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Audited Balance Sheet and Profit & Loss Accounts for the year ended 31st March 2005
Contents
Page
Director’s Report 1
Auditor’s Report 4
Balance Sheet 7
Schedules 9
To,
The Members, Dabur Foods Ltd.
Your Directors have pleasure in presenting the 8th Annual Report on the business and operations of the Company together with
the audited statement of accounts for the year ended 31st March, 2005.
FINANCIAL RESULTS
Particulars Amt. (Rs. in‘lacs)
Turnover 13014.72
Profit before Tax 570.26
Less: Provision for Tax- current 44.71
Profit after Tax 525.55
Loss Brought Forward (2006.83)
Balance carried over to Balance Sheet (1481.28)
AUDIT COMMITTEE:
The Audit Committee comprises of Mr. V C Burman, Mr. Amit Burman and Mr. P D Narang, all non-executive Directors with Mr.
V C Burman as its chairman. The role, terms of reference and the authority and powers of the Audit Committee are in conformity
with the requirements of the Companies Act, 1956.
REMUNERATION COMMITTEE:
The remuneration Committee comprises of Mr. Charanjit Mohan, Mr. Sunil Duggal and Mr. P D Narang, all non-executive
independent Directors. The role, terms of reference and the authority and powers of the Remuneration Committee are in
conformity with the requirements of the Companies Act, 1956.
DIRECTORS:
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Amit Burman
and Mr. P D Narang, Directors retire by rotation and being eligible offer themselves for re-appointment.
AUDITORS:
M/s. Jhalani & Company, Chartered Accountants, New Delhi, Statutory Auditors of the Company will retire at the ensuing Annual
General Meeting and being eligible, offer themselves for reappointment.
FIXED DEPOSITS:
The Company has not accepted Fixed Deposits pursuant to section 58A of the Companies Act, 1956.
SUBSIDIARIES:
As required by the provisions of section 212 of the Companies Act, 1956, the audited accounts together with Directors Report
and Auditors Report of the subsidiary Company are appended and forms part of the Annual Report. The statement pursuant to
Section 212 of the Act is attached and forms part of this report.
PARTICULARS OF EMPLOYEES :
During the year under review no employee of the Company was in receipt of remuneration exceeding the limits as laid down
under section 217 (2A) of the Companies Act, 1956. Therefore, the information as required under section 217(2A) of the Act,
read with the Companies (Particulars of Employees) Rules, 1975 is not being given.
ACKNOWLEDGEMENT:
Your Directors would like to express their grateful appreciation for the continued support and co-operation received from the
Customers, Dealers, Bankers, Government authorities and shareholders. They also wish to place on record their appreciation
for the dedication and hard work put in by the employees of the Company at all levels.
(Figures in Rupees)
To
The Members, Dabur Foods Ltd.
We have audited the attached Balance Sheet of Dabur Foods Limited as at 31st March,2005 and also the Profit and Loss Account
of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the
company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
(1) We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
(2) As required by Companies (Auditor’s Report) Order,2003 [as amended by the Companies (Auditor’s Report) (Amendment)
Order, 2004] issued by the Government of India in terms of sub-section (4A) of section 227 of the Companies Act,1956, we
enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.
(3) Further to our comments in the Annexure referred to above, we report that:
(a) We have obtained all the information and explanations, which, to the best of our knowledge and belief were necessary
for the purpose of our audit;
(b) In our opinion, proper books of account have been kept as required by law so far as appears from our examination
of those books;
(c) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with
the books of account;
(d) In our opinion, the profit and loss account, balance sheet and the cash flow statement comply with the Accounting
Standards specified by the Institute of Chartered Accountants of India, referred to in Section 211 (3C) of the Companies
Act, 1956,to the extent applicable.
(e) On the basis of representation received from the directors as on 31st March 2005, and taken on records by the Board
of Directors, we report that none of the directors is disqualified as on 31st March 2005 from being appointed as a
director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act 1956.
(f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give
the information required by the Companies Act, 1956 in the manner so required and also give a true and fair view in
conformity with the accounting principals generally accepted in India.
(i) in the case of balance sheet, of the state of affairs as at 31st March,2005;
(ii) in the case of the profit & loss account , of the Profit for the year ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.
V.K. Jhalani
Partner
(Membership No.:82691)
Ghaziabad
22nd April, 2005
Name of the Nature of the Forum where the Amount Period to which
Statute Dues demand is Pending (Rs. in lacs) amount relates
10. At the end of the financial year March 31, 2005, the company has accumulated losses of Rs.1481.13 lacs and the same
is more than the fifty percent of the net worth of the company. Further, the Company has not incurred any cash losses
during the financial year ended March 31, 2005 and in the immediately preceding financial year.
11. According to the records of the Company examined by us and the information and explanations given to us, the
Company during the year has not defaulted in repayment of dues to financial institutions and banks.
12. As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures
and other securities, paragraph 4 (xii) of the Order is not applicable.
13. The provisions of any special statute as specified under paragraph 4 (xiii) of the Order are not applicable to the
Company.
14. As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of
the Order is not applicable.
15. In our opinion and according to the information and explanations given to us, the Company has not given any
guarantees during the year for loans taken by others from banks or financial institutions.
16. In our opinion and according to the information and explanations given to us, the term loans during the year have
been applied for the purpose for which they were obtained.
17. According to the information and explanations given to us and on an overall examination of the balance sheet of the
Company, we report that short term funds have not been used to finance long term investments.
18. As the Company has not made any preferential allotment of shares during the year, paragraph 4 (xviii) of the Order is
not applicable.
19. During the year, since the Company has not issued any debentures, paragraph 4 (xix) of the Order is not applicable.
20. During the year, since the Company has not raised any money by way of public issue, paragraph 4 (xx) of the Order is
not applicable.
21. Based upon the audit procedures performed and information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended
March 31, 2005.
FOR JHALANI & CO.
Chartered Accountants
V.K. Jhalani
Partner
(Membership No.:82691)
Ghaziabad
22nd April, 2005
As at 31st As at 31st
March 2005 March 2004
Schedule (Rs. In lac) (Rs. In lac)
Sources of funds :
Shareholders’ funds:
A) share capital A 1,000.00 1,000.00 1,000.00 1,000.00
Loan funds:
A) secured loans B 1,637.34 625.00
B) unsecured loans C 1,727.79 1,836.46
3,365.13 2,461.46
Total 4,365.13 3,461.46
Application of funds :
Fixed assets :
(A) gross block E 7.52 7.39
(B) less : depreciation 3.00 1.52
(C) net block 4.52 5.87
As per our report of even date attached For Dabur Foods Ltd.
For Jhalani & Co.
Chartered Accountants Amit Burman Director
P. D. Narang Director
V.K. Jhalani Neeraj Aggarwal Manager Finanace&
Partner Company Secretary
Ghaziabad
22nd April, 2005
Income : I
Sales less returns 12,969.97 8,579.80
Other income 44.75 145.35
Expenditure :
Cost of materials J 7,508.47 5,207.93
Payments to and provisions for employees K 404.04 384.56
Selling and administrative expenses L 4,316.23 2,659.97
Financial expenses M 214.24 198.49
Miscellaneous expenditure written off 0.00 114.70
Depreciation 1.48 0.98
As per our report of even date attached For Dabur Foods Ltd.
For Jhalani & Co.
Chartered Accountants Amit Burman Director
P. D. Narang Director
V.K. Jhalani Neeraj Aggarwal Manager Finanace&
Partner Company Secretary
Ghaziabad
22nd April, 2005
Authorised :
20000000 Equity shares of Rs.10 each 2,000.00 1,000.00
(previous year 10000000 equity shares of Rs.10 each)
2,000.00 1,000.00
Issued, subscribed and paid up:
10000000 Equity shares of Rs.10 each fully paid up 1,000.00 1,000.00
(all the shares have been held by holding
company, Dabur India Limited and its nominees) -
1,000.00 1,000.00
Electrical Appliances 0.85 - 0.10 0.75 0.33 0.08 - 0.41 0.34 0.52
Furniture & Fixtures 0.21 0.23 - 0.44 0.13 0.03 - 0.16 0.28 0.08
TOTAL 7.39 0.23 0.10 7.52 1.52 1.48 0.00 3.00 4.52 5.87
As on 31.03.2004 1.36 6.03 0.00 7.39 0.54 0.98 0.00 1.52 5.87
As at 31st As at 31st
Schedule - F Investments (At Cost)
March 2005 March 2004
(Rs.in lac) (Rs.in lac)
Long Term Investment
A) Govt. Securities
(National Saving Certificates Viii Series) 0.20 0.20
(Lodged With Sales Tax Department)
B) Trade Investment In Subsidiary Company
Unquoted
Pasadensa Foods Ltd 500.01 500.01
(5000000 Equity Shares Of Rs.10/- Each Fully Paid Up, At Cost )
(Book Value Of Unquoted Investment Is Rs.195.88
Previous Year Rs.483.65)
Share Application Money Pending Allotment - 5.00
(With Pasadensa Foods Ltd) 500.21 505.21
Schedules annexed to and forming part of the Profit and Loss account for the year ended 31st March 2005
A. Sales :
domestic sales less returns 12,400.32 8,347.06
export sales 569.65 232.74
12,969.97 8,579.80
B. Other income :
premium on transfer of loan - 132.00
miscellaneous receipts 12.28 13.18
interest received 32.47 0.17
(tax deducted at source Rs. 6.64 previous year nil) 44.75 145.35
Schedule N - Notes Forming Part Of The Accounts For The Year Ended 31st March,2005
A. ACCOUNTING POLICIES
Significant accounting policies are summarized below:
1. Accounting Convention
The financial statements are prepared under the historical cost convention in accordance with applicable mandatory
Accounting Standards and relevant provisions of the Companies Act, 1956.
2. Use of estimates
• The preparation of the financial statement in conformity with generally accepted accounting policies requires
management to make estimates and assumptions that effect the reported balances of assets & liabilities and
disclosure relating to contingent assets & liabilities as at the date of the financial statements and reported
amounts of income & expenses during the period.
• Management assesses using external and internal sources whether there is an indication that asset may be
impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected
to arise from the continuing use of the assets and its eventual disposal. The impairment loss to be expensed is
determined as the excess of the carrying amount over the higher of the asset’s net sales price or present value
as determined above.
• Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably
estimated. Actual results could differ from those estimates.
3. Investments
Long term investments are stated at cost. A provision for diminution is made to recognize a decline other than
temporary in the nature of value of investment.
4. Sales
Sales are recognized net of returns when goods are supplied in accordance with terms of sale. Sales comprise of sale
price of goods including sales tax. Breakage and leakage claims from customers are charged as expenses upon
approval.
6. Inventories
Inventories, other than goods in transit, are valued at cost (on FIFO basis) or estimated net realizable value, whichever
is lower, after providing for cost of obsolescence and other anticipated losses, where considered necessary.
9. Retirement benefits
• Liability of Gratuity to employees is determined on the basis of contribution made to Life Insurance Corporation
of India from whom the company has taken the Group Gratuity Insurance policy.
• Liability for leave encashment benefit determined on the basis of contribution made to Life Insurance Corporation
of India from whom the company has taken the Leave Encashment policy
• Contributions to defined contribution schemes such as Provident Fund and Family Pension Fund are charged to
profit & Loss Account as incurred.
10. Borrowing Cost
Borrowing cost that are attributable to acquisition of qualifying assets are capitalized as part of the cost of such
assets. All other borrowing costs are charged to revenue.
11. Taxes on income
• Deferred tax amount is recognized subject to the consideration of the prudence on the tax effect of timing
difference between the taxable income and accounting income computed for the current accounting year and
reversal of earlier year timing difference.
• Deferred Tax assets are recognized and carried forward to the extent there is a reasonable certainty except
arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is
virtual certainty that sufficient future taxable income will be available against such deferred tax assets.
12. Cash flow statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of
transactions of a non-cash nature and any deferrals of accruals of past or future cash receipts or payments. The cash
flows from regular revenue generating; investing and financing activities of the company are segregated.
B. NOTES TO ACCOUNTS
1. The company has provided Rs 2.64 (previous period Rs 3.40) as liability accruing on account of deferred entitlement
towards LTC. (Refer Para 6 of Accounting Policies).
2. Contingent Liabilities (Disclosed in terms of AS-29 issued by ICAI which becomes mandatory with effect from 01.04.2004)
• Bank Guarantees issued by banks on behalf of the company Rs.3.20 (previous year Rs.12.05).
• In respect of Letters of Credit Rs. 572.66 (previous year Rs. 732.30).
• Sales Tax
A demand of Rs.85.52 has been issued against the company due to dispute over taxability of the food products. The
company has filed an appeal before the DC (Appeals), Delhi and the same is pending for hearing. The company has
been legally advised that no provision is necessary as the probability of crystallization of the liability is very remote.
• Estimated Amount of contract remaining to be executed on capital Account Rs.300 net of advance (Previous year
Rs.Nil)
3. The company has entered into an agreement with Dabur India Ltd., its holding company, for exclusive rights to use
trademarks Real, Hommade and Lemoneez in the domestic market.
4 Balances of Sundry Creditors and Debtors are subject to confirmation.
5. Particulars of consumption of Important Raw Materials
2004-2005 2003-2004
Class of Goods Qty.(In MT) Value Qty.(In MT) Value
(Previous year figures given in bracket. Fruit juices unit in Kilo Liters & Vegetable Pastes in M Ton)
31.03.2005 31.03.2004
8. CIF Value of Imports (Purchases)
Raw Materials 93.38 43.70
9. Earnings in Foreign Exchange
On account of exports at FOB 513.47 21.31
10. Segment Reporting:
The company has primarily engaged in the business of fruit juices and vegetable pastes, which are governed by the same
set of risk and return and therefore the entire business is covered under one Food segment. The said treatment is in
accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS 17).
11. Deferred Taxation:
As per Accounting Standard 22, accounting for tax on income, no provision has been made for deferred taxes in view of
carry forward loss as per Income Tax Act, 1961, and after considering the effect of timing difference, still there was loss
and hence no deferred tax assets/liabilities has been created.
12. In the opinion of management, fall in the value of long term investment in Pasadensa Foods Limited, (wholly owned
subsidiary of the company) is of temporary nature. Hence provision for diminution in the value of investment is not
deemed necessary.
13. Managerial Remuneration under section 198 of the Companies Act, 1956 paid or payable during the year, to the Manager:
31.03.2005 31.03.2004
Basic Salary 6.02 5.45
Contribution to Pension, PF & other Funds 1.92 1.74
Other Allowances 12.95 11.46
20.89 18.65
The above remuneration has been approved by the Central Government, hence the computation of remuneration u/s 349
of The Companies Act, 1956 has not been given.
14. Total outstanding dues to small scale industries have been determined to the extent such parties have been identified on
the basis of information available with the Company. The list of small scale industries to whom the Company owes any
sum as on March 31, 2005 are:
• Sheel Packaging Pvt. Ltd • Dayanamic Sticker Industries
• Northern Aeromatic Ltd • Sun Control System Ltd
• Jainex India
15. Earning per share
31.03.2005 31.03.2004
Earning
Profit after tax 525.55 146.27
Shares
Weighted Average No. of Shares 10000000 10000000
E.P.S.(Basic & Diluted) 5.26 1.46
Note:
Names of related parties and description of relationship:
Dabur India Limited - Holding Company
Dabur Nepal Pvt. Limited - Fellow Subsidiary
Pasadensa Foods Limited - Subsidiary Company
Mr. Sanjay Sharma - Key Management Personnel
Dabur Foods Limited • Annual Report 2004-05 18
20
Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005 (Contd...)
(Rs. In lac)
2.97 2.76
18. Foreign Exchange loss of Rs.4.08 (net of gain) has been charged to Profit & Loss Account.
19. The company has not received any claim for interest from any supplier under the
“Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertaking Act, 1933”.
20. Previous year figures have been regrouped and rearranged wherever considered necessary.
21. Additional information as required under Part IV of Schedule VI of the Companies Act, 1956:
I. Registration Details
Registration No. 83594
State Code 55
Balance Sheet Date 31.03.2005
As per our report of even date attached For Dabur Foods Ltd.
For Jhalani & Co.
Chartered Accountants Amit Burman Director
P. D. Narang Director
V.K. Jhalani Neeraj Aggarwal Manager Finanace&
Partner Company Secretary
Ghaziabad
22nd April, 2005