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  • ANNUAL REPORT 2017-18

    MAKING SUSTAINABLE

    LIVING COMMONPLACE

  • THIS ANNUAL REPORT 2017-18 OF HINDUSTAN UNILEVER LIMITED (HUL) IS MADE UP OF THE STRATEGIC REPORT, WHICH INCLUDES REPORT OF BOARD OF DIRECTORS, MANAGEMENT DISCUSSION AND ANALYSIS; AND THE CORPORATE GOVERNANCE REPORT, THE FINANCIAL STATEMENTS; NOTES AND ADDITIONAL INFORMATION AS REQUIRED UNDER THE COMPANIES ACT, 2013 (‘THE ACT’) AND THE SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 (‘LISTING REGULATIONS’).

    The terms ‘HUL’, ‘the Company’, ‘we’, ‘our’ and ‘us’ refer to Our Corporate Governance Report, which forms part of Report of Hindustan Unilever Limited. Our Strategic Report, pages 1 to Board of Directors, pages 46 to 65, contains an analysis of steps 65, contains information about us, how we create value for our taken in the area of Corporate Governance including information as stakeholders and how we run our business. It includes our strategy, required under the Listing Regulations. Our Financial Statements business model, market outlook and key performance indicators. and Notes are on pages 66 to 169. The Strategic Report and The Report of Board of Directors and Management Discussion and Financial Statements have been approved by the Board of Directors Analysis; includes details of our performance under each of the of the Company. strategic pillar as well as our approach to sustainability and risk.

    CAUTIONARY STATEMENT Statements in this Annual Report, particularly those that 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.

    ONLINE You can find more information about Hindustan Unilever Limited online at www.hul.co.in For further information on the Unilever Sustainable Living Plan (USLP) visit www.hul.co.in/sustainable-living Annual Report 2017-18 along with other related documents can be downloaded at https://www.hul.co.in/investor-relations/annual-reports/hul-annual-report-related-documents.html

    CONTENTS OVERVIEW –

    – Board of Directors ...................................................................... 3 –

    Financial Performance .......................................................... 6

    – Our Value Creation Model ......................................................... 9 – Notes ........................................................................................ 81

    – Our Strategy ............................................................................. 10 Consolidated Financial Statements

    REPORTS – Independent Auditors’ Report ............................................... 121

    ..................... 128 Annual Report on Corporate Social Responsibility ............. 32

    – Consolidated Statement of Changes in Equity

    Business Responsibility Report ........................................... 37 – Consolidated Statement of Cash Flows ............................... 130

    FINANCIAL STATEMENTS About us ..................................................................................... 1

    – Chairman’s Statement .............................................................. 2 Standalone Financial Statements – Economic Value Added ............................................................. 66 – Independent Auditors’ Report ................................................. 68

    Management Committee .......................................................... 4 – Our Performance ....................................................................... 5

    – Balance Sheet .......................................................................... 74 – Statement of Profit and Loss .................................................. 76 – Statement of Changes in Equity .............................................. 78

    Unilever Sustainable Living Plan ........................................... 7 – The Changing World .................................................................. 8

    – Statement of Cash Flows ........................................................ 79

    – Consolidated Balance Sheet ................................................. 124 – Report of Board of Directors and Management Discussion

    and Analysis ................................................................................... 11 – Statement of Consolidated Profit and Loss ......................... 126

    – – Corporate Governance Report ................................................ 46

    – Notes ...................................................................................... 132

    Secretarial Audit Report .......................................................... 64 – Form AOC-1............................................................................ 169

    Others – Awards and Recognition ........................................................ 170 – Corporate Information .......................................................... 171

    Notice of Annual General Meeting ................................... 172

    Profle of Directors (seeking re-appointment) ............. 177

    Proxy Form

    https://www.hul.co.in/investor-relations/annual-reports/hul-annual-report-related-documents.html www.hul.co.in/sustainable-living http:www.hul.co.in

  • Overview Reports Financial Statements

    11 Overview Reports Financial St atements

    ABOUT US

    AT A GLANCE

    HINDUSTAN UNILEVER LIMITED (HUL) IS INDIA’S LARGEST FAST-MOVING CONSUMER GOODS COMPANY WITH A HERITAGE OF OVER 80 YEARS. NINE OUT OF TEN INDIAN HOUSEHOLDS USE OUR PRODUCTS EVERYDAY TOFEEL GOOD, LOOK GOOD AND GET MORE OUT OF LIFE; GIVING US A UNIQUE OPPORTUNITY TO BUILD A BRIGHTER FUTURE.

    Each of our categories – Home Care, Personal Care, Foods and Refreshments – includes a portfolio of brands that serves consumers across the length and breadth of India. With over 40 brands spanning 20 distinct categories including soaps, detergents, shampoos, skincare, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, frozen desserts, water and air purifiers, the Company is part of the daily life of millions of consumers. Our portfolio includes leading brands such as Lux, Lifebuoy, Surf excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, BRU, Knorr, Kissan, Kwality Wall’s and Pureit. Our products are available in over seven million outlets across India.

    Nearly 900 suppliers work with our supply chain that spans 28 of our own factories and several others that manufacture on our behalf. Our products are stocked in warehouses dotted across the country and delivered to 3,500 customers.

    HUL has around 18,000 employees working across 28 factories and 9 offices and creates employment opportunities for several thousand more across its value chain – from smallholder farmers, who provide raw materials to the distribution partners who take the products to customers and consumers.

    Your Company has a clear and compelling strategy that focuses on Winning with Brands and Innovation, Winning in the Marketplace, Winning through Continuous Improvement and Winning with People. This is underpinned by the Unilever Sustainable Living Plan (USLP) that sets our vision to increase the size of the business, whilst decoupling it with our environmental footprint and increasing our positive social impact.

    Over the years, HUL has been driving the virtuous cycle of growth, which has been resulting in consistent, competitive, profitable and responsible growth for us. Our continuous effort to re-invent the organisation and stay ahead of the curve by constantly innovating helps us drive scale. Meeting consumer needs enables us to increase our footprint and drive higher volume growth. With higher volume growth, we are able to get benefits from scale, efficiencies and we invest the savings behind our products and brands which thereby results in the virtuous cycle.

    To harness the opportunities of the changing world, your Company had implemented a transformational programme, Connected 4 Growth (C4G), in the organisation. This has led to faster decision-making, localised and swifter innovation and increased speed to market, which is driving business performance.

    OUR PURPOSE

    HINDUSTAN UNILEVER LIMITED HAS A CLEAR PURPOSE – TO MAKE SUSTAINABLE LIVING COMMONPLACE. WE BELIEVE THIS IS THE BEST WAY TODELIVER LONG-TERM SUSTAINABLE GROWTH.

    As the pace of change accelerates, we are creating a stronger, simpler and more agile business. However volatile and uncertain the world becomes, we believe managing for the long-term is the best way for us to grow. We are well placed to deliver long-term value through our strategy and the USLP. These are supported by a transformational change agenda, which combines our own actions with a stakeholder approach to external advocacy and public policy.

    The USLP is a value driver in its own right. Our commitment to the USLP’s three big global goals of improving health and well-being of more than 1 billion people globally by 2020, halving our environmental footprint by 2030, and enhancing livelihoods for millions across the globe by 2020 has delivered growth for the business. The success