Risk Management
& Opportunities

We closely monitor the potential risks and opportunities that arise from political, economic and regulatory environment, exchange rate fluctuations, technology changes, environment and climate change and competition. Dabur has an integrated approach to managing risks arising from its strategy and daily operations.

At Dabur, risk management is an integral part of doing business, supported by clear governance. Risks, we feel, are an essential element during Opportunity Assessment and Strategy Formulation. In conducting our business and executing our strategy, we identify risks, prepare strategies to manage and mitigate these risks while making the best use of their opportunities.

Our business is subject to risks and uncertainties that could have both short-term and long-term implications for the Company. At Dabur, risk assessment is undertaken based on the likelihood of occurrence and possible impact. This assessment metric is pre-defined and approved by the Risk Management Committee. Risk Registers are categorised into Critical and Non-Critical with High and Medium Risks forming part of Critical Risk Register while Low Risks form part of Non-Critical Risk Register.

The COVID-19 outbreak in 2020 and consequent measures undertaken by various governments across the world to contain its spread negatively impacted our business in the initial part of the 2020-21 financial year. Our Company not only managed these risks successfully but also converted them into opportunities and emerged stronger towards the end of the first half of the year. While the extent of the pandemic had subsided as the year went by, the emergence of a second wave is threatening to open up new risks, the extent of which remains uncertain, and it is expected to further affect our way of doing business in the coming fiscal.

Following are some of the risks identified by us from a business perspective and our approach towards addressing them. We recognise that this is not a full overview of all risks and uncertainties that may affect the Company. As new risks emerge and existing immaterial risks evolve, timely discovery and accurate evaluation of risks are at the core of Dabur’s risk management system.

Key Risks

COVID-19 continues to affect our people and our business. It emerged as an unexpected and unprecedented risk in 2020-21, severely impacting our global business operations. Potential Impact With the fresh wave now emerging, the exact impact remains difficult to predict and will depend on the evolution and duration of the outbreak, as well as the policy actions and restrictions taken by local governments to mitigate the impact. It will also depend on the success of the vaccination programme.

Potential Impact

With the fresh wave now emerging, the exact impact remains difficult to predict and will depend on the evolution and duration of the outbreak, as well as the policy actions and restrictions taken by local governments to mitigate the impact. It will also depend on the success of the vaccination programme.

Key Mitigation Strategy

Dabur moved quickly to respond to the changing dynamics in the marketplace, right from securing supplies of essential raw and packing material to revamping its portfolio construct by introducing a host of new products in line with the growing consumer need and deploying new Go-To-Market strategies to drive Sales. Our efforts helped effectively stem loss of Sales and get back on the growth track from Q2 2020-21 onwards.

Capital Impacted
  • Financial Capital
  • Manufactured Capital
  • Human Capital
  • Social & Relationship Capital
  • Intellectual Capital

The Regulatory environment in the Consumer Goods industry continues to evolve with newer Health & Safety norms in the works.

Potential Impact

While some regulatory changes create new business opportunities, others come with significant costs and business restrictions.

Key Mitigation Strategy

We adhere to all the statutory and regulatory requirements on a timely basis, and ensure smooth tradition to any new regime, whenever required.

Capital Impacted
  • Financial Capital
  • Social & Relationship Capital

Speed and scope of environment-related changes on business operations are increasing. Climate-related physical and transitional disruptions impact both business operations and consumer demand.

Potential Impact

Dabur has a range of products based on Nature and natural ingredients. The adversity of Climate Change has significantly impacted the supply of these Naturebased raw material, which are critical to the production of some of our popular brands and products.

Key Mitigation Strategy

We are committed to reducing our absolute energy consumption and CO2 emissions, besides adopting clean energy, recycling waste and working towards increasing biodiversity by involving local communities.

Capital Impacted
  • Financial Capital
  • Social & Relationship Capital
  • Natural Capital

Counterfeit and spurious products are a global problem of enormous scale, impacting almost every sector. In India, the presence of counterfeit is specifically high in FMCG, causing significant losses to the industry and the Government.

Potential Impact

Not only are counterfeit products a major drain on the National exchequer, they also lead to loss of sales and consumer confidence in the brand.

Key Mitigation Strategy

Dabur has been working with local authorities across states to identify and target spurious and counterfeit products manufacturers, including label printers and conducting regular raids. We also constantly change our product packaging to stay ahead of spurious products makers, while organising regular interactions with communities and consumers to educate them about identifying counterfeit products.

Capital Impacted
  • Manufactured Capital
  • Social & Relationship Capital

Several states across India are banning use of plastic, and the onus of collecting and responsibly disposing plastic waste generated by their packaging has been put on Companies.

Potential Impact

Failure to comply with current or future regulations on plastic packaging or failure to meet commitments on packaging and the environment would attract hefty fines and may even lead to loss of Sales.

Key Mitigation Strategy

Dabur has set itself the target of becoming a Plastic Waste Neutral Company by the end of 2021-22 financial year. In 2020-21, we have successfully collected and processed/recycled over 11,000 MT of post-consumer plastic waste from around 25 states across India.

Capital Impacted
  • Social & Relationship Capital
  • Natural Capital

Being a transnational enterprise, we are exposed to risks from fluctuations in exchange rates that may have an adverse impact on our business.

Potential Impact

The principal foreign exchange transaction exposure comprises the geographical locations of Dabur’s overseas production facilities, the sourcing of raw material and sales outside India.

Key Mitigation Strategy

Dabur has been taking forward cover for foreign currency exports and imports from time to time. Besides, foreign currency borrowings are fully hedged at the time of inception. We are also driving growth in local markets abroad to drive Revenue and Profitability of the businesses in individual geographies and their respective local currencies. In our International business, we are also making efforts to maximise local procurement.

Capital Impacted
  • Financial Capital

Dabur relies heavily on technology and IT infrastructure for its day-to-day business, and Cyber threats have emerged as a key risk across sectors and industries.

Potential Impact

A cyber-attack or non-availability of IT systems could have severe financial, regulatory and reputational consequences for our business. We face the risk of leak or misuse of sensitive data and information, including production plans, investment strategies and new product launches. There is also the risk of losing important information over the Internet given the fact that several employees are now working from home.

Key Mitigation Strategy

We have installed a robust IT security system to safeguard all our sensitive information. We continue to work with industry leaders in developing and deploying a wide array of advanced defensive technologies. Strict vigilance is maintained in all offices and manufacturing locations, regarding entry of laptops, mobile phones, hard disks and pen drives to ensure no leak of information. We undertake real-time back-up of SAP and e-mail data to ensure Business Continuity.

Capital Impacted
  • Human Capital
  • Intellectual Capital
download-pdfAnnual Report 2020-21