Your Directors have pleasure in presenting the 42nd AnnualReport on the business and operations of the Company together with the audited accountsfor the financial year ended March 31 2017.
Financial results are presented in the table below: (Rs. incrores)
|Particulars ||Consolidated ||Standalone |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Revenue from Operations including other Income ||7999.79 ||8085.96 ||5644.48 ||5616.93 |
|Less Expenses: || || || || |
|Cost of goods sold ||3843.22 ||3849.56 ||2858.78 ||2858.56 |
|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 ||1559.67 ||1706.83 ||974.39 ||1034.04 |
|Total Expenses ||6389.39 ||6532.16 ||4350.13 ||4407.58 |
|Profit before exceptional items and tax ||1610.40 ||1553.80 ||1294.35 ||1209.35 |
|Exceptional items ||0.00 ||0.00 ||0.00 ||0.00 |
|Profit before tax ||1610.40 ||1553.80 ||1294.35 ||1209.35 |
|Tax expense ||330.34 ||299.90 ||296.02 ||272.09 |
|Profit for the year from continuing operations ||1280.06 ||1253.90 ||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 ||1276.94 ||1251.15 ||998.33 ||937.26 |
Transfer to Reserves
The Company proposes to transfer an amount of Rs.100 crores (Previousyear Rs.95 crores) to general reserves.
The Company has paid an interim dividend of 125% being Rs.1.25 pershare of Re.1/-each fully paid up on November 17 2016. We are pleased to recommend a 3nal dividend of 100% being Re.1/- per share of Re.1/- each fully paid up for thefinancial year 2016-17. The 3 nal dividend if approved by the members will be paid tomembers within the period stipulated by the Companies Act 2013. The aggregate dividendfor the year will amount to 225% being Rs.2.25 per share of Re.1/- each fully paid up asagainst 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 dividenddistribution is at 47.78%.
Pursuant to the provisions of Section 124 (5) of the Companies Act2013 Final dividend for the financial year 2008-09 amounting to Rs.2692622/- andinterim dividend for the financial year 2009-10 amounting to Rs.2083034/- which remainedunpaid/ unclaimed for a period of 7 years from the date it was lying in the unpaiddividend account has been transferred by the Company to the Investors Education andProtection Fund (IEPF) of the Central Government. The due dates for transfer of unpaiddividend to IEPF for subsequent years is given in the Corporate Governance Report. Thelist of unpaid dividend declared up to the financial year 2015-16 (updated up to the dateof 41st AGM held on 19.07.2016) and for interim dividend declared during thefinancial year 2016-17 is available on Company`s website www.dabur.com. Shareholders arerequested to check the said lists and if any dividend due to them remains unpaid in thesaid lists can approach the Company for release of their unpaid dividend.
In accordance with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as `Listing Regulations`) andSection 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 statementsincluding consolidated financial statements for the financial year 2016-17 along withstatement containing salient features of the Directors' Report (including IntegratedReporting and Management Discussion & Analysis and Corporate Governance Report) isbeing sent to all shareholders who have not registered their email address(es) for thepurpose of receiving documents/ communication from the Company in electronic mode. Pleasenote that you will be entitled to be furnished free of cost the full Annual Report2016-17 upon receipt of written request from you as a member of the Company.
Full version of the Annual Report 2016-17 containing complete BalanceSheet Statement of Profit & Loss other statements and notes thereto includingconsolidated financial statements prepared as per the requirements of Schedule III to theCompanies Act 2013 Directors' Report (including Integrated Reporting and ManagementDiscussion &3 Analysis and Corporate Governance Report) is being sent via email to allshareholders who have provided their email address(es).
Full version of Annual Report 2016-17 is also available for inspectionat the registered off ce of the Company during working hours up to the date of ensuingAnnual general meeting (AGM). It is also available at the Company`s website atwww.dabur.com.
Consolidated Financial Statements
In compliance with the applicable provisions of Companies Act 2013including the Accounting Standard Ind AS 110 on Consolidated Financial Statements thisAnnual Report also includes Consolidated Financial Statements for the financial year2016-17. Consolidated Turnover was Rs.7999.79 crores as against Rs.8085.96 crores in theprevious year. Net Profit after Tax for the year stood at Rs.1276.94 crores as againstRs.1251.15 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 refers to a set of systems procedures andpractices which ensure that the company is managed in the best interest of all corporatestakeholders i.e. shareholders employees suppliers customers and society in general.Fundamentals of Corporate Governance includes transparency accountability andindependence.
Dabur views Corporate Governance more as a way of business life than amere legal obligation. The Company has adopted various practices of governance confirmingto highest ethical and responsible standard of business globally benchmarked. Strong andeffective implementation of governance practices in the Company have been rewarded interms of improved share valuations stakeholder`s con3 dence market capitalization highcredit ratings and bagging of various awards etc. These have helped Dabur to payuninterrupted dividends to its shareholders.
During the FY 2016-17 the Company was awarded by the Institute ofCompany Secretaries of India (ICSI) a National award for excellence in CorporateGovernance certifying Dabur India Ltd. as one of the "Best Governed Companies"of India.
A certificate from Auditors of the Company regarding compliance of theconditions of Corporate Governance as stipulated under Schedule V of the ListingRegulations is attached as `Annexure 1 Rs and forms part of this Report.
Business Responsibility Report
At Dabur ful3 lment of environmental social and governanceresponsibility is an integral part of the way the Company conducts its business. Adetailed information on the initiatives of the Company as enunciated in the NationalVoluntary Guidelines on Social Environmental and Economic Responsibilities of Business2011 Rs is provided in the Business Responsibility Report a copy of which will beavailable on the Company`s website www.dabur.com.
Business Responsibility Report as stipulated under Regulation 34 of theListing Regulations is also available on the website of the Company at weblinkhttp://dabur.com/in/en-us/investor/investor-information/business-responsibility-report-as-per-sebi-listing-regulations.Anymember interested in obtaining a physical copy of the same may write to the CompanySecretary at the Registered off ce of the Company.
During the year the Company has sustained its long term bank facilitycredit rating of AAA (stable) which has been rea3 rmed by CRISIL. The highest creditrating of AAA awarded by CRISIL reffects the highest degree of safety regarding timelyservicing of financial obligations. Further CRISIL has rea3 rmed the rating of NCDprogramme of the Company as AAA (stable). The rating indicates highest degree of safetyregarding timely servicing of financial obligation. The rated instrument carries lowestcredit risk. The Company`s short term bank facility credit rated as A1+ by CRISIL hasbeen rea3 rmed. The rating of A1+ for Commercial Paper has also been rea3 rmed by CRISIL.This highest rating of A1+ indicates a very strong degree of safety with regard to timelypayment of interest & principal. Such instrument carry lowest credit risk.
Further ICRA has rea3 rmed the rating on NCD programme of the Companyas AAA (stable). The rating indicates highest degree of safety regarding timely servicingof financial obligation. The rated instrument carries lowest credit risk and the outlookon the rating is stable.
Pursuant to Section 149 152 and other applicable provisions of theCompanies Act 2013 one-third of such of the Directors as are liable to retire byrotation shall retire every year and if eligible off er themselves for re-appointmentat 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 196197 198 and 203 read withSchedule 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 on31.03.2018 is proposed to be re-appointed as a Whole Time Director of the Company for aperiod of 5 ( five) years with effect from 01.04.2018 to 31.03.2023 not subject toretirement by rotation on the terms and conditions including remuneration as set out inthe explanatory statement annexed to the Notice convening the ensuing AGM.
A brief resume of the Directors proposed to be re-appointed the natureof their expertise in specific functional areas names of companies in which they haveheld Directorships committee memberships/ chairmanships their shareholding etc. arefurnished 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 underSection 149(7) of the Companies Act 2013 confirming that they meet the criteria ofindependence as laid down in Section 149(6) of the Companies Act 2013 and the ListingRegulations.
Key Managerial Personnel
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:
Mr. P D Narang Whole Time Director
Mr. Sunil Duggal Chief Executive off cer and Whole Time Director
Mr. Lalit Malik Chief Financial off cer
Mr. Ashok Kumar Jain V P (Finance) and Company Secretary
During the year there was no change (appointment or cessation) in the off ce of KMP.
Policy on Directors Rs appointment and Policy on remuneration
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act2013 the Policy on appointment of Board members including criteria for determiningqualifications positive attributes independence of a Director and the Policy onremuneration of Directors KMP and other employees is attached as `Annexure 2 & 3 Rsrespectively to this Report.
Particulars of remuneration of Directors/ KMP/ Employees
Disclosures pertaining to remuneration and other details as requiredunder 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 asAnnexure 4A Rs to this Report. Further in terms of the provisions of Section197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 a statement showing the names and otherparticulars of employees drawing remuneration in excess of the limits set out in the saidrules is attached as Annexure 4B' to this Report.
Employees Stock Option Plan
During the year 137031 options in 3 tranches were granted toeligible employees of the Company in terms of Employees Stock Option Plan (Dabur ESOP2000). During the year 2379340 options were exercised by the employees after vesting.Accordingly the Company has made the allotment of 1750000 equity shares on April 152016 601800 equity shares on May 27 2016 and 27540 equity shares on August 23 2016against the options exercised by the employees. Post the closure of financial year2016-17 the Nomination and Remuneration Committee of the Board of Directors of thecompany in its meeting held on April 21st 2017 has cancelled 2117161 stock optionsgranted to the employees of the company and its subsidiaries relevant to the Financialyear 2016-17. During the financial year 2016-17 there has been no change in the EmployeesStock Option Plan (Dabur ESOP 2000) of the Company. Further it is confirmed that the ESOPScheme 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 OptionPlan of the Company are available on the website of the Company at www.dabur.com andweblink 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 Meetingswere held. For details thereof kindly refer to the Section `Board of Directors- Number ofBoard Meetings' in the Corporate Governance Report.
Performance Evaluation of the Board its Committees and IndividualDirectors
Pursuant to applicable provisions of the Companies Act 2013 and theListing Regulations the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria forperformance evaluation of the entire Board of the Company its Committees and individualDirectors including Independent Directors. The framework is monitored reviewed andupdated by the Board in consultation with the Nomination and Remuneration Committeebased on need and new compliance requirements.
The annual performance evaluation of the Board its Committees and eachDirector has been carried out for the financial year 2016-17 in accordance with theframework. The details of evaluation process of the Board its Committees and individualDirectors including Independent Directors have been provided under the CorporateGovernance Report which forms part of this Report.
Directors' Responsibility Statement
Pursuant to the provisions under Section 134(5) of the Companies Act2013 with respect to Directors' Responsibility Statement the Directors confirm: a)That in the preparation of the annual accounts the applicable accounting standards havebeen followed and no material departures have been made from the same; b) That they hadselected such accounting policies and applied them consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof a3 airs of the Company at the end of the financial year and of the Profit and loss ofthe Company for that period; c) That they had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) That they had prepared the annual accounts ona going concern basis; e) That they had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and f ) That they had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
Statutory Auditors and their Report
Pursuant to the provisions of Section 139 of the Companies Act 2013the tenure of current auditors - M/s G. Basu & Co. Chartered Accountants shall cometo an end at the conclusion of forthcoming AGM. Accordingly M/s. Walker Chandiok & CoLLP Chartered Accountants (Firm Registration No. 001076N/ N500013) have been recommendedby the Audit Committee and by the Board to be appointed as Statutory Auditors of theCompany for a term of five consecutive years to hold off ce from the conclusion of theensuing 42nd Annual General Meeting until the conclusion of 47thAnnual General Meeting of the Company to be held in the calendar year 2022 subject toannual rati3 cation by members at every Annual General Meeting on such remuneration asmay be decided by the Audit Committee of the Board. They being eligible have consented andoff ered themselves for appointment as statutory auditors for conducting audit of accountsfor five consecutive financial years starting from 2017-18.
Pursuant to Section 139 and 141 of the Companies Act 2013 and relevantRules prescribed there under the Company has received certificate dated January 30 2017from the Auditors to the effect inter-alia that their appointment if made would bewithin the limits laid down by the Act shall be as per the term provided under the Actthat they are not disqualified for such appointment under the provisions of applicablelaws and also that the list of proceedings against them or any of their partners pendingwith respect to professional matter of conduct as disclosed in the cert3 cate is trueand correct.
The Auditors have also confirmed that they have subjected themselves tothe peer review process of Institute of Chartered Accountants of India (ICAI) and holds avalid certificate issued by the Peer Review Board of the ICAI.
Report of Statutory Auditors
The current Statutory Auditors- M/s G. Basu & Co. CharteredAccountants have submitted their Report on the Financial Statements of the Company forthe FY 2016-17 which forms part of the Annual Report 2016-17. Observations of Auditors inpara 10 of CARO report when read with corresponding reference in note no. 57 of financialstatements would be found self explanatory. There are no other observations (including anyqualification reservation adverse remark or disclaimer) of the Auditors in their AuditReports that may call for any explanation from the Directors.
The Auditors have also confirmed that they have subjected themselves tothe peer review process of Institute of Chartered Accountants of India (ICAI) and holds avalid 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 framedthereunder 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 toconduct cost audit of the accounts maintained by the Company in respect of the variousproducts prescribed under the applicable Cost Audit Rules. The remuneration of CostAuditors has been approved by the Board of Directors on the recommendation of AuditCommittee. The requisite resolution for rati3 cation of remuneration of Cost Auditors bymembers of the Company has been set out in the Notice of ensuing annual general meeting.The Cost Auditors have certi3 ed that their appointment is within the limits of Section141(3)(g) of the Companies Act 2013 and that they are not disqualified from appointmentwithin the meaning of the said Act.
The Cost Audit Report for the financial year 2015-16 issued by M/sRamanath Iyer & Company Cost Auditors in respect of the various products prescribedunder Cost Audit Rules was 3 led with the Ministry of Corporate A3 airs on 25thAugust 2016.
Secretarial Auditors and their Report
M/s Chandrasekaran Associates Company Secretaries were appointed asSecretarial Auditors of the Company for the financial year 2016-17 pursuant to Section 204of the Companies Act 2013. The Secretarial Audit Report submitted by them in theprescribed form MR- 3 is attached as `Annexure 5 Rs to this Report.
There are no qualifications or observations or adverse remarks ordisclaimer of the Secretarial Auditors in the Report issued by them for the financial year2016-17 which call for any explanation from the Board of Directors.
M/S Chandrasekaran Associates Company Secretaries have beenre-appointed to conduct the Secretarial Audit of the Company for the financial year2017-18. They have confirmed that they are eligible for the said appointment.
Details in respect of frauds reported by Auditors other than thosewhich are reportable to the Central Government
The Statutory Auditors Cost Auditors or Secretarial Auditors of theCompany have not reported any frauds to the Audit Committee or to the Board of Directorsunder 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 termInternal Financial Control (IFC) means the policies and procedures adopted by the companyfor ensuring the orderly and e3 cient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.
The Company has a well placed proper and adequate IFC system whichensures that all assets are safeguarded and protected and that the transactions areauthorised recorded and reported correctly. The Company's IFC system also comprisesdue compliances with Company`s policies and Standard Operating Procedures (SOP`s) andaudit and compliance by in-house Internal Audit Division supplemented by internal auditchecks from Price Waterhouse & Co. Bangalore LLP the Internal Auditors and varioustransaction auditors. The Internal Auditors independently evaluate the adequacy ofinternal 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 AuditDivision and Internal Auditors to the Audit Committee of the Board. During the year theInternal auditors were engaged for providing assistance in improvising IFC framework(including preparation of Risk & Control Matrices for various processes) anddeployment of Self Assessment Tool.
To further strengthen the internal control process the Company hasdeveloped a very comprehensive legal compliance system called `e-nforce` which drillsdown from the CEO to the executive level person who is responsible for compliance. Thisprocess is fully automated and generate alerts for proper and timely compliance.
Adequacy of Internal Financial Controls with reference to the financialstatements
The Companies Act 2013 re-emphasizes the need for an effectiveInternal Financial Control system in the Company which should be adequate and shalloperate effectively. Rule 8(5)(viii) of Companies (Accounts) Rules 2014 requires theinformation regarding adequacy of Internal Financial Controls with reference to thefinancial statements to be disclosed in the Board`s report. To ensure effective InternalFinancial Controls the Company has laid down the following measures:
All operations are executed through Standard Operating Procedures (SOPs) in allfunctional activities for which key manuals have been put in place. The manuals areupdated and validated periodically.
All legal and statutory compliances are ensured on a monthly basis for alllocations in India through a fully automated tool called "e-nforce". Non-compliance if any is seriously taken by the management and corrective actions are takenimmediately. Any regulatory amendment is updated periodically in the system.
Approval of all transactions is ensured through a pre- approved Delegation ofAuthority (DOA) Schedule which is in-built into the SAP system. DOA is reviewedperiodically by the management and compliance of DOA is regularly checked and monitored bythe auditors.
The Company follows a robust 2-tier internal audit process:
Tier-1: Management/ Strategic/ Proprietary audits are conducted on regular basisthroughout 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 managementcommittee and audit committee for review and necessary action.
The Company's Books of Accounts are maintained in SAP and transactions areexecuted through SAP (ERP) setups to ensure correctness/ effectiveness of alltransactions 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 theperformance 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 headsdiscuss their business issues and future plans in monthly review meetings. They reviewtheir achievements vs. budgets in quarterly review meetings. Specialized issues likeinvestments property FOREX are discussed in their respective internal committeemeetings.
Compliance of secretarial functions is ensured by way of secretarial audit.
Compliance relating to cost records of the company is ensured by way of costaudit.
The Internal auditors were engaged for providing assistance inimprovising IFC framework (including preparation of Risk & Control Matrices forvarious processes) and deployment of Self Assessment Tool. After close of the financialyear the internal auditors have issued their report apprising the company of certain gapsin design/ operating effectiveness of controls for which the management has agreed totake remedial action.
Development and implementation of Risk Management
Dabur has in place comprehensive risk assessment andminimization procedures which are reviewed by the Board periodically. The Risk ManagementCommittee of the Board is responsible for preparation of Risk Management Plan reviewingand monitoring the same on regular basis identifying and reviewing critical risks onregular basis updating the Risk Register on quarterly basis reporting of key changes incritical risks to the Board on an ongoing basis reporting of critical risks to AuditCommittee in detail on yearly basis and such other functions as may be prescribed by theBoard.
The Committee holds quarterly meetings to review the critical risksidentified. The risks faced by the Company their impact and their minimization proceduresare assessed categorically under the broad heads of High Medium and Low risks. Thenon-critical risks faced by the company and their mitigation are also reviewed by thecommittee on a quarterly basis. The Risk Register of the Company is also audited byinternal auditors of the Company. Further the risks control systems are instituted toensure that the risks in each business process are mitigated. The two joint Chief Riskofficers (CROs) are responsible for the overall risk governance in the Company and reportsdirectly 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 Planof the Company. During the year Price Waterhouse & Co. Bangalore LLP InternalAuditors have been engaged for preparing Risk & Control Matrices for variousprocesses as a part of Internal financial control framework.
In the opinion of the Board there has bee no identification of elementsof 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 subsidiarycompanies are as under: During the year the Company has set up a new manufacturing unit atTezpur Assam. Commercial production at the said unit had commenced on 16thMarch 2017. Further the Company has launched a range of aerated fruit beverage - `RealVOLO Rs for the domestic market.
Dabur Pars a step down wholly owned subsidiary was incorporated inIran during the FY 2016-17 for the business of cosmetic products in Iran. The Company hasstarted its operations and first sale was registered in February 2017.
Dabur South Africa (PTY) Limited a step down wholly owned subsidiarywas acquired during the FY 2016-17 for manufacturing and trading of cosmetic products inSouth Africa. During the year the Company has bought over certain assets of CTL group ofCompanies as a going concern.
Further updates regarding operational performance and projectsundertaken by the subsidiary companies can be referred in the report on highlights ofperformance of subsidiaries presented elsewhere in this Report.
During the year `Dabur Pars` incorporated in Iran by our existingwholly owned subsidiaries- Dabur International Limited and Dabur (UK) Limited have becomeour 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 Limitedand 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 downsubsidiary company w.e.f. 30.4.2016.
Pursuant to Section 129 (3) of the Companies Act 2013 and Ind - AS 110issued by the Institute of Chartered Accountants of India Consolidated FinancialStatements presented by the Company include the financial statements of its subsidiaries.
Further a separate statement containing the salient features of thefinancial statements of subsidiaries of the company in the prescribed form AOC-1 has beendisclosed in the Consolidated Financial Statements.
In terms of provisions of Section 136 of the Companies Act 2013separate audited accounts of the subsidiary companies shall be available on its website atwww.dabur.com. The Company will make available physical copies of these documents uponrequest by any shareholder of the Company/ subsidiary interested in obtaining the same.
These documents shall also be available for inspection at theregistered off ce of the Company during business hours up to the date of ensuing AGM.
Report on the highlights of performance of Subsidiaries Associates andJoint 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 theCompanies (Accounts) Rules 2014 the report on highlights of performance of subsidiariesassociates and joint venture companies and their contribution to the overall performanceof the Company is attached as `Annexure 6 Rs to this Report.
Information with respect to financial position of the above entitiescan be referred in form AOC-1 which has been disclosed in the Consolidated FinancialStatements.
Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
Pursuant to provisions of Section 134 of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 the details of Conservationof Energy Technology Absorption Foreign Exchange Earnings and Outgo are attached as`Annexure 7 Rs to this Report.
Environmental Health and Safety (EHS) Review
Details with respect to Environmental Health and Safety (EHS)review are attached as `Annexure 8 Rs to this Report.
Details of Policy developed and implemented on Corporate SocialResponsibilities (CSR) initiatives
The Company has in place a CSR Policy in line with Schedule VII of theCompanies Act 2013. As per the policy the CSR activities are focused not just around theplants and off ces of the Company but also in other geographies based on the needs of thecommunities. The four focus areas where special Community Development programmes are runare:
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 Rswhich is attached to this Report. Apart from this the Company also releases a detailedBusiness 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 StockExchange of India Limited (NSE) Bombay Stock Exchange Limited (BSE) and MetropolitanStock Exchange of India Limited (MSEI). The shares are actively traded on NSE and BSE andhave not been suspended from trading.
In the year under review following shares were allotted and admittedfor trading in NSE BSE and MSEI.
Equity shares allotted against the options exercised byemployees pursuant to Employees Stock Option Scheme of the Company are:
1750000 equity shares allotted on April 15 2016.
601800 equity shares allotted on May 27 2016.
27540 equity shares allotted on August 23 2016.
Extract of Annual Return
The extract of Annual Return as on March 31 2017 in the prescribedForm No. MGT-9 pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 is attached as `Annexure 10 Rs tothis Report.
Particulars of Loans Guarantees or Investments under Section 186 ofthe Companies Act 2013
Particulars of loans guarantees and investments under Section 186 ofthe Act as at the end of the Financial Year 2016-17 are provided in the standalonefinancial statements (refer Note No. 29).
Contracts or arrangements with related parties under Section 188(1) ofthe Companies Act 2013
With reference to Section 134(3)(h) of the Companies Act 2013 allcontracts and arrangements with related parties under Section 188(1) of the Act enteredby the Company during the financial year were in the ordinary course of business and onan arm's length basis.
During the year the Company had not entered into any contract orarrangement with related parties which could be considered material' (i.e.transactions exceeding ten percent of the annual consolidated turnover as per the lastaudited financial statements entered into individually or taken together with previoustransactions during the financial year) according to the policy of the Company onmateriality of Related Party Transactions. Accordingly there are no transactions that arerequired to be reported in form AOC-2.
However you may refer to Related Party transactions in Note No.49 ofthe Standalone Financial Statements.
Disclosure on Audit Committee
The Audit Committee as on March 31 2017 comprises of the followingIndependent Directors: Mr P.N Vijay (Chairman) Mr. R.C. Bhargava Dr S. Narayan Dr AjayDua 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 Reportwhich forms part of this Report.
All recommendations of Audit Committee were accepted by the Board ofDirectors.
Disclosure on Public Deposits
During the year under review the Company has neither accepted norrenewed any deposits in terms of Chapter V of the Companies Act 2013 and Rules framedthereunder.
Disclosure on Vigil Mechanism
The Company has established a vigil mechanism through which Directorsemployees and business associates may report unethical behavior malpractices wrongfulconduct fraud violation of Company's code of conduct without fear of reprisal. TheCompany has set up a Direct Touch initiative under which all Directors employeesbusiness associates have direct access to the Chairman of the Audit committee and also toa three-member direct touch team established for this purpose. The direct touch teamcomprises one senior woman member so that women employees of the Company feel free andsecure while lodging their complaints under the policy. Further information on the subjectcan be referred to in Section `Disclosures Rs - Whistle-Blower Policy / Vigil Mechanism ofthe Corporate Governance Report.
You may refer to note no. 57 of the standalone financial statementsregarding compliant received under Whistle Blower Mechanism of the Company.
Dividend Distribution Policy
To bring transparency in the matter of declaration of dividend andprotect the interests of investors Dabur had in place a Dividend Policy since long.However after incorporation of Regulation 43A of the Listing Regulations the existingPolicy was revised during the year in line with the Listing Regulations and the CompaniesAct 2013 which is attached as `Annexure 11 Rs to this Report. The Policy has also beendisplayed 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 discriminationbetween individuals at any point on the basis of race colour gender religion politicalopinion national extraction social origin sexual orientation or age.
At Dabur every individual is expected to treat his/her colleagues withrespect and dignity. This is enshrined in values and in the Code of Ethics & Conductof Dabur. The Direct Touch (Whistle-Blower & Protection Policy) Policy provides aplatform to all employees for reporting unethical business practices at workplace withoutthe fear of reprisal and help in eliminating any kind of misconduct in the system. ThePolicy 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 TheSexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013. All employees (permanent contractual temporary and trainees) are covered underthis policy.
An Internal Complaints Committee (ICC) is in place to redresscomplaints received regarding sexual harassment.
The following is a summary of sexual harassment complaints received anddisposed 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 orTribunals impacting the going concerns status and company`s operations in future
The Company has not received any Significant or material orders passedby any Regulatory Authority Court or Tribunal which shall impact the going concern statusand Company`s operations in future.
Material changes and commitments affecting the financial position ofthe Company
There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate and the date of this report.
The Company maintained healthy cordial and harmonious industrialrelations at all levels. The enthusiasm and unstinting efforts of employees have enabledthe Company to remain at the leadership position in the industry. It has taken varioussteps to improve productivity across organization.
Your Directors place on record their gratitude to the CentralGovernment State Governments and Company's Bankers for the assistance co-operationand encouragement they extended to the Company. Your Directors also wish to place onrecord their sincere thanks and appreciation for the continuing support and unstintingefforts of investors vendors dealers business associates and employees in ensuring anexcellent 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 |