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Updated:17 Apr, 2014, 14:37 PM IST

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Updated:17 Apr, 2014, 14:49 PM IST

DIRECTORS? REPORT

To,

The Members,

Your Directors have pleasure in presenting the 37th Annual Report on the business and operations of the Company, together with the Audited Accounts for the financial year ended March 31, 2012.

Dividend

The Company has paid an interim dividend of 55% (Re. 0.55 per share of Rupee one each) on November 15, 2011. We are pleased to recommend a final dividend of 75% (Rs. 0.75 per share of Rupee one each) for the financial year 2011-12. The final dividend, if approved by the members, will be paid to members within the period stipulated by the Companies Act, 1956. The aggregate dividend for the year will amount to 130% (Rs.1.30 per share of Rupee one each) as against 115% (Rs.1.15 per share of Rupee one each) declared last year. The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution, is at 56.82%.

Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, final dividend for the year 2003-04 and interim dividend for the year 2004-05 which remained unpaid or unclaimed for a period of 7 years, amounting to Rs.1271757/- and Rs.962765/- respectively has been transferred by the Company to the Investors' Education and Protection Fund (IEPF). Further interim dividend for the year 2004-05 pertaining to erstwhile Femcare Pharma Limited (FEM), now merged with the Company, which remained unpaid or unclaimed for a period of 7 years, amounting Rs. 108365/- 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 Table 11 under Corporate Governance Report.

Operations and Business Performance

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

Corporate Governance

Dabur is committed to practising sound corporate governance in conducting business in a legal, ethical and transparent manner - a dedication that originates from the very top and permeate throughout the organization. Besides adhering to the prescribed corporate governance practices as per clause 49 of the Listing Agreement, it voluntarily governs itself as per highest standards of ethical and responsible conduct of business in line with local and global standards. Strong governance practices at Dabur has earned for it recognition and has strengthened its bond of trust not only with the stakeholders but with the society at large.

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

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.

Credit Rating

During the year under review the Company has sustained its long term credit rating of AAA. The highest credit rating of AAA awarded by CRISIL reflects the Company's financial discipline and prudence. The Company's short term credit rated as A1+ by CRISIL, has also been reaffirmed. This being the highest rating indicates a very strong degree of safety with regard to timely payment of interest & principal.

Directors

During the year, w.e.f. 31.01.2012, Mr. Pradip Burman, Executive Promoter Director had resigned from the office of Director of the Company and Mr. Saket Burman was appointed as additional Non Executive Promoter Director. Mr. Saket Burman shall hold office upto the date of the ensuing Annual General Meeting of the Company and, being eligible, offer himself for reappointment.

In terms of Article 103 and 104 of the Articles of Association of the Company, Dr S Narayan, Mr. Albert Wiseman Paterson, Mr. Analjit Singh and Mr. Amit Burman will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment in terms of the provisions of Article 106 of the Articles of Association of the Company.

The brief resumes of the Directors who are to be 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) and Bombay Stock Exchange Limited (BSE) and are actively traded.

In the year under review, following shares were allotted and admitted for trading in NSE and BSE:- Equity shares allotted against the options exercised by employees pursuant to Employees Stock Option Scheme of the Company:

? 1001598 equity shares allotted on July 01, 2011.

? 321926 equity shares allotted on September 02, 2011.

? 46657 equity shares allotted on November 29, 2011.

? 6875 equity shares allotted on December 30, 2011.

Auditors and their Report

M/s G. Basu & Company, Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General