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Updated:23 Oct, 2014, 19:47 PM IST

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Updated:23 Oct, 2014, 19:31 PM IST

DIREC TORS' REPORT

To,

The Members,

Your Directors have pleasure in presenting the 39th Annual Report on the business and operations of the Company, together with the audited accounts for the financial year ended March 31, 2014.

DIVIDEND

The Company has paid an interim dividend of 75% (Rs.0.75 per share of Rs.1/–each) on November 8, 2013. We are pleased to recommend a final dividend of 100% (Rs.1.00 per share of each) for the financial year 2013–14. The final dividend, if approved by the members, will be paid to members within the period stipulated by the applicable Companies Act. The aggregate dividend for the year will amount to 175% (Rs.1.75 per share of Rs.1/– each) as against 150% (Rs.1.50 per share of each) declared last year. The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution, is at 53.12%.

Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, final dividend for the year 2005–06 amounting to Rs.1684989/– and interim dividend (I) for the financial year 2006–07 amounting to Rs.1804848/–, which remained unpaid or unclaimed for a period of 7 years, has been transferred (interim dividend (II) for the financial year 2006–07 amounting to Rs.2341419/– is under process of being transferred) by the Company to the Investors' Education and Protection Fund (IEPF). Further final dividend for the year 2005–06 pertaining to erstwhile Femcare Pharma Limited (FEM), now merged with the Company, which remained unpaid or unclaimed for a period of 7 years, amounting to Rs.238362/– has also been transferred by the Company to IEPF. The due dates for transfer of unpaid dividend to IEPF for subsequent years is given in the Corporate Governance Report. The list of unpaid dividend upto the financial year 2012–13 is available on Company's website www. dabur.com. Shareholders are requested to check the said list and if any dividend due to them remains unpaid in the unpaid list (apart from the above mentioned unpaid dividend already transferred to IEPF), can approach the Company for release of the unpaid dividend.

ABRIDGED FINANCIAL STATEMENTS

In accordance with the SEBI circular no. CIR/CFD/DIL/7/2011 dated 5th October 2011, the abridged Annual Report containing salient features of the Balance Sheet and Profit & Loss Account for the financial year 2013–14, as prescribed in section 219(1)(b)(iv) of the Companies Act, 1956 along with statement containing salient features of the Directors' Report (including Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the company in electronic mode.

Full version of the Annual Report 2013–14 containing complete Balance Sheet, Statement of Profit & Loss Account, other statements and notes thereto prepared as per the requirements of Schedule VI to the Companies Act, 1956, Directors Report (including Management Discussion and Analysis, Corporate Governance Report, Business Responsibility Report) are being sent via email to all shareholders who have provided their email address(es). Full version of Annual Report 2013–14 is also available at the Company's website at www.dabur.com Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2013–14, upon receipt of written request from you, as a member of the Company.

OPERATIONS AND BUSINESS PERFORMANCE

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

CORPORATE GOVERNANCE

We at Dabur believe that sound Corporate Governance is critical in enhancing and retaining stakeholders' trust. Our priority is attainment of all performance goals with integrity. Besides adhering to the prescribed Corporate Governance practices as per clause 49 of the Listing Agreement, Dabur voluntarily governs itself as per highest standards of ethical and responsible conduct of business in line with local and global standards. The Company exercises its fiduciary responsibilities in the widest sense of the term which has remarkably boosted the level of stakeholders' confidence testified by improved market capitalization, high credit ratings and various awards bagged by the Company for its brands, stocks, environmental impact, etc. We continuously strive to attain our benchmarked standards with our meticulous efforts, which gave Dabur the honour of being selected amongst the top 5 Best Board of India 2013, in a survey conducted by Hay Group with Jury headed by Mr. Kumar Mangalam Birla.

A certificate from Auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is attached as 'Annexure 1' and forms part of this report. Certificate of the CEO/CFO, inter alia, confirming the correctness of the financial statements, compliance with Company's Code of Conduct, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is attached in the Corporate Governance report and forms part of this Report.

BUSINESS RESPONSIBILITY REPORT

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

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

CREDIT RATING

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

Further, ICRA has reaffirmed the rating 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 and the outlook on the rating is stable.

DIRECTORS

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

Further as per Section 149(5) of the Companies Act, 2013 the Company is required to appoint Independent Directors under Section 149(4) within a period of one year from 1.4.2014 i.e. the date of commencement of the said Section and Rules made thereunder. Since the Company had already appointed Mr. P N Vijay, Mr. R C Bhargava, Dr S. Narayan, Mr. Albert Wiseman Paterson, Dr. Ajay Dua and Mr. Sanjay Kumar Bhattacharyya as Non–Executive Independent Directors subject to retirement by rotation in the past, in terms of Companies Act, 1956 and the Listing Agreement, and out of them Mr. P N Vijay and Dr S Narayan are liable to retire by rotation in the ensuing Annual General Meeting, the Board of Directors in their meeting held on April 29, 2014 after consideration has recommended to reappoint all the aforesaid Directors as Non–Executive Independent Directors within the meaning of Section 149 and 152 [including Section 149(10)] of the new Companies Act, 2013 read with Schedule IV attached thereto and Rules made there under, not subject to retirement by rotation, for a term of 5 (five) consecutive years with effect from the date of ensuing Annual General Meeting upto the conclusion of Annual General Meeting of the Company to be held in the calendar year 2019.

The briefresume of the Directors being appointed/ re–appointed, the nature of their expertise in specific functional areas, names of companies in which they have held directorships, committee memberships/ chairmanships, their shareholding etc., are furnished in the explanatory statement to the notice of the ensuing Annual General Meeting. Your Directors recommend their appointment /re–appointment at the ensuing Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

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

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

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

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

The Company's shares are listed on the National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and MCX Stock Exchange Limited (MCX) and are actively traded. In the year under review, following shares were allotted and admitted for trading in NSE, BSE and MCX. Equity shares allotted against the options exercised by employees pursuant to Employees Stock Option Scheme of the Company:

• 696850 equity shares allotted on May 24, 2013.

• 181212 equity shares allotted on August 12, 2013.

AUDITORS AND THEIR REPORT

M/s G. Basu & Co., Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re–appointment as Statutory Auditors for the financial year 2014–15. Pursuant to Section 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate dated April 2, 2014 from the Auditors to the effect, inter–alia, that their re–appointment, if made, would be within the limits laid down by the Act, shall be as per the term provided under the Act, that they are not disqualified for such re–appointment under the provisions of applicable laws and also that there is no proceeding against them or any of their partners pending with respect to professional matter of conduct.

The Auditors have vide their letter dated April 21, 2014 also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.

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

COST AUDITORS

M/s Ramanath Iyer & Company, Cost Accountants, have been re–appointed as Cost Auditors for the financial year 2014–15 by the Audit Committee, to conduct cost audit of the accounts maintained by the Company, in respect of the various products prescribed under Cost Audit Rules, 2011. However, necessary approvals, if any, shall be taken as may be required by the applicable provisions. Full particulars of the Cost Auditor are as under:

M/s Ramanath Iyer & Company 808, Pearls Business Park, Netaji Subash Place, Pitampura, New Delhi – 110088. Tel. No. : 011–45655448; Email ID – Info@ ramanathiyer.com (Firm's Membership No. 000019)

The Cost Audit Report for the financial year 2012–13, issued by M/s Ramanath Iyer & Company, Cost Auditors, in respect of the various products prescribed under Cost Audit Rules, 2011, was filed with the Ministry of Corporate Affairs (MCA) on September 6, 2013. The due date for filing the said Report with MCA was September 27, 2013.

The Cost Audit Report for the financial year 2013–14, in respect of the various products prescribed under Cost Audit Rules, 2011, is due to be filed with MCA and shall be filed as per the requirements of applicable laws.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2013­14. Consolidated Turnover grew by 15.10% to Rs.7225.89 crore as compared to Rs.6277.96 crore in the previous year. Similarly, Net Profit after Tax and after Minority Interest for the year at Rs.913.92 crore is higher by Rs.150.50 crore as compared to Rs. 763.42 crore in the previous year.

INTERNAL CONTROL SYSTEM

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

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

NATURE OF BUSINESS

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

Dabur Lanka (Pvt) Limited (Sri Lanka) has set up a new project for manufacturing of fruit pulp based beverages mainly for export. The commercial production at the new plant commenced in July, 2013.

Asian Consumer care (Pvt) Ltd. (Bangladesh) has set up a new green field project for manufacturing Hair oil, Shampoo, Tooth paste, etc. The commercial production at this new plant commenced from February, 2014.

Further, during the year the Company has purchased a Business Undertaking situated at Pantnagar, Uttarakhand for manufacturing of Ayurvedic Medicines and Cosmetics from its supplier.

SUBSIDIARIES

During the year the following new step down subsidiaries of the Company were incorporated:­– Dabur Consumer Care (Private) Limited, on April 19, 2013 in Sri Lanka, and – Dabur Tunisie, on December 17, 2013 in Tunisia. In terms of general approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Report of the Auditors of the subsidiary companies have not been attached with the Balance Sheet of the Company.The Company will make available these documents and related detailed information upon request by any shareholder of the Company/ subsidiary interested in obtaining the same.

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

The following information in aggregate for each subsidiary has been disclosed in the Consolidated Balance Sheet (a) Capital (b) Reserves (c) Total assets (d) Total liabilities (e) Details of investment (except in case of investment in subsidiaries) (f) Turnover (g) Profit before taxation (h) Provision for taxation (i) Profit after taxation (j) Proposed dividend. A statement of the holding company's interest in the subsidiary companies is attached as 'Annexure 2' and forms part of this report.

EMPLOYEES STOCK OPTION PLAN

During the year, 45464 options in one tranche were granted to eligible employees of the Company in terms of Employees Stock Option Plan (Dabur ESOP 2000). During the year, 878062 options were exercised by the employees after vesting. Accordingly, the company made the allotment of 696850 equity shares on May 24, 2013 and 181212 equity shares on August 12, 2013 against the options exercised by the employees.

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

PARTICULARS OF EMPLOYEES

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

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

A. Conservation of energy:

a) Energy conservation measures taken:–

A number of energy conservation techniques were initiated at large scale and successfully implemented.

Some of the key initiatives undertaken in the manufacturing units were as follows–

• Improvement in power factor upto 99%.

• I nstallation of transparent sheets on the roof in Chyawanprash/ Oil day store/Boiler/DG/RM store at Pantnagar unit.

• AC interlocking with light switch.

• Timer put on package AC's.

• Air compressor auto drain valve timing increased.

• Installation of blow down heat recovery system.

• Installation of DO system at ETP (Effluent Treatment Plant).

• Use of methane gas in herbal waste drier.

• Use of RO reject water in vacuum pump & floor cleaning.

• Use of VFD (Variable–Frequency Drives) in herbal waste ID (Induced Draft) & FD (Forced Draft) fans.

• Installation of Voltage stabilizer on low tension line.

• Installation of online temperature in ETP Bio digester for saving steam.

• Installation of CRS to use condensate water in boiler feed.

• Use of CFL lights in place of HPMV (High Pressure Mercury Vapour)/HPSV (High Pressure Sodium Vapour).

• Installation of solar street lights.

• Installation of LED tube lights.

• Installation of solar water heater.

• Trial started in March'14 for alternate fuel called Bio–LDO (made from vegetable oil) for boiler in place of HSD (made from petroleum).

• 100% usage of herbal waste as boiler feed.

• I nstallation of steam condensate recovery system to recycle condensate recovered after steam usage.

• Usage of lower capacity motor in vacuum pumps for Glucose manufacturing.

• Generation of compressed air at lower pressure resulting in net saving of 10% of power.

• Nozzle size of boiler fuel reduced from 12mm to 9mm to reduce fuel consumption.

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

• Additional Investment of Rs.121.38 lacs was made during the year for reduction of consumption of energy.

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

• The energy conservation measures taken during the year have resulted into yearly saving of approximately Rs.172.72 lacs and thereby lowered the cost of production by equivalent amount. These measures have also lead to better pollution control, reduced maintenance time and cost, improved hygienic condition and consistency in quality and improved productivity.

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

• Attached herewith as Annexure 4

B. Technology Absorption:

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

C. Foreign Exchange earnings and outgo:

i) Activities and i nitiatives relating to exports:

Dabur's key markets for international business which is managed by its wholly owned subsidiary Dabur International Limited and other step down subsidiaries are Middle East, Africa, U.S., Europe and South Asia with manufacturing facilities across regions. In addition, Dabur has a private label business in the U.S. and a guar gum export business.

International Business:

Dabur's international business continued on the strong growth trajectory growing by 22.3% to Rs. 2310.8 crores in fiscal 2013–14. The international business now contributes 32.4% to consolidated sales. During fiscal 2013–14, key markets in MENA (Middle East and North Africa) and South Asia (ex–India) regions performed well. Dabur continued to gain share in categories such as Hair Oils, Hair Creams, Shampoos and Toothpastes in key markets. For instance, market share in Hair Oils increased to 69% in KSA (Kingdom of Saudi Arabia) as compared to 66% last year. Similarly, Hair Oil market shares witnessed a jump in Egypt and were at 62% as compared to 53% last year. In Hair Creams as well there were strong market share gains with market share in KSA increasing to 35% as compared to 29% last year and in the UAE, increasing to 33% as compared to 29% last year. In addition, toothpaste market shares witnessed an uptick in Nigeria, Algeria and Morocco. Brand–wise overview:

Vatika

Vatika witnessed strong growth in fiscal 2013–14. The brand saw several new innovative product and variant launches such as Vatika Hair Mayonnaise, Vatika Hammam Zaith – Volume and Thickness, Vatika Brillantine Shine Hair Cream. The brand extended its Hair Gel platform into innovative need based, first of its kind product called Vatika Gel Creams which provides styling of a Gel and Nourishment of a cream. Vatika consolidated its position in the highly competitive shampoo and conditioners category by successfully completing the launch of Vatika Ingredient Range of Shampoos and Conditioners. Vatika also garnered a space in the multi competitor category – Hair Colors by successfully extending Vatika Hair Color Creme to most of its International Markets.

Amla

Amla portfolio performed well in 2013–14. The brand entered into new and upcoming sub–categories with the product Amla Leave on Oils which provides nourishment of oil in a user friendly cream format. Amla also extended its equity of Hair Oils and moved on to highly competitive categories of Shampoos and Conditioners with its range of Vitamin, Keratin and Snake Oil shampoos and conditioners.

Miswak and Dabur Herbal Toothpaste (DHTP)

Miswak and DHTP brands provide premium oral care benefits on herbal platform. The oral care brand Miswak performed well, especially in North African markets and is now the second biggest toothpaste brand in Morocco and Algeria. A new innovative format extension of DHTP brand was launched.

Dermoviva

The Dermoviva portfolio of skincare products continued on an impressive growth trend in 2013–14, with Lotions and Creams growing in double digits. The brand focus was on reaching out to potential consumers in the key markets of Saudi Arabia, UAE and Algeria through specialized consumer contact programs. By the end of the fiscal year, Dermoviva is primed to enter the highly competitive but high growth category of Face Care. With an initial offering of Face Wash, Face Scrub & Facial Cleanser Toners, Dermoviva continues to expand its consumer franchise across MENA by catering to skin care needs by combining the wonderful properties of natural ingredients and the advances of science.

FEM

FEM's growth has been quite phenomenal in 2013–14. After a successful packaging design overhaul, FEM Hair Removal Creams have been a strong growth pillar for the brand. This year, FEM extended into the popular format Halawa (Hot Wax), which is a traditional home­made hair removal product used by Arab women. FEM also extended its equity with the launch of a premium proposition in the form of FEM Gold Hair Removal Cream (with real gold particles).

Exports from Dabur India

The company exports guar gum and private label oral care products from India. During fiscal 2013–14 the company recorded guar gum exports to the tune of Rs. 87.9 crores as compared to Rs. 158.7 crores in fiscal 2012–13.

Sales in USA (Dabur Branded and Private label) grew from Rs. 39.6 crores in fiscal 2012–13 to Rs. 46.5 crores in fiscal 2013–14.

The company caters to the ethnic Indian channels in the USA supplying the range of Dabur brands which are popular among the South Asian / Indian community. Retail penetration was extended by extending direct distribution to several new states in the US in the South West and Mid West.

Distribution was further extended to wholesalers targeting Hispanics and African–Americans in Florida, Michigan and Ethnic pockets in New York state and California. Distribution was also extended to Quebec in Canada. The strategic tieup with Canada's largest Retailer, Loblaws was fortified with Stores carrying 40 SKUs. A range of Ethnic hair care products were launched which included Shampoos, Hair Serums and Hair masks under the Vatika brand.

Dabur also exports private label oral care products to USA and Europe which includes Toothpastes, Mouthwash and Denture Adhesives. The company acquired new customers for private label in France, Central Europe, Netherlands, Mexico and several customers in the U.S. Several new advanced Oral Care formulations were developed and launched across Toothpastes, Denture Adhesives and Mouthwash.

ii) Development of new markets for Products & Services:

New Markets have been opened up for business in countries like Armenia, Portugal and Chad by Dabur International Limited. The Sales & Distribution infrastructure has been augmented by appointing new distributors in these areas. Local resources have been enhanced in key markets of Middle East & North Africa, Nigeria, Egypt, East Africa and South East Asia to further strengthen the S&D structure.

iii) Export Plans:

The focus, going forward, is to continue expanding the presence of the company and its subsidiaries, across geographies and to exploit the opportunities that exist in existing and potential segments. Key focus is on enhancing the presence in current geographies and adding scale in the current operations. The Company, including subsidiaries, will continue to invest in brand building, manufacturing and human capital in order to maintain and improve the existing robust growth path. Total Foreign Exchange used during 2013–14: Rs. 42.51 crores.

Total Foreign Exchange Earned during 2013–14: Rs.219.72 crores.

HEALT H, SAFETY AND ENVIRONMENTAL REVIEW (HSE)

Dabur India Limited is committed to achieving its vision of zero harm and zero environmental incident. The 'Occupational Health, Safety and Environment Policy' is in place for implementing the mission. The Health, safety and environment strategy prioritises eliminating workplace illness, injuries and environmental incident through the Integrated Management System. Huge progress has been made in the area of process safety and HSE Management System implementation which is evident from the fact that there were no High Potential Accidents during the year. With regard to other environmental focus areas, Dabur has greatly improved its waste management and also reduced the GHG emissions to reduce the overall impact on environment.

To ensure focus and delivery of HSE activity, Dabur conducted 3rd National Safety Meet at Rudrapur with HSE Improvement Plan at manufacturing level. Focus is more on building an engaged safety culture where expectations are clear, people are trained, interventions are welcomed and consequences are understood. One key to build an engaged safety culture is through safety behaviour and Hazard observation. The tools used in Dabur to register safety behaviour / Hazard Observation is called SBO which is recorded through the inbuilt software called SURAKSHA which is in place since last three years. Beside this, all the manufacturing units have complied with statutory requirements laid by Government in terms of Act and Rules w.r.t. to Health, Safety and Environment. With its Health, Safety and Environment management system, Dabur aims to effectively control risks and prevent people from being injured or harmed during the course of their work. An online Permit to Work System (PTW) is being used in all Manufacturing units to ensure that necessary communication take place and hazards are controlled.

With an aim to certify all its operational locations with the Integrated Management system OHSAS 18001 and ISO 14001 – Occupational Health, Safety and Environment, Dabur has got externally accreditation for its twelve (12) manufacturing location by TUV NORD and nine (9) manufacturing units have successfully completed their Surveillance Audit. This standard is the foundation of the overall health, safety and environment framework of Dabur. In relation to safety & risk, HIRA (Hazard Identification and Risk Assessment) Audit is being carried out by EQMS India Pvt. Ltd for all Manufacturing units.

The environmental agenda of reducing environmental impact of Company's operations was achieved by environment management program through a combination of energy & water conservation, rainwater harvesting and solid waste recycling. Some sites modified their boilers to use bio–fuels, resulting in significant environmental benefits by reducing the Sox and CO2 emission in environment. Carbon and Water Footprint study was conducted for all manufacturing unit and targeted to reduce emission by 35% with the focus on use of renewable resources like bio–mass fuel, Solar Lights, etc. The Company is also getting validation of Carbon Footprint for all Manufacturing locations from TUV NORD carbon services. To reduce the environmental impact a mass tree plantation is done on 1st January every year.

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

Key Initiatives taken during the year are:

– Medical check up of workers.

– 48 number of new fire extinguishers, with suitable pressure rating, installed in place of old low pressure rating extinguishers.

– Procurement of electric arc flash kit.

– EOHS performance was reviewed in operations review with plant leadership team.

– Safety committee meeting was convened twice every month.

– Safety training was imparted to workers. Safety week was celebrated in first week of March.

– IMS audit was conducted as per schedule.

– Safety Awards received for Baddi Cluster:

a) Greentech Safety Award – 2013 in FMCG sector (Silver Category)

b) Workplace Safety & Health Award – 2014

– Successful completion of Recertification Audit for OHSAS 18001 for:

a) Hajmola & 44 Bigha Unit

b) Chyawanprash Unit

c) Oral Care Unit

– Successful surveillance audit for OHSAS 18001: 2007 for Skin Care Unit and Greenfield Unit was conducted.

– Extension of Hydrant system at Honey warehouse and ETP at Greenfield Unit.

– Regular Tool Box talk at the Shop floor for the workers comprising of safety related Do's and Don'ts.

Safety induction of new workers before joining duty & training as per the monthly training calendar.

– Regular planned inspection by the designated zone owners.

– Arrangements made for safety belt anchoring at FG and RM/PM.

– Pedestrian walk way marked throughout the plant.

– Toe guard fixed on working platforms.

– Guarding and interlocking done on the machines.

– Working platforms/ fixed ladders for Amla day store being fabricated.

– Automation done on miracle mill and prakshep grinding mill for fire prevention.

– Pishti handling system installed for avoiding manual lifting of material.

– Wheel chokes fabricated and are being used for vehicle control.

– Tree plantation at various locations.

– Installation of rain water harvesting at three locations.

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 BURMAN)

CHAIRMAN

Place: New Delhi

Date: 29th April, 2014