Your Directors are pleased to present their report and financial statements forthe year ended 31st December 2020.
Financial Results and State of Company's Affairs
| || ||(Rs in Million) |
|Particulars ||2020 ||2019# |
|Sale of products ||132901.6 ||122952.7 |
|Add : Other operating revenues ||598.7 ||736.3 |
|Add : Other Income ||1458.5 ||2468.8 |
|Total Income ||134958.8 ||126157.8 |
|Less : Total Expense ||106830.9 ||99422.9 |
|Profit before tax ||28127.9 ||26734.9 |
|Less: Tax expense ||7303.6 ||7050.5 |
|tax Profitafter ||20824.3 ||19684.4 |
|Add : Other Comprehensive Income ||(922.1) ||(1547.7) |
|Total Comprehensive Income ||19902.2 ||18136.7 |
|Opening balance in Retained Earnings ||10173.7 ||27565.3 |
|Amount available for appropriation ||30072.7 ||45736.3 |
|Interim dividends || || |
|2020: Rs 135.00 per share ||13016.1 || |
|2019: Rs 101.00 per share || ||9738.0 |
|Special interim dividend paid out ofaccumulated profits of previous years(surplus in the profit & loss account) || || |
|2020: Nil || || |
|2019: Rs 180.00 per share || ||17354.8 |
|Final dividends || || |
|2019: Rs 61.00 per share ||5881.4 || |
|2018: Rs 25.00 per share || ||2410.4 |
|Less: Dividend distribution tax || ||6059.4 |
|Closing balance in Retained Earnings ||11175.2 ||10173.7 |
|Key ratios: || || |
|Earnings per share (Rs) ||215.98 ||204.16 |
|Dividend per share (Rs) || || |
|Interim ||135.00 ||281.0 * |
|Proposed - Final ||65.00 ||61.0 |
|Additional Information: || || |
|Profit from operations ||28775.4 ||25940.4 |
* includes special interim dividend of Rs 180/- paid out of accumulated profits ofprevious years (surplus in the profit & loss account).
# Figures have been reinstated in accordance with implementation of Ind AS 116Leases.
Total Sales and Domestic Sales for the year increased by 8.1% and 8.5% respectively.Domestic Sales growth is largely driven by volume & mix and is broad based. Demand inOut-of-Home channel was impacted throughout the year due to COVID-19 pandemic. ExportSales growth at 1.4% impacted by lower coffee exports.
Other Income has decreased due to lower yields and lower average liquidities.
Your Company has created a contingency provision of
Rs 1088.9 Million (previous year Rs 1163.4 Million) for various contingenciesresulting mainly from matters which are under litigation / related to disputes and otheruncertainties requiring management judgement. Your Company has also reversed utilized /settled contingency provision of Rs 580.2 Million (previous year Rs 914.6 Million) due tosatisfactory settlement of certain litigations and settlement of obligations under freereplacement warranty for which provision is no longer required.
The Board of Directors have recommended a final dividend of Rs 65.00 per equity shareamounting to Rs 6267 Million for the year 2020. The total dividend for 2020 aggregates toRs 200 per equity share which includes interim dividend of Rs 135.00 per equity share paidon 20th November 2020. The dividend recommendation is in accordance with theDividend Distribution Policy of the Company which is annexed and forms part of the AnnualReport and the same is available on the Company's website and can be accessed athttps://www.nestle.in
Material changes affecting the Company
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this report. There has beenno change in the nature of business of the Company.
Amount Transfer to Reserves
Your Directors do not propose to transfer any amount to the reserves.
In 2020 the exports of your Company registered 4.8% volume growth driven bycategories such as Prepared Dishes and Cooking Aids Milk Products and Nutrition. YourCompany's continued focus on MAGGI range extension and channel proliferation broughtgrowth across international markets. Your Company recorded highest ever exports of MAGGInoodles and sauces to the United States Canada United Kingdom European Union Australiaand New Zealand despite disruptions in supply chain caused as a result of COVID-19.Categories such as Coffee and Beverages were negatively impacted by supply chaindisruptions lower coffee exports to Turkey and drop in Out-of-Home consumption. YourCompany continues to explore new markets for categories such as Prepared Dishes andCooking Aids Chocolates and Confectionery in the Middle East.
Contribution to the Exchequer
Your Company over the years has been enabling significant contribution to varioustaxes. During the year 2020 the Company through its business enabled tax collections atCentral and State level close to Rs 35.3 Billion in aggregate.
In 2020 the rapidly evolving COVID-19 pandemic not only posed a health challenge butsignificantly impacted businesses and the economy across the world. Your Company committeditself to the nation's fight against COVID-19 and confronted the uncertainties by focusingon three key priorities safeguarding the health and well-being of its peopleensuring business continuity to meet consumer needs and supporting communities through itsrelief efforts.' Your Company worked closely with employees local communities andbusiness partners to navigate through the unprecedented times reduced manufacturingcomplexities which arose as a result of the lockdown and made available its products toconsumers with speed and agility.
Your Company stood by nearly 100000 dairy farmers in these difficult times and boughtevery drop of milk which was offered by them. Your Company continued to work closely withits 3500 coffee farmers 1250 spice growers and extended its support to numerous farmersin Karnataka by sourcing substantial quantity of tomatoes from them through its suppliersto reduce distress. Despite a challenging environment your Company delivered robustgrowth across all its categories largely driven by volume and mix-led growth. NESCAFKITKAT EVERYDAY MAGGI noodles MASALA-Ae-MAGIC outperformed and continued to besignificant growth drivers. Your Company delivered strong performance in the e-commercechannel due to rise in in-home consumption. During the rapidly evolving times yourCompany continued with its innovation and renovation journey to meet consumer needs andseven out of the eight Nestl brands held number one position according to Nielsen data.With a strong thrust on innovation your Company launched more than 80 new products in thelast 5 years and has been consistently present across 7935 urban towns in last 5 years.
Your Company accelerated its digital engagements across key parts of its portfolio andalso extended AskNestl 2.0 to Hindi an intuitive mobile website that providesreal-time and personalized advice on nutrition.
Your Company is proposing to invest Rs 26 Billion over the next three to four years toaugment its existing manufacturing capacities as well as towards its new underconstruction state of the art' factory in Sanand Gujarat which demonstrates yourCompany's commitment to India.
Protecting and preserving the planet in order to carve a sustainable future is weavedinto the purpose of your Company. Your Company has accelerated its actions to achieve netzero green house gas (GHG) emissions sustainable logistics responsible sourcing and lesscarbon footprint. Your Company's GHG emissions and energy consumption has been reducedsubstantially over a period of 15 years. We have taken considerable steps towards reducingpackaging consumption by 2000 metric tons from 2018 to 2020. Your Company continues toimplement behaviour change initiatives towards plastic waste management. Your Company hasmade a long-term commitment to responsible sourcing and has collaborated with itssuppliers to optimise their consumption of natural resources and minimise solid wasteincluding food waste. Your Company encourages sustainable agriculture practices fordifferent crops creating long-term sourcing connections that generate economic stabilityfor farmers and enhances livelihood outcomes. Navigating through uncertain times yourCompany continued its commitment to shape a better world not only for its business butalso for individuals and families communities and for the planet.
Innovating and Renovating Prepared Dishes and Cooking Aids
The Prepared Dishes and Cooking Aids business continued to be an ally in everydaycooking for Millions of consumers during COVID-19. Your Company increased its productioncapacity and invested in innovations under the MAGGI portfolio to meet the needs ofconsumers during these unprecedented times.
MAGGI registered strong growth across its brands that strengthened its position as theindustry leader. MAGGI noodles responded to consumers experimenting during in-homeindulgence and launched new flavours such as Yummy Capsica and Chatpata Tomato andrenovated Desi Cheesey.
Your Company also launched MAGGI Atta Spinach noodles for consumers seeking both tasteand nutritional benefits. MAGGI Sauces registered double-digit growth and MAGGI Upma andPoha scaled up in volume and delivered strong presence in the Ready-to-Eat segment. Asthere was an increased need for cooking aids during and post-lockdown your Companylaunched MAGGI Fried Rice Masala with two spice mixes - Classic Veg and Chilli Garlicfried rice and MAGGI Paneer-ae-Magic Shahi Paneer and Kadhai Paneer Masala mix.
To strengthen the consumers trust your Company created QR code enabledanti-counterfeit solution for MAGGI Masala-ae-Magic to ensure the authenticity of thepack. Your Company launched MAGGI Cooking Made Simple' a service that makesevery-day cooking simple convenient and enjoyable for everybody. This service bringspopular recipes from across the country under three areas of made easy' madewith a twist' and made healthier'.
Your Company believes in the power of food to enhance lives improve livelihoods andprotect the planet for future generations. Your Company launchedMAGGI - DESHKE LIYE 2 MINUTE Ek Chhoti Si Koshish' an initiative aimed at inspiringpeople to take small steps to bring about change. Centered around 3S - Swasthya Swachhtaand Sahayata MAGGI collaborated with communities in a purposeful way provided 1 Millionmeals to disadvantaged sections of the society supported street food vendors to come outof these challenging times inspired the youth to connect with agriculture and supported10000 home chefs to start their own food business.
Building Breakfast Cereals
Your Company launched KOKO KRUNCH a global cereal brand in 2020 and NESPLUS wasrenovated with new packaging. The business displayed agility and embraced the shift inchannel dynamics because of COVID-19. Focus on e-commerce delivered growth. Single serveSKUs helped drive penetration and trials among consumers.
Strengthening of Milk products and Nutrition Portfolio
The Milk Product and Nutrition business continued to deliver good performance despitedisruptions caused by COVID-19 and challenges linked to commodity price fluctuation. YourCompany mitigated some of these challenges by identifying and implementing efficiencyimprovements across the value chain. Your Company continued to support over 100000Dairy farmers during the pandemic by buying every litre of milk offered to your Companyproviding uninterrupted timely payments and ensuring COVID-19 related precautions arefollowed during milk collection. Your Company distributed over 6 Million serves of dairyproducts as a part of Care Packs' to frontline COVID warriors. Your Company alsopioneered the purpose-driven campaign by distributing sweet dish made from MILKMAID toover 10000 families during Kerala's Onam festival.
Your Company continued to inspire consumers to bake desserts with MILKMAID through livemasterclasses by renowned chefs. Your Company further leveraged e-commerce throughtargeted communication range selling and consumer base sampling which led to a growingcontribution of e-commerce to Milk Products and Nutrition category. Your Company believesthat breastmilk provides the best nutrition for babies and every child should beexclusively breastfed for six months followed by introduction of age appropriatecomplementary feeding and continued breastfeeding until two years and beyond. YourCompany's nutrition business is committed to providing high quality innovativescience-based nutrition.
Your Company continued to build a strong Toddler portfolio with the launch of LACTOGROWToddler. Your Company's Healthcare Nutrition Business Nestl Health Science has aportfolio of science based medical and consumer healthcare nutrition products. In 2020your Company continued to consolidate its portfolio that delivered growth. Introduction ofsmaller 200g SKUs of RESOURCE HIGH PROTEIN and RESOURCE DIABETIC in key channels helped
increase consumer access. With continued endeavors to renovate and innovate yourCompany also expanded its offerings in the weight management category by launchingOPTIFAST vanilla flavor variant.
Growing Coffee and Beverages Business
Your Company continued to focus on growing Coffee and Beverages business and remainrelevant to consumers despite the challenges posed by COVID-19. Remaining consistent tothe successful strategy over last few years NESCAF led the journey of building thecoffee consumption category throughout the year. This reflected in strong brand growth andresulted in significant market share gains. Your Company continued its journey of buildingrelevance and strong connection with consumers with the NESCAF Classic new campaign'Karne se hi hona hai' The campaign was anchored in hope and action to inspire consumersto restart lives in the new normal. NESCAF SUNRISE moved ahead in its journey of drivinga differentiated brand in the core coffee market in the southern part of India. Along withbrand building initiatives it activated sampling coffee to frontline warriors to extendsupport in the difficult times.
NESCAF accelerated its premiumization journey building on the promise of deliveringcoffee at its best with NESCAF Gold. As more and more people stayed indoors there was aneed for in-home indulgences. With exciting coffee recipes and product solutions NESCAFGold helped consumers create a caf like experience at home resulting in strong growth.
More offerings in the Chocolates and Confectionery Portfolio
Your Company's Chocolates and Confectionery business continued its robust performancewith strong growth and market share gains in a challenging year. Your Company launchedmultiple category first' innovations across key brands such as Nestl POLO ExtraStrong and Nestl POLO Paan.
Your Company focused on innovation to address new consumption opportunities such asthe launch of new packaging during the festive season for KITKAT. The KITKATglow-in-the-dark packs were designed to encourage consumers to find small joys whiletaking meaningful breaks.
Your Company launched MUNCH Star initiative a unique platform that celebrates thespirit of inventiveness and resilience in Millions of young Indians.
Nestl Professional - Out-of-Home Business
Your Company ensured continuous customer engagement as a spirit of partnership andsolidarity. Your Company's Out of Home' business initiated a programme calledNayi Shuruat' or New Beginnings'. Your Company offered financial support inthe form of credit period extensions free goods machine rental waivers and variable payprotection to its customers and partners.
Despite the pandemic your Company continued to build its portfolio through the launchof innovative products and solutions. In response to hygiene concerns post the pandemicyour Company led the launch of contactless beverage solutions in the industry. Continuingwith the objective to premiumize the beverages business portfolio Roast & Ground(R&G) coffee was developed and launched. This was accompanied by the development of anR&G beverage solution which opens-up an additional market for such solutions.
Since the dependence on food delivery due to the pandemic had increased your Companyintroduced a service and product platform to expand its role in the delivery ecosystem.Your Company introduced 100+ quick and easy recipes for menu partnerships withrestaurants based on top-sellers and limited pantry support. Your Company also introduceda food solutions portfolio customized for delivery applications like rice seasonings(Oriental) and pasta sauce mixes (Italian) that are operator friendly and cost effective.
Your Company took an important initiative to scale up the kiosk business throughEntrepreneurship for Youth' which aims to create livelihood and job opportunitiesfor people through their kiosk business model helping the youth of the country cope withthese unprecedented times. The kiosks are run on a youth-facing franchisee-operatedbusiness model offering unique entrepreneurial opportunities to generate sustainablebusiness decent employment and respectable livelihoods for the franchise owners.
Awards and Recognitions
Your Company received several awards and was recognized at important industry forumsin the areas of corporate management marketing nutrition quality and societalinitiatives.
CNBC-AWAAZ awarded Mr Suresh Narayanan as the Best Performing Leader for the MNCcategory.
Business Standard awarded Nestl India as the MNC of the year.
Nestl India recognized as Company of the year at Business World PURE -Purpose and Resilience' Award 2020 for its strong commitment towards COVID ReliefEfforts launch of
Nesternship and continued investment towards building brand love through its uniquebrand initiatives.
Nestl India ranked Joint FIRST in Access to Nutrition Index (ATNI) IndiaSpotlight Index 2020 and led in product marketing and engagement index categories. TheIndia Spotlight Index 2020 is an independent national assessment to measure thecontribution of India's largest foods and beverages manufacturers towards meeting thehealth and nutrition needs of Indian consumers.
Nestl India awarded for Excellence in Environment Management' at theCII-ITC Sustainability Awards for responsible sourcing water conservation sustainablepackaging and managing post-consumer plastic waste. Nestl India won UnitedNations Global Compact Network India (UN GCNI) best innovative practices award for womenin the workplace in the category of private sector.
Business World awarded Nestl India for Best Financial Performance in the MNCCategory.
AskNestl won Bronze at the Global WARC Awards for effective innovation.
Nescaf awarded silver and AskNestl awarded Bronze at the Effies.
Nestl India Supply Chain won No.1 Rank in Apex 10 amongst India's TOPConsumer Supply Chain people's choice award.
MAGGI Special Masala Launch on Flipkart won 2 Gold awards at the Economic TimesDigiPlus awards.
Nanjangud Factory awarded the Golden Peacock National Quality Award. CIIawarded excellence in Quality and Food Safety to Ponda Moga and Choladi factories onCOVID-19 practices. Nestl India won the GSS Global Safety and the Golden PeacockOccupational Health and Safety Award in the food and beverages category
In your Company safety well-being and security of people has always been of paramountimportance. Employees had to embrace new and different ways of working such as workfrom home' and have been subject to stresses fears and anxieties never experiencedbefore. Your Company rolled out numerous virtual' engagement and trainingprogrammes mental health initiatives check-in' programmes with youngsters who livealone or far from home and free advisory calls with accredited doctors. Technology playeda vital role during this crisis especially in terms of workforce connectivity.
Your Company rolled out across all its factories a NESTL SAMMAN' programme thatrewarded operators for working tirelessly during the stipulated period. Your Companyundertook strict social distancing and other precautionary measures at all itsmanufacturing locations.
Your Company rolled out the NESTL SURAKSHA' programme for front-line salesforce who work for our distribution partners to cover those who were not covered by Employees'State Insurance with a COVID-19 insurance protection. Your Company launched Nesternshipa virtual internship programme for final year graduates and post-graduates acrossdisciplines. The programme focused on upskilling 1000 interns providing them with adepth ofexperience and a wealth of knowledge to thrive in workplaces. Each student wasprovided a monthly stipend and interned with an expert from different functions of yourCompany. Employees of your Company stood together to support the fight against COVID-19.Your Company started an "Employee voluntary contribution programme" whereinemployees contributed a part of their monthly salary for COVID relief. Your Company toppedup an equivalent amount and a total contribution of around Rs 25 Million was provided toIndian Red Cross Society to strengthen its efforts and provide relief for people impactedby COVID-19. Diversity inclusion and commitment to equal opportunity areimportant pillars for your Company and this year it continued its focus and worked inthis direction.
Your Company embarked on a new work culture at the distributor points where safety ofpeople was given high priority. Your company launched Project Surakshit SampoornDistributor that focused on safety guidelines and effective distribution. Your Companymade its best endeavor to make available its products to consumers in all geographiesdespite challenging logistical issues.
Your Company also stepped up its efforts to make its products available in residentialsocieties so that the consumers can avoid stepping out during the pandemic.
Your Company activated emerging platforms and newer Route to Market (RTM) by partneringwith hyperlocal delivery platforms within a month after lockdown in a few cities for thefirst time. E-commerce channel accelerated during the pandemic bringing in strong growth.By making its products available on the e-commerce platforms your Company provided easyaccess to consumers.
Demand for MAGGI Noodles Sauces and Pasta Nestl A+ UHT Milk NESCAF and NESCAFSUNRISE (Coffees) MILKMAID condensed milk increased as consumers stocked products due touncertainty and increase in in-home consumption as well as in-home cooking. Consumers wereengaged digitally through relevant targeted communication across brands such as MAGGINESCAF KITKAT CEREGROW RESOURCE HIGH PROTEIN among others. The period between Aprilto June 2020 saw a significant increase in first-time e-commerce shoppers. The intensityof e-commerce business accelerated further quarter on quarter with the business frome-commerce almost doubling in 2020.
COVID-19 was not only a health crisis it had far-reaching implications on the globaleconomy. The pandemic led to a sharp decline in global trade lower commodity prices andtighter liquidity conditions. The contraction in GDP seen in many countries includingIndia was because of reduced economic activity and restricted mobility due to COVID-19as people curtailed discretionary spending and focused on essentials and precautionarysavings due to the level of uncertainty. The pandemic affected both demand and supply atleast in the short-term. As lockdowns eased across the world economic activity graduallystarted to recover.
The November RBI Consumer Confidence Survey showed that while consumer sentiment washigher by November compared to July and September 2020 it remained lower than inNovember 2019. Exports and imports both declined as a result of reduced consumer andindustrial demand according to NCAER. According to the Economic Survey 2020-2021 thegovernment adopted a four-pillar strategy of containment fiscal financial and long-termstructural reforms. India had good monsoons and the Indian agriculture sector achievedrecord food grain production and registered positive growth despite the coronaviruspandemic. Rural consumption was stronger than urban demand. According to India's EconomicSurvey 2020-2021 India remained a preferred investment destination in financial year2020-21.
Risks and Opportunities
The COVID-19 pandemic led to changes in food consumption habits. Consumers startedexperimenting with convenience leading to a shift in preferences for easy-to-preparemeals. Being confined to homes balancing work and household chores has led to anincrease in the demand for food and beverage options cooking aids and recipe solutions.
Global and Macro-Economic Factors:
Global and macro-economic factors may lead to a impact in consumer demand and sharpinflation in commodity prices could create risks. However your Company's consumer clusterbased model brings in agility and allows it to adapt to changing consumer demand andrealign portfolios. Your Company launched more than 80 new products in the last 5 yearsout of which 10 new products were launched in 2020.
Changes in Out-of-Home Consumption
Changes in Out-of-Home' consumption as a result of restricted mobility impactedthe business. However with gradual increase in mobility the demand for Out-of-Homechannels continues to improve and your Company continued to launch innovative products andsolutions.
Information Technology Vulnerability:
As a result of COVID-19 the dependence on IT increased substantially because of theremote working conditions. However excessive dependence on IT has also led tovulnerability to cyber attacks. To address this your Company has a robust IT system andfirewalls to mitigate any threats and risks.
Confronting Climate Emergency
Climate change continues to be a threat to the world. Your Company is committed towardsaddressing climate change and protecting the environment and has taken important stepstowards conserving resources such as energy and water. Your Company is continuouslyreducing waste and emissions while simultaneously optimizing its production measuresreducing food loss and waste and improving soil health.
Focus on Holistic Health
Your Company leveraged its in-depth knowledge of food and nutrition and continuedinnovating and renovating its products in keeping with consumer requirements. It also madeavailable a service website and curated recipes from across the country as it continuedits engagement with consumers. COVID-19 led to enormous concern for nutrition quality andsafety of brands and products. Consumers began focusing on total well-being and holistichealth. Your Company has always been committed to quality and safety. Even during thesetesting times it continued to serve its consumers by responsibly manufacturing productsensuring complete safety and traceability across the value chain. The changing food habitswill drive higher innovations from companies and larger numbers of SKUs for consumers tochoose from.
Rapid Digital Transformation:
The kirana stores or the local grocery will continue to hold relevance due to theconvenience in localities. Yet another trend that emerged is that consumers became moreactive digitally adopting online channels shopping on e-commerce platforms and optingfor omnichannel grocery. Your Company continues to invest in these new platforms and atthe same time focus on traditional channels.
Increase in Rural Demand:
Increasing the reach in rural markets by putting sharper focus on increasing mind shareand market share will be important. Companies would need to expedite their ruraldistribution strategy keep consumers engaged with new offerings and drive thepremiumization strategy to adapt to the changing landscape. Through the cluster-basedapproach that is powered by data and technology your Company has made deeper penetrationinto newer markets unleashed growth potential and created a transparent planning process.
Quality and Safety
Your Company's priorities during the pandemic was to keep its people safe assurecontinued supply of essential products for its consumers and support its businesspartners. Your Company instituted a Company level COVID Response Committee comprising allMembers of the Risk Management Committee and other members of the management committee andheaded by the Chairman and Managing Director. This Committee provided safety guidelinesand protocols and had a robust weekly governance system. In addition the factories andsales branches also had their Unit level Covid Response Committees that were equallyvigilant.
Your Company organized regular awareness sessions for employees and contractors onCOVID-19 prevention measures social distancing and sanitation. Your Company ensuredstringent social distancing at workstations and canteens through installation of physicalbarriers as per the standard guidelines.
Ensuring Quality & Food Safety with New
Your Company's operating procedures of cleaning and sanitization were implemented inline with the Ministry of Health & Family Welfare guidelines as well as localauthority requirements and your Company's stringent internal guidelines. Collaboration wascarried out with industry and Local authorities in keeping with the changing COVID-19environment.
Reduction in Green House Gas Emissions
Sustainability is an integral part of your Company business. Your Company'smanufacturing units continued improving operational efficiencies minimizing consumptionof natural resources and reducing water energy and carbon emissions. From 2005 to 2020for every ton of production your Company reduced the usage of energy by around 48% waterusage by around 52% generation of wastewater by around 55% and reduction in specificdirect GHG emissions by 53%. Your Company's key renewable energy projectscontributed to GHG savings. This was implemented through the purchase of solar power atCholadi factory and usage of natural and partial replacement of fossil fuel with greenfuel for hot air generation.
Packaging and Plastic Waste Management
Commitment to shaping a waste free future is important for your Company. Plastics playa key role in preventing food wastage and ensuring the quality and safety of foodproducts. However the leakage of plastic waste into the environment has become asignificant challenge. Your Company is strongly committed to minimizing the impact thatplastic has on the environment and ensuring right disposal or reuse of packaging. YourCompany is determined to look at every option to solve complex packaging challenges byembracing multiple solutions. The vision of your Company is that 100% of packaging isreusable or recyclable by 2025.
Extended Producer Responsibility (EPR)
EPR initiative is being driven by your Company to comply with Plastic Waste ManagementRules 2016. Your Company was amongst the first organizations to apply for registrationunder Central Pollution Control Board and supported pilot EPR initiatives on plastic wastemanagement.
Your Company engaged with various waste agencies for end-to-end management of plasticwaste. In 2020 your Company achieved EPR of 20137 MT through plastic waste management.
Your Company reviews its sustainability goals regularly and remains committed torecyclable packaging. Your Company successfully applied single polymer recyclablepackaging solution for Noodles Chocolates & Confectionary products. KITKAT MILKYBARMOOSHA MAGGI variants are some of the SKUs that transitioned in 2020 to mono materialpolypropylene laminate.
Localization of ingredients
Your Company focused on acceleration of projects pertaining to localization ofingredients that were being imported by providing continuous knowledge transfer to itspartners through a team of in-house experts. This not only led to reduction in carbonfootprint but also supported the Make in India initiative of the country.
During the lockdown there were restrictions on road transportation delaying supply ofessential products to consumers. To ensure smooth supply and uninterrupted access of itsproducts to the consumers your Company provided its own transportation and manpowerservice for suppliers who were impacted. To meet consumer demand it directly procuredingredients from suppliers and used alternative packaging formats to enable speed tomarket. Your Company ensured safety of people in the supply chain and conducted safety andsocial distancing workshops for farmers and drivers.
Even before COVID-19 your Company kept pace with digitalization and automation byusing technology which led to transparency and speed that has benefited all itsstakeholders in the value chain including dairy farmers. Farmers receive E-slips showingresults of Fat and Solid Not Fat (SNF) on their mobiles and online payment systems on aregular basis. This has brought speed and reduced turnaround time through onlineinformation sharing. This initiative has put milk collection centres of Punjab and Haryanaon a digital platform. During COVID-19 your Company accelerated the invoicingplatform and adopted paperless invoicing. Nearly 40% of your Company's invoices aremanaged digitally now. Moreover introducing automation and digitalization across itssupply chain from order and collection process to centralized logistics has enhancedefficiency in processes and speed to market. It has improved transparency of informationto suppliers farmers customers and consumers. In order to ensure a sustainable futureacross the value chain your Company focused on reduction in wastage through alternativemode of transportation such as railways and waterways.
Your Company enhanced quality in distribution that helped deliver fresher products onshelf and reduce carbon footprint in operations.
Statements in this Report particularly those which relate to Management Discussion andAnalysis as explained in the Corporate Governance Report describing the Company'sobjectives projections estimates and expectations may constitute forward lookingstatements' within the meaning of applicable laws and regulations. Actual results mightdiffer materially from those either expressed or implied in the statement depending on thecircumstances.
Directors' Responsibility Statement
The Directors state that: a) in the preparation of the annual accounts for theyear ended 31st December 2020 the applicable accounting standards have beenfollowed and no material departures have been made from the same; b) they haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31st December 2020 and of the profits of theCompany for that period; c) they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) they have prepared the annual accounts on a going concern basis;e) they have laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively; andf) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Directors and Key Managerial Personnel
Pursuant to the Retirement Policy of the Non-Executive Directors of the Company DrRakesh Mohan (DIN: 02790744) Independent Non-Executive Director of the Company retiredwith effect from 30th June 2020. The Directors wish to place on record theirappreciation for the contribution made by Dr Rakesh Mohan during his tenure as adistinguished Independent Director of the Company.
The Members in the 61st Annual General Meeting held on 19th June2020 ("AGM") approved the appointment of Mr Prathivadibhayankara RajagopalanRamesh (DIN: 01915274) ("Mr P R Ramesh") as an Independent Non-ExecutiveDirector for a term of five consecutive years from 1st July 2020; approved theappointment of Mr David S McDaniel (DIN: 08662504) as Whole-time Director designated as"Executive Director - Finance & Control and Chief Financial Officer" for aterm of five consecutive years from1st March 2020; and approved there-appointment of Mr Suresh Narayanan (DIN: 07246738) as Managing Director for a furtherterm of five consecutive years from 1st August 2020. During the year Mr MartinRoemkens relinquished his office as Executive Director Technical with effect from 1stNovember 2020 to take up another assignment within Nestl Group. The Directors wish toplace on record their appreciation for the contribution made by Mr Martin Roemkens duringhis tenure as Executive Director Technical. The Board of Directors on therecommendation of the Nomination and Remuneration Committee at their meeting held on 23rdOctober 2020 appointed Mr Matthias C Lohner (DIN : 08934420) as anAdditional Director and a Whole-Time Director designated as "Executive Director -Technical" of the Company for a term of five consecutive years with effect from 1stNovember 2020 subject to requisite approvals. The Members through Postal Ballot on 24thDecember 2020 approved the appointment of Mr Matthias C Lohner as Director and Whole-timeDirector designated as Executive Director Technical and terms of appointment andremuneration payable to him. Your Company has made requisite applications for approval ofthe Central Government for the appointment of Mr David S McDaniel and Mr Matthias CLohner as they are non-resident in India. Mr David S McDaniel shall retire at theforthcoming Annual General Meeting by rotation and being eligible offers himself forre-appointment. Details of the proposal for his re-appointment is mentioned in theExplanatory Statement of the Notice of the 62nd Annual General Meetingof the Company pursuant to Section 102 of the Companies Act 2013. The re-appointment ofDirector is appropriate and in the best interest of the Company.
All the Independent Directors of your Company have submitted the declaration confirmingthat they meet the criteria of independence as prescribed under the Act and the ListingRegulations and are not disqualified from continuing as Independent Directors. The Boardis of the opinion that the Independent Directors of the Company possess requisitequalifications experience and expertise and they hold highest standards of integrity. TheIndependent Directors of the Company have confirmed compliance of relevant provisions ofRule 6 of the Companies (Appointments and Qualifications of Directors) Rules 2014. Thepolicy of the Company on appointment and remuneration includes criteria for determiningqualifications positive attributes and independence of a director. The Nomination andRemuneration Committee had adopted principles for identification of Key ManagerialPersonnel Senior Management including the executive directors which are based on"The Nestl Management and Leadership Principles" and "Nestl LeadershipFramework". The policy relating to the remuneration of Directors Key ManagerialPersonnel and other employees is framed with the object of attracting retaining andmotivating talent which is required to run the Company successfully. The same is availableon the website of the Company at the link: https://www.nestle.in/investors/policies Thedetails of familiarization programmes to Independent Directors with the Company theirroles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company and related matters are available on thewebsite of the Company at the link: https://www.nestle.in/investors/directorsandofficers/familiarisation-programme
In terms of the requirement of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations')an annual performance evaluation of the Board its Committees and the Directors wasundertaken which included the evaluation of the Board as a whole Board Committees andpeer evaluation of the Directors. The criteria for performance evaluation covers the areasrelevant to the functioning of the Board and Board Committees such as its compositionoversight and effectiveness performance skills and structure etc. The performance ofindividual directors was evaluated on the parameters such as preparation participationconduct independent judgement and effectiveness. The performance evaluation ofIndependent Directors was done by the entire Board of Directors and in the evaluation ofthe Directors the Directors being evaluated had not participated. A reputed HR ConsultantFirm compiled and provided analysis of the results of the annual performance evaluation.As an outcome of the evaluation it was noted that Board as a whole has a composition thatis diverse in experience and perspective and fosters lively and constructive debates. Thediscussion quality is robust well intended and leads to clear direction and decision. Thepresentations by the Senior Management and their teams provides an insight at a deeperlevel and exposure to categories. It was also noted that the Board Committees functionsprofessionally and smoothly and besides the Board Committee's terms of reference asmandated by law important issues are bought up and discussed in the respective BoardCommittees. The Board also noted that given the plethora of information presented at theBoard/ Committee meetings pre-reads helps assimilate issues discussed during themeetings. The Board engages itself in the areas identified and wherever required actionstaken.
Corporate Social Responsibility
During the year Mr David S McDaniel Executive Director Finance & Controland Chief Financial Officer was appointed as a member of the Corporate SocialResponsibility (CSR') Committee with effect from 1st August 2020. As on31st December 2020 the CSR Committee comprised of Dr Swati A Piramal(Chairperson) Ms Rama Bijapurkar Independent Non-Executive Director Mr SureshNarayanan Chairman and Managing Director and Mr David S McDaniel Executive Director Finance & Control and Chief Financial Officer of the Company. The terms ofreference of the Corporate Social Responsibility Committee is provided in the CorporateGovernance Report. Your Company has also formulated a Corporate Social ResponsibilityPolicy (CSR Policy) which is available on the website of the Company athttps://www.nestle.in/investors/policies. Annual Report on CSR activities as requiredunder the Companies (Corporate Social Responsibility Policy) Rules 2014 has been appendedas Annexure 2 and forms part of this Report.
In terms of Section 135 of the Companies Act 2013 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 as amended ("CSR Rules") and inaccordance with the CSR Policy during the year 2020 your Company has spent above twopercent of the average net profits of your Company during the three immediately precedingfinancial years. Your Company provided relief efforts to the communities impacted byCOVID-19 in collaboration with credible NGOs across various states. Your Company focusedits relief efforts towards feeding programmes for less privileged sections distributingessential groceries to the needy supporting the purchase of medical equipment and PPEsand providing Nestl food and beverage products to frontline workers and those impactedmost by the pandemic. The details are provided in the Annual Report on CSR activities. Inaddition to the above your Company has been implementing societal activities since manydecades under the umbrella of Creating Shared Value which have not been reckoned forarriving at the spends as per CSR Rules.
Nestl Healthy Kids Programme
Nestl Healthy Kids Programme has been developed with a focus to raise nutritionhealth and wellness awareness among adolescents. The programme is implemented inpartnership with seven regional universities and NGO Magic Bus India Foundation.
Launched in 2009 the programme has expanded significantly incorporating plastic wastemanagement in the existing curriculum as well as including parents and teachers asdirect beneficiaries. Till 2020 over 397000 adolescents across 23 states have beenencouraged to live healthier lives through this programme.
In 2020 your Company signed an agreement with Gujarat University to extend theprogramme to government schools near its upcoming Sanad factory. To further equipbeneficiaries about implications of COVID-19 and its precautionary measures your Companyin collaboration with its NGO partner held virtual training sessions for thebeneficiaries.
As part of its commitment to inspire people to lead healthier lives your Company inpartnership with Mamta Health Institute for Mother and Child implemented Project Jagriti.The project focuses on developing community support for improved health and nutritionoutcomes among adolescents young couples and caregivers while improving the uptake ofpublic health services.
As a result of COVID-19 beneficiaries of Project Jagriti were trained virtually aboutthe preventive measures of COVID-19. Till 2020 the programme has reached out to6.5 Million beneficiaries across 8 States/Union Territories.
Project Serve Safe Food
Recognizing the potential of street food vendors as an important source of livelihoodyour Company partnered with NGO Nidan and National Association of Street Vendors of India(NASVI) to develop programmes to train street food vendors on health food handling foodsafety personal hygiene cart hygiene and garbage disposal. As a result of COVID-19street food vendors were anxious about impact of the pandemic on their livelihoods. Alongwith its NGO partner your Company organized virtual sessions on food safety hygieneCOVID-19 precautionary measures and digital payments. Your Company distributed over 10000grocery kits across various locations to provide relief to the street vendors whoselivelihoods had been severely impacted by COVID-19.
Till 2020 the programme has been implemented across 18 States/UTs reaching out to21800 street food vendors.
Strengthening your Company's commitment towards building a healthier society andpositively impacting the lives of people in marginalised communities your Company incollaboration with S M Sehgal Foundation launched Project Vriddhi' an initiativetowards village adoption. The three-year project is aimed at improving the livelihoods of1500 people in the village of Rohira in Nuh district Haryana to bring a positive changein the lives of the locals. The project focuses on improving access to clean drinkingwater for communities promoting water-saving irrigation practices increasing awarenesson nutrition enhancing farm productivity and providing healthy learning environment inschools by improving hygiene and sanitation practices. During these testing times virtualawareness sessions were organized to provide information about COVID-19. In addition tothese sessions the entire village was sanitized.
Business Responsibility Report
Creating Shared Value is fundamental to how your Company does business. Your Companybelieves that it can only be successful in the long term by creating value both for itsshareholders and for society. Your Company is mindful of the needs of the communities andworks to make a positive difference and create maximum value for the society. It has beenconducting business in a way that delivers long-term shareholder value and benefitssociety. As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernanceperspective is attached in the format prescribed as Annexure 3 and formsan integral part of the Annual Report.
Statutory Auditors and Auditor's Report
In terms of Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 Members of the Company in 58th Annual General Meetingheld on 11th May 2017 approved the appointment of M/s B S R and Co. LLPChartered Accountants (ICAI Registration No-101248W/W-100022) as the Statutory Auditorsof the Company for an initial term of 5 years i.e. from the conclusion of 58thAnnual General Meeting till the conclusion of 63rd Annual General Meeting ofthe Company. The Statutory Auditors have confirmed they are not disqualified fromcontinuing as Auditors of the Company. The Report given by M/s B S R and Co. LLPChartered Accountants on the financial statement of the Company for the year 2020 is partof the Annual Report. The Notes on financial statement referred to in the Auditor's Reportare self-explanatory and do not call for any further comments. The Auditor's Report doesnot contain any qualification reservation adverse remark or disclaimer. During the yearunder review the Auditors had not reported any matter under Section 143 (12) of the Acttherefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.
Cost Accounts and Cost Auditors
Your Company is required to make and maintain cost records for milk powder products asspecified by the Central Government under sub-section (1) of section 148 of the Act.Accordingly your Company has been making and maintaining the records as required. Interms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules 2014the Audit Committee recommended and the Board of Directors appointed M/s RamanathIyer and Co. Cost Accountants New Delhi (Registration No. 00019) being eligible as CostAuditors of the Company to carry out the cost audit of milk powder products manufacturedby the Company falling under the specified Customs Tariff Act Heading 0402 in relation tothe financial year ending 31st December 2021. The Company has received theirwritten consent that the appointment is in accordance with the applicable provisions ofthe Act and rules framed thereunder. The Cost Auditors have confirmed that they are notdisqualified to be appointed as the Cost Auditors of the Company for the year ending 31stDecember 2021. The remuneration of Cost Auditors has been approved by the Board ofDirectors on the recommendation of Audit Committee and in terms of the Companies Act 2013and Rules thereunder requisite resolution for ratification of remuneration of the CostAuditors by the members has been set out in the Notice of the 62nd AnnualGeneral Meeting of your Company.
Secretarial Auditors and Secretarial Standards
The Secretarial Audit was carried out by M/s S.N. Ananthasubramanian & Co. CompanySecretaries (PCS Registration No. 1774) for the financial year ended 31stDecember 2020. The Report given by the Secretarial Auditors is annexed as Annexure 4 andforms integral part of this Report. The Secretarial Audit Report is self-explanatory anddoes not call for any further comments. The Secretarial Audit Report does not contain anyqualification reservation adverse remark or disclaimer. During the year under reviewthe Secretarial Auditors had not reported any matter under Section 143 (12) of the Acttherefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.
In terms of Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of
Managerial Personnel) Rules 2014 the Audit Committee recommended and the Board ofDirectors appointed M/s S.N. Ananthasubramanian & Co. Company Secretaries (PCSRegistration No. 1774) as the Secretarial Auditors of the Company in relation to thefinancial year ending 31st December 2021.
The Company has received their written consent that the appointment is in accordancewith the applicable provisions of the Act and rules framed thereunder. The SecretarialAuditors have confirmed that they are not disqualified to be appointed as the SecretarialAuditors of the Company for the year ending 31st December 2021.
During the year your Company has complied with applicable Secretarial Standards i.e.SS-1 and SS-2 relating to "Meetings of the Board of Directors" and"General Meetings" respectively.
Meetings of the Board
Six Meetings of the Board of Directors were held during the year. The particulars ofthe meetings held and attended by Directors are detailed in the Corporate GovernanceReport.
In terms of Section 92(3) of the Companies Act 2013 and Rule 12 of the Companies(Management and Administration) Rules 2014 the Annual Return of the Company is availableon the website of the Company at the link:https://www.nestle.in/investors/stockandfinancials/annualreturns
Details of Loans and Investments
Details of the loans given by your Company under Section 186 of the Act during thefinancial year ended 31st December 2020 are as follows: Purina PetCare IndiaPrivate Limited (Fellow Subsidiary):
Rs 350 Million at the interest rate of 6.97% per annum for general business purpose(Loan outstanding at the end of the year was Nil). For details of investments pleaserefer Note no. 45 forming part of financial statements.
Related Party Transactions
Your Company has formulated a policy on related party transactions which is alsoavailable on Company's website at https://www.nestle.in/investors/policies. This policydeals with the review and approval of related party transactions. The Board of Directorsof the Company has approved the criteria to grant omnibus approval by the Audit Committeewithin the overall framework of the policy on related party transactions. Prior omnibusapproval is obtained for related party transactions which are of repetitive nature andentered in the ordinary course of business and at arm's length. All related partytransactions are placed before the Audit Committee for review and approval.
All related party transactions entered during the financial year 2020 were in ordinarycourse of the business and were on an arm's length basis. In terms of the Act no materialrelated party transactions were entered during the Financial Year by your Company. Thedisclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC 2 is not applicable to your Company. Members may refer tonote no. 45 to the financial statement which sets out related party disclosures pursuantto IND AS-24. In terms of Regulation 23(4) and other applicable provisions of the ListingRegulations the members of the Company at the 60th Annual General Meeting heldon 25th April 2019 approved the Ordinary Resolution (OrdinaryResolution') inter alia for continuation of the payment of general licence fees(royalty) by the Company to Socit des Produits Nestl S.A. (the Licensor')being a related party at the rate of 4.5% (four and a half percent) net of taxes of thenet sales of the products sold by the Company as per the terms and conditions of theexisting General Licence Agreements (GLAs') notwithstanding that the transaction(s)involving payments to the Licensor with respect to general licence fees (royalty) duringany financial year including any part thereof is considered material related partytransaction(s) being in excess of the limits specified under Regulation 23(1A) of theListing Regulations at any time. In terms of the Listing Regulations no related partyvoted on the Ordinary Resolution. The Ordinary Resolution is effective from 1stJuly 2019 and approval of members shall be sought every
5 (five) years in compliance with the applicable laws and regulations.
The Board of Directors had constituted Risk Management Committee (RMC) to identifyelements of risk in different areas of operations and to develop policy for actionsassociated to mitigate the risks.
The RMC on timely basis informed members of board of directors about risk assessmentand minimization procedures. In the opinion of the RMC there are no such risks which maythreaten the existence of the Company. The details of Risk Management Committee areincluded in the Corporate Governance Report.
Your Company has not accepted any Public Deposits under Chapter V of the Companies Act2013.
Significant and Material orders passedby the Regulators / Courts / Tribunals
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impacts the going concern status and Company's operations in future.
Complaint filed in NationalCommission
The Union of India Department of Consumer Affairs in 2015 had filed a complaint beforethe National Consumer Dispute Redressal Commission on the allegation that by selling MAGGINoodles in the past your Company has indulged in unfair trade practice sold defectivegoods to the public and sold goods which will be hazardous. Complaint seeks compensationof Rs 2845.5 Million and punitive damages of Rs 3554.1 Million. Your Company haschallenged the complaint. The court proceedings are currently ongoing.
Internal Financial Controls and the iradequacy
The Directors had laid down internal financial controls to be followed by the Companyand such policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information. The Audit Committee evaluates the internal financial control systemperiodically.
During the year 2020 Mr P R Ramesh Independent Non-Executive Director was appointedas the Chairman of Audit Committee effective from 24th October 2020 in placeof Mr Rajya Vardhan Kanoria. Dr Rakesh Mohan ceased to be member of the AuditCommittee upon his retirement as Director of the Company with effect from 30thJune 2020. Accordingly the Audit Committee comprises Independent Non-Executive Directorsnamely Mr P R Ramesh (Chairman) Mr Rajya Vardhan Kanoria and Ms Roopa Kudva. Powers androle of the Audit Committee are included in Corporate Governance Report. All therecommendations made by the Audit Committee were accepted by the Board of Directors.
The Vigil Mechanism of the Company is governed by significant documents "TheNestl Corporate Business Principles""The Nestl Management and LeadershipPrinciples" "Nestl Code of Business Conduct" and "Nestl IndiaVigil Mechanism/ Whistle-blower Policy". The documents are available on
Company's website at https://www.nestle.in/investors/policies The said mechanism isavailable to the Director(s)/ Employee(s) who can report to the Company Secretary on aconfidential basis any practices or actions believed to be inappropriate or illegal underthe Nestl India Code of Business Conduct ("the Code"). The Code/ Policyprovides for adequate safeguards against victimization of director(s)/ employee(s) whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee in exceptional cases. It is affirmed that no person has been denied access tothe Audit Committee.
As an additional facility to all the Directors and Employees of the Company theCompany under the Code provides Integrity Reporting System ("IRS") anindependent third party operated free phone and web-based facility for the directors andemployees of the Company across all locations. The details of IRS along with FAQs areavailable to the Directors and Employees on the Company's intranet portal. Further theCompany has appointed Ombudsman for Infant Code under which employees can report InfantCode violations directly to the Ombudsman with adequate safeguard to protect the employeereporting. The Company also provided an independent third party operated free phone andweb-based facility "Tell us" to all internal and external stakeholders with adedicated communication channel for reporting potential instances of non-compliance withNestl Corporate Business Principles. Details of the link to "Tell Us" wereavailable on www.nestle.in The Company sensitizes the availability of the above vigilmechanism from time to time to the directors and employees of the Company.
Information regarding Conservation of Energy Technology Absorption and
Foreign Exchange Earnings and Outgo
Information required under Section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 for the financial year ended 31st December2020 in relation to the Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo is given in the Annexure 5 forming integral part of this report.
Information regarding employees and related disclosures
Your Company considers people as its biggest assets and Believing in People' isat the heart of its human resource strategy. It has put concerted efforts in talentmanagement and succession planning practices strong performance management and learningand training initiatives to ensure that your Company consistently develops inspiringstrong and credible leadership. During the year the focus of your Company was to ensurethat young talent is nurtured and mentored consistently that rewards and recognition arecommensurate with performance and that employees have the opportunity to develop and grow.
Your Company has established an organization structure that is agile and focused ondelivering business results. With regular communication and sustained efforts it isensuring that employees are aligned on common objectives and have the right information onbusiness evolution. Your Company strongly believes in fostering a culture of trust andmutual respect in all its employees and seeks to ensure that Nestl values and principlesare understood by all and are the reference point in all people matters.
The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(Rules') is appended as Annexure 6 to the Report. The information as perRule 5 of the Rules forms part of this Report. However as per second proviso to Section136(1) of the Act and second proviso of Rule 5 of the Rules the Report and FinancialStatements are being sent to the Members of the Company excluding the statement ofparticulars of employees under Rule 5(2) of the Rules. Any Member interested in obtaininga copy of the said statement may write to the Company Secretary at the Registered Officeof the Company.
As per the requirement of The Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013 (POSH) your Company has a robust mechanism in placeto redress complaints reported under it. The Company has complied with provisions relatingto the constitution of Internal Complaints Committee under POSH. The Internal Committee(IC) was composed of internal members and an external member who has extensive experiencein the field. In 2020 four cases of sexual harassment were reported which have beeninvestigated and resolved as per the provisions of the POSH. During the course of 2020initiatives were undertaken to demonstrate the Company's zero tolerance philosophy againstdiscrimination and sexual harassment which included creation of comprehensive and easy tounderstand training and communication material which are also made easily accessible. Inaddition online workshops were also run for the employees to enhance awareness andknowledge of other biases that may influence thinking and actions by running theunconscious bias session.
Statement on Investor Education and Protection Fund
Pursuant to the provisions of Section 124 of the Act Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 ("IEPFRules") read with the relevant circulars and amendments thereto the amount ofdividend remaining unpaid or unclaimed for a period of seven years from the due date isrequired to be transferred to the Investor Education and Protection Fund("IEPF") constituted by the Central Government. The Company had accordinglytransferred Rs 3597120/- Rs 2589376/- Rs 3266586/- and Rs 3007512 /- being theunpaid and unclaimed dividend amount pertaining to Second Interim Dividend 2012 ThirdInterim Dividend 2012 First Interim Dividend 2013 and Second Interim Dividend 2013respectively during the year 2020 to the IEPF.
Pursuant to the provisions of IEPF Rules all shares in respect of which dividend hasnot been paid or claimed for seven consecutive years shall be transferred by the Companyto the designated Demat Account of the IEPF Authority (IEPF Account') within aperiod of thirty days of such shares becoming due to be transferred to the IEPF Account.Accordingly the Company has transferred such equity shares on which the dividend remainedunpaid or unclaimed for seven consecutive years to the demat account of IEPF Authorityafter following the prescribed procedure.
The Company has been awarded AAA credit rating for its bank credit facilities byCRISIL. It is the highest rating and indicates a stable outlook for the Company. Therating reflects that the Company has serviced its financial obligations on time. Asregards the short-term facility provided by the bank the Company has been awarded thecredit rating of A1+. The rated instrument reflects strong degree of safety and lowestcredit risk.
The Company maintained healthy cordial and harmonious industrial relations at alllevels. Despite severe competition the enthusiasm and unstinting efforts of the employeeshave enabled the Company to remain at the forefront of the Industry.
Your Company continued to receive co-operation and unstinted support from thedistributors retailers stockist suppliers and others associated with the Company as itstrading partners. The Directors wish to place on record their appreciation for the sameand your Company will continue in its endeavor to build and nurture strong links withtrade based on mutuality respect and co-operation with each other and consistent withconsumer interest.
Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functions andareas as well as the efficient utilization of the Company's resources for sustainable andprofitable growth.
The Directors hereby wish to place on record their appreciation of the efficient andloyal services rendered by each and every employee without whose whole-hearted effortsthe overall satisfactory performance would not have been possible. Your Directors lookforward to the long-term future with confidence.
|On behalf of the Board of Directors || |
|Date : 16th February 2021 ||Suresh Narayanan |
|Place : Gurugram ||Chairman and |
| ||Managing Director |