Company has achieved plastic neutrality by collecting and
responsibly processing over 1.16 lakh tonnes plastic in 2021. We have a framework called
Less Plastic, Better Plastic, No Plastic? with which we evaluate our plastic
footprint. For instance, we have reduced virgin plastic usage by replacing them with
Post-Consumer Recycled (PCR) plastic for Vim Dishwash, Surf excel Matic, Surf excel Easy
Wash, Rin Matic and Comfort etc. We are working with leading organisations such as UNDP
and Xynteo to change consumer behaviour of plastic segregation at source to build a better
ecosystem for post consumer recycle uses and it?s circularity. So far, the project
has reached out to more than_75,000 households.
Protect and regenerate nature
We continue to work towards a deforestation-free supply chain.
Unilever?s People & Nature Policy enhances supplier requirements around no
deforestation and human rights for our key commodities. Our Regenerative Agriculture
Principles guides our suppliers and farmers, including smallholders, on how to nourish
soil and water, capture carbon and restore land. We are sourcing nearly 95% of tomatoes
used in Kissan ketchup_ sustainably. We have sourced and procured over 68% of tea from
sustainable sources and by the end of 2021, 100% of the chicory was sourced sustainably.
Through the Hindustan Unilever Foundation (HUF), a not-for-profit company that works in
the area of water management, we_reached over 10,000 villages. Along with its partners,
the foundation has delivered a cumulative and collective water potential of over 1.9
trillion litres through improved supply and demand water management, over 1.3 million
tonnes of agricultural and biomass production, and over 60 million person-days of
employment in financial year 2020-21.
A fairer, more inclusive world
We are helping to build more resilient and equitable communities by
raising living standards, advancing equity, diversity and inclusion.
Raising living standards
Growing inequality in society has direct impact on consumption and
India has one of the highest gap. We have taken an ambitious target to ensure everyone in
our value chain who directly provide goods/services to us shall earn a living wage by
2030. Through Prabhat, our community development initiative around HUL?s sites, we
have trained women and youth in employable and future-fit skills such as IT, electrical,
plumbing, solar technician, tailoring, beauty and more. In our journey to build a fairer
and more inclusive future, we have been training people with disabilities, transgenders,
sex workers, widows and other vulnerable communities, through Project Prabhat?s 18
livelihood centres.
Equity, diversity and inclusion
We believe that until social justice and fairness become commonplace,
it is our responsibility to drive equity and create a fairer, more socially inclusive
society. We have achieved 44%* gender diversity in 2021 across our managerial
base and have a strong roadmap to be gender balanced by 2025. Through several programmes
we are striving to enhance women representation on the shop floor. Samavesh is our project
to improve women participation in our factory shop floors. With our Ahilya initiative, we
are empowering women to become sales professionals. Our ambition is to achieve 5% of our
workforce to be made up of people with disabilities by 2025.
Improving health, confidence and wellbeing
Through our brands and our operations, we continue to promote health
and wellbeing, inclusive beauty and positive nutrition finding ways to power growth
through purpose.
Health and wellbeing
Lifebuoy?s purpose is preventing illness and saving lives through
handwashing with soap. Its H for Handwashing? education campaign has been
teaching children the importance of handwashing since its inception. To drive awareness on
Covid Prevention in communities, Lifebuoy and the Federation of Indian Chambers of
Commerce and Industry (FICCI) partnered for a new public service campaign called
It?s In Your Hands?. The campaign made a humble appeal to the people of
the country, asking them to play their part in fighting the virus by practising proper
hygiene, wearing a mask in the right way, maintaining social distancing, getting
vaccinated and washing hands with soap.
Based on our learning from 2020, we took steps to augment health
infrastructure in Covid-19 hotspots during the second Covid-19 wave. In response to the
severe shortage of medical oxygen and to reduce the pressure on healthcare infrastructure,
we airlifted over 5,500 oxygen concentrators from across the world. Under
Mission HO2PE, these were made available in the most
impacted areas in the country. We initiated a partnership through which
we executed a model that delivers oxygen concentrators to Covid-19 patients at home
through a borrow-use-return model. During the year, we launched three more Suvidha centres
with the centre in Dharavi, Mumbai being one of the largest community toilets in India.
Suvidha? is a first-of-its-kind urban water, hygiene and sanitation community
centre, that was first set up at Ghatkopar, one of the largest slums in Mumbai. Inspired
by the success of the first seven Suvidha centres, along with Municipal Corporation of
Greater Mumbai & HSBC. We have announced the plan for establishment of 10 more Suvidha
centres across the city.
Positive nutrition
Your Company?s Future Foods? ambition demonstrates our
commitment to being a force for good. Your Company is continuously working to improve its
products to help people transition towards healthier diets. Your Company?s aim is to
help people make the transition to healthier eating by providing positive nutrition. Foods
that deliver positive nutrition are defined as products containing impactful amounts of
vegetables, fruits, proteins, fibre, unsaturated fatty acids or micronutrients such as
vitamins, zinc, iron and iodine. Your Company has committed to double the number of
products sold that deliver positive nutrition by 2025.
Respecting and promoting human rights
We aim to advance and promote respect for human rights in everything we
do within our workplaces, through our supply and distribution chains and through
our brands. With our suppliers, peers, industry bodies, trade unions and civil society we
are working to address human rights impact and ensure that all those connected to our
value chain are treated with respect, dignity and fairness.
In addition to this, our Code of Business Principles (the
Code?) upholds the principles of human rights and fair treatment. The Code also
conforms to the International Labour Organisation (ILO) principles. The principles of
human rights are followed in the same spirit within and outside the organisation when
engaging with business partners.
Shareholders
We are focusing on our strategic choices to deliver 4G growth i.e.
consistent, competitive, profitable and responsible growth
This financial year was unpredictable and challenging with continued
pressure from Covid-19 and unprecedented cost inflation. As global supply chains were
disrupted, firstly, due to the pandemic and then later due to the geopolitical crisis,
inflation in many commodities like crude oil derivatives, vegetable oils, packaging, etc.
rose to historic highs resulting in significant input cost pressures. High inflation also
resulted in a marked moderation in FMCG market growth with volumes declining in second
half of the year.
Our performance
In a challenging environment, we have shown resilience and agility to
deliver strong all-round performance. Our reported turnover and net profit grew 11% and
11% respectively in financial year 2021-22. We further cemented our leadership position
with highest YoY market share gains* in more than a decade. More than 75% of
our business is winning market share, both value and volume. We have gained market shares
in all our divisions, across price segments and across regions.
In our divisions, Home Care delivered a strong performance, growing 19%
led by double-digit growth in both Fabric Care and Household Care. Beauty & Personal
Care grew 8% with Skin Cleansing and Hair Care performing well on a strong base
comparator. Skin Care and Colour Cosmetics portfolio which was impacted due to Covid-19
led mobility restrictions recovered during second half of the year and was ahead of
pre-pandemic levels in the latter half of the year. Foods & Refreshment continued to
perform well and grew 7% on an exceptionally high base. Ice Cream made a strong comeback
and was significantly ahead of pre-pandemic levels. Tea delivered another year of strong
performance, strengthening value and volume market leadership.
Our dynamic financial management, a strong savings programme and
calibrated pricing actions helped protect our business model against rising input costs as
we kept our EBITDA margins at a healthy 25%. Our cash from operations (after taxes) was at
Rs.11,684 crores.
* As per Nielsen Market Report (for HUL relevant categories)
Your Directors are pleased to recommend a final dividend of Rs.19/- per
equity share of face value of Rs. 1/- for the year ended 31st March, 2022. The interim
dividend of Rs.15/- per share was paid on 12th November, 2021. The total dividend for the
financial year ended 31st March, 2022 amounts to Rs.34/- per share of face value of Rs.1/-
each.
Our strategic choices for growth
Last year we set out in detail the Compass strategy to deliver our
vision. The five clear choices we have made in our strategy portfolio, brands,
channels, structure & capabilities, and culture the continued delivery of our
five Growth Fundamentals, have been playing an important role in building momentum across
the business.
Developing our portfolio
We continue to invest in building a future-fit portfolio and create
long-term value. We are strengthening our core, creating categories of the future through
market development, and driving premiumisation by upgrading consumers to higher order
benefits.
We are driving growth in our core portfolio by focusing on product
superiority and building purposeful brands. Our biggest brand Surf excel, for instance
continued to build its relevance through the iconic campaign Dirt is Good? and
has been delivering strong results for us.
With a wide and resilient portfolio that straddles the price-benefit
pyramid our consumers are able to choose their trusted brands at various price points.
Even our highly penetrated categories like Fabric Wash and Tea offer opportunities to grow
through premiumisation. Our brands like Surf excel, Dove, TRESemm?, Brooke Bond are
responding to the needs of the consumers and leading premiumisation in their respective
categories. In early 2021, we also setup the Premium Beauty Business unit (PBBU) to
strengthen our play in the fast growing Masstige? beauty segment. Overall,
these actions have yielded good results as our premium portfolio grew ahead of the rest of
the portfolio during the financial year 2021-22.
We have a strong track record of seeding and building scale in new
categories through market development activities.
For instance, our liquid detergents and fabric conditioners grew 4
times in last 5 years to become a _1,700 crores business. We are also covering portfolio
white spaces through Mergers & Acquisitions. Indulekha, a specialist natural hair care
brand with strong Ayurveda credentials has grown 6x since its acquisition in 2016. VWash,
a female intimate hygiene brand acquired in 2020 is gaining good traction with consumers.
With the merger of GSK CH, we acquired strong brands and capabilities in the functional
nutrition space. Overall, our market development portfolio performed well in the financial
year 2021-22.
Winning with our brands as a force for good, powered by purpose and
innovation
We see an increasing number of consumers preferring trusted brands that
not only deliver great products, but also positively impact people and planet. With more
than 100 PhD scientists working across three R&D centres in India and access to the
work done by 5,000 people in Global R&D function of Unilever, we have the largest
R&D function across FMCG companies in India. Using world-class technology, we
continuously strive to bring superior products which are also good for the planet. For
instance, our brand Surf excel has launched a new formulation for its liquid detergent
with biodegradable actives, packed in 100% recyclable plastic bottles made with 50%
recycled materials. Horlicks has launched Diabetes Plus which is scientifically made to
support dietary management of at-risk and diabetic individuals. By harnessing digital,
artificial intelligence (AI) capabilities, as well as the latest IT solutions, our newly
set up Agile Innovation Hub is transforming HUL?s speed of innovation using a unique
digital innovation workflow.
Leading in the channels of the future
Advancement in technology is increasingly influencing consumer
behaviour. While traditional Kirana stores continue to be the largest ecosystem for
consumers to access their favourite brands, e-Commerce is growing at a fast pace. There is
also consolidation amongst customers, evolution of the e-B2B firms and omnichannel
ecosystems. With quick commerce, shoppers now have a choice of express/instant deliveries
in many places. As the distribution landscape is rapidly transforming, we are clearly
focussed in ensuring that our brands are available wherever shopper wants to shop.
Design for Channel has been one of the strategic thrusts for us and we
are designing products and organising our business for organised retail by collaborating
with our customers and partners. Shikhar, our e-B2B online ordering solution is a real
gamechanger for us. We believe that by helping smaller retailers engage with the digital
economy through Shikhar, we can help them build more resilient and profitable businesses
that also grow our sales. We have now scaled Shikhar to cover more than 8 lakhs stores. We
are also expanding our digital presence through D2C platforms we now have D2C
websites for our premium brands like Lakm?, Indulekha, Simple and a multi-brand platform
UShop. This allows consumers access to their favourite brands directly from our platforms
and get it home delivered giving them a unique shopping experience. All these initiatives
have now enabled us to capture more than 20% of our demand digitally and gives us a unique
ability to run our demand generation and demand fulfilment activities in a disruptive way.
Building differentiated structure and capabilities
Rapid digitalisation in our country has transformed the market dynamics
across sectors. This has led to fragmentation of consumer choice, new channel shifts and
the creation of service ecosystems. Our Reimagine HUL journey continues to help us
accelerate our shift towards becoming an "Intelligent Enterprise". Subsequent to
the digitalisation of our process, we are now focussing on creating connected ecosystem
across consumer, customer and operation, supported by data, technology and analytics at
its core.
As part of the consumer ecosystem, we are focused on faster-better
innovation, leveraging next generation media tools to reach consumers effectively and
efficiently, and building consumer engagement platforms. In the customer ecosystem, we are
building competitive moats across demand capture, demand fulfilment and demand generation
by digitalising our operations and leveraging data-driven analytics. To drive agility and
resilience for our business, optimise costs with a focus on sustainable growth, our supply
chain is undergoing a transformation. We continue to treat data as an enterprise asset and
are enabling data-led decision making in all parts of our business. We are integrating
data from disparate internal and external data sources and are analysing them to enable
better and faster data-led decision making across the business.
Winning in Many Indias (WiMI) has been a cornerstone of our strategy.
Looking at the diverse nature of our country we have de-averaged India into 15 consumer
clusters. This brings us close to the consumers and allows us to capture consumer trends
at a granular level. With the help of these rich granular insights, we are able to deploy
customised strategies to drive growth. As consumers increasingly become more discerning
our WiMI strategy will continue to keep us future-fit.
Building a purpose-led, future-fit organisation and growth culture
We believe that when employees are clear on their purpose in life and
how this connects to the work they do, they are more engaged and willing to go the extra
mile. Working with purpose is at the heart of our culture. This also helps us attract the
best talent, as evidenced by our status as number one employer of choice across industries
in the country. We are transforming how we work at HUL by introducing more flexible and
agile ways of working. We continue on our journey to build a diverse and inclusive
organisation through our progressive policies. We are reskilling and upskilling our
people, and embracing hybrid ways of work to prepare for the future of work. We continue
to build organisational capabilities with clear focus on functional learning priorities
and embedding digital-first mindset to make our people future-fit.
Technology absorption
The Company continues to derive sustainable benefit from the strong
foundation and long tradition of R&D at Unilever, which differentiates it from others.
New products, processes and benefits flow from work done in various Unilever R&D
centres across the globe, including in India. The Unilever R&D labs in Mumbai,
Bengaluru and Gurgaon work closely with the business to create exciting innovations that
help us win with our consumers. With world-class facilities, and a superior science and
technology culture, Unilever attracts the best talent to provide a significant technology
differentiation to its products and processes. The R&D programmes, undertaken by
Unilever globally, are focused on the development of breakthrough and proprietary
technologies with innovative consumer propositions. The global R&D team comprises
highly qualified scientists and technologists working in the areas of Home Care, Beauty
& Personal Care, Foods
& Refreshment and Water Purification and critical functional
capability teams in the areas of Regulatory, Clinicals, Digital R&D, Product &
Environment Safety and Open Innovation.
We have an existing Technical Collaboration Agreement (TCA) and a
Trademark License Agreement (TMLA) with Unilever since 2013. Your Company is enjoying the
benefits of an increasing stream of new products and innovations, backed by technology and
know-how from Unilever. The pace of innovations and the scope of services have expanded
over the years. Unilever?s global resources are providing greater expertise and
superior innovations. This has helped in bringing to the Indian consumers bigger, better
and faster innovations.
The TCA provides for payment of royalty on net sales of specific
products manufactured by your Company, with technical know-how provided by Unilever. The
TMLA provides for the payment of trademark royalty as a percentage of net sales on
specific brands where Unilever owns the trademark in India including use of Unilever
Corporate logo?.
Your Company maintains strong and healthy interactions with Unilever
through a well-coordinated management exchange programme, which includes setting out
governing guidelines pertaining to identifying areas of research, agreeing timelines,
resource requirements, scientific research based on hypothesis testing and
experimentation. This leads to new, improved and alternative technologies, supporting the
development of launch-ready product formulations based on research, and introducing them
to markets. Your Company continuously imports technology from Unilever under the TCA,
which is fully absorbed.
Your Company also receives continuous support and guidance from
Unilever to drive functional excellence in marketing, supply management, media buying and
IT, among others, which help your Company build capabilities, remain competitive and
further step-up its overall business performance. Unilever is committed to ensuring that
the support in terms of new products, innovations, technologies and services is
commensurate with the needs of your Company and enables it to win in the marketplace.
B. Our risks and opportunities
Our risk appetite and approach to risk management
Risk management is integral to your Company?s strategy and to the
achievement of HUL?s long-term goals. Our success as an organisation depends on our
ability to identify and leverage the opportunities generated by our business and the
markets we operate in. In doing this we take an embedded approach to risk management which
puts risk and opportunity assessment at the core of the Board?s agenda, which is
where we believe it should be.
HUL?s appetite for risk is driven by the following:
Our growth should be consistent, competitive, profitable, and responsible;
Our actions on issues such as plastic and climate change must reflect their
urgency, and not be constrained by the uncertainty of potential impacts;
Our behaviours must be in line with our Code of Business Principles (Code) and
Code Policies;
Our ambition to continuously improve our operational efficiency and
effectiveness.
Our approach to risk management is designed to provide reasonable, but
not absolute, assurance that our assets are safeguarded, the risks facing the business are
being assessed and mitigated and all information that may be required to be disclosed is
reported to HUL?s Senior Management and Board & Board Committees including, where
appropriate, the Chief Executive Officer and Managing Director, Chief Financial Officer,
Audit Committee, Risk Management Committee.
For each of our principal risks we have a risk management framework
detailing the internal controls we have in place and who is responsible for managing both
the overall risk and the individual controls mitigating that risk. Our assessment of risk
considers short and long term as well as internal and external risks including financial,
operational, sectoral, sustainability (particularly Environment, Social and Governance
related risks), information, cyber security, legal & compliance and any other risks as
may be determined by the Company Leadership teams. How the identified risks are changing
as well as emerging risk areas are reviewed on an ongoing basis, and formally by Risk
Management Committee and the Board at least twice a year.
Processes
HUL engages in a wide range of processes and activities across all its
operations covering strategy, planning, execution and performance management . Risk
management is integrated into every stage of this business cycle. These procedures are
formalised and documented and are increasingly being centralised and automated into
transactional and other information technology systems.
Risk and Internal Adequacy
The Board advised by the Risk Management Committee, where appropriate,
regularly reviews the significant risks and decisions that could have a material impact on
HUL. These reviews consider the level of risk that HUL is prepared to take in pursuit of
the business strategy and the effectiveness of the management controls in place to
mitigate the risk exposure.
The Company?s internal control systems are commensurate with the
nature of its business and the size and complexity of its operations. These are routinely
tested and certified by Statutory as well as Internal Auditors and cover all offices,
factories and key business areas. Significant audit observations and follow up actions
thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and
effectiveness of the Company?s internal controls environment and monitors the
implementation of audit recommendations, including those relating to strengthening of the
Company?s risk management policies and systems.
Principal risks
In the following pages we have identified the risks that we regard as
the most relevant to our business. These are the risks that we see as most material to
HUL?s business and performance at this time. There may be other risks that could
emerge in the future. Our principal risks have not changed this year. However the Macro
economic and Geopolitical movements, rapidly evolving business transformation, heightened
ESG focus and increasing vulnerability of systems and information have accentuated the
risks in these areas. Much of our risk mitigation focus during the year has been on
managing these risks.
Key areas where we believe there is an increased level of risk compared
to last year are as under
1. Macro-economic and geopolitical volatility
Heightened risk due to inflationary and supply chain pressures,
geopolitical and Covid-19 uncertainties.
2. Systems & Information
Greater exposure to Cyber risks with increased digitisation of business
and the cyber attacks being increasingly active and sophisticated.
3. Rapidly changing Business Models
Rapidly evolving consumer behaviour, new-demand spaces and changing
shopping habits; Transforming retail channel landscape; Pandemic accelerated
reconfiguration of work protocols-hybrid models; Heightened ESG focus.
The potential impact and likelihood of certain principal risks remain
heightened due to the Covid-19 pandemic. These risks are the safety and wellbeing of our
employees and the extended value chain, continuity of operations, and IT availability.
We regularly review our risk areas and the Company leadership retains
the responsibility for determining the nature and extent of significant risks and drawing
out commensurate mitigation plans. We identify the most relevant risks for our business
and reflect on whether the level of risk associated with each of our principal risks is
increasing or decreasing. We set out below our principal risks, certain mitigating actions
that we believe help us to manage our risks and the increase/decrease corresponding to
each of the these.
Risk |
Risk Description |
Management of Risk |
Level of risk |
Brand preference |
Our success depends on the value and relevance of our
brands and products to our consumers and on our ability to innovate and remain
competitive. |
Your Company monitors external market trends and collates
consumer, customer and shopper insights in order to develop category and brand strategies.
We invest in markets and segments where we have built, or are confident that we can build,
competitive advantage. |
No Change |
|
Consumer tastes, preferences and behaviours are changing more
rapidly than ever before. We see a growing trend for consumers preferring brands which
both meet their functional needs and have an explicit social or environmental purpose.
Under indexation of product portfolio in segments where substantial market is moving to,
may lead to loss of market share and long- term competitive disadvantage. Our ability to
create innovative products that continue meeting the needs of consumers and deploy the
right communication, both in terms of messaging content and medium is critical to the
continued strength of our brands. |
Our R&D function actively identifies ways to translate
trends in consumer preferences into new technologies for incorporation in future products.
Our innovation management process converts category strategies into projects which deliver
new products to market. We develop product ideas both in-house and with selected partners
to enable us to respond to rapidly changing consumer trends with speed. |
|
|
The Covid-19 pandemic has driven significant changes in
consumer habits and demands which requires rapid evolution of portfolio and continued
innovations to remain relevant and competitive. |
Our brand communication strategies are designed to optimise
digital communication opportunities. We develop and customise brand messaging content
specifically for each of our chosen communication channels (both traditional and digital)
to ensure that our brand messages reach our target consumers. Our brand teams are driving
social purpose into their brand?s proposition and communications. |
|
Legal & Regulatory |
Compliance with laws and regulations is an essential part
of HUL?s business operations. |
HUL is committed to complying with the laws and regulations
of the country. In specialist areas, the relevant teams are responsible for setting
detailed standards and ensuring that all employees are aware of and comply with
regulations and laws specific and relevant to their roles. Our legal and regulatory
specialists are involved in monitoring and reviewing our practices to provide reasonable
assurance that we remain aware of and are in line with all relevant laws and legal
obligations. |
No Change |
|
Proliferation or instability in regulatory policies related
to levy of direct/indirect taxes, data privacy, corporate governance, listing &
disclosure, food quality compliance, labour laws, consumer communications, imports among
others, may lead to adverse impact on growth and profitability and increased exposure to
civil and/or criminal actions leading to damages, fines and criminal sanctions against us
and/or our employees with possible consequences for our corporate reputation. Changes to
laws and regulations could have a material impact on the cost of doing business. |
|
|
Risk |
Risk Description |
Management of Risk |
Level of risk |
Supply chain |
Our business depends on purchasing materials, efficient
manufacturing and the timely distribution of products to our customers. |
We have contingency plans designed to enable us to secure
alternative key material supplies at short notice, to transfer or share production between
manufacturing sites and to use substitute materials in our product formulations and
recipes. |
Increased |
|
Our supply chain network is exposed to potentially adverse
events such as physical disruptions, environmental and industrial accidents, labour
unrest, trade restrictions or disruptions at a key supplier, which could impact our
ability to deliver orders to our customers. |
Commodity price risk is actively managed through forward
buying of traded commodities, other hedging mechanisms and product pricing. Trends are
monitored and modelled regularly and integrated into our forecasting process. |
|
|
The cost of our products can be significantly affected by the
cost of the underlying commodities and materials from which they are made. Fluctuations in
these costs may negatively impact business especially if such movements are not
effectively managed. |
We have policies and procedures designed to ensure the health
and safety of our employees and the products in our facilities, and to deal with major
incidents including business continuity and disaster recovery. |
|
|
Covid-19 and geopolitical uncertainity around the world has
challenged and continues to challenge the resilience and continuity of our supply chain.
Maintaining manufacturing and logistics operations will continue to require ongoing focus
and flexibility. |
|
|
Business transfor- mation |
Successful execution of business transformation projects
is key to delivering their intended business benefits and avoiding disruption to other
business activities. |
All acquisitions, disposals and transformation projects have
steering groups in place led by senior leadership teams. Sound project discipline is
followed in all transformation projects and these projects are resourced by dedicated and
appropriately qualified personnel. All such projects are monitored through strong
governance and reviewed by the Board of the Company for delivery of maximum synergies. |
No Change |
|
HUL is continually engaged in major change projects,
including acquisitions, disposals and organisational transformation, to drive continuous
improvement in our business and to strengthen our portfolio and capabilities. |
|
|
|
We have an extensive programme of transformation projects.
Ineffective execution of strategic business transformation projects could result in
under-delivery of the expected benefits/synergies, inability to unlock growth
opportunities and a significant negative impact on the value of the business. |
The digitalisation of our business is led by a dedicated
specialist team together with representatives from all parts of the business to ensure an
integrated and holistic approach. |
|
|
Continued digitalisation of our business models and
processes, together with enhancing data management capabilities, is a critical part of our
transformation. |
New ways of working and business models are constantly being
explored to manage our business optimally in changing times. |
|
Macro- Economic Volatility |
Uncertain macro-economic outlook coupled with geopolitical
uncertainties may impact consumer demand for our products, disrupt sales operations and/or
impact the profitability of our operations. |
HUL?s flexible business model allows us to adapt our
portfolio and respond quickly to develop new offerings that suit consumers? and
customers? changing needs during economic downturns. We regularly update our forecast
of business results and cash flows and, where necessary, rebalance investment priorities.
We believe that many years of exposure to challenging market conditions have given us
experience of operating and developing our business successfully during periods of
economic & political instability. |
Increased |
|
Prolonged and accentuated inflationary pressure; rise in
unemployment, fall in disposable incomes could lead to a demand shock. |
|
|
Risk |
Risk Description |
Management of Risk |
Level of risk |
Plastic packaging |
We use a significant amount of plastic to package our
products. A reduction in the amount of virgin plastic we use, the use of recycled plastic
and an increase in the recyclability of our packaging are critical to our future success. |
We are working on three different streams to address the
risk: Advocacy: We are working with Government and Industry bodies on packing substitutes,
central regulation for all States, improving recycling infrastructure for plastics,
framing of EPR regulation framework. |
No Change |
|
Consumer and customer responses to environmental impact of
plastic waste and emerging regulations by Government to tax or ban the use of certain
plastics, require us to find solutions to reduce the amount of plastic we use; increase
recycling post-consumer use; and to source recycled plastic for use in our packaging. |
Collection and Recovery: We are driving waste management
pilots through tie-ups with various companies/NGOs deploying mass collection, processing
and disposal models. We are also helping consumers to understand waste segregation and
disposal methods. In 2021, we achieved plastic neutrality by collecting and responsibly
processing over 1.16 lakh tonnes plastic. |
|
|
Not only is there a risk around finding appropriate
replacement materials, due to high demand, but the cost of recycled plastic or other
alternative packaging materials could significantly increase in the foreseeable future and
this could impact our profitability. We could also be exposed to higher costs as a result
of taxes or fines if we are unable to comply with plastic regulations which would again
impact our profitability and reputation. |
Design and development of alternative packaging: We are
committed to make 100% of our plastic packaging reusable, recyclable or compostable by
2025 and are working on innovative solutions for accelerated development of alternative
packaging and associated Supply Chain capability in order to reduce usage of virgin
plastic. |
|
Systems & information |
Your Company?s operations are increasingly dependent
on IT systems and the management of information. |
To reduce the impact of external cyber-attacks impacting our
business we have firewalls and threat monitoring systems in place, complete with immediate
response capabilities to mitigate identified threats. We also maintain a robust system for
the control and reporting of access to our critical IT systems. This is supported by an
annual programme of testing of access controls. |
Increased |
|
The cyber-attack threat of unauthorised access and misuse of
sensitive information or disruption to operations continues to increase. Such an attack
could inhibit our business operations in a number of ways, including disruption to sales,
production and cash flows, ultimately impacting our results. |
We have policies covering the protection of both business and
personal information, as well as the use of IT systems and applications by our employees.
Our employees are trained to understand these requirements. |
|
|
Increasing digital interactions with customers, suppliers and
consumers place greater emphasis on the need for secure and reliable IT infrastructure and
careful management of the information that is in our possession to ensure data privacy. |
We also have a set of IT security standards and closely
monitor their operation to protect our systems and information. Hardware that runs and
manages core operating data is fully backed up with separate contingency systems to
provide real-time backup operations should they ever be required. |
|
|
Given the changes in ways of working of all our employees as
well as our customers and suppliers, with increased activities online, there has been a
greater reliance on certain elements of our IT infrastructure. We are particularly reliant
on third party experts in this space and thus the impact of any disruptions on their
operations also poses a risk for us. Accelerated pace of digitisation of our operations
also gives rise to the need to detect and mitigate risks arising from technological
advancements such as deployment of AI, Robotics Process Automation, Machine Learning. |
We have standardised ways of hosting information on our
public websites and have systems in place to monitor compliance with appropriate privacy
laws and regulations, and with our own policies. |
|
|
|
We are increasingly putting in place review and monitoring
frameworks for new age automations to assess inherent open risks and mitigate the same. |
|
Risk |
Risk Description |
Management of Risk |
Level of risk |
Quality and safety |
The quality and safety of our products are of paramount
importance for our brands and our reputation. |
Our product quality processes and controls are comprehensive,
from product design to customer shelf. Our internal safety and quality norms are
constantly reviewed to ensure that our products meet the most stringent norms. HUL has a
robust quality inspection process in all manufacturing and warehousing locations to avoid
and detect quality and safety issues. Our key suppliers are externally certified, and the
quality of material received is regularly monitored to ensure that it meets the rigorous
quality standards that our products require. We have processes in place to ensure that the
data used to generate on- pack labelling is compliant with applicable regulations and HUL
labelling policies in order to provide the clarity and transparency needed for consumers. |
No Change |
|
The risk that raw materials are accidentally or maliciously
contaminated throughout the supply chain or that other product defects occur due to human
error, equipment failure or other factors cannot be excluded. Labelling errors can have
potentially serious consequences for both consumer safety and brand reputation. Therefore
on-pack labelling needs to provide clear and accurate ingredient information so that
consumers can make informed decisions regarding the products they buy. |
|
|
Talent |
Ensuring employee safety and wellbeing is a key priority
for us. A skilled workforce and agile ways of working are essential for the continued
success of our business |
In light of Covid-19, we have been proactive and swift in
ensuring safe working conditions and providing the necessary infrastructure and equipment
across all operations to strictly adhere to government guidelines on Covid-19 safety
measures. |
No Change |
|
Covid-19 has had a significant impact on people?s lives,
therefore helping our employees manage this impact and their ability to work effectively
require continued focus. |
Our working spaces have been reconfigured with renewed
protocols in line with return to work requirements post Covid-19. |
|
|
Covid-19 accelerated the shift to remote working. We are now
working in an interweaving ecosystem of physical and virtual work spaces and our ability
to manage hybrid ways of working will be the key to operational effectiveness. There is an
imminent need to re-engage and redeploy our workforce to pre-covid levels. |
We constantly invest in upskilling, reskilling, redeployment
and dynamic allocation of our talent. We regularly review our ways of working to drive
speed and simplicity through our business in order to remain agile and responsive to
marketplace trends. We are adopting flexible ways of working to unlock internal capacity
and optimise talent deployment. |
|
|
With the rapidly changing nature of work and skills, there is
a risk that our workforce is not equipped with the skills required for the new
environment. |
Over the years we have developed a good equity to attract top
talent. We have an integrated management development process which includes regular
performance reviews underpinned by a common set of leadership behaviours, skills and
competencies. We have development plans to upskill and reskill employees for future roles
and will bring in flexible talent to access new skills. We have targeted programmes to
attract and retain top and niche talent and we actively monitor our performance in
retaining a diverse talent pool within HUL. |
|
|
Our ability to attract, develop and retain a diverse range of
skilled people is critical if we are to compete and grow effectively. |
|
|
|
The loss of management or other key personnel or the
inability to identify, attract and retain qualified personnel could make it difficult to
manage the business and could adversely affect operations and financial results. |
|
|
Risk |
Risk Description |
Management of Risk |
Level of risk |
Ethics |
HUL?s brands and reputation are valuable assets and
the way in which we operate, contribute to society and engage with the world around us is
always under scrutiny. |
Our Code and our Code Policies govern the behaviour of our
employees, suppliers, distributors and other third parties who work with us. Our processes
for identifying and resolving breaches of our Code and our Code Policies are clearly
defined and regularly communicated throughout HUL. Data relating to such breaches is
reviewed by HUL Management Committee and by relevant Board Committees that help to
determine the allocation of resources for future policy development, process improvement,
training and awareness initiatives. Our Responsible Sourcing |
No Change |
|
Acting in an ethical manner, consistent with the expectations
of customers, consumers and other stakeholders, is essential for the protection of the
reputation of HUL and its brands. Any significant breach to our Code by employees or
extended enterprises would lead to damage to HUL?s corporate reputation and business
results. |
Business Partner Policy help us improve the lives of the
people in our supply chains by ensuring human rights are protected and makes a healthy and
safe workplace a mandatory requirement for our suppliers We have detailed safety standards
and monitor safety incidents at the highest level. Through our Brands with Purpose agenda,
a number of our brands are taking action on societal issues such as fairness and equality |
|
Climate change |
Climate change and governmental actions to reduce such
changes may disrupt our operations and/or reduce consumer demand for our products. |
As part of our sustainability targets, we monitor climate
change and are responding by ensuring that we reduce the environmental impact of our
operations to the extent possible. |
Increased |
|
Climate change may impact our business in various ways
through increased costs or reduced growth and profitability. Physical environment risks
such as water scarcity could impact our operations, reduce demand for our products that
require water during consumer use or decrease sales on account of reduced product efficacy
due to water shortage. Uncertainty in timing and severity of summer, winter and monsoon
may impact the seasonal swings that we get on our mixes. |
Remove as much carbon from our operations and supply
chain as we can |
|
|
Increased frequency of extreme weather events such as high
temperatures, hurricanes or floods could cause increased incidence of disruption to our
supply chain, manufacturing and distribution network. |
Sustainably source all our key commodities |
|
|
|
Ensure deforestation-free supply chain |
|
|
|
In order to deal with the water scarcity and quality problems
in the country, we are making water saving formulations available for seasonal deployment
across portfolios. We also have ongoing plans to de-seasonalise our product portfolios to
deal with extreme unfavourable seasonal swings. We monitor governmental developments
around actions to combat climate change and take proactive action to minimise the impact
on our operations. |
|
|
Market risks associated with the energy transition and rising
energy prices could disrupt our operations and increase costs. Our inability to reduce our
carbon footprint and meet conscious consumption agenda across consumer segments may be
detrimental to our reputation and growth in the long term. |
|
|
Opportunities
|
Opportunities |
What We are doing to respond to |
Growing in channels of the future |
With the advent of technology-enabled distribution models
there has been a hyper fragmentation of channels. Accelerated growth of e-Commerce and
Modern Trade has brought about a huge opportunity to tap into these channels and drive
business growth. Covid-19 has caused rapid digitisation of purchase behaviours which
require us to accelerate development of our e-Commerce and e-RTM capabilities. |
While HUL continues to drive growth in the traditional trade
and route to market, it is also critical to increase the Company?s footprint in
emerging channels. Covid-19 has accelerated the shift of consumers to online with the
trend of e-everything becoming highly discernible. Your Company is working on rapid
proliferation of technology enabled distribution models to engage key customers and
consumers strategically. |
|
Strategically designed and flawlessly executed e-RTM, B2B
solutions and E2E Supply Chain transformation would open up a huge opportunity to tap into
the new age channels and drive business growth. |
Several new initiatives have been piloted which include
digitisation of general trade through our eB2B app Shikhar, smart demand capture,
leveraging opportunities in Omni channel, B2B2C and e-Commerce. |
Future-fit portfolio |
HUL?s strategic investment choices in keeping with
changing consumer demographics, aspirations and spending power will bring about an
opportunity for growth and improved margins. There is a huge headroom to grow through
building our product portfolio in high growth spaces such as masstige, health and hygiene,
digital first brands, naturals and therapeutics. |
Our strategy and our business plans are designed to ensure
that resources are prioritised towards high growth segments. As an outcome of Covid-19
there has been an upswing in categories like health, hygiene and nutrition. We have a
strong pipeline of relevant innovations and are staying close to consumers by proactively
spotting consumer insights and capturing potential trends to adapt to the emerging demand
patterns in the short term and prepare for any structural changes in the medium term. We
are also focused on making brands aspirational and driving premiumisation across the
breadth of the product portfolio. HUL has significantly enhanced brand propositions and
marketing investments to increase adoption in under- penetrated categories. |
Digital transforma- tion |
Digital Transformation Opportunities arising from rapidly
emerging digital technologies, analytics and big data present a chance to make meaningful
interventions and develop capabilities across the value chain redefining the way we do
business. The ability to keep our operations future-fit through building digital
capabilities in systems, workforce and business models will help us stay agile and respond
in time to evolving stakeholder requirements. |
HUL has been a leader in using big data and analytics as a
tool to drive sustainable growth. We continue to drive organisation-wide digital
transformation agenda under the umbrella of Reimagine HUL? to capture the
digital opportunity. Pre-empting the imminent disruption, we have established a sharp
digitalisation agenda in each function. These include those around our core ERP platform
using Cloud, Artificial Intelligence and other digital technologies. Each day we build new
capabilities in Systems, Workforce and Business Models with strong focus on external
orientation and partnerships across large IT Companies/Industry Bodies. We are also
invested to make sure that our talent is digitally enabled and future-fit to ride the
digital transformation wave. |
ESG focus |
The effects of climate change and nature loss are becoming
ever more apparent and increasingly urgent. Our stakeholders recognise that responsible
business practices are critical to generating long term value. |
HUL is a frontrunner in sustainable business practices.
Through the Compass we have integrated our sustainability and business strategies. We aim
to demonstrate that robust financial results are not contrary to sustainable business; in
fact, they are complementary. |
|
Your Company is committed to operate and grow the business in
a responsible way. Our Compass commitments guide our purpose and vision. Your Company has
the opportunity to leverage its ESG credentials for a consumer perception benefit. |
The Company has a strong governance mechanism in place
consisting of cross functional steering committees to action our ESG commitments. We are
constantly driving advocacy around sustainability and getting broader industry
participation to lead the change. |
Financial Review
Results
(Rs. in crores)
|
For the year ended 31st
March, 2022 |
For the year ended 31st
March, 2021 |
Turnover |
50,336 |
45,311 |
Earnings Before Interest, Taxes, Depreciation and
Amortisation (EBITDA) |
12,503 |
11,324 |
Profit before exceptional items and tax |
11,773 |
10,717 |
Profit for the year |
8,818 |
7,954 |
Division Wise Turnover
(Rs. in crores)
|
For the year ended 31st
March, 2022 |
For the year ended 31st
March, 2021 |
|
Turnover |
Others* |
Turnover |
Others* |
Home Care |
16,470 |
108 |
13,883 |
76 |
Beauty & Personal Care |
19,157 |
303 |
17,709 |
255 |
Foods & Refreshment |
14,020 |
85 |
13,148 |
56 |
Others (including Exports and consignment sales) |
689 |
361 |
571 |
298 |
Total |
50,336 |
857 |
45,311 |
685 |
* Others include service income from operations, relevant to the
respective businesses.
Summarised Profit and Loss Account
(Rs. in crores)
|
For the year ended 31st
March, 2022 |
For the year ended 31st
March, 2021 |
Turnover |
50,336 |
45,311 |
Other operational income |
857 |
685 |
Total Revenue from operations |
51,193 |
45,996 |
Operating Costs |
38,690 |
34,672 |
Profit before Depreciation, Interest, Tax (PBDIT) |
12,503 |
11,324 |
Depreciation |
1,025 |
1,012 |
Profit before Interest & Tax (PBIT) |
11,478 |
10,312 |
Other Income (net) |
295 |
405 |
Profit before exceptional items |
11,773 |
10,717 |
Exceptional items |
(34) |
(227) |
Profit before Tax (PBT) |
11,739 |
10,490 |
Taxation |
2,921 |
2,536 |
Profit for the year |
8,818 |
7,954 |
Basic EPS (Rs.) |
37.53 |
33.85 |
Key Financial Ratios: |
|
|
Particulars |
2021-22 |
2020-21 |
Return on Net Worth (%) |
18.6 |
17.0 |
Return on Capital Employed (%) |
107.8 |
113.0 |
Basic EPS (after exceptional items) |
37.53 |
33.85 |
Debtors Turnover |
28.1 |
30.2 |
Inventory Turnover |
13.8 |
14.0 |
Interest Coverage Ratio |
129.2 |
108.8 |
Debt Service Coverage Ratio |
21.4 |
20.2 |
Current Ratio |
1.3 |
1.3 |
Debt Equity Ratio |
0.02 |
0.02 |
Operating Profit Margin (%) |
22.8 |
22.8 |
Net Profit Margin (%) |
17.5 |
17.6 |
The calculation for above ratios (including restatement of prior year
ratios, wherever necessary) is in accordance with formula prescribed by Guidance note on
Schedule III issued by the Institute of Chartered Accountants of India. Opening balances
for FY 2020-21 have been adjusted for GSK CH merger Increase in Return on Net Worth is led
by PAT growth There is no significant change (i.e. change of 25% or more as compared to
the FY 2020-21) in the other key financial ratios.
Detailed explanation of ratios
(i) Return on Net Worth
Return on Net Worth (RONW) is a measure of profitability of a Company expressed in
percentage. It is calculated by dividing total comprehensive income by average
shareholder?s equity.
(ii) Return on Capital Employed
Return on Capital Employed (ROCE) indicates the ability of a Company?s management
to generate returns for both the debt holders and the equity holders. It measures a
Company?s profitability and the efficiency with which its capital is used. It is
calculated by dividing profit before exceptional items, interest and tax by capital
employed. Capital Employed = tangible net worth + total debt + deferred tax liability.
(iii) Basic EPS
Earnings Per Share (EPS) is the portion of a Company?s profit allocated to each
share. It serves as an indicator of a Company?s profitability.
It is calculated by dividing Profit for the year by Weighted average number of shares
outstanding during the year.
(iv) Debtors Turnover
Debtors Turnover measures the efficiency at which the firm is managing the receivables.
The ratio shows how well a Company uses and
manages the credit it extends to customers and how quickly that short-term debt is
collected or is paid. It is calculated by dividing turnover by
average trade receivables.
(v) Inventory Turnover
Inventory Turnover measures the efficiency with which a Company utilises or manages its
inventory. It establishes the relationship between sales and average inventory held during
the period. It is calculated by dividing turnover by average inventory.
(vi) Interest Coverage Ratio
The Interest Coverage Ratio measures how many times a Company can cover its current
interest payment with its available earnings. It is calculated by dividing earnings
available for debt service by interest payments.
(vii) Debt Service Coverage Ratio
Debt Service coverage ratio is used to analyse the firm?s ability to pay-off
current interest and instalments. It is calculated by dividing earnings available for debt
service by debt service.
(viii)Current Ratio
The Current Ratio indicates a Company?s overall liquidity position. It measures a
Company?s ability to pay short-term obligations or those due within one year. It is
calculated by dividing the current assets by current liabilities.
(ix) Debt Equity Ratio
Debt Equity ratio is used to evaluate a Company?s financial leverage. It is a
measure of the degree to which a Company is financing its operations through debt versus
wholly owned funds. It is calculated by dividing total debt by shareholder?s equity.
(x) Operating Profit Margin (%)
Operating Profit Margin is used to calculate the percentage of profit a Company
produces from its operations. It is calculated by dividing EBIT by turnover.
(xi) Net Profit Margin (%)
The net profit margin is equal to how much net profit is generated as a percentage of
revenue. It is calculated by dividing net profit by turnover.
Other Financial Disclosures
There were no material changes and commitments affecting the financial
position of the Company which occurred between the end of the financial year to which this
financial statement relates on the date of this Integrated Annual Report.
During the financial year, there was no amount proposed to be
transferred to the Reserves.
Capital Expenditure (including Intangible Assets)during the financial
year was at Rs.919 crores (Rs.4,051 crores in the previous financial year).
During the financial year, your Company did not accept any public
deposits as defined under Chapter V of the Companies Act, 2013. Your Company manages cash
and cash flow processes assiduously, involving all parts of the business. There was cash
and bank balance of Rs.3,618 crores (financial year 2020-21: Rs.4,321 crores), as on
31st March, 2022. The Company?s low debt equity ratio provides
ample scope for gearing the Balance Sheet, should the need arise. Foreign Exchange
transactions are fully covered with strict limits placed on the amount of uncovered
exposure, if any, at any point in time. There are no materially significant uncovered
exchange rate risks in the context of Company?s imports and exports. The Company
accounts for mark-to-market gains or losses every quarter end, are in line with the
requirements of Ind AS 21. The details of foreign exchange earnings and outgo as required
under Section 134 of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules,
2014 are mentioned below:
(Rs. in crores)
|
For the year ended 31st
March, 2022 |
For the year ended 31st
March, 2021 |
Foreign Exchange earnings |
1,527 |
1,407 |
Foreign Exchange outgo |
3,131 |
2,698 |
Includes all Indian subsidiaries, excludes Unilever Nepal Limited
Performance of subsidiaries
The summary of performance of the subsidiaries is provided as below:
Unilever India Exports Limited
Unilever India Exports Limited is a wholly owned subsidiary of the
Company and is engaged in FMCG exports business. The focus of the FMCG exports operation
is two-fold: to develop overseas markets by driving distribution of brands, such as
Vaseline, Dove, Pears, BRU, Red Label, Lakm?, Horlicks, Boost and to effectively provide
cross-border sourcing of FMCG products to other Unilever companies across the world.
The topline growth of the Company was driven by robust growth in
Personal Wash, Personal care, and Culinary products portfolio. Brands like Dove, Vaseline,
Lakm?, Glow & Lovely, Horlicks, Lifebuoy, Knorr and Kissan have registered healthy
growth in the focused markets.
Lakme Lever Private Limited
Lakme Lever Private Limited is a wholly owned subsidiary of the
Company. The Company is engaged in Salons business and also operates a manufacturing unit
at Gandhidham which carries out job work operations for your Company by manufacturing
toilet soaps, bathing bars and detergent bars.
The company delivered robust topline and bottom line growth led by
recovery in the salon business which was impacted by Covid-19 during the previous
financial year. With focus on safety, quality of operations, expert treatments and prudent
cost optimisation, the salon business continues to perform well in the beauty services
category. Job work business continues its strong top line and bottom line growth momentum.
It has over 400 owned/managed and franchisee salons. At Lakm? Salon,
safety and wellbeing of our experts and consumers have always been the topmost priority.
This is assured by detailed Lakm? SOPs, rigorous training and high-quality products. The
stringent safety and hygiene protocols rolled out after the first wave were strengthened
when salons reopened post wave 2. The extended team comprising the housekeeping staff,
experts, salon managers and business partners have been trained and audited continuously
to ensure complete adherence to protocols. The safety standards were communicated in an
authentic and credible manner leveraging walk throughs and client testimonials with the
Safer than Home campaign. This has improved company?s Net Promoter Score?
which is in the healthy range of 85 to 90%.
Innovations like Free Spirits vibrant colours, Beautysutra
facials and manicure/pedicure treatments and Tresplex hair treatments added excitement to
our comprehensive Runway Secrets portfolio. Thematic campaigns Good Hair Day, Happy
New You and Hair Tech helped gain new clients and sustain existing ones. Lakm? Salon was
awarded several awards notable amongst which are Best Franchisor Beauty and
Wellness at the Franchise India Summit and Best National Salon Chain at the Salon
Congress.
Hindustan Unilever Foundation
Hindustan Unilever Foundation (HUF) is a not-for-profit company that
anchors water management related community development and sustainability initiatives of
Hindustan Unilever Limited. The company operates the Water for Public Good?
programme, with a specific focus on water conservation, building local community
institutions to govern water resources and enhancing farm-based livelihoods through
adoption of judicious water practices. HUF?s programmes currently reach over 10,000
villages* in 46 Districts in 8 States and 2 Union Territories across India in partnership
through 15 NGO partners and multiple co-funders. The Company also supports several
knowledge initiatives in water conservation, governance and behaviour change.
By the end of financial year 2020-21, the cumulative and collective
achievements through partnered programmes of the Company (independently assured) include:
Water Conservation: Over 1.9 trillion litres of water potential
created;
Crop Yield: Additional agriculture production of over 1.3
million tonnes has been generated;
Livelihoods: Over 60 million person-days of employment have been
created though water conservation and increased agriculture production*.
Unilever Nepal Limited
Unilever Nepal Limited (UNL), a subsidiary of your Company and is
engaged in manufacturing, marketing and sale of detergents, foods and refreshment
products, toilet soaps, personal products and laundry soaps in Nepal.
During the year, UNL enhanced its growth trajectory which was broad
based across all categories. UNL has maintained its bottom-line performance, driven by
mix, judicious price management and by leveraging the current manufacturing capability.
Transformation programmes such as Distributor Management System and SAP migration
*The significant reach and livelihood impact are on account of
HUF?s support to MGNREGS programme partnership in West Bengal with PRADAN, a reputed
non-profit organisation. This programme reaches out to over 7,000 villages across 54
blocks in 6 districts.
are helping in faster decision-making, localised and swifter innovation
delivery and increased speed-to market.
Unilever India Limited
Unilever India Limited is a wholly owned subsidiary of your Company
that had been incorporated to leverage the growth opportunities in a fast-changing
business environment. Presently, it is in the process of setting up its manufacturing
facility at Sumerpur, Uttar Pradesh. It is proposed to manufacture detergent powder at
this facility. This company is on-track to commission its factory and start commercial
production in the financial year 2022-23.
Other Subsidiaries
Pond?s Exports Limited is a subsidiary of your Company which
was engaged in leather business and has currently discontinued operations.
Bhavishya Alliance Child Nutrition Initiatives is a not-for-profit
subsidiary of your Company and has discontinued operations.
Daverashola Estates Private Limited is a subsidiary of your Company
which currently has no business activity. There is an ongoing litigation on the property
owned by the company in Tamil Nadu.
Jamnagar Properties Private Limited is a subsidiary of your Company
and has currently discontinued operations.
Levers Associated Trust Limited, Levindra Trust Limited and Hindlever
Trust Limited, subsidiaries of your Company, act as trustees of the employee benefits
trusts of your Company.
The Scheme for merger of Ponds Exports Limited and Jamnagar Properties
Private Limited into Unilever India Exports Limited was filed with the Hon?ble
National Company Law Tribunal, Mumbai on 1st July, 2021. As on date, the final order on
the company petition for merger is awaited.
During the year, your Company has obtained a certificate from the
Statutory Auditors certifying that the Company is in compliance with the Foreign Exchange
Management Act with respect to the downstream investment made in its subsidiary company
i.e. Unilever India Limited.
C. Others
Cost Audit
In terms of the Section 148 of the Companies Act, 2013 read with Rule 8
of the Companies (Accounts) Rules, 2014, the cost audit is applicable for following
businesses such as Coffee, Drugs and Pharmaceuticals, Insecticides, Milk Powder, Organic
Chemicals, Other Machinery, Petroleum Products and Tea. The accounts and records for the
above applicable businesses are made and maintained by the Company as specified by the
Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.
Employee Stock Option Plan (ESOP)
Details of the shares issued under Employee Stock Option Plan (ESOP),
as also the disclosures in compliance with SEBI (Share Based Employee Benefits)
Regulations, 2014, are uploaded on the website of the Company https://www.
hul.co.in/investor-relations/annual-reports/hul-annual-report-related-documents/. No
employee has been issued share options during the year equal to or exceeding one percent
of the issued capital of the Company at the time of grant.
Pursuant to the approval of the Members at the Annual General Meeting
held on 23rd July, 2012, the Company adopted the 2012 HUL Performance Share
Scheme?. In accordance with the terms of the Performance Share Scheme, employees are
eligible for award of conditional rights to receive equity shares of the Company at the
face value of Rs. 1/- each. These awards will vest only on the achievement of certain
performance criteria measured over a period of three years. The Company confirms that the
2012 HUL Performance Share Scheme complies with the provisions of SEBI (Share Based
Employee Benefits) Regulations, 2014.
No shares were awarded to employees under the 2012 HUL
Performance Share Scheme? in the financial year 2021-22. The employees of the Company
are eligible for Unilever share award plans, namely Performance Share Plan (PSP) and the
SHARES plan. Through PSP, all managers are eligible to receive a conditional grant of
Unilever shares on an annual basis. The Target PSP share award is equivalent to 50% of the
Target Bonus for Managers and 100% of the Target Bonus for Senior Leaders. The actual
share grant is determined by the line manager basis the employees? sustained impact,
leadership and future-fit talent profile. These shares vest after a 3 year period with
vesting being determined by Company performance against metrics. Under the SHARES Plan,
eligible employees can invest in the shares of Unilever PLC (Holding Company) up to a
specified amount and after three years, one share is granted to the employees for every
three shares invested, subject to the fulfilment of conditions of the plan. The Holding
Company charges the Company for the grant of shares to the Company?s employees based
on the market value of the shares on the exercise date.
Disclosures with respect to the remuneration of Directors and employees
as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
(?Rules?) have been appended as an Annexure to this Integrated Annual Report.
Details of employee remuneration as required under provisions of Section 197(12) of the
Companies Act, 2013 and Rule 5(2) and 5(3) of the Rules are available on the
Companys website at https://www.hul.co.in/investor-relations/annual-reports/
hul-annual-report-related-documents/.
Dividend
Your Directors are pleased to recommend a final dividend of Rs.19/- per
equity share of face value of Rs.1/- each for the year ended 31st March, 2022. The interim
dividend of Rs.15/- per equity share was paid on Friday, 12th November, 2021. The final
dividend, subject to the approval of Members at the Annual General Meeting on Thursday,
23rd June, 2022, will be paid on or after Monday, 27th June, 2022 to the Members whose
names appear in the Register of Members, as on the Book Closure date, i.e. from Friday,
17th June, 2022 to Thursday, 23rd June, 2022 (both days inclusive). The total dividend for
the financial year, including the proposed final dividend, amounts to Rs.34/- per equity
share and will absorb Rs. 7,989 crores. In view of the changes made under the Income-tax
Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be
taxable in the hands of the Shareholders. Your Company shall, accordingly, make the
payment of the final dividend after deduction of tax at source.
Unpaid/Unclaimed Dividend
In terms of the provisions of Investor Education and Protection Fund
(Accounting, Audit, Transfer and Refund) Rules, 2016/Investor Education and Protection
Fund (Awareness and Protection of Investors) Rules, 2001, Rs.12.11 crores of
unpaid/unclaimed dividends were transferred during the financial year to the Investor
Education and Protection Fund.
Mergers and Acquisitions
There were no mergers/acquisitions during the year.
Particulars of Loan, Guarantee or Investments
Details of loans, guarantee or investments made by your Company under
Section 186 of the Companies Act, 2013, during financial year 2021-22 are appended as an
Annexure to this Integrated Annual Report.
Governance, Compliance and Business integrity
The Legal function of the Company continues to be a valued business
partner that provides solutions to protect your Company and enable it to win in the
volatile, uncertain, complex and ambiguous environment. Through its focus on creating
value with values?, the function provides strategic business partnership in the
areas including product claims, mergers and acquisitions, legislative changes, combatting
unfair competition, business integrity and governance. As the markets continue to be
disrupted with newer technologies and ever-evolving consumer preferences, the need to have
a framework around data security and privacy is paramount. Your Company continues to
ensure it has an appropriate framework and safeguards for data privacy of its stakeholders
with enhanced legal and security standards. The legal function of your Company continues
to embrace newer technologies to make the function future ready to support the growth
agenda of the business.
Your Company is of the view that the menace of counterfeits can be
effectively addressed if enforcement actions are supplemented with building awareness
amongst the consumers of tomorrow. Your Company continued to engage with various
stakeholders including e-Commerce Channel Partners, Industry Bodies and Regulators to curb
the menace of counterfeiting on the e-Commerce platforms.
One of the key activities undertaken by your Company in this direction
is propagating intellectual property awareness, particularly among school students. Your
Company believes it is important to educate students on intellectual property and build
awareness and understanding of the subject so that students start respecting intellectual
property rights from a young age. The Legal function of your Company works with leading
industry associations, national and regional regulators and key opinion formers to develop
a progressive regulatory environment in the best interest of all stakeholders.
Business Integrity
Our principles and values apply to all our employees through our Code
of Business Principles (Code) and Code Policies. Our employees undertake mandatory annual
training on these Policies via online learning modules and sign an annual Business
Integrity Pledge. Our Business Integrity governance framework includes clear processes for
dealing with Code breaches.
During the financial year, we closed 52 incidents across all areas of
our Code and Code Policies, with 21 confirmed breaches. During the year, we terminated the
employment of 7 employees as a consequence of such breaches. The Code and Code Policies
reflect our desire to fight corruption in all its forms. We are committed to eradicating
any practices or behaviours though our zero-tolerance approach to such practices. The Code
of Business Principles is periodically refreshed and updated so that it provides a current
reflection of the way we do business at Unilever. Our Code and Code Policies have been
reviewed to align them with the changes in the internal and the external environment.
Our Responsible Sourcing Business Partner Policy help to give us
visibility of our third parties to ensure their business principles are consistent with
our own.
Corporate Governance
Maintaining high standards of Corporate Governance has been fundamental
to the business of your Company since its inception. A separate report on Corporate
Governance is provided together with a Certificate from the Statutory Auditors of the
Company regarding compliance of conditions of Corporate Governance as stipulated under
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing
Regulations). A Certificate of the CEO and CFO of the Company in terms of Listing
Regulations, inter-alia, confirming the correctness of the financial statements and cash
flow statements, adequacy of the internal control measures and reporting of matters to the
Audit Committee, is also annexed.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on 31st March, 2022 is available on the Company?s website on
https://www.hul.co.in/ investor-relations/annual-reports/.
Prevention of Sexual Harassment at Workplace
As per the requirement of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013 (POSH Act?) and Rules made
thereunder, your Company has constituted Internal Committees (IC). Your Company?s
POSH Policy is now inclusive and gender neutral, detailing the governance mechanisms for
prevention of sexual harassment issues relating to employees across genders including
employees who identify themselves with LGBTQI+ community.
While maintaining the highest governance norms, the Company has
appointed external independent persons who have prior experience in the areas of women
empowerment and prevention of sexual harassment, as Chairpersons of each of the Internal
Committees. During the year, 2 complaints with allegations of sexual harassment were
received by the Company and they were investigated and resolved as per the provisions of
the
POSH Act. To build awareness in this area, the Company has been
conducting induction/refresher programmes in the organisation on a continuous basis.
During the year, your Company organised offline training sessions on the topics of Gender
Sensitisation and Code Policies including POSH for all office and factory based employees.
Related Party Transactions
In line with the requirements of the Companies Act, 2013 and amendment
to the Listing Regulations, your Company has formulated a revised Policy on Related
Party Transactions?, which is also available on the Company?s website at
https://www.hul.co.in/investor-relations/ corporate-governance/. The Policy intends to
ensure that proper reporting, approval and disclosure processes are in place for all
transactions between the Company and Related Parties.
All Related Party Transactions and subsequent material modifications
are placed before the Audit Committee for review and approval. Prior omnibus approval is
obtained for Related Party Transactions on a quarterly basis for transactions which are of
repetitive nature and/ or entered in the Ordinary Course of Business and are at Arm?s
Length. All Related Party Transactions are subjected to independent review by a reputed
accounting firm to establish compliance with the requirements of Related Party
Transactions under the Companies Act, 2013, and Listing Regulations.
All Related Party Transactions entered during the year were in Ordinary
Course of the Business and at Arm?s Length basis. No Material Related Party
Transactions, as per the materiality threshold adopted by the Board of Directors, were
entered during the year by your Company. Accordingly, the disclosure of Related Party
Transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2
is not applicable.
Board of Directors and Key Managerial Personnel
During the year, based on the recommendation of Nomination and
Remuneration Committee, the Board of the Directors approved the appointment of Ms. Ashu
Suyash (DIN: 00494515) as an Additional Director - Independent Director, of the Company,
with effect from 12th November, 2021, which was subject to shareholders approval.
Securities Exchange Board of India vide Third Amendment Regulations,
2021 read with the corrigendum to Listing Regulations has stipulated the requirement of
attaining approval of shareholders by means of a special resolution, for appointment of an
Independent Director on the Board of Directors either at the next general meeting or
within a time period of three months from the date of appointment, whichever is earlier,
effective from 1st January, 2022. Even though the requirement of obtaining shareholder
approval was effective only from 1st January, 2022, as part of good Corporate Governance
practice, the Company has received approval of the Members of the Company by means of
Special Resolution through Postal Ballot for appointment of Ms. Ashu Suyash as an
Independent Director of the Company for a period of 5 (five) years with effect from 12th
November, 2021 to 11th November, 2026.
The Board of Directors based on the recommendation of the Nomination
and Remuneration Committee appointed Mr. Nitin Paranjpe (DIN: 00045204) as an Additional
Director - Non-Executive Director designated as Chairman of the Company with effect from
31st March, 2022, subject to approval of shareholders. Mr. Sanjiv Mehta will continue as
the Chief Executive Officer and Managing Director of the Company with effect from 31st
March, 2022. The Board of Directors had expressed their deep sense of appreciation and
gratitude to Mr. Sanjiv Mehta for the immense contribution made by him as Chairman of the
Board and the Company and the manner in which he had led the Board and the Company.
Members at the 83rd Annual General Meeting of the Company held on 30th
June, 2017 had approved the appointment of Mr. Dev Bajpai (DIN: 00050516), as the
Whole-time Director of the Company for a period of five years with effect from 23rd
January, 2017 till 22nd January, 2022. The Board of Directors had based on the
recommendation of Nomination and Remuneration Committee and subject to approval of the
Members, approved the re-appointment of Mr. Dev Bajpai, as a Whole-time Director and
Company Secretary of the Company for a further period of 5 years, with effect from 23rd
January, 2022 to 22nd January, 2027.
The Company has received approval of the Members of the Company on 16th
April, 2022 through Postal Ballot for appointment of Mr. Nitin Paranjpe as Non-Executive
Director and re-appointment of Mr. Dev Bajpai as a Whole-time Director.
As per the provisions of the Act, the Independent Directors are not
liable to retire by rotation. The Independent Directors of your Company have given the
certificate of independence to your Company stating that they meet the criteria of
independence as mentioned under Section 149(6) of the Companies Act, 2013 and the Listing
Regulations. All other Directors, except the Managing Director, will retire at the ensuing
Annual General Meeting and being eligible, offer themselves for re-election.
The details of training and familiarisation programme and Annual Board
Evaluation process for Directors have been provided in the Corporate Governance Report.
The policy on Director?s appointment and remuneration including criteria for
determining qualifications, positive attributes, independence of Director, and also
remuneration for key managerial personnel and other employees, forms part of the Corporate
Governance Report of this Annual Report. During the year, five meetings of the Board of
Directors were held. The details of meetings held and Director?s attendance are
provided in the Corporate Governance Report, which forms part of this Integrated Annual
Report.
Management Committee
The day-to-day management of the Company is vested with the Management
Committee, which is subjected to the overall supervision and control of the Board. The
Management Committee is headed by the Chief Executive Officer and Managing Director, and
has Functional/ Business Heads as its members.
During the year, the Board of Directors approved the appointment of Mr.
Srinandan Sundaram, Executive Director, Customer Development as Executive Director, Foods
and Refreshment in succession of Mr. Sudhir Sitapati, who had decided to pursue an
external opportunity. Further, the Board of Directors approved the appointment of Mr.
Kedar Lele as Executive Director, Customer Development and a Member of Management
Committee replacing Mr. Srinandan Sundaram. Ms. Priya Nair, currently, Executive Director
Beauty & Personal Care has been appointed Chief Marketing Officer, Beauty &
Wellbeing at Unilever. Accordingly, the Board of Directors approved the appointment of Mr.
Madhusudhan Rao as Executive Director, Beauty & Personal Care and a Member of
Management Committee of the Company in succession to Ms. Priya Nair.
Ms. Prabha Narasimhan, Executive Director, Home Care decided to leave
the Company to pursue an external opportunity. The Board of Directors of the Company
approved the appointment of Mr. Deepak Subramanian as Executive Director, Home Care and a
Member of Management Committee of the Company, in succession to Ms. Prabha Narasimhan.
The Board places on record its appreciation for the leadership and
invaluable contribution made by Mr. Sudhir Sitapati, Ms. Priya Nair and Ms. Prabha
Narasimhan during their tenure as Members of Management Committee of the Company.
Auditors
M/s. B S R & Co. LLP, Chartered Accountants were re-appointed as
Statutory Auditors of your Company at the Annual General Meeting held on 29th June, 2019,
for the second term of five consecutive years. The Auditors have confirmed that they are
not disqualified from being re-appointed as Auditors of the Company.
The Report given by the Auditors on the financial statement of the
Company is part of this Integrated Annual Report. There has been no qualification,
reservation, adverse remark or disclaimer given by the Auditors in their Report. During
the year under review, the Auditors had not reported any matter under Section 143 (12) of
the Companies Act, 2013.
M/s. R A & Co., Cost Accountants carried out the cost audit for
applicable businesses during the year. The Board of Directors has appointed M/s. R A &
Co., Cost Accountants as Cost Auditors for the financial year 2022-23.
T h e B o a r d o f D i r e c t o r s h a d a p p o i n t e d M/s. S.
N. Ananthasubramanian & Co., Company Secretaries to conduct Secretarial Audit for the
financial year 2021-22. The Secretarial Audit Report forms part of this Integrated Annual
Report. The Secretarial Audit Report does not contain any qualification, reservation or
adverse remark.
Disclosure
The details in relation to Internal Financial Controls, Director?s
Remuneration Policy and the composition of Audit Committee, establishment of Vigil
Mechanism for raising concerns by Directors, employees, any other persons including
vendors, contractors, sub-contractors, consultants, trainees, shareholders, former
employees or any other third parties, is provided in the Corporate Governance Report
forming part of this Integrated Annual Report. No significant or material orders were
passed by the Regulators or Courts or Tribunals which impacts the Company?s going
concern status and operations in future.
Compliance with Secretarial Standards
The Company has complied with all the applicable provisions of
Secretarial Standard on Meetings of Board of Directors (SS-1), Revised Secretarial
Standard on General Meetings (SS-2), Secretarial Standard on Dividend (SS-3) Secretarial
Standard on Report of the Board of Directors (SS-4) respectively issued by Institute of
Company Secretaries of India.
Stakeholder Engagement
Our multi-stakeholder model aims to respect the interests of and be
responsive towards all stakeholders. Stakeholder engagement and partnership are essential
to grow your Company?s business and to reach the ambitious targets set out in the
Compass sustainability commitments. The Code of Business Principles, which is the
statement of values and represents the standard of conduct for everyone associated with
your Company, and the Code Policies guide how we interact with our partners, suppliers,
customers, employees, shareholders, Government, Non-Governmental Organisations (NGOs),
trade associations and industry bodies. Through the underlying standards set in Code and
Code Policies, your Company is committed to transparency, honesty, integrity and openness
in all its engagements with the various stakeholders. Details on stakeholder engagement is
provided in the Business Responsibility Report on pages 72 to 85.
Outlook
Our overarching goal remains the delivery of 4G growth that is,
growth which is consistent, competitive, profitable and responsible. In the backdrop of a
challenging operating environment in this fiscal, we dynamically managed our business to
deliver strong bottomline performance whilst growing our consumer franchise and made
significant progress on our strategic priorities. We will continue to take this approach
in financial year 2022-23 where operating environment is expected to remain challenging
with further input cost inflation and soft FMCG market growth. Our strategic clarity, the
strength of our brands, our execution prowess, agility and adaptability will continue to
hold us in good stead. We remain confident of outpacing FMCG market growth and maintaining
margins at healthy levels.
Notwithstanding these near-term challenges, Indian FMCG sector offers
significant potential for growth. In the mid-long term, we will continue to create value
for all our stakeholders by growing ahead of the market, delivering modest margin
expansion and through disciplined use of capital.
Responsibility Statement
The Directors confirm that:
In the preparation of the Annual Accounts, the applicable
accounting standards have been followed and that no material departures have been made
from the same;
They have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and prudent, so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profits of the Company for that period;
They have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013, for safeguarding the assets of the Company and for preventing and detecting fraud
and other irregularities;
They have prepared the annual accounts on a going concern basis;
They have laid down internal financial controls for the Company
and such internal financial controls are adequate and operating effectively; and
They have devised proper systems to ensure compliance with the
provisions of all applicable laws and such systems are adequate and operating effectively
Appreciations and Acknowledgments
Your Directors place on record their deep appreciation to all employees
for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of
the employees have enabled the Company to remain an industry leader.
Your Directors would also like to acknowledge the excellent
contribution by Unilever to your Company in providing the latest innovations,
technological improvements and marketing inputs across almost all categories in which it
operates. This has enabled the Company to provide higher levels of consumer delight
through continuous improvement in existing products, and introduction of new products.
The Board places on record its appreciation for the support and
co-operation your Company has been receiving from its suppliers, distributors, retailers,
business partners and others associated with it as its trading partners. Your Company
looks upon them as partners in its progress and has shared with them the rewards of
growth. It will be your Company?s endeavour to build and nurture strong links with
the trade based on mutuality of benefits, respect for and co-operation with each other,
consistent with consumer interests.
The Directors regret the loss of lives and are deeply grateful, share
their immense respect for every person who risked their life and safety to fight this
pandemic.
Your Directors also take this opportunity to thank all Shareholders,
Business Partners, Government and Regulatory Authorities and Stock Exchanges, for their
continued support.
|
On behalf of the Board |
|
Nitin Paranjpe |
|
Chairman |
Mumbai, 27th April, 2022 |
(DIN: 00045204) |
#MDEnd#
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