nestle india ltd share price Directors report

Boards Report - 2021

Dear Members,

Your Directors are pleased to present their report and financial statements for the year ended 31st December 2021.

(Rs. in Million)
Particulars 2021 2020
Sale of products 146,337.2 132,901.6
Add : Other operating revenues 756.9 598.7
Add : Other Income 1,201.1 1,458.5
Total Income 148,295.2 134,958.8
Less : Total Expense 117,092.5 106,830.9
Profit before exceptional items and tax 31,202.7 28,127.9
Exceptional items 2,365.0 -
Profit before tax 28,837.7 28,127.9
Tax expense 7,389.1 7,303.6
Profit after tax 21,448.6 20,824.3
Add : Other Comprehensive Income (1,514.1) (922.1)
Total Comprehensive Income 19,934.5 19,902.2
Opening balance in Retained Earnings 11,175.2 10,173.7
Amount available for appropriation 31,108.2 30,072.7
Interim dividends paid during
2021: Rs. 135.00 per share 13,016.1
2020: Rs. 135.00 per share 13,016.1
Final dividends paid during
2021: Rs. 65.00 per share 6,267.0
2020: Rs. 61.00 per share 5,881.4
Closing balance in Retained Earnings 11,825.1 11,175.2
Key ratios:
Earnings per share (Rs.) 222.5 216.0
Dividend per share (Rs.)
Interim Dividends 135.00 135
Proposed - Final Dividend 65.00 65.00
Additional Information:
Profit from operations 32,547.5 28,775.4

Total Sales and Domestic Sales for the year increased by 10.1% and 10.7% respectively. Domestic Sales growth is largely driven by volume and mix and is broad based. Export Sales were lower by 1.2% mainly due to lower coffee exports and change in product mix.

Other Income decreased due to lower average liquidities following transition to "Future Ready Plan" as explained below, partly offset by higher yields.

Your Company has created a contingency provision of Rs.905.8 million (previous year Rs.1,088.9 million) for various contingencies resulting mainly from matters, which are under litigation / related to disputes and other uncertainties requiring management judgement. Your Company has also reversed, utilized / settled contingency provision of Rs.749.8 million (previous year Rs.580.2 million) due to the settlement of certain litigations and settlement of obligations for which provision is no longer required.

Exceptional item comprises the aggregate of past service cost, settlement cost and incidental expenses incurred for the implementation of the Future Ready Plan effective 1st December 2021, for certain category of employees. Future Ready Plan is a combination of amended Defined Benefit Pension Scheme for past period of service and a Defined Contribution Scheme for future service. For details please refer Note No. 3 of the Financial Statement attached.

Comparable Profit After Tax without the impact of Exceptional Item (Transition cost of Pension Plan)


The Board of Directors have recommended a final dividend of Rs.65/- per equity share amounting to Rs.6,267.0 million for the year 2021 for approval of the members at the 63rd Annual General Meeting of the Company ("63rd AGM"). The total dividend for 2021 aggregates to Rs.200/- per equity share which includes interim dividend of Rs.25/- and Rs.110/- per equity share paid on 19th May 2021 and 16th November 2021, respectively.

The dividend recommendation is in accordance with the Dividend Distribution Policy ("Policy") of the Company. The Policy is available on the website of the Company at

Material changes affecting the Company

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

Amount Transfer to Reserves

Your Directors do not propose to transfer any amount to the reserves.


During 2021 exports of your Company remained stable with an overall drop of 1.2% mainly due to lower coffee exports and change in product mix.

MAGGI Noodles and Sauces witnessed growth in UK, Canada, Australia and New Zealand, while EVERYDAY in Nepal and Bhutan faced a challenging year as a result of supply chain disruptions because of COVID-19.

Strengthening the confectionery export portfolio with the launch of POLO in the Middle East helped to establish your Company as a key exporter in the category. Your Company expanded Crunch Wafers in ASEAN markets, such as Indonesia and Philippines.

Your Companys continuous focus on the development of new markets such as Indonesia and Mauritius, channel expansion with the mainstream thrust in Australia and New Zealand and launch of range extensions like MAGGI Sauces to Oceania facilitated growth for MAGGI Noodles and Sauces and KITKAT.

Your Company continues to explore new markets for categories such as prepared dishes and cooking aids, chocolates and confectionery in the Middle East.

Contribution to the Exchequer

Your Company over the years has been enabling significant contribution to various taxes. During the year 2021, the Company through its business, enabled tax collections at Central and State level close to Rs.38.1 billion, in aggregate.

Business Development

As the pandemic raged on, your Company was determined to keep strong as it stood the test of resilience. It delivered double-digit growth pivoted on volume and mix performance despite a challenging and highly volatile economic environment. To better penetrate the market, your Company through the granular cluster-based approach, powered by data and technology, deepened its engagement into newer towns and villages. Your Company progressed firmly and resolutely on its RURBAN journey that was accelerated further by using a healthy mix of customized portfolio and building deep consumer connect. Your Company delivered strong rural growth performance in addition to sustained growth in smaller town classes and urban agglomerates.

E-commerce showed strong acceleration. Growth was fueled by new emerging formats such as quick commerce and click and mortar, leading to lower delivery times and improved shopper experience. Organized trade witnessed resurgence and good revenue growth, despite the second wave of the pandemic.

Your Company continued to leverage the strength of its portfolio and aligned its products with the new normal. Its brands have further strengthened their equity and forged ahead.

Strengthening its commitment to Make in India through augmentation of manufacturing facilities, your Companys new state-of-the-art manufacturing factory in Sanand in Gujarat for the MAGGI portfolio, became fully operational in 2021. Your Company also commissioned a new KITKAT line in its Ponda factory in Goa in 2021.

Innovation continues to be an engine of growth

Innovation and Renovation pipeline of products continues to be a thrust area, across categories such as Prepared Dishes and Cooking Aids, Chocolates and Confectionery, Milk Products and Nutrition. Your Company has launched more than 90 products since 2016 and another 20 projects are in the pipeline.

Transforming with digital analytics

Digitalization is a growth accelerator for your Company and will continue to be so in the future. Leveraging the power of data and analytics is your Company business strategy. It has a multi-intelligent data analytics system that sources internal and external data to converge insights that triggers swift and decisive business actions.

Diverse and inclusive workforce with respect at the core

Diversity is an integral part of Nestle India, where confluence of new ideas and thoughts, diverse skills and experiences fuels innovation and growth. Your Company has a multigenerational workforce, where 72% are millennials.

Equal opportunity, respect and dignity are anchored on the pillars of Purpose and Values of Nestle India. Women comprised 43% of its new hires in 2021. In the Sanand factory in Gujarat 70% of the workforce are women.

Sustainability initiatives at the core of Business a force for good

Your Company is committed to environmentally sustainable business practices across its value chain making the right choices to protect the future by integrating environmental considerations into its business planning. Preserving the planet is weaved into the Purpose of your Company - "We unlock the power of food to enhance quality of life for everyone, today and for generations to come".

Your Company has accelerated the sustainability journey by working across 4 commitments related to climate, packaging, sourcing and water. Its efforts encompass the entire value chain, where it actively engages with farmers, suppliers, employees and consumers to increase awareness about the planet.

Through the NESCAFE Plan, MAGGI Spice Plan and partnering with the dairy farmers, your Company collaborates with the farmers on environmental sustainability programmes.

All your Companys brands continue to be plastic neutral, which means the quantum of plastic that is being used in the packaging is compensated by what is collected and managed.

Amidst critical times like the pandemic, your Companys strong values and purpose ensured that it never lost sight of the well-being of the society and continued walking the path of being a Force for Good. Programmes such as Project Vriddhi, Project Jagriti, Nestle Healthy Kids Programme, creating access to clean drinking water and providing sanitation facilities to girl students are important steps that your Company continues to take every year.

Prepared Dishes and Cooking Aids Portfolio

The Prepared Dishes and Cooking Aids business offers convenience, taste, and quality to consumers. It strengthened its place as an ally to consumers by bringing in a dash of excitement to everyday cooking. In 2021, the continuing momentum and improved availability helped MAGGI Noodles and MAGGI Masala-ae-Magic achieve double digit growth, while MAGGI Sauces continued to grow profitably by focusing on premiumisation.

MAGGI Tomato Ketchup was ranked No. 1 by Consumer Voice (A Government of India Supported Initiative) once again establishing consumer trust in the sauce segment.

Pioneering innovation that caters to diverse consumer choices and distinctive local taste, your Company launched MAGGI Veggie Masala Noodles with the goodness of vegetables in the iconic masala taste.

In a zeal to bring in new products, your Company launched MAGGI Special Chicken65 Masala Noodles, a variant inspired by one of the most popular chicken delicacies of regional cuisine. Packed with robust flavors and masalas, MAGGl Special Chicken65 Masala

Noodles has been carefully crafted by culinary experts, using the choicest selection of 19 herbs and spices from across India.

With an increase in snacking among consumers, your Company launched two new variants of MAGGI Hot n Sweet Sauce - Sriracha and Extra Hot.

MAGGI Masala-ae-Magic expanded its presence in South India with the launch of a new variant MAGGI Masala-vin-Magic, a unique spice mix tailormade for South Indian cuisine that elevates taste, aroma and flavor of everyday meals.

Your Company strengthened consumer trust with an anticounterfeit campaign in 2021, creating awareness amongst consumers to stay vigilant and purchase the authentic MAGGI noodles packed with the goodness of iron.

Your Company also launched the QR Code Anti-Counterfeit Solution, which enables consumers, retailers and authorities to assess the authenticity of MAGGI Masala-ae-Magic within a minute.

Your Company concluded MAGGI Desh ke Liye 2 Minute - Apna Food Business initiative, which received 10,000 entries, where winners were supported with funds, equipment and training to start their own food business.

With the surge in consumers searching how-to-cook everyday meals, MAGGIs website carrying recipes attracted 1.5 million users. The brand forged strong partnerships with top home chefs to help consumers simplify everyday cooking and became their ally in the kitchen.

Accelerating its commitment to sustainability, your Company, through the MAGGI Spice Plan that sources seven spices from 39 villages of India, continued to partner with farmers and suppliers, adopted sustainable agricultural practices focusing on soil health, water usage and biodiversity enhancement. At the same time, your Company stayed committed to resilient livelihood and farm profitability.

Strengthening Breakfast Cereals

Your Company launched Nestle GOLD Corn and Oat flakes which is a differentiated proposition in the cereals category. Nestle GOLD Corn and Oat flakes is fortified with immuno- nutrients such as zinc, iron and selenium. KOKO KRUNCH was renovated with improved taste and increase in whole grains.

Your Company also launched KOKO

KRUNCH Kookie cereal further strengthening the kids cereal portfolio. KOKO KRUNCH Kookie cereal has choco chips embedded in the cereal and tastes like a cookie.

E-commerce grew with speed and delivered growth for your Companys breakfast cereals business. Single serve SKUs drove penetration among consumers.

Milk Products and Nutrition Portfolio

The Milk Product and Nutrition business continued to deliver good performance despite challenges linked to commodity prices, that were mitigated by cost optimisation and efficiencies across the value chain. Your Company displayed resilience as it navigated through the second wave of COVID-19. E-commerce contributed towards driving the performance of Milk Products and Nutrition category. Your Company leveraged its in-depth knowledge of nutrition and quality as it continued to adapt to the new normal.

With consumers spending more time at home adopting creative pursuits such as baking and experimenting with new recipes, MILKMAID increased its engagement through its digital platform by providing dessert recipe solutions for baking enthusiasts. Over 300,000 consumers visited the website every month, which increased in-home usage of MILKMAID and fueled growth.

Your Companys Ready-to-Drink beverage portfolio of NESCAFE and MILO saw accelerated growth as a result of increase in home consumption that was supported by an increase *— in distribution that mitigated the impact of declining out-of-home consumption.

Sustainability is embedded in the way your Company does business. Nestle MILO and Royal Challengers Bangalore joined hands during the Indian Premier League season to bat for the planet, with the launch of paper straws for the MILO beverage packs. Your Company responsibly sourced paper straws from renewable sources and certified by the Forest Stewardship Council (FSC). This transition into paper straws has also been made for NESCAFE.

Your Company believes that breastmilk provides the best nutrition for babies, and every child should be exclusively breastfed for six months, followed by introduction of age-appropriate complementary feeding and continued breastfeeding until two years and beyond. Your Companys nutrition business is committed to providing high quality, innovative, science-based nutrition. Your Company continued to focus on scientifically upgrading its portfolio while expanding the reach of the Toddler range of products.

Your Companys Healthcare Nutrition Business, Nestle Health Science, has a portfolio of science based medical and consumer healthcare nutrition products. In 2021, your

Company continued to accelerate growth through a multichannel engagement, building its presence in nutritional science through products such as RESOURCE HIGH PROTEIN, RESOURCE DIABETIC and OPTIFAST. In order to meet consumer needs, your Company renovated RESOURCE HIGH PROTEIN with immunonutrients. Your Companys Medical Nutrition portfolio witnessed robust performance, with its flagship product PEPTAMEN for patients in critical care.

Coffee and Beverages Portfolio

Your Company continued to focus on growing the Coffee and Beverages business by remaining consistent on the successful strategy of building coffee consumption habit through the year. NESCAFE registered yet another year of double-digit volume-led growth, based on significant growth in household penetration and increase in market share.

Your Company continued its thrust on innovation while addressing the different needs of consumers with the launch ot NESCAFE ALL in 1 - a convenient coffee premix affordably priced at Rs.10 and NESCAFE Black Roast - an intense cup for strong coffee lovers.

Your Company accelerated its premiumization journey, delivering coffee at its best with NESCAFE Gold. With innovative product and packaging solutions, NESCAFE Gold continued in its journey to delight consumers with a cafe like experience at home, resulting in strong brand growth.

Your Company moved ahead in its journey of driving a differentiated brand in the southern part of India with the launch of a renovated recipe for NESCAFE SUNRISE offering superior taste and aroma, in its distinct granulated format. Your Company also expanded its portfolio with launch of NESCAFE SUNRISE Liquid Decoction which is a ready-to- use coffee decoction for consumers desiring a filter coffee experience.

Along with brand building initiatives, your Company distributed coffee to the frontline COVID warriors and extended support during the testing times.

Your Company continued to remain committed to respecting the environment and supporting the coffee farmers with its sustainability initiatives. Through the NESCAFE Plan, your Company trained and supported coffee farmers to adopt agricultural practices that improve farm yield and farmers income.

Chocolates and Confectionery Portfolio

Despite a challenging year, your Companys Chocolates and Confectionery portfolio continued its strong performance with healthy growth and market share gains. Your Company also commissioned a new KITKAT line in its Ponda factory in Goa in 2021.

In times when consumers are looking for "good for me" ingredients in their food, your Company launched Nestle MUNCH FRUIT 0 NUTS, a unique combination of flavor and texture, where crunchy almonds combined with the fruity taste of pomegranate are wrapped around a crunchy wafer center. MUNCH FRUIT O NUTS is a category first innovation, leveraging your Companys strong R&D capabilities and extensive consumer research insights on the taste preferences of India that is diverse.

Through MUNCH and its full pack range, your Company continued to grow its footprint in rural India by associating with festivals of India, that was further augmented through its association with Disney Marvel, that is popular in towns across the country.

In order to meet the needs of the consumers, your Company launched a limited edition of KITKAT Kookie & Creme flavor, across all channels. KITKAT Kookie & Creme flavor is a fusion of the familiar taste of KITKAT with Cookie & Creme flavour.

Nestle Professional - Out-of-Home Business

Your Companys Out-Of-Home (OOH) business is on a recovery path with gradual opening of hotels, restaurants, offices and malls. There are signs of a return to prepandemic levels of business in some geographies such as Tier 1 and Tier 2 towns.

In 2021, there was significant portfolio expansion with product launches across Prepared Dishes and Cooking Aids and Coffee and Beverages portfolio that supported the OOH business to be future ready. Launch of NESCAFE Roasted Whole Beans, NESCAFE Sunrise Strong and Seasonings from MAGGI for OOH, are noteworthy innovations.

In 2021, your Company continued to focus on premiumizing the beverage portfolio, through the scale up of NESCAFE Roasted Whole Bean coffee and bean-to-cup solution. The coffee solution displayed strong customer acceptance, despite the challenges thrown by the lockdown in the second wave of the COVID-19 pandemic.

Better ingredients are core areas of strength of your Company. With the aim of providing consumers with premium products for the OOH operators menu, your Company launched NESTEA Instant Green Tea Powder, a 100% pure and natural powder manufactured in the Choladi factory. NESTEA Instant Green Tea Powder can be used to make both hot and iced green tea, instantly. NESCAFE Sunrise Strong with a stronger and more aromatic coffee-chicory blend was introduced in South India.

With the rise of food delivery and the increased need of standardized and operator friendly solutions, your company continued to invest into differentiated solutions to address the requirements of the new age food service industry. 2021 saw the inclusion of easy step solutions to help make popular dishes like biryani and manchurian sauce, that were introduced in the menu. In addition to products, your Company continued to focus on service support by providing 135+ recipes to help customers build a strong menu with minimal steps, minimal pantry usage and easy delivery.

Your Company continued to grow and invest into the kiosk business through "Entrepreneurship for Youth" which helped create livelihood and job opportunities for franchisers. Your Company now has 600+ franchise operated kiosks across channels, generating sustainable business for the entrepreneurs. To further unlock scalability, new kiosk models like express and trolley plus were also launched year to encourage more entrepreneurs to participate in this growing business opportunity with lower investments formats.

Awards and Recognitions

Your Companys performance and commitment has been recognized by leading industry forums for its work in the areas of corporate management, marketing and quality

• Business Today recognized Mr. Suresh Narayanan as Indias Best CEO, FMCG

• CNBC TV18 India Business Leader Awards (IBLA) recognized Nestle India as the "Outstanding Company of the year"

• Mr. Suresh Narayanan, Chairman and Managing Director, Nestle India, was honored as the Entrepreneurial CEO at EY Entrepreneur of The Year 2020

• Mr. Suresh Narayanan honoured amongst the Top 101 Male Gender Equality Champions Globally

• MAGGI featured in Kantar BrandZ Indias Most Purposeful FMCG Brand List

• MAGGI and NESCAFE India awarded the most preferred brands of 2021 by Marksmen Daily and Zee Business

• NESCAFE recognised for its best-in-class marketing effectiveness and advertising communication and awarded 2 silver metals and 1 bronze metal at the EFFIES.

• Ask Nestle awarded gold at the Brand Equity Media strategy awards

• KITKAT Musical Breaks won gold in ET SPOTT Awards 2021 in the category Brand promotions on audio or music streaming apps

People Focus

Your Company has always considered safety, security and well-being of people at its core and continued with virtual engagements, virtual trainings, mental health initiatives and check-in programmes for its employees.

Your Company rolled-out NestAid, an ecosystem of care, that has initiatives for the security of Nestle employees and their families. Organized under three pillars, the initiatives provide meaningful and impactful support.

Plan for the Unforeseen, the financial support pillar addresses the emergency needs and NesSHIELD- focuses on financial needs and health related expenses in an unfortunate event that a colleague passes away.

Care when you need it the medical support pillar which ensures timely medical help through tie-ups with reputed hospitals, tele consultations and supply of oxygen concentrators and other medical facilities.

Healthy Mind Healthy Life the wellbeing pillar focuses on employees mental and physical wellbeing, especially during the pandemic, through a tie-up with a leading employee assistance provider for counselling and self-help, nutrition support, sessions with medical experts and yoga practitioners.

Your Company continued its commitment to the youth via Nesternship, a virtual internship programme for final year graduates and post-graduates across disciplines. The programme focused on upskilling 1,000 interns, providing them with a depth of experience and a wealth of knowledge to thrive in workplaces. Each student was provided a monthly stipend and interned with an expert from different functions of your Company.

Your Company continued its focus on upskilling their employees through various learning initiatives such as, Henri Nestle Scholarship: An empowered learning solution that gives an opportunity to employees to pursue any learning of their choice. The organization reimbursed Rs.50,000 per participant and had covered over 160 employees with the expectation that each scholar teaches other employees, covering over 200 employees.

Your Company also introduced Ascent a nine-month blended learning journey, designed to support employees transitioning to first time people manager roles; Nestle India Learning Catalogue: A curated repository of over 300 resources to empower employees to learn at will, on the go, as per choice.

Your Company also started NesVidya a micro-learning performance solution app, with over 500 users aimed to help employees learn concepts, evaluate progress and compare knowledge in byte-sized format.

In 2021, your Company further accelerated use of virtual and digital platforms to build scale and intensity in training sales teams for continuous learning and engagement, covering around 650 sales employees and 8400 field force of business partners. Through this model of training of leveraging network of internal subject matter experts, customized content and global expertise, the sales teams motivated employeed to learn and improve performance.

Around 150 Nestle volunteers participated in the Virtual Employee Volunteering Programme. Over 250 sessions were conducted on nutrition, environment, health and hygiene by volunteers that positively impacting the lives of hundreds of beneficiaries such as adolescents, women and waste workers.


Your Companys organized trade witnessed a resurgence and good revenue growth and it continued on its path of robust and sustained growth in large metros, and also in smaller towns despite the impact of the second COVID-19 wave

Your Company set out firmly and resolutely on its RURBAN journey by using a healthy mix of a customized portfolio, direct distribution and enhanced distribution infrastructure, deployment of resources, regional and localized communication, enhanced visibility, participation in village haats and building consumer connect. Through Project RURBAN, your Company reached out to small towns with population less than 100,000 and large villages with population greater than 2,000, that offer long-term growth opportunities.

E-commerce channel showed strong acceleration and its growth was fuelled by new emerging formats such as quick commerce and Click & Mortar, leading to lower delivery times and improved shopper experience. Your Companys effort to ensure last mile access were aided by hyperlocal - quick commerce channels. E-commerce made your Companys products accessible at point of purchase, providing differentiated offerings to consumers through special and innovative product propositions through targeted digital communication for brands such as MAGGI, NESCAFE, KITKAT, CEREGROW, NANGROW, MILKMAID, RESOURCE HIGH PROTEIN. Lockdown relaxation after the second wave, paved the way for channel stabilization and shopper mobility increased across offline channels.

Supply Chain

Your Company developed a resilient supply chain that supported business growth despite adversities caused by the second wave of COVID-19. Staying agile it continued sourcing raw materials from over 400 suppliers and over 100,000 farmers, while ensuring the safety of its partners and customers.

Price outlook for key categories like edible oils, coffee, wheat, fuel remained firm to bullish while costs of packaging materials continued to increase amid supply constraints, rising fuel and transportation costs. Input prices are expected to be on bullish trend both globally and to some extent locally. Fresh milk prices are expected to remain firm with continued increase in demand and rise in feed costs to farmers. In an environment of raw and packaging material inflation, the Company continues to keenly look for opportunities for cost optimization and efficiencies. Your Company is accelerating its commitment towards sustainability by increasing purchase of sustainable oils, coffee, cocoa etc

To address short-term disruptions, it augmented co-manufacturing strategy, to enable speed to market and accelerated the paperless invoicing platform. Your Company shifted to shorter planning horizon, focusing on priority SKUs and channel-wise planning and upscaled transport control tower to enhance stock and transit visibility.

Automation and digitalization across the supply chain enhanced efficiency in processes and speed to market providing transparency to suppliers, farmers, customers and consumers.

A simple, yet innovative example of this was the timely implementation of a telecaller model to take orders across trade channels. The front-line sales colleagues stood tall to overcome serious logistical obstacles and ensure availability. The efforts to ensure last mile access were aided by e-commerce and in particular hyperlocal channels. The 8,000 SMEs your Company worked with were provided support by training, equipping them with orders and advance payments.

Quality, safety and compliance continues to remain the backbone of supply chain operations team. Your Company enhanced quality in distribution that helped deliver fresher products on shelf and reduce carbon footprint in operations.

In order to ensure sustainable logistics across the value chain, your Company focused on alternative mode of transportation such as railways/ waterways and optimizing vehicle fill rate. It introduced 4 waterways in 2021 to strengthen sustainable logistics. Your Company increased usage of bigger size vehicles from 5.9% in 2019 to 9.8% in 2021, increased usage of railways from 0% in 2019 to 8.2% in 2021 and increased vehicle payload utilization from 90.3% in 2019 to 92.5% in 2021.

Management Analysis

Global Economy

The global economy surged to an estimated 5.5% growth in 2021 after contracting 3.4 % in 2020 (United Nations World Economic Situation and Prospects 2022). The global GDP in the first quarter was stronger, reflecting continued adaptation of economic activity to the pandemic. Momentum weakened in the second quarter, weighed down by increasing infections in many emerging markets and developing economies (IMF World Economic Outlook 2021).

Advanced economies and many middle-income countries attained substantial vaccination rates, and sizable fiscal support helped cushion some of the adverse economic impacts of the pandemic. However multidimensional challenges confronted the global economy such as subdued employment growth and rising debt levels.

Commodity prices soared in 2021 following the broad-based decline in 2020, with prices of several commodities reaching all-time highs. Global energy prices surged in the second half of 2021, particularly for natural gas and coal, owing to recovering demand and constrained supply. Non-energy commodity prices stabilized.

Global inflation increased to 5.2% in 2021, because of persistent supply chain bottlenecks and rising freight costs across the globe impacting global production and trade, pushing up prices of essential goods. Food prices shot up by 22% in 2021, reaching their highest levels in a decade, with sharp increases in vegetable oils, cereals and dairy prices (FAO, 2021).

The surge in Covid infections in 2021 sapped consumer demand, but to a much more limited degree than the earlier waves (World Bank Report 2022), though emergence of new variants could further impair market confidence and derail economic recoveries.

The pace of global economic recovery is expected to be slow in the near term as recurring pandemic waves disrupt economic activity. The recovery is also at risk from more persistent supply disruptions, inflationary pressures, financial stress and climate-related issues. As the world confronts the pandemic, climate emergency its economic impact is also gaining sharper focus.

Indian Economy

The recovery that has been underway in the Indian economy with the ebbing of the second wave of the pandemic encountered headwinds from a rapid surge in infections in a third wave marked by the rapid transmissibility of the Omicron variant.

Accelerated rates of vaccination and substantially reduced mobility restrictions have improved consumer confidence (Deloitte Insights). Vaccination is important for opening of the economy, and India delivered 157 crore doses that covered 91 crore people with at least one dose and 66 crore with both doses (Economic Survey 2021-2022).

Indias economy rebounded in the July-September quarter of FY 2021-22. GDP grew at 8.4% year on year (YoY) in Q2 FY2021-22, growth was driven by strong exports, because of global economic recovery, and domestic private investment as businesses ramped up production to meet festive demand (Deloitte Insights, 2022). In September 2021 rural consumption in the FMCG sector increased 58.2% YoY, twice as high as the increase in urban consumption of 27.7% (IBEF, 2021).

Indias Consumer Price Index inflation stood at 5.6% YoY in December 2021. RBIs consumer confidence survey on both the present situation and future expectations suggests sustained uptick in consumer sentiment. Private consumption is poised to see stronger recovery with rapid coverage in vaccination and faster normalisation of economic activity.

India has taken an important step by committing to reaching net-zero emissions by 2070 and reducing the carbon intensity of the economy by 45 % by 2030 (PIB, November 2021)

Opportunities and Risks

With the environment, economy, technology and society undergoing radical shifts, their impacts continue to challenge businesses and create risks and tensions, and opportunities for change and renewal.


Supply chain challenges

The worldwide supply chain continues to be affected by challenges relating to the COVID-19 pandemic, including delays and disruption. Organizations need to reimagine and manage their supply chains differently to ensure business continuity and growth for the future and provide new solutions for customers to access products and services.

Digital vulnerabilities

There has been a growing dependency on digital systems which has been intensified during COVID19, with increased usage of digital tools and digital payments, adoption of platforms and devices that allow sensitive data to be shared with third parties - cloud service providers, data aggregators, application programming interfaces and other technology-related intermediaries. Additionally, there has been an increase in cybersecurity threats such as malware and ransomware attacks, misinformation and frauds creating cyber risks for the business.

Climate change continues

The economic crisis created by the COVID-19 pandemic could further delay efforts to tackle climate change. Complete climate inaction could lead to losses projected at 18% of global GDP, with different impacts across regions (Swiss Re Institute). Consequences may be irreversible for the environment, humankind, and economic activity


The Indian food processing industry has tremendous growth potential. The COVID-19 pandemic led to increased acceptance for processed food (KPMG 2021). Rural areas and Tier 2 and 3 cities are expected to continue driving the demand for processed food.

Investing in Innovation

Food companies need to continue to leverage their in-depth knowledge of food habits, nutrition, quality and safety in order to innovate and renovate, and adapt to this new normal. They must respond to new demands, reset defining relationships with consumers and reconsider their product portfolio in the post-COVID era to make products healthier, and allow consumers to make informed choices.

Buttressing E-commerce to fuel growth

E-commerce had an increasing impact on the FMCG industry globally during the pandemic as consumers increased their online shopping. As COVID-19 changed consumer habits, FMCG firms saw a surge in the contribution of e-commerce to their overall sales during Covid waves, and stabilization at higher levels as waves receded.

Enhancing digital first with a human touch

Consumers have become more digitally active. According to McKinsey, the COVID-19 pandemic has fundamentally changed the pace of business, and the companies with superior technology capabilities had significant advantage. To meet new demands, companies are making digital, and technology investments, across the business model. To enhance digital experience of the future and enable it to blend with the physical experience, businesses will have to focus on making consumer experience more authentic, more human. This would mean bringing elements of tactile experience (touch, see, feel, smell, taste) as well as making digital interactions more authentic by including multilingual capabilities for wider customer reach and acceptance.

Accelerating sustainability and committing to planet

Addressing climate change will require a multi-stakeholder approach to collaborate and monitor progress, laying the foundation for a better world. This includes regenerative agriculture practices, a transition to 100% renewable electricity, as well as reformulating products to make them more sustainable. There is a need for accelerating actions towards reducing greenhouse gas emissions, creating more recyclable or reusable packaging products.

Quality and Safety

Your Company across all its factories introduced life-saving rules. Safety is a priority for your Company and it has been taken into account right from design stage to ensuring world class equipment, to ensure a safe workplace. Best in class ring-lock scaffolding has been deployed which has not only ensured quick turnaround time but also taken the safety of civil construction several levels higher. Across all operating sites, "Line of risk" training has been deployed to increase people awareness to prevent any body parts in line of any energy, which can cause harm in any way.

Environment Sustainability

Reduction in Energy water usage, wastewater and direct Green House Gas Emissions

Your Company has sustainability as part of its DNA. The focus continued on improving operational efficiencies by reducing consumption of natural resources and reduction in energy and GHG emissions.

From 2006 to 2021, for every ton of production, your Company reduced the usage of energy by around 43%, water usage by around 52%, generation of wastewater by around 67% and specific direct GHG emissions by 57%.

Investing in Renewable Energy

Your Companys key renewable energy projects contributed to GHG savings. This was implemented through the higher purchase of solar power for the Choladi factory and Nanjangud factory and replacement of fossil fuel with clean fuel for steam generation at the Bicholim factory.

Packaging and Plastic Waste Management

Your Company will be annually eliminating 30 million plastic straws. These paper straws are responsibly sourced from renewable sources and certified by the Forest Stewardship Council (FSC). This transition has also been incorporated for the packs of NESCAFE range of cold coffees.

EPR (Extended Producer Responsibility) Initiative

Your Company engaged with various waste agencies, for end- to-end management of plastic waste. In 2021, your Company achieved EPR of 23,600 MT tonnes through plastic waste management.

Nestle a+ brand collaborated with Tetra Pak to launch Cartons to Classroom, an initiative to increase awareness about recycling in India by converting used beverage cartons to create classroom furniture for schools for less-privileged children.

Sustainable Logistics

Your Company is one of the pioneers to transport consumer goods through railways and has initiated 4 inland waterways for strengthening sustainable logistics.

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis as explained in the Corporate Governance Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.

Directors Responsibility Statement

The Directors state that:

a) in the preparation of the annual accounts for the year ended 31st December 2021, the applicable accounting standards have been followed and no material departures have been made from the same;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st December 2021 and of the profits of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors and Key Managerial Personnel

Mr. Matthias Christoph Lohner (DIN: 08934420) Executive Director of the Company, retires by rotation at the 63rd AGM, and being eligible, has offered himself for re-appointment. A resolution seeking approval of the members for his re-appointment, forms part of the Notice of the 63rd AGM. As per the terms of his appointment, his re-appointment at the 63rd AGM as a director retiring by rotation would not constitute break in his appointment as a Whole-time Director, designated as "Executive Director - Technical".

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of Company, has recommended appointment of Ms. Anjali Bansal as an Independent Non-Executive Director of the Company for a consecutive term of five years from 1 st May 2022, to the members for their approval by way of a special resolution at the 63rd AGM. Ms. Anjali Bansal fulfils the criteria provided in the Nomination and Remuneration Policy of the Company including her expertise, experience, proficiency and integrity.

Brief resume, nature of expertise in specific functional areas, disclosure of relationships between directors inter-se, details of directorship held in other companies, membership of committees of the Board along with listed entities from which she resigned in the past three years, shareholding in the Company held by the directors proposed to be appointed/ re-appointed at the 63rd AGM, is provided in the Notice of the 63rd AGM.

All the Independent Directors of your Company have submitted the declaration confirming that they meet the criteria of independence as prescribed under the Act and the Listing Regulations and are not disqualified from continuing as Independent Directors. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity. The Independent Directors of the Company have confirmed compliance of relevant provisions of Rule 6 of the Companies (Appointments and Qualifications of Directors) Rules, 2014. The Nomination and Remuneration Committee had adopted principles for identification of Key Managerial Personnel, Senior Management including the executive directors which are based on "The Nestle Management and Leadership Principles" and "Nestle Leadership Framework". The policy of the Company on appointment and remuneration includes criteria for determining qualifications, positive attributes and independence of a director. The policy relating to the remuneration of directors, key managerial personnel, senior management and other employees is framed with the object of attracting, retaining and motivating talent which is required to run the Company successfully. The same is also available on the website of the Company at

An annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors and the details of manner of performance evaluation of Directors, Board and its Committees are available in the Corporate Governance Report which forms an integral part of the Annual Report.

The details of familiarization programmes to Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are available on the website of the Company at programme.

Corporate Social Responsibility ("CSR")

As on 31st December 2021, the CSR Committee comprised of Dr. Swati A. Piramal (Chairperson), Ms. Rama Bijapurkar, Independent Non- Executive Director, Mr. Suresh Narayanan, Chairman and Managing Director and Mr. David Steven McDaniel, Executive Director - Finance & Control and CFO of the Company, as members. The terms of reference of the CSR Committee are provided in the Corporate Governance Report.

Your Company has also formulated a CSR Policy, which is available on the website of the Company at Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended ("CSR Rules") is annexed as Annexure 2 and forms an integral part of this Report.

In terms of Section 135 of the Companies Act, 2013 read with CSR Rules and in accordance with the CSR Policy and the Annual Action Plan, your Company has during the year 2021 spent over two percent of the average net profits of your Company during the three preceding financial years. Your Company provided relief efforts to the communities impacted by COVID-19 in collaboration with credible NGOs across various states. Your Company focused its relief efforts towards feeding programmes for less privileged sections, distributing essential groceries to the needy, and supporting the purchase of medical equipment and PPEs. The details are provided in the Annual Report on CSR activities. In addition to the above, your Company has been implementing societal activities since many decades under the umbrella of Creating Shared Value which have not been reckoned for arriving at the spends as per CSR Rules.

Project Vriddhi

As part of your Companys vision of strengthening community-led rural development for positively impacting the lives of people, Nestle India in collaboration with SM Sehgal Foundation launched the second phase of Project Vriddhi, reaching out to 1,300 beneficiaries. In the second phase, the initiative expanded to the villages of Naharpur and Gabanspur in Punhana block. The three-year old project was launched in 2019 in the village of Rohira in Nuh district and has touched the lives of 1,500 beneficiaries till date.

The project focuses on improving access to clean drinking water for communities, promoting water-saving irrigation practices, increasing awareness on nutrition, enhancing farm productivity and providing healthy learning environment in schools by improving hygiene and sanitation practices.

Nestle Healthy Kids Programme

The Nestle Healthy Kids Programme started over a decade back continued to scale up with University partners and NGO partner, Magic Bus India Foundation year after year. In 2021, your Company expanded the programme to Ladakh for reaching out to 650 adolescents. The programme has also expanded in terms of the curriculum, incorporating plastic waste management in the existing curriculum, as well as, including parents and teachers as direct beneficiaries.

During year, 188,700 beneficiaries were reached with 50,546 new enrollments. Till date over 445,000 adolescents across 23 States/UTs have been encouraged to live healthier lives through this programme. To further equip beneficiaries about implications of COVID-19 and its precautionary measures, your Company in collaboration with its NGO partner held virtual training sessions for the beneficiaries.

Project Jagriti

Project Jagriti continued to focus on creating an enabling environment for the best health outcomes, involving the health care system and stakeholders from the community. Your Company had launched this project in partnership with Mamta Health Institute for Mother and Child as part of its commitment to inspire people to lead healthier lives.

As a result of COVID-19, beneficiaries of Project Jagriti were trained virtually about the preventive measures of COVID-19. In 2021, 1.9 million beneficiaries (0.5 direct and 1.4 million indirect) were reached.

Till 2021, the programme has reached out to 8.4 million beneficiaries (2.7 direct and 5.7 indirect) across 8 States/ UTs, strengthening the continuum of care.

Project Serve Safe Food

Your Company launched Project Serve Safe Food in 2016 with National Association of Street Vendors of India (NASVI), to provide training to the street food vendors and enable them to voluntarily adopt the hygienic practices that improve the food quality. The behaviour-change that this initiative has brought has benefitted 25,900 street food vendors across 19 States/UTs till 2021.

As a result of COVID-19, street food vendors were anxious about impact of the pandemic on their livelihoods. Along with its NGO partner, Nidan your Company organized training sessions on food safety, hygiene, COVID-19 precautionary measures and digital payments. Your Company distributed over 36,900 grocery kits across various locations to provide relief to the street vendors whose livelihoods had been severely impacted by COVID-19.

Plastic Waste Management Awareness

Plastics play a key role in delivering a safe food supply from farm to fork and also helps in preventing food wastage. However, plastic waste has become a significant environment challenge. Your Company is creating awareness about antilittering and waste segregation at source which is a key to establish sustainable waste management systems.

Your Company has worked towards creating an integrated plastic waste management model through its project titled "HILLDAARI" in Mussoorie, Dalhousie, Nainital, Ponda, Munnar and Mahabaleshwar that aims at empowering waste workers and also focuses on working collectively with local stakeholders like urban local bodies, institutions, residents, households, waste generators, and waste workers to raise awareness about anti-littering and segregation at source.

Given the pandemic situation, as a part of Hilldaari, your Company along with its partners organized virtual training for waste workers in Mussoorie, Nainital, Mahabaleshwar, Ponda and Dalhousie to help them adapt to the changes in the new normal, equipping them with safer working conditions. They were provided with PPE kits and safety kits and trained how to use it. Training was also provided how to collect waste with minimum contact, ensure proper sanitation and safety before meeting other people at their respective homes. News ways of collecting and disposing waste were introduced, such as establishing 4-part segregation (dry waste, wet waste, domestic bio-medical waste and hazardous waste) for collection and proper disposal of waste. Waste workers were trained to use smartphones and digital monitoring apps required for monitoring the collection and segregation of waste. The waste workers were also trained in availing relevant government schemes.

Business Responsibility Report

Creating Shared Value is fundamental to how your Company does business. Your Company believes that it can only be successful in the long term by creating value both for its shareholders and for society. Your Company is mindful of the needs of the communities and works to make a positive difference and create maximum value for the society. It has been conducting business in a way that delivers long-term shareholder value and benefits society.

As stipulated under the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is annexed as Annexure 3 and forms an integral part of the Annual Report.

Statutory Auditors and Auditors Report

As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the term of M/s. B S R and Co. LLP, Chartered Accountants (ICAI Registration No.: 101248W/W-100022) ("M/s. BSR"), as the Statutory Auditors of the Company, expires at the conclusion of 63rd AGM of the Company.

The Report given by M/s. BSR on the financial statement of the Company for the year 2021 is part of the Annual Report. The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

The Board of Directors of the Company at their meeting held on 11th November 2021, on the recommendation of the Audit Committee, have made its recommendation for appointment of M/s. S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Registration No.: 301003E/E300005) ("M/s. SRB") as the Statutory Auditors of the Company, by the members at the 63rd AGM of the Company for a term of five consecutive years. Accordingly, an ordinary resolution, proposing appointment of M/s. SRB, as the Statutory Auditors of the Company for a term of five consecutive years i.e. from the conclusion of 63rd AGM till the conclusion of 68th AGM of the Company pursuant to Section 139 of the Act, forms part of the Notice of the 63rd AGM of the Company. The Company has received their written consent and a certificate that they 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. SRB, is a firm of Chartered Accountants registered with the Institute of Chartered Accountants of India. M/s. SRB was established in the year 1949 and is a limited Liability Partnership Firm ("LLP") incorporated in India. It has its registered office at 22, Camac Street, Kolkata apart from 7 other branch offices in various cities in India. M/s. SRB has a valid Peer Review certificate and is part of S.R. Batliboi & Affiliates network of audit firms. It is primarily engaged in providing audit and assurance services to its clients.

Cost Accounts and Cost Auditors

The Company is required to make and maintain cost records for milk powder products as specified by the Central Government under sub-section (1) of section 148 of the Act. Accordingly, the Company has been making and maintaining the records as required.

In terms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules, 2014, the Audit Committee recommended and the Board of Directors appointed M/s. Ramanath Iyer and Co., Cost Accountants, New Delhi (Registration No.: 00019) being eligible, as Cost Auditors of the Company, to carry out the cost audit of milk powder products manufactured by the Company falling under the specified Customs Tariff Act Heading 0402 in relation to the financial year ending 31st December 2022. The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Cost Auditors have confirmed that they are not disqualified to be appointed as the Cost Auditors of the Company for the year ending 31st December 2022.

The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee and in terms of the Act and Rules thereunder requisite resolution for ratification of remuneration of the Cost Auditors by the members has been set out in the Notice of the 63rd AGM of your Company.

Secretarial Auditors and Secretarial Standards

The Secretarial Audit was carried out by M/s. S.N. Ananthasubramanian & Co., Company Secretaries (PCS Registration No.: 1774) for the financial year ended 31st December 2021. The Report given by the Secretarial Auditors is annexed as Annexure 4 and forms an integral part of this Report. The Secretarial Audit Report is self-explanatory and does not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

During the year, your Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively.

In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee recommended, and the Board of Directors appointed M/s. S.N. Ananthasubramanian & Co., Company Secretaries (Registration No.: 1774) as the Secretarial Auditors of the Company in relation to the financial year ending 31st December 2022.

The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Secretarial Auditors have confirmed that they are not disqualified to be appointed as the Secretarial Auditors of the Company for the year ending 31st December 2022.

Meetings of the Board

Seven Meetings of the Board of Directors of the Company were held during the year 2021. The particulars of the meetings held and attendance by Directors are detailed in the Corporate Governance Report, which is annexed as Annexure 1 and forms an integral part of this Report.

Annual Return

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at

Details of Loans, Guarantee and Investments

Details of loans, guarantee and investments are given in Note No. 6, 7, 11, 15 & 17, which forms part of the Financial Statements.

Related Party Transactions

Your Company has formulated a policy on related party transactions which is also available on the website of the Company at This policy deals with the review and approval of related party transactions. The Board of Directors of the Company has approved the criteria to grant omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions.

All related party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for related party transactions on a quarterly basis for transactions which are of repetitive nature and/or entered in the ordinary course of business and are at arms length basis.

All related party transactions entered during the year were in ordinary course of the business and at arms length basis. No material related party transactions, i.e. transactions exceeding 10% of the annual consolidated turnover, as per the last audited financial statement, were entered during the year by your Company. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013, in Form AOC-2 is not applicable. Members may refer to Note No. 45 to the Financial Statement which sets out related party disclosures pursuant to IND AS-24.

In terms of Regulation 23(4) and other applicable provisions of the Listing Regulations, the members of the Company at the 60th Annual General Meeting held on 25th April 2019 approved the Ordinary Resolution ("Ordinary Resolution"), inter-alia, for continuation of the payment of general licence fees (royalty) by the Company to Societe des Produits Nestle S.A. ("the Licensor"), being a related party, at the rate of 4.5% (four and a half percent), net of taxes, of the net sales of the products sold by the Company as per the terms and conditions of the existing General Licence Agreements ("GLAs"), notwithstanding that the transaction(s) involving payments to the Licensor with respect to general licence fees (royalty), during any financial year including any part thereof, is considered material related party transaction(s) being in excess of the limits specified under Regulation 23(1A) of the Listing Regulations at any time. In terms of the Listing Regulations, no related party voted on the ordinary resolution. The ordinary resolution was effective from 1st July 2019 and approval of members shall be sought every five years in compliance with the applicable laws and regulations.

Risk Management

During the year, Mr. P. R. Ramesh and Ms. Roopa Kudva, Independent Non-Executive Directors, were appointed as members of the Risk Management Committee ("RMC") with effect from 20th April 2021.

Mr. Matthias Christoph Lohner, Executive Director-Technical, ceased to be the member of the RMC on 20th April 2021.

As on 31st December 2021, the RMC comprised of Mr. Suresh Narayanan (Chairman), Mr. P. R. Ramesh (Member), Ms. Roopa Kudva (Member) and Mr. David Steven McDaniel (Member).

The RMC on timely basis informed the Board of Directors about risk assessment and minimization procedures. The RMC has, inter-alia, formulated a detailed Risk Management Policy, as prescribed under the Listing Regulations. In the opinion of the RMC, there are no such risks, which may threaten the existence of the Company.

The terms of reference of the RMC are provided in the Corporate Governance Report, which forms an integral part of the Annual Report.

Scheme of Arrangement

The Board of Directors, in their meeting held on 28th July 2021, had approved the Scheme of Arrangement between the Company and its Members under Section 230 of the Act, as amended, read with other applicable provisions of the Act and rules made thereunder (the "Scheme"), which envisages transfer of the entire balance of Rs.8,374.3 Million standing to the credit of the General Reserves to Retained Earnings. The Scheme, under the relevant Section(s) of the Act, is subject to the approval of the shareholders and such other class of persons as directed by the Honble National Company Law Tribunal, Delhi Bench ("NCLT"), sanction of the Honble NCLT and such other approvals as may be prescribed. Your Company had received a No Observation Letter dated 16th December 2021 from BSE Limited with no adverse observation. The Company is in process of filing of an application with the NCLT, in due course for the sanction of the Scheme.

Upon the Scheme becoming effective the entire amount of Rs.8,374.3 Million standing to the credit of the General Reserves of the Company shall be reclassified and credited to the Retained Earnings of the Company and constitute accumulated profits of the Company for the previous financial years, arrived at after providing for depreciation in accordance with the provisions of the Act and remaining undistributed in the manner provided in the Act and other applicable laws. The amount so transferred, pursuant to the Scheme, shall be available for utilisation by the Company for payout to the Members in accordance with the terms of the Scheme. The details of the Scheme and other related documents are available on the website of the Company at https: // /investors/stockandfinancials /scheme- arrangement.

Complaint filed in National Consumer Dispute Redressal Commission

The Union of India, Department of Consumer Affairs in 2015 had filed a complaint before the National Consumer Dispute Redressal Commission on the allegation that by selling

MAGGI Noodles in the past, your Company has indulged in unfair trade practice, sold defective goods to the public and sold goods which will be hazardous. Complaint seeks compensation of Rs.2,845.5 million and punitive damages of Rs.3,554.1 million. Your Company has challenged the complaint. The court proceedings are currently ongoing.

Internal Financial Controls and their adequacy

The Directors had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

Audit Committee

During the year, there was no change in the composition of Audit Committee. Accordingly, as on 31st December 2021, the Audit Committee comprised of Independent Non-Executive Directors, Mr. P. R. Ramesh (Chairman), Mr. Rajya Vardhan Kanoria (Member) and Ms. Roopa Kudva (Member). Powers and role of the Audit Committee are included in Corporate Governance Report, which forms an integral part of the Annual Report. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

Vigil Mechanism

The Vigil Mechanism of the Company is governed by significant documents "The Nestle Corporate Business Principles", "The Nestle Management and Leadership Principles", "Nestle India Code of Business Conduct" and "Nestle India Vigil Mechanism/Whistle-blower Policy". The documents are available on the website of the Company at The Code/ Policy provides for adequate safeguards against victimization of director(s)/ employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. It is affirmed that no person has been denied access to the Audit Committee.

The Company provides an independent third party operated free phone and web-based Platform, namely, "Speak up", to all internal and external stakeholders including directors and employees with a dedicated communication channel for reporting potential instances of non-compliance with Nestle Corporate Business Principles or for reporting, on a confidential basis, any practices or actions believed to be inappropriate or illegal under the Nestle India Code of Business Conduct. Details of the link to "Speak up" is available on the website of the Company at your-concerns.

Further, the Company has appointed Ombudsman for Infant

Code, under which employees can report Infant Code violations directly to the Ombudsman, with adequate safeguard to protect the employee reporting.

The Company sensitizes the availability of the above vigil mechanism from time to time to the directors and employees of the Company.

Information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 for the financial year ended 31st December 2021, in relation to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is annexed as Annexure 5 and forms an integral part of this Report.

Information regarding employees and related disclosures

Your Company considers people as its biggest assets and Believing in People is at the heart of its human resource strategy. It has put concerted efforts in talent management and succession planning practices, strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. During the year, the focus of your Company was to ensure that young talent is nurtured and mentored consistently, that rewards and recognition are commensurate with performance and that employees have the opportunity to develop and grow.

Your Company has established an organization structure that is agile and focused on delivering business results. With regular communication and sustained efforts, it is ensuring that employees are aligned on common objectives and have the right information on business evolution. Your Company strongly believes in fostering a culture of trust and mutual respect in all its employees and seeks to ensure that Nestle values and principles are understood by all and are the reference point in all people matters.

The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules), is annexed as Annexure 6 and forms an integral part of this Report. As per second proviso to Section 136(1) of the Act and second proviso of Rule 5 of the Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company or at the email address:

As per the requirement of The Sexual Harassment of Women

at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH"), your Company has a robust mechanism in place to redress complaints reported under it. The Company has complied with provisions relating to the constitution of Internal Committee under POSH. The Internal Committee (IC) comprises of internal members and external member who has extensive experience in the field. In 2021, one case of sexual harassment was reported, which was investigated and resolved as per the provisions of the POSH. During the course of 2021, initiatives were undertaken to demonstrate the Companys zero tolerance philosophy against discrimination and sexual harassment, which included creation of comprehensive and easy to understand training and communication material which are also made easily accessible. In addition, online workshops were also run for the employees to enhance awareness and knowledge of other biases that may influence thinking and actions by running the unconscious bias session.

Statement on Investor Education and Protection Fund

Pursuant to the provisions of Section 124 of the Act, Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules") read with the relevant circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund ("IEPF"), constituted by the Central Government. The Company had, accordingly, transferred Rs.4,365,900/- and Rs.5,114,640/-, being the unpaid and unclaimed dividend amount pertaining to Final dividend 2013 & Interim Dividend 2014; and Second Interim 2014, respectively, during the year 2021, to the IEPF.

Pursuant to the provisions of IEPF Rules, all shares in respect of which dividend has not been paid or claimed for seven consecutive years shall be transferred by the Company to the designated Demat Account of the IEPF Authority ("IEPF Account") within a period of thirty days of such shares becoming due to be transferred to the IEPF Account. Accordingly, the Company has transferred such equity shares on which the dividend remained unpaid or unclaimed for seven consecutive years to the demat account of IEPF Authority, after following the prescribed procedure.

Credit Rating

The Company has been awarded AAA credit rating for its bank credit facilities by CRISIL. It is the highest rating and indicates a stable outlook for the Company. The rating reflects that the Company has serviced its financial obligations on time. As regards the short-term facility provided by the bank, the Company has been awarded the credit rating of A1+. The rating reflects strong degree of safety and lowest credit risk.


During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to: (a) details relating to deposits covered under Chapter V of the Act; (b) issue of equity shares with differential rights as to dividend, voting or otherwise; (c) issue of shares (including sweat equity shares) to employees of the Company under any scheme; (d) raising of funds through preferential allotment or qualified institutions placement; (e) significant or material order passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future; (f) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016; and (g) instance of one-time settlement with any bank or financial institution.

Trade Relations

The Company maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry.

Your Company continued to receive co-operation and unstinted support from the distributors, retailers, stockist, suppliers and others associated with the Company as its trading partners. The Directors wish to place on record their appreciation for the same and your Company will continue in its endeavor to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other and consistent with consumer interest.


Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and areas as well as the efficient utilization of the Companys resources for sustainable and profitable growth.

The Directors hereby wish to place on record their appreciation of the efficient and loyal services rendered by each and every employee, without whose whole-hearted efforts, the overall satisfactory performance would not have been possible. Your Directors look forward to the long-term future with confidence.

On behalf of the Board of Directors
Date : 17th February 2022 Suresh Narayanan
Place : Gurugram Chairman and Managing Director