Your Directors have pleasure in presenting the 45th AnnualReport on the business and operations of the Company together with the audited accountsfor the financial year ended March 31 2020.
Financial performance of the Company is summarised in the table below:
(Rs in crores)
|Particulars || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from Operations including other Income ||9008.88 ||8829.22 ||6586.70 ||6547.93 |
|Less Expenses: || || || || |
|Cost of goods sold ||4360.24 ||4309.03 ||3244.70 ||3257.51 |
|Employee benefits expenses ||947.74 ||937.91 ||578.26 ||572.33 |
|Finance cost ||49.54 ||59.58 ||19.27 ||29.80 |
|Depreciation and Amortization expenses ||220.45 ||176.90 ||129.93 ||108.83 |
|Other Expenses ||1603.26 ||1546.55 ||1106.07 ||1076.11 |
|total Expenses ||7181.23 ||7029.97 ||5078.23 ||5044.58 |
|Profit before share of profit from joint venture and exceptional items ||1827.65 ||1799.25 ||NA ||NA |
|Share of profit of Joint Venture ||(0.01) ||0.96 ||NA ||NA |
|Profit before exceptional items and tax ||1827.64 ||1800.21 ||1508.47 ||1503.35 |
|Exceptional items ||100.00 ||75.34 ||100 ||0 |
|Profit before tax ||1727.64 ||1724.87 ||1408.47 ||1503.35 |
|Tax expense ||279.72 ||278.62 ||238.12 ||239.06 |
|Net Profit for the year ||1447.92 ||1446.25 ||1170.35 ||1264.29 |
|Net profit attributable to - || || || || |
|Owners of the Holding Company ||1444.96 ||1442.33 ||NA ||NA |
|Non-Controlling interest ||2.96 ||3.92 ||NA ||NA |
TRANSFER TO RESERVES
There is no amount proposed to be transferred to reserves.
The Company has paid an interim dividend of Rs 1.40 per share of Rs1/-each fully paid up (being 140%) on November 25 2019. We are pleased to recommend adividend of Rs 1.60 per share of Rs 1/- each fully paid up (being 160%) for the financialyear 2019-20. The dividend recommended if approved by the members will be paid tomembers within the period stipulated by the Companies Act 2013 (hereinafter referred toas 'Act'). The aggregate dividend for the year will amount to Rs 3.00 per share of Rs 1/-each fully paid up (being 300%) as against Rs 2.75 per share of Rs 1/- each fully paid up(being 275%) declared last year. The dividend payout ratio for the current year inclusiveof corporate tax on dividend distribution is at 49.64%. The dividend recommended is inaccordance with the Company's Dividend Distribution Policy.
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. ThePolicy was revised in Financial year 2016-17 in accordance with Regulation 43A of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as 'Listing Regulations') and the Act and has been displayed on the Company's websiteat www.dabur.com . The Policy is attached as 'Annexure1' to this report.
Unpaid/ unclaimed Dividend
Pursuant to the provisions of Section 124 (5) of the Act Finaldividend for the financial year 2011-12 amounting to Rs 4299831/- and interim dividendfor the financial year 2012-13 amounting to Rs 3578935/- which remained unpaid/unclaimed for a period of 7 years from the date it was lying in the unpaid dividendaccount has been transferred by the Company to the Investors Education and ProtectionFund (IEPF) of the Central Government. The due dates for transfer of unpaid dividend toIEPF for subsequent years is given in the Corporate Governance Report. The list of unpaiddividend declared up to the financial year 2018-19 [updated up to the date of 44th Annualgeneral meeting (AGM) held on 30.08.2019] and for interim dividend declared during thefinancial year 2019-20 is available on Company's website www.dabur.com .Shareholders are requested to check the said lists and if any dividend due to them remainsunpaid in the said lists can approach the Company for release of their unpaid dividend.
In accordance with the Ministry of Corporate Affairs ("MCA")circular dated May 5 2020 read with circulars dated April 8 2020 and April 13 2020 theAnnual Report 2019-20 containing complete Balance Sheet Statement of Profit & Lossother
statements and notes thereto including consolidated financialstatements prepared as per the requirements of Schedule III to the Act Directors' Report(including Integrated Reporting and Management Discussion & Analysis and CorporateGovernance Report) is being sent via email to all shareholders who have provided theiremail address(es).
The Annual Report 2019-20 is also available at the Company's website at www.dabur.com .
Consolidated Financial Statements
In compliance with the applicable provisions of Act including theAccounting Standard Ind AS 110 on Consolidated Financial Statements this Annual Reportalso includes Consolidated Financial Statements for the financial year 2019-20.Consolidated Turnover was Rs 9008.88 crores as against Rs 8829.22 crores in the previousyear. Net Profit after Tax for the year stood at Rs 1444.96 crores as against Rs 1442.33crores 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.
Good governance practices forms part of business strategy at Dabur. TheCompany is committed to focus on long term value creation and protecting stakeholdersinterests by applying proper care skill and diligence to business decisions. Apart fromadhering to the requirements set by Government regulations the Company has alsoimplemented several best governance practices. Recently the Company has also formulated aPolicy on Group Governance to monitor governance of its unlisted subsidiaries across theglobe.
The report on Corporate Governance as stipulated under the ListingRegulations forms part of the Annual Report. A certificate from Auditors of the Companyregarding compliance of the conditions of Corporate Governance as stipulated underSchedule V of the Listing Regulations is attached as 'Annexure 2' and forms part of thisreport.
business responsibility report
At Dabur fulfilment of environmental social and governanceresponsibility is an integral part of the way the Company conducts its business.
Business Responsibility Report as stipulated under Regulation 34 of theListing Regulations is available on the website of the Company www.dabur.com at weblink 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 CompanySecretary at the Registered Office of the Company.
During the year the Company has sustained its long term bank facilitycredit rating of AAA (stable) which has been reaffirmed by CRISIL. The highest creditrating of AAA awarded by CRISIL reflects the highest degree of safety regarding timelyservicing of financial obligations. Further CRISIL has reaffirmed 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 reaffirmed. The rating of A1+ for Commercial Paper has also been reaffirmed byCRISIL. This highest rating of A1 + indicates a very strong degree of safety with regardto timely payment of interest & principal. Such instruments carry lowest credit risk.
Further ICRA has reaffirmed 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 long term 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 offer themselves for re-appointment atevery AGM. Consequently Mr. Amit Burman (DIN: 00042050) and Mr. Saket Burman (DIN:05208674) directors will retire by rotation at the ensuing AGM and being eligibleoffers themselves for re-appointment in accordance with provisions of the Act. The Boardof Directors on the recommendation of the Nomination and Remuneration Committee("NRC") has recommended their re-appointment.
Dr. Anand Chand Burman stepped down from the office of Chairman andDirector of the Company post Board meeting held on 19th July 2019. The Board places onrecord its deep appreciation for the guidance support and leadership provided by Dr.Anand Burman during his tenure as Chairman and also the amazing growth recorded by theCompany in India and International arena. Upon request of the Board Dr. Anand Burman wasappointed as Honorary advisor to the Board and shall be permanent invitee for all futureBoard meetings.
Mr. Sunil Duggal resigned from executive position w.e.f. 16th May2019 and resigned from the office of director post Board Meeting held on 19th July 2019.The Board places on record its high degree of appreciation for the valuable and excellentcontribution made by him during his tenure in the Company.
Chairman & vice Chairman
Consequent upon stepping down of Dr. Anand Chand Burman Mr. AmitBurman (DIN: 00042050) Vice Chairman was appointed as Chairman and Mr. Mohit Burman (DIN:00021963) was appointed as Vice Chairman of the Company for a period of 5 (five) years.Both are from Non Executive Promoter Director category.
As per Section 149 of the Act the Board of Directors has onrecommendation of NRC re-appointed Mr. P N Vijay (DIN: 00049992) Mr. R C Bhargava (DIN:00007620) Dr. S. Narayan (DIN: 00094081) Dr. Ajay Dua (DIN: 02318948) and Mr. SanjayKumar Bhattacharyya (DIN: 01924770) as Non-Executive Independent Directors of the Companyw.e.f. 22nd July 2019 and Mrs. Falguni Sanjay Nayar (DIN: 00003633) as Non-ExecutiveIndependent Director of the Company w.e.f. 28th July 2019 for a second term of 5 (five)consecutive years. All re-appointments were approved by shareholders in the AGM held on30th August 2019. Mr. Ajit Mohan Sharan (DIN: 02458844) who was appointed asNon-Executive Independent Director w.e.f. 31st January 2019 for a first term of 5 (five)consecutive years was also approved by shareholders in the AGM held on 30th August 2019.
Pursuant to Section 149 152 and other applicable provisions of theAct Companies (Appointment and Qualification of Directors) Rules 2014 and ListingRegulations the Board of Directors upon recommendation of NRC in their meeting held on19th July 2019 had appointed Mr. Aditya Burman (DIN:00042277) as an Additional Directorin the category of Non-Executive Promoter Director which was approved by the shareholdersin AGM held on 30th August 2019.
Further pursuant to Section 196 197 198 and 203 read with Schedule Vof the Act and rules made there under and Listing Regulations Mr. Mohit Malhotra (DIN:08346826) who was appointed as Whole Time Director w.e.f. 31st January 2019 designatedas Chief Executive Officer (CEO) was approved by Shareholders of the Company in the AGMheld on 30th August 2019. Approval of Central Government has also been received for hisappointment as such.
A brief resume of the Directors being re-appointed by way of retirementby rotation the nature of expertise in specific functional areas names of companies inwhich they hold directorships committee memberships/ chairmanships their shareholding inthe Company etc. have been furnished in the explanatory statement to the notice of theensuing AGM. The NRC and the Board of Directors of the Company recommend theirre-appointment at the ensuing AGM.
The Company has received necessary declaration from all the IndependentDirectors under Section 149(7) of the Act confirming that they meet the criteria ofindependence as laid down in Section 149(6) of the Act and Regulation 16(1) (b) of theListing Regulations. The Company has also received from them declaration of compliance ofRule 6 (1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules2014 regarding online registration with the Indian Institute of Corporate Affairs'at Manesar for inclusion/ renewal of name in the data bank of Independent Directors. Withregard to integrity expertise and experience (including the proficiency) of theIndependent Directors appointed/re-appointed during the Financial year 201920 the Boardof Directors have taken on record the declarations and confirmations submitted by theindependent directors and is of the opinion that all the Independent Directors are personsof integrity and possesses relevant expertise and experience and their continuedassociation as Directors will be of immense benefit and in the best interest of theCompany. With regard to proficiency of the Independent Directors ascertained from
the online proficiency self-assessment test conducted by the instituteas notified under Sub-Section (1) of Section 150 of the Act the Board of Directors havetaken on record the declarations submitted by Independent Directors that they are exemptfrom appearing in the test or that they will comply with the applicable law before theprescribed timeline.
None of the Directors of the Company are related inter-se in terms ofSection 2(77) of the Act including Rules there under.
Key Managerial Personnel
The Key Managerial Personnel (KMP) in the Company as per Section 2(51)and 203 of the Act are as follows:
Mr. P D Narang Whole Time Director
Mr. Mohit Malhotra Whole Time Director & Chief Executive officerMr. Lalit Malik Chief Financial Officer
Mr. Ashok Kumar Jain Executive Vice President (Finance) and CompanySecretary
Policy on Directors' appointment and Policy on remuneration
Pursuant to Section 134(3)(e) and Section 178(3) of the Act the policyon appointment of Board Members including criteria for determining qualificationspositive attributes independence of a director and the policy on remuneration ofdirectors KMP and other employees is attached as 'Annexure 3 & 4' respectively tothis report. The same are also available on the website of the Company at www.dabur.com at weblink https://www.dabur.com/img/upload- files/111972-appointment-and-remuneration-policy.pdf
Particulars of remuneration of Directors/ KMP/ Employees
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached as Annexure 5A' tothis report. Further in terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of employeesdrawing remuneration in excess of the limits set out in the said rules is attached asAnnexure 5B' to this report.
Employees Stock Option Plan
During the year 537533 options in 4 tranches were granted to eligibleemployees of the Company in terms of Employees Stock Option Plan (Dabur ESOP 2000).
During the financial year 2019-20 there has been no change in theEmployees Stock Option Plan (Dabur ESOP 2000) of the Company. Further it is confirmedthat the ESOP Scheme of the Company is in compliance with SEBI (Share Based EmployeeBenefits) 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 and weblink for the same is http://www.dabur.com/in/en-us/ investor/investor-information/esops
Performance Evaluation of the Board its Committees and IndividualDirectors
Pursuant to applicable provisions of the Act and the ListingRegulations the Board in consultation with its NRC has formulated a frameworkcontaining inter-alia the criteria for performance evaluation of the entire Board of theCompany its Committees and individual directors including Independent Directors. Theframework is monitored reviewed and updated by the Board in consultation with theNomination and Remuneration Committee based 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 201920 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 Act withrespect to Directors' Responsibility Statement the Directors confirm:
a) That in the preparation of the annual accounts the applicableaccounting standards have been followed and no material departures have been made from thesame;
b) That they had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
c) That they had taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraudand 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 followedby the company and that such internal financial controls are adequate and were operatingeffectively; and
f) That they had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
statutory auditors and their report
Pursuant to the provisions of Section 139 of the Act and rules madethereunder M/s. Walker Chandiok & Co LLP Chartered
Accountants (Firm Registration No. 001076N/ N500013) were appointed asStatutory Auditors of the Company for a term of five consecutive years to hold officefrom the conclusion of the 42nd AGM held on 26th July 2017 until the conclusion of 47thAGM of the Company to be held in the calendar year 2022.
Pursuant to Section 139 and 141 of the Act and relevant Rulesprescribed there under the Statutory Auditors have confirmed they are not disqualifiedfrom continuing as Auditors of the Company.
The Auditors have also confirmed that they have subjected themselves tothe peer review process of Institute of Chartered Accountants of India (ICAI) and hold avalid certificate issued by the Peer Review Board of the ICAI.
Report of Statutory Auditors
M/s. Walker Chandiok & Co LLP Chartered Accountants havesubmitted their Report on the Financial Statements of the Company for the FY 2019-20which forms part of the Annual Report 2019-20. There are no observations (including anyqualification reservation adverse remark or disclaimer) of the Auditors in the AuditReports issued by them which call for any explanation from the Board of Directors.
cost auditors and their report
As per Section 148 of the Act read with Companies (Cost Records andAudit) Rules 2014 M/s Ramanath Iyer & Company Cost Accountants (Firm's MembershipNo. 000019) have been re-appointed as Cost Auditors for the financial year 2020-21 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 ratification of remuneration of Cost Auditors bymembers of the Company has been set out in the Notice of ensuing AGM. The Cost Auditorshave certified that their appointment is within the limits of Section 141(3)(g) of the Actand that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the financial year 2018-19 issued by M/sRamanath Iyer & Company Cost Auditors in respect of the various products prescribedunder Cost Audit Rules was filed with the Ministry of Corporate Affairs on 14.08.2019.
There were no observations (including any qualification reservationadverse remark or disclaimer) of the Cost Auditors in the Report issued by them for thefinancial year 2018-19 which call for any explanation from the Board of Directors.
SECRETARIAL AUDITORS AND THEIR REPORT
M/s Chandrasekaran Associates Company Secretaries were appointed asSecretarial Auditors of the Company for the financial year 2019-20 pursuant to Section 204of the Act. The
Secretarial Audit Report submitted by them in the prescribed form MR- 3is attached as 'Annexure 6' 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 year2019-20 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 year2020-21. They have confirmed that they are eligible for the said appointment.
INTERNAL FINANCIAL CONTROL SYSTEM
According to Section 134(5)(e) of the Act the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable 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 comprises duecompliances with Company's policies and Standard Operating Procedures (SOP's) and auditand compliance by in-house Internal Audit Division supplemented by internal audit checksfrom Pricewaterhouse Coopers Pvt. Ltd. the Internal Auditors. The Internal Auditorsindependently evaluate the adequacy of internal controls and concurrently audit themajority of the transactions in value terms. Independence of the audit and compliance isensured by direct reporting of Internal Auditors to the Audit Committee of the Board.
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 Act re-emphasizes the need for an effective Internal FinancialControl system in the Company which should be adequate and shall operate effectively. Rule8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regarding adequacyof Internal Financial Controls with reference to the financial statements to be disclosedin the Board's Report.
To ensure effective Internal Financial Controls the Company has laiddown the following measures:
All operations are executed through Standard OperatingProcedures (SOPs) in all functional activities for which key manuals have been put inplace. The manuals are updated and validated periodically.
All legal and statutory compliances are ensured on a monthlybasis for all locations in India through a fully automated tool called"e-nforce". Non- compliance if any is seriously taken by the management andcorrective actions are taken immediately. Any regulatory amendment is updated periodicallyin the system.
Approval of all transactions is ensured through a preapprovedDelegation of Authority (DOA) Schedule which is in-built into the SAP system. DOA isreviewed periodically by the management and compliance of DOA is regularly checked andmonitored by the auditors.
The Company follows a robust 2-tier internal audit process:
Tier-1: Management/ Strategic/ Proprietary audits are conductedon regular basis throughout the year as per agreed audit plan.
Tier-2: Transaction audits are conducted regularly to ensureaccuracy of financial reporting safeguard and protection of all the assets. Stock auditis conducted on quarterly basis at all locations in India. Fixed Asset Verification isdone on an annual basis including Ind AS-36 testing at all locations.
The audit reports for the above audits are compiled andsubmitted to management committee and audit committee for review and necessary action.
The Company's Books of Accounts are maintained in SAP andtransactions are executed through SAP (ERP) setups to ensure correctness/ effectiveness ofall transactions integrity and reliability of reporting.
The Company has a comprehensive risk management framework.
The Company has a robust mechanism of building budgets at anintegrated cross- functional level. The budgets are reviewed on a monthly basis so as toanalyze 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. Alldepartmental heads discuss their business issues and future plans in monthly reviewmeetings. They review their achievements vs. budgets in quarterly review meetings.Specialized issues like investments property FOREX are discussed in their respectiveinternal committee meetings.
Compliance of secretarial functions is ensured by way ofsecretarial audit.
Compliance relating to cost records of the company is ensured byway of cost audit.
DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
Dabur has in place comprehensive risk assessment and minimization
procedures which are reviewed by the Board periodically. The Risk
Management Committee of the Board is responsible for preparation ofRisk Management Plan reviewing and monitoring the same on regular basis identifying andreviewing critical risks on regular basis updating the Risk Register on quarterly basisreporting of key changes in critical risks to the Board on an ongoing basis and a detailedreport on yearly basis evaluation of risk management systems by the Audit Committee onyearly basis and such other functions as may be prescribed by the Board.
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.
Further the risks control systems are instituted to ensure that therisks in each business process are mitigated. The two joint Chief Risk Officers (CROs) areresponsible for the overall risk governance in the Company and reports directly to theManagement Committee (MANCOM) which consists of various functional heads. The Boardprovides oversight and reviews the Risk Management Policy on a quarterly basis. The Boardis responsible for framing implementing and monitoring the risk management plan of theCompany. During the year Pricewaterhouse Coopers Pvt. Ltd. Internal auditors had testedthe Risk & Control Matrices for various processes as a part of Internal financialcontrol framework. These Risk & Control Matrices were prepared by them during the lastfinancial year.
In line with the Listing Regulations during the year cyber securityrisk has been included in the risk management plan and a Risk Management Policy withrespect to Commodities including through hedging has also been framed by the Company.
Covid -19 is an unprecedented risk and it has severely affected all thekey dimensions of business operations both at national level and international level sinceMarch 2020. Nation wide lockdowns were announced across the world to minimize its impact.Currently restrictions are being relaxed in a phased manner. Huge financial stimuluspackage has been announced by Indian government to support the economy. However situationis still far from normal and uncertainty prevails over future.
This has resulted in impact of INR 360 crore on top line and INR 115crore on bottom line during Q4 FY 2019-20. Covid-19 has impacted various key functionsviz. Marketing Human Resource Finance function Procurement function Sales andMarketing Function Manufacturing and plant operations supply chain and logisticsInformation Technology etc. But with effective mitigation strategy put in place quicklyDabur has been able to minimize this impact to a great extent. Dabur's COVID ManagementStrategy has covered - Employee well being Brand Building Driving Sales GrowthStreamlining supply chain and Community Welfare. Many new products across Healthcare Homeand Personal care and Foods categories have been launched targeting the growing consumerneed for Immunity-boosters and Hygiene products. Dabur will continue taking steps tomitigate the impact of Covid-19.
In the opinion of the Board there has been no identification ofelements 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.
Dabur has a diverse portfolio consisting of a number of brands andsub-brands across the three verticals of Home and Personal care Healthcare and Foods. Inaddition the Company has presence across various channels such as general grocerieschemists organized retail and ecommerce. During the year the company followed a channelfocus strategy whereby each channel was leveraged through specific strategies and teams.This led to high growth in channels such as organized retail and ecommerce.
Post the Covid pandemic the Company launched a number of new productsfor immunity and in personal and home hygiene space.
During fiscal 2019-20 the following new products were launched:
Ethnic Masala Range of Juices in 2 additional variants - MasalaMixed Fruit and Masala Aam Panna
Real Mixed Berries Juice
Real Aloe Vera Kiwi Juice
Real Fruit ORS
Real Koolerz - INR 10 SKU of mango drink
Babool Ayurvedic Toothpaste
Dabur Glucoplus C - Mango Flavour
Amla Kids Hair Oil and Shampoo
Range of 7 Ayurvedic Single Herb Churnaswhich includes threeImmunity-boosters like GiloyChurna AmlaChurna and Ashwagandha Churna. The other productsin this range are Hareetaki (Harad) Churna Neem Churna Arjun ChhalChurna and BrahmiChurna
Fem Fruit Creme Bleach
Nature Care Kabz Over for treatment of constipation
A new variant of Hajmola called the HajmolaChatpati Hing
Two new fragrances in Odonil Aerosol - Floral Bliss and OceanBreeze
Dabur ArshoghaniVati an Ayurvedic medicine beneficial fortreatment of piles
Dabur Tulsi drops
Dabur Immunity Kit
Dabur Amla Juice
Dabur Giloy-Neem-Tulsi Juice
Dabur Hand Sanitize
Dabur &Dazzl Surface Sanitizers
Odonil Air Sanitizer
During the year the Company focused on its power brands - DaburChyawanprash Dabur Honey Dabur Lal Tail Dabur
Honitus Pudin Hara Dabur Red Paste Dabur Amla Hair Oil Real andVatika. This led to strong growth in these brands in the first 11 months of the fiscal.The last month of the fiscal was impacted on account of the corona virus pandemic andassociated lockdowns in India which impacted the sales significantly.
In terms of distribution the Company increased its direct reach from1.1 million to 1.2 million taking the total reach to 6.7 million outlets. Through itsinitiatives it also saw strong growth in both Modern Trade and E-commerce channels. Itexpanded the village coverage to 55000 villages from 44000 villages at the start of theyear. This expansion in reach along with relevant portfolio has helped to increasepenetration and post strong growth in rural areas.
In continuation of the region-focused and analytics-based initiativeRISE the Company captured the insights and ideas from the 12 clusters of India and basedon these insights launched the following products:
Real Fruit ORS was initially launched in North East and afterwitnessing strong demand for this product it was expanded to pan-India
Anmol Green in Tamil Nadu to adhere to the region specificcolour coding for hair oils
In addition to the product launches it also stepped up on regionalcommunication by partnering for events in particular geographies communicating in regionspecific languages and partnering with regional celebrities for its products.
As the Company move along the course of RISE it will continue tolaunch products and initiatives with different propositions and characteristics which arecloser to the consumer's pulse in the respective markets.
During the year the company witnessed considerable improvements in itssupply chain through project Lakshya' which entailed improving range availability atC&FA and distributors improving lead time adherence improving the OTIF (On-Time andIn-Full) metric for modern retail reducing logistics cost and finished good inventory. Italso reduced the number of C&FAs from 32 to 26 as part of this initiative.
New product launches under International Business:
In Overseas markets
VatikaMenz Hair Tonic
Dabur Amla Keratin Serum
Dabur Herbolene Natural Jelly
Real Juices in UAE Japan and Bahrain
Vatika Hair Wax
ORS Olive Oil Fix-It Range
Vatika Hair Food
Dabur Honitus Herbal Lozenges in UAE
Sea Salt Spray under the Hobby brand in Turkey
Kids Hair Gel under the Hobby brand in Turkey
BB Weightless Hair Mousse under the Hobby brand in Turkey
Dabur Organic Virgin Coconut Oil in GCC
Further updates regarding operational performance and projectsundertaken by the subsidiary companies can be referred in the report on performance ofsubsidiaries presented elsewhere in this report.
Dabur Tunisie a step down wholly owned subsidiary company which wasdecided to be dissolved during the financial year 17-18 is under process of liquidationand is expected to be completed by December 2020.
Excel Investments (FZC) (previously FZE) in Sharjah UAE had become astep down subsidiary company of Dabur India Limited w.e.f. 20th August 2019 uponacquisition of management control of this new subsidiary by Dabur International Limited (awholly owned subsidiary of Dabur India Limited).
Pursuant to Section 129 (3) of the Act and Ind - AS 110 issued by theInstitute of Chartered Accountants of India Consolidated Financial Statements presentedby 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 Act separate auditedaccounts of the subsidiary companies shall be available on website of the Company at www.dabur.com .
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 Act and Rule 8(1) of the Companies(Accounts) Rules 2014 the report on highlights of performance of subsidiaries associatesand joint venture companies and their contribution to the overall performance of theCompany is attached as 'Annexure 7' 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.
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 theAct. As per the policy the CSR activities are focused not just around the plants andoffices of the Company but also in other geographies based on the needs of thecommunities. 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 8' whichis attached to this report..
Change in Capital Structure and Listing of Shares
The paid up share capital of the Company as on 31st March 2020 is Rs1767063892/- divided into 1767063892 equity shares of Rs 1/- each. The Company'sequity shares are listed on the National Stock Exchange of India Limited (NSE) and BSELimited (BSE). During the year 772751 equity shares of Rs 1/- each were allotted underESOP scheme of the Company and admitted for trading on NSE and BSE.
The shares are actively traded on NSE and BSE and have not beensuspended from trading.
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.
Number of Meetings of the Board
During the Financial Year 2019-20 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.
Disclosure on Audit committee
The Audit Committee as on March 31 2020 comprises of the followingindependent directors:
Mr. P.N Vijay (Chairman) Mr. R.C. Bhargava Dr. S. Narayan Dr. AjayDua Mr. S.K. Bhattacharyya and Mr. Ajit Mohan Sharan as members. For more details kindlyrefer to the section 'Committees of the Board - Audit Committee' in the CorporateGovernance Report which forms part of this Report.
All recommendations of Audit Committee were accepted by the Board ofDirectors.
Conservation of Energy Technology Absorption Foreign exchangeearnings and Outgo
Pursuant to provisions of Section 134 of the Act read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 the details of
Conservation of Energy Technology Absorption Foreign Exchange
Earnings and Outgo are attached as 'Annexure 9' to this report.
Environmental Health and Safety (EHS) Review
Details with respect to Environmental Health and Safety (EHS) revieware attached as 'Annexure 10' to this report.
The extract of Annual Return as on March 31 2020 in the prescribedForm No. MGT-9 pursuant to Section 92 of the Act is available on the website of theCompany at www.dabur.com at the link https://www.dabur.com/in/en-us/investor/investor-information/annual-return .
Particulars of Loans Guarantees or Investments under Section 186 ofthe act
Particulars of loans guarantees and investments under Section 186 ofthe Act as at the end of the Financial Year 2019-20 are provided in the standalonefinancial statements (refer Note No. 47).
Contracts or arrangements with related parties under section 188(1) ofthe act
With reference to Section 134(3)(h) of the Act all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year were in the ordinary course of business and on an arm's lengthbasis.
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.54 ofthe Standalone Financial Statements.
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 Act including rules made there under.
Disclosure on Public Deposits
During the year under review the Company has neither accepted norrenewed any deposits in terms of Chapter V of the Act and Rules framed thereunder.
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 leak or suspected leak ofunpublished price sensitive information without fear of reprisal. The Company has set up aDirect Touch initiative under which all directors employees business associates havedirect access to the Chairman of the Audit committee and also to a three-member directtouch team established for this purpose. The direct touch team comprises one senior womanmember so that women employees of the Company feel free and secure while lodging theircomplaints under the policy. Further information on the subject can be referred to insection 'Policies Affirmations and Disclosures' - Whistle-Blower Policy / Vigil Mechanismof the Corporate Governance Report.
Disclosure on Cost Records
Pursuant to provisions of Section 134 of the Act read with Rule 8(5) ofthe Companies (Accounts) Rules 2014 it is confirmed that maintenance of cost records asspecified by the Central Government under Sub-Section (1) of section 148 of the Act isrequired by the Company and accordingly such accounts and records are made and maintained.
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 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.
The Company has complied with provisions relating to the constitutionof Internal Complaints Committee (ICC) under The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 to redress complaints received regardingsexual harassment.
The Direct Touch (Whistle-Blower & Protection Policy) policy alsoprovides a platform to all employees for reporting unethical
business practices at workplace without the fear of reprisal and helpin eliminating any kind of misconduct in the system. The policy also includes misconductwith respect to discrimination or sexual harassment.
The following is a summary of sexual harassment complaints received anddisposed of during the year:
No. of complaints received: 0
No. of complaints disposed of: NA
No. of complaints pending: 0
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.
The applicable Secretarial Standards i.e. SS-1 and SS-2 relating toMeetings of the Board of Directors' and General Meetings' respectively havebeen duly followed by the Company.
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-operation andencouragement they extended to the Company. Your Directors also wish to place on recordtheir sincere thanks and appreciation for the continuing support and unstinting efforts ofinvestors vendors dealers business associates and employees in ensuring an excellentall around operational performance.
For and on behalf of the Board
| ||amit burman |
|Place: New Delhi ||Chairman |
|Date : 30 July 2020 ||DIN:00042050 |