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BSE: 500096ISIN: INE016A01026INDUSTRY: Personal Care

BSE   ` 432.80   Open: 429.45   Today's Range 423.25
433.45
+5.45 (+ 1.26 %) Prev Close: 427.35 52 Week Range 312.45
490.70
Year End :2018-03 

Directors' Report

To,

The Members,

The Directors have pleasure in presenting the 43rd Annual Report on the business and operations of the Company, together with the audited accounts for the financial year ended March 31, 2018.

Financial Results

Financial results are presented in the table below:

(Rs. in crores

Particulars

Consolidated

Standalone

2017-18

2016-17

2017-18

2016-17

Revenue from Operations including other Income

8053.52

7,999.79

5892.29

5,644.48

Less Expenses:

Cost of goods sold

3846.41

3,843.22

2919.46

2858.78

Employee benefits expenses

792.79

789.61

461.13

425.30

Finance cost

53.05

54.03

21.89

16.23

Depreciation and

Amortization

expenses

162.18

142.86

102.50

75.43

Other Expenses

1491.70

1,559.67

999.64

974.39

Total Expenses

6346.13

6,389.39

4504.62

4,350.13

Profit before share of profit from Joint Venture and exceptional items

1707.39

1610.40

NA

NA

share of profit of Joint Venture

0.24

0.25

NA

NA

Profit before exceptional items and tax

1707.63

1,610.65

1387.67

1,294.35

Exceptional items

14.54

0.00

14.54

0.00

Profit before tax

1693.09

1,610.65

1373.13

1,294.35

Tax expense

335.35

330.34

301.08

296.02

Net Profit for the year

1357.74

1,280.31

1072.05

998.33

Net profit attributable to

Owners of the Holding Company

1354.39

1276.94

NA

NA

Non-Controlling

interest

3.35

3.37

NA

NA

Dividend

The Company has paid an interim dividend of Rs.1.25 per share of Re.1/-each fully paid up (being 125%) on November, 22, 2017. We are pleased to recommend a dividend of Rs.6.25 per share of Re.1/- each fully paid up (being 625%) which includes final dividend of Rs.1.25 per share of Re.1/-each fully paid up (being 125%) for the financial year 2017-18 and a special dividend of Rs.5 per share of Re.1/- each fully paid up (being 500%) to mark the silver jubilee year of listing of Dabur India Limited's share in the financial year 1993-94. The dividend recommended, 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 Rs.7.50 per share of Re.1/-each fully paid up (being 750%) as against Rs.2.25 per share of Re.1/- each fully paid up (being 225%), declared last year. The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution is at 148.53% (which includes 99.04% pertaining to special dividend).

Pursuant to the provisions of Section 124 (5) of the Companies Act, 2013, Final dividend for the financial year 2009-10 amounting to Rs.39,72,246/- and interim dividend for the financial year 2010-11 amounting to Rs.30,89,625/- 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 201617 (updated up to the date of 42nd AGM held on 26.07.2017) and for interim dividend declared during the financial year 2017-18 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 abridged Annual Report containing salient features of the financial statements, including consolidated financial statements, for the financial year 2017-18, 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. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2017-18, upon receipt of written request from you, as a member of the Company.

Full version of the Annual Report 2017-18 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) shall be sent via email to all shareholders who have provided their email address(es).

Full version of Annual Report 2017-18 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 2017-18. Consolidated Turnover was Rs. 8,053.52 crores as against Rs.7999.79 crores in the previous year. Net Profit after Tax for the year stood at Rs. 1,354.39 crores as against Rs.1,276.94 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 is the system of rules, practices and processes through which objectives of a corporate entity are set and pursued in the context of the social, regulatory and market environment. It essentially involves balancing the interests of various stakeholders, such as shareholders, Management, customers, suppliers, financiers, Government and the community. Fundamentals of Corporate Governance includes transparency, accountability and independence.

At Dabur good governance practices forms part of business strategy which includes, inter alia, focus on long term value creation and protecting stakeholders interests by applying proper care, skill and diligence to business decisions. Payoffs from strong governance practices have been in the sphere of valuations, stakeholders' confidence, market capitalization and high credit ratings in positive context apart from obtaining of awards from appropriate authorities for brands, stocks, environmental protection, etc. These contributes to Dabur paying uninterrupted dividends to its shareholders. During the financial year 2017-18, the Company was awarded by the Institute of Company Secretaries of India (ICSI), a National award for excellence in Corporate Governance for 2017, certifying Dabur India Ltd., as one of the “Best Governed Companies” of India. This is the second year in a row and fourth overall that Dabur has been awarded by ICSI for excellence in Corporate Governance.

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 long term 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 Saket Burman (DIN: 05208674), Director will retire by rotation at the ensuing AGM, and being eligible, offers himself for re-appointment in accordance with provisions of the Companies Act, 2013.

His brief resume, the nature of expertise in specific functional areas, names of Companies in which he hold Directorships, Committee Memberships/Chairmanships, his shareholding in the Company etc., are furnished in the explanatory statement to the notice of the ensuing AGM.

The Directors recommend his re-appointment at the ensuing AGM.

None of the Directors of the Company have resigned from the office of Director of the Company during the year.

The Company has received necessary declaration from all the Independent Directors 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

Mr. Mohit Malhotra, Chief Executive officer- India Business

(w.e.f. 1st May, 2018)

During the year, there was no change (appointment or cessation) in the office of KMP. However, after the close of financial year, the Board of Directors in their meeting held on 1st May, 2018 have designated Mr. Mohit Malhotra, Chief Executive officer- India Business, as KMP of the Company.

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, 36,720 options in 3 tranches were granted to eligible employees of the Company in terms of Employees Stock Option Plan (Dabur ESOP 2000).

During the financial year 2017-18, 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 2017-18, 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 2017-18 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, M/s. Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration No. 001076N/ N500013) were appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of the 42nd Annual General Meeting held on 26th July, 2017 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. However, as per the Companies Amendment Act, 2017, the requirement of annual ratification has been omitted, which is yet to be notified. Accordingly, the ratification of their appointment shall be placed before the shareholders, in the ensuing Annual General Meeting, if so required.

Pursuant to Section 139 and 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate dated April 12, 2018 from the Auditors to the effect, inter-alia, that their appointment 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 there are no pending proceedings against them or any of their partners with respect to professional matters of conduct.

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

M/s. Walker Chandiok & Co LLP, Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the FY 2017-18, which forms part of the Annual Report 2017-18. There are no 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.

Cost Auditors and their Report

As per Section 148 of the Companies Act, 2013 read with Rules framed there under, M/s Ramanath Iyer & Company, Cost Accountants, (Firm's Membership No. 000019) have been re-appointed as Cost Auditors for the financial year 2018

19 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 2016-17, 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 30/08/2017.

Secretarial Auditors and their Report

M/s Chandrasekaran Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2017-18 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 2017-18 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 2018-19. 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 thereunder.

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 water house Coopers Pvt. Ltd., 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 Auditors to the Audit Committee of the Board.

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:

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

o 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.

o 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.

- 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 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, Pricewaterhouse Coopers Pvt. Ltd., 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 fiscal 2017-18 the Company acquired the following assets/ brands:

1. Completion of acquisition of assets of CTL group of Companies by Dabur South Africa Pty Ltd. Through this acquisition Dabur acquired a facility for manufacturing hair care products in South Africa which has enabled it to have its dedicated local manufacturing operations for hair care products under the ORS brand.

2. Acquisition of 100% shareholding of D&A Cosmetics Proprietary Ltd and Atlanta Body and Health Products Proprietary Ltd. Through this acquisition the Company acquired the brand 'Long and Lasting' which operates in hair care market in South Africa. This is expected to enable the Company to consolidate its position in hair care market with 2 brand strategy and expand its footprint in the region.

Recognizing the fast growing e-commerce channel In India Dabur embarked upon an aggressive e-commerce strategy. As part of this strategy the Company signed an agreement with the leading e-tailer Amazon to showcase its Ayurvedic range on their health and wellness Section in India. Dabur and Amazon have jointly set up an online marketplace exclusively for Ayurveda where all Ayurvedic products will be sold. This exclusive online Ayurveda store houses all Ayurveda brands and products available in the country and offers consumers an insight into the various Ayurvedic medicines available for treating a variety of ailments. This exclusive Ayurveda e-marketplace has been hosted by Amazon India and the content developed by Dabur India.

Dabur has also formed an alliance with Amazon to expand its reach in The US, Canada and Mexico markets under the e-retailer's Global Selling Program. Under this collaboration, Amazon will take around 30 products from Dabur's popular range such as, Vatika hair oil, Meswak toothpaste, Red toothpaste and Chyawanprash, to millions of overseas loyal Amazon customers, besides help strengthen and expand the brand's reach and take Ayurveda to global audiences. Along with this, Dabur will also offer an exclusive range of products specially created for Amazon's global customers.

During the year the Company piloted a unique project called 'AskDabur' which entails setting up call centers to address queries regarding common healthcare problems and recommend products from our healthcare portfolio. The call center is manned by a team of Ayurvedic doctors who provide advice and guide the patients to nearby stores for buying the products. This project would help establish Dabur's leadership in Ayurveda and also create new market opportunities for its wide range of products.

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

After the close of financial year w.e.f. 5.4.2018 two Companies incorporated and having operations in the Republic of South Africa, namely i) D and A Cosmetics Proprietary Limited and

ii) Atlanta Body & Health Products Proprietary Limited, have become our step down wholly owned subsidiary Companies. These two Companies were acquired by our existing step down wholly owned subsidiary Dermoviva Skin Essentials Inc.

During the year, Dabur Tunisie, a step down wholly owned subsidiary Company was decided to be dissolved and its liquidation is under process which is expected to be completed by March, 2019.

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 website of the Company 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. Promotion of Education.

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 paid up share capital of the Company as on 31st March, 2018 is Rs.1,76,15,20,510/- divided into 1,76,15,20,510 equity shares of Re.1/- each. 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. During the year under review no shares were allotted and admitted for trading in NSE, BSE and MSEI.

Extract of Annual Return

The extract of Annual Return as on March 31, 2018 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 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 2017-18 are provided in the standalone financial statements (refer Note No. 47).

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.54 of the Standalone Financial Statements.

Disclosure on Audit Committee

The Audit Committee as on March 31, 2018 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 thereunder.

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 'Policies, Affirmations and Disclosures ' - Whistle-Blower Policy / Vigil Mechanism of the Corporate Governance Report.

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. The Policy was revised in accordance with Regulation 43A of the Listing Regulations and the Companies Act, 2013 and has been displayed on the Company's website at www.dabur.com. The Policy is attached as 'Annexure 11' to this report.

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: 1

- No. of complaints disposed of: 1

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, 2018 DIN: 00056216