Investors: Ensuring returns through sustainable growth
Ensuring returns through sustainable growth
The company created history when it was listed in the Bombay, Calcutta, and Madras Stock Exchanges in 1956 and offered 10% of its equity to Indian shareholders. It became the first subsidiary of a foreign company in India to offer equity to the Indian public. Today, HUL shares are listed on the Bombay Stock Exchange and the National Stock Exchange.
What we do
With our portfolio of strong brands, our presence across the country, and our long-standing commitment to ‘shared value creation’, we believe we can achieve our most ambitious goals. We ensure a successful future by adopting good governance practices and embedding the principle of sustainability in all our business strategies.
Well-poised for growth
Our brands – Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Sunsilk, Clinic, Close-up, Pepsodent, Lakme, Brooke Bond, Kissan, Knorr, Annapurna, Kwality Wall’s, and many more –are household names across the country and span many categories, such as soaps, detergents, personal care, tea, coffee, staples, ice-cream and culinary products.
Seven hundred million consumers use HUL brands in India* in their daily lives. We hold leading market positions in most of the categories we operate in. We are market leaders in terms of value share in eight categories and a strong number two in three others#. We have an extensive distribution network covering 6.3 million retail outlets, including direct reach to over one million outlets. Our structure is designed to infuse speed and flexibility in decision-making and implementation, with empowered managers across the company’s nationwide operations.
Corporate governance
Success, we believe, requires us to display the highest standards of professional behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact. This is our road to sustainable, profitable growth, and long-term value for our shareholders, our people, and our business partners.
Hence, our foundation is rooted in stringent corporate governance principles of fairness, transparency, and accountability. Being ethical is not only the right thing to be, it is also a good business practice and leads to more successful and profitable operations.
Our Code of Business Principles (CoBP) lays down the framework of standards within which we work. It supports our approach to governance and corporate responsibility. With respect to shareholders, the CoBP states that we will conduct our operations in accordance with internationally accepted principles of good corporate governance. We will provide timely, regular, and reliable information about our activities, structure, financial situation, and performance to all shareholders. Our approach, governance structure, corporate policies, internal controls and risk management are discussed in detail in our annual financial report.
Rewarding shareholders
At HUL, we believe in creating long term value for our shareholders. HUL has a history of consistent dividend payment to its shareholders. As on March 31, 2010, HUL has over 3.5 lakh shareholders, of which more than 3.4 lakh are retail investors.
To mark the completion of the 75th year of our operation in India, HUL, in 2007, declared a special Platinum Jubilee Dividend to the shareholders at the rate of INR 3 per share. A share buy-back scheme, announced in the same year, further strengthened the Earning Per Share (EPS) for the shares of the Company. For 2009-10, HUL has declared a total dividend of INR 6.5 per share of INR 1 each.
Communication to shareholders
Effective communication of information is an essential component of corporate governance. It is a process of sharing information, ideas, thoughts, opinions and plans to all stakeholders, and promotes management shareholder relations. HUL regularly interacts with shareholders through multiple channels of communication, such as the results announcement, annual report, media releases, company website and other subject specific communications. Quarterly, half-yearly and annual results are published in leading newspapers. The results are also made available on the website www.hul.co.in. The website also has vital information related to the company, official press releases and presentations for analysts.
The Annual General Meeting of Shareholders is an important annual event where the shareholders of the Company come in direct communication with the Board of Directors and management. The Board engages with shareholders and answers their queries on varied subjects whether relating to financials, performance of the Company or otherwise.
Investor services: Alternative dispute redressal
In 2004, HUL pioneered the mechanism of providing an alternate redressal system for shareholders to resolve shares-related disputes pending before the parties by amicable settlement. We started the unique initiative of organising Alternative Dispute Redressal Meetings wherein aggrieved investors could get a chance to settle their disputes, some of which were pending for years.
HUL has engaged the services of retired judges to preside over the meetings in order to give a fair view to each case. A number of shareholders have availed the benefit of this process. Through our various initiatives we keep exploring the possibilities of settling such issues. The process helps the investor release the locked-up investment and save their time from being consumed in contesting legal proceedings. The objective of this process is to facilitate a quick resolution between the parties.
Embedding sustainability in business strategy for long-term returns
Corporate sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risksderiving from economic, environmental,and social developments.
Companies that wait to be forced into action, or those who see sustainability solely in terms of reputation management will do too little too late and face challenges in the future.
We’ve always believed in doing the right thing, and in the power of our brands when it comes to improving the quality of people’s lives. As our business grows, so do our responsibilities. We recognise that global challenges such as climate change concern us all. Analysing and remedying the wider impact of our actions is embedded in our core values and is a fundamental part of who we are. We have embedded the principle of sustainability in our business strategy and our approach towards sustainability is expressed in the strategy section of the report.
External recognition
In 2008, HUL was in the top five of Standard & Poor’s Environment, Social and Governance India Index, which measured 50 companies from a pool of 500 Indian companies that had the highest score in terms of environmental, social, and corporate governance responsibility. In 2009, Unilever and HUL have both been named in the Forbes ‘Top 100 Most Respected Companies’ list for the first time in the survey’s four-year history.
We feel proud to belong to a company whose visionary founders had laid the foundation for good governance several decades ago. Our parent company, Unilever, is a recognised leader in sustainability. It has led the food sector of the Dow Jones Sustainability Index for the last 11 years.
Unilever has been named in the 2009 World’s Most Ethical (WME) Companies list. The ranking, awarded by the Ethisphere Institute, evaluated a record-breaking 10,000 companies from more than 100 countries, and over 35 industries. Unilever topped the latest Tomorrow’s Value Rating, which assesses the sustainability of the world’s top ten companies in the Food & Beverage sector.
