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Hindustan Unilever Limited Annual Report 2014-15

FOR FURTHER INFORMATION ON OUR ECONOMIC,
ENVIRONMENTAL AND SOCIAL PERFORMANCE,
PLEASE VISIT OUR WEBSITE:

HINDUSTAN UNILEVER LIMITED
Registered Office:
Unilever House,
B. D. Sawant Marg, Chakala,
Andheri (East),
Mumbai - 400 099
CIN : L15140MH1933PLC002030

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MAKING
SUSTAINABLE
LIVING
COMMONPLACE

ANNUAL REPORT 2014-15

Awards and Recognition
FINANCIAL YEAR 2014-15 SAW MANY SUCCESSES.
SOME OF THE ACHIEVEMENTS ARE LISTED BELOW.

1

2

3

4

1 BrandZ TM Awards
2 ‘Client of the Year’ at Effies
3 Dun and Bradstreet Corporate Awards
4 Greentech Award

OUR BRANDS

• HUL was the No. 1 Indian company to feature on the Forbes list of the World’s
Most Innovative Companies.
• HUL’s mobile radio channel ‘Kan
Khajura Tesan’ won three Gold Lions at the Cannes International Festival of
Creativity.
• Ten HUL brands featured in the first ever BrandZ™ Top 50 Most Valuable
Indian Brands ranking.
• The Kissanpur campaign won Silver at the Jay Chiat Strategic Excellence
Awards 2014.
• HUL was the ‘Client of the Year’ at
Effies 2014 and ‘Media Client of the
Year’ at Emvies 2014.

OUR PEOPLE

UNILEVER SUSTAINABLE LIVING PLAN (USLP)
The USLP is our key differentiator. It is our blueprint to drive sustainable growth and has three big goals,
i.e. improving the health and well-being of more than a billion people, reducing the environmental

footprint of the making and use of our products, and enhancing the livelihoods of millions of people across our value chain.

• HUL is the ‘No. 1 Employer of Choice’ across all sectors for the 2015 graduating batch of B-School students according to Nielsen Campus Track-B
School Survey.
• HUL was the ‘Dream Employer’ for sixth year in a row according to Nielsen
Campus Track-B School Survey.

• HUL was recognised as the ‘Top Indian
Company’ in FMCG sector at Dun &
Bradstreet Corporate Awards.
• HUL was ranked No. 3 in Fortune
India’s list of most admired companies.
• HUL ranked No. 3 in the 2014 Global
Aon Hewitt Top Companies for Leaders survey. • HUL earned the highest recognition of
‘Leadership in HR Excellence’ across industries at the 5th Confederation of
Indian Industry (CII) National HR
Excellence Awards 2014.

OUR OPERATIONS

• HUL’s Nasik factory won the
Vasundhara Award for environment management performance.

SUSTAINABILITY

• HUL’s Project Shakti received the
‘Porter Prize’ for ‘Creating Shared
Value’.
• HUL’s Silvassa manufacturing cluster was conferred the prestigious Sankalp
Award 2014 by the Administration of
Dadra and Nagar Haveli for the outstanding work done in uplifting the region under the USLP-linked ‘Prabhat’ initiative. • HUL won ‘Best Overall CSR Practices’ at the Global CSR Excellence &
Leadership Awards.
• HUL won the ICAI CSR Awards for Best
CSR Projects under two categories
– Health and Environment.

• HUL received the ‘Frost and Sullivan
Award’ for Excellence in FMCG Supply
Chain.
• HUL’s legal team was awarded the
‘best in house compliance team’ by
Legal Era.
• HUL’s Haridwar factory won Gold at
Greentech Environment Award 2015 in the FMCG sector.

Produced by Hindustan Unilever Limited.
Creative Consultants: AICL Communications Limited (info@aicl.in) | Printed at Burda Druck India Pvt. Ltd.

Our purpose
OUR PURPOSE IS TO MAKE SUSTAINABLE LIVING COMMONPLACE. WE SEE IT AS THE BEST,
LONG-TERM WAY FOR OUR BUSINESS TO GROW.
Our clear Purpose helps us to remain distinct in the eyes of consumers, retailers and suppliers.
It also means we can set an ambitious
Vision – to double the size of the business whilst reducing our environmental footprint and increasing our positive social impact.
To meet our growth ambition we invest in people whose talent will help us win through our brands and innovation, unrivalled execution in the market place and a relentless focus on continuous improvement for greater efficiency.
Our environmental and social ambitions are driven through the Unilever

Sustainable Living Plan (USLP), which has economic benefits and operates across all our brands, markets and our entire value chain.
Even when markets are tough we cannot ignore sustainability. If we did, this would diminish the future resilience of Hindustan
Unilever Limited (HUL) for its long-term shareholders. We would miss out on the growing consumer preference for goods that do not damage the environment or exploit people.
Our entire business would rely on increasingly rare and expensive raw materials, pushing up our costs. Without more efficient use of energy our production costs would increase while we

would miss considerable savings from more sustainable packaging and less waste.
We would also risk the disapproval of governments, regulators and NGOs, and our brands could suffer reputational damage, representing serious economic loss to the business.
That’s why sustainability is at the heart of everything we do to ensure we have a viable long-term business that is attractive to investors.

ONLINE

You can find more information about Hindustan Unilever Limited online at www.hul.co.in.
For the latest information on the USLP visit www.hul.co.in/sustainable-living-2015.

CONTENTS
Overview
02 Hindustan Unilever at a Glance 04 Financial Performance 05 Performance Trends 06 Chairman’s Statement 07 Board of Directors 08 About Us 10 Our Business Model 11 Delivering Value 12 Our Brands 14 Our People 16 Our Operations 18 Unilever Sustainable Living Plan 20 Management Committee

Reports 21 Notice of the Annual General Meeting 26 Profile of Directors (seeking Appointment / Re-appointment) 28 Directors’ Report and Management Discussion and Analysis 66 Corporate Governance Report 86 Secretarial Standards Report
Secretarial Audit Report

Financial Statements
Standalone Financial Statements 88 Economic Value Added 90 Independent Auditors’ Report 94 Balance Sheet 95 Statement of Profit and Loss 96 Cash Flow Statement 98 Notes
Consolidated Financial Statements
1
45 Independent Auditors’ Report
152 Balance Sheet 1 53 Statement of Profit and Loss
1
54 Cash Flow Statement
156 Notes 198 Form AOC-1 Shareholder information
200 Investor Safeguards 201 Corporate Information • Proxy Form

hINDUSTAN Unilever at a glance

WHO WE ARE

Hindustan Unilever Limited is one of the leading fast-moving consumer goods companies in India. We own some of the best-known and best-loved brands like
Dove, Lifebuoy, Surf, Kissan, Bru and
Pureit. We are passionate about them and proud of the way they help people get more out of life.

WHAT WE DO

We build our brands and develop our products through extensive consumer insight, relentless innovation, and crystal-clear design and marketing. This is a powerful blend that helps us excite and inspire our customers and consumers. We are committed to making sustainable living commonplace and developing new

ways of doing business that will reduce our environmental footprint and increase our positive social impact.

OPERATIONAL HIGHLIGHTS

Despite the challenging environment, we have delivered another year of strong performance with broad-based growth ahead of the market and sustained margin improvement. We remained focused on strengthening the core of our business through innovation, leading market development and continuous improvement of our executional capabilities. Our strategy is well on track as we delivered on our goals of consistent, competitive, profitable and responsible growth.

• 
Domestic Consumer business grew by
10% with 5% underlying volume growth, both ahead of market.
• 
Profit before interest and tax (PBIT) grew by 17% with PBIT margin improving +90 bps, even as we sustained competitive investment behind our brands.
• 
The strong track record of cash generation was maintained as cash from operations exceeded Rs. 5,000 crores for yet another year.
• 
Total dividend of Rs. 15 per share was declared for the Financial Year.
•  continued to make good progress
We
on our sustainability priorities.

SEGMENTAL PERFORMANCE
SEGMENTAL REVENUE (%)

SEGMENTAL RESULTS (%))

Soaps and Detergents
Personal Products
Beverages
Packaged Foods
Others

2

Hindustan Unilever at a Glance

48.4
29.3
11.8
6.2
4.3

Soaps and Detergents
Personal Products
Beverages

39.6
47.2
12.0

Packaged Foods
Others

1.6
-0.3

Hindustan Unilever Limited

Reports

Overview

OUR KEY PERFORMANCE INDICATORS

We report our performance against key financial and non-financial performance indicators below. The Directors’

Financial Statements

Shareholder Information

Report starting on page 28 gives details of our performance in each of the business segments and functions. Details of the progress made on the Unilever Sustainable Living Plan (USLP) commitments are given on pages 18 and 19.

FINANCIAL
NET REVENUE

OPERATING PROFIT

EPS (BASIC)

CASH FROM OPERATIONS

2014-15

2014-15

2014-15

2014-15

Rs.

Rs.

Rs.

Rs.

crores

30,806

The Domestic Consumer business grew by 10% with
5% underlying volume growth in a challenging environment crores

4,922

19.95

per share

crores

5,000+

Operating profit grew by
17% with operating margins improving +90 bps

Last year basic EPS:
Rs. 17.88 per share

Cash from operations was up Rs. 42 crores over the previous year

2014

2014

2014

2014

2013: 27%

2013: 37%

2013: >84%

NON-FINANCIAL
MANUFACTURING

37%

44%

38

88%

2013: 35

Reduction in CO2 per tonne of production compared to
2008 baseline

Reduction in water use per tonne of production compared to 2008 baseline

Reduction in total waste per tonne of production compared to 2008 baseline

BETTER LIVELIHOODS

SUSTAINABLE SOURCING

HEALTH AND
WELL-BEING

2014

2014

2014

2013: 65,000

2013: 80%

Manufacturing units with
100% zero non-hazardous waste to landfill

2013: 58 million

>70,000
No. of Shakti Ammas
(women Shakti
Entrepreneurs) empowered

Annual Report 2014-15

85%
Tomatoes used in Kissan ketchup sourced sustainably 63 million
People reached with
Lifebuoy Handwashing
Programme since 2010

Hindustan Unilever at a Glance

3

Financial Performance
10 YEAR RECORD
Standalone
Statement of Profit and Loss
Gross Sales*
Other Income
Interest
Profit Before Taxation @
Profit After Taxation @
Earnings Per Share of Re. 1
Dividend Per Share of Re. 1

Rs. crores
2005

2006

2007

11,975.53 13,035.06 14,715.10
304.79
354.51
431.53
(19.19)
(10.73)
(25.50)
1,604.47 1,861.68 2,146.33
1,354.51 1,539.67 1,743.12
6.40
8.41
8.73
5.00
6.00
9.00#

2008-09
(15 months)
21,649.51
589.72
(25.32)
3,025.12
2,500.71
11.46
7.50

2009-10
18,220.27
349.64
(6.98)
2,707.07
2,102.68
10.10
6.50

2010-11 ^ 2011-12 ^ 2012-13 ^ 2013-14 ^ 2014-15 ^
20,285.44 22,800.32
627.38
659.08
(0.24)
(1.24)
2,730.20 3,350.16
2,153.25 2,599.23
10.58
12.46
6.50
7.50

* Sales before Excise Duty Charge @ Before Exceptional/Extraordinary items ^ Based on Revised Schedule VI

Balance Sheet
Fixed Assets
Investments
Net Deferred Tax
Net Assets
(Current and Non-current)
Share Capital
Reserves and Surplus
Loan Funds

2005

2006

2007

1,483.53 1,511.01 1,708.14
2,014.20 2,413.93 1,440.80
220.14 224.55
212.39
(1,355.31) (1,353.40) (1,833.57)
2,362.56 2,796.09
220.12
220.68
2,085.50 2,502.81
56.94
72.60
2,362.56 2,796.09

2008-09
2009-10
(15 months)
2,078.84
2,436.07
332.62
1,264.08
254.83
248.82
(182.84) (1,365.45)

#

26679.76
1,210.73
(25.15)
4,349.48
3,314.35
17.56
18.50#

28,947.06 32,086.32
1,231.87 1,253.51
(36.03)
(16.82)
4,799.71 5,523.12
3,555.32 3,842.86
17.88
19.95
13.00
15.00

Includes Special Dividend

2010-11^ 2011-12^ 2012-13^ 2013-14^ 2014-15^
2,457.86
1,260.67
209.66
(1,268.67)

2,362.92 2,508.54
2,741.84 2,936.54
2,438.21 2,330.66
3,094.12 3,277.93
214.24
204.78
161.73
195.96
(1,502.44) (2,369.96) (2,720.64) (2,685.65)

1,527.76
217.74
1,221.49
88.53
1,527.76

2,483.45
217.99
1,843.52
421.94
2,483.45

2,583.52
218.17
2,365.35
2,583.52

2,659.52
215.95
2,443.57
2,659.52

3,512.93
216.15
3,296.78
3,512.93

2,674.02
216.25
2,457.77
2,674.02

3,277.05
216.27
3,060.78
3,277.05

3,724.78
216.35
3,508.43
3,724.78

2008-09
(15 months)
49
29
19
3

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

48
30
20
2

46
32
20
2

48
31
19
2

49
31
18
2

49
29
18
4

49
29
18
4

2008-09
(15 months)
13.1
8.3*
11.6
107.5*
103.6*
2154

2009-10

2010-11 2011-12 2012-13

2013-14

2014-15

14
7.5
11.5
103.8
88.2
1791

12.1
8.3
10.6
87.5
74.0
1750

13.5
9.6
11.4
96.8
77.7
2250

14.1
10.6
12.4
109.1
94.7
2926

14.6
10.6
12.3
130.2
104.1
3147

15.3
10.9
12.0
127.7
99.5
3380

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

238.70

284.60

409.90

466.10

603.65

872.90

52,077
3,704

61,459
3,953

88,600
4,839

1,00,793
6,365

1,30,551
6,680

1,88,849
8,309

^ Based on Revised Schedule VI

Segment-Wise Sales (%)

2005

2006

2007

45
28
22
5

47
29
20
4

47
29
21
3

Key Ratios and EVA

2005

2006

2007

EBIT (% of Gross Sales)
Fixed Asset Turnover (No. of Times)
PAT / Gross Sales (%)
Return on Capital Employed (%)
Return on Net Worth (%)
Economic Value Added (EVA)
(Rs. crores)

12.3
8.1
11.3
68.7
61.1
1014

13.1
8.6
11.8
67.0
68.1
1126

13.1
8.6
11.8
78.0
80.1
1314

2005

2006

2007

197.25

216.55

2008-09
(15 months)
213.90
237.50

43,419
2,638

47,788
2,813

46,575
3,133

Soaps and Detergents
Personal Products
Beverages and Packaged Foods
Others

* Shown on annualised basis

Others
HUL Share Price on BSE (Rs. Per
Share of Re. 1)*
Market Capitalisation (Rs. crores)
Contribution to Exchequer
(Rs. crores)

51,770
4,429

* Based on year-end closing prices quoted in the BSE Limited.

4

Financial Performance

Hindustan Unilever Limited

Reports

Overview

Financial Statements

Shareholder Information

Performance Trends
Gross Sales (Rs. crores)

20.0

4000
3500

16.0

3000
2500

12.0

2000
8.0

1500
1000

4.0

9000
8000
7000
5000

2014-15

2013-14

2012-13

2011-12

2010-11

2014-15

2013-14

2012-13

2011-12

2010-11

0

2014-15

2013-14

2012-13

2011-12

2010-11

2009-10

*2008-09

2007

2006

2.0

2005

2014-15

2013-14

2012-13

2011-12

2010-11

0

2009-10

0

*2008-09

1000
2007

10
2006

2000

2005

20

2009-10

4.0

3000

30

2007

6.0

4000

40

2009-10

50

*2008-09

8.0

6000

60

2006

10.0

2008-09

70

12.0

2007

80

Fixed Assets Turnover (No. of times)

2006

90

2005

2014-15

2013-14

2012-13

2011-12

2010-11

2009-10

2007

*2008-09

2006

Contribution to Exchequer (Rs. crores)

100

0

2005

Segment Wise Sales (%)

2005

0

2014-15

2013-14

2012-13

2011-12

2010-11

*2008-09

2009-10

2007

2006

500 2005

32500
30000
27500
25000
22500
20000
17500
15000
12500
10000
7500
5000
2500
0

EBIT (% of Sales)

Profit After Tax (Rs. crores)

• Soaps and Detergents • Personal Products
• Beverages and Packaged Foods • Others

Economic Value Added (EVA)

Earnings and Dividend Per Share

(Rs. crores)

(Rs.)

Market Capitalisation and HUL
Share Price

2.00

20,000

100

0

0

0

#

#

2014-15

2013-14

2012-13

2011-12

2010-11

2009-10

*2008-09

2007

2006

2005

• Earnings per share • Dividend per share
* Figures are for 15 months period # Includes Special Dividend

Annual Report 2014-15

2014-15

200

400

2013-14

40,000

2012-13

300

4.00

800

2011-12

60,000

2010-11

400

6.00

1200

2009-10

80,000

2008-09

500

8.00

1600

2007

100,000

2006

600

10.00

2000

2005

120,000

2014-15

700

12.00

2013-14

140,000

2012-13

800

14.00

2400

2011-12

2800

160,000

2010-11

900

16.00

2009-10

3200

*2008-09

1000

180,000

2007

200,000

18.00

2006

20.00

2005

3600

0

• Market capitalisation (Rs. crores) • HUL share price (Rs.)
Based on year-end closing prices quoted in the
BSE Limited.

Performance Trends

5

CHAIRMAN’S statement

Rs. 5,000 crores for the second successive year. With a final dividend of Rs. 9 per share proposed by the Board of Directors and an interim dividend of Rs. 6 per share, the total dividend for the financial year ending 31st March 2015 amounts to Rs. 15 per share.
In 2014, we launched ‘Dial Up the Big Q’, an initiative to further step up quality of our execution across all the levers of our business, i.e. brands and innovation, go-to-market, continuous cost improvement and our talent agenda.

1

Dear Shareholders,
In Financial Year 2014-15, your Company delivered a robust performance despite considerable headwinds. The business continued to focus on the delivery of consistent, competitive, profitable and responsible growth. This was another year of exciting innovations, further improvement in execution and sustained focus on operational efficiencies. Our performance was anchored in the Unilever
Sustainable Living Plan (USLP) and we made considerable progress on our sustainability agenda.
We delivered broad-based growth along with significant margin improvement. Our
Domestic Consumer business grew by
10% with 5% underlying volume growth, both ahead of market. Profit before interest and tax (PBIT) grew by 17% with
PBIT margin improving +90 bps. Profit after tax but before exceptional items, PAT
(bei), grew by 8% to Rs. 3,843 crores, impacted by the higher tax rate. Net Profit at Rs. 4,315 crores was up 12%, aided by the exceptional income arising from property related sales. The strong track record of cash generation was sustained as cash from operations exceeded

6

Chairman’s Statement

We accelerated our pace of innovation whilst delivering a significant improvement in the success rate and
‘on-time in-full’ delivery of key projects. In
Personal Care, Axe launched a range of body perfumes – Axe Signature,
TRESemmé continued the premiumisation agenda with two new launches, Closeup launched Diamond Attraction in the premium whitening segment and Pond’s launched the men’s range of products. In
Home Care, Surf Excel re-launched Easy
Wash detergent and Surf bar, Vim introduced a new tub format for its dish wash bar and Pureit launched Ultima with
RO+UV technology. In Beverages, Taj
Mahal launched ‘Flavour of Darjeeling’ in the premium tea segment and the re-launch of Lipton green tea met with resounding success.
In line with our underlying objective of serving diverse consumers and customers across channels and geographies, we reorganised our go-to-market operations from the traditional four sales branches to
14 consumer clusters. We also added a fifth branch in Central India to accelerate our growth in this relatively underpenetrated but high-growth market. We call this initiative ‘Winning In Many Indias’.
Our continued focus on cost effectiveness and improving operational efficiencies

resulted in significant savings across the board. These savings helped to sustain competitive investments behind our brands and at the same time contributed to the steady improvement in our operating margins.
We continued to drive our USLP agenda and made significant progress in the areas of improving health and well-being, reducing environmental impact and enhancing livelihoods.
Since 2010, Lifebuoy has helped 63 million people through its handwashing programme and Pureit has partnered with
Micro Finance Institutions to provide safe drinking water cumulatively to over three lakh low income families in urban slums and remote rural areas.
On the environmental front, we made substantial progress on waste management in our factories and water conservation through the Hindustan
Unilever Foundation (HUF). All our factories became zero non-hazardous waste to landfill sites and nearly 100% of our manufacturing waste in factories was recycled. HUF has so far initiated 18 projects across India in partnership with
NGOs, government agencies and local communities to address the issue of depleting water resources. These projects have the potential of conserving 100 billion litres of water and generate seven lakh person days of employment.
Project Shakti continues to enhance livelihoods in remote villages across India through micro-enterprise opportunities.
By the end of 2014, we empowered over
70,000 women entrepreneurs (Shakti
Ammas) and they were complemented by
48,000 ‘Shaktimaans’, the male members of the Shakti families. Through another project, Prabhat, we are serving communities around our factories by creating awareness about health and

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

BOARD OF DIRECTORS

hygiene, building water conservation capacities and improving livelihoods through skill development programmes.
These initiatives, along with several others, reaffirm our belief that addressing societal needs and business growth go hand-in-hand. Our people are our biggest asset. I firmly believe that the growth of our business is intrinsically linked with the growth of our people. We have always encouraged diversity, agility and a performance-driven organisational culture in which people give their best and feel proud to be part of a successful and caring company. Our work ethics and culture of leadership development has enabled us to attract and build the finest talent in the industry across all levels of the organisation. In
2014, we were once again declared the
‘Dream Employer’ by students across top business schools and we retained our position as the ‘No. 1 Employer Brand’.
I would like to thank each and every one of our employees whose commitment and passion made 2014 yet another successful year for the Company.
I would also like to thank you, all our shareholders, for your continued support in our journey.
Best Regards,

2

3

5

6

8

4

7

9

1 Mr. Harish Manwani Chairman

5 Mr. Aditya Narayan Independent Director

2 Mr. Sanjiv Mehta Managing Director and Chief Executive Officer

6 Mr. S. Ramadorai Independent Director

3 Mr. P. B. Balaji
Executive Director,
Finance and IT and
Chief Financial Officer
4 Mr. Pradeep Banerjee Executive Director,
Supply Chain

7 Mr. O. P. Bhatt Independent Director
8 Dr. Sanjiv Misra Independent Director
9 Ms. Kalpana Morparia Independent Director

Harish Manwani
Chairman

Annual Report 2014-15

Board of Directors

7

ABOUT US
THIS SECTION EXPLAINS OUR BUSINESS – HOW AND WHERE WE MAKE OUR PRODUCTS,
HOW WE TAKE THEM TO MARKET AND HOW WE ENSURE THAT OUR BRANDS REMAIN OUR
CONSUMERS’ CHOICE.

1. CONSUMERS
INSIGHTS FOR INNOVATION

A fundamental requirement at HUL is to understand our consumers. We use focus groups and quantitative studies and spend time with consumers in stores and in their homes to find out what is important to them so we can create products they need and want. Our
Consumer Care line, Levercare, is also a rich source of information. We engage with our consumers through digital communications and social media. We use all these data to identify and anticipate future consumer trends and gain a competitive edge.

4. SOURCING
SUSTAINABLE SOURCING

A dedicated team is responsible for HUL’s procurement programme, including agricultural raw materials. In 2014, we rolled out our Responsible
Sourcing Policy (RSP) as part of our commitment to business integrity, openness, respect for universal human rights and core labour principles.

2. INNOVATION
TECHNOLOGY AT WORK

Research and Development (R&D) is an engine of sustainable growth. At HUL, we benefit from
Unilever’s global R&D expertise. There are 6,000 R&D professionals in Unilever globally, who are responsible for building brands through benefit-led innovation, which is unlocked through science and technology.
This includes looking at long-term emerging science and transforming science into technologies which are used to design branded products.

3. COLLABORATION
PARTNER TO WIN

To meet our Vision we know we must work in partnership with others, such as suppliers, agencies, academia, governments and NGOs.
The big development in 2014 has been the launch of the Partner To Win 2020 programme to create a supplier ecosystem where partners work with us and each other to create breakthroughs in products or packaging to deliver the capacity, innovation and sustainable solutions to meet our growth ambition.

700

tonnes

8

About Us

LESS PLASTIC USE
Design and material optimisation implemented across categories to reduce packaging waste

Hindustan Unilever Limited

Overview

OUR VALUE CHAIN

Hindustan Unilever’s value chain – the process by which we create brands, products and ultimately shareholder value
– begins with acquiring insight into consumers’ needs, which vary considerably across India.
This knowledge helps us to target our subsequent R&D activities and our investments in innovation.

Reports

Financial Statements

Bringing these innovations to market as physical products is a core function of our supply chain, one of the largest in the country.
Our products are manufactured at our factories situated across the length and breadth of the country. By sourcing large amounts of raw materials sustainably, we can protect scarce resources, ensure security of supply for our business and reduce price volatility while protecting the environment and enhancing people’s lives, which is at the heart of our Unilever
Sustainable Living Plan (USLP).

Shareholder Information

By the time manufacturing is under way, our marketing teams work with our category experts to define the complete marketing mix, including communications that make our brands come alive.
Our logistics operations move our products to retailers and our go-to-market teams ensure that we get enough of the right products in the right price bracket in the right sales channels for consumers to buy.

8. SALES
5. MANUFACTURING
GLOBAL SCALE, LOCAL AGILITY

We make the majority of what we sell through a network of manufacturing sites across India. We have invested significantly in our factories in recent years to create an efficient, reliable and more sustainable network. We leverage the global scale of Unilever and have the agility to meet local demands. More ecoefficient production is helping us meet USLP targets.
For instance, all our factories had achieved zero non-hazardous waste to landfill.

6. LOGISTICS
CENTRALISED LOGISTICS EXPERTISE

How we move products from factories to customers is the role of our logistics operation. HUL is continuously evolving its logistics network and investing in warehousing infrastructure and technology to support business growth, deliver savings, reduce stocks, reduce carbon emissions and improve customer service in an ever-changing environment. Annual Report 2014-15

GO-TO-MARKET EXPERTISE

We work closely with retailers to win in the market place and make sure that our brands are always available, properly displayed and in the right price bracket. Our go-to-market capability ensures that we become the supplier of choice for our customers and trade partners, through strong joint business planning and in-store execution via Perfect Store programmes, to help deliver sustainable sales growth. This is essential for us to be able to add premium brand extensions to our product ranges, land product innovations on the shelves, enter new geographies and markets, and build our distribution strength to reach new consumers.

7. MARKETING
GENERATING CONSUMER-LED GROWTH

Through advertising, we ensure that our brands and products are consumers’ first choice. We use multiple media to achieve cut-through in a highly competitive and cluttered world. Traditional media channels continue to play a big part but digital communications have revolutionised the way marketing engages with people, creating entirely new sales and marketing opportunities. We create our own entertainment content and this is distributed, for example, by mobile devices.

About Us

9

Our business model
OUR BUSINESS MODEL AND STRATEGY COME TOGETHER TO DELIVER VALUE FOR
SHAREHOLDERS. HERE WE EXPLAIN THEIR ELEMENTS AND HOW THEY ARE COMBINED.

OUR CORE PURPOSE
MAKING SUSTAINABLE LIVING COMMONPLACE

Our business model starts with our core Purpose which is a clear expression of what we believe to be the best long-term way for
Hindustan Unilever Limited to grow. It is a simple Purpose to help us meet changing consumer preferences and the challenges of a volatile, uncertain, complex and ambiguous world.

KEY INPUTS
BRANDS, OPERATIONS, PEOPLE

Our business model works by combining three key inputs and filtering them through the lens of the Unilever Sustainable Living
Plan (USLP). Our brands have significant value and succeed through products that meet the needs of consumers. Our people identify social and consumer needs to grow our brands, market them, manufacture and distribute them. Our operations encompass procurement of raw material, manufacturing, logistics, go-to-market and marketing. We invest financial capital to support all these assets and activities.

HOW WE DRIVE PROFIT
PROFITABLE VOLUME GROWTH, COST LEVERAGE +
EFFICIENCY, INNOVATION + MARKETING
INVESTMENT

HUL aims for a virtuous circle of growth. Profitable volume growth is driven by investment in innovation and brands to deliver products that millions of consumers use every day. We can leverage this scale to spread fixed costs and improve profitability while further investing in the business. This investment funds
R&D and innovation to create new and improved products backed by marketing to create even stronger brands. This drives profitable volume growth and the virtuous circle continues.

10

Our Business Model

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

DELIVERING VALUE

OUR
CONSUMERS

In 2014, many consumers faced tough conditions as economic uncertainty held back growth around the world. Meanwhile, consumption continues to be linked to many of the world’s biggest problems – deforestation, climate change, water scarcity, malnutrition and unhealthy diets. However, each of our categories continue to innovate to meet the challenges posed by these trends and changing consumer preferences, such as products that are sustainably sourced.

Annual Report 2014-15

SOCIETY

Acting alone we can only do so much to make sustainable living commonplace. Acting in partnership with others can help bring about transformational change at a societal level to tackle the world’s major social, environmental and economic issues. By adopting a leadership role, and working with governments, NGOs, suppliers and others, we are influencing change on a bigger scale. We are deepening our efforts where we have scale, influence and resources to create transformational change: sustainable agriculture and smallholder farmers; and water, sanitation and hygiene.

OUR
PEOPLE

Delivering our business goals requires us to recruit, develop and retain the right talent. We are determined to help all our people to be the best they can be, to help fulfil their potential and the potential of the business. Training and development are crucial at all levels and we strive to create a working environment that respects the human rights and interests of all our employees. Ensuring gender equality is a fundamental part of our approach while our
Purpose of making sustainable living commonplace is a commitment that our people can engage with every day and make it a reality through their work.

Delivering Value

11

OUR BRANDS
OUR BRANDS ARE DRIVEN BY THE PURPOSE
OF MAKING SUSTAINABLE LIVING
COMMONPLACE. THEY HELP PEOPLE FEEL
GOOD, LOOK GOOD AND GET MORE OUT
OF LIFE.

Kissan through its Kissanpur campaign motivated children to get off gadgets and enjoy ‘real’ nature. Kissan launched a special pack with Pogo channel that helped kids get creative with empty ketchup bottles helping in cutting down waste. These efforts helped Kissan
Ketchup deepen its connect with consumers and outpace market growth.

Our Brands

PROFITABLE
VOLUME
GROWTH

OUR
BRANDS

LD

I

12

COST
LEVERAGE +
EFFICIENCY

BU

Through the Fair & Lovely Foundation, the brand has been empowering Indian women. This year, the Foundation also provided scholarships to young women for vocational training and start-ups.

E
RENC
EFE
PR
ER
UM

IN

G

BR

AN

D EQ

U ITI E S

INNOVATION +
MARKETING
INVESTMENT

BIGGER BRANDS
AGE
VER
LE

Pureit, with its partnership with Micro
Finance Institutions, protected over three hundred thousand low income households in urban slums and remote rural areas by providing Pureit devices.

This year, we started on our ‘Winning In
Many Indias’ journey to redefine the way we touch the lives of our consumers. We transformed our traditional four sales branches into five branches handling consumer clusters based on homogeneity of consumers and shoppers within the geographies. In line with the ‘Dial Up the
Big Q’ agenda, the sales system focused on some key initiatives like driving higher throughput per store, to harness the power of the significant coverage expansion done in previous years. We increased the number of stores that positively impacted our growth. We also focused on over 1,00,000 select high throughput stores, and significantly increased our presence and impact in these. We also focussed on ‘Building
Brands in Store’, especially in modern trade. The focus was to design and deploy plans that help build our brand equities through in-store execution.

CO
NS

With nine out of ten Indian households using our products, we believe we have the ability to make a difference through our brands and bring about a social change.
Lifebuoy reached out to 63 million people through its various handwashing programmes. The brand launched a successful handwashing pilot in Bihar and extended the ‘Help a Child Reach 5’ campaign to six more villages in
Chhindwara district, Madhya Pradesh.
Since inception, the Pepsodent school contact programme has reached out to over one million children in six cities in India.

CONSUMERS AT THE HEART OF
OUR BUSINESS

WI
N

BRANDS AT THE FOREFRONT OF
SOCIAL CHANGE

Several campaigns were launched to reach our consumers more effectively.
Red Label launched the ‘Swad Apnepan
Ka’ campaign to reinstate its core category benefit of taste and of bringing people together. The brand won the Silver Effie in the beverages category in 2014.
As a market leader in conditioners, Dove turbocharged market development through the twin sachet – shampoo + conditioner offering. The unique sachet format helped to further strengthen our leadership in conditioner segment. The core brand, Dove, refreshed its communication campaign and successfully built superiority of Dove to ordinary soaps. It also built scale by doubling the number of households reached through the direct contact programme. All this helped in putting
Dove back on a double digit growth path.
Pond’s deployed a new look that stood for authentic beauty rooted in authoritative science.
Lipton green tea launched with a new identity. It initiated a partnership with
Anjali Mukherjee and other leading nutritionists to educate people on healthier lifestyles and the benefits of green tea.
‘Kan Khajura Tesan’, HUL’s mobile radio channel that was launched to reach consumers in the media dark areas received international recognition in the form of three Golds at the Cannes
International Festival of Creativity.

Hindustan Unilever Limited

Overview

DELIVERING CONSUMER NEEDS

We accelerated the pace of innovations this year. TRESemmé continued the premiumisation agenda in 2014 with two new launches – Split Remedy and Spa
Rejuvenation, joining HUL’s 100 crore club and creating en route, India’s largest hair care YouTube page. Closeup forayed into the premium whitening segment with the launch of Closeup Diamond Attraction, which received a positive consumer response. Innovations targeted at male grooming were big hits. Axe Signature, a concentrated body perfume especially developed for the young Indian male has helped turnaround Axe with a strong double digit growth. Pond’s Men launched on the proposition of recharging the face through the power of coffee beans was also a big success. All these innovations helped Personal Care deliver double digit growth well ahead of the market.
The ice cream and frozen desserts business delivered a very strong performance. A sharp focus on Magnum,
Cornetto and Paddle Pop delivered double digit growth on Impulse. Magnum was launched across two more cities – Delhi and Kolkata – making it available across seven Indian cities.

Reports

Financial Statements

BRU Instant Coffee improved its penetration in South significantly while
BRU Gold was the fastest growing instant coffee brand in the country. We had a successful year in the powdered soft drink market with the success of Lipton Ice Tea which was scaled up with a new TV and digital campaign, and breakthrough in-store visibility. Knorr soups achieved higher pace of growth in the soup segment with the marketing and distribution ramp up of the instant Rs. 10 range.
In 2014, Pureit launched an innovation in the premium market – ‘Ultima with RO+UV technology’. The product performed very well.

Shareholder Information

GROWING WITH INDIA

Our purpose driven social initiative Project
Shakti now has over 70,000 Shakti
Entrepreneurs (Shakti Ammas) and 48,000
Shaktimaans covering 1,65,000 villages and reaching over four million rural households. We created a consumer contact programme aimed at accelerating the growth and adoption of small and emerging categories in rural India.
Through this, we reached more than
2.5 million rural consumers and contacted
8,00,000 school children. This programme is now active in over 8,000 villages across the country.

Surf Excel, Wheel, Rin and Sunlight continued to lead the laundry category in
India. Surf Excel, led the growth with a strong focus on reaching out to new consumers beyond core geographies and with formats that cater to varying needs.

Our Brands: to find out more visit www.hul.co.in/brands-in-action/ WINNING IN MANY INDIAS
Last year, acknowledging the homogeneity in the diversity of India, we segmented the market into 14 consumer clusters. Our attempt at ushering in this new wave of segmented marketing was christened
Winning In Many Indias or WIMI.
The 14 clusters enable us to understand better the changing preferences drilled down to the interiors and multiple consumer segments. This empowers our people to respond appropriately and swiftly to market conditions.

Annual Report 2014-15

Our Brands

13

COST
LEVERAGE +
EFFICIENCY

VAL
UE
S&

ULTURE
CE C
AN
RM
FO
ER

PROFITABLE
VOLUME
GROWTH

X I B L E DI V E RS E
FLE ON
IL E
ATI
AG GANIS
OR

PEOPLE ARE OUR BIGGEST ASSET. SUSTAINABLE,
PROFITABLE GROWTH CAN ONLY BE ACHIEVED IN AN
ORGANISATION WHICH FOCUSES ON PERFORMANCE
CULTURE AND WHERE EMPLOYEES ARE ENGAGED AND
EMPOWERED TO BE THE BEST THEY CAN BE.

P

OUR PEOPLE

OUR
PEOPLE

CA

P

AB

Success in the future will depend on being lean, agile and competitive in a resourcechallenged world. We are working towards creating a simpler, diverse and agile organisation that will help us move faster, innovate better and leverage our global scale.

EMPLOYER OF CHOICE –
ATTRACTING THE RIGHT TALENT

For the fourth year in a row, HUL was recognised as the ‘No. 1 Employer of
Choice’ in the Nielsen campus track
B-school survey. In addition, HUL retained the ‘Dream Employer’ status for the sixth consecutive year and continued to be the top company considered for application by
B-School students.

IL

IT

Y&

LEA

D E R S H IP

INNOVATION +
MARKETING
INVESTMENT

BUILDING THE EMPLOYER
BRAND, DIGITALLY

Our Facebook ‘Unilever Diaries’ page has over 5,00,000 fans and helps us deepen our engagement with the extended student community. This in turn helps us strengthen our brand image among students. The Alumni Facebook group that engages our ex-employees crossed the
1,000 member mark in 2014.

CREATING AN INCLUSIVE WORK
CULTURE THAT’S AGILE

We have made steady progress in improving the gender balance across all functions. This has been achieved in a systematic manner through senior leadership commitment, balanced hiring practices, enabling infrastructure and work practices like maternity and paternity support programmes, flexible work arrangements and much more. We have also built an inclusive culture to drive diversity on the shop floor.
In addition, we have a well-defined agile working policy which includes work from home, flexi-timing and hot desking. Our thrust is to build an agile and inclusive organisation that celebrates differences and leverages diversity.

14

Our People

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

677 Words

Our People: to find out more visit www.hul.co.in/careers-jobs/ NURTURING TALENT AND
BUILDING LEADERS

We encourage a performance driven culture of leadership development. Our
Management Trainee Programme has been the training ground for many inspiring leaders across HUL and provides extensive cross functional experience through live projects and assignments. In
2014, the programme entered its
60th year.

In our manufacturing units, we have taken a huge leap in our capability agenda for shop floor employees by launching HR for
Factories and World Class Manufacturing to focus on skill enhancement and career progression. The Front Line Leadership
Development Programme designed especially for the supply chain supervisors to develop the right competencies essential to lead the shop floor, was launched. DEVELOPING A LEARNING
CULTURE

DRIVING EMPLOYEE
ENGAGEMENT

We have a 70:20:10 approach to learning.
We believe that 70% of learning is done through on-the-job training, unique job experiences, challenging assignments and building business-linked capabilities; 20% is through coaching and mentoring and
10% of learning is through formal development. We have established a framework for embedding capabilities into the DNA of the organisation and institutionalising them as ways of working for the organisation to deliver key business priorities.
There is an increased focus on ‘Individual
Development Plans’, where employees are encouraged to discover their purpose and articulate their short-term and long-term aspirations. Annual Report 2014-15

Our Global People Survey (GPS) measures the level of engagement of all employees.
Our employee engagement score in GPS showed a 300 bps improvement in 2014 over 2013.

ENSURING SAFETY

Our mission is to protect and enhance the well-being of our employees, visitors and partners. Safe working is a nonnegotiable. We have a clear focus on safety practices ensuring all possible safety hazards are eliminated; not just from the work place but during travel and at employee homes.

5,00,000
FANS OF UNILEVER
DIARIES

Strengthening brand HUL
We are deepening our engagement with the extended student community on social media.
This in turn helps us strengthen our brand image among students.

HUL recognised as the

NO. 1 EMPLOYER
OF CHOICE

for the fourth consecutive year
HUL retained the

DREAM
EMPLOYER

status for the sixth year in a row

Our People

15

OUR operations
AT HUL, WE AIM TO DELIVER GROWTH THAT IS CONSISTENT, COMPETITIVE, PROFITABLE
AND RESPONSIBLE. AT EVERY STEP OF THE VALUE CHAIN WE STRIVE TO DELIVER
SUPERIOR CUSTOMER EXPERIENCE, BETTER QUALITY AND COMPETITIVE COST WHILE
MAINTAINING A FLEXIBLE, LEAN AND AGILE STRUCTURE. THIS APPROACH WHEN
COMBINED WITH OUR GLOBAL SCALE, GENERATES SIGNIFICANT SAVINGS WHICH WE
INVEST BACK INTO OUR BUSINESS.

DELIGHTING CUSTOMERS
AND CONSUMERS

We continued to improve our customer service with CCFOT (Customer Casefill-onTime) increasing to 94.3% and Modern
Trade OSA (On-Shelf Availability) at 95.2%.
Some of our modern trade customers have acknowledged this performance and declared us ‘the best supplier of the year’.
We continued to strengthen the Sales and
Operation Planning process (S&OP) and
Innovation Process Management (IPM) in order to respond to market demand with speed and agility.

MERS
NSU
CO
RE
O
M

COST
LEVERAGE +
EFFICIENCY

OUR
OPERATIONS

S
FA

T

,F

16

LA

W

LE

SS

EX E

C U T IO N

Our Operations

INNOVATION +
MARKETING
INVESTMENT

ENTIRE VALUE C
HAI
N

PROFITABLE
VOLUME
GROWTH

SUSTAINABLE SOURCING

LEADING WITH INNOVATION AND
TECHNOLOGY

We have maintained the innovation OTIF
(On Time in Full) with more than 80 innovation networks being executed during the year.

We further strengthened our processes through technology. IT played an important part in the key transformation project
WIMI (Winning in Many Indias).
The ‘Primary Banking’ project delivered a step change in our transaction banking capabilities by implementing best-in-class solutions whilst strengthening controls, reducing costs and simplifying operations.
The project spanned 10 work streams and was implemented seamlessly with a tight change management and governance process.

G
AGIN
VER
LE

RE
AC
HI
NG

We saw steady improvement in quality by focusing on better product design and implementing various QIPs (Quality
Improvement Programmes). These led to
40% reduction in consumer complaints over last year.

We continued to invest in TV and non-TV mediums to reach our consumers and increased our investments in digital considerably. In 2014 with ‘Kan Khajura
Tesan’, our flagship free mobile radio channel, we reached millions of consumers in media dark areas in a cost efficient manner.

The Public-Private Partnership project between HUL and the Maharashtra
Government for sustainable sourcing of tomatoes has continued to benefit farmers and our business. HUL provides farmers with a buy-back guarantee for their produce. HUL also offers global and local knowledge and expertise in sustainable agriculture practices in tomato cultivation. This includes the latest agricultural techniques, irrigation practices and recommendation of the right type of seeds.

Sustainable Sourcing: to find out how we partner with smallholder farmers visit www.hul.co.in/sustainable-living/

Hindustan Unilever Limited

Overview

END-TO-END COST FOCUS

A strong supply chain saving programme, driven by various cross functional teams such as R&D, Procurement,
Manufacturing and Logistics, has delivered significant savings in 2014.
To achieve manufacturing excellence, our company has embarked on the journey of
‘World Class Manufacturing’ that aims to eliminate non-value added activities leading to further improvement in efficiencies and cost.
We continued to leverage the benefits of various transformational initiatives under the Finance Programme that helped reduce cost, complexity and time of transaction processing.
The ‘Procure to Pay’ project ensured sustained world class levels of payment efficiency and purchase order compliance.
Excellence in the ‘Record to Report’ helped us rank among the Top 3 companies in manufacturing sector for
Best Presented Accounts by the Institute of Chartered Accountants of India, for the second consecutive year.

Reports

Financial Statements

EMBEDDING SUSTAINABILITY IN
OUR OPERATIONS

Specific water consumption in manufacturing operations reduced by over
44%, CO2 emissions (per tonne of production) reduced by 37% and total waste per tonne from manufacturing sites reduced by 88% vis-à-vis the
2008 baseline.
During 2014, we used almost 60,000 tonnes of renewable biomass as fuel and reduced absolute water abstraction from
2,715 million litres in 2008 to
2,111 million litres in 2014. Our operations achieved a target of zero total nonhazardous waste to landfill last year.

Shareholder Information

80

INNOVATION
NETWORKS
EXECUTED

Driving Innovations
We accelerated the pace of innovations this year.

Our injury rates in 2014 were less than one-fourth of the injury rates in 2008.

Project ‘My Business Information’ tapped into the potential of big data through professional analytics, state-of-the-art forecasting tools and real-time data warehouse. This enabled marketers to understand the consumers better and as a result, deploy the right marketing mix.

Annual Report 2014-15

Our Operations

17

UNILEVER sustainable living PLAN
WE CANNOT ACHIEVE OUR VISION TO DOUBLE OUR SIZE UNLESS WE FIND NEW WAYS TO
OPERATE THAT DECOUPLE GROWTH FROM OUR ENVIRONMENTAL IMPACT, WHILE USING
GROWTH AS AN ENABLER FOR POSITIVE SOCIAL IMPACT.

IMPROVING HEALTH AND WELL-BEING
By 2020, we will help more than a billion people take action to improve their health and well-being.

REDUCING
ENVIRONMENTAL IMPACT

By 2020, our goal is to halve the environmental footprint of the making and use of our products as we grow our business.

1 HEALTH AND
HYGIENE

2 NUTRITION
3  GREENHOUSE
GASES

By 2020, Unilever will help more than a billion people globally, to improve their health and hygiene. This will help reduce the incidence of lifethreatening diseases like diarrhoea. • MORE THAN
63 MILLION PEOPLE
IN INDIA REACHED
THROUGH LIFEBOUY
HANDWASHING
PROGRAMMES
SINCE 2010.

18

By 2020, Unilever will double the proportion of portfolio that meets the highest nutritional standards, based on globally-recognised dietary guidelines. This will help hundreds of millions of people to achieve a healthier diet.
• IN 2014, 46% OF THE
PORTFOLIO IN INDIA
MET THE HIGHEST
NUTRITIONAL
STANDARDS BASED
ON GLOBALLY,
RECOGNISED DIETARY
GUIDELINES.

Unilever Sustainable Living Plan

Halve the greenhouse gas impact of Unilever products globally, across the lifecycle by 2020.
• IN INDIA, WE ACHIEVED
37% REDUCTION IN CO2
EMISSIONS PER TONNE
OF PRODUCTION IN 2014
COMPARED TO THE 2008
BASELINE.

4 WATER

Halve the water associated with the making and consumer use of Unilever products globally, by 2020.
• IN INDIA, WE HAVE
REDUCED WATER USAGE
(CUBIC METRE PER
TONNE OF PRODUCTION)
IN OUR MANUFACTURING
OPERATIONS BY 44%,
COMPARED TO THE 2008
BASELINE.

Hindustan Unilever Limited

Reports

Overview

Financial Statements

Launched in 2010, the Unilever Sustainable Living Plan (USLP) is our blueprint for sustainable growth. It is helping to drive profitable growth for our brands, save costs and fuel innovation.
The USLP sets out three big, ambitious goals. Underpinning these goals are nine commitments supported by targets spanning our social and environmental performance. We are making good progress with our first goal: to help more than a billion people globally, improve their health and well-being by 2020, reaching over 110 million by the end of 2014, in India alone.
The progress on our second goal is more mixed. We have achieved zero non-hazardous waste to landfill from our factories, and continue to make significant reductions in the greenhouse gas (GHG) and water impacts of our manufacturing. However, the

Shareholder Information

consumer element of our target to halve the water and GHG impacts of our products remains a challenge.
On our third goal, we are making good progress. We are now sourcing more than half our agricultural raw materials sustainably. We have created 70,000 women micro-entrepreneurs distributing our products in India while making progress on our new commitments to enhance livelihoods across the value chain.
More on our performance against our targets can be found in our online Sustainable Living Report 2014 published in May 2015. You can view it at www.hul.co.in.

ENHANCING LIVELIHOODS

By 2020, we will enhance the livelihoods of millions of people as we grow our business.

7 FAIRNESS IN THE
WORKPLACE
5 WASTE

Halve the waste associated with the making and use of
Unilever products globally, by 2020.
• IN INDIA, WE ACHIEVED
88% REDUCTION IN TOTAL
WASTE GENERATION IN
OUR MANUFACTURING
(KG PER TONNE OF
PRODUCTION) IN 2014
OVER THE 2008 BASELINE.

8 OPPORTUNITIES
FOR WOMEN

By 2020, Unilever will advance human rights across its operations and extended supply chain, globally. By 2020, Unilever will empower 5 million women, globally .

9 INCLUSIVE
BUSINESS

6 SUSTAINABLE
SOURCING

By 2020, globally, Unilever will source 100% of agricultural raw materials sustainably. • IN INDIA, WE SOURCED
85% OF TOMATOES USED
IN KISSAN KETCHUP
FROM SUSTAINABLE
SOURCES, IN 2014.
• ALL OUR PALM
DERIVATIVES ARE
BACKED BY RSPO
(ROUNDTABLE ON
SUSTAINABLE PALM OIL)
CERTIFICATES.

Annual Report 2014-15

• 100% OF THE FACTORY
SITES AND OFFICES IN
HUL ADHERE TO
COLLECTIVE BARGAINING
AGREEMENTS.

• WE TRAINED 70,000
WOMEN MICRO–
ENTREPRENEURS TO
SELL OUR PRODUCTS
IN RURAL INDIA AS OF
END 2014.

By 2020, Unilever will have a positive impact on the lives of 5.5 million people, globally. • IN INDIA, WE ARE
RUNNING 13 SKILL
DEVELOPMENT CENTRES
AS PART OF OUR
‘PRABHAT’ INITIATIVE
AROUND OUR
MANUFACTURING
LOCATIONS. MORE THAN
1,500 PEOPLE HAVE
ALREADY BEEN
CERTIFIED THROUGH THE
PROGRAMME AND OVER
500 OF THEM EITHER
HAVE A JOB OR HAVE
BEEN UP-SKILLED OR
ARE SELF EMPLOYED.

Unilever Sustainable Living Plan

19

management committee

1

2

4

5

6

7
7

8
8

99

1  Sanjiv Mehta
Mr.
Managing Director and Chief Executive Officer

5 
Ms. Geetu Verma Executive Director,
Foods & Refreshment

2 Mr. P. B. Balaji
Executive Director,
Finance and IT and
Chief Financial Officer

3

6  B. P. Biddappa
Mr.
Executive Director,
Human Resources

3  Pradeep Banerjee
Mr.
Executive Director,
Supply Chain
4  Dev Bajpai
Mr.
Executive Director,
Legal & Corporate Affairs and Company Secretary

20

Management Committee

7 Mr. Samir Singh
Executive Director,
Personal Care
8 Ms. Priya Nair
Executive Director,
Home Care
9 Mr. Punit Misra
Executive Director,
Sales and Customer
Development

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

Registered Office: Unilever House, B. D. Sawant Marg, Chakala,
Andheri (East), Mumbai - 400 099
CIN: L15140MH1933PLC002030, Web: www.hul.co.in, Email: levercare.shareholder@unilever.com, Tel: +91 22 39832285 / 39832452

NOTICE

of the Annual General Meeting
Notice is hereby given that the 82nd Annual General Meeting of Hindustan Unilever Limited will be held on Monday,
29th June, 2015 at 2.00 p.m. at the Registered Office of the
Company at Unilever House, B. D. Sawant Marg, Chakala, Andheri
(East), Mumbai - 400 099, to transact the following business :

ORDINARY BUSINESS
1.  receive, consider and adopt the audited financial
To
statements (including audited consolidated financial statements) for the Financial Year ended 31st March, 2015 and the Reports of the Directors and Auditors thereon.
2.  confirm the payment of Interim Dividend and to declare
To
Final Dividend on equity shares for the Financial Year ended
31st March, 2015.
3.  appoint a Director in place of Mr. Harish Manwani
To
(DIN 00045160), who retires by rotation and being eligible, offers himself for re-appointment.
4.  appoint a Director in place of Mr. Pradeep Banerjee
To
(DIN 02985965), who retires by rotation and being eligible, offers himself for re-appointment.
5.  appoint a Director in place of Mr. P. B. Balaji
To
(DIN 02762983), who retires by rotation and being eligible offers himself for re-appointment.
6.  ratify the appointment of M/s. B S R & Co. LLP, Chartered
To
Accountants, Mumbai (Firm Registration No. 101248W/
W-100022) as approved by Members at the Eighty
First Annual General Meeting as Statutory Auditors of the Company, to hold office until the conclusion of Eighty Sixth Annual General Meeting, and to fix their remuneration for the financial year ending
31st March, 2016.

SPECIAL BUSINESS
7.  consider and, if thought fit, to pass the following
To
resolution as an Ordinary Resolution: 
“RESOLVED THAT pursuant to the provisions of
Sections 149, 150 and 152 and other applicable provisions, if any, of the Companies Act, 2013, and the Rules made thereunder, read with Schedule IV of the said Act,
Ms. Kalpana Morparia (DIN : 00046081), who was appointed as an Additional Director of the Company with effect from
9th October, 2014 under Section 161 of the Companies
Annual Report 2014-15

Act, 2013, be and is hereby appointed as an Independent
Director of the Company to hold office for a term upto five consecutive years commencing from 9th October, 2014.”
8.  consider and, if thought fit, to pass the following
To
resolution as an Ordinary Resolution: 
“RESOLVED THAT pursuant to the provisions of Section
148(3) and other applicable provisions, if any, of the
Companies Act, 2013 and the Rules made thereunder, the remuneration payable to M/s. RA & Co, Cost Accountants
(Firm Registration No. 000242), appointed by the Board of Directors as Cost Auditors to conduct the audit of the cost records of the Company for the financial year ending
31st March, 2016, amounting to Rs. 10 lacs (Rupees Ten
Lacs only) as also the payment of service tax as applicable and re-imbursement of out of pocket expenses incurred in connection with the aforesaid audit, be and is hereby ratified and confirmed.”
9.  consider and, if thought fit, to pass the following
To
resolution as a Special Resolution: 
“RESOLVED THAT in supersession of the resolution passed by the Members at the Annual General Meeting held on
26th July, 2013 and pursuant to the provisions of
Sections 197, 198 and other applicable provisions, if any, of the Companies Act, 2013 and Rules made thereunder and Article 114 of the Articles of Association, the Company be and is hereby authorised to pay to its Directors (other than the Managing Director and Whole Time Directors of the Company), for a period of five years commencing from
1st April, 2015 to 31st March, 2020, such sum by way of commission as the Board and/or a Committee thereof may determine from time to time, but not exceeding 1% (one percent) or such other percentage of the Net Profits of the
Company in any financial year as may be specified under the Companies Act, 2013 from time to time and computed in the manner provided under Section 198 of the Companies
Act, 2013 or Rs. 300 lacs in aggregate, whichever is lower.”
10.  consider and, if thought fit, to pass the following
To
resolution as a Special Resolution: 
“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of the Companies
Act, 2013 and Rules made thereunder, a new set of Articles of Association, placed before the Members, be and is hereby adopted and substituted in place of the existing Articles of
Association of the Company.
Notice

21

 
RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to perform and execute all such acts, deeds, matters and things, as may be deemed necessary, proper or expedient to give effect to this resolution and for the matters connected herewith or incidental hereto.”

1.  Explanatory Statement pursuant to Section 102 of the
An
Companies Act, 2013 relating to the Special Business to be transacted at the Annual General Meeting is annexed hereto. 7.  accordance with the Articles of Association of the
In
Company, all Directors (except Mr. Sanjiv Mehta, who has been appointed as the Managing Director for a term of 5 years effective 1st October, 2013), retire every year and, if eligible, offer themselves for re-appointment at the Annual General Meeting. As per the provisions of the
Companies Act, 2013, Independent Directors are appointed for a term upto five consecutive years and are not liable to retire by rotation. The relevant details of Directors seeking appointment / re-appointment under Item nos. 3, 4, 5 and
7 of this Notice are provided at page nos. 26 and 27 of the
Annual Report.

2.  MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED
A
TO APPOINT A PROXY TO ATTEND AND VOTE ON POLL
ON HIS / HER BEHALF AND THE PROXY NEED NOT BE A
MEMBER OF THE COMPANY. Pursuant to Section 105 of the Companies Act, 2013, a person can act as a Proxy on behalf of not more than fifty members holding in aggregate, not more than ten percent of the total share capital of the Company. Members holding more than ten percent of the total share capital of the Company may appoint a single person as Proxy, who shall not act as a Proxy for any other Member. The instrument of Proxy, in order to be effective, should be deposited at the Registered Office of the Company, duly completed and signed, not later than 48 hours before the commencement of the meeting. A Proxy
Form is annexed to this Report. Proxies submitted on behalf of limited companies, societies, etc., must be supported by an appropriate resolution / authority, as applicable.

8. 
Pursuant to Section 101 and Section 136 of the
Companies Act, 2013 read with relevant Rules made thereunder, companies can serve Annual Reports and other communications through electronic mode to those
Members who have registered their email address either with the Company or with the Depository Participant(s).
Members who have not registered their email address with the Company can now register the same by submitting a duly filled-in ‘E-communication Registration Form’ available on the website of the Company www.hul.co.in to M/s Karvy Computershare Pvt. Ltd or Investor Service
Department of the Company. Members holding shares in demat form are requested to register their email address with their Depository Participant(s) only. Members of the
Company who have registered their email address are also entitled to receive such communication in physical form, upon request.

3. 
The Register of Members and Share Transfer Books of the
Company will remain closed from Tuesday, 23rd June, 2015 to Monday, 29th June, 2015 (both days inclusive). The book closure dates have been fixed in consultation with the Stock
Exchanges.

9. 
The Notice of AGM, Annual Report and Attendance Slip are being sent in electronic mode to Members whose email address are registered with the Company or the
Depository Participant(s), unless the Members have registered their request for the hard copy of the same.
Physical copy of the Notice of AGM, Annual Report and
Attendance Slip are being sent to those Members who have not registered their email address with the Company or Depository Participant(s). Members who have received the Notice of AGM, Annual Report and Attendance Slip in electronic mode are requested to print the Attendance
Slip and submit a duly filled in Attendance Slip at the
Registration Counter at the AGM.

Notes :

4. 
The Final Dividend for the financial year ended
31st March, 2015, as recommended by the Board, if approved at the AGM, will be paid on or after Friday, 3rd July, 2015 to those Members whose name appears in the Register of
Members of the Company as on the book closure dates.
5. Members holding shares in demat form are hereby informed that bank particulars registered with their respective
Depository Participants, with whom they maintain their demat accounts, will be used by the Company for the payment of dividend. The Company or its Registrar cannot act on any request received directly from the Members holding shares in demat form for any change of bank particulars. Such changes are to be intimated only to the
Depository Participants of the Members. Members holding shares in demat form are requested to intimate any change in their address and / or bank mandate immediately to their
Depository Participants.
6. 
Members holding shares in physical form are requested to intimate any change of address and / or bank mandate to M/s. Karvy Computershare Private Limited / Investor
Service Department of the Company immediately.

22

Notice

10. Pursuant to Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules,
2014, as amended and Clause 35B of the Listing Agreement, the Company is pleased to provide the facility to Members to exercise their right to vote on the resolutions proposed to be passed at AGM by electronic means. The Members, whose names appear in the Register of Members / list of Beneficial
Owners as on Monday, 22nd June, 2015, i.e. the date prior to the commencement of book closure, are entitled to vote on the Resolutions set forth in this Notice. The members may cast their votes on electronic voting system from place other than the venue of the meeting (remote e-voting).
The remote e-voting period will commence at 9.00 a.m. on Thursday, 25th June, 2015 and will end at 5.00 p.m. on
Sunday, 28th June, 2015. In addition, the facility for voting through electronic voting system shall also be made
Hindustan Unilever Limited

Overview

Reports

available at the AGM and the Members attending the AGM who have not cast their vote by remote e-voting shall be eligible to vote at the AGM. The Company has appointed
Mr. S. N. Ananthasubramanian, Practising Company
Secretary, to act as the Scrutinizer, to scrutinize the entire e-voting process in a fair and transparent manner.
The Members desiring to vote through remote e-voting are requested to refer to the detailed procedure given hereinafter. Financial Statements

(a) In case of Members receiving an e-mail from NSDL: (i) 
Open the PDF file ‘HUL remote e-Voting.pdf’ attached to the e-mail, using your Client ID / Folio
No. as password. The PDF file contains your User
ID and Password for e-voting. Please note that the
Password provided in PDF is an ‘Initial Password’. (ii) 
Launch an internet browser and open https://www.evoting.nsdl.com/ (b)  case of Shareholders receiving physical copy of the
In
Notice of AGM and Attendance Slip

(i) 
Initial Password is provided, as follows, at the bottom of the Attendance Slip.
EVEN
(E-Voting Event Number)

USER ID

PASSWORD

–

PROCEDURE FOR REMOTE E-VOTING
I. The Company has entered into an arrangement with National
Securities Depository Limited (NSDL) for facilitating remote e-voting for AGM. The instructions for remote e-voting are as under:

Shareholder Information

–

–

(ii) 
Please follow all steps from Sr. No. (i) to Sr. No.
(xii) mentioned above, to cast vote.

II. In case of any queries, you may refer to the ‘Frequently
Asked Questions’ (FAQs) and ‘e-voting user manual’ available in the downloads section of NSDL’s e-voting website https://evoting.nsdl.com.

III. 
The voting rights shall be as per the number of equity shares held by the Member(s) as on Monday, 22nd June,
2015, being the cut off date. Members are eligible to cast vote electronically only if they are holding shares as on that date.

(iii) Click on Shareholder - Login.

(iv) 
Insert ‘User ID’ and ‘Initial Password’ as noted in step (i) above and click on ‘Login’.

IV. 
Members who have acquired shares after the despatch of the Annual Report and before the book closure may obtain the user ID and Password by sending a request at evoting@nsdl.co.in or levercare.shareholder@unilever. com. (v) 
Password change menu will appear. Change the
Password with a new Password of your choice with minimum 8 digits/characters or combination thereof. Please keep a note of the new Password.
It is strongly recommended not to share your
Password with any person and take utmost care to keep it confidential.


However, if you are already registered with NSDL for remote e-voting, then you can use your existing user ID and password for casting your vote. If you have forgotten your password, you can reset your password by using
“Forgot User Details/Password” option available on www.evoting.nsdl.com or contact NSDL at the following toll free no. 1800-222-990.

(vi) 
Home page of e-voting will open. Click on e-Voting
- Active Voting Cycles.

(vii) Select ‘EVEN’ of Hindustan Unilever Limited.

(viii)  ow you are ready for e-voting as ‘Cast Vote’ page
N
opens.

(ix)  ast your vote by selecting appropriate option
C
and click on ‘Submit’. Click on ‘Confirm’ when prompted. (x) 
Upon confirmation, the message ‘Vote cast successfully’ will be displayed.

(xi) nce you have confirmed your vote on the
O
resolution, you cannot modify your vote.

(xii) 
Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG Format) of the relevant
Board Resolution/ Authority Letter, along with attested specimen signature of the duly authorised signatory(ies) who are authorised to vote, to the
Scrutinizer by an e-mail at scrutinizer@snaco.net with a copy marked to evoting@nsdl.co.in.
Annual Report 2014-15

V. 
The results of the electronic voting shall be declared after the AGM. The results along with the Scrutinizer’s
Report, shall also be placed on the website of the
Company.

11.  case of joint holders, attending the meeting, only such
In
joint holder who is higher in the order of names, will be entitled to vote at the Meeting.
12. 
The Register of Directors and Key Managerial Personnel and their Shareholding maintained under Section 170 of the Companies Act, 2013, the Register of Contracts or arrangements in which Directors are interested under
Section 189 of Companies Act, 2013 and the Certificate from Auditors of the Company certifying that the ‘2001
HLL Stock Option Plan’, ‘2006 HLL Performance Share
Scheme’ and ‘2012 HUL Performance Share Scheme’ are being implemented in accordance with the Securities and
Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014, will be available for inspection at the
Annual General Meeting.

Notice

23

13.  embers can also provide their feedback online, using
M
the ‘Shareholders’ Satisfaction Survey’ form available on the ‘Investor Centre’ page on the website of the Company www.hul.co.in. This feedback will help the Company in improving Shareholder Service Standards.
14. 
Members are requested to note that as per Section 205A of the Companies Act, 1956, dividends not encashed / claimed within seven years from the date of declaration will be transferred to the Investor Education and Protection Fund
(IEPF). After transfer of the said amount to IEPF, no claims in this respect shall lie against IEPF or the Company.
15. Members are requested to contact M/s. Karvy Computershare
Private Limited / Investor Service Department of the
Company for encashing the unclaimed dividends standing to the credit of their account. The detailed dividend history and due dates for transfer to IEPF are available on ‘Investor
Centre’ page on the website of the Company www.hul.co.in
16. 
Members may utilise the facility extended by the Registrar and Transfer Agent for redressal of queries. Members may visit http://karisma.karvy.com and click on Members option for query registration through free identity registration process.
17. he Securities and Exchange Board of India (SEBI) has
T
mandated submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in demat form are, therefore, requested to submit
PAN details to the Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to
M/s. Karvy Computershare Private Limited / Investor Service
Department of the Company.
18.  convenience of the Members and proper conduct of the
For
meeting, entry to the meeting venue will be regulated by
Attendance Slip, which is enclosed with this Annual Report.
Members are requested to sign at the place provided on the
Attendance Slip and hand it over at the Registration Counter at the venue.
19. 
Members desiring any information relating to the accounts are requested to write to the Company well in advance so as to enable the management to keep the information ready.
Registered Office:
Unilever House,
B. D. Sawant Marg,
Chakala, Andheri (East),
Mumbai - 400 099

Mumbai : 8th May, 2015

24

Notice

By Order of the Board

EXPLANATORY STATEMENT
Item No. 7
The Board of Directors of the Company had appointed Ms. Kalpana
Morparia as an Additional Director of the Company with effect from
9th October, 2014. In accordance with the provisions of Section 161 of Companies Act, 2013, Ms. Kalpana Morparia shall hold office up to the date of the forthcoming Annual General Meeting and is eligible to be appointed as an Independent Director for a term upto five years. The Company has received notice under Section 160 of the Companies Act, 2013 from Ms. Kalpana Morparia signifying her candidature as an Independent Director of the Company.
A brief profile of Ms. Kalpana Morparia, including nature of her expertise, is provided at page no. 27 of this Annual Report.
The Company has received a declaration of independence from
Ms. Kalpana Morparia. In the opinion of the Board, Ms. Kalpana
Morparia fulfills the conditions specified in the Companies Act,
2013 and the Equity Listing Agreement, for appointment as
Independent Director of the Company. A copy of the draft Letter of Appointment for Independent Directors, setting out terms and conditions of appointment of Independent Directors is available for inspection at the Registered Office of the Company during business hours on any working day and is also available on the website of the Company www.hul.co.in
None of the Directors or Key Managerial Personnel and their relatives, except Ms. Kalpana Morparia, are concerned or interested (financially or otherwise) in this Resolution. The Board commends the Ordinary Resolution set out at Item no. 7 for approval of the Members.
Item No. 8
The Board of Directors of the Company, on the recommendation of the Audit Committee, approved the appointment and remuneration of M/s. RA & Co, Cost Accountants, to conduct the audit of the cost records of the Company for the financial year ending 31st March, 2016. In terms of the provisions of Section
148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of the
Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the
Members of the Company. Accordingly, consent of the Members is sought to ratify the remuneration payable to the Cost Auditors.
None of the Directors or Key Managerial Personnel and their relatives, are concerned or interested (financially or otherwise) in this Resolution.
The Board commends the Ordinary Resolution set out at
Item no. 8 for the approval of Members.

Dev Bajpai
Executive Director (Legal &
Corporate Affairs) and
Company Secretary
FCS No.: 3354

Item No. 9
The Members of the Company, at the Annual General Meeting held on 26th July, 2013, had approved the payment of remuneration by

Hindustan Unilever Limited

Overview

Reports

way of commission on profits to Non-Executive Directors of the
Company upto a maximum of Rs. 150 lakhs in aggregate, to be allocated in such manner as the Board may determine, from time to time, with effect from 1st January, 2013 for a period of five years.
In line with the globally accepted governance practices, your
Company had adopted a ‘Differential Remuneration Policy’ for Non-Executive Directors under which the payment of remuneration is linked to their attendance at the meetings of the Board or Committees thereof and also depending upon their position in various Committees of the Board, whether that of the
Chairman or Member of the Committees.
In accordance with the approval of the Board, all the Non-Executive
Independent Directors are currently paid a remuneration of
Rs. 15 lakhs per annum by way of fixed commission and a variable commission linked to their attendance at Meetings and also depending upon their position in the Committees. In addition, the
Non-Executive Directors are paid sitting fees for attending the meetings of the Board or Committees thereof.
With the introduction of the Companies Act, 2013 and amendments in the Equity Listing Agreement, the role of Independent
Directors to maintain oversight has gone up. These changes have enhanced the Corporate Governance requirements, particularly
Board Governance and Management, requiring greater time commitments, attention and higher level of oversight of the
Independent Directors.
Further, Mr. Harish Manwani, Non-Executive Chairman of the
Company, has retired from the position of Chief Operating Officer of Unilever with effect from 31st December, 2014. Mr. Manwani, however, continues to act as the Non-Executive Chairman of the
Company. Mr. Harish Manwani, did not receive any remuneration, whether by way of commission or sitting fees from the Company till his retirement from Unilever i.e. 31st December, 2014.
Subsequent to his retirement from Unilever, the Board of Directors have approved the proposal to remunerate Mr. Manwani for his role as the Non-Executive Chairman of the Company with effect from 1st January, 2015. In addition to the responsibility of a NonExecutive Chairman, Mr. Manwani would also be responsible for leading the evaluation process of the Board, its Committees and
Individual Directors under both the Companies Act and Equity
Listing Agreement.
Considering above changes, it is proposed to revise the maximum limit of remuneration payable to Non-Executive Directors from the existing Rs. 150 lakhs to Rs. 300 lakhs. The revised limit shall be made effective from 1st April, 2015 for a period of five years. The revised limit is commensurate with enhanced role and engagement of the Non-Executive Directors of the Company. The remuneration payable to each Non-Executive Director shall be determined by the Board or Committee thereof within this overall limit of Rs. 300 lakhs.

Financial Statements

Shareholder Information

valid for a period of five years commencing 1st April, 2015 upto
31st March, 2020.
None of the Directors or Key Managerial Personnel and their relatives (except Non-Executive Directors), are concerned or interested (financially or otherwise) in this Resolution.
The Board commends the Special Resolution set out at Item no. 9 for the approval of Members.
Item No. 10
The Articles of Association of the Company currently in force were originally adopted when the Company was incorporated under the Companies Act, 1913.
The Articles of Association were amended from time to time in accordance with the provisions of the Companies Act, 1956. With the introduction of the Companies Act, 2013, it is proposed to amend the existing Articles of Association to make it consistent with the provisions of Companies Act, 2013 including the Rules framed thereunder.
A copy of the proposed set of new Articles of Association of the
Company would be available for inspection at the Registered Office of the Company during the business hours on any working day, up to the date of the Annual General Meeting and during the Annual
General Meeting. The proposed draft Articles of Association is available on the Company’s website at www.hul.co.in for perusal by the shareholders.
None of the Directors or Key Managerial Personnel and the relatives, are concerned or interested (financially or otherwise) in this Resolution.
The Board commends the Special Resolution set out at Item no. 10 for the approval of Members.
Registered Office:
Unilever House,
B. D. Sawant Marg,
Chakala, Andheri (East),
Mumbai - 400 099

Mumbai : 8th May, 2015

By Order of the Board

Dev Bajpai
Executive Director (Legal &
Corporate Affairs) and Company Secretary
FCS No.: 3354

The aforesaid maximum limit is enabling in nature to accommodate future revisions, bearing in mind that the approval of Members is

Annual Report 2014-15

Notice

25

PROFILE OF DIRECTORS

(seeking Appointment / Re-appointment)
HARISH MANWANI (DIN : 00045160)
Mr. Harish Manwani (61) assumed charge as the Non-Executive
Chairman of the Company with effect from 1st July, 2005.
Mr. Manwani joined the Company in 1976. He joined the Board of the Company in 1995 as a Director responsible for the Personal
Products business. In addition, he held regional responsibility as the Category Leader for Personal Products for the then Central
Asia & Middle East (CAME) Group.
In 2000, Mr. Manwani moved to UK as Senior Vice President for the Global Hair Care and Oral Care categories and in early
2001, he was appointed as President - Home & Personal Care
(HPC), Latin America Business Group. He has also served as the Chairman of Unilever’s Latin America Advisory Council. In
2004, he was appointed President of the HPC North America
Business Group and in April 2005, was elevated to the Unilever
Executive as the President - Asia & Africa and the region was later extended to include Central and Eastern Europe.
In 2008, Mr. Manwani received the CNBC Asia Business Leader of the Year Award and as a part of the Singapore National Day
Awards 2012, Mr. Manwani was conferred the Public Service
Medal (Friends of Singapore) by the Singapore Government.

Membership(s) / Chairmanship(s) of Board Committees in other Companies
Whirlpool Corporation

Corporate Governance and Nominating Committee -Member
Finance Committee – Member
Pearson PLC

Nomination Committee - Member
Reputation and Responsibility Committee - Member
Economic Development Board, Singapore

Human Resources Committee - Member
Qualcomm Incorporated

Finance Committee - Member
Nielsen N. V.

Compensation Committee - Member

PRADEEP BANERJEE (DIN : 02985965)

Mr. Manwani was the Chief Operating Officer of Unilever and a member of the Unilever Leadership Executive (ULE) until
31st December, 2014, whereafter Mr. Manwani superannuated from Unilever.

Mr. Pradeep Banerjee (56) joined the Company as a Management
Trainee in 1980. He has held a series of assignments in Supply
Chain, Research & Development and Categories. Mr. Banerjee became the Vice President - Technical (Home and Personal Care) in 2003 and later moved to UK in 2005 as Vice President, Global
Supply Chain for Personal Care Category. He has also served as the Vice President for Global Procurement in Singapore.

Mr. Manwani is an Honours Graduate from the Mumbai University and holds a Master Degree in Management Studies. He has also attended the Advanced Management Programme (AMP) at
Harvard Business School.

Mr. Banerjee was appointed as Executive Director - Supply Chain of the Company in March, 2010. He holds a Bachelor’s Degree in
Engineering (Chemical) from IIT Delhi. Mr. Banerjee is a member of Risk Management Committee of the Company.

Mr. Manwani is a member of the Nomination and Remuneration
Committee of the Company.
Directorship in other Companies
Indian School of Business

Directorship in other Companies
Unilever Nepal Limited
Unilever India Exports Limited

Whirlpool Corporation

Membership(s) / Chairmanship(s) of Board Committees in other Companies

Pearson PLC

Unilever India Exports Limited

Economic Development Board, Singapore

Nomination and Remuneration Committee – Member
Corporate Social Responsibility Committee - Member

Qualcomm Incorporated
Nielsen N. V.

26

Profile of Directors

Hindustan Unilever Limited

Overview

Reports

P. B. BALAJI (DIN : 02762983)
Mr. P. B. Balaji (45) joined the Company as a Management
Trainee in May 1993 and has worked in number of roles in finance and supply chain over a period of 20 years.
Mr. P. B. Balaji was the Vice President, Finance for Unilever
America, Supply Chain, based out of Switzerland, responsible for financial aspects of an 18 billion supply chain. Prior to that, he was the Group Chief Accountant of Unilever worldwide based at
London. Before moving to London, Mr. P. B. Balaji has served as the Vice President, Finance for the Home and Personal Care business in India and earlier as the Vice President, Treasury for the AAR region based out of Singapore.
Mr. P. B. Balaji is a Mechanical Engineer from IIT Chennai and has a PGDM from IIM Kolkata. Mr. Balaji is currently the
Executive Director Finance & IT and CFO of the Company.
Mr. P. B. Balaji is a Member of Stakeholders’ Relationship
Committee, Corporate Social Responsibility Committee and Risk
Management Committee of the Company.
Directorship in other Companies
Hindustan Unilever Foundation

Financial Statements

Shareholder Information

and National media for her role as one of the leading women professionals. She is also a Member of the Governing Board of
Bharti Foundation.
Ms. Morparia was appointed as an Independent Director on the
Board of the Company with effect from 9th October, 2014. She is also a Member of the Audit Committee and Corporate Social
Responsibility of the Company.
Directorship in other Companies
Dr. Reddy’s Laboratories Limited
Bennett, Coleman & Company Limited
Philip Morris International Inc
JP Morgan Services India Private Limited
JP Morgan Asset Management India Private Limited
Membership(s) / Chairmanship(s) of Board Committees in other Companies
Dr. Reddy’s Laboratories Ltd

Bhavishya Alliance and Child Nutrition Initiatives

Audit Committee – Member
Nomination, Governance & Compensation Committee - Member
Stakeholders Relationship Committee - Chairperson

Membership(s) / Chairmanship(s) of Board Committees in other Companies

Bennett, Coleman & Company Limited

Nil

Audit Committee – Chairperson
Nomination and Remuneration Committee - Chairperson
Philip Morris International Inc.

KALPANA MORPARIA (DIN : 00046081)
Ms. Kalpana Morparia (65) is the Chief Executive Officer of
JP Morgan, India. Ms. Morparia leads each of the firm’s lines of business – Corporate & Investment Banking and Asset
Management. She also has the responsibility for Service Groups operating in India, including Global Research, Finance, Technology and Operations. Internationally, Ms. Morparia is a member of
JP Morgan’s Asia Pacific Management Committee.
Prior to joining JP Morgan India, Ms. Morparia served as Vice
Chair on the Boards of ICICI Group Companies. She was a Joint
Managing Director of ICICI Group from 2001 to 2007. She had been with the ICICI Group since 1975.
A graduate in law from Bombay University, Ms. Morparia has served on several Committees constituted by the Government of India. She has been recognized by several International

Annual Report 2014-15

Finance Committee – Member
Nominating and Corporate Governance Committee –Chairperson
Product Innovation and Regulatory Affairs Committee –
Member

DIRECTORS’ INTEREST
The Directors may be deemed to be concerned or interested to the extent of shares held by them in the Company as given in the table below:
Name of the Director

No. of Shares

% Holding

Harish Manwani

22,130

0.0010

Pradeep Banerjee

35,038

0.0016

P. B. Balaji

12,406

0.0006

Nil

Nil

Kalpana Morparia

Profile of Directors

27

DIRECTORS’ REPORT

and Management Discussion and Analysis
To the Members,
Your Company’s Directors are pleased to present the 82nd Annual Report of the Company, along with Audited Accounts, for the
Financial Year ended 31st March, 2015.

1. FINANCIAL PERFORMANCE (STANDALONE)
1.1. Results
(Rs. crores)
For the year ended
31st March, 2015

For the year ended
31st March, 2014

Revenue from operations, net of excise

30,805.62

28,019.13

Profit before exceptional items and tax

5,523.12

4,799.71

Profit for the year

4,315.26

3,867.49

(3,881.22)

(3,272.97)

-

(386.75)

1,177.09

743.05

Dividend (including tax on distributed profits)
Transfer to General Reserve
Profit & Loss Account balance carried forward
1.2. Category Wise Turnover

(Rs. crores)
For the year ended
31st March, 2015

For the year ended
31st March, 2014

Sales

Others*

Sales

Others*

14,640.66

235.95

13,460.98

222.43

Personal Products

8,865.03

141.50

7,979.79

141.10

Beverages

3,581.31

50.18

3,275.12

36.74

Packaged Foods

1,863.42

28.38

1,620.75

27.55

Others (including Exports, Chemicals, Infant Care Products, Water, etc.)

1,220.29

92.61

1,071.63

84.67

30,170.71

548.62

27,408.29

512.49

Soaps and Detergents

TOTAL
* Others include service income from operations, relevant to the respective businesses.

28

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

1.3. Summarised Profit and Loss Account

Sale of products less excise duty
Other operational income
Total Revenue
Operating Costs
Profit Before Depreciation, Interest, Tax (PBDIT)
Depreciation
Profit Before Interest & Tax (PBIT)
Other Income (net)
Profit before exceptional items
Exceptional items
Profit Before Tax (PBT)
Taxation
Profit for the year
Basic EPS (Rs.)

For the year ended
31st March, 2015
30,170.50
635.12
30,805.62
(25,597.38)
5,208.24

(Rs. crores)
For the year ended
31st March, 2014
27,408.29
610.84
28,019.13
(23,543.87)
4,475.26

(286.69)
4,921.55
601.57
5,523.12
664.30
6,187.42
(1,872.16)
4,315.26
19.95

(260.55)
4,214.71
585.00
4,799.71
228.68
5,028.39
(1,160.90)
3,867.49
17.88

2. DIVIDEND
Your Directors are pleased to recommend a Final Dividend of
Rs. 9/- per equity share of face value of Re. 1/- each for the year ended 31st March, 2015. The Interim Dividend of Rs. 6/- per equity share was paid on14th November, 2014.
The Final Dividend, subject to the approval of Members at the
Annual General Meeting on 29th June, 2015, will be paid on or after
3rd July, 2015 to the Members whose names appear in the
Register of Members, as on the date of book closure, i.e. from
Tuesday, 23rd June, 2015 to Monday, 29th June, 2015 (both days inclusive). The total dividend for the financial year, including the proposed Final Dividend, amounts to Rs. 15/- per equity share and will absorb Rs. 3,881 crores, including Dividend Distribution
Tax of Rs. 636 crores.

3. RESPONSIBILITY STATEMENT
The Directors confirm that:
•  the preparation of the annual accounts, the applicable in 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 judgments and estimates that are reasonable and prudent, so as to give a true and fair
Annual Report 2014-15

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.

MANAGEMENT DISCUSSION AND
ANALYSIS
To avoid duplication between the Directors’ Report and the
Management Discussion and Analysis, we present below a composite summary of performance of the various businesses and functions of the Company.

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4. ECONOMY AND MARKETS
The year witnessed a marked slowdown in global growth.
Emerging markets were characterised by a sharp fall in growth rates, especially in China. Europe and Japan continued to be under pressure all through the year, while US showed tepid signs of improvement.
In the domestic market, better macroeconomic conditions, coupled with improved sentiment post the general elections, helped India to be among the better performing emerging market economies. There was a slight increase in the GDP growth, while inflation moderated and the Rupee remained relatively stable during the year.
Consumer spending remained muted and this was reflected in a moderate growth across FMCG categories. Given the backdrop of a market slowdown coupled with a volatile input cost environment and heightened competitive intensity, the operating environment for the year continued to be challenging.
Your Company’s performance for the year 2014-15 has to be viewed in the context of aforesaid economic and market environment. 5. 
PERFORMANCE OF BUSINESSES AND
CATEGORIES
In a year of slower economic recovery, reflected in consumer down trading, high competitive intensity, your Company delivered competitive growth, aided by strong marketing and trade investments, a robust innovation pipeline and sharper in-market execution. Your Company sustained a strong focus on innovation across the portfolio and continued to delight consumers with a range of exciting offerings launched during the year. The impact of the regulatory changes in the space of media availability was managed effectively through strategic tie ups with broadcasters and media houses, driving efficiencies in media buying and better deployment of non television led media. The investment in non television and digital media was significantly stepped up during the year. Your Company continued to leverage and benefit from the inputs received from Unilever across various aspects of the business, including technology, innovation and communication.
The commodity markets, especially vegetable oils continued to remain volatile, which coupled with uncertain currency markets posed a major challenge during the year. Given the challenging environment with the start of the fiscal impact during the second half of the year, your Company embarked on ambitious cost savings programmes which have started yielding results. These cost saving programmes along with judicious pricing, without
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compromising on the competitiveness of brand investments, both in terms of technology as well as advertising and promotion, helped deliver profitable growth for the year.
Rural and Modern Trade channels continued as a key focus area for your Company. Your Company continued its focus on innovation to deliver value to consumers. To build awareness and demonstrate the consumer benefits of its brands and product formats, your Company continued to invest in consumer connect programmes. The school contact programme run by your Company’s brands, Lifebuoy and Pepsodent, continued to encourage and educate children on the importance and correct method of hand washing and brushing teeth. The rural consumer activation programme “Khushiyon ki Doli” covered ~5,500 villages during the year, to build awareness of emerging categories of the future. Your Company has set up an innovative mobile consumer reach initiative ‘Kan Khajura Tesan’ – a mobile entertainment radio channel in which the content is interspersed with HUL brand communication, to reach consumers in media dark rural areas. ‘Kan Khajura Tesan’ is now the largest mobile radio station in the State of Bihar, where it was piloted and has now been extended to North India. This initiative was recognised with three prestigious Lions Gold Awards at Cannes. Your Company continued to strengthen its digital deployment capability, including stepping up its capability and structure to harness the newly emerging e-commerce channel. Your Company further leveraged the sharp geographic focus outlined in the ‘Winning In
Many Indias’ (WIMI) structure during the year. This will continue to be a key strategic thrust for the future.
The business of your Company falls under five segments. Soaps and Detergents segments comprises categories of Soaps,
Detergents and Household Care, Personal Products segment includes categories of Skin Care, Hair Care, Oral Care, Colour
Cosmetics and Deodorants. Beverages segment covers Tea and
Coffee. Packaged foods segment includes Culinary and Bakery
Products, Frozen Desserts and Ice cream. The residual segment of ‘Others’ is primarily made up of Water business.

5.1 Soaps and Detergents
Against the backdrop of a volatile environment, the Soaps and Detergents segment delivered a healthy competitive performance with turnover growth of 9% during the year. The growth was profitable with segmental profit increasing by
14% while sustaining investments behind quality and brand marketing. Soaps category grew competitively in a market, which witnessed volatile commodity prices coupled with subdued growth on volumes. Your Company managed the business dynamically during this period of volatility to deliver a healthy performance on both topline and bottomline. Dynamic and decisive pricing actions were taken across Dove, Lifebuoy, Lux and Liril. Lifebuoy continued to perform well by reaching its highest ever market
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share and has crossed the Rs. 2,000 crore mark, a fitting example of what a brand with a purpose and compelling proposition can achieve. In the premium segment, Dove continued to deliver volume led growth, driven by the consistency of its proposition.
Lux was re-launched during the year with a superior fragrance proposition, which met with good consumer response. Your
Company continued to invest in developing the market in the liquids format, viz. handwash and bodywash.
Detergents category delivered competitive growth, largely driven by mix improvement and price growth. The slow economic environment continued to adversely impact category growths.
Your Company has been focusing on driving upgradation in this category by offering consumers a superior experience and value proposition. Surf and Comfort continued to lead category premiumisation with high double digit growth, buoyed by the continuing momentum on Surf Excel Easy Wash and good growth in rest of the Surf portfolio. The steady performance of Surf over the last few years has earned it the distinction of being the Company’s largest brand now. The performance in
Rin improved with the new thematic communication and the bars portfolio continued to lead upgradation, while powders witnessed moderate growth. Wheel powder witnessed muted growth for the year. The three laundry brands - Surf, Wheel and
Rin - are now Rs. 2,000 crore brands, which is a source of pride for your Company. The nascent segments of Machine Wash (Surf
Excel Matic) and Fabric Conditioners (Comfort) continued to perform well. The category witnessed significant media heat and competitive intensity during the year. Your Company was agile in passing the benefits of decline in commodity costs to consumers and thus remained competitive in the market. Your Company will continue to focus on driving innovations, exercising cost control across the value chain and delivering effective communication to win in the highly competitive Detergents category.
In Household Care, Vim delivered yet another year of double digit growth. The growth was driven by the tub and liquids portfolio.
With the claim of de-greasing through the power of 100 lemons,
Vim continued to delight consumers through superior product quality, focused advertising and a strong activation programme.
The Vim tub segment continued to grow strongly with launch of 250 gm pack in the third quarter to complement the existing
500 gm pack. This is expected to consolidate the presence of the brand across dishwash bars and help reach new consumers. The brand also has a strong programme to build new consumers across the country especially in rural. The Domex Toilet Academy
(DTA) programme is being progressively scaled up with the aim to eradicate open defecation by building toilets and to improve sanitation facilities.

5.2 Personal Products
Personal Products consist of Skin Care, Hair Care, Oral Care,
Colour Cosmetics and Deodorants. In a challenging market

Annual Report 2014-15

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Shareholder Information

environment, where the growth of discretionary categories has continued to remain under pressure, the Personal Products segment delivered a healthy turnover growth of 11%. Segmental profit improved by 17%. Your Company continued to invest for competitive growth in its core categories and build the segments of the future.
Skin Care category registered competitive growth in a slow market. Face Care delivered growth ahead of market across skin lightening, facial cleansing, anti-ageing and men’s formats.
Fair & Lovely delivered good growth in the second year of the re-launch of the ‘Best Ever’ Fair & Lovely - a product that is tailor-made to deliver superior skin lightening results in India.
The Face Wash segment registered significantly higher growth compared to market across brands. Pond’s continued to deliver double digit growth led by the good performance particularly of the skin lightening and talcs portfolio. The activation around
‘spot removal’ buoyed Pond’s White Beauty to high double digit growth. During the year, Pond’s also forayed into the male grooming segment through the launch of Pond’s Men that includes facewashes and moisturisers, which has performed well. Lakmé sustained its growth momentum during the year.
A new hydration range Lakmé Absolute was introduced under
Lakmé during the year. Your Company continued to lead market development with Vaseline through the ‘healing power’ activation on the brand.
Hair Care delivered another strong year of competitive volume led double digit growth. Your Company continued to deploy innovations and impactful campaigns on its core brands while leading market development in the emerging conditioners segment. The ‘Go Play’ campaign under the brand Dove was well received and the brand grew in high double digits during the year. TRESemmé performed well and the brand continued to drive exponential growth in its second year of launch. In line with its brand proposition of ‘Salon like hair, at home everyday’, your Company launched a new innovation ‘Spa Rejuvenation’ under the brand which has been well received. Clinic Plus consolidated its position as the largest shampoo franchise; growing in strong double digits during the year. As for Sunsilk brand, it leveraged festive occasions across the country, through a structured communication platform with a sharp geographical focus as also high profile Bollywood movie tie-ups. Toni&Guy, the premium brand from the Unilever hair portfolio was rolled out in key premium outlets during the year.
The year was challenging for the Oral Care business which saw high competitive and promotional intensity. Your Company continued to invest behind its brands, matching promotional intensity and landing exciting innovations during the year.
Closeup continued to lead the freshness proposition by expanding mental and physical reach in focus markets. Closeup launched a new variant, Diamond Attraction, a first-of-its-kind premium whitening variant which works instantly to make teeth whiter and
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over time, it continues to work to give a whiter, brighter and more radiant smile. The re-launch of Pepsodent Gum Care has been successful. Your Company also continued to invest in building oral health and hygiene, and reached out to children across the country through a school contact programme.
Lakmé Colors business sustained double digit growth during the year despite slow markets and the sluggish rate of premiumisation for the year. Lakmé continues to drive premiumisation by upgrading users through long lasting 9 to 5 platform, and bringing the global make-up trends to India under the Absolute platform. Lakmé successfully launched the gloss look as the global trend in India this year at the Lakmé Fashion
Week with a range of products under Absolute Gloss Addict.
It also launched a first of its kind Makeup Pro App, which is a real-time virtual makeover mobile application with the complete palette of shades and looks across the Lakmé portfolio. The launch of creaseless lipsticks and the introduction of new
Kajal trends with Eyeconic shades under the ‘9 to 5’ range was received well.
In the Deodorant portfolio, through Axe, your Company continued to deploy impactful campaigns and activation including the ‘Axe
Boat Party’, which was launched for the first time in India. During the year, your Company entered into the perfume spray segment with the launch of ‘Axe Signature’, which has seen an increase in consumer franchise within a short period of time. Unilever has commissioned a world-class deodorants manufacturing facility in Khamgaon, during the year. This facility will provide a regular supply of high quality deodorant products to cater to the markets across Asia, including India. This will support the indigenisation of production for a large portion of deodorants in the aerosol form, which is currently imported.

5.3 Beverages
The Beverages segment delivered 9% turnover growth in the year, ahead of the market, with broad based growth across both
Tea and Coffee. The growth across key brands was driven by a strengthened mix and focused in-market activities. Price growth was impacted by softer commodity costs during the second half of the year.
Your Company drove its five leading brand positions across India, with both the premium and popular brands growing competitively.
Taj Mahal and 3 Roses continued to drive premiumisation. Red
Label offered unbranded tea users a good mix of superior, great tasting tea for value. Red Label and 3 Roses Natural Care Tea with its differentiated immunity benefit witnessed exponential growth. Your Company grew the Green Tea category exponentially during the year on the back of sustained market development.
The Instant Coffee business delivered strong performance during the year with BRU Gold doing particularly well.

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5.4 Packaged Foods
The Packaged Foods segment of your Company comprises culinary products such as jams, ketchups and squashes under
Kissan; soups, soupy noodles and meal makers under Knorr; branded staples (atta and salt) under Annapurna; bakery products under Modern; and frozen desserts/ ice creams under Kwality
Walls and Magnum. The segment delivered a strong 15% turnover growth with segmental profit growing by 36% during the year, as your Company continued to drive growth in topline and bottom line, while continuing to invest in building this business.
Kissan sustained its strong, consistent performance, delivering another year of double digit growth, driven by impactful activation around unlocking everyday relevance for consumers. The brand reinforced its ‘real’ credentials focusing on the fact that Kissan is made from 100% real fruits and vegetables through ‘Kissanpur’ and other powerful activations. The year also witnessed the relaunch of entire Kissan range with exciting new packaging. The consumer preference, along with a strong distribution increase in both Ketchup and Jam, resulted in the business growing faster than the market.
The performance of Knorr in the year was led by soups, with the convenient instant soups single serve format performing particularly well. Your Company expanded its instant soup offerings with exciting new flavors at incredible price points.
This supported by widespread sampling ensured that the soap category has grown in relevance as a healthy option to tide over in between meal hunger pangs.
Knorr Noodles was restaged at the end of the year with exciting new Chinese flavours. The Knorr Meal Maker portfolio continued to be led by in-store sampling and activations.
During the year, your Company’s desserts portfolio re-launched its
‘Brown & Polson’ and ‘Rex’ brands, with positive initial response.
Your Company continued its focus on improving the profitability of the Annapurna business by driving efficiencies across the value chain. Your Company also scaled up its experiential marketing initiatives.
Given the relevance of market development categories, it is critical that consumers sample your Company’s products and discover the great taste and convenience that the products offer. Foods
Beverages reached over 12 million consumers last year through sampling. Modern Foods, the division which deals with bakery products continued the good performance both in terms of top line and bottom line. Despite low growth in bread industry due to challenges posed by other breakfast options and low entry rate in the segment, Modern Foods managed to maintain leadership position in most of the markets. Ability to innovate fast with value

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added product range like oats bread, rusk, cakes, helped Modern
Foods to stay ahead in the market. Superior distribution system and better play in emerging channels like Modern Trade were the highlights of the year’s operational excellence of the business.
The Frozen Desserts and Ice Cream business which had a challenging previous year, delivered a strong performance with double digit growth and improved profitability this year. The business continued to unlock distribution growth, making the brands more accessible for consumers. Cornetto and Paddle
Pop grew strongly during the year with Cola Blast and Jiggly
Jelly receiving good response from kids. Cornetto is connecting with consumers through digital platform in addition to traditional media. Post the successful launch of Magnum, the premium indulgent ice-cream brand, in Chennai, Mumbai, Pune, Bangalore and Hyderabad, your Company expanded this brand to Delhi and
Kolkata, during the year.

5.5 Water
Pureit is the world’s largest selling range of water purifiers in non-pitcher and non-faucet mount segment. Pureit delivered a double digit growth in a tough consumer durable market while improving margins significantly. The brand continues to strengthen its position in a slow and weak consumer durables market. During the year, Pureit introduced a breakthrough innovation in the premium segment, Ultima (RO+UV purifier) with superior design, aesthetics and superior functionality. Within a year the product has been able to gain strong presence in the premium RO+UV segment, with a double digit market share in Modern Trade. The Pureit brand continued to dominate the self-fill non electric purifiers with the communication focusing on building relevance around safe drinking water. During the year, Pureit focused on driving Non Electric Storage Purifers
Range through the Micro Finance Institutions and targeted the premium consumers with a model of leads and referrals.
Pureit also pioneered an exchange programme in the Water
Purifier Category, actively up trading consumers. Pureit has received ‘Innovating for a Better Tomorrow’ award by CNN IBN in partnership with Infosys, for an exemplary innovation in India that has brought about progressive change.

5.6 Hindustan Unilever Network
The year continued to be extremely challenging one for the entire direct selling industry, including your Company, due to ambiguity on acceptable norms for direct selling in India. As a responsible corporate citizen, your Company has always conducted its business within the framework of law.
Given the challenging operating context of the business, your
Company conducted a strategic review of the business. As a result of this review, your Company has changed the servicing model from a physical servicing model to an online ordering and fulfilment model.
Annual Report 2014-15

Financial Statements

Shareholder Information

Your Company has also optimised its product portfolio to bring focus on a differentiated but limited product range and also changed its compensation plan.

5.7 Non-FMCG Exports
Rice exports showed a double digit growth, while continuing to expand geographies, looking for seeding opportunities and improving its mix.

5.8 Subsidiaries and Joint Venture
Pursuant to the Scheme of Amalgamation sanctioned by the
Honorable High Court of Bombay, Aquagel Chemicals Private
Limited, a subsidiary of the Company was amalgamated with Lakmé Lever Private Limited, another subsidiary of the
Company, with effect from 1st April, 2014. Consequent to the said amalgamation, Aquagel Chemicals Private Limited ceased to be a subsidiary of the Company.
During the year, your Company has divested its entire shareholding in Brooke Bond Real Estates Private Limited
(BBREPL), a subsidiary of the Company, in favour of
M/s. Brigade Properties Private Limited, a subsidiary of M/s.
Brigade Enterprises Limited. Consequently, BBREPL ceased to be a subsidiary of the Company with effect from 23rd March,
2015.
During the year, your Company increased its stake in Bhavishya
Alliance Child Nutrition Initiatives, a not-for-profit company, by acquiring the balance 75% of the equity share capital, thereby making it a wholly-owned subsidiary. Bhavishya Alliance was incorporated on 3rd October, 2010 as a not-for-profit company to work in the areas of social, economical and environmental issues The summary of performance of the subsidiary and joint venture companies is provided below:
Unilever India Exports Limited
Unilever India Exports Limited (UIEL) is a subsidiary of the
Company, engaged in FMCG exports business. The focus of the FMCG exports operation is two-fold: to develop overseas markets by driving distribution of ethnic brands, such as Kissan,
BRU, Brooke Bond, Lakmé, Pears among the Indian diaspora in international markets and to effectively provide cross-border sourcing of FMCG products to other Unilever companies across the world.
The Home and Personal Care segment in the exports business has witnessed a stable year, driven primarily by
Personal Wash. Brands like Pears and Lakmé have registered healthy performance in the focused markets through strong

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communication and activation support. In case of Unilever sourcing countries, categories like Home Care and Personal
Wash have delivered healthy growth. The Foods & Beverages segment saw expansion into new geographies. Overall, the business delivered healthy profitability through focus on effective cost management.
Lakme Lever Private Limited
Lakme Lever Private Limited (LLPL), subsidiary of the Company, has 230 salons, of which 56 are Company owned / managed and
174 are franchisee salons. LLPL delivered double digit growth for the fifth consecutive year, although the market slowed down by consumers pulling back on discretionary spends. While net expansion during the financial year was 25 salons, the business also ‘reinvented’ half the network with backstage inspired interiors and a trendy Runway Secrets portfolio. Innovations like the Moroccan Liquid Gold Ritual and Nutristraight Quadratherapy have delighted consumers and driven growth. Your Company will continue to support LLPL to drive growth in this attractive market opportunity.
Pond’s Exports Limited
The leather business, under the subsidiary Pond’s Exports
Limited, showed a stellar performance, with healthy operating profitability and double digit sales growth. This performance was achieved through new product designs, excellent customer service, world-class quality and cost innovations.
Unilever Nepal Limited
Unilever Nepal Limited (UNL), subsidiary of the Company, is engaged in manufacturing, marketing and sale of detergents, toilet soaps, personal products, soap noodles and laundry soaps in Nepal. UNL had yet another challenging year given the difficult political environment and low levels of GDP growth. Additionally, the emigration of skilled and unskilled labour continued to impact the consumption and growth of FMCG categories.
Despite strong challenges, UNL managed to deliver a robust double digit growth of 13% and PAT increase by 22%. Despite a slowdown of internal growth, our market presence continued to be strong reflecting the competitive growth of our brands and slowdown in the overall market. Unilever Nepal brands continue to be market leaders in all the categories they operate in.
The country was recently affected by a natural tragedy. All employees and assets of the company were accounted safe and there was no major damage.
Hindustan Unilever Foundation
Hindustan Unilever Foundation (HUF) is a not-for-profit company that anchors various community development initiatives of
Hindustan Unilever Limited. HUF supports national priorities for socio-economic development through its ‘Water for Public Good’

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programme. All projects carried out under HUF complies with the requirements of the CSR Rules of the Companies Act, 2013.
HUF operates the ‘Water for Public Good’ programme in 90 districts across India in partnership with 20 NGOs. HUF also supports several knowledge initiatives in this area.
HUF has initiated projects in 6,000 villages and has created a collective and cumulative water potential of nearly 100 billion litres. The cumulative impacts of these projects initiated by HUF have been independently assured.
Bhavishya Alliance Child Nutrition Initiatives
Bhavishya Alliance Child Nutrition Initiatives (BACNI) is a notfor-profit subsidiary of the Company, and is working on the hand washing behaviour change programme in the State of Bihar. The programme aims to reduce diarrhoea and pneumonia in children under the age of five years across Bihar, by implementing the
‘School of 5’ hand washing project in rural schools to reach
9 million school children.
In addition, Daverashola Estates Private Limited and Jamnagar
Properties Private Limited are subsidiaries of the Company, which have been exploring opportunities to enter into appropriate business activities. Levers Associated Trust Limited, Levindra
Trust Limited and Hindlever Trust Limited, subsidiaries of the
Company, act as trustees of the employee benefits trusts of the
Company.
Kimberly Clark Lever Private Limited
Kimberly Clark Lever Private Limited (KCL) is a joint venture between your Company and Kimberly-Clark Corporation, USA, with infant care diapers as its primary product category. The business maintained its growth momentum during the year delivering healthy double digit growth. With the consumer preference shifting towards pants format, the category construct continued to move in favour of pants. Pants volume witnessed healthy growth and more than doubled over previous years.
Huggies brand saw a healthy increase of share within the pants format. To meet the growing demand of pants format, investments have been made to increase the production capacity.
The low penetration and consumption levels in India offer significant growth potential for this category. The competitive intensity in the infant care category remains high and continues to attract both local and global competitors. KCL will continue to drive growth in business through innovations that positively impact consumers. As a joint venture partner, your Company remains committed to this business.
Pursuant to the provisions of Section 129(3) of the Companies
Act, 2013, a statement containing salient features of financial statements of subsidiaries, associates and joint venture companies in Form AOC 1 is attached to the Accounts. The separate audited financial statements in respect of each of the
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subsidiary companies shall be kept open for inspection at the
Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting.
Your Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of each of the subsidiary companies is also available on the website of your Company at www.hul.co.in/investorrelations/
AnnualReports/
Your Company has obtained a certificate from the Statutory
Auditors certifying that the Company is in compliance with the
FEMA regulations with respect to the downstream investments made in its subsidiaries and joint venture companies during the year.

6. CUSTOMER DEVELOPMENT
During the year, your Company has undertaken and delivered several ambitious initiatives to reaffirm its leadership position across the country and be the preferred channel partner for over
2,500 redistribution stockists and millions of retailers.
Your Company has always strived for everyday execution excellence in Customer Development, which was at the center of the ambitious Big “Q” – Harvest, Impact and Transform (HIT) agenda. During the year, your Company took on the challenge of increasing sales throughput of the outlets added under its coverage expansion programmes. Harvesting the growth potential of the new stores contributed significantly to the aim of winning in the market place and resulted in improving the reach and distribution of the products. Impact stores, the high contribution stores, were chosen to drive business through increased point of sale cisibility and cluster breakup execution in stores and these have contributed to your Company’s growth.
Your Company has put in place the plan of building brands in stores in the Modern Trade environment, and intend to scale up the initiative based on the learnings built.
Your Company also undertook the ambitious transformation agenda of ‘Winning In Many Indias’ (WIMI) to leverage the diversity of people, culture, habits, economics and demographics that exists across India. Your Company has structured itself to better serve the diverse opportunities and consumer needs across the country. As a key step in executing the WIMI strategy, your Company set up the fifth sales branch in Lucknow to unlock growth in Central India. This geography with over 500 million population holds immense potential for sustainable growth over the next many years. In line with the WIMI strategy, performance of the country will be driven through 14 consumer clusters, reporting into 5 sales branches, focusing the categories

Annual Report 2014-15

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Shareholder Information

on the unique consumer needs in each cluster. Plans have been put in place to leverage the new WIMI structure through sharper, localised marketing and sales initiatives, to enable your Company to win with consumers and shoppers across all consumer clusters. Modern Trade continues to be a focus area for your Company. Renewed focus on joint business planning, ensuring best-in-class on shelf availability and delivering clutter breaking product launches have brought in fresh momentum in this channel and were appreciated by Modern Trade customers.
Your Company was once again awarded the ‘Best Supplier’ by leading Modern Trade customers.
E-commerce is an emerging and fast growing channel in the country and your Company is well placed to lead category growth in this channel. Your Company has developed a comprehensive e-commerce strategy and execution roadmap, and has a team in place to drive disproportionate growth in this channel in the coming years.
Your Company has been a thought leader in the area of big data and analytics as a tool to drive sustainable growth. Using the 115 million transactions captured every month, your Company uses intelligent analytics at the back end, to deliver better on shelf availability in stores. We will continue to invest in the power of knowledge and big data, to stay at the forefront of execution, and enhance the impact and effectiveness of our execution.
Your Company continues to focus and drive ‘Project Shakti’, the initiative for driving social responsibility and sustainability, aimed at enhancing livelihoods and building opportunities for small scale entrepreneurs in rural India.
Your Company runs dedicated call centres for distributors as well as retailers, which enable them to connect directly with the Company anytime, thereby achieving world class customer service. Mandatory customer immersion sessions for Customer
Development team gives them the opportunity to spend more time with distributors and retailers, observing and interacting with them in their milieu to understand their needs better. These initiatives have helped to keep the needs of the customer as the guiding force for all your Company’s activities.

7. SUPPLY CHAIN
Your Company’s supply chain agenda remained focused on five key areas: customer service excellence, consumer and customer quality, end to end cash and cost savings program, leading with innovation & technology and sustainability.
Your Company made significant progress in its vision to deliver customer service excellence to enable sustainable growth.

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The service delivery standards improved steadily with CCFOT
(Customer Case Fill-On-Time) increasing to 94%. Sharper focus on identified portfolio, channel, and geography opportunities to drive end to end performance were the key highlights for the year.
This resulted in fit for purpose strategies for priority elements of our Supply Chain. Your Company’s supply chain continued to be recognised by its customers for the progress in this area.
Your Company continued to strengthen the Sales and Operation
Planning (S&OP) and Innovation Process Management (IPM) processes,which are the foundation of our performance.
Product Quality on shelf is one of the highest priorities for your
Company. Your Company carried out an end-to-end quality review covering every point along the Supply Chain from supplier to shelf, which led to strategic quality improvement initiatives. Focus was increased further on working closely with the suppliers and partners in warehousing and logistics to implement specific quality improvement projects in these areas.
These quality programmes have resulted in 40% reduction in consumer complaints which is a proof of the effectiveness of these interventions.
Your Company has a robust Supply Chain savings programme with continuous focus on end-to-end cost reduction with new technologies, processes and methods. During the year, your
Company delivered 5% saving in Supply Chain cost which is driven by various cross functional teams, such as R&D,
Procurement, Manufacturing and Logistics. The robust savings programmes were driven through workshops, rigorous monthly reviews, project trackers and a strong ideas’ funnel.
Your Company has achieved good progress in usage of biogenic fuels as energy source in factories. During the year, your
Company used almost 60,000 tonnes of renewable biomass as fuel, saving corresponding amount of fossil fuels. This has been done through installation of specially designed biomass boilers, thermic fluid heaters and hot air generators capable of efficiently burning locally available agri-waste like paddy straw, cotton stalks, sawdust and bagasse.
Your Company has overhauled rainwater harvesting facilities in all its plants as well as upgraded equipment for more efficient use of water. Optimising operation of cooling towers, reduction of drift losses, reuse of gland sealing water, installation of mechanical seals, segregation of process streams, improvement of CIP systems, installation of reverse osmosis plants and similar technology interventions allowed your Company to reduce its fresh water usage from 2,715 million litres in 2008 to
2,111 million litres in 2014, despite volume increase.
Your Company progressed well in implementing its longterm manufacturing strategy, with efficient capacity creation while introducing new technologies to support volume growth. To

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achieve manufacturing excellence, your Company further accelerated the transformation of its manufacturing operations through the use of World Class Manufacturing techniques.
This will lead to further improvement in efficiencies and cost performance. Your Company has identified significant cost reduction opportunities in production costs, which are converted into projects and monitored closely, in the sites where World
Class Manufacturing programme has been introduced.
There has been a 6% improvement in innovation OTIF (On Time in Full) with more than 80 innovation networks being executed during the year, touching about 60% of the product portfolio. The focus on bigger and faster innovation and capability development has significantly helped the Company launch innovations first time right.
Through Partner to Win programme, developed by Unilever globally, your Company continued the joint business plan journey with suppliers and business partners. This has resulted in reduced lead time and costs and improved reliability and new innovation delivery.

8. RESEARCH & DEVELOPMENT
Your Company continues to derive sustainable benefit from the strong foundation and long tradition of Research & Development
(R&D), which differentiates it from many others. New products, processes and benefits flow from work done in various Unilever
R&D centres across the globe, as well as in the R&D centres in India. The R&D labs in Mumbai and Bengaluru are aligned to Unilever’s global R&D. Many of the projects executed out of these centres are of global relevance, and have a strong focus on regional needs and the overall Developing & Emerging (D&E) world. With world-class facilities and a superior science and technology culture, your Company is able to attract the best talent to provide a significant technology differentiation to its products and processes.
These R&D programmes are focused on the development of breakthrough and proprietary technologies with innovative consumer propositions. The R&D team of over 750 people comprises highly qualified scientists and technologists working in areas of Home Care, Personal Care, Foods & Beverages and Water Purification. The R&D group also comprises critical functional capability teams in the areas of Regulatory, Clinicals,
Digital R&D, Product & Environment Safety and Open Innovation.
Your Company had entered into a Technical Collaboration
Agreement (TCA) and a Trade Mark License Agreement (TMLA) with Unilever in 2012. The TCA provides for payment of royalty on net sales of specific products manufactured by your Company,

Hindustan Unilever Limited

Overview

Reports

with technical inputs developed by Unilever. The TMLA provides for the payment of trademark royalty, as a percentage of net sales on specific brands, where Unilever owns the trade mark in India.
Given that the pace of innovations and the scope of services have expanded over the years and that Unilever’s global resources are providing greater expertise, superior innovations and scale advantage for all Unilever entities, your Company is enjoying the benefits of an increasing stream of new products and innovations, backed by technology and know-how from Unilever such as those explained below.
During the year, your Company introduced several innovations in Soaps and Detergents category. In Detergents category, Surf
Excel Matics powder formulations were improved. External brand equity studies adjudged Surf Excel as amongst the top 10 brands in India. Wheel powder mix was re-launched with new communication on pack as ‘Naya and Damdar’. The mix also enhanced the formulation with improved efficacy.
In the Household Care category, Vim bar was re-launched with an improved polycoat, changed shape and a strong claim of
‘lasts up to 4 days longer’. Vim bars own patented technology of
‘Polycoat’ which enables this competitive advantage.
In the Soaps category, Lifebuoy had one of its most successful re-launches ever with a new more efficacious formulation leveraging ActivNaturol Shield (ANS) - the R&D discovered synergistic combination of sustainable natural actives with proven superior efficacy against germs including evolved germs.
The technology and the claims on Lifebuoy were endorsed and approved by the world renowned Royal Society for Public
Health (RSPH), in its first ever endorsement of a soap brand.
The technology also enabled Lifebuoy mount and supported a strong consumer oriented campaign. Lifebuoy hand wash liquid introduced a first of its kind viewstrip to enable consumers track usage and refill the pumps. In addition, Lifebuoy also launched its revolutionary self-foaming hand wash under its Clinicare10 range, which has been specially formulated to save more than
18% water while being ultra-mild and yet delivering 99.9% germ protection in 10 seconds. It also gives 10 times better germ protection compared to ordinary soap bars. Lifebuoy partnered with Dow Chemicals to reformulate the Rs. 5 minibar providing better skin feel, better value and hence better affordability to consumers while providing them unbeatable germ protection.
This was awarded the 4th breakthrough to World Challenges award by the Board of Dow. Lux core range saw introduction of new visuals of flower embossing, active silk extract and new packaging which were re-lauched as Lux Soft Touch and Lux
Velvet Touch with SilkEssenceTM.
In the Skin Care category, Fair and Lovely launched its advanced multivitamin cream in a re-closable sachet at an accessible price point of Rs. 5. Pond’s for the first time launched a range of skin care products for men, that offers brightening and oil control
Annual Report 2014-15

Financial Statements

Shareholder Information

benefits through its moisturisers and face wash formats. Pond’s
White Beauty with its revolutionary GenWhiteTM Active Technology launched new daily anti-spot fairness cream with non oily, light feel sensory. Lakmé continues to lead premiumisation in skin care by launching new Lakmé Absolute Gloss range (entry in premium hydration) and innovative formats under the Lakmé
Perfect Radiance range (Serums and Gel based creme).
Oral Care witnessed the launch of Closeup Diamond Attraction toothpaste with a Unilever Patented Technology to deliver whiter teeth in one brush. This launch marked your Company’s entry into the beauty segment in oral care. Pepsodent Gumcare was also re-launched elevating it to the expert protection advanced care range.
In the Hair category, Dove continued its journey of bringing improved products to its consumers and re-launched its conditioner range with new technology to provide efficient conditioning. New variants were introduced in TRESemmé focussing on the needs of the modern consumer. TRESemmé
SPA Rejuvenation was introduced to allow the consumer to experience Spa-like benefits at home.
The Deodorant category had strategic launches this year. Axe
Signature range was launched as the first ever body perfume range from your Company. The 4 variants of Axe Signature range were a successful launch in the market place with superior claim of 3 times more perfume in every drop. In the spray range,
Axe Gold temptation variant was launched as a special variant to
Dark Temptation.
In Water business, your Company launched a new storage purifier
‘Pureit Advanced 14L’ with premium aesthetics which provide double purification benefit through a combination of membrane and biocide technologies. In the premium RO Purifier segment,
‘Marvella RO+UV’ device was launched with superior control logic and aesthetics. In addition, the ‘Pureit Ultima RO+UV’ device launched in early 2014 has proved to be one of the most successful innovations for your Company during the year.
The Foods R&D team focused on re-launch of the Kissan range with product re-launches both in squash, jams and in tomato sauces. For the Knorr brand, major initiatives happened around
Knorr Cup-a-soup; establishing soups as a great tasting snack and healthier alternative to deep fried snacks.
The year saw key strategic launches under tea brands contributing to good business growth. Under green tea category, the range was further extended with two new flavours launched
- ‘Tulsi’ and ‘Honey Lemon’, which helped in accelerating the category growth. In Coffee, small pack blend was launched with improved aroma and sensorial. Through R&D initiatives, cost savings were also delivered to manage commodity inflation.

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37

In the Frozen Desserts category, Kwality Wall’s launched ‘Mango
Creamy Delight’ variant enriched with real Alphonso mango.
Under kid’s platform, new Paddle Pop ‘Cola blast’ was launched to create excitement among kids and deliver a unique experience.
R&D has further contributed to the Company’s sustainability agenda by enabling significant reduction in packaging material consumption through several material efficiency initiatives.
Your Company is committed to reduce its packaging waste footprint. For the Laundry category, your Company reduced paper consumption by 1,700 tonnes without compromising on delivered quality. The re-launch of Lifebuoy involved a significant improvement on the pack design and new technology for a more cost effective wrapper which resulted in a saving of 300 tonnes on polymer adhesives besides more sustainable packaging for the handwash pumps and refills resulting in a savings of 35 tonnes of polymer. There has been a paperboard savings of 2,500 tonnes which has been a result of improving the paper quality with respect to compression strength and hence innovating on the design for sustainability. Packaging material usage was reduced by around 120 tonnes across Beverages and Ice creams. In the Foods category, the packaging development team achieved a major improvement of the jam jar with state-of-art glass technology and improved jar designs. Your Company’s R&D is also working on novel technologies to help save substantial amount of water.
With strong scientific expertise and the potential to deliver high value technologies, your Company is well placed to meet the challenges emanating from the increased competition intensity and the opportunities to drive faster growth on the back of a strong support from R&D as well as brand development capabilities. 8.1. Technology Absorption
The Company maintains interaction with Unilever internationally.
This is facilitated through well co-ordinated management exchange programme. The programme includes setting out governing guidelines pertaining to identifying areas of research, agreeing timelines, resource requirements etc.; scientific research based on hypothesis testing and experimentation which leads to new / improved / alternative technologies; support the development of launch ready product formulation based on research and implementation of the launch ready product formulations in specific markets. The benefits derived by your Company through technology absorption and Research
& Development are detailed above. Your Company continuously imports technology from Unilever under the Technical
Collaboration Agreement and the same is fully absorbed.
Your Company is receiving support and guidance from Unilever to drive functional excellence in marketing, supply management,

38

Directors’ Report

media buying and IT, among others, which helps your Company to 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.
The details of expenditure on scientific Research and
Development at the Company’s in-house R&D facilities eligible for a weighted deduction under Section 35(2AB) of the Income
Tax Act, 1961 for the year ended 31st March, 2015, are as follows:
• Capital Expenditure

: Rs. 2.54 crores

• Revenue Expenditure : Rs. 29.60 crores

9. 
ENVIRONMENT, SAFETY, HEALTH AND
ENERGY CONSERVATION
Your Company has a vision of being a ‘Zero Injury’ organisation. The
Compass, your Company’s strategic framework, integrates Safety as a non-negotiable value. Over the past years, your Company has been progressing well in terms of reducing recordable injury frequency rates across its operations. The injury rates in 2014 were less than one-fourth of the injury rates in 2008. The safety incident rate measured as Total Recordable Frequency Rate (TRFR) in 2014 was only 0.4 incidents per million man-hours worked.
This has been achieved through a combination of training and hardware upgradation leveraging core technology concepts and safety standards from Unilever. A customised behavioral safety framework ‘BeSafE’ developed by Unilever is being rolled out in India. Rigorous deployment of BeSafE across your Company targeting change in behaviour patterns and elimination of unsafe acts has played a big part in eliminating safety hazards from workplaces. Sustainability is deeply rooted in all the operations of your
Company ranging from sourcing to manufacturing and logistics.
Your Company’s aim is to achieve significant year-on-year reduction in environmental impact of manufacturing operations, in line with Unilever Sustainability Living Plan (USLP). Following are some of the milestones of environmental performance during the year:
• 
Two more biomass fired burners (one hot air generator and one boiler) were commissioned in 2014. Use of biogenic fuels like biomass briquettes, spent tea leaves and coffee beans, was maximised at existing facilities, which helped in reduction of fossil fuel consumption for operations.
• All new projects and line extensions in factories are equipped with high efficiency motors, variable frequency drives,
LED lights, screw compressors instead of reciprocating compressors, roof mounted self-driven ventilators and

Hindustan Unilever Limited

Overview

Reports

maximised use of natural illumination. These are also being retrofitted in existing factories after feasibility evaluation.
• 
Going beyond rain water harvesting and recharging to ground which is already practised at most of manufacturing sites, your Company initiated pilot projects for direct use of rainwater in process to further reduce ground water.
Your Company made capital investments amounting to
Rs. 16.2 crores during the financial year 2014-15 on the energy conservations equipments.
Your Company saved 52376 GJ/annum of energy through its various conservation energy initiatives taken during the year. The financial savings due to conservation initiatives amounted to Rs. 1,070 lakhs.
Specific water consumption in manufacturing operations is reduced by over 44%, when compared to 2008 baseline. Your
Company has reduced CO2 emissions (per tonne of production) in India by 37%, compared to 2008 baseline.
Waste generation across units is minimised through the principles of 3Rs - reduce, reuse and recycle. Co-processing of wastes in cement kilns, composting of boiler and hot air generator ash and usage of organic process waste as fuel have been the major initiatives strengthened during year. Segregation at source followed by re-use are practiced for all recyclable wastes, such as packaging materials, empty raw material containers and project scrap. Total waste per tonne from manufacturing sites has reduced by 88% vis-a-vis 2008 baseline.
Several prestigious awards have been conferred upon your
Company by national and international organisations of repute, both from government and non-government sectors in recognition of your Company’s efforts in the spheres of Safety,
Environment and Sustainability.

10. HUMAN RESOURCES
Your Company’s Human Resource agenda remained focused on reinforcing the key thrust areas;being the employer of choice on campus, building an inclusive culture and a strong talent pipeline, institutionalising mission critical capabilities in the organisation, driving greater employee engagement and continuing to focus on progressive employee relation policies.
Your Company is known for developing future leaders and having the best people practices. This coupled with the ability to attract the best talent, provides a competitive edge to the organisation. According to the Campus Track Business School
Survey 2014, conducted by Nielsen for the 2015 graduating batch of the B-School students, your Company has been chosen

Annual Report 2014-15

Financial Statements

Shareholder Information

as the preferred employer across all sectors for the fourth year in a row. Your Company has also retained the ‘Dream Employer’ status for the sixth consecutive year.
Your Company continued to build on the Diversity and Inclusion agenda. Maternity and Paternity Support, Career by Choice and location flexibility programmes have helped in further driving the agenda. Your Company’s focus has been on driving inclusion through building leadership capability, recognizing line managers who drive a simple, flexible and respectful work environment for their teams. With these enablers and commitment to diversity and inclusion, your Company has witnessed a 13% shift in the gender balance ratio over the last four years.
Your Company has developed an integrated framework and approach using structure, systems and skills focused on areas such as Beauty, Foods, Digital, Rural and E-commerce and designed plans to ensure capabilities for the future are built.
Apart from a strong foundation on learning programmes to build capability, there is an increased focus on driving Development
Plans for all employees in your Company.
Your Company has also focussed on building speed and simplification in ways of working. Sunset, an initiative where employees can share ideas for quick solutions making your
Company agile, saw an improvement in closure time and satisfaction scores. Ideas received were implemented in plenty, which encouraged employee participation. Simplification projects were launched and implemented that potentially released a significant number of man-days of process time.
With strong business performance backed with leadership commitment to ensure engagement and development of employees, your Company’s 2014 Global People Survey results showed improvement in scores across dimensions. Employee
Engagement score improved by 300 bps over the previous year.
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act,
2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as
Annexure to this Report.
Details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours before 21 days of the Annual
General Meeting and shall be made available to any shareholder on request. Such details are also available on your Company’s website www.hul.co.in/investorrelations/AnnualReports/

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39

11. INFORMATION TECHNOLOGY (IT)
IT continues to support business operations in your Company, through continued investment in the enterprise wide SAP platform including data analytics. Your Company supports the distributors by providing a common distribution management system which integrates with the Company’s system. In addition, a common mobility solution is in place for all individuals who execute sales transactions in the market place
IT has played a key role in bringing to life your Company’s Winning in Many Indias (WIMI) strategy. WIMI provides your Company an ability to get granular understanding of the changing consumer profile and competition across geographies to identify sales gaps and market creation opportunities.
Your Company continues to invest in capabilities that enable customised engagement with end consumers using mobile technologies. Kan Khajura Tesan (KKT) is the first mobile based entertainment-on-demand platform that allows the Company to directly engage with millions of consumers with customised content. Your Company continues to drive resilience through targeted remediation of high risk IT components, including hardware, databases, operating systems and applications. Alongside the investment in technology, your Company is also improving its service management processes to prevent any defects in the
IT environment and to enable faster resolution of any such incidents with minimum business disruption.

12. FINANCE AND ACCOUNTS
Your Company continued to drive the virtuous circle of growth as evidenced in its performance during this year. Profitable volume growth is driven by investment in innovation and brands to deliver better products. Your Company leverages its scale to spread fixed costs and improve profitability while further investing in the business. This investment funds R&D and innovation to create new and improved products backed by marketing to create even stronger brands. This further drives profitable volume growth, thus the virtuous circle continues. Your Company aims to translate this profitable growth to superior cash generation through efficient capital management. The cash balances are managed prudently by deploying cash surplus in a balanced portfolio that are designed to offer safety, liquidity and returns.
There was a net cash surplus of Rs. 2,537.56 crores, as on
31st March, 2015. The Company’s low debt equity ratio provides ample scope for gearing the Balance Sheet, should the need arise. 40

Directors’ Report

During the year, your Company leveraged the benefits of the significant work done on finance transformation over the past couple of years and enabled de-coupling business growth from increased cost, complexity and time of transaction processing.
The key building blocks of Finance Transformation programme were Procure to Pay, Record to Report, Zero based controls and
My Business Information projects.
• 
‘Procure to Pay’ project aimed to raise the bar on payments process and shift the needle of services from vendor satisfaction to vendor delight. This year, your Company leveraged the centralised, standardised and automated processes created under the programme and further accentuated value delivery through process efficiency, flexibility and scalability. Your Company brought in synergies with the global centre of excellence in Bengaluru and developed a rich pipeline of continuous improvement initiatives thereby landing super-efficient, automated processes. This is reflected in the sustained best in class levels of payment efficiency and purchase order compliance.
• 
‘Record to Report’ project began with the vision of creating one accounting excellence centre at Bengaluru. This project enables consistent improvement in excellence in reporting; both in terms of quality and the speed to release results to the market. Your Company has been ranked among the Top
3 companies in manufacturing sector for Best Presented
Accounts by the Institute of Chartered Accountants of India, for two years in a row. Your Company also received a merit award from South Asian Federation of Accountants for excellence in financial reporting.
• 
‘Zero Based Controls’ programme began with a revamp of the traditional gatekeeping lens of finance. With over 50% of key controls automated and a cutting-edge automated cockpit flagging control exceptions, this year, your Company has reaped benefits of the pioneering work done under this programme. The project promised a blemish free control environment and delivery of the same is substantiated through multiple control testing, both by the management and independent audits. This project enabled stewardship delivery in a comprehensive and faster manner while reducing the audit efforts on monitoring controls. This robust control environment enabled a smooth transition of the Statutory Auditors.
• 
‘My Business Information’ is a centralised and standardised repository of information. With significant investments in IT underway, your Company’s finance function is enhancing effectiveness in partnering the business with professional analytics and state-of-art forecasting tools while providing real time updates to aid decision making.
During the year, the finance function partnered the business agenda on increased customer and consumer focus through
Project WIMI (Winning In Many Indias). This project required

Hindustan Unilever Limited

Overview

Reports

complete rewiring of all IT systems to cater to a granular level reporting providing the right insights and thereby enabling decision making. Finance team played a pivotal role in ensuring seamless transition and enabling end-to-end reporting at a consumer cluster level.
During the year, the Primary Banking project was implemented, delivering a step change in your Company’s transaction capabilities through ‘best in class’ solutions whilst strengthening controls, reducing costs and simplifying operations. After a detailed ‘Request for Proposal’ (RFP) process, 3 banks each were mandated to perform the collections and payments activities of your Company. The project spanned 10 workstreams, which were implemented seamlessly with a tight change in management and governance process. The project leveraged technology extensively like SWIFT to build robust and bank agnostic solutions. Many manual activities like receivables accounting were automated delivering tangible simplification benefits across the organization.
Indian Accounting Standards (Ind AS) – IFRS Converged
Standards
The Ministry of Corporate Affairs vide its notification dated
16th February, 2015 has notified the Companies (Indian
Accounting Standard) Rules, 2015. Companies having a net worth of Rs. 500 crores or more (as per the standalone financial statements as on 31st March, 2014) are required to comply with
Ind AS (Accounting standards converged with the International

Financial Statements

Shareholder Information

Financial Reporting Standards - IFRS) in the preparation of their financial statements for accounting periods beginning on or after 1st April, 2016, with the comparatives for the periods ending 31st March, 2016, or thereafter. In pursuance of the above notification, the Company, its subsidiaries and joint venture will adopt Ind AS with effect from 1st April, 2016. The implementation of Ind AS is a major change process for which the Company has established a project team and is dedicating considerable resources. The impact of the change on adoption of Ind AS on
Company’s reported reserves and surplus and on the net profit for the relevant periods is being assessed. In particular, the current accounting policies for revenue recognition, investments, tangible assets, employee share based payments, income taxes, consolidation, retirement/post retirement benefits, proposed dividends and segment reporting differ from Ind AS. This list of differences identified by the Company should not be viewed as exhaustive and definitive as it is intended to highlight those areas that are considered to be most significant as of date.
Your Company has not accepted any Public Deposits under
Chapter V of Companies Act, 2013, during this year. In terms of the provisions of Investor Education and Protection
Fund (Awareness and Protection of Investors) Rules, 2001,
Rs. 6.66 crores of unpaid / unclaimed dividends were transferred during the year to the Investor Education and Protection Fund.
Capital Expenditure during the year was at Rs. 526.40 crores
(Rs. 526.50 crores in the previous year).

Return on Net Worth, Return on Capital Employed and Earnings Per Share (EPS) for the last four years and for the year ended
31st March, 2015, are given below:
Particulars

2010-11

2011-12

Return on Net Worth (%)

74.0

Return on Capital Employed (%)

87.5
10.58

Basic EPS (after exceptional items) (Rs.)

2012-13

2013-14

2014-15

77.7

94.7

104.1

99.5

96.8

109.1

130.2

127.7

12.46

17.56

17.88

19.95

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 statements relate and the date of this Report.

Annual Report 2014-15

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41

Segment-wise Results
Your Company has identified five business segments, in line with the Accounting Standard on Segment Reporting (AS-17), which comprise: (i) Soaps and Detergents, (ii) Personal Products,
(iii) Beverages, (iv) Packaged Foods, including Culinary, Branded
Staples, Frozen Dessert and Ice Cream and (v) Others, including
Exports, Chemicals, Water Business, Infant Care Products, etc.
The audited financial results of these segments are provided as a part of financial statements.
Details of loans, guarantee or investments made by your
Company under Section 186 of the Companies Act, 2013 during the financial year 2014-15 are appended as Annexure to this
Report.

12.1. Risk and Internal Adequacy
Your Company has an elaborate Risk Management procedure, which is based on three pillars: Business Risk Assessment,
Operational Controls Assessment and Policy Compliance processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Some of the identified risks relate to competitive intensity and cost volatility. During the year, your Company has set up a new Risk Management Committee in accordance with

the requirements of Listing Agreement to monitor the risks and their mitigating actions. The key risks and mitigating actions are also placed before the Audit Committee of the Company.
The Company’s internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested and certified by
Statutory as well as Internal Auditor 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 control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company’s risk management policies and systems.
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, in line with the requirements of Accounting
Standard 11. The details of foreign exchange earnings and outgo as required under Section 134 and Rule 8(3) of Companies
(Accounts) Rules, 2014 are mentioned below:

Foreign Exchange Earnings & Outgo
(Rs. crores)
For the year ended
31st March, 2015
Foreign Exchange earnings
Foreign Exchange outgo

13. LEGAL, GOVERNANCE AND BRAND PROTECTION
Your Company continued to focus on the key areas and projects within the Legal, Compliance and Corporate Affairs functions.
The Company has developed an in house workflow based compliance tool ‘Self-Compli’ that tracks compliances across factories and offices. The tool is one of the best practices and is being exported to other businesses of Unilever. The focus on litigation management continued during the year as also on combating unfair competition with a series of actions to protect your Company’s Brands from counterfeits, look-alike and grey imports. As part of cascading knowledge of Competition Law, the
Company collaborated with the Federation of Indian Small and
Medium Enterprises to conduct Competition Law Awareness
Sessions for Small and Medium Enterprises.

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Directors’ Report

For the year ended
31st March, 2014

573.43

547.91

3,846.50

3,132.40

13.1 Corporate Governance
Your Company is renowned for exemplary governance standards since inception and continues to lay a strong emphasis on transparency, accountability and integrity.
The new Companies Act, 2013 and amended Listing Agreement have strengthened the governance regime in the country. Your
Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, ahead of time. Your Company is committed to embrace the new law in letter and spirit. In line with the requirements of new law, your Company has constituted new Board Committees. Your Company has in place all the statutory Committees required under the law. Details of Board
Committees along with their terms of reference, composition and meetings of the Board and Board Committees held during the year, are provided in the Corporate Governance Report.

Hindustan Unilever Limited

Overview

Reports

During the year, your Company has adopted new policies and amended existing policies such as Policy on Related Party
Transactions, Policy on Material Subsidiaries, CSR Policy and
Whistle Blower Policy in line with new governance requirements.
These policies are available on the website of the Company at www. hul.co.in/investorrelations/CorporateGovernance/. The Company has established a vigil mechanism for Directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report annexed to this Report.
During the year, Secretarial Audit and Secretarial Standards
Audit were carried out by M/s S. N. Ananthasubramanian & Co.,
Company Secretaries, the Secretarial Auditor of the Company for the financial year 2014-15. There were no qualification, reservation or adverse remarks given by Secretarial Auditors of the Company. The detailed reports on the Secretarial
Standards and Secretarial Audit are appended as an Annexure to this Report.
The extract of annual return in Form MGT 9 as required under
Section 92(3) and Rule 12 of the Companies (Management and
Administration) Rules, 2014 is appended as an Annexure to this Report.
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 Clause 49 of the Equity Listing Agreement with the Stock Exchange(s). A Certificate of the CEO and CFO of the Company in terms of sub-clause IX of Clause 49 of Equity
Listing Agreement, 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.

13.2 Related Party Transactions
In line with the requirements of the Companies Act, 2013 and
Equity Listing Agreement, your Company has formulated a
Policy on Related Party Transactions which is also available on Company’s website at www.hul.co.in/investorrelations/
CorporateGovernance/. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
This Policy specifically deals with the review and approval of
Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions 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 Equity Listing Agreement.

Annual Report 2014-15

Financial Statements

Shareholder Information

All Related Party Transactions entered during the year were in
Ordinary Course of the Business and on Arm’s Length basis.
No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, 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.

13.3 Prevention of Sexual Harassment at Workplace
As per the requirement of The Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made thereunder, your Company has constituted
Internal Complaints Committees (ICC). The Company has designated the external independent member as a Chairperson for each of the Commettees which was beyond the requirements of law. During the year, 2 complaints with allegations of sexual harassment were filed with the Company and the same were investigated and resolved as per the provisions of the Act.

14. SUSTAINABLE LIVING
Your Company has embraced the Unilever Sustainable Living
Plan (USLP) since the year 2010 and has made good progress on the goals set by the Plan. The Plan spans your Company’s entire portfolio of brands, has a social and economic dimension and works across the entire value chain; from the sourcing of raw materials to the delivery of products to the consumers.
USLP has three big global goals to achieve:
• 
Improving Health and Well-being - By 2020, we will help more than a billion people take action to improve their health and well-being.
• 
Reducing Environmental Impact - By 2020, our goal is to halve the environmental footprint of the making and use of the products as we grow our business.
• 
Enhancing Livelihoods - By 2020, we will enhance the livelihoods of millions of people as we grow our business.
Your Company progressed well on its goals. The highlights of progress in the year 2014 are given below:
• 
The Company reached out to a total of 63 million people through Lifebuoy Handwashing Programme since 2010.
• 
Pureit in-home water purifier provided 55 billions litres of safe drinking water by the end of 2014.
•  your Company’s children’s ice cream brands now
All
contained, 110 kilocalories or fewer per portion.
• CO2 emission per tonne of production was reduced by 88% compared to 2008.
• 
Your Company created water conservation potential

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of nearly 100 billion litres through Hindustan Unilever
Foundation partnerships.
•  manufacturing locations of your Company achieved zero
All
non-hazardous waste to landfills.
•  total of 111 tea estates in Assam, West Bengal, Kerala
A
and Tamil Nadu are certified as ‘Sustainable Estates’
•  total of 85% of tomatoes used in Kissan Ketchup are now
A
sourced from sustainable sources
• 
Project Shakti network expanded to include over 70,000
Shakti Entrepreneurs (Shakti Ammas) by the end of 2014.
During last year, the Unilever Sustainable Living Plan was broadened with a more substantive and far reaching ‘Enhancing
Livelihoods Programme’. The three new commitments under this pillar are:
• 
Drive Fairness in the Workplace by advancing human rights across the operations and extended supply chain.
• Advance Opportunities for Women by promoting their safety, providing up-skilling and expanding opportunities.
• 
Develop Inclusive Business to improve the livelihoods of smallholder farmers, improve the incomes of smallscale retailers and increase the participation of young entrepreneurs in the value chain.
Your Company continued to put more emphasis on human and labour rights and enhanced the role of women in the value chain while growing the business sustainably and driving social and economic development. During the year, your Company recruited over 50 women to work on shop floors in its factories taking the total number of female employees on shop floors to 100.
As part of Project Prabhat, your Company initiated projects around its manufacturing operations to ensure development of local communities. These focussed on improving health and hygiene, conserving water and enhancing livelihoods. Prabhat’s livelihood programme saw enrollment of over 3,000 candidates across 13 livelihood centers in India.
Your Company’s ‘Project Sunlight’ which aims to involve consumers as a part of the USLP, progressed well in 2014.
Your Company worked to make sustainability more relevant to the common people by involving children as agents of change.
Your Company identified two issues that are important for India to create a brighter future - first, to stop littering and second, to reduce water wastage. Children were the key influencers for both the activations.
Your Company has shared its progress on Unilever Sustainable
Living Plan in India which is made available on the website of the Company, www.hul.co.in/sustainable-living-2015/. Your
Company has also released the Business Responsibility Report that describes the initiatives undertaken in line with the key principles enunciated in the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of

44

Directors’ Report

Business’ framed by the Ministry of Corporate Affairs. The report is made available on your Company’s website, www.hul.co.in, and forms a part of this Annual Report. The Business Responsibility
Report shall be kept open for inspection at the Registered Office of the Company. If a Member is interested in obtaining a hard copy of the Business Responsibility Report, they may write to the Investor Service Department at the Registered Office of the
Company.
In accordance with the requirements of Section 135 of
Companies Act, 2013, your Company has constituted a Corporate
Social Responsibility Committee. The composition and terms of reference of the Corporate Social Responsibility Committee is provided in the Corporate Governance Report.
Your Company has also formulated a Corporate Social
Responsibility Policy which is available on the website of the
Company
at www.hul.co.in/investorrelations/ CorporateGovernance/. Annual report on CSR activities as required under the Companies (Corporate Social Responsibility
Policy) Rules, 2014 has been appended as Annexure to this Report.

15. EMPLOYEE STOCK OPTION PLAN (ESOP)
Details of the shares issued under Employee Stock Option Plan
(ESOP), as also the disclosures in compliance with Section 62 of
Companies Act, 2013 and Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and SEBI (Share Based Employee
Benefits) Regulations, 2014 and SEBI (Employees Stock Option
Scheme and Employees Stock Purchase Scheme) Guidelines,
1999 are set out in the Annexure to this Report. No employee has been issued share options during the year, equal to or exceeding
1% 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 place of ‘2006 HLL
Performance Share Scheme’. In accordance with the terms of the Performance Share Plan, employees are eligible for award of conditional rights to receive equity shares of the Company at the face value of Re. 1/- each. These awards will vest only on the achievement of certain performance criteria measured over a period of three years.
Under the said Plan, eligible Managers were given Conditional
Performance Grant of shares of Unilever and the Company in the ratio of 67:33, to mirror your Company’s shareholding, where
Unilever held 67% shareholding. During the year, 204 employees, including Whole time Directors, were awarded conditional rights to receive 1,58,840 Equity Shares at the face value of Re. 1/each. It comprises conditional grants made to eligible managers covering performance period from 2014 to 2016 and from 2015 to 2017.
Hindustan Unilever Limited

Overview

Reports

16. 
BOARD OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL
During the year, the Board of Directors appointed Ms. Kalpana
Morparia as an Additional Director with effect from 9th October,
2014, to hold office up to the date of forthcoming Annual General
Meeting. Being eligible, Ms. Morparia offered herself to be appointed as the Independent Director of your Company.
As per the provisions of the Companies Act, 2013, Independent
Directors are required to be appointed for a term of five consecutive years, but shall be eligible for reappointment on passing of a special resolution by the Company and shall not be liable to retire by rotation. All other Directors, except the
Managing Director, will retire at the ensuing Annual General
Meeting and, being eligible, offer themselves for re-election.
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.
The details of training and familiarization programmes and
Annual Board Evaluation process for Directors have been provided under 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
Corporate Governance Report of this Annual Report.

17. MANAGEMENT COMMITTEE
The day-to-day management of the Company is vested with the Management Committee, which is subjected to the overall superintendence and control of the Board. The Management
Committee is headed by the Chief Executive Officer and has
Functional / Business Heads as its members.
During the year, Mr. Sridhar Ramamurthy, Executive Director,
Finance & IT and Chief Financial Officer was elevated to the position of Senior Vice President, Finance for Global Markets and Mr. P. B. Balaji succeeded him and joined the Management
Committee in his capacity as Executive Director, Finance & IT and Chief Financial Officer with effect from 1st July, 2014.
Mr. Hemant Bakshi, Executive Director, Home and Personal Care
(HPC) was elevated as CEO of Unilever’s Indonesia business and ceased to be a member of the Management Committee of your Company. Considering the scale of business and requisite focus to further grow the categories in which the businesses operate, it was decided to divide the Home and Personal Care
Annual Report 2014-15

Financial Statements

Shareholder Information

business of the Company into Home Care and Personal Care with separate Executive Directors heading each business. Accordingly,
Ms. Priya Nair and Mr. Samir Singh were appointed as members of Management Committee as Executive Director, Home Care and
Executive Director, Personal Care, respectively with effect from
1st October, 2014.
Mr. Manish Tiwary, Executive Director, Sales and Customer
Development was elevated as the Managing Director of the Gulf business of Unilever and Mr. Punit Misra, VP, CD Global RTM, TT was appointed as Executive Director, Sales and Customer Development and a member of the Management Committee, in place of
Mr. Manish Tiwary with effect from 1st November, 2014.

18. AUDITORS
M/s. B S R & Co. LLP were appointed as Statutory Auditors of your
Company at the last Annual General Meeting held on 30th June,
2014 for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of
Auditors is required to be ratified by Members at every Annual
General Meeting.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
M/s N. I. Mehta & Co., Cost Accountants carried out the cost audit for applicable business during the year. The Board of
Directors have appointed M/s R. A. & Co., Cost Accountants for the financial year 2015-16.

19. OUTLOOK
The global economic climate continues to be volatile, uncertain and prone to geo-political risks. The marked slowdown in global markets is expected to continue in 2015. The sharp fall in growth of emerging markets, notably China, will continue to keep commodity prices including oil, which is significantly lower than last year, volatile. The divergence in developed market growths as a result of the US recovery is expected to add to the volatility in the currency markets.
In this global backdrop, India is expected to perform better, aided by improving macroeconomic fundamentals. However, execution of the reform agenda and kick starting the investment cycle will be key determinants of India’s economic performance. While currently inflation is benign, upside pressures on inflation from the vagaries of monsoon or sudden changes in the rupee, could have a significant bearing on inflation.

Directors’ Report

45

FMCG markets are expected to grow. While consumer confidence has increased, this has not yet translated into significant improvement in FMCG market conditions. There are a few green shoots in market growths; however, uncertain global economic environment, inflation and competitive intensity continue to pose challenges. While the near term conditions pose a challenge for the economy, the medium to long term secular trends based on rising incomes, aspirations, low consumption levels, are positive and an opportunity for the FMCG sector. Your Company, with its brands, talent and investment in capabilities, is well placed to benefit disproportionately from this opportunity

19.1. Cautionary Statement
Statements in the Annual Report, particularly those which relate to Management Discussion and Analysis, describing the
Company’s objectives, projections, estimates and expectations, may constitute ‘forward looking statements’ within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ. materially from those either expressed or implied.

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, redistribution stockists, retailers, business partners and others associated with the Company 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 the
Company’s endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and cooperation with each other, consistent with consumer interests.
The Directors also take this opportunity to thank all Investors,
Clients, Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges, for their continued support.

20. APPRECIATIONS AND ACKNOWLEDGMENTS
On behalf of the Board

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leaders. Harish Manwani

Mumbai, 8th May, 2015

Chairman
(DIN: 00045160)

46

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

Annexure to the Directors’ Report

Particulars of Loans, Guarantees or Investments

Amount outstanding as at 31st March, 2015
(Rs. crores)
Amount
179.77
8.20
3,277.93

Particulars
Loans given
Guarantee given
Investments made
Loan, Guarantee and Investments made during the Financial Year 2014-15
Name of Entity

Relation

Amount Particulars of loan,
(In Crores) guarantee and investments Purpose for which the loans, guarantee and investments are proposed to be utilized

Lakme Lever Private Limited

Subsidiary

10.50 Loan

Business purpose

Pond’s Exports Limited

Subsidiary

63.00 Loan

Business purpose

Brooke Bond Real Estates Private Limited*

Subsidiary

2.14 Loan

Business purpose

Mutual Funds#

-

Lakme Lever Private Limited
Kimberly Clark Lever Private Limited
Bhavishya Alliance Child Nutrition
Initiatives

Subsidiary

Broadcast Audience Research Council

Member of
Association

106.33 Investments

Cash Management

Subsidiary

40.00 Investments

Business purpose

Joint Venture

22.51 Investments

Business purpose

0.75 lakhs Investments
8.20 Guarantee

Investment in non-profit making
Company
Corporate guarantee provided to
YES Bank, Bankers of Broadcast
Audience Research Council to facilitate fund raising

* The company ceased to be a subsidiary with effect from 23rd March, 2015.
# For details refer to Note 1B of standalone financial statements.

On behalf of the Board
Harish Manwani

Mumbai, 8th May, 2015

Chairman
(DIN: 00045160)

Annual Report 2014-15

Directors’ Report

47

Annexure to the Directors’ Report

Details of shares issued Under Employees Stock Option Plan (ESOP)

2001 HLL Stock Option Plan
(Period: 2001 to 2005)

2006 HUL Performance Share 2012 HUL Performance Share
Scheme (Period: 2006 to 2012) Scheme (Period: 2013 to 2015)

a) Options granted

1,31,62,941

Conditional grant of 22,87,135 equity shares of Rs.1 each

Conditional grant of 8,14,439 equity shares of Rs.1 each

b) Options vested

1,31,62,941

21,22,653

N. A.

c) Options exercised

1,00,98,691

17,92,871

NIL

d) 
The total number of shares arising as a result of exercise of option 1,00,98,691

17,92,871

NIL

e) Options lapsed

30,41,150

5,153

NIL

f) Exercise Price

Year 2001 - Rs.208.69
Year 2002 - Rs.201.59
Year 2003 - Rs.127.24
Year 2004 - Rs.128.47
Year 2005 - Rs.132.05

Face value of Re.1/-

Face value of Re.1/-

g) 
Variation of terms of options Reduction in exercise price by
Rs. 8.76 per share for grant year
2001,2002 & 2003

N.A.

N.A.

h) 
Money realized by exercise of options during the year

Rs. 2.11 crores

Rs. 6.1 lakhs

N.A.

i) 
Total number of options in force

23,100 options granted in the year
2005

3,64,566 options (11,448 options forfeited due to resignation.) 7,47,221 options (67,218 options forfeited due to resignation.)

j) Pricing Formula

Closing market price as on the date Face value of Re.1/of grant for the years 2001,2002,2003 and 2005; Average of 2 week high and low preceding the date of grant for the year 2004

Face value of Re.1/-

Details of Options granted during the year ended 31st March, 2015 under Performance Share Plan 2015
k)  o employee of the Company received grant of options during the year amounting to 5% or more of options granted or exceeding
N
1% of issued capital of the Company. During the year 5,256 options were granted to Mr. Dev Bajpai, Executive Director (Legal &
Corporate Affairs) and Company Secretary under the 2012 HUL Performance Share Scheme for 2012. No options were granted to any other Key Managerial Personnel.

48

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

l) 
Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with
Accounting Standard (AS) 20 ‘Earnings Per Share’.
m) i) 
Method of calculation of employee compensation cost

Financial Statements

Shareholder Information

Rs. 19.94

The Company has calculated the employee compensation cost using the intrinsic value method of accounting to account for
Options issued under the “2012 HUL Performance Share Scheme”.
Gain of Rs. 2.87 crores

ii) 
Difference between the employee compensation cost so computed at (i) above and the employee compensation cost that shall have been recognised if it had used the fair value of the Options iii)  he impact of this difference on profits and on EPS of the The effect of adopting the fair value method on the net income and
T
Company earnings per share of 2014-15 is presented below:
Net Income
Rs. Crores
As reported
4,315.26
Add: Difference between Intrinsic
2.87
value and Fair Value Calculation
Adjusted Net Income
4,318.13
(Rs.)

Earnings Per Share (Basic &
Diluted)

n) 
Weighted average exercise price and weighted average fair value o) 
Fair value of Options based on Black Scholes methodology
Assumptions
Risk free rate
Expected life of options
Volatility
Expected Dividends
Closing market price of share on date of option grant

-As reported
-As adjusted
Exercise Price is Re. 1/-

Basic EPS
19.95
19.96

Diluted EPS
19.94
19.95

8.85% for 2014 and 7.86% for 2015
3.125 years for each plan
25.56% for 2014 and 25.44% for 2015
Rs. 13.5 per share
Rs. 557.25 for 2014 and Rs. 892.8 for 2015

Notes:
(i)
Pursuant to approval of the Members at the Annual General Meeting held on 23rd July, 2012, the Company adopted the “2012
HUL Performance Share Scheme”, in place of ‘2006 HLL Performance Share Scheme’
(ii) The Pricing Formula adopted by the Company for ‘Employees Stock Option Plan’ for the years 2001 to 2005, was based on the
“Market Price” as defined in SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, and Maximum number of options to be issued per employee in a fiscal year did not exceed 0.01% of the outstanding issued share capital, in the line with Clause 6.2(h) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme)
Guideline 1999.
On behalf of the Board

Mumbai, 8th May, 2015

Annual Report 2014-15

Harish Manwani
Chairman
(DIN: 00045160)

Directors’ Report

49

Annexure to the Directors’ Report

Annual Report on Corporate Social Responsibility
(Pursuant to Companies (Corporate Social Responsibility Policy) Rules, 2014)
1. 
Brief outline of the Company’s CSR Policy, including overview of projects/ programmes undertaken The Corporate Social Responsibility (CSR) Policy of the
Company, as approved by the Board of the Directors, is available on the Company’s website at www.hul.co.in

•  Drinking Water: The lack of safe drinking water is
Safe
a major public health issue, particularly in developing countries where majority of diseases are waterborne.
The Pureit innovation addresses one of the biggest technological challenges - that of making safe water accessible and affordable for millions. Pureit provides
1 litre of “As safe as boiled”™ water at a running cost of just 30 paisa without the hassles of boiling, without the need of electricity or a continuous tap water supply.
Pureit is available at a price starting from Rs. 1,600/-.
However, to reach those at the “Bottom of the Pyramid” who may not be able to afford the same, Pureit has partnered with NGOs and Micro-Finance Institutions which provide micro loans to low income consumers on small monthly instalments. Pureit in-home water purifier has provided 55 billion litres of safe drinking water in India as of end of 2014.

• 
Domex Toilet Academy (DTA): Approximately, 792 million Indians live without improved sanitation, of which some 597 million people continue to defecate in the open3 . These statistics clearly show that sanitation conditions in India need improvement. Your Company is committed to help in gaining improved access to a toilet and at the same time, drive behaviour change to use the toilets. One of the ways in which your Company will do this is through the Domex Toilet Academy (DTA) model. The DTA is a market-based, entrepreneurial model that provides people access to sanitation in rural communities. In partnership with the social enterprise eKutir, the DTA programme trains local micro-entrepreneurs who help execute the project in their local communities by supplying and building toilets. Through DTA, toilets are made accessible and affordable, while promoting the benefits of clean toilets and good hygiene. The objective of the programme is to reduce the incidence of open defecation and improve proper sanitation thereby promoting preventive healthcare. It also helps create awareness and drive behaviour change. Five DTAs are currently operating in
Maharastra, Odisha and Madhya Pradesh. Since 2014, the programme has reached out to over 15,000 people by building over 3,000 toilets in villages across Odisha,
Maharashtra and activities have expanded to Madhya
Pradesh, Uttar Pradesh and Bihar. The programme has also trained more than 100 local entrepreneurs so far to sell and maintain toilets.

•  Daan: Asha Daan is a home in Mumbai for
Asha
abandoned, differently-abled children, the HIV-positive and the destitute. Since the inception of Asha Daan in 1976, your Company has been looking after the maintenance of the premises. Your Company takes care of over 400 infants, destitute men and women and
HIV-positive patients at Asha Daan.

•

Your Company is committed to operate and grow its business in a socially responsible way. The Company’s vision is to grow its business, whilst reducing the environmental impact of its operations and increasing its positive social impact. Your Company has embraced Unilever Sustainable
Living Plan (USLP) www.hul.co.in/sustainable-living/ which contributes to activities listed in the Schedule VII of Section 135 of the Companies Act, 2013. The USLP has three global goals namely (i) help more than a billion people take action to improve their health and well-being; (ii) halve the environmental footprint of the making and use of the products; and (iii) enhance the livelihoods of millions of people while growing the business.

A brief overview of your Company’s projects is as given below: Improving Health and Well-being

•

H
 and Washing Behaviour Change Programme: India has the highest number of child deaths from diarrhoea and pneumonia in the world with 6,09,000 children dying each year before their 5th birthday from these diseases1.
Handwashing with soap can reduce diarrhoea diseases by over 40% and respiratory infections by 30%2.
Your Company’s Lifebuoy handwashing programme promotes the benefits of handwashing with soap at key times in schools and anganwadis (pre-school centres). Since 2010, Lifebuoy has reached more than
63 million people in India with its Behaviour Change programme, through a combination of comics, songs, games and rewards which encourages children to sustain good hand washing behaviours. A successful pilot project last year in Thesgora village resulted in scale-up of ‘Help a Child Reach 5’ programme in
2014 which led to addition of six more villages from
Chhindwara district in Madhya Pradesh under the programme. The programme reached out to hundreds of new mothers and kids. Your Company has also entered into a partnership with Children’s Investment
Fund Foundation (CIFF) and the Government of Bihar to promote Handwashing Behaviour Change among children in Bihar with the aim to help prevent childhood illnesses and mortality. Your Company piloted the programme in two districts of Bihar – Begusarai and
Khagaria, reaching out to nearly 1 million people. Your
Company will now scale up the programme to cover more districts in Bihar and reach out to more number of people. Over the next three years, 45 million people are expected to benefit through this programme

1

WHO and UNICEF (2014), “Progress on Drinking Water and Sanitation: Update 2014”, World
Health Organization and United Nations Children’s Fund, Switzerland. Refer to http://www. unicef.org/gambia/Progress_on_drinking_water_and_sanitation_2014_update.pdf 2

http://www.unicef.org/eapro/Pneumonia_and_Diarrhoea_Report_2012.pdf

50

Directors’ Report

3

Sanjivani: Your Company runs a free mobile medical service camp ‘Sanjivani’ near Doom Dooma Factory in Assam. The aim is to provide free mobile medical facility in the interior villages of Assam. There are two mobile vans dedicated to the project each vehicle has

http://www.unicef.org/india/wes.html

Hindustan Unilever Limited

Overview

Reports

one male and one female doctor, two nurses, a medical attendant (helper) and a driver. The vans are equipped with basic kits such as diagnostic kit, blood pressure measuring unit, medicines and a mobile stretcher.
More than 2,75,000 patients have been treated in these service camps since its inception in 2003. In 2014 alone,
20,512 patients were treated in the service camps.

Reducing Environmental Impact

• 
Water Conservation Projects: According to the estimates, by 2030, the supply of water in India will be half its demand. To understand and partake in meeting this challenge, your Company set up Hindustan
Unilever Foundation (HUF) in 2010, a not-for-profit company that anchors various community development initiatives of Hindustan Unilever Limited. HUF supports national priorities for socio-economic development, through its ‘Water for Public Good’ programme. HUF, alongwith its partners, has initiated 18 projects in more than 4,000 villages of 82 districts in 13 states located across 13 river basins in India since inception. The collective action of HUF and its partners has helped in the creation of cumulative water potential of nearly
100 billion litres. • 
Environment & Sustainability - Supply Chain: Your
Company has significantly reduced the environmental footprint in areas of greenhouse gases, water and waste across manufacturing locations. With regard to reducing
GHG emissions from manufacturing, the CO2 emissions per tonne of production in 2014 has reduced by 37% compared to the 2008 baseline. Major contribution to this reduction has come from using alternative forms of energy like biogenic fuels, solar photovoltaic energy, etc. in the manufacturing operations. With respect to reducing water use in the manufacturing process, water usage (cubic meter per tonne of production) in manufacturing operations reduced by 44% compared to
2008 baseline. Major contribution to this reduction has come from reusing treated water in gardening, toilet flushing and harvesting captive rainwater collected on roof tops. Lastly, with regard to reducing waste from manufacturing, 88% reduction was achieved in total waste generation (kg per tonne of production) in 2014 over 2008 baseline. Some of the initiatives which have helped reduce the disposed waste footprint are usage of spent coffee, tea waste in biomass boilers, composting of ash and co-processing waste in cement industries.
All manufacturing locations are zero non-hazardous waste to landfills. • 
Solidaridad – Sustainability (Tea Procurement):
Your Company has a clear roadmap to achieve bold commitment to source 100% of agricultural raw materials sustainably by 2020. Sustainable agriculture means growing food in ways which sustain the soil, minimise water and fertiliser use, protect biodiversity and enhance farmers’ livelihoods. The Company will ensure that the agricultural raw materials that are used such as tea, fruits and vegetables are sustainably sourced. The programme aims to move the Indian tea

Annual Report 2014-15

Financial Statements

Shareholder Information

industry producers into adopting a sustainability code which shall promote sustainable agricultural practices, improve productivity and reduce costs ensuring future security of tea supply in India and also protect the ecosystems (soil, water and bio-diversity) whilst improving the quality of life for producers and workers.

Enhancing Livelihoods

• 
Project Shakti: Project Shakti is an initiative to financially empower rural women and create livelihood opportunities for them. It provides a regular income stream for the Shakti entrepreneurs and their families.
HUL provides training on basic accounting, selling skills, health & hygiene and relevant IT skills to Shakti entrepreneurs and equips them with smart phones which have been enabled with a mini Enterprise
Resource Package (ERP) which helps them to run their business efficiently and further augment their income. Your Company has trained thousands of
Shakti Ammas across the villages in a bid to develop an entrepreneurial mindset and make them financially independent and more empowered. Project Shakti has empowered over 70,000 Shakti Ammas, complemented by 48,000 Shaktimaans. Shaktimaans are typically the husbands or brothers of the Shakti Ammas. They sell products on bicycles in surrounding villages, covering a larger area than Shakti Ammas can cover on foot. •  & Lovely Foundation: The Foundation identifies
Fair
academically exceptional girls from financially challenged backgrounds and offers scholarships to the deserving candidates. To maintain integrity and fairness the selection is done by a panel of eminent personalities from diverse fields. The Foundation granted scholarships of Rs.1 crore to deserving 200 girl students in the financial year 2014-15. • 
Livelihood Programme: Prabhat (Dawn) is a programme which focuses on development of local communities around the Company’s manufacturing sites. Under Prabhat’s Livelihood initiative, seven new centers were launched in 2014 taking the total number of centers to thirteen and candidate enrolments to over
3,000. Twelve of the Company’s Skill Development
Centers are running in collaboration with LabourNet, a training partner of the National Skill Development
Corporation (NSDC). More than 1,500 people have already been certified through the programme and over
500 of them either have a job or have been up-skilled or are self employed. • nkur: Ankur is a centre for special education for
A
differently abled children at Doom Dooma in Assam.
It was set up in 1993 by your Company’s Plantations
Division at Doom Dooma. Ankur provides educational, vocational and recreational activities to such differentlyabled children.

Others

• 
Project Sunlight: Project Sunlight is your Company’s initiative to build a world where everyone lives well and lives sustainably. It comprises a growing community of
Directors’ Report

51

people who are actively working to make this world a better place for children and future generations. It allows people to contribute in the form of volunteering, spreading the message on social media, preaching and practising behaviour changing habits or by just watching and sharing the Company’s videos. In 2014, your Company took up two issues that are important for
India to create a brighter future – first, to stop littering and second to reduce water wastage. Children were the key influencers for both the initiatives. • elief Funds / Donation: Your Company has always been at the forefront in responding to its call for national duty and has
R
 contributed generous amounts for upliftment of communities hit by natural disasters. It has done this through contribution to
Government relief funds such as Uttarakhand flood relief, J&K flood relief etc. Last year, your Company also made a donation to ‘Save the Children’ towards Mobile Health Units run by them for street children in Delhi.

2. Composition of the CSR Committee


Please refer to the Corporate Governance Report for the composition of the CSR Committee.
(Rs. lakhs)
3,99,093.00

3. Average Net Profit of the Company for last 3 financial years
4. Prescribed CSR Expenditure
5. Details of CSR spent during the financial year 2014- 15

7,982.00

a) 
Total amount to be spent for the financial year

7,982.00

b) 
Total amount spent during the year. (2.1% of Average Net Profit)

8,235.00

c)

Amount unspent, if any

d)

Manner in which the amount was spent during the financial year 2014-15 is detailed below:

Sr. CSR Project
No.

Nil

Relevant
Projects/
Amount
Section of
Programmes outlay
Schedule
coverage
(budget)
VII in which the Project is covered
(Note 1)

(Rs. lakhs)

Amount spent on the Cumulative project/programs expenditure upto 31st
March, 2015

Amount spent
Direct / through implementing agency*

Direct expenditure Overheads

60

60

-

60

CIFF

1

Handwashing Behaviour
Change Programme

(i)

Bihar

2

Safe Drinking Water

(i)

West Bengal

200

199

-

199

Population Services
International (PSI)

3

Domex Toilet Academy

(i)

Chindwara,
UP and
Orissa

106

106

-

106

eKutir

4

Ashadaan

(iii)

Mumbai

67

88

-

88

Direct

5

Sanjivani

(i)

Assam

70

66

-

66

Direct

6

Water Conservation
Projects

(iv)

PAN India

2,200

1,890

222

2,112

Implementing
Agencies (Note 2)

7

Environment &
Sustainability - Supply
Chain

(iv)

PAN India

263

263

-

263

Direct

52

Directors’ Report

Hindustan Unilever Limited

Overview

Sr. CSR Project
No.

Reports

Financial Statements

Relevant
Projects/
Amount
Section of
Programmes outlay
Schedule
coverage
(budget)
VII in which the Project is covered
(Note 1)

Shareholder Information

Amount spent on the Cumulative project/programs expenditure upto 31st
March, 2015
Direct
expenditure

Amount spent
Direct / through implementing agency*

Overheads

8

Solidaridad Sustainability
(Tea Procurement)

(iv)

PAN India

126

126

-

126

Solidaridad Regional
Expertise Centre

9

Project Shakti

(iii)

PAN India

4,651

4,651

-

4,651

Direct

10 Fair & Lovely
Foundation

(ii)

PAN India

300

100

154

254

Direct

11 Livelihood Programme Prabhat

(ii)

PAN India

150

147

-

12 Ankur School

(iii)

Assam

30

22

-

22

Direct

13 Project Sunlight

(iv)

PAN India

105

105

-

105

Direct

14 Relief Funds / Save the
Children - Donation

(iii)

Delhi

31

31

-

31

Direct

15 Good Life Club Scholarship (Hot Tea
Shop)

(ii)

Chennai

5

5

-

5

Direct

8,364

7,859

376

8,235

TOTAL

147 Labour Net and TARA
Livelihood Academy

Note 1:
(i)  eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water
(ii)  promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;
(iii)  promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
(iv)  ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water;
Note 2:
F
oundation for Ecological Society, Mysore Resettlement and Development Agency, Society for Promotion of Eco Friendly Sustainable Development,
Development Support Centre, Aga Khan Rural Support Programme (India), DHRUVA, Maharashtra Institute of Technology Transfer for Rural Areas (Khamgaon),
Maharashtra Institute of Technology Transfer for Rural Areas (Nashik), Solidaridad Regional Expertise Centre, Watershed Organisation Trust (WOTR), Sanjeevani
Institute for Empowerment and Development, Parmarth Samaj Sevi Sansthan, People’s Action for National Integration, Professional Assistance for Development
Action, International Finance Corporation, Samuha, Baif Institute for Rural Development, Parmarth Samaj Sevi Sansthan- Sumerpur, Sahjeevan

6. CSR Committee Responsibility Statement 
The CSR Committee confirms that the implementation and monitoring of the CSR activities of the Company are in compliance with the CSR objectives and CSR Policy of the Company.
On behalf of the Board

Mumbai, 8th May, 2015

Annual Report 2014-15

Sanjiv Mehta
Managing Director and
Chief Executive Officer
(DIN: 06699923)

O. P. Bhatt
Chairman, CSR Committee
(DIN: 00548091)

Directors’ Report

53

Annexure to the Directors’ Report
Extract of Annual Return

Form No. MGT-9
(As on the Financial Year ended on 31st March, 2015)
[Pursuant to Section 92(3) of the Companies Act, 2013 and
Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I.

REGISTRATION AND OTHER DETAILS:
i)

CIN

:

L15140MH1933PLC002030

ii)

Registration Date

:

17th October, 1933

iii)

Name of the Company

:

Hindustan Unilever Limited

iv)

Category / Sub-Category of the Company

:

Public Company / Subsidiary of Foreign Company limited by shares v)

Address of the Registered Office and contact details

:

Unilever House, B. D. Sawant Marg, Chakala, Andheri (East),
Mumbai 400 099. Tel : 022-39832285/39832452
E-mail : levercare.shareholder@unilever.com Website : www. hul.co.in vi)

Whether listed company

:

Yes

vii)

Name, Address and contact details of Registrar and
Transfer Agent, if any :

:

M/s. Karvy Computershare Private Limited,
Unit : Hindustan Unilever Limited, Karvy Selenium Tower B,
Plot 31-32, Gachibowli Financial District, Nanakramguda
Hyderabad - 500 032
Phone : +91 - 40 - 67161500 ,33211000
Fax : +91 - 40 – 23420814,23001153
Toll Free no.: 1800-345-4001
E-mail : einward.ris@karvy.com
Website : www.karvy.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
Sl. No.

NIC Code of the Product

% to total turnover of the Company

1

Soaps

20231

31.99

2

Detergents

20233

16.53

3

54

Name and Description of Products

Cosmetics & Toiletries

20237

16.44

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Sl
No.

Name and address of the company

CIN/GLN

% of shares
Held

Holding Company [Section 2(46)]
1

Unilever PLC
Port Sunlight, Wirral, Merseyside CH624ZD

N.A.

51.51

2

Brooke Bond Group Limited #

N.A.

4.93

3

Unilever Overseas Holdings AG
Hinterbergstrasse 28, Postfach 5364, 6330 Cham 2, Switzerland

N.A.

3.18

4

Unilever UK&CN Holdings Limited #

N.A.

2.78

5

Brooke Bond South India Estates Limited #

N.A.

2.44

6

Brooke Bond Assam Estates Limited #

N.A.

1.52

7

Unilever Overseas Holdings B V #

N.A.

0.87

Subsidiary Companies [Section 2(87)(ii)]
1

Unilever India Exports Limited *

U51900MH1963PLC012667

100

2

Pond’s Exports Limited *

U24246MH1981PLC261125

90

3

Lakme Lever Private Limited
Shree Niwas House, 1st Floor, H. Somani Marg, Fort, Mumbai 400 001

U24247MH2008PTC188539

100

4

Unilever Nepal Limited
Basamadi V.D.C. – 5, P.O. Box-11, Hetauda, Dist. Makwanpur, Nepal

N.A.

5

Daverashola Estates Private Limited *

U15200MH2004PTC149035

100

6

Jamnagar Properties Private Limited *

U70101MH2006PTC165144

100

7

Levers Associated Trust Limited *

U74999MH1946PLC005403

100

80

# Registered Office address as - Unilever House, 100 Victoria, Embankment, London EC4Y0DY
* Registered Office address as - B. D. Sawant Marg, Chakala, Andheri (East), Mumbai 400 099

Annual Report 2014-15

Directors’ Report

55

Sl
No.

Name and address of the company

CIN/GLN

% of shares
Held

8

Levindra Trust Limited *

U67120MH1946PLC005402

100

9

Hindlever Trust Limited *

U65990MH1958PLC011060

100

10

Hindustan Unilever Foundation *

U93090MH2010NPL201468

76

11

Bhavishya Alliance Child Nutrition Initiatives
U93090MH2010NPL208544
Plot No. 131, J lane, Near Sagar Vihar Sector 8, Vashi Navi Mumbai – 400730

100

Associate Company [Section 2(6)]
1

Kimberly Clark Lever Private Limited
Gat No 934-937 Villagesanaswadi Taluka- Shirur, PUNE - 412208

U74999PN1994PTC081290

50

# Registered Office address as - Unilever House, 100 Victoria, Embankment, London EC4Y0DY
* Registered Office address as - B. D. Sawant Marg, Chakala, Andheri (East), Mumbai 400 099

56

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY) i)

Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year
Demat

No. of Shares held at the end of the year

Physical

Total

%of
Total
Shares

Demat

Physical

Total

%
Change
%of during Total the year
Shares

A. Promoters
1. Indian

-

-

-

-

-

-

-

-

2. Foreign

-

-

-

-

-

-

-

-

-

– Bodies Corporates

Total Promoter Shareholding (A)

-

145,44,12,858

- 1,45,44,12,858

67.25 1,45,44,12,858

- 1,45,44,12,858

67.23

-0.02

1,45,44,12,858

- 1,45,44,12,858

67.25 1,45,44,12,858

- 1,45,44,12,858

67.23

-0.02

B. Public Shareholding
1. Institutions

– Mutual Funds

61,21,796

49,284

61,71,080

0.29

68,16,072

49,284

68,65,356

0.32

0.03

– Banks / Financial Institutions

50,77,884

1,30,990

52,08,874

0.24

21,62,571

1,30,990

22,93,561

0.11

-0.13

– State Government

-

20

20

-

-

20

20

-

0.00

– Insurance Companies

-0.20

– Foreign Institutional Investors

Sub-total (B)(1)

7,77,08,936

9,500

7,77,18,436

3.59

7,34,75,359

9,500

7,34,84,859

3.39

30,49,01,482

38,480

30,49,39,962

14.10

32,47,53,230

37,960

32,47,91,190

15.01

0.91

39,38,10,098

2,28,274

39,40,38,372

18.22

40,72,07,232

2,27,754

40,74,34,986

18.83

0.61

2,77,31,981

2,76,274

2,82,67,145

1.31

2,38,56,485

4,85,464

2,43,41,949

1.13

-0.18

3,600

-

3,600

-

3,600

-

3,600

-

0.00

21,41,67,969 5,58,00,123

26,99,68,092

12.48

20,93,74,692 5,19,21,729

26,12,96,421

12.08

-0.40

9,20,230

52,11,038

0.24

45,64,254

7,10,350

52,74,604

0.24

0.00

10,82,684

-

10,82,684

0.05

17,72,826

-

17,72,826

0.08

0.03

69,45,506

4,27,400

73,72,906

0.34

72,65,962

4,22,630

76,88,592

0.36

0.02

4,886

3,120

8,006

-

13,895

3,120

17,015

-

0.00

23,879

-

23,879

-

23,879

-

23,879

-

0.00

2. Non-Institutions

– Bodies Corporates i) Indian ii) Overseas

– Individuals i) Individual shareholders holding nominal share capital upto Rs. 1 lakh ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

42,90,808

– Others

i)

ii) Non Resident Indians

Trust

iii) Foreign Nationals

iv) Foreign Banks

v) Directors & their Relatives

vi) Clearing Members

vii) Qualified Foreign Investor

1,26,303

-

1,26,303

0.01

68,168

1,441

69,609

-

-0.01

21,81,309

-

21,81,309

0.10

11,28,512

-

11,28,512

0.05

-0.05

100

-

-

100

-

-

-

-

0.00

Sub-total (B)(2):-

25,65,59,025 5,74,27,147

31,42,45,062

14.53

24,80,72,273 5,35,44,734

30,16,17,007

13.94

-0.59

Total Public Shareholding
(B)=(B)(1)+(B)(2)

65,03,69,123 5,76,55,421

70,82,83,434

32.75

65,52,79,505 5,37,72,488

70,90,51,993

32.77

0.02

-

-

-

-

-

100.00 2,10,96,92,363 5,37,72,488 2,16,34,64,851

100.00

-

C.  hares held by Custodian for
S
GDRs & ADRs
Grand Total (A+B+C)

Annual Report 2014-15

-

-

2,10,47,81,981 5,76,55,421 2,16,26,96,292

-

-

Directors’ Report

57

ii) Shareholding of Promoters
Sl
No.

Shareholder’s Name

Shareholding at the beginning of the year

No. of %of Shares
% of Shares
Shares total of the
Pledged / company encumbered to total shares
1

Unilever PLC

1,11,43,70,148

51.53

2

Brooke Bond Group Limited

10,67,39,460

4.93

-

3

Unilever Overseas Holdings AG

6,87,84,320

3.18

4

Unilever UK & CN Holdings
Limited

6,00,86,250

5

Brooke Bond South India
Limited

6
7

% change in share holding during the year

Shareholding at the end of the year

No. of
Shares

%of total
% of Shares
Shares of
Pledged / the company encumbered to total shares
51.51

-

-0.02

10,67,39,460

4.93

-

0.00

-

6,87,84,320

3.18

-

0.00

2.78

-

6,00,86,250

2.78

-

0.00

5,27,47,200

2.44

-

5,27,47,200

2.44

-

0.00

Brooke Bond Assam Estates
Limited

3,28,20,480

1.52

-

3,28,20,480

1.52

-

0.00

Unilever Overseas Holdings BV

1,88,65,000

0.87

-

1,88,65,000

0.87

-

0.00

1,45,44,12,858

67.25

- 1,45,44,12,858

67.23

-

-0.02

Total

- 1,11,43,70,148

iii) Change in Promoters’ Shareholding 
There are no changes in the Promoter’s shareholding during the Financial Year 2014-15. The percentage change in the
Promoters’ holding is due to increase in the paid up share capital of the Company iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) as on
31st March, 2015:
Sl. Name of shareholders
No.

Cumulative Shareholding during the year

Shareholding

No. of shares
1

No. of shares

% of total shares of the company

1,78,74,900

0.83

1,78,74,900

0.83

17,97,749

0.08

1,96,72,649

0.91

-

-

1,96,72,649

0.91

1,96,72,649

0.91

1,96,72,649

0.91

Life insurance Corporation of India
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year

58

% of total shares of the company

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

Sl. Name of shareholders
No.

Financial Statements

Shareholder Information

Cumulative Shareholding during the year

Shareholding

No. of shares
2

Bought during the year
Sold during the year
At the end of the year

Bought during the year
Sold during the year
At the end of the year

Bought during the year
Sold during the year
At the end of the year

0.88

1,90,17,349

0.88

5,000

-

1,90,22,349

0.88

14,45,191

0.07

1,75,77,158

0.81

1,75,77,158

0.81

1,75,77,158

0.81

1,96,91,476

0.91

1,96,91,476

0.91

3,59,974

0.02

2,00,51,450

0.93

51,23,696

0.24

1,49,27,754

0.69

1,49,27,754

0.69

1,49,27,754

0.69

1,72,56,269

0.80

1,72,56,269

0.80

-

-

1,72,56,269

0.80

36,44,781

0.17

1,36,11,488

0.63

1,36,11,488

0.63

1,36,11,488

0.63

1,87,88,244

0.87

1,87,88,244

0.87

Aberdeen Global Indian Equity (Mauritius)
Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year

6

1,90,17,349

Vontobel India Fund
At the beginning of the year

5

% of total shares of the company

Virtus Emerging Markets Opportunities Fund
At the beginning of the year

4

No. of shares

The New India Assurance Company limited
At the beginning of the year

3

% of total shares of the company

-

-

1,87,88,244

0.87

58,13,029

0.27

1,29,75,215

0.60

1,29,75,215

0.60

1,29,75,215

0.60

Vanguard Emerging Markets Stock Index
Fund A Series
At the beginning of the year

1,25,30,229

0.58

1,25,30,229

0.58

Bought during the year

8,09,066

0.04

1,33,39,295

0.62

Sold during the year

5,02,397

0.03

1,28,36,898

0.59

1,28,36,898

0.59

1,28,36,898

0.59

At the beginning of the year

95,57,203

0.44

95,57,203

0.44

Bought during the year

24,07,781

0.11

1,19,64,984

0.55

2,31,198

0.01

1,17,33,786

0.54

1,17,33,786

0.54

1,17,33,786

0.54

At the end of the year
7

Abu Dhabi Investment Authority – Gulab

Sold during the year
At the end of the year

Annual Report 2014-15

Directors’ Report

59

Sl. Name of shareholders
No.

Cumulative Shareholding during the year

Shareholding

No. of shares
8

% of total shares of the company

No. of shares

% of total shares of the company

1,29,74,415

0.60

1,29,74,415

0.60

General Insurance Corporation of India
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year

9

-

-

1,29,74,415

0.60

12,43,475

0.06

1,17,30,940

0.54

1,17,30,940

0.54

1,17,30,940

0.54

1,57,00,443

0.72

1,57,00,443

0.72

Aberdeen Emerging Markets Fund
At the beginning of the year
Bought during the year

-

-

1,57,00,443

0.72

50,07,000

-0.23

1,06,93,443

0.49

1,06,93,443

0.49

1,06,93,443

0.49

At the beginning of the year

54,96,225

0.26

54,96,225

0.26

Bought during the year

52,19,083

0.24

1,07,15,308

0.50

Sold during the year

12,50,037

0.06

94,65,271

0.44

94,65,271

0.44

94,65,271

0.44

Sold during the year
At the end of the year
10

Government of Singapore

At the end of the year

Notes :
• The above information is based on the weekly beneficiary position received from Depositories.

•

The date wise increase or decrease in shareholding of the top ten shareholders is available on the website of the Company www.hul.co.in

v) Shareholding of Directors and Key Managerial Personnel:
Sl.
No.

Name of Directors / KMP

1

Shareholding at the beginning of the year

Mr. Harish Manwani

No. of shares

At the beginning of the year
Bought during the year
Sold during the year

% of total shares of the company

Cumulative Shareholding during the year

No. of shares

% of total shares of the company

22,130

-

22,130

-

-

-

22,130

-

-

-

22,130

-

22,130

-

22,130

-

At the beginning of the year

3,985

-

3,985

-

Bought during the year

8,421*

-

12,406

-

-

-

12,406

-

12,406

-

12,406

-

At the end of the year
2

Mr. P B Balaji

Sold during the year
At the end of the year

60

Directors’ Report

Hindustan Unilever Limited

Overview

Sl.
No.

Name of Directors / KMP

3

Reports

Financial Statements

Shareholder Information

Shareholding at the beginning of the year

Cumulative Shareholding during the year

Mr. Pradeep Banerjee

No. of shares

% of total shares of the company

No. of shares

% of total shares of the company

At the beginning of the year

26,024

-

26,024

-

Bought during the year

15,536*

-

41,560

-

6,522

-

35,038

-

35,038

-

35,038

-

At the beginning of the year

35

-

35

-

Bought during the year

-

-

35

-

Sold during the year

-

-

35

-

35

-

35

-

At the beginning of the year

20,838

-

20,838

-

Bought during the year

5,052*

-

25,890

-

7,202

-

18,688

-

18,688

-

18,688

-

Sold during the year
At the end of the year
4

Mr. S. Ramadorai

At the end of the year
5

Mr. Dev Bajpai

Sold during the year
At the end of the year

Note : Mr. Sanjiv Mehta, Mr. Aditya Narayan, Mr. O. P. Bhatt, Dr. Sanjiv Misra and Ms. Kalpana Morparia did not hold any shares of the Company during the financial year 2014-15
* Shares alloted under ESOP

V. INDEBTEDNESS The Company had no indebtedness with respect to secured or Unsecured Loans or Deposits during the financial year 2014-15

Annual Report 2014-15

Directors’ Report

61

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(Rs. lakhs)
Sl. No. Particulars of Remuneration

Name of MD/WTD
Sanjiv
Sridhar
Mehta Ramamurthy $

1.

Total
Amount

P. B. Pradeep
Balaji $ $ Banerjee

Gross salary
(a)

Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

629.84

265.66

380.07

203.28

1,478.85

(b)

Value of perquisites u/s 17(2) Income-tax
Act, 1961

108.57

8.06

11.99

19.58

148.20

(c)

Profits in lieu of salary under section 17(3)
Income-tax Act, 1961

292.28

99.38

51.08

87.36

530.10

2.

Stock Option

361.03

368.67

177.33

180.97

1,088.00

3.

Sweat Equity

-

-

-

-

-

4.

Commission

5.

Others (Contribution to PF & Superannuation)

-

-

-

-

-

25.40

5.80

10.16

15.02

56.38

Total (A)

1,417.12

747.57

630.63

506.21

3,301.53

Ceiling as per the Act

Rs. 55,362 lakhs (being 10% of Net Profits of the Company has calculated as per Section 198 of the Companies Act,
2013)

$ Ceased to be as Director w.e.f. 30th June, 2014 $$ Appointed as Director w.e.f. 1st July, 2014

62

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

B. Remuneration to other Directors:
(Rs. lakhs)
Particulars of Remuneration

Name of other Directors
Chairman*
Harish
Manwani

– Fee for attending Board /
Committee meetings

Total
Amount

Independent Directors
Aditya S Ramadorai O P Bhatt
Narayan

Sanjiv
Misra

Kalpana
Morparia

Total

Nil

4.00

3.40

3.40

3.00

1.40

15.20

– Commission#

15.5

24.00

22.47

25.04

21.75

13.50

122.26

Total (B)

15.5

28

25.87

28.44

24.75

14.90

137.46

Ceiling as per the Act

Rs. 553.6 lakhs (being 1% of Net Profits of the Company calculated as per Section 198 of the Companies Act, 2013)

Total Managerial
Remuneration =(A+B)

3,423.49

Overall Ceiling as per the Act Rs. 60,898 lakhs (being 11% of Net Profits of the Company calculated as per Section
198 of the Companies Act, 2013) *

Non-Executive Non-Independent Director
#
The commission for the Financial Year ended 31st March, 2015 will be paid after adoption of accounts by the shareholders at the AGM to be held on 
29th June, 2015

C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD
(Rs. lakhs)
Sl. No. Particulars of Remuneration
1

2.
3.
4.
5.

Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary under section 17(3) Income tax Act, 1961
Stock Option
Sweat Equity
Commission
Others
Total

Key Managerial Personnel
Dev Bajpai
181.69
15.80
80.82
96.86
12.55
387.72

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: There were no penalties / punishment / compounding of offences for breach of any section of Companies Act against the
Company or its Directors or other officers in default, if any, during the year.
On behalf of the Board

Mumbai, 8th May, 2015

Annual Report 2014-15

Harish Manwani
Chairman
(DIN: 00045160)

Directors’ Report

63

Annexure to the Directors’ Report

Statement of Disclosure of Remuneration Under Section 197 of Companies Act, 2013 and Rule
5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 i . 
Ratio of the remuneration of each Executive Director to the median remuneration of the Employees of the Company for the financial year 2014-15, the percentage increase in remuneration of Chief Executive Officer, Chief Financial Officer and other
Executive Director and Company Secretary during the financial year 2014-15.
Ratio of remuneration of each Director to median remuneration of Employees
93:1

Percentage increase in Remuneration

S.No Name of Director/KMP

Designation

1

Sanjiv Mehta

Managing Director & CEO

2

P. B. Balaji

Executive Director, Finance &IT and CFO

59:1

(1.4)*

3

Pradeep Banerjee

Executive Director, Supply Chain

32:1

5.4

4

Dev Bajpai

Executive Director (Legal and Corporate
Affairs) and Company Secretary

Not Applicable

5.6

(2.9)*

* Governed under remuneration structure, impacted by currency fluctuations.
Note : a) 
The Non-Executive Directors of the Company are entitled for sitting fee and commission as per the statutory provisions and within the limits approved by the shareholders. The details of remuneration of Non-Executive Directors are provided in the Corporate Governance Report and is governed by the Differential
Remuneration Policy, as detailed in the said report. The ratio of remuneration and percentage increase for Non-Executive Directors Remuneration is therefore not considered for the purpose above.

b) 
Percentage increase in remuneration indicates annual target total compensation increases, as approved by the Nomination and Remuneration Committee of the
Company during the financial year 2014- 15.

c)

Employees for the purpose above includes all employees excluding employees governed under collective bargaining.

ii. The percentage increase in the median remuneration of Employees for the financial year was 4.55%. iii. The Company has 6,289 permanent Employees on the rolls of Company as on 31st March, 2015. iv. 
Relationship between average increase in remuneration and Company’s performance: The reward philosophy of the Company is to provide market competitive total reward opportunity that has a strong linkage to and drives performance culture. Every year, the salary increases for the Company are decided on the basis of a benchmarking exercise that is undertaken with similar profile organizations. The final salary increases given are a function of Company’s market competitiveness in this comparator group as well as overall business affordability. During the year, similar approach was followed to establish the remuneration increases to the Employees. Variable compensation is an integral part of our total reward package and is directly linked to an individual performance rating and business performance. Salary increases during the year were in line with Company’s performance as well as per Company’s market competitiveness.
v. 
Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: In line with
Company’s reward philosophy, merit increases and annual bonus pay-outs of its Employees including Key Managerial Personnel are directly linked to individual performance as well as that of the business. Given the superior business performance and the performance rating of the Key Managerial Personnel, appropriate reward by way of merit increase or variable pay have been awarded to the Key Managerial Personnel for the current year. This was duly reviewed and approved by the Nomination &
Remuneration Committee of the Company. During the year, the Company’s Domestic Consumer business grew by 10% with 5% underlying volume growth. Profit before interest and tax (PBIT) grew by 17% with PBIT margin improving +90 bps. Profit after tax but before exceptional items, PAT (bei), grew by 8%.

64

Directors’ Report

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

vi. 
The Market Capitalisation of the Company as on 31st March, 2015 was Rs.1,88,849 crores as compared to Rs. 1,30,551 crores as on 31st March, 2014. The price earnings ratio of the Company was 43.75 as at 31st March, 2015 and was 33.76 as at 31st March,
2014. The closing share price of the Company at BSE Limited on 31st March, 2015 being Rs. 879.90/- per equity share of face value of Re. 1/- each has grown 451 times since the last offer for sale made in the year 1980 (Offer Price was Rs. 19.50/- per equity share of face value of Rs. 10/- each). vii. 
Average percentage increase made in the salaries of Employees other than the managerial personnel in the financial year was
3.95% whereas the increase in the managerial remuneration was [0.8] %. The average increases every year is an outcome of
Company’s market competitiveness as against its peer group companies. In keeping with our reward philosophy and benchmarking results, the increases this year reflect the market practice. viii.  he key parameters for any variable component of remuneration: Variable compensation is an integral part of our total reward
T
package for all Employees including Executive Directors. Annual Bonus is directly linked to an individual performance rating and business performance. At the start of the year, every Employee (including Executive Directors), have key targets assigned for the year in addition to their job fundamentals. These are drawn from the organizational strategic plan and are then reviewed for consistency and stretch. Business targets are a combination of goals such as Underlying Volume Growth, Underlying Sales
Growth, Core Operating Margin etc. ix.  ratio of the remuneration of the highest paid Director to that of the Employees who are not Directors but receive
The
remuneration in excess of the highest paid Director during the year : Not Applicable
x.

It is hereby affirmed that the remuneration paid during the year is as per the Remuneration Policy of the Company.
On behalf of the Board
Harish Manwani

Mumbai, 8th May, 2015

Chairman
(DIN: 00045160)

Annual Report 2014-15

Directors’ Report

65

CORPORATE
GOVERNANCE
“I believe that nothing can be greater than a business, however small it may be, that is governed by conscience; and that nothing can be meaner or more petty than a business, however large, governed without honesty and without brotherhood.”
– William Hesketh Lever
Transparency and accountability are the two basic tenets of
Corporate Governance. At Hindustan Unilever, we feel proud to belong to a Company whose visionary founders laid the foundation stone for good governance long back and made it an integral principle of the business, as demonstrated in the words above. Responsible corporate conduct is integral to the way we do our business. Our actions are governed by our values and principles, which are reinforced at all levels within the Company. At
Hindustan Unilever, we are committed to doing things the right way which means taking business decisions and acting in a way that is ethical and is in compliance with applicable legislation.
Our Code of Business Principles is an extension of our values and reflects our continued commitment to ethical business practices across our operations. We acknowledge our individual and collective responsibilities to manage our business activities with integrity. Our Code of Business Principles inspires us to set standards which not only meet applicable legislation but go beyond in many areas of our functioning.
To succeed, we believe, requires highest standards of corporate behaviour towards everyone we work with, the communities we touch and the environment on which we have an impact. This is our road to consistent, competitive, profitable and responsible growth and creating long term value for our shareholders, our people and our business partners. The above principles have been the guiding force for whatever we do and shall continue to be so in the years to come.
The Board of Directors (‘the Board’) is responsible for and committed to sound principles of Corporate Governance in the
Company. The Board plays a crucial role in overseeing how the management serves the short and long term interests of shareholders and other stakeholders. This belief is reflected in our governance practices, under which we strive to maintain an effective, informed and independent Board. We keep our governance practices under continuous review and benchmark ourselves to best practices across the globe.

66

Corporate Governance

The Board of Directors has adopted ‘Corporate Governance
Code’ for the Company which is a statement of practices and the procedures to be followed by the Company. The copy of the code is available on Company’s website www.hul.co.in/ investorrelations/CorporateGovernance/ THE BOARD OF DIRECTORS
The Board of Directors is entrusted with the ultimate responsibility of the management, general affairs, direction and performance of the Company and has been vested with requisite powers, authorities and duties. The Management Committee of the Company is headed by the Managing Director and Chief
Executive Officer and has business / functional heads as its members, which look after the management of the day-to-day affairs of the Company.

Composition
The Board comprises such number of Non-Executive, Executive and Independent Directors as required under applicable legislation. As on date of this Report, the Board consists of nine Directors comprising one Non-Executive Chairman, five Independent Directors and three Executive Directors.
The composition of the Board represents an optimal mix of professionalism, knowledge and experience and enables the
Board to discharge its responsibilities and provide effective leadership to the business. The positions of the Chairman of the
Board and the Chief Executive Officer of the Company are held by separate individuals, where the Chairman of the Board is a
Non-Executive Director. None of the Directors of your Company are related to each other.
During the year, Mr. Sridhar Ramamurthy, consequent to his elevation as Senior Vice President, Finance for Global Markets,
Unilever stepped down as the Executive Director, Finance &
IT and Chief Financial Officer of the Company. Mr. P. B. Balaji was appointed as the Executive Director, Finance & IT and Chief
Financial Officer succeeding Mr. Sridhar Ramamurthy on the
Board with effect from 1st July, 2014.
Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

The Board of Directors appointed Ms. Kalpana Morparia, as an Independent Director on the Board of the Company with effect from
9th October, 2014.
The details of each member of the Board along with the number of Directorship(s) / Committee Membership(s)/Chairmanship(s) and date of joining the Board are provided hereinbelow:

Composition and Directorship(s) / Committee Membership(s)/Chairmanship(s) as on 31st March, 2015
Name
Non-Executive Chairman
Harish Manwani
Managing Director and CEO
Sanjiv Mehta
Executive Director (Finance & IT) and CFO
P. B. Balaji
Executive Director
Pradeep Banerjee
Independent Directors
Aditya Narayan
S. Ramadorai
O. P. Bhatt
Sanjiv Misra
Kalpana Morparia
#

Date of joining the
Board

Directorship
Membership(s) of
Chairmanship(s)
in other Committees of other of Committees of
Companies#
Companies## other Companies##

29.04.2005

–

–

–

01.10.2013

–

–

–

01.07.2014

–

–

–

01.03.2010

1

1

–

29.06.2001
20.05.2002
20.12.2011
08.04.2013
09.10.2014

2
7
2
3
2

2
4
3
2
3

1
1
–
1
2

Excluding Private Limited Companies, Foreign Companies, Section 8 Companies and Alternate Directorships.
Includes only Audit Committee and Stakeholders’ Relationship Committee.

##

The number of Directorships, Committee Memberships/
Chairmanships of all Directors is within respective limits prescribed under the Companies Act, 2013 and Listing Agreement.

Appointment and Tenure
The Directors of the Company are appointed by Members at the
General Meetings. In accordance with the Articles of Association of the Company, all Directors, except the Managing Director and
Independent Directors of the Company, step down at the Annual
General Meeting each year and, if eligible, offer themselves for re-election. The Managing Director of the Company is appointed for a term of five years as per the requirement of the statute. The
Executive Directors on the Board serve in accordance with the terms of their contract of service with the Company.
As regards the appointment and tenure of Independent Directors, following is the policy adopted by the Board:
• The Company has adopted the provisions with respect to appointment and tenure of Independent Directors which are consistent with the Companies Act, 2013 and Listing
Agreement.
• The Independent Directors will serve a maximum of two terms of five years each.
• The Company would not have any upper age limit of retirement of Independent Directors from the Board and their appointment

Annual Report 2014-15

and tenure will be governed by provisions of the Companies
Act, 2013.

Board Independence
Our definition of ‘Independence’ of Directors is derived from
Clause 49 of the Equity Listing Agreement and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, all Non-Executive Directors other than the Chairman are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act,
2013. Mr. Harish Manwani, who was acting as Chief Operating
Officer of the parent Company till 31st December, 2014, is not considered as an Independent Director.

Board Meetings
The Board meets at regular intervals to discuss and decide on
Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee
Meetings is circulated to the Directors well in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. However, in case of a special and urgent business need, the Board’s approval is taken by passing resolutions by circulation, as permitted by law, which is noted and confirmed in the subsequent Board meeting.
Corporate Governance

67

The notice of Board meeting is given well in advance to all the
Directors. Usually, meetings of the Board are held in Mumbai.
The Agenda of the Board / Committee meetings is set by the
Company Secretary in consultation with the Chairman and the
Chief Executive Officer of the Company. The Agenda is circulated a week prior to the date of the meeting. The Agenda for the
Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision.

• appointing Directors on the Board and Members of Management
Committee;

During the Financial Year ended 31st March, 2015, eight Board meetings were held on 28th April, 2014, 29th and 30th April,
2014, 28th July, 2014, 5th September, 2014, 27th October,
2014, 19th December, 2014, 19th January, 2015 and 17th and
18th March, 2015. The maximum interval between any two meetings was well within the maximum allowed gap of 120 days.

The Company Secretary is responsible for collation, review and distribution of all papers submitted to the Board and
Committees thereof for consideration. The Company Secretary is also responsible for preparation of the Agenda and convening of the Board and Committee meetings. The Company Secretary attends all the meetings of the Board and its Committees, advises / assures the Board on Compliance and Governance principles and ensures appropriate recording of minutes of the meetings.

Board Business
The normal business of the Board includes:
• framing and overseeing progress of the Company’s annual plan and operating framework;
• framing strategies for shaping of portfolio and direction of the
Company and for corporate resource allocation;
• reviewing financial plans of the Company;
• reviewing quarterly and annual business performance of the
Company;
• reviewing the Annual Report and accounts for adoption by the
Members;
• reviewing the progress of various functions and businesses of the Company;
• reviewing the functioning of the Board and its Committees;
• reviewing the functioning of the subsidiary companies;
• considering and approving declaration / recommendation of dividend; • reviewing and resolving fatal or serious accidents or dangerous occurrences, any materially significant effluent or pollution problems or significant labour issues, if any;
• reviewing the details of significant development in human resources and industrial relations front;
• reviewing details of foreign exchange exposure and steps taken by the management to limit the risks of adverse exchange rate movement; • reviewing compliance with all relevant legislations and regulations and litigation status, including materially important show cause, demand, prosecution and penalty notices, if any;
•
reviewing Board Remuneration Policy remuneration packages of Directors;

and

individual

• advising on corporate restructuring such as merger, acquisition, joint venture or disposals, if any;
68

Corporate Governance

• reviewing Corporate Social Responsibility policy of the
Company and monitoring implementation thereof;
• reviewing details of risk evaluation and internal controls;
• reviewing reports on progress made on the ongoing projects;
• monitoring and reviewing Board Evaluation framework.

Board Support

With a view to leverage technology and reducing paper consumption, the Company has adopted a web-based application for transmitting Board / Committee Agenda and Pre-reads. The
Directors of the Company receive the Agenda and Pre-reads in electronic form through this application, which can be accessed through Browsers or iPads. The application meets high standards of security and integrity that is required for storage and transmission of Board / Committee Agenda and Pre-reads in electronic form.

Separate Independent Directors’ Meetings
The Independent Directors meet at least once in a quarter, without the presence of Executive Directors or Management representatives. They also have a separate meeting with the
Non-Executive Chairman, to discuss issues and concerns, if any.
The Independent Directors met four times during the Financial
Year ended 31st March, 2015 on 28th April, 2014, 28th July,
2014, 27th October, 2014 and 19th January, 2015 and inter alia discussed: • the performance of non-Independent Directors and the Board as a whole;
• the performance of the Chairperson of the Company, taking into account the views of Executive Directors and NonExecutive Directors; and
• the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
In addition to these formal meetings, interactions outside the
Board meetings also take place between the Chairman and
Independent Directors.
Hindustan Unilever Limited

Overview

Reports

Directors’ Induction and Familiarization
The provision of an appropriate induction programme for new
Directors and ongoing training for existing Directors is a major contributor to the maintenance of high Corporate Governance standards of the Company. The Chief Executive Officer and the Company Secretary are jointly responsible for ensuring that such induction and training programmes are provided to
Directors. The Independent Directors, from time to time request management to provide detailed understanding of any specific project, activity or process of the Company. The management provides such information and training either at the meeting of
Board of Directors or otherwise.
The induction process is designed to:
a. build an understanding of Hindustan Unilever, its businesses and the markets and regulatory environment in which it operates;
b. provide an appreciation of the role and responsibilities of the
Director;
c. fully equip Directors to perform their role on the Board effectively; and
d.
develop understanding of Company’s people and its key stakeholder relationships.
Upon appointment, Directors receive a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments.
In addition to the extensive induction and training provided as part of the familiarization programme, the Independent Directors are also taken through various business and functional sessions in the
Board meetings including the Board meetings to discuss strategy.
The details of Director’s induction and familiarization are available on the Company’s website at www.hul.co.in/investorrelations/
CorporateGovernance/

Board Evaluation
The Nomination and Remuneration Committee of the Company approved a Evaluation Policy during the year, which was adopted by the Board of Directors. The policy provides for evaluation of the Board, the Committees of the Board and individual Directors, including the Chairman of the Board. The Policy provides that evaluation of the performance of the Board as a whole, Board
Committees and Directors shall be carried out on an annual basis and the same will be facilitated by an independent consultant once in three years.
During the year, the first Evaluation cycle was completed by the
Company internally which included the Evaluation of the Board as a whole, Board Committees and Directors. The exercise was led by the Non Executive Chairman alongwith a Senior Independent
Director of the Company. The Evaluation process focused on various aspects of the Board and Committees functioning such
Annual Report 2014-15

Financial Statements

Shareholder Information

as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and independent judgement.
The results of the Evaluation were shared with the Board,
Chairman of respective Committees and individual Directors.
Based on the outcome of the Evaluation, the Board and
Committees have agreed on the action plan to improve on the identified parameters.

COMMITTEES OF THE BOARD
The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas / activities which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles which are considered to be performed by members of the Board, as a part of good governance practice. The Board supervises the execution of its responsibilities by the Committees and is responsible for their action. The minutes of the meetings of all
Committees are placed before the Board for review. The Board
Committees can request special invitees to join the meeting, as appropriate. The Board has currently established the following statutory and non-statutory Committees.

Audit Committee
The Company’s Audit Committee comprises all the five
Independent Directors. The Audit Committee is headed by
Mr. Aditya Narayan and has Mr. S. Ramadorai, Mr. O. P. Bhatt,
Dr. Sanjiv Misra and Ms. Kalpana Morparia as its members.
During the year, Ms. Kalpana Morparia was appointed as a
Member of the Committee with effect from 9th October, 2014.
All the members of the Committee have relevant experience in financial matters.
The Audit Committee of the Company is entrusted with the responsibility to supervise the Company’s internal controls and financial reporting process and inter alia performs the following functions: • overseeing the Company’s financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible;
• reviewing and examination with management the quarterly financial results before submission to the Board;
• reviewing and examination with management the annual financial statements before submission to the Board and the auditors’ report thereon;
Corporate Governance

69

• review management discussion and analysis of financial condition and results of operations;
• scrutiny of inter-corporate loans and investments made by the
Company;
• reviewing with management the annual financial statements as well as investments made by the unlisted subsidiary companies; • reviewing, approving or subsequently modifying any Related
Party Transactions in accordance with the Related Party
Transaction Policy of the Company;
• approving the appointment of Chief Financial Officer after assessing the qualifications, experience and background, etc. of the candidate;
• recommending the appointment, remuneration and terms of appointment of Statutory Auditors of the Company and approval for payment of any other services;
• reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
• reviewing management letters / letters of internal control weaknesses issued by the Statutory Auditors;
• discussing with Statutory Auditors, before the audit commences, on the nature and scope of audit as well as having post-audit discussion to ascertain area of concern, if any;
• reviewing with management, Statutory Auditors and Internal
Auditor, the adequacy of internal control systems;
•
recommending appointment, remuneration and terms of appointment of Internal Auditor of the Company;
•
reviewing the adequacy of internal audit function and discussing with Internal Auditor any significant finding and reviewing the progress of corrective actions on such issues;
• evaluating internal financial controls and risk management systems; • valuating undertaking or assets of the Company, wherever it is necessary; • reviewing the functioning of the Whistle Blowing mechanism;
• reviewing the progress made on cases that are reported under the Code of Business Principles of the Company and implication of these cases, if any, under the UK Bribery Act, 2011.
In addition to quarterly meetings for consideration of financial results, special meetings of the Audit Committee are convened.
In these meetings, the Audit Committee reviews various businesses / functions, business risk assessment, controls and critical IT applications with implications of security and internal audit and control assurance reports of all the major divisions of the Company. The Audit Committee also reviews the functioning of the Code of Business Principles and Whistle
Blower Policy of the Company and cases reported thereunder.
The recommendations of audit committee were duly approved and accepted by the Board.

70

Corporate Governance

The meetings of Audit Committee are also attended by the Chief
Executive Officer, Chief Financial Officer, Statutory Auditors and
Internal Auditor as special invitees. The Company Secretary acts as the Secretary to the Committee. The minutes of each
Audit Committee meeting are placed and confirmed in the next meeting of the Board. The Audit Committee also meets the internal and external auditors separately, without the presence of Management representatives.
The Audit Committee met six times during the Financial Year ended 31st March, 2015 on 28th April, 2014, 9th June, 2014,
28th July, 2014, 27th October, 2014, 19th December, 2014 and
19th January, 2015.
Internal Controls and Risk Management
The Company has robust systems for internal audit and corporate risk assessment and mitigation. The Company has an independent Control Assurance Department (CAD) assisted by dedicated outsourced audit teams.
The Internal Audit covers all the factories, sales offices, warehouses and centrally controlled businesses and functions, as per the annual plan agreed with the Audit Committee. The audit coverage plan of CAD is approved by the Audit Committee at the beginning of every year. Every quarter, the Audit Committee of the Board is presented with key control issues and actions taken on the issues highlighted in previous report.
Business Risk Assessment procedures have been set in place for self-assessment of business risks, operating controls and compliance with Corporate Policies. There is an ongoing process to track the evolution of risks and delivery of mitigating action plans.
During the year, on the recommendation of the Audit Committee, the Board of Directors appointed Mr. V. Hariharan as the Internal
Auditor of the Company.
Financial controls review procedures and guidelines are issued by Unilever annually in line with Sarbanes-Oxley (S. 404) requirements. Unit heads are responsible for implementing these procedures to confirm the effectiveness of the financial controls in that unit and to correct any instances of weaknesses identified. In addition, effectiveness of operational and nonfinancial controls is also reviewed by the unit heads.

Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises
Mr. S. Ramadorai as the Chairman and Mr. Aditya Narayan,
Mr. O. P. Bhatt, Dr. Sanjiv Misra and Mr. Harish Manwani as members of the Committee. During the year, Mr. Sanjiv Mehta stepped down as a member of the Committee with effect from
23rd June, 2014 to make the composition of the Committee consistent with requirements of revised clause 49 of Listing
Agreement. In terms of Section 178 (1) of the Companies Act,
2013 and Clause 49 of the Listing Agreement, the Nomination
Hindustan Unilever Limited

Overview

Reports

and Remuneration Committee should comprise of at least three
Directors; all of whom should be Non-Executive Directors. At least half of the Committee members should be Independent with an
Independent Director acting as the Chairman of the Committee.
The role of Nomination and Remuneration Committee is as follows: • Determine/ recommend the criteria for appointment of Executive,
Non-Executive and Independent Directors to the Board;
• Determine/ recommend the criteria for qualifications, positive attributes and independence of Director;
• Identify candidates who are qualified to become Directors and who may be appointed in the Management Committee and recommend to the Board their appointment and removal;
• Review and determine all elements of remuneration package of all the Executive Directors, i.e. salary, benefits, bonuses, stock options, pension etc;
• Review and determine fixed component and performance linked incentives for Directors, along with the performance criteria;
• Determine policy on service contracts, notice period, severance fees for Directors and Senior Management;
• Formulate criteria and carryout evaluation of each Director’s performance and performance of the Board as a whole;
The Committee also plays a role of a Compensation Committee and is responsible for administering the Stock Option Plan and Performance Share Plan of the Company and determining eligibility of employees for stock options. During the year, the
Nomination and Remuneration Committee has formulated the policy on Board Diversity to ensure diversity of experience, knowledge, perspective, background, gender, age and culture.
The Nomination and Remuneration Committee met five times during the Financial Year ended 31st March, 2015 on 28th April,
2014, 28th July, 2014, 5th August, 2014, 5th September, 2014 and
18th February, 2015.
Board Membership Criteria
The Board of Directors are collectively responsible for selection of a member on the Board. The Nomination and Remuneration Committee of the Company follows a defined criteria for identifying, screening, recruiting and recommending candidates for election as a Director on the Board. The criteria for appointment to the Board include:
• composition of the Board, which is commensurate with the size of the Company, its portfolio, geographical spread and its status as a listed Company;
• desired age and diversity on the Board;
• size of the Board with optimal balance of skills and experience and balance of Executive and Non-Executive Directors consistent with the requirements of law;
•
professional qualifications, expertise and experience in specific area of business;
Annual Report 2014-15

Financial Statements

Shareholder Information

• balance of skills and expertise in view of the objectives and activities of the Company;
• avoidance of any present or potential conflict of interest;
•
availability of time and other commitments for proper performance of duties;
• personal characteristics being in line with the Company’s values, such as integrity, honesty, transparency, pioneering mindset. Reward Policy
The Reward philosophy of the Company is to provide market competitive total reward opportunity that has a strong linkage to and reinforces the performance culture of the Company. This philosophy is set forth into practice by various policies governing the different elements of total reward. The intent of all these policies is to ensure that the principles of reward philosophy are followed in entirety, thereby facilitating the Company to recruit and retain the best talent. The ultimate objective is to gain competitive advantage by creating a reward proposition that inspires employees to deliver Company’s promise to consumers and the world and achieve superior operational results.
The guiding principles for Company’s reward policies / practices are as follows:
1. Open, Fair, Consistent and Explainable: increase transparency and ensure fairness and consistency in Reward framework.
2.
Insight and Engagement: make Reward truly relevant to the employees by using leading edge tools that helps the
Company ‘hear’ how employees feel about their Reward.
3. Innovation: continuously improve Company’s Reward through innovations based on insight, analytics and Unilever’s expertise. 4.
Simplicity, Speed and Accuracy: simplify reward plans and processes and deliver the information employees need quickly, clearly and efficiently.
5.
Business Results: Company’s business results are the ultimate test of whether Reward solutions are effective and sustainable. The appointment of Executive Directors, Key Managerial
Personnel, Management Committee members and other employees is by virtue of their employment with the Company as management employees and therefore, their terms of employment vis-à-vis salary, variable pay, service contract, notice period and severance fee, if any, are governed by the applicable policies at the relevant point in time. The total reward for Executive Directors, Key Managerial Personnel and
Management Committee members is reviewed and approved by the Nomination and Remuneration Committee annually, taking into account external benchmarks within the context of group and individual performance.

Corporate Governance

71

A fair portion of Executive Directors’ total reward is linked to Company’s performance. This creates alignment with the strategy and business priorities to enhance shareholder value.
Long term incentives in the form of Share Plans, seek to reward Executive Directors, Management Committee members and other eligible employees by aligning their deliverables to business results. Pursuant to the approval of Members at the
Annual General Meeting held on 23rd July, 2012, the Company adopted ‘2012 HUL Performance Share Scheme’, which provides for conditional grant of Performance Shares without charging premium to eligible management employees.
In line with the Evaluation Policy of the Company, the Nomination and Remuneration Committee considers the outcome of the annual Evaluation before recommending the changes in the remuneration of the Executive Directors and appointment/reappointment of Directors.
Non-Executive Independent Directors are eligible for sitting fees and commission not exceeding the limits prescribed under the Companies Act, 2013. The remuneration payable to NonExecutive Directors is decided by the Board of Directors subject to the overall approval of Members of the Company.

Independent Directors are currently paid sitting fees of
Rs. 20,000/- for attending every meeting of the Board or
Committee thereof which has been revised to Rs. 30,000/- with effect from 1st April, 2015. In line with the globally accepted governance practices, the Board of Directors adopted a
‘Differential Remuneration Policy’ for Non-Executive Directors’ remuneration. As per the Differential Remuneration Policy, NonExecutive Independent Directors are entitled to fixed commission on profits at the rate of Rs. 15 lakhs for each financial year. In addition, Non-Executive Independent Directors are entitled to a remuneration linked to their attendance at the meetings of the Board or Committees thereof and also on the basis of their position in various Committees of the Board, whether that of a
Chairman or a member of the Committee(s).
The remuneration payable to the Independent Directors under the Differential Remuneration Policy shall be within the overall limit of Rs. 150 lakhs, as approved by the Members at the Annual
General Meeting held on 26th July, 2013. The criteria adopted by the Company for Differential Remuneration policy is as under:

Rs. lakhs
Commission (p.a.)

Particulars
Fixed Commission:
Base Fixed Commission for Independent Directors
Additional Variable Commission:
Corresponding to the percentage of attendance at all the Board and Committee Meeting(s)
In the capacity of Chairperson of the Committee(s)*
In the capacity of Member of the Committee(s)*

15.00
5.00
2.00
1.00

* Committee includes Audit Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee and Corporate Social Responsibility Committee.

The Non-Executive Directors, who continuously serve minimum two terms of five years each, are also entitled to one time commission of
Rs. 10 lakhs at the time of stepping down from the Board.
During the year, there were no pecuniary relationships or transactions between the Company and any of its Non-Executive
Directors apart from sitting fees and commission. The Company

has not granted any stock options to any of its Non-Executive
Independent Directors.
The details of remuneration paid, stock options and conditional grants made to Executive Directors and remuneration paid to Non-Executive Directors for the Financial Year ended 31st
March, 2015 are provided hereinafter:

Details of Remuneration of Executive Directors for the Financial Year ended 31st March, 2015
Name
Sanjiv Mehta
P. B. Balaji$
Sridhar Ramamurthy$$
Pradeep Banerjee
$
Appointed as a Director w.e.f. 1st July, 2014
$$
Ceased to be a Director w.e.f. 30th June, 2014
72

Corporate Governance

Salary
629.84
380.07
265.66
203.28

Bonus
292.28
51.08
99.38
87.36

Contribution to PF
25.40
10.16
5.80
15.02

Perquisites
469.60
189.32
376.73
200.55

Rs. lakhs
Total
1,417.12
630.63
747.57
506.21

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

Details of Stock Options and Conditional Grants made to the Executive Directors
Outstanding as at
31st March, 2014
Name

Stock
Options

Options / Grants Exercised during the year

Performance
Shares

Stock
Options

Balance as at
31st March, 2015

Grant under
Performance
Performance Share Scheme
Shares during the year

Stock
Options

Performance
Shares

P. B. Balaji$

-

8,421*

-

8,421

-

-

-

Sridhar Ramamurthy$$

-

56,149*

-

40,784

-

-

15,365

8,800

20,422*

8,800

6,736

1,993

-

15,679

Pradeep Banerjee

Exercised and Allotted in March, 2015
$
Appointed as a Director w.e.f. 1st July, 2014
$$
Ceased to be a Director w.e.f. 30th June, 2014
* Including vesting adjustment

Details of Remuneration of Non-Executive Directors for the Financial Year ended 31st March, 2015
Name

Sitting Fees*

Commission#

Rs. lakhs
Total

Harish Manwani

-

15.50

15.50

Aditya Narayan

4.00

24.00

28.00

S. Ramadorai

3.40

22.47

25.87

O. P. Bhatt

3.40

25.04

28.44

Sanjiv Misra

3.00

21.75

24.75

Kalpana Morparia

1.40

13.50

14.90

Includes sitting fees paid for Board and Board Committee meetings.

*

#

The Commission for the Financial Year ended 31st March, 2015 as per the Differential Remuneration Policy will be paid to Independent Directors, subject to deduction of tax, after adoption of accounts by the shareholders at the Annual General Meeting to be held on 29th June, 2015.

Stakeholders’ Relationship Committee
The Stakeholders’ Relationship Committee is comprised of
Mr. O. P. Bhatt, Independent Director as the Chairman and
Mr. Sanjiv Mehta and Mr. P. B. Balaji, as members of the
Committee. Mr. Sridhar Ramamurthy ceased to be a member of the Committee and Mr. P. B. Balaji was appointed as a member of the Committee with effect from 1st July, 2014.
The role of Stakeholders’ Relationship Committee is as follows:
• consider and resolve the grievances of shareholders of the
Company with respect to transfer of shares, non-receipt of annual report, non-receipt of declared dividend, etc;

During the Financial Year ended 31st March, 2015, the Committee met once on 19th December, 2014.
Details of Shareholders’ / Investors’ Complaints
Mr. Dev Bajpai, Executive Director (Legal & Corporate Affairs) and Company Secretary, is the Compliance Officer for resolution of Shareholder’s/Investor’s complaints. During the Financial
Year ended 31st March, 2015, 99 complaints were received from the shareholders. All complaints have been redressed to the satisfaction of the shareholders and none of them were pending as on 31st March, 2015.

• evaluate performance and service standards of the Registrar and Share Transfer Agent of the Company;
• provide guidance and make recommendations to improve investor service levels for the investors.

Annual Report 2014-15

Complaints
Received

Complaints
Redressed

Non-Receipt of Dividend
Non-Receipt of Shares lodged for
Transfer
Others (e.g. non-receipt of
Annual Report)

35
47

35
47

17

17

TOTAL

• ensure expeditious share transfer process in line with the proceedings of the Share Transfer Committee;

99

99

Non-Receipt of Dividend

Corporate Governance

73

TREND OF COMPLAINTS RECEIVED DURING
LAST 5 YEARS:
Non-receipt of Dividend
Non-receipt of shares lodged for transfer
Others

33
6
33

18

2010-11

47
45

In accordance with the requirement of Listing Agreement, your Company constituted a Risk Management Committee during the year. The Committee comprises Mr. Sanjiv Mehta as the Chairman and Mr. P. B. Balaji, Mr. Pradeep Banerjee,
Mr. Dev Bajpai, Executive Director (Legal & Corporate Affairs) and Company Secretary and Mr. V. Hariharan, Internal Auditor as members of the Committee.
The role of Risk Management Committee is as follows:
• Reviewing the Company’s financial and risk management policies; • Assessing risk and minimizing the procedures;

38

24
2011-12

Risk Management Committee

• Implementation of Risk Management Systems and Framework;

37

24
40

17
17

During the Financial Year ended 31st March, 2015, the Committee met once on 28th April, 2014.

35

19
2012-13

2013-14

2014-15

• Framing, implementing and monitoring the risk management plan for the Company.
During the Financial Year ended 31st March, 2015, the Committee met once on 19th March, 2015.

Share Transfer / Transmission Committee
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee comprises
Mr. O. P. Bhatt as the Chairman and Mr. Aditya Narayan,
Dr. Sanjiv Misra, Ms. Kalpana Morparia, Mr. Sanjiv Mehta and
Mr. P. B. Balaji as members of the Committee. During the year Mr. Sridhar Ramamurthy ceased to be a member of the
Committee. Mr. P. B. Balaji and Ms. Kalpana Morparia were appointed as members of the Committee with effect from
1st July, 2014 and 9th October, 2014 respectively.
The role of Corporate Social Responsibility Committee is as follows: The Share Transfer / Transmission Committee has been formed to look into share transfer and related applications received from shareholders, with a view to accelerate the transfer procedures.
The Committee comprises three Directors of the Board. The
Committee inter alia considers applications for transfer, transmission, split, consolidation of share certificates and cancellation of any share certificate in compliance with the provisions in this regard. The Committee is authorised to sign, seal or issue any new share certificate as a result of transfer, consolidation, splitting or in lieu of share certificates lost, defaced or destroyed.

• formulating and recommending to the Board the CSR Policy and activities to be undertaken by the Company;

The Committee meets at regular intervals to approve the share transfers and other related matters.

• recommending the amount of expenditure to be incurred on
CSR activities of the Company;

Committee for Allotment of Shares under ESOPs

• reviewing the performance of the Company in area of CSR;
• providing external and independent oversight and guidance on the environmental and social impact of how the Company conducts its business;
• monitoring CSR Policy of the Company from time to time;
•
monitoring the implementation of the CSR projects or programs or activities undertaken by the Company;

74

Corporate Governance

The Committee for Allotment of Shares under ESOPs has been constituted to expedite the process of allotment and issue of eligible shares to the employees under the Stock Option Plan of the Company.
The Committee comprises three Directors of the Board and is constituted for approval, issue and allotment of shares under
ESOPs, pursuant to and in terms of ‘2001 HLL Stock Option
Plan’, ‘2006 HLL Performance Share Scheme’ and ‘2012 HUL
Performance Share Scheme’.

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

Other Functional Committees

Committee for approving Disposal of Surplus Assets

Apart from the above statutory Committees, the Board of
Directors has constituted the following Functional Committees to raise the level of governance as also to meet the specific business needs.

The Committee for approving Disposal of Surplus Assets has been set up and entrusted with the responsibility of identifying the surplus assets of the Company and to authorise sale and disposal of such surplus property. The Committee is fully authorised to take necessary steps to give effect to sale and transfer of the ownership rights, interest and title in the said property, for and on behalf of the Company. The Committee comprises three Directors of the Board. The Committee reports to the Board and minutes of these meetings are placed before the Board for confirmation.

Routine Business Matter Committee
The Routine Business Matter Committee has been set up to inter alia oversee routine operations that arise in the normal course of the business, such as decision on banking relations, delegation of operational powers, appointment of nominees under statutes, etc. The Committee comprises three Directors of the Board.
The Committee reports to the Board and the minutes of these meetings are placed before the Board for confirmation.

Attendance of Directors at Board and Committee Meeting(s)
The following table shows attendance of Directors at the Board and Committee meeting(s) for the year ended 31st March, 2015.
Attendance is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number of meeting(s) required to be attended.
Board
Audit
Meeting Committee

Name
Harish Manwani
Sanjiv Mehta
P. B. Balaji$
Pradeep Banerjee
Sridhar Ramamurthy$$
Aditya Narayan
S. Ramadorai
O. P. Bhatt
Sanjiv Misra
Kalpana Morparia $$$

8 of 8#
8 of 8
6 of 6
8 of 8
2 of 2
8 of 8
7 of 8
7 of 8
6 of 8
4 of 4

-

6 of 6#
6 of 6
4 of 6
5 of 6
3 of 3

Nomination and
Remuneration
Committee 5 of 5 5 of 5 5 of 5 4 of 5# 4 of 5 4 of 5 -

Stakeholders’
Relationship
Committee 1 of 1 1 of 1 1 of 1# -

Corporate Social
Responsibility
Committee 1 of 1 1 of 1 1 of 1 1 of 1# 0 of 1 0 of 0

Risk
Management
Committee 1 of 1 1 of 1 1 of 1 -

-

Chairman Appointed as a Director w.e.f. 1st July, 2014
$$
Ceased to be a Director w.e.f. 30th June, 2014
$$$
Appointed as a Director w.e.f. 9th October, 2014
#
$

The last Annual General Meeting of the Company held on 30th June, 2014 was attended by all members of the Board of Directors.

COMPANY POLICIES
Code of Business Principles / Whistle Blower Policy
The Code of Business Principles (CoBP) is the Company’s statement of values and represents the standard of conduct which all employees are expected to observe in their business endeavors. The Code reflects the Company’s commitment to principles of integrity, transparency and fairness. It forms the benchmark against which the world at large is invited
Annual Report 2014-15

to judge the Company’s activities. The copy of the Code of
Business Principles is available on the website of the Company www.hul.co.in/aboutus/purposeandprinciples/ The Company has adopted a Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the fundamental business principles of the Company. The Company has provided dedicated e-mail addresses whistleblowing. hul@unilever.com and cobp.hul@unilever.com for reporting
Corporate Governance

75

such concerns. Alternatively, employees can also send written communications to the Company. The employees are encouraged to voice their concerns by way of whistle blowing and all the employees have been given access to the Audit Committee.
The Company Secretary is the designated officer for effective implementation of the policy and dealing with the complaints registered under the policy. All cases registered under the Code of Business Principles and the Whistle Blower Policy of the
Company, are reported to the Committee of Executive Directors and are subject to the review of the Audit Committee. The Whistle
Blower Policy is available on the website of the Company www. hul.co.in/investorrelations/CorporateGovernance/. Preventing Conflict of Interest
The Board of Directors is responsible for ensuring that rules are in place to avoid conflict of interest by the Board members and the Management Committee. The Board has adopted the Code of
Conduct for the members of the Board and Senior Management
Team. The Code provides that the Directors are required to avoid any interest in contracts entered into by the Company. If such an interest exists, the Directors are required to make disclosure to the Board and to abstain from discussion, voting or otherwise influencing the decision on any matter in which the concerned
Director has or may have such interest. The Code also restricts
Directors from accepting any gifts or incentives in their capacity as a Director of the Company, except what is duly authorised under the Company’s Gift Policy.
The members of the Board and the Management Committee annually confirm the compliance of the Code of Conduct to the
Board. The Code of Conduct is in addition to the Code of Business
Principles of the Company. A copy of the said Code of Conduct is available on the website of the Company www.hul.co.in/ investorrelations/CorporateGovernance/. In addition, members of the Board and Management Committee also submit, on an annual basis, the details of individuals to whom they are related and entities in which they hold interest and such disclosures are placed before the Board. Transactions with any of the entities referred above are placed before the Board for approval. Details of all Related Party Transactions are placed before the Audit
Committee on quarterly basis.

Policy on dealing with Related Party Transactions
The Company has not entered in any material Related Party
Transaction during the year. In line with requirement of the
Companies Act, 2013 and Equity Listing Agreement, your
Company has formulated a Policy on Related Party Transactions which is also available at Company’s website at www.hul.co.in/ investorrelations/CorporateGovernance/. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and
Related Parties.

76

Corporate Governance

This policy specifically deals with the review and approval of
Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions 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.

Policy on Material Subsidiary
The Company has adopted a Policy in line with the requirements of the Listing Agreement. The objective of this policy is to lay down criteria for identification and dealing with material subsidiaries and to formulate a governance framework for subsidiaries of the Company. The policy on Material Subsidiary is available on the website of the Company www.hul.co.in/investorrelations/
CorporateGovernance/.

Share Dealing Code
The Company has instituted mechanism to avoid Insider Trading and abusive self-dealing. In accordance with the SEBI Regulations as amended, the Company has established systems and procedures to restrict insider trading activity and has framed a Share Dealing
Code. The Share Dealing Code of the Company prohibits the
Directors of the Company and other specified employees dealing in the securities of the Company on the basis of any unpublished price sensitive information, available to them by virtue of their position in the Company. The objective of this Code is to prevent misuse of any unpublished price sensitive information and prohibit any insider trading activity, in order to protect the interest of the shareholders at large. The Board of Directors of the Company have adopted a new
Share Dealing Code, in line with new SEBI (Prohibition of Insider
Trading) Regulations, 2015.
The details of dealing in Company’s shares by Specified Employees
(which include members of the Management Committee and
Directors) are placed for intimating the Board on quarterly basis.
The Code also prescribes sanction framework and any instance of breach of code is dealt with in accordance with the same. A copy of the Share Dealing Code of the Company is made available to all employees of the Company and compliance of the same is ensured. The Share Dealing Code is available on the website of the
Company www.hul.co.in/investorrelations/CorporateGovernance/
DealingHulShares/.

UN Global Compact
Unilever is a signatory to the United Nations Global Compact
Programme and is fully committed to the principles of the UN
Global Compact which covers human rights, labour practices, environment commitment and prevention of corruption in business organisations. The UN Global Compact is a symbol of leadership in a complex business world and provides a forward
Hindustan Unilever Limited

Overview

Reports

looking forum in which the United Nations, companies and civil society organisations can come together in an open and transparent dialogue. The Company’s CoBP mechanism upholds these principles in all aspects of its business operations.

AFFIRMATION AND DISCLOSURE
All the members of the Board and the Management Committee have affirmed their compliance with the Code of Conduct as on
31st March, 2015 and a declaration to that effect, signed by the
Managing Director and Chief Executive Officer (CEO), is attached and forms part of this Report.
There were no materially financial or commercial transaction, between the Company and members of the Management
Committee that may have a potential conflict with the interest of the Company at large.
All details relating to financial and commercial transactions where Directors may have a pecuniary interest are provided to the Board and the interested Directors neither participate in the discussion nor vote on such matters.

DISCLOSURE OF PENDING CASES / INSTANCES OF
NON-COMPLIANCE
There were no non-compliances by the Company and no instances of penalties and strictures imposed on the Company by the Stock
Exchanges or SEBI or any other statutory authority on any matter related to the capital market during the last three years.
With respect to the Show Cause Notice received from the
Securities and Exchange Board of India (SEBI) last year for alleged violation of the provisions of Regulation 8(3) of the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations,
1997 (SAST Regulations, 1997) with respect to delay in filings in the year 2008 and 2010, the Company had filed an application for compounding the matter with SEBI. SEBI has passed an order for compounding of the matter on payment of requisite compounding fee. The matter accordingly stands closed.
The Company has been impleaded in certain legal cases related to disputes over title to shares arising in the ordinary course of share transfer operations. However, none of these cases are material in nature, which may lead to material loss or expenditure to the Company.

Annual Report 2014-15

Financial Statements

Shareholder Information

COMPLIANCE WITH THE GOVERNANCE FRAMEWORK
The Board of Directors periodically reviewed the compliance of all applicable laws and steps taken by the Company to rectify instances of non-compliance, if any. The Company is in compliance with all mandatory requirements of Clause 49 of the Listing Agreement. In addition, the Company has also adopted the following non-mandatory requirements to the extent mentioned below:
• The Board & Separate posts of Chairman and CEO: The positions of the Chairman and the CEO are separate.
Mr. Harish Manwani, Non Executive Chairman of the Company maintains office at the Company’s expenses and is also allowed reimbursement of expenses incurred in performance of his duties.
• Shareholders rights: The quarterly results alongwith the press release are uploaded on the website of the Company www.hul.co.in/investorrelations/QuarterlyResults/. The soft copy of the quarterly results is also sent to the shareholders who have registered their e-mail addresses.
• Audit qualifications: Company’s financial statements are unqualified • Reporting of Internal Auditor: The Internal Auditor of the Company directly reports to the Audit Committee on functional matters.

SECRETARIAL STANDARDS AND SECRETARIAL
AUDIT REPORT
The Company has undertaken Secretarial Standards Audit for the year 2014-15 for audit of secretarial records and procedures followed by the Company in compliance with relevant Secretarial
Standards issued by the Institute of Company Secretaries of India, which were recommendatory in nature and Company voluntarily decided to adhere to the same. The Secretarial Standards Audit
Report is part of this Annual Report.
The Company has also undertaken Secretarial Audit for the year
2014-15 which, inter alia, includes audit of compliance with the
Companies Act, 2013, and the Rules made under the Act, Listing
Agreement and Regulations and Guidelines prescribed by the
Securities and Exchange Board of India and Foreign Exchange
Management Act, 1999. The Secretarial Audit Report is part of this Annual Report.

Corporate Governance

77

SHAREHOLDER INFORMATION
General Body Meetings
Details of last three Annual General Meetings and the summary of Special Resolutions passed therein are as under:
Financial year ended
31st March, 2012

Date and Time
23rd July, 2012
10.30 a.m

Venue
Unilever House,
B.D. Sawant Marg,
Chakala,
Andheri (East),
Mumbai - 400 099

Special Resolutions Passed
• 
Re-appointment of Mr. Nitin Paranjpe as Managing
Director for another term of five years with effect from
4th April, 2013.
• 
Increase in the maximum limit of salary payable to
Managing Director(s) of the Company from the existing
Rs. 180 lakhs per annum to Rs. 290 lakhs per annum effective 1st April, 2013.
• 
Adoption of the revised ‘2012 HUL Performance Share
Scheme’ in amendment of ‘2006 HLL Performance
Share Scheme’.

31st March, 2013

26th July, 2013
3.30 p.m.

Unilever House,
B.D. Sawant Marg,
Chakala,
Andheri (East),
Mumbai - 400 099

• 
Revision in overall limits of remuneration of NonExecutive Directors, upto a maximum of Rs. 150 lakhs in aggregate or 1% of Net Profits, whichever is lower.

31st March, 2014

30th June, 2014
2.00 p.m.

Unilever House,
B.D. Sawant Marg,
Chakala,
Andheri (East),
Mumbai - 400 099

No special resolutions were passed in this meeting

Postal Ballot
During the year, a Special Resolution for appointment of Mr. P. B. Balaji as the Executive Director, Finance & IT and Chief Financial
Officer of the Company with effect from 1st July, 2014 was passed by the Shareholders of the Company through Postal Ballot. In the
Postal Ballot conducted pursuant to Clause 35B of the Listing Agreement, the Company had also offered e-voting facility, through
National Securities Depository Limited, as an alternate, to enable the shareholders to cast their votes electronically.
The Board had appointed Mr. S. N. Ananthasubramanian, Practising Company Secretary, as the scrutinizer to conduct the Postal Ballot process. The results of the postal ballot were declared on 5th May, 2014. Details of the voting pattern were as under:
Description of Resolution
Approval for appointment of Mr. P. B. Balaji as the Wholetime
Director of the Company.

No. of total valid Postal Ballot
Forms / e-votes received
6,130

Votes Cast (No. of Shares)
For
Against
168,04,05,455
41,06,383

Accordingly the said Resolution was approved by the shareholders, with requisite and overwhelming majority.

Annual General Meeting for the financial year 2014-15
Date

Monday, 29th June, 2015

Venue

Unilever House, B.D. Sawant Marg, Chakala, Andheri (East), Mumbai - 400 099

Time

2.00 p.m.

Book Closure Dates for Final Dividend

Tuesday 23rd June, 2015 to Monday 29th June, 2015 (both days inclusive)

Last Date of receipt of Proxy Forms

Saturday, 27th June, 2015 before 2 p.m. at Registered Office of the Company

78

Corporate Governance

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Calendar of Financial Year ended 31st March, 2015
The meetings of Board of Directors for approval of quarterly financial results during the Financial Year ended 31st March,
2015 were held on the following dates:
First Quarter Results
Second Quarter and Half yearly Results
Third Quarter Results
Fourth Quarter and Annual Results

28th July, 2014
27th October, 2014
19th January, 2015
8th May, 2015

Tentative Calendar for financial year ending 31st March, 2016
The tentative dates of meeting of Board of Directors for consideration of quarterly financial results for the financial year ending 31st March, 2016 are as follows:
First Quarter Results
Second Quarter and Half yearly Results
Third Quarter Results
Fourth Quarter and Annual Results

21st July, 2015
14th October, 2015
27th January, 2016
29th April, 2016

Dividend
The Board of Directors at their meeting held on 8th May, 2015, recommended a Final Dividend of Rs. 9.00 per equity share

Shareholder Information

of face value of Re. 1/- each, for the financial year ended
31st March, 2015. Together with the Interim Dividend of Rs. 6.00 per equity share paid on 14th November, 2014, the total dividend for the year works out to Rs. 15.00 per equity share of face value of Re. 1/- each. Final Dividend, if approved by Members, will be paid on or after 3rd July, 2015.
Unclaimed Dividends
During the year under review, the Company has credited
Rs. 6.66 crores to the Investor Education and Protection Fund
(IEPF) pursuant to Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and
Protection of Investors) Rules, 2001.
Pursuant to the provisions of Investor Education and Protection
Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 30th June, 2014 (date of last Annual
General Meeting) on the Company’s website www.hul.co.in/ investorrelations/ and on the website of the Ministry of Corporate
Affairs.

Distribution of Shareholding as on 31st March, 2015
Shareholders
Number
3,01,528
6,951
3,162
780
311
150
257
379
3,13,518

Holding
1 – 5000
5001 – 10000
10001 – 20000
20001 – 30000
30001 – 40000
40001 – 50000
50001 – 100000
100001 and above
TOTAL

Shares
Number
14,08,94,166
4,89,74,693
4,36,65,638
1,88,45,934
1,07,33,824
66,96,510
1,76,27,504
1,87,60,26,582
2,16,34,64,851

%
96.17
2.22
1.01
0.25
0.10
0.05
0.08
0.12
100.00

Categories of Shareholders as on 31st March, 2015
Category

No. of
Folios
7
169
140
18
609
2,455
4,704

Unilever PLC and its Affiliates
Mutual Funds and Unit Trust of India
Financial Institutions / Banks
Insurance Companies
Foreign Institutional Investors
Bodies Corporate
NRIs / Foreign Bodies Corporate /
Foreign Nationals
Directors and their Relatives
6
Resident Individuals and Others
305,410
TOTAL
Annual Report 2014-15

Shares
Held (Nos.)
145,44,12,858
68,65,356
22,93,561
7,34,84,859
32,47,91,190
2,43,41,949
77,33,086
69,609
26,94,72,383

0.36
1.12

0.00

%
6.51
2.26
2.02
0.87
0.50
0.31
0.82
86.71
100.00

12.45

67.23
15.01

3.40
0.11
0.32

313,518 2,16,34,64,851
Corporate Governance

79

Bifurcation of shares held in physical and demat form as on 31st March, 2015
Particulars

No. of Shares

%

5,37,72,488

2.49

208,38,72,211*

Physical Segment

96.32*

Demat Segment
NSDL

2,58,20,152

TOTAL

1.19

216,34,64,851

CDSL

100.00

* includes shares of Unilever PLC and its Affiliates

There are no outstanding GDRs / ADRs / Warrants / Convertible Instruments of the Company.

Listing Details
Name of Stock Exchange

Stock Code

BSE Limited (BSE)

500696

National Stock Exchange of India Limited (NSE)

HINDUNILVR

ISIN

INE030A01027

The listing fee for the financial year 2015-16 has been paid to the above Stock Exchanges.

Share Price Data
The monthly high and low prices and volumes of shares of the Company at BSE Limited (BSE) and the National Stock Exchange of India
Limited (NSE) for the year ended 31st March, 2015 are as under:
Month

BSE

NSE

High

Low

Volume

High

Low

Volume

Apr-14

619.85

556.25

18,56,465

619.80

556.00

2,32,19,699

May-14

608.60

550.30

28,99,110

615.00

550.25

3,60,69,095

Jun-14

645.15

589.60

29,19,439

645.95

588.35

2,55,91,163

Jul-14

699.50

614.15

29,91,869

701.30

615.05

2,58,45,392

Aug-14

744.00

680.30

25,03,045

744.90

678.00

2,01,37,137

Sept-14

771.00

722.35

15,33,187

771.90

721.85

1,99,47,771

Oct-14

765.00

708.00

14,04,479

766.05

707.15

1,53,61,302

Nov-14

799.00

730.00

17,78,011

798.85

728.75

1,43,99,100

Dec-14

828.75

744.00

11,86,104

829.75

744.50

2,36,08,207

Jan-15

967.00

750.00

60,09,445

968.85

752.65

6,63,62,851

Feb-15

930.50

881.00

21,45,799

930.85

880.40

2,59,90,616

Mar-15

979.00

849.00

23,57,462

981.00

848.95

3,68,90,881

80

Corporate Governance

Hindustan Unilever Limited

Overview

Reports

Financial Statements

BSE SENSEX VS HUL SHARE PRICE (INDEXED)

Shareholder Information

NSE NIFTY VS HUL SHARE PRICE (INDEXED)

180

180

170

170

160

160

150

150

140

140

130

130

120

120

110

110

100

100

90

90

80

80
Apr-14

May-14

Jun-14

Jul-14

Aug-14

HUL

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

Apr-14

May-14

Jun-14 Jul-14

BSE Indexed

Aug-14

HUL

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

NSE Indexed

10 - year Performance of Hindustan Unilever Share vis-à-vis Sensex and Nifty
Date of
Purchase

HUL Share
HUL Share
Price on BSE Performance

03-01-2005
02-01-2006
02-01-2007
01-01-2008
01-01-2009
04-01-2010
03-01-2011
03-01-2012
01-01-2013
01-01-2014
01-01-2015

144.35
195.20
216.45
218.10
250.75
264.70
313.15
407.95
530.60
570.00
758.25

425%
288%
250%
248%
202%
186%
142%
86%
43%
33%
-

BSE
Sensex
HUL Share
Sensex Performance Price on NSE
6,679.00
9,390.00
13,942.00
20,300.00
9,903.46
17,558.73
20,561.05
15,939.36
19,580.81
21,222.19
27,507.54

312%
193%
97%
36%
178%
57%
34%
73%
40%
30%
-

142.29
192.11
213.08
218.45
250.75
264.70
313.15
407.70
530.60
570.65
759.30

HUL Share
Performance
434%
295%
256%
248%
203%
187%
142%
86%
43%
33%
-

NSE
Nifty
Nifty Performance
2,115.00
2,835.95
4,007.40
6,144.35
3,033.45
5,232.20
6,157.60
4,765.30
5,950.85
6,301.65
8,284.00

292%
192%
107%
35%
173%
58%
35%
74%
39%
31%
-

Source: BSE and NSE website
All comparisons are with respect to 1st January, 2015 (the reference date).

Mergers and Demergers
The details of Mergers and Demergers with Companies and respective share exchange ratios are available on ‘Investor
Centre’ page on the website of the Company www.hul.co.in.

Plant Locations
The details of Plant Locations form part of this Report.

COMMUNICATION TO SHAREHOLDERS
Effective communication of information is an essential component of Corporate Governance. It is a process of sharing information, ideas, thoughts, opinions and plans to all stakeholders which promotes management-shareholder relations. The Company
Annual Report 2014-15

regularly interacts with shareholders through multiple channels of communication such as results announcement, annual report, media releases, Company’s website and subject specific communications. The quarterly, half yearly and annual results of the Company’s performance are published in leading newspapers such as
Times of India and Maharashtra Times. These results are also made available on the website of the Company www.hul.co.in/ investorrelations/QuarterlyResults. The website also displays vital information relating to the Company and its performance, official press releases and presentation to analysts. The
Company also sends quarterly, half yearly and annual results as well as the notice of the Board Meeting to Members on e-mail.

Corporate Governance

81

The Investor Centre of the Company’s website provides more than 50 Frequently Asked Questions on various topics related to transfers and transmission of shares, dematerialisation, nomination, change of address, loss of share certificates, dividend and sub-division of share certificates. In addition, various downloadable forms required to be executed by the shareholders have also been provided on the website of the
Company.
The Quarterly Results, Shareholding Pattern and all other corporate communication to the Stock Exchanges are filed through NSE Electronic Application Processing System (NEAPS) and BSE Listing Centre, for dissemination on their respective websites. Investor Services
Web-based Query Redressal System
Members may utilise the facility extended by the Registrar and
Transfer Agent for redressal of queries. Investors may visit http://karisma.karvy.com and click on “INVESTORS” option for query registration through free identity registration process.
Investors can submit their query in the “QUERIES” option provided on the above website, which would give the grievance a registration number. For accessing the status / response to the query submitted, the grievance registration number can be used at the option “VIEW REPLY” after 24 hours. Investors can continue to put an additional query relating to the case till they get a satisfactory reply.
Investors can provide their feedback on the services provided by the Company and its Registrar and Transfer Agent by filling the
Shareholder Satisfaction Survey form available in Investor Centre on website of the Company at www.hul.co.in/investorrelations/
ShareholderSatisfactionSurvey/.

Alternative Dispute Redressal
Shareholders
Long pending litigations involve significant investment as monetary value of the disputed shares and accrued dividends / other benefits are locked up unutilised till the dispute is settled.
Further, in terms of the requirements of the Companies Act, 1956, such dividends / other specified incomes remaining unclaimed
/ unpaid for a period of seven years are to be credited to the
Investor Education and Protection Fund and the Shareholders are not entitled to claim the same thereafter.
Keeping the above in mind, the Company in 2004, pioneered the mechanism of providing an alternate dispute redressal for
Shareholders to resolve the shares related disputes pending before the courts / authorities by amicable settlement. The
Company had started this unique initiative of organising
Alternative Dispute Redressal meetings wherein aggrieved

82

Corporate Governance

investors come face to face and get a chance to settle their disputes, some of which were pending for years.
A number of Shareholders have availed the benefit of this process and the Company through its various initiatives keeps exploring the possibilities of settling such issues. The process helps the investors in releasing the locked up investment and save their time consumed in contesting legal proceedings. The objective of this process is to facilitate quick resolution of the dispute between the parties.
The Shareholders who are willing to avail the benefits of
Alternative Dispute Redressal mechanism may approach the
Investor Service Department of the Company at the Registered
Office of the Company.
Consumers / Customers
In line with one of the Company’s key tenets of Consumer and
Customer Centricity, the Company commenced a process of resolving consumer and customer disputes and grievances through an alternative disputes redressal mechanism. The
Company appointed four retired Judges of different High Courts, one in each region, to act as Ombudsman to hear the Company’s consumers and customers in a bid to resolve long pending disputes. The Ombudsman independently reviews the merits of the complaint and decides on the issue. The Company has taken the view that the decision arrived at such disputes resolution meetings, while being fully binding on the Company, may not be binding on its consumers and customers and if they choose to continue with litigation, they are free to do so. These meetings were held in all the four regions and achieved reasonable success. The Company believes that such independent dispute resolution mechanism will further reinforce its commitment and credibility with its consumers and also set new benchmarks for the industry.
The Company has also set a consumer care helpline ‘Levercare’, to help consumers reach the Company for their grievances, suggestions, ideas and to help brands reach out to consumers.

Address for Correspondence
All shareholders’ correspondence should be forwarded to
M/s. Karvy Computershare Private Limited, the Registrar and Transfer Agent of the Company or to the Investor Service
Department at the Registered Office of the Company at the addresses mentioned below.
The
Company’s dedicated e-mail address for
Investors’ Complaints and other communications is levercare.shareholder@unilever.com Hindustan Unilever Limited

Overview

Reports

Financial Statements

Karvy Computershare Private Limited Investor Service Department
Unit : Hindustan Unilever Limited
Karvy Selenium Tower B,
Plot 31-32, Gachibowli
Financial District, Nanakramguda
Hyderabad - 500 032
Phone : +91 - 40 - 67161500 ,33211000
Fax : +91 - 40 – 23420814,23001153
Toll Free no.: 1800-345-4001
E-mail : einward.ris@karvy.com
Website : www.karvy.com

Hindustan Unilever Limited
Unilever House,
B. D, Sawant Marg, Chakala,
Andheri (East), Mumbai - 400 099
Phone : +91 - 22 – 39832285 / 32452
Fax : +91 - 22 - 28249457
E-mail : levercare.shareholder@unilever.com
Website : www.hul.co.in

Shareholder Information

Compliance Officer
Mr. Dev Bajpai
Executive Director (Legal & Corporate
Affairs) and Company Secretary
E-mail : levercare.shareholder@unilever.com
Phone : +91 - 22 – 39832557 / 32358 / 32532 / 32312

Loans and advances in the nature of loan to subsidiaries:
Information pursuant to Clause 32 of the Listing Agreement
Rs. crores
Name of the Company
Lakme Lever Private Limited
Brooke Bond Real Estates Private Limited
Pond’s Exports Limited

Annual Report 2014-15

Balance as at
31st March, 2015

Maximum outstanding during the year

166.77

217.77

-

18.01

12.00

14.00

Corporate Governance

83

CHIEF EXECUTIVE OFFICER (CEO) & CHIEF FINANCIAL OFFICER
(CFO) CERTIFICATION
To
The Board of Directors
Hindustan Unilever Limited
We, the undersigned, in our respective capacities as Chief Executive Officer and Chief Financial Officer of Hindustan Unilever
Limited (“the Company”), to the best of our knowledge and belief certify that:
(a)  have reviewed the financial statements and the cash flow statement for the Financial Year ended 31st March, 2015 and
We
based on our knowledge and belief, we state that :

(i)  these statements do not contain any materially untrue statement or omit any material fact or contain any statements that might be misleading.

(ii)  these statements together present a true and fair view of the Company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulations.

(b)  further state that to the best of our knowledge and belief, there are no transactions entered into by the Company during the
We
year, which are fraudulent, illegal or violative of the Company’s code of conduct.
(c)  hereby declare that all the members of the Board of Directors and Management Committee have confirmed compliance
We
with the Code of Conduct as adopted by the Company.
(d)  are responsible for establishing and maintaining internal controls and for evaluating the effectiveness of the same over
We
the financial reporting of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. (e) We have indicated, based on our most recent evaluation, wherever applicable, to the Auditors and Audit Committee:

(i)  significant changes, if any, in the internal control over financial reporting during the year;

(ii)  significant changes, if any, in the accounting policies made during the year and that the same has been disclosed in the notes to the financial statements; and

(iii)  instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having significant role in the Company’s internal control system over financial reporting.
Sanjiv Mehta

84

Corporate Governance

Managing Director and
Chief Executive Officer

Executive Director - Finance & IT and Chief Financial Officer

(DIN: 06699923)

Mumbai : 8th May, 2015

P. B. Balaji

(DIN: 02762983)

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

AUDITORS’ CERTIFICATE REGARDING COMPLIANCE OF
CONDITIONS OF CORPORATE GOVERNANCE
To the Members of
Hindustan Unilever Limited
We have examined the compliance of conditions of Corporate Governance by Hindustan Unilever Limited (‘the Company’) for the year ended 31 March, 2015, as stipulated in clause 49 of the Listing Agreement of the Company with Stock Exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For M/s. B S R & Co. LLP
Chartered Accountants
Firm’s Registration No: 101248W/ W – 100022

Akeel Master
Partner

Mumbai : 8th May, 2015

Annual Report 2014-15

Membership No: 046768

Corporate Governance

85

SECRETARIAL STANDARDS REPORT
The Board of Directors,
Hindustan Unilever Limited
CIN : L15140MH1933PLC002030
Unilever House,
B D Sawant Marg,
Chakala, Andheri (East),
Mumbai 400 099.
At the request of the management, we have examined relevant registers, records and documents maintained and made available to us by Hindustan Unilever Limited (“the Company”) for the period commencing from 1st April, 2014 to 31st March, 2015 for compliances of Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
ICSI had issued Secretarial Standards numbering 1 to 10 with reference to the provisions of the Companies Act, 1956 which were recommendatory in nature and the management had voluntarily decided to adhere to them. During the period under review ICSI had not issued corresponding Secretarial Standards with reference to the provisions of the Companies Act, 2013; nonetheless, the management had decided to continue to adhere to Standards issued earlier and comply with the same to the extent applicable to the Company.
Our examination was limited to procedures and implementation thereof adopted by the Companwy for ensuring the compliance of
Standards.
In our opinion and to the best of our information and according to the explanation given to us, we report that the Company has complied with all material aspects of applicable Secretarial Standards issued by ICSI.
S. N. Ananthasubramanian & Co
S. N. Ananthasubramanian

Thane: 7th May, 2015

FCS : 4206
CP :1774

SECRETARIAL AUDIT REPORT
To,
The Members,
Hindustan Unilever Limited
CIN : L15140MH1933PLC002030
Unilever House, B. D. Sawant Marg,
Chakala, Andheri (East)
Mumbai - 400099.
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Hindustan Unilever Limited (hereinafter called the “Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2015, complied with the statutory provisions listed hereunder and also that the Company
86

Corporate Governance

has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of:
i. 
The Companies Act, 2013 (‘the Act’) and the rules made thereunder; ii. 
The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; iii. 
The Depositories Act, 1996 and the Regulations and Byelaws framed thereunder; iv. 
Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct
Investment, Overseas Direct Investment and External
Commercial Borrowings;
v. 
The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI
Act’):Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

SECRETARIAL AUDIT REPORT (CONTD.) a. 
The Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers)
Regulations, 2011; b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; c. 
The Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations,
2009;

d. 
The Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 /Securities And Exchange
Board of India (Share Based Employee Benefits)
Regulations, 2014 (effective 28th October, 2014); e. 
The Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008 – Not applicable as the Company has not issued any debt securities; f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer
Agent during the financial year under review; g. 
The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not applicable as the Company has not delisted /propose to delist its equity shares from any stock exchange during the financial year under review;

h. 
The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable as the
Company has not bought back / propose to buyback any of its securities during the financial year under review. vi. 
The Company has identified the following laws as specifically applicable to the Company:

1. 
The Hazardous Wastes (Management and Handling)
Rules 1989;
2. 
The Insecticide Act, 1968;
3. 
The Drugs and Cosmetics Act, 1940;
4. 
The Prevention of Food Adulteration Act, 1954;
5. 
The Legal Metrology Act, 2009;
6. 
The Legal Metrology (Packaged Commodities) Rules,
2011;
7. 
Food Safety and Standards Act, 2006 and Rules 2011 with allied rules and regulations.

We have also examined compliance with the applicable clauses of the following:
(i) 
Secretarial Standards issued by The Institute of Company
Secretaries of India (ICSI) – ICSI had issued Secretarial
Standards numbering 1 to 10 with reference to the provisions of the Companies Act, 1956 which were recommendatory in nature and the management had voluntarily decided to
Annual Report 2014-15

adhere to them. During the period under review ICSI had not issued Standards corresponding with reference to the provisions of the Companies Act, 2013; nonetheless, the management had decided to continue to adhere to
Standards issued earlier.
(ii) 
The Listing Agreements entered into by the Company with
BSE Limited and National Stock Exchange of India Limited;
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,
Standards, etc. mentioned above.

We further report that: • 
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive
Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
• 
Adequate notice is given to all Directors to schedule the
Board Meetings, agenda and detailed notes on agenda were sent adequately in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
• 
Majority decision is carried through while the dissenting members’ views, if any, are captured and recorded as part of the minutes.

We further report that based on review of compliance

mechanism established by the Company and on the basis of the
Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that the management has adequate systems and processes commensurate with its size and operations, to monitor and ensure compliance with all applicable laws, rules, regulations and guidelines; and
•  informed, the Company has responded to notices for as demands, claims, penalties etc levied by various statutory
/ regulatory authorities and initiated actions for corrective measures, wherever necessary.

We further report that during the audit period, there are

no specific events / actions having a major bearing on the
Company’s affairs in pursuance of the laws, rules, regulations, guidelines, standards, etc, referred to above.
S. N. Ananthasubramanian & Co
S. N. Ananthasubramanian

Thane: 7th May, 2015

FCS : 4206
CP :1774

Note : This report should be read with the letter of even date by the Secretarial Auditors, which is available on the website of the Company www.hul.co.in
Corporate Governance

87

ECONOMIC VALUE ADDED
ADDITIONAL INFORMATION : ECONOMIC VALUE ADDED (EVA)
What is EVA ?
Traditional approaches to measuring Shareholder’s Value
Creation’ have used parameters such as earnings capitalisation, market capitalisation and present value of estimated future cash flows. Extensive equity research has established that it is not earnings per se, but VALUE that is important. A measure called
‘Economic Value Added’ (EVA) is increasingly being applied to understand and evaluate financial performance
*EVA = Net Operating Profit after Taxes (NOPAT) - Cost of
Capital Employed (COCE), where,
NOPAT = Profits after depreciation and taxes but before interest costs. NOPAT thus represents the total pool of profits available on an ungeared basis to provide a return to lenders and shareholders, and
COCE = Weighted Average Cost of Capital (WACC) x Average
Capital Employed
*Cost of debt is taken at the effective rate of interest applicable to an “AAA” rated Company like HUL for a short term debt, net of taxes. We have considered a pre tax rate of 8.42% for 2014-15
(9.63% for 2013-14)
*Cost of Equity is the return expected by the investors to compensate them for the variability in returns caused by fluctuating earnings and share prices.

88

Standalone

Cost of Equity = Risk free return equivalent to yield on long term
Government Bonds (taken at 7.74% for 2014-15)
+
Market risk premium (taken at 4.42%) (x) Beta variant for the
Company, (taken at 0.719) where Beta is a relative measure of risk associated with the Company’s shares as against the market as a whole.
Thus HUL’s cost of equity = 7.74% + 4.42% (x) 0.719 = 10.91%
What does EVA show?
EVA is residual income after charging the Company for the cost of capital provided by lenders and shareholders.It represents the value added to the shareholders by generating operating profits in excess of the cost of capital employed in the business.
When will EVA increase?
EVA will increase if:
a. 
Operating profits can be made to grow without employing more capital, i.e. greater efficiency.
b. 
Additional capital’s invested in projects that return more than the cost of obtaining new capital, I.e. profitable growth.
c. 
Capital is curtailed in activities that do not cover the cost of capital, i.e liquidate unproductive capital
EVA in practice at Hindustan Unilever Limited.
In Hindustan Unilever Limited, the goal of sustainable long term value creation for our shareholders is well understood by all the business groups. Measures to evaluate business performance and to set targets take into account this concept of value creation.

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

ECONOMIC VALUE ADDED (Contd.)

(Rs. crores)

EVA Trends:2005-2015 (Unaudited)
Particulars

2005

2006

2007

360

163

2008-09
(15 months) 2009-10 2010-11

382

2011-12

2012-13

2013-14

2014-15

0

0

0

0

Cost of Capital Employed (COCE)
1

Average Debt

342

119

2

2

Average Equity

2,200

2,515

2,402

1,928

2,497

3,118

3,462

4,018

3,715

4,338

3

Average Capital Employed : (1) + (2)

2,560

2,678

2,784

2,270

2,616

3,120

3,462

4,018

3,715

4,338

4

Cost of Debt, post-tax %

3.38

5.90

6.24

3.91

3.95

5.36

6.20

6.02

6.36

5.56

5

Cost of Equity %

15.50

16.38

17.59

14.47

12.51

12.93

10.10

10.07

11.62

10.91

6

Weighted Average Cost of Capital % (WACC)

13.80

15.74

16.03

12.88

12.12

12.92

10.10

10.07

11.62

10.91

7

COCE : (3) x (6)

353

421

446

365

317

403

350

405

432

474

1,355

1,540

1,743

2,501

2,103

2,153

2,599

3,314

3,555

3,843

12

7

17

17

5

0

1

17

24

11

1,367

1,547

1,760

2,518

2,108

2,153

2,600

3,331

3,579

3,854

Economic Value Added (EVA)
8

Profit after tax, before exceptional items

9

Add : Interest, after taxes

10

Net Operating Profits After Taxes (NOPAT)

11

COCE, as per (7) above

12

EVA : (10) - (11)

353

421

446

365

317

403

350

405

432

474

1,014

1,126

1,314

2,154

1,791

1,750

2,250

2,926

3,147

3,380

Economic Value Added (EVA) (Rs. crores)
3600
3200
2800
2400
2000
1600
1200
800

Annual Report 2014-15

2014-15

2013-14

2012-13

2011-12

2009-10

2010-11

2008-09

2007

2006

0

2005

400

Standalone

89

INDEPENDENT AUDITORS’ REPORT

to Members of Hindustan Unilever Limited
REPORT ON THE STANDALONE FINANCIAL
STATEMENTS
We have audited the accompanying standalone financial statements of Hindustan Unilever Limited(“the Company”), which comprise the Balance Sheet as at March 31, 2015, the
Statement of Profit and Loss, and the Cash Flow Statement for the year ended on that date, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE
FINANCIAL STATEMENTS
The Company’s Board of Directors is responsible for the matters stated in sub-section 5 of Section 134 of the Companies
Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under sub-section 10 of Section 143 of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial

90

Standalone

statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.

REPORT ON OTHER
REQUIREMENTS

LEGAL

AND

REGULATORY

1. As required by the Companies (Auditor’s Report) Order, 2015
(‘the Order’), issued by the Central Government of India in exercise of powers conferred by sub-section 11 of section
143 of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
2.  required by sub-section 3 of Section 143 of the Act, we
As
report that:

(a)  have sought and obtained all the information and
We
explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b)  our opinion, proper books of account as required
In
by law have been kept by the Company so far as it appears from our examination of those books.

(c) 
The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

INDEPENDENT AUDITORS’ REPORT (Contd.)

(d)  our opinion, the aforesaid standalone financial
In
statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule
7 of the Companies (Accounts) Rules, 2014.

(e)  the basis of the written representations received
On
from the Directors as on March 31, 2015 taken on record by the Board of Directors, none of the Directors are disqualified as on March 31, 2015 from being appointed as a Director in terms of sub-section 2 of
Section 164 of the Act.

(f) 
With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

1. 
The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 24 to the financial statements;

Annual Report 2014-15

2. 
Provision has been made in the financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivatives contracts - Refer Note 55 to the financial statements; and

3. 
There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.
For B S R & Co. LLP

Chartered Accountants
Firm’s Registration
No: 101248W/W-100022

Akeel Master
Partner

Membership No: 046768

Mumbai: 8 May, 2015

Standalone

91

ANNEXURE TO THE
INDEPENDENT AUDITORS’ REPORT

(Referred to in our report of even date)
(i)

(b) 
The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. In accordance with this programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.
In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

Government for maintenance of cost records under subsection 1 of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(a) 
The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(ii) (a) 
The inventory, except goods-in-transit, has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them.
In our opinion, the frequency of such verification is reasonable. (b) 
The procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the
Company and the nature of its business.

(c) 
The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) 
The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act.
(iv)  our opinion and according to the information and
In
explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weakness in internal control system.
(v) 
The Company has not accepted any deposits from the public in accordance with the provisions of sections 73 to
76 of the Act and the rules framed there under.
(vi)  have broadly reviewed the records maintained by the
We
Company pursuant to the rules prescribed by the Central

92

Standalone

(vii) (a) 
According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees’ State
Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess,
Professional tax and other material statutory dues have been regularly deposited during the year by the
Company with the appropriate authorities. 
According to the information and explanations given to us, no undisputed amounts payable in respect of
Provident Fund, Employees’ State Insurance, Incometax, Sales tax, Wealth tax, Service tax, Customs duty,
Excise duty, Value added tax, Cess, Professional tax and other material statutory dues were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(b) 
According to the information and explanations given to us, there are no dues of Income tax, Wealth tax,
Sales tax, Value added tax, Service tax, Customs duty,
Excise duty and Cess which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Annexure I to this report.

(c) 
According to the information and explanations given to us and on the basis of our examination of the records of the Company, the amount required to be transferred to
Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii)  he Company does not have any accumulated losses at the
T
end of the year and has not incurred cash losses during the year and in the immediately preceding financial year.
(ix)  our opinion and according to the information and
In
explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institution or debentures holders during the year.

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

ANNEXURE TO THE
INDEPENDENT AUDITORS’ REPORT (Contd.)
(x) 
According to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loan taken by others from bank are not prejudicial to the interest of the Company. The Company has not given any guarantees for loan taken by others from financial institutions.

no instances of material fraud on or by the Company has been noticed or reported during the course of our audit.
For B S R & Co. LLP

Chartered Accountants
Firm’s Registration
No: 101248W/W-100022

(xi)  our opinion and according to the information and
In
explanations given to us, the Company has not raised any term loans.

Akeel Master

(xii) 
According to the information and explanations given to us,

Mumbai: 8 May, 2015

Partner

Membership No: 046768

Annexure I
Name of the statute Nature of dues

The Central Excise Excise duty Including
Act, 1944
Interest and penalty, if applicable
The Central Excise Excise duty Including
Act, 1944
Interest and penalty, if applicable
The Central Excise Excise duty Including
Act, 1944
Interest and penalty, if applicable
Customs Act, 1962 Custom Duty,
Including Interest and penalty, if applicable
Central and Local Sales tax (including
Sales Tax interest and penalty,
Acts
as applicable)
Central and Local Sales tax (including
Sales Tax Acts interest and penalty, as applicable)
Central and Local Sales tax (including
Sales Tax Acts interest and penalty, as applicable)
Central and Local Sales tax (including
Sales Tax Acts interest and penalty, as applicable)
Service Tax
Appellate Authority
(Finance
upto Commissioner’s
Act, 1994) level Income Tax Act,
Income Tax Including
1961
interest and penalty, as applicable
Income Tax Act,
Income Tax Including
1961
interest and penalty, as applicable
Income Tax Act,
Income Tax Including
1961
interest and penalty, as applicable

Annual Report 2014-15

Amount
Demanded
(Rs. crores)
170.90

Amount deposited
Periods to which the under dispute amount relates
(Rs in crores)

Forum where the dispute is pending 4.58

1994-2014

Appellate Authority upto
Commissioner’s level

19.40

0.43

1994-2010

5.30

-

2003- 2012

Customs, Excise and Service
Tax Appellate Tribunals of various states
High Courts of various states

1.71

-

2011-2012

Appellate Authority upto
Commissioner’s level

127.83

32.07

1985-2015

Appellate Authority upto
Commissioner’s level

21.17

2.5

1984-2015

Sales Tax Appellate Tribunals of various states

114.82

75.3

1983-2015

High Courts of various states

22.23

9.42

1985-2007

Supreme Court

80.55

0.5

2005-2014

Appellate Authority upto
Commissioner’s level

117.14

-

1979 - 1980, 1991,
2009 – 2010

0.20

-

1963 – 1964
1982 - 1983

Income Tax Appellate
Tribunal, Mumbai

0.06

-

1982 – 1983

Bombay High Court

Appellate Authority - upto
Commissioner’s Level

Standalone

93

BALANCE SHEET

As at 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

As at
31st March, 2015

As at
31st March, 2014

3
4

216.35
3,508.43

216.27
3,060.78

5
6

170.11
956.35

278.82
923.99

7
9
10

5,288.90
908.05
2,585.87
13,634.06

5,623.84
911.33
1,983.37
12,998.40

2,435.50
22.03
479.01
654.11
195.96
583.46
0.44

2,397.94
24.12
312.08
7.70
636.17
161.73
605.51
0.68

2,623.82
2,602.68
782.94
2,537.56
657.27
59.28
13,634.06

2,457.95
2,747.53
816.43
2,220.97
528.78
80.81
12,998.40

Note

EQUITY AND LIABILITIES

Shareholders’ funds

Share capital
Reserves and surplus
Non-current liabilities
Other long-term liabilities
Long-term provisions
Current liabilities
Trade payables
Other current liabilities
Short-term provisions
TOTAL

ASSETS

Non-current assets
Fixed assets
Tangible assets
12
Intangible assets
13
Capital work-in-progress
Intangible assets under development
Non-current investments
14
Deferred tax assets (net)
15
Long-term loans and advances
16
Other non-current assets
17
Current assets
Current investments
18
Inventories
19
Trade receivables
20
Cash and bank balances
21
Short-term loans and advances
22
Other current assets
23
TOTAL
Significant accounting policies
2
Contingent liabilities, capital and other commitments
24, 25
The accompanying notes are an integral part of these financial statements
As per our report of even date

For and on behalf of Board of Directors

For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai: 8th May, 2015
94

Standalone

Mumbai: 8th May, 2015
Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

STATEMENT OF PROFIT AND LOSS

For the year ended 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

Year ended
31st March, 2015

Note

REVENUE FROM OPERATIONS (GROSS)

Year ended
31st March, 2014

32,721.44

28

TOTAL REVENUE

28,019.13

618.39

621.03

31,424.01

Other income

(1,538.77)

30,805.62

Revenue from operations (net)

29,557.90

(1,915.82)

27

Less: Excise duty

28,640.16

EXPENSES
Cost of materials consumed

29

11,867.31

11,159.81

Purchases of stock-in-trade

30

3,697.96

3,350.19

Changes in inventories of finished goods
(including stock-in-trade) and work-in-progress

31

58.28

(166.38)

Employee benefits expenses

32

1,578.89

1,435.95

Finance costs

33

16.82

36.03

Depreciation and amortisation expenses

34

286.69

260.55

Other expenses

35

8,394.94

7,764.30

25,900.89

23,840.45

5,523.12

4,799.71

664.30

228.68

6,187.42

5,028.39

(1,902.33)

(1,117.84)

TOTAL EXPENSES

Profit before exceptional items and tax
Exceptional items

36

Profit before tax
Tax expenses
Current tax

37

Deferred tax credit/(charge)

38

30.17

(43.06)

4,315.26

3,867.49

Basic (Face value of Re. 1 each)

Rs. 19.95

Rs. 17.88

Diluted (Face value of Re. 1 each)

Rs. 19.94

Rs. 17.87

PROFIT FOR THE YEAR
Earnings per equity share

39

Significant accounting policies

2

The accompanying notes are an integral part of these financial statements
As per our report of even date

For and on behalf of Board of Directors

For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai: 8th May, 2015

Annual Report 2014-15

Mumbai: 8th May, 2015

Standalone

95

CASH FLOW STATEMENT

For the year ended 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

Year ended
31st March, 2015

A

CASH FLOW FROM OPERATING ACTIVITIES:

Profit before exceptional items and tax
Adjustments for:
Depreciation and amortisation expenses
Net gain on sale of investments
(Profit)/Loss on fixed assets sold, scrapped, etc. (net)
Interest income
Dividend income
Provision for expense on employee stock options/performance share schemes
Provision for diminution in the value of non-current investments
Write back for doubtful debts and advances (net)
Bad debts/advances written off
Provision for Mark to Market loss on derivative instruments
Unrealised foreign exchange differences
Interest expense
Cash Generated from operations before working capital changes
Adjustments for:
(Increase)/decrease in trade receivables
(Increase)/decrease in short-term loans and advances
(Increase)/decrease in long-term loans and advances
Increase/(decrease) in trade payables
Increase/(decrease) in long-term provisions
Increase/(decrease) in short-term provisions
Increase/(decrease) in other current liabilities
Increase/(decrease) in other long term liabilities
(Increase)/decrease in inventories
Cash generated from operations
Taxes paid (net of refunds)
Cash flow before exceptional items
Exceptional items:
Amounts paid for other restructuring activities
Net cash generated from operating activities - [A]

B

96

CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of tangible/intangible assets
Sale proceeds of tangible assets
Investment in equity shares of a subsidiary
Purchase of non-current investments
Sale of non-current investments
Redemption of long term deposits with banks
Purchase of current investments
Sale proceeds of current investments
Loans given to subsidiaries/fellow subsidiaries
Loans repaid by subsidiaries/fellow subsidiaries
Investment in bank deposits (having original maturity more than 3 months)
Redemption/maturity of bank deposits (having original maturity more than 3 months)

Standalone

Year ended
31st March, 2014

5,523.12

4,799.71

286.69
(294.38)
(2.79)
(205.78)
(118.23)
19.41
(3.31)
5.54
36.60
1.23
16.82
(258.20)
5,264.92

260.55
(259.08)
12.25
(258.02)
(103.93)
7.00
13.46
(18.35)
22.11
17.33
2.26
36.03
(268.39)
4,531.32

30.91
(130.10)
30.19
(372.76)
41.93
159.47
(11.35)
(108.71)
144.85
(215.57)
5,049.35
(1,940.43)
3,108.92

13.04
70.61
(64.99)
606.61
51.12
(3.39)
368.96
(344.87)
(220.54)
476.55
5,007.87
(1,278.53)
3,729.34

(5.16)
3,103.76

(5.19)
3,724.15

(526.54)
31.79
(40.00)
(22.52)
119.37
296.03
(17,435.19)
17,405.32
(75.64)
101.01
(2,513.00)
2,009.97

(530.81)
19.66
(100.64)
(11.13)
9.13
(9,537.48)
9,091.73
(261.77)
135.74
(2,549.72)
2,641.19

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

CASH FLOW STATEMENT (CONTD.)

For the year ended 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

Year ended
31st March, 2015
224.98
51.22
99.55
18.68
(254.97)
521.09
181.92
448.04

C

Cash and cash equivalents comprise of:
Cash on hand
Balances with banks
In current accounts
Term deposits with original maturity of less than three months
Short term, highly liquid investments
Treasury bills with original maturity of less than three months

(2,472.70)
(406.39)
(14.19)
(25.02)

2.18
(3,450.44)
101.36
620.61
721.97

1.51
(2,916.79)
294.20
326.41
620.61

1.42
34.50
417.02

147.27
721.97

Dividends paid
Dividend distribution tax paid
Amounts deposited in bank accounts towards unpaid dividends
Interest paid
Proceeds from share allotment under employee stock options/performance share schemes
Net cash used in financing activities - [C]
Net increase/(decrease) in cash and cash equivalents - [A+B+C]
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

(2,912.30)
(515.27)
(8.23)
(16.82)

31.87
542.09

CASH FLOW FROM FINANCING ACTIVITIES:

197.13
(513.16)

0.74

Interest received
Gain on sale of short term highly liquid investments
Dividend received from subsidiaries
Dividend received from others
Cash flow before exceptional items
Exceptional items:
Consideration received on disposal of surplus properties
Consideration received on disposal of a subsidiary
Net cash generated/(used in) from investing activities - [B]

Year ended
31st March, 2014
210.38
29.53
130.63
13.27
(710.29)

167.67
620.61

Notes:
i) The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard 3 (AS-3), “Cash
Flow Statements”. ii) 
Cash comprises cash on hand, Current Accounts and deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
As per our report of even date

For and on behalf of Board of Directors

For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai: 8th May, 2015
Annual Report 2014-15

Mumbai: 8th May, 2015
Standalone

97

NOTES

to the financial statements for the year ended 31st March, 2015
(All amounts in Rs. crores, unless otherwise stated)

1) COMPANY INFORMATION
Hindustan Unilever Limited (the ‘Company’) is a public limited company domiciled in India and is listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE). The
Company is a market leader in the FMCG business comprising
Home and Personal Care (HPC), Foods and Refreshments. The
Company has manufacturing facilities across the country and
Research and Development centres in Mumbai and Bangalore and sells primarily in India through independent distributors and modern trade.

2) SIGNIFICANT ACCOUNTING POLICIES
2.1. Basis of preparation
These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section
133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the
Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally accepted in India, to the extent applicable.
All assets and liabilities have been classified as current or noncurrent as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.
Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as
12 months for the purpose of current/non-current classification of assets and liabilities.
Transactions and balances with values below the rounding off norm adopted by the Company have been reflected as “0.00” in the relevant notes in these financial statements.
2.2.
Revenue recognition
Revenue from sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, the Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Sales are recognised net of trade discounts, rebates, sales taxes and excise duties (on goods manufactured and outsourced).
Income from export incentives such as duty drawback and premium on sale of import licenses, and lease license fee are recognised on accrual basis.
Income from services rendered is recognised based on agreements/arrangements with the customers as the service
98

Standalone

is performed using the proportionate completion method when no significant uncertainty exists regarding the amount of the consideration that will be derived from rendering the service and is recognised net of service tax, as applicable.
Interest on investments is recognised on a time proportion basis taking into account the amounts invested and the rate of interest.
Dividend income on investments is recognised when the right to receive dividend is established.
2.3.
Expenditure
Expenses are accounted on accrual basis.
Revenue expenditure pertaining to research is charged to the
Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product’s technical feasibility and other criteria as set out in paragraph 44 of AS 26 – ‘Intangible Assets’ have been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible assets.
2.4.
Tangible assets
Tangible assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any.
Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.
Items of tangible assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the financial statements under “Other current assets”. Any expected loss is recognised immediately in the Statement of Profit and
Loss.
Tangible assets not ready for the intended use on the date of
Balance Sheet are disclosed as “Capital work-in-progress”.
Losses arising from the retirement of, and gains or losses arising from disposal of tangible assets which are carried at cost are recognised in the Statement of Profit and Loss.
Depreciation is provided on a pro-rata basis on the straight line method at the rates prescribed under Schedule II to the
Companies Act, 2013 with the exception of the following:

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

-  plant and equipment is depreciated over 4 to 21 years based on the technical evaluation of useful life done by the management. -  assets costing Rs. 5,000 or less are fully depreciated in the year of purchase.
2.5.
Intangible assets
Intangible assets are stated at acquisition cost, net of

accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis as per rates mentioned below:
Asset class
Goodwill
Brands/Trademarks
Computer Software

Rate of amortisation
25%
25%
20%

2.6.
Impairment
A
 ssessment for impairment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made.
Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount by recognising the impairment loss as an expense in the Statement of Profit and Loss. Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each
Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased.
2.7.
Investments
Investments are classified into current and non-current

investments. Current investments are stated at the lower of cost and fair value. Non-current investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, separately for each individual non-current investments. Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as “Current investments”.

Annual Report 2014-15

All other investments investments”. are

classified

as

“Non-current

Investment in land and buildings that are not intended to be occupied substantially for use by, or in the operations of the Company, have been classified as investment property.
Investment properties are carried at cost less accumulated depreciation and accumulated impairment losses, if any.
Depreciation on the building component of the investment property is provided in line with the policy on tangible assets.
2.8.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is computed on a weighted average basis. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale. Finished goods and work-in-progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition.
2.9. Trade receivables and Loans and advances
Trade receivables and Loans and advances are stated after making adequate provisions for doubtful balances.
2.10. Provisions and Contingent liabilities
Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the
Balance Sheet date and are not discounted to its present value.
These are reviewed at each year end date and adjusted to reflect the best current estimate.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.11. Retirement/post retirement benefits
Defined contribution plans
Contributions to defined contribution schemes such as employees’ state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be

Standalone

99

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

made as and when services are rendered by the employees.
Company’s provident fund contribution, in respect of certain employees, is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
Defined benefit plans
In respect of certain employees, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous
Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The liability in respect of the shortfall of interest earnings of the Fund is determined on the basis of an actuarial valuation. The Company also provides for retirement/postretirement benefits in the form of gratuity, pensions (in respect of certain employees), compensated absences (in respect of certain employees) and medical. The Company’s liability towards such defined benefit plans is determined based on valuations, as at the Balance Sheet date, made by independent actuaries using the projected unit credit method. Actuarial gains and losses in respect of the defined benefit plans are recognised in the Statement of Profit and Loss in the year in which they arise.
The classification of the Company’s net obligation into current and non- current is as per the actuarial valuation report.
Termination benefits
Termination benefits, in the nature of voluntary retirement benefits or termination benefits arising from restructuring, are recognised in the Statement of Profit and Loss when: a) the
Company has a present obligation as a result of past event; b) a reliable estimate can be made of the amount of the obligation; and c) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. 2.12. Income taxes
Tax expense for the year comprises current tax and deferred tax.
Current tax is measured at the amount expected to be paid to
(recovered from) the taxation authorities using the applicable tax rates and tax laws.
Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are

100

Standalone

recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date for any write down, as considered appropriate.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
2.13. Foreign currency translations
Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.
Forward exchange contracts outstanding as at the year end on account of firm commitment transactions are marked to market and the losses, if any, are recognised in the Statement of Profit and Loss and gains are ignored in accordance with the announcement of the Institute of Chartered Accountants of India on ‘Accounting for Derivatives’ issued in March 2008.
2.14. Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. The Company is both a lessee and a lessor under such arrangements. Payments and receipts under such leases are charged or credited to the Statement of Profit and Loss on a straight line basis over the primary period of the lease.
2.15. Segment reporting
The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the
Company. Further,
a) 
Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market based.

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

b) 
Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the
Company as a whole and are not allocable to segments on a reasonable basis, have been included under “Un-allocated corporate expenses net of un-allocated income”.
2.16. Cash and cash equivalents
In the cash flow statement, cash and cash equivalents include cash in hand, term deposits with banks and other short-term highly liquid investments with original maturities of three months or less.
2.17. Earnings per share
Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.18. Employee share based payments
Equity settled stock options granted under “HUL ESOP/
Performance Shares Schemes” are accounted for under the intrinsic value method as per the accounting treatment prescribed by Employee Stock Option Scheme and Employee
Stock Purchase Guidelines, 1999, issued by Securities and
Exchange Board of India and the Guidance Note on Employee
Share-based Payments issued by the Institute of Chartered
Accountants of India.
2.19. Use of estimates
The preparation of the financial statements in conformity with the generally accepted accounting principles requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates.
2.20. Government Grants
Government Grants and subsidies are received and recognised after fulfilling the conditions attached to them. Government grants are of the nature of promoters’ contribution and are credited to Capital Subsidy which is treated as part of Reserves and Surplus.

3) SHARE CAPITAL
As at
31st March, 2015

As at
31st March, 2014

225.00

225.00

216.35

216.27

216.35

216.27

Authorised
2,25,00,00,000 (March 31, 2014: 2,25,00,00,000) equity shares of Re. 1 each
Issued, subscribed and fully paid up
2,16,34,64,851 (March 31, 2014: 2,16,26,96,292) equity shares of Re. 1 each

a)

Reconciliation of the number of shares
As at
31st March, 2015
Number of shares

Equity Shares:
Balance as at the beginning of the year
Add: ESOP shares issued during the year (Refer Note 51)
Balance as at the end of the year

Annual Report 2014-15

Amount

As at
31st March, 2014
Number of shares

Amount

2,16,26,96,292
7,68,559
2,16,34,64,851

216.27
0.08
216.35

2,16,24,72,310
2,23,982
2,16,26,96,292

216.25
0.02
216.27

Standalone 101

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

b)

Rights, preferences and restrictions attached to shares

Equity shares: The Company has one class of equity shares having a par value of Re. 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing
Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c)

Shares held by holding company and subsidiaries of holding company in aggregate
As at
31st March, 2015

As at
31st March, 2014

111.44

111.44

34.00

34.00

Equity Shares of Re. 1 :
1,11,43,70,148 shares (March 31, 2014 : 1,11,43,70,148 shares) held by Unilever PLC,
UK, the holding company
34,00,42,710 shares (March 31, 2014 : 34,00,42,710 shares) held by subsidiaries of the holding company
d)

Details of equity shares held by shareholders holding more than 5% of the aggregate shares in the Company
As at
31st March, 2015
1,11,43,70,148
51.51%

Number of shares
Unilever PLC, UK, the holding company
e)

As at
31st March, 2014
1,11,43,70,148
51.53%

Shares reserved for issue under options
As at
31st March, 2015
Number of shares

Under 2001 HLL Stock Option Plan: equity shares of Re.
1 each, at an exercise price of Rs. 132.05 per share
Under 2006 HUL Performance Share Scheme: equity shares of Re. 1 each, at an exercise price of Re. 1 per share
Under 2012 HUL Performance Share Scheme: equity shares of Re. 1 each, at an exercise price of Re. 1 per share

Amount

As at
31st March, 2014
Number of shares

Amount

23,100

0.00

1,85,300

0.02

3,64,566

0.04

7,93,662

0.08

7,47,221
11,34,887

0.07
0.11

6,35,057
16,14,019

0.06
0.16

For terms and other details Refer Note 51.
f) 
Aggregate number of shares bought back during 5 years immediately preceding March 31, 2015
As at
31st March, 2015
No. of equity shares bought back by the Company

102

Standalone

As at
31st March, 2014

2,28,83,204

2,28,83,204

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

4) RESERVES AND SURPLUS

Capital Reserve
Capital Redemption Reserve
Securities Premium Account Balance as at the beginning of the year Add: Additions during the year on exercise of employee stock options Balance as at the end of the year
Revaluation Reserve
Employee Stock Options Outstanding Account Balance as at the beginning of the year Add: Employee compensation expense for the year (Refer Note 51) Less: Utilised during the year Balance as at the end of the year
Capital Subsidy (Received from Government for eligible projects under its scheme)
Export Profit Reserve Balance as at the beginning of the year Less: Transfer to General Reserve Balance as at the end of the year
Development Allowance Reserve Balance as at the beginning of the year Less: Transfer to General Reserve Balance as at the end of the year
General Reserve Balance as at the beginning of the year Add: Transfer from Surplus in Statement of Profit and Loss Add: Transfer from Export Profit Reserve Add: Transfer from Development Allowance Reserve Less: Adjusted for Depreciation (a) Balance as at the end of the year
Other Reserves (b)
(Created on amalgamation of Brooke Bond Lipton India Limited)
Surplus in Statement of Profit and Loss Balance as at the beginning of the year Add: Profit for the year Less: Appropriations Interim dividend on equity shares for the year [per share Rs. 6.00 (2013-14: Rs. 5.50 per share)] Proposed final dividend on equity shares for the year [per share Rs. 9.00 (2013-14: Rs. 7.50 per share)] Dividend distribution tax - net (c) Transfer to General Reserve Balance as at the end of the year
TOTAL

As at
31st March, 2015
4.22
6.46

As at
31st March, 2014
4.22
6.46

59.76
21.40
81.16
0.67

55.69
4.07
59.76
0.67

42.69
19.41
(19.30)
42.80
6.19

38.27
7.00
(2.58)
42.69
6.19

12.22
(12.22)
-

12.22
12.22

0.27
(0.27)
-

0.27
0.27

2,182.74
12.22
0.27
(7.90)
2,187.33
2.51

1,795.99
386.75
2,182.74
2.51

743.05
4,315.26

535.28
3,867.49

(1,298.20)

(1,189.41)

(1,947.12)

(1,622.02)

(635.90)
1,177.09
3,508.43

(461.54)
(386.75)
743.05
3,060.78

(a)  uring the year, the Company has adopted estimated useful life of fixed assets as stipulated by Schedule II to the Companies Act,
D
2013. Accordingly, depreciation of Rs. 7.90 crores (net of deferred tax of Rs. 4.07 crores) on account of assets whose useful life is already exhausted on April 01, 2014 has been adjusted against General Reserve.
(b) Not available for capitalisation/declaration of dividend/share buyback.
(c) 
Dividend Distribution Tax (DDT)-net, pertaining to the current year comprises the DDT on interim and proposed final dividend and the credit in respect of tax paid under section 115 O of the Indian Income-tax Act, 1961 by the Company on dividend received from its domestic subsidiaries during the year.
Annual Report 2014-15

Standalone 103

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

5) OTHER LONG-TERM LIABILITIES
As at
31st March, 2015
152.06
18.05

112.43
166.39

170.11

278.82

As at
31st March, 2015

As at
31st March, 2014

522.65
127.78
305.92

521.75
131.98
270.26

956.35

923.99

As at
31st March, 2015

As at
31st March, 2014

437.36
4,851.54

882.35
4,741.49

5,288.90

Employee and ex-employee related liabilities
Security deposits

As at
31st March, 2014

5,623.84

6) LONG-TERM PROVISIONS
Provision for employee benefits (pension, medical, compensated absences and others) (Refer Note 50)
Provision for income tax (net of advance tax)
Other provisions (including for statutory levies etc) - net (Refer Note 11)

7) TRADE PAYABLES

Acceptances
Trade payables (Refer Note 8)

8) DUES TO MICRO AND SMALL ENTERPRISES
Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts/interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years.

9) OTHER CURRENT LIABILITIES
As at
31st March, 2015
92.30
404.16
274.42
43.42
93.75

84.07
316.82
262.52
34.42
213.50

908.05

Unpaid dividends [Refer note (a) below]
Statutory dues (including provident fund, tax deducted at source and others)
Salaries, wages and bonus payable
Advance from customers
Other payables (VRS, payable for purchase of tangible assets etc.)

As at
31st March, 2014

911.33

a) 
There are no amounts due for payment to the Investor Education and Protection Fund Under Section 125 of the Companies Act,
2013 as at the year end.

104

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

10) SHORT-TERM PROVISIONS
As at
31st March, 2015
Provision for employee benefits (gratuity, pension, medical, compensated absences and others) (Refer Note 50)
Provision for wealth tax (net of advance tax)
Others
Provision for proposed final dividend (Refer Note 26)
Provision for dividend distribution tax on proposed final dividend
Other provisions (including restructuring etc.) (Refer Note 11)

As at
31st March, 2014

50.86
6.73

10.24
5.68

1,947.12
396.39
184.77
2,585.87

1,622.02
275.66
69.77
1,983.37

11) MOVEMENT IN OTHER PROVISIONS (SHORT TERM AND LONG TERM) (REFER NOTES 6 AND 10)
As at
31st March, 2015
Opening balance
Provision/reclassified during the year
Amount utilised/reversed during the year
Balance at the end of the year

As at
31st March, 2014

340.03
160.27
(9.61)
490.69

189.21
153.98
(3.16)
340.03

Other Provisions (in Short Term and Long Term includes provision for tax disputes, employee related disputes, restructuring and other provisions)
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution.

Annual Report 2014-15

Standalone 105

106

Standalone
0.07
0.07
0.07

59.75
58.78

Accumulated Depreciation
Balance as at April 01, 2013
Additions
Deletions
Balance as at March 31, 2014
Additions
Deletions
Adjusted with General Reserve
Balance as at March 31, 2015

Net Block
Balance as at March 31, 2014
Balance as at March 31, 2015
43.25
26.57

9.92
2.74
(0.00)
12.66
0.77
(7.66)
5.77

55.92
(0.01)
55.91
(23.57)
32.34

786.50
797.50

218.77
29.54
(0.10)
248.21
30.91
(0.54)
0.35
278.93

980.76
54.21
(0.26)
1,034.71
47.04
(5.32)
1,076.43

Buildings

1,423.89
1,497.28

1,263.84
198.71
(74.70)
1,387.85
214.66
(40.07)
1,562.44

2,562.22
338.04
(88.52)
2,811.74
300.22
(52.24)
3,059.72

Plant and
Equipment

42.90
35.67

34.55
4.49
(1.52)
37.52
8.15
(1.51)
2.95
47.11

78.67
3.97
(2.22)
80.42
4.93
(2.57)
82.78

Furniture and Fixtures

0.09
0.08

1.61
0.00
(0.31)
1.30
0.01
(0.06)
1.25

1.70
(0.31)
1.39
0.00
(0.06)
1.33

Vehicles

41.56
19.62

47.28
9.35
(3.39)
53.24
20.56
(4.95)
8.67
77.52

92.26
6.17
(3.63)
94.80
8.02
(5.68)
97.14

Office
Equipment

2,397.94
2,435.50

1,576.06
244.84
(80.02)
1,740.86
275.06
(54.79)
11.97
1,973.10

3,832.84
419.67
(113.71)
4,138.80
360.21
(90.41)
4,408.60

Total

(e) 
Depreciation of Rs. 11.97 crores on account of assets whose useful life is already exhausted on April 01, 2014 has been adjusted against General
Reserve pursuant to adoption of estimated useful life of fixed assets as stipulated by Schedule II of Companies Act, 2013. [Refer Note 4(a)].

(d) 
Additions in capital expenditure of Rs. 0.81 crores (March 31, 2014 - Rs. 1.10 crores) and Rs. 1.72 crores (March 31, 2014 - Rs. 4.54 crores) incurred at Company’s inhouse R&D facilities at Mumbai and Bangalore respectively are eligible for weighted deduction under section 35 (2AB) of the
Income Tax Act, 1961.

(c) 
Deletions include Assets held for sale shown under ‘Other current assets’ (Refer Note 23) : Gross block Rs. 1.13 crores (March 31, 2014 - Rs. 3.10 crores), Accumulated depreciation Rs. 0.08 crores (March 31, 2014 - Rs. 0.69 crores) and Net block Rs.1.05 crores (March 31, 2014 - Rs. 2.41 crores). (b) 
The title deeds of Freehold Land aggregating Rs. 3.21 crores (March 31, 2014 - Rs. 3.21 crores), acquired on transfer of business/undertakings are in the process of being transferred in the name of the Company.

-

0.01
0.01
0.01

0.01
0.01
0.01

- Railway
Slidings

Others

(a) 
Buildings include Rs. 0.00 crore (March 31, 2014 - Rs. 0.01 crore) being the value of shares in co-operative housing societies.

NOTES :

61.30
17.28
(18.76)
59.82
(0.97)
58.85

- Freehold

- Leasehold

Land

Gross Block
Balance as at April 01, 2013
Additions
Deletions
Balance as at March 31, 2014
Additions
Deletions
Balance as at March 31, 2015

(Own assets, unless otherwise stated)

12) TANGIBLE ASSETS

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

13) INTANGIBLE ASSETS

(Acquired, unless otherwise stated)
Goodwill

Brands/
Trademarks

Computer
Software

Total

Gross Block
Balance as at April 01, 2013
Additions
Deletions
Balance as at March 31, 2014
Additions
Deletions
Balance as at March 31, 2015

11.82
11.82
11.82

159.85
159.85
159.85

129.69
2.69
132.38
8.75
(0.04)
141.09

301.36
2.69
304.05
8.75
(0.04)
312.76

Accumulated Depreciation
Balance as at April 01, 2013
Additions
Deletions
Balance as at March 31, 2014
Additions
Deletions
Adjusted with General Reserve
Balance as at March 31, 2015

11.82
11.82
11.82

146.35
6.00
152.35
3.75
156.10

107.08
8.68
115.76
7.10
(0.05)
122.81

265.25
14.68
279.93
10.85
(0.05)
290.73

-

7.50
3.75

16.62
18.28

24.12
22.03

Net Block
Balance as at March 31, 2014
Balance as at March 31, 2015

Annual Report 2014-15

Standalone 107

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

14) NON - CURRENT INVESTMENTS
As at
31st March, 2015
-

27.65
(8.20)
19.45
19.45

-

11.66

-

INVESTMENT PROPERTY Cost of building given on operating lease Less: Accumulated depreciation Net block
Total (A)

As at
31st March, 2014

11.66

72.63

72.63

172.43

20.00

4.60

4.60

2.58

2.58

-

112.43

35.94

13.43

0.52

0.52

0.06

0.06

-

0.02

0.10

0.10

A.

B. TRADE INVESTMENTS (VALUED AT COST UNLESS OTHERWISE STATED) a) Quoted equity instruments
- Equity shares [March 31, 2014: 38,33,619] of Rs. 10 each held in Tata Chemicals Limited b) Unquoted equity instruments Investment in subsidiaries
29,75,000 Equity shares [March 31, 2014: 29,75,000] of Rs. 10 each held in Unilever India Exports Limited
3,59,07,547 Equity shares [March 31, 2014: 2,00,00,000] of
Rs. 10 each held in Lakme Lever Private Limited
[Refer Note (i) below]
7,36,560 Equity shares [March 31, 2014: 7,36,560] of
Nepalese Rs. 100 each held in Unilever Nepal
Limited
1,79,10,132 Equity shares [March 31, 2014: 1,79,10,132] of Re. 1 each held in Pond’s Export Limited
- Equity shares [March 31, 2014: 20,05,600] of Rs. 100 each held in Aquagel Chemicals Private Limited
[Refer Note (i) below]

Investment in joint venture
4,24,10,843 Equity shares [March 31, 2014: 3,97,00,000] of
Rs. 10 each held in Kimberly Clark Lever Private
Limited [net of provision for other than temporary diminution in value Rs. 49.71 crores (March 31,
2014: Rs. 49.71 crores)]
Investment in associates
52,000
58,400

Others

96,125

108

Standalone

Equity shares [March 31, 2014: 52,000] of Rs.
100 each held in Aquagel Chemicals Bhavanagar
Private Limited
Equity shares [March 31, 2014: 58,400] of Rs. 10 each held in Hi Tech Surfactants Limited
Equity shares [March 31, 2014: 7,164] of Rs. 100 each held in Goldfield Fragrances Private Limited
Equity shares [March 31, 2014: 96,125] of Rs. 10 each held in Hindustan Field Services Private
Limited

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

14) NON - CURRENT INVESTMENTS (CONTD.)

50

c)

Unquoted preference instruments
5,20,000 9% Cumulative Redeemable Preference Shares
[March 31, 2014: 5,20,000] of Rs. 100 each held in
Aquagel Chemicals Bhavanagar Private Limited

Total (B)
C.

OTHER INVESTMENTS (VALUED AT COST UNLESS OTHERWISE STATED)
a) Quoted equity instruments
10,000 Equity shares [March 31, 2014: 10,000] of Rs. 10 each held in Scooters India Limited

b) Unquoted equity instruments Investment in subsidiaries
- Equity shares [March 31, 2014: 1,29,46,000] of Rs.
10 each held in Brooke Bond Real Estates Private
Limited
50,00,000 Equity shares [March 31, 2014: 50,00,000] of Rs. 10 each held in Jamnagar Properties Private Limited
2,21,700 Equity shares [March 31, 2014: 2,21,700] of Rs. 10 each held in Daverashola Estates Private Limited
50,000 Ordinary shares [March 31, 2014: 50,000] of Rs. 10 each held in Levindra Trust Limited
50,000 Ordinary shares [March 31, 2014: 50,000] of Rs. 10 each held in Hindlever Trust Limited
50,000 Ordinary shares [March 31, 2014: 50,000] of Rs. 10 each held in Levers Associated Trust Limited
7,600 Equity shares [March 31, 2014: 7,600] of Rs. 10 each held in Hindustan Unilever Foundation
10,000 Equity shares [March 31, 2014: 2,500] of Rs. 10 each held in Bhavishya Alliance Child Nutrition Initiatives Investment in associates
2,40,000 Equity shares [March 31, 2014: 2,40,000] of Rs.
10 each held in Comfund Financial Services India
Limited

Annual Report 2014-15

0.00

0.00

0.00

0.00
226.37

5.20

5.20

5.20
294.06

5.20
243.23

0.01

0.01

0.01

1

Equity shares [March 31, 2014: 1,000] of Rs. 10 each held in Super Bazar Co-operative Stores Limited
Equity share [March 31, 2014: 1] of Rs. 10,000 each held in Coffee Futures India Exchange Limited
Equity shares [March 31, 2014: 50] of Rs. 100 each held in Dugdha Sahakari Kraya-Vikraya Samiti
Limited

As at
31st March, 2014
0.00

288.86

1,000

As at
31st March, 2015
0.00

0.01

-

12.95

5.00

5.00

4.51

4.51

0.05

0.05

0.05

0.05

0.05

0.05

0.01

0.01

0.01

0.00

0.24

0.24

Standalone 109

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

14) NON - CURRENT INVESTMENTS (CONTD.)
As at
31st March, 2015
Investment in others
1,00,000
8,284
200
1,000
1,150

Equity shares [March 31, 2014: 1,00,000] of Rs. 10 each held in Biotech Consortium India Limited
Equity shares [March 31, 2014: 8,284] of Rs. 10 each held in Assam Bengal Cereals Limited
Equity shares [March 31, 2014: 200] of Rs. 100 each held in The Nilgiri Co-operative Enterprises Limited
Equity shares [March 31, 2014: 1,000] of Rs. 10 each held in Saraswat Co-operative Bank Limited
Ordinary shares [March 31, 2014: 1,150] of Rs. 100 each held in Annamallais Ropeway Company Limited

c) Unquoted other instruments Investment in debentures and bonds
- 6% Capital Gains Bond [March 31, 2014: 500] face value of Rs. 10,000 each held in National Highway
Authority of India
14 6 1/2% Non-redeemable Registered Debentures
[March 31, 2014: 14] face value of Rs. 1,000 each held in The Bengal Chamber of Commerce & Industry
44 1/2% Debentures [March 31, 2014: 44] face value of Rs. 100 each held in Woodlands Hospital and
Medical Research Centre Limited
1 5% Non-redeemable Registered Debenture stock
[March 31, 2014: 1] face value of Rs. 100 each held in Woodlands Hospital and Medical Research
Centre Limited
56 5% Debentures [March 31, 2014: 56] face value of
Rs. 100 each held in Shillong Club Limited Investment in government and trust securities
7 Year National Savings Certificates - II Issue Investment in controlled trust
Hindustan Unilever Limited Securitisation of
Retirment Benefit Trust
Total (C)
Total (A+B+C)
Aggregate amount of quoted investments
Market Value of quoted investments
Aggregate amount of unquoted investments
Aggregate amount of investment property
Aggregate provision for diminution other than temporary in the value of non-current investments 0.10

0.10

0.01

0.01

0.00

0.00

0.00

0.00

0.00

0.00

10.03

As at
31st March, 2014

22.97

-

0.50

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.01

0.01

350.00
350.01
360.05
654.11
0.01
0.02
654.11
49.71

350.00
350.51
373.49
636.17
11.67
110.11
605.05
19.45
49.71

(i) Pursuant to the scheme of amalgamation of Aquagel Chemicals Private Limited with Lakme Lever Private Limited under Sections
391 to 394 of the Companies Act, 1956 (or re-enactment thereof upon effectiveness of the Companies Act, 2013) as sanctioned by
Honourable High Court of Judicature of Bombay vide its Order dated February 06, 2015, the entire business and all assets and liabilities of Aquagel Chemicals Private Limited were transferred and vested in Lakme Lever Private Limited effective from the appointed date,
i.e. April 01, 2014. Accordingly, the Company has reassigned the investments made in Aquagel Chemicals Private Limited to Lakme
Lever Private Limited.
110 Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

15) DEFERRED TAX ASSETS (NET)
As at
31st March, 2015

Deferred tax liabilities
Depreciation

153.18
29.00
136.25
148.19
466.62

148.28
28.26
110.54
109.06
396.14

(270.66)

(234.41)

195.96

Deferred tax assets
Provision for post retirement benefits and other employee benefits
Provision for doubtful debts and advances
Expenses allowable for tax purposes when paid
Other timing differences

As at
31st March, 2014

161.73

Refer Note 4(a) for utilisation of Deferred Tax of Rs. 4.07 crores (2013-14: Nil) on depreciation on account of assets whose useful life is already exhausted on April 01, 2014 has been adjusted against General Reserve.

16) LONG-TERM LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated)
As at
31st March, 2015
Capital advances

As at
31st March, 2014

9.01

10.82

35.12

55.38

Security deposits
- Deposits with customs, port trust, excise and other government authorities

99.76

103.57

Loans and advances to related parties (Refer Note 57)

- Deposits with others

179.77

205.14

Advance income tax (net of provision for tax)

247.36

212.40

5.09

5.09

7.35

13.11

Advance agriculture tax (net of provision for tax)
Other loans and advances (includes employee advances, advances for materials etc)
- Considered good
- Considered doubtful

46.60

50.98

(46.60)

(50.98)

583.46

605.51

As at
31st March, 2015

- Less: Provision for doubtful loans and advances

As at
31st March, 2014

17) OTHER NON-CURRENT ASSETS

Long term deposits with banks with original maturity of more than twelve months

Annual Report 2014-15

0.44

0.68

0.44

0.68

Standalone

111

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

18) CURRENT INVESTMENTS (with original maturity of between 3 months and 12 months) (At cost or market value, whichever is less)
As at
31st March, 2015

As at
31st March, 2014

1,303.80

1,707.95

463.69

-

UTI Mutual Fund - Units UTI Liquid Fund - Cash Plan - Direct Growth - 2,644,859 units [March 31, 2014: 2,618,552 units]

556.03

550.00

DWS Insta Cash Plus Fund - Direct Plan - Growth - 15,604,816 units [March 31, 2014: 12,019,029 units]

265.00

200.00

UTI Mutual Fund-Units UTI Liquid Fund - Cash Plan - IP Growth - 109,598 units [March 31, 2014: Nil units]

25.01

-

Reliance Liquidity Fund - Direct Plan - Growth - 48,824 units
[March 31, 2014: Nil units]

10.29

-

Aggregate amount of quoted investments

2,623.82
1,767.49

2,457.95
1,707.95

Market value of quoted investments

1,792.03

1,731.33

856.33

750.00

Quoted
Government securities
Treasury bills of face value aggregating Rs. 1,353.87 crores
[March 31, 2014 - Rs. 1,776.44 crores]
Government Securities of face value aggregating Rs. 445.00 crores [March 31, 2014 - Rs. Nil]
Unquoted
Mutual Funds

Aggregate amount of unquoted investments

19) INVENTORIES (At the lower of cost and net realisable value)
As at
31st March, 2015
Raw materials [includes in transit: Rs. 24.88 crores, (March 31, 2014 - Rs. 46.21 crores)]
Packing materials
Work-in-progress (Refer Note 42)
Finished goods [includes in transit: Rs. 29.52 crores (March 31, 2014 - Rs. 51.20 crores)] (Refer Note 41)
Stores and spares

As at
31st March, 2014

776.87
108.99
294.83
1,361.00

885.04
126.98
318.34
1,344.83

60.99
2,602.68

72.34
2,747.53

Finished goods include stock-in-trade, as both are stocked together

112

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

20) TRADE RECEIVABLES (Unsecured unless otherwise stated)
As at
31st March, 2015

Less: Provision for doubtful debts

34.80
36.13
70.93

764.09
764.09
(37.20)
782.94

781.63
781.63
(36.13)
816.43

As at
31st March, 2014

0.74

1.42

31.87
542.09

34.50
417.02

147.27
721.97

167.67
620.61

1,723.00

1,219.97

0.29

296.32

92.30
1,815.59
2,537.56

84.07
1,600.36
2,220.97

As at
31st March, 2015

Other trade receivables
-  onsidered good
C
- Considered doubtful

18.85
37.20
56.05

As at
31st March, 2015

Trade receivables outstanding for a period exceeding six months from the date they were due for payment
 Considered good
- Considered doubtful

As at
31st March, 2014

As at
31st March, 2014

83.56
381.52

96.05
264.59

165.16
27.03
657.27

124.08
44.06
528.78

21) CASH AND BANK BALANCES

A.

Cash and cash equivalents
Cash on hand
Balances with banks In current accounts Term deposits with original maturity of less than three months Short term, highly liquid investments Treasury bills with original maturity of less than three months
Total (A)
B. Other bank balances 
Term deposit with original maturity of more than three months but less than twelve months [including lien and margin money deposits Rs. 2.08 crores
(March 31, 2014 - Rs. 2.69 crores)] 
Long term deposit with maturity of more than three months but less than twelve months from the Balance Sheet date Unpaid dividend account
Total (B)
Total (A+B)

22) SHORT-TERM LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated)

Current account balances with group companies and joint venture
Other loans and advances
Others

CENVAT receivable VAT credit receivable

Annual Report 2014-15

Standalone

113

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

23) OTHER CURRENT ASSETS (Unsecured, considered good unless otherwise stated)
As at
31st March, 2015
Income accrued on investments

As at
31st March, 2014

6.41

0.04

Income accrued on deposits

32.98

58.31

Export benefits receivable

10.51

8.90

9.38

13.56

59.28

80.81

As at
31st March, 2015

As at
31st March, 2014

558.99

545.90

Tangible assets held for sale (at lower of cost and net realisable value) [Refer Note 12 (c)]

24) CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debts
Income tax matters
Sales tax matters - Rs. 40.54 crores (March 31, 2014 - Rs. 52.84 crores) net of tax
E
 xcise duty, service tax and customs duty matters - Rs. 134.23 crores (March
31, 2014 - Rs. 132.61 crores) net of tax
O
 ther matters including claims related to employees/ex-employees, property related demands, etc - Rs. 51.62 crores (March 31, 2014 - Rs. 45.74 crores) net of tax
(i)

(ii)

8.20

-

The Company has given Bank Guarantees in respect of certain matters of above contingent liabilities.



Corporate Guarantee given

114

69.29

The Company’s pending litigations comprise of claims against the Company by employees and pertaining to proceedings pending with Income Tax,
Excise, Custom, Sales/VAT tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

(iv)

78.20

T
 he Company does not expect any reimbursements in respect of the above contingent liabilities.

(iii)

80.05
200.89

It
 is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

61.42
203.35

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

25) CAPITAL AND OTHER COMMITMENTS
As at
31st March, 2015

As at
31st March, 2014

162.55

95.07

162.55

95.07

As at
31st March, 2015

As at
31st March, 2014

The final dividend proposed for the year is as follows:
On equity shares of Re. 1 each Amount of dividend proposed

1,947.12

1,622.02

Rs. 9.00

Rs .7.50

Year ended
31st March, 2015

Year ended
31st March, 2014

32,086.32

28,947.06

511.88
123.24
32,721.44
(1,915.82)

479.57
131.27
29,557.90
(1,538.77)

30,805.62

28,019.13

Year ended
31st March, 2015

Year ended
31st March, 2014

168.21
37.57

204.44
53.58

99.55
18.42
0.26
294.38
618.39

90.66
8.78
4.49
259.08
621.03

(a) Capital commitments 
Estimated value of contracts in capital account remaining to be executed and not provided for (net of capital advances)
(b) Other commitments 
During the year, the Company has issued letters of undertakings to provide need based financial support to its following wholly owned subsidiaries: i) Lakme Lever Private Limited ii) Daverashola Estates Private Limited iii) Jamnagar Properties Private Limited

26) PROPOSED DIVIDEND

Dividend per equity share

27) REVENUE FROM OPERATIONS

Sale of products (Refer Note 40)
Other operating revenue
Income from services rendered to group companies
Others (including scrap sales, export incentives, commission, lease license fee etc.)
Less: Excise duty

28) OTHER INCOME

Interest income
On bank deposits
On others (includes interest on income tax refund)
Dividend income
From subsidiaries
From current investments
From non-current investments
Net gain on sale of investments

Annual Report 2014-15

Standalone

115

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

29) COST OF MATERIALS CONSUMED
Year ended
31st March, 2015
9,435.93
2,431.38

8,912.18
2,247.63

11,867.31

11,159.81

Year ended
31st March, 2015

Year ended
31st March, 2014

3,697.96

3,350.19

3,697.96

Raw materials consumed (Refer Note 43)
Packing materials consumed

Year ended
31st March, 2014

3,350.19

Cost materials consumed is based on derived values.

30) PURCHASES OF STOCK-IN-TRADE

Purchases of goods (Refer Note 46)

31) CHANGES IN INVENTORIES OF FINISHED GOODS (INCLUDING STOCK-IN-TRADE) AND WORK-IN-PROGRESS
Year ended
31st March, 2015

Year ended
31st March, 2014

1,344.83

1,280.66

318.34

226.96

(1,361.00)

(1,344.83)

(294.83)

(318.34)

Opening inventories
Finished goods
Work-in-progress
Closing inventories
Finished goods
Work-in-progress

50.94

(10.83)

58.28

(166.38)

Year ended
31st March, 2015

Year ended
31st March, 2014

1,390.08

1,245.02

Contribution to provident fund and other funds

57.69

85.58

Gratuity

11.74

14.22

Excise duty on increase/(decrease) of finished goods

32) EMPLOYEE BENEFITS EXPENSES

Salaries, wages, bonus, etc.

Expense on employee stock option schemes (Refer Note 51)

19.41

7.00

Workmen and staff welfare expenses

99.97

84.13

1,578.89

1,435.95

116

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

33) FINANCE COSTS
Year ended
31st March, 2015
Interest expense on bank overdraft/short term borrowings
Interest on Income tax

Year ended
31st March, 2014

0.23

0.06

-

11.01

16.59

24.96

16.82

36.03

Year ended
31st March, 2015

Year ended
31st March, 2014

275.06
10.85
0.78
286.69

244.83
14.68
1.04
260.55

Year ended
31st March, 2015

Interest expense on security deposit

Year ended
31st March, 2014

125.01
304.62
380.78
196.51
12.68
81.37
11.32
5.18
128.07
3,874.94
1,411.51
(3.31)
5.54
166.07
(2.79)
735.47
977.81
(15.84)
8,394.94

111.70
321.05
354.12
183.94
12.16
84.65
10.21
5.73
129.51
3,613.60
1,297.73
(18.35)
22.11
192.65
12.25
525.29
917.64
(11.69)
7,764.30

34) DEPRECIATION AND AMORTISATION EXPENSES

Depreciation on tangible assets
Amortisation on intangible assets
Depreciation on investment property

35) OTHER EXPENSES

Consumption of stores & spares
Power, Fuel, Light and Water
Processing charges
Rent [Refer note (c) below]
Repairs to building
Repairs to plant and equipment
Repairs others
Insurance
Rates and taxes (excluding income tax)
Advertising and sales promotion
Carriage and freight
Provision/(write back) for doubtful debts and advances (net)
Bad debts/advances written off
Travelling and motor car expenses
(Profit)/Loss on fixed assets sold, scrapped, etc. (net)
Royalty
Miscellaneous expenses [Refer note (d) below]
Expenses shared by subsidiary companies for use of common facilities

Annual Report 2014-15

Standalone

117

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

Year ended
31st March, 2015

Year ended
31st March, 2014

Statutory Audit fees

1.60

1.80

Tax audit fees

0.60

0.70

-

-

Fees for other audit related services

1.08

1.24

Fees for certification

0.56

0.64

0.20

0.20

Cost audit fees

0.11

0.22

Reimbursement of out-of-pocket expenses

0.01

0.02

62.31

73.64

(a) Miscellaneous expenses include:
Auditors’ remuneration and expenses

Non audit fees
Others

Reimbursement of out-of-pocket expenses
Payments to Cost auditors

Research and development expenses

(b) Total revenue expenditure (net of recoveries) on Research and Development (R&D) included in Note 35, eligible for weighted deduction under section 35(2AB) of the Income Tax Act, 1961 aggregates to Rs. 29.60 crores (2013-14 -Rs. 31.22 crores). The details are:
Location of the R&D facility

Bangalore

Mumbai

8.08
(9.16)
0.56
(1.06)

11.00
(10.98)
4.59
(2.92)

2.37
(4.04)

0.16
(0.14)
2.84
(2.92)

Revenue expenditure eligible u/s 35(2AB)
Salaries & wages
Materials, consumables and spares
Utilities
Other expenditure directly related to R&D

(figures in brackets pertain to 2013-14)
(c) The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godown etc.) and computers. These leasing arrangements which are not non-cancellable (other than those specified in note below), range between 11 months and 10 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent in the Statement of Profit and Loss.

118

The Company has also given certain land and building on operating lease to a third party which has been disposed during the year. The lease arrangement was for a period of 5 years, including a non-cancellable term of 3 years. The license fee of Rs. 23.35 crores (2013-14 - Rs. 30.90 crores) on such lease is included in other operating revenue (Refer Note 27).

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

With respect to non-cancellable period of the operating lease, the future minimum lease license fee receivable is as follows:
Year ended
31st March, 2015
Not later than one year

Year ended
31st March, 2014

-

30.37

The Company has entered into agreement to take certain land and building on operating lease for warehousing activities from a third party during the year. The lease arrangement is for 10 years, including a non-cancellable term of 9 years. The lease rent of of Rs 6.26 crores (2013-14- Rs. Nil) on such lease is included in Rent.
Year ended
31st March, 2015

Year ended
31st March, 2014

Not later than one year

11.40

-

Later than one year and not later than five years

50.96

-

Later than five years

52.60

-

(d) Miscellaneous expenses include provision for other than temporary diminution in the value of investment in joint venture Rs.
Nil crores (2013-14 - Rs. 13.46 crores) - Refer note 14(B)(b) and the net foreign exchange loss (i.e. exchange differences on settlement/restatement of all monetary items and mark to market valuation of outstanding forward contracts on account of firm commitments) Rs. 24.41 crores (2013-14 - Rs. 19.40 crores).
(e) Other expenses include Rs.82.35 crores spent towards various schemes of Corporate Social Responsibility as prescribed under section 135 of the Companies Act, 2013.

36) EXCEPTIONAL ITEMS
Year ended
31st March, 2015
503.77
168.97
5.37

188.31
50.75

678.11

239.06

(13.81)
(13.81)
664.30

(10.38)
(10.38)
228.68

Year ended
31st March, 2015

i) Profit on disposal of surplus properties ii) Profit on disposal of Subsidiary iii) Reduction in liability for retirement benefits arising from actuarial assumption changes Total exceptional income (A) iv) Restructuring costs :
a) Other costs
Total exceptional expenditure (B)
Exceptional items (net) (A+B)

Year ended
31st March, 2014

Year ended
31st March, 2014

1,871.17
31.16
1902.33

1,293.15
(175.31)
1,117.84

37)
CURRENT TAX

Income tax for the year
Adjustments/(credits) related to previous year - (net)

Annual Report 2014-15

Standalone

119

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

38)
DEFERRED TAX
Year ended
31st March, 2015
(33.82)
3.65
(30.17)

24.83
18.23
43.06

Year ended
31st March, 2015

Year ended
31st March, 2014

4,315.26
2,16,31,11,502
Rs. 19.95

3,867.49
2,16,25,58,113
Rs. 17.88

11,63,349

13,21,344

2,16,42,74,851
Rs. 19.94

2,16,28,32,747
Rs. 17.87

Year ended
31st March, 2015

Deferred tax for the year - (credit)/charge
Adjustments/(credits) related to previous year - (net)

Year ended
31st March, 2014

Year ended
31st March, 2014

6,141.18
7,175.95
8,996.69
2,811.93
551.48
23.73
905.73
465.11
3,098.70
30,170.50

5,694.54
6,539.82
8,092.72
2,577.98
454.91
23.27
770.20
434.80
2,820.05
27,408.29

39) EARNINGS PER SHARE

Earnings Per Share has been computed as under:
Profit for the year (Rs. crores)
Weighted average number of equity shares outstanding
Earnings Per Share (Rs.) - Basic (Face value of Re. 1 per share)
Add: Weighted average number of potential equity shares on account of employee stock options/performance share schemes
Weighted average number of Equity shares (including dilutive shares) outstanding
Earnings Per Share (Rs.) - Diluted (Face value of Re. 1 per share)

40) SALES (INCLUDING EXPORTS), NET OF EXCISE DUTY

Soaps
Synthetic detergents
Personal products
Tea
Frozen desserts
Processed triglycerides/hydrogenated oils/vanaspati
Canned and processed fruits and vegetables
Branded staple foods (a)
Others (b)
NOTES:

a) Branded staple foods includes breads, wheat flour, iodised salt and rice in consumer packs.
b) Others includes coffee, scourers, water, marine products, agriculture commodities, infant care products etc.

41) CLOSING FINISHED GOODS INVENTORY
As at
31st March, 2015
Soaps
Synthetic detergents
Personal products
Tea
Others (coffee, water, scourers, etc.)

120

Standalone

As at
31st March, 2014

330.04
229.55
403.52
126.68
271.21
1,361.00

287.90
266.78
446.13
106.50
237.52
1,344.83

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

42) CLOSING WORK-IN-PROGRESS
As at
31st March, 2015

As at
31st March, 2014

Soaps

59.44

67.99

Synthetic detergents

41.06

46.84

Personal products

43.76

43.26

129.02

150.12

Tea
Others (coffee, water, scourers, etc.)

21.55

10.13

294.83

318.34

Year ended
31st March, 2015

Year ended
31st March, 2014

Oils, fats and rosins

1,928.87

1,711.01

Chemicals and perfumes

5,072.60

4,888.19

Tea

1,465.36

1,336.51

969.10

976.47

9,435.93

8,912.18

43) RAW MATERIALS CONSUMED

Others (coffee, flavours, other chemicals, etc.)

44) VALUE OF IMPORTED AND INDIGENOUS MATERIALS CONSUMED

Year ended
31st March, 2015

Year ended
31st March, 2014

%

Amount

%

Amount

9

875.70

8

719.81

- Indigenous

91

8,560.23

92

8,192.37

- Imported

19

24.69

27

29.76

- Indigenous

Raw materials

81

107.41

73

81.94

- Imported

Stores and spares
(including components)

45) VALUE OF IMPORTS ON CIF BASIS

(excluding purchases from canalising agencies and imported items purchased locally)
Year ended
31st March, 2015

Raw and packing materials

Year ended
31st March, 2014

827.62

735.98

Stores, spare parts and components

23.93

44.54

Capital goods

81.88

82.11

933.43

862.63

Annual Report 2014-15

Standalone 121

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

46) PURCHASES OF STOCK-IN-TRADE
Year ended
31st March, 2015

Year ended
31st March, 2014

501.20
973.53
1,193.29
0.40
92.44
14.36
1,234.87
4,010.09
(312.13)
3,697.96

357.18
972.19
1,071.72
1.75
78.12
14.33
1,137.33
3,632.62
(282.43)
3,350.19

Year ended
31st March, 2015

Year ended
31st March, 2014

81.07
492.36

91.21
456.70

573.43

547.91

Year ended
31st March, 2015

Year ended
31st March, 2014

1.82
726.98
125.18
95.63
949.61

7.84
514.14
150.41
116.54
788.93

Soaps
Synthetic detergents
Personal products
Tea
Frozen desserts
Processed triglycerides
Others (coffee, water, scourers, etc.)
Total
Less : Excise duty on purchases

47) EARNINGS IN FOREIGN EXCHANGE

Exports at FOB (including exports to Nepal and Bhutan)
Income from services rendered

48) EXPENDITURE IN FOREIGN CURRENCY

Professional and consultants fees
Royalty
Import of stock-in-trade
Other expenses (advertisement fees, travel, freight, training, etc)

49) NET DIVIDEND REMITTED IN FOREIGN CURRENCY
Year ended
31st March, 2015

Year ended
31st March, 2014

Rs. crores
2012-13 Final to 7 shareholders on 1,13,48,49,460 shares of Re. 1 each
2013-14 Interim to 7 shareholders on 1,45,44,12,858 shares of Re. 1 each
2013-14 Final to 7 shareholders on 1,45,44,12,858 shares of Re. 1 each
2014-15 Interim to 7 shareholders on 1,45,44,12,858 shares of Re. 1 each

122

Standalone

USD crores

Rs. crores

USD crores

1,090.81
872.65
1,963.46

18.12
14.18
32.30

680.91
799.93
1,480.84

11.49
12.93
24.42

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

50) DEFINED BENEFIT PLANS 
Gratuity is funded through investment mostly with an insurance service provider and partly through direct investment under Hind
Lever Gratuity Fund. 
Pension for most employees are managed through a trust, investments with an insurance service provider and for some employees investments are managed through Company managed trust.

Post-retirement medical benefits are managed through investment made under Company managed trust.


Provident Fund for most of the employees are managed through trust investments and for some employees through government administered fund.  per Actuarial Valuation as on March 31, 2015 and as recognised in the financial statements in respect of Employee Benefit
As
Schemes :
Gratuity

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

2015
I

II

Components of Employer Expense
(a) Current Service Cost
(b) Interest Cost
(c) Expected Return on Plan Assets
(d) Actuarial (Gain)/Loss
(e) Total expense/(gain) recognised in the Statement of Profit and
Loss
Net Asset/(Liability) recognised in
Balance Sheet as at March 31, 2015
(a) Present Value of Obligation as at
March 31, 2015
(b) Fair Value of Plan Assets as at
March 31, 2015
(c) (Asset)/Liability recognised in the
Balance Sheet (Refer notes #, * and @ below)

Notes:
#
Refer footnote at the bottom of Note 50
*
The excess of assets over liabilities in respect of Officer’s Pension have not been recognised as they are lying in an Income
Tax approved irrevocable trust fund
@
Refer Note 14’(c) in respect of the
Company’s investment in Hindustan
Unilever Limited Securitisation of
Retirement Benefit Trust covering management pension and post retirement medical benefits
III
Change in Defined Benefit Obligations
(DBO) during the year ended as on
March 31, 2015
(a) Present Value of Obligation as at
March 31, 2014
(b) Current Service Cost
(c) Interest Cost
(d) Settlement Cost/(Credit)

Annual Report 2014-15

2014

2015

2014

2015

2014

2015

2014

2015

2014

8.97
15.23
(12.46)
27.58
39.32

11.09
13.90
(10.77)
(13.37)
0.85

5.40
38.30
(6.82)
(1.02)
35.86

5.83
34.03
(6.58)
0.23
33.51

0.48
1.16
(4.18)
(0.23)
(2.77)

0.53
1.17
(4.14)
(3.06)
(5.50)

55.50
112.80
(114.70)
1.90
55.50

51.40
89.80
(103.40)
13.60
51.40

0.51
14.14
(33.31)
(18.66)

0.61
14.48
(32.00)
(16.91)

204.16

169.22

464.94

442.00

11.68

13.78

1,448.60

1,275.90

136.61

162.57

(163.33)

(168.37)

(94.38)

(95.73)

(49.91)

(57.76)

(1,448.60)

(1,275.90)

-

-

40.83

0.85

370.56

346.27

-*

-*

-

-

136.61

162.57

169.22

170.80

442.00

435.62

13.78

15.69

1,275.90

1,145.40

162.57

184.56

10.48
15.23
-

11.09
13.90
-

5.40
38.30
-

5.83
34.03
-

0.48
1.16
(1.02)

0.53
1.17
(0.02)

55.50
112.80
(0.40)

51.40
89.80
-

0.51
14.14
-

0.61
14.48
-

Standalone 123

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

50) DEFINED BENEFIT PLANS (CONTD.)
Gratuity

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

2015
(e)
(f)
(g)

Acquisition Adjustment
Employees' contribution
Actuarial (Gain)/Loss

(h)

Benefits Paid

(i)

Present Value of Obligation as at
March 31, 2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

30.00

(8.63)

(0.06)

0.68

(0.27)

(1.89)

113.50
4.40

5.70
107.20
9.90

(33.31)

(32.00)

(20.77)

(17.94)

(20.70)

(34.16)

(2.45)

(1.70)

(113.10)

(133.50)

(7.30)

(5.08)

204.16

169.22

464.94

442.00

11.68

13.78

1,448.60

1,275.90

136.61

162.57

168.37

148.69

95.73

95.98

57.76

59.89

1,275.90

1,145.40

-

-

$ Includes an amount of Rs. 1.51 crores (2013-14: Nil) towards cost borne by the subsidiaries and a fellow subsidiary. IV

Changes in the Fair value of Plan Assets
(a)

Present Value of Plan Assets as at March 31, 2014

(b)

Acquisition Adjustment

(c)

Expected Return on Plan Assets

(d)

Actuarial Gain/(Loss)

(e)

Assets distributed on settlements

(f)
(g)
(h)
(i)

-

-

-

-

-

-

-

5.70

-

-

12.46

10.77

6.82

6.58

4.18

4.14

114.70

103.40

-

-

2.42

4.74

0.96

0.44

(0.05)

1.17

2.50

(3.70)

-

-

-

-

-

-

(5.53)

(0.02)

(0.40)

-

-

-

Employer's Contribution

0.85

22.11

11.57

26.89

(4.00)

(5.72)

55.50

51.40

7.30

5.08

Employees' contribution

-

-

-

-

-

-

113.50

107.20

-

-

Benefits Paid

(20.77)

(17.94)

(20.70)

(34.16)

(2.45)

(1.70)

(113.10)

(133.50)

(7.30)

(5.08)

Fair Value of Plan Assets as at
March 31, 2015

163.33

168.37

94.38

95.73

49.91

57.76

1,448.60

1,275.90

-

-

14.88

15.51

7.78

7.01

4.13

5.31

117.20

99.70

-

-

V

Actual return on Plan Assets

VI

Actuarial Assumptions
Financial Assumptions:
(a)

Discount Rate (per annum)

7.90%

8.85%

7.90%

8.85%

7.90%

8.85%

7.90%

8.85%

7.90%

8.85%

(b)

Expected Rate of Return on
Assets (per annum)

7.30%

7.30%

7.10%

7.10%

7.40%

7.40%

8.88%

8.80%

N.A.

N.A.

(c)

Annual Increase in Healthcare
Costs (per annum)

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

9.00%

12.00%

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Demographic Assumptions:
Mortality in Service : Indian Assured
Lives Mortality (2006-08) Ultimate table
Mortality in Retirement : LIC Buy-out
Annuity Rates & UK Published PA (90)
Annuity Rates suitably adjusted for
Indian Lives.

124

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

50) DEFINED BENEFIT PLANS (CONTD.)
Gratuity
2015
VII

VIII

IX

Management
Pension
2014

2015

Officers Pension

2014

2015

Provident Fund #

2014

2015

Post Retirement
Medical Benefits

2014

2015

2014

1.50

2.23

17.97

23.55

(1.32)

(1.84)

(15.91)

(19.46)

Effect of Increase or Decrease in
Healthcare costs
Effect of 1% increase in Healthcare
Costs on
- the aggregate of service cost and interest cost
- Defined Benefit Obligation
Effect of 1% decrease in Healthcare
Costs on
- the aggregate of service cost and interest cost
- Defined Benefit Obligation
Percentage of each Category of Plan
Assets to total Fair Value of Plan
Assets as at March 31, 2015
(a) Government of India
Securities
(b) Corporate Bonds
(c) Bank Deposits (Special Deposit
Scheme, 1975)
(d) Administered by Life Insurance
Corporation of India
(e) Others
Expected Employers contribution for the next year

9.00%

8.00%

-

-

-

-

43.00%

44.00%

-

-

7.00%
-

7.00%
-

-

-

-

-

40.00%
14.00%

37.00%
16.00%

-

-

84.00%

85.00%

100.00% 100.00%

-

-

-

-

40.83

20.00

-

3.00%
60.00

3.00%
57.60

7.33

6.69

100.00% 100.00%
40.00

Gratuity
X

For the year ended March 31, 2015
Present value of DBO
Fair value of plan assets
Deficit/(Surplus)

-

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

Present value of DBO, Fair Value of Plan Assets, Deficit/
(Surplus), Experience Adjustments for current and earlier periods:

i)

30.00

ii)

Experience adjustments on plan liabilities
Experience adjustments on plan assets
For the year ended March 31, 2014
Present value of DBO
Fair value of plan assets
Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets

Annual Report 2014-15

204.16
163.33
40.83

464.94
94.38
370.56

11.68
49.91
(38.23)

1,448.60
1,448.60
-

136.61
136.61

9.19
2.42

(8.03)
0.96

(0.71)
(0.05)

4.40
2.50

2.68
-

169.22
168.37
0.85

442.00
95.73
346.27

13.78
57.76
(43.97)

1,275.90
1,275.90
-

162.57
162.57

7.56
4.74

8.66
0.44

(1.35)
1.17

9.90
(3.70)

(10.15)
-

Standalone 125

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

50) DEFINED BENEFIT PLANS (CONTD.)
Gratuity
iii)

For the year ended March 31, 2013
Present value of DBO
Fair value of plan assets

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

v)

435.62
95.98

15.70
59.89

1,145.40
1,145.40

184.56
-

22.11
7.02
2.92

339.64
(14.41)
3.91

(44.19)
2.08
1.85

12.30
5.10

184.56
(8.62)
-

149.80
132.55

427.84
91.86

15.90
62.19

181.54
-

Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets
For the year ended March 31, 2011

17.25
7.24
0.21

335.98
2.25
4.65

(46.29)
2.47
0.68

181.54
1.87
-

Present value of DBO
Fair value of plan assets
Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets

iv)

170.80
148.69

134.12
126.28
7.84
5.35
2.79

436.45
103.93
332.52
(30.41)
3.18

19.07
64.84
(45.77)
5.62
1.68

170.35
170.35
2.18
-

Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets
For the year ended March 31, 2012
Present value of DBO
Fair value of plan assets

The Guidance Note on Implementing AS 15, ‘Employee Benefits’ issued by the Accounting Standard Board (ASB) of the Institute of
Chartered Accountants of India states that Provident Funds set up by employers that guarantee a specified rate of return and which require interest shortfall to be met by the employer would be defined benefit plans in accordance with the requirements of paragraph
26(b) of AS 15. The year 2012-13 was the first year in which the actuary had given the detailed disclosures in the actuarial valuation report, in view of the issuance of the Guidance Note by the Institute of Actuaries of India. Accordingly the compliance with the disclosure requirements of paragraph 120(n) of AS 15: Employee Benefits in respect of Provident Fund has been done prospectively from 2012-13.

51) EMPLOYEE STOCK OPTION PLAN

The members of the Company had approved ‘2001 HLL Stock Option Plan’ at the Annual General Meeting held on 22nd June, 2001. The plan envisaged grant of share options to eligible employees at market price as defined in SEBI (Employee Stock Option Scheme And
Employee Stock Purchase Scheme) Guidelines, 1999.
This plan was amended and revised vide ‘2006 HLL Performance Share Scheme’ at the Annual General Meeting held on 29th May,
2006. This scheme provided for conditional grant of Performance Shares at nominal value to eligible management employees as determined by the Compensation Committee of the Board of Directors from time to time, at the end of 3-year performance period. The performance measures under this scheme include group underlying sales growth and free cash flow. The scheme also provided for
‘Par’ Awards for the managers at different work levels.
The 2006 scheme was further amended and revised vide ‘2012 HUL Performance Share Scheme’ at the Annual General Meeting held on 23rd July, 2012. This scheme provided for conditional grant of Performance Shares at nominal value to eligible management employees as determined by the Nomination and Remuneration Committee of the Board of Directors from time to time, at the end of 3-year performance period. The performance measures under this scheme include group underlying sales growth, core operating margin improvement and operating cash flow.
The number of shares allocated for allotment under the 2006 and 2012 Performance Share Schemes is 2,00,00,000 (two crores) equity shares of Re. 1/- each. The schemes are monitored and supervised by the Nomination and Remuneration Committee of the
Board of Directors in compliance with the provisions of SEBI (Employee Stock Option Scheme And Employee Stock Purchase Scheme)
Guidelines, 1999 and amendments thereof from time to time.
126

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

51) EMPLOYEE STOCK OPTION PLAN (CONTD.)
Scheme

Year

Date of Grant

2004

30-Jun-04

2005
2009

27-May-05
11-May-09

Interim PSP 2009
2010
Interim PSP 2010
2011
Interim PSP 2011
2012
Interim PSP 2012
2013

06-Nov-09
29-Mar-10
05-Nov-10
29-Mar-11
07-Nov-11
17-Feb-12
30-Jul-12
18-Mar-13

Interim PSP 2013
2014
Interim PSP 2014
2015

29-Jul-13
14-Feb-14
28-Jul-14
13-Feb-15

2001 HLL Stock Option
Plan
2006 HLL Performance
Share Scheme

2012 HUL Performance
Share Scheme

Annual Report 2014-15

Numbers of options granted

Vesting
Conditions

16,30,450 Vested after three years from date of grant 15,47,700
3,33,811 Vested after three years from date of grant 4,920
2,71,113
51,455
3,08,455
47,118
4,20,080
51,385
3,68,023 Vested after three years from date of grant 25,418
2,62,155
16,805
1,42,038

Exercise Period

7 years from date of vesting

3 months from date of vesting

3 months from date of vesting

Exercise Price
(INR) per share

Weighted
Average
Exercise Price
(INR) per share

128.47

128.47

132.05
1.00

132.05
1.00

1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00

1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00

1.00
1.00
1.00
1.00

1.00
1.00
1.00
1.00

Standalone 127

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

51) EMPLOYEE STOCK OPTION PLAN (CONTD.)
Number of Share Options
Scheme

Year

Outstanding at the beginning of the year

Granted during the year *

Forfeited/
Expired during the year

Exercised during the year

Exercisable at the end of the year Outstanding at the end of the year 2001 HLL Stock Option
Plan

2004

68,900
(1,36,000)
1,16,400
(1,65,300)
(59,137)
(45,283)
3,50,503
(2,57,869)
41,282

(7,473)
(1,11,151)
18,507

(3,911)
(18,517)
-

68,900
(67,100)
93,300
(48,900)
(59,137)
(48,845)
3,50,503
59,789

(68,900)
23,100
(1,16,400)
(3,50,503)
-

(68,900)
23,100
(1,16,400)
(3,50,503)
-

Interim PSP 2012

(43,818)
3,59,170
(3,88,942)
42,707

1,61,526
-

(2,536)
(29,772)
2,770

1,96,067
-

-

(41,282)
3,24,629
(3,59,170)
39,937

(51,385)

-

3,47,484

-

(8,678)

2013

28,232

-

-

3,19,252

(3,68,023)
25,418
2,62,155
-

(25,418)
(2,62,155)
16,805
1,42,038

(20,539)
18,447
-

-

-

(3,47,484)
25,418
(25,418)
2,43,708
(2,62,155)
16,805
1,42,038

2005

2006 HUL Performance
Share Scheme

2010
Interim PSP 2010
2011
Interim PSP 2011
2012

2012 HUL Performance
Share Scheme

Interim PSP 2013
2014
Interim PSP 2014
2015

(42,707)

* Granted during the year includes additional shares granted upon meeting the vesting conditions

(figures in bracket pertain to 2013-14)
The Company has adopted the intrinsic value method as permitted by the Securities and Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share
Based Payment issued by the Institute of Chartered Accountants of India in respect of stock options granted. The value of the underlying shares has been determined by an independent valuer.
The Employee Stock Option Plan includes employees of Hindustan Unilever Limited, its subsidiaries and a subsidiary of parent company. The Company’s profit for the year and earnings per share would have been as under, had the compensation cost for employees’ stock options been recognized based on the fair value at the date of grant in accordance with Black Scholes model.

128

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

51) EMPLOYEE STOCK OPTION PLAN (CONTD.)
31st March, 2015
4,315.26
2.87
4,318.13

3,867.49
1.03
3,868.52

2,16,31,11,502
19.95
19.96

2,16,25,58,113
17.88
17.89

2,16,42,74,851
19.94
19.95
696.07
1.34

2,16,38,79,457
17.87
17.88
588.46
1.43

Year ended
31st March, 2015

Profit for the year
Add: Reduction in employee compensation cost based on fair value
Profit for the year as per fair value method
Basic Earnings Per Share (EPS)
Weighted average number of equity shares
Basic EPS as reported (in Rs.) (Refer Note 39)
Proforma Basic EPS (in Rs.)
Diluted Earnings Per Share (EPS)
Weighted average number of equity shares (including dilutive ESOP shares)
Diluted EPS as reported (in Rs.) (Refer Note 39)
Proforma Diluted EPS (in Rs.)
Weighted average equity share price at the date of exercise of options (in Rs.)
Weighted average remaining contractual life of options (in years)

31st March, 2014

Year ended
31st March, 2014

7.86%
3.125
25.44%
1.51%

8.85%
3.125
25.56%
2.06%

The following assumptions were used for calculation of fair value of grants:

Risk-free interest rate (%)
Expected life of options (years) [(year to vesting + contractual option term)/2]
Expected volatility (%)
Dividend yield

The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. Volatility calculation is based on historical stock prices using standard deviation of daily change in stock price. The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date.
Effect of share-based payment plan on the Statement of Profit and Loss:
Year ended
31st March, 2015
Expense arising from employee share-based payment plan

Annual Report 2014-15

Year ended
31st March, 2014

19.41

7.00

Standalone 129

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

52) DERIVATIVE INSTRUMENTS
a)

The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to the firm commitments.
The Company does not enter into any derivative instruments for trading or speculative purposes. The forward exchange contracts outstanding as at 31st March, 2015 are as under:

Currency exchange
i)

Number of ‘buy’ contracts

ii)

Aggregate “buy” foreign currency amount (crores)

iii) Number of ‘sell’ contracts iv) Aggregate “sell” foreign currency amount (crores)

GBP/
INR

EUR/
INR

7
(1)
0.13
(0.01)
-

USD/
INR

42
(26)
2.63
(1.65)
-

SEK/
INR

39
(76)
5.15
(5.61)
1
(3)
0.03
(0.09)

CAD/
INR

10
(4)
1.78
(0.97)
-

EUR/
USD

2
0.12
-

GBP/
USD

(4)
(0.23)
-

(2)
(0.04)
-

SGD/
INR
9
(1)
0.18
(0.02)
-

(figures in bracket pertain to 2013-14)
b)

The foreign currency exposures not hedged in respect of trade receivables as at the year end are as under:

Currency exchange

GBP

EUR

Unhedged exposure in currency (crores)

0.00
(0.02)

0.02
(0.04)

USD
0.01
(0.03)

SEK

SGD

0.05
(0.09)

0.01
(0.02)

JPY
0.10
-

THB
0.02
-

(figures in bracket pertain to 2013-14)
c)

Mark-to-Market losses
Year ended
31st March, 2015
36.60

Mark-to-market losses provided for

Year ended
31st March, 2014
17.33

53) INTEREST IN JOINT VENTURE
The Company has the following investment, in a jointly controlled entity:
Name of the entity

Kimberly Clark Lever Private Limited

130

Standalone

Country of
Incorporation

Percentage of ownership interest, as at 31st March, 2015

Percentage of ownership interest, as at 31st March, 2014

India

50%

50%

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

53) INTEREST IN JOINT VENTURE (CONTD.)
The Company’s interest in this Joint Venture is reported as Non-current investment (Refer Note 14) and is stated at cost (net of provision for other than temporary diminution in value). The Company’s share of each of the assets, liabilities, income, expenses, etc (each without elimination of the effect of transactions between the Company and the Joint Venture) related to its interest in this joint venture, based on the audited financial statements are:
As at
31st March, 2015
(a)

(b)

(c)
(d)
(e)

ASSETS
Fixed Assets (including capital work-in-progress)
Long-term loans and advances
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
LIABILITIES
Long-term borrowings
Deferred tax liability (net)
Long-term provisions
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
INCOME
EXPENSES
OTHER MATTERS
Contingent liabilities
Capital commitments

As at
31st March, 2014

43.57
40.33
33.26
3.36
8.89
4.26
0.25

28.82
32.72
31.95
4.82
10.37
3.15
0.02

7.00
0.37
36.04
54.84
14.43
0.91

8.44
0.22
37.14
52.07
5.98
0.37

177.39
180.01

156.61
182.46

58.03
0.13

75.49
0.18

54) DISCLOSURES PURSUANT TO CLAUSE 32 OF THE EQUITY LISTING AGREEMENT AND SECTION 186 OF THE
COMPANIES ACT, 2013
Year ended
31st March, 2015
(a)

Loans and advances in the nature of loans to subsidiaries
Loan to subsidiary: Pond's Exports Limited, India
Balance as at the year end
Maximum amount outstanding at any time during the year
(Pond's Export Limited has utilised the loan for meeting working capital requirements. It is repayable over a period of 7 years and carries an average rate of interest at 9.34%)
Loan to subsidiary: Lakme Lever Private Limited, India
Balance as at the year end
Maximum amount outstanding at any time during the year
(Lakme Lever Private Limited has utilised the loan for meeting capital projects for job work business and working capital requirements of salon business. It is repayable over a period of 7 years and carries an average rate of interest at 9.34%)

Annual Report 2014-15

Year ended
31st March, 2014

12.00
14.00

4.50
4.50

167.77
217.77

70.00
70.00

Standalone 131

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

54) DISCLOSURES PURSUANT TO CLAUSE 32 OF THE EQUITY LISITNG AGREEMENT AND SECTION 186 OF THE
COMPANIES ACT, 2013 (CONTD.)
Year ended
31st March, 2015

Loan to subsidiary: Aquagel Chemicals Private Limited, India
Balance as at the year end
Maximum amount outstanding at any time during the year
(b)

18.01

15.87
15.87

-

Loan to subsidiary: Brooke Bond Real Estates Private Limited, India
Balance as at the year end
Maximum amount outstanding at any time during the year
(Brooke Bond Real Estates Private Limited has utilised the loan for meeting working capital requirements which has been repaid during the year and carried an average rate of interest at 9.34%)

Year ended
31st March, 2014

114.77
114.77

Investment by the loanees in the shares of the Company
The loanees have not made any investments in the shares of the Company

55) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material

foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.

56) PREVIOUS YEAR FIGURES
Previous year’s figures have been regrouped/restated wherever necessary to conform with this year’s classification. Previous year’s financial statements were audited by a firm of Chartered Accountants other than B S R & Co. LLP.

57) RELATED PARTY DISCLOSURES
A.

:

Unilever PLC

(ii)

Subsidiaries|
(Extent of holding)

:

Aquagel Chemicals Private Limited (100%) (Amalgamated with Lakme Lever Private Limited with effect from April
01, 2014) [Refer Note 14(i)]
Brooke Bond Real Estates Private Limited (100%) (upto
March 23, 2015)
Daverashola Estates Private Limited (100%)
Hindlever Trust Limited (100%)
Jamnagar Properties Private Limited (100%)
Lakme Lever Private Limited (100%)
Levers Associated Trust Limited (100%)
Levindra Trust Limited (100%)
Pond's Exports Limited (90%)
Unilever India Exports Limited (100%)
Unilever Nepal Limited (80%)
Bhavishya Alliance Child Nutrition Initiatives (100%) (with effect from March 12, 2015) (Section 8 company)
Hindustan Unilever Foundation (76%) (Section 8 company)

(iii)

132

Enterprises where control exists
(i)
Holding Company

Trust

:

Hindustan Unilever Limited Securitisation of Retirement
Benefit Trust (100% control)

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
B.

Other Related Parties with whom the Company had transactions during the year
(i)
Fellow Subsidiaries

Annual Report 2014-15

:

Brooke Bond Assam Estates Limited
Brooke Bond Group Limited
Brooke Bond South India Estates Limited
Conopco, Inc.
Corporativo Unilever de Mexico, S.de R.L. de C.V. (merged)
Glidat Strauss Limited
Unilever Europe Business Center BV
Lipton Soft Drinks Ireland
Mascolo Brothers Limited
OOO Unilever Russia
P.T. Unilever Indonesia, Tbk.
Tigi Holdings Limited
Tigi Linea International B.V.
UL Research & Development Vlaard
Unilever (Malaysia) Holdings Sdn Bhd
Unilever ASCC AG
Unilever Asia Private Limited
Unilever Australia Limited
Unilever Bangladesh Limited
Unilever Brasil Limited
Unilever Business and Marketing Support AG
Unilever Canada-Food Solutions
Unilever De Argentina SA
Unilever Employment Services B.V.
Unilever Europe IT Services
Unilever Gulf Free Zone Establishment, Arabia
Unilever Industries Private Limited
Unilever Italy Holdings Srl
Unilever Japan
Unilever Lipton Ceylon Limited
Unilever N.V.
Unilever Overseas Holdings AG
Unilever Overseas Holdings BV
Unilever Pakistan Limited
Unilever Philippines , Inc.
Unilever Research and Development Vlaardingen B.V.
Unilever Sanayi ve Ticaret Türk A.S.
Unilever Singapore PTE LTD
Unilever SNG
Unilever South Africa (Pty) Limited
Unilever South Central Europe S.R.L
Unilever Sri Lanka Limited
Unilever Supply Chain Company AG

Standalone 133

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
Unilever Thai Services Limited
Unilever Thai Trading Limited
Unilever U.K. Central Resources Limited
Unilever UK & CN Holdings Limited
Unilever United States, Inc.
Unilever Ventures India Advisory Private Ltd
Unilever Zimbabwe (Pvt) Limited
Walls (China) Co. Limited
Unilever Kenya Ltd
Unilever Andina Ecuador
Unilever Market Development (pty) Limited
USUP Spolka z ograniczona odpo
Lever International Marine Supplies (LIMS) BV
Toni&Guy Product Limited
Unilever Belgium BVBA
Unilever Technology Ventures Advisory Company LLC
Unilever Iran
Unilever UK Limited
(ii)

:

Kimberly Clark Lever Private Limited

(iii)

Associates

:

Aquagel Chemicals (Bhavnagar) Pvt. Ltd.
Hi Tech Surfactants Pvt Ltd
Comfund Financial Services India Limited
Hindustan Field Services Private Limited (up to March 10, 2015)

(iv)

Key Management Personnel

:

BP Biddappa
Dev Bajpai
Geetu Verma
Hemant Bakshi
Manish Tiwary (up to November 30, 2014)
Nitin Paranjpe (up to October 09, 2013)
PB Balaji (with effect from July 01, 2014)
Pradeep Banerjee
Priya Nair (with effect from October 01, 2014)
Punit Misra (with effect from November 01, 2014)
Sanjiv Mehta
Samir Singh (with effect from October 01, 2014)
Sridhar Ramamurthy (up to June 30, 2014)

(v)

Other (Non Executive Chairman)

:

Harish Manwani (upto December 31, 2014)

(vi)

134

Joint Ventures

Employees’ Benefit Plans where there is significant influence :

Standalone

Hind Lever Gratuity Fund
The Hind Lever Pension Fund
The Union Provident Fund

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure of transactions between the Company and Related Parties and the status of outstanding balances as on 31st March, 2015

Holding Company

Subsidiaries/Trust

Fellow Subsidiaries

Annual Report 2014-15

:

:

:

Dividend paid
Royalty expense
Income from services rendered
Outstanding as at the year end :
- Trade payables
Sale of finished goods/raw materials etc
Processing charges
Sale of fixed assets
Purchase of fixed assets
Investment in equity shares
Purchase of finished goods/raw materials etc
Royalty income
Rent income
Management fees paid
Commission paid
Expenses shared by subsidiary companies
Dividend income
Interest income
Reimbursement received/receivable towards pension and medical benefits
Purchase of export licences
Rent expense
Contribution to foundation
Reimbursements paid
Reimbursements received
Inter corporate loans given during the year
Inter corporate loans repaid during the year
Investment in trust
Redemption of preference shares
Outstanding as at the year end:
- Current account balances receivable with subsidiaries and trust
- Advances recoverable in cash or kind or for value to be received
- Trade receivables
- Trade payables
- Loans & advances to subsidiaries
- Security deposits
Purchased of fixed assets
Rent income
Sale of fixed assets
Income from services rendered
Management fees paid
Purchase of finished goods/raw materials etc.

For the Year ended
31st March, 2015
1,504.40
726.86
484.05

For the Year ended
31st March, 2014
1,089.79
519.71
447.04

136.46

97.30

297.52
128.71
0.05
40.01
13.33
6.99
0.61
2.49
0.81
15.84
99.55
20.62
22.98

232.48
94.55
6.78
1.14
9.13
96.73
7.03
0.12
5.86
11.69
90.66
16.51
25.13

21.26
0.12
21.11
0.51
6.58
75.64
101.01
-

27.43
0.12
10.23
1.89
29.02
157.62
30.19
2.00
9.13

16.59

27.28

-

3.76

23.05
12.11
179.77
1.66
0.48
1.10
0.62
27.84
1.73
278.81

22.39
24.23
205.14
1.84
1.10
0.28
32.53
1.95
286.74

Standalone 135

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure of transactions between the Company and Related Parties and the status of outstanding balances as on 31st March, 2015
For the Year ended
31st March, 2015
459.06
8.61
3.86
6.09
66.67
21.43
-

For the Year ended
31st March, 2014
391.05
5.58
4.35
4.54
26.53
34.51
104.15
105.55
0.22

35.14

43.70

70.90

91.95

Purchase of finished goods/raw materials etc.
Reimbursements received
Investment in equity shares
Outstanding as at the year end with joint ventures
- Current account balances receivable with joint ventures - Trade payables

367.87
80.83
22.52

369.33
82.98
-

31.83

25.07

2.37

5.85

Processing charges
Expense for business support services
Dividend Income
Purchase of finished goods/raw materials etc.
Rent income
Reimbursements received
Outstanding as at the year end with associates
- Trade payables

10.12
318.60
0.26
9.33
0.98
0.28

7.95
309.40
0.66
13.02
0.88
0.25

1.23

1.99

71.68
0.46
0.39

39.91
0.45
0.26

0.01

0.03

38.15

64.86

-

4.06

1.36

-

Dividend paid
Royalty expense
Expenses shared by fellow subsidiary companies
Maintenance and support costs for licences and software
Reimbursements paid
Reimbursements received
Inter corporate loans given during the year
Inter corporate loans repaid during the year
Interest income
Outstanding as at the year end with fellow subsidiaries
- Current account balances receivable with fellow subsidiaries - Trade payables
Joint Ventures

Associates

:

:

Key Management
Personnel

:

Remuneration
Dividend paid
Consideration received on exercise of options

Other (Non Executive
Chairman)

:

Dividend paid

Employees’ Benefit
Plans where there is significant influence

:

Contributions during the year
Outstanding as at the year end :
- Advances recoverable in cash or kind or for value to be received
- Payables

136

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
For the Year ended
31st March, 2015
Remuneration
Nitin Paranjpe
Sridhar Ramamurthy
BP Biddappa
Pradeep Banerjee
Hemant Bakshi
Sanjiv Mehta
Purchase of export licences
Pond’s Exports Limited
Unilever India Exports Limited
Maintenance and support costs for licences and software
Unilever N.V.
Unilever U.K. Central Resources Limited
Reimbursements paid
Unilever N.V.
Reimbursements received
Unilever Industries Private Limited
Kimberly Clark Lever Private Limited
Expense for business support services
Hindustan Field Services Private Limited
Contributions during the year
The Union Provident Fund
Hind Lever Gratuity Fund
Consideration received on exercise of options
Pradeep Banerjee
Nitin Paranjpe
Hemant Bakshi
Sridhar Ramamurthy
Manish Tiwari
Outstanding as at the year end - loans and advances to subsidiaries
Lakme Lever Private Limited
Brooke Bond Real Estates Private Limited
Aquagel Chemicals Private Limited
Outstanding as at the year end - trade receivables
Unilever India Exports Limited
Outstanding as at the year end - payable
The Union Provident Fund
The Hind Lever Pension Fund

Annual Report 2014-15

For the Year ended
31st March, 2014

7.48
5.85
5.06
9.01
14.17

4.56
4.83
4.99
4.34
6.71
6.14

4.57
16.69

2.85
24.58

4.41
1.68

0.85
3.69

51.00

14.85

12.59
80.83

22.29
82.98

318.60

309.40

37.31
0.85

39.52
22.11

0.12
0.19
0.00
0.07

0.14
0.11
0.00
0.00
-

167.77
-

70.00
15.87
114.77

23.05

22.39

2.65
0.16

-

Standalone 137

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
For the Year ended
31st March, 2015

For the Year ended
31st March, 2014

-

3.76

Outstanding as at the year end - advances recoverable in cash or kind or for value to be received
Hindustan Unilever Limited Securitisation of Retirement Benefit Trust
The Hind Lever Pension Fund
Hind Lever Gratuity Fund

-

1.14

1.44

0.93

1.66

1.84

Security deposits
Unilever India Exports Limited
Outstanding as at the year end - current account balances receivable with group companies and joint venture
Unilever India Exports Limited
Kimberly Clark Lever Private Limited
Pond’s Exports Limited

3.24

9.39

31.83

25.07

0.79

11.86

25.35

40.23

136.46

97.30

Unilever Supply Chain Company AG

44.10

40.58

Unilever Asia Private Limited

12.00

21.17

Unilever Industries Private Limited
Outstanding as at the year end - trade payables
Unilever Plc

Pond’s Exports Limited

0.35

3.73

Unilever N.V.

6.05

15.63

1,504.40

1,089.79

726.86

519.70

484.05

447.04

296.19

230.20

128.71

94.55

Dividend paid
Unilever Plc
Royalty expense
Unilever Plc
Income from services rendered
Unilever Plc
Sale of finished goods/raw materials etc
Unilever India Exports Limited
Processing charges
Lakme Lever Private Limited
Investment in equity shares
Kimberly Clark Lever Private Limited

138

22.52

-

Lakme Lever Private Limited

40.01

9.13

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
For the Year ended
31st March, 2015

For the Year ended
31st March, 2014

0.62

0.28

-

6.71

Unilever India Exports Limited

0.05

0.80

Unilever Europe IT Services

0.48

0.34

Sale of fixed assets
Unilever Sri Lanka Limited
Unilever India Exports Limited
Purchase of fixed assets

Expenses shared by subsidiary companies/fellow subsidiaries
Pond’s Exports Limited

1.58

1.24

11.49

10.45

Unilever Industries Private Limited

3.86

4.35

Lakme Lever Private Limited

2.77

-

Unilever Nepal Limited

39.55

34.95

Unilever India Exports Limited

60.00

50.00

0.80

1.43

18.29

6.13

1.53

1.48

-

7.47

Unilever Industries Private Limited

1.10

1.10

Hindustan Field Services Private Limited

0.84

0.84

Lakme Lever Private Limited

0.61

0.12

Lakme Lever Private Limited

1.70

1.77

Unilever Nepal Limited

5.29

5.26

Unilever Industries Private Limited

1.73

1.95

Lakme Lever Private Limited

2.49

5.86

0.81

-

Kimberly Clark Lever Private Limited

367.87

369.33

Unilever Supply Chain Company AG

168.00

158.67

96.80

112.80

Unilever India Exports Limited

Dividend income

Interest income
Pond’s Exports Limited
Lakme Lever Private Limited
Brooke Bond Real Estates Private Limited
Aquagel Chemicals Private Limited
Rent income

Royalty income

Management fees paid

Commission paid
Lakme Lever Private Limited
Purchase of finished goods/raw materials etc.

Unilever Asia Private Limited

Annual Report 2014-15

Standalone 139

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

57) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
For the Year ended
31st March, 2015

For the Year ended
31st March, 2014

0.12

0.12

21.11

10.23

-

2.00

-

9.13

Lakme Lever Private Limited

63.00

18.90

Pond’s Exports Limited

10.50

4.50

Unilever Industries Private Limited

-

104.15

Aquagel Chemicals Private Limited

-

132.96

0.80

2.00

Unilever Industries Private Limited

-

105.55

Aquagel Chemicals Private Limited

-

28.19

Lakme Lever Private Limited

80.00

-

Brooke Bond Real Estates Private Limited

18.01

-

Hindustan Unilever Limited Securitisation of Retirement Benefit Trust

22.98

25.13

Standalone

Hindustan Unilever Limited

Rent expense
Unilever India Exports Limited
Contribution to foundation
Hindustan Unilever Foundation
Investment in trust
Hindustan Unilever Limited Securitisation of Retirement Benefit Trust
Redemption of preference shares
Aquagel Chemicals Private Limited
Inter corporate loans given during the year

Inter corporate loans repaid during the year
Pond’s Exports Limited

Reimbursement received/receivable towards pension and medical benefits

140

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

58) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2015
Information About Primary Business Segments
For the Year ended 31st March, 2015

For the Year ended 31st March, 2014

External

Intersegment

Total

External

Intersegment

Total

REVENUE
Soaps and Detergents

14,876.61

-

14,876.61

13,683.41

-

13,683.41

Personal Products

9,006.53

-

9,006.53

8,120.91

-

8,120.91

Beverages

3,631.49

-

3,631.49

3,311.86

-

3,311.86

Packaged Foods

1,891.80

-

1,891.80

1,648.30

-

1,648.30

1,312.91

-

1,312.91

1,156.30

-

1,156.30

30,719.34

-

30,719.34

27,920.78

-

27,920.78

Others
Total Revenue (Refer note 3 to segment information) RESULT
Soaps and Detergents

2,033.65

1,785.81

Personal Products

2,424.35

2,068.06

614.56

580.69

83.17

61.26

Beverages
Packaged Foods
Others

(15.48)

(37.00)

Total Segment

5,140.25

4,458.82

Un-allocated corporate expenses net of un-allocated income

(218.70)

(244.11)

Operating Profit

4,921.55

4,214.71

(16.82)

(36.03)

Finance Costs
Other income

618.39

621.03

5,523.12

Profit before exceptional items and tax

4,799.71

Exceptional items - income/(expenditure) Segment
Soaps and Detergents

(5.88)

22.37

Personal Products

(3.49)

13.26

Beverages

(1.43)

3.58

Packaged foods

(2.55)

(0.03)

Others

(0.47)

1.19
(13.82)

Exceptional items - income/(expenditure) Unallocated/Corporate
Profit before tax

40.37

678.12

188.31

6,187.42

5,028.39

(1,902.33)

(1,117.84)

Taxation for the year
Current tax
Deferred tax - credit/(charge)
Profit for the year
Annual Report 2014-15

30.17

(43.06)

4,315.26

3,867.49
Standalone

141

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

58) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2015 (CONTD.)
Information About Primary Business Segments
Other Information
Segment Assets

Segment Liabilities

As at
31st March, 2015

As at
31st March, 2014

As at
31st March, 2015

As at
31st March, 2014

Soaps and Detergents

3,233.82

3,122.51

(3,357.15)

(3,353.42)

Personal Products

1,464.22

1,380.59

(1,891.82)

(1,855.68)

Beverages

1,077.01

1,083.27

(699.81)

(735.92)

Packaged foods

683.89

612.49

(467.97)

(438.21)

Others

221.43

237.23

(246.00)

(258.83)

Total

6,680.37

6,436.09

(6,662.75)

(6,642.06)

Unallocated Corporate Assets/
(Liabilities)

7,224.36

6,796.72

(3,517.20)

(3,313.70)

13,904.73

13,232.81

(10,179.95)

(9,955.76)

Total Assets/(Liabilities)

Depreciation/Amortisation

Capital Expenditure

Non - Cash Expenses other than Depreciation

For the year ended 31st
March, 2015

For the year ended 31st
March, 2014

For the year ended 31st
March, 2015

For the year ended 31st
March, 2014

For the year ended 31st
March, 2015

For the year ended 31st
March, 2014

Soaps and Detergents

260.45

245.80

94.39

86.76

29.23

22.20

Personal Products

104.16

130.00

84.74

80.75

17.15

14.07

Beverages

57.06

31.91

15.88

13.32

6.72

6.07

Packaged Foods

58.27

43.98

33.19

30.48

3.41

2.95

2.32

17.09

8.58

7.54

4.93

1.16

44.15

57.72

49.91

41.70

0.11

13.46

Others
Unallocated Corporate Assets/
(Liabilities)

142

Standalone

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

Information about Secondary Business Segments
For the Year ended
31st March, 2015

For the Year ended
31st March, 2014

30,144.20

27,370.08

575.14

550.70

30,719.34

27,920.78

482.25

468.78

-

-

482.25

468.78

6,680.37

6,436.09

-

-

6,680.37

6,436.09

Revenue by Geographical Markets
India
Outside India
Total
Additions to Tangible and Intangible Fixed Assets
India
Outside India
Total
Carrying Amount of Segment Assets
India
Outside India
Total

Annual Report 2014-15

Standalone 143

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

NOTES :
1.
Business Segments

The Company has considered business segments as the primary segments for disclosure on the basis that the risk and returns of the Company is primarily determined by the nature of products and services. Consequently the geographical segment has been considered as a secondary segment. The products included in each of the reported domestic business segments are as follows:

a)

b) 
Personal Products include products in the categories of Oral Care, Skin Care (excluding soaps), Hair Care, Deodorants,
Talcum Powder, Colour Cosmetics, Ayush services, etc.

Soaps and Detergents include soaps, detergent bars, detergent powders, detergent liquids, scourers, etc.

c)
Beverages include tea and coffee.

d) 
Packaged foods include Branded Staples (Atta, Salt, Bread, etc.), Culinary Products (tomato based products, fruit based products, soups, etc.) and Frozen desserts.

e)

Segment Revenue relating to each of the above domestic business segments includes Income from Services provided to group companies, where applicable.

The above business segments have been identified considering :

Others include Exports, Chemicals, Water business, Infant Care Products etc.

a) nature of products and services the b) differing risks and returns the c)

the internal organisation and management structure, and

d)

the internal financial reporting systems

2. Geographical Segments

The geographical segments considered for disclosure are as follows :
a)

Sales within India includes sales to customers located within India.

b)

Sales outside India includes sales to customers located outside India.

c) The carrying amount of segment assets in India and Outside India is based on geographical location of assets.
3.

Revenue comprises :

Sale of Products (net of excise duty)
Income from services rendered to group companies
Scrap sales and export incentives included in other operating income

Year ended
31st March, 2015
30,170.50
511.89
36.95
30,719.34

Year ended
31st March, 2014
27,408.29
479.57
32.92
27,920.78

4. Previous year’s figures have been regrouped wherever necessary to conform with this year’s classification. As per our report of even date
For and on behalf of Board of Directors
For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai: 8th May, 2015
144 Standalone

Mumbai: 8th May, 2015
Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

INDEPENDENT AUDITORS’ REPORT

to Members of Hindustan Unilever Limited
REPORT ON THE CONSOLIDATED FINANCIAL
STATEMENTS
We have audited the accompanying consolidated financial statements of Hindustan Unilever Limited (hereinafter referred to as ‘the Holding Company’), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and a jointly controlled entity, comprising the consolidated Balance
Sheet as at March 31, 2015, the consolidated Statement of Profit and Loss and consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as
“the consolidated financial statements”).

MANAGEMENT’S RESPONSIBILITY FOR THE
CONSOLIDATED FINANCIAL STATEMENTS
The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013
(hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its jointly controlled entity in accordance with the accounting principles generally accepted in India, including the Accounting
Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014 (particularly
Accounting Standard 21 - Consolidated Financial Statements and
Accounting Standard 27 - Financial Reporting of Interest in Joint
Ventures). The respective Board of Directors of the companies included in the Group and of its jointly controlled entity are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and its jointly controlled entity and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding
Company, as aforesaid.

AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
Annual Report 2014-15

We conducted our audit in accordance with the Standards on Auditing specified under sub section 10 of Section 143 of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the
Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Holding
Company has an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of
Directors, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

OPINION
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of a subsidiary and a jointly controlled entity, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
i)  the case of Consolidated Balance Sheet, of the in consolidated state of affairs of the Group and its jointly controlled entity as at March 31, 2015; ii)  the case of the Consolidated Profit and Loss Account, of in the consolidated profits for the year ended on that date; and iii)  the case of the Consolidated Cash Flow Statement, of in the consolidated cash flows for the year ended on that date.

OTHER MATTER
We did not audit the financial statements / financial information
Consolidated 145

INDEPENDENT AUDITORS’ REPORT (Contd.)

of one subsidiary and one jointly controlled entity, whose financial statements reflect total assets of Rs. 523.05 crores as at March 31, 2015, total revenues of Rs. 693.78 crores and net cash inflows amounting to Rs. 10.49 crores for the year then ended, as considered in the consolidated financial statements.
These financial statements / financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of the subsidiary and the jointly controlled entity and our report in terms of sub-sections
(3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiary and jointly controlled entity, is based solely on the reports of the other auditors. Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of this matter with respect to our reliance on the work done and the reports of the other auditors.

REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
1.  required by the Companies (Auditor’s Report) Order,
As
2015 (“the Order”), issued by the Central Government of India in terms of sub-section 11 of Section 143 of the
Act, based on the comments in the auditors’ reports of the Holding Company, subsidiary companies and jointly controlled company incorporated / registered in India, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2.  required by sub-sections 3 of Section 143 of the Act,
As
based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of a subsidiary and a jointly controlled entity, as noted in the ‘Other Matter’ paragraph, we report, to the extent applicable, that:

146

(a)  have sought and obtained all the information and
We
explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
(b)  our opinion, proper books of account as required
In
by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
(c) 
The Consolidated Balance Sheet, the Consolidated
Statement of Profit and Loss, and the Consolidated
Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.
Consolidated

(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule
7 of the Companies (Accounts) Rules, 2014.

(e)  the basis of the relevant assertion contained in
On
the audit reports on standalone financial statements of each subsidiary company and the jointly controlled entity which are incorporated in India none of the
Directors of any such company is disqualified as on
March 31, 2015 from being appointed as a Director of that company in terms of sub-section 2 of Section 164 of the Act.

(f) 
With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of a subsidiary and a jointly controlled entity, as noted in the ‘Other Matter’ paragraph: i. 
The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group and its jointly controlled entity – Refer Note 27 to the consolidated financial statements;

ii. 
Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivatives contracts – Refer note 47 to the consolidated financial statements; and

iii. 
There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Holding
Company and its subsidiary companies and jointly controlled entity incorporated in India.
For B S R & Co. LLP

Chartered Accountants
Firm’s Registration
No: 101248W/W-100022

Akeel Master
Partner

Membership No: 046768

Mumbai: 8 May, 2015
Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

ANNEXURE TO THE
INDEPENDENT AUDITORS’ REPORT
As stated in Para 1 ‘Report on Other Legal and Regulatory
Requirements’ in our Auditors’ report of even date, the following statement is based on the comments in the Auditors’ reports on the standalone financial statements of the Holding
Company, subsidiary companies and jointly controlled company incorporated in India.
(i) (a) 
The Holding Company, its subsidiary companies and jointly controlled company incorporated in India have maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) 
The Holding Company, its subsidiary companies and jointly controlled company incorporated in India have a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner largely over a period of two years.
In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Group and its jointly controlled company and the nature of its assets. In accordance with this programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(ii) (a) 
The inventory, except goods-in-transit, has been physically verified by the respective management of the Holding Company, its subsidiary companies and jointly controlled company incorporated in India during the year. In our opinion, the frequency of such verification is reasonable. In respect of inventory lying with third parties, written confirmations have been obtained for a substantial part of such inventory.

(b) 
The procedures for the physical verification of inventories followed by the management as referred to above are reasonable and adequate in relation to the size of the respective company and the nature of its business. (c) 
The Holding Company, its subsidiary companies and jointly controlled company incorporated in India are maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) 
The Holding Company, its subsidiary companies and jointly controlled company incorporated in India have not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained by it under
Section 189 of the Act.
Annual Report 2014-15

(iv)  their opinion and according to the information and
In
explanations obtained by the statutory auditors of the
Holding Company, its subsidiary companies and jointly controlled company incorporated in India, these companies have an adequate internal control system commensurate with the respective size of each company and the nature of its business with regard to purchase of inventories and fixed assets and sale of goods and services except that for jointly controlled company incorporated in India with regards to key fixed assets, their nature and specifications are such that the jointly controlled company incorporated in India is required to procure them from specified vendors only, without inviting comparative quotations and there is no continuing failure to correct major weaknesses in internal control system in any of these companies.
(v) 
The Holding Company, its subsidiary companies and jointly controlled company incorporated in India have not accepted any deposits in accordance with the provisions of Sections
73 to 76 of the Act and the rules framed there under.
(vi) 
The statutory auditors of the Holding Company and jointly controlled company incorporated in India have broadly reviewed the books of account maintained by each company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-Section 1 of
Section 148 of the Act wherever applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, the statutory auditors have not made a detailed examination of the records. For subsidiary companies incorporated in India, the Central Government has not prescribed the maintenance of cost records under sub-section 1 of Section
148 of the Companies Act, 2013, for the products and services of the Company.
(vii) (a) 
According to the information and explanations given to and on the basis of the examination of the records of the Holding Company, its subsidiary companies and jointly controlled company incorporated in India by their respective statutory auditors, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident
Fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess, Professional tax and other material statutory dues, as applicable, have been generally regularly deposited during the year by each of these companies with the appropriate authorities.

Consolidated 147

ANNEXURE TO THE
INDEPENDENT AUDITORS’ REPORT (Contd.) 
According to the information and explanations given to the statutory auditors of the Holding Company, its subsidiary companies and jointly controlled company incorporated in India, no undisputed dues in respect of
Provident Fund, Employees’ State Insurance, Incometax, Sales tax, Wealth tax, Service tax, Customs duty,
Excise duty, Value added tax, Cess, Professional tax and other material statutory dues were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(b) 
According to the information and explanations given to the statutory auditors of the holding company, its subsidiary companies and jointly controlled company incorporated in India such dues of Income tax, Wealth tax, Sales Tax, Value added tax, Service tax, Customs duty, Excise duty and Cess as have not been deposited with the appropriate authorities on account of any dispute are disclosed in Annexure I to this report.
(c) 
According to the information and explanations given to and on the basis of the examination by the statutory auditors of the records of the Holding Company, its subsidiary companies and jointly controlled company incorporated in India, the amounts required to be transferred by the Holding Company to Investor
Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of
1956) and rules made thereunder has been transferred to such fund within time. The subsidiary companies and the jointly controlled company incorporated in
India did not have any dues on account of Investor
Education and Protection Fund.

(viii) 
One of the subsidiary companies has accumulated losses at the end of the year on a standalone basis and has incurred cash losses on a standalone basis in the immediately preceding financial year (No cash losses were incurred on a standalone basis in the current financial year). The jointly controlled company has accumulated losses exceeding fifty percent of its net worth at the end of the year on a standalone basis and has also incurred cash losses on a standalone basis in the current financial year and in the immediately preceding financial year. The Holding
Company and the remaining subsidiary companies do not have any accumulated losses at the end of the year on a standalone basis, and have not incurred cash losses on a standalone basis, during the year and in the immediately preceding financial year. On a consolidated basis, the
Holding Company and its subsidiaries and jointly controlled company do not have any accumulated losses at the end of

148

Consolidated

the year, and have not incurred cash losses during the year and in the immediately preceding financial year.
(ix)  their opinion and according to the information and
In
explanations given to the statutory auditors of the Holding
Company and jointly controlled company incorporated in
India, none of the companies has defaulted in repayment of their respective dues to their bankers. The subsidiary companies incorporated in India did not have dues to banks during the year. The holding company, its subsidiary companies and jointly controlled company incorporated in
India did not have any outstanding dues to any financial institution or debentures holders during the year.
(x) 
According to the information and explanations given to the statutory auditors of the Holding Company, the terms and conditions on which the holding company has given guarantees for loan taken by other from bank is not prejudicial to its interest. The subsidiary companies and jointly controlled company incorporated in India have not given any guarantees for the loans taken by others from bank. The Holding Company, its subsidiary companies and jointly controlled company incorporated in India has not given any guarantees for loans taken by others from financial institutions.
(xi)  their opinion and according to the information and
In
explanations given to the respective statutory auditors, the Holding Company and its subsidiary companies incorporated in India have not raised any term loan and the term loan taken by the jointly controlled company incorporated in India has been applied for the purpose for which it was obtained.
(xii) 
According to the information and explanations given to the statutory auditors of the Holding Company, its subsidiary companies and jointly controlled company incorporated in
India no instances of material fraud on or by each company has been noticed or reported during the course of audit by the statutory auditors of the Holding Company, its subsidiary companies and jointly controlled company incorporated in
India.
For B S R & Co. LLP

Chartered Accountants
Firm’s Registration
No: 101248W/W-100022

Akeel Master
Partner

Membership No: 046768

Mumbai: 8 May, 2015
Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

ANNEXURE TO THE
INDEPENDENT AUDITORS’ REPORT (Contd.)
Annexure I
Name of the
Company

Relationship

Name of the
Statute

Nature of dues Amount
Demanded
(Rs in Crores)

Amount
Deposited
Under
Disputes (Rs in Crores )

Period to which the amount relates

Forum where dispute is pending Hindustan
Unilever Limited

Holding
Company

The Central
Excise Act, 1944

Excise duty
Including
Interest and penalty, if applicable 170.90

4.58

1994-2014

Appellate
Authority upto
Commissioner’s
level

Hindustan
Unilever Limited

Holding
Company

The Central
Excise Act, 1944

Excise duty
Including
Interest and penalty, if applicable 19.40

0.43

1994-2010

Customs, Excise and Service
Tax Appellate
Tribunals of various states

Hindustan
Unilever Limited

Holding
Company

The Central
Excise Act, 1944

Excise duty
Including
Interest and penalty, if applicable 5.30

-

2003- 2012

High Courts of various states

Hindustan
Unilever Limited

Holding
Company

Customs Act,
1962

Custom Duty,
Including
Interest and penalty, if applicable 1.71

-

2011-2012

Appellate
Authority upto
Commissioner’s
level

Hindustan
Unilever Limited

Holding
Company

Central and
Local Sales Tax
Acts

Sales tax
(including
interest and penalty, as applicable) 127.83

32.07

1985-2015

Appellate
Authority upto
Commissioner’s
level

Hindustan
Unilever Limited

Holding
Company

Central and
Local Sales Tax
Acts

21.17

2.5

1984-2015

Sales Tax
Appellate
Tribunals of various states

Hindustan
Unilever Limited

Holding
Company

Central and
Local Sales Tax
Acts

Sales tax
(including
interest and penalty, as applicable) Sales tax
(including
interest and penalty, as applicable) 114.82

75.3

1983-2015

High Courts of various states

Hindustan
Unilever Limited

Holding
Company

Central and
Local Sales Tax
Acts

Sales tax
(including
interest and penalty, as applicable) 22.23

9.42

1985-2007

Supreme Court

Hindustan
Unilever Limited

Holding
Company

Service Tax
(Finance Act,
1994)

Appellate
Authority upto
Commissioner’s
level

80.55

0.5

2005-2014

Appellate
Authority upto
Commissioner’s
level

Hindustan
Unilever Limited

Holding
Company

Income Tax Act,
1961

Income Tax
Including
Interest and penalty, as applicable 117.14

-

1979 1980, 1991,
2009 – 2010

Appellate
Authority upto
Commissioner's
level

Annual Report 2014-15

Consolidated 149

ANNEXURE TO THE
INDEPENDENT AUDITORS’ REPORT (Contd.)
Annexure I
Name of the
Company

Relationship

Name of the
Statute

Nature of dues Amount
Demanded
(Rs in Crores)

Amount
Deposited
Under
Disputes (Rs in Crores )

Period to which the amount relates

Forum where dispute is pending Hindustan
Unilever Limited

Holding
Company

Income Tax
Act, 1961

Income Tax
Including
Interest and penalty, as applicable 0.20

-

1963 – 1964

Income Tax
Appellate
Tribunal, Mumbai

Hindustan
Unilever Limited

Holding
Company

Income Tax
Act, 1961

Income Tax
Including
Interest and penalty, as applicable 0.06

-

1982 – 1983

Bombay High
Court

Unilever India
Exports Limited

Subsidiary

The Central
Excise Act, 1994

Excise duty
Including
Interest and penalty, if applicable 0.30

-

2007-2008

High Court

Unilever India
Exports Limited

Subsidiary

The Central
Excise Act, 1994

Excise duty
Including
Interest and penalty, if applicable 0.11

-

2004-2005

Appellate
Authority upto
Commissioner’s
level

Unilever India
Exports Limited

Subsidiary

Customs Act,
1962

Custom Duty,
Including
Interest and penalty, if applicable 8.74

-

2001-2013

Appellate
Authority upto
Commissioner’s
level

Unilever India
Exports Limited

Subsidiary

Customs Act,
1962

Custom Duty,
Including
Interest and penalty, if applicable 3.81

-

2011-12

Supreme Court

Unilever India
Exports Limited

Subsidiary

Customs Act,
1962

Custom Duty,
Including
Interest and penalty, if applicable 0.28

-

2004

Customs, Excise and Service
Tax Appellate
Tribunals of various states

Unilever India
Exports Limited

Subsidiary

Income Tax Act,
1961

Income tax,
Including
Interest and penalty, if applicable 0.01

-

2001-2002

Appellate
Authority upto
Commissioner’s
level

Unilever India
Exports Limited

Subsidiary

Central Sales
Tax Act and
Local Sales Tax
Act

Sales Tax,
Including
Interest and penalty, if any.

0.77

-

2001-2008

Appellate
Authority upto
Commissioner’s
level

150

Consolidated

1982 - 1983

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

ANNEXURE TO THE
INDEPENDENT AUDITORS’ REPORT (Contd.)
Annexure I
Name of the
Company

Relationship

Name of the
Statute

Nature of dues Amount
Demanded
(Rs in Crores)

Amount
Deposited
Under
Disputes (Rs in Crores )

Period to which the amount relates

Forum where dispute is pending Pond’s Exports
Limited

Subsidiary

The Central
Excise Act, 1994

Excise duty
Including
Interest and penalty, if applicable 0.05

-

1999-2004

Customs, Excise and Service
Tax Appellate
Tribunal, Chennai

Pond’s Exports
Limited

Subsidiary

Income Tax Act,
1961

Income tax,
Including
Interest and penalty, if applicable 0.33

-

2008-2014

Appellate
Authority
-Income Tax officer’s Lakme Lever
Pirvate Limited

Subsidiary

The Central
Excise Act, 1994

Excise duty
Including
Interest and penalty, if applicable 0.72

-

2008-2013

Appellate
Authority upto
Commissioner’s
level

Lakme Lever
Pirvate Limited

Subsidiary

Income Tax Act,
1961

Income tax,
Including
Interest and penalty, if applicable 0.59

-

2007-2015

Appellate
Authority
-Income Tax officer’s Kimberly Clark
Lever Private
Limited

Joint Venture

Income Tax Act,
1961

Income tax,
Including
Interest and penalty, if applicable 65.01

-

2007-2012

Income Tax
Appellate
Tribunal, Mumbai

Kimberly Clark
Lever Private
Limited

Joint Venture

Central Sales
Tax Act and
Local Sales Tax
Act

Sales tax including Interest and penalty, as applicable 56.70

-

2005-2009

Sales Tax
Appellate
Tribunals of various states

Kimberly Clark
Lever Private
Limited

Joint Venture

Central Sales
Tax Act and
Local Sales Tax
Act

Sales tax including Interest and penalty, as applicable 11.51

-

2006-2009

Appellate
Authority upto
Commissioner’s
level

Annual Report 2014-15

Consolidated 151

BALANCE SHEET

As at 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

As at
31st March, 2015

As at
31st March, 2014

3
4

216.35
3,805.29
24.80

216.27
3,321.02
22.28

5
6
7
8

7.00
0.37
178.24
993.56

8.44
0.22
285.55
983.69

9
10
12
13

36.04
5,507.31
952.77
2,709.07
14,430.80

37.14
5,824.86
966.50
2,088.14
13,754.11

2,717.80
22.03
516.30
81.18
323.90
199.79
587.24
0.46

2,640.94
24.12
364.90
7.70
81.18
380.19
179.77
546.46
0.70

2,701.18
2,848.79
1,011.18
2,689.49
646.79
84.67
14,430.80

2,457.95
2,939.83
1,016.81
2,516.03
504.87
92.66
13,754.11

Note

EQUITY AND LIABILITIES

Shareholders’ funds Share capital Reserves and surplus
Minority Interest
Non-current liabilities Long-term borrowings Deferred tax liabilities (net) Other long-term liabilities Long-term provisions
Current liabilities Short-term borrowings Trade payables Other current liabilities Short-term provisions
TOTAL

ASSETS

Non-current assets
Fixed assets
Tangible assets
15
Intangible assets
16
Capital work-in-progress
Intangible assets under development
Goodwill on Consolidation
Non-current investments
17
Deferred tax assets (net)
18
Long-term loans and advances
19
Other non-current assets
20
Current assets Current investments
21
Inventories
22

Trade receivables
23

Cash and bank balances
24

Short-term loans and advances
25

Other current assets
26
TOTAL
Significant accounting policies
2
Contingent liabilities and capital commitments
27, 28
The accompanying notes are an integral part of these consolidated financial statements
As per our report of even date

For and on behalf of Board of Directors

For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai : 8th May, 2015
152

Consolidated

Mumbai : 8th May, 2015
Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

STATEMENT OF PROFIT AND LOSS

For the year ended 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

Year ended
31st March, 2015
33,903.14

Year ended
31st March, 2014
30,797.15

(1,930.95)
31,972.19
566.65
32,538.84

(1,563.41)
29,233.74
570.12
29,803.86

32
33
34

12,569.21
3,549.82
57.04

11,889.68
3,151.63
(171.30)

35
36
37
38

1,723.87
17.70
322.39
8,658.52
26,898.55
5,640.29
679.22
6,319.51

1,572.66
40.68
295.54
8,045.40
24,824.29
4,979.57
235.61
5,215.18

(1,959.81)
15.81

(1,228.24)
(31.20)

4,375.51
(12.43)
4,363.08

3,955.74
(10.17)
3,945.57

Rs. 20.17
Rs. 20.16

Rs. 18.24
Rs. 18.23

Note

REVENUE FROM OPERATIONS (GROSS)

30

Less: Excise duty Revenue from operations (net) Other income
TOTAL REVENUE

31

EXPENSES Cost of materials consumed Purchases of stock-in-trade 
Changes in inventories of finished goods (including stock-intrade) and work-in-progress Employee benefits expenses Finance costs Depreciation and amortisation expenses Other expenses
TOTAL EXPENSES
Profit before exceptional items and tax
Exceptional items
Profit before tax
Tax expenses Current tax 
Deferred tax credit/(charge) [Share of joint venture Rs. 0.15 crores, (2013-14 Rs. 0.47 crores)]
Profit after tax and before minority interest
Less : Minority Interest
PROFIT FOR THE YEAR
Earnings per equity share Basic (Face value of Re. 1 each) Diluted (Face value of Re. 1 each)
Significant accounting policies

39

40
41

42

2

The accompanying notes are an integral part of these consolidated financial statements
As per our report of even date

For and on behalf of Board of Directors

For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai : 8th May, 2015
Annual Report 2014-15

Mumbai : 8th May, 2015
Consolidated 153

CASH FLOW STATEMENT

For the year ended 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

A

CASH FLOW FROM OPERATING ACTIVITIES:

Profit before exceptional items and tax
Adjustments for: Depreciation and amortisation expenses Unrealised foreign exchange loss Net gain on sale of investments Profit or Loss on fixed assets sold, scrapped, etc. (net) Interest income Dividend income 
Provision for expenses on employee stock options/performance share schemes Provision/(write back) for doubtful debts and advances (net) Bad debts/advances written off Provision for Mark to Market loss on derivative instruments Interest expense
Cash generated from operations before working capital changes
Adjustments for:
(Increase)/decrease in trade receivables
(Increase)/decrease in short-term loans and advances
(Increase)/decrease in other current assets
(Increase)/decrease in long-term loans and advances
Increase/(decrease) in trade payables
Increase/(decrease) in long-term provisions
Increase/(decrease) in short-term provisions
Increase/(decrease) in other current liabilities
Increase/(decrease) in other long-term liabilities
(Increase)/decrease in inventories
Cash generated from operations
Taxes paid (net of refunds)
Cash flow before exceptional items
Exceptional items: Amounts paid for other restructuring activities
Net cash generated from operating activities - [A]

B

154

CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of tangible/intangible assets Sale proceeds of tangible assets Investment in equity shares of a subsidiary Sale/(Purchase) of other non-current investments Investment in long-term deposits with banks Purchase of current investments Sale proceeds of current investments Loans given to fellow subsidiaries Loans repaid by fellow subsidiaries Investment in bank deposits (having original maturity more than 3 months) 
Redemption/maturity of bank deposits (having original maturity more than 3 months) Interest received Gain on sale of short term highly liquid investments

Consolidated

For the year ended
31st March, 2015

For the year ended
31st March, 2014

5,640.29

4,979.57

322.39
0.57
(294.93)
(1.31)
(218.26)
(24.31)

295.54
(259.28)
13.34
(283.33)
(14.87)

19.41

7.00

(2.12)
13.78
36.60
17.70
(130.48)
5,509.81

(20.43)
22.77
20.64
40.68
(177.94)
4,801.63

1.77
(179.13)
3.81
25.46
(325.94)
26.70
143.62
(22.16)
(107.31)
91.04
(342.14)
5,167.67
(2,029.73)
3,137.94

(17.18)
47.89
10.37
(51.95)
546.47
50.72
21.98
340.37
(342.10)
(201.22)
405.35
5,206.98
(1,383.61)
3,823.37

(14.17)
3,123.77

(5.19)
3,818.18

(605.69)
33.05
56.29
296.27
(19,409.54)
19,461.24
(2,504.88)

(606.38)
21.98
(100.64)
11.87
(9,537.51)
9,171.53
(104.15)
105.55
(2,563.26)

2,009.97

2,641.19

218.26
-

232.47
29.53

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

CASH FLOW STATEMENT (CONTD.)

For the year ended 31st March, 2015

(All amounts in Rs. crores, unless otherwise stated)

For the year ended
31st March, 2015
24.31
(420.72)
526.84
200.00
306.12

C

(2,960.29)
382.85
462.46
845.31

0.90
0.35

1.71
-

81.33
574.09

64.45
601.17

147.27

167.67

8.83
812.77

Cash and cash equivalents comprise of: Cash on hand Cheques on hand
Balances with banks In current accounts Term deposits with original maturity of less than three months
Short term, highly liquid investments Treasury bills with original maturity of less than three months
Share of Joint Venture In current accounts

(2,481.38)
(422.65)
(14.25)
(28.86)
(10.03)
(4.63)
1.51

(3,462.42)
(32.53)
845.31
(0.01)
812.77

CASH FLOW FROM FINANCING ACTIVITIES:

Dividends paid Dividend distribution tax paid Amounts deposited in bank accounts towards unpaid dividends Interest paid Amounts (repaid)/borrowed for long-term purposes Amounts (repaid)/borrowed for short-term purposes 
Proceeds from share allotment under employee stock options/ performance share schemes
Net cash used in financing activities - [C]
Net increase/(decrease) in cash and cash equivalents - [A+B+C]
Cash and cash equivalents at the beginning of the year
Less: In respect of sold subsidiary company
Cash and cash equivalents at the end of the year

207.27
(475.04)

(2,911.80)
(525.45)
(7.12)
(17.68)
(1.44)
(1.10)
2.17

Dividend received
Cash flow before exceptional items
Exceptional items: Consideration received on disposal of surplus properties Consideration received on disposal of a subsidiary
Net cash (used in)/generated from investing activities - [B]

For the year ended
31st March, 2014
15.51
(682.31)

10.31
845.31

Notes:
i)  above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard 3 (AS - 3),
The
‘Cash Flow Statements’. ii) Figures in brackets indicate Cash Outflow. iii) The previous year’s figures have been regrouped/restated wherever necessary to conform to this year’s classification. iv) 
During the year, Aquagel Chemicals Private Limited got merged with Lakme Lever Private Limited pursuant to a scheme of amalgamation as described in Note 1 (a) Group Information. This being a share swap arrangement, is a non-cash transaction.
As per our report of even date

For and on behalf of Board of Directors

For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai : 8th May, 2015
Annual Report 2014-15

Mumbai : 8th May, 2015
Consolidated 155

NOTES

to the financial statements for the year ended 31st March, 2015
(All amounts in Rs. crores, unless otherwise stated)

1)
GROUP INFORMATION
Hindustan Unilever Limited (the ‘Company’) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange
(BSE) and the National Stock Exchange (NSE). The Company is a market leader in the FMCG business comprising Home and Personal
Care (HPC) and Foods and Refreshments. The Company has manufacturing facilities across the country and Research and Development centres in Mumbai and Bangalore and sells primarily in India through independent distributors and modern trade.
The Company, its subsidiaries, controlled trust and its joint venture (jointly referred to as the ‘Group’ herein under) considered in these consolidated financial statements are:

a) Subsidiaries:
Name of the Company

Country of
Incorporation
India
Nepal
India
India
India
India
India
India
India
India

% voting power held as at
31st March, 2014
100
80
100
100
100
100
100
100
100
100

India

Unilever India Exports Limited
Unilever Nepal Limited
Daverashola Estates Private Limited
Pond’s Exports Limited
Levers Associated Trust Limited
Levindra Trust Limited
Hindlever Trust Limited
Jamnagar Properties Private Limited
Lakme Lever Private Limited
Brooke Bond Real Estates Private Limited*
(sold w.e.f. March 23, 2015)
Aquagel Chemicals Private Limited ^
(Amalgamated with Lakme Lever Private Limited w.e.f.
April 01, 2014)

% voting power held as at
31st March, 2015
100
80
100
100
100
100
100
100
100
-

100

* The Group has sold the investments in Brooke Bond Real Estates Private Limited (BBREPL) during the year and accordingly the difference between the proceeds from disposal of investment in the subsidiary and the carrying amount of its assets and liabilities as on the date of disposal is recognised in the consolidated Statement of Profit and Loss as the profit on the disposal of the investment in the subsidiary.
^ During the year, Aquagel Chemicals Private Limited (ACPL) got merged with Lakme Lever Private Limited pursuant to a scheme of amalgamation under Sections 391 to 394 of the Companies Act, 1956 (or re-enactment thereof upon effectiveness of the Companies
Act, 2013) as sanctioned by Honourable High Court of Judicature of Bombay vide its Order dated February 06, 2015, the entire business and all assets and liabilities of Aquagel Chemicals Private Limited were transferred and vested in Lakme Lever Private Limited effective from the appointed date, i.e. April 01, 2014.
During the previous year, the excess of the cost to the Company of its investment in ACPL over the Company’s portion of equity of ACPL amounting to Rs. 81.18 crores, at the date of investment, has been treated as ‘Goodwill on consolidation’ and is shown as a separate asset line item in the Balance Sheet. This ‘Goodwill on consolidation’ will be tested for impairment at each reporting date.

b) Controlled Trust:
Name of the Entity
Hindustan Unilever Limited Securitisation of
Retirement Benefit Trust

Country of
Incorporation
India

% ownership interest, as at 31st March, 2015
100

% ownership interest, as at 31st March, 2014
100

Country of
Incorporation
India

% ownership interest, as at 31st March, 2015
50

% ownership interest, as at 31st March, 2014
50

c) Joint Venture:
Name of the Company
Kimberly Clark Lever Private Limited

156

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

d) Associate:
Section 129 (3) of the Companies Act, 2013, requires preparation of consolidated financial statement of the company and of all the subsidiaries including associate company and joint venture businesses in the same form and manner as that of its own. Accounting
Standard (AS) 23 on Accounting for Investments in Associates in Consolidated Financial Statements defines Associate Company as an enterprise in which an entity has significant influence and which is neither a subsidiary nor a joint venture of that party. It mentions that if an investing party holds, directly or indirectly through intermediaries, 20 per cent or more of the voting power of the enterprise, it is presumed that the investing party does have significant influence, unless it can be clearly demonstrated that this is not the case
The Company holds investments in the below entities which by share ownership are deemed to be an associate company:
i) C mfund Financial Services India Limited where the Company has 24% equity holding. This is a NBFC set up between HUL and o a partner company, currently dormant. ii) Aquagel Chemicals (Bhavnagar) Private Limited where the Company has 26% equity and 26% preference capital holding. This is a Company engaged in Silica business. iii) 
Hi-Tech Surfactants Limited where the Company has 33% equity holding. This is a job-worker for HUL undertaking conversion activities for laundry business.
However the Company does not exercise significant influence in any of the above entities, as demonstrated below :
i) The Company does not have any representation on the Board of Directors or corresponding governing body of the investee. ii) The Company does not participate in policy making process. iii) The Company does not have any material transactions with the investee. iv) The Company does not interchange any managerial personnel.
v) The Company does not provide any essential technical information to the investee. vi)  these are not investments strategic to the core business of HUL, these are intended to be divested/liquidated in the near
As
future.
As the interests in above enterprises originated for investment purposes and are not of sufficient proportions for the Company to be able to control or exercise significant influence on decisions of the investee, these are not being construed as associate companies for the purpose of consolidation and therefore these have not been consolidated in the financial statement of the company.

e)

Name of the Entity Parent Company Hindustan Unilever Limited
Subsidiaries
Indian Unilever India Exports Limited Lakme Lever Private Limited Pond's Exports Limited Daverashola Estates Private Limited Levers Associated Trust Limited Levindra Trust Limited Hindlever Trust Limited Jamnagar Properties Private Limited Hindustan Unilever Limited Securitisation of Retirement Benefit Trust Brooke Bond Real Estates Private Limited
Foreign

Unilever Nepal Limited Minority Interest in all Subsidiaries
Joint Venture
Indian

Kimberly Clark Lever Private Limited
Total Eliminations
TOTAL
Annual Report 2014-15

Net Assets
(Total Assets - Total Liabilities)
As % of consolidated
Amount
net assets

Share in Profit or Loss
As % of consolidated profit or loss

Amount

92.05%

3,724.78

98.34%

4,315.25

9.42%
3.73%
0.32%
0.10%
0.00%
0.00%
0.00%
0.10%
8.74%

381.29
150.99
12.76
4.18
0.05
0.05
0.05
4.03
353.83

2.26%
(0.78%)
0.11%
0.00%
0.00%
0.00%
0.00%
0.00%
0.03%

99.04
(34.30)
4.73
(0.11)
1.42

0.02%

0.76

(0.04%)

(1.88)

1.94%
0.61%

78.41
24.80

1.42%
0.28%

62.13
12.43

0.50%
(17.54%)
100.00%

20.33
(709.86)
4,046.45

(0.22%)
(1.39%)
100.00%

(9.80)
(60.97)
4,387.94

Consolidated 157

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

2) SIGNIFICANT ACCOUNTING POLICIES
2.1. of preparation
Basis
These consolidated financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally accepted in India, to the extent applicable and in particular Accounting Standard 21 (AS 21) - ‘Consolidated
Financial Statements’ and Accounting Standard 27 (AS 27) ‘Financial Reporting of Interest in Joint Venture’.
The financial statements of the Company, its subsidiaries, controlled trust and the joint venture (on a proportionate basis) have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses. Intra group balances and intra group transactions and resulting unrealised profits are eliminated in full. Unrealised losses resulting from intra group transactions are also eliminated unless cost cannot be recovered.
The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
The difference between the cost of investment in the subsidiaries, and the Company’s share of net assets at the time of acquisition of share in the subsidiaries is recognised in the financial statement as Goodwill or Capital Reserve as the case may be.
Minority Interest in the net assets of consolidated subsidiaries is identified and presented in the consolidated Balance
Sheet separately from liabilities and equity of the Company’s shareholders. Minority interest in the net assets of consolidated subsidiaries consists of:
(a) 
The amount of equity attributable to minority at the date on which investment in a subsidiary is made; and
(b) 
The minority share of movements in equity since the date parent subsidiary relationship came into existence.
Minority interest’s share of Net Profit/(Loss) for the year of consolidated subsidiaries is identified and adjusted against the profit after tax of the Group.
All assets and liabilities have been classified as current or noncurrent as per the Group’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.
Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Group has ascertained its operating cycle as 12
158

Consolidated

months for the purpose of current/non-current classification of assets and liabilities.
Transactions and balances with values below the rounding off norm adopted by the Group have been reflected as “0.00” in the relevant notes in these consolidated financial statements.
2.2 Revenue recognition
Revenue from sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, the Group retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Sales are recognised net of trade discounts, rebates, sales taxes and excise duties (on goods manufactured and outsourced).
Income from export incentives such as duty drawback and premium on sale of import licences, and lease license fee are recognised on accrual basis.
Income from Property Development Activity is recognised in terms of arrangements with developers, where applicable.
Income from services rendered is recognised based on agreements/arrangements with the customers as the service is performed using the proportionate completion method when no significant uncertainty exists regarding the amount of the consideration that will be derived from rendering the service and is recognised net of service tax, as applicable.
Interest on investments is recognised on a time proportion basis taking into account the amounts invested and the rate of interest. Dividend income on investments is recognised when the right to receive dividend is established.
2.3 Expenditure
Expenses are accounted on accrual basis.
Revenue expenditure pertaining to research is charged to the
Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product’s technical feasibility and other criteria set out in paragraph 44 of AS 26 – ‘Intangible assets’ have been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible assets.
2.4 Tangible assets
Tangible assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any.
Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.
Items of tangible assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the financial statements under “Other current assets”. Any expected loss is recognised immediately in the Statement of Profit and Loss.
Tangible assets not ready for the intended use on the date of
Balance Sheet are disclosed as “Capital work-in-progress”.
Losses arising from the retirement of, and gains or losses arising from disposal of tangible assets which are carried at cost are recognised in the Statement of Profit and Loss.
Depreciation is provided on a pro-rata basis on the straight line method at the rates prescribed under Schedule II to the
Companies Act, 2013 with the exception of the following:
- plant and equipment is depreciated over 2 to 21 years based on the technical evaluation of useful life done by the management.
- certain assets lying at salons and training centre, included in plant and equipment, furniture and fixtures and office equipment, are depreciated over five to nine years.
- assets costing Rs. 5,000 or less are fully depreciated in the year of purchase.
2.5. Intangible assets
Intangible assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis as per rates mentioned below:
Asset class
Goodwill
Brands/Trademarks
Computer Software

Rate of amortisation
25%
25%
25%

2.6
Impairment
Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount by recognising the impairment loss as an expense in the Statement of Profit and Loss. Recoverable

Annual Report 2014-15

amount is higher of an asset’s or cash generating unit’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased.
2.7
Investments
Investments are classified into current and non-current investments. Current investments are stated at the lower of cost and fair value. Non-current investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, separately for each individual non-current investments. Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as “Current investments”.
All other investments are classified as “Non-current investments”. Investment in land and buildings that are not intended to be occupied substantially for use by, or in the operations of the company, have been classified as investment property. Investment properties are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation on the building component of the investment property is provided in line with the policy on tangible assets.
2.8 Interests in joint venture

Interests in Jointly controlled entities (incorporated Joint
Venture) are accounted for using proportionate consolidation method. 2.9 Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is computed on a weighted average basis. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale. Finished goods and work-in-progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition.
2.10 Trade receivables and Loans and advances
Trade receivables and Loans and advances are stated after making adequate provisions for doubtful balances.
2.11 Provisions and Contingent liabilities
Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources

Consolidated 159

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the
Balance Sheet date and are not discounted to its present value.
These are reviewed at each year end date and adjusted to reflect the best current estimate.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Group or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.12 Retirement/post retirement benefits

Defined contribution plans
Contributions to defined contribution schemes such as employees’ state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Group’s provident fund contribution, in respect of certain employees, is made to a government administered fund and charged as an expense to the
Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Group has no further defined obligations beyond the monthly contributions.
Defined benefit plans
In respect of certain employees, provident fund contributions are made to a trust administered by the Group. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous
Provisions Act, 1952 and shortfall, if any, shall be made good by the Group. The liability in respect of the shortfall of interest earnings of the Fund is determined on the basis of an actuarial valuation. The Group also provides for retirement/postretirement benefits in the form of gratuity, pensions (in respect of certain employees), compensated absences (in respect of certain employees) and medical. The Group’s liability towards such defined benefit plans is determined based on valuations, as at the Balance Sheet date, made by independent actuaries using the projected unit credit method. Actuarial gains and losses in respect of the defined benefit plans are recognised in the Statement of Profit and Loss in the year in which they arise.
The classification of the Group’s net obligation into current and non-current is as per the actuarial valuation report.

160

Consolidated

Termination benefits
Termination benefits, in the nature of voluntary retirement benefits or termination benefits arising from restructuring, are recognised in the Statement of Profit and Loss when: a) the
Group has a present obligation as a result of past event; b) a reliable estimate can be made of the amount of the obligation; and c) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.
2.13 Income taxes
Tax expense for the year comprises current tax and deferred tax.
Current tax is measured at the amount expected to be paid to
(recovered from) the taxation authorities using the applicable tax rates. Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Group has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date for any write down, as considered appropriate.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
2.14 Foreign currency translations

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.
Forward exchange contracts outstanding as at the year end on account of firm commitment transactions are marked to market and the losses, if any, are recognised in the Statement of Profit and Loss and gains are ignored in accordance with the
Announcement of the Institute of Chartered Accountants of India on ‘Accounting for Derivatives’ issued in March 2008.

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

2.15 Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. The Group is both a lessee and a lessor under such arrangements. Payments and receipts under such leases are charged or credited to the Statement of Profit and Loss on a straight line basis over the primary period of the lease.
2.16 Segment reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Group.
Further,
a) 
Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market based.
b) 
Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the
Group as a whole and are not allocable to segments on a reasonable basis, have been included under “Un-allocated corporate expenses net of un-allocated income”. 2.17 Cash and cash equivalents
In the cash flow statement, cash and cash equivalents include cash in hand, term deposits with banks and other short-term highly liquid investments with original maturities of three months or less.
2.18 Earnings per share

Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented

is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.19 Employee share based payments
Equity settled stock options granted under “HUL ESOP/
Performance Shares Schemes” are accounted for under the intrinsic value method as per the accounting treatment prescribed by Employee Stock Option Scheme and Employee
Stock Purchase Guidelines, 1999, issued by the Securities and
Exchange Board of India and the Guidance Note on Employee
Share-based Payments issued by the Institute of Chartered
Accountants Of India.
2.20 Use of estimates
The preparation of the financial statements in conformity with the generally accepted accounting principles requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. 2.21 Government Grants

Government Grants and subsidies are received and recognised after fulfilling the conditions attached to them. Government grants are of the nature of promoters’ contribution and are credited to Capital Subsidy which is treated as part of Reserves and Surplus.

3) SHARE CAPITAL
As at
31st March, 2015
Authorised
2,25,00,00,000 (March 31, 2014: 2,25,00,00,000) equity shares of Re. 1 each
Issued, subscribed and fully paid up
2,16,34,64,851 (March 31, 2014: 2,16,26,96,292) equity shares of Re. 1 each

As at
31st March, 2014

225.00

225.00

Annual Report 2014-15

216.35

216.27

216.35

216.27

Consolidated

161

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

a)

Reconciliation of the number of shares
As at 31st March, 2015

As at 31st March, 2014

Number of shares

Amount

Number of shares

Amount

2,16,26,96,292
7,68,559
2,16,34,64,851

216.27
0.08
216.35

2,16,24,72,310
2,23,982
2,16,26,96,292

216.25
0.02
216.27

Equity Shares:
Balance as at the beginning of the year
Add : ESOP shares issued during the year
Balance as at the end of the year
b)

Rights, preferences and restrictions attached to shares

Equity shares: The Company has one class of equity shares having a par value of Re. 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing
Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c)

Shares held by holding company and subsidiaries of holding company in aggregate
As at
31st March, 2015

As at
31st March, 2014

111.44

111.44

34.00

34.00

Equity Shares of Re. 1 held by:
1,11,43,70,148 shares (March 31, 2014 : 1,11,43,70,148 shares) held by Unilever PLC,
UK, the holding company
34,00,42,710 shares (March 31, 2014 : 34,00,42,710 shares) held by subsidiaries of the holding company
d)

Details of equity shares held by shareholders holding more than 5% of the aggregate shares in the Company
As at
31st March, 2015
1,11,43,70,148
51.51%

Number of shares
Unilever PLC, UK, the holding company
e)

As at
31st March, 2014
1,11,43,70,148
51.53%

Shares reserved for issue under options
As at 31st March, 2015

As at 31st March, 2014

Amount
0.00

Number of shares
1,85,300

Amount
0.02

3,64,566

0.04

7,93,662

0.08

7,47,221

0.07

6,35,057

0.06

11,34,887

Under 2001 HLL Stock Option Plan: equity shares of Re. 1 each, at an exercise price of Rs. 132.05 per share
Under 2006 HUL Performance Share Scheme: equity shares of Re. 1 each, at an exercise price of Re. 1 per share
Under 2012 HUL Performance Share Scheme: equity shares of Re. 1 each, at an exercise price of Re. 1 per share

Number of shares
23,100

0.11

16,14,019

0.16

For terms and other details Refer Note 44
f)

Aggregate number of shares bought back during 5 years immediately preceding March 31, 2015

No. of equity shares bought back by the company

162

Consolidated

As at
31st March, 2015
2,28,83,204

As at
31st March, 2014
2,28,83,204

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

4) RESERVES AND SURPLUS
As at
31st March, 2015
4.22
6.46

As at
31st March, 2014
4.22
6.46

Capital Reserve
Capital Redemption Reserve
Securities Premium Account
Balance as at the beginning of the year
59.75
55.68
Add: Additions during the year on exercise of employee stock options
21.40
4.07
Balance as at the end of the year
81.15
59.75
Revaluation Reserve
0.67
0.67
Employee Stock Options Outstanding Account
Balance as at the beginning of the year
42.68
38.26
Add: Employee compensation expense for the year (Refer Note 44)
19.41
7.00
Less: Utilised during the year
(19.30)
(2.58)
Balance as at the end of the year
42.79
42.68
Capital Subsidy (Received from Government for eligible projects under its scheme)
6.20
6.20
Export Profit Reserve
Balance as at the beginning of the year
12.26
12.26
Less: Transfer to General Reserve
(12.22)
Balance as at the end of the year
0.04
12.26
Development Allowance Reserve
Balance as at the beginning of the year
0.27
0.27
Less: Transfer to General Reserve
(0.27)
Balance as at the end of the year
0.27
General Reserve
Balance as at the beginning of the year
2,298.30
1,896.17
Add: Transferred from Surplus in Statement of Profit and Loss
402.13
Add: Transfer from Export Profit Reserve
12.22
Add: Transfer from Development Allowance Reserve
0.27
Less: Adjusted for Depreciation (a)
(8.77)
Balance as at the end of the year
2,302.02
2,298.30
Other Reserves (b)
2.51
2.51
(Created on amalgamation of Brooke Bond Lipton India Limited)
Surplus in Statement of Profit and Loss
Balance as at the beginning of the year
887.70
625.82
Add: Profit for the year
4,363.08
3,945.57
Less: Adjusted for Depreciation (a)
(0.14)
Less: Appropriations
Interim dividend on equity shares for the year
(1,298.20)
(1,189.41)
[per share Rs. 6.00 (2013-14: Rs. 5.50 per share)]
Proposed final dividend on equity shares for the year
(1,947.12)
(1,622.02)
[per share Rs. 9.00 (2013-14: Rs. 7.50 per share)]
Dividend distribution tax - net (c)
(646.09)
(470.04)
Dividend distribution tax on Preference shares
(0.09)
Transfer to General Reserve
(402.13)
Balance as at the end of the year
1,359.23
887.70
TOTAL
3,805.29
3,321.02
(a) 
During the year, the Group has adopted estimated useful life of fixed assets as stipulated by Schedule II to the Companies Act,
2013. Accordingly, depreciation of Rs. 8.91 crores (net of deferred tax of Rs. 4.07 crores) on account of assets whose useful life is already exhausted on April 01, 2014 has been adjusted against General reserve and Surplus in statement of Profit and Loss.
(b) Not available for capitalisation/declaration of dividend/share buyback.
(c) 
Dividend Distribution Tax (DDT)-net, pertaining to the current year comprises the DDT on interim and proposed final dividend and the credit in respect of tax paid under section 115 O of the Indian Income-tax Act, 1961 by the Company on dividend received from its domestic subsidiaries during the year.
Annual Report 2014-15

Consolidated 163

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

5) LONG-TERM BORROWINGS
As at
31st March, 2015

As at
31st March, 2014

7.00

8.44

7.00

8.44

Secured
Loan from Bank*
Share of Joint Venture - Refer Note 46

*Loan from bank is repayable in three yearly installments starting from February, 2018; to be secured against assets to be purchased by the joint venture.

6) DEFERRED TAX LIABILITIES (NET)
As at
31st March, 2015

As at
31st March, 2014

0.37

0.22

0.37

0.22

As at
31st March, 2015

As at
31st March, 2014

158.63

119.38

19.61

166.17

178.24

285.55

-

-

178.24

285.55

As at
31st March, 2015

As at
31st March, 2014

Provision for employee benefits (gratuity, pension, medical, compensated absences and others) (Refer Note 43)

524.68

522.98

Provision for income tax (net of advance tax)

131.80

148.62

Other provisions (including for statutory levies etc) - net (Refer Note 14)

337.08

312.09

993.56

983.69

Share of Joint Venture - Refer Note 46

7) OTHER LONG-TERM LIABILITIES

Employee and ex-employee related liabilities
Security deposits
Share of Joint Venture - Refer Note 46

8) LONG-TERM PROVISIONS

Share of Joint Venture - Refer Note 46

164

Consolidated

-

-

993.56

983.69

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

9) SHORT-TERM BORROWINGS
As at
31st March, 2015

As at
31st March, 2014

Unsecured
Short-term Loan from Bank*
Share of Joint Venture - Refer Note 46

36.04

37.14

36.04

37.14

*Loan from bank is repayable in three yearly installments starting from February, 2018; to be secured against assets to be purchased by the joint venture.

10) TRADE PAYABLES
As at
31st March, 2015
Acceptances

As at
31st March, 2014
889.94
4,882.85
5,772.79

54.84

52.07

5,507.31

Share of Joint Venture - Refer Note 46

439.65
5,012.82
5,452.47

Trade payables (Refer Note 11)

5,824.86

11) DUES TO MICRO AND SMALL ENTERPRISES
Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is based on the information available with the Group regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Group. There are no overdue principal amounts/interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years.
.

12) OTHER CURRENT LIABILITIES
As at
31st March, 2015
Unpaid dividends [Refer note (a) below]

As at
31st March, 2014

93.60

85.18

Statutory dues (including provident fund, tax deducted at source and others)

409.07

319.55

Salaries, wages and bonus payable

291.04

277.79

Advance from customers

45.98

36.58

Other payables (VRS, payable for purchase of tangible assets etc.)

98.65

241.42

938.34

960.52

14.43

5.98

952.77

966.50

Share of Joint Venture - Refer Note 46

a)  here are no amounts due for payment to the Investor Education and Protection Fund Under Section 125 of the Companies Act, 2013
T
as at the year end.

Annual Report 2014-15

Consolidated 165

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

13) SHORT-TERM PROVISIONS
As at
31st March, 2015

As at
31st March, 2014

50.88

10.25

Provision for income tax (net of advance tax)

107.58

93.86

Provision for wealth tax (net of advance tax)

6.78

5.74

1,947.12

1,622.02

396.39

275.75

Provision for employee benefits (gratuity, pension, medical, compensated absences and others) (Refer Note 43)

Others

Provision for proposed final dividend (Refer Note 29)

Provision for dividend distribution tax on proposed final dividend

Other provisions (including for restructuring etc.) (Refer Note 14)

Share of Joint Venture - Refer Note 46

199.41

80.15

2,708.16

2,087.77

0.91

0.37

2,709.07

2,088.14

14) MOVEMENT IN OTHER PROVISIONS (SHORT-TERM AND LONG-TERM), REFER NOTES 8 AND 13
As at
31st March, 2015

As at
31st March, 2014

392.24

222.44

-

1.90

Provision/reclassified during the year

176.25

171.06

Amount utilised/reversed/reclassified during the year

(32.00)

(3.16)

Balance at the end of the year

536.49

392.24

Opening Balance
Transfer in through acquisition

Other Provisions (in Short Term and Long Term includes provision for tax disputes, employee related disputes, restructuring and other provisions) It is not practicable for the Group to estimate the timings of cash outflows, if any, in respect of the above, pending resolution.

166

Consolidated

Hindustan Unilever Limited

Annual Report 2014-15
9.31

0.07

76.23
61.17

Net Block
Balance as at March 31, 2014
Balance as at March 31, 2015
1,547.67
1,659.50

1,821.35

1,367.43
221.37
118.68
(79.61)
1,627.87
237.40
(43.92)
-

2,715.86
380.23
173.30
(93.85)
3,175.54
361.64
(56.33)
3,480.85

Plant and equipment 55.81
54.67

53.55

41.00
6.43
0.44
(1.96)
45.91
8.07
(3.73)
3.30

94.01
10.79
0.47
(3.55)
101.72
11.45
(4.95)
108.22

Furniture and Fixtures

0.10
0.07

1.36

1.76
0.01
0.09
(0.41)
1.45
0.01
(0.10)
-

1.86
0.10
(0.41)
1.55
0.00
(0.12)
1.43

Vehicles

44.55
22.13

83.79

52.35
10.17
0.93
(3.64)
59.81
21.26
(6.58)
9.30

99.72
7.66
0.98
(4.00)
104.36
8.73
(7.17)
105.92

Office
Equipment

-

0.01

0.01
0.01
-

0.01
0.01
0.01

-Railway
Slidings

2,613.39
2,679.94

2,291.66

1,708.29
275.22
138.57
(86.70)
2,035.38
303.47
(60.17)
12.98

4,074.42
478.08
219.99
(123.72)
4,648.77
433.87
(111.04)
4,971.60

Total

27.55
37.86

13.89

18.24
4.60
(0.02)
22.82
7.62
(16.55)
-

47.43
3.03
(0.09)
50.37
17.62
(16.24)
51.75

Share in Joint
Venture

2,640.94
2,717.80

2,305.55

1,726.53
279.82
138.57
(86.72)
2,058.20
311.09
(76.72)
12.98

4,121.85
481.11
219.99
(123.81)
4,699.14
451.49
(127.28)
5,023.35

Grand Total

Financial Statements

(d) 
During the year, the Group has adopted estimated useful life of fixed assets as stipulated by Schedule II to the Companies Act, 2013, applicable for accounting periods commencing from April 01, 2014 or re-assessed useful life based on technical evaluation. Accordingly, depreciation of Rs. 12.98 crores on account of assets whose useful life is already exhausted as on April 01, 2014 has been adjusted General Reserve and Profit and Loss.
(e) 
Under the Gudalur Janmam Estates (Abolition and Conversion into Ryotwari) Act, 1969, the right and title to certain leasehold land may be altered at a later date, the nature and effect of which cannot be ascertained at present However, appropriate steps have been taken to protect the Group’s interest. (f) 
Impairment charge of Rs. NIL (March 31, 2014 - Rs. 0.68) on plant and equipment has been included in depreciation charge as the Group’s share of joint venture.
(g) 
Accelerated depreciation of Rs. 3.51 crores (March 31, 2014 - Rs. NIL) on plant and equipment has been included in exceptional items (Refer Note
39) as the Group’s share of joint venture.

NOTES :
(a)  Buildings include Rs. 0.01crores (March 31, 2014 - Rs. 0.01 crores) being the value of shares in co-operative housing societies.
(b)   he title deeds of Freehold Land aggregating Rs. 8.80 crores (March 31, 2014 - Rs. 7.67 crores), acquired on transfer of business/undertakings are in the
T
process of being transferred in the name of the Group.
(c) 
Deletions include Assets held for sale shown under ‘Other current assets’ (Refer Note 26) : Gross block Rs. 1.13 crores (March 31, 2014 - Rs. 3.10 crores),
Accumulated depreciation Rs. 0.08 crores (March 31, 2014 - Rs. 0.69 crores) and Net block Rs.1.05 crores (March 31, 2014 - Rs. 2.41 crores).

845.61
851.03

322.22

235.48
34.38
18.43
(1.08)
287.21
35.84
(1.21)
0.38

1,029.82
62.12
44.02
(3.14)
1,132.82
51.84
(11.41)
1,173.25

Buildings

Others

Reports

43.42
31.37

10.19
2.86
13.05
0.89
(4.63)
-

56.48
(0.01)
56.47
(15.79)
40.68

0.07
0.07
-

76.66
17.28
1.12
(18.76)
76.30
0.21
(15.27)
61.24

- Leasehold

Accumulated Depreciation
Balance as at April 01, 2013
Additions
Transfer in through acquisition
Deletions
Balance as at March 31, 2014
Additions
Deletions
Adjusted with General Reserve and Profit and Loss
Balance as at March 31, 2015

Gross Block
Balance as at April 01, 2013
Additions
Transfer in through acquisition
Deletions
Balance as at March 31, 2014
Additions
Deletions
Balance as at March 31, 2015

- Freehold

Land

(Own assets, unless otherwise stated)

15) TANGIBLE ASSETS

Overview
Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

Consolidated 167

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

16) INTANGIBLE ASSETS

(Acquired, unless otherwise stated)
Goodwill

Brands/
Trademarks

Computer
Software

Total

Gross Block
Balance as at April 01, 2013
Additions
Deletions
Balance as at March 31, 2014
Additions
Deletions
Balance as at March 31, 2015

6.34
6.34
6.34

159.85
159.85
159.85

129.69
2.69
132.38
8.76
(0.05)
141.09

295.88
2.69
298.57
8.76
(0.05)
307.28

Accumulated Depreciation
Balance as at April 01, 2013
Additions
Deletions
Balance as at March 31, 2014
Additions
Deletions
Adjusted with General Reserve and Profit and Loss
Balance as at March 31, 2015

6.34
6.34
6.34

146.35
6.00
152.35
3.75
156.10

107.08
8.68
115.76
7.10
(0.05)
122.81

259.77
14.68
274.45
10.85
(0.05)
285.25

-

7.50
3.75

16.62
18.28

24.12
22.03

Net Block
Balance as at March 31, 2014
Balance as at March 31, 2015

17) NON - CURRENT INVESTMENTS (VALUED AT COST UNLESS OTHERWISE STATED)

Investment Property
Trade Investments
Quoted
Unquoted
Other Investments
Quoted
Unquoted
Aggregate amount of quoted investments
Market value of quoted investments
Aggregate amount of unquoted investments
Aggregate amount of investment property

168

Consolidated

As at
31st March, 2015
-

As at
31st March, 2014
19.45

323.51

36.15
323.70

0.01
0.38
323.90
0.01
0.02
323.89
-

0.01
0.88
380.19
36.16
110.11
324.58
19.45

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

18) DEFERRED TAX ASSETS (NET)
As at
31st March, 2015
Deferred tax assets Provision for post retirement benefits and other employee benefits Provision for doubtful debts and advances Expenses allowable for tax purposes when paid Depreciation Other timing differences
Deferred tax liabilities Depreciation
Share of Joint Venture - Refer Note 46

As at
31st March, 2014

154.23
31.48
139.13
0.51
151.78
477.13

149.55
28.53
115.94
0.64
125.89
420.55

(277.34)
199.79
199.79

(240.78)
179.77
179.77

(a) 
Refer Note 4(a) for utilisation of Deferred Tax of Rs. 4.07 crores (2013-14: Nil) for depreciation on account of assets whose useful life is already exhausted on April 01, 2014 has been adjusted against General Reserve.
(b) Deferred tax balances of the Group have been aggregated on a line by line basis for the like items.

19) LONG-TERM LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated)

Capital advances
Security deposits - Deposits with customs, port trust, excise, and other government authorities - Deposits with others
Advance income tax (net of provision for tax)
Advance agriculture tax (net of provision for tax)
Other loans and advances (includes employee advances, advances for materials etc) - Considered good - Considered doubtful - Less : Provision for doubtful loans and advances
Share of Joint Venture - Refer Note 46

As at
31st March, 2015
9.63

As at
31st March, 2014
11.49

35.21
113.28
376.35
5.09

55.47
116.00
312.58
5.09

7.35
46.60
(46.60)
546.91
40.33
587.24

13.11
50.98
(50.98)
513.74
32.72
546.46

As at
31st March, 2015
0.46
0.46
0.46

As at
31st March, 2014
0.70
0.70
0.70

20) OTHER NON-CURRENT ASSETS

Long term deposits with original maturity of more than twelve months
Share of Joint Venture - Refer Note 46

Annual Report 2014-15

Consolidated 169

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

21) CURRENT INVESTMENTS (with original maturity between 3 months and 12 months)
(At cost or market value, whichever is less)

Share of Joint Venture - Refer Note 46
Aggregate amount of quoted investments
Market value of quoted investments
Aggregate amount of unquoted investments

As at
31st March, 2014
1,707.95
750.00
2,457.95
2,457.95
1,707.95
1,731.33
750.00

As at
31st March, 2015
895.75
132.15
318.19
1,399.82
69.62
2,815.53
33.26
2,848.79

As at
31st March, 2014
950.27
149.41
337.93
1,389.21
81.06
2,907.88
31.95
2,939.83

As at
31st March, 2015

Quoted investments
Unquoted investments

As at
31st March, 2015
1,767.49
933.69
2,701.18
2,701.18
1,767.49
1,792.03
933.69

As at
31st March, 2014

37.01
41.08
78.09

51.66
39.45
91.11

970.81
970.81
(41.08)
1,007.82
3.36
1,011.18

960.33
960.33
(39.45)
1,011.99
4.82
1,016.81

22) INVENTORIES
(At the lower of cost and net realisable value)

Raw materials [includes in transit: Rs. 24.88 crores, (March 31,2014 - Rs. 51.25 crores)]
Packing materials
Work-in-progress
Finished goods [includes in transit: Rs. 29.56 crores, (March 31,2014 - Rs. 51.34 crores)]
Stores and spares
Share of Joint Venture - Refer Note 46
Finished goods include stock-in-trade, as both are stocked together

23) TRADE RECEIVABLES
(Unsecured unless otherwise stated)

Trade receivables outstanding for a period exceeding six months from the date they were due for payment - Considered good - Considered doubtful
Other trade receivables - Considered good - Considered doubtful
Less: Provision for doubtful debts
Share of Joint Venture - Refer Note 46

170

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

24) CASH AND BANK BALANCES
As at
31st March, 2015
Cash and cash equivalents
Cash on hand
Cheques/drafts on hand
Balances with banks In current accounts Term deposits with original maturity of less than three months
Short term, highly liquid investments Treasury bills with original maturity of less than three months
Share of Joint Venture - Refer Note 46
Sub Total - (A)
B. Other bank balances
Term deposit with original maturity of more than three months but less than twelve months [including lien and margin money deposits Rs. 2.08 crores,
(March 31,2014 - Rs. 2.69 crores)]
Long term deposit with maturity of more than three months but less than twelve months from the Balance Sheet date
Unpaid dividend account
Share of Joint Venture - Refer Note 46
Sub Total - (B)
Total (A+B)

As at
31st March, 2014

0.90
0.35

1.71
-

81.33
574.09

64.45
601.17

147.27
8.83
812.77

167.67
10.31
845.31

1,784.07

1,289.16

0.29

296.32

92.30
0.06
1,876.72
2,689.49

85.18
0.06
1,670.72
2,516.03

As at
31st March, 2015
427.50

As at
31st March, 2014
319.07

188.00
27.03
642.53
4.26
646.79

137.26
45.39
501.72
3.15
504.87

A.

25) SHORT-TERM LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated)

Other loans and advances*
Others

CENVAT receivable VAT credit receivable
Share of Joint Venture - Refer Note 46

* Other loans and advances include current account balances with group companies and joint venture amounting to Rs. 51.05 crores
(March 31, 2014 - Rs. 56.24 crores).

Annual Report 2014-15

Consolidated 171

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

26)  THER CURRENT ASSETS
O
(Unsecured, considered good unless otherwise stated)

Share of Joint Venture - Refer Note 46

As at
31st March, 2014
7.55
58.96
12.57
13.56
92.64
0.02
92.66

As at
31st March, 2015

Income accrued on investments
Income accrued on deposits
Export benefits receivable
Tangible assets held for sale (at lower of cost and net realisable value)(Refer Note 15 (c))

As at
31st March, 2015
14.00
33.15
27.89
9.38
84.42
0.25
84.67

As at
31st March, 2014

565.50
61.42
204.12

547.63
81.39
201.48

93.51

85.39

8.20
932.75
58.03

915.89
75.49

27) CONTINGENT LIABILITIES

Claims against the Group not acknowledged as debts
Income tax matters
Sales tax matters - Rs. 40.54 crores (March 31, 2014 - Rs. 53.73 crores) net of tax
Excise duty, service tax and customs duty matters - Rs. 134.74 crores (March 31,
2014 - Rs. 132.99 crores) net of tax
Other matters including claims related to employees/ex-employees, property related demands, etc - Rs. 67.72 crores (March 31, 2014 - Rs. 56.37 crores) net of tax Corporate Guarantee TOTAL
Share of Joint Venture - Refer Note 46

172

(a)  is not practicable for the Group to estimate the timings of cash outflows,
It
if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
(b) 
The Group does not expect any reimbursements in respect of the above contingent liabilities.
(c) 
The Group’s pending litigations comprise of claims against the Group by employees and pertaining to proceedings pending with Income Tax, Excise,
Custom, Sales/VAT tax and other authorities. The Group has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Group does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
(d) 
The Group has given Bank Guarantees in respect of certain matters of above contingent liabilities.

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

28) CAPITAL COMMITMENTS
As at
31st March, 2015
166.78

As at
31st March, 2014
110.00

166.78
0.13
166.91

110.00
0.18
110.18

As at
31st March, 2015

As at
31st March, 2014

1,947.12
Rs. 9.00

1,622.02
Rs. 7.50

Year ended
31st March, 2015

Year ended
31st March, 2014

32,944.20

29,937.44

Income from services rendered to group companies

511.88

479.57

Others (including salon services, export incentives, scrap sales, commission, lease license fee etc.)

260.59

214.73

33,716.67

30,631.74

(1,930.95)

(1,563.41)

31,785.72

29,068.33

186.47

165.41

31,972.19

29,233.74

Estimated value of contracts in capital account remaining to be executed and not provided for (net of capital advances)
Share of Joint Venture - Refer Note 46

29) PROPOSED DIVIDEND

The final dividend proposed for the year is as follows:
On Equity Shares of Re.1 each Amount of dividend proposed Dividend per Equity Share

30) REVENUE FROM OPERATIONS

Sale of products
Other operating revenue

Less: Excise Duty [includes share of Joint Venture Rs. 12.00 crores (2013-14 Rs. 10.22 crores)]
Share of Joint Venture including excise duty - Refer Note 46

Annual Report 2014-15

Consolidated 173

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

31) OTHER INCOME
Year ended
31st March, 2015

Year ended
31st March, 2014

Interest income

From non-current investments

From bank deposits

From others (includes interest on income tax refund)

0.01

-

176.14

222.53

42.11

60.80

24.05

10.38

0.26

4.49

294.93

259.28

26.23

11.22

563.73

568.70

2.92

1.42

566.65

570.12

Dividend income

From current investments

From non-current investments

Net gain on sale of current investments
Miscellaneous income [Refer note (a) below]
Share of Joint Venture - Refer Note 46

(a)  he net difference in foreign exchange (i.e. exchange differences on settlement/restatement of all monetary items and mark to
T
market valuation of outstanding forward contracts on account of firm commitments) Rs. 9.76 crores (2013-14 - Rs. 26.95 crores debited to Statement of Profit and Loss).

32)  OST OF MATERIALS CONSUMED
C

Raw materials consumed
Packing material consumed
Share of Joint Venture - Refer Note 46

Year ended
31st March, 2015
9,850.32
2,609.63
12,459.95
109.26
12,569.21

Year ended
31st March, 2014
9,387.43
2,396.68
11,784.11
105.57
11,889.68

Year ended
31st March, 2015
3,548.02
3,548.02
1.80
3,549.82

Year ended
31st March, 2014
3,150.06
3,150.06
1.57
3,151.63

Cost of materials is based on derived values

33) PURCHASES OF STOCK - IN - TRADE

Purchases of goods
Share of Joint Venture - Refer Note 46

174

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

34) CHANGES IN INVENTORIES OF FINISHED GOODS (INCLUDING STOCK-IN-TRADE) AND WORK-IN-PROGRESS
Year ended
31st March, 2015
Opening inventories Finished goods Work-in-progress Transfer in by way of acquisition
Closing inventories Finished goods Work-in-progress
Excise duty on increase/(decrease) of finished goods
Share of Joint Venture - Refer Note 46

Year ended
31st March, 2014

1,389.21
337.93
-

1,310.72
248.00
9.37

(1,399.82)
(318.19)
51.03
60.16
(3.12)
57.04

(1,389.21)
(337.93)
(10.83)
(169.88)
(1.42)
(171.30)

Year ended
31st March, 2015
1,510.43
62.13
12.46
19.41
106.68
1,711.11
12.76
1,723.87

Year ended
31st March, 2014
1,361.69
90.06
14.22
7.00
90.06
1,563.03
9.63
1,572.66

Year ended
31st March, 2015
0.23
0.02
16.59
16.84
0.86
17.70

Year ended
31st March, 2014
2.49
11.82
24.96
39.27
1.41
40.68

Year ended
31st March, 2015
306.65
10.85
0.78
318.28
4.11
322.39

Year ended
31st March, 2014
275.22
14.68
1.04
290.94
4.60
295.54

35) EMPLOYEE BENEFITS EXPENSES

Salaries, wages, bonus, etc.
Contribution to provident fund and other funds
Gratuity
Expense on employee stock option schemes (Refer Note 44)
Workmen and staff welfare expenses
Share of Joint Venture - Refer Note 46

36) FINANCE COSTS

Interest expense on bank overdraft/short-term and long-term borrowings
Interest on income tax
Interest expense on security deposit
Share of Joint Venture - Refer Note 46

37) DEPRECIATION AND AMORTISATION EXPENSES

Depreciation on tangible assets
Amortisation on intangible assets
Depreciation on investment property
Share of Joint Venture - Refer Note 46

Annual Report 2014-15

Consolidated 175

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

38) OTHER EXPENSES

Consumption of stores & spares
Power, fuel, light and water
Processing charges
Rent [Refer note (a) below]
Repairs to buildings
Repairs to plant and equipment
Repairs others
Insurance
Rates and taxes (excluding income tax)
Advertising and sales promotion
Carriage and freight
Provision/(write back) for doubtful debts and advances (net)
Bad debts/advances written off
Travelling and motor car expenses
(Profit)/Loss on fixed assets sold, scrapped, etc. (net)
Royalty
Miscellaneous expenses [Refer note (a) below]
Share of Joint Venture - Refer Note 46

Year ended
31st March, 2015
141.80
346.97
291.62
219.13
15.08
92.12
14.39
6.66
128.95
3,943.59
1,460.40
(2.12)
13.78
170.99
(1.31)
751.19
1,007.43
8,600.67
57.85
8,658.52

Year ended
31st March, 2014
120.57
362.76
300.08
205.80
13.31
93.72
15.19
7.95
132.90
3,674.66
1,354.64
(20.43)
22.77
197.97
13.34
543.50
945.79
7,984.52
60.88
8,045.40

(a) 
The group’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godown etc.) and computers. These leasing arrangements which are not non-cancellable (other than specified in note below), range between 11 months and 10 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms.
The aggregate lease rentals payable are charged as rent in the statement of Profit and Loss. 
The group has also given certain land and building on operating lease to a third party which has been disposed during the year.
The lease arrangement was for a period of 5 years, including a non-cancellable term of 3 years. The license fee of Rs. 26.22 crores
(2013-14 - Rs. 33.79 crores) on such lease is included in other operating revenue.

With respect to non-cancellable period of the operating lease, the future minimum lease license fee receivable is as follows:

Not later than one year
Later than one year and not later than five years

Year ended
31st March, 2015
1.00
0.95

Year ended
31st March, 2014
31.49
0.97


The group has entered into agreement to take certain land and building on operating lease for warehousing activities from a third party during the year. The lease arrangement is for 10 years, including a non-cancellable term of 9 years.The lease rent of
Rs. 6.26 crores (2013-14- Rs. Nil) on such lease is included in Rent (Refer Note 38).

Not later than one year
Later than one year and not later than five years
Later than five years

176

Consolidated

Year ended
31st March, 2015
11.40
50.96
52.60

Year ended
31st March, 2014
-

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

(b) 
Other expenses include Rs. 88.13 crores spent towards various schemes of Corporate Social Responsibility as prescribed under
Section 135 of the Companies Act, 2013.

39) EXCEPTIONAL ITEMS
Year ended
31st March, 2015

Year ended
31st March, 2014
198.37

i)

Profit on disposal of surplus properties

510.51

ii)

Profit on disposal of subsidiary

181.16

-

iii)

Reduction in liability for retirement benefits arising from actuarial assumption changes 5.23

51.07

696.90

249.44

Total exceptional income (A) iv) Restructuring costs :
a) Compensation under voluntary separation schemes

-

-

(14.17)

(13.83)

Total exceptional expenditure (B)

(14.17)

(13.83)

Exceptional items (net) (A+B)

682.73

235.61

b) Other costs

Share of Joint Venture - Refer Note 46

(3.51)

-

679.22

235.61

*Group’s share of joint venture in exceptional items represents accelerated depreciation of Rs. 3.51 crores (March 31, 2014 - Rs. NIL) on plant and equipment [Refer note 15(g)].

40) CURRENT TAX
Year ended
31st March, 2015

(175.20)
1,228.24

-

1,228.24

Year ended
31st March, 2015

Year ended
31st March, 2014

(19.61)

13.66

3.65

18.23

(15.96)

Share of Joint Venture - Refer Note 46

1,403.44

30.78

1,959.81

Adjustments/(credits) related to previous year - (net)

1,929.03
1,959.81

Income tax for the year

Year ended
31st March, 2014

31.89

41) DEFERRED TAX

Deferred tax for the year - (credit)/charge
Adjustments/(credits) related to previous year - (net)
Share of Joint Venture - Refer Note 46

(0.69)

(15.81)

Annual Report 2014-15

0.15

31.20

Consolidated 177

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

42) EARNINGS PER SHARE
For the year ended
31st March, 2015

For the year ended
31st March, 2014

Earnings Per Share has been computed as under:
Profit for the year (Rs. crores)

43,63.08

3,945.57

2,16,31,11,502

Weighted average number of Equity shares outstanding

2,16,25,58,113

Earnings Per Share (Rs.) - Basic (Face value of Re. 1 per share)

Rs. 20.17

Rs. 18.24

Add: Weighted average number of potential equity shares on account of employee stock options/ performance share schemes

11,63,349

13,21,344

Weighted average number of Equity shares (including dilutive shares) outstanding

2,16,42,74,851

2,16,38,79,457

Rs. 20.16

Rs. 18.23

Earnings Per Share (Rs.) - Diluted (Face value of Re. 1 per share)

43) DEFINED BENEFIT PLANS 
Gratuity is funded through investment mostly with an insurance service provider and partly through direct investment under Hind
Lever Gratuity Fund. Pension for most employees are managed through a trust, investments with an insurance service provider and for some employees investments are managed through Company managed trust. Post-retirement medical benefits are managed through investment made under company managed trust. 
Provident Fund for most of the employees are managed through trust investments and for some employees through government administered fund.  per Actuarial Valuation as on March 31, 2015 and as recognised in the financial statements in respect of Employee Benefit
As
Schemes:
Gratuity

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

2015
I

Components of Employer Expense
(a) Current Service Cost
(b) Interest Cost
(c) Expected Return on Plan Assets
(d) Actuarial (Gain)/Loss
(e) Total expense/ (gain) recognised in the Statement of Profit and Loss
Net Asset/ (Liability) recognised in
Balance Sheet as at March 31, 2015
(a) Present Value of Obligation as at
March 31, 2015
(b) Fair Value of Plan Assets as at
March 31, 2015
(c) (Asset)/ Liability recognised in the
Balance Sheet (Refer note *, $ and
@ below)

II

Notes:
#
*

178

2014

2015

204

2015

2014

2015

2014

2015

2014

9.69
15.23
(12.46)
27.58
40.04

11.09
13.90
(10.77)
(13.37)
0.85

5.40
38.30
(6.82)
(1.02)
35.86

5.83
34.03
(6.58)
0.23
33.51

0.48
1.16
(4.18)
(0.23)
(2.77)

0.53
1.17
(4.14)
(3.06)
(5.50)

55.50
112.80
(114.70)
1.90
55.50

51.40
89.80
(103.40)
13.60
51.40

0.51
14.14
(33.31)
(18.66)

0.61
14.48
(32.00)
(16.91)

204.16

169.22

464.94

442.00

11.68

13.78

1,448.60

1,275.90

136.61

162.57

(163.33)

(168.37)

(94.38)

(95.73)

(49.91)

(57.76)

(1,448.60)

(1,275.90)

-

-

40.83

0.85

370.56

346.27

-*

-*

-

-

136.61

162.57

Refer footnote at the bottom of Note 43
The excess of assets over liabilities in respect of Officer’s Pension have not been recognised as they are lying in an Income
Tax approved irrevocable trust fund

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

43) DEFINED BENEFIT PLANS (CONTD.)
Gratuity

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

2015
@

III

Refer note 14’(c) of standalone financial statement in respect of the Company’s investment in Hindustan Unilever Limited
Securitisation of Retirement Benefit Trust covering management pension and post retirement medical benefits
Change in Defined Benefit Obligations
(DBO) during the year ended as on
March 31, 2015
(a) Present Value of Obligation as at
March 31, 2014
(b) Current Service Cost
(c) Interest Cost
(d) Settlement Cost/(Credit)
(e) Acquisition Adjustment

2014

2015

204

2015

2014

2015

2014

2015

2014

169.22

170.80

442.00

435.62

13.78

15.69

1,275.90

1,145.40

162.57

184.56

10.48$
15.23
-

11.09
13.90
-

5.40
38.30
-

5.83
34.03
-

0.48
1.16
(1.02)
-

0.53
1.17
(0.02)
-

55.50
112.80
(0.40)
-

51.40
89.80
5.70

0.51
14.14
-

0.61
14.48
-

-

-

-

-

-

-

113.50

107.20

-

(32.00)

(f)

Employees’ Contribution

(g)

Actuarial (Gain)/Loss

30.00

(8.63)

(0.06)

0.68

(0.27)

(1.89)

4.40

9.90

(33.31)

(h)

Benefits Paid

(20.77)

(17.94)

(20.70)

(34.16)

(2.45)

(1.70)

(113.10)

(133.50)

(7.30)

(5.08)

(i)

Present Value of Obligation as at
March 31, 2015

204.16

169.22

464.94

442.00

11.68

13.78

1,448.60

1,275.90

136.61

162.57

168.37

148.69

95.73

95.98

57.76

59.89

1,275.90

1,145.40

-

-

$

Includes an amount of Rs. 0.79 crores
(2013-14: Nil) towards cost borne by a fellow subsidiary.

IV

Changes in the Fair value of Plan Assets
(a)

Present Value of Plan Assets as at
March 31, 2014

(b)

Acquisition Adjustment

(c)

Expected Return on Plan Assets

(d)

Actuarial Gain/(Loss)

(e)

Assets distributed on settlements

(f)

Employer’s Contribution

(g)

Employees’ Contribution

-

-

-

-

-

-

113.50

107.20

-

-

(h)

Benefits Paid

(20.77)

(17.94)

(20.70)

(34.16)

(2.45)

(1.70)

(113.10)

(133.50)

(7.30)

(5.08)

(i)

Fair Value of Plan Assets as at
March 31, 2015

163.33

168.37

94.38

95.73

49.91

57.76

1,448.60

1,275.90

-

-

14.88

15.51

7.78

7.01

4.13

5.31

117.20

99.70

-

-

V

Actual return on Plan Assets

VI

-

-

-

-

-

-

-

5.70

-

-

12.46

10.77

6.82

6.58

4.18

4.14

114.70

103.40

-

-

2.42

4.74

0.96

0.44

(0.05)

1.17

2.50

(3.70)

-

-

-

-

-

-

(5.53)

(0.02)

(0.40)

-

-

-

0.85

22.11

11.57

26.89

(4.00)

(5.72)

55.50

51.40

7.30

5.08

Actuarial Assumptions
Financial Assumptions:
(a)

Discount Rate (per annum)

7.90%

8.85%

7.90%

8.85%

7.90%

8.85%

7.90%

8.85%

7.90%

8.85%

(b)

Expected Rate of Return on Assets
(per annum)

7.30%

7.30%

7.10%

7.10%

7.40%

7.40%

8.88%

8.80%

N.A.

N.A.

Annual Report 2014-15

Consolidated 179

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

43) DEFINED BENEFIT PLANS (CONTD.)
Gratuity

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

2015
(c)

Annual Increase in Healthcare Costs
(per annum)

2014

2015

204

2015

2014

2015

2014

2015

2014

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

9.00%

12.00%

1.50

2.23

17.97

23.55

(1.32)

(1.84)

(15.91)

(19.46)

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Demographic Assumptions:
Mortality in Service : Indian Assured Lives
Mortality (2006-08) Ultimate table
Mortality in Retirement : LIC Buy-out
Annuity Rates & UK Published PA (90)
Annuity Rates suitably adjusted for Indian
Lives.
VII

Effect of Increase or Decrease in
Healthcare Costs
Effect of 1% increase in Healthcare Costs on
-  aggregate of service cost and
The
interest cost
- Defined Benefit Obligation
Effect of 1% decrease in Healthcare Costs on
- The aggregate of service cost and interest cost
- Defined Benefit Obligation

VIII

Percentage of each Category of Plan
Assets to total Fair Value of Plan Assets as at March 31, 2015
(a)
(b)
(c)

IX

180

Government of India Securities
Corporate Bonds
Bank Deposits (Special Deposit
Scheme, 1975)
(d) Administered by Life Insurance
Corporation of India
(e) Others
Expected Employers contribution for the next year

Consolidated

9.00%
7.00%
-

8.00%
7.00%
-

84.00%

85.00%

40.83

20.00

-

-

100.00% 100.00%
40.00

30.00

-

43.00%
40.00%
14.00%

44.00%
37.00%
16.00%

-

-

100.00% 100.00%

-

-

-

-

-

3.00%
60.00

3.00%
57.60

7.33

6.69

-

-

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

43) DEFINED BENEFIT PLANS (CONTD.)
Gratuity
X

i)

Present value of DBO, Fair Value of Plan Assets, Deficit/
(Surplus), Experience Adjustments for current and earlier periods:
For the year ended March 31, 2015
Present value of DBO
Fair value of plan assets
Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets
For the year ended March 31, 2014
Present value of DBO
Fair value of plan assets
Deficit/(Surplus)

Management
Pension

Officers Pension

Provident Fund #

Post Retirement
Medical Benefits

iii)

iv)

v)

464.94
94.38
370.56
(8.03)
0.96

11.68
49.91
(38.23)
(0.71)
(0.05)

1,448.60
1,448.60
4.40
2.50

136.61
136.61
2.68
-

169.22
168.37
0.85

442.00
95.73
346.27

13.78
57.76
(43.97)

1,275.90
1,275.90
-

162.57
162.57

7.56
4.74

8.66
0.44

(1.35)
1.17

9.90
(3.70)

(10.15)
-

170.80
148.69

435.62
95.98

15.70
59.89

1,145.40
1,145.40

184.56
-

22.11
7.02
2.92

339.64
(14.41)
3.91

(44.19)
2.08
1.85

12.30
5.10

184.56
(8.62)
-

149.80
132.55

427.84
91.86

15.90
62.19

181.54
-

Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets
For the period ended March 31, 2011

17.25
7.24
0.21

335.98
2.25
4.65

(46.29)
2.47
0.68

181.54
1.87
-

Present value of DBO
Fair value of plan assets
Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets

ii)

204.16
163.33
40.83
9.19
2.42

134.12
126.28
7.84
5.35
2.79

436.45
103.93
332.52
(30.41)
3.18

19.07
64.84
(45.77)
5.62
1.68

170.35
170.35
2.18
-

Experience adjustments on plan liabilities
Experience adjustments on plan assets
For the year ended March 31, 2013
Present value of DBO
Fair value of plan assets
Deficit/(Surplus)
Experience adjustments on plan liabilities
Experience adjustments on plan assets
For the year ended March 31, 2012
Present value of DBO
Fair value of plan assets

Annual Report 2014-15

Consolidated 181

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

43) DEFINED BENEFIT PLANS (CONTD.)
XI

Share of Joint Venture (Refer Note 46)

i)

Components of Employer Expense
(a) Current Service Cost
(b) Interest Cost
(c) Expected Return on Plan Assets
(d) Actuarial (Gain)/Loss
(e) Total expense/(gain) recognised in the Statement of Profit and Loss
Net Asset/(Liability) recognised in Balance Sheet as at March 31, 2015
(a) Present Value of Obligation as at March 31, 2015
(b) Fair Value of Plan Assets as at March 31, 2015
(c) (Asset)/Liability recognised in the Balance Sheet
Change in Defined Benefit Obligations (DBO) during the year ended as on March 31, 2015
(a) Present Value of Obligation as at March 31, 2014
(b) Current Service Cost
(c) Interest Cost
(d) Settlement Cost/(Credit)
(e) Acquisition Adjustment
(f) Employees' Contribution
(g) Actuarial (Gain)/Loss
(h) Benefits Paid
(i) Present Value of Obligation as at March 31, 2015

ii)

iii)

iv)

v)

Changes in the Fair value of Plan Assets
(a) Present Value of Plan Assets as at March 31, 2014
(b) Acquisition Adjustment
(c) Expected Return on Plan Assets
(d) Actuarial Gain/(Loss)
(e) Assets distributed on settlements
(f) Employer's Contribution
(g) Employees' Contribution
(h) Benefits Paid
(i) Fair Value of Plan Assets as at March 31, 2015

Gratuity
2015

2014

0.18
0.07
(0.06)
0.30
0.49

0.11
0.06
(0.05)
(0.09)
0.03

1.30
(0.70)
0.60

0.83
(0.48)
0.34

0.83
0.18
0.07
(0.00)
0.33
(0.10)
1.30

0.77
0.11
0.06
(0.10)
(0.01)
0.83

0.68
0.06
0.03
(0.00)
0.05
(0.10)
0.70

0.43
0.05
0.01
0.48

7.80%

9.10%

8.75%

9.15%

Actuarial Assumptions
Financial Assumptions:
(a) Discount Rate (per annum)
(b)

Expected Rate of Return on Assets (per annum)

The Guidance Note on Implementing AS 15, ‘Employee Benefits’ issued by the Accounting Standard Board (ASB) of the Institute of
Chartered Accountants of India states that Provident Funds set up by employers that guarantee a specified rate of return and which require interest shortfall to be met by the employer would be defined benefit plans in accordance with the requirements of paragraph 26(b) of AS
15. The year 2012-13 was the first year in which the actuary had given the detailed disclosures in the actuarial valuation report, in view of the issuance of the Guidance Note by the Institute of Actuaries of India. Accordingly the compliance with the disclosure requirements of paragraph 120(n) of AS 15: Employee Benefits in respect of Provident Fund has been done prospectively from 2012-13.

182

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

44) EMPLOYEE STOCK OPTION PLAN
The Group implemented ‘2001 HLL Stock Option Plan’ on 22nd June, 2001. The plan envisaged grant of share options to eligible employees at market price as defined in SEBI (Employee Stock Option Scheme And Employee Stock Purchase Scheme) Guidelines, 1999.
This plan was amended and revised vide ‘2006 HLL Performance Share Scheme’ on 29th May, 2006. This scheme provided for conditional grant of Performance Shares at nominal value to eligible management employees as determined by the Compensation Committee of the
Board of Directors from time to time, at the end of 3-year performance period. The performance measures under this scheme include group underlying sales growth and free cash flow. The scheme also provided for ‘Par’ Awards for the managers at different work levels.
The 2006 scheme was further amended and revised vide ‘2012 HUL Performance Share Scheme’ on 23rd July, 2012. This scheme provided for conditional grant of Performance Shares at nominal value to eligible management employees as determined by the Nomination and Remuneration Committee of the Board of Directors from time to time, at the end of 3-year performance period. The performance measures under this scheme include group underlying sales growth, core operating margin improvement and operating cash flow.
The number of shares allocated for allotment under the 2006 and 2012 Performance Share Schemes is 2,00,00,000 (two crores) equity shares of Re. 1/- each. The schemes are monitored and supervised by the Nomination and Remuneration Committee of the
Board of Directors in compliance with the provisions of SEBI (Employee Stock Option Scheme And Employee Stock Purchase Scheme)
Guidelines, 1999 and amendments thereof from time to time.
Scheme

2001 HLL Stock Option
Plan
2006 HLL Performance
Share Scheme

2012 HUL Performance
Share Scheme

Annual Report 2014-15

Year

Date of Grant

2004
2005

30-Jun-04
27-May-05

2009
Interim PSP 2009
2010
Interim PSP 2010
2011
Interim PSP 2011
2012
Interim PSP 2012
2013
Interim PSP 2013
2014
Interim PSP 2014
2015

11-May-09
06-Nov-09
29-Mar-10
05-Nov-10
29-Mar-11
07-Nov-11
17-Feb-12
30-Jul-12
18-Mar-13
29-Jul-13
14-Feb-14
28-Jul-14
13-Feb-15

Numbers of options granted

Vesting
Conditions

16,30,450 Vested after
15,47,700 three years from date of grant 3,33,811 Vested after
4,920 three years from date of grant
2,71,113
51,455
3,08,455
47,118
4,20,080
51,385
3,68,023 Vested after
25,418 three years from date of
2,62,155
grant
16,805
1,42,038

Exercise Period

Exercise Price
(INR) per share

Weighted
Average
Exercise Price
(INR) per share

7 years from date of vesting

128.47
132.05

128.47
132.05

3 months from date of vesting

1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00

1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00

3 months from date of vesting

Consolidated 183

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

44) EMPLOYEE STOCK OPTION PLAN (CONTD.)
Number of Share Options
Scheme

Year

Outstanding at the beginning of the year

Granted during the year *

Forfeited/
Expired during the year

Exercised during the year

Exercisable at the end of the year Outstanding at the end of the year 2001 HLL Stock Option
Plan

2004

68,900
(1,36,000)
1,16,400
(1,65,300)
-

-

-

68,900
(67,100)
93,300
(48,900)
-

(68,900)
23,100
(1,16,400)
-

(68,900)
23,100
(1,16,400)
-

(59,137)

-

-

(59,137)

-

-

-

-

-

-

-

-

(45,283)

(7,473)

(3,911)

(48,845)

-

-

2005

2006 HUL Performance
Share Scheme

2010

Interim PSP 2010
2011
Interim PSP 2011

3,50,503

-

-

3,50,503

-

-

(2,57,869)

(1,11,151)

(18,517)

-

(3,50,503)

(3,50,503)

2012

41,282

18,507

-

59,789

-

-

(43,818)

-

(2,536)

-

-

(41,282)

Interim PSP 2012

3,59,170

1,61,526

-

1,96,067

-

3,24,629

(3,88,942)

-

(29,772)

-

-

(3,59,170)

2012 HUL Performance
Share Scheme

2013
Interim PSP 2013
2014
Interim PSP 2014
2015

42,707

-

2,770

-

-

39,937

(51,385)

-

(8,678)

-

-

(42,707)

3,47,484
(3,68,023)
25,418
2,62,155

(25,418)
(2,62,155)
16,805
1,42,038

28,232
(20,539)
18,447

-

-

3,19,252
(3,47,484)
25,418
(25,418)
243,708
(2,62,155)
16,805
1,42,038

-

-

-

* Granted during the year includes additional shares granted upon meeting the vesting conditions.

(figures in bracket pertain to 2013-14)
The Group has adopted the intrinsic value method as permitted by the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share Based
Payment issued by the Institute of Chartered Accountants of India in respect of stock options granted. The value of the underlying shares has been determined by an independent valuer.
The Employee Stock Option Plan includes employees of Hindustan Unilever Limited, its subsidiaries and a subsidiary of parent
Company.
The Group’s profit for the year and earnings per share would have been as under, had the compensation cost for Employees’ Stock
Options been recognized based on the fair value at the date of grant in accordance with Black Scholes model.

184 Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

44) EMPLOYEE STOCK OPTION PLAN (CONTD.)
31st March, 2015

31st March, 2014

Profit for the year

4,363.08

3,945.58

Add: Reduction in employee compensation cost based on fair value
Profit for the year as per fair value method
Basic Earnings Per Share (EPS)
Weighted average number of equity shares
Basic EPS as reported (in Rs.) (Refer Note 42)
Proforma Basic EPS (in Rs.)
Diluted Earnings Per Share (EPS)
Weighted average number of equity shares (including dilutive ESOP shares)
Diluted EPS as reported (in Rs.) (Refer Note 42)
Proforma Diluted EPS (in Rs.)
Weighted average equity share price at the date of exercise of options (in Rs.)
Weighted average remaining contractual life of options (in years)

2.87
4,365.96

1.03
3,946.61

2,16,31,11,502
20.17
20.18

2,16,25,58,113
18.24
18.25

2,16,42,74,851
20.16
20.17
696.07
1.34

2,16,38,79,457
18.23
18.24
588.46
1.43

Year ended
31st March, 2015

Year ended
31st March, 2014

7.86%
3.125
25.44%
1.51%

8.85%
3.125
25.56%
2.06%

The following assumptions were used for calculation of fair value of grants:

Risk-free interest rate (%)
Expected life of options (years) [(year to vesting + contractual option term)/2]
Expected volatility (%)
Dividend yield

The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. Volatility calculation is based on historical stock prices using standard deviation of daily change in stock price. The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date.
Effect of share-based payment plan on the Statement of Profit and Loss:
Year ended
31st March, 2015
Expense arising from employee share-based payment plan

Annual Report 2014-15

Year ended
31st March, 2014

19.41

7.00

Consolidated 185

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

45) DERIVATIVE INSTRUMENTS
a)

The Group uses forward exchange contracts to hedge against its foreign currency exposures relating to the firm commitments.
The Group does not enter into any derivative instruments for trading or speculative purposes. The forward exchange contracts outstanding as at March 31, 2015 are as under:

Currency exchange

GBP/
INR

EUR/
INR

USD/
INR

SEK/
INR

CAD/
INR

EUR/
USD

GBP/
USD

SGD/
INR

CAD/
USD

AUD/
INR

i)

Number of ‘buy’ contracts

ii)

Aggregate “buy” foreign currency amount (crores)

7.08
(1.01)
0.22
(0.02)
0.04
(0.02)
0.07
(0.05)

42.02
(26.07)
2.69
(1.78)
0.16
(0.13)
0.52
(0.45)

39.06
(76.01)
5.23
(5.64)
1.58
(3.70)
3.66
(5.17)

10.00
(4.00)
1.78
(0.97)
-

2.00
0.12
(0.01)
(0.02)

(4.00)
(0.23)
(0.04)
(0.19)

(2.00)
(0.04)
(0.01)
(0.04)

9.00
(1.00)
0.18
(0.02)
-

(0.01)
(0.01)

0.01
0.01
0.08
(0.05)
0.09
(0.10)

iii) Number of ‘sell’ contracts iv) Aggregate “sell” foreign currency amount (crores)

(figures in bracket pertain to 2013-14)
b)

The foreign currency exposures not hedged in respect of trade receivables as at the year end are as under:

Currency exchange
Unhedged exposure in currency (crores)

GBP

EUR

USD

SEK

SGD

JPY

THB

CAD

CHF

AUD

0.01
(0.05)

0.07
(0.12)

0.02
(0.16)

0.05
(0.09)

0.01
(0.02)

0.10
-

0.02
-

0.00
(0.00)

0.00
-

0.02
(0.00)

(figures in bracket pertain to 2013-14)
c)

Mark-to-Market losses
Year ended
31st March, 2015
36.60

Mark-to-market losses provided for

Year ended
31st March, 2014
18.67

46) INTEREST IN JOINT VENTURE
The Company has the following investment, in a jointly controlled entity:
Name of the Entity

Kimberly Clark Lever Private Limited

186

Consolidated

Country of
Incorporation

Percentage of ownership interest, as at 31st March, 2015

Percentage of ownership interest, as at 31st March, 2014

India

50%

50%

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

46) SHARE IN JOINT VENTURE (CONTD.)
The Group’s share of each of the assets, liabilities, income, expenses, etc. (each without elimination of the effect of transactions between the Group and the Joint Venture) related to its interests in this joint venture, based on the audited financial statement are:
As at
31st March, 2015
ASSETS
Fixed Assets (including capital work-in-progress)
Long-term loans and advances
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
(b) LIABILITIES
Long-term borrowings*
Deferred tax liability (net)
Long-term provisions
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
* Long-term borrowings representing loan from bank repayable in three yearly installments starting from February, 2018; to be secured against assets to be purchased by the joint venture.
(c) INCOME
(d) EXPENSES
(e) OTHER MATTERS
Contingent liabilities
Capital commitments

As at
31st March, 2014

43.57
40.33
33.26
3.36
8.89
4.26
0.25

28.82
32.72
31.95
4.82
10.37
3.15
0.02

7.00
0.37
36.04
54.84
14.43
0.91

8.44
0.22
37.14
52.07
5.98
0.37

177.39
180.01

156.61
182.46

58.03
0.13

75.49
0.18

(a)

47) The Group has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Group has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.

48) PREVIOUS YEAR FIGURES
Previous year’s figures have been regrouped/restated wherever necessary to conform with this year’s classification. Previous year’s financial statements were audited by a firm of Chartered Accountants other than B S R & Co. LLP.

Annual Report 2014-15

Consolidated 187

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

49) RELATED PARTY DISCLOSURES
A.

Enterprises where control exists
(i) Holding Company

:

Unilever PLC

:

Brooke Bond Assam Estates Limited
Brooke Bond Group Limited
Brooke Bond South India Estates Limited
Conopco, Inc.
Corporativo Unilever De Mexico, S.De R.L. De C.V. (Merged)
Elida Nepal (Pvt) Ltd.
Glidat Strauss Limited
Lever International Marine Supplies (LIMS) BV
Lipton Soft Drinks Ireland
Mascolo Brothers Limited
OOO Unilever Russia
P.T. Unilever Indonesia, Tbk.
Tigi Holdings Limited
Tigi Linea International B.V.
Tigi Liniea, LP
UL Research & Development Vlaard
Unilever Algerie Spa
Unilever Andina Colombia Ltd
Unilever Ascc AG
Unilever Asia Private Limited
Unilever Australasia
Unilever Australia Limited
Unilever Australia Trading Limited
Unilever Bangladesh Limited
Unilever Brasil Limited
Unilever Business And Marketing Support AG
Unilever Canada INC
Unilever Canada-Food Solutions
Unilever Chile S.A.
Unilever Chile Home And Personal Care Limitada
Unilever China Limited
Unilever Cote D'ivoire
Unilever De Argentina SA
Unilever De Mexico S De RL
Unilever Employment Services B.V.
Unilever Europe IT Services

B. 
Other Related Parties with whom the Group had transactions during the year

(i) Fellow Subsidiaries

188

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

49) RELATED PARTY DISCLOSURES (CONTD.)
(i) Fellow Subsidiaries (Contd.)

Annual Report 2014-15

Unilever Gulf Free Zone Establishment, Arabia
Unilever Hong Kong Limited
Unilever Industries Private Limited
Unilever Iran (Private Joint Stock Company)
Unilever Israel Marketing Limited
Unilever Europe Business Center BV
Unilever Italy Holdings Srl
Unilever Japan
Unilever Kenya Ltd
Unilever Korea
Unilever Lipton Ceylon Limited
Unilever Maghreb Exports SA,Tunisia
Unilever (Malaysia) Holdings Sdn Bhd
Unilever Market Development (pty) Limited
Unilever Mashreq International Company
Unilever N.V.
Unilever Nigeria Plc.
Unilever Overseas Holdings AG
Unilever Overseas Holdings BV
Unilever Pakistan Limited
Unilever Philippines , Inc.
Unilever Research and Development Vlaardingen B.V.
Unilever Sanayi ve Ticaret Türk A.S.
Unilever Singapore PTE LTD
Unilever SNG
Unilever South Africa (Pty) Limited
Unilever South Central Europe S.R.L
Unilever Sri Lanka Limited
Unilever Supply Chain Company AG
Unilever Taiwan Limited
Unilever Thai Services Limited
Unilever Thai Trading Limited
Unilever Trading LLC
Unilever U.K. Central Resources Limited
Unilever UK & CN Holdings Limited
Unilever United States, Inc.
Unilever Ventures India Advisory Private Ltd
Unilever Vietnam International Company Limited
Unilever Zimbabwe (Pvt) Limited
Walls (China) Co. Limited
Unilever Andina Ecuador
Toni&Guy Product Limited

Consolidated 189

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

49) RELATED PARTY DISCLOSURES (CONTD.)
Unilever Belgium BVBA
Unilever Technology Ventures Advisory Company LLC
Unilever Iran
USUP Spolka z ograniczona odpo
Unilever UK Limited
Unilever Japan BEV
Unilever South East Africa - Z
Binzagr Unilever Ltd
AL Gurg Lever LLC
Severn Gulf FZE
Unilever Korea Chusik Hoesa
Unilever Mashreq - Personal Care
(ii) Joint Ventures

:

Kimberly Clark Lever Private Limited
Aquagel Chemicals (Bhavnagar) Pvt. Ltd.
Hitech Surfactants Pvt Ltd
Comfund Financial Services India Limited
Hindustan Field Services Private Limited (up to March 10, 2015)

(iii) Associate

(iv) Key Management Personnel

:

BP Biddappa
Dev Bajpai
Geetu Verma
Hemant Bakshi
Manish Tiwary (up to November 30, 2014)
Nitin Paranjpe (up to October 09, 2013)
PB Balaji (with effect from July 01, 2014)
Pradeep Banerjee
Priya Nair (with effect from October 01, 2014)
Punit Misra (with effect from November 01, 2014)
Sanjiv Mehta
Samir Singh (with effect from October 01, 2014)
Sridhar Ramamurthy (up to June 30, 2014)

(v) Other (Non Executive Chairman)

:

Harish Manwani

(vi) Employees’ Benefit Plans where there is significant

influence

:

Hind Lever Gratuity Fund
The Hind Lever Pension Fund
The Union Provident Fund

(vii) Controlled Entity (Sec. 8 Companies Act, 2013)

:

Bhavishya Alliance Child Nutrition Initiatives (100%) (with effect from March 12, 2015)
Hindustan Unilever Foundation (76%)

190

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

49) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure of transactions between the Group and Related Parties and the status of outstanding balances as on 31st March, 2015 For the year ended
For the year ended
31st March, 2015
31st March, 2014
Holding Company
: Dividend paid
1,504.40
1,089.79
Royalty expense
728.28
537.92
Income from services rendered
484.05
447.04
Outstanding as at the year end:
- Trade Payables
137.37
104.09
Fellow Subsidiaries

:

Sale of finished goods/raw materials etc
Purchased of fixed assets
Purchase of finished goods/raw materials etc
Rent income
Sale of fixed assets
Income from services rendered
Management fees paid
Dividend paid
Royalty expense
Expenses shared by fellow subsidiaries
Maintenance and support costs for licences and software Reimbursements paid
Reimbursements received
Inter corporate loans given during the year
Inter corporate loans repaid during the year
Interest income

661.46
0.48
332.35
1.10
0.62
27.84
1.73
459.06
8.61
3.86
6.09

731.54
334.98
1.10
0.28
32.53
1.95
391.05
5.58
4.35
4.54

66.67
21.43
-

26.53
34.51
104.15
105.55
0.22

35.14

43.62

138.68
76.52

136.53
106.94

Purchase of finished goods/raw materials etc.
Reimbursements received
Investment in equity shares
Outstanding as at the year end :
-  urrent account balances receivable with joint
C
ventures
- Trade payables

183.93
40.42
22.52

184.67
41.49
-

15.92

12.54

1.19

2.92

Processing charges
Expense for business support services
Dividend Income
Purchase of finished goods/raw materials etc.
Rent income
Reimbursement of expenses
Outstanding as at the year end :
- Trade payables

10.12
318.60
0.26
9.33
0.98
0.28

7.95
309.40
0.66
13.02
0.88
0.25

1.23

1.99

Outstanding as at the year end:
-  urrent account balances receivable with fellow
C
subsidiaries
- Trade receivables
- Trade payables
Joint Venture
(to the extent not consolidated) Associate

Annual Report 2014-15

:

Consolidated 191

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

49) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure of transactions between the Group and Related Parties and the status of outstanding balances as on 31st March, 2015

Key Management Personnel :

Other (Non Executive
Chairman)
Employees’ Benefit Plans where there is significant influence Controlled Entity
(Sec. 8 Companies Act, 2013)

:

:

For the year ended
31st March, 2015
71.68
0.46
0.39

For the year ended
31st March, 2014
39.91
0.45
0.26

0.01

0.03

Contributions during the year
Outstanding as at the year end :
-  dvances recoverable in cash or kind or for value
A
to be received
- Payables

38.15

64.86

-

4.06

1.36

-

Contribution to foundation

24.68

10.23

Remuneration
Dividend paid
Consideration received on exercise of options
Dividend paid

Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
For the year ended
31st March, 2015
Dividend paid Unilever PLC
Royalty expense Unilever PLC
Income from services rendered Unilever PLC
Sale of finished goods/raw materials etc. Unilever Asia Private Limited Unilever Gulf Free Zone Establishment, Arabia
Purchase of fixed assets Unilever Europe IT Services
Purchase of finished goods/raw materials etc. Kimberly Clark Lever Private Limited Unilever Supply Chain Company AG Unilever Asia Private Limited
Rent income Unilever Industries Private Limited Hindustan Field Services Private Limited
Sale of fixed assets Unilever Sri Lanka Limited
Management fees paid Unilever Industries Private Limited
Expenses shared by fellow subsidiaries Unilever Industries Private Limited
192

Consolidated

For the year ended
31st March, 2014

1,504.40

1,089.79

728.28

537.92

484.05

447.04

146.85
164.43

152.27
184.25

0.48

0.34

183.93
168.00
148.33

184.67
158.66
160.54

1.10
0.84

1.10
0.84

0.62

0.28

1.73

1.95

3.86

4.35

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

49) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
For the year ended
31st March, 2015
Dividend income Hindustan Field Services Private Limited
Maintenance and support costs for licences and software Unilever N.V. Unilever U.K. Central Resources Limited
Reimbursements paid Unilever N.V.
Reimbursements received Unilever Industries Private Limited Kimberly Clark Lever Private Limited
Expense for business support services Hindustan Field Services Private Limited
Inter corporate loans given during the year Unilever Industries Private Limited
Inter corporate loans repaid during the year Unilever Industries Private Limited
Interest income Unilever Industries Private Limited
Investment in equity shares Kimberly Clark Lever Private Limited
Remuneration

Nitin Paranjpe Sridhar Ramamurthy Sanjiv Mehta BP Biddappa Pradeep Banerjee Hemant Bakshi
Contributions during the year The Union Provident Fund Hind Lever Gratuity Fund
Consideration received on exercise of options Pradeep Banerjee Nitin Paranjpe Hemant Bakshi Sridhar Ramamurthy Leena Nair Manish Tiwari
Processsing charges Hitech Surfactants Pvt Ltd

Annual Report 2014-15

For the year ended
31st March, 2014

0.26

0.66

4.41
1.68

0.85
3.69

51.00

14.85

12.59
40.42

22.29
40.42

318.60

309.40

-

104.15

-

105.55

-

0.22

22.52

-

7.48
14.17
5.85
5.06
9.01

4.56
4.83
6.14
4.99
4.34
6.71

37.31
0.85

39.52
22.11

0.12
-

0.14
0.11

0.19
0.00
0.07

0.00
0.00
-

10.12

7.95

Consolidated 193

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

49) RELATED PARTY DISCLOSURES (CONTD.)
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
For the year ended
31st March, 2015

For the year ended
31st March, 2014

24.68

10.23

31.20
40.17
19.99

34.97
19.77
17.70

25.35
15.92

39.94
12.54

137.37
44.10
17.57

104.09
40.58
31.07

Contribution to fund Hindustan Unilever Foundation
Outstanding as at the year end - trade receivables Unilever Asia Private Limited Unilever Gulf Free Zone Establishment, Arabia Unilever ASCC AG
Outstanding as at the year end - current account balances receivable with group companies and joint venture Unilever Industries Private Limited Kimberly Clark Lever Private Limited
Outstanding as at the year end - trade payables Unilever Plc Unilever Supply Chain Company AG Unilever Asia Private Limited

50) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2015
Information About Primary Business Segments
For the Year ended 31st March, 2015

For the Year ended 31st March, 2014

External

Intersegment

Total

External

Intersegment

Total

REVENUE
Soaps and Detergents

14,876.50

-

14,876.50

13,683.41

-

13,683.41

Personal Products

9,100.03

-

9,100.03

8,194.36

-

8,194.36

Beverages

3,631.26

-

3,631.26

3,311.86

-

3,311.86

Packaged Foods

1,891.80

-

1,891.80

1,648.30

-

1,648.30

2,392.01

-

2,392.01

2,306.31

-

2,306.31

31,891.60

-

31,891.60

29,144.24

-

29,144.24

Others
Total Revenue (Refer note 3 to segment information) RESULT
Soaps and Detergents

2,065.50

1,802.34

Personal Products

2,423.53

2,056.77

614.56

580.69

83.17

61.26

Beverages
Packaged Foods
Others

196.10

205.33

Total Segment

5,382.86

4,706.39

Un-allocated corporate expenses net of un-allocated income

(288.95)

(256.26)

194

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

50) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2015 (CONTD.)

For the Year ended 31st March, 2015

For the Year ended 31st March, 2014

External

External

Intersegment

Operating Profit

Total

Intersegment

Total

5,093.91
(17.70)

Finance Costs
Other income

4,450.13
(40.68)

564.08

570.12

5,640.29

Profit before exceptional items and tax

4,979.57

Exceptional items - income/(expenditure) Segment
Soaps and Detergents

(5.88)

22.37

Personal Products

(3.49)

13.26

Beverages

(1.43)

3.58

Packaged foods

(2.55)

(0.03)

Others

(3.98)

1.19
40.37

(17.33)
Exceptional items - income/(expenditure) Unallocated/Corporate

696.55

195.24

6,319.51

5,215.18

(1,959.81)

Profit before tax

(1,228.24)

Taxation for the year
Current tax
Deferred tax - credit/(charge)

15.81

(10.17)

4,363.08

Profit for the year

3,955.74

(12.43)

Less: Minority Interest

(31.20)

4,375.51

Profit after tax and before minority interest 3,945.57

Information about Primary Business Segments
Other Information
Segment Assets

Segment Liabilities

As at
31st March, 2015
Soaps and Detergents
Personal Products
Beverages
Packaged foods
Others
Total
Unallocated Corporate Assets/
(Liabilities)
Total Assets/(Liabilities)
Annual Report 2014-15

As at
31st March, 2014

As at
31st March, 2015

As at
31st March, 2014

3,409.52
1,491.88
1,077.01
683.89
870.73
7,533.03
7,178.25

3,283.69
1,412.33
1,083.27
612.49
806.14
7,197.92
6,812.38

(3,357.15)
(1,877.23)
(699.81)
(467.97)
(562.86)
(6,965.02)
(3,699.83)

(3,382.35)
(1,875.46)
(735.92)
(438.21)
(538.26)
(6,970.20)
(3,480.53)

14,711.28

14,010.30

(10,664.85)

(10,450.73)
Consolidated 195

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

50) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2015 (CONTD.)
Capital Expenditure

Depreciation/Amortisation

Non - Cash Expenses other than Depreciation

For the year ended 31st
March, 2015
Soaps and Detergents
Personal Products
Beverages
Packaged Foods
Others
Unallocated Corporate Assets/
(Liabilities)

For the year ended 31st
March, 2014

For the year ended 31st
March, 2015

For the year ended 31st
March, 2014

For the year ended 31st
March, 2015

For the year ended 31st
March, 2014

287.45
111.25
57.06
58.27
39.21
44.15

545.37
135.86
31.91
43.98
39.11
57.74

110.64
87.78
15.88
33.19
24.80
50.10

103.27
83.12
13.32
30.48
23.39
41.96

29.23
18.00
6.72
3.41
7.10
0.96

22.50
14.64
6.07
2.95
6.77
-

Information about Secondary Business Segments
For the Year ended
31st March, 2015
Revenue by Geographical Markets
India
Outside India
Total
Additions to Tangible and Intangible Fixed Assets
India
Outside India
Total
Carrying Amount of Segment Assets
India
Outside India
Total

For the Year ended
31st March, 2014

29,981.59
1,910.01
31,891.60

27,210.45
1,931.56
29,142.01

548.36
4.87
553.23

791.86
4.37
796.23

7,254.45
278.58
7,533.03

6,940.83
257.09
7,197.92

NOTES:
1.
Business Segments 
The Group has considered business segments as the primary segments for disclosure on the basis that the risk and returns of the Group is primarily determined by the nature of products and services. Consequently the geographical segment has been considered as a secondary segment. The products included in each of the reported domestic business segments are as follows:
a) Soaps and Detergents include soaps, detergent bars, detergent powders, detergent liquids, scourers, etc.
b) Personal Products include products in the categories of Oral Care, Skin Care (excluding soaps), Hair Care, Deodorants,
Talcum Powder, Colour Cosmetics, Ayush services, etc.
c) Beverages include tea and coffee.
d) Packaged foods include Branded Staples (Atta, Salt, Bread, etc.), Culinary Products (tomato based products, fruit based products, soups, etc.) and Frozen desserts.

196

Consolidated

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

NOTES

to the financial statements for the year ended 31st March, 2015 (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

50) SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2015 (CONTD.)
e) Others include Exports, Chemicals, Water business, Infant Care Products etc.

Segment Revenue relating to each of the above domestic business segments includes Income from Services provided, where applicable. In addition, the Group’s others segment includes export sale of Marine products, Leather products etc.

The above business segments have been identified considering:
a)

the nature of products and services

b)

the differing risks and returns

c)

the internal organisation and management structure, and

d)

the internal financial reporting systems.

2.

Geographical Segments

The geographical segments considered for disclosure are as follows :
a) Sales within India includes sales to customers located within India.
b) Sales outside India includes sales to customers located outside India.
c) The carrying amount of segment assets in India and Outside India is based on geographical location of assets.

3.

Revenue comprises:
Year ended
31st March, 2015

Sale of products (net of excise duty)

Year ended
31st March, 2014

31,199.72

28,538.98

Income from services rendered to group companies

511.88

479.57

Salon services, Export incentives, scrap sales included in other operating income

180.00

123.46

31,891.60

29,142.01

Total
4.

Previous year’s figures have been regrouped wherever necessary to conform to this year’s classification.

As per our report of even date

For and on behalf of Board of Directors

For B S R & Co. LLP
Firm Registration No. 101248W/W - 100022
Chartered Accountants

Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Akeel Master
Partner
Membership No. 046768

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai : 8th May, 2015
Annual Report 2014-15

Mumbai : 8th May, 2015
Consolidated 197

FORM AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
(All amounts in Rs. crores, unless otherwise stated)

STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/JOINT VENTURES

Part “A”: Subsidiaries
Name of the subsidiary Unilever
India
Exports
Limited

Pond’s Unilever Unilever
Exports
Nepal
Nepal
Limited Limited Limited - Indian Nepalese
Rs
Rs

Lakme Jamnagar Daverashola Hindustan Bhavishya
Lever Properties
Estates
Unilever
Alliance
Private
Private
Private Foundation
Child
Limited
Limited
Limited
Nutrition
Initiatives

2 Share capital

31/03/2015 31/03/2015

Levindra
Levers
Trust Associated
Limited
Trust
Limited

(note iii)

(note ii and iii)

1 Reporting period

Hindlever
Trust
Limited

31/03/2015 31/03/2015 31/03/2015 31/03/2015 31/03/2015 31/03/2015 31/03/2015 31/03/2015

15/07/2014 (Ashaad,
31, 2071)

2.98

1.99

5.75

9.20

35.91

5.00

0.22

0.01

0.01

0.05

0.05

0.05

3 Reserves & surplus

378.32

10.77

85.08

136.13

115.10

(0.97)

3.96

1.11

0.46

-

-

-

4 Total assets

575.17

53.76

255.21

408.34

366.51

4.03

4.47

1.30

3.16

0.05

0.05

0.05

5 Total Liabilities

193.88

41.00

164.38

263.01

215.51

-

0.29

0.19

2.69

-

-

-

48.79

-

-

-

-

-

-

-

-

-

-

-

7 Turnover

932.46

138.27

336.68

538.69

227.28

-

-

-

-

-

-

-

8 Profit / (loss) before taxation 154.59

3.88

79.12

126.59

(34.30)

(0.11)

-

0.10

0.47

-

-

-

9 Provision for taxation (55.55)

0.85

(16.99)

(27.18)

-

-

-

-

-

-

-

-

99.04

4.73

62.13

99.41

(34.30)

(0.11)

-

0.10

0.47

-

-

-

11 Proposed Dividend

-

-

-

-

-

-

-

-

-

-

-

-

12 % of shareholding

100%

90%

100%

100%

100%

76%

100%

100%

100%

100%

6 Investments

10 Profit /(loss) after taxation 80%

Notes: i) 
During the year Brooke Bond Real Estates Private Limited (BBREPL) and Aquagel Chemicals Private Limited (ACPL ) ceased to be the subsidiaries of the Company. ii) Converted into Indian Rupees at the Exchange rate INR 1 = 1.6 Nepalese Rupees. iii) The financial statements have been audited by a firm of Chartered Accountants other than B S R & Co. LLP.

198

Form AOC-1

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

FORM AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) (Contd.)
(All amounts in Rs. crores, unless otherwise stated)

Part “B”: Joint Venture
Name of the subsidiary

Kimberly - Clark Lever Private Limited (Refer note iii above)

1 Latest audited Balance Sheet Date
2

31/03/2015

Shares of Joint Ventures held by the Company on the year end
i) Number ii) Amount of Investment in Joint Venture

iii)

4,23,46,667

Extend of Holding%

35.94
50%

3 Description of how there is significant influence

Joint venture agreement

4 Reason why the joint venture is not consolidated

Not applicable

5 Net worth attributable to shareholding as per latest audited Balance Sheet

20.33

6 Loss for the year
i)

Considered in Consolidation

(9.80)

ii)

Not Considered in Consolidation

(9.80)

Note: a) Refer note 1. d of the consolidated financial statements for information on associates.

For and on behalf of Board of Directors
Sanjiv Mehta
Managing Director and CEO
[DIN: 06699923]

PB Balaji
Executive Director (Finance & IT) and CFO
[DIN: 02762983]

Aditya Narayan
Chairman - Audit Committee

Dev Bajpai
Executive Director Legal and Company Secretary
Membership No. FCS 3354

[DIN: 00012084]

Ritesh Tiwari

Group Controller

Mumbai : 8th May, 2015

Annual Report 2014-15

Form AOC-1 199

INVESTOR SAFEGUARDS
In order to serve you better and prevent risks associated with dealing in securities, we request you to follow the general safeguards as detailed hereunder:

Demat / Exchange
To avail the benefits of holding shares in demat form,
Members are requested to convert their physical holdings to demat / electronic form through a
Depository Participant (DP) of their choice. Holding securities in demat form helps investors to get immediate transfer of securities, without payment of stamp duty. The Company also offers help to its
Members to demat their physical shares. Share certificates of face value of Rs. 10/- are no longer tradeable in the market and will not be accepted by the DPs for demat. Members who still hold Share
Certificates with a face value of Rs. 10/- each are therefore requested to forward the same to M/s. Karvy
Computershare Private Limited (the Registrar), along with a request letter signed by all the holders for exchange of Share Certificate(s). The exchanged Share
Certificate(s) of shares having a face value of Re.1/each will help you to demat your shares expeditiously.

Registration of Nomination and NECS Mandate
Members holding shares in physical form are requested to register Nomination in their folio(s) by sending duly completed Nomination Form to the Registrar / Investor Service Department of the
Company.
Members who have not registered their NECS
Mandate are requested to send their NECS Mandate
Form to the Registrar / Investor Service Department of the Company or to their DP, as the case may be. For any change in bank particulars either due to banker having migrated their operations to core banking solutions or merged with another bank, Members are requested to register a fresh NECS Mandate with the revised bank particulars.

PAN Requirement for Transfer of Shares in Physical Form

Unclaimed Dividend
Details of unclaimed dividends are available on the Investor Centre page on the website of the
Company www.hul.co.in. Those Members whose dividends remain unclaimed are requested to check the details of unclaimed dividends on the website and send their requests to the Registrar
/ Investor Service Department of the Company for issuance of fresh Demand Drafts. To ensure maximum disbursement of unclaimed dividends, the Company also sends reminders to the relevant
Members before transfer of unclaimed dividends to
Investor Education and Protection Fund (IEPF).

SEBI has mandated submission of Permanent
Account Number (PAN) for securities market transactions and off market / private transactions involving transfer of shares of listed companies in physical form. Therefore, it shall be mandatory for the transferee(s) to furnish a copy of their PAN card to the Registrar /
Investor Service Department of the Company for registration of such transfers. Members /
Investors are, therefore, requested to take note of the same and submit their PAN card copy to the Registrar / Investor Service Department of the Company.

E-Communication
To receive Company related information and communication promptly, Members are requested to register / update their e-mail addresses with the
Company by sending duly completed E-Communication
Registration Form, which is available on the website of the Company www.hul.co.in. Members who hold shares in demat form can request their DP to update the e-mail address in their records. The Companies Act, 2013 and
Rules framed thereunder governing e-communication have been notified and the Company shall be sending notice, documents, financial statements, etc. through electronic mode to the Members who have provided their email address to the Company or Depository Participants.
Members may send request for hard copy of such notices, documents, financial statements, etc. to the Registrar /
Investor Service Department of the Company.

Consolidation of Multiple Folios
Members are requested to consolidate their shareholdings under multiple folios, to save themselves from the burden of receiving multiple communications as also to facilitate one point tracking of all corporate benefits on their shares.

General Safeguards
•

Please send Share Certificate(s) and high value dividend warrants / cheques / demand drafts by registered post or courier so as to avoid loss of document in transit.

•

Exercise due diligence and notify any change in address, stay abroad or demise of any shareholder as soon as possible to the
Company or DP, as the case may be.

•

Deal only with SEBI registered intermediaries and obtain a valid Contract Note / Confirmation
Memo from the broker / sub-broker, within 24 hours of execution of the trade.

•

Do not disclose your Folio Nos. / DP ID and
Client ID to any unknown person.

•

Do not hand over signed blank transfer deeds, delivery instruction slips to any unknown person. •

Do not leave your demat account dormant for long. •

Obtain periodic statement of holdings from the concerned DP and verify the holdings periodically. For further information on Investor Safeguards, Frequently Asked Questions and Related Forms, please visit the ‘Investor
Centre’ page on the website of the Company www.hul.co.in.

INVESTOR SERVICE DEPARTMENT
Hindustan Unilever Limited
Unilever House, B. D. Sawant Marg
Chakala, Andheri (East)
Mumbai - 400 099.
Phone : +91 - 22 – 39832285 / 32452
Fax
: +91 - 22 - 28249457
E-mail : levercare.shareholder@unilever.com
Website : www.hul.co.in 200 Investor Safeguards

KARVY COMPUTERSHARE PRIVATE LIMITED
Karvy Computershare Private Limited
Unit : Hindustan Unilever Limited
Karvy Selenium Tower B,
Plot 31-32, Gachibowli Financial District,
Nanakramguda
Hyderabad - 500 032
Phone
: +91 - 40 - 67161500, 33211000
Fax
: +91 - 40 – 23420814, 23001153
Toll Free no. : 1800-345-4001
E-mail
: einward.ris@karvy.com
Website
: www.karvy.com

Hindustan Unilever Limited

Overview

Reports

Financial Statements

Shareholder Information

CORPORATE INFORMATION
REGISTERED OFFICE
Unilever House, B. D. Sawant Marg,
Chakala, Andheri (East), Mumbai – 400 099.

AUDITORS
B S R & Co. LLP, Mumbai

BANKERS
Bank of America

Hongkong & Shanghai Banking Corporation

State Bank of Hyderabad

Bank of Baroda

ICICI Bank

State Bank of India

Bank of India

Indian Bank

Syndicate Bank

Citibank N.A.

Punjab National Bank

Union Bank of India

Deutsché Bank

Royal Bank of Scotland

HDFC Bank

Standard Chartered Bank

PLANT LOCATIONS

NORTHERN REGION
BAROTIWALA
• Khasra No. 94-96, 355-409, Village Balyana, Barotiwala IA,
Tehsil Kasauli, District Solan - 174 103, Himachal Pradesh
• Khasra No. 1350 – 1318, Bhatoli Kalan, Hill Top Industrial
Area, Jharmajri, Tehsil Baddi, District Solan - 173 205,
Himachal Pradesh

RAJPURA
A-5, Phase ll-B, Focal Point, Rajpura - 140 401, Punjab

ETAH
Village Asrauli, G.T.Road, Etah-207 001, Uttar Pradesh

EASTERN REGION

HARIDWAR
Plot No. 1, Sector 1A, Integrated Industrial Estate, Ranipur,
Haridwar - 249 403, Uttarakhand
NALAGARH
Hudbust No. 143, Khasra No. 182 / 183 / 187/1, Village
Kirpalpur, Near Nalagarh Fire Station, Tehsil - Nalagarh,
District Solan - 174 101, Himachal Pradesh
ORAI
A-1,UPSIDC Industrial Area, Orai, District Jalaun - 285 001
Uttar Pradesh

Annual Report 2014-15

SUMERPUR
A-1,UPSIDC Industrial Area, Bharua, Sumerpur,
Hamirpur - 210 502, Uttar Pradesh

HALDIA
PO Durgachak, Haldia - 721 602, Midnapore, West Bengal
KOLKATA
•
•
•

1, Transport Depot Road, Kolkata - 700 088, West Bengal
63, Garden Reach, Kolkata - 700 024, West Bengal
P10 Taratola Road, Kolkata - 700 088, West Bengal

TINSUKIA
Dag No. 21 of 122 FS Grants, Mouza - Tingrai, Off NH No. 37,
Doom Dooma Industrial Estate, District Tinsukia - 786 151,
Assam

Corporate Information 201

PLANT LOCATIONS (CONTD.)

SOUTHERN REGION

WESTERN REGION

BANGALORE
30, Industrial Suburb Stage II, Yashwantpur,
Bangalore - 560 002, Karnataka

CHHINDWARA
5/6 KM Stone, Narsinghpur Road, Lehgadua, Post Khajari,
Chhindwara – 480 002, Madhya Pradesh

CHENNAI
C.P.T. Campus, Tharamani, Chennai – 600 113, Tamilnadu

CHIPLUN
B-7/17, Lote Parshuram MIDC, Khed Taluka,
District Ratnagiri, Chiplun – 415 722, Maharashtra

COCHIN
• Ernakulam North PO, Tatapuram, Cochin - 682 018, Kerala
• Edapally, Cochin – 682 024, Kerala
HOSUR
Plot No.50 & 51, SIPCOT Industrial Complex,
Hosur - 635 126, Tamilnadu
HYDERABAD
Uppal Kalan, Hyderabad – 500 039, Andhra Pradesh
MANGALORE
Sultan Battery Road, Boloor, Mangalore – 575 003, Karnataka
MYSORE
Plot No. 424, Hebbal Industrial Area, Mysore – 570 016,
Karnataka
PONDICHERRY
• Off NH 45A, Vadamangalam, Pondicherry - 605 102
• No. 3, Cuddalore Main Road, Kirumambakkam,
Pondicherry – 605 702.

202 Corporate Information

GOA
Plot Nos. 128 - 139 & 324 - 326, Kundaim Industrial Estate,
Kundaim – 403 115, Goa
KHAMGAON
C-9, MIDC, Khamgaon, District Buldhana – 444 303,
Maharashtra
MUMBAI
Aarey Milk Colony, Goregaon, Mumbai – 400 065, Maharashtra
NASIK
Plot No. A-8/9, MIDC, Malegaon, Sinnar - 422 103, Nasik,
Maharashtra
SILVASSA
• Survey No.151/1/1, Village Dapada, Khanvel Road,
Silvassa - 396 230, Dadra and Nagar Haveli
• Survey No.907, Kilwali Road, Amli Village, Near
Gandhigram Bus Stop, Silvassa - 396 230,
Dadra and Nagar Haveli

Hindustan Unilever Limited

Registered office: Unilever House, B. D. Sawant Marg, Chakala, Andheri (East), Mumbai - 400 099
CIN: L15140MH1933PLC002030, Web: www.hul.co.in, Email: levercare.shareholder@unilever.com, Tel: +91 22 39832285 / 39832452

Form No. MGT-11

PROXY FORM
[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]
Name of the Member(s):
Registered address:
E-mail ID:

Folio No. / DP ID and Client ID:

I/We, being the Member(s) of

shares of the above named Company, hereby appoint

1. Name:

E-mail ID:

Address:

Signature:

2. Name:

E-mail ID:

Address:

Signature:

3. Name:

, or failing him/her

, or failing him/her

E-mail ID:

Address:

Signature:

as my/our proxy to attend and vote, in case of a poll, for me/us and on my/our behalf at the 82nd Annual General Meeting of the Company, to be held on Monday, the 29th day of June, 2015 at 2.00 p.m. at the Registered Office of the Company and at any adjournment thereof in respect of such resolutions and in such manner as are indicated below:

Reso. No.

Description

For*

1.
2.

Confirmation of interim dividend and declaration of final dividend

3.

Re-appointment of Mr. Harish Manwani as Director

4.

Re-appointment of Mr. Pradeep Banerjee as Director

5.

Re-appointment of Mr. P. B. Balaji as Director

6.

Ratification of the appointment of M/s. BSR & Co. LLP, Statutory Auditors and to fix their remuneration for the financial year ending 31st March, 2016

7.

Appointment of Ms. Kalpana Morparia as an Independent Director of the Company for a term upto five years

8.

Ratification of the remuneration of M/s. RA & Co, Cost Accountants for the financial year ending 31st March, 2016

9.

Increase in overall limit of remuneration payable to Non-Executive Directors

10.

Against*

Adoption of Financial Statements and Reports thereon for the financial year ended 31st March, 2015

Adoption of new Articles of Association of the Company

Signed this

day of

2015.
Signature of Shareholder (s)

Notes:

Affix
Revenue
Stamp

* 1. Please put a ‘X’ in the Box in the appropriate column against the respective resolutions. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. 2. A Proxy need not be a Member of the Company. Pursuant to the provisions of Section 105 of the Companies Act, 2013, a person can act as Proxy on behalf of not more than fifty Members and holding in aggregate not more than ten percent of the total Share Capital of the
Company. Members holding more than ten percent of the total Share Capital of the Company may appoint a single person as Proxy, who shall not act as Proxy for any other Member. 3. This form of Proxy, to be effective, should be deposited at the Registered Office of the Company at Unilever House, B. D. Sawant Marg,
Chakala, Andheri (East), Mumbai - 400 099 not later than FORTY-EIGHT HOURS before the commencement of the aforesaid meeting.

Awards and Recognition
FINANCIAL YEAR 2014-15 SAW MANY SUCCESSES.
SOME OF THE ACHIEVEMENTS ARE LISTED BELOW.

1

2

3

4

1 BrandZ TM Awards
2 ‘Client of the Year’ at Effies
3 Dun and Bradstreet Corporate Awards
4 Greentech Award

OUR BRANDS

• HUL was the No. 1 Indian company to feature on the Forbes list of the World’s
Most Innovative Companies.
• HUL’s mobile radio channel ‘Kan
Khajura Tesan’ won three Gold Lions at the Cannes International Festival of
Creativity.
• Ten HUL brands featured in the first ever BrandZ™ Top 50 Most Valuable
Indian Brands ranking.
• The Kissanpur campaign won Silver at the Jay Chiat Strategic Excellence
Awards 2014.
• HUL was the ‘Client of the Year’ at
Effies 2014 and ‘Media Client of the
Year’ at Emvies 2014.

OUR PEOPLE

UNILEVER SUSTAINABLE LIVING PLAN (USLP)
The USLP is our key differentiator. It is our blueprint to drive sustainable growth and has three big goals,
i.e. improving the health and well-being of more than a billion people, reducing the environmental

footprint of the making and use of our products, and enhancing the livelihoods of millions of people across our value chain.

• HUL is the ‘No. 1 Employer of Choice’ across all sectors for the 2015 graduating batch of B-School students according to Nielsen Campus Track-B
School Survey.
• HUL was the ‘Dream Employer’ for sixth year in a row according to Nielsen
Campus Track-B School Survey.

• HUL was recognised as the ‘Top Indian
Company’ in FMCG sector at Dun &
Bradstreet Corporate Awards.
• HUL was ranked No. 3 in Fortune
India’s list of most admired companies.
• HUL ranked No. 3 in the 2014 Global
Aon Hewitt Top Companies for Leaders survey. • HUL earned the highest recognition of
‘Leadership in HR Excellence’ across industries at the 5th Confederation of
Indian Industry (CII) National HR
Excellence Awards 2014.

OUR OPERATIONS

• HUL’s Nasik factory won the
Vasundhara Award for environment management performance.

SUSTAINABILITY

• HUL’s Project Shakti received the
‘Porter Prize’ for ‘Creating Shared
Value’.
• HUL’s Silvassa manufacturing cluster was conferred the prestigious Sankalp
Award 2014 by the Administration of
Dadra and Nagar Haveli for the outstanding work done in uplifting the region under the USLP-linked ‘Prabhat’ initiative. • HUL won ‘Best Overall CSR Practices’ at the Global CSR Excellence &
Leadership Awards.
• HUL won the ICAI CSR Awards for Best
CSR Projects under two categories
– Health and Environment.

• HUL received the ‘Frost and Sullivan
Award’ for Excellence in FMCG Supply
Chain.
• HUL’s legal team was awarded the
‘best in house compliance team’ by
Legal Era.
• HUL’s Haridwar factory won Gold at
Greentech Environment Award 2015 in the FMCG sector.

Produced by Hindustan Unilever Limited.
Creative Consultants: AICL Communications Limited (info@aicl.in) | Printed at Burda Druck India Pvt. Ltd.

WWW.HUL.CO.IN

Hindustan Unilever Limited Annual Report 2014-15

FOR FURTHER INFORMATION ON OUR ECONOMIC,
ENVIRONMENTAL AND SOCIAL PERFORMANCE,
PLEASE VISIT OUR WEBSITE:

HINDUSTAN UNILEVER LIMITED
Registered Office:
Unilever House,
B. D. Sawant Marg, Chakala,
Andheri (East),
Mumbai - 400 099
CIN : L15140MH1933PLC002030

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MAKING
SUSTAINABLE
LIVING
COMMONPLACE

ANNUAL REPORT 2014-15