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Company Information

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29 November 2023 | 03:58

Industry >> Food Processing - Bakery/Dairy/Fruits/Others

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ISIN No INE239A01016 BSE Code / NSE Code 500790 / NESTLEIND Book Value (Rs.) 255.06 Face Value 10.00
Bookclosure 01/11/2023 52Week High 24745 EPS 247.94 P/E 97.07
Market Cap. 232048.52 Cr. 52Week Low 17880 P/BV / Div Yield (%) 94.36 / 0.91 Market Lot 1.00
Security Type Other


You can view full text of the latest Director's Report for the company.
Year End :2022-12 

Your Directors are pleased to present their report and financial statements for the year ended 31st December 2022.

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 ' 156.9 million (previous year ' 749.8 million) due to satisfactory settlement of certain litigations and settlement of obligations for which provision is no longer required.

(? in million)




Sale of products



Add : Other operating revenues



Add : Other Income



Total Income



Less : Total Expense


1 17,669.2

Profit before exceptional items and tax



Exceptional items


Profit before tax



Tax expense



Profit after tax



Add : Other Comprehensive Income



Total Comprehensive Income



Opening balance in Retained Earnings



Amount available for appropriation



Interim dividends paid during 2022: ' 145.00 per share 2021: ' 135.00 per share



Final dividends paid during 2022: ' 65.00 per share 2021: ' 65.00 per share



Closing balance in Retained Earnings



Key ratios:

Earnings per share (?)



Dividend per share (?) Interim Dividends Proposed - Final Dividend





Additional Information: Profit from operations



2022 and 2021 figures have been restated to include the financials of acquired Pet Food Business as per requirements of Ind ^5 103 - Business Combinations under Common Control

Exceptional Item in 2021 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, asper your Company policy. '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 4 to the Financial Statements attached.

Total Sales and Domestic Sales for the year increased by 14.5% and 14.8%, respectively. Domestic Sales growth is broad based with a healthy balance of pricing and volume. Export Sales have increased by 8.2%. Other Income decreased due to lower average liquidities following transition to “Future Ready Plan", partly offset by higher yields.

Your Company has created a contingency provision of ' 1,309.4 million (previous year ' 907.5 million) for various


The Board of Directors have recommended a final dividend of ' 75.00 per equity share amounting to ' 7,231.2 million for the year 2022 for approval of the members at the 64th Annual General Meeting of the Company (“64th AGM"). The total dividend for 2022 aggregates to ' 220.00 per equity share which includes interim dividend of ' 25.00 and ' 120.00 per equity share paid on 6th May 2022 and 16th November 2022, respectively.

The interim dividends paid during the year and the final dividend recommended 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 which occurred between the end of the financial year of the Company to which the financial statements related to 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.


In 2022, your Company's export business experienced growth. The focus was on promoting the Indian product portfolio, particularly in the confectionery and foods category, through both traditional and mainstream channels.

Products from the prepared dishes and cooking aids category, such as Masala-ae-Magic, MAGGI noodles, sauces, and Pazzta, witnessed growth in key markets such as Canada, the United States, Australia, New Zealand, and Singapore. This growth underscores your Company's commitment to reach new customers and deliver high-quality products to the global market.

The confectionery business in the Middle East delivered strong growth, led by TOFFO Sugar Chewy Boiled confectionary. During the year, your Company began exporting Polo Holes to Taiwan, where it introduced new formats such as POLO jars and POLO pouches.

NESCAFE SUNRISE, which is a fine blend of coffee and chicory continued to gain traction in Singapore and Taiwan.

Your Company's instant tea saw a sharp uptake after COVID abated resulting in out-of-home consumption increasing across all the markets. Export to Nepal and Bhutan had stable growth despite economic challenges as a result of low forex reserves, liquidity crunch and high inflation in 2022 in both the countries. Growth was secular across Confectionery, Beverages, Milk Products & Nutrition and Prepared Dishes and Cooking Aids Portfolio.

Contribution to the Exchequer

Your Company over the years has been enabling significant contribution to various taxes. During the year 2022, your Company through its businesses, enabled tax collections at Central and State level close to ' 42.6 billion, in aggregate.

Business Development

During 2022, the Indian economy started to recover despite the Omicron wave of January 2022. As stated in the Economic Survey 2022-23, mobility was enabled by localized lockdowns, rapid vaccination coverage, milder symptoms and quick recovery from the virus contributed towards minimizing the loss of economic output. IMF estimated India to be among the top two fast-growing significant economies in 2022.

However, there were several headwinds for the FMCG sector in India in 2022, a sharp rise in inflation worsened further by supply chain issues with an increase in fuel costs. Rural inflation was higher than urban inflation that delayed rural consumption.

Robust performance

Despite an external volatile environment, inflation, price and cost to consumer, your Company steered through challenges, with its growth platforms not being compromised. These were driven by strategies of scale, efficiencies, mix and pricing.

Your Company delivered double-digit growth pivoted on volume and broad-based performance across all categories. This was the highest growth in a decade despite a challenging economic environment.

In 2022 total sales grew by 14.5% and domestic sales increased by 14.8%, with broad-based performance across all categories. Your Company's robust performance on e-commerce continued, fuelled by Quick Commerce and Click & Mortar. Out-of-Home (OOH) business made a strong comeback in 2022, recovering its pre-COVID base and delivering robust growth by revamping, resetting geography, channel and sales priority.

Your Company has made a strong commitment to transforming itself using data analytics, across every aspect of its business be it manufacturing, supply chain, sales, marketing and communications. This has helped understand evolving consumer needs, spotting trends, delivering innovations. This has also led to streamlining business practices, bringing operational efficiencies, becoming more strategic and predicative while making more effective business decisions.

Strong Brands

Your Company's business categories such as prepared dishes and cooking aids, milk products and nutrition, beverages and confectionery witnessed consistency in growth. Its brands and products, continued to resonate with consumers because of strong thrust on innovation, with multiple offerings at different stages of life. Your Company continued to launch new products in India, and has launched over 110 new products over the last seven years with approximately 30 new projects in the pipeline.

Your Company continued in its path of premiumization through the acquisition of Purina Petcare business and the launch of globally renowned brand Gerber Cereals, bringing in expertise

introduction of age-appropriate complementary feeding and continued breastfeeding until two years and beyond. Your Company's Nutrition business is committed to providing high-quality, innovative, science-based nutrition to babies and young children.

In line with its commitment to always deliver 'Good Food, Good Life' to consumers, your

in science and nutrition. Such initiatives are testimony to your Company's confidence in the market opportunities in India.

Recognizing the enormous potential of millets, which also aligns with several UN Sustainable Development Goals, the Government of India has prioritized Millets. 2023 has been declared as the International Year of Millets by the United Nations General Assembly. Your Company has already incorporated millets in its sub-brand CEREGROW™ Grain Selection™ and will continue to do so across categories.

Nestle R&D Centre India Pvt. Ltd., Manesar (a subsidiary of Nestle S.A. and a part of Nestle's global R&D network) recently signed an MOU with Nutrihub, ICAR-Institute of Millet Research with the aim of collaborating in areas such as millet processing, understanding health and nutrition benefits of millets in different product applications, building consumer awareness, sustainability of millet by developing regenerative agriculture practices to enhance cultivation and encouraging start-up collaborations. This will also benefit your Company in launching new and innovative products with the goodness of millets.

Inspired people

Your Company embarked towards creating a future ready workforce that is diverse, equitable, inclusive and multi-generational. In addition to upskilling people, your Company instituted policies on mental health and well-being and gender agnostic policies.

Empowered Communities

Your Company remained committed to enhancing the resilience of communities through its societal initiatives, expanding its initiatives to more geographies and creating meaningful impact by unlocking the power of food for everyone today and for generations to come.

Committed to sustainability

Your Company has worked steadfastly to meet its sustainability ambitions and constituted Sustainability Task Forces that stays responsible for planning, management and implementation of the sustainability initiatives across climate, packaging, sourcing and water, committed to its ambitious sustainability goals to advance the health of its planet supported by healthy sustainable food systems.

Prepared Dishes and Cooking Aids Portfolio

Your Company's Prepared Dishes and Cooking Aids business showed strong growth momentum, with a healthy balance of product mix, pricing and volume growth in MAGGI Noodles and MAGGI Masala-ae-Magic aided by strong consumer engagements and market presence with media campaigns and attractive consumer activations. In line with demand forecasts, production capacity was ramped up across factories enabling strong growth momentum. MAGGI Noodles

in 2022 saw the highest ever distribution and maintained market leadership as per Nielsen report.

MAGGI has enjoyed an extraordinary journey in the country, spanning four decades. True to the mission of 'Good Food, Good life', MAGGI portfolio offers convenience, taste and quality to its consumers. MAGGI brand as an ally in everyday cooking, has a portfolio that continues to evolve, introducing new products that make everyday meals extraordinary.

On World Environment Day, your Company launched a campaign to raise awareness on waste disposal. Indian Actor Rajkumar Rao known for his work in Hindi cinema, was roped in to highlight how MAGGI responsibly manages plastic equivalent to the number of packs that are sold, while urging consumers to spend 2-minutes to practice responsible disposal themselves.

Strengthening Breakfast Cereals

Your Company's breakfast cereals business accelerated in 2022 with a focus on driving penetration through accessible price points. Taste and nutritional benefits of its offerings were communicated to consumers through extensive sampling across metropolitan cities. Availability of breakfast cereal portfolio increased manifold resulting in strong volume growth for brands such as NESTLE KOKO KRUNCH and NESTLE GOLD. NESTLE KOKO KRUNCH also associated with Jurassic World and Disney for Avatar helping build brand relevance.

Milk Products and Nutrition Portfolio

Your Company's Milk Product and Nutrition Portfolio registered satisfactory growth. Your Company believes that breastmilk provides the best nutrition for babies, and every child should be exclusively breastfed for six months, followed by the

Company expanded its offerings for toddlers aged two and above. During the year, your Company brought the globally renowned and iconic brand GERBER® to India. GERBER® was started in 1928 by a mother, Dorothy Gerber in Michigan, USA and in 2007, Nestle acquired the brand as part of its vision to provide a full range of nutritious food options worldwide. GERBER® Cereals with Powerblend® was launched in two variants - Spinach & Carrot and Mango & Berry. The product combines the goodness of 4 diverse food groups - cereals, legume, milk and fruits or vegetables depending on the variant, with age-appropriate fortification for toddlers. GERBER® Cereals are aimed at the uncompromising mother who is highly discerning and well-informed about the latest in nutrition recommendations as well as quality of different brands.

Introducing a category-first innovation in India, your Company launched Nestle KITKAT Moodbreaks range with two new fruity flavour. The multi-colored KITKAT fingers are available in Mixed-fruit flavour with vibrant pink and brown fingers and Mango flavour with bright yellow and brown fingers. Through KITKAT, there

The offering is customised to the needs of Indian toddlers, benefitting from over 90 years of GERBER®'s nutritional expertise.

Your Company also launched CEREGROW™ Grain Selection - a nutritious cereal for toddlers inspired by traditional ingredients, made from ragi, mixed fruits and ghee. CEREGROW™ Grain Selection is specially for parents who are looking for ways to integrate traditional ingredients and recipes into their children's diets, along with the confidence of assured

nutrition. Millets have been an integral component of the food basket in India, and CEREGROW™ Grain Selection is an effort to rediscover the value of these traditional millets.

MILKMAID and acceleration of ready-to-drink ('RTD') business also contributed to the growth. Strong double-digit value growth in MILKMAID was fueled by providing an exciting range of experimental desserts across national and regional festivals, collaborating with top chefs and the upcoming trend of baking, attracting more than 2 million visits to MILKMAID's website. The RTD portfolio delivered accelerated growth second year in a row. While in-home consumption continued to grow, there was a post-pandemic revival of the out-ofhome channels. NESCAFE RTD launched a unique campaign - Thoda Aur Machaa, celebrating India's Gen Z real heroes.

MILO specialized for teenage nutrition with Whey protein and jaggery was launched in Tamil Nadu and received a good response. The launch of Mishti Doi with jaggery was the first ever in its category and has seen strong acceptance and accelerated growth since launch. The NESTLE a Greek Yoghurt range was introduced with local fruits like Mahabaleshwar Strawberries and Alphonso Mangoes from Ratnagiri, leading to the business increasing by double.

To continue leading the Force-for-Good, NESTLE a launched a unique upcycling initiative programme called Nestle a Cartons to Classroom, in partnership with Tetra Pack and Reliance Retail. Under this programme, a consumer can return any used milk carton to specific collection points. These cartons were upcycled to make desks that have been placed in classrooms. This programme was piloted in Mumbai and 100 desks have already been placed.

Your Company's Nestle Health Science business through a multi-channel engagement continued to build its presence in nutritional science.

Beverages Portfolio

The coffee and beverages business continued to witness strong growth enabled by a sharp, consistent strategy focused on recruitment and building relevance for the coffee category.

NESCAFE in-home portfolio consisting of NESCAFE Classic, NESCAFE Sunrise, NESCAFE GOLD delivered

broad-based double-digit growth. NESCAFE in-home touched new milestones in 2022, recording the highest ever single-year growth in household penetration, and maintained its leadership position in the category with significant growth in market share. NESCAFE ready-to-drink and out-of-home delivered broad-based double-digit growth.

NESCAFE CLASSIC spearheaded category recruitment with a thematic campaign that clearly defined role for coffee with youth which was complemented by consistent distribution expansion. Your Company sustained innovation-led growth with NESCAFE ALL in 1 premixes that added to the NESCAFE recruitment strategy by offering a consistent, tasty cup each time. Your Company continued its journey of winning in South India with NESCAFE SUNRISE through the launch of a renovated product, a refreshed brand look and new communication. This was enabled by a cluster strategy, with customised plans for each market that ensured NESCAFE SUNRISE delivered healthy growth. NESCAFE GOLD delivered stellar growth and led premium category creation through its promise of delivering coffee at its best.

A significant enabler last year, was a sharp focus on mitigating inflationary pressures by adopting several key initiatives that delivered optimizations across the value chain which allowed for sustainable growth across the portfolio. Your Company continues to closely collaborate with coffee farmers in Karnataka, Tamil Nadu and Kerala through the NESCAFE Plan towards developing good agricultural practices, sustainable management of landscapes and enhancing biodiversity in coffee farms.

Confectionery Portfolio

After two pandemic-led challenging years, this year your Company witnessed return of the confectionary consumers. The portfolio registered robust growth and market share gains led by two iconic brands - KITKAT and MUNCH. KITKAT Moodbreaks and MUNCH Max were well received by consumers. Your Company continued to focus on superior execution and implementation of robust trade plans.

was a sustained focus on the key brand proposition, 'taking a break', in all forms of traditional and new-age communication. All this resonated strongly with every consumer segment across the country.

At the time of growing consumer consciousness around environmental responsibilities and in line with your Company's focus on sustainability, your Company introduced a unique initiative -KITKAT 'Breaks for Good'. KITKAT installed benches made from recycled plastic packaging across popular youth hangouts and colleges in India. The campaign was a friendly reminder to the youngsters that these recycled benches not only serve as a break for them, but for the environment too.

Further leveraging your Company's access to strong global R&D expertise and staying agile on value-up strategy of MUNCH, your Company launched MUNCH Max that has extra crunch and chocolaty flavour.

The MUNCH 'Thaalam' campaign, for the Southern markets, showcasing the popular boat race of Kerala successfully conveyed the messaging of 'Munching with confidence'. It also became the year when MUNCH leveraged the new-age phenomenon of Metaverse for their Indian Premier League activation, enabling consumers to meet and greet their favourite cricketers in the digital world. MUNCH was the first in the category to spearhead this exclusive engagement for its consumers.

Pet Food Portfolio

With the recent acquisition of Pet Food business from Purina Petcare India Pvt. Ltd., through slump sale, your Company

has made an entry in the potentially high-growth pet food category. With great passion and commitment of making the lives of pets longer, happier, and healthier, your Company's Pet Food portfolio has delivered a strong performance with an accelerated growth in the Dry Dog and Cat Food products.

Your Company's Pet Food portfolio includes globally recognized brands like PURINA

Supercoat and PURINA Pro Plan in the Dry Dog Food range that provide complete and balanced nutrition, with no artificial colours or flavour, to help keep dogs happy and healthy. The Pet Food portfolio also includes PURINA Friskies, and PURINA Fancy Feast in the Dry and Wet Cat Food range respectively, that provide the right balance of nutrition and delicious taste.

With a plan to bring new products and innovation, your Company has recently launched Felix Wet Cat Food, making a strong entry in one of the highest growth portfolios across the world in the Pet Food Category. Leveraging the unique and patented grilled technology, Felix is positioned to create a strong benchmark of taste and overall nutrition. eCommerce grew with speed and delivered high growth and market penetration for your Company's Pet Food portfolio.

Nestle Professional - Out-of-Home Business

Your Company's Out-of-Home (OOH) business made a strong comeback in 2022 recovering its pre-COVID base and delivering robust growth which was an outcome of revamping, resetting geography, channel and sales priority.

As a beverage solution provider, your Company cemented its participation in the larger and faster growing Bean to Cup segment, by enhancing its range of blends and machine solutions, and offering the widest menu. To premiumize small operators, your Company launched CAFE MENU range, which is 'tin and spoon' application for hot cappuccino and cold coffee. To improve its share in the street channel, SUNRISE STRONG with a superior strength and aroma was launched.

Your Company built a differentiated and relevant food solutions portfolio in line with the growing industry need of standardization, versatility and delivery-friendliness. Chefs curated a range of recipe applications for cuisines such as biryani, oriental fried rice and pasta sauces, focusing on channels such as cloud kitchens, restaurant chains and catering.

Geographical expansion beyond metros into Tier-1 towns, tapping tourist hot spots and focusing on geographical clusters led to growth. This expansion was supported with an enhanced chef organization, cafe care engineers, OOH distributors and feet on street.

Under ONE NESTLE, your Company added new sites to take the total number to over 620 MaGGI and NESCAFE branded kiosks. The model stood tall throughout the pandemic. Your Company continued to recruit new franchises on the back of our 'Employment for Youth' programme, extending its channel mix to include healthcare and hospital sites, launching multiple kiosk formats to fit different site requirements and deploying KITKAT branded benches, made using recyclable plastic waste.


RURBAN approach

Your Company continued its path of robust growth, strengthening the RURBAN approach. There was an acceleration on the RURBAN thrust by going deeper into smaller towns and cities, scaling up on-ground activation, deploying more resources, and leveraging partnerships to expand coverage. Your Company added around 55,000 villages and 1800 distribution touch points in 2022 and increased consumer connect through Haat activities and RURBAN smart stores. During the year, your Company recruited women from rural areas as a part of Project Swabhiman by upskilling them.

Direct to Consumer

Your Company also launched its first ever 'direct to consumer' (D2C) e-commerce platform - to offer to consumers products manufactured by your Company in India created specifically keeping the consumer needs in mind, to delight the consumer in every way with curated product bundles, personalized gifting and subscriptions. Consumers can also access gourmet recipes on the site and get free nutrition counselling. Launched in Delhi NCR, it will subsequently expand to the cosumers in other parts of the country.

E-commerce, Quick commerce and Click and Mortar:

Growth from e-commerce channels continued with strong performance driven by MAGGI Noodles from the Prepared Dishes and Cooking Aids Portfolio, Coffee and Beverages and Confectionary portfolios. Quick commerce and Click & Mortar also enabled the growth of e-Commerce. Quick Commerce growth was fueled by new user acquisition initiatives through targeted digital communication and ensuring

access to your Company's products at the point of purchase. Your Company also leveraged emerging specialized formats such as ePharmacies.


People have always been at the heart of your Company and with the unveiling of the new Nest, the renovated Head Office, evolved ways of working were initiated. The new nest is an inclusive workspace with day-care facilities, recreational zones, gender neutral accessible washrooms, height adjustable workstations and accessible elevators. The NesLife initiative offers fexibility, empowering employees to be their best at work, combining positive aspects of hybrid/ remote working.

Your Company continues to focus on employee wellbeing by establishing a Mental Health First Aider Network, and through offering mental health benefits as part of health insurance. There have been regular virtual sessions focusing on overall physical well-being as well.

Your Company also introduced a sabbatical policy aimed to support diverse needs of employees like pursuing higher education, upskilling programmes, caring for a family member or pursuing a social cause. Your Company continued its commitment to the youth through the Nesternship programme, third year in a row, upskilling 1000 interns with a depth of experience and a wealth of knowledge to thrive in workplaces.

Your Company continues to live its commitment towards being a 'Force for Inclusion' and introduced a new parental leave policy enabling primary caregivers with 26 weeks of leave and secondary caregivers 4 weeks of leave. Your Company also introduced a gender-neutral childcare policy where either parent with children below 6 years of age are eligible for childcare benefits.

Your Company continues its journey towards inclusion by hiring people with disabilities and by ensuring continuous improvements to existing facilities by conducting accessibility audits. Your Company is also taking steady steps in the direction of making the workplace more inclusive for LGBTQA by revising healthcare benefits to include same-sex partner insurance and introducing gender-neutral policies.

Your Company has one of the highest representation of women in field sales in the FMCG industry. Ensuring safety and hygiene at distribution points, supporting working mothers are some of the interventions undertaken by your Company to empower women sales force in both urban and RUrBaN centres.

Your Company rolled out various trainings and learning initiatives to mentor employees. The LinkedIn Learning Programme offers over 10000 courses, certifications with leading Institutes and was availed by employees. A network of in-house mentors also helped groom talent for senior roles. Over 100 mentees were mentored by over 60 mentors. Your Company also instituted 'Force for Great Leadership

Programme' that has been instituted for mid managerial levels, where select employees are assessed, coached, made to attend leadership labs and external immersions.

Supply chain

Your Company has developed a resilient and agile supply chain framework that sources its direct and indirect materials from its suppliers and has touched the lives of farmers, retailers, distributors while ensuring the safety of its partners and customers.

Your Company selects its suppliers through strictly laid out procedures and engages with them in line with Nestle Responsible Sourcing Standard ('NRSS'). The requirements of Business Integrity, Human Rights (labour standards), Health and Safety and Sustainable environmental standards in their business activities, production processes, services provision, and their own purchasing procedures, as enshrined in the NRSS, apply to all suppliers.

Your Company's Sustainable Sourcing team ensures that raw and packaging materials and the services received are aligned with NRSS.

Your Company works with farming communities to ensure sustainable production in the long-term. Your Company is committed to increase responsibly sourced ingredients such as fresh milk, palm oil, cocoa, wheat, spices, rice and green coffee. During FY 2022, 73% of inputs were sourced sustainably.

Your Company engages with rice, wheat and spice farmers for good agricultural practices, helping them grow safe, high-quality raw materials, and develop resilient, sustainable farms. Your Company procures raw materials locally. In addition to collecting milk and implementing the Nestle Milk District Model successfully to ensure a stable livelihood for local dairy farmers, your Company supports the development of milk farmers by assisting them to improve milk productivity and quality through technical assistance, providing veterinary services, medicines at no profit basis and promotion of sustainable agricultural practices.

Environment Sustainability

Your Company's sustainability commitment focuses on climate change, packaging, sourcing, and water.

From 2007 to 2022, for every ton of production, your Company reduced the usage of energy by around 36%, water usage by around 51%, generation of wastewater by around 38% and specific direct Green House Gas emissions by 52%.

Your Company was among the first to responsibly manage quantity equivalent to the post-consumer plastic waste generated by its products, and its brands have remained plastic neutral since 2020. It continues to engage with various waste management agencies, for end-to-end management of plastic waste as part of Extended Producer Responsibility Initiative and has achieved EPR of 23,300 MT through plastic waste management.

Sustainable sourcing is key to how your Company does business. Your Company collaborates with the dairy farmer to encourage sustainable dairy farming practices. As part of the NESCAFE Plan, your Company trains coffee farmers in sustainable agricultural practices and through MAGGI Spice Plan, your Company is now sourcing 8 key spices from suppliers, that are sustainably and local sourced.

Management Analysis

Year 2022 was an interplay of complex disruptions and opportunities as well. The geo-political order was transforming, with an increasingly interconnected world, where the ramification of disruptions caused by war, economics, climate had an impact on consumers, society and businesses. As outlined by the International Monetary Fund, through investing in people, digitalization, green energy, and supply chain diversification, economies can bounce back from adversity and stay resilient.

India's Economic Survey 2021 -2022 stated that the health and economic shocks of the pandemic and the spike in commodity prices in 2022 will wear off creating opportunities for growth. Reforms in digitalization, higher financial inclusion, and more economic opportunities will be the second most important driver of India's economic growth in the medium term. Trends underpinned by India's advanced digital infrastructure, offshoring, investments in manufacturing and energy transition, could create an environment for India to surpass other mature economies.

The 2023 edition of World Economic Forum's Global Risks Report highlights the multiple areas where the world is at a critical inflection point. The global “new normal" is a return to basics - food, energy, security - problems our globalized world was thought to be on a trajectory to solve. Last few years have also exposed multinational firms to an unprecedented risk due to global trade tensions, pandemic-induced supply chain disruptions and the Ukraine-Russia war.

Risks and Opportunities


Global and Macro-Economics

Global volatility can put business to the risk of unforeseen inflationary pressures and potential moderation of consumer demands and choices. Churn in geopolitics can impact the landscape of operating macroeconomics and in specific supply chains. Evolving business models and the vulnerability of Information Technology (IT) systems could additionally challenge and sometimes disrupt the normal course of operations.

Your Company has a comprehensive process of commodity procurement and business-continuity measures towards meeting exigencies. With a robust framework in place, it ensures a continuous monitoring, identification and redressal to meet unforeseen challenges.

Cyberattacks and cybercrime

Post-pandemic world has led to substantially enhanced usage of IT and consequently, the increase in risks associated with the IT systems. Systemic susceptibility to cyberattacks, loss of sensitive information, breakdown in systems or unavailability of critical IT means and outputs remains a constant risk. Your Company has been sensitive to the prevailing challenges of systemic issues, cyberattacks and cybercrime to its business operations. It has upgraded its safety mechanisms and processes, carries periodic internal assessments and builds the requisite firewalls to mitigate any threats and risks. Specific measures have been deployed towards identifying business-critical IT systems and their disaster recovery plan to ensure business-continuity in any eventuality. Multiple training sessions and Standard Operating Procedures (SOPs) have been put in place to align the relevant stakeholders to handle any sort of IT risk eventuality.

Climate Change

Climate change is a staring risk that directly impacts the food and beverage industry. World Bank in its recent report stated that in India more erratic monsoon rains have translated into more volatile food prices, destabilizing households' inflation expectations and undermining the ability to forecast inflation. From increased cost of raw materials, lower production to multiple issues related to water shortage, it has direct bearing on your Company's business. Even governmental action to address climate change imperatives could have an impact on our existing business model. Societal and consumer sensitivity to issues like carbon emission, energy consciousness and water management puts additional challenge to continuously improve and adapt. Your Company has taken the challenge seriously and made bold commitments. Your Company is constantly monitoring the environmental impact of its operations and taking strong steps to meet its sustainability targets.


Conscious consumer

Consumer preferences and sensitivities are fast evolving. Speed of consumer shifts is expected to increase even further with easier access to information, rising demand to know more and seek more choices based on their preferences. Consumers progressively seek to know the transparent impact of their purchase decision, consumption and subsequent management of the product packaging by the organisation. Sustainability and societal concerns for the planet is paramount and they are demanding tangible action on plastic neutrality, zero emission and sustainable practices that go into the process of sourcing, manufacturing, transportation and handling of waste. The importance of label to bear critical information like nutritional composition of ingredients, sourcing details and proper disposal instruction are becoming a priority. Your Company is constantly upgrading its information dissemination on the labels and via other brand communication mechanisms to provide all relevant details to enhance and enrich the consumer experience.

Holistic Health

With a plethora of information available on the various ingredients and product attributes, the Consumer is seeking clarity based on science and validated efficacy. Your Company is leveraging its vast resources and know-how of technological and scientific knowledge on food and nutrition by having access to global R&D network to meet the consumer requirements. It is utilising various platforms like the corporate websites, brand websites and even dedicated helplines for easy access and engagement. The information shared is holistic and is curated towards aiding the consumers lead a balanced, pleasurable and healthy lifestyle.

Digital Transformation

As consumers increasingly rely on digital platforms for easy access, querying and engagement with prospective brands and services, ensuring meaningful presence across online channels is critical. Your Company is investing substantial time and resources to develop compelling content and presence across various social media platforms, web and mobile applications. These engagements are viewed as meaningful investments to convince and retain consumers towards our brand and services and build long-term relationships.


Increasing the reach in rural markets by putting sharper focus on increasing mind share and market share will be important. Companies would need to expedite their rural distribution strategy, keep consumers engaged with new offerings and drive the premiumization strategy to adapt to the changing landscape. Through the cluster-based approach, that is powered by data and technology, your Company has made deeper penetration into newer markets, unleashed growth potential and created a transparent planning process.



• Nestle India was awarded the 'MNC of the year' by All India Management Association (AIMA)

• Nestle India Procurement secured 2nd position in FICCI Sustainable agriculture award for building climate-resilient agriculture.

• Nestle India Supply Chain won Inflection Awards 2022 from Alden Global for Digital Supply Chain of the Year in Category- FMCG-2022.

• The Procurement team received the 4th Procurement India Leadership Awards organized by Institute of Supply Chain Management (ISCM) for Best Sustainability Initiative in procurement and Best Procurement risk mitigation.

• Choladi Factory was acknowledged by the Madras Export Processing Zone and awarded the No. 1 Export Excellence Award for the third consecutive year.

• NQAC Moga won “Golden Peacock National Quality Award 2022" in the “Analytics" category.

• Ponda & Bicholim Factory won Gold at the 8th Edition of India Green Manufacturing Challenge 2022.


• Nestle KITKAT won India's Most Desirable Chocolate Bar Brand 2022 at the 8th Edition of TRA's most desirable brand.

• NESCAFE won the prestigious Brands of India Award 2022 by BARC Asia.

• NESCAFE RTD was awarded gold for the paper straw campaign at E4M Impact Digital Infuencers Award 2022.

• Resource High Protein received the Product of the Year at Channelier FMCG Awards 2022 and Resource Diabetic won the Effective Marketing Strategy at CIMS Nutrition & Wellness Awards 2022 for its thematic campaign “What did you do for yourself today".

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis as explained in the Corporate Governance Report, describing the Company's 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 2022, 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 2022 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 Companies Act, 2013 (“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

Ms. Rama Bijapurkar (DIN: 00001835), retired as an Independent Non-Executive Director of the Company with effect from 30th April 2022 after completion of her term of five consecutive years. Your Directors wish to place on record their appreciation for the contribution made by Ms. Rama Bijapurkar during her tenure as an Independent Non-Executive Director of the Company.

The members, at the 63rd Annual General Meeting held on 12th April 2022 approved the appointment of Ms. Anjali Bansal (DIN: 00207746) as an Independent Non-Executive Director with effect from 1st May 2022, to hold office for a term of five consecutive years.

During the year, Ms. Roopa Kudva (DIN: 00001766) resigned as an Independent Non-Executive Director with effect from 31st May 2022 to fulfil her commitments on her professional responsibilities in the social impact investing space. Your Directors wish to place on record their appreciationfor the contribution made by Ms. Roopa Kudva during her tenure as an Independent Non-Executive Director.

The Board of Directors had, on the recommendation of the Nomination and Remuneration Committee, at their meeting held on 21st April 2022 appointed Ms. Alpana Parida (DIN: 06796621) as an Independent Non-Executive Director of the Company with effect from 1st June 2022 for a term of five consecutive years, subject to approval of the Members. Subsequently, the Members had, vide resolution passed through Postal Ballot on 27th May 2022, approved the appointment of Ms. Alpana Parida as an Independent Non-Executive Director of the Company with effect from 1st June 2022, to hold office for a term of five consecutive years.

All the Independent Non-Executive Directors of your Company have submitted the declaration confirming that they meet the criteria of independence as prescribed under the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations") and are not disqualified from continuing as Independent Non-Executive Directors. The Board is of the opinion that the Independent Non-Executive Directors of the Company including those appointed during the year possess requisite qualifications, expertise and experience and they hold highest standards of integrity. The Independent Non-Executive Directors of the Company have confirmed compliance of relevant provisions of Rule 6 of the Companies (Appointments and Qualifications of Directors) Rules, 2014.

In terms of the Articles of Association of the Company, the Board of Directors, at its meeting held on 16th February 2023, appointed Ms. Svetlana Leonidovna Boldina as an Additional Director with effect from 1st March 2023. The Board of Directors had also, on the recommendation of the Nomination and Remuneration Committee, recommended appointment of Ms. Svetlana Leonidovna Boldina

(DIN: 10044338) as a whole-time director, designated as “Executive Director - Finance & Control and Chief Financial Officer" ('Key Managerial Personnel') with effect from 1st March 2023, for a term of five consecutive years, to the members for their approval at the 64th AGM, in place of Mr. David McDaniel, Executive Director - Finance & Control and Chief Financial Officer, who will relinquish his office with the effect from 28th Feberuary 2023. Ms. Svetlana Leonidovna Boldina holds office as Additional Director up to the date of the forthcoming Annual General Meeting and is eligible for the appointment. Further, in terms of Listing Regulations, the Audit Committee has approved her appointment as Chief Financial Officer after assessment of her qualification, experience and background.

Appointment of Ms. Svetlana Leonidovna Boldina, being a non-resident in India, is subject to the approval of the Central Government. Ms. Svetlana Leonidovna Boldina fulfils the criteria provided in the Nomination and Remuneration Policy of the Company including her qualification, experience, background, expertise, 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 resigned in the past three years, shareholding in the Company held by the directors proposed to be appointed/ re-appointed at the 64th AGM, is provided in the Notice of the 64th AGM.

Mr. Matthias Christoph Lohner (DIN: 08934420) Executive Director of the Company, retires by rotation at the 64th 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 64th AGM. As per the terms of his appointment as approved by the members, his re-appointment at the 64th AGM as a director retiring by rotation would not constitute break in his appointment as a whole-time director, designated as “Executive Director - Technical".

The Board of Directors had, on the recommendation of the Nomination and Remuneration Committee, at their meeting held on 28th July 2022, approved the appointment of Mr. Pramod Kumar Rai (FCS 4676) as the Company Secretary and Compliance Officer (Key Managerial Personnel) of the Company effective from 1st October 2022 in place of Mr. B. Murli, Company Secretary & Compliance Officer of the Company, who retired on 30th September 2022 after an illustrious career of over three decades with the Company. The Directors wish to place on record their appreciation for the contribution made by Mr. B. Murli during his tenure with the Company. Mr. Pramod Kumar Rai is a fellow member of the Institute of Company Secretaries of India and a law graduate from University of Delhi with over 26 years of experience in varied fields such as legal, governance, compliance, investor relations, audit, insurance and has been associated with the Company for over 18 years and before taking up this assignment was designated as Deputy Company Secretary and Associate General Counsel (Corporate Legal, Governance and Compliance) of the Company.

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". Nomination and Remuneration (NR) Policy of the Company includes criteria for determining qualifications, positive attributes and independence of a director. The NR 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 Directors of its own performance and that of its Committee and individual Directors and the details of manner of performance evaluation of Directors, Board and it's Committees are available in the Corporate Governance Report, which forms an integral part of the Annual Report.

The details of familiarization programmes to Independent Non-Executive 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 familiarisation-programme.

Corporate Social Responsibility (CSR)

During the year, the CSR Committee was re-constituted, Ms. Anjali Bansal, Independent Non-Executive Director, was appointed as member of the CSR Committee with effect from 1st May 2022 in place of Ms. Rama Bijapurkar, Independent Non-Executive Director, who ceased as member of the CSR Committee with effect from 30th April 2022, due to completion of her tenure as a Director of the Company.

As on 31st December 2022, the CSR Committee comprised of Dr. Swati A. Piramal as Chairperson and Mr. Suresh Narayanan, Mr. David Steven McDaniel and Ms. Anjali Bansal, 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, your Company has during the year 2022 spent over two percent of the average net profits of your Company during the three preceding financial years in accordance with the CSR Policy and the Annual Action Plan approved by the Board of Directors, from time to time on the recommendation of the CSR Committee. 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. Your Company's CSR activity

expands across nutrition awareness, water and sanitation, rural development and environment. Details of some of the salient features of the CSR Policy and CSR initiatives are mentioned hereunder:

Project Vriddhi

As a part of your Company's vision to strengthen community-led rural development to positively impact the lives of people, Your Company in collaboration with SM Sehgal Foundation, expanded the project to two more villages in Haryana in 2022. Since its launch in 2019, Project Vriddhi has touched the lives of over

6,000 beneficiaries across all 5 villages. The Project focuses on improving access to clean drinking water, promoting watersaving irrigation, increasing nutrition awareness, enhancing farm productivity and providing a conducive learning environment in schools by improving hygiene and sanitation practices.

Your Company has been a part of the transformation journey of villages that is unleashing a multiplier effect on several development indicators such as nutrition and health, hygiene and sanitation, education and agriculture.

Nestle Healthy Kids Programme

The Nestle Healthy Kids Programme is a part of your Company's commitment to promote healthier lifestyles amongst adolescents and parents. The Programme focusses on promotion of healthy eating habits, personal hygiene and the importance of physical activity as part of their daily routine. Launched as a pilot in 2009, the Programme has expanded significantly since its inception, incorporating pertinent elements like plastic waste management. Till date over 466,000 adolescents and over 30,000 parents across 25 States and Union Territories have been encouraged to live healthier lives through this Programme.

Project Jagriti

Project Jagriti is aimed at promoting optimal health outcomes in collaboration with healthcare providers and community stakeholders. Launched by your Company in partnership with Mamta, an NGO working in the field of nutrition, Project Jagriti focuses on four key groups- adolescents, young couples, pregnant women and lactating mothers. It emphasizes the importance of nutrition and healthy eating, prenatal and postnatal care, exclusive breastfeeding, family planning, check-ups, counselling, contraception, and adolescent-friendly health services at primary and secondary health centers.

Till 2022, the project has reached out to over 9.7 million beneficiaries (3.1 million direct and 6.6 million indirect beneficiaries) across 10 States and Union Territories.

Project Serve Safe Food

Project 'Serve Safe Food' was launched by your Company in 2016 in partnership 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 food

quality. Along with an NGO, Nidan your Company organized training sessions on food safety, hygiene, COVID-19 precautionary measures and digital payments This project has benefitted over 41,000 street food vendors across 25 states/Union Territories till 2022.

Plastic Waste Management Awareness

Your Company launched Project Hilldaari in 2019 to address the issue of plastic waste management in 5 tourist cities Mussoorie, Dalhousie, Ponda, Mahabaleshwar and Munnar. The project aims to create an integrated waste management model by engaging multiple stakeholders including government authorities, waste management contractors, local NGOs, residents and organizations to collaborate towards a common goal of a sustainable and clean environment.

The project aims at achieving 3 outcomes i.e. diverting waste from landfill by creating awareness on waste segregation and anti-littering; professionalizing waste workers to improve the ways of working, getting recognized and leading a better life; enabling digital mechanism to manage waste in the city, in monitoring waste at different stages, creating revenue out of waste and having a system in place to manage waste workers.

Since 2019, your Company has managed to divert over

22.000 MT of waste, which includes over 3,550 MT plastic waste from landfills. Your Company has also been working with over 680 waste professionals and provided over 1,350 safety gears to the waste management professionals to improve their working conditions. Your Company has also enabled digital monitoring system in more than 25,000 property units that include household and institutions across these cities.

Project Jigyasa

Your Company believes that education is a powerful tool in bringing a change in the society. Project Jigyasa was launched in 2022 with the aim to spread science education, science labs and libraries were set up in 4 schools of Goa and Samalkha with about 2,000 students. The Project aims to increase access to practical, hands-on science education through an innovative model that is holistic and experiential.

Water and Sanitation

Your Company is committed to providing access to clean water to communities in schools located near its factories. Since 1999, your Company has supported setting up of over 300 clean drinking water facilities, benefitting over

150.000 beneficiaries.

It has constructed modern, easily maintainable modular toilets to ensure that sanitation is not compromised. These sanitation blocks come with its own water supply and storage area. Over 800 schools have been provided with sanitation facilities till 2022, giving more than 270,000 girl students access to clean toilets and the opportunity to lead healthier lives, as well as pursue their academic dreams.

Disaster Management

In addition to CSR, your Company has made interventions where societal needs are high or in special situations such as natural calamities, disasters including COVID-19.

Business Responsibility and Sustainability Report

Your Company does business that delivers long-term shareholder value and benefits society. Your Company continue to focus on its commitments which are aligned with national priorities and United Nations Sustainability Development Goals.

Your Company aims to make safe, tasty and sustainable food that is nutritous, accessible and affordable, minimising its impact on the resources, contributing to a future in which they are available for generations to come; boosting the well-being of the communities and enabling a just transition to regenerative practices; and creating a positive business environment and empowering your Company's employees to make sustainable business decisions.

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations") read with relevant SEBI Circulars, new

reporting requirements on ESG parameters were prescribed under “Business Responsibility and Sustainability Report" ('BRSR'). The BRSR seeks disclosure on the performance of the Company against nine principles of the “National

Guidelines on Responsible Business Conduct' ('NGRBCs'). As per the SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for the top 1000 listed companies by market capitalisation and

filing of BRSR is voluntary for the financial year 2021-2022. Accordingly, for the financial year ended

31st December 2022, your Company has opted to publish BRSR instead of Business Responsibility Report. BRSR 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 your Companies (Audit and Auditors) Rules, 2014, the members of the Company in 63rd Annual General Meeting of the Company ('63rd AGM') approved the 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 for a term of five consecutive years i.e. from the conclusion of 63rd AGM till the conclusion of 68th AGM.

The Report given by M/s. SRB on the Financial Statements of your Company for the financial year 2022 is part of the Annual Report. The Notes on the Financial Statements referred to in the Auditor's Report are self-explanatory and do not call for any comments. The Auditor's Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year, 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.

Cost Auditors and Cost Accounts

Your 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, your Company has been making and maintaining such cost records as per the requirements.

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 2023. Your 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 they are not disqualified to be appointed as the Cost Auditors of your Company for the year ending 31st December 2023. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee. 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 64th AGM of your Company. In the opinion of the Directors, considering the limited scope of audit, the proposed remuneration payable to the Cost Auditors would be reasonable and fair and commensurate with the scope of work carried out by them.

Secretarial Auditors and Secretarial Audit Report

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 2022. 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 comments. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year, 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.

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 for the financial year ending 31st December 2023.

Your 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 financial year ending 31st December 2023.

Secretarial Standards

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

Meetings of the Board

Seven meetings of the Board of Directors of your Company were held during the year 2022. The particulars of the meetings held and attendance of the Directors in the meetings 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 the web-link

Details of Loans, Guarantee and Investments

Details of loans, guarantee and investments are given in Note no. 7, 8, 11 and 16 to the Financial Statements attached.

Related Party Transactions

Your Company has formulated a policy on materiality of related party transactions and on dealing with related party transactions ('RPT Policy') including clear thresholds limits as approved by the Board of Directors. The updated Policy is available on the website of your Company at The RPT Policy was last reviewed and approved by the Board of Directors at their meeting held on 17th February 2022 on the recommendation of the Audit Committee. The Board of Directors of your Company has approved the criteria to grant omnibus approval by the Audit Committee within the overall framework of the RPT Policy on related party transactions. All members of the Audit Committee are Independent Non-Executive Directors.

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

All related party transactions entered during the year were in ordinary course of the business and at arm's length basis. No material related party transactions, i.e. transaction with a related party exceeding Rupees one thousand crore or 10% of the annual consolidated turnover, as per the last audited Financial Statements of your Company whichever is lower,

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. 42 to the Financial Statements 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. During the year, there was no subsequent material modification in the terms and conditions of GLAs, as defined by the Audit Committee and specified in the RPT Policy.

Risk Management

Your Company has developed and implemented a Risk Management Policy and in the opinion of the Board of Directors, during the year, there were no elements of risks identified which may threaten the existence of the Company.

The Board of Directors of your Company evaluates the risk management systems periodically and takes into account any recommendation(s) of the Risk Management Committee and the Audit Committee.

The Risk Management Committee (RMC) was re-constituted and Ms. Anjali Bansal, Independent Non-Executive Director was appointed as member of the RMC effective from 1st May 2022. Ms. Roopa Kudva, Independent Non-Executive Director ceased as member of the RMC upon her resignation as a Director of your Company with effect from 31st May 2022.

As part of Nestle's global sustainability commitment, your Company, in pursuing its business purpose, aim for long-term sustainable value creation, is conscious of the interdependence of economic, social and environmental interests and seeks to reconcile them in its daily business activities. Sustainability is an integral part of Nestle's strategy and behaviour in business as described in Nestle's Corporate Business Principles. In view of the above and considering the regulatory framework prescribed by Securities and Exchange Board of India ('SEBI') on Business Responsibility and Sustainability Reporting, the Board of Directors had at its meeting held on 28th July 2022, on the recommendation of the Nomination and Remuneration Committee, extended the terms of reference of the Risk Management Committee to the following “Sustainability Areas":

a) review Company's sustainability agenda including the measures which ensure your Company's sustainability and how its long term strategy relates to its ability to create shared value;

b) review reports and give advice on measures which ensure the long-term sustainability of your Company in its economic, social and environmental dimension;

c) monitor your Company's performance against essential and leadership indicators provided under the Business Responsibility and Sustainability Reporting;

d) review the annual Business Responsibility and Sustainability Report ('BRSR') and give its recommendations thereon to the Board of Directors of your Company; and

e) any other terms of reference by the Board of Directors of your Company on the Company's sustainability initiatives.

To better reflect the extended role of the Committee in the matters of sustainability, the Board of Directors had approved change in the nomenclature of the Risk Management Committee to “Risk Management and Sustainability Initiatives Committee" or “RMSI Committee". The RMSI Committee was further re-constituted and Dr. Swati A. Piramal, Independent Non-Executive Director and Chairperson of the CSR Committee was appointed as a member of the Committee with effect from 1st October 2022. As on 31st December 2022, the RMSI Committee comprised of Mr. Suresh Narayanan as Chairman and Mr. P R Ramesh, Ms. Anjali Bansal, Dr. Swati A. Piramal and Mr. David McDaniel, as members.

The RMC or RMSI Committee on timely basis informed the Board of Directors about risk assessment and minimization procedures. The RMSI Committee has, inter-alia, formulated a detailed Risk Management Policy, as prescribed under the Listing Regulations.

Scheme of Arrangement

The Board of Directors, at its meeting held on 28th July 2021, had approved the Scheme of Arrangement between the Company and its members under Section 230 of the Companies Act, 2013, as amended (“the Act") read with other applicable provisions of the Act and Rules made thereunder (“the Scheme"), which envisages transfer of the entire balance of ' 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 Hon'ble National Company Law Tribunal, Delhi Bench (Hon'ble NCLT), sanction of the Hon'ble NCLT and such other approvals as may be prescribed.

Your Company had filed an application with Hon'ble NCLT on 22nd March 2022 for the sanction of Scheme and in terms of the Orders of the Hon'ble NCLT, the Scheme was approved by the members of the Company at their NCLT convened meeting on 25th July 2022. As per the Orders of the Hon'ble NCLT, meeting of the un-secured creditors was dispensed with. Your Company had filed its second motion application with Hon'ble NCLT on 4th August 2022 for the sanction of Scheme and as per the Orders of the Hon'ble NCLT, your Company has served notice to the Statutory Authorities seeking their objection, if any, to the Scheme. Sanction of the Scheme is awaited from Hon'ble NCLT.

Upon the Scheme becoming effective, the entire amount of ' 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 your Company and constitute accumulated profits of your 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 your 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 a https://www.

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 had indulged in unfair trade practice, sold defective goods to the public and sold goods which were hazardous. Complaint seeks compensation of ' 2,845.5 million and punitive damages of ' 3554.1 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 Company's 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 controls systems periodically.

Audit Committee

During the year, the Audit Committee was re-constituted and Ms. Alpana Parida, Independent Non-Executive Director, was appointed as member of the Audit Committee with effect from 1stJune 2022 in place of Ms. Roopa Kudva, Independent Non-Executive Director, who ceased to be a member of the Audit Committee upon her resignation as a Director of the Company with effect from 31st May 2022.

As on 31st December 2022, the Audit Committee comprised of Mr. P. R. Ramesh as Chairman, Mr. Rajya Vardhan Kanoria and Ms. Alpana Parida as members of the Committee, all are Independent Non-Executive Directors.

Powers and roles 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.

Your Company as part of establishment of Vigil Mechanism 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 https://

Further, your 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.

Your Company sensitizes the availability of the above Vigil Mechanism from time to time to the directors and employees of your 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 2022, 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

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 Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH), as amended, your Company has a robust mechanism in place to redress complaints reported under it. Your 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 an extensive experience in the field. In 2022, one case of sexual harassment was reported, which was investigated and resolved as per the provisions of the POSH.

During the year 2022, initiatives were undertaken to demonstrate your Company's 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. In terms of the IEPF Rules, during the year 2022, your Company had transferred ' 4,813,619/- and ' 1,608,472/- to the IEPF, being the unpaid and unclaimed dividend amount pertaining to Third Interim 2014 and Final Dividend 2014 & First Interim Dividend 2015, respectively.

Pursuant to the provisions of IEPF Rules, all shares in respect of which any dividend which 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 had transferred such equity shares on which the dividend(s) remained unpaid or unclaimed for seven consecutive years to the demat account of IEPF Authority, after following the prescribed procedure.

Credit Rating

Your 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 Company's 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.

Your Company did not have any subsidiary or joint venture or associate Company.

Trade Relations

Your Company maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and the 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 support from the distributors, retailers, stockist, suppliers and others associated with your Company as its trading and value chain partners. Your 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, fairness, 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 of its operations as well as the efficient utilization of your Company's resources for sustainable and profitable growth.

Your 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: 16th February 2023 Suresh Narayanan

Place: Gurugram Chairman and Managing Director