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Dabur India Ltd.
 
BSE Code   500096
ISIN Demat   INE016A01026
Book Value   28.30
NSE Code DABUR
Dividend Yield %  0.60
Market Cap   883003.27
P/E   69.58
EPS   7.18
Face Value 1  
Year End: March 2016
 

MANAGEMENT DISCUSSION & ANALYSIS

The Indian Economy is on a steady growth trajectory. If some estimates are to be believed, the Indian Economy is said to be at a much sweeter spot when compared to the rest of the world. In the IMF Estimates of GDP growth among big economies all over the world, India, for the first time ever, tops the chart. And the road ahead looks good for India as an emerging Economy (Chart 1

According to the UNIDO's (United Nations Industrial Development Organization) industrial statistics 2016, India has climbed up three positions to become the sixth largest industrial country in the world during 2015, up from ninth position in the brvious year.

Riding on strong macroeconomic fundamentals, favourable business sentiments and downward trend in interest rates, the Confederation of Indian Industry (CII) expects the Indian economy to grow at around 8% in 2016-17. Even the Reserve Bank of India has forecast a GDP growth of 7.6% for 2016-17. The CSO data has also projected a growth of 7.6% for 2015-16, (Chart 2) despite growth deceleration to 7.3% in the quarter ended December 2015. (Chart 3)

The government has taken several initiatives in the areas of infrastructure, easing the process of doing business, opening the doors to FDI, targeting inflation for monetary policy, starting campaigns on smart cities, urban development, encouraging startups, skill development etc.

India's Consumer Price Inflation eased to a lower-than-expected 5.18% in February from a year ago, helped by a fall in food prices,  according to data released by Ministry of Statistics. Inflation Rate in India averaged 7.85 percent from 2012 until 2016, reaching an all-time high of 11.16 percent in November of 2013 and a record low of 3.69 percent in July of 2015. (Chart 4)

However, flat corporate performance, fiscal brssure from implementing the seventh pay commission recommendations and a potential increase in oil prices in the coming year would be risk factors for the Economy. Hence, it is highly important to keep up the reform momentum and ensure that there is fiscal discipline to ensure continued growth.

The government has taken several initiatives in the areas of infrastructure, easing the process of doing business, opening the doors to FDI, targeting inflation for monetary policy, starting campaigns on smart cities, urban development, encouraging startups, skill development etc. The impact of most of these measures can be gauged over a period of time and may not get reflected in the economic numbers immediately as they must hence be interbrted more in terms of laying a foundation for future growth.

FMCG SECTOR

Over the past few years, when the Economy was showing signs of debrssion, the FMCG industry has remained resilient and delivered superior returns over most sectors. While there have been some quarters of muted growth, the FMCG industry has reported 12% growth between 2005 and 2015. According to 'Re-Imagining FMCG in India', a joint report by CII and Boston Consulting Group, growth in disposable income, increased urbanization, and the increase in the number of nuclear households are driving growth of the Indian branded FMCG sector estimated to be currently worth around $65 billion. The industry, it said, is expected to accelerate further to 14% between the next decade of 2015 and 2025. This high growth would help the branded FMCG market grow to $220-240 Billion, i.e. 3.6 times its current size of around $65 Billion.

These projections seem based on the improved consumer sentiment in India, which jumped to a 4-month high in March 2016. The MNI India Consumer Sentiment Indicator rose to 111.2 in March, led by optimistic expectations for future finances and business conditions. Despite this recent buoyancy in sentiment, a Deutsche Bank report pointed out that consumers remained concerned about the current state of their finances. Sentiment towards current finances and the business environment, in general, remains weak, while sentiment towards spending took a backseat. As a result, the FMCG industry reported muted growth during most part of the 2015-16 financial year.

The sentiments were hurt further by a lower than expected Monsoon in most parts of the country in 2015. The absence of stimuli, coupled with deficit rainfall for two consecutive years, has stressed consumption in rural areas, with sales growth in the hinterland decelerating to single digits during the year under review. But the prospects for rural growth seemed better with the Government announcing a slew of measures in the Union Budget earlier this year.

The government has renewed focus on farmers with an aim to raise their incomes significantly in the next 5 years, coupled with plans to improve connectivity from farm to market, fast-tracking irrigation projects, enhancing allocation towards MNREGA, provision towards interest subvention for farmers and a crop insurance scheme. These steps will help millions of farmers recover from the rough patch they have been going through and go a long way in boosting confidence and fuelling consumption in rural India.

While the sentiments largely remained subdued for FMCG industry on the whole in 2015-16 financial year, the year also saw the emergence of new growth opportunities or pockets  of growth. With a revival in consumer demand expected in the near to medium term, these new growth opportunities are expected to play catalysts. As inflation comes under control and some of the macroeconomic indicators appear to be stable, outlook for the FMCG industry is positive.

Some of the new emerging trends that would drive demand growing forward are:

1.Growing acceptance of Ayurvedic and Natural products by consumers in India.

2.A growth in affluent households, which will further accelerate brmiumization in the consumer goods market.

3.Growing urbanization, which would drive consumerism in Tier-II and Tier-III towns.

4.Consumers of FMCG products getting increasingly  digitally influenced.

5.Exponential growth of e-commerce

To effectively capture these changing trends the industry will need to re-invent itself and build newer capabilities. Companies will need to develop innovative and contemporary products to appeal to the more educated and affluent consumers. Internet will play a major role in changing buying habits and will become a major channel of sales and communication. It is estimated that 150-200 million consumers will be digitally active in the next few years and this will entail fast development of allied channels. Emergence of ecommerce players focused on consumer staples and groceries is another key development indicating the emergence of e-commerce as a significant channel and market place

Consumers around the world are 'going organic', and in many ways the movement towards herbal and ayurvedic products in India is a manifestation of the same trend. The Herbal Wave is catching up and across the industry efforts are being directed towards capitalizing on this opportunity. Given India's cultural heritage, many consumers' brference for herbal/ayurvedic products and the movement of Ayurveda having become the buzz word, not just Indian companies but also multinationals are coming up with more offerings in the natural and herbal space to win consumers. Companies having a traditional herbal  positioning and a strong R&D in this space are likely to benefit disproportionately from this trend.

To win in this new reality, Dabur has put in place a host of initiatives that aim not just to capture the Ayurvedic /Herbal trend, expand the company's brsence across geographies but also create a whole new portfolio of brmium products that cater to the evolving needs of its consumers. Details of these initiatives are available in the following sections of this report.

DABUR PERFORMANCE OVERVIEW

The demand environment continued to be challenging through most part of the year, which was compounded by the headwinds in the form of geo-political disturbances in key geographies in the Middle East and delayed winters in India. The political unrest in Nepal leading to blockade of the India-Nepal border for over 3 months hampered supplies from the fruit juices plant in Nepal impacting sales of packaged juices during the festive season.

The overall demand environment remained tepid with some key segments showing deceleration while competitive intensity remained at a high. Despite these tough conditions, Dabur pursued a prudent growth strategy to deliver a steady growth in Sales and Profit during the 2015-16 financial year.

Moving forward on its journey to make itself Future Ready, the Company rolled out a host of new products and campaigns aimed at the new generation. The year 2015-16 began with the introduction of Dabur's new brmium baby care brand 'Dabur Baby'. The first product launched under Dabur Baby umbrella brand is the Dabur Baby Massage Oil with Olive & Almond, which is free of paraffin and parabens, making it a completely safe product. The range would soon be expanded with the launch of a host of new products that will position Dabur as a serious player in most of the baby care categories in India. The year also saw the national launch of Hajmola Yoodley, which marked the extension of brand Hajmola into the Ready-to-Drink beverage market with a new range of drinks offering the uniqueness of 'chatpata' traditional Indian flavors to the consumers. In the hair oil market, Dabur introduced the Vatika Jasmine Non-Sticky Coconut Hair Oil, which provides nourishment of coconut oil and jasmine  extracts that help restore moisture balance and make the hair smooth, manageable and less frizzy.

The year also saw the expansion of Dabur's Skin Care portfolio with the launch of professional salon facial products under the OxyLife brand -- OxyLife Salon Professional ProWhite Pure Oxygen Facials for women and men. In addition, the facial bleach range was enhanced with the launch of the first ever Fem Diamond Creme Bleach, targeting the brmium category. The Dabur Gulabari range was also expanded with a range of rose extract based face wash products that have been specially developed to cater to the skin care needs of teenagers.

Strengthening its brsence in the Ayurveda and Natural Health Care products market in India, Dabur expanded its Women's Health Care range with the launch of India's first fruit-flavoured health tonics for women. Dabur's traditional Ayurvedic post­natal health tonic Dashmularishta and the menstrual pain relief tonic Ashokarishta were both launched in two fruit flavours -Apple and Mixed Fruit. In addition, your Company launched a sugar-free variant of its brmium Chyawanprash - Dabur Ratnaprash Sugar Free.

The organized healthcare sector is growing at a fast pace and within that there is a growing brference for natural products based on holistic and alternate therapies such as Ayurveda. Your Company believes that doctor advocacy is a significant element in demand generation for healthcare products. Dabur added another leg to its distribution enhancement programme with the launch of Project LEAD (Leveraging through Empowered Anchoring and Detailing). Under this initiative, your Company is building advocacy for its portfolio of OTC and ethical products by engaging with more than 30,000 healthcare professionals, both Ayurvedic and Allopathic. A medical detailing team has been put in place for covering the doctors and detailing the products to them on an ongoing basis. Around 170 product specialists have already been hired and this number is expected to go up to 250 during 2016-17. This initiative is in line with the Company's focus on healthcare, particularly Ayurvedic healthcare, being an important driver of growth and will seek to establish a good connect with the healthcare fraternity.

Riding on these initiatives, Dabur ended the year with steady growth in Sales and Profits. The highlights of Dabur India Ltd's performance during fiscal 2015-16 on a consolidated basis are:

0 Net Sales grew by 8.1% to Rs. 8436.0 crore in fiscal 2015-16, up from Rs. 7806.4 crore in 2014-15

0 Earnings Before Interest, Taxes, Debrciation and Amortization (EBITDA) increased by 17.9% to Rs. 1739.0 crore in fiscal 2015-16, up from Rs. 1474.4 crore in 2014-15

 Profit After Tax (PAT) increased to Rs. 1252.7 crore in 2015-16, up 17.5% from Rs. 1065.8 crore in 2014-15

0 Diluted Earnings Per Share (EPS) increased to Rs. 7.08 in 2015-16 from Rs. 6.03 in 2014-15.

REACHING OUT

Dabur has been using a judicious mix of campaigns, both on-air and on-ground, to reach out to its consumers. Our new brands and campaigns, targeting the youth, continued to rule the consumer mind-space and won a number of accolades during the year. Dabur Amla Hair Oil was named the best hair oil at Femina Beauty Awards. Dabur Hair Oil and Toothpaste brands were ranked in Top 100 Most Trusted Brands 2015 List by Brand Equity and Hajmola Yoodley was ranked among the Buzziest Brands of 2015 by Afaqs.

The #BraveAndBeautiful campaign, which showcased the protagonist's story of coming out stronger after losing all her hair to cancer, won several awards during the year. It bagged 8 awards at Goafest 2015, including the Grand Prix, in addition to winning the Blue Elephant at Kyoorius Awards 2015 in 'Advertising for Good' category. The campaign bagged the IndIAA Award for 'real, hard-working advertising', was ranked amongst the Best Ad Campaigns of 2015, by aFaqs and also won 2 Effies. The campaign had gone viral on the internet with more than 2 million views and likes. The print campaign for Dabur's ethical medicine Dabur Gastrina won the Silver at Cannes 2015.

During the year Dabur Gulabari rolled out a digital campaign #AmPrettyTough, which has been very well received by the audience. The #AmPrettyTough campaign seeks to empower young teenage girls to pursue their tough passions without worrying about their skin. With this campaign the brand seeks to motivate young girls to break stereotypes based on looks and follow their dreams.

The Company continued to reach out to consumers through a variety of on-ground initiatives that not only gave them an opportunity to touch, feel and experience our products, but also generated a huge buzz and positive word for the brands. We have also been using a mix of localised promotional and marketing strategies as well as technology to access the consumers across markets and to supplement our distribution enhancement initiatives. In urban markets, for instance, we undertook a host of school contact programmes and consumer activation initiatives. In rural India, we stepped up our consumer connect initiatives through participation in haats, nukkad nataks, Melas and innovative initiatives like regional beauty pageants and rural talent hunts.

At the Nashik Kumbh this year, for instance, Dabur sbrad the message of oral hygiene among millions of devotees using a unique Toothpaste dispenser. The first-of-its-kind toothpaste dispensers were installed at over 1,000 hotel rooms and dharamshalas around the Kumbh Shahi Snan venue. These dispensers squeezed out adequate amount of Dabur Red Paste on the toothbrush every time a user put the brush under the dispenser. These unique dispensers, being the first of their kind, were a big draw among the rural audience and helped generate huge trials for the brand. The dispensing units carry the message: "Kya aapne dant snan kiyaRs." (Have you cleansed your mouth) written on them. With this initiative, Your Company embarked on promoting oral hygiene along with sampling of Dabur Red Paste.

These and other such initiatives, helped Dabur effectively capture the consumer mind-space. Two of our consumer activations, Real Heroes initiative and Goonj, have won brstigious on-ground promotion awards during the year.

Digital is the new buzz word today and it is an area which your Company successfully tapped during the year. While the e-retail landscape is still at a nascent stage for the FMCG industry and contribution in terms of business is low, however it is ramping up at a rapid pace. This is an important development in the context of evolving shopping behavior and in terms of consumer engagement for the brands. According to the CII-BCG report referred to earlier, the disruption in Consumer Goods due to digital would increase at an unbrcedented pace. Proliferation in Internet connectivity, evolution of new business models and increase in digital media consumption would provide companies enormous opportunities to create value.

Today, consumers are increasingly going online to seek information about various products and also for making purchases. Dabur also uses the Internet and various emerging social media platforms to communicate frequently and directly with customers. We are working with multiple partners across many categories to sell our range of products online. In addition, special e-commerce portals have been created for specific products.

Dabur has embraced technology in a big way to better reach out to the modern day consumer and better service her needs. By creating interfaces on the digital social platform, Dabur as an entity and its various brands are reaching out to consumers, interacting with them and, in the process, enabling them to become our brand ambassadors. Dabur has taken Beauty, Health & Wellness to the digital world with four dedicated portals - www.daburmediclub.com, www.liveveda.com, www.mybeautynaturally.com and www.daburdentalcare.com The company's website www.dabur.com has been renovated with a focus towards better engagement with consumers and visitors.

We have also forged successful partnerships with most e-grocers and are working with multiple partners across categories to sell our products online. Dabur has joined hands with online marketplace Snapdeal to set up an e-store, called LiveVEDA, for its range of Ayurvedic products. E-commerce browsing is becoming a catchment area for brands and there is a substantial growth in the online health care market. This, we feel, is a significant opportunity for our future business.

SCIENCE BASED AYURVEDA

The demand for Ayurvedic and natural products has been growing at a steady pace with more and more consumers embracing these products. This category has, of late, seen heightened activity with the entry of new players, both domestic and international. Dabur's core philosophy is rooted in Ayurveda having been associated with this traditional system of healthcare for more than a century.

Your company continued to invest behind its brands and rolled out a host of new products that not just contemporized its portfolio by making it more youthful, but also helped establish Dabur as the custodian of traditional Ayurvedic knowledge. Dabur has been developing and successfully introducing products based on Ayurveda to cater to the ever-changing needs of the consumer. The Company continued to introduce new products, invest in enhancing its distribution network and communicating effectively with its consumers to sbrad awareness about the high quality of its products as also the benefits that they offer.

Dabur has highly differentiated brands in the market, and nearly all its products are based on natural and Ayurvedic ingredients. While a lot of companies today offer herbal or Ayurvedic products, Dabur enjoys the consumer's trust having the longest Ayurvedic heritage and consumers' trust for more than 130 years. Dabur, as a brand, evokes feelings of trust, health & well-being in the consumer's mind. Dabur has, in fact, been ranked as the Number 1 Ayurveda brand in India for the fourth year in running, by TRA Research Private Limited. This speaks volumes about the trust that consumers place on brand Dabur.

Dabur India also has a strong in-house research wing that follows a 'bush-to-brand' approach. We have our in-house nursery, which grows several rare herbs that go into various products. This in-depth knowledge about nature and natural ingredients is one of our biggest strengths in the market. This research wing also undertakes detailed tests on individual ingredients and products to ensure that the final product meets customer needs and aspirations and is compliant with regulatory standards.

Dabur has also been one of the first movers in Ayurveda R&D initiating research activities on classical formulations as well as developing proprietary formulations. Our R&D Centre is today equipped with state-of-the-art equipment as well as trained manpower needed for pharma-grade research activities. The R&D team has been involved in developing several classical formulations, proprietary patent formulations, herbal cosmetics and health supplements as well as carry out clinical studies to validate their safety and efficacy.

During 2015-16 Dabur entered into a license agreement with the Government of India to commercially produce two new Ayurvedic drugs - Ayush-64 for treatment of Malaria and Ayush-82 for management of Diabetes. Dabur also signed a Memorandum of Understanding (MoU) with the Central Council of Research in Ayurvedic Sciences (CCRAS), an apex research body under the Ministry of AYUSH, Government of India, for collaboration and co-operation in pharmaceutical R&D for different novel dosage forms and drug development in Ayurveda.

The Company is brparing to commercially produce the two new Ayurvedic medicines during the next fiscal and these medicines will be available in various formats. The Ayurvedic drug Ayush-64 is highly effective for the treatment of Malaria. In view of its wide brvalence and drug resistant malarial parasite, a poly-herbal non-toxic drug has been developed by CCRAS after carrying out extensive pharmacological, toxicological and Clinical studies. Ayush-82, an anti-diabetic drug also developed by CCRAS is a combination of known and tested hypoglycemic drugs. It is supported by extensive clinical studies. These two drugs can potentially benefit millions of people suffering from Malaria and Diabetes.

CCRAS and Dabur have also agreed to explore the feasibility of collaboration in diverse areas of R&D relating to Ayurvedic medicines. This collaboration is paving a new horizon in Ayurvedic drug development, utilizing optimally the existing resources of CCRAS and Dabur R&D, on public private partnership model. The collaboration will happen at various stages of drug development like formulation development, analytical development, br-clinical studies, clinical studies etc. After successful completion of the project on a specific product, Dabur will market the same with its strong distribution network in India. Dabur may also market some of the already developed products  by CCRAS.

STRATEGIC BUSINESS UNITS

Our business structure today stands as below (Chart 5):

0 Consumer Care Business incorporating the Health Care and Home & Personal Care (HPC) accounts for 53% of Consolidated Sales

0 Foods Business comprising packaged fruit juices and culinary products accounts for 11.4% of Consolidate  Sales

0 International Business, including Dabur's organic overseas business as well as the acquired entities of Hobi Group  and Namaste Laboratories LLC, accounts for 31.8% o  Consolidated Sales

Consumer Care and Foods Business are together referred to as the India FMCG Business in this report

India FMCG Business

The India FMCG business includes the Consumer Care and Foods Business at Dabur. It includes the entire consumer products business of Dabur, encompassing Health Care (which includes Health Supplements, Digestives, OTC and Ethicals), Home and Personal Care (which includes Hair Care, Oral Care, Skin Care and Home Care) and Foods. This business ended 2015-16 with 6.3% growth. Chart 6 provides category-wise breakdown of the India FMCG Business.

Health Care

With increasing brvalence of lifestyle diseases in India, one out of four Indians is at risk of dying from non-communicable diseases like diabetes, cardio-vascular ailments or cancer before the age of 70. According to a white paper released by CII, roughly 5.8 million Indians die every year from heart and lung diseases, stroke, cancer and diabetes. Prevalence of such ailments is a result of lifestyle patterns that have changed significantly over the last decade.

Another alarming fact is that a large proportion of patients detected with lifestyle diseases like hypertension, diabetes and cardiovascular diseases belong to the age group of 30 years or less. Sedentary lifestyle and unhealthy food habits are among key reasons for this increase in incidence of lifestyle diseases

For a country like India which boasts of a huge demographic advantage with a large number of population under the age of 30, this is a truly alarming situation.

Given this rise in lifestyle diseases, brventive healthcare is beginning to play an important role in our lives. India has seen tremendous social and economic changes over the past decades, particularly in the big cities. Millions of people with desk jobs in offices commute long distances to and from work. Till a few years back, fitness, in general, was not a high priority for most people in India. But times are changing. Today, there is a growing consciousness about health-related issues among people, giving a boost to brventive health checkups. There is also a steady increase in the number of people taking to health management programs or adopting healthier practices in their daily lifestyle.

India is blessed with a healing habitat, drawing medicinal values and cures through the age-old science that is known as Ayurveda. It is a unique blend of science, logical reasoning and understanding that delivers Nature's way of curing many an ailment - not just age-old ones but even the modern, lifestyle diseases.

With a legacy of over 130 years, Dabur has been a leader in Health & Well-Being with a portfolio of products that offer holistic well-being to its consumers. Targeting the Millennial Generation, Dabur has been rolling out a number of products and services to not just address their health-related queries but also guide them towards leading a healthy lifestyle. One of our key initiatives has been towards promoting Ayurveda for healthy living.

Ayurveda has been one of the modes for us to communicate with Nature and reap its benefits. The principles of Ayurveda are an invaluable link to understanding, in detail, natural and healthy living. The primitive times didn't have the facility of a modern tool or technology to assist the concept. With advanced technology and better understanding today, effective delivery of Ayurveda has become popular through which we can reap the benefits of natural healthy living. Gradually people are realizing the importance and benefits of taking personal responsibility for one's own well-being, making Ayurveda the perfect system of health knowledge for today's world.

Dabur has been relentlessly working towards making Ayurveda more contemporary and relevant to today's audience, by validating the benefits of Ayurvedic and natural ingredients through scientific validation. We have been marrying this age- old traditional knowledge with modern day science to develop products that are scientifically tested and meet consumers' need for a healthy lifestyle. A consumer validation of our efforts comes in the form of Dabur being named the Most Trusted Health Care and Ayurvedic brand in India for the fourth year in running, by TRA Research Private Limited.

Dabur's Health Care vertical comprises Health Supplements, Digestives, Over-The-Counter (OTC) and Ayurvedic Ethical products. This vertical contributed 33% to the India FMCG sales  in 2015-16.

Health Supplements

Dabur's Health Supplements portfolio has three key brands -- Dabur Chyawanprash, Dabur Honey and Dabur Glucose. This category accounts for 18% of the India FMCG business. In line with our renewed focus on Ayurveda, this portfolio saw a host of new initiatives that sought to further establish Dabur's image as being dedicated to Health and Well-being of every household. These initiatives encompassed new product introduction, consumer connect programmes and high-decibel on-air campaigns.

Climatic conditions were a major concern for the Health Supplements business this year. Unfavorable summers, unseasonal rains and a less intensive winter impacted sales of these products. As a result, the category remained flattish during the fiscal 2015-16.

Dabaur Chyawanprash, our flagship health supplement brand, is based on an over 3,000-year-old formulation. An Ayurvedic supplement, fortified with various herbs and minerals, Dabur Chyawanprash is rich in Vitamin C and helps in brvention of a variety of diseases through its immuno-modulator effects and rejuvenation properties. Over the years, it has been established as a trusted immunity builder and remedy for cough and cold for Indian households. Dabur is the first branded and highest selling Chyawanprash in the country.

Moving forward on its commitment towards building the immunity of Indians, particularly children, Dabur Chyawanprash once again conducted its mega health awareness initiative - Dabur Chyawanprash Immune India School Challenge, covering schools across Delhi, Maharashtra, UP, MP, Bihar, Jharkhand and Rajasthan. As part of this initiative, Dabur Chyawanprash joined hands with Max Healthcare and reached out to schools to identify and recognize the healthiest schools of the country. At Dabur, we recognize the fact that schools play an important role in shaping a child's health since they are the primary caregivers during the formative years. For the last few years through the Immune India School Challenge, we have been reaching out to schools across the country to educate students & teachers on the need for immunity. This year, this initiative reached out to nearly 500,000 school children. The top schools from all the participating schools were declared on the basis of Average Attendance, Academic Records, School Hygiene and BMI.

Another initiative was launched under this programme in association with the leading NGO - Goonj. This brought together school children from 19 cities across India to collect warm clothes during winter months. This was amongst the largest clothes collection drives this season and the warm clothes were handed over to Goonj for distribution to the poor and needy.

The year also saw the national roll-out of the Chocolate flavored Chyawanprash, in addition to the launch of the sugar-free variant of the brmium health supplement Ratnaprash. Enriched with the power of potent Ayurvedic ingredients like Moti, Kesar, Musali, Dabur Ratnaprash SugarFree provides strength, stamina and energy in a sugar free format.

Dabur Honey, another key brand in the Health Supplements portfolio, posted good growth during the year. Deemed as a top health food across the globe, honey is a wonderful creation. The health properties of this thick golden liquid have been valued since ages. A spoon of honey taken with warm water in the morning is traditionally known to be useful in weight management, and our campaigns have been sbrading this message. Honey is known to be a good source of energy as its natural sugar and carbohydrates are easily digested by the body and it contains vitamins, minerals and antioxidants which are good for health.

A special microsite has also been created for Dabur Honey - www.daburhoney.com  - which offers the digitally savvy consumers exhaustive information about Honey. On this website, Dabur offers a range of healthy Honey recipes, specially created by celebrity chef Vikas Khanna. Visitors to this website also get an opportunity to speak to dietician and customize their own diet plan, besides get expert advice and fitness tips.

This year saw heightened competitive activity in this category. Despite low priced competition and less intensive winters, the brand reported double digit growth during the year. Going forward your Company is planning to launch of a host of new value-added variants and formats to the brand. Dabur has also been sbrading awareness about the quality and purity of Dabur Honey. This has been validated by Consumer Voice which had ranked Dabur Honey as the No. 1 honey brand in India.

The other major brand in this category, Dabur Glucose saw muted growth during the year because of unfavorable summer and unseasonal rains. Despite an adverse external environment, Dabur Glucose, which has been positioned on the 'Cooling Energy' proposition, ended the year with gain in market share. Dabur is working towards introduction of newer variants to drive excitement for the brand and has added the traditional flavor Aampanna to its Glucose portfolio.

Digestives

Rapid urbanisation, highly stressful lives and long working hourshave all led to a growing number of urban Indians developing increasingly irregular daily schedules. This trend was especially notable amongst the younger generation who live apart from their families. This has given rise to a host of digestive issues, pushing demand for digestive remedies. However, another emerging trend in this market is the consumer's increasing tendency to use OTC medicines to alleviate indigestion and stomach-related conditions rather than visiting a doctor.

Dabur India Ltd is a leading player in the digestive category with brands like Dabur Hajmola, Pudin Hara and Nature Care. The category contributed 6% to India FMCG Business and posted growth of 2% during the year. The year marked the extension of brand Hajmola into Ready-to-Drink beverage market with the launch of Hajmola Yoodley, a new range of drinks offering the uniqueness of 'chatpata' traditional Indian flavors to the consumers. The new Hajmola Yoodley, which was launched in  Modern Trade outlets in early 2015-16, is now being rolled out nationally.

Hajmola Yoodley has been launched in six different variants. The ready-to-drink beverage is available in a 250ml pack, priced at Rs. 30, and comes in a very colorful and interesting packaging. The product has the same chatpata (Khatta Meetha) taste experience as Hajmola and the flavours are unmistakably Indian and local.

The parent brand Hajmola tablets and candies posted a steady performance and your Company has introduced a new variant Hajmola Amrud to further drive demand. We continued to undertake high-decibel consumer connect programmes around local melas and haats for sampling and promoting the products.

The other key brand in this category, Pudin Hara reported good growth during the year despite unseasonal rains in the summer months. While demand for Pudin Hara liquid was somewhat impacted, Pudin Hara Pearls continued to grow well, driving up the overall franchise. Your Company is now extending the franchise with the introduction of new formats under brand Pudin Hara and the first of the new launches - a natural Antacid with suspension - will be launched this summer. Dabur Nature Care continued to grow at a steady pace.

OTC & Ayurvedic Ethicals

The upward trend in self-medication has led to improved demand for Over-The-Counter (OTC) products in India. A growing number of Indians are opting for OTC products, and more importantly natural and Ayurvedic remedies, when it comes to treating day to day ailments. This trend is increasingly being driven by educated younger population who are more aware about side effects and the potential risks of allopathic medicines. As a result, more and more Indians are gravitating towards natural medicines and remedies, particularly in categories like Cough & Cold, Digestion, Allergy Remedies, Vitamins & Dietary Supplements etc., leading to a rise in demand for herbal and traditional products. In a country where herbal home remedies have been brvalent since generations, these products are usually perceived as extensions of home remedies and have high acceptance.

For more than a century, Dabur has been validating the benefits of Ayurvedic ingredients and products with modern day technology. Our research wing undertakes detailed tests on individual ingredients and products to ensure that the final product meets customer needs and aspirations. Our R&D Centre is equipped with state-of-the-art equipment as well as trained manpower needed for pharma-grade research activities. In fact, Dabur has been engaged in research in both classical/ethical as well as OTC formulations for more than 50 years.

The OTC and Ethicals portfolio was 9% of the India FMCG Business and reported growth of 10% during the year. Dabur's OTC portfolio includes products in Cough & Cold, Women's Health Care, Baby Care and Rejuvenator categories.

In the Cough & Cold category, Dabur's flagship brand Dabur Honitus reported strong growth during the year with significant increase in market share.

Dabur's Honitus Cough Syrup does not contain harmful ingredients like Codeine and Alcohol and is a non-addictive formula that provides effective relief from cough, without side-effects. It is a Honey-based herbal cough syrup fortified with Tulsi, Mulethi & Banapsha and other powerful scientifically proven herbs. Its 100% Ayurvedic and safe formulation is clinically proven and provides fast relief against acute cough and throat irritation.

As part of efforts to further increase awareness about Dabur's range of OTC and Ayurvedic products, a new initiative, Project LEAD, was rolled out during the year to enhance coverage of doctors, both Ayurvedic and Allopathic. This initiative plans to drive greater awareness about OTC and Ethical products as well as apprise the doctors regarding scientific and clinical data for each of these products.

The initiative bore fruit with doctors now becoming more aware of and starting to advocate natural products. More details about this initiative have been provided under the Sales & Distribution section.

The year also saw Dabur roll out third season of the Dabur Honitus BIG Junior RJ, a talent hunt for kids. This talent hunt, conducted in association with 92.7 BIG FM, awarded 45 lucky winners the chance to co-host their very own show on their local FM station. With this initiative, our endeavour is to help children discover their potential and play a meaningful role in supporting them while doing so.

The other major initiative during the year was the national launch of Dabur's new brmium baby care brand, Dabur Baby. This brand will feature a range of baby care products using natural oils, essential for safe and tender care of the youngest member of the family. The first product launched under the Dabur Baby umbrella brand was the Dabur Baby Massage Oil with Olive & Almond, which is free of paraffin and paraben  making it a completely safe product. Packed with natural ingredients like olive, almond, jojoba and sesame, Dabur Baby Massage Oil provides extra skin nourishment and is dermatologic ally tested.

Today, young mothers in India are increasingly seeking products that not just meet the global standards but which are also true to the Indian traditional knowledge. Dabur is combining the best global practices with traditional Indian knowledge and introducing high quality, safe and natural products under the Dabur Baby brand. The response to Dabur Baby Massage Oil has been encouraging and we plan to expand our brsence in the baby care market with newer introductions, and emerge as a serious player in most of the baby care categories in India.

Dabur has also been brsent in the baby care market for decades with traditional Ayurvedic products and our baby care portfolio includes Dabur Lal Tail, an Ayurvedic massage oil and Dabur Gripe Water and Dabur Janam Ghunti which are traditional tonics for babies. Dabur Lal Tail crossed the 100 crore mark in sales this year, clocking strong double digit growth and riding on innovative sampling and activations targeting new mothers and primary health clinics. Dabur Lal Tail is an Ayurvedic baby massage oil made from time-tested Ayurvedic ingredients which have many proven benefits for the Baby. The product helps strengthen the baby's bones and muscles and this has been proven through clinical research conducted by pediatricians at leading institutions.

The fiscal 2015-16 saw Dabur revamping its Women's Health Care range to make it more contemporary and in sync with the tastes and needs of modern day consumers. As part of this initiative, Dabur's traditional Ayurvedic health tonics, Dashmularishta and Ashokarishta were launched in two fruit flavours - Apple and Mixed Fruit. This marked a new first for this category and is expected to help modernize these age-old health tonics and expand the consumer base.

Dabur Dashmularishta is an Ayurvedic formulation consisting of more than 50 Ayurvedic herbs including Dashmula, the group of ten herb roots along with Ashwagandha, Manjishta and Draksha, which help in recovering from post-delivery weakness effectively and naturally. It also helps in improving metabolism and digestion. Dabur Ashokarishta is an Ayurveda tonic to ease menstrual pains and problems. It is packed with the goodness of herbs like Ashoka, Dhataki, Musta, Haritaki and Amlaki which have anti-inflammatory and rejuvenating properties.

Our Energizer and rejuvenator portfolio, which includes Shilajit and Shilajit Gold, also reported good growth during the year.

Ayurveda is core to our business and Dabur has undertaken a host of initiatives aimed at popularizing classical Ayurveda and ethical medicines which are part of this traditional system. To start with, Dabur hosted a series of Seminars on Ayurveda, christened Ayurmedha, across India to disseminate information about traditional Ayurvedic remedies and medicines among the new generation. Dabur also announced plans to institute a scholarship for students of Bachelor of Ayurveda, Medicine & Surgery (BAMS). The scholarship is open to students at all leading Ayurveda Medical colleges in the country.

The company also conducted a seminar for practitioners & consumers at the International Arogya Fair held at Varanasi. The focus of the Seminar was to disseminate information on how Ayurveda can provide safe, cost-efficient and effective health care for all. Dabur also used the opportunity to showcase the core principles of Ayurveda while processing and manufacturing Ayurvedic medicines, using scientific technology to provide the most effective and quality assured Ayurvedic medicines.

Besides, over 200 Health Camps were organized across the country, where Dabur provided health check-ups, Ayurvedic medicines, investigation and treatment to the poor & needy, free of cost. We are confident that our efforts would go a long way in popularizing the benefits of applying holistic methods of treatment, as brscribed in Ayurvedic literature, to control and reduce several modern lifestyle ailments, besides establishing Dabur as the custodian of this traditional knowledge.

The fiscal 2015-16 ended with Dabur inking a license agreement with the Government of India to commercially produce two new Ayurvedic drugs - Ayush-64 for treatment of Malaria and Ayush-82 for management of Diabetes. Dabur is brparing to commercially produce these Ayurvedic medicines within the next fiscal and making them available in various formats. Dabur also signed a MoU with the Central Council of Research in Ayurvedic Sciences, an apex research body under the Ministry of AYUSH, Government of India, for collaboration and co-operation in pharmaceutical R&D for different novel dosage forms and drug development in Ayurveda. More details of these Ayurvedic drugs have been provided in brceding sections.

Home & Personal Care

The recent years have seen a marked increase in beauty and grooming needs among Indian population. It is a known fact that life is on fast track, long working hours and constant stress take a drastic toll on our hair and skin. The affluent and middle class population in India today don't consider beauty and wellness as a luxury, but a necessity and there is an increased emphasis on looking good and young at all times. With consumers across the world in general, and India in particular, going Green, the demand for Natural and Ayurvedic beauty care products is also rising.

In this segment too, natural remedies are fast finding acceptance, particularly among the new generation of upwardly mobile Indians. Given the fact that Indians have been traditionally inclined towards natural products and home remedies for their daily beauty care needs, and the growing awareness about the side-effects of using chemical-laden products, consumers are increasingly seeking Natural and Ayurvedic personal care products.

Dabur has been at the forefront of offering Natural and Ayurvedic Personal Care solutions to its consumers with a  range of products that cater to all age-groups. We have also developed specialized products for skin and hair care needs of our consumers. Dabur's Home and Personal Care business today covers Hair Care, Oral Care, Skin Care & Salon and Home Care. This vertical contributed 49% to the India FMCG sales and grew by 10% in 2015-16.

Dabur's Hair Care portfolio comprises Hair Oils and Shampoos and contributed to 23% of the India FMCG business. This segment posted 6.8% growth in 2015-16.

Hair Oils: Hair oiling is amongst the oldest of beauty regimes in India. An intrinsic part of our heritage, hair oiling is widely practiced across age groups for nourishing and grooming hair. Hair oils are known to provide benefits of nourishment, strengthening hair, faster and better growth and reducing the problem of falling hair. They are also used as an aid for hair styling and grooming.

Dabur has a strong brsence in this category with a portfolio of hair oils, led by its flagship brand Dabur Amla Hair Oil, along with a range of hair oils under brands Dabur, Vatika and Anmol. Dabur Amla Hair Oil, which was re-launched a year ago in a modern avatar, posted good growth despite disruptive competition. The brand also continued on its journey of specialized communications for specific geographies and signed south Indian actress Anushka Shetty (of Baahubali fame) as the new face of Dabur Amla Hair Oil in South India. Often people treat India as one big market, but the reality is that India is a continent in itself - a mix of different cultures, languages and markets. So, you need to add a distinct local flavor to your brands to help them gain more recognition and acceptability in the specific markets. We have introduced campaigns specifically for the South Indian consumers created after intense research in their brferences and consumer insights.

Dabur's other key hair oil brand Vatika expanded its franchise with launch of Vatika Jasmine Non-Sticky Coconut Hair Oil, which provides nourishment of coconut oil, jasmine extracts that help restore moisture balance in hair and give smooth, manageable less frizzy hair. The other brands in this category, Dabur Almond Hair Oil and Anmol Hair Oil registered strong double digit growth. Going forward, we will further expand our hair oils portfolio with the addition of specialized products to cater to the emerging hair care needs of our consumers.

Shampoos: Dabur's Shampoo portfolio which accounts for around 15% of hair care category witnessed a slow down impacted by heightened competition. During the year the Vatika shampoo portfolio was completely re-vamped with launch of four specialised variants - Vatika Split Treatment Shampoo, Vatika Smoothing Treatment Shampoo, Vatika Hair Fall Treatment Shampoo and Vatika Anti-Dandruff Shampoo. With its unique Oil Balance formula fortified with natural extracts like Henna & Olive, the new range offers superior cleansing with goodness of natural ingredients.

The year also marked the launch of Dabur Almond Shampoo in key markets. With its special Almond-Vita Complex and milk extracts, this brmium shampoo provides rich nourishment to hair making it healthy, soft and shiny. With no harmful chemicals, this new shampoo provides gentle cleansing and conditioning for hair. Dabur conducted a sampling exercise to mark the launch of this new product, whereby free sachets of Dabur Almond Shampoo were distributed among consumers along with an almond, which not only helped establish the compelling ingredient story among consumers but also generated trials. The brand has been well received in the market.

A beauty pageant 'Vatika Miss Natural' was launched in Uttar Pradesh across colleges, beauty parlors and educational institutes to reinforce the brand's association with natural & beautiful hair. It was concluded in a grand pageant held in Lucknow. The campaign has helped reinforce the consumer connect and promote the newly launched variants among consumers.

Oral Care

Dabur's oral care portfolio of highly differentiated products based on Ayurvedic and Natural ingredients, posted strong double digit growth during the year, growing ahead of the category. Oral Care portfolio comprises two key product categories - toothpastes (with brands like Dabur Babool, Dabur Red Paste and Dabur Meswak) and toothpowder (with Dabur Lal Dant Manjan).

Dabur's oral care portfolio which contributed 15% to India FMCG sales reported 16.2% growth during the year despite heightened competitive intensity and entry of newer brands in the market. Dabur operates in the toothpaste market with a highly differentiated product portfolio and our USP is the brsence of natural ingredients in the oral care offerings. Our unique range of natural and Ayurvedic formulations have helped drive demand for our brands, giving us the strategic advantage in an otherwise highly competitive segment.

Both Dabur Red Paste and Meswak Toothpaste are based on the centuries old knowledge of Ayurveda, the benefits of which have been validated with science. This has helped us develop efficacious products that are contemporary and offer our consumers holistic oral health and well-being. Dabur Red Paste is an Ayurvedic offering that helps keep dental problems away, while Meswak has the unique ingredient of Meswak herb for complete oral care.

In addition to sustained media campaigns around these brands, Dabur rolled out a series of Oral Health Camps across the country to build awareness among school-going kids about the need for Oral Hygiene. Dental camps were organized in schools across Urban and Rural India and the children were educated about best dental care practices.

Dabur's Toothpowder offering Dabur Lal Dant Manjan reported steady demand, riding on sustained rural consumer activation targeting non-dentifrice users.

Skin Care & Salon

The Skin Care business is among the youngest businesses of Dabur and has been riding on the consumer need for specialized natural products that provide nourishment and beauty. The portfolio today includes facial bleaches under the Fem and OxyLife brands, hair removal creams under the Fem brand and Rose-based mainstream skin care products under the Dabur Gulabari brand. This segment today accounts for 5% of Consumer Care Business and has recorded 4% growth  in 2015-16.

During the year Dabur expanded its Skin Care and Salon portfolio with the launch of a host of new products that also sought to brmiumize the category. Dabur expanded its Fem facial bleach range with the launch of brmium Fem Diamond Creme Bleach. The specially formulated diamond creme bleach is packed with diamond dust to give the skin long-lasting  sparkling glow. The dermatologically tested Fem Diamond Creme Bleach comes with br-bleach and post-bleach cream add-ons that help optimize skin rejuvenation and nourishment for a pleasant usage experience.

Dabur also launched a range of professional salon facial products under the OxyLife brand -- OxyLife Salon Professional ProWhite Pure Oxygen Facials for women as well as men. These facial kits have been created exclusively for professional use. OxyLife Professional Facial is a revolutionary facial which combines the goodness of nature with science to deliver the benefits of oxygen through its patented German OxySphere Technology. The OxyLife brand also saw the introduction of OxyLife Creme + Creme bleach, which is the first facial bleach to have a Creme-based Activator. Its specially designed formula contains vitamin E and active oxygen which releases oxygen direct to the skin to fight skin problems like dark spots, sun tan and dullness.

The mainstream rose-based skin care range under Dabur Gulabari was restaged this year. The brand, which crossed turnover of Rs.100 Crore in 2015-16 fiscal, expanded its portfolio with the launch of a range of face wash products. The range includes three products -- Gulabari White Rose Soft Fairness Face Wash, Gulabari Pink Rose Soft Daily Face Wash and Gulabari Black Rose Soft Pimple Control Face Wash - that have been specially developed to cater to the different skin care needs of teenage girls. The different colors of rose often connote different emotions, and hence have been used in the Face Wash range to denote the individual benefits of each product.

During the year, Dabur hosted special sessions for parlor professionals across the country where renowned beauty consultant and cosmetologist Avleen Khokhar trained the parlor professionals on best skin care practices. Dabur professional range today reaches 27,500 salons and parlors in over 300 cities.

A series of consumer activations were also conducted to reach out to our consumers. This included a mega model hunt - Fem Miss North India Princess 2015. The pageant, one of the biggest in North India, sought to discover the most beautiful and fresh new face of North India. This pageant also offered young girls across cities of North India a platform to showcase their beauty and enter the world of mainstream modeling. The hunt was conducted across colleges and institutes in North India, with on-ground activation covering cities across Delhi-NCR, Uttar Pradesh, Uttarakhand and Punjab.

In addition, Fem ran a unique campaign on the occasion of Karva Chauth offering consumers an instant makeover for the festive season. Christened 'Fem Get Set Glow Makeover', this initiative gave consumers a chance to participate or nominate their loved ones for a FEM free instant makeover in their city. For this, Fem joined hands with beauty salons across India to offer these free instant makeovers to women during the festival season. Various media, including TVC, Digital films, Web banners, Radio, Outdoor, were used to promote the initiative. The campaign comes to life with a series of digital films that generated buzz on the social media platforms and garnered over 70,000 views within a few days.

Home Care

Dabur's Home Care portfolio includes Mosquito Repellents (Odomos), Air Fresheners (Odonil) and Toilet Cleaners (Sanifresh). This portfolio continued to perform well and ended the year with growth of 12.9%. The business accounted for 6% of the Consumer Care Business in 2015-16.

The mosquito repellant brand Odomos performed well during the year, riding on sustained activity around brvention from deadly mosquito-borne diseases. Dabur has positioned Odomos as the expert for protection against Dengue causing mosquitoes. During the year, Dabur launched a mega initiative christened Dengue Fighter, which was aimed at brventing school-going children across Delhi-NCR, Uttar Pradesh, Maharashtra, Tamil Nadu and Karnataka from falling bry to the deadly mosquito-borne disease Dengue.

Under this initiative, aimed at equipping children with knowledge about Dengue and turning them into Dengue-Fighters, healthcare professionals from leading hospital chains were engaged to visit schools and educate students, teachers as well as parents about effective brvention from Dengue. Schools across these cities will also be ranked and rated on the basis of the Dengue brvention measures implemented by them, and a Dengue Report Card of each city brpared.

Under this initiative, Dabur reached out to over 700,000 students and 40,000 teachers across India. Schools were encouraged to implement measures to brvent mosquito breeding and sbrad of mosquito borne diseases. A special Audio Visual has been developed to sbrad the message among kids and educate them about how mosquitoes breed and the effective measures to be taken to brvent this.

Dabur's toilet cleaner brand Sanifresh took forward its mega social campaign "700 Se 7 Kadam" which works towards protecting the dignity of women in rural India. Under this initiative, Re.1 was collected from every pack of SaniFresh sold and the proceeds went towards construction of toilets in rural house households and schools. During the year, SaniFresh, which is committed to improve the sanitation facilities in rural India, helped construct over 1,000 household toilets in rural Uttar Pradesh, Himachal Pradesh and Uttarakhand.

Meanwhile, Dabur's air freshener brand Odonil reported strong double digit growth with the launch of new fragrances and extension of existing formats. The brand has successfully established itself as the air freshener expert offering a variety of air care solutions for all spaces inside a house. The recent innovations such as Odonil Gels and Odonil One Touch have received a good response and inducted more consumers into the brand.

Foods

Dabur's Foods business which includes packaged fruit juices & beverages and culinary pastes contributes 18% to the India FMCG Business. This is the youngest business at Dabur and has also been the fastest growing in the recent years, clocking strong double digit growth year after year. This business opened the year on a strong note and continued to grow at a good pace. However, the political unrest in Nepal that occurred in the second half of fiscal 2015-16 and the blockade of Indo-Nepal border that followed severely impacted the supply of packaged fruit juices and beverages to India. The blockade, in fact, coincided with the peak festive season and continued for more than three months.

Despite growing demand for its products, your Company was unable to service the requirement during the third quarter of the year as the border blockade brought the supply of juices from Nepal to a complete halt. While we were quick to respond to situation and took immediate steps to mitigate the impact by ramping up the production of juices at our manufacturing units in Sri Lanka and India, we were unable to meet the entire demand. This impacted sales of fruit juices significantly during the third quarter. The blockade has since been lifted with supplies coming back to normal in the fourth quarter of the year.

The year saw Dabur introduce a new sub-brand Real Wellnezz with 100% Jamun Juice. In addition, the Real Activ range was also expanded with the launch of 100% Mixed Fruit Juice. Real Activ Coconut Water, which was launched last year, found greater acceptance and grew at a healthy pace. Today, Dabur has the largest range of fruit juices in the market and will continue to add new variants to this range to keep up the excitement and grow its market share. This summer will see the launch of Mausambi (Sweet Lime) juice under the Real brand.

Moving forward on its social commitment to fight malnutrition among under privileged kids, Real joined hands with Prayas Juvenile Aid Centre Society to launch a mega social initiative -Real Dil Se Dua. Launched on the occasion of Raksha Bandhan, this initiative is part of Dabur India Ltd's mission to touch the lives of thousands of under-privileged children and sbrad Health & Happiness during the festive season. As part of the campaign, Dabur and Prayas Juvenile Aid Centre Society launched a signature campaign across major cities, covering Delhi-NCR, Chandigarh, Ludhiana, Jalandhar, Amritsar, Jammu and Mumbai. Against each signature, Dabur committed to give one pack of Real fruit beverage to a child thus providing nourishment to under nourished children.

INTERNATIONAL BUSINESS

Dabur's International Business contributes to about a third of consolidated sales with revenues coming from Middle East, Africa, South Asia, Europe and Americas. Country-wise break up of sales is provided in Chart 7.

The International Business recorded sales of Rs. 2712.1 crore during fiscal 2015-16 growing by 11.9% over brvious year. Geopolitical and economic brssures have adversely affected the business environment either directly, leading to disruption of business or indirectly, leading to debrssion of investments and cash flows. In-spite of the above mentioned headwinds the business was able to post steady growth on account of the brand equity and wide consumer base established in these markets through sustained investments.

The portfolio of Dabur International is built with adaptation and innovation of existing brands to cater to local tastes and consumer habits. This business comprises a large range of hair, skin and oral care products. It follows a localized supply chain strategy whereby own manufacturing facilities have been set up in each of our key markets such as UAE, Egypt, Nigeria, Turkey, Nepal, Bangladesh and Sri Lanka.

An overview of performance of each of the regions during fiscal 2015-16 is brsented below.

Middle East : Middle East constitutes 33% of the total International business. Gulf countries namely Saudi Arabia, UAE Oman and Kuwait are the largest markets in terms of value. Other potentially large markets in the Levant region such as Yemen, Iraq and Syria have remained debrssed due to geopolitical upheavals. By portfolio type Hair care is the largest with a large range of hair care products such as hair oils, hair creams, hair gels, shampoos, conditioners, nourishment products such as Hamam Zaith and serums. The second largest is the oral care portfolio which comprises Dabur Herbal Toothpastes, Miswak toothpaste and a number of extensions and variants. This is followed by the fast growing range of skin care products under the brands Fem and Dermoviva which have been added in the last few years.

The oral care portfolio in the Middle East region recorded strong growth in 2015-16 with improvement in market share. In Saudi Arabia which is one of our biggest markets in this region, Dabur is the largest in hair oils and hair cream categories with 66% share in hair oils and 42% in hair cream category. In UAE, which is another key market for us in Middle East, Dabur's share in hair oils was at 35% and in hair creams at 48%. Dabur entered the shampoos category in 2012 and has since built a strong niche position on the herbal platform in this highly competitive segment. Dabur's share in shampoo category remained steady as Vatika Shampoo range continued to perform well. A new Alpha ingredient range of shampoos has been introduced which utilize local ingredients and have received a good response in the markets where it has been rolled out.

The brand Vatika continued to innovate in the hair care space by launching localized offerings specific to the region and increased its natural ingredient linked brand equity. Its offerings in hair conditioning category have followed the local alpha ingredient extension route and this has given rich dividends in volumes and value to the brand over the course of the year making new variants significant in the growth of the brand. Vatika portfolio was expanded to hair colours and the offerings were evolved in sync with fashion trends driving the hair colour category. Dabur Amla as a brand has a heritage and high recall in this region which was capitalized to extend the brand into hair care formats other than oils. The range of In-wash and post-wash product offerings in the form of shampoos, conditioners, hair creams and Hamam Zaiths has played on the strength of the hair nourishment equity that the brand enjoys and has led to trials and purchase of the new offerings giving an avenue of future growth to the brand beyond its traditional portfolio of Hair Oils. Target segment expansion has gained importance and one of the latest offerings, Dabur Amla for Kids is an example of that. The range includes brwash conditioning in the form of Hair Oils and post wash conditioning in the form of de-tanglers.

The oral care portfolio was the star performing category growing by double digits. This was on the back of existing range of No Fluoride toothpastes in Herbal Toothpaste range and the locally and culturally significant Miswak range. Innovations were done in terms of benefit expansion in Herbal Toothpastes with specialized offerings such as anti-ageing benefit and toothpaste offerings for the special oral care needs of smokers and sensitivity. The portfolio also expanded in the Miswak range with the launch of the new Miswak Gold toothpaste and format extensions into mouthwashes.

The DermoViva portfolio of skincare products posted good growth in 2015-16. The brand introduced a host of new products and formats with improved product and propositions refined by customer feedback and reinforced by market research. Face care category, into which Dermoviva brand has been extended, has performed exceptionally with a high consumer traction. There was good consumer interest in the range of cleansers, toners, face washes and face scrubs. The brand has developed a unique, locally relevant nature led proposition to develop a range of baby care products. Baby care is a very large category and can be a good driver for growth in the coming years with expansion and growth of the Dermoviva baby range covering hair, wash, and moisturizing need based products. The range comprises of Hair Oil, Shampoo, Body lotion and creams, Talcum powders, and baby wipes to provide a complete complement of babycare products based on olive oil nourishment equity.

The skin care brand 'FEM' posted a good performance in 2015-16. After a successful packaging design overhaul, FEM Hair Removal Creams have been a strong growth pillar for the brand. Its innovative offerings have been growth drivers including the In-shower hair removing cream, Gold HRC with actual gold particles and localized format of HRC branded and sold as FEM Halawa. The launch of Fair and Radiant Facial Kit was a key launch growing the brand's equity in face care segment.

Africa

Africa is an important region for Dabur contributing to 22% of total international business. Key markets within Africa are Egypt, Nigeria, South Africa and Kenya. The company has been focusing on deepening its market brsence in Africa by establishing its own brands as well as building the specialized hair care offerings under the brand ORS which was acquired a few years ago as part of acquisition of Namaste Laboratories LLC.

Egypt is one of the largest overseas markets for Dabur contributing to 11.4% of international business sales. Dabur Egypt Ltd manufactures and markets a large range of products in hair, skin and oral care categories. The company maintained its No. 1 position in hair creams, hair oils and Hammam Zaith Creams during the year. Our market share was steady at 47% in Hair Creams and 69% in Hair Oils. The strategy of localization and extension of brands into shampoos and Hamam Zaith categories has worked well for the business leading to a growth of 12% in local currency sales.

Business operations at Sub Saharan Africa have been consolidated into three hubs anchored at Lagos, Nairobi and Johannesburg to derive business synergies across the economic zones. Focus is on enhancing capabilities and skill set with the addition of qualified manpower to the regional talent pool.

In Nigeria, the company manufactures and markets oral care, hair care and home care products. Dabur Herbal Toothpaste has a good brsence in the market with a portfolio of flavours and variants. Market share in Toothpaste category continued to hold strong at around 6% despite the severe economic crunch. Hub & Spoke distribution arrangement is being set-up to provide pan Nigeria coverage across open markets and retail network. Alongside, portfolio expansion into toilet cleaner category is being led with the launch of SaniFresh. Besides oral care and home care products, the hair care range under the ORS brand of Namaste has a good brsence in the market. A manufacturing line has been set up at Dabur's plant at Lagos for manufacturing ORS range of hair care products from the Namaste portfolio.

Local marketing efforts are underway to strengthen the consumer franchise in East, West & South African markets for the Namaste portfolio which has a good consumer base here. Gearing up brand availability by improving access to the important salon channel, building distribution infrastructure in key Namaste markets for Nigeria, Ghana, Kenya, Tanzania, Uganda, DRC, Zambia and South Africa and relationship building with Hair Associations are some of the key initiatives in the Namaste growth framework. In addition, widening the portfolio sbrad and strengthening connect with Key Opinion Leaders i.e. Hair Stylists has been in focus. Localization of manufacturing is another key initiative to streamline and strengthen local supply chain for the products. This is underway with two new facilities coming up in Nigeria and Egypt.

South Asia (ex India)

Dabur's key markets in this region are Nepal, Bangladesh, Pakistan, Sri Lanka and Myanmar. The region contributes 17% to International Business sales.

Dabur Nepal Private Ltd, one of the largest FMCG companies in Nepal, manufactures & markets wide range of Consumer goods under segments like Foods, Home Care, Personal Care and Health Care with products like Fruit Juices/Beverages, Chyawanprash, Glucose, Tooth Pastes, Hair Oils, Digestive Tablets, Honey, etc. The key brand in the portfolio Real Fruit Juices continued to perform well in spite of closure of the factory for more than 3 months due to the blockade of the India-Nepal border. Brands such as Vatika, Hajmola and Dabur Toothpastes are popular in the country and recorded good offtakes. The year saw a number of new launches, the most notable being Burrst Litchi & Burrst Apple which are local innovations. The year once again saw a renewed focus on enhancing business processes & systems. Initiatives to drive distribution expansion and strengthen the front end were undertaken which led to double digit growth in sales. Bangladesh market posted strong growth driven by momentum in categories like hair oils, shampoos, oral care and digestives. The newly set up green field plant at Dhamrai on the outskirts of Dhaka was in full operation. The plant has facilities to manufacture Hair Oils, Shampoos, Toothpastes, Honey and Odonil. Odonil and Red Tooth Paste which were introduced into the market last year continued to grow well.

Dabur has set up sales and marketing operations in Sri Lanka post the commissioning of its fruit juice facility near Colombo. The company is selling fruit juices in the local market under the Real brand besides other products such as Honey, Sanifresh, Odonil, Hair Oils and Shampoos.

Myanmar market offers good potential as it is opening up. Dabur has entered the oral care, hair care, skin care and mosquito repellant categories in Myanmar and the portfolio is growing well.

In Pakistan, Dabur markets its range of hair oils, shampoos and digestives under the brands Amla, Vatika and Hajmola. The Company introduced market specific variants like Shikakai and Mustard in hair oils and Egg & Henna Shampoo under Vatika Shampoos. It expanded its Amla Franchise in the shampoo category and launched Amla Shampoo. The Company launched a new brand called Dabur Hazmazza in the digestive segment. Dabur entered the baby care category with Dermoviva Baby and launched Dabur Red Toothpaste in the oral care category.

Americas

Americas contribute to 17% of International Business. Dabur's major brsence in America is through the hair care portfolio of Namaste Laboratories which caters to people of African origin residing in the US.

In additional to traditional products likes relaxers, nourishment, styling and cleansing products Namaste has launched a range of products for the New Naturals Hairstylers which is a strongly growing segment.

The business had been under brssure last fiscal due to distribution restructuring, pricing alignment among various markets and under performance of the relaxers category. The relaxers category witnessed a slow down as consumer brferences were shifting towards New Naturals (curly look). However, FY2015-16 was marked by an improvement in performance on the back of improved product portfolio and better business dynamics. The ORS brand experienced good growth led by products such as New Growth Kit, Monoi Oil brand, a restaged Curls Unleashed and other new product introductions.

In the Naturals segment, Namaste launched the ORS Black Olive Oil™ Repair7™- which helps to transform dry, weak and damaged hair with the help of essential fatty acids and vital anti-oxidants to moisture, strengthen & repair hair. The range includes 5 products - Sulfate-Free Shampoo, Rinse Out Conditioner, Leave-In Conditioner, Leave-In Treatment and Oil Elixir.

The Olive Oil Styling Range was expanded to better meet the needs of the New Naturals consumer. The new styling offerings expanded the styling line into new formats such as hair gels & non Aerosol hair spray.

The Company expanded the Monoi Oil range further with the launch of Monoi Oil Edge Control Gel Stick, Monoi Oil Shampoo & Monoi Oil Conditioner. The range was supported with TV, Print, Digital, and Out of Home advertising.

Dabur also caters to the ethnic Indian channels in the USA supplying the range of Dabur brands which are popular among the South Asian / Indian community. The business witnessed strong growth driven by distribution and range expansion. The new range of shampoos, serums and hair masks under the Vatika brand received a good response from consumers.

Dabur's private label oral care exports to USA including Toothpastes, Mouthwash and Denture Adhesives continued to perform well

Europe (Including Turkey)

Europe contributes 11% to Dabur's International Business. Dabur's Turkey business, Hobi Kozmetik, continued on a good growth trajectory. Hobi Kozmetik, once again delivered a good double digit growth in 2015-16, capitalising upon a strong distribution platform and building on growth pillars like Hair Care, Hair Styling and Liquid Soap. The company has a wide product range which includes more than 190 personal care and cosmetics products in categories like hair gels, hair sprays, mousses, hair shapers, hair conditioners, shampoos, hair care complexes, body creams, hand and body lotions, body shampoos, liquid hand soaps, baby and skin care products. Despite political and economic crises within Turkey and some of the export markets struggling, the company posted a good performance. Hobby continues to be the market leader in Hair Styling and Liquid Soaps with more than 30% share in hair gels category. Plans are afoot to further expand the Dabur portfolio within Turkey with introduction of brands like Fem and Vatika and in parallel strengthen Hobby's brsence in export markets.

Europe business overall grew strong double digits led by the Namaste portfolio despite regulatory and economic headwinds. New products and categories launched during the year generated robust traction.

SALES & DISTRIBUTION

In a highly complex market like India, the efficiency of its distribution infrastructure is the key to the success of any enterprise. At Dabur, we take pride in having implemented strategies ahead of the times to ensure timely delivery of our products across channels, both established and emerging, to tap the emerging needs and trends in the marketplace. Dabur has been investing in its Sales & Distribution network, refining its go-to-market strategies and strengthening the capabilities of its field force to maintain close and continuous touch with the market.

In the brvious years, we have put in place focused initiatives for both rural and urban markets, which helped us drive growth across geographies and channels. In the urban markets, we had rolled out a sales and distribution initiative called Project 50/50, which was aimed at leveraging the potential of Top 130 towns that contribute to 50% of urban consumption. As part of this, steps were taken to enhance quality of market interface and improve sales efficiencies by segregating the grocery channel teams for wholesale & retail separately as these two segments of trade have completely different servicing requirements.

In addition, a new programme 'Project Core' was initiated to enhance our effective coverage of chemist outlets in 150 focus towns, which has improved availability of our product range in this channel. Besides being critical retail points, Chemists also act as advisors to consumers seeking solutions to treat moderate and non-critical health problems hence influencing purchase of OTC products in a big way.

We have also been enhancing our rural distribution footprint under Project Double, which was initiated a few years ago. Under this initiative, we had increased our rural footprint from 14,000 villages about few years back to 45,000 villages in 2014-15. This network is being streamlined and consolidated for enhancing the efficiency and productivity of the rural field force and infrastructure already deployed in the rural markets.

We have been using a mix of localised promotional and marketing strategies as well as technology to access the consumers in these markets and to supplement these distribution enhancement initiatives. In urban markets, for instance, we undertook a host of school contact programmes and consumer activation initiatives. In rural India, we have rolled out a host of activities to not only engage the consumer but also provide her an opportunity to touch, feel and experience the products. We have also stepped up our consumer connect initiatives through participation in haats, nukkad nataks, melas and innovative initiatives like regional beauty pageants and rural talent hunts, which helped Dabur effectively capture the consumer mind-space.

With the market place evolving, a series of new initiatives have been put in place to tap the emerging opportunities. We have increased on focus on expert channels like Salons, Healthcare Professionals and even Key Opinion Leaders or Influencers as part of our efforts to drive deeper into the consumer mind-space.

Medical Marketing

This year the Company has launched a new initiative, Project LEAD (Leveraging through Empowered Anchoring and Detailing). As a part of this initiative, we are focusing on enhancing our coverage of doctors, both Ayurvedic and Allopathic. Doctor advocacy shall be the key to demand generation, and a medical detailing team has been put in place for the same. This project was initially rolled out in three states, i.e. Uttar Pradesh, West Bengal and Maharashtra. We are now planning to extend it to Bihar, Rajasthan, Madhya Pradesh, Karnataka and Andhra Pradesh.

This initiative is in line with our focus on healthcare as an important driver of growth and will help establish a good connect with the healthcare fraternity. Around 170 product specialists have already been hired and this team will be expanded along with increase of coverage. The doctor detailing team has been armed with tablets in order to make their job of product detailing to doctors and healthcare professionals a lot easier. These tablets are programmed with all information about Dabur's Health Care range as also information on various ingredients and clinical study data about each product. The initiative has started bearing results with the Company witnessing a quantum jump in brscription of its various Health Care products being covered under this programme. Your company has already covered around 30,000 doctors -­both Allopathic and Ayurvedic - under this programme and the same is expected to be scaled up further.

Dabur is also working towards upgrading its network of 362 Dabur Ayurvedic Centres which act as sales as well as advocacy centers. The company has been organizing doctor conferences that are aimed at sbrading awareness about our product range.

Organised Retail & E-Commerce

Organized Retail, or Modern Trade as it is popularly known, has come to play an important role in the retail landscape in India, contributing 10-11% of business for the overall FMCG industry. Modern Trade, in fact, has been a key driver of growth in Urban India for Dabur in 2015-16. The channel contributed good growth driven by deeper engagement, focused strategies and better placement of our products.

E-retail or e-commerce, on the other hand, is still at a nascent stage. While its contribution in terms of business is still negligible, it is ramping up at a fast pace. The joint report by CII and Boston Consulting Group estimates that by 2020, more that 150 million consumers would be digitally influenced in

FMCG. These consumers would spend more than $45 billion on FMCG categories. The combined effects of these demographic shifts with the emergence of new channels like e-commerce, proliferation of the internet connectivity and consumption of digital media, will reshape the FMCG sector.

This is an important development in the context of evolving shopper behavior and in terms of consumer engagement for the brands. Given the increasing trend of online shopping, a number of brick-and-mortar Modern Retailers are also venturing into the e-commerce space.

Dabur has forged partnerships with e-grocers like Big Basket, specialist players like First Cry and Top Marketplaces like Amazon & Snapdeal. We are also working closely with Hyper Local players in their journey of consumer acquisition and retention. With a large as well as a specialized range, we believe e-commerce offers a critical communication channel for marketing as any other. We are working with multiple partners across many categories to sell our range of products online. In addition, special e-commerce portals have also been created for specific products.

Dabur has embraced technology in a big way to better reach out to the modern day consumer and better service her needs. By creating interfaces on the digital social platform, Dabur as an entity and its various brands are reaching out to consumers, interacting with them and, in the process, enabling them to become our brand ambassadors. In another first, Dabur has tied up with Snapdeal to set up an exclusive e-store LiveVEDA for its range of Ayurvedic products. Going forward, we are also looking at launching certain products exclusively through the e-platforms.

RETAIL BUSINESS - NEWU

Dabur operates its specialized beauty retail business under the brand 'NewU'. This business is operated under Dabur's wholly-owned subsidiary H&B Stores Ltd. The NewU stores merchandise a wide range of beauty care products and are mainly located at brmium locations. These stores offer a unique blend of domestic and international brands covering a vast variety of cosmetics, fragrances, skin care, personal care and beauty and fashion accessories.

At the end of fiscal 2015-16, NewU's retail footprint stood at 73 stores across 30 cities. NewU also extended its market share by way of Ecommerce and has brsence across all major market platforms and expanded its own Ecommerce website Newu.in which generated an excellent response from consumers.

The business witnessed sales growth of 26.7% during the year as nearly all stores reported a good increase in sales with an  enhanced and streamlined product range. A number of new international beauty brands were introduced through the NewU store network during the year. NewU continued its focus on bringing high quality products at reasonable price under its own brand names "Newu" and "Zensual. NEWU extended the offerings to include kajal, sindoor and new range of nail paints and removers. During the year Newu continued its effort to increase the number of exclusive brands at its stores.

OPERATIONS

Since its inception in 1884, Dabur has been developing products that meet the evolving needs of our consumers across geographies. We have been going the extra mile to create and maintain the highest quality and safety standards, incorporating the latest technology at our manufacturing units and carrying out extensive quality checks on both raw materials and finished products to ensure that our consumers always get best-in-class products.

Dabur also stays up to date with new regulations and industry best practices and has been regularly participating in various forums on Food Safety and Quality. During the year 2015­16, Dabur continued its focus on driving the quality culture and improving environment management across all our manufacturing units, both in India and abroad. In addition to developing innovative, natural and highly efficacious products, each of our manufacturing locations have been regularly undertaking initiatives towards meeting and exceeding environment protection norms, quality improvement and improving safety awareness of our employees. Details of our various environment and employee safety related initiatives have been provided in the Business Responsibility Report section.

Domestic Manufacturing

Dabur today has manufacturing units at 12 locations across India. We have production units organised around two main locations of Baddi (Himachal Pradesh) and Pantnagar (Uttaranchal). Other factories are located at Sahibabad (Uttar Pradesh), Jammu, Silvassa, Alwar, Katni, Narendrapur, Pithampur, Siliguri, Nashik and a Foods manufacturing facility in Newai (Rajasthan). Nearly 90% of our products are manufactured at company-owned units, while the balance at third party facilities.

During the 2015-16 fiscal, a host of initiatives were taken at our manufacturing units to add capacities, reduce cost, reduce impact on environment, reduce wastages, new product and pack introduction, improve safety awareness, quality improvement & Total Productivity Maintenance (TPM). Moving forward on its commitment towards environment protection, Dabur has installed online effluent monitoring system at the Sahibabad unit, in line with the Central Pollution Control Board guidelines. As part of our efforts to achieve best environmental pollution control standards on the principle of Reduce, Reuse & Recycle, Dabur implemented 'Acidification Reaction System' by adding a special bio-culture tank called 'Acidogenic Bacteria Tank' with the help of in-house technical team. This is a first for the FMCG industry. Our efforts on the manufacturing front have been recognized with your Company bagging two Greentech Safety Gold Awards in 2015.

International Manufacturing

During the year capacity of the company's plant at Rasal-al-khaima (RAK) in UAE was enhanced from 44,500 MT to 51,000 MT per annum. New manufacturing and packing facilities were set up for Henna Hair Colours and additional Namaste products. In addition, new packing lines for shampoo, toothpaste, skin cream and mouthwash have been installed and commissioned. Various process and automation initiatives have been implemented in RAK during the year to optimize manpower requirement and improve productivity.

In Egypt the company operates through its state of the art manufacturing facility at 10th of Ramadan City, which has an investment of more than 100 million EGP. It is an ISO compliant company with state of the art quality lab. Warehouse management system (WMS) has been implemented at this plant during the FY 2015-16.

HUMAN RESOURCES

Human Resource is the most vital factor to achieve the goals of any organization. Being a progressive organization, Dabur firmly believes in the strength of its most vital asset --  the over 6,000 strong workforce. To maintain its competitive edge in a highly dynamic industry, Dabur recognizes the importance of having a work force which is consumer-focused, performance-driven and future-capable. In keeping with this, a number of policies and initiatives have been drawn up to ensure a healthy balance between business needs and individual aspirations.

At Dabur, we believe in fostering equal employment opportunities, where individuals are selected and treated on the basis of their job-relevant merits and are given equal opportunities within the organization. Our practices seek to address needs specific to the development, engagement, growth and retention of women employees. We have taken several steps towards encouraging women and enhancing workforce diversity through our initiatives on work-life flexibility. Given the fact that a growing number of young employees are working couples, we understand their need and now offer paid Maternity Leave of four months besides doubling the paternity leave scheme to help people better manage their Work-Life balance. These steps have helped Dabur become more gender sensitive and also make our women employees feel more secure. This International Women's Day, Dabur announced its decision to offer the women employees flexible working hours for four months post the maternity leave. This is in addition to the four-month paid maternity leave that we offer to our women employees.

We have in place a variety of measures to engage the employee and ensure career progression, helping employees move from their current level to a higher level. These include giving our employees overseas exposure, job rotations and even special projects. This ensures that there is a continuous learning process for the employee.

With its focus on being Future Ready, Dabur is rolling out special programs to attract Gen-Y or the millennial generation. In an industry first, Dabur had last year initiated a program to empower its young managers and involve them in key decision making exercises involving new media, product development & new launches. Towards this end, Dabur had created a Youth Committee (Y-COM), composed of the youngest members of the marketing team, which connects the rest of the marketing team with the latest trends and emerging brferences of youth. They go to colleges and invite college students to the Dabur headquarters for informal chats among other things to forge a direct link with the new generation. The insights and learnings are then used in developing go-to-market strategies for specific brands and products.

This year, we have taken it a step further. Dabur has started a unique program to connect with students at eminent B Schools and introduce some of our youth focused brands at the campuses. Christened Campus DREAMS (Dabur Reach-out for Engagement & Awareness in Marketing and Sales), this initiative serves the twin purpose of better reaching out to both potential employees as well as consumers. This is a part of Dabur's strategy to become Future Ready and is first of the several new initiatives that we are planning with B-School students. Dabur continues to maintain its record on Industrial Relations without any interruption in work. As on March 2016, the company had 6607 employees on its rolls across the globe.

FINANCIAL REVIEW

During fiscal 2015-16, your Company recorded consolidated sales of Rs. 8436.0 crore growing by 8.1%. The Domestic FMCG Business reported growth of 6.3% while the International Business grew by 11.9%.

The business witnessed a benign cost environment during the year due to a steep correction in crude oil prices. This led to an improvement in the gross margins with material cost as a percentage of sales reducing from 47.7% in FY2014-15 to 45%  in FY2015-16.

The Advertisement and Promotion expenditure for the year stood at 14.7% as compared to 14.4% in the brvious year, which was a reflection of our continued investment behind our brands. The year 2015-16 witnessed many new product launches as well as a revamp of some of our existing products.

The Company's EBIDTA grew by 17.9% to Rs. 1739.0 crore. Consequently, our EBITDA margins improved to 20.6% during 2015-16 as compared to 18.9% in the brvious fiscal. Effective Tax Rate on a consolidated basis showed a marginal increase going up from 19% in 2014-15 to 19.4% in 2015-16. Profit After Tax (PAT) after minority interest grew by 17.5% to Rs. 1252.7 crores in fiscal 2015-16. PAT margins improved consequently to 14.8% from 13.7% in the brvious year. Chart 11 provides a summary of the consolidated income statement.

OPPORTUNITIES AND THREATS

The consumer landscape has been continuously evolving and one has to keep pace with the changing trends in order to win consumer confidence. The Herbal Wave in India offers a significant growth opportunity to be tapped and appropriate strategies need to be formulated to capture this opportunity. Dabur is capturing these opportunities by investing in brands that are positioned strongly on the herbal platform and appeal to the contemporary consumers. Dabur is leveraging its deep experience and heritage in the field of Ayurveda and building its business based on the Health and Wellness theme across categories.

Currency volatility, slowdown in category growth rates and unbrdictable weather patterns are some of the threats to the company's prospects.

OUTLOOK

An improvement in the macro-economic fundamentals is expected to ramp up demand by improving the overall consumer sentiment. The Company expects demand to pick up as and when the disposable income in the hands of consumers increases due to pick up in economic activity and various government initiatives like NREGA, 7th Pay commission, implementation of DBT schemes etc.

The company has a good product pipeline and has also been investing in various distribution channels to service the demand all across geographies. We are well poised to effectively capture the growth opportunities in the FMCG domain.

INTERNAL FINANCIAL CONTROL SYSTEM

Please refer to the section on Internal Financial Control System included in the Directors' Report.

RISK MANAGEMENT

Business risks exist for any enterprise having national and international exposure. Dabur also faces some such risks, the key ones being - a longer than anticipated delay in economic revival, unfavorable exchange rate fluctuations, emergence of inflationary conditions, rise in counterfeits and look-alikes and any unexpected changes in regulatory framework.

The Company is well aware of these risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions. 

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Dabur's objectives, projections, estimates and expectations might be construed as 'forward looking statements' within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those exbrssed or implied. Important developments that could affect the Company's operations include a downward trend in the FMCG industry, rise in input costs, exchange rate fluctuations and significant changes in political and economic environment, environment standards, tax laws, litigation and labour relations

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