HUL gains after reaching settlement with ex-employees of Kodaikanal factory

Hindustan Unilever rose 0.76% to Rs 833.85 at 15:10 IST on BSE after the company announced that it has reached settlement with former employees of Kodaikanal factory with regard to dispute over the economic rehabilitation.

The announcement was made during market hours today, 9 March 2016.

Meanwhile, the BSE Sensex was up 18.84 points, or 0.13%, to 24,691.49.

On BSE, so far 65,437 shares were traded in the counter, compared with an average volume of 1.12 lakh shares in the past one quarter. The stock hit a high of Rs 840.30 and a low of Rs 827.95 so far during the day. The stock hit a record high of Rs 979 on 11 March 2015. The stock hit a 52-week low of Rs 765.35 on 27 January 2016. The stock had underperformed the market over the past one month till 8 March 2016, falling 0.29% compared with gains of 1.53% in the Sensex. The scrip had, however, outperformed the market in past one quarter, gaining 0.24% as against Sensex's 2.57% fall.

The large-cap company has an equity capital of Rs 216.39 crore. Face value per share is Re 1.

Hindustan Unilever (HUL) announced that the company and Pond's HLL ex-Mercury Employees Welfare Association, representing the ex-employees of the former thermometer factory in Kodaikanal, have reached a settlement with regard to dispute over economic rehabilitation after closure of this factory. The Memorandum of Settlement reached was recorded in an order passed by the Madras High Court. The settlement has been entered into on humanitarian considerations to put an end to a long standing matter pending in the Court for several years and also is in keeping with the suggestion of the Madras High Court. The former workers of the thermometer factory had filed a petition in the Madras High Court in February 2006 seeking economic rehabilitation. This petition was filed more than four years after HUL had made a full and final settlement in November 2001.

As part of the agreement, HUL, with an objective to ensure long term well being of its former workers, has agreed to provide ex gratia payments to 591 former workers/association members and their families towards livelihood enhancement projects and skill enhancement programs. The former employees have confirmed this as a full and final settlement of all their claims and demands. They will withdraw the petition they had filed in February 2006 in the Madras High Court.

Meanwhile, the other key aspect on the matter relates to soil remediation within the factory site. HUL has submitted the Detailed Project Report (DPR) to Tamil Nadu Pollution Control Board (TNPCB) in August 2015 and is awaiting consent, HUL said.

HUL's net profit declined 22.4% to Rs 971.40 crore on 3.2% rise in net sales to Rs 7822.86 crore in Q3 December 2015 over Q3 December 2014.

HUL is a leading fast moving consumer goods (FMCG) company.

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