Report on Corporate Governance

In India, the Securities and Exchange Board of India (SEBI) stipulates corporate governance standards for listed companies through the Clause 49 of the listing agreement of the stock exchanges. SEBI, through circulars dated 29th October, 2004 and 29th March, 2005, has revised the existing Clause 49 and has mandated listed companies to comply with the revised Clause 49 by 31st December, 2005. As a Company, which is committed to ensuring good corporate governance practices in all its dealings, Dabur has moved beyond merely meeting mandated regulations and made concerted efforts to imbibe global standards of corporate governance. In this pursuit, Dabur has already put in place systems and procedures and is fully compliant with the revised Clause 49 well before it becomes mandatory. This chapter, along with the chapters on Management Discussion and Analysis and Additional Shareholders Information, reports Daburs compliance with existing as well as the revised Clause 49 and highlights the additional initiatives taken in line with international best practices.

COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE

Daburs philosophy of corporate governance is based on preserving core values and ethical business conduct. Commitment to maximising shareholder value on a sustained basis, while looking after the welfare of multiple stakeholders is a fundamental shared value of Daburs Board of Directors, management and employees and critical to the companys success. This value system translates into institutionalising structures and procedures that enhance the efficacy of the Board and inculcates a culture of transparency, accountability and integrity across the Company.

promoter Director, the Board comprises of five executive Directors (of whom three are promoter Directors), and four non-executive independent Directors. The composition of the Board is in conformity with Clause 49 of the listing agreement, which stipulates that 50 per cent of the Board should comprise of non-executive Directors, and if the Chairman is nonexecutive, one-third of the Board should be independent.

Number of Board Meetings

The Board of Directors met 6 times during the year on 5th May, 2004, 26th July, 2004, 27th September, 2004, 27th October, 2004, 27th January, 2005 and 28th March, 2005. The maximum gap between any two meetings was less than 3 months.

BOARD OF DIRECTORS
Composition of the Board
As on 31st March, 2005 the Daburs Board consists of 10 members. Apart from the Chairman, who is a non-executive
Dabur India Limited Report on Corporate Governance

Directors attendance record and Directorship held

As mandated by the Clause 49, none of the Directors are members of more than ten Board level committees nor are

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they Chairman of more than five committees in which they are members. Table 1 gives the details of the Board as on 31st March, 2005.

Table 1:

Composition of the Board of Directors of Dabur India

Category # Attendance Particulars Number of Board Meetings Held Attended 6 6 5 5 6 6 0 6 0 1 4 Yes Yes Yes No Yes Yes No Yes No No No 3 4 5 8 11 2 6 3 0 11 0 0 1 1 3 1 1 0 2 0 6 0 1 0 1 1 2 0 0 2 0 2 0 Last AGM No. of other Directorships and committee memberships/chairmanships Other Directorships Committee Memberships Committee Chairmanships

Name of the Directors

V C Burman Pradip Burman Dr Anand Burman Amit Burman P D Narang Sunil Duggal HH Maharaja Gaj Singh P N Vijay Ajay Bahl R C Bhargava Stuart E Purdy

PD/NED PD/ED PD/NED PD/ED ED ED ID ID ID ID ID

6 6 6 6 6 6 6 6 6 1 6

# PD Promoter Director; NED Non-Executive Director; ID Independent Non-Executive Director; ED Executive Director Ceased to be a member from 27th January, 2005; Appointed as a member from 27th January, 2005; Ceased to be an Executive Director from 1st April, 2005; Will cease to be an Executive Director from 1st May, 2005

Shareholding of Non Executive Directors

Name of Director V C Burman Dr Anand Burman Amit Burman HH Maharaja Gaj Singh Ajay Bahl R C Bhargava Stuart E Purdy P N Vijay Status PD / NED PD / NED PD / ED ID ID ID ID ID No of shares held 5000 37000 0 2000 0 0

Directors on Daburs Board: Apart from receiving Directors remuneration, do not have any material pecuniary relationships or transactions with the company, its promoters, its Directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the Director. Are not related to promoters or persons occupying management positions at the board level or at one level below the board. Have not been an executive of the company in the immediately preceding three financial years. Are not partners or executives or were not partners or an executives during the preceding three years of the:

0 0

Details of other Board Directorships is separately mentioned in Annexure 1. As mandated by the revised Clause 49, the independent

Statutory audit firm or the internal audit firm that is associated with the Company.
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Legal firm(s) and consulting firm(s) that have a material association with the company.

Are not material suppliers, service providers or customers or lessors or lessees of the company, which may affect independence of the Director. Are not substantial shareholders of the Company i.e. do not own two percent or more of the block of voting shares.

on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company. Details of any joint venture or collaboration agreement. Transactions that involve substantial payment towards goodwill, brand equity or intellectual property. Significant labour problems and their proposed solutions. Any significant development in human resources/industrial relations front like signing of wage agreement, implementation of voluntary retirement scheme, etc. Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer, etc. Details of investment of surplus funds available with the company. Minutes of the Board Meetings of the subsidiary companies. Statement showing significant transactions & arrangements entered into by the subsidiary companies.

Information Supplied to the Board

The Board has complete access to all information with the Company. Inter-alia, the following information is regularly provided to the Board as a part of the agenda papers well in advance of the Board meetings or is tabled in the course of the Board meeting: Annual operating plans & budgets and any update thereof. Capital budgets and any updates thereof. Quarterly results for the Company and operating divisions and business segments. Minutes of the meetings of the audit committee and other committees of the Board. Information on recruitment and remuneration of senior officers just below the level of Board, including the appointment or removal of Chief Financial Officer and Company Secretary. Materially important show cause, demand, prosecution notices and penalty notices. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. Any material default in financial obligations to and by the company, or substantial non-payment for goods sold by the Company. Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures

The Board has established procedures to enable the Board to periodically review compliance reports of all laws applicable to the Company, prepared by the company as well as steps taken by the company to rectify instances of non-compliances.

Responsibilities of the Chairman and CEO

The current policy of the Company is to have a Chairman Mr V C Burman and a Chief Executive Officer (CEO) Mr Sunil Duggal. There are clear demarcations of responsibility and authority between the two.

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Dabur India Limited Report on Corporate Governance

The Chairman is responsible for formulating the corporate strategy along with the Board of Directors and ensuring that the implementation is in accordance with the values and vision of the Company. He is also responsible for reviewing and approving the Board Agenda. The CEO is responsible for implementation of corporate strategy, brand equity planning, external contacts, and other management matters. He is also responsible for achieving the annual business plan.

recommendations of the Nomination Committee. The skill profile of independent Board members will be driven by the key tasks defined by the Board, which are broadly based on: Independent corporate governance Guiding strategy and enhancing shareholders value Monitoring performance, management development & compensation Control & compliance

Board Membership Criteria

The Nomination Committee works with the entire board to determine the appropriate characteristics, skills and experience for the Board as a whole as well as its individual members. The selection of Board members is based on

The constitution of the Board will be as follows: Non-executive chairman Family nominee director/s Executive member/s Independent directors and non executive members constituting 50 per cent of the Board

The viz matrix gives the detailed skill set required for becoming a Board member as specified by the BOD.
Key Skill Area Strategy/Business Leadership Corporate Strategy Consultant Sales and Marketing experience Essential 2-3 years experience as a CEO, preferably of an MNC in India Consultant/Academician with experience in FMCG Industry and business strategy. Desirable FMCG experience Basic understanding of Finance

At least 10 years experience in sales and marketing Experience with FMCG Good understanding of commercial processes or other consumer products 2-3 years as head of sales or marketing Expert knowledge of Corporate Law At least 5 years as a CFO or as head of a merchant banking operation Expert Knowledge of Trade & Economic Policies Retired Beaurocrat Ayurvedic doctor with a minimum of 20 years experience as a practitioner/researcher Experience in trade/consumer related laws FMCG experience FMCG experience Basic understanding of Finance and Business. Basic understanding of finance and business

Corporate law Finance Trade Policy & Economics Administration & Government Relations Ayurvedic specialist

Other Directors could be based on Companys priority at a particular time, viz: Knowledge of export markets that Dabur is focusing on Commodity procurement expert

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Remuneration paid to Directors

Table 2 gives details of remuneration paid to Directors for the year 2004-05.

Table 2:

Remuneration of Directors
Sitting Fees 1,50,000 2,85,000 30,000 15,000 1,95,000 6,75,000 Salary & Perquisites Superannuation 7,05,001 8,39,180 2,56,500 7,57,336 6,03,985 31,62,002 1,95,90,541 99,15,426 96,75,115 Stock Option Commission 38,80,000 38,80,000 Total 40,30,000 93,42,776 1,30,85,014 34,97,466 2,12,51,482 1,99,00,525 2,85,000 30,000 15,000 1,95,000 7,16,32,262

Name of the Director V C Burman Pradip Burman Dr. Anand Burman Amit Burman P D Narang Sunil Duggal HH Gaj Singh P N Vijay Ajay Bahl R C Bhargava Stuart E Purdy Total

86,37,775 1,22,45,834 32,40,966 1,05,78,720 96,21,425 4,43,04,719

Ceased to be a member from 27th January, 2005; Appointed as a member from 27th January, 2005

During 2004-05 the Company did not advance any loans to any of its Directors. Mr P D Narang and Mr Sunil Duggal were issued 99960 and 94299 Stock Options respectively during the year having a vesting period spread from 1 to 5 years and exercisable over a period of 3 years after vesting. The Options are exercisable at par. Pursuant to the approval of shareholders in the Annual General Meeting held on 9th September, 1998 and subsequently on 5th September, 2002, in addition to the above remuneration certain Directors are entitled to severance fee as contained in the resolution passed in the aforesaid meeting on cessation of their employment and Directorship with the company. The notice period for the

three executive Directors namely Mr Pradip Burman, Mr P D Narang, and Mr Sunil Duggal is 3 months. Two employees are relatives of Directors of Dabur. Mr Mohit Burman, son of Mr V C Burman (Chairman), joined the Company on 12th September, 1997 and is currently, General Manager, Sales and Marketing. Gross remuneration paid to him for 2004-05 was Rs. 35,92,400 as per approval of the shareholders and the Government. Mr Chetan Burman, son of Mr Pradip Burman (Executive Director), joined the Company on 1st February, 1996, and is currently Deputy General Manager, Sales and Marketing. Gross remuneration paid to him for 2004-05 was Rs. 31,72,956 as per approval of the shareholders and the Government. Both of them have resigned from their respective position and are being relieved from their duties on 30th April, 2005.

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Dabur India Limited Report on Corporate Governance

Code of Conduct
Daburs Board has laid down a code of conduct for all Board members and senior management of the Company. The code of conduct is available on the website of the Company www.dabur.com. All Board members and senior management personnel have affirmed compliance with the Code of Conduct. A declaration signed by the Chief Executive Officer (CEO) to this effect is enclosed at the end of this report.

Details on the role and composition of these committees, including the number of meetings held during the financial year and the related attendance, are provided below:

a) Audit Committee
As on 31st March, 2005, the Audit Committee comprises three independent Directors. They are Mr P N Vijay (Chairman), Mr. Stuart Purdy and Mr R C Bhargava. The Audit Committee held four meetings during 2004-05 on 5th May, 2004, 23rd July, 2005, 26th October, 2004 and 24th January, 2005. The time gap between any two meetings was less than four months. The details of the audit committee are given in Table 3:

Risk Management
Dabur has established robust risk assessment and minimization procedures, which are reviewed by the Board periodically. At Dabur we have a structure in place to identify and mitigate the various risks faced by the company from time to time. At every Board meeting, the risk register is reviewed by the Board, new risks are identified, the same are then assessed, controls are designed, put in place and enforced through the process owner and a fixed timeline is set for achieving the same. The Company has adopted COSO framework for internal control. Under this framework risks are identified as per each process flow and control systems instituted to ensure that the risks in each business process is mitigated. The Chief Risk Officer (CRO) is responsible for the overall risk governance in the Company and reports directly to the Management Committee (MANCOM), which consists of various functional heads. The Audit Committee of the Board provides oversight and reviews the risk management policy annually.

Table 3:
(Category)

Attendance record of Daburs Audit Committee

Status No. of Meetings Held Chairman Member Co-Chairman Member 4 4 4 0 Attended 4 4 0 0

Name of Members

Mr P N Vijay (ID) Mr Stuart E Purdy (ID) Mr Ajay Bahl (ID) Mr R C Bhargava (ID)

Ceased to be a member from 27th January, 2005; Appointed as a member from 27th January, 2005

The Director responsible for the finance function, the head of internal audit and the representative of the statutory auditors, internal auditors and cost auditors are permanent invitees to the audit committee. The company secretary is the secretary to the committee All members of the Audit Committee including the Chairman (Mr P N Vijay), have accounting and financial management expertise. The Chairman of the Audit Committee attended the Annual General Meeting (AGM) held on 6th July, 2004 to answer shareholder queries. The functions of the Audit Committee include the following: Oversight of the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment,

COMMITTEES OF THE BOARD

Dabur has five Board level committees Audit Committee, Remuneration Committee, Compensation Committee, Nomination Committee and Shareholders/Investors Grievance & Share Transfer Committee. All decisions pertaining to the constitution of committees, appointment of members and fixing of terms of service for committee members is taken by the Board of Directors.

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re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. To review the functioning of the Whistle Blower mechanism, in case the same is existing. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

Matters required to be included in the Directors Responsibility Statement to be included in the Boards report in terms of clause (2AA) of section 217 of the Companies Act, 1956. Changes, if any, in accounting policies and practices and reasons for the same. Major accounting entries involving estimates based on the exercise of judgment by management. Significant adjustments made in the financial statements arising out of audit findings. Compliance with listing and other legal requirements relating to financial statements. Disclosure of any related party transactions. Qualifications in the draft audit report.

The Audit Committee is empowered, pursuant to its terms of reference, to: Investigate any activity within its terms of reference and to seek any information it requires from any employee. Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, when considered necessary.

Reviewing, with the management, the quarterly financial statements before submission to the board for approval. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any significant findings and follow up there on. Reviewing the findings of any internal investigations by the internal auditors into matters where there is
Dabur India Limited Report on Corporate Governance

Dabur has systems and procedures in place to ensure that the Audit Committee mandatorily reviews: Management discussion and analysis of financial condition and results of operations. Statement of significant related party transactions (as defined by the audit committee), submitted by management. Management letters / letters of internal control weaknesses issued by the statutory auditors. Internal audit reports relating to internal control weaknesses. The appointment, removal and terms of remuneration of the Chief internal auditor. The uses/applications of funds raised through public

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issues, rights issues, preferential issues by major category (capital expenditure, sales and marketing, working capital, etc.), as part of the quarterly declaration of financial results (whenever applicable). On an annual basis, statement certified by the statutory auditors, detailing the use of funds raised through public issues, rights issues, preferential issues for purposes other than those stated in the offer document/prospectus/notice (whenever applicable).

scope and plan for their respective audits. The Committee also discussed the results of their examinations, their evaluation of the Companys internal controls and the overall quality of financial reporting. The Management presented to the Committee, the companys financial statements and also affirmed that the companys financial statements had been drawn in accordance with the Indian GAAP. Based on its review and discussions conducted with the management and the independent auditors, the audit committee believes that the Companys financial statements are fairly presented in conformity with Indian GAAP in all material aspects. The Committee has also reviewed the internal controls put in place to ensure that the accounts of the Company are properly maintained and that the accounting transactions are in accordance with prevailing laws and regulations. In conducting such reviews, the Committee found no material discrepancy or weakness in the Internal Control Systems of the Company. The Committee has recommended to the board the reappointment and fees of M/s G Basu & Co., Chartered Accountants as statutory auditors of the Company. The committee also approved the re-appointment of M/s Bansal & Co., Chartered Accountants and M/s Waring & Partners, Chartered Accountants as Branch Auditors for Alwar Division and London Branch respectively to carry out audit of the accounts of the respective division/branch for the financial year 2004-05. In addition the Committee also recommended and approved the appointment of Price Waterhouse Coopers Private Limited as the internal auditors for the period 1st April, 2004 to 31st March, 2006. In conclusion, the Committee is sufficiently satisfied that it has complied with the responsibilities as outlined in the Audit Committees responsibility statement. Signed New Delhi April 27, 2005 P N Vijay Chairperson, Audit Committee

The audit committee is also presented with the following information on related party transactions (whenever applicable) : A statement in summary form of transactions with related parties in the ordinary course of business. Details of material individual transactions with related parties which are not in the normal course of business. Details of material individual transactions with related parties or others, which are not on an arms length basis along with managements justification for the same.

Audit Committee Report for the year ended 31st March, 2005
To the shareholders of Dabur India Limited: Each member of the audit committee is an independent Director, according to the definition laid down in the Clause 49 of the Listing Agreement with the relevant stock exchanges. The Management is responsible for the Companys internal controls and financial reporting process. The independent auditors are responsible for performing an independent audit of the Companys financial statements in accordance with the Indian GAAP (generally accepted accounting principles) and for issuing a report thereon. The Committee is also responsible for overseeing the processes related to the financial reporting and information dissemination. In this regard the Committee discussed with the Companys internal auditors and independent auditors the overall

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b) Remuneration Committee
As of 31st March, 2005, the Remuneration Committee comprises Mr R C Bhargava (Chairman), Mr P N Vijay and HH Maharaja Gaj Singh, all of whom are independent Directors. The Remuneration Committee held two meetings during 2004-05 on 20th July, 2004 and 27th October, 2004. Table 4 gives the details.

Remuneration policy
The remuneration paid to the non-executive Directors of the Company is decided by the Board of Directors on the recommendations of the Remuneration Committee.The existing remuneration policy of the Company is directed towards rewarding performance, based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice. As per the shareholders approval obtained at the Annual General Meeting of the Company held on 5th September, 2002, commission is paid at the rate not exceeding one per cent of the net profits per annum of the Company, calculated in accordance with the provisions of Sections 198, 349 and 350 of the Companies Act, 1956. 1. Non-Executive Chairman Besides sitting fees, the non-executive Chairman is also entitled to commission out of profits of the Company as approved by the Board and within the overall limits prescribed by the Companies Act, 1956. 2. Independent Directors Non-Executive independent Directors are paid sitting fees for attending the meetings of the Board of Directors and committees thereof within the prescribed limits. This has been increased recently. 3. Executive Directors Remuneration of the Executive Directors consists of a fixed component and a variable performance incentive. The Remuneration Committee makes annual appraisal of the performance of the Executive Directors based on a detailed performance evaluation and recommends the compensation payable to them, within the parameters approved by the shareholders, to the Board for their approval.

Table 4: Attendance details of Daburs Remuneration Committee

Name of Members (Category) Mr R C Bhargava (ID) Mr Ajay Bahl (ID) Mr P N Vijay (ID) HH Mah. Gaj Singh (ID) Chairman Chairman Member Member Status No. of Meetings Held 0 2 2 2 Attended 0 2 2 0

Ceased to be a member from 27th January, 2005; Appointed as a member from 27th January, 2005

W.e.f. 27th January, Mr R C Bhargava has been appointed as the Chairman of the remuneration committee. Remuneration Committee of the Company recommends to the Board the compensation terms of executive Directors and its responsibilities include: Framing and implementing on behalf of the Board and on behalf of the shareholders, a credible and transparent policy on remuneration of executive Directors including ESOP, pension rights and any compensation payment. Considering, approving and recommending to the Board the changes in designation and increase in salary of the executive Directors. Ensuring that remuneration policy is good enough to attract, retain and motivate the Directors. Bringing about objectivity in determining the remuneration package while striking a balance between the interest of the Company and the shareholders.

c) Compensation Committee
Daburs Compensation Committee comprises two independent Directors Mr P N Vijay (Chairman) and Mr Stuart E Purdy. The Compensation Committee met four

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Dabur India Limited Report on Corporate Governance

times during the year on 5th May, 2004, 23rd July, 2004, 26th October, 2004 and 24th January, 2005. Table 5 gives the details.

vested in him at one time or at various points of time within the exercise period;

Table 5:

Attendance details of Daburs Compensation Committee

Status No. of Meetings Held Member Member Member 4 4 4 Attended 4 4 0

Name of Members (Category) Mr P N Vijay (ID) Mr Stuart E Purdy (ID) Mr Ajay Bahl (ID)

Procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of rights issues, bonus issues and other corporate actions; Grant, vest and exercise of option in case of employees who are on long leave; Procedure for cashless exercise of options; Forfeiture/cancellation of Options granted; All other issues incidental to the implementation of ESOS.

Ceased to be a member from 27th January, 2005

The Compensation committee has the overall responsibility for approving and evaluating the executive Directors and senior management compensation plans, policies and programs of the Company. The functions of the Committee include: To frame the ESPS/ESOS and recommend the same to the Board/Shareholders for their approval and to implement the Scheme approved by the Shareholders. To suggest to Board/Shareholders changes in the ESPS/ ESOS. To decide the terms and conditions of Employees Share Purchase Scheme (ESPS) and Employees Stock Option Scheme (ESOS) which inter-alia include the following:

To issue grant/award letters. To allot shares upon exercise of vested options.

Compensation Committee Report For The Year Ended 31st March, 2005
To the Shareholders of Dabur India Limited: The compensation committee comprises of 2 independent directors. The main responsibility of the Compensation Committee is to incentivize and reward executive performance that will lead to long-term enhancement of shareholder performance. The Committee reviewed and approved the stock options payable to all Executive Directors, within the overall limits approved by shareholders. The committee also reviewed and approved the stock options of all MANCOM members for the year 2004-05. In addition, the committee reviewed the grant of sign-on and regular stock options to various other employees of the Company during the year. The Committee was also provided information on appraisal systems, the outcome of performance assessment programs, compensation policies for employees and the information to decide on grant of options to various employees Signed Stuart E Purdy Member, Compensation Committee
Annual Report 2004-05

Quantum of options to be granted under the Scheme per employee and in aggregate; Vesting Period; Conditions under which option vested in employees may lapse in case of termination of employment for misconduct; Exercise period within which the employee should exercise the option and that option would lapse on failure to exercise the option within the exercise period; Specified time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee; Right of an employee to exercise all the options

New Delhi April 28, 2005

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d) Nomination Committee
Daburs Nomination Committee consists of Mr. V C Burman, non-executive promoter Director, Mr. Pradip Burman, executive promoter Director, Mr. Stuart E. Purdy, independent Director and HH Maharaja Gaj Singh, independent Director. The Nomination Committee met once during the year on 24th January, 2005. Table 6 gives the details.

Table 7:

Attendance Details of Daburs Shareholders/ Investor Grievance & Share Transfer Committee
Status Chairman Member Member No. of Meetings Held 3 3 3 Attended 3 3 3

Name of Members (Category) Mr P N Vijay (ID) Mr V C Burman (PD/NED) Mr P D Narang (ED)

Table 6:

Attendance details of Daburs Nomination Committee

Status No. of Meetings Held Member 1 1 1 1 Attended 1 0 1 0

Mr A K Jain, Additional General Manager (Finance) & Company Secretary, is the Compliance Officer. The Committee supervises the mechanism for redressal of investor grievances and ensures cordial investor relations. Apart from looking into redressal of shareholders and investors complaints like transfer of shares, non-receipt of annual reports, non-receipt of dividend and allied matters. The committee performs the following functions: Transfer/Transmission of shares/Debentures. Split-up/Sub-division and Consolidation of shares, debentures, letters of rights, renewals, letters of allotment, call notices. Issue of new and duplicate share/debentures certificates. Registration of Power of Attorneys, Probate Letters of transmission or similar other documents. Grant extension of time for making allotment/First Call/ Second and Final Call Payments. To open/close Bank Account(s) of the Company for depositing share/debenture application, allotment and call monies, authorize operation of such account(s) and issue instructions to the Bank from time to time in this regard. To look into the redressing of shareholder and investors complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc. Any allied matter(s) out of and incidental to these functions and not herein above specifically provided for.

Name of Members (Category) Mr V C Burman (PD/NED)

Mr Pradip Burman (PD/ED) Member Mr Stuart E Purdy (ID) HH Mah Gaj Singh (ID) Member Member

The functions of the Nomination Committee include: To identify and recommend candidates to the Board of Directors for appointment as members of the Board. To engage the services of consultants and seek their help in the process of identifying candidates for appointments to the Board. To decide the remuneration of consultants engaged by the Committee.

e) Shareholders/Investor Grievance & Share Transfer Committee

The Committee consists of three members, Mr P N Vijay (Chairman), Mr V C Burman and Mr. P D Narang. The Committee met three times in the year under review on 23rd July, 2004, 26th October, 2004 and 24th January, 2005. Table 7 gives the details.

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Dabur India Limited Report on Corporate Governance

Details of queries and grievances received and attended by the Company during the year 2004-05 is given in Table 8.

Table 8:

Nature of complaints received and attended to during 2004-05

Pending as on 1 April, 2004 Nil Nil Nil 1 1 Nil Nil 2 Received during the year Nil 1 Nil 36 12 Nil Nil 49 Answered during the year Nil 1 Nil 37 13 Nil Nil 51 Pending as on 31 March, 2005 Nil Nil Nil Nil Nil Nil Nil Nil

Nature of Complaint 1. Transfer / Transmission / Duplicate 2. Non-receipt of Dividend 3. Dematerialisation / Rematerialisation of shares 4. Complaints received from: - Securities and Exchange Board of India - Stock Exchanges - Registrar of Companies/Dept. of Company Affairs 5. Others Total

There were no complaints which were pending as on 31st March, 2005.

In order to provide efficient services to investors and for speedy redressal of the complaints, the Board of Directors has delegated the power of approving transfer and transmission of shares and other matters like split up/subdivision, and consolidation of shares, issue of new certificates on re-materialisation, sub-division, consolidation, exchange and duplicate share certificates severally to Mr A K Jain, Additional General Manager (Finance) & Company Secretary, and Mr R B Sachan, Senior Executive Secretarial, subject to a maximum of 5000 shares per case.

trading and shareholder characteristics. 4. 5. 6. 7. General shareholder feedback/opinions. Peer comparisons. Intelligence on competitors. Anticipated market reaction toward planned corporate developments such as mergers and acquisitions or divestitures. Being a part of the companys disclosure team.

8.

Investor Relations Boosting Investor Confidence

The role of investor relations at public companies continues to expand, due in part to increased disclosure and reporting requirements, more IROs (Investor relations Officer) providing more input to the Board of Directors and becoming members of their Companys disclosure committee. At Dabur India the job responsibilities of the IRO are clearly defined as under: 1. 2. 3. Building Investor Confidence in the firm. Being a strategic advisor to the Senior Management. General market intelligence, including data on stock

At Dabur, we have various avenues to ensure that investors get a good understanding of the company and its strategies. In order to achieve this Dabur holds: 1. One-on-one meetings and quarterly conference calls - to show case the companys performance and also highlight the Companys forward looking strategy. Webcasting - Daburs presentations are webcast. Webcasts are left up on corporate Web sites for upto 1 month. Investor Meetings both in India and Outside Dabur India holds frequent investor meetings outside India for the benefit of FIIs (Foreign Institutional Investors) to enable them understand the Operations at Dabur better.

2.

3.

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Subsidiary Companies
The revised Clause 49 defines a material non-listed Indian subsidiary as an unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year: Dabur does not have a material non-listed Indian subsidiary.

Goods worth Rs. 2.92 crore were sold to DNPL at market prices. Goods worth Rs.3.87 crore were sold to Dabur International Limited. Collateral and guarantees given by the Company to Banks and financial institutions on behalf of DNPL amount to Rs.8.64 crore and on behalf of Dabur Foods Limited amount to Rs.37.50 crore. Dividend amounting to Rs.1.59 crore was received by the Company, from DNPL.

MANAGEMENT
Management Discussion and Analysis
Annual Report has a detailed Chapter on Management Discussion and Analysis.

2. Fellow Subsidiaries (subsidiary of a subsidiary):

Goods worth Rs.3.84 crore were sold to Weikfield International (UAE) LLC. Goods worth Rs.3.67 crore were sold to Asian Consumercare Peivate Limited. Collateral and guarantees have been given on behalf of Dabur Egypt Limited amounting to Rs.2.83 crore and on behalf of Pasadena Foods Limited amounting to Rs.16.00 crore.

Disclosures
Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the Directors or the Management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large: Dealings in Companys shares on the part of persons in management have been reported to Board periodically. The material, financial and commercial transactions where persons in management have personal interest exclusively relate to transactions involving Key Management Personnel forming part of the disclosure on related parties referred to in Note13 in Schedule P to Annual Accounts which was reported to Board of Directors.

3. Associates:
Services for amount Rs.1.60 crore by Jetways Travels Pvt. Ltd. (Travel Agency). Such services were rendered at market rates. A contribution amounting to Rs.5.41 crore was given to Dabur Research Foundation for scientific research.

4. Relatives of Key Management Personnel:

There were no relatives of key management personnel who were paid remuneration / pension of Rs. one crore or more during the year.

Related Party Transactions

Significant related party transactions are summarised herein below:-

Disclosure of accounting treatment in preparation of financial statements

Dabur has followed the guidelines of accounting standards laid down by the Institute of Chartered Accountants of India (ICAI) in preparation of its financial statements.

1. Subsidiaries:
Goods worth Rs.57.06 crore were purchased from Dabur Nepal Pvt. Ltd. (DNPL) at market prices.

36

Dabur India Limited Report on Corporate Governance

Details of non-compliance by the Company

Dabur has complied with all the requirements of regulatory authorities. No penalties/strictures were imposed on the Company by stock exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years.

Allow and encourage employees and business associates to bring to the management notice concerns about suspected unethical behavior, malpractice, wrongful conduct, fraud, violation of policies Ensure timely and consistent organizational response Build and strengthen a culture of transparency and trust Provide protection against victimization

Code for prevention of insider trading practices

In compliance with the SEBI regulation on prevention of insider trading, the Company has instituted a comprehensive code of conduct for its management and staff. The code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of Dabur, and cautioning them of the consequences of violations.

The above mechanism has been appropriately communicated within the Company across all levels and has been displayed on the Companys intranet as well as on companys website www.dabur.com. The Audit Committee periodically reviews the existence and functioning of the mechanism.

Dividend Policy
To bring transparency in the matter of declaration of dividend and to better protect the interests of investors, Dabur has adopted a Dividend Policy which has been displayed on the Companys website, www.dabur.com

Code of Ethics and Conduct

Dabur has a well-defined policy framework, which lays down procedures to be followed by employees for ethical professional conduct. The code outlines fundamental ethical considerations as well as specific considerations that need to be maintained for professional conduct. This code has been displayed on the Companys website, www.dabur.com The CEO has affirmed to the Board that this Code of Ethics and Conduct has been complied by the Board Members and Senior Management.

CEO/CFO certification
The CEO and CFO certification of the financial statements and the cash flow statement for the year is enclosed at the end of the report.

SHAREHOLDERS
Reappointment/Appointment of Directors
As per the articles of association of Dabur, one-third of its Directors retire every year and, if eligible, offer themselves for re-election at every Annual General Meeting. Consequently, Mr V C Burman, Mr P D Narang, and Mr Stuart E Purdy would retire this year and being eligible, offer themselves for re-appointment in accordance with the provisions of the Companies Act, 1956. Their brief CVs are given below: Mr V C Burman: Mr V C Burman is the promoter Director of the Dabur Group and currently holds the chairmans position on the Board of Directors.

Whistle-Blower Policy
In line with the best international governance practices, Dabur has put in place a system through which employees and business associates may report unethical business practices at work place without fear of reprisal. The Company has set up a direct touch initiative under which all employees / business associates have direct access to the Chairman of the Audit Committee and also to a three member direct touch team established for this purpose. The whistle blower protection policy aims to:

Annual Report 2004-05

37

Mr P D Narang: Mr P D Narang is a B.Com, FCA, MIIA, ACS, AICWA. He started his career at Dabur as a Management Accountant and has been with the company ever since. He is currently the Group Director for Corporate Affairs for the Dabur group Mr Stuart E Purdy: A Fellow of the Chartered Insurance Institute and a Chartered Insurer, Mr Purdy is the managing Director, Aviva Life Insurance India. He has held a number of positions within the UK and International business units of the Aviva Group. He currently has no shareholding in Dabur India.

Table 9:

Publications of the financial results during 2004-05

Date 26th July, 2004

Description Unaudited Financial Results for the quarter ended on 30th June, 2004 Audited Financial Results for the quarter/ half year ended on 30th September, 2004 Unaudited Financial Results for the quarter/nine months ended on 31st December, 2004

27th October, 2004

27th January, 2005

Appointment of New Director

Mr R C Bhargava: Has been appointed as an Independent director in place of Ajay Bahl w.e.f 27th January, 2005. He has a MA in Developmental Economics from Williams College, USA and a MS in Mathematics from Allahabad University, India. He has served in the Indian Administrative Service and has held the post of Joint Secretary in the Ministry of Energy and in the Cabinet Secretariat. He has also served as the Director (Commercial) at BHEL. He retired in 1997 after serving 12 years as the CEO of MUL. At present he is the President and CEO of RCB Consulting Pvt. Ltd., a firm engaged in management and human resource consultancy. He brings into the Board a rich experience from his various stints in the government and manufacturing concern. He currently has no shareholding in Dabur India Ltd.

The quarterly, half yearly and annual financial statements are promptly and prominently displayed on the Companys web site i.e. www.dabur.com. The Company also displays the official news releases and presentations made to institutional investors and to analysts on this website. Further, the Company has also been complying with SEBI regulations for filing of its financial results under the EDIFAR system. These are available on the SEBI web-site www.sebiedifar.nic.in.

General Body Meetings

Table 10 gives the details of the last five General Meetings.

Table 10: Location and time of the last 5 General Meetings

Financial CateYear gory* 2000-01 AGM Location of the meeting Air Force Auditorium Subroto Park, New Delhi - 110010 Air Force Auditorium Subroto Park, New Delhi - 110010 Air Force Auditorium Subroto Park, New Delhi - 110010 Air Force Auditorium Subroto Park, New Delhi - 110010 Air Force Auditorium Subroto Park, New Delhi - 110010 Date Time

18/09/01 11.00 AM

Means of Communication with Shareholders

Half yearly financial information, including summary of significant events, for the half-year ended 30 September, 2004 was sent to the households of all shareholders. The quarterly and half yearly financial results are published in The Economic Times and Navbharat Times newspapers. Table 9 gives details of the publications of the financial results in the year under review.

2001-02

AGM

05/09/02 11.00 AM

2002-03

AGM

02/08/03 9.30 AM

2003-04

EGM

02/08/03 2.00 PM

2003-04

AGM

06/07/04 11.00 AM

*AGM - Annual General Meeting, EGM - Extraordinary General Meeting

38

Dabur India Limited Report on Corporate Governance

The following Special Resolutions were taken up in the last three AGMs, and were passed with requisite majority.

Postal Ballot
During the year under review, in pursuance to Section 192A of the Companies Act, 1956 and Companies (Passing of the Resolution by Postal Ballot) Rules, 2001, postal ballot was conducted seeking approval of the shareholders for Investment(s) in and loan(s) to Balsara Hygiene Products Limited, Balsara Home Products Limited and Besta Cosmetics Limited. Loan(s) to and/or provide guarantee(s)/ security (ies) for and to make further investment(s) in subsidiary companies.

2002-03
Appointment of Mr Amit Burman as an Additional Director and also as Whole-time Director of the Company. Appointment of Mr Pradip Burman as Whole-time Director of the Company Reappointment of Mr P D Narang as Whole-time Director of the Company. Payment of Commission to Non-Whole time Directors of the Company subject to the stipulation that such commission shall not exceed 1% of the net profits of the Company. Payment of retirement benefits to Directors and their relatives. Amendments in Articles of Association of the Company to include the viz:

The result of postal ballot was published in Pioneer Delhi and Rashtriya Sahara Hindi on 8th March, 2005. Mr V K Jhalani, Chartered Accountant was appointed as the Scrutinizer for conducting the postal ballot process. He reported the vote count on 5th March, 2005. The results of the ballot are given below:

Table 11A: Result of the Postal Ballot (Special resolution 1)

Particulars No. of postal ballot forms recd. In Favour Against No. of Votes 1395 224705632 1741753 62004 226509389 99.20 00.77 00.03 100.00 Per cent

The words or Committees thereof inserted after the words meetings of the Board in line 3 of Article 95 of the Articles of Association of the Company. The new Article 57A with marginal notes as Buy-back of shares inserted after the existing Article 57.

Invalid Ballots Total Receipts

Table 11B: Result of the Postal Ballot (Special resolution 2)

2003-04
Special Resolution passed through postal ballot to delist the Companys equity share from The Delhi Stock Exchange Association Ltd., The Uttar Pradesh Stock Exchange Association Ltd. The Calcutta Stock Exchange Association Ltd. The Ludhiana Stock Exchange Association Ltd., Magadh Stock Exchange Association, Bangalore Stock Exchange Ltd., The Jaipur Stock Exchange Ltd., and The Stock Exchange, Ahmedabad.

Particulars No. of postal ballot forms recd. In Favour Against Invalid Ballots Total Receipts

No. of Votes 1395 224757802 1687583 63579 226508964

Per cent

99.23 00.74 00.03 100.00

2004-05
Keeping of records at the place other than registered office of the Company.

The Chairman after receiving the Scrutinizers Report announced that the Special Resolution at Item No.1 of the Postal Ballot Notice and Special Resolution at Item No.2 of the Postal Ballot Notice were duly passed with the requisite majority and directed that the resolutions be recorded in the minute book recording the proceedings of general meetings of the members.
Annual Report 2004-05

39

COMPLIANCE
Mandatory requirements
Dabur is fully compliant with the applicable mandatory requirements of the revised Clause 49.

c) Remuneration Committee
Dabur has a wholly independent remuneration committee that comprises of three members.

d) Half-yearly Declaration
Dabur prepared a half-yearly report of financial performance in the year under review including a section on Management Discussion and Analysis. The half-yearly report was sent to all shareholders.

Table 12: Compliance report

Particulars Clause of Compliance listing status agreement 49 I Yes 49 (IA) Yes 49 (IB) Yes 49 (IC) 49 (ID) 49 (II) 49 (IIA) 49 (IIB) 49 (IIC) 49 II(D) 49 (IIE) 49 (III) 49 (IV) 49 (IV A) 49 (IV B) 49 (IV C) 49 (IV D) 49 (IV E) 49 (IV F) 49 (V) 49 (VI) 49 (VII) Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA Yes Yes Yes Yes Yes Yes

I. Board of Directors (A) Composition of Board (B) Non-executive Directors Compensation & Disclosures (C) Other provisions as to Board and Committees (D) Code of Conduct II. Audit Committee (A) Qualified & Independent Audit Committee (B) Meeting of Audit Committee (C) Powers of Audit Committee (D) Role of Audit Committee (E) Review of Information by Audit Committee III. Subsidiary companies IV. Disclosures (A) Basis of related party transactions (B) Board Disclosures (C) Proceeds from public, rights, preference issues etc (D) Remuneration of Directors (E) Management (F) Shareholders V. CEO/CFO Certification VI. Report on Corporate Governance VII. Compliance

e) Audit Qualifications
With reference to Auditors qualification the managements clarification is as under:The Companys investment in the joint venture M/s Dabon International Private Limited, has not been accounted for in accordance with AS 27 as the same is being held for disposal in the foreseeable future. Consequently no provision is deemed necessary for diminution in the value of the investment as per AS 13.

f) Mechanism for evaluation of non-executive Directors

The performance evaluation of non-executive directors is done through a peer-to-peer performance evaluation of the Board of Directors. The Directors are marked on a scale of 1 to 5, with respect three broad parameters namely guiding strategy, monitoring reference and statutory compliance & Corporate Governance.

g) Whistle Blower Policy

Dabur has whistle-blower policy in place. The details with regard to the functioning of the whistle-blower policy have been mentioned earlier in this report.

Adoption of non-mandatory requirements

a) Maintenance of the Chairmans office
The company maintains the office of the non-executive Chairman and provides for reimbursement of expenses incurred in performance of his duties.

ADDITIONAL SHAREHOLDER INFORMATION

Annual General Meeting
Date: Time: Venue: 15 July, 2005 11:00 am Air Force Auditorium, Subroto Park, New Delhi - 110010

b) Tenure of Independent Directors

No specific tenure has been specified for the independent Directors.
40
Dabur India Limited Report on Corporate Governance

Financial Calendar
Financial year: 1st April to 31st March For the year ended 31st March, 2005, results were announced on: 26th July, 2004: First Quarter 27th October, 2004: Half Yearly 27th January, 2005: Third Quarter 28th April, 2005: Fourth Quarter and Annual

Dividend Payment
An interim dividend of Re.1 per equity share was paid on 8th November, 2004 final dividend of Rs. 1.50 per equity share will be paid on 20th July, 2005 subject to approval by the shareholders at the Annual General Meeting.

Listing
At present, the equity shares of the Company are listed on Mumbai Stock Exchange (BSE), and the National Stock Exchange (NSE). During the year the Companys shares were delisted from The Calcutta Stock Exchange Association Limited w.e.f. 24th January, 05. The annual listing fees for the financial year 2004-05 to NSE and BSE has been paid. Table 1: Daburs Stock Exchange codes ISIN No: Mumbai Stock Code: National Stock Code: Bloomberg Code: Reuters Code: INE016A01026 500096 DABUR DABUR IB DABU.BO

For the year ending 31st March, 2006, results will be announced in: End July 2005 First Quarter End October 2005: Half Yearly End January 2006: Third Quarter End April 2006: Fourth Quarter and Annual

Book Closure
The dates of book closure are from 1st July, 2005 to 15th July, 2005 inclusive of both days.

Stock Market Data

Table 2 and Chart A gives details

Table 2: High, lows and volumes of Daburs shares for 2004-05 at BSE and NSE
MUMBAI STOCK EXCHANGE Date April 2004 May 2004 June 2004 July 2004 August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 High (Rs.) 86.00 90.90 85.20 74.45 72.60 75.85 81.00 93.50 95.90 102.00 118.40 125.95 Low (Rs.) 73.00 61.00 60.50 61.05 65.00 68.00 71.40 80.10 82.50 83.10 100.00 107.00 Volume 1464268 3920122 3273532 3431739 2272831 3282682 5671375 3590514 3444235 4242668 3894271 3294952 NATIONAL STOCK EXCHANGE High (Rs.) 88.20 90.70 85.15 74.40 73.05 75.85 81.45 94.00 96.00 107.25 117.60 145.00 Low (Rs.) 73.00 60.95 60.00 61.40 65.00 68.05 70.50 72.85 82.20 81.10 100.50 105.10 Volume 3964182 7152048 8514604 7519420 5851924 7385489 5446225 9165345 9515463 12332879 9993441 7771013

Annual Report 2004-05

41

Chart A: Daburs Share Performance Versus BSE Sensex:

Note: Dabur and BSE Sensex indexed to 100 as on 1st April 2004.

Distribution of Shareholding
Table 3 and 4 lists the distribution of the shareholding of the equity shares of the Company by size and by ownership class as on 31st March, 2005.

Table 3: Shareholding pattern by size

Number of equity shares held Up to 5000 5001 - 10000 10001 and above Total Physical Form No. of share holders 5831 5 1 5837 No. of shares 4169181 40188 25000 4234369 Dematerialisation Form holders 40613 177 234 41024 13589281 1394456 267199607 282183344 46444 182 235 46861 99.11 0.39 100.00 17758462 1434644 286417713 6.20 0.50 93.30 100.00 Total No. of % of share holders Total No. % of share of shares holding No. of share No of shares shareholders

0.50 267224607

Table 4: Shareholding Pattern by ownership

Particulars No. of share holders Directors, promoters and family members FIIs Mutual Funds Fin.Institutions/Banks NRIs Corporates Individuals Total 32 37 9 1959 957 43836 46861 0.07 0.08 0.02 4.18 2.04 93.54 100.00 17740997 3011414 11995874 2819833 4524985 22152432 286419713 6.19 1.05 4.19 0.99 1.58 7.73 100.00 14 32 9 1944 1238 43397 46668 0.03 0.07 0.02 4.17 2.65 92.99 10216217 6076872 16983896 2485696 4011732 22265906 3.57 2.12 5.93 0.87 1.40 7.78 100.00 31 As on 31st March, 2005 % of share holders 0.07 No. of share held 224174178 % of share holding 78.27 holders 34 As on 31st March, 2004 No. of share % of share No. of % of share holding 78.33 holders share held 0.07 224208733

100.00 286249052

42

Dabur India Limited Report on Corporate Governance

Dematerlisation of Shares and Liquidity

Trading in equity shares of the Company in dematerialized form became mandatory from 31st May, 1999. To facilitate trading in demat form, in India, there are two depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Dabur has entered into agreement with both these depositories. Shareholders can open their accounts with any of the Depository Participant registered with these depositories. As on 31st March, 2005, over 98.52 per cent shares of the Company were held in dematerialized form. The equity shares of the Company are frequently traded at Mumbai and National Stock Exchange.

Share Transfer System

All share transfer and other communications regarding share certificates, change of address, dividends, etc. should be addressed to Registrar and Transfer Agents. Shareholders/Investor Grievance and Share Transfer Committee is authorised to approve transfer of shares in the physical segment. With effect from January 2004. Mr A K Jain and Mr R B Sachan, have been delegated the responsibility of approving transfer and transmission of shares and other related matters. Such transfers now take place on fortnightly basis. All share transfers are completed within statutory time limit from the date of receipt, provided documents meet the stipulated requirement of statutory provisions in all respects.

Outstanding GDRs/ADRs/Warrants/ Options

The Company has 15,25,740 outstanding Options as on 31st March, 2005.

Companys Registered Office Address:

8/3, Asaf Ali Road, Delhi-110002 Ph: 011-23253488, 011-23276739

Details of Public Funding Obtained in the last three years

Dabur has not obtained any public funding in the last three years.

Registrar and Transfer Agent

Securities and Exchange Board of India (SEBI), through its circular No.DandCC/FITTC/CIR-5/2002 dated 27th December, 2002, has made it mandatory for all work related to share registry, both in physical and electronic form, to be handled either wholly in house by companies or wholly by a SEBI registered external registrar and transfer agent. Dabur had appointed MCS Limited as its registrar and transfer agent in 1994 for both segments, much before this was mandated by SEBI. Details of the registrar and transfer agent are given belowMCS Limited Unit: Dabur India Limited Sri Venkatesh Bhawan, W-40 Okhla Industrial Area Phase II, New Delhi 110020 Phone: 011-26384909 11, Fax: 011-26384907

Annual Report 2004-05

43

PLANT LOCATIONS
Sahibabad
Unit I and II 22, Site IV, Industrial Area, Sahibabad, Ghaziabad (U.P.) Tel: 0120 3982000, 3001000, Fax: 0120 2779048 Unit - III Plot No. 5/1, Site IV, Sahibabad 201 010, Ghaziabad (U.P.) Tel: 0120 3982000, 3001000, Fax: 0120 2779048

Narendrapur
9, Netaji Subhash Chandra Bose Road, Narendrapur 743 508 Distt. 24 Parganas, West Bengal Tel: 033-24772324, Fax: 033-24772621

Alwar
SPC 162, Matsya Industrial Area, Alwar 301 030, Rajasthan Tel: 0144-2881217, Fax: 0144-2881302

Baddi
Chyawanprash Unit 220-221, HPSIDC Industrial Area, Baddi 173 205, Distt Solan, HP, Tel: 01795-245273, Fax : 01795-244090 Hajmola Unit 109, HPSIDC Industrial Area, Baddi 173 205, Distt Solan, HP, Tel: 01795-245273, Fax : 01795-244090 Red Toothpaste Unit Village Billanwali Lavana, Baddi 173 205, Distt Solan, HP, Tel: 01795-245273, Fax : 01795-244090 Amla/Honey Unit Village Billanwali Lavana, Baddi 173 205, Distt Solan, HP, Tel: 01795-245273, Fax : 01795-244090 Glucose Unit Plot No. 12, Industrial Area, Baddi 173 205, Distt Solan, HP, Tel: 01795-245273, Fax : 01795-244090 Shampoo Unit Village Billianwali, Baddi 173 205, Distt Solan, HP, Tel: 01795-245273, Fax : 01795-244090 Honitus/Nature Care Unit 109, HPSIDC Industrial Area, Baddi 173 205, Distt Solan, HP Tel: 01795-245273, Fax : 01795-244090 Fit N Activ Unit 221, HPSIDC Industrial Area, Baddi 173 205, Distt Solan, HP Tel: 01795-245273, Fax : 01795-244090

Katni
10.4, Mile Stone, Village Padia, Katni, Madhya Pradesh Tel: 07622-262317, Fax: 07622-262297

Jammu
Lane No. 3, Phase II, SIDCO Ind. Complex, Bari Brahmna, Jammu Tel: 01923-220123, Fax: 01923-220123

Uttaranchal
Plot No.4, Sector-2, Integrated Industrial Estate, Rudrapur Dist. Udham Singh Nagar, Uttaranchal Tel: 05944-239231, Fax: 05944-242480

Address for Correspondence

For share transfer / dematerialisation of shares, payment of dividend and any other query relating to the shares MCS Limited, Sri Venkatesh Bhawan, W-40, Okhla Industrial Area, Phase II, New Delhi 110020 Tel: 011-26384909-11, Fax: 011-26384907 For queries of Media, Analysts, FIIs, Institutions, Mutual Funds, Banks and others Mrs Gagan Ahluwalia/Mr Sharad Goel Dabur India Limited, Punjabi Bhawan,10 Rouse Avenue, New Delhi 110002 Tel: 011-23221167-70; Fax: 011-23222051 email: corpcomm@dabur.com

For investors assistance

Mr. A K Jain, Additional General Manager (Fin.) & Company Secretary, Dabur India Limited, Punjabi Bhawan,10 Rouse Avenue, New Delhi 110 002 Tel: 011-23221167-70; Fax: 011-23222051

44

Dabur India Limited Report on Corporate Governance

CERTIFICATION BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF THE COMPANY
We, Sunil Duggal, Chief Executive Officer and Rajan Varma, Chief Financial Officer, of Dabur India Limited, to the best of our knowledge and belief certify that: 1. We have reviewed the Balance Sheet and Profit and Loss Account of the Company for the year ended 31st March, 2005 and all its schedule and notes on accounts, as well as the Cash Flow Statement. To the best of our knowledge and information: a. these statements do not contain any materially untrue statement or omit to state a material fact or contains statement that might be misleading; b. these statements together present a true and fair view of the Companys affairs and are in compliance with existing accounting standards, applicable laws and regulations. 3. We also certify, that based on our knowledge and the information provided to us, there are no transactions entered into by the Company, which are fraudulent, illegal or violate the companys code of conduct. The Companys other certifying officers and we are responsible for establishing and maintaining internal controls and procedures for the Company, and we have evaluated the effectiveness of the Companys internal controls and procedures. The Companys other certifying officers and we have disclosed, based on our most recent evaluation, wherever applicable, to the companys auditors and thru them to the audit committee of the Companys Board of Directors: a. All significant deficiencies in the design or operation of internal controls, which we are aware and have taken steps to rectify these deficiencies; b. Significant changes in internal control during the year; c. Any fraud, which we have become aware of and that involves Management or other employees who have a significant role in the Companys internal control systems; d. Significant changes in accounting policies during the year. We further declare that all board members and senior management have affirmed compliance with the code of conduct for the current year.

2.

4.

5.

Signed Rajan Varma CFO, Dabur India Limited

Signed Sunil Duggal CEO, Dabur India Limited

New Delhi, April 28, 2005

Annual Report 2004-05

45

ANNEXURE 1 - DETAILS OF OTHER DIRECTORSHIPS HELD

Name of the Director Status Directorship Committee Membership Shareholders/Investors Grievance Committee Nomination Committee Audit Committee Committee Chairmanship

V C Burman

PD/NED

Dabur India Limited

Dabur Foods Limited Dabur Ayurvedic Specialities Limited Burmans Finvest Limited Dr Anand Burman PD/NED Dabur India Limited Dabur Pharma Limited Dabur Pharmaceuticals Limited Dabur Overseas Limited Dabur Oncology Plc Hindustan Motors Limited Pradip Burman PD/ED Dabur India Limited Ayurvet Limited Sanat Products Limited Dabur Exports Limited Burmans Finvest Limited Dabur India Limited Dabur Pharma Limited Dabur Foods Limited Apollo Health Street Limited E-medlife.com Limited Pasadensa Foods Limited Q H Talbros Limited Radico Khaitan Limited Burmans Finvest Limited Dabur India Limited Dabur Egypt Limited Sanat Products Ltd. Welltime Housing & Finance Limited Dabur Finance Limited Dabur Ayurvedic Specialities Ltd. Dabur Foods Limited Dabur Pharma Limited Dabur International Limited Balsara Hygiene Products Limited Balsara Home Products Limited Besta Cosmetics Limited Sunil Duggal ED Dabur India Limited Dabur Foods Limited Dabur International Limited Remuneration Committee Audit Committee

Shareholders/Investors Grievance Committee

Audit Committee

Amit Burman

PD/NED

Audit Committee

Remuneration Committee Remuneration Committee

Audit Committee

P D Narang

ED

Shareholders/Investors Grievance Committee

Audit Committee Audit Committee Remuneration Committee

46

Dabur India Limited Report on Corporate Governance

Name of the Director

Status

Directorship

Committee Membership Remuneration Committee Nomination Committee

Committee Chairmanship

HH Mah. Gaj Singh

ID

Dabur India Limited Jodhna Medical & Research Centre Limited Maharaja Heritage Resorts Limited Shankar Packagings Limited Tourism Finance Corporation of India Limited Fortune Park Hotels Limited Birla Sunlife Insurance Compnay Limited

P N Vijay

ID

Dabur India Limited

Remuneration Committee Compensation Committee Shareholders/Investors Grievance Committee Shareholders/Investors Grievance Committee Audit Committee Compensation Committee Nomination Committee Audit Committee Compensation Committee Audit Committee

Eicher Limited Reed Relay & Electronics Limited Eicher Motors Limited Stuart Edward Purdy ID Dabur India Limited

Shareholders/Investors Grievance Committee Audit Committee Audit Committee

Audit Committee

Ajay Bahl R C Bhargava

ID ID

Dabur India Limited Dabur India Limited ILFS Limited Polaris Software Lab Ltd. Machino Basell India Ltd. Roulunds Codan India Ltd. Grasim Industries Limited Lord Krishna Bank Ltd. Optimus Outsourcing Co. Ltd. Maruti Udyog Limited Omax Auto Ltd. Thomson Press Ltd. UltraTech Cement Co.Ltd.

Remuneration Committee Remuneration Committee Audit Committee

Audit Committee Audit Committee Audit Committee Audit Committee Shareholders/Investors Grievance Committee

Shareholders/Investors Grievance Committee

Audit Committee

resigned as Director w.e.f. 27th January, 2005 appointed as Director w.e.f. 27th January, 2005

Annual Report 2004-05

47