Nestle India Ltd Management Discussions

(within the limits set by the Companys competitive position)

Industry structure and developments, segment wise or product-wise performance, outlook, risks, opportunities and threats of the Company and discussion on financial performance with respect to the operational performance, has been covered in the Boards Report more specifically under the sections on Financial Performance and State of Companys Affairs and Management Analysis, Exports, Business Development of the Company.

The Company has an adequate system of internal controls to ensure that transactions are properly authorised, recorded and reported, apart from safeguarding its assets. The internal control system is supplemented by well-documented policies, guidelines and procedures and reviews carried out by the Companys internal audit function, which submits reports periodically to the Management and the Audit Committee.

In order to foster an improved internal control culture in the Company, wherein every employee is fully aware of all the major risk/concerns faced in his/ her work sphere and assumes responsibility for the controls performed therein, the Company has inter-alia implemented a tool called "Controls Manager" which works on the basic concept of Control Self-Assessment. The Self- Assessments by process/ control owner are also used as the basis of CEO/ CFO certification as required under Regulation 17(8) of the Listing Regulations.

The Company has a favourable work environment that motivates performance, customer focus and innovation while adhering to the highest degree of quality and integrity. As part of manpower development and training and with an aim to enhance operational efficiency, employees of the Company have been sent on postings and assignments to other Nestl? Group companies. Manpower figure of the Company as on 31^st December 2022 was 8,117.

The Annual Report has details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios as applicable, along with detailed explanations thereof, including (i) Debtors Turnover, (ii) Inventory Turnover, (iii) Interest Coverage Ratio, (iv) Current Ratio, (v) Debt Equity Ratio, (vi) Operating Profit Margin(%), and (vii) Net Profit Margin(%). Details of change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof is also part of this Annual Report.

CEO/ CFO CERTIFICATION

The Chairman and Managing Director and the Executive Director- Finance & Control and CFO of the Company have certified to the Board of Directors, inter-alia, the accuracy of financial statements and adequacy of internal controls for the financial reporting as required under Regulation 17(8) of the Listing Regulations for the year ended 31^st December 2022.

DISCLOSURES

During the year 2022, the Company had no materially significant related party transaction, which is considered to have potential conflict with the interests of the Company at large. Transactions with related parties are disclosed in Note No. 42 to the Annual Audited Financial Statements. The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions. The said Policy is also available on the website of the Company at https://www.nestle.in/investors/policies.

The equity shares of the Company are listed on BSE Limited, Mumbai and the Company has complied with all the applicable Regulations of capital markets. No penalties or strictures have been imposed on the Company by the Stock Exchange, SEBI or any other statutory authority, on any matter relating to the capital markets, during the last three years.

The standard of behaviour of Nestl? India is governed by significant documents "The Nestl? Corporate Business Principles", "The Nestl? Management and Leadership Principles" and "Nestl? India Code of Business Conduct". Employees can report to the Company Secretary, on a confidential basis, any practices or actions believed to be inappropriate or illegal under Nestl? India Code of Business Conduct ("the Code"). The Company has established vigil mechanism/ whistle blower policy ("Policy"), which is available on the website of the Company at https://www.nestle.in/investors/policies.

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 Nestl? Corporate Business Principles or for reporting, on a confidential basis, any practices or actions believed to be inappropriate or illegal under the Code. Link to "Speak-Up Platform" is available on the website of the Company at https://www.nestle.com/aboutus/businessprinciples/report-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 has not raised any funds through preferential allotment or qualified institutions placement as specified under Regulation 32 (7A) of the Listing Regulations.

The Company has obtained a certificate from M/s. S.N. Ananthasubramanian & Co., Practicing Company Secretary (Registration No. 1774), Secretarial Auditors of the Company, confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of the Company by the SEBI/ MCA or any such Statutory Authority. The said Certificate is enclosed as "Annexure - I" and forms integral part of this Report.

During the year 2022, total fees for all services has been paid by the Company to the Statutory Auditors, M/s. S R B & Co. LLP, Chartered Accountants, and all the entities forming part of the same network, aggregated to Rs23.6 million.

During the year 2022, the Board of Directors accepted all recommendations of the Committees of the Board of Directors, which were mandatorily required to be made.

As per the requirement of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH"), the Company has a policy and 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 is composed of internal members and an external member who has extensive experience in the field. During the year 2022, the Company has received one complaint on sexual harassment, which was classified as significant incidents for investigation and the said complaint was investigated and resolved as per the provisions of the POSH and as on 31^st December 2022, no complaint is pending for investigation and resolution.

During the year, the Company has not provided any loans and advances in the nature of loans to firms/companies in which directors are interested.

The Company does not have any share in the demat suspense account or unclaimed suspense account.

The Company has inter-alia complied with all the mandatory requirements specified in Regulations 17 to 27 and clauses (b) to (i) of sub - regulation (2) of Regulation 46 of the Listing Regulations.

The Corporate Governance Report of the Company for the year 2022 or as on 31^st December 2022 are in compliance with all applicable requirements of Listing Regulations.

The status of adoption of the discretionary requirements as specified in sub - regulation 1 of Regulation 27 of the Listing Regulations are as follows:

(a) The Board: The Company has an Executive Chairman;

(b) Shareholder Rights: Half-yearly and other quarterly financial results are published in newspapers, uploaded on the website of the Company at www.nestle.in and sent to the members individually through email to their email address registered with the Company/ depository participant(s);

(c) Modified opinion(s) in audit report: The Company already has a regime of un-qualified financial statements. Auditors have raised no qualification on the financial statements;

(d) Reporting of Internal Auditor: The Chief Internal Auditor of the Company administratively reports to the Executive Director - Finance & Control and CFO with functional independence and has direct access to the Audit Committee.

	On behalf of the Board of Directors
Date : 16th February 2023	Suresh Narayanan
Place : Gurugram	Chairman and Managing Director