#MDStart#

Management Discussion and Analysis

Your Board of Directors is pleased to share with you the Business
Performance along with the Audited Financial Statements for the financial year ended 31st
March, 2024.

ABOUT US

Hindustan Unilever Limited is India's largest FMCG Company with a
90-year heritage in the country. We are a Company of brands and people driven by our
purpose of making sustainable living commonplace.

Nine out of ten Indian households use one or more of our brands to feel
good and get more out of their lives. We have a wide and resilient portfolio of 50+
brands, spanning over 16 FMCG categories, which are a part of everyday life of millions of
consumers across India.

In a rapidly evolving world, where digitisation and sustainability have
taken centre stage, we are steadfastly progressing on our purpose-led and future-fit
journey.

ECONOMIC OVERVIEW Global

Global economy continues to present a mixed picture. Multiple factors
like the on-going geopolitical conflicts, wide-spread elevation of debt, extreme weather
conditions and elections in many parts of the world continue to contribute to the
uncertainty of the Global Economic Outlook. Encouragingly, inflation has softened over the
highs of the previous year and is expected to continue to moderate. Global GDP growth is
expected to remain low at 3% for 20241. Country variations will continue, with different
parts of the world growing at varied pace.

India

Amidst these conditions, Indian economy has continued to grow with
resilience. With a GDP growth of 7.8% in Calendar Year 20231, the fifth- largest economy
was the fastest growing major economy. The biggest contribution to the GDP growth has come
in the form of capital expenditure by the Government. At 3% of GDP, ^10 lakh crore2 was
allocated towards capital expenditure, a record high. The Government's strengthened thrust
on capex will augur well for the economy in mid to long term with the creation of
employment opportunities, improved infrastructure, and elevated ease of doing business in
the country.

Consumption has remained subdued in the year. This weak consumption is
primarily on account of a muted agricultural growth. Agricultural production was disrupted
during the year due to erratic weather patterns, triggered by El Nino. With agricultural
outputs impacted, rural consumption has been weaker than usual, evident in sluggish FMCG
volume recovery trends. Consumption patterns remain uneven with mass consumption showing
sluggish growth and upper-end consumption driving growth.

This trend is further amplified by a growing preference for premium
products across all consumer categories.

India's digital transformation is surging ahead, fuelled by booming
broadband access, affordable data plans, and a government push for digital infrastructure.
The India Stack, is a one-of-its-kind digital scalable public infrastructure, based on
identity, payments and consent-based data sharing. It is a global benchmark for most
countries today. We have more than 130 crores Aadhar Card holders. In the years to come,
applications based on this digital infrastructure, such as ONDC for digital commerce,
Unified Logistics interface Platform (ULIP) for logistics, Ayushman Bharat for electronic
health records among others, will spur innovations and new growth. Democratisation of
Unified Payments Interface (UPI) or digital payments have enabled formalisation of the
digital economy. This has resulted in the rise of the start-up economy in India with the
country becoming the third largest ecosystem for ventures globally.

Despite a subdued consumption in the economy this year, economic
activity indicators suggest underlying strength that will bode well for the economy in the
medium term.

The consumer confidence levels, which look at consumer perceptions,
current and for one year ahead, on general economic situation, employment scenario,
overall price situation, income and spending, has returned to pre-covid levels3. The
future perception scores have also registered a new peak suggesting high consumer
confidence on the economic outlook. Inflation, which was a primary concern in the economy
last year, has softened this financial year. Inflation has significantly moderated
from the highs of 2022 with CPI inflation for FY 2023-24 projected at 5.3%1.


Infrastructure investment, pace of innovation and technology, best in
class digital ecosystem and robust policies has led India onto a journey of transformative
growth that is expected to continue for the foreseeable future.

Fast Moving Consumer Goods Sector in India

The FMCG industry is India's fourth-largest sector, making it a
significant contributor to the country's economic growth by fuelling consumption,
generating employment, and boosting manufacturing. Within the sector, about 50% of sale is
comprised of products from the household and personal care category, while food &
beverages contributes 31% and healthcare 19%, to the total FMCG sales in India2. Over the
years, this sector has demonstrated remarkable agility in overcoming challenges and
adapting to meet evolving consumer needs, shaping its trajectory for sustainable growth.

In FY 2023-24, the FMCG industry witnessed a challenging year due to
weather vagaries impacting agricultural output and consumer sentiment. As a result of
this, while the industry witnessed sequential easing of inflation, volumes have been
recovering gradually albeit readjusting with a lag. Three continuous years of sustained
inflation prior to FY 2023-24 has impacted disposable income, specially in rural areas.
This has resulted in a slower pace of recovery in rural and mass segments while urban and
premium segments have been resilient.

Notwithstanding the volume sluggishness seen in recent times, the
Indian FMCG industry presents a compelling growth narrative. This is fuelled by several
key factors:

Fastest growing major economy

At 7.8% GDP growth for Calendar Year 2023, India continues to showcase
a strong and resilient performance. As per International Monetary Fund (IMF) estimates
India will be the third largest economy before 2030 with its GDP projected to surpass both
Japan and Germany. Both private consumption and investment are projected to rise steadily,
contributing to GDP expansion. Backed by strong economy growth, FMCG consumption is
expected to flourish.

Favourable Demographics

In the coming decades, India will continue to have one of the largest
shares of working population amongst the major economies.

With a working population of more than 1 billion people and a
favourable demographic dividend for many decades to come, India will have significant
advantage in the long run.

India would remain the largest provider of human resources in the
world. About 24.3% of the incremental global workforce over the next decade will come from
India3. Young labour force and high working age population will lead to a rise in income
levels and purchasing power which will drive growth and consumption momentum in the
country.

Under indexed per-capita FMCG consumption and low penetration

Per-capita consumption for FMCG in India is low, within that rural
being highly under- indexed to urban consumption. In fact, per- capita FMCG consumption in
India remains disproportionately lower compared to economies like China, Philippines,
Thailand, and Indonesia, even after adjusting for their per- capita income divergences.

This disparity, coupled with low category penetration rates across
numerous categories within the industry, presents a great opportunity for FMCG companies
to continue their strong growth trajectory.

Rising Affluence

India is witnessing a significant increase in its affluence levels.
With increasing urbanisation and upward mobility in income, the opportunity to premiumise
is immense.

Digital Revolution

India is leading the Digital revolution.

While in several other, more developed nations, digitisation is a
privilege, in India digitisation has been democratised to reach even the grassroot levels,
with initiatives such as the Aadhar, Jan Dhan Yojana and UPI. With affordable data plans,
India has witnessed a surge in mobile phone usage and internet penetration, which is
fuelling the growth of e-Commerce, online payments, and other digital services.

Trends shaping our industry A. Premiumisation

India is seeing a rapid rise in affluent households, providing us with
a huge opportunity to grow. Naturally, these households will have a much higher per-capita
FMCG consumption. These consumers are becoming more discerning, looking for superior
products that promote sustainable living, hyper-personalisation and an elevated shopping
experience, even if that would mean paying a premium for products. With changing
lifestyles, increasing disposable income and higher exposure to global trends, India is
expected to see a dramatic increase in per capita consumption of beauty products. Like
China, Indonesia, Philippines, we expect to see a similar trend of multi-fold increase in
beauty consumption once the per capita income of the country crosses an inflection point.
With growth in digital technologies and changing consumers behaviours, India is seeing an
unprecedented influx of digital first beauty brands and innovative methods of brand
building.

What HUL is doing

Foreseeing this trend, we are consistently investing in market
development and product premiumisation over the years. As a result, we now enjoy an
over-indexed position in the premium segment compared to the broader market. During the
year, we continued to double down on our premiumisation agenda - we have expanded our
premium product footprint through innovations and brand extensions into new demand spaces
and formats of the future. As a result of focused interventions and continued investments,
our premium portfolio delivered strong growth during the year. We continue to build
capabilities towards mass customisation, precision marketing and better shopper experience
to appeal to the consumers.

When it comes to Beauty and Wellbeing, as the largest beauty company in
India, HUL is in a unique position to take advantage of its deep strengths and emerge
stronger through this journey. We have large masterbrands that have great equity and
salience amongst consumers and can be expanded to play in new demand spaces and formats.
At the same time, through our Premium Beauty Business Unit, we have the proven capability
of launching digital first brands much faster. With our strong distribution moat,
scaling up these successful digital first brands is an area we have competitive advantage
in. We also have a rich stable of premium & masstige brands in Unilever that we will
dip into when we believe the time is right.


The innovation rhythm and competitive landscape in Beauty and Personal
Care category is diverging. To bring more focus and leverage our strong portfolio, we
transitioned into 2 independent business units namely Beauty & Wellbeing and Personal
Care from 1 st April, 2024. It will help us seed new brands, rapidly scale digital first
innovations and craft curated In-Store experiences.

B. Digital transformation

Technology continues to transform every aspect of our life and
business. Rapid digital transformation has changed the way of life for consumers,
customers, and suppliers. Consumers are increasingly aware of global trends through social
media, they navigate between multiple channels and multiple devices to make buying
decisions. Traditional trade customers are adopting technology and digital interventions
to improve operational efficiency and become future fit while newer channels are leading
technological disruption from the front. Suppliers across the industry are leveraging
technology to substantially elevate product availability, quality, and operations. Digital
is opening new opportunities, from digital marketing to emergence of digital first brands
and use of data analytics in the business.

What HUL is doing

Through our agenda of 'Re-Imagine HUL', we have been at the forefront
of this digitalisation journey. Under this program, we are embedding technology across the
length and breadth of our company to build distinctive capabilities. For instance, our
Agile Innovation Hub that uses technology to scrub data, identify trends and new demand
spaces, enables for quick digital prototyping and deployment, and has significantly helped
reduce the cycle time from ideation to product launch. Similarly, our 'Supply Chain Nerve
Center' that will integrate the Plan, Source, Make and Deliver pillars by building an
intelligent layer, will drive faster decision-making, better visibility and automated
actions. We continue to make significant strides in our digitalisation journey of demand
generation,

capture and fulfilment through a variety of tools and technologies that
include nano factories, machine learning, digital marketing, D2C channels and end-to-end
automated warehouses. To seize the digital opportunity and to continue to win
competitively with consumers, we have appointed a Chief Digital Officer who will steer the
next phase of HUL's digital transformation journey focusing on enhancing consumer and
customer experience through digitalisation.

C. Sustainable living

Extreme fluctuations in weather conditions resulting from greenhouse
gas emissions, plastic usage, unsustainable sourcing and water crises are impacting
consumer sentiments, livelihoods and safety. Society demands a more proactive response
from businesses. Consumers are rapidly shifting towards sustainable choices, driving a
global movement for change. With rising public consciousness, businesses are expected to
shift to sustainable operations to protect our planet. The cost of inaction far outweighs
the cost of action.

What HUL is doing

HUL has been a pioneer in campaigning for the cause of sustainable
business operations in India. Guided by our purpose of 'making sustainable living
commonplace', sustainability is deeply ingrained in all our operations here at HUL. We
have outlined our Environmental, Social and Governance (ESG) goals (refer page 14) against
which we have made significant progress. We are a recognised industry leader with one of
the best ESG ratings in the Indian FMCG industry. In our manufacturing operations, we have
reduced our CO2 emissions by 98% (per tonne of production), water usage by 47% (cubic
meter per tonne of production) and total waste generated from our factories by 58% (per
tonne of production) in FY 2023-24, compared to 2008 baseline. We are working to reach
100% sustainable sourcing of our key crops. Through focused programmes, we have achieved
sustainable sourcing for 94% of our total paper and board, 81% of our total tomatoes and
79% of our total tea procured during the calendar year 2023. We are committed to
responsibly sourcing palm oil and aim to be 100%

No Deforestation, No Peat (NDP) compliant in India.

Through Hindustan Unilever Foundation (HUF), a not-for-profit
subsidiary, we are driving water management related community development initiatives.
HUF's water potential created stood at over 3.2 trillion litres which is sufficient water
to meet the drinking needs for all Indians for nearly 2 years.

D. Healthy living

Consumers are becoming increasingly conscious of their consumption
choices and its impact on their holistic health and wellness. When it comes to Foods &
Refreshment, consumers are opting for products that provide nutritional, long-term
benefits. They are also foraying into health supplements and science-backed brands. Within
Home and Personal Care, clean, natural products free from harmful toxins and chemicals are
increasingly becoming popular. Consumers want to know the ingredients used to make
products they consume and seek products with transparent labelling.

What HUL is doing

With nutrition drinks, HUL is addressing the prevalent micro-nutrient
deficiency in the country. We have strengthened our adult nutrition drinks portfolio,
focusing on specific health concerns ranging from diabetes to women's health to bone
strength through scientifically backed brands. Through our strategic partnerships with
OZiva and Wellbeing Nutrition, we have increased our presence in the health and well-being
segment with clean, plant based, organic nutritive choices and continue to scale these
businesses, leveraging our existing capabilities. We continue to expand our play in the
clean and naturals segment across beauty and personal care, be it via Simple, Love, Beauty
and Planet or Indulekha or in home care through our plant-based, paraben-free dishwash
formulations.

OUR RISKS AND OPPORTUNITIES

Our risk appetite and approach to risk management

Risk management is integral to our strategy and to the achievement of
our long-term goals.

Our success as an organisation depends on our ability to identify and
leverage the opportunities generated by our business and the markets we operate in. In
doing this, we take an embedded approach to risk management which puts risk and
opportunity assessment at the core of the Board's Agenda, which is where we believe it
should be.

HUL's appetite for risk is driven by the following:

• Our actions on issues such as plastic and climate change must
reflect their urgency, and not be constrained by the uncertainty of potential impacts;

• Our behaviours must be in line with our Code of Business
Principles (Code) and Code Policies;

• Our ambition to continuously improve our operational efficiency
and effectiveness.

Our approach to risk management is designed to provide reasonable, but
not absolute, assurance that our assets are safeguarded, the risks facing the business are
being assessed and mitigated and all information that may be required to be disclosed is
reported to HUL's Senior Management and Board and Board Committees including, where
appropriate, the Chief Executive Officer and Managing Director, Chief Financial Officer,
Audit Committee, and Risk Management Committee.

For each of our principal risks, we have a risk management framework
detailing the internal controls we have in place and who is responsible for managing both
the overall risk and the individual controls mitigating that risk. Our assessment of risk
considers short and long term as well as internal and external risks, including financial,
operational, sectoral, sustainability (particularly Environmental, Social and Governance
related risks), information, cyber security, legal and compliance, and any other risks as
may be determined by the Company Leadership teams. How the identified risks are changing
as well as emerging risk areas are reviewed on an ongoing basis, and formally by Risk
Management Committee and the Board at least twice a year.

Processes

We engage in a wide range of processes and activities across our
operations covering strategy, planning, execution, and performance management. Risk
management is integrated into every stage of the business cycle. These procedures
are formalised and documented and are increasingly being centralised and automated into
transactional and other information technology systems.


Risk and Internal Adequacy

The Board advised by the Risk Management Committee, where appropriate,
regularly reviews the significant risks and decisions that could have a material impact on
HUL. These reviews consider the level of risk that the Company is prepared to take in
pursuit of the business strategy and the effectiveness of the management controls in place
to mitigate the risk exposure.

The Company's internal control systems are commensurate with the nature
of its business and the size and complexity of its operations. These are routinely tested
and certified by Statutory as well as Internal Auditors 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 controls environment and monitors the implementation of audit
recommendations, including those relating to strengthening of the Company's risk
management policies and systems.

Principal risks

In the following pages, we have identified the risks that we currently
regard as the most relevant to our business. These are the risks that we see as most
material to HUL's business and performance at this time. There may be other risks that
could emerge in the future.

Our principal risks have not changed this year. However climate change
and increased vulnerability of systems and information have accentuated the risks in these
areas. Much of our risk mitigation focus during the year has been on managing these risks.

We regularly review our risk areas and the Company's leadership retains
the responsibility for determining the nature and extent of significant risks and drawing
out commensurate mitigation plans. We identify the most relevant risks for our business
and reflect on whether the level of risk associated with each of our principal risks is
increasing or decreasing.

We set out below our principal risks, certain mitigating actions that
we believe help us to manage our risks, and the increase/decrease corresponding to each of
the these.


  

    
Risk
    
Risk Description
    
Management of Risk
    
Level of Risk
  
  

    
Brand
Preference
    
Our success depends on the value and
    relevance of our brands and products to our consumers and on our ability to innovate and
    remain competitive.

    
Consumer tastes, preferences, and behaviours are changing more
    rapidly than ever before. The increased competitive intensity due to entry of new players
    may fuel it further.
    
We see a growing trend for consumers preferring brands which meet both
    their functional needs and have an explicit social or environmental purpose. Under
    indexation of product portfolio in segments, where substantial market is moving to, may
    lead to loss of market share and long-term competitive disadvantage. Our ability to create
    innovative products that continue meeting the needs of consumers and deploy the right
    communication, both in terms of messaging content and medium, are critical to the
    continued strength of our brands.
    
The Company monitors external market trends
    and collates consumer, customer, and shopper insights in order to develop category and
    brand strategies. We invest in markets and segments where we have built, or are confident
    that we can build, competitive advantage.

    
Our R&D function actively identifies ways to translate trends in
    consumer preferences into new technologies for incorporation in future products.
    
Our innovation management process converts category strategies into
    projects which deliver new products to market.
    
We develop product ideas both in-house and with selected partners to
    enable us to respond to rapidly changing consumer trends with speed.
    
Our brand communication strategies are designed to optimise digital
    communication opportunities. We develop and customise brand messaging content,
    specifically for each of our chosen communication channels (both traditional and digital)
    to ensure that our brand messages reach our target consumers. Our brand teams are driving
    social purpose into their brand's proposition and communications.
    
No

    
Change
  
  

    
Legal& Regulatory
    
Compliance with laws and regulations is
    an essential part of HUL's business operations.

    
Increase in and changes in regulations, that have applicability at
    both Central and State level, related to levy of direct/ indirect taxes, data privacy,
    corporate governance, listing and disclosure, food standards compliance, packaged
    commodities, labour laws, consumer communications and advertising, imports, among others,
    and manner of enforcement may lead to adverse impact on growth and profitability and
    increased exposure to civil and/or criminal actions leading to damages, fines, and
    criminal sanctions against us and/or our employees with possible consequences for our
    corporate reputation. Changes to laws and regulations could have a material impact on the
    cost of doing business.
    
We are committed to complying with the laws
    and regulations of the country. In specialist areas, the relevant teams are responsible
    for setting detailed standards and ensuring that all employees are aware of and comply
    with regulations and laws specific and relevant to their roles. Our legal and regulatory
    teams are involved in monitoring and reviewing our regulatory practices to provide
    reasonable assurance that we remain aware of and are in line with all relevant laws and
    legal obligations. The teams also work with the Industry and Trade Associations in making
    recommendations on newer and evolving regulations keeping the multistakeholder model in
    mind.
    
No

    
Change
  
  

    
Supply Chain
    
Our business depends on purchasing
    materials, efficient manufacturing and the timely distribution of products to our
    customers.

    
Our supply chain network is exposed to potentially adverse events,
    such as physical disruptions, environmental and industrial accidents, labour unrest, trade
    restrictions, or disruptions at a key supplier, which could impact our ability to deliver
    orders to our customers.
    
The cost of our products can be significantly affected by the cost of the
    underlying commodities and materials from which they are made. Fluctuations in these costs
    may negatively impact business, especially if such movements are not effectively managed.
    
Geopolitical uncertainty around the world has challenged and continues to
    challenge the resilience and continuity of our supply chain. Maintaining manufacturing and
    logistics operations will continue to require ongoing focus and flexibility.
    
We have contingency plans designed to enable
    us to secure alternative key material supplies at short notice, to transfer or share
    production between manufacturing sites and to use substitute materials in our product
    formulations and recipes.

    
Commodity price risk is actively managed through forward buying of traded
    commodities, other hedging mechanisms and product pricing. Trends are monitored and
    modelled regularly and integrated into our forecasting process.
    
We have policies and procedures designed to ensure the health and safety
    of our employees and the products in our facilities, and to deal with major incidents
    including business continuity and disaster recovery.
    
No

    
Change
  
  

    
Business
Transformation
    
Successful execution of business
    transformation projects is key to delivering intended business benefits and avoiding
    disruption to other business activities.

    
We are continually engaged in major change projects, including
    acquisitions, disposals, and organisational transformation, to drive continuous
    improvement in our business and to strengthen our portfolio and capabilities. We have an
    extensive programme of transformation projects. Ineffective execution of strategic
    business transformation projects could result in under-delivery of the expected
    benefits/synergies, inability to unlock growth opportunities, and a significant negative
    impact on the value of the business. Continued digitisation of our business models and
    processes, together with enhancing data management capabilities, is a critical part of our
    transformation.
    
All acquisitions, disposals, and
    transformation projects have steering groups in place led by senior leadership teams.
    Sound project discipline is followed in all transformation projects and these projects are
    resourced by dedicated and appropriately qualified personnel. All such projects are
    monitored through strong governance and reviewed by the Board of the Company for delivery
    of maximum synergies. The digitisation of our business is led by a dedicated specialist
    team together with representatives from all parts of the business to ensure an integrated
    and holistic approach. New ways of working and business models are constantly being
    explored to manage our business optimally in changing times.
    
No

    
Change
  
  

    
Macro
Economic
    
Volatility
    
Uncertain macro-economic outlook coupled
    with geopolitical uncertainties may impact consumer demand for our products, disrupt sales
    operations, and/or impact the profitability of our operations.

    
Prolonged and accentuated commodity price increases; rise in
    unemployment, fall in disposable incomes could lead to a demand shock.
    
Our flexible business model allows us to
    adapt our portfolio and respond quickly to develop new offerings that suit consumers' and
    customers' changing needs during economic downturns. We regularly update our forecast of
    business results and cash flows, and, where necessary, rebalance investment priorities. We
    believe that many years of exposure to challenging market conditions have given us
    experience of operating and developing our business successfully during periods of
    economic and political instability.
    
No

    
Change
  
  

    
Plastic
Packaging
    
We use plastic to package our products. A
    reduction in the amount of virgin plastic we use, the use of recycled plastic, and an
    increase in the recyclability of our packaging are critical to our future success.

    
Consumer and customer responses to environmental impact of plastic
    waste and emerging regulations by Government to tax or ban the use of certain plastics,
    require us to find solutions to reduce the amount of plastic we use; increase recycling
    post-consumer use; and to source recycled plastic for use in our packaging. Not only is
    there a risk around finding appropriate replacement materials, due to high demand, but the
    cost of recycled plastic or other alternative packaging materials could significantly
    increase in the foreseeable future and this could impact our profitability. We could also
    be exposed to higher costs as a result of taxes or fines if we are unable to comply with
    plastic regulations which would again impact our profitability and reputation
    
We are working on three different streams to
    address the risk:

    
Advocacy: We are working with Government and Industry bodies on
    packing substitutes, putting in place a National Framework on Extended Producers
    Responsibility (EPR), harmonisation of regulations on plastic waste management between the
    Central & State Regulations, improving recycling infrastructure for plastics.
    
Collection and Recovery: We are driving waste management pilots
    through tie-ups with various companies/NGOs deploying mass collection, processing and
    disposal models. We are also helping consumers to understand waste segregation and
    disposal methods. Through our partners, we collect and safely dispose more plastic than we
    use in packaging of our products.
    
Design and development of alternative packaging: We are committed
    to make 100% of our plastic packaging reusable, recyclable, or compostable by 2025 and are
    working on innovative solutions for accelerated development of alternative packaging and
    associated Supply Chain capability in order to reduce usage of virgin plastic.
    
No

    
Change
  
  

    
Systems & Information
    
The Company's operations are increasingly
    dependent on IT systems and the management of information.

    
The cyber-attack threat of unauthorised access and misuse of
    sensitive information or disruption to operations continues to increase. Such an attack
    could inhibit our business operations in a number of ways, including disruption to sales,
    production and cash flows, ultimately impacting our results. Increasing digital
    interactions with customers, suppliers, and consumers place greater emphasis on the need
    for secure and reliable IT infrastructure and careful management of the information that
    is in our possession to ensure data privacy. Given the changes in ways of working of all
    our employees as well as our customers and suppliers, with increased activities online,
    there has been a greater reliance on certain elements of our IT infrastructure. We are
    particularly reliant on third party experts in this space and thus the impact of any
    disruptions on their operations also pose a risk for us. Accelerated pace of digitisation
    of our operations also gives rise to the need to detect and mitigate risks arising from
    technological advancements such as deployment of Al, Robotics Process Automation, Machine
    Learning.
    
To reduce the impact of external cyber-
    attacks impacting our business we have firewalls and threat monitoring systems in place,
    complete with immediate response capabilities to mitigate identified threats.

    
We also maintain a robust system for the control and reporting of access
    to our critical IT systems. This is supported by an annual programme of testing of access
    controls. We have policies covering the protection of both business and personal
    information, as well as the use of IT systems and applications by our employees. Our
    employees are trained to understand these requirements. We also have a set of IT security
    standards and closely monitor their operation to protect our systems and information. We
    have moved all systems and data to cloud this year. Robust and scalable system
    architecture with multi-level redundancy, is built on the cloud that allows real time data
    replication capability. This ensures system resilience including minimum downtime of the
    systems and minimum to zero data loss in case of any disaster. We have standardised ways
    of hosting information on our public websites and have systems in place to monitor
    compliance with appropriate privacy laws and regulations, and with our own policies. We
    are increasingly putting in place review and monitoring frameworks for new age automations
    to assess inherent open risks and mitigate the same.
    
Increase
  
  

    
Quality and Safety
    
The quality and safety of our products
    are of paramount importance for our brands and our reputation.

    
The risk that raw materials are accidentally or maliciously
    contaminated throughout the supply chain or that other product defects occur due to human
    error, equipment failure, or other factors cannot be excluded. Labelling errors can have
    potentially serious consequences for both consumer safety and brand reputation. Therefore,
    on-pack labelling needs to provide clear and accurate ingredient information so that
    consumers can make informed decisions regarding the products they buy.
    
Our product quality processes and controls
    are comprehensive, from product design to customer shelf. Our internal safety and quality
    norms are constantly reviewed to ensure that our products meet the most stringent norms.
    We have a robust quality inspection process in all manufacturing and warehousing locations
    to avoid and detect quality and safety issues. Also, we have a well-defined and periodic
    sampling and inspection process both at the distributor floor and on the market shelf
    ensuring quality of delivered product. Our key suppliers are externally certified, and the
    quality of material received is regularly monitored to ensure that it meets the rigorous
    quality standards that our products require. We have processes in place to ensure that the
    data used to generate on-pack labelling is compliant with applicable regulations and HUL
    labelling policies in order to provide the clarity and transparency needed for consumers.
    
No

    
Change
  
  

    
Talent
    
Ensuring employee safety and well-being
    is a key priority for us.

    
A skilled workforce and agile ways of working are essential for the
    continued success of our business.
    
With the rapidly changing nature of work and skills, there is a risk
    that our workforce is not equipped with the skills required for the new environment. Our
    ability to attract, develop, and retain a diverse range of skilled people is critical if
    we are to compete and grow effectively. The loss of management or other key personnel or
    the inability to identify, attract, and retain qualified personnel could make it difficult
    to manage the business and could adversely affect operations and financial results. We now
    work in an interweaving ecosystem of physical and virtual work spaces and our ability to
    manage hybrid ways of working will be the key to operational effectiveness.
    
We have always ensured safe working
    conditions for our employees and are providing the necessary infrastructure and equipment
    across all operations to strictly adhere to the highest safety measures. We constantly
    invest in upskilling, reskilling, redeployment, and dynamic allocation of our talent. We
    regularly review our ways of working to drive speed and simplicity through our business in
    order to remain agile and responsive to marketplace trends. We are adopting flexible ways
    of working to unlock internal capacity and optimise talent deployment.

    
Over the years we have developed a good equity to attract top talent. We
    have an integrated management development process which includes regular performance
    reviews, underpinned by a common set of leadership behaviours, skills, and competencies.
    We have development plans to upskill and reskill employees for future roles and will bring
    in flexible talent to access new skills. We have targeted programmes to attract and retain
    top and niche talent, and we actively monitor our performance in retaining a diverse
    talent pool.
    
No

    
Change
  
  

    
Ethics
    
Our brands and reputation are valuable
    assets, and the way i n which we operate, contribute to society, and engage with the world
    around us is always under scrutiny.

    
Acting in an ethical manner, consistent with the expectations of
    customers, consumers, and other stakeholders, is essential for the protection of the
    reputation of HUL and its brands.
    
Any significant breach to our Code by employees or extended enterprises
    would lead to damage to HUL's corporate reputation and business results.
    
Our Code and our Code Policies govern the
    behaviour of our employees, suppliers, distributors, and other third parties who work with
    us. Our processes for identifying and resolving breaches of our Code and our Code Policies
    are clearly defined and regularly communicated throughout HUL. Data relating to such
    breaches is reviewed by Management Committee and by relevant Board Committees that help to
    determine the allocation of resources for future policy development, process improvement,
    training, and awareness initiatives. Our Responsible Partner Policy helps us improve the
    lives of the people in our supply chains by ensuring human rights are protected and makes
    a healthy and safe workplace a mandatory requirement for our suppliers. We have detailed
    safety standards and monitor safety incidents at the highest level. Through our Brands
    with Purpose agenda, a number of our brands are taking action on societal issues such as
    fairness and equality.
    
No

    
Change
  
  

    
Climate
Change
    
Cli mate change and governmental actions
    to reduce such changes may disrupt our operations and/or reduce consumer demand for our
    products.

    
Climate change may impact our business in various ways through
    increased costs or reduced growth and profitability. Physical environment risks such as
    water scarcity could impact our operations, reduce demand for our products that require
    water during consumer use or decrease sales on account of reduced product efficacy due to
    water shortage. Uncertainty in timing and severity of summer, winter, and monsoon may
    impact the seasonal swings that we get on our mixes.
    
Increased frequency of extreme weather events such as high temperatures,
    hurricanes, or floods could cause increased incidence of disruption to our supply chain,
    manufacturing, and distribution network. Market risks associated with the energy
    transition and rising energy prices could disrupt our operations and increase costs. Our
    inability to reduce our carbon footprint and meet conscious consumption agenda across
    consumer segments may be detrimental to our reputation and growth in the long term.
    
As part of our sustainability goals, we
    monitor climate change and are responding by ensuring that we reduce the environmental
    impact of our operations to the extent possible.

    
• Remove as much carbon from our operations and supply chain as we
    can
    
• Sustainably source all our key commodities
    
• Ensure deforestation-free supply chain
    
In order to deal with the water scarcity and quality problems in the
    country, we are making water-saving formulations available for seasonal deployment across
    portfolios. We also have ongoing plans to de-seasonalise our product portfolios to deal
    with extreme unfavourable seasonal swings. We monitor governmental developments around
    actions to combat climate change and take proactive action to minimise the impact on our
    operations.
    
Increased
  










Opportunities


  

    

    
Opportunities
    
What we are doing to respond
  
  

    
Growing in Channels of the Future
    
With the advent of technology-enabled
    distribution models, there has been a hyper fragmentation of channels. Accelerated growth
    of e-Commerce and Modern Trade has brought about a huge opportunity to tap into these
    channels and drive business growth. The rapid digitisation of purchase behaviours require
    us to accelerate development of our e-Commerce and e-RTM (Route-to-market) capabilities.
    Strategically designed and flawlessly executed e-RTM, B2B solutions, and E2E Supply Chain
    transformation would open up a huge opportunity to tap into the new age channels and drive
    business growth.
    
While we continue to drive growth in the
    traditional trade and route to market, it is also critical to increase our footprint in
    emerging channels. We are working on rapid proliferation of technology-enabled
    distribution models to engage key customers and consumers strategically. Several new
    initiatives have been piloted which include digitisation of general trade through our
    e-B2B app Shikhar, smart demand capture, leveraging opportunities in omni channel, B2B2C,
    and e-Commerce including q-Commerce.
  
  

    
Future-fit
Portfolio
    
Our strategic investment choices in keeping
    with changing consumer demographics, aspirations, and spending power will bring about an
    opportunity for growth and improved margins. There is a huge headroom to grow through
    building our product portfolio in high-growth spaces such as masstige, health and hygiene,
    digital-first brands, naturals, and therapeutics.
    
Our strategy and our business plans are
    designed to ensure that resources are prioritised towards high growth segments. We have a
    strong pipeline of relevant innovations and are staying close to consumers by proactively
    spotting consumer insights and capturing potential trends to adapt to the emerging demand
    patterns in the short term and prepare for any structural changes in the medium term. We
    are also focused on making brands aspirational and driving premiumisation across the
    breadth of the product portfolio. We have significantly enhanced brand propositions and
    marketing investments to increase adoption in under-penetrated categories.
  
  

    
Digital
Transformation
    
Digital Transformation Opportunities arising
    from rapidly emerging digital technologies, analytics, and big data present a chance to
    make meaningful interventions and develop capabilities across the value chain redefining
    the way we do business. The ability to keep our operations future-fit through building
    digital capabilities in systems, workforce, and business models will help us stay agile
    and respond in time to evolving stakeholder requirements.
    
We have been a leader in using big data and
    analytics as a tool to drive sustainable growth. We continue to drive organisation-wide
    digital transformation agenda under the umbrella of 'Re-Imagine HUL' to capture the
    digital opportunities. Pre-empting the imminent disruption, we have established a sharp
    digitalisation agenda in each function. These include those around our core Enterprise
    Resource Planning (ERP) platform using Cloud, Artificial Intelligence, and other digital
    technologies. Each day, we build new capabilities in Systems, Workforce, and Business
    Models with strong focus on external orientation and partnerships across large IT
    Companies/Industry Bodies. We are also invested to make sure that our talent is digitally
    enabled and future-fit to ride the digital transformation wave.
  
  

    
ESG Focus
    
The effects of climate change, nature loss,
    and social inequality are becoming ever more apparent and increasingly urgent. Our
    stakeholders recognise that responsible business practices are critical to generating
    long-term value. We are committed to operate and grow the business in a responsible way.
    
We are a frontrunner in sustainable business
    practices. We have integrated sustainability into business strategies. We aim to
    demonstrate that robust financial results are not contrary to sustainable business; in
    fact, they are complementary.

    
We have a strong governance mechanism in place consisting of
    cross-functional steering committees to action our ESG goals. We are constantly driving
    advocacy around sustainability and getting broader industry participation to lead the
    change.
  








Financial Review

Results

(Rs crores)


  

    

    
For the year ended 31st March, 2024
    
For the year ended 31st March, 2023
  
  

    
Turnover
    
59,579
    
58,154
  
  

    
Earnings before Interest, Tax, Depreciation and Amortisation
    (EBITDA)
    
14,190
    
13,632
  
  

    
Profit before exceptional items and tax
    
13,764
    
13,141
  
  

    
Profit for the year
    
10,114
    
9,962
  




Division Wise Turnover


  

    

    
For the year
    ended 31st March, 2024
    
For the year
    ended 31st March, 2023
  
  

    

    
Sales
    
Other Operating Income
    
Sales
    
Other Operating Income
  
  

    
Home Care
    
21,767
    
133
    
21,103
    
127
  
  

    
Beauty & Personal Care
    
21,864
    
301
    
21,498
    
333
  
  

    
Foods & Refreshment
    
15,153
    
139
    
14,744
    
132
  
  

    
Others (including consignment sales)
    
795
    
317
    
810
    
397
  
  

    
Total
    
59,579
    
890
    
58,154
    
990
  




Summarised Profit and Loss Account


  

    

    
For theyearended 31st March, 2024
    
For the year ended 31st March, 2023
  
  

    
Turnover
    
59,579
    
58,154
  
  

    
Other Operating Income
    
890
    
990
  
  

    
Total Revenue from operations
    
60,469
    
59,144
  
  

    
Operating Costs
    
46,279
    
45,512
  
  

    
EBITDA
    
14,190
    
13,632
  
  

    
Depreciation and amortisation
    
1,097
    
1,030
  
  

    
Earnings Before Interest & Tax (EBIT)
    
13,093
    
12,602
  
  

    
Other Income (net)
    
671
    
539
  
  

    
Profit before exceptional items
    
13,764
    
13,141
  
  

    
Exceptional items
    
(89)
    
(62)
  
  

    
Profit Before Tax (PBT)
    
13,675
    
13,079
  
  

    
Taxation
    
3,561
    
3,117
  
  

    
Profit for the year
    
10,114
    
9,962
  
  

    
Basic EPS (Rs)
    
43.05
    
42.40
  




Key Financial Ratios


  

    
Particulars
    
2023-24
    
2022-23
  
  

    
Return on Net Worth (%)
    
20.0
    
20.1
  
  

    
Return on Capital Employed (%)
    
96.3
    
101.9
  
  

    
Basic EPS (after exceptional items) (Rs)
    
43.05
    
42.40
  
  

    
Debtors Turnover (no. of times)
    
22.0
    
24.9
  
  

    
Inventory Turnover (no. of times)
    
15.2
    
14.7
  
  

    
Interest Coverage ratio
    
118.3
    
143.9
  
  

    
Debt Service Coverage ratio
    
23.6
    
21.8
  
  

    
Current ratio
    
1.6
    
1.4
  
  

    
Debt Equity ratio
    
0.0
    
0.0
  
  

    
Operating profit margin (%)
    
22.0
    
21.7
  
  

    
Net profit margin (%)
    
17.0
    
17.1
  




Increase in Debt Equity ratio is on account of higher lease liabilities
during the year

There is no significant change (i.e. change of 25% or more as compared
to the FY 2022-23) in the other key financial ratios.



Explanation to Key Financial Ratios

(i) Return on Net Worth (%)

Return on Net Worth is a measure of profitability of a Company
expressed in percentage. It is calculated by dividing total comprehensive income by
average shareholder's equity.



(ii) Return on Capital Employed (%)

Return on Capital Employed indicates the ability of a Company's
management to generate returns for both the debt holders and the equity holders. It
measures a Company's profitability and the efficiency with which its capital is used. It
is calculated by dividing profit before exceptional items, interest and tax by capital
employed. Capital Employed = Tangible net worth + Total debt + Deferred tax liabilities.



(iii) Basic EPS

Earnings Per Share (EPS) is the portion of a Company's profit allocated
to each share. It serves as an indicator of a Company's profitability. It is calculated by
dividing Profit for the year by weighted average number of shares outstanding during the
year.



(iv) Debtors Turnover

Debtors Turnover measures the efficiency at which the Company is
managing the receivables. The ratio shows how well a Company uses and manages the credit
it extends to customers and how quickly short- term debt is collected or is paid. It is
calculated by dividing turnover by average trade receivables.



(v) Inventory Turnover

I nventory Turnover measures the efficiency with which a Company
utilises or manages its inventory. It establishes the relationship between sales and
average inventory held during the period. It is calculated by dividing turnover by average
inventory.



(vi) Interest Coverage Ratio

Interest Coverage Ratio measures how many times a Company can cover its
current interest payment with its available earnings. It is calculated by dividing
earnings available for debt service by interest payments.



(vii) Debt Service Coverage Ratio

Debt Service coverage ratio is used to analyse the firm's ability to
pay-off current interest and instalments. It is calculated by dividing earnings available
for debt service by debt service.



(viii) Current Ratio

Current Ratio indicates a Company's overall liquidity position. It
measures a Company's ability to pay short-term obligations or those due within one year.
It is calculated by dividing the current assets by current liabilities.



(ix) Debt Equity Ratio

Debt Equity ratio is used to evaluate a Company's financial leverage.
It is a measure of the degree to which a Company is financing its operations through debt
versus wholly owned funds. It is calculated by dividing total debt by shareholder's
equity.



(x) Operating Profit Margin (%)

Operating Profit Margin is used to calculate the percentage of profit a
Company produces from its operations. It is calculated by dividing EBIT by turnover.



(xi) Net Profit Margin (%)

The net profit margin is equal to how much net profit is generated as a
percentage of revenue. It is calculated by dividing net profit by turnover.



Economic Value Added What is EVARs

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.

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 7.69%.

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.

Cost of Equity = Risk free return equivalent to yield on long term
Government Bonds + Market risk premium (x) Beta variant for the Company, 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 = 10.70%.



What does EVA showRs

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 increaseRs

EVA will increase if:

a Operating profits can be made to grow without employing more capital,
i.e. greater efficiency.

b Additional capital 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

At 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.

(Rs crores)


  

    

    
IGAAP
    
IND AS
  
  

    

    
2014-15
    
2015-16
    
2016-17
    
2017-18
    
2018-19
    
2019-20
    
2020-21
    
2021-22
    
2022-23
    
2023-241
  
  

    
Cost of Capital Employed (COCE)
    

    

    

    

    

    

    

    

    

    

  
  

    
1 Average Debt
    
0
    
0
    
0
    
0
    
0
    
0
    
0
    
0
    
0
    
0
  
  

    
2 Average Equity
    
4,338
    
5,664
    
5,831
    
6,181
    
6,668
    
7,227
    
46,890
    
47,156
    
48,486
    
49,508
  
  

    
3 Average Capital Employed: (1)+(2)
    
4,338
    
5,664
    
5,831
    
6,181
    
6,668
    
7,227
    
46,890
    
47,156
    
48,486
    
49,508
  
  

    
4 Cost of Debt, post-tax %
    
5.56
    
5.43
    
4.90
    
5.21
    
5.77
    
5.25
    
4.70
    
4.81
    
5.87
    
5.75
  
  

    
5 Cost of Equity %
    
10.91
    
11.98
    
12.85
    
14.19
    
11.84
    
9.11
    
8.86
    
9.09
    
10.90
    
10.70
  
  

    
6 Weighted Average Cost of Capital % (WACC)
    
10.91
    
11.98
    
12.85
    
14.19
    
11.84
    
9.11
    
8.86
    
9.09
    
10.90
    
10.70
  
  

    
7 COCE: (3)x(6)
    
474
    
679
    
749
    
877
    
789
    
658
    
4,153
    
4,289
    
5,285
    
5,297
  
  

    
Economic Value Added (EVA)
  
  

    
8 Profit after tax, before exceptional
    items
    
3,843
    
4,116
    
4,247
    
5,135
    
6,080
    
6,743
    
7,963
    
8,724
    
9,720
    
10,105
  
  

    
9 Add: Interest, after taxes
    
11
    
0
    
0
    
0
    
0
    
0
    
0
    
0
    
0
    
0
  
  

    
10 Net Operating Profits After Taxes
    (NOPAT)
    
3,854
    
4,117
    
4,247
    
5,135
    
6,080
    
6,743
    
7,963
    
8,724
    
9,720
    
10,105
  
  

    
11 COCE, as per (7) above
    
474
    
679
    
749
    
877
    
789
    
658
    
4,153
    
4,289
    
5,285
    
5,297
  
  

    
12 EVA: (10)-(11)
    
3,380
    
3,438
    
3,498
    
4,258
    
5,291
    
6,085
    
3,810
    
4,435
    
4,435
    
4,808
  




Other Financial Disclosures

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 statement relates on the date of this Integrated Annual Report.

During the Financial Year, there was no amount proposed to be
transferred to Reserves.

Capital Expenditure (including Intangible Assets) during the financial
year was at Rs1,318 crores (Rs1,042 crores in the previous financial year).

During the Financial Year, the Company did not accept any public
deposits as defined under Chapter V of the Companies Act, 2013 (the Act).

The Company manages cash and cash flow processes assiduously, involving
all parts of the business. There was cash and bank balance of Rs7,216 crores (FY 2022-23:
Rs4,422 crores), as on 31st March, 2024. The Company's low debt equity ratio provides
ample scope for gearing the Balance Sheet, should the need arise. 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 Ind
AS 21.



Foreign Exchange Earnings and Outgo

The details of foreign exchange earnings and outgo as required under
Section 134 of the Act and Rule 8(3) of Companies (Accounts) Rules, 2014 are mentioned
below:

(Rs crores)


  

    

    
For theyearended 31st
    March, 2024
    
For the year ended 31st
    March, 2023
  
  

    
Foreign Exchange earnings
    
1,497
    
1,574
  
  

    
Foreign Exchange outgo
    
4,463
    
3,695
  




Includes all Indian subsidiaries, except Unilever Nepal Limited



Performance of Subsidiaries

The summary of performance of the Company's subsidiaries is provided as
below:



Unilever India Exports Limited

Unilever India Exports Limited (UIEL) is a wholly owned subsidiary of
the Company and is engaged in Fast Moving Consumer Goods (FMCG) exports business. The
focus of the FMCG exports operation is two-fold: to expand global presence of brands, such
as Vaseline, Dove, Pears, Bru, Lakme, Sunsilk, Horlicks and Boost and to effectively
provide cross-border sourcing of FMCG products to other Unilever companies across the
world.

The turnover of UIEL was driven by products in Skin Care, Nutrition
Drinks, Hair Care and Personal Wash. Brands like Dove, Horlicks, Vaseline, Pears, Bru,
Sunsilk, Glow and Lovely, Pond's, Lakme, Lifebuoy have contributed in the focused markets.



Lakme Lever Private Limited

Lakme Lever Private Limited (LLPL) is a wholly owned subsidiary of the
Company. LLPL is engaged in Salon business and also operates a manufacturing unit at
Gandhidham, Gujarat which carries out job work operations for HUL.

LLPL delivered resilient top line growth. With focus on quality of
operations, expert treatments and prudent cost optimisation, the salon business continued
to perform well in the beauty services category. Job work business continued to do well.

LLPL has over 450 owned and managed & franchisee Salons. The
extended team comprising the housekeeping staff, experts, salon managers and business
partners were trained and audited continuously to ensure complete adherence to protocols.
LLPL has also dialled up expertise by enhancing training and launching its flagship Salon
at Powai, Mumbai. By ensuring safety and keeping customer satisfaction as focus, LLPL's
Net Promoter Score continued to be above 90%. Lakme Salons continued to improve quality
and expertise across all touch points in customer journey with trendsetting look &
#UnapologeticallyME campaign.

Innovations like Quintessential bridal looks, Tressplex Collagen
Treatment for normal & curly hair, Cappuccino Spa added excitement to Lakme Salon's
comprehensive Runway Secrets portfolio. Thematic campaigns - Good Hair Day and Happy New
You continued helping gain new clients and sustain existing ones. Lakme Salon continues to
be the preferred option for franchisees in the beauty and wellness category attracting
several professionals and entrepreneurs.



Hindustan Unilever Foundation

Hindustan Unilever Foundation (HUF) is a not-for-profit company that
anchors water management related community development and sustainability initiatives of
the Company.

HUF operates the 'Water for Public Good' programme, with a specific
focus on water conservation, building local community institutions to govern water
resources and enhancing farm-based livelihoods through adoption of judicious water
practices. It aims to catalyse effective solutions to India's water challenges through a
partnership approach involving the Government, communities, experts and mission-based
organisations.

HUF partners with non-profit organisations in water- stressed regions
across the country to support rural communities with water conservation and regenerative
agricultural practices amongst farmers. The initiative has delivered a cumulative and
collective water potential of over 3.2 trillion litres through improved supply and demand
water management, over 2.1 million tonnes of additional agricultural and biomass
production, and over 114 million person-days of employment due to project interventions*.
Till now, HUF's programmes have reached more than 15,000 villages across India.

*Assured by an independent external firm.



Unilever Nepal Limited

Unilever Nepal Limited (UNL) is a subsidiary of the Company listed on
Nepal Stock Exchange and is engaged in marketing and manufacturing products related to
Beauty & Wellbeing, Personal Care and Home Care in Nepal for the past 30 years.

Despite a challenging business environment in Nepal, (impacted by
national liquidity crunch, low foreign reserves and rising migration), UNL has
demonstrated resilient performance with flat growth for this year and held its
profitability on par with past years performance. To boost consumer franchise, UNL has
invested in advertising and promotion spends across various mediums in Nepal.



Unilever India Limited

Unilever India Limited (UIL) is a wholly owned subsidiary of the
Company incorporated to leverage the growth opportunities in a fast-changing business
environment. UIL has a Home Care factory in Sumerpur, Uttar Pradesh.

The state-of-the-art spray dried detergent factory manufactures Home
Care products for Company. It is designed to make the best use of digital 4th industrial
revolution, guaranteeing world class performance in people safety, product quality,
innovation lead times and environmental performance. The site's integrated design allows
for an ecosystem of material suppliers, logistic operators and manufacturing partners to
be located at the site for optimal supply chain integration.

This unit is firmly on its path to be Unilever's first gender balanced
factory in South Asia and currently has 170+ female employees. It is an inspiring example
of the path breaking work being done to increase female representation in our shop floors
through Project Samavesh.

In the current Financial Year, UIL has ramped up its operations and has
delivered robust volume growth. The top-line and bottom-line growth is in line with the
growth in volumes.



Zywie Ventures Private Limited

Zywie Ventures Private Limited (ZVPL) is a subsidiary of the Company
engaged in the business of Health and Well-being products under the brand name of 'OZiva'.
The Company acquired 53.34% stake (51.00% on a fully diluted basis) in ZVPL on 10th
January, 2023.

OZiva is a plant-based and clean label consumer wellness brand focused
on need spaces such as Lifestyle Protein, Hair & Beauty Supplements and Women's
Health. OZiva is a digital-first brand with an omnichannel approach, available on its D2C
website, digital marketplaces and a growing offline presence. ZVPL has a strong inhouse
R&D team comprising Ph.D.s, Phyto-chemists and Biotechnologists.

This investment is in Line with the Company's strategy to enter fast
evolving growth space of Health and WeLL-being.



Other Subsidiaries

Daverashola Estates Private Limited is a subsidiary of the Company
which currently has no business activity. There is an ongoing litigation on the property
owned by the company in Tamil Nadu.



Levers Associated Trust Limited, Levindra Trust Limited and Hindlever
Trust Limited, subsidiaries of the Company, act as trustees of the employee benefits
trusts of your Company.

The National Company Law Tribunal, Mumbai Bench (Tribunal) vide its
order dated 18th December 2023, approved the voluntary liquidation of Bhavishya
Alliance Child Nutrition Initiatives (BACNI) a not-for-profit subsidiary of the
Company. BACNI was liquidated with effect from 27th December, 2023.

Further, vide its order dated 16th January, 2024, the Tribunal approved
the Scheme for merger of Pond's Exports Limited and Jamnagar Properties Private Limited
into Unilever India Exports Limited. The amalgamation was effective from 13th
February, 2024.



Audit & Auditors Statutory Auditors

In terms of provisions of Section 139 of the Act, M/s. B S R & Co.
LLP, Chartered Accountants (Firm Registration No.: 101248W/W-100022) were re- appointed as
Statutory Auditors of the Company at the 86th Annual General Meeting (AGM) held on 29th
June, 2019, to hold office till the conclusion of 91st AGM of the Company. The Report
given by M/s. BSR & Co. LLP, on the financial statements of the Company for the FY
2023-24 is part of this Integrated Annual Report. There has been no qualification,
reservation, adverse remark or disclaimer given by the Auditors in their Report. During
the year under review, M/s. BSR & Co. LLP has filed a report under Section 143(12) of
the Act in Form ADT-4 as prescribed under RuLe 13 of Companies (Audit and Auditors) Rules,
2014 with the Central Government. However, they have not reported any instances of frauds
committed in the Company by its officers or employees involving an amount of Less than Rs1
crores to the Audit Committee or Board under Section 143(12) of the Act. Therefore, no
detail is required to be disclosed in the Director's Report under Section 134(3)(ca) of
the Act.

As the term of M/s. B S R & Co. LLP as the Statutory Auditors of
the Company expires at the conclusion of 91st AGM, the Board of Directors of the Company
at their meeting held on 24th April, 2024, based on the recommendation of the Audit
Committee, has recommended to the Members the appointment of M/s. Walker Chandiok &
Co. LLP, Chartered Accountants (Firm Registration No. 001076N/ N500013), as Statutory
Auditors of the Company, for a term of 5 (five) consecutive years from the conclusion of
91st AGM tiLL the conclusion of the 96th AGM. AccordingLy, an Ordinary ResoLution,
proposing appointment of M/s. WaLker Chandiok & Co. LLP, as the Statutory Auditors of
the Company for a term of five consecutive years pursuant to Section 139 of the Act, forms
part of the Notice of the 91st AGM of the Company. The Company has received the written
consent and a certificate that M/s. WaLker Chandiok & Co. LLP satisfy the criteria
provided under Section 141 of the Act and that the appointment, if made, shaLL be in
accordance with the appLicabLe provisions of the Act and ruLes framed thereunder.

M/s. WaLker Chandiok & Co. LLP, is a firm of Chartered Accountants
registered with the Institute of Chartered Accountants of India. It was estabLished in the
year 1935 and is a Limited Li a b i Li ty Partnership Firm incorporated in India. It has
its registered office at L-41, Connaught Circus, New DeLhi - 110001 apart from 15 other
branch offices in various cities in India. It is primariLy engaged in providing audit and
assurance services to its cLients.



Secretarial Auditors

The Board, at its meeting heLd on 27th ApriL, 2023 had appointed M/s.
S. N. Ananthasubramanian & Co., (ICSI Unique Code: P1991MH040400) Company Secretaries
to conduct SecretariaL Audit for the FY 2023-24. The SecretariaL Audit Report forms part
of this Integrated AnnuaL Report and does not contain any quaLification, reservation or
adverse remark. During the year under review, the SecretariaL Auditor has not reported any
fraud under Section 143(12) of the Act.

In Line with the best governance practices codified under our Corporate
Governance Code, the SecretariaL Auditor must be rotated every ten years and a cooLing off
period of three years must have eLapsed to be re-appointed by the Company. AccordingLy, in
terms of provisions of Section 204 of the Act, read with the Companies (Appointment and
Remuneration of ManageriaL PersonneL) RuLes, 2014, the Board, at its meeting heLd on 19th
January, 2024 had appointed M/s. Parikh & Associates, Company Secretaries (ICSI Unique
Code: P1988MH009800) to conduct SecretariaL Audit for the FY 2024-25.

M/s. Parikh & Associates is a firm of Practising Company
Secretaries founded in 1987. The firm provides professionaL services in the fieLd of
Corporate Laws, SEBI ReguLations, FEMA ReguLations incLuding carrying out SecretariaL
Audits, Due DiLigence Audits and CompLiance Audits. The firm is Peer Reviewed and QuaLity
Reviewed by the Institute of the Company Secretaries of India.



Cost Records and Cost Audit

In terms of provisions of Section 148 of the Act read with the
Companies (Accounts) RuLes, 2014, Cost Audit is appLicabLe for foLLowing businesses such
as Coffee, Drugs and PharmaceuticaLs, Insecticides, MiLk Powder, Organic ChemicaLs, Other
Machinery, PetroLeum Products, Tea, etc. The accounts and records for the above appLicabLe
businesses are made and maintained by the Company as specified by the CentraL Government
under Section 148 (1) of the Act.

The Board, at its meeting heLd on 27th ApriL, 2023 had appointed M/s. R
A & Co., Cost Accountants (Firm Registration No. 000242) to conduct Cost Audit for the
FY 2023-24. During the year under review, M/s. R A & Co. has not reported any fraud
under Section 143(12) of the Act.

During the year, due to a casuaL vacancy in the office of the Cost
Auditors, pursuant to disquaLification incurred by M/s. R A & Co., Cost Accountants,
the Board, at its meeting heLd on 24th ApriL, 2024, based on the recommendation of the
Audit Committee, has appointed M/s. R Nanabhoy & Co., Cost Accountants (Firm
Registration No. 000010) as the Cost Auditors of the Company for FY 2023-24 and FY
2024-25. M/s. R Nanabhoy & Co., Cost Accountants, being eLigibLe, have consented to
act as the Cost Auditors of the Company for FY 2023-24 and FY 2024-25 and are in the
process of carrying out the cost audit for appLicabLe products for the FY 2023-24. The
foLLowing remuneration is proposed to be paid to the Cost Auditors, subject to
ratification by the Members of the Company at the ensuing AnnuaL GeneraL Meeting:


  

    
Period
    
Remuneration *
  
  

    
FY ending 31st March, 2024
    
m Lakhs
  
  

    
FY ending 31st March, 2025
    
Rs15 Lakhs
  




* ExcLusive of taxes and re-imbursement of out-of-pocket expenses
incurred by the Cost Auditors in connection with the aforesaid audit.

M/s. R. Nanabhoy & Co, Cost Accountants was estabLished in the year
1948. It has its registered office at 1st FLoor, Sadhana Rayon House, 221, Dadabhai
Naoraji Road, Borabazar Precinct, Fort , Mumbai - 400001. It is primariLy engaged in
providing wide spectrum of services in the areas of Cost and Management Accounting.



Internal Financial Controls

The Company has a robust InternaL FinanciaL ControL framework which is
estabLished in accordance with the Committee of Sponsoring Organisation (COSO) framework.
The detaiLs of InternaL FinanciaL ControL framework, form a part of the Corporate
Governance Report of this Integrated AnnuaL Report.



Material Developments In Human Resource Front

The Company recognises that buiLding a cuLture that prioritises
weLL-being and empowers peopLe to Learn and deveLop is criticaL to its Long- term success.

During the year, the Company has continued to invest in peopLe through
Learning and deveLopment sessions of over 1,00,000+ hrs. Through weLL-defined poLicies, we
foster a cuLture of positive work environment enabLing empLoyees to perform at their
highest potentiaL and consistency deLiver resuLts. The Company continues to make inroads
in incLusion through muLtipLe pioneering programmes and poLicies. As a resuLt of our
Leading practices, the Company has continued to retain its position as #1 EmpLoyer of
Choice across sectors in top Business schooLs as weLL as

the preferred empLoyer of women titLe. For further detaiLs pLease refer
page 84.



Employee Stock Option Plan (ESOP)

The empLoyees of the Company are eLigibLe for UniLever share award
pLans, nameLy AnnuaL Share PLan (ASP), Performance Share PLan (PSP) and the SHARES pLan.

Starting 2024, UniLever is moving away from Performance Share PLan to
AnnuaL Share PLan for its junior and middLe management taLent. Under the scheme eLigibLe
empLoyees wiLL receive shares of the hoLding company. For 2024 PersonaL Differentiation
Factor wiLL be awarded for the impact, Leadership and future fitness of an individuaL with
a range of 0 - 200%. Vesting period wouLd be 3 years with no business performance
conditions being appLied at the time of vesting. The Target ASP share award is equivaLent
to 50% of the Target Bonus for junior management and 100% of the Target Bonus for middLe
management.

The Senior Management are eLigibLe to receive a conditionaL grant of
UniLever shares under the Performance Share PLan (PSP) on an annuaL basis. The actuaL
share grant is determined by the Line manager basis the empLoyees' sustained impact,
Leadership and future- fit taLent profiLe. These shares vest after a 3-year period with
vesting being determined by Company performance against metrics. The performance measures
for PSP for grants being made effective 2024 are UnderLying SaLe Growth, ReLative TotaL
SharehoLder Return, UnderLying Return on Invested CapitaL and SustainabiLity Progress
Index. The awards under PSP pLans wiLL vest after 3 years between 0% and 200% of grant
LeveL, depending on the achievement against the performance metrics.

During the year under review, the Company has introduced the Hindustan
UniLever Limited Performance Share PLan Scheme, 2024 (Scheme). Under the Scheme eLigibLe
empLoyees wouLd receive 62% of their ASP Award or PSP Award denominated in UniLever PLC
Shares and the remaining 38% of the award vaLue wouLd be denominated in HUL Shares. Other
terms and conditions on determination of vaLue of grants for the award and vesting
conditions continue to remain the same as under the UniLever AnnuaL Share PLan and
Performance Share PLan Scheme. The Scheme was considered and duLy approved by the
SharehoLders on 5th March, 2024 vide PostaL BaLLot. The grants under the Scheme are
further subject to necessary statutory approvaLs and wouLd be made in conformity with the
appLicabLe Laws. No shares were awarded to empLoyees under the Scheme during the FY
2023-24.1

Further, under the SHARES PLan, eLigibLe empLoyees can invest in the
shares of UniLever PLC (hoLding company) up to a specified amount and after three years,
one share is granted to the empLoyees for every three shares invested, subject to the
fuLfiLment of conditions of the pLan. The hoLding company charges the Company for the
grant of shares to the Company's empLoyees based on the market vaLue of the shares on the
exercise date.

Disclosures in compliance with SEBI (Share Based Employee Benefits)
Regulations, 2014, are uploaded on the website of the Company at www.hul.co.in.



Particulars of Employees and Related Disclosures

Disclosures with respect to the remuneration of Directors and employees
as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 (Rules) have been appended as an
Annexure to this Integrated Annual Report.

The statement containing particulars of employee remuneration as
required under provisions of Section 197(12) of the Act and Rule 5(2) and 5(3) of the
Rules are available on the Company's website at www.hul.co.in.



Dividend

Your Directors are pleased to recommend a Final Dividend of Rs24/- per
equity share of face value of Rs1/- each for the year ended 31st March, 2024. The Interim
Dividend of Rs18/- per equity share was paid on Thursday, 16th November, 2023.

The Final Dividend, subject to the approval of Members at the Annual
General Meeting on Friday, 21st June, 2024, will be paid on or after 25th June, 2024, to
the Members whose names appear in the Register of Members, as on the Book Closure date,
i.e. from Saturday, 15th June, 2024 to Friday, 21st June, 2024 (both days inclusive). The
total dividend for the financial year, including the proposed Final Dividend, amounts to
Rs42/- per equity share and will absorb Rs9,868 crores. In view of the changes made under
the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the
Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly,
make the payment of the Final Dividend after deduction of tax at source.



Unpaid / Unclaimed Dividend

In terms of the provisions of Investor Education and Protection Fund
(Accounting, Audit, Transfer and Refund) Rules, 2016 / Investor Education and Protection
Fund (Awareness and Protection of Investors) Rules, 2001, ^13.77 crores of unpaid /
unclaimed dividends were transferred during the year to the Investor Education and
Protection Fund.



Mergers, Acquisitions & Divestments

During the year under review, the Company has entered into a strategic
partnership with Brookfield to set up a solar energy park with 45 MW capacity in
Rajasthan. This will help the Company in its journey towards Net zero commitment. The
project is being developed at the site of Brookfield's solar park, being undertaken as a
part of Brookfield Global Transition Fund (Brookfield). The Board, at its meeting held on
1st December, 2023, approved an equity investment of up to 27.73% in Transition
Sustainable Energy Services One Private Limited, a Special Purpose Vehicle (SPV)
incorporated by Brookfield, a leading global alternative asset manager with one of the
world's largest renewable power platforms. The SPV is formed under the Government's Group
Captive Open Access Renewable Energy Scheme. This is seen as a transformative partnership
that aligns with environmental and economic sustainability and will help stakeholders
across the value chain. As on the date of this Integrated Annual Report, the Company has
completed the acquisition of 22.33% of equity share capital of the SPV.

The 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 investment made in the SPV.



Particulars of Loan, Guarantee or Investments

Details of loans, guarantee or investments made by the Company under
Section 186 of the Act, during FY 2023-24 are appended as an Annexure to this Integrated
Annual Report.



Governance, Compliance and Business Integrity

The Legal function of the Company continues to be a valued business
partner that provides solutions to protect the Company and enable it to win in the
brittle, anxious, non-linear and incomprehensible environment. Through its focus on
creating 'Value with Values', the function provides strategic business partnership in the
areas including product claims, mergers and acquisitions, legislative changes, combatting
unfair competition, business integrity and governance. The function works with the growth
enabler mindset.

As the markets continue to be disrupted with newer technologies and
ever-evolving consumer preferences, the need to have a framework around data security and
privacy is paramount. The Company continues to ensure it has appropriate framework and
safeguards for data privacy of its stakeholders with enhanced legal and security
standards. The legal function of the Company continues to embrace newer technologies to
make the function future ready to support the growth agenda of the business.

The Company is of the view that the menace of counterfeits can be
effectively addressed if enforcement actions are supplemented with building awareness
amongst the consumers of tomorrow. We continued to engage with various stakeholders
including e-Commerce Channel Partners, Industry Bodies and Regulators to curb the menace
of counterfeiting across channels and markets, including through the import route to the
country.

The Legal function of the Company works with leading Industry
Associations, National and Regional Regulators and Key Opinion Formers to develop a
progressive regulatory environment in the best interest of all stakeholders.



Business Integrity

Our principles and values apply to all our employees through our Code
of Business Principles (CoBP) and Code Policies. Our employees undertake mandatory annual
training on these Policies via online learning modules and sign an annual Business
Integrity Pledge. Our Business Integrity governance framework includes clear processes for
dealing with CoBP breaches.

During the year under review, 87 incidents were reported across all
areas of our CoBP and Code Policies, with 41 confirmed breaches. During the year, we
terminated employment of 16 employees and issued 20 warning letters as a consequence of
such breaches.

The CoBP and Code Policies reflect our desire to fight corruption in
all its forms. We are committed to eradicating any practices or behaviours though our
zero-tolerance approach to such practices. The CoBP is periodically refreshed and updated
so that it provides a current reflection of the way we do business at Unilever. The Code
Policies have also been reviewed to align them with the changes in the internal and the
external environment.

Our Responsible Partner Policy helps to give us visibility of our third
parties to ensure their business principles are consistent with our own.



Corporate Governance

Maintaining high standards of Corporate Governance has been fundamental
to the business of the Company since its inception. 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
Listing Regulations. A Certificate of the CEO and CFO of the Company in terms of Listing
Regulations, 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.



Prevention of Sexual Harassment at Workplace

As per the requirement of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013 (POSH Act) and Rules made thereunder,
the Company has constituted Internal Committees (IC). Our POSH Policy is inclusive and
gender neutral, detailing the governance mechanisms for prevention of sexual harassment
issues relating to employees across genders including employees who identify themselves
with LGBTQI+ community.

During the year, 7 (seven) complaints with allegations of sexual
harassment were received by the Company, all of which were investigated and resolved as
per the provisions of the POSH Act. To build awareness in this area, the Company has been
conducting induction/ refresher programmes on a continuous basis. During the year, the
Company organised offline training sessions on the topics of Gender Sensitisation and Code
Policies including POSH for all office and factory based employees.



Related Party Transactions

In line with the requirements of the Act and the Listing Regulations,
the Company has formulated a Policy on Materiality of Related Party Transaction (RPT)
& Dealing with Related Party Transactions which is also available on the Company's
website at www.hul.co.in. The Policy intends to ensure that proper reporting, approval and
disclosure processes are in place for all transactions between the Company and its Related
Parties.

All Related Party Transactions and subsequent material modifications
are placed before the Audit Committee for its review and approval. Prior omnibus approval
is obtained for RPT 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 subject to independent review by a reputed accounting firm to
establish compliance with the requirements of Related Party Transactions under the Act,
and Listing Regulations.

All RPTs entered during the year were in ordinary course of the
business and at arm's length basis. No Material RPTs were entered during the year by the
Company. Accordingly, the disclosure of RPTs as required under Section 134(3)(h) of the
Act, in Form AOC-2 is not applicable.



Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return of the Company in Form MGT-7 for FY 2023-24, is available on the Company's
website at www.hul.co.in.



Board of Directors and Key Managerial Personnel Change in Directorate

During the year, Dr. Ashish Gupta (DIN: 00521511), tendered his
resignation as the Independent Director of the Company, with effect from close of business
hours on 26th June, 2023, citing pre-occupation and other personal commitments.

The Board places on record its appreciation for the leadership and
invaluable contribution made by Dr. Gupta whose extensive knowledge and understanding of
the digital ecosystem, coupled with his entrepreneurial experience played an important
role in the Company's transformation journey.

The Board, at its meetings held on 20th July, 2023 and 1st December,
2023, based on the recommendation of the Nomination and Remuneration Committee of the
Company, approved the following appointments / re-appointment to the Board:

(a) the appointment of Ms. Neelam Dhawan (DIN: 00871445) as an
Additional Director - Independent Director of the Company for a term of 5 (five)
consecutive years with effect from 1st August, 2023.

(b) the re-appointment of Mr. Leo Puri (DIN: 01764813) as an
Independent Director of the Company for a further term of 5 (five) consecutive years with
effect from 12th October, 2023.

(c) the appointment of Mr. Tarun Bajaj (DIN: 02026219) as an Additional
Director - Independent Director of the Company for a term of 5 (five) consecutive years
with effect from 1st December, 2023.

The above-mentioned appointments / re-appointment were duly approved by
the Members of the Company vide Postal Ballot(s) on 7th September, 2023 and 9th January,
2024, respectively.

Further, at its meeting held on 24th April, 2024, the Board approved
the appointment of Mr. Biddappa Bittianda Ponnappa (Mr. Biddappa) (DIN: 06586886) as an
Additional Director - Whole-time Director of the Company for a term of 5 (five)
consecutive years with effect from 1st June, 2024. The appointment is subject to approval
of the Shareholders at the ensuing AGM.



Retirement by rotation and subsequent re-appointment

Mr. Nitin Paranjpe (DIN: 00045204), Mr. Ritesh Tiwari (DIN: 05349994)
and Mr. Dev Bajpai (DIN: 00050516), are liable to retire by rotation at the ensuing AGM
and being eligible have offered their candidature for re-appointment.

As per the provisions of the Act, the Independent Directors are not
liable to retire by rotation.

Brief resume, nature of expertise, disclosure of relationship between
directors inter-se, details of directorships and committee membership held in other
companies of the Directors proposed to be appointed / re-appointed, along with their
shareholding in the Company, as stipulated under Secretarial Standard 2 and Regulation 36
of the Listing Regulations, is appended as an Annexure to the Notice of the ensuing AGM.



Key Managerial Personnel

Mr. Rohit Jawa (DIN: 10063590), Chief Executive Officer and Managing
Director (CEO & MD), Mr. Ritesh Tiwari, Chief Financial Officer and Mr. Dev Bajpai,
Company Secretary are the Key Managerial Personnel of the Company as on 31st March, 2024.
During the year, Mr. Rohit Jawa succeeded Mr. Sanjiv Mehta (DIN: 06699923) as the CEO
& MD and as the head of the Management Committee of the Company with effect from 27th
June, 2023.



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 CEO & MD and has Functional and Business Heads
as its members.

During the year, the Board of Directors, based on the recommendation of
the Nomination and Remuneration Committee, approved the following changes to the
Management Committee:

(a) the appointment of Mr. Arun Neelakantan as the Chief Digital
Officer with effect from 1st January, 2024.

(b) the appointment of Ms. Harman Dhillon as the Executive Director,
Beauty & Well-being, in succession to Mr. Madhusudhan Rao, with effect from 1st April,
2024.

(c) the appointment Mr. Srinandan Sundaram as the Executive Director,
Home Care in succession to Mr. Deepak Subramanian with effect from 1st April, 2024.

(d) the appointment of Mr. Shiva Krishnamurthy as the Executive
Director, Foods and Refreshment in succession to Mr. Srinandan Sundaram with effect from
1st April, 2024.

Further, Mr. Biddappa will succeed Ms. Anuradha Razdan as Executive
Director, Human Resources and Member of Management Committee of the Company with effect
from 1st June, 2024.



Declaration from Independent Directors

The Company has, inter alia, received the following declarations from
all the Independent Directors confirming that:

• they meet the criteria of independence as prescribed under the
provisions of the Act, read with the Rules made thereunder, and the SEBI Listing
Regulations. There has been no change in the circumstances affecting their status as
Independent Directors of the Company;

• they have complied with the Code for Independent Directors
prescribed under Schedule IV to the Act; and

• they have registered themselves with the Independent Director's
Database maintained by the Indian Institute of Corporate Affairs

In the opinion of the Board, all Independent Directors possess
requisite qualifications, experience, expertise and hold high standards of integrity
required to discharge their duties with an objective independent judgment and without any
external influence. List of key skills, expertise and core competencies of the Board,
including the Independent Directors, forms a part of the Corporate Governance Report of
this Integrated Annual Report.



Meetings of the Board, Board Evaluation, Training and Familiarisation
Programme & Vigil Mechanism

During the year, seven meetings of the Board of Directors were held.

The details of meetings held and Director's attendance, training and
familiarisation programme and Annual Board Evaluation process for Directors, 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, composition of Audit Committee, establishment of Vigil
Mechanism for Directors and employees, form a part of the Corporate Governance Report of
this Integrated Annual Report.



Technology Absorption

HUL has a long tradition of being a responsible and pioneering
business. Innovations for our great brands powered by deep consumer understanding combined
with Science & Technology expertise are at the heart of HUL's ambition of sustainable
growth.

Unilever R&D is known for innovating boldly for people and planet.
It has 6 global R&D labs and 10 regional R&D hubs including 3 in India located at
Mumbai, Bengaluru (both global R&D Centres), and Gurugram (Regional Hub). Through
these, HUL business has access to more than 20,000 international patents, and more than
5,000 leading edge scientists and technology experts working across all business groups
and critical R&D capabilities of Regulatory, Clinicals & Digital R&D. HUL
business benefits from constant flow of new products designs, novel product &
processing technologies from the work done across the global R&D centres.

Our commitment towards 'Ending Animal Testing Globally' is a great
example of how Unilever R&D uses new age science, not animals, to assure safety of our
products and ingredients. HUL business directly benefits from the Unilever's Safety and
Environmental Assurance Centre (SEAC), which assess all our products from the lens of
safety impact on People and Environment. Scientists at SEAC partner with Unilever R&D
Scientists and use internationally recognised safety approaches, and authoritative
scientific evidence, to ensure that people are safe when they use our products and we do
not negatively impact the environment. SEAC team have world leaders who are advocating
elimination of animal testing for product evaluation and have been able to develop animal
testing alternatives to influence regulatory agencies across the globe and bring in
regulation changes.

HUL derives exceptional benefits and advantage of scale from Unilever
R&D's extensive global ecosystem of academia, technology experts and long-term
collaborations with large suppliers for material and technologies. Through these partners
HUL is working on developing next generation sustainable materials and products with lower
Carbon Footprint that will enable us to achieve our Net zero goal by 2039.

HUL also benefits from Unilever's continued capital investments into
critical R&D capabilities and infrastructure in India, including setting up of 'Agile
Innovation Hub' and 'Advanced Manufacturing Centre', robotics led high throughput
technology screening and product validation capabilities to step up innovation, speed
& impact by leveraging data science, technology & automation.

The above flow of benefits to HUL have been enabled through a Technical
Collaboration Agreement (TCA) and a Trademark License Agreement (TMLA) between HUL &
Unilever since 2013. The TCA provides for payment of royalty on net sales of specific
products manufactured by the Company, with technical know-how provided by Unilever. The
TMLA provides for the payment of trademark royalty as a percentage of net sales on
specific brands where Unilever owns the trademark in India including use of 'Unilever
Corporate logo'. With the aid of these agreements HUL business has been able to bring in
bigger, better, and faster innovations to Indian consumers from the global R&D teams.

The Company continuously imports technology from Unilever under the
TCA, which is fully absorbed in our products. One such recent example among many others
includes Novology Hyper Pigmentation Serum that was launched in 2023 with triple action
technology. This technology has been clinically proven to act on multiple pathways of
melanogenesis to reduce hyper pigmentation. Similarly, Novology Acne Range was launched in
2023 which was clinically proven technology to reduce acne and restore skin microbiome. We
have adopted multiple technologies containing natural, nature identical and naturally
cultivated molecules in our beauty

and personal care products that provide skin benefits like better
hygiene, naturally glowing skin, etc.

In 2023, our Home Care category has adopted various polymer
technologies for superior cleaning, foam, and whitening benefits as well as functional
materials for improved processing of fabric care formulations. We have also adopted
biosurfactant technologies to design new variant of dishwash liquid.

In line with our global commitments on plastic waste reduction, we have
adopted technologies that allow us to use less, better and no plastic in our packaging
e.g., 20% to 70% PCR in various Home Care, Beauty and Personal Care products under Vim,
Surf excel, Comfort, Lux, Pears, Lifebuoy, Dove, etc.

The Company leverages Unilever R&D's digital capabilities to
fast-track innovations. For instance, in our Foods and Refreshment category we have
adopted digital tools like MINERVA and PHAROS for fast-tracking product design and safety
assessment.

We also receive continuous support and guidance from Unilever to drive
functional excellence in marketing, supply management, media buying and IT, among others,
which helps us build capabilities, remain competitive and further step-up our 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 HUL
and enables us to win in the marketplace.



Conservation of Energy

For details on the steps taken by the Company on conservation of
energy, water and reduction of waste, please refer to the Business Responsibility and
Sustainability Report, which forms part of this Integrated Annual Report.



Compliance with Secretarial Standards

The Company has generally complied with all the applicable provisions
of Secretarial Standard on Meetings of Board of Directors (SS-1) and Secretarial Standard
on General Meetings (SS-2), respectively issued by Institute of Company Secretaries of
India.



Stakeholder Engagement

Our multi-stakeholder model aims to respect the interests of and be
responsive towards all stakeholders. Stakeholder engagement and partnership are essential
to grow the Company's business and to reach the ambitious targets set out in the ESG
Goals. The CoBP, which is the statement of values and represents the standard of conduct
for everyone associated with the Company, and the Code Policies guide how we interact with
our partners, suppliers, customers, employees, shareholders, Government, Non- Governmental
Organisations (NGOs), trade associations and industry bodies. Through the underlying
standards set in CoBP and Code policies, the Company is committed to transparency,
honesty, integrity and openness in all its engagements with the various stakeholders.



Outlook

In FY 2023-24, we delivered a resilient performance led by our focus on
providing the right consumer value, excellence in execution, increased investments behind
brands and capabilities, premiumisation and market development.

In the near term, we expect FMCG demand to continue improving
gradually. Forecast of above normal monsoons and improving macro-economic indicators augur
well. In this context, our focus remains on driving competitive volume led growth across
our business. We will continue to generate savings through our productivity programme and
re-invest it behind our brands and long-term strategic capabilities while maintaining
EBITDA margin at the current levels.

We remain confident of the mid to long term potential of Indian FMCG
sector given rising affluence, under-indexed FMCG consumption and a strong digital
infrastructure. To serve the evolving aspirations of Indian consumers, we have embarked on
a journey of 'Transform to Outperform'. Our key thrusts of Growing our Core through
Unmissable Brand Superiority, Market making and Premiumisation, Re-shaping our portfolio
to high growth spaces and Leadership in Channels of the future, backed by our distinctive
capabilities will enable us to continue winning competitively in the Indian FMCG sector.



Responsibility Statement

Pursuant to Section 134 of the Act, the Board of Directors confirms
that:

• In the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and there are no material departures from the
same;

• They have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and prudent, so as to
give a true and fair view of the state of affairs 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 Act and 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.



Other Disclosures

During the year under review:

• no significant and material orders were passed by the regulators
or courts or tribunals impacting the going concern status of the Company and or it's
operations in future;

• no proceedings are made or pending under the Insolvency and
Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or
Financial Institution;

• no shares with differential voting rights and sweat equity
shares have been issued;

• no public deposits as defined under Chapter V of the Act have
been accepted by the Company;

• there has been no change in the nature of business of the
Company.



Appreciations and Acknowledgment

Your Directors place on record their deep appreciation to all employees
for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of
the employees have enabled your Company to remain an industry leader.

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 your Company to provide higher levels of consumer delight
through continuous improvement in existing products, and introduction of new products.

Your Board places on record its appreciation for the support and
co-operation your Company has been receiving from its suppliers, distributors, retailers,
business partners and others associated with it 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 your Company's endeavour to build and nurture strong links with the
trade based on mutuality of benefits, respect for and co-operation with each other,
consistent with consumer interests.

Your Directors also take this opportunity to thank all Shareholders,
Business Partners, Government and Regulatory Authorities and Stock Exchanges, for their
continued support.


  

    

    
On behalf of the Board
  
  

    

    
Nitin Paranjpe
  
  

    

    
Chairman
  
  

    
Mumbai, 24th April, 2024
    
(DIN: 00045204)
  




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