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Dabur India Ltd.
Market Cap. (Rs.) 70005.89 Cr. P/BV 12.27 Book Value (Rs.) 32.31
52 Week High/Low (Rs.) 491/312 FV/ML 1/1 P/E(X) 51.69
Bookclosure 12/11/2018 EPS (Rs.) 7.67 Div Yield (%) 1.89
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2017-03 

Directors’ Report

To,

The Members,

The Directors have pleasure in presenting the 42nd Annual Report on the business and operations of the Company, together with the audited accounts for the financial year ended March 31, 2017.

Financial Results

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

Particulars

Consolidated

Standalone

2016-17 2015-16

2016-17| 2015-16

Revenue from Operations including other Income

7,999.79 8,085.96

5,644.48 5,616.93

Less Expenses:

Cost of goods sold

3,843.22 3,849.56

2,858.78 2,858.56

Employee benefits expenses

789.61 794.10

425.30 431.89

Finance cost

54.03 48.48

16.23 10.26

Depreciation and Amortization expenses

142.86 133.19

75.43 72.83

Other Expenses

1,559.67 1,706.83

974.39 1,034.04

Total Expenses

6,389.39 6,532.16

4,350.13 4,407.58

Profit before exceptional items and tax

1,610.40 1,553.80

1,294.35 1,209.35

Exceptional items

0.00 0.00

0.00 0.00

Profit before tax

1,610.40 1,553.80

1,294.35 1,209.35

Tax expense

330.34 299.90

296.02 272.09

Profit for the year from continuing operations

1,280.06 1,253.90

998.33 937.26

share of profit/ loss of associates & Joint Venture

0.25 (0.01)

0.00 0.00

Non-Controlling interest

3.37 2.74

0.00 0.00

Profit for the year

1,276.94 1,251.15

998.33 937.26

Transfer to Reserves

The Company proposes to transfer an amount of Rs.100 crores (Previous year Rs.95 crores) to general reserves.

Dividend

The Company has paid an interim dividend of 125%, being Rs.1.25 per share of Re.1/-each fully paid up, on November 17,

2016. We are pleased to recommend a final dividend of 100% being Re.1/- per share of Re.1/- each fully paid up, for the financial year 2016-17. The final dividend, if approved by the members, will be paid to members within the period stipulated by the Companies Act, 2013. The aggregate dividend for the year will amount to 225% being Rs.2.25 per share of Re.1/- each fully paid up, as against 225%, being Rs.2.25 per share of Re.1/- each fully paid up, declared last year. The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution is at 47.78%.

Pursuant to the provisions of Section 124 (5) of the Companies Act, 2013, Final dividend for the financial year 2008-09 amounting to Rs.26,92,622/- and interim dividend for the financial year 2009-10 amounting to Rs.20,83,034/- which remained unpaid/ unclaimed for a period of 7 years, from the date it was lying in the unpaid dividend account, has been transferred by the Company to the Investors Education and Protection Fund (IEPF) of the Central Government. 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 declared up to the financial year 2015

16 (updated up to the date of 41st AGM held on 19.07.2016) and for interim dividend declared during the financial year 2016-17 is available on Company's website www.dabur.com. Shareholders are requested to check the said lists and if any dividend due to them remains unpaid in the said lists, can approach the Company for release of their unpaid dividend.

Financial Statements

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 'Listing Regulations') and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014, the Annual Report containing salient features of the financial statements, including consolidated financial statements, for the financial year 2016-17, along with statement containing salient features of the Directors' Report (including Integrated Reporting and 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. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2016-17, upon receipt of written request from you, as a member of the Company.

Full version of the Annual Report 2016-17 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 Integrated Reporting and Management Discussion & Analysis and Corporate Governance Report) is being sent via email to all shareholders who have provided their email address(es).

Full version of Annual Report 2016-17 is also available for inspection at the registered office of the Company during working hours up to the date of ensuing Annual general meeting (AGM). It is also available at the Company's website at www.dabur.com.

Consolidated Financial Statements

In compliance with the applicable provisions of Companies Act, 2013 including the Accounting Standard Ind AS 110 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2016-17. Consolidated Turnover was Rs.7,999.79 crores as against Rs.8,085.96 crores in the previous year. Net Profit after Tax for the year stood at Rs.1,276.94 crores as against Rs.1,251.15 crores in the previous year.

Operations and Business Performance

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

Corporate Governance

Corporate Governance refers to a set of systems, procedures and practices which ensure that the company is managed in the best interest of all corporate stakeholders i.e. shareholders, employees, suppliers, customers and society in general. Fundamentals of Corporate Governance includes transparency, accountability and independence.

Dabur views Corporate Governance more as a way of business life than a mere legal obligation. The Company has adopted various practices of governance confirming to highest ethical and responsible standard of business, globally benchmarked. Strong and effective implementation of governance practices in the Company have been rewarded in terms of improved share valuations, stakeholder's confidence, market capitalization, high credit ratings and bagging of various awards, etc. These have helped Dabur to pay uninterrupted dividends to its shareholders. During the FY 2016-17, the Company was awarded by the Institute of Company Secretaries of India (ICSI), a National award for excellence in Corporate Governance, certifying 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 Schedule V of the Listing Regulations is attached as 'Annexure 1' and forms part of this Report.

Business Responsibility Report

At Dabur, fulfillment 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.

Business Responsibility Report as stipulated under Regulation 34 of the Listing Regulations is also available on the website of the Company at we blink http://dabur.com/in/en-us/investor/ investor-information/business-responsibility-report-as-per-sebi-listing-regulations.Any member interested in obtaining a physical copy of the same may write to the Company Secretary at the Registered office of the Company.

Credit Rating

During the year the Company has sustained its long term bank facility 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 bank facility credit rated as A1 by CRISIL, has been reaffirmed. The rating of A1 for Commercial Paper has also been reaffirmed by CRISIL. This highest rating of A1 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

Pursuant to Section 149, 152 and other applicable provisions 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 Mohit Burman (DIN 00021963) and Mr. Amit Burman (DIN: 00042050), Directors will retire by rotation at the ensuing AGM, and being eligible, offer themselves for re-appointment in accordance with provisions of the Companies Act, 2013.

Pursuant to the provisions of Sections 196,197, 198 and 203 read with Schedule V and other applicable provisions of the Companies Act, 2013, Mr. P.D. Narang (DIN 00021581), whose term as a Whole Time Director of the company shall expire on 31.03.2018, is proposed to be re-appointed as a Whole Time Director of the Company for a period of 5 (five) years with effect from 01.04.2018 to 31.03.2023, not subject to retirement by rotation, on the terms and conditions including remuneration as set out in the explanatory statement annexed to the Notice convening the ensuing AGM.

A brief resume of the Directors proposed to be 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 re-appointment at the ensuing AGM.

None of the Directors of the Company have resigned as Director of the Company.

The Company has received necessary declaration from all the Independent Directors under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and the Listing Regulations.

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 KMP.

Policy on Directors' appointment and Policy on remuneration

Pursuant to 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 to this Report.

Particulars of remuneration of Directors/ KMP/ Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as 'Annexure 4A' to this Report. Further, in terms of the provisions of Section 197(12) of the Act 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 employees drawing remuneration in excess of the limits set out in the said rules is attached as 'Annexure 4B' to this Report.

Employees Stock Option Plan

During the year, 1,37,031 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, 23,79,340 options were exercised by the employees after vesting. Accordingly, the Company has made the allotment of 17,50,000 equity shares on

April 15, 2016 6,01,800 equity shares on May 27, 2016 and 27,540 equity shares on August 23, 2016 against the options exercised by the employees. Post the closure of financial year 2016-17, the Nomination and Remuneration Committee of the Board of Directors of the company in its meeting held on April 21st 2017 has cancelled 21,17,161 stock options granted to the employees of the company and its subsidiaries relevant to the Financial year 2016-17.

During the financial year 2016-17, there has been no change in the Employees Stock Option Plan (Dabur ESOP 2000) of the Company. Further, it is confirmed that the ESOP Scheme of the Company is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014.

The applicable disclosures as stipulated under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 with regard to Employees Stock Option Plan of the Company are available on the website of the Company at www.dabur.com and weblink for the same is http://www.dabur.com/in/en-us/investor/ investor-information/esops

Number of Meetings of the Board

During the Financial Year 2016-17, 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 Regulations, 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. The framework is monitored, reviewed and updated by the Board, in consultation with the Nomination and Remuneration Committee, based on need and new compliance requirements.

The annual performance evaluation of the Board, its Committees and each Director has been carried out for the financial year 2016

17 in accordance with the framework. The details of evaluation process of the Board, its Committees and individual Directors, including Independent Directors have been provided under the Corporate Governance Report which forms part of this Report.

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 Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013, the tenure of current auditors - M/s G. Basu & Co., Chartered Accountants, shall come to an end at the conclusion of forthcoming AGM. Accordingly, M/s. Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration No. 001076N/ N500013) have been recommended by the Audit Committee and by the Board to be appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of the ensuing 42nd Annual General Meeting until the conclusion of 47th Annual General Meeting of the Company to be held in the calendar year 2022, subject to annual ratification by members at every Annual General Meeting, on such remuneration as may be decided by the Audit Committee of the Board. They being eligible have consented and offered themselves for appointment as statutory auditors for conducting audit of accounts for five consecutive financial years starting from 2017-18.

Pursuant to Section 139 and 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate dated January 30, 2017 from the Auditors to the effect, inter-alia, that their 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 appointment under the provisions of applicable laws and also that the list of proceedings against them or any of their partners pending with respect to professional matter of conduct, as disclosed in the certificate, is true and correct.

The Auditors have 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.

Report of Statutory Auditors

The current Statutory Auditors- M/s G. Basu & Co., Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the FY 2016-17, which forms part of the Annual Report 2016-17. Observations of Auditors in para 10 of CARO report, when read with corresponding reference in note no. 57 of financial statements would be found self explanatory. There are no other observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Reports that may call for any explanation from the Directors.

The Auditors have 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

Cost Auditors and their Report

As per Section 148 of the Companies Act, 2013 read with Rules framed thereunder, M/s Ramanath Iyer & Company, Cost Accountants, (Firm's Membership No. 000019) were re-appointed as Cost Auditors for the financial year 2016-17 and 2017-18 to conduct cost audit of the accounts maintained by the Company in respect of the various products prescribed under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing annual general meeting. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment within the meaning of the said Act.

The Cost Audit Report for the financial year 2015-16, 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 on 25th August, 2016.

Secretarial Auditors and their Report

M/s Chandrasekaran Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2016-17 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 5' to this Report.

There are no qualifications or observations or adverse remarks or disclaimer of the Secretarial Auditors in the Report issued by them for the financial year 2016-17 which call for any explanation from the Board of Directors.

M/S Chandrasekaran Associates, Company Secretaries have been re-appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18. They have confirmed that they are eligible for the said appointment.

Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made there under.

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 IFC system which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Company's IFC system also comprises due compliances with Company's policies and Standard Operating Procedures (SOP's) and audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from Price Waterhouse & Co., Bangalore 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. During the year the Internal auditors were engaged for providing assistance in improvising IFC framework (including preparation of Risk & Control Matrices for various processes) and deployment of Self Assessment Tool.

To further strengthen the internal control process, the Company has developed a very comprehensive legal compliance system 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 which should be adequate and shall operate 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 regulatory amendment is updated periodically in the system.

- Approval of all transactions is ensured through a preapproved 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 regular basis throughout the year as per agreed audit plan.

- Tier-2: Transaction audits are conducted regularly 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 is done on an annual basis including Ind AS-36 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.

- The Company 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.

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

- The Company 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 vs. budgets 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.

- The Internal auditors were engaged for providing assistance in improvising IFC framework (including preparation of Risk & Control Matrices for various processes) and deployment of Self Assessment Tool. After close of the financial year the internal auditors have issued their report apprising the company of certain gaps in design/ operating effectiveness of controls, for which the management has agreed to take remedial action.

Development and implementation of Risk Management

Dabur has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically. The Risk Management Committee of the Board is responsible for preparation of Risk Management Plan, reviewing and monitoring the same on regular basis, identifying and reviewing critical risks on regular basis, updating the Risk Register on quarterly basis, reporting of key changes in critical risks to the Board on an ongoing basis, reporting of 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, their impact and their minimization procedures are assessed categorically under the broad heads of High, Medium and Low risks. The non-critical risks faced by the company and their mitigation are also reviewed by the committee on a quarterly basis. The Risk Register of the Company is also audited by internal auditors of the Company.

Further the risks 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. The Board is responsible for framing, implementing and monitoring the Risk Management Plan of the Company. During the year, Price Waterhouse & Co., Bangalore LLP, Internal Auditors, have been engaged for preparing Risk & Control Matrices for various processes as a part of Internal financial control framework.

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 Company and its subsidiary companies are as under:

During the year the Company has set up a new manufacturing unit at Tezpur, Assam. Commercial production at the said unit had commenced on 16th March, 2017. Further, the Company has launched a range of aerated fruit beverage - 'Real VOLO' for the domestic market.

Dabur Pars, a step down wholly owned subsidiary was incorporated in Iran during the FY 2016-17 for the business of cosmetic products in Iran. The Company has started its operations and first sale was registered in February, 2017.

Dabur South Africa (PTY) Limited, a step down wholly owned subsidiary was acquired during the FY 2016-17 for manufacturing and trading of cosmetic products in South Africa. During the year the Company has bought over certain assets of CTL group of Companies as a going concern.

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

Subsidiaries

During the year 'Dabur Pars', incorporated in Iran by our existing wholly owned subsidiaries- Dabur International Limited and Dabur (UK) Limited, have become our step down wholly owned subsidiary company w.e.f. 31.5.2016.

Dabur South Africa (PTY) Limited [previously- Discaria Trading (Pty) Ltd.] was acquired by our existing wholly owned subsidiary-Dabur International Limited and have become our step down wholly owned subsidiary company w.e.f. 14.7.2016.

Namaste Cosmeticos Ltda., in Brazil had ceased to be our step down subsidiary company w.e.f. 30.4.2016.

Pursuant to Section 129 (3) of the Companies Act, 2013 and Ind -AS 110 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, separate audited accounts of the subsidiary companies shall be available 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 highlights of performance of Subsidiaries, Associates and Joint Venture Companies and their contribution to the overall performance of the company.

Pursuant to Section 134 of the Companies Act, 2013 and Rule 8(1) of the Companies (Accounts) Rules, 2014 the report on highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company is attached as 'Annexure 6' to this Report.

Information with respect to financial position of the above entities can 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 7' to this Report.

Environmental, Health and Safety (EHS) Review

Details with respect to Environmental, Health and Safety (EHS) review are attached as 'Annexure 8' to 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 9' which is attached to 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 equity shares are listed on the National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and Metropolitan Stock Exchange of India Limited (MSEI). The shares are actively traded on NSE and BSE and have not been suspended from trading.

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

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

- 17,50,000 equity shares allotted on April 15, 2016.

- 6,01,800 equity shares allotted on May 27, 2016.

- 27,540 equity shares allotted on August 23, 2016.

Extract of Annual Return

The extract of Annual Return as on March 31, 2017 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 as 'Annexure 10' to this Report.

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

Particulars of loans, guarantees and investments under Section 186 of the Act as at the end of the Financial Year 2016-1 7 are provided in the standalone financial statements (refer Note No. 29).

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' (i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements entered into individually or taken together with previous transactions during the financial year) according to the policy of the Company on materiality of Related Party Transactions. Accordingly, there are no transactions that are required to be reported in form AOC-2.

However, you may refer to Related Party transactions in Note No.49 of the Standalone Financial Statements.

Disclosure on Audit Committee

The Audit Committee as on March 31, 2017 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. For more details kindly refer to the Section 'Committees of the Board - Audit Committee', in the Corporate Governance Report, which forms part of this Report.

All recommendations of Audit Committee were accepted by the Board of Directors.

Disclosure on Public Deposits

During the year under review, the Company has neither accepted nor renewed any deposits in terms of Chapter V of the Companies Act, 2013 and Rules framed there under.

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.

You may refer to note no. 57 of the standalone financial statements regarding compliant received under Whistle Blower Mechanism of the Company.

Dividend Distribution Policy

To bring transparency in the matter of declaration of dividend and protect the interests of investors, Dabur had in place a Dividend Policy since long. However, after incorporation of Regulation 43A of the Listing Regulations, the existing Policy was revised during the year in line with the Listing Regulations and the Companies Act, 2013 which is attached as 'Annexure 11' to this Report. The Policy has also been displayed on the Company's website, www. dabur.com.

Disclosure under Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013

At Dabur, all employees are of equal value. There is no discrimination between individuals at any point on the basis of race, colour, gender, religion, political opinion, national extraction, social origin, sexual orientation or age.

At Dabur, every individual is expected to treat his/her colleagues with respect and dignity. This is enshrined in values and in the Code of Ethics & Conduct of Dabur. The Direct Touch (Whistle-Blower & Protection Policy) Policy provides a platform to all employees for reporting unethical business practices at workplace without the fear of reprisal and help in eliminating any kind of misconduct in the system. The Policy also includes misconduct with respect to discrimination or sexual harassment.

The Company also has in place 'Prevention of Sexual Harassment Policy'. This Anti-Sexual Harassment Policy of the Company is in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

An Internal Complaints Committee (ICC) is in place to redress complaints received regarding sexual harassment.

The following is a summary of sexual harassment complaints received and disposed off during the year:

- No. of complaints received: Nil

- No. of complaints disposed off: NA

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.

Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

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: New Delhi Chairman

Date: May 1, 2017 DIN: 00056216

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