BOARD S REPORT

TO

THE MEMBERS,

Your Board of Directors ('Board') is pleased to présent the Twenty Eighth Annual Report of your Company, Marico Limited, for the year ended March 31, 2016 ('the year under review', 'the year' or 'FY16').

In line with the requirements of the Companies Act, 2013 ('the Act') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('the SEBI Regulations'), this report covers the financial results and other developments during the financial year April 1, 2015 to March 31, 2016 in respect of Marico Limited ('Marico' or 'the Company' or 'your Company') and Marico Consolidated comprising Marico, its subsidiaries and associate in India and overseas. The consolidated entity has been referred to as 'Marico Group' or 'Your Group' in this report.

RESERVES

There is no amount proposed to be transferred to the Reserves.

BONUS ISSUE AND RECLASSIFICATION OF AUTHORIZED SHARE CAPITAL OF THE COMPANY

In order to increase the overall liquidity to enable broad-based investor participation, the Company, during the year under review issued bonus equity shares in the ratio of 1:1 to the shareholders which were allotted in December, 2015.

To facilitate the aforesaid bonus issue, your Company re-classified its Authorized Share Capital to Rs. 215 Crores divided into 150 Crores Equity Shares of Re. 1 each and 6.5 Crores Preference Shares of Rs. 10 each, which led to consequential alteration of Clause V of the Memorandum of Association of your Company.

DIVIDEND

Your Company's wealth distribution philosophy has aimed at sharing its prosperity with its shareholders, through a formal earmarking/disbursement of profits to the shareholders.

Your Company's distribution to equity shareholders during FY16 comprised the following:

First Interim Dividend of 175% on the equity base of Rs. 64.51 Crores.

Second Interim Dividend of 150% on the post bonus equity base of Rs. 129.02 Crores.

One time Special Third Interim Dividend of 100% on the post bonus equity base of Rs. 129.02 Crores.

The total equity dividend for FY16 (including dividend distribution tax) aggregated to Rs. 500.86 Crores. The overall dividend payout ratio hence is 69% of the consolidated profit after tax as compared to 30% during FY15.

REVIEW OF OPERATIONS

During FY16 Marico posted revenue from operations of Rs. 6,132 Crores, a growth of 7% over the previous year. The business delivered a volume growth of 7% with an operating margin of 17.3%. The business reported bottom line of Rs. 725 Crores, growth of 26% over last year.

Marico India, the domestic FMCG business, achieved a turnover of Rs. 4,755 Crores in FY16, a growth of 7% over last year. Volume growth for the year was also at 7%. The overall sales growth was backed by continued growth momentum in categories of Parachute Coconut Oil, Edible Oils and Value Added Hair Oils (VAHO). The operating margin for the India business was healthy at 21.6% before corporate allocations. Higher operating margins can be attributed mainly to gross margin expansion led by softer input costs.

During the year, Marico International, the International FMCG business, posted a turnover of Rs. 1,376 Crores, a growth of 7% over FY15 in constant currency terms. The operating margin for the year was at 17.7% (before corporate allocations) reflecting a sustained structural shift over the last few years.

Your Company has demonstrated steady growth on both, the top line and the bottom line. Over the last 5 years, the top line has grown by 16% and bottom line by 19% at a Compounded Annual Growth Rate.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed Management Discussion and Analysis, which inter-alia, covers the following, forms part of the Annual Report.

• Update on Macro Economic Indicators & FMCG Industry

• Opportunities and Threats

• Risks and Concerns

• Internal control systems and their adequacy

• Discussion on financial and operational performance

• Segment-wise performance

• Outlook

• Material development in Human Resource /Industrial Relations including number of people employed

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

The composition of the CSR Committee is disclosed in the Corporate Governance Report.

A brief outline of the CSR Policy of the Company, the CSR initiatives undertaken during the financial year 2015-16 together with progress thereon and the report on CSR activities as required by the Companies (Corporate Social Responsibility Policy) Rules, 2014, are set out in 'Annexure A' to this Report.

SUBSIDIARIES AND ASSOCIATE

A list of companies which are subsidiaries/associate to your Company is provided as part of the notes to Consolidated Financial Statements. During the period under review, there were no companies which have become subsidiaries of your Company. Beauté Cosmétique Societé Par Actions, a company in Vietnam, ceased to be a subsidiary of your Company w.e.f. May 14, 2015 consequent to divestment. During the year under review, Bellezimo Professionale Products Private Limited became an associate of your Company w.e.f October 21, 2015 as per Section 2(6) of the Companies Act, 2013, consequent to acquisition of 45% equity stake by your Company.

A separate statement containing salient features of the financial statements of all subsidiaries of your Company forms part of the Consolidated Financial Statement in compliance with Section 129 and other applicable provisions of the Act. The statement reflects the performance and financial position of each of the subsidiaries.

The financial statements of the subsidiary companies and related information shall be uploaded on the website of your Company which can be accessed using the link <http://> marico.com/india/investors/documentation and the same are available for inspection by the Members at the Registered Office of your Company during business hours on all working days except Saturdays and Sundays up to the date of the Annual General Meeting, as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office Address.

Your Company has approved a policy for determining material subsidiaries and the same is uploaded on the Company's website which can be accessed using the link <http://marico>. com/investorspdf/Policy for determining Material Subsidiaries.pdf.

RELATED PARTY TRANSACTIONS

All transactions with related parties entered into during the financial year 2015-16 were at arm's length basis and in the ordinary course of business and in accordance with the provisions of the Act and the Rules made thereunder. There were no transactions which were material (considering the materiality thresholds prescribed under the Act or clause 49 of the erstwhile Listing Agreement/Regulation 23 of the SEBI Regulations). Accordingly, no disclosure is made in respect of the Related Party Transactions in the prescribed Form AOC-2 in terms of Section 134 of the Act and Rules made thereunder.

All transactions with related parties are placed before the Audit Committee for approval. An omnibus approval of the Audit Committee is obtained for the related party transactions which are repetitive in nature. In case of transactions which are unforeseen and in respect of which complete details are not available, the Audit Committee grants an omnibus approval to enter into such unforeseen transactions provided the transaction value does not exceed Rs. 1 Crore (per transaction in a financial year). The Audit Committee reviews all transactions entered into pursuant to the omnibus approvals so granted on a quarterly basis. During the year under review, in accordance with the amendment brought to the Companies (Meetings of Board and its Powers) Rules, 2014, on December 14, 2015, the Audit Committee, as authorized by the Board, has framed Criteria for granting an omnibus approval to the related party transactions to be entered into by the Company.

During the year under review, your Board updated the policy on Related Party Transactions as required under the SEBI Regulations. The policy is uploaded on the Company's website and can be accessed using the link <http://marico.com/> investorspdf/Policy on Related Party Transactions.pdf.

DEPOSITS

There were no outstanding deposits within the meaning of Sections 73 and 74 of the Act, read together with the Companies (Acceptance of Deposits) Rules, 2014, at the end of the financial year 2015-16 or the previous financial year. Your Company did not accept any deposit during the financial year 2015-16.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act, are given in the notes to the Standalone Financial Statements of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and information and based on the information and explanations provided to them by the Company, your Directors make the following statement in terms of Section 134(3)(c) of the Act:

• that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed and there are no material departures from the same;

• that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2016 and of the profit and loss of your Company for the said period;

• that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• that the annual accounts have been prepared on a 'going concern' basis;

• that proper internal financial controls to be followed by the Company were laid down and such internal financial controls are adequate and were operating effectively;

• that proper systems to ensure compliance with the provisions of all applicable laws were devised and that such systems were adequate and operating effectively.

DIRECTORS

There is no change in the composition of the Board.

During the year under review, declarations were received from all Independent Directors of the Company that they satisfy the 'criteria of Independence' as defined under Regulation 16(1)(b) of the SEBI Regulations and Section 149(6) of the Act, read with Schedule IV and the relevant Rules made thereunder.

DIRECTORS RETIRING BY ROTATION

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Rajen Mariwala (DIN: 00007246) is liable to retire by rotation at the 28th Annual General Meeting (AGM) and being eligible, has offered himself for re-appointment. His re-appointment is being placed for your approval at the AGM. Your Directors recommend his re-appointment as the Non-Executive Director of your Company.

KEY MANAGERIAL PERSONNEL

During the year under review, there is no change in the Key Managerial Personnel of the Company. Subsequent to the close of the year, Mr. Surender Sharma, Head Legal -International Business has been appointed as the Company

Secretary & Compliance Officer w.e.f. April 29, 2016 in place of Ms. Hemangi Ghag, who resigned from the post of Company Secretary & Compliance Officer on April 28, 2016. Ms. Ghag continues as an employee of your Company.

The Key Managerial Personnel of the Company as on date are:

1. Mr. Saugata Gupta is the Managing Director (MD) & Chief Executive Officer (CEO).

2. Mr. Vivek Karve is the Chief Financial Officer (CFO).

3. Mr. Surender Sharma is the Company Secretary (CS).

MEETINGS

The details of the meetings of the Board of Directors and its Committees held during the year under review are stated in the Corporate Governance Report.

The details of attendance of the Directors in the Board Meetings and its Committees during the year under review are stated in the Corporate Governance Report.

AUDIT COMMITTEE

The composition of the Audit Committee of the Board of Directors along with the composition of other Committees is stated in the Corporate Governance Report.

COMPANY'S POLICY ON NOMINATION, REMUNERATION, BOARD DIVERSITY, EVALUATION AND SUCCESSION

In terms of the applicable provisions of the Act, read with the Rules made thereunder and the SEBI Regulations, your Board has formulated a Policy on appointment, removal and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel and also on Board Diversity, Succession Planning and Evaluation of Directors. Salient features of the said Policy are stated in the Corporate Government Report.

BOARD EVALUATION

Your Board is committed to assessing its own performance as also performance of individual director in order to identify its strengths and areas in which it may improve its functioning. Towards this end, the Corporate Governance Committee of the Board ('CGC') (which functions as the Nomination and Remuneration Committee of the Company for the purpose of the Companies Act, 2013), established the criteria and processes for evaluation of performance of individual Directors, Chairman of the Board, the Board as a whole and its individual statutory Committees. The appointment/re-appointment/ continuation of Directors is subject to positive outcome of the annual evaluation process. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. In terms of the Act, the Independent Directors on your Board also meet separately once in a year to discuss the matters as prescribed under Schedule IV to the Act and to assess the performance of the Non - Independent Directors of your Board.

The board evaluation exercise during the year under review has resulted in the Board identifying three focus areas for it to work upon in the coming years:

1. Intensifying its efforts in guiding the organization to get future ready, especially in identifying new growth drivers;

2. Renewed focus and time commitment for mentoring the senior management, setting them up for success in the ever changing macro environment; and

3. Revisiting the Board composition with an eye on future trends especially in the digital era.

The Board is also committed to review progress on these priorities during the annual Board Retreats held once a year.

DISCLOSURE RELATING TO REMUNERATION

The information required pursuant to Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is disclosed in 'Annexure B' to this report.

The Managing Director & CEO of your Company does not receive remuneration from any of the subsidiaries of your Company.

The statement containing particulars of remuneration of employees as required under Section 197(12) of the Act, read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in an annexure to the Annual Report. In terms of Section 136(1) of the Act, the Annual Report is being sent to the Members excluding the aforesaid annexure. However, this annexure shall be made available on the website of the Company 21 days prior to the date of Annual General Meeting ('AGM'). The information is also available for inspection by the Members at the Registered Office of the Company during business hours on all working days except Saturdays and Sundays up to the date of the AGM. Any Member desirous of obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office Address.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company's approach on Corporate Governance has been detailed out in the Corporate Governance Report. Your Company has deployed the principles enunciated therein to ensure adequacy of Internal Financial Controls with reference to the financial statements. Your Board has also reviewed the internal processes, systems and the internal financial controls and the Directors' Responsibility Statement contains a confirmation as regards adequacy of the internal financial controls.

VIGIL MECHANISM

Your Company has a robust vigil mechanism in the form of Unified Code of Conduct which enables employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Code. The Company's Unified Code of Conduct can be accessed on its website using the link <http://marico.com/investorspdf/CoC> book 09-04-14.pdf.

This mechanism also provides for adequate safeguards against victimization of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The guidelines are meant for all members of the Company from the day they join and are designed to ensure that they may raise any specific concern on integrity, value adherence without fear of being punished for raising that concern. The guidelines also cover our associates who partner us in our organizational objectives and customers for whom we exist.

To encourage employees to report any concerns and to maintain anonymity, the Company has provided a toll free helpline number and a website, wherein the grievances/ concerns can reach the Company. For administration and governance of the Code, a Committee called 'the Code of Conduct Committee' ('CCC') is constituted. The CCC has the following sub-Committees namely:

• HR Committee - with an objective to appoint investigation team for investigation of HR related concerns / complaints.

• IT Committee - with an objective of implementing the IT policy and resolution of IT related concerns / complaints under the Code.

• Whistle Blower Committee - with an objective to appoint an investigation team for investigation for whistle blower complaints.

• Prevention of Sexual Harassment Committee (PoSH Committee) — with an objective to ensure a harassment free work environment including but not limited to appointment of investigation team for investigation of sexual harassment concerns/complaints.

The Board, the Audit Committee and the Corporate Governance Committee are informed periodically on the matters reported to CCC and the status of resolution of such cases.

The Company affirms that no personnel has been denied access to the Audit Committee.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Company has a policy for the prevention of sexual harassment which is embedded in the CCC. As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has constituted an Internal Complaints Committees (ICC). During the financial year 2015­16, the ICC received 1 complaint on sexual harassment and the same was disposed of in accordance with applicable laws and the policy of your Company.

RISK MANAGEMENT

For your Company, Risk Management is an integral and important component of Corporate Governance. Your Company believes that a robust Risk Management ensures adequate controls and monitoring mechanisms for a smooth and efficient running of the business. A risk-aware organization is better equipped to maximize the shareholder value.

The key cornerstones of your Company's Risk Management Framework are:

1. Periodic assessment and prioritization of risks that affect the business of your Company;

2. Development and deployment of risk mitigation plans to reduce the vulnerability to the prioritized risks;

3. Focus on both the results and efforts required to mitigate the risks;

4. Defined review and monitoring mechanism wherein the functional teams, the top management and the Board review the progress of the mitigation plans;

5. Embedding of the Risk Management processes in significant decisions such as large capital expenditures, mergers, acquisitions and corporate restructuring;

6. Wherever, applicable and feasible, defining the risk appetite and install adequate internal controls to ensure that the limits are adhered to.

The constitution of the Risk Management Committee ('RMC') is stated in the Corporate Governance Report. The RMC assists the Board in monitoring and reviewing the risk management plan, implementation of the risk management framework of the Company and such other functions as Board may deem fit. The detailed terms of reference and the composition of RMC are set out in the Corporate Governance Report.

Détails ofsignificant and material orders passed by the regulators

There were no significant/material orders passed by the regulators or courts or tribunals impacting the going concern status of your Company and its operations in future.

ESOP/Stock Appréciation Rights Schemes

Marico Employee Stock Option Scheme 2007

Your Company had formulated and implemented an Employee Stock Option Scheme ('the Scheme') in 2007 for grant of Employee Stock Options ('the Options') to certain employees of the Company and its subsidiaries. Accordingly, during the year under review, in view of exercise of the Options by the eligible employees of the Company, an aggregate of 1,03,600 equity shares were issued to them by the Company.

Subsequent to exercise of all the Options under the Scheme, the Scheme was concluded.

None of the Non-Executive Directors (including Independent Directors) have received Options in pursuance of the above Scheme. Likewise, no employee has been granted stock options, during the year equal to or exceeding 0.5% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

Marico Employee Stock Option Scheme 2014

The Members of the Company at its Extra Ordinary General Meeting held on March 25, 2014 approved the Marico Employee Stock Option Scheme 2014 ('the Scheme') for the benefit of the Managing Director & Chief Executive Officer (MD & CEO). The objective of this Scheme was to give a wealth building dimension to the remuneration structure of the MD & CEO. Further, it also aimed at promoting desired behaviour for meeting organization's long term objectives and to enable retention through a customized approach.

The CGC is responsible for administrating the Scheme. The stock options (3,00,000) granted to the MD & CEO by the CGC on April 1, 2014, stand increased to 6,00,000 as at March 31, 2016 due to bonus equity shares issued by the Company during the year under review (in the ratio of 1:1) and are vested in the MD & CEO. The stock options vested in the MD & CEO constitute 0.05% of the current paid up equity capital of the Company as on the date of this Report.

Marico MD CEO Employee Stock Option Plan 2014

At the 26th Annual General Meeting of the Company held on July 30, 2014, the Members had approved the Marico MD CEO Employee Stock Option Plan 2014 ('MD CEO ESOP Plan 2014' or 'the Plan') for the benefit of Managing Director & Chief Executive Officer ('MD & CEO') of the Company. The objective of this Plan is to enable grant of stock options on an annual basis to the MD & CEO as a part of his remuneration through one or more Scheme(s) notified under the Plan. The number of equity shares that may arise on a cumulative basis upon exercise of stock options under this Plan shall not exceed in aggregate 0.5% of the total paid up equity share capital of the Company.

The CGC is entrusted with the responsibility of administering the Plan and the Scheme(s) notified there under. Accordingly, no stock options were granted to the MD & CEO under the said Scheme for the year under review. However, the options granted (46,600) to the MD & CEO on January 5, 2015 by the CGC stand increased to 93,200 as at March 31, 2016 due to bonus equity shares issued by the Company during the year under review (in the ratio of 1:1). These stock options constitute 0.007% of the paid up equity share capital of the Company as on the date of this Report.

Marico Employees Stock Appreciation Rights Plan, 2011

At the 27th Annual General Meeting of the Company held on August 5, 2015, the Members had approved the Marico Stock Appreciation Rights Plan, 2011 ('STAR Plan'), for the welfare of its employees and those of its subsidiaries. Under the STAR Plan, the Corporate Governance Committee notifies various Schemes for granting Stock Appreciation Rights (STARs) to the eligible employees. Each STAR is represented by one equity share of the Company. The eligible employees are entitled to receive in cash the excess of the maturity price over the grant price in respect of such STARs subject to fulfillment of certain conditions and applicability of tax. The STAR Plan involves secondary market acquisition of the equity shares of your Company by an independent Trust set up by your Company for the implementation of the STAR Plan. Your Company lends monies to the Trust for making secondary acquisition of shares.

As at March 31, 2016 an aggregate of 50, 67,800 STARs were outstanding which constitute about 0.39% of the current paid up equity share capital of the Company.

Statutory information on ESOS, STAR and Trust

Disclosure on ESOS, STAR and Trust in terms of Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, Regulation 14 of the SEBI (Share Based Employee Regulations) and SEBI Circular dated June 16, 2015 is enclosed as 'Annexure C' and forms part of this report. Further, the Company has complied with the applicable accounting standards in this regard.

The statutory auditors of the Company i.e. M/s. Price Waterhouse, have certified that implementation of all the above ESOP Schemes/Plans is in accordance with the erstwhile Securities and Exchange board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the SEBI (Share Based Employees Benefits) Regulations, 2014, as applicable, and the resolutions passed by the Members at the respective General Meetings approving the ESOP Schemes/Plans.

AUDITORS

Statutory Auditors

The Members, pursuant to the appointment of M/s. Price Waterhouse, Chartered Accountants as the statutory auditors of your Company at the 26th Annual General Meeting of your Company ('AGM'), had ratified their appointment at the 27th AGM, to hold office from the conclusion thereof till the conclusion of the 28th AGM of the Company. Further, as required under Regulation 33(1)(d) of the SEBI Regulations, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The appointment of statutory auditors is approved by the Members up to the conclusion of 29th AGM of the Company.

Accordingly, your Directors seek ratification of the appointment of the statutory auditors for the financial year 2016-17.

Cost Auditors

M/s. Ashwin Solanki & Associates, Cost Accountants, were appointed as the Cost Auditor for the financial year 2015-16 to conduct the audit of the cost records of your Company. Your Directors have re-appointed M/s. Ashwin Solanki & Associates, Cost Accountants, as the Cost Auditor for the financial year 2016-17. In terms of the provisions of Section 148(3) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to the Cost Auditors has to be ratified by the Members of the Company. Accordingly, the Board seeks ratification of the remuneration payable to the Cost Auditors for the financial year 2016-17 at the 28th AGM.

SECRETARIAL AUDIT

Pursuant to Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company appointed Dr. K. R. Chandratre, Practising Company Secretary, to conduct the secretarial audit of your Company. The Secretarial Audit Report is enclosed as 'Annexure D' to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

STATUTORY AUDITOR'S REPORT

The Auditor's Report for the year ended March 31, 2016 does not contain any qualification, reservation or adverse remark.

CORPORATE GOVERNANCE

As per the SEBI Regulations, a separate section on Corporate Governance practices followed by the Company together with a certificate from the Company's statutory auditors, confirming compliance thereto is attached to this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION

AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act, read with Rule 8 of The Companies (Accounts) Rules, 2014 is enclosed as 'Annexure E' to this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 in accordance with Section 92(3) of the Act, read with the Companies (Management and Administration) Rules, 2014, are enclosed as 'Annexure F' to this report

ACKNOWLEDGEMENT

Your Board takes this opportunity to thank all its employees for their dedicated service and firm commitment to the goals & vision of the Company. Your Board also wishes to place on record its sincere appreciation for the wholehearted support received from shareholders, distributors, bankers and all other business associates and from the neighborhood  communities of the various Marico locations. We look forward to continued support of all these partners in progress.

On behalf of the Board of Directors

Harsh Mariwala

Chairman

(00210342)

Place: Mumbai

Date: April 29, 2016