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Directors Report of Dabur India Ltd.

Mar 31, 2015

The Members,

The Directors have pleasure in presenting the 40th Annual Report on the business and operations of the Company, together with the audited accounts for the financial year ended March 31,2015.

Financial Results

Financial results are presented in the table below: (Rs. in crores)

Particulars Consolidated Standalone 2014-15 2013-14 2014-15 2013-14

Revenue from Operations 7985.25 7203.37 5569.13 4979.74 (including other Income)

Less Expenses :

Cost of goods sold 3720.07 3400.03 2826.09 2562.63

Employee benefits expenses 689.56 607.67 392.99 343.93

Finance cost 40.12 54.15 9.89 19.35

Depreciation 114.98 97.49 65.97 53.89

Other Expenses 2101.16 1907.78 1273.70 1137.89

Total Expenses 6665.89 6067.12 4568.64 4117.69

Profit before exceptional and 1319.36 1136.25 1000.49 862.05 extraordinary items and tax

Exceptional items 0.00 0.00 -23.96 0.00

Profit before extraordinary 1319.36 1136.25 976.53 862.05 items and tax

Extraordinary items 0.00 -0.72 0.00 -0.72

Profit before tax 1319.36 1135.53 976.53 861.33

Tax expense 250.89 219.08 213.95 189.23

Profit for the year from 1068.47 916.45 762.58 672.10 continuing operations

Minority interest 2.64 2.53 0.00 0.00

Profit after minority interest 1065.83 913.92 762.58 672.10

The Company proposes to transfer an amount of Rs.80.00 crores (Previous year Rs.70.00 crores) to general reserves.

Dividend

The Company has paid an interim dividend of 125% (Rs.1.25 per share of Re.1/-each) on September 25, 2014. We are pleased to recommend a final dividend of 75% (Re.0.75 per share of Re.1/- each) for the financial year 2014-15. The final dividend, if approved by the members, will be paid to members within the period stipulated by the applicable Companies Act. The aggregate dividend for the year will amount to 200% (Rs.2 per share of Re.1/- each) as against 175% (Rs.1.75 per share of Re.1/- each) declared last year. The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution, is at 54.67%.

Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, interim dividend (II) for the financial year 2006-07 amounting to Rs.2341419/- and interim dividend for the year 2007-08 amounting to Rs. 5329027/- which remained unpaid or unclaimed for a period of 7 years, has been transferred by the Company to the Investors Education and Protection Fund (IEPF) of the Central Government. Further, final dividend for the year 2006-07 pertaining to erstwhile Femcare Pharma Limited (FEM), now merged with the Company, which remained unpaid or unclaimed for a period of 7 years, amounting to Rs.192094/- has also been transferred by the Company to IEPF. The due dates for transfer of unpaid dividend to IEPF for subsequent years is given in the Corporate Governance Report. The list of unpaid dividend upto the financial year 2013-14 is available on Company''s website www.dabur.com. Shareholders are requested to check the said list and if any dividend due to them remains unpaid in the unpaid list (apart from the above mentioned unpaid dividend already transferred to IEPF), can approach the Company for release of the unpaid dividend.

Abridged Financial Statements

In accordance with the listing agreement with Stock Exchanges and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014 of the said Act, the Abridged Annual Report containing salient features of the Financial Statements, including Consolidated Financial Statements, for the financial year 2014-15, along with statement containing salient features of the Directors'' Report (including Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the Company in electronic mode.

Full version of the Annual Report 2014-15 containing complete Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including Consolidated Financial Statements, prepared as per the requirements of Schedule III to the Companies Act, 2013, Directors''Report (including Management Discussion and Analysis, Corporate Governance Report and Business Responsibility Report) are being sent via email to all shareholders who have provided their email address(es).

Full version of Annual Report 2014-15 is also available for inspection at the registered office of the Company during working hours upto the date of ensuing Annual General Meeting (AGM). It is also available at the Company''s website at www. dabur.com.

Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2014-15, upon receipt of written request from you, as a member of the Company.

Operations and Business Performance

Kindly refer to Management Discussion & Analysis and Corporate Governance Report which forms part of this report.

Corporate Governance

Corporate Governance is the system by which corporate entities are directed and controlled. It provides the structure through which the company''s objectives are set and provides the means of attaining those objectives and monitoring performance. It is the application of best management practices, compliance of law, adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for the sustainable development of all stakeholders. Dabur beholds Corporate Governance measures as an integral part of business strategy which adds considerable internal and external values and contributes to the business growth in ethical perspective. Besides complying with the prescribed Corporate Governance practices as per Clause 49 of the Listing Agreement in terms of revised dispensation, the Company has voluntarily adopted various practices of governance confirming to highest ethical and responsible standard of business, globally benchmarked. Strong governance practices of the Company have been rewarded in terms of improved share valuations, stakeholder''s confidence, improved market capitalization, high credit ratings and bagging of various awards for brands, stocks, environmental protection, etc. These have helped Dabur to pay uninterrupted dividends to its shareholders.

During the FY 2014-15, the Institute of Company Secretaries of India (ICSI), in its ceremony for National award for excellence in Corporate Governance, certified Dabur India Ltd., as one of the Best Governed Companies of India.

A certificate from Auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is attached as ''Annexure 1'' and forms part of this report.

Certificate of the CEO/CFO, inter-alia, confirming the correctness of the financial statements, compliance with Company''s Code of Conduct, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is attached in the Corporate Governance Report and forms part of this Report.

Business Responsibility Report

At Dabur, fulfilment of Environmental, Social and Governance Responsibility is an integral part of the way the Company

conducts its business. A detailed information on the initiatives of the Company as enunciated in the ''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011'' is provided in the Business Responsibility Report, a copy of which will be available on the Company''s website www.dabur.com.

For Business Responsibility Report as stipulated under Clause 55 of the Listing Agreement with the Stock Exchanges, kindly refer to Business Responsibility Report section which forms part of the Annual Report.

Credit Rating

During the year under review the Company has sustained its long term credit rating of AAA (stable) which has been reaffirmed by CRISIL. The highest credit rating of AAA awarded by CRISIL reflects the highest degree of safety regarding timely servicing of financial obligations. Further CRISIL has reaffirmed the rating of NCD programme of the Company as AAA (stable). The rating indicates highest degree of safety regarding timely servicing of financial obligation. The rated instrument carries lowest credit risk. The Company''s short term credit rated as A1 by CRISIL, has also been reaffirmed. This rating indicates a very strong degree of safety with regard to timely payment of interest & principal. Such instrument carry lowest credit risk.

Further ICRA has reaffirmed the rating on NCD programme of the Company as AAA (stable). The rating indicates highest degree of safety regarding timely servicing of financial obligation. The rated instrument carries lowest credit risk and the outlook on the rating is stable.

Directors

During the year, w.e.f. September 8, 2014, Mr. Albert Wiseman Paterson had resigned from the position of Non-Executive Independent Director owing to increased international nature of his role with another entity due to which he was finding it difficult to effectively discharge his duties as an Independent Director required as per the Corporate Governance standards.

Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re-appointment at every AGM. Consequently, Mr. Amit Burman and Mr. Saket Burman, Directors will retire by rotation at the ensuing AGM, and being eligible, offer themselves for re-appointment in accordance with the provisions of the Companies Act, 2013.

Pursuant to Section 149(1) of the Companies Act, 2013 the Board of Directors of the Company had on 28th July, 2014 appointed a Women Director Mrs. Falguni Sanjay Nayar as Additional Director in the category of Non-Executive Independent Director. Mrs. Nayar shall hold office upto the date of the ensuing AGM of the Company and, being eligible, offer herself for re-appointment. The Company has also received a notice in writing from a member proposing her candidature for the office of Director along with a deposit of Rupees one lakh.

The Board of Directors in their meeting held on 5th May, 2015 has recommended to re-appoint Mrs. Falguni Sanjay Nayar as Non-Executive Independent Director within the meaning of Section 149 and 152 of the Companies Act, 2013 read with Schedule IV attached thereto and Rules made there under, not subject to retirement by rotation, for a term of 5 (five) consecutive years commencing from the date of her appointment as an Additional Director in the Company i.e. 28th July, 2014 upto the conclusion of AGM of the Company to be held in the calendar year 2019 or 27th July, 2019 whichever is earlier.

The brief resume of the Directors being appointed/ re- appointed, the nature of their expertise in specific functional areas, names of companies in which they have held Directorships, Committee Memberships/ Chairmanships, their shareholding etc., are furnished in the explanatory statement to the notice of the ensuing AGM.

The Directors recommend their appointment/re-appointment at the ensuing AGM.

Pursuant to the provisions under Section 134(3)(d) of the Companies Act, 2013, with respect to statement on declaration given by Independent Directors under Section 149(6) of the Act, the Board hereby confirms that all the Independent Directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said Section 149(6).

Key Managerial Personnel

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:

Mr. P D Narang: Whole Time Director

Mr. Sunil Duggal: Chief Executive officer and Whole Time

Director

Mr. Lalit Malik: Chief Financial Officer

Mr. Ashok Kumar Jain: V P (Finance) and Company Secretary

During the year there was no change (appointment or cessation) in the office of any KMP.

Policy on Directors appointment and Policy on remuneration

Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached as ''Annexure 2 & 3'' respectively, which forms part of this report.

Particulars of remuneration of Directors/ KMP/ Employees

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is attached as ''Annexure 4A'' which forms part of this report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as ''Annexure 4B'' which forms part of this report.

Employees Stock Option Plan

During the year, 11163200 options in 3 tranches were granted to eligible employees of the Company in terms of Employees Stock Option Plan (Dabur ESOP 2000). During the year, 12698917 options were exercised by the employees after vesting. Accordingly, the Company has made the allotment of 12435710 equity shares on May 30, 2014, 112531 equity shares on August 12, 2014 and 150676 equity shares on November 20, 2014 against the options exercised by the employees.

The applicable disclosures as stipulated under the SEBI Regulations as on March 31, 2015 with regard to Employees Stock Option Plan are provided in ''Annexure 5'' to this report.

Number of Meetings of the Board

During the Financial Year 2014-15, 5 (five) number of Board meetings were held. For details thereof kindly refer to the section ''Board of Directors- Number of Board Meetings'', in the Corporate Governance Report.

Performance Evaluation of the Board, its Committees and Individual Directors

Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors.

A structured questionnaire has been prepared, covering various aspects of the functioning of the Board and its Committee, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Board''s focus, regulatory compliances and Corporate Governance, etc. Similarly, for evaluation of Individual Director''s performance, the questionnaire covers various aspects like his/ her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc.

Board members had submitted their response on a scale of 5 (excellent) - 1 (poor) for evaluating the entire Board, respective Committees of which they are members and of their peer Board members, including Chairman of the Board.

The Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of non- Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of executive and Non-Executive Directors.

The Nomination and Remuneration Committee has also carried out evaluation of every Director''s performance.

The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires.

The Directors expressed their satisfaction with the evaluation process.

Directors'' Responsibility Statement

Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, the Directors confirm:

a. That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

b. That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c. That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That they had prepared the annual accounts on a going concern basis;

e. That they had 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. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Statutory Auditors and their Report

M/s G. Basu & Co., Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the ensuing AGM and being eligible have consented and offered themselves for re-appointment as Statutory Auditors for the financial year 2015-16. Pursuant to Section 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate dated April 3, 2015 from the Auditors to the effect, inter-alia, that their re-appointment, if made, would be within the limits laid down by the Act, shall be as per the term provided under the Act, that they are not disqualified for such re-appointment under the provisions of applicable laws and also that there is no proceeding against them or any of their partners pending with respect to professional matter of conduct.

The Auditors have vide their letter dated April 22, 2015 also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.

There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. Further, the notes to accounts referred to in the Auditor''s Report are self-explanatory.

Cost Auditors and their Report

M/s Ramanath Iyer & Company, Cost Accountants, were re- appointed as Cost Auditors for the financial year 2014-15 to conduct cost audit of the accounts maintained by the Company in respect of the various products prescribed under the applicable Cost Audit Rules.

Full particulars of the Cost Auditors are as under:

M/s Ramanath Iyer & Company

808, Pearls Business Park, Netaji Subash Place, Pitampura, New Delhi - 110088. Tel. No. : 011-45655448; Email ID: Info@ ramanathiver.com. (Firm''s Membership No. 000019)

The Cost Audit Report for the financial year 2013-14, issued by M/s Ramanath Iyer & Company, Cost Auditors, in respect of the various products prescribed under Cost Audit Rules was filed with the Ministry of Corporate Affairs (MCA) on September 17, 2014. The due date for filing the said Report with MCA was September 27, 2014.

The Cost Audit Report for the financial year 2014-15, in respect of the various products prescribed under relevant Cost Audit Rules shall be filed as per the requirements of applicable laws.

Secretarial Auditors and their Report

M/s Chandrasekaran Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2014-15 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as ''Annexure 6'' and forms part of this report.

There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued by them for the financial year 2014-15 which call for any explanation from the Board of Directors.

Consolidated Financial Statements

In compliance with the applicable provisions of Companies Act, 2013 including the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2014- 15. Consolidated Turnover grew by 10.85% to Rs.7985.25 crores as compared to Rs.7203.37 crores in the previous year. Net Profit after Tax and after Minority Interest for the year at Rs.1065.83 crores is higher by Rs.151.91 crores as compared to Rs. 913.92 crores in the previous year.

Internal Financial Control System

According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the 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 Company has a well placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s internal financial control system also comprises due compliances with Company''s policies and Standard Operating Procedures (SOPs) and audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from Price Waterhouse Coopers Private Limited/ Price Waterhouse & Co., LLP, the Internal Auditors and various transaction auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board.

To further strengthen the internal control process, the Company has developed a very comprehensive legal compliance manual called ''e-nforce'' which drills down from the CEO to the executive level person who is responsible for compliance. This process is fully automated and generate alerts for proper and timely compliance.

Adequacy of Internal Financial Controls with reference to the financial statements

The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Board''s report.

To ensure effective Internal Financial Controls the Company has laid down the following measures:

All operations are executed through Standard Operating Procedures (SOPs) in all functional activities for which key manuals have been put in place. The manuals are updated and validated periodically.

All legal and statutory compliances are ensured on a monthly basis for all locations in India through a fully automated tool called "e-nforce" Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system.

Approval of all transactions is ensured through a pre- approved Delegation of Authority (DOA) Schedule which is in-built into the SAP system. DOA is reviewed periodically by the management and compliance of DOA is regularly checked and monitored by the auditors.

The Company follows a robust 2-tier internal audit process:

- Tier-1: Management/ Strategic/ Proprietary audits are conducted on a regular basis throughout the year as per agreed audit plan.

- Tier-2: Transaction audits are conducted regularly in India and abroad to ensure accuracy of financial reporting, safeguard and protection of all the assets. Stock audit is conducted on quarterly basis at all locations in India. Fixed Asset verification of assets in India is done on an annual basis including AS-28 testing at all locations.

- The audit reports for the above audits are compiled and submitted to Management Committee and audit Committee for review and necessary action.

The Company''s books of accounts are maintained in SAP and transactions are executed through SAP (ERP) setups to ensure correctness/ effectiveness of all transactions, integrity and reliability of reporting.

The Company has a comprehensive risk management framework.

Dabur has a robust mechanism of building budgets at an integrated cross- functional level. The budgets are reviewed on a monthly basis so as to analyze the performance and take corrective action, wherever required.

Dabur has in place a well-defined Whistle Blower Policy/ Vigil Mechanism.

Dabur has a system of Internal Business Reviews. All departmental heads discuss their business issues and future plans in monthly review meetings. They review their achievements in quarterly review meetings. Specialized issues like investments, property, FOREX are discussed in their respective Internal Committee meetings.

Compliance of secretarial functions is ensured by way of secretarial audit.

Compliance relating to cost records of the company is ensured by way of cost audit.

Development and implementation of Risk Management

Dabur has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically. During the year, as per the requirements of Listing Agreement with the Stock Exchanges, a Risk Management Committee was constituted by the Board of Directors on July 9, 2014 with responsibility of preparation of Risk Management Plan, reviewing and monitoring the same on regular basis, to identify and review critical risks on regular basis, to update Risk Register on quarterly basis, to report key changes in critical risks to the Board on an ongoing basis, to report critical risks to Audit Committee in detail on yearly basis and such other functions as may be prescribed by the Board.

The Committee holds quarterly meetings to review the critical risks identified. The risks faced by the Company and their minimization procedures are assessed categorically under the broad heads of High, Medium and Low risks. The Risk Register of the Company is also audited by Internal Auditors of the Company.

Further, the Company identifies risks, and control systems are instituted to ensure that the risks in each business process are mitigated. The two joint Chief Risk Officers (CROs) are responsible for the overall risk governance in the Company and reports directly to the Management Committee (MANCOM), which consists of various functional heads. The Board provides oversight and reviews the Risk Management Policy on a quarterly basis.

In the opinion of the Board there has been no identification of elements of risk that may threaten the existence of the Company.

Nature of business

There has been no change in the nature of business of the Company. However, updates regarding new projects undertaken by the subsidiary companies are as under:

Naturelle LLC located at Ras al Khaimah (RAK), the manufactur- ing arm of Dabur International Ltd. enhanced its RAK plant''s capacity from 42,000 MT to 44,500 MT per annum. New manu- facturing and packing facilities were set up for Fem hair removal creams and Namaste products. In addition, new packing lines for creams and hair oils were installed and commissioned. The infrastructure expanded in RAK during the year by increasing warehouse space by 10,000 sq. m. and the second production facility has been made operational with production of Hair Oils, Hair Serums, Herbolene and Hair Removal Cream.

Further updates regarding operational performance and projects undertaken by the subsidiary companies can be referred in the report on performance and financial position of subsidiaries presented elsewhere in this report.

Subsidiaries

During the year a wholly owned step down subsidiary company- Dabur Egypt Trading Limited has ceased to be subsidiary company w.e.f. 29th May, 2014 owing to its liquidation on the said date.

Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries.

Further, a separate statement containing the salient features of the financial statements of subsidiaries of the Company in the prescribed form AOC-1 has been disclosed in the Consolidated Financial Statements.

In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the Subsidiary Companies on its website at www.dabur.com.

The Company will make available physical copies of these documents upon request by any shareholder of the Company/ subsidiary interested in obtaining the same.

These documents shall also be available for inspection at the registered office of the Company during business hours up to the date of ensuing AGM.

Report on the performance and financial position of Subsidiaries, Associates and Joint Venture companies

Pursuant to Section 134 of the Companies Act, 2013 and Rule 8(1) of the Companies (Accounts) Rules, 2014 the report on performance and financial position of subsidiaries, associates and joint venture companies included in the consolidated Financial Statements is attached as ''Annexure 7'' which forms part of this report.

Information in this respect can also be referred in form AOC-1 which has been disclosed in the Consolidated Financial Statements.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as ''Annexure 8'' which forms part of this report.

Environmental, Health and Safety (EHS) Review

Details with respect to Environmental, Health and Safety (EHS) review are attached as ''Annexure 9'' which forms part of this report.

Details of policy developed and implemented on Corporate Social Responsibilities (CSR) initiatives

The Company has in place a CSR policy in line with Schedule VII of the Companies Act, 2013. As per the policy the CSR activities are focused not just around the plants and offices of the Company, but also in other geographies based on the needs of the communities. The four focus areas where special Community Development programmes are run are:

1. Eradicating hunger, poverty and malnutrition;

2. Promoting Health care including preventive health care;

3. Ensuring environmental sustainability;

4. Employment and livelihood enhancing vocational skills and projects.

The annual report on CSR activities is furnished in ''Annexure 10'' which forms part of this report. Apart from this the Company also releases a detailed Business Responsibility Report which shall be available on its website www.dabur.com.

Change in Capital Structure and Listing of Shares

The Company''s shares are listed on the National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and Metropolitan Stock Exchange of India Limited (mSXI) (Formerly known as MCX Stock Exchange Ltd.) and are actively traded.

In the year under review following shares were allotted and admitted for trading in NSE, BSE and mSXI.

Equity shares allotted against the options exercised by employees pursuant to Employees Stock Option Scheme of the Company are:

- 12435710 equity shares allotted on May 30, 2014.

- 112531 equity shares allotted on August 12, 2014.

- 150676 equity shares allotted on November 20, 2014.

After the close of the financial year 2014-15, 308180 equity shares have been allotted on April 10, 2014 against options exercised by employees pursuant to Employees Stock Option Scheme of the Company.

Extract of Annual Return

The extract of Annual Return as on March 31, 2015 in the prescribed Form No. MGT-9, pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is attached herewith as ''Annexure 11'' and forms part of this Report.

Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

Pursuant to Section 134(3)(g) of the Companies Act, 2013 particulars of loans, guarantees or investments under Section 186 of the Act as at end of the Financial Year 2014-15 are attached as ''Annexure 12'' which forms part of this report.

Contracts or arrangements with Related Parties under Section 188(1) of the Companies Act, 2013

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm''s length basis.

During the year, the Company had not entered into any contract or arrangement with related parties which could be considered ''material'' according to the policy of the Company on Materiality of Related Party Transactions.

Your attention is drawn to the Related Party disclosures set out in Note no. 51 of the Standalone Financial Statements.

Disclosure on Audit Committee

The Audit Committee as on March 31, 2015 comprises of the following Independent Directors:

Mr. P N Vijay (Chairman), Mr. R C Bhargava, Dr. S. Narayan, Dr. Ajay Dua and Mr. S K Bhattacharyya as members.

Further, all recommendations of Audit Committee were accepted by the Board of Directors.

Disclosure on Vigil Mechanism

The Company has established a vigil mechanism through which Directors, employees and business associates may report unethical behavior, malpractices, wrongful conduct, fraud, violation of Company''s code of conduct without fear of reprisal. The Company has set up a Direct Touch initiative, under which all Directors, employees, business associates have direct access to the Chairman of the Audit Committee, and also to a three-member direct touch team established for this purpose. The direct touch team comprises one senior woman member so that women employees of the Company feel free and secure while lodging their complaints under the policy. Further information on the subject can be referred to in section ''Disclosures'' - Whistle-Blower Policy / Vigil Mechanism of the Corporate Governance Report.

Disclosure on Deposit under Chapter V

The Company has neither accepted nor renewed any deposits during the Financial Year 2014-15 in terms of Chapter V of the Companies Act, 2013.

Significant and material orders passed by the regulators or courts or tribunals impacting the going concerns status and company''s operations in future

The Company has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal which shall impact the going concern status and Company''s operations in future.

Industrial Relations

The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of Employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.

Acknowledgements

Your Directors place on record their gratitude to the Central Government, State Governments and Company''s Bankers for the assistance, co-operation and encouragement they extended to the Company. Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of investors, vendors, dealers, business associates and employees in ensuring an excellent all around operational performance.

For and on behalf of the Board

(DR. ANAND C BURMAN)

Place: Jebel Ali - UAE Chairman Date: May 5, 2015 DIN: 00056216


Mar 31, 2013

To, The Members

The Directors have pleasure in presenting the 38th Annual Report on the business and operations of the Company, together with the Audited Accounts for the financial year ended March 31, 2013.

FINANCIAL RESULTS

Financial results are presented in Table below :

(Rs. in crore)

2012-13 2011-12

Turnover (including other income) 4,436.28 3,812.68

Profits before Tax 749.67 587.03

Less : Tax Expenses 158.69 123.79

Profit after Tax 590.98 463.24

Add: Balance in Profit & Loss Account 864.11 714.22 brought forward from the previous year

Sub Total 1,455.09 1,177.46

Less: Appropriation to General Reserve 60.00 50.00

Capital Reserve 0.00 0.14

Interim Dividend - Paid 113.29 95.81

Final Dividend - Proposed 148.15 130.66

Corporate tax on Dividend 43.56 36.74

Dividend adjustment of earlier years 0.05 0.00

Dividend tax adjustment of earlier years 0.01 0.00

Balance in Surplus Account 1,090.02 864.11

DIVIDEND

The Company has paid an interim dividend of 65% (Rs. 0.65 per share of Rupee one each) on November 7, 2012. We are pleased to recommend a final dividend of 85% (Rs. 0.85 per share of Rupee one each) for the financial year 2012-13. The final dividend, if approved by the members, will be paid to members within the period stipulated by the Companies Act, 1956. The aggregate dividend for the year will amount to 150% (Rs.1.50 per share of Rupee one each) as against 130% (Rs.1.30 per share of Rupee one each) declared last year. The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution, is at 51.61%.

Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, final dividend for the year 2004-05 and interim dividend for the year 2005-06 which remained unpaid or unclaimed for a period of 7 years, amounting to Rs.1,3,00,752/- and Rs.1,3,50,524/- respectively has been transferred by the Company to the Investors'' Education and Protection Fund (IEPF). Further final dividend for the year 2004-05 pertaining to erstwhile Femcare Pharma Limited (FEM), now merged with the Company, which remained unpaid or unclaimed for a period of 7 years, amounting Rs.1,07,744/- has also been transferred by the Company to IEPF. The due dates for transfer of unpaid dividend to IEPF for subsequent years is given in Table 11 under the Corporate Governance Report. The list of unpaid dividend is available on Company''s website www.dabur.com. Shareholders are requested to check the said list and if any dividend due to them remains unpaid in the unpaid list, can approach the company for release of the unpaid dividend.

ABRIDGED FINANCIAL STATEMENTS

In accordance with the SEBI Circular No. CIR/CFD/DIL/7/2011 dated 5th October 2011, the Abridged Annual Report containing salient features of the Balance Sheet and Profit & Loss Account for the Financial Year 2012-13, as prescribed in section 219(1)(b) (iv) of the Companies Act, 1956 is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the company in electronic mode.

Full version of the Annual Report 2012-13 containing complete Balance sheet, Statement of Profit & Loss Account, other statements and notes thereto prepared as per the requirements of Schedule VI to the Companies Act, 1956, Directors Report (including Management Discussion and Analysis, Corporate Governance Report and Business Responsibility Report) are being sent via email to all shareholders who have provided their email address(es) and are also available at the Company''s website at www.dabur.com. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2012-13, upon receipt of written request from you, as a member of the Company.

OPERATIONS AND BUSINESS PERFORMANCE

Kindly refer to Management Discussion & Analysis and Corporate Governance Report which forms part of this report.

CORPORATE GOVERNANCE

Dabur today is truely becoming a global organization and hence has a strong belief that the corporate governance standards must also be globally benchmarked. Besides adhering to the prescribed corporate governance practices as per Clause 49 of the Listing Agreement, it voluntarily governs itself as per highest standards of ethical and responsible conduct of business in line with local and global standards. Strong Governance practices by the Company have boosted the level of stakeholder''s confidence testified by improved market capitalization, high credit ratings and various awards bagged by the Company for its brands, stocks, environmental impact, etc. In recognition of excellence in Corporate Governance, Dabur India limited has been awarded the prestigious ''Golden Peacock award for excellence in Corporate Governance'' for the year 2012 in the FMCG Sector.

A certificate from Auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is attached as ''Annexure 1'' and forms part of this report.

Certificate of the CEO/CFO, inter alia, confirming the correctness of the financial statements, compliance with Company''s Code of Conduct, adequacy of the Internal Control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is attached in the Corporate Governance Report and forms part of this Report.

BUSINESS RESPONSIBILITY REPORT

At Dabur, fulfilment of environmental, social and governance responsibility is an integral part of the way the Company conducts its business. A detailed information on the initiatives of the Company as enunciated in the''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011'' is provided in the Business Responsibility Report, a copy of which will be available on the Company''s website at www.dabur.com.

Further, for Business Responsibility Report as stipulated under Clause 55 of the Listing Agreement with the Stock Exchanges, kindly refer to Business Responsibility Report section which forms part of the Annual Report.

CREDIT RATING

During the year under review the Company has sustained its long term credit rating of AAA. The highest credit rating of AAA awarded by CRISIL reflects the Company''s financial discipline and prudence. The Company''s short term credit rated as A1 by CRISIL, has also been reaffirmed. This being the highest rating indicates a very strong degree of safety with regard to timely payment of interest & principal.

Further ICRA has reaffirmed the rating of NCD programme of the Company as AAA (stable). The rating indicates highest credit quality. The rated instrument carries lowest credit risk and the outlook on the rating is stable.

DIRECTORS

During the year, Mr Analjit Singh, Independent Director had resigned from the Board on 16.07.2012 and Mr. Sanjay Kumar Bhattacharyya was appointed as additional Non Executive Independent Director on 23.07.2012. Mr Bhattacharyya shall hold office upto the date of the ensuing Annual General Meeting of the Company and, being eligible, offer himself for reappointment.

In terms of Article 103 and 104 of the Articles of Association of the Company, Dr Anand Burman, Mr P D Narang, Dr Ajay Dua and Mr R C Bhargava will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment in terms of the provisions of Article 106 of the Articles of Association of the Company.

The brief resumes of the Directors who are to be appointed/ re-appointed, the nature of their expertise in specific functional areas, names of companies in which they have held directorships, committee memberships/ chairmanships, their shareholding etc., are furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

Your Directors recommend their appointment/ re-appointment at the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, the Directors confirm:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give true and fair view of the state of affairs of the Company at the end of the financial year, and of the profit of the Company for that period except to the extent mentioned in notes to accounts;

iii) That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That they had prepared the annual accounts on a going concern basis.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

The Company''s shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) and are actively traded. Application for listing on MCX Stock Exchange Limited (MCX) has been filed by the company. In the year under review, following shares were allotted and admitted for trading in NSE and BSE :

Equity shares allotted against the options exercised by employees pursuant to Employees Stock Option Scheme of the Company:

- 677829 equity shares allotted on May 30, 2012.

- 142528 equity shares allotted on August 07, 2012.

- 13800 equity shares allotted on December 07, 2012.

AUDITORS AND THEIR REPORT

M/s G. Basu & Company, Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment as statutory auditors for the financial year 2013-14. The Company has received a letter dated April 1, 2013 from them to the effect that their re-appointment, if made, would be within the limit prescribed under section 224(1 B) of the Companies Act, 1956, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956.

The Auditors have vide their letter dated April 22, 2013 also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the peer Review Board of the ICAI.

The observations of the Auditors, together with the notes to Accounts referred to in the Auditors'' Report, are self-explanatory and do not call for any further explanation from the Directors.

COST AUDITORS

M/s Ramanath Iyer & Company, Cost Accountants, were re-appointed as Cost Auditors for the financial year 2013- 14 to conduct cost audit of the accounts maintained by the Company, in respect of the various products prescribed under Cost Audit Rules, 2011. Full particulars of the Cost Auditor are as under: M/s Ramanath Iyer & Company 808, Pearls Business Park, Netaji Subash Place, Pitampura, New Delhi - 110088.

Telephone No: 011-45655448; Email ID - Info@ramanathiyer.com (Firm''s Membership No. 000019)

The Cost Audit Report for the Financial year 2011-12, issued by M/s Ramanath Iyer & Company, Cost Auditors, in respect of the various products prescribed under Cost Audit Rules, 2011, was filed with the Ministry of Corporate Affairs (MCA) on December 28, 2012. The due date for filing the said Report with MCA was February 28, 2013.

The Cost Audit Report for the Financial year 2012-13, in respect of the various products prescribed under Cost Audit Rules, 2011, is due to be filed with MCA on or before September 27, 2013 (being within 180 days from the end of reporting year).

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2012-13. Consolidated Turnover grew by 16.93% to Rs. 6,270.62 crore as compared to Rs. 5,362.82 crore in the previous year. Similarly, Net Profit after Tax and after Minority Interest for the year at Rs. 763.42 crore is higher by Rs. 118.53 crore as compared to Rs. 644.89 crore in the previous year.

INTERNAL CONTROL SYSTEM

The Company has a well placed, proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s internal control system comprises audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from PriceWaterhouseCoopers Private Limited, the Internal

Auditors and various transaction auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board.

To further strengthen the internal control process, the Company has developed a very comprehensive legal compliance manual called ''e-nforce'', which drills down from the CEO to the executive level person who is responsible for compliance. This process is fully automated and generate alerts for proper and timely compliance.

NATURE OF BUSINESS

There has been no change in the nature of business of the Company. However, updates regarding new projects undertaken by the subsidiary Companies is as under:

Dabur Egypt Limited (Egypt) has set up a new Green field project with an approximate cost of EGP 6.5 crores (INR 51.87 crores) to support the expansion of its existing line of products and launch of certain new products. Commercial production at the new project had commenced by the end of July, 2012. Dabur Lanka (Pvt.) Limited (Srilanka) is in the process of setting up a new project for manufacturing of fruit pulp based beverages mainly for export involving an approximate project cost of INR 84.84 crore. The project is nearing completion and the commercial production is scheduled to commence by May, 2013.

Asian Consumer care Pvt Ltd. (Bangladesh) is in the process of setting up a new green field project involving an approximate project cost of Tk 55 crore (INR 38.5 crores) for manufacturing Hair oil, Shampoo, Tooth paste, etc. The commercial production is scheduled to commence from July, 2013 tentatively.

SUBSIDIARIES

During the year Weikfield International (U.A.E.) Ltd has ceased to be the step down subsidiary of the Company. Further Namaste Cosmeticos Ltda have been newly incorporated as a step down subsidiary of the Company in Brazil.

After the close of the Financial Year, a new step down subsidiary of the Company namely -Dabur Consumer Care (Private) Limited has been incorporated on April 19, 2013, in Srilanka.

In terms of general approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Report of the Auditors of the subsidiary companies have not been attached with the Balance Sheet of the Company. The Company will make available these documents and related detailed information upon request by any shareholder of the Company/ subsidiary interested in obtaining the same.

However, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its Subsidiaries. The Financial Statements of the subsidiary companies are also available for inspection by the shareholders at the Registered Office of the Company and that of its respective subsidiaries. The Financial Statements of each subsidiary shall also be available on Company''s website www.dabur.com.

The following information in aggregate for each subsidiary has been disclosed in the consolidated balance sheet

(a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend.

A statement of the holding company''s interest in the subsidiary companies is attached as ''Annexure 2'' and forms part of this report.

EMPLOYEES STOCK OPTION PLAN

During the year, 742226 options in 4 tranches were granted to eligible employees of the Company in terms of Employees Stock Option Plan (Dabur ESOP 2000). During the year 834157 options were exercised by the employees after vesting. Accordingly, the Company made the allotment of 677829 equity shares on May 30, 2012, 142528 equity shares on August 07, 2012 and 13800 equity shares on December 07, 2012, against the options exercised by the employees.

The particulars of options issued under the said Plan as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are appended as ''Annexure 3'' and forms part of this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining a copy of such particulars may write to the Company Secretary at the Registered office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of energy:

(a) Energy conservation measures taken:-

A number of energy conservation techniques were initiated at large scale and successfully implemented. Some of the key initiatives undertaken in the manufacturing units were as follows-

- Investment in Independent 33 KVA feeder for Pantnagar Units with continuous power supply option, to reduce the HSD consumption and the cost of Power.

- Promotion of use of Solar light for street light for reducing Power Consumption.

- Replacement of Normal tube lights with LED for power saving.

- Interlocking of Cooling Tower (CT) fans, wet scrubber pump with forced draft (FD) fan in briquette boiler and CT fan with temperature controller.

- Replacement of old less efficient air compressors with new energy efficient compressors.

- VFD control in Air compressor motors of certain units.

- Modification in Pump House and raw water pipe lines to save the raw water pump running hours.

- Installation of DO System for ETP which has resulted in annual savings.

- Shifting of Line No 1 and 2 to Line No 3 & 4, in Baddi - Skin Care Unit, to reduce the activity load of Air conditioning.

- Installation of Magnetic resonator for Boiler & DG.

- Installation of Ducool Drying system in Pudin

Hara Drying area. This has reduced energy utilization by 50%.

- Installation of New DG Set in Odonil Section for better fuel efficiency.

- Recirculation of waste water of Vacuum pump.

- Installation of new Cooling Tower for 80 TR at Chyawanprash Unit.

- Strict control of power factor.

- Replacement of electrical exhaust fans with air ventilators in manufacturing.

- Replacement of forced draft cooling tower with natural draft cooling tower.

- Installation of Transparent Roof Sheet.

- Installation of Photocell Sensor on Box Tapping Machine.

- Replacement of Auto collator from 12 KW to 8 KW.

- Installation of temperature controllers in two chillers of Toothpaste tube filling machines.

- 100% usage of Herbal Waste as Boiler Feed.

- Use of tunnel consuming 2KW heater (inbuilt) in place of 10 KW heater for shrink poly bags in LDM & Anmol.

- Reduced product change over by doing manufacturing campaign batches which has resulted in power & water savings.

- Replacement of Vapour Street Light with CFL Light.

- Replacement of 750 KVA Dg with 250 KVA to optimize load and increase SFC.

- Introduction of wind ventilator in Herbal Boiling section.

- Replacement of 150 number of copper ballast luminaries with electronic choke.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:-

- Additional Investment of Rs. 282.87 Lacs was made during the year for reduction of consumption of energy.

(c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods:-

- The energy conservation measures taken during the year have resulted into yearly saving of approximately Rs.157.98 Lacs and thereby lowered the cost of production by equivalent amount. These measures have also lead to better pollution control, reduced maintenance time and cost, improved hygienic condition and consistency in quality and improved productivity.

(d) Total energy consumption and energy consumption per unit of production as per Form A

- Attached herewith as Annexure 4

B. Technology Absorption:

Efforts made in technology absorption as per Form B is attached herewith as Annexure 5.

C. Foreign Exchange earnings and outgo:

i) Activities and initiatives relating to exports:

Dabur''s key markets for international business which is managed by its wholly owned subsidiary

Dabur International Limited and other step down subsidiaries are Middle East, Africa, U.S. and South Asia with manufacturing facilities across regions. In addition, Dabur has a private label business in the U.S. and a guar gum export business operating out of India.

International Business:

Dabur''s international business continued on the strong growth trajectory growing by 17.1 % to Rs. 1892 crores in fiscal 2012-13. The international business now contributes 31% to consolidated sales.

During fiscal 2012-13, key markets in MENA (Middle East and North Africa) and South Asia (ex-India) regions performed well. Dabur continued to gain share in categories such as Hair Oils, Hair Creams and Shampoos in the key markets. Overall in the MENA region it continued to be market leader in Hair Oils with a 52% market share. In Egypt the Hair Oil market share increased to 50% from 44% last year. Similarly Hair Oil market shares in KSA (Kingdom of Saudi Arabia) witnessed an uptick and were at 65.7% v/s 63.4% last year. In the Hair Creams category, the share in the MENA region was 25%. Dabur continued to be the biggest Hair Creams player in KSA with a 27.7% market share v/s 24.7% last year. In UAE, its Hair Creams market share increased to 26.5% v/s 23.4% last year.

Some of the international markets were under pressure during fiscal 2012-13. The situation was tense in Egypt and macro-economic indicators such as GDP growth rates and the local currency, Egyptian Pound (EGP) were under pressure. In addition, turmoil in the YSL markets (Yemen, Syria and Libya) impacted sales during fiscal 2012-13.

During fiscal 2012-13 raw material prices were relatively benign in the overseas operations and this led to improvement in gross margins.

Vatika

Vatika witnessed strong growth in fiscal 2012-13. The brand witnessed several new product launches such as Vatika Hair Oil Curry Leaves, Vatika Enriched hair oil (Black Seed), Vatika Ingredient Range of Shampoo and Conditioner in Argan, Garlic and Black Seed variants. In addition, Vatika Hair Serums were launched entering the Hair Serum category. Vatika Henna Hair Colors were launched during the year marking the entry into Hair Colors category on the naturals platform. Dabur had made a foray into Hair Gels category in the fiscal 2011-12 with launch of Vatika Hair Gels which performed well, garnering share in the hair gels segment.

Dabur Amla

Dabur Amla portfolio performed well during fiscal 2012-13. Performance was driven by the Hair Oil portfolio which grew particularly well in KSA (Kingdom of Saudi Arabia), where it crossed 50% mark in terms of market share. Dabur Amla Hair Oil is now the 2nd biggest Hair Oil brand in Egypt, witnessing increase in market share from 16% to 19%. Dabur Amla''s brand extensions such as Hair Creams also performed well and added to the growth.

Miswak and Dabur Herbal Toothpaste

Dabur''s international business also has oral care products which sell in GCC, North and West Africa. The Miswak toothpaste which is based upon the herbal ingredient "Miswak" is well known for its medicinal properties in MENA region and is sold widely in the North African countries. The brand performed well during fiscal 2012-13. In Nigeria Dabur sells a range of toothpastes under the brand ''Dabur Herbal Toothpastes'' offering herbal variants such as basil, neem and clove. The range was extended with the launch of Dabur Natural Medicated Toothpaste during fiscal 2012-13.

Dermoviva

The skin care offerings such as skin creams and lotions under the Dermoviva brand launched during fiscal 2011-12 continue to elicit positive response, particularly in key markets in the MENA (Middle East and North Africa) region.

Fem

Fem had undergone a complete design and range overhaul earlier. During fiscal 2012-13, Fem expanded its hair removal cream portfolio with the offering, "Fem Hair Removal Cream enriched with aloe extracts" specifically meant for extra dry skin. This expansion takes the entire range of hair removal cream to 5 variants. Fem also expanded its geographic reach of wax strips in North Africa. The year saw launch of Fem wax strips and hair removal creams into Turkey. These have been specially formulated for the Turkish consumer and this launch also marks the entry of Dabur products into Turkey by leveraging the distribution network available through Hobi Kozmetik.

Operations

The manufacturing facility in Sri Lanka for manufacturing fruit juices is nearing completion and will be commissioned in the earlier part of fiscal 2013-14. A greenfield manufacturing facility for hair care and skin care products was commissioned in Egypt. The toothpaste manufacturing facility in Nigeria was expanded and a new Hair Cream manufacturing facility was installed in RAK (Ras- al Khaimah). The manufacturing facilities received many certifications during fiscal 2012-13. The RAK factory received GMP ISO 22716 (International Cosmetic Good Manufacturing Practices), Food GMP Certificate as per ISO-22000 Guidelines, EPC-2012 from Ministry of Environment and Water (Consistent Environmental Performance). The facility in Nigeria received GMP ISO 22716, certification from NAFDAC (National Agency for Food and Drug Administration and Control).

Performance in key regions/ subsidiaries

(a) GCC, one of the largest regions in the International Business grew by 20% in fiscal 2012-13.

(b) Egypt grew by 15% in fiscal 2012-13 inspite of tough political and macro-economic conditions.

(c) Nigeria has been flattish in fiscal 2012-13 over last year.

(d) Pakistan has grown by 38% in fiscal 2012-13. Hajmola and Dabur Amla are the two strong brands for the region.

(e) Bangladesh performed exceedingly well with a growth of 70% during the fiscal 2012-13. A new manufacturing facility is under commissioning to further enhance presence in Bangladesh.

(f) Dabur Nepal Pvt Limited which manufactures fruit juices and also caters to local consumer market in Nepal recorded growth of 13% during fiscal 2012-13 in its local sales.

(g) Hobi Kozmetik: For Hobi Group, the Gulf and African regions recorded impressive sales growths. Dabur''s distributors and channel partners continued to be the drivers of growth for the Hobby range of products with new countries being opened along with ramped up distribution in markets such as Jordan and Kenya, where Hobby range of products were re- introduced through existing Dabur distributors. Major export markets for Hobby - Saudi Arabia, Iraq, Ethiopia and Algeria continued to demonstrate robust growth.

A key highlight of the year was the launch of Fem range of products, marking the entry of Dabur''s range of products in Turkey. The range of products launched includes wax strips and hair removal creams, which have been specially formulated for the Turkish consumer. The range will be distributed by Hobi Kozmetik across leading modern trade outlets in Turkey.

The ERP platform, SAP was successfully rolled out across all functions in Turkey, enabling seamless information flow, thereby ensuring complete data integration between Dabur and Hobi Kozmetik. Best practices are continuously being shared across functions to enable growth of the business in Turkey as well as the export markets.

(h) Namaste Laboratories: Africa currently contributes 21% to Dabur''s international business. The region continues to offer tremendous opportunities for consumer product companies driven by factors such as a rapidly emerging middle class, with increasing disposable incomes.

With the sheer volumes and growth in the number of consumers, Africa continues to excite leading FMCG players. Further, women of African origin are known for relatively higher usage intensity of hair care products. Accordingly, Dabur has established a dedicated business unit for Sub Saharan Africa, tasked with exploiting these opportunities. With the acquisition of Namaste Laboratories LLC, Dabur is in a unique position to offer an extremely relevant product range specifically targeted for the African consumer. Further, the product offerings strategically fit in with Dabur''s product portfolio in Africa. The biggest product segment in Namaste''s portfolio is the relaxing and hair straightening products. Namaste''s other products targeted at the women of African origin comprise nourishment products such as olive oil based shampoos, conditioners and hair fertilizers.

The Namaste portfolio already has a strong base in the United States,which contributes to around 70% of its sales. The African continent is the next biggest contributor. With the rapid expansion of opportunities and growing consumption in Africa, the Company expects greater potential for these products in this market.

As part of integration between Namaste and Dabur, Dabur has started manufacturing Namaste products in the Ras-al-Khaimah facility in UAE and is considering adding another line at the existing manufacturing facility in Nigeria, to ensure optimization of supply chain for the African business. Further, local manufacturing is being explored in South Africa, thereby ensuring that Dabur International continues to tap into the growing potential of Africa.

Exports from India

The company exports Guar Gum and private label oral care products from India. During fiscal 2012-13 the company recorded guar gum exports to the tune of Rs. 158.7 crores as compared to Rs. 107.3 crore in fiscal 2011-12. Exports of guar gum reported high growth as the demand for guar gum saw extraordinary increase worldwide particularly for the value added hydrating guar variants.

Sales in USA (Dabur Branded and Private label) grew from Rs. 34.4 crores in fiscal 2011-12 to Rs. 39.6 crores in fiscal 2012-13. The company caters to the ethnic Indian channels in the USA supplying the range of Dabur brands which are popular among the South Asian / Indian community. Retail penetration was extended by extending direct distribution to several new states in the US such as California, Texas, Florida and Michigan. Distribution was also extended to wholesalers targeting Hispanics and African- Americans. A strategic tie-up also was made with Canada''s largest Retailer, Loblaws. A range of Ethnic hair care products were launched which included Shampoos, Hair Serums and Hair masks under the Vatika brand. Dabur also exports private label oral care products to USA and Europe which includes Toothpastes, Mouthwash and Denture Adhesives. The company acquired new customers for private label in Italy, Central Europe, Central America and in the U.S. Several new advanced Oral Care formulations were developed and launched which included Whitening, Herbal and Pro-Age formulations.

ii) Development of new markets for Products & Services:

New Markets have been opened up for business in geographies like South East Asia (Cambodia), far East (Japan, Taiwan), West Africa (Ghana, Senegal) and Latam (Panama). The Sales & Distribution infrastructure in these markets has been augmented by appointing new distributors. Local resources have been enhanced in key markets of Middle East & North Africa, Nigeria, Egypt, East Africa and South East Asia to further strengthen the S&D structure.

(iii) Export Plans:

The focus, going forward, is to continue expanding the Group''s presence through its subsidiaries across geographies and to exploit opportunities in existing and potential segments. There are huge growth opportunities across Middle East, Africa and South Asian markets for our products. As part of group''s growth plans, we will expand our current product portfolio, consider focused geographic expansion, and increase penetration for our products across various distribution networks.

Depending on various factors that make a market attractive, Dabur has divided the world into focus markets, potential markets, and opportunistic markets. We consider the GCC, Egypt, Nigeria, Turkey, the United States, Pakistan, Bangladesh, Nepal and Sri Lanka to be our key focus markets. The Levant, North Africa, Sub-Saharan Africa, and the European Union are potential markets for us, and we are concentrating on growing in these markets as well. The opportunistic markets are the ones where some demand is visible albeit on a smaller scale and this is catered through our exiting supply chains without adding too many resources and infrastructure.

The Company will continue to invest in brand building, manufacturing and human capital in order to maintain and improve the existing robust growth path in focus and potential markets.

Total Foreign Exchange used during 2012-13: Rs. 3,742 lac.

Total Foreign Exchange Earned during 2012-13: Rs. 23,817 lac.

HEALTH, SAFETY AND ENVIRONMENTAL REVIEW (HSE)

Dabur India Limited. is committed to achieving its vision of zero harm and Zero Environmental incident. To renew the commitment, the Occupational Health and Safety Policy and the Environment Policy were merged and launched on 1st April, 2012 under the name ''Occupational Health, Safety and Environment Policy''. The Health, safety and environment strategy prioritises eliminating workplace illness, injuries and environmental incident through the Integrated Management System. Huge progress has been made in the area of process safety and HSE Management System implementation which is evident from the fact that there were no High Potential Accidents. With regard to other environmental focus areas, Dabur has greatly improved its waste management and also reduced the GHG emissions to reduce the overall impact on environment.

To ensure focus and delivery of HSE activity, Dabur has conducted the 2nd National Safety Meet with HSE Improvement Plan at manufacturing level. Focus is more on building an engaged safety culture where expectations are clear, people are trained, interventions are welcomed and consequences are understood. One key to build an engaged safety culture is through safety behaviour and Hazard observation. The tools used in Dabur to register safety behaviour / Hazard Observation is called SBO which is recorded through the inbuilt software called SURAKSHA which is in place since last two years. Beside this, all the manufacturing units have complied with statutory requirements laid by Government in terms of Act and Rules w.r.t. to Health, Safety and Environment. With its Health, Safety and Environment management system Dabur aims to effectively control risks and prevent people from being injured or harmed during the course of their work.

With an aim to certify all its operational locations with the Integrated Management system OHSAS 18001 and ISO 14001 - Occupational Health, Safety and Environment, Dabur has got externally accreditation for its twelve (12) manufacturing location by TUV NORD and nine (9) manufacturing units have successfully completed their Surveillance Audit. This standard is the foundation of the overall health, safety and environment framework of Dabur.

The environmental agenda of reducing environmental impact of Company''s operations was achieved by environment management program through a combination of energy & water conservation, rainwater harvesting and solid waste recycling. Some sites modified their boilers to use bio-fuels, resulting in significant environmental benefits by reducing the SoX and CO2 emission in environment.

Dabur, being aware of its social corporate responsibility, is in the process of further strengthening its current resources for better health, safety and environment management.

Key Initiatives taken during the year are:

- Got certified its 12 manufacturing location with OHSAS 18001 and ISO 14001 integrated management system and is in a process of preparing 1 more manufacturing location for the certification.

- Risk assessment at all manufacturing locations was done with a system of planned inspection product wise, which resulted in reduction of All Injury Rate (AIR) and Total Recordable Frequency Rate (TRFR)

- Legally Complied at unit level w.r.t to Safety and Environment Act and Rules.

- Carbon and Water Footprint Study was conducted for all Manufacturing locations with a focus on Product Life Cycle Analysis of 3 products viz. Chyawanprash, Honey and Real juice.

- Environmental Monitoring was carried out at unit level to check the impact on environment.

- Different Guidelines and Standards were rolled out for implementation at unit level and focus on the training (on job and off job) to minimize the AIR.

- Installation of Fire Hydrant and Detector System was as per latest technologies.

- Emergency preparedness plan is in place which was executed through mock drill.

- Regular Tool Box Talk at the Shop floor for the workers comprising of Safety related Do''s and Don''ts.

- Different tests have been carried out at unit level to check the efficiency of PPE''s used at work place.

- Health Check up for all employees was carried out at unit level.

- LOTO (Lock out Tag out) - Training and Survey conducted for manufacturing facilities.

- Procurement of Safety equipments viz. oxygen meter, DB meter and multi gas detector, to detect any hazardous environment in surroundings before doing any activity.

- Generation of Bio Gas from ETP, for use in Kitchen and other places.

- Tree Plantation at manufacturing locations to reduce the GHG emission. 1st January every year is being observed as Tree Plantation Day.

- Conversion of organic waste as a fuel for Boiler.

INDUSTRIAL RELATIONS

The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.

ACKNOWLEDGEMENTS

Your Directors place on record their gratitude to the Central Government, State Governments and Company''s Bankers for the assistance, co-operation and encouragement they extended to the Company. Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of Investors, Vendors, Dealers, Business Associates and Employees in ensuring an excellent all around operational performance.

For and on behalf of the Board

Sd/-

Place: New Delhi (DR ANAND BURMAN)

Date: April 30, 2013 CHAIRMAN


Mar 31, 2012

The Directors have pleasure in presenting the 37th Annual Report on the business and operations of the Company, together with the Audited Accounts for the financial year ended March 31, 2012.

Financial Results

Financial results are presented in Table 1.

Table1: Financial Results (Rs. in crore)

2011-12 2010-11

Turnover (including other income) 3812.68 3306.96

Profits before Tax 587.03 596.26

Less : Tax Expenses 123.79 124.85

Profit after Tax 463.24 471.41

Add : Balance in Profit & Loss Account brought forward from the previous year 714.22 526.91

Sub Total 1177.46 998.32 Less : Appropriation to

General Reserve 50.00 50.00

Capital Reserve 0.14 1.34

Interim Dividend - Paid 95.81 87.04

Final Dividend - Proposed 130.66 113.30

Corporate tax on Dividend 36.74 32.42

Balance in Surplus Account 864.11 714.22

Dividend

The Company has paid an interim dividend of 55% (Re. 0.55 per share of Rupee one each) on November 15, 2011. We are pleased to recommend a final dividend of 75% (Rs. 0.75 per share of Rupee one each) for the financial year 2011-12. The final dividend, if approved by the members, will be paid to members within the period stipulated by the Companies Act, 1956. The aggregate dividend for the year will amount to 130% (Rs.1.30 per share of Rupee one each) as against 115% (Rs.1.15 per share of Rupee one each) declared last year. The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution, is at 56.82%.

Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, final dividend for the year 2003-04 and interim dividend for the year 2004-05 which remained unpaid or unclaimed for a period of 7 years, amounting to Rs.1271757/- and Rs.962765/- respectively has been transferred by the Company to the Investors' Education and Protection Fund (IEPF). Further interim dividend for the year 2004-05 pertaining to erstwhile Femcare Pharma Limited (FEM), now merged with the Company, which remained unpaid or unclaimed for a period of 7 years, amounting Rs. 108365/- has also been transferred by the Company to IEPF. The due dates for transfer of unpaid dividend to IEPF for subsequent years is given in Table 11 under Corporate Governance Report.

Operations and Business Performance

Kindly refer to Management Discussion & Analysis and Corporate Governance Report which forms part of this Report.

Corporate Governance

Dabur is committed to practising sound corporate governance in conducting business in a legal, ethical and transparent manner - a dedication that originates from the very top and permeate throughout the organization. Besides adhering to the prescribed corporate governance practices as per clause 49 of the Listing Agreement, it voluntarily governs itself as per highest standards of ethical and responsible conduct of business in line with local and global standards. Strong governance practices at Dabur has earned for it recognition and has strengthened its bond of trust not only with the stakeholders but with the society at large.

A certificate from Auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is attached as 'Annexure 1' and forms part of this report.

Certificate of the CEO/CFO, inter alia, confirming the correctness of the financial statements, compliance with Company's Code of Conduct, adequacy of the Internal Control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is attached in the Corporate Governance Report and forms part of this Report.

Business Responsibility Report

At Dabur, fulfilment of environmental, social and governance responsibility is an integral part of the way the Company conducts its business. A detailed information on the initiatives of the Company as enunciated in the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011' is provided in the Business Responsibility Report, a copy of which will be available on the Company's website.

Credit Rating

During the year under review the Company has sustained its long term credit rating of AAA. The highest credit rating of AAA awarded by CRISIL reflects the Company's financial discipline and prudence. The Company's short term credit rated as A1 by CRISIL, has also been reaffirmed. This being the highest rating indicates a very strong degree of safety with regard to timely payment of interest & principal.

Directors

During the year, w.e.f. 31.01.2012, Mr Pradip Burman, Executive Promoter Director had resigned from the office of Director of the Company and Mr. Saket Burman was appointed as additional Non Executive Promoter Director. Mr Saket Burman shall hold office upto the date of the ensuing Annual General Meeting of the Company and, being eligible, offer himself for reappointment.

In terms of Article 103 and 104 of the Articles of Association of the Company, Dr S Narayan, Mr Albert Wiseman Paterson, Mr Analjit Singh and Mr Amit Burman will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment in terms of the provisions of Article 106 of the Articles of Association of the Company.

The brief resumes of the Directors who are to be appointed/re-appointed, the nature of their expertise in specific functional areas, names of companies in which they have held directorships, committee memberships/ chairmanships, their shareholding etc., are furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

Your Directors recommend their appointment/ re-appointment at the ensuing Annual General Meeting.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, the Directors confirm:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give true and fair view of the state of affairs of the Company at the end of the financial year, and of the profit of the Company for that period except to the extent mentioned in notes to accounts;

iii) That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That they had prepared the annual accounts on a going concern basis.

Change in Capital Structure and Listing of Shares

The Company's shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) and are actively traded.

In the year under review, following shares were allotted and admitted for trading in NSE and BSE:-

- Equity shares allotted against the options exercised by employees pursuant to Employees Stock Option Scheme of the Company:

- 1001598 equity shares allotted on July 01, 2011.

- 321926 equity shares allotted on September 02, 2011.

- 46657 equity shares allotted on November 29, 2011.

- 6875 equity shares allotted on December 30, 2011.

Auditors and their Report

M/s G. Basu & Company, Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment as statutory auditors for the financial year 2012-13. The Company has received a letter dated April 4, 2012 from them to the effect that their re-appointment, if made, would be within the limit prescribed under section 224(1B) of the Companies Act, 1956, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956.

The Auditors have vide their letter dated 28.04.2012 also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the peer Review Board of the ICAI.

The observations of the Auditors, together with the notes to Accounts referred to in the Auditors' Report, are self-explanatory and do not call for any further explanation from the Directors.

Cost Auditors

M/s Ramanath Iyer & Company, Cost Accountants, were re-appointed as Cost Auditors for the financial year 2012-13 to conduct cost audit of the accounts maintained by the Company, in respect of the various products prescribed under Cost Audit Rules, 2011.

Consolidated Financial Statements

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2011-12. Consolidated Turnover grew by 29.64% to Rs. 5362.82 crore as compared to Rs. 4136.66 crore in the previous year. Similarly, net profit after tax and after minority interest for the year at Rs. 644.89 crore is higher by Rs. 76.32 crore as compared to Rs. 568.57 crore in the previous year.

Internal Control System

The Company has a well placed, proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company's internal control system comprises audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from Price Waterhouse Coopers Private Limited, the Internal Auditors and various transaction auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board.

To further strengthen the internal control process, the Company has developed a very comprehensive legal compliance manual called 'e-nforce', which drills down from the CEO to the executive level person who is responsible for compliance. This process is fully automated and generate alerts for proper and timely compliance.

Nature of business

There has been no change in the nature of business of the Company and any of its subsidiary companies during the year. Subsidiaries

During the year Zeki Plastik Imalat Sanayi Ve Ticaret Limited has ceased to be step down subsidiary of the Company due to its amalgamation with another step down subsidiary of the Company - Hobi Kozmetik Imalat Sanayi Ve Ticaret Anonim Sirketi.

Further Dabur Lanka (Pvt) Ltd. have been newly incorporated as a step down subsidiary of the Company in SriLanka to cater to the increased market demand of beverages. A new manufacturing plant is being set up in SriLanka.

In terms of general approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Report of the Auditors of the subsidiary companies have not been attached with the Balance Sheet of the Company. The Company will make available these documents and related detailed information upon request by any shareholder of the Company/ subsidiary interested in obtaining the same.

However, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its Subsidiaries. The Financial Statements of the subsidiary companies are also available for inspection by the shareholders at the Registered Office of the Company and that of its respective subsidiaries. The Financial Statements of each subsidiary shall also be available on Company's website www.dabur.com.

The following information in aggregate for each subsidiary has been disclosed in the consolidated balance sheet (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend.

Employees Stock Option Plan

During the year, 1557412 options in 4 tranches were granted to eligible employees of the Company in terms of Employees Stock Option Plan (Dabur ESOP 2000). During the year, 1377056 options were exercised by the employees after vesting. Accordingly, the Company made the allotment of 1001598 equity shares on July 01, 2011, 321926 equity shares on September 02, 2011, 46657 equity shares on November 29, 2011 and 6875 equity shares on December 30, 2011, against the options exercised by the employees.

The particulars of options issued under the said Plan as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are appended as 'Annexure 2' and forms part of this report.

Particulars of Employees

In terms of the provisions of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining a copy of such particulars may write to the Company Secretary at the Registered office of the Company.

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

A. Conservation of energy:

a) Energy conservation measures taken:-

A number of energy conservation techniques were initiated at large scale and successfully implemented. Energy was used more efficiently (2.33 GigaJoules to 2.17 GigaJoules compared to LY). This was despite increase in tariff rates of Power & Fuel and absorbing cost of owned generated power for 5 new manufacturing facilities at Baddi, Pantnagar and Jammu commissioned in 2010 - 11.

Some of the key initiatives were as follows-

In the existing manufacturing units various initiatives were undertaken to conserve/ reduce environmental impact, by adapting to green manufacturing and concept of "Reduce, Reuse and Recycle", viz.

- Use of thermic fluid heating system in place of boiler in Fluid Bed Evaporator (FBE) for Hajmola manufacturing.

- Efficient Maintenance and daily monitoring of Capacitor Bank for improvement of Power Factor.

- Replacing energy inefficient equipments with new technologies which are energy efficient with AC Drives.

- Introduction of Herbal Extractor in place of Boiling Pan.

- Bio-Gas generated from ETP used in Canteen.

- 100% usage of Herbal Waste as Boiler Feed.

- Replaced electrical powered Turbo vents in roof of production hall with natural wind powered, to save electricity.

- Replaced old boiler with new to conserve on usage of HSD.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:- Additional Investment of Rs. 112.50 Lacs was made during the year for reduction of consumption of energy.

Some new initiatives taken, where the projects are under implementation;

- Replacement of fossil fuel (FO) base thermic fluid to Pet coke.

- Replacement of electrical water heater with solar water heater.

c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods:-

- The energy conservation measures taken during the year have resulted into yearly saving of approximately Rs 209 Lacs and thereby lowered the cost of production by equivalent amount. These measures have also lead to better pollution control, reduced maintenance time and cost, improved hygienic condition and consistency in quality and improved productivity.

d) Total energy consumption and energy consumption per unit of production as per Form A

- Attached herewith as Annexure 3

B. Technology Absorption:

Efforts made in technology absorption as per Form B is attached herewith as Annexure 4.

C. Foreign Exchange earnings and outgo:

i) Activities and initiatives relating to exports:

The Company's key markets for international business are the Middle East, Africa, US and South Asian geographies, with manufacturing plants located across regions. Three new greenfield plants are under commissioning in Egypt, Bangladesh and Sri Lanka. The Company also has a private label business in USA, along with Guar gum exports, which takes place from its Indian plants.

International Business:

Dabur's International Business continued on a strong growth trajectory with sales growing by 78.3% to Rs. 1616.1 crores during fiscal 2011-12. The International Business now contributes 30.3% to consolidated sales. The fiscal 2011-12 was the first full year of the two overseas acquisitions - Hobi Group and Namaste Laboratories, LLC under the Dabur fold. During the year, these acquisitions were assimilated and integrated with the existing organic overseas business. The International Business excluding acquisitions grew by 27.1% to Rs. 929.9 crores. Our key geographies by total overseas revenues now are: Middle East, Africa, Asia and U.S.

The Company has built a robust brand architecture with brands like Dabur and Vatika in these geographies. Our key categories in International Business are hair oils, hair creams, shampoos and toothpastes. As per Nielsen Retail Audit, Dabur Amla Hair Oil is the largest brand in the hair oils category in Saudi Arabia. Dabur Amla brand has been extended into hair creams and other hair conditioning products such as serums etc. The Vatika brand now has a large portfolio including a wide variety of hair oils, shampoos, hair creams and Hamam Zaith. Performance of key brands in the International portfolio during FY2011-12 is as below:

Dabur Amla

- Dabur Amla Hair Oil continues to retain the No. 1 position in Saudi Arabia with market share of 41.6% in the Hair Oil segment. Dabur Amla Gold has market share of 8.9% while Dabur Amla Jasmine has a market share of 6.2%. Overall, the Dabur Amla franchise of Hair Oils commands a market share of 59.2% in Saudi Arabia. Dabur Amla enjoys 30.6% share of hair oils category in UAE and is the No. 2 player in Egypt with market share of 16.9%.

- The brand has been extended into the styling hair cream segment with introduction of Dabur Amla Hair Creams which has notched up its share in the hair creams market.

- Dabur has recently launched two new variants of Hair Oils viz. Anti Dandruff Hair Oil and Cooling Hair Oil which have performed well.

- Recent launch of Amla Hair Serum in 3 variants: Repair Therapy, Frizz Control and Extreme Shine has reported a strong performance.

Vatika

- There has been robust growth in the Vatika franchise which includes Vatika Enriched Hair Oil, Vatika Shampoo and Conditioners, Vatika Hamam Zaith, Vatika Hair Creams and this year's launch of Vatika Styling Hair Gels.

- Enriched Hair Oil range of Vatika Hair Oils registered strong growth. Two new variants of Enriched Hair Oil were introduced - Vatika Black Seed Hair Oil and Vatika Garlic Hair Oil. Vatika Enriched Hair Oil range is the No. 2 player in the segment with market share of 14.9% in Saudi Arabia. Vatika is also the No. 1 brand in Egypt with market share of 40.1%.

- Vatika Shampoo and Conditioners have shown strong performance. Three new Conditioner variants (Nourish & Protect, Repair & Restore and Volume & Thickness) and one new Shampoo variant (Volume & Thickness) were launched during the year.

- Vatika Hamam Zaith reported impressive growth during the year. The range was further strengthened through addition of two new variants - Black Seed Hamam Zaith and Garlic Hamam Zaith.

- Vatika Hair Cream has retained the No. 1 position in hair cream category in Saudi Arabia and Egypt (basis Retail Audit data). The brand has captured 21.1% market share in Saudi Arabia and 18.6% market share in Egypt in spite of the category witnessing stiff competition from established brands.

- Vatika also made an entry into the Styling Hair Gel market through 3 variants - Wet Look, Strong Hold and Extreme Hold.

DermoViva - This relatively new brand launched for the Personal Wash and Skin Care segments has performed well aided by strong growth in Personal Wash segment and launch of Skin Serums, Skin Cream, Skin Lotions and Wet Wipes in the Skin Care category during the year.

Fem - The Fem portfolio, including hair removal creams and wax strips, was re-launched during the year and has already garnered 2.4% market share in UAE and 1.2% market share in Saudi Arabia within few months after the re-launch.

Dabur Herbal Toothpaste - Dabur Herbal Toothpaste has grown strongly in the MENA region and has shown positive traction with consumers. The brand had an impressive performance in Nigeria where it retained the No. 2 position in the category touching 9.7% market share of the toothpaste segment.

Dabur Miswak Toothpaste - Dabur Miswak Toothpaste has shown strong double digit growth and has become the No. 3 player in Morocco with 16.4% market share and captured 6.7% market share in the Algerian market.

GCC, the largest region in the International Business Division has grown by 28% over last year fuelled by innovations and new product launches in the Hair Care, Skin Care and Oral Care segments.

Dabur Egypt Limited has witnessed another year of spectacular performance with 29% growth in sales.

African Consumer Care, Nigeria has grown by 34% over last year, aided by strong growth of Dabur Herbal Toothpaste and Dabur Herbal Gel in the Oral Care category.

Asian Consumer Care, Pakistan has grown by 22% in revenue over last year, with Hajmola and Dabur Amla emerging as the two strong brands for the region.

Asian Consumer Care, Bangladesh, has performed well with a growth of 47.9% during fiscal 2011-12. The growth has been led by increased distribution penetration and focussed brand approach.

Dabur Nepal Pvt Limited which manufactures fruit juices for India and also caters to local consumer market in Nepal recorded impressive growth of 21% in its sales to the domestic market of Nepal.

Efficient operations of the manufacturing plant in Ras Al Khaimah ensured 12 new SKU launches during the year and doubling of manufacturing and packing capacity for Shampoo. We also received Halal Certification for all products manufactured in the Ras Al Khaimah plant. 13 new SKUs were launched in Egypt during the year. In Nigeria, additional capacity was installed for toothpastes and our toothpaste products have received certification of Standard Organization of Nigeria.

With the acquisition of Hobi Group, we have access to a new and complementary product range in hair styling and other hair care, skin care and body care products. As part of the strategy to derive synergy benefits from Hobi with our existing international business, we launched products out of the Hobi range in the Middle East and North African geographies and used their expertise in hair gels to launch Vatika hair gels in some of these markets.

Africa continues to be an important growth driver which we believe offers tremendous opportunities. Currently, Egypt and Nigeria are our key markets in Africa and we plan to extend our presence in a phased manner in other parts of Africa leveraging the product portfolio of Namaste Laboratories.

Exports from India

The Company also exports guar gum and private label oral care products from India. During fiscal 2011-12 the Company recorded Guar gum exports to the tune of Rs. 105.3 crores as compared to Rs. 52.7 crore in fiscal 2010-11. Exports of Guar gum reported high growth as the demand for Guar gum saw extraordinary increase worldwide particularly for the value added hydrating guar variants.

Sales in USA (Dabur Branded and Private label) grew from Rs. 45.1 crores to Rs. 47.6 crores. The Company caters to the ethnic Indian channels in the USA supplying the range of Dabur brands which are popular among the South Asian / Indian community. Retail penetration was extended by launching the range in retailers such as USA (Stop n Shop) and in Canada (Loblaws network). Dabur also exports some private label oral care products to USA which includes toothpastes, Mouthwash and Denture Adhesives.

ii) Development of new markets for Products & Services:

New avenues for growth were opened up through expansion into the new markets of Turkmenistan, Senegal, Somalia, Zambia, Hong Kong, Ivory Coast, Togo, Sierra Leone and Seychelles. The Sales & Distribution infrastructure has been augmented by appointing new distributors in Saudi Arabia, Fiji, Cambodia and Philippines. Local resources have been enhanced in key markets of Middle East & North Africa, Nigeria, Egypt, East Africa and South East Asia to further strengthen the S&D structure.

iii) Export Plans:

The focus, going forward, is to continue expanding the Company's presence across geographies and to exploit the opportunities that exist in existing and potential segments. The Company will continue to invest in brand building, manufacturing and human capital in order to maintain and improve the existing robust growth path.

Total Foreign Exchange used during 2011-12: Rs. 3357 lac.

Total Foreign Exchange Earned during 2011-12: Rs. 16719 lac.

Health, Safety and Environmental Review (HSE)

Dabur India Ltd. is committed to keep up the good HSE performance delivered in earlier years. It has made huge progress in the area of process safety with no fatal accident reported during the period and implementation of Integrity Management System is well underway. With regard to other environmental focus areas, Dabur has greatly improved its waste management and has also reduced its GHG emissions.

To ensure focus and delivery of HSE activity, Dabur has conducted the 1st National Safety Meet with HSE Improvement Plan at manufacturing level. Focus is more on building an engaged safety culture where expectations are clear, people are trained, interventions are welcomed and consequences are understood. One key to build an engaged safety culture is through safety behaviour and Hazard observation. The tools used in Dabur to register safety behaviour / Hazard Observation is called SBO which is recorded through the inbuilt software called SURAKSHA. Beside this, all the manufacturing units have complied with statutory requirements laid by Government in terms of Act and Rules w.r.t. to Health, Safety and Environment. With its Health, Safety and Environment management system Dabur aims to effectively control risks and prevent people from being injured or harmed during the course of their work.

With an aim to certify all its operational locations with the Integrated Management system OHSAS 18001 and ISO 14001 - Occupational Health, Safety and Environment, Dabur has got externally accreditation for its nine (9) manufacturing location by TUV NORD. This standard is the foundation of the overall health, safety and environment framework of Dabur.

The environmental agenda of reducing environmental impact of Company's operations was achieved by environment management program through a combination of energy & water conservation, rainwater harvesting and solid waste recycling. Some sites modified their boilers to use bio-fuels, resulting in significant environmental benefits by reducing the Sox emission in environment. Dabur, being aware of its social corporate responsibility, is in the process of further strengthening its current resources for better health, safety and environment management.

Key Initiatives taken during the year are:

- Got certified its 9 manufacturing location with OHSAS 18001 and ISO 14001 integrated management system.

- Is in a process of preparing 5 more manufacturing location for the certification of OHSAS 18001 and ISO 14001 integrated management system.

- Risk assessment at all manufacturing locations done with a system of planned inspection product wise, resulted in reduction of All Injury Rate (AIR) and Total Recordable Frequency Rate (TRFR)

- Legally complied at unit level w.r.t to Safety and Environment Act and Rules.

- Environmental Monitoring was carried out at unit level to check the impact on environment.

- Different Guidelines and Standards rolled out for implementation at unit level and focus on the training (on job and off job) to minimize the TRFR (Total Recordable Frequency Rate).

- Installation of Fire Hydrant and Detector System as per latest technologies.

- Emergency preparedness plan is in place which was executed through mock drill.

- In house monitoring of sound, light and gas with different test has been carried out at unit level to check the efficiency of PPE's used at work place.

- Health Check up for all employees carried out at unit level.

- Safety Committee meetings were conducted regularly to make the work place safe and to get the maximum suggestion / input from employees.

- Installed Natural turbo ventilator & transparent FRP (Fiber Reinforced Plastic) for lighting in shop-floor.

Industrial Relations

The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.

Acknowledgements

Your Directors place on record their gratitude to the Central Government, State Governments and Company's Bankers for the assistance, co-operation and encouragement they extended to the Company. Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of Investors, Vendors, Dealers, Business Associates and Employees in ensuring an excellent all around operational performance.

For and on behalf of the Board Place : New Delhi DR ANAND BURMAN

Date : 30th April, 2012 Chairman

Research & Development

 
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