Harish Manwani, HUL's longest serving chairman, takes final bow at AGM

42-year career comes to an end; Manwani says Rs 350-bn firm must respond with the new paradigm of 'great to good'

A 42-year-long career drew to an end on Friday as Harish Manwani, 65, chaired the annual general meeting of Hindustan Unilever (HUL), the country's largest consumer goods company, for the last time.

Addressing shareholders at the AGM, which was the company's 85th, Manwani, who was HUL's longest-serving chairman (appointed in 2005 in a non-executive capacity), said these were unpredictable times and that the nearly Rs 350-billion firm would have to respond with a new paradigm that was 'great to good'.

"Going from great to good requires businesses to embrace a larger purpose that goes beyond generating short-term financial results. A corporate purpose that is relatable, a purpose that goes beyond physical products and services, and makes a real difference to society," he said, acknowledging shareholder gratitude for his tenure at the company.

Manwani also reiterated the importance of digital and technology, saying they were key for the success of the company in the future. "We are leading the digital transformation with significant investment in automation, robotics and artificial intelligence across the value chain. Through advanced data analytics, we are reinventing the way we market our brands through digital media and our go-to-market models," Manwani said.

HUL, he said, was using GPS tagging technology to identify and prioritise  markets for distribution among other its digital initiatives. And was also using technology to increase its presence in e-commerce, a small but growing channel.

Manwani also said that the company was working on a food strategy that was centred on building a platform of brands that were innovative and  met consumer needs.

The statement acquires significance since earlier this month, HUL said it was bringing its food and refreshment verticals together, effective July 1, in keeping with global portfolio alignments.

The company had also said that the move would allow it to harness synergies and scale up the business as the combined vertical was a strategic priority for it.

Manwani also said that he saw no problem with HUL paying royalty to parent Unilever, since the subsidiary was paying for what it received.

"I am not at all concerned with what we pay them (Unilever) because a cost-benefit analysis of the royalty we give is done," he said while addressing a shareholder query on the subject.

HUL, has in the last five years, increased royalty to Unilever in a phased manner from 1.4 per cent to 3.15 per cent as the local portfolio has seen introduction of global brands from Unilever.

HUL also declared a total dividend of Rs 20 per share for the 2017-18 financial year though Manwani said there was no bonus issue in the offing.

"What we look at is total shareholder value versus a bonus issue. And the former includes dividend payout and capital appreciation, parameters on which we have done well," he said.

Manwani also said that the introduction of Goods & Services Tax in July 2017 had led to lower output tax on over half its portfolio and that the new tax regime was good for overall category and market growth.