DABUR INDIA LIMITED

ANNUAL REPOR T
w w w. d a b u r. c o m
Report on Corporate Governance

06 Auditors Report

17 Consolidated Financial Statements

25

Directors Report

13 Financial Statements

18 Statements as per US GAAP

31

CHAIRMANS MESSAGE

Some key achievements areConsolidated net sales from operations increased

by 23.6 per cent from Rs.1,537 crore in 2004-05 to
Rs.1,900 crore in 2005-06.
I Consolidated profits after tax (PAT) after accounting
for minority interests and exceptional items grew
by 37.5 per cent from Rs.155.8 crore to Rs.214.2 crore.
I Return on capital employed (ROCE) increased from
31.5 per cent to 39 per cent.
I Return on net worth (RONW) increased from
43.5 per cent to 46.1 per cent.
I Fully diluted earnings per share (EPS-diluted) rose
from Rs.2.71 to Rs.3.71.
I

20

I would like to touch upon some of the key developments that occurred during the year 2005-06.
As you know, we had acquired the Balsara business in the current year. Integration is the key to any
successful acquisition. I am delighted to inform you
that due to the focussed efforts of your Company and
the Balsara team, the integration was successfully completed within the first six months of acquisition. Balsara's home care and oral care products have been well
positioned in the overall Dabur portfolio and have
demonstrated good potential for growth. Also we have
turned a loss making business into a profit making one.
Operational integration completed, the process of merging the three Balsara entities with Dabur is underway
and will further contribute to shareholders' value.
Dabur's Consumer Care Division, which comprises
of the core FMCG business has performed well during the year, driven by new product launches, innovation and marketing initiatives. During the year your
company forayed into the soap category by launching a herbal soap under the Vatika brand. While Dabur
Chyawanprash further consolidated its market share
and continued to be the market leader, its variant
Chyawanshakti was also launched during the year.
Toothpastes emerged as major drivers in the oral care
segment. Focus on South India market added momentum to CCD growth.

Yours sincerely,
V.C. Burman
Chairman

05-06

Chairman
Vice Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Director

PERFORMANCE HIGHLIGHTS
FMCG+Pharma

SALES
(Rs crore)

20
10

2001 02- 03 04 05-02 03 -04 -05 2006

PROFIT AFTER
TAX
(Rs crore)

43.1

38.7

34.9

30
27.2

189.08

148.02

40

14.5

80

101.2

120

40
2001 02- 03 04 05-02 03 -04 -05 2006

13.1

160

72

400
0

FMCG

50

64.44

1268.72

800

1148.0

1200

Pharma

200
1369.7

1600

183.8

Mr V C Burman
Dr Anand Burman
Mr Pradip Burman
Mr Amit Burman
Mr P D Narang
Mr Sunil Duggal
HH Maharaja Gaj Singh
Mr R C Bhargava
Mr P N Vijay
Mr Stuart Edward Purdy
Dr S Narayan

1163.2

oday India is at the forefront of global economic

activity and investments on account of its strong
economic growth and stellar corporate performance. The GDP in India has grown at 8.5 per cent,
7.2 per cent and 8.1 per cent in the last three years.
The consensus among analysts is that India has gone
beyond the point of inflexion and is poised for a period of sustained high growth.
However, the FMCG industry had not kept pace
with this overall economic growth. The period 20002004 saw low rates of growth in demand for FMCG
products leading to intense competition between companies and severe pricing pressures. It has often been
postulated that a few consecutive years of sustained
high growth is necessary for overall economic prosperity to translate into benefits for the FMCG sector.
In 2005-06, on the back of 3 consecutive years of strong
economic growth, the fortunes of the FMCG industry
as a whole have started to look much better.
The FMCG sector will continue to gain from the
fact that domestic consumption is growing both on
the urban as well as the rural front. Successful businesses of the future will have to reach out to the vast
semi-urban and rural markets in India. The low levels of FMCG market penetration in rural and semi-urban India coupled with improved economic conditions provide considerable scope of growth in these
areas. Your company with its product mix and sales
and distribution network is well positioned to leverage its strengths and consistently deliver high quality products at affordable prices in these markets. In
addition the consumer spends in urban areas are increasing with rising affluence, changing lifestyles and
a seeming up-gradation to premium / higher end products. Your company has a good portfolio of brands and
products catering to this market as well.
In 2005-06, your Company has successfully leveraged the revival in the FMCG sector and combined it
with laudable improvements in costs, productivity, efficiency and supply chain management to deliver superior growth in revenues and even more so in profits.

Dabur's traditional ayurvedic business is undertaken by the Consumer Healthcare Division. This business consistently recorded high growths throughout
the year. With sales of Rs.148.6 crore, it has registered
38.7 per cent growth. This growth has been led by a
number of initiatives like reaching out to the consumers directly through Dabur Ayurvedic centers, organising health camps, vaid meets, collaborating with
the academicia, etc. We identify our healthcare business as one of the growth drivers in future. Increasing
preference for natural remedies is likely to ensure a
sustained demand for our ayurvedic products.
The group's foods business under Dabur Foods
Limited, a wholly owned subsidiary of your Company grew by over 46 per cent to reach sales of Rs.190
crore. Today, many of its products, especially its juices
under the brands Real, Real Activ and Coolers are
found in every household and account for almost 57
per cent of India's juice market. During the year, the
business more than doubled its profit due to scale and
operational excellence and has become a significant
driver of growth of your Company. Changing lifestyles
and modern retail formats are expected to benefit the
foods business in future.
I would also like to share with you your Company's overseas business performance. Overseas business grew at 19% with markets such as GCC growing
at 27% and Egypt at 49%.There is a lot of potential for
Dabur products in the international market. During
the year, your company has reorganised its international business around the focus, potential and opportunistic markets to be able to tap its potential to the
fullest. A subsidiary has been established for Pakistan
market to leverage on Dabur's equity there.
On the operational front, the company's manufacturing unit at Uttaranchal crossed Rs 500 crore production in a span of just 18 months. Your company is
the first company in Uttaranchal to achieve this milestone. It has become the largest employer in the region and has added to the region's economic prosperity. Going ahead further capacity expansion has
been planned for this unit. Also, the Silvassa unit that
came with the acquisition of Balsara is being upgraded/transformed into an EOU to cater to the export
requirements. During the year, the company spent its
time and resources to migrate to an improved ERP
platform- SAP to ensure best business practices. The
target of going live on 1st April 2006 on SAP was successfully met.
The Institute of Companies Secretaries of India
conferred upon Dabur the 'National Award for Excellence in Corporate Governance' for the year2005. The
company's CFO was recognised as one among the best
three CFOs of the country for the year 2005 by Business India. Your company has always made concerted efforts to ensure highest levels of disclosures, transparency and corporate governance. Such recognition
further motivates the Company towards continuing
its efforts in this direction.
A major survey conducted by two reputed HR consulting firms and published in the Business World listed your Company as one of the top ten 'Great Places To
Work'. This is a creditable achievement for your company and recognizes its efforts to empower its employees and keep them fully motivated and aligned with the
Company's goals.
During the year your Company made a bonus issue of one share for every share held thereby rewarding the shareholders for its outstanding growth in the
past few years. The Company also declared a dividend
of 350% on pre-bonus capital, the highest till date.
I would like to take this opportunity to thank all
the employees, vendors and distributors for their commitment and hard work leading to the Company's success. Also I would like to thank the shareholders for
their continuing faith and support. Your company
has performed well in the past and I can assure you
that it will continue to aim for higher achievements
in future too.

1048.5

Dear Shareholders,

BOARD OF DIRECTORS

2001 02- 03 04 05-02 03 -04 -05 2006

RETURN ON
CAPITAL
EMPLOYED (%)

MANAGEMENT
DISCUSSION & ANALYSIS
our years ago, Dabur India Limited (Dabur, DIL or the company) had laid down its long-term
plan of transforming to focused
and transformed FMCG player. The
blueprint involved developing and implementing marketing initiatives based
on a clear strategic plan with a restructured brand architecture, continuously introducing a stream of new products
and creating a niche for the company in
the FMCG segment based on the herbal
and natural products platform. In 200506, Dabur has surpassed all the key milestones set out in this plan. Today, these
drivers are firmly entrenched in Dabur
and continue to foster development of
its business strategies and operations,
as is evident in its stand-alone and consolidated results for 2005-06.

Stand-alone performance
of DIL
The highlights of
Dabur India Limiteds
(DILs) stand-alone results for 2005-06 are:

Revenue from operations increased

by 8 per cent from Rs.1,269 crore in
2004-05 to Rs.1,370 crore in 2005-06
Operating profit (EBIDTA) increased
by 29.5 per cent from Rs.188 crore in
2004-05 to Rs.243 crore in 2005-06
Profit after tax (PAT) increased by
27.7 per cent
from Rs.148
crore
in
2004-05 to
Rs.189 crore
in 2005-06
Return on
capital

MANAGEMENT DISCUSSION & ANALYSIS

Dabur India Limited

Annual Report 2005-06

PERFORMANCE HIGHLIGHTS

30
20

10

2001 02- 03 04 05-02 03 -04 -05 2006

OPERATING
MARGIN
(%)

RETURN ON NET
WORTH
(%)

250

200

2001 02- 03 04 05-02 03 -04 -05 2006

EARNINGS PER
SHARE
(Rs)

20.6

48.6

39.8

2001 02- 03 04 05-02 03 -04 -05 2006

185.8

LOAN FUNDS
(Rs crore)

2001 02- 03 04 05-02 03 -04 -05 2006

NET WORTH
(Rs crore)

200
100

81.6

261.2

-22.9

-100

-70.3

0
-16.9

415
332.3

100
0

112.3

200

262

300

222.9

400

50

300

398.9

500

81.7

3.3

3.5

2.5

2.3

150
100

5.2

28.3

6.5

12

2001 02- 03 04 05-02 03 -04 -05 2006

213.6

12

11

10

10.7

15

45.5

40

employed (ROCE) increased from 38.7 per cent in 2004-05 to 43.1 per cent in 2005-06
Return on net worth (RONW) increased from 44.5 per cent in 2004-05 to 45.5 per cent
in 2005-06

Consolidated performance of Dabur

44.5

20
17.8

50

14.8

25

FMCG-post bonus issue

38.6

FMCG

32.3

Pharma

16.2

FMCG+Pharma

2001 02- 03 04 05-02 03 -04 -05 2006

NET WORKING
CAPITAL
(Rs crore)

DIL stand alone financials

Chart A: Value growth in key FMCG segments (%)

30
28

25
20
15
10

11
8

3.3

Perfumed hair oil

Coconut oil

Normal Shampoo

Anti-Dandruff
shampoo

Toothpaste

Source:AC Nielson Retail Audit Report (Apr-Mar 2006)

COMPANY INFORMATION
AUDITORS
M/s G. Basu & Co.
Charted Accountants
Internal Auditors
Price Waterhouse Coopers Pvt.Ltd.
Addl. GM (Finance) & Company Secretary
Mr A K Jain
BANKERS
Punjab National Bank
Standard Charted Bank
HSBC Ltd.
State bank of India
ABN Amro Bank
Citibank NA
United Bank of India
HDFC Bank Ltd.
IDBI Bank Ltd.
CORPORATE OFFICE
Dabur India Limited
Dabur Tower, Kaushambi,
Sahibabad, Ghaziabad-201010,
(U.P), India

Chart B: Category contributions to CCD (%)

Home care

Dabur caters to the domestic personal care and health care markets through its parent
company, DIL. The foods business operates through its wholly owned subsidiary, Dabur
Foods Limited (DFL). The international operations have been streamlined under another subsidiary called Dabur International Limited (DIntL), which, in turn, has its subsidiaries in focus markets. While the three Balsara companies are being merged into DIL
with effect from 1 April 2006, during 2005-06 they functioned as DILs subsidiaries. Consequently, the full picture of Daburs overall performance can be best seen when viewed
as a consolidated entity.
The salient features of Daburs consolidated performance in 2005-06 are:

Consolidated net sales from operations increased by 23.6 per cent from Rs.1,537 crore
in 2004-05 to Rs.1,900 crore in 2005-06

Consolidated profits after tax (PAT) after accounting for minority interests and exeptional
items grew by 37.5 per cent from Rs.156 crore in 2004-05 to Rs.214 crore in 2005-06

Return on capital employed (ROCE) increased from 31.5 per cent in 2004-05 to 39 per
cent in 2005-06

Return on net worth (RONW) increased from 43.5 per cent in 2004-05 to 46.1 per cent
in 2005-06.
This year Dabur has undertaken a new initiative to prepare and present results as per
US GAAP. The key points thereof are stated in the Financial section.
In the beginning of 2005-06, Dabur had made its first major acquisition the Balsara
business. This consisted of three entities: Balsara Home Products Limited, Balsara Hygiene Products Limited and Besta Cosmetics Limited. Balsaras oral care products complemented Daburs oral care range and its homecare products added a new segment to
Daburs FMCG portfolio. During the year, while the company consolidated and broad
based the core FMCG business with this acquisition, it also strengthened its other growth
drivers the consumer healthcare business and the foods business.
A key initiative undertaken during the year was renewed management focus and a fresh
approach to developing the consumer healthcare business. This business segment, with an 8
per cent share in Daburs overall revenues, is an important part of the companys portfolio, as
it is the foundation of its Ayurvedic and herbal positioning and offers multiple growth avenues
for Daburs healthcare franchise. The reformulated strategy stressed on refurbishing product
profiles, strengthening the sales and distribution channels, re-organising the workforce and
developing the Ayurveda space in a scientific manner. The aim was to generate a quantum
jump in growth and in 2005-06 the revenue from this business increased by 38.7 per cent.
The foods business, under the wholly owned subsidiary Dabur Foods Limited (DFL),
had witnessed impressive growth in the last two years. However, this was largely driven
by the top-line; profitability had been lower than optimal. During 2005-06, with special focus on operations including investments in backward integration, the business has recorded a profit growth in excess of 100 per cent. Consequently, DFL has almost entirely wiped
out its carried forward accumulated losses. With changes happening in consumption habits
and the expected growth momentum in organised retail trade across the country, the foods
business is expected to emerge as a potentially strong portfolio in Daburs business.
After a few dull years, the FMCG sector in India has started to look up and a demand
pick up is evident across most segments of this sector (see chart A). This augurs well for
Dabur, which is well positioned with a diversified and strong suite of products catering
to different target segments and markets.

30

care. With the Balsara acquisition, products under the home care segment have been added
to this SBU. Chart B gives the relative contribution of each category to CCDs sales.

From a strategic perspective, 2005-06 can be considered a positive inflexion point in

Daburs long-term growth path. Having delivered good results in the last four years, even
while the industry was undergoing adverse demand conditions, the company has spelt
out its intent of entering a new growth trajectory. The new four-year plan aims at continuing the growth momentum across businesses so as to outperform the sector as a whole.
Business strategies have been developed in consonance with the growth objectives, focusing on three key elements expansion, innovation and acquisition.
Expansion entails expanding the companys footprint across platforms and markets.
While the company will continue to leverage its herbal specialist platform and build on
its core strength in Ayurveda, it will also explore newer platforms in the FMCG space that
have potential and synergies with Daburs existing capabilities. Already, in 2005-06 the
company has made a foray into skin care, home care and the OTC healthcare segment. In
terms of markets, the company has laid specific emphasis on south India by re-organising the distribution set up, reformulating marketing strategies and customising products
to that regions prevailing market needs.
Innovation is about regularly introducing new products that can cater to the changing
needs of the market. This is a continuation of the new product development thrust of the
last few years. Dabur has successfully launched over 20 brands or variants across different segments in the last five years. The new product portfolio is expected to contribute to
over 5 per cent of sales every year.
The companys first major acquisition Balsara has come on line as planned during 2005-06. While Balsara had an impressive product portfolio, the business itself was
generating losses. As in many such acquisitions, there were two clear tasks facing Dabur.
First, was the financial challenge of turning these losses into profits. Second, was a much
deeper and wider task of integrating the people and processes at Balsara with that of Dabur.
Both these tasks were successfully achieved during 2005-06. Today, there is total operational and business integration of the two companies; and on the financial front, the erstwhile loss-making Balsara entity has generated profits of Rs 14.9 crore
Success of this integration has provided the company with greater confidence in its
ability to develop inorganic growth. With improvements in profitability leading to strong
internal accruals, Dabur today has sufficient resources to pursue a concerted acquisition
strategy. This will be implemented in a judicious manner keeping in view the right valuations and strategic synergies with Dabur. The approach would be to leverage the existing strengths of Dabur to drive significant value creation and quantum jump in growth.
However, since this is dependent upon availability of the right opportunities at the right
valuation, it cannot be built into the business plans and the growth of the Company at
the moment is largely planned in organic terms.
In the following sections we look at the developments in Daburs different businesses
in India and abroad. This is presented in terms of markets and operations across the three
entities Dabur India Limited (this includes the Balsara companies), Dabur Foods Limited and Dabur International limited. This is followed by the financials of DIL on a standalone basis and as a consolidated entity.

MARKETS
DOMESTIC BUSINESS
Dabur Indias domestic business has been divided into three separate Strategic Business
Units (SBUs): Consumer Care Division (CCD) and Consumer Healthcare Division (CHD),
both of which are directly under DIL, and the foods business, which is undertaken by Dabur
Foods Limited (DFL). In terms of sales in 2005-06, CCD contributed 79 per cent of Daburs
consolidated domestic revenues, while DFL contributed 11 per cent and CHD 9 per cent.

CONSUMER CARE DIVISION (CCD)

The consumer care division (CCD) is the largest SBU of Dabur, and its product portfolio
covers hair care, oral care, health supplements, digestives and candies, baby oils and skin

Health
supplements

6
21
Hair care

33
10

Digestives &
Confectionery

8
22
Oral Care

Baby &
Skin Care

CCDs sales have increased by 22 per cent from Rs.1089.9 crore in 2004-05 to Rs.1,328.7
crore in 2005-06. This growth includes sales from Balsara products in the oral care and
the home care segments, which account for 12 per cent of total sales of CCD.
Dabur continued with its time-tested and successful strategy of product promotion
through celebrity endorsements. In 2005-06, key brand endorsements by celebrities included Amitabh Bachchan for Dabur Chyawanprash and Rani Mukherji for Dabur Anmol and Vatika hair care portfolio. The company also signed up Vivek Oberoi to endorse
Babool toothpaste and Dabur Chyawanprash.
The CCD business continues to lay emphasis on developing an efficient distribution
channel and re-organising it according to the changing market requirements. We believe
that the distribution channel has to increasingly cater to a varied set of customers such as
grocery stores, chemists and organised retail outlets. Each of these has different needs,
which can only be addressed by developing specialised teams that are focused on clear
customer classifications and cater to their specific requirements. Dabur has embarked
upon an ambitious programme named DARE (Driving Achievement of Retail Excellence)
to address these varied needs to achieve greater penetration and higher levels of service
for a wide range of customers. The project also focuses on increasing Daburs penetration
into rural markets through a combination of marketing and distribution strategies.
HAIR CARE
Our hair care category consists of hair oils and shampoos. It is the largest category in Daburs
CCD portfolio with a 33 per cent share. For Dabur, 2005-06 was a challenging year in this
category with sales growing by 3.4 per cent.
Daburs hair oil portfolio, excluding institutional sales to the army and other channels,
registered a 7 per cent increase in sales in 2005-06. However, there was poor off-take by
institutional buyers due to issues arising out of VAT implementation in the first quarter
of the year. These have been subsequently resolved. The companys Anmol brand, which
is on the economy platform, did well with sales of the mustard and coconut oil variants
increasing by 13.7 per cent and 33 per cent respectively. Dabur Amla Hair Oil, with a
turnover in excess of Rs.200 crore, grew by 5.2 per cent in 2005-06. Decline in sales of value added coconut oils under the Vatika brand was a dampener in this category. A new
communication package and marketing mix has been designed to re-vitalise this brand.
In shampoos, sales of the Vatika shampoo portfolio grew by 8.7 per cent for the year as
whole. The good news is that by the second half of 2005-06, shampoos emerged from a
phase of severe price cuts to experience a degree of price stabilisation. Consequently, the
second half of 2005-06 saw the Vatika shampoo portfolio grow by 12.7 per cent a significant increase from the 5 per cent growth in the first half of the year.
ORAL CARE
With the Balsara acquisition, the companys oral care offerings now provide a wider choice
to consumers across different price points. The brands are positioned as Dabur Red Toothpaste in the popular segment, Babool in the economy segment and Meswak in the premium segment. In the classical toothpowder category, Dabur has its flagship product,
Dabur Lal Dant Manjan.
During 2005-06, this portfolio (including Balsara sales) increased by 6 per cent. With
its range of existing and acquired brands, Dabur has been able to add market share in the
toothpaste category and is now holding 7 per cent of the toothpaste market. Babool and
Meswak toothpastes grew by 70 per cent and 72 per cent respectively. Babools success
can be largely attributed to a carefully crafted strategy that brought about necessary changes
in the product, its packaging, promotion schemes and advertising. The Meswak brand
was revitalised and found a significant growth in the number of takers despite being in
the premium segment. Red Toothpaste grew by 18.6 per cent to Rs.55 crore in 2005-06,
which contributed to its market share increasing from 2 per cent to 2.8 per cent.
Sales of the toothpowder, Dabur Lal Dant Manjan, have been under pressure because
of a general slowdown in the category attributable to a shift in consumer preference
from toothpowder to toothpastes. While this gradual shift to the toothpaste category may
continue, we have in place a strong toothpaste portfolio to capture the migration and continue the growth momentum in the oral care category as a whole.
HEALTH SUPPLEMENTS
This category recorded a healthy growth of 15 per cent. Sales of Dabur Chyawanprash,
which in value terms is the largest product in this category, grew by 11.8 per cent in 200506. This flagship product was promoted by a new advertisement campaign featuring
Amitabh Bachchan and Vivek Oberoi. The company also did an extensive print campaign
to educate consumers about the holistic benefits of consuming Chyawanprash. As a result, Daburs market share in this category has risen from 60.9 per cent to 62.6 per cent.
During the year, the company launched Dabur Chyawanshakti, a unique mix of 47
herbs and natural ingredients like draksha, ashwagandha and kesar. This health supplement is targeted at working adults to help them tackle work related stress and pressures
of their daily lifestyle.
Dabur Honey also witnessed good growth of 9.4 per cent. Dabur Glucose increased by
40 per cent in value terms and gained significant market share. This was particularly heartening as it occurred at a time when the category itself had shrunk by 5.8 per cent.
DIGESTIVE AND CONFECTIONERIES
This category had a disappointing year, with sales growing by 1.6 per cent in 2005-06. Hajmola candys sales remained almost stagnant a factor that brought down the overall
growth of the category. However, there were bright sparks: Hajmola tablet sales grew by
5.8 per cent; the Pudin Hara brand also did well, with a growth of 15.4 per cent. Within
the Pudin Hara brand, Pudin Hara Pearls and Pudin Hara Liquid grew by 27.2 per cent and
10.6 per cent respectively.
SKIN CARE/BABY OILS
Although it is a small category, Daburs skin care/baby oils had a good year in terms of sales
growth. In 2005-06, sales increased by 34.3 per cent over the previous year and crossed
Rs.100 crore, with skin care products expanding at a much faster clip than baby oils. This
was largely because of Daburs entry into the personal wash segment with the national
launch of its new Vatika Honey & Saffron Soap in September 2005. With this, Dabur made
its first foray into the Rs.4,800 crore Indian soap market. Vatika Honey & Saffron is targeted at the beauty and skin care conscious consumer, who accounts for around 50 per cent
of total soap demand in India. Within the first six months of its launch, the cumulative sales
of this soap were Rs.18.9 crore. Since the product is very competitively priced in its category and offers distinct benefits we expect the positive market response to continue.
Sales of Gulabari, an extract of fragrant red roses, grew by 17.7 per cent in 2005-06. The cold
cream under the Anmol brand, which was test launched last year was successfully extended
to other markets in North, East and Western India. In the Baby Care segment, Dabur Janamghunti
sales increased by 15.1 per cent while that of Dabur Lal Tail increased by 3.1 per cent.
HOME CARE
The Home Care category came to Daburs fold after the Balsara acquisition. Its contribution to CCD sales was the smallest, at 6 per cent, but it was the fastest growing portfolio
with sales growth of 62.9 per cent in 2005-06 over the previous year. Daburs Home Care
brands include Odonil in air fresheners, Odomos in mosquito repellents, Sani Fresh in
surface cleaning and Odopic in the dish washing powders category.

MANAGEMENT DISCUSSION & ANALYSIS

Dabur India Limited

Annual Report 2005-06

Odomos sales increased by 70 per cent in 2005-06. Odomos has been identified as a
strong brand with significant latent equity and various products will be offered under this
brand with different delivery mechanisms like gels, mats, coils, lotions and liquid vaporisers. The Odomos mosquito repellent cream, which is the original product under this
brand, has been re-furbished and is displaying good growth potential in the market.
Likewise, the Odonil brand is well recognised in the air-fresheners category, and the
company plans to expand the product portfolio under this brand by introducing aerosols
and other contemporary formats. In 2005-06, Odonil sales increased by a healthy 80 per
cent. Sales of Sani Fresh were above expectations as well, with the brand showing good
potential for growth. We believe that with low penetration in most of these categories and
the increasing usage of home care products, there is significant scope of growth in this
segment.

tries were below expectations.

Dabur has also made a foray into the Pakistan market through its subsidiary Asia Consumer Care (Pak) Ltd. The initial response has been good, and the company is optimistic
about its prospects there. A team has been put in place headed by a Pakistani national who
has extensive experience in the local FMCG market.
During the year, the company revamped the organisational structure of its international business and re-organised it to suit the emerging business requirements. Going forward, the international business will be split into two portfolios:
Portfolio One: Comprises Asian markets including Pakistan, Bangladesh, Nepal, Sri
Lanka Bangladesh and Malaysia, the developed markets including USA and UK; the
healthcare business in CIS countries and the opportunistic markets in Asia Pacific. This
portfolio will be supported by the manufacturing facility at Silvassa, which will be remodelled into a state-of-the art export oriented facility.

CONSUMER HEALTHCARE BUSINESS

In last years annual report, we had noted that the company was renewing its focus on the
consumer health care business. The business comprises pure grantha based products on
the Ayurveda platform, which can be classified into OTC products, branded ethicals, and
generics including Asavs and Classicals. Renewed management focus and reformulated
business strategy led to a strong revival in growth of this division. In 2005-06, the business achieved a milestone by registering 37.8 per cent growth in sales from Rs.107.8
crore in 2004-05 to Rs.148.6 crore in 2005-06, versus a CAGR of 8 per cent over the previous five years.
There has been even and widespread growth across all segments of this business. Sales
in the OTC category increasing by 65 per cent; Branded Ethicals by 81 per cent; Classicals
by 32 per cent; and Asavs by 26 per cent. Some of the well-known products offered by
CHD are Dabur Churna, Honitus, Asavs: Ashokarishta and Dashmularishta, Shankhapushpi Syrup, Ring Ring, Nature Care and Shilajit.
The Honitus brand, which includes Honitus cough drops, syrup and the recently
launched cough lozenges, was actively promoted through television advertisements. Our
Asavs Ashokarishta and Dashmularishta were also advertised through various media channels in order to reach the target consumer. Dabur Churna and other OTC products were promoted through print and outdoor advertisements through dealer boards and
hoardings and bus panels. Our new product launches for the year including Dabur
Mensta, a product for womens healthcare, and Rheumatil, a product to prevent arthritis
were well received in the market.
Dabur believes that this business is a key growth driver and constitutes a critical element of its long-term strategy. With a movement towards holistic Ayurveda-based health
remedies, the industry is expected to enjoy sustained levels of high growth. We believe
that Dabur will be able to fully leverage its Ayurvedic knowledge and equity in the healthcare space by developing this business. The plan is to re-define the Ayurvedic space and
develop strong OTC capabilities through healthcare promotion activities, pharmacy selling, media campaigns and trade promotion. The aim is to take Ayurveda to the patient. To
give an example, in order to promote Ayurveda directly with patients, the company organised 1,500 health camps, developed 160 Dabur Ayurvedic Centres where Ayurvedic
doctors provide free consultation, conducted 150 vaid meetings, apart from organising
several seminars, exhibitions and events promoting Ayurveda among academia, doctors,
vaids and consumers.
The business distribution network has been expanded to cover over 140,000 urban
pharmacy outlets, and the sales organisation restructured to optimise sales and productivity. The strategy includes building a strong relationship with retail pharmacists, promoting merchandising and displays, creating in-shop promotion through Dabur Consumer Health Corners (DCHC) and stressing on pharmacist education.

FOODS BUSINESS
DABUR FOODS LIMITED
Dabur Foods Limited (DFL) is a wholly owned subsidiary of Dabur India Limited. DFLs
product range in the market includes juices under three brands (Real, Activ and Coolers),
culinary items like Hommade cooking paste, sauces, and items for institutional sales under the Natures Best brand.
DFLs sales grew by 46.3 per cent in 2005-06 to reach Rs.190 crore. New product launches and institutional channel constituted 24 per cent of this growth. The top-line growth
has been accompanied by a significant increase in profits. PAT for the business increased
by 130.3 per cent from Rs.5.3 crore in 2004-05 to Rs.12.1 crore in 2005-06. In the branded juice market, DFL was the leader with a 57 per cent market share, with the nearest competitor being at 24.5 per cent. Chart C gives Daburs share in the juice market.

Chart C: Dabur's Market Share in Juice Market* (%)

Godjej-Xs

3.3

Parle-Appy

NDDB-Safal

13.3
2
56.9

Pepsi-Tropicana

Dabur-Real

24.5

Source:AC Nielson Retail Audit Report (Apr-Dec 2005)

DFLs portfolio of fruit juices can be classified into the sweetened range under the Real brand, and higher end unsweetened range under the Activ brand. The Real brand has
grown by 36.2 per cent. There are nine different flavours available under Real, which includes pineapple, mixed fruit and orange and sweetened nectar range comprising litchi,
guava, mango, apple and cranberry.
The unsweetened or Real Activ brand is targeted at health conscious young adults in
the premium segment, and has had an outstanding performance during 2005-06, with
sales increasing by 98.6 per cent. Sales growth was also fuelled by introduction of new
330 ml packs. The product range has five flavours two of which are fruit juices, and
three being fruit and vegetable blends. Being the creator of this category, we definitely enjoy market leadership and intend to introduce newer variants under Real Activ.
The economy segment of the portfolio consists of Coolers range of fruit beverage especially meant for summer. While Coolers sales increased by 58 per cent in 2005-06 over
2004-05, the base has been fairly small. There are six flavours available in this category:
Aam Panna, Watermelon, Pomegranate, Musk Melon, Lemon Barley and Jamoon. All these
fruits have cooling properties, which protect the body from the ill effects of the summer
heat.
Our culinary category which includes Hommade pastes like garlic and ginger, coconut milk, and tomato puree has also done well, pushing the category sales by 26.2
per cent. We also introduced a new mango drink under the Mango Twist brand and received a very positive response from the market. DFL made a major foray into the export
market recoding export sales of Rs.14.7 crore. The exports can be classified into bulk concentrates (which are largely sold to Middle East and Europe), and branded products (which
go to Australia and also the Middle East). In the year, we received a one star export house
certification from the Government of India.
To strengthen its competitive position in the domestic market, the business has reorganised its sales and distribution teams to focus separately on retail and institutional marketing and sales. The company has also laid stress on investing to improve its manufacturing facilities at its three plants located at Siliguri, Nepal and Jaipur. While the Nepal
plant has been traditionally catering to the needs of this business, the Siliguri plant processes fruit pulp, and Jaipur plant is a blending and packaging plant acquired during 2005-06.

INTERNATIONAL BUSINESS
International business recorded a sales growth of 19per cent from Rs.181.2 crore in 200405 to Rs.216.1crore in 2005-06. This includes the exports of Balsaras portfolio of products in the oral care and private label segments.
Middle East and Egypt performed very well with growth of 27 per cent and 49 per cent
respectively. Sales in Bangladesh grew by 54 per cent led by Vatika and Anmol range of
shampoos. However, performance in the developed markets of UK, USA and CIS coun-

Table 1:Dabur's Sales,Domestic and Overseas (Rs.crore)

Domestic

Overseas

2005-2006

2004-2005

2005-2006

2004-2005

Sales

1683.5

1355.7

216.1

181.2

% of total

88.6%

88.2%

11.4%

11.8%

Net Profit*

208.0

148.5

18.6

8.5

% of total

91.8%

94.6%

8.2%

5.4%

* Before exceptional items and minority interest.

Portfolio Two includes the markets in the GCC countries, the African markets including Egypt, Nigeria, Sudan and Morocco, other Middle-Eastern countries like Iran and Iraq,
the personal care business in the CIS and other opportunistic markets. This business will
be supported by the manufacturing facilities in the Middle East and Africa.
The structure of the international business was further streamlined during the year by
transferring Dabur India Limiteds shareholding in Dabur Nepal Private Limited and Dabur
Overseas Limited to Dabur International Limited. With this, all international subsidiaries
are now consolidated under a single entity, namely, Dabur International Limited.
The strategy for growing the international business has the following elements:

Making geographical expansions. Going forward, the expansion markets will be
clearly identified based on strategic choice. The company will commit major investments and human resources in focus markets.

Leveraging the natural platform. This will make full use of the growing global demand for natural products by occupying differentiated competitive niches in the
health care and the personal care segments.

Acquiring international brands / businesses and forming strategic alliances. The
company will also actively explore overseas acquisitions and alliances.
With this reorganisation and strategic focus, the international business is expected to contribute over 15 per cent of the consolidated sales of Dabur in the course of the next four years.

MANAGEMENT DISCUSSION & ANALYSIS

Dabur India Limited

MASTER BRANDS

a trusted name in natural healthcare for over

100 years, is known for providing a range of
efficacious and time-tested healthcare products
based on the principles of Ayurveda.

Annual Report 2005-06

OPERATIONS
Robust manufacturing and supply chain practices support Daburs widened presence in
the FMCG market place with newer and increased product offerings. The company has
been undergoing a structured change in it operations structure, with emphasis on enhancing in-house manufacturing capabilities, utilising innovative procurement tools and
developing an efficient supply chain. A clear reflection of gains from these functions is
the fact that in an inflationary input market scenario, DIL managed to increase its operating profitability margin (PBDIT/Sales) from 14.8 per cent in 2004-05 to 17.8 per cent in
2005-06. The core operations are supported by a strong information technology (IT), human resources (HR) and research and development (R&D) backbone.

MANUFACTURING

a premium brand and a leader in its

category, is one of the flagship brands
and a popular name in the natural
personal care space.

a tasty fun-filled digestive available in various

forms-from tablets, traditional churans to
modern formats like centre-filled candyappealing to all age groups.

a relatively new member in the family of

Daburs key brands, provides a range of herbal
and natural products across various FMCG
categories with a focus on providing quality
and affordability.

countrys leading brand of packaged

fruit juices, provides the largest range
of refreshing and healthy fruit juices
that are 100 percent natural and free of
preservatives.

The manufacturing strategy has revolved around re-organising the companys production facilities to increase in-house production and leverage maximum benefits from
economies of scale. Over the last few years new plants have been set up and inefficient
ones scaled down, including reduced exposure to third party producers. As an example,
six years ago over 40 per cent of Daburs products were out-sourced; today, only 8 per cent
is outsourced, while 92 per cent of the companys requirements are manufactured inhouse. This has allowed for much greater control on production and stricter adherence
to best in class TQM and TPM practices.
Dabur has nine production facilities organised around three main factories at Baddi (Himachal Pradesh), Pantnagar (Uttaranchal) and Nepal; and six support factories at Sahibabad
(Uttar Pradesh), Jammu, Alwar, Katni, Narendrapur and Jaipur. These plants have stabilised
and are in a position to be ramped up to cater to the companys long-term growth plans.
In addition, during 2005-06, with the acquisition of Balsara, the company inherited
their plants at Baddi and Silvassa. While the Baddi plant manufactures oral care products, Silvassa caters exclusively to exports. A totally integrated plant has been set up in
Jammu to produce the erstwhile Balsaras home-care line of products. All the processes
of these plants have been streamlined with Daburs production systems and procedures.
The company believes in cost and quality leadership through technology and innovation and being the best in the operations domain. These translate into focus on adopting best quality practices, enhancing productivity and improving asset utilisation. Productivity improvements have been achieved by following best TQM and TPM practices,
reaping benefits from economies of scale and increasing the sense of empowerment among
factory-level management. In 2006, for the first time the company hosted a factory heads
conference in Nainital something that created much greater bonding among those who
produce for the company. Some of the productivity gains were also the result of process
improvements. For example, there were gains in productivity by increasing Amla hair oil
batch sizes and reducing Vatika hair oil production cycle time.
These improvements are paying off. Consider, for instance, an example of this the
reduction in wastages as a percentage of turnover, as shown in Chart X.

Chart X: Wastage to turnover ratio (%)

1.0

a leading provider of Oral Care and Household

Care products in the Indian market, is a new
member in the Dabur family. With this
acquisition, the company will further
strengthen its Oral Care portfolio and make its
debut in the high-growth Homecare segment.

0.8

0.79

0.75
0.63

INFORMATION TECHNOLOGY
With rapid growth as well as the Balsara acquisition, there was a multitude of IT platforms
for storing and analysing information. The aim of our IT initiative in 2005-06, therefore,
was to bring the operations of the company under one platform a user-friendly cohesive system that would give us maximum value for money in terms of information processing. The system also had to be flexible enough to be integrated with and applied to
any existing system prevailing in any company that could be an acquisition target.
Keeping these objectives in mind, Dabur has installed the SAP ERP R3 system, which
is the basic module. This has gone online, all at once in a big bang approach from 1 April
2006. The decision to invest in the SAP platform was taken six months before its implementation. Hence, in a very short span of time, we have moved from current practices to
the best practice in managing IT. It was not an easy task. Integration required explaining
the usage of new practice to all our employees across functions, ranging from manufacturing plants to sales, to logistics and finance teams. In addition to SAP going online for
Dabur India Limited, it was also rolled out to Balsara. Dabur International and Dabur Nepal
will be integrated by the 1 May 2006. This initiative will be extended to all our international manufacturing and international sales operations in due course.
In addition to the basic module we would be implementing various SAP products for
using stored information for financial reporting and management decision-making. The
SAP Business Warehouse would be used for data retrieval for management information
systems (MIS), with an added functionality of integrating information from various sources.
SAP Business Consolidation System will enable us to report consolidated accounting
numbers after taking care of inter-company transfers. For accounting purposes it is also
multi-GAAP functional. We also intend to install Business Plan Simulation (BPS) software, which would help us in decision management by simulating the impact of any
change in business environment on Dabur.
For our employees we intend to deploy SAP-HR, a human resource information system
that would store each individuals information on the system. Each employees life cycle with
the company, performance appraisal and other information would be available on this system. This would also enable us to leverage technology for training our employees, as the system would flag employees that fit the training needs of a particular module. In doing so, it
would form an integral part of the knowledge management programme for our employees.
As a disaster recovery measure, the entire information stored on our central server at
Daburs Kaushambi office is also stored in at a location in Mumbai.

0.68

0.6

RESEARCH AND DEVELOPMENT

0.56

0.4

01-02

02-03

03-04

04-05

05-06

All the plants have GMP certification. More significantly, four units including glucose,
honey and Chyawanprash plants at Baddi and at Uttaranchal have Hazard Analysis and
Critical Control Point (HACCP) certification, which requires adherence to significantly
more stringent standards. The fruit juice plant at Nepal also has the HACCP certification.
In some of the formulations there is the issue of presence of heavy metals. To tackle the issue of heavy metals in certain formulations, a major quality initiative has been taken by
installing atomic-absorption-spectrophotometer in its plants at Baddi, Uttaranchal and
Sahibabad. This is used to test all products before despatch to prevent the presence of
heavy metals beyond prescribed range in the companys products.
Your company continues to remain committed towards preserving and protecting the
environment. The plants have efficient effluent treatment systems that prevent air, water
and noise pollution. Dabur also took a lead in rain water harvesting, which is being implemented in three units, in addition to preserving and utilising artesian wells in Uttaranchal.

PROCUREMENT
As the company grows in scale with a more diverse portfolio of products that include herbal
and ayurvedic formulations, the specialised procurement function gains utmost importance.
At Dabur, procurement has been regularly utilising customised IT tools, innovating on purchase negotiations and procurement systems like reverse auctions. These initiatives have
led to the gradual decrease in material cost to sales ratio in the last few years.
The challenge in procurement is to predict the commodity price cycle and make strategic purchases. Dabur has built a fairly strong knowledge base in this domain. Empowered
with technical tools of analysis, the procurement team has regularly made strategic buys
and sells in the commodity market optimising on long term prices, while maintaining the
minimum levels of inventory necessary to prevent stock outs.
A second initiative being undertaken is to reduce material costs by venturing down the value chain and eliminating a layer of middlemen. In effect, this initiative aims at building direct
relationships with the actual supplier by becoming directly visible to suppliers supplier.

RECOGNITION

with each individuals goals and performance. This year, the scorecard covered 325 managers. Using the Balanced Scorecard, the company has modified key performance indicators (KPIs) of the variable pay plan, which have been communicated to employees.
The company has also hired top class persons from among the best management institutes. In 2005-06 we recruited 17 such Management Trainees. They are undergoing rigorous training under the Young Managers Development Programme (YMDP), where each
is put through a years cross-functional training programme while being mentored by a
member of the senior management.
During the year under review several other HR initiatives were undertaken, both at the
corporate as well as the plant level. We provided learning opportunities to our employees through various programmes such as Prayas, Leading and Facilitating Performance,
and Campus to Corporate. An audiovisual-based module, SPORT, was used to train our
own frontline sales personnel as well as those on the rolls of our stockists. Approximately 2,000 people have been trained through this module in 2005-06. A competency-based
selection tool was also developed for selecting the right set of front line employees.
In 2005-06, we were successfully able to integrate Balsara into our fold, which included
the Balsara manpower and its HR policies and processes. At the plant level, the company
enjoyed excellent industrial relations across all manufacturing locations in India.

SUPPLY CHAIN
The supply chain function at Dabur comprises production planning, despatch, warehousing and transportation. Since the front end of the supply chain ends at the Clearing
Forwarding Agent (CFA) or the stockist, production planning and despatch is done to meet
the requirements of the CFA. This is done across all the units on a weekly basis in terms
of SKUs. Decisions on warehousing and transportation rely on the despatch product mix
and underlying dynamics of the transport markets.
The entire supply chain has been knit together into an efficient unit through Project
Garuda an initiative that integrates IT tools and compensation schemes that measure
the health of the supply chain. In this, the first year of its implementation, Project Garuda lays down a set of measurable parameters to test the health of the supply chain. The
system is divided into two tiers and puts in an evaluation mechanism for each element of
the supply chain from forecasting and production planning to inventory management.
By utilising this matrix as a tool for monitoring performance, the company has been able
to devise a variable pay structure that penalises negative deviations.
On the IT front, there is complete internal networking through a new SAP platform.
The company is exploring to move forward and reach out to stockists and integrate them
into Daburs ERP. This will go a long way to improve the quality of forecasts provided for
production planning.
During 2005-06, significant efficiency gains were realised from central ownership of
warehousing and reverse auctions for transportation. Daburs ability to continuously service diverse markets while maintaining negative working capital bears testament to the
efficiency of its supply chain management.

HUMAN RESOURCES
Recognizing that people are key constituents of Dabur and represent the DNA of the organisation, we have been constantly raising our own standards of being an employeefriendly organisation. The year under review witnessed a significant achievement: of being listed as a Great Place to Work, in a survey conducted by Grow Talent & Company
and Great Place to Work Institute, USA. Dabur was listed as the 10th Great Place to Work.
The results were published in Business World dated February2006.
Dabur has adopted the Balance Scorecard for performance evaluation and strategy deployment. This tool ensures balanced performance by managers across multiple dimensions financial performance, customer management, internal business processes and
innovation and learning and helps in sharper alignment of overall business strategy

Research and Development (R&D) provides Dabur with critical edge in the market. The
activities are focused around two basic domains. First, to continuously develop new products; and second, to test and guarantee their efficacy.
R&D activities include research on Ayurvedic and herbal products, organic substances,
phytochemicals, tissue culture, foods, cosmetics, oral care and other personal care. During 2005-06, the company displayed its efficiencies in terms of high speed to market by
successfully developing its Vatika Honey & Saffron soap. The entire development process
from concept to delivery in the market was carried out in-house and at very fast pace. The
companys products regularly go through clinical research and toxicity studies. This is
done in collaboration with external organisations like the Dabur Dhanwantry hospital in
Chandigarh and a number of other renowned institutions.
Through its agronomy department, Dabur has continued with its initiative of preserving herbs and plants in the endangered list, especially those that the company uses in its
formulations. Specific plants are identified; the company then develops sufficient scientific knowledge of such plants; and then promotes their contract or corporate farming. So
far, 14 such plants have been identified and the knowledge base built. Some examples of
these interventions include corporate or contract farming of ghorbotch, brahmi, chiraita
and pipli. The company has also leased in two wasteland areas to develop these herbs
Sandila in Uttar Pradesh and a private public partnership initiative in Uttaranchal.

FINANCIALS
The abridged financials of Dabur India Limited (DIL) for the year 2005-06 including revenue, expenditure and profits, are presented in Table 2.

Table 2: DILs profit and loss account (Rs.crore)

2005-06

2004-05

Growth

1,369.7

1,268.7

8.0%

Net Sales

Other Income

5.4

11.5

-53.5%

Total Revenue

1,375.0

1,280.2

7.4%

Total Expenditure

1,131.7

1,092.3

3.6%

EBIDTA

243.3

187.9

29.5%

Depreciation

19.1

17.1

11.4%

Amortisation

4.3

1.5

185.9%

Interest

5.7

4.3

31.6%

PBIT

220.0

169.3

29.9%

10

PBT

214.4

165.0

29.9%

11

Current Tax & FBT

21.8

13.0

67.7%

12

Deffered Tax

4.0

4.0

0%

13

PAT(before exceptional item)

188.6

148.0

27.4%

14

Exceptional item

0.51

0.0

15

PAT

189.1

148.0

27.7%

16

EPS

3.3

2.58

27.9%

17

EPS (Diluted)

3.27

2.57

27.2%

As can be seen in Table 2, DIL continues to pursue its path of profitable growth. With
the renewed strength of its brands, the company recorded a 8 per cent growth in net sales,
from Rs.1,268.7 crore in 2004-05 to Rs.1,369.7 crore in 2005-06. This healthy top-line
growth, accompanied by efficiencies in manufacturing and supply chain, has contributed
to a 29.5 per cent growth in operating profits (EBIDTA) from Rs.187.9 crore in 2004-05 to
Rs.243.3 crore 2005-06.
DIL continues to operate with negative working capital accompanied by reduction in
inventory and sundry debtors levels.
Profit after tax (PAT) increased by 27.7 per cent during the year from Rs.148.0 crore in
2004-05 to Rs.189.1 crore in 2005-06. As evident in Table 3, all profitability ratios of the
company have increased in the year under review.
There has been a significant improvement in operating margin (EBDITA/Total sales),
which grew from 14.8 per cent in 2004-05 to 17.8 per cent in 2005-06. Net profit margin
(PAT/Total sales) has also grown from 11.7 per cent in 2004-05 to 13.8 per cent in 2005-06.
Improved margins have been primarily driven by two factors. First, due to efficiency
gains at our plants translating into better operating margins be it wastage reduction, fiscal incentives or economies of scale. Second, procurement led initiatives that have resulted

MANAGEMENT DISCUSSION & ANALYSIS

Dabur India Limited

Annual Report 2005-06

RISK MANAGEMENT

Table 3: DIL's Profitability Ratios

2005-06

2004-05

EBDITA/sales

17.8%

14.8%

PBT/sales

15.6%

13%

PAT/sales

13.8%

11.7%

ROCE

43.1%

38.7%

RONW

45.5%

44.5%

in decline in material costs as per cent of sales in spite of an inflationary environment.

During the year, DIL extended loans to Dabur International Ltd and Dabur Foods Ltd.,
which were, in turn, utilised to repay debt. While this has reduced the groups overall exposure to outside debt, it has increased the working capital for DIL on a stand-alone business although the oveall working capital remains in the negative domain.
With its focus on core businesses, the company has sold its investment in Dabon International Private Limited, a non-core investment that was not yielding any returns. This
has impacted the consolidated financials by Rs.12.7 crore, as an exceptional item. DILs
investments in Dabur Nepal Pvt Limited and Dabur Overseas Limited have been transferred to Dabur International Limited for consolidating international operations under
one entity. While this makes no difference to the consolidated financials, it re-states the
subsidiary holdings along business and operational lines making it more efficient to manage them.

INTERNAL CONTROLS AND THEIR ADEQUACY

Consolidated Financials
Table 4 gives the abridged financials of Dabur on a consolidated basis.

Table 4:Consolidated,abridged profit and loss account (Rs.crore)

2005-06

2004-05

Growth

1,899.6

1,537.0

23.6%

Net Sales

Other Income

13.4

9.2

45.6%

Total Revenue

1,913.0

1,546.2

23.7%

Total Expenditure

1,608.8

1,328.1

21.1%

EBIDTA

304.2

218.0

39.5%

Depreciation

26.9

28.0

(4.0)%

Amortisation

4.3

1.5

186.6%

Interest

16.4

12.4

32.2%

PBIT

273.0

188.5

44.8%

10 PBT

256.6

176.1

45.7%

26.5

15.1

75.5%

3.5

4.0

(12.5)%

13 PAT

226.6

157

44.3%

14 Exceptional Item

(12.7)

0.00

15 Minority Interest

0.3

(1.2)

214.2

155.8

37.5%

17 EPS

3.74

2.72

37.5%

18 EPS (Diluted)

3.71

2.71

36.9%

11 Current Tax & FBT

12 Deferred Tax

16 PAT after minority interest & exceptional items

The net sales of the company on a consolidated basis registered a growth of 23.6 per
cent from Rs.1, 537 crore in 2004-05 to Rs.1, 899.6 crore in 2005-06. Consolidated net profit (PAT after minority interest and exceptional items) also posted a strong growth of 37.5
per cent increasing from Rs.155.8 crore in 2004-05 to Rs.214.2 crore in 2005-06.
As seen in Table 5, all profitability ratios calculated on a consolidated basis have shown
a marked improvement in 2005-06.

Table 5: Consolidated,Profitability Ratios

2005-06

2004-05

16%

14.2%

PBT/ sales

13.5%

11.5%

PAT/sales

11.3%

10.1%

39%

31.5%

46.1%

43.5%

EBDITA/ sales

ROCE
RONW

The highlights of the consolidated performance are as follows:

Operating profits (EBIDTA) increased by 39.5 per cent from Rs.218 crore in 2004-05
to Rs.304.2 crore in 2004-05.

Operating margin (EBDITA/sales) also grew from 14.2 per cent in 2004-05 to 16 per
cent in 2005-06

The interest coverage ratio (ratio of profit before interest and tax to interest payments)
has increased from 15.2 times in 2004-05 to 16.7 times in 2005-06

Net profit margin (PAT/sales) increased from 10.1 per cent in 2004-05 to 11.3 per cent in 2005-06

Return on capital employed (ROCE) has gone up from 31.5 per cent in 2004-05 to 39per
cent in 2005-06

Return on net worth (RONW) increased from 43.5 per cent in 2004-05 to 46.1 per cent
in 2005-06.
This year Dabur has undertaken a major initiative to prepare and present results as per
US GAAP. Table 6 gives the results.
The reconciliation of net income between Indian GAAP and US GAAP is as follows

Table 6:Consolidated financials,US GAAP

In Rs.crore (Except for earning per share,which is in Rs.)
Audited for the year ended on
Particulars

31.03.2006

31.03.2005

1720.0

1368.4

Cost of Revenue

944.8

759.9

Gross Profit

775.2

608.5

Net Income

219.0

161.2

Basic

3.8

2.8

Diluted

3.8

2.8

1040.4

943.8

Cash and cash equivalents

48.9

13.9

Liquid mutual funds

41.0

43.8

31.03.2006

31.03.2005

214.2

155.8

Revenue*

Earning Per Share

Total Assets

*Revenues as per US GAAP are net of VAT/Sales tax and excise duty

Audited for the year ended on

Particulars
Consolidated net profit as per Indian GAAP
Loss on sale of long term investment net of deferred tax

8.6

Additional depreciation on property,plant & equipments

(7.3)

(0.3)

Deferred taxes adjustments

2.5

6.0

Others

1.0

(0.3)

219.0

161.2

Consolidated net profit as per US GAAP

Dabur has a robust and well-structured risk management system in place. The entire system is driven by its people and the process goes deep down into lower layers of management. The Chief Risk Officer (CRO) of the company, who is responsible for and ensures
Effective Risk Management both risk identification and mitigation, champions the risk
management system. A team of risk officers at each company location supports the CRO.
Each employee is entitled to identify risk and report it to the concerned risk officer who
in turn reports it to the CRO.
The risks are reported in the Risk Register and classified in terms of their impact and
probability of occurrence. The Risk Register is an inventory of risks affecting Dabur covering its various functions like marketing, operations, regulatory affairs, finance and human resource development. The risks are further mapped in terms of mitigation action to
be taken and the people responsible for taking the actions. The Risk Register is reviewed
periodically by senior management and is presented to the Audit Committee on a quarterly basis.
While we have a systematic risk identification and mitigation framework in place, there
are certain business risks, which are external and intrinsic to the company. Over these risks
the company has very little control. Some of these include a general downturn in market
demand conditions, loss of value to the ayurveda equity due to false claims about the
product constitution or efficacy, look-alike products in the market, escalation in raw material prices and changes in regulatory frameworks pertaining to health related issues.
In the past, all our transactional data was stored in a central server at our corporate office
in Ghaziabad, UP. One of the important risk reduction initiatives taken during the year was
setting up of a disaster recovery site in Mumbai where all the data is stored as a back up.

Dabur has a robust internal audit and control system which is a process overseen by
the Board of Directors, management and other personnel, and provides reasonable assurance regarding the effectiveness and efficiency of operations, reliability of financial
reporting, and compliance with applicable laws and regulations.
Price Waterhouse Coopers is the internal auditor for the company and its subsidiaries.
The Companys Internal Audit function is staffed with qualified and experienced people. The Standard Operating Procedures (SOPs) put in place by the company are in line
with the best global practices, and have been laid down across the process flows, along
with authority controls for each activity. Dabur has implemented the COSO framework
for internal controls and adequacy of internal audit. Under this framework, various risks
facing the company are identified and assessed routinely across all levels and functions
and suitable control activities are designed to address and mitigate the significant risks.

CAUTIONARY STATEMENT
Statements in this management discussion and analysis describing the companys objectives, projections, estimates and expectations may be forward looking statements
within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that
could affect the companys operations include a downward trend in the domestic FMCG industry, rise in input costs, exchange rate fluctuations, and significant changes in
political and economic environment in India, environment standards, tax laws, litigation and labour relations.

REPORT ON CORPORATE GOVERNANCE

Dabur India Limited

Annual Report 2005-06

s a Company, Dabur believes in good governance in true spirit, beyond merely complying with mandatory requirements. The Companys commitment towards adoption of sound governance, at par with global standards, on
a sustained basis is evident from the fact that it had put in place systems and procedures well before it had become
mandatory. This attitude of Dabur has strengthened the bond of trust with its stakeholders.
In recognition of Companys efforts, The Institute of Company Secretaries of India (ICSI) has honoured Dabur with
its most prestigious National award for excellence in Corporate Governance for the year 2005. This award recognizes our commitment in adopting best practices towards Boards independence & Governance; Transparency and Disclosure Compliances; Consistent Stakeholders Value Enhancement and Risk management Systems. This Award has
motivated the Company to strive for still better governance.
This chapter, along with the chapters on Management Discussion and Analysis and Additional Shareholders Information, reports Daburs compliance with 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.

BOARD OF DIRECTORS

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.

COMPOSITION OF THE BOARD

As on 31st March 2006 the Daburs Board consists of 11 members. Apart from the Chairman, who is a non-executive promoter Director, the Board comprises of three executive Directors (of whom one is promoter Director), two non executive
promoter Directors and five 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 non-executive, one-third of the Board should be independent.

NUMBER OF BOARD MEETINGS

The Board of Directors met 4 times during the year on 28th April, 2005, 26th July 2005, 24th October, 2005 and 27th January, 2006. The maximum gap between any two meetings was less than 3/4 months as stipulated under clause 49.

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 they
Chairman of more than five committees in which they are members.
Table 1 gives the details of the Board as on 31st March 2006.

Statutory audit firm or the internal audit firm that is associated with the company;
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.


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 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 nonpayment 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.

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 noncompliances.

RESPONSIBILITIES OF THE CHAIRMAN AND CEO

Table 1:Composition of the Board of Directors of Dabur India Ltd.

Name of the Directors

Category #

Attendance Particulars
Number of
Board Meetings
Held

Attended

Last
AGM

No.of other Directorships and Committee

Memberships/Chairmanships
Other
Committee
Committee
Directorships Memberships Chairmanships

V C Burman

PD / NED

Yes

Pradip Burman

PD / ED

No

Dr.Anand Burman

PD / NED

Yes

Amit Burman*

PD / NED

Yes

P D Narang

ED

Yes

12

Sunil Duggal

ED

Yes

HH Gaj Singh

ID

No

P N Vijay

ID

Yes

S.Narayan**

ID

No

R C Bhargava

ID

No

12

Stuart E Purdy

ID

Yes

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.

The Chairman is responsible for mentoring the core management team and in transforming the company into a world
class, next generation organization that is dedicated to the well being of each and every household not only within India but also across the globe. Also as the chairman of the board he is responsible for all the board matters. He is also responsible for formulating the corporate strategy along with the BOD.

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.

BOARD MEMBERSHIP CRITERIA

The nominations 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 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.
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% of the board.

# PD - Promoter Director
NED - Non-Executive Director
ID - Independent Non-Executive Director
ED - Executive Director
*Ceased to be an Executive Director from 1st May,2005
**Appointed as a member from 26th July,2005

The viz matrix gives the detailed skill set required for becoming a board member as specified by the BOD.

Shareholding of Non Executive Directors

Name of Director

Status

No of shares held

V C Burman

PD / NED

10000

Dr Anand Burman

PD / NED

74000

Amit Burman

PD / NED

Maharaja HH Gaj Singh

ID

4000

R C Bhargava

ID

Stuart E Purdy

ID

P N Vijay

ID

S.Narayan

ID

Details of Other Board Directorships is separately mentioned in Annexure 1

As mandated by the revised Clause 49, the independent 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 executives during the preceding three years of the:

Key Skill Area

Essential

Desirable

Strategy/Business Leadership

2-3 years experience as a CEO,preferably of an MNC in India FMCG experience

Corporate Strategy
Consultant

Consultant /Academician with experience in FMCG

Industry and business strategy.

Basic understanding of Finance

Sales and Marketing experience

At least 10 years experience in sales and marketing

Good understanding of commercial processes
2-3 years as head of sales or marketing

Experience with FMCG or other

consumer products

Corporate law

Expert knowledge of corporate Law

Experience in trade/consumer
related laws

Finance

At least 5 years as a CFO or as held of a merchant banking

operation

FMCG experience

Trade Policy & Economics

Expert Knowledge of Trade & Economic Policies

FMCG experience

Administration & Government

Relations

Retired Beaurocrat

Basic understanding of
Finance and Business.

Ayurvedic specialist

Ayurvedic doctor with a minimum

of 20 years experience
as a practitioner/researcher

Basic understanding of
finance and business

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.

Remuneration paid to Directors

Table 2 gives details of remuneration paid to Directors for the year 2005-06
Name of the Director
V C Burman
Pradip Burman

Sitting Fees

Salary & Perquisites

Superannuation

Stock Option

Commission

Total

165000

8864000

9029000

8513489

704999

9218488

Dr.Anand Burman

60000

60000

Amit Burman*

30000

282651

22500

335151

P D Narang

11415483

900423

14344656

26660562

Sunil Duggal

11453494

748796

13505098

25707388

HH Gaj Singh

15000

15000

300000

300000

S Narayan**

45000

45000

R C Bhargava

150000

150000

Stuart E Purdy

135000

135000

Total

900000

31665117

2376718

27849754

8864000

71655589

P N Vijay

* Ceased to be Executive Director from 1st May,2005.

** Appointed as a member from 26th July,2005

REPORT ON CORPORATE GOVERNANCE

Annual Report 2005-06

Dabur India Limited

During 2005-2006 the company did not advance any loans to any of its Directors.
Mr P D Narang and Mr Sunil Duggal were issued 781973 and 773559 Stock Options respectively during the year having 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 erstwhile employees (relieved from their duties on 30th April, 2005) are relatives of Directors of Dabur. Mr.
Mohit Burman, son of Mr. V. C. Burman (Chairman), joined as General Manager, Sales and Marketing of the Company on 12th September, 1997. Gross remuneration paid to him for 2005-2006 was Rs.269667 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 as Deputy General Manager, Sales and Marketing. Gross remuneration paid to him
for 2005-06 was Rs.233867 as per approval of the shareholders and the Government. Both of them have resigned on
30th April, 2005.

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.

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 Board provides oversight and reviews the risk
management policy quarterly.

Audit Committee report for the year ended 31st March, 2006
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 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
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 also presented to the committee, the companies financial statements and also represented 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 also reviewed Management Discussion and Analysis, Statement of Significant
Related Party Transactions, Directors Responsibility Statement, compliance relating to financial statements and draft
auditors report.
The Committee is recommending to the board the re-appointment of M/s G Basu & Co., Chartered Accountants as
statutory auditors of the company, 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 company and of respective division/branch for the financial year 2006-07.
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 25, 2006

P N Vijay
Chairman, Audit Committee

COMMITTEES OF THE BOARD

b) Remuneration cum Compensation Committee
Dabur has four Board level committees Audit Committee, Remuneration cum Compensation Committee, Nomination Committee and Shareholders/Investors Grievance and 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. 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 2006, the Audit Committee comprises of four independent Directors. They are Mr. P N Vijay (Chairman), Mr. Stuart E Purdy, Mr. R. C. Bhargava and Dr. S. Narayan. The Audit Committee held seven meetings during 200506 on 27th April 2005, 26th July, 2005, 25th August, 2005, 24th October, 2005, 10th November, 2005, 27th January, 2006
and 27th February, 2006. The time gap between any two meetings was less than four months. The details of the audit
committee are given in Table 3:

Table 3:Attendance record of Dabur's Audit Committee

Name of Members (Category)

Status

No.of Meetings
Held

Attended

Mr.P N Vijay (ID)

Chairman

Mr.Stuart E Purdy (ID)

Member

Mr.R C Bhargava (ID)

Member

Dr.S Narayan)(ID)*

Member

* Appointed as a member from 24th October,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. Mr. A K Jain, Additional
General Manager (Finance) & Company Secretary is the secretary to the committee.
All members of the Audit Committee have accounting and financial management expertise. Mr. P N Vijay, Chairman
of the Audit Committee, has accounting and financial management expertise. The Chairman of the Audit Committee
attended the Annual General Meeting (AGM) held on 15th July 2005 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, 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:
 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.

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 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 postaudit 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.
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.
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 shall be subject to review by the
Audit Committee.

The uses/applications of funds raised through public 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).
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.

The name of Compensation Committee was changed to Remuneration cum Compensation Committee on 28th April,
2005 after dissolving the Remuneration Committee and merging it with the Compensation Committee.
As of 31st March 2006, the Remuneration cum Compensation Committee comprises of Mr. P N Vijay (Chairman) and
Mr. Stuart E Purdy, being independent Directors and Mr. V C Burman, being Non Executive Promoter Director.
The Remuneration cum Compensation Committee held six meetings during 2005-06 on 28th April, 2005, 26th July
2005, 24th October, 2005, 10th November, 2005, 25th November, 2005 and 27th January, 2006. Table 4 gives the details.

Table 4:Attendance details of Dabur's Remuneration cum Compensation Committee

Name of Members (Category)

Status

No.of Meetings
Held

Attended

Mr P N Vijay (ID)

Chairman

Mr Stuart E Purdy (ID)

Member

Mr V C Burman (PD/NED)*

Member

*appointed as a member w.e.f. 28/4/2005.

REPORT ON CORPORATE GOVERNANCE

Dabur India Limited

Annual Report 2005-06

The Remuneration cum Compensation Committee of the Company recommends to the Board the compensation
terms of executive Directors, approves and evaluates the executive Directors and senior management compensation
plans, policies and programs of the Company. The responsibilities of the Committee 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.
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: 











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

To issue grant/award letters.

To allot shares upon exercise of vested options.

Any allied matter(s) out of and incidental to these functions and not herein above specifically provided for.
Details of queries and grievances received and attended by the Company during the year 2005-06 is given in Table 6.

Table 6:Nature of complaints received and attended to during 2005-2006

Nature of
Complaint

Pending
as on 1st
April,2005

Received
during
the year

Answered
during
the year

Pending
as on 31st
March,2006

1. Transfer / Transmission / Duplicate

Nil

38

38

Nil

2. Non-receipt of Dividend

Nil

Nil

3. Dematerialisation /
Rematerialisation of shares

Nil

30

30

Nil

4. Others (Non receipt of bonus shares/

POA/ change of signatures/ etc.)

Nil

23

23

Nil

5. Complaints received from:

Securities and Exchange Board of India
Stock Exchanges
Registrar of Companies/
Department of Company Affairs

Nil
Nil
Nil

54
6
Nil

54
6
Nil

Nil
Nil
Nil

6. Others

Nil

Nil

Nil

Nil

Nil

153

153

Nil

Total

There were no complaints which were pending as on 31st March06.

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 / sub-division,
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) and Company Secretary,
and Mr. R B Sachan, Asst. Manager Secretarial, subject to a maximum of 5000 shares per case.

Shareholders/Investor Grievance and Share Transfer Committee Report for the year ended 31st March,
2006

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 cum Compensation 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.

To the Shareholders of Dabur India Limited:

The Shareholders/Investor Grievance and Share Transfer Committee comprises of 3 members. The main responsibility of the Committee is to ensure cordial investor relations and supervise the mechanism for redressal of investor grievances pertaining to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc. It performs
the functions of Transfer/Transmission/ Split-up/Sub-division and Consolidation of shares, issue of new and duplicate
share certificates and allied matter(s).
The Committee approved 728 cases of transfer, 120 cases of re-materialisation, 3 cases of sub-division and 29 cases
of issue of duplicate share certificates. The committee reviewed the status of investors grievances on quarterly basis. As
at the close of the Financial Year there were no complaints pending for redressal.
Signed

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.
3. Executive Directors
Remuneration of the executive Directors consists of a fixed component and a variable performance incentive. The Remuneration cum Compensation 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.

Remuneration cum Compensation Committee Report for the year ended 31st March, 2006

New Delhi
April 25, 2006

P N Vijay
Chairman, Shareholders/Investor Grievance and Share Transfer Committee

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:

To the Shareholders of Dabur India Limited:

The Remuneration cum Compensation Committee comprises of 2 independent directors and 1 Non Executive Promoter
Director. The main respo nsibility of the Remuneration cum 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 2005-2006. 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 also reviewed and approved the revision in remuneration of Mr. P D Narang and Mr. Sunil Duggal, Executive Directors.
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
New Delhi
April 25, 2006

P N Vijay
Chairman,Remuneration cum Compensation Committee

1. Building Interest in the firm on the buy side.

2. Being a strategic advisor to the Senior Management.
3. General market intelligence, including data on stock trading and shareholder characteristics.
4. General shareholder feedback/opinions.
5. Peer comparisons.
6. Intelligence on competitors.
7. Anticipated market reaction toward planned corporate developments such as mergers and acquisitions or divestitures.
8. Coping with the short term perspective of the investment committee.
9. Building Investor Confidence in the firm.
10. Being a part of the companys disclosure team.
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.
2. Webcasting - Daburs presentations are webcast. Webcasts are left up on corporate Web sites for upto 1 month.
3. Group Analyst Meeting both in India and Outside at Singapore Dabur India holds at least one analyst meeting outside India for the benefit of FIIs (Foreign Institutional Investors) to enable them understand the operations at Dabur
better.

c) Nomination Committee
Subsidiary Companies
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 did not meet during the year under review.
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.

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.

Management
Management Discussion and Analysis
Annual Report has a detailed Chapter on Management Discussion and Analysis which forms part of this report.

To decide the remuneration of consultants engaged by the Committee.

Disclosures
d) Shareholders/Investor Grievance and 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 four times in the year under review on 27th April, 2005, 26th July 2005, 24th October, 2005 and 27th January 2006. Table 5 gives the details.

Table 5: Attendance Details of Dabur's Shareholders/Investor Grievance and Share Transfer Committee
Name of Members (Category)

Status

No.of Meetings

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 and
whenever required to the Stock Exchanges. 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 Note in Schedule P to Annual Accounts which was reported to Board of
Directors.

Related Party Transactions -

Held

Attended

Mr P N Vijay (ID)

Chairman

Significant related party transactions are summarised herein below:-

Mr V C Burman (PD / NED)

Member

Mr P D Narang (ED)

Member

1. Subsidiaries:
- Collaterals and guarantees have been given by the Company on behalf of Dabur Foods Ltd amounting to Rs.37.50 crores.
- Goods worth Rs.2.49 crores were purchased from Dabur International Ltd.
- Goods worth Rs.3.30 crores were sold to Dabur International Limited.
- Share application money of Rs. 21.78 crores has been given to Dabur International Ltd.
- Sale of investments for an amount of Rs. 21.85 crores was made by the Company to Dabur International Ltd.
- Dabur Foods Ltd. was given a loan of Rs.8.25 crores by the company.
- Dabur International Ltd. was given a loan of Rs.27.00 crores by the company.
- Balsara Home Products Ltd. was given a loan of Rs.5.00 crores by the company.
- Dabur Foods Ltd. had repayed the Loan of Rs.5.25 crores given by the company.
- Balsara Home Products Ltd. had repayed the Loan of Rs.5.00 crores given by the company.

Mr. A K Jain, Additional General Manager (Finance) and 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.

2. Fellow Subsidiaries (subsidiary of a subsidiary):

- Goods worth Rs.2.19 crores were sold to Asian Consumercare Private Limited.
- Goods worth Rs.2.55 crores were sold to Dabur Nepal Pvt Ltd.
- Goods worth Rs.59.86 crores were purchased from Dabur Nepal Pvt Ltd.
- Collateral and guarantees have been given on behalf of Dabur Egypt Limited amounting to Rs.5.02 crores,
on behalfof Dabur Nepal Pvt. Ltd. amounting to Rs.3.13 crores and on behalf of Pasadena Foods Limited
amounting to Rs.25.50 crores.
- Goods worth Rs.3.99 crores were sold to Weikfield International (UAE) LLC.

REPORT ON CORPORATE GOVERNANCE

Annual Report 2005-06

Dabur India Limited

3. Associates:
- Services for an amount of Rs.1.80 crores by Jetways Travels Pvt. Ltd. (Travel Agency) were received by the
company. Such services were rendered at market rates.

General Body Meetings

Table 8 gives the details of the last five General Meetings.

4. Key Management Personnel and their Relatives:

- For key management personnel kindly refer to Table 2 of this report.
- There were no relatives of key management personnel who were paid remuneration / pension of
Rs.1 crore or more during the year.
The detailed related party transactions can be referred to in Note in Schedule P to Annual Accounts.

Table 8:Location and time of the last 5 General Meetings.

Disclosure of accounting treatment in preparation of financial statements

2002-2003

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.

Details of non-compliance by the Company

Financial Year

Category *

Location of the meeting

Date

Time

2001-2002

AGM

Air Force Auditorium

Subroto Park,New Delhi - 110010

5th September,2002

11.00 AM

AGM

Same as above

2nd August,2003

9.30 AM

2003-2004

EGM

Same as above

2nd August,2003

2.00 PM

2003-2004

AGM

Same as above

6th July,2004

11.00 AM

2004-2005

AGM

Same as above

15th July,2005

11.00 AM

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

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.

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 following Special Resolutions were taken up in the last three AGMs, and were passed with requisite majority.
2003-2004
Special Resolution passed through postal ballot to de-list the companys equity shares 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.
2004 2005

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

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.

2005 2006

Reappointment of Mr Sunil Duggal as Whole-time Director of the Company.

Appointment of Mr Amit Burman as Whole-time Director in Dabur Foods Limited.

Appointment of Mr Mohit Burman as Whole-time Director in Balsara Home Products Limited.

Appointment of Mr Chetan Burman as Executive Director in Dabur Nepal Private Limited.

Postal Ballot
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:

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.

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
1. Capitalization of Share Premium Account and issue of bonus shares in the ratio of 1:1 to existing equity shareholders of the company.
2. Increase in authorized share capital of the Company from Rs.50,00,00,000/- to Rs.1,25,00,00,000/3. Amendment in Clause V of the Memorandum of Association of the Company.
4. Amendment in Article 4 of the Articles of Association of the Company
The result of postal ballot was published in The Statesman, Delhi and Rashtriya Sahara Hindi on 22nd December 2005.
Mr. V.K. Jhalani, Chartered Accountant was appointed as Scrutinizer for conducting the postal ballot process. He reported the vote count on 21st December, 2005. The results of the ballot are given below:

Table 9 A: Result of the Postal Ballot ( Special resolution 1)

Particulars
Number of Postal Ballot Forms received

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.

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, Dr. Anand Burman, Mr. Sunil Duggal, Mr P N Vijay and His
Highness Maharaja Gaj Singh 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:
Dr. Anand Burman: M.Sc., Ph.d. (University of Kansas, USA) was born in 1952 and was appointed as a member on the
Board in 1986. He is the promoter Director and currently holds the Vice chairmans position on the Board of Directors.
The current shareholding of Dr. Anand Burman in the Company is 74000 shares.
Mr. Sunil Duggal: M.B.A. (IIM, Kolkata) was born in 1957 and joined the Board in 2000. He is currently the Chief Executive Officer of the Company.
His current shareholding in the Company is 469676 shares.
Mr. P N Vijay: Post Graduate from IIT, Chennai was born in 1951 and joined the Board in 2001. He is a leading expert
in stock market.
He currently has no shareholding in the Company.
His Highness Maharaja Gaj Singh: M.A. (Oxford) was born in 1948 and joined the Board in 1993. He is the Founder
and Managing Trustee of various philanthropic Institutions and religious charitable Trusts associated with education
and women welfare. He is the chief patron of certain renowned educational societies.
His current shareholding in the Company is 4000 shares.

Appointment of New Director

Dr. S Narayan has been appointed as an Independent director w.e.f 26th July, 2005.
He is retired IAS, born in 1943 and has done M.Sc. Physics, Master in Business Management (Finance),
M.Phil in Development Economics from Cambridge University- UK and Ph.d from IIT Delhi. He has been in
public service in the State and Central Government for nearly four decades. During 2003-04 he was
Economic Advisor to the Prime Minister. He has also served as Finance and Economic Affairs Secretary, Secretary
in the Departments of Revenue, Petrolium, Industrial Development and coal and secretary in Rural Development
in Tamil Nadu. Besides the above he is visiting faculty at several academic Institutions. He brings into the
board a rich experience from his various stints in the government concerns. He currently has no shareholding in
Dabur India Ltd.

Means of Communication with Shareholders

Half yearly financial information, including summary of significant events, for the half-year ended 30 September 2005
was sent to the households of all shareholders. The quarterly and half yearly financial results are normally published
in The Economic Times/ Times of India and Navbharat Times/ Rashtriya Sahara newspapers. Table 7 gives details of the
publications of the financial results in the year under review.

Table 7:Publications of the financial results during 2005-2006

Description

Date

Unaudited Financial Results for the quarter ended on 30th June,2005

28th July,2005

Audited Financial Results for the quarter / half year ended on 30th September,2005

26th October,2005

Unaudited Financial Results for the quarter / Nine months ended on 31st December,2005

29th January,2006

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.

In Favour

No. of Votes

1992
222942103

99.98%

0.00%

Invalid Ballots

52340

0.02%

Total Receipts

222994443

100.00%

Against

10 REPORT ON CORPORATE GOVERNANCE

Dabur India Limited

Annual Report 2005-06

Table 9 B: Result of the Postal Ballot ( Special resolution 2)

Particulars

No. of Votes

Number of Postal Ballot Forms received

1992

In Favour

221977628

99.55%

964275

0.43%

Invalid Ballots

52605

0.02%

Total Receipts

222994508

100.00%

Against

Table 9 C: Result of the Postal Ballot ( Special resolution 3)

Particulars

26th July, 2005: First Quarter

24th October, 2005: Half Yearly
27th January, 2006: Third Quarter
25th April, 2006: Fourth Quarter and Annual
For the year ending 31st March, 2007, results will be announced in:
End July, 2006 First Quarter
End October, 2006: Half Yearly
End January, 2007: Third Quarter
End April, 2007: Fourth Quarter and Annual

Book Closure
The dates of book closure are from 23rd June, 2006 to 8th July, 2006 inclusive of both days.

No. of Votes

Number of Postal Ballot Forms received

Dividend Payment

1992

In Favour

221977473

99.55%

Against

964375

0.43%

Invalid Ballots

52660

0.02%

Total Receipts

222994508

100.00%

An interim dividend of Re.1.50 per equity share was paid on 14th November, 2005 and final dividend of Rs. 1.00 per
equity share will be paid on 12th July, 2006 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). The annual listing fees for the financial year 2005-2006 to NSE and BSE has been paid.

Table 9 D: Result of the Postal Ballot ( Special resolution 4)

Particulars

No. of Votes

Number of Postal Ballot Forms received

1992

In Favour
Against

ISIN No:

INE016A01026

221976563

99.55%

Mumbai Stock Code:

500096

964375

0.43%

National Stock Code:

DABUR

53570

0.02%

Bloomberg Code:

DABUR IB

Reuters Code:

DABU.BO

Invalid Ballots
Total Receipts

Table A:Daburs Stock Exchange codes

222994508

100.00%

The Chairman after receiving the Scrutinizers Report announced that the Special Resolutions at Item No.1 to 4 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.

Stock Market Data

Table B and Chart A gives details

Compliance
Table B: High,low and volume of Daburs shares for 2005-06 at BSE and NSE
Mandatory requirements
MUMBAI STOCK EXCHANGE
Dabur is fully compliant with the applicable mandatory requirements of the revised Clause 49.

Date

High (Rs.)

Low (Rs.)

Volume

High (Rs.)

Low (Rs.)

Volume

60.75

54.50

2,700,658

60.47

54.50

6,169,601

Apr-05

Table 10:Compliance report

NATIONAL STOCK EXCHANGE

May-05

65.22

55.50

2,110,625

65.50

58.15

5,563,490

Compliance status

Jun-05

68.50

62.57

5,728,947

69.90

60.00

6,624,221

49 (I)

Yes

Jul-05

78.12

63.00

5,681,302

81.00

63.32

14,549,406

(A) Composition of Board

49(IA)

Yes

Aug-05

79.85

71.30

2,382,438

80.00

69.05

9,998,422

(B) Non-executive Directors Compensation & Disclosures

49 (IB)

Yes

Sep-05

84.85

71.37

2,497,428

84.75

74.62

7,778,446

(C) Other provisions as to Board and Committees

49 (IC)

Yes

Oct-05

93.20

77.50

6,103,536

94.70

79.00

18,637,984

(D) Code of Conduct

49 (ID)

Yes

Nov-05

90.77

81.20

3,380,733

91.00

81.15

10,882,802

II. Audit Committee

49 (II)

Yes

Dec-05

105.90

85.12

4,558,362

106.05

85.25

14,792,191

(A) Qualified & Independent Audit Committee

49 (IIA)

Yes

Jan-06

119.00

102.27

6,696,522

119.90

102.32

23,707,112

(B) Meeting of Audit Committee

49 (IIB)

Yes

Feb-06

120.00

107.00

7,710,303

120.10

101.65

22,009,984

(C) Powers of Audit Committee

49 (IIC)

Yes

Mar-06

125.95

109.25

25,697,384

125.90

109.85

30,236,000

(D) Role of Audit Committee

49 II(D)

Yes

(E) Review of Information by Audit Committee

49 (IIE)

Yes

III. Subsidiary Companies

49 (III)

Yes

IV. Disclosures

49 (IV)

Yes

(A) Basis of related party transactions

49 (IV A)

Yes

(B) Board Disclosures

49 (IV B)

Yes

(C) Proceeds from public,rights,preference issues,etc.

49 (IV C)

Not Applicable

(D) Remuneration of Directors

49 (IV D)

Yes

(E) Management

49 (IV E)

Yes

(F) Shareholders

49 (IV F)

Yes

V. CEO/CFO Certification

49 (V)

Yes

VI. Report on Corporate Governance

49 (VI)

Yes

VII. Compliance

49 (VII)

Yes

Particulars
I.

Clause of listing agreement

Board of Directors

Note:The value of Dabur share has been adjusted to half of its market price for April`05 to Jan`06 to give effect to bonus of 1:1 allotted on 27/01/06.

Chart A:Daburs Share Performance versus BSE Sensex

250

Dabur

200

150

100

BSE Sensex
50

April

May

June

August September

July

Adoption of non-mandatory requirements

October

November December

January

2005

February

March

2006

Note:Daburs adjusted closing price and BSE Sensex indexed to 100 as on 1st April 2005.

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.

Distribution of Shareholding

b) Tenure of Independent Directors

No specific tenure has been specified for the Independent Directors.

Table C and D lists the distribution of the shareholding of the equity shares of the Company by size and by ownership
class as on 31st March, 2006.

c) Remuneration Committee
Dabur has a Remuneration cum Compensation Committee that comprises of three members, two members being independent directors and one being non executive director. The Chairman of the Committee is an independent director.
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.
e) Audit Qualifications

Table C :Shareholding pattern by size

Number
of equity
shares
held

Physical form
No.of
No.of
share
shares
holders

up to 5000
5001 10000

The Auditors have raised no qualification for the Financial Statements of the Company.

10001 and above

f) Mechanism for evaluating performance of non-executive Directors

Total

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 to three broad parameters namelyguiding strategy, monitoring management performance and development /compensation 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.

Additional Shareholder Information

Annual General Meeting
Date: 8th July, 2006
Time: 9:30 am
Venue: Air Force Auditorium, Subroto Park, New Delhi - 110010

Dematerialisation form
No.of
No.of
share
shares
holders

Total
number
of share
holders

% of
share
holders

28728819

82712

98.99%

5834

6991316

76878

26

194000

403

3056844

429

0.51%

3250844

0.57%

97000

415

534234805

419

0.50%

534331805

93.20%

5864

7282316

77696

566020468

83560

100.00%

35720135

6.23%

573302784 100.00%

Table D:Shareholding Pattern by ownership

Particulars

As on 31st March,2006

As on 31st March,2005

No.of
share
Holders

% of
share
Holders

No.of
shares
held

% of
share
Holding

No.of
share
holders

Directors,promoters
and family members

34

0.04%

426004818

74.31%

31

0.07% 224174178

FIIs

51

0.06%

55620603

9.70%

32

0.07%

17740997

6.19%

Mutual Funds

44

0.05%

8354761

1.46%

37

0.08%

3011414

1.05%

Financial Institutions/Banks

29

0.03%

27529700

4.80%

0.02%

11995874

4.19%

NRIs

2418

2.89%

4064240

0.71%

1959

4.18%

2819833

0.98%

Corporates

1675

2.00%

9170725

1.60%

957

2.04%

4524985

1.58%

93.54%

22152432

7.73%

Financial Calendar

Individuals

79309

94.91%

42557937

7.42%

43836

Financial year: 1st April to 31st March

Total

83560

100.00%

573302784

100.00%

46861

For the year ended 31st March, 2006, results were announced on:

Total
% of
number
share
of shares holding

% of
share
holders

No.of
% of
shares
share
held holding
78.27%

100.00% 286419713 100.00%

REPORT ON CORPORATE GOVERNANCE 11

Annual Report 2005-06

Dabur India Limited

Dematerlisation of Shares and Liquidity

ANNEXURE 1 - DETAILS OF OTHER DIRECTORSHIPS HELD

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, 2006, about 98.73% shares of the Company were held in dematerialized form.

The equity shares of the Company are frequently traded at Mumbai and National Stock Exchange.

Name
of the
Director

Status

Directorship

Committee
Membership

V C Burman

PD/NED

Dabur India Limited

Shareholders/Investors
Grievance Committee

Outstanding GDRs/ADRs/Warrants/Options

Committee
Chairmanship

Remuneration cum
Compensation Committee

The Company has 66,91,484 outstanding Options as on 31st March, 2006 with vesting period from 1 to 5 years from the
date of grant.
Dabur Ayurvedic
Specialities Limited

Details of Public Funding Obtained in the last three years

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

Burmans Finvest Limited

Dr Anand Burman

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: 011-41406149/51/52, 41609386, 41709885
Fax: 011-41709881

PD/NED

Dabur India Limited

Dabur Pharma Limited

Audit Committee

Shareholders/Investors
Grievance Committee

Dabur Pharmaceuticals
Limited
Dabur Overseas Limited
Dabur Oncology Plc
Hindustan Motors
Limited
PradipBurman

PD/ED

Dabur India Limited

Share Transfer System

Ayurvet Limited

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, has 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.

Sanat Products Limited

Audit Committee

Dabur Exports Limited

Burmans Finvest Limited
CNS Infotech Ltd.
Amit Burman

PD/NED

Dabur India Limited

Dabur Pharma Limited

Companys Registered Office Address:

Dabur Foods Limited

8/3, Asaf Ali Road,

New Delhi-110002
Ph: 011-23253488

Apollo Health Street

Limited

Audit Committee

E-medlife.com Limited

PLANT LOCATIONS
Sahibabad

Baddi

Unit I & II
22,Site IV,Industrial Area,Sahibabad,Ghaziabad (U.P.) Tel:0120 3982000,3001000:Fax:0120 2779048

Pasadensa Foods
Limited

Remuneration Committee

Q H Talbros Limited

Remuneration Committee

Unit III
Plot No.5/1,Site IV,Sahibabad 201 010,Ghaziabad (U.P.) Tel:0120 3982000,3001000:Fax:0120 2779048

Radico Khaitan Limited

Chyawanprash Unit

PVR Ltd.

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 Billanwali Lavana,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
Narendrapur

9,Netaji Subhash Chandra Bose Road,Narendrapur 743 508

Distt.24 Parganas,West Bengal ,Tel:033-24772324 Fax :033-24772621

Alwar

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

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
Phone: 011-41406149/51/52, 41609386, 41709885, Fax: 011-41709881

For queries of Analysts, FIIs,

Institutions, Mutual Funds,
Banks, Media and others

Mrs Gagan Ahluwalia / Mr Sharad Goel

Dabur India Limited,
Punjabi Bhawan 10 Rouse Avenue, New Delhi 110002
Tel: 011-42786000; Fax: 011-23222051

For investors assistance

Mr. A K Jain
Additional General Manager (Finance) and Company Secretary,
Dabur India Limited, Punjabi Bhawan, 10, Rouse Avenue,
New Delhi 110 002., Tel: 011 42786000, Fax: 011 2322 2051

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, 2006
and all its schedule and notes on accounts, as well as the Cash Flow Statement.
2. 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.
4. The companys other certifying officers and we are responsible for establishing and maintaining internal controls
for financial reporting and procedures for the company, and we have evaluated the effectiveness of the companys
internal controls and procedures pertaining to financial reporting.
5. 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 over financial reporting 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 over financial reporting;
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.
New Delhi
April 25, 2006

Signed
Sunil Duggal
CEO, Dabur India Limited

Signed
Rajan Varma
CFO, Dabur India Limited

Burmans Finvest Limited

P D Narang

ED

Dabur India Limited

Dabur Egypt Limited
Sanat Products Ltd.

Shareholders/Investors
Grievance Committee

Audit Committee

12 REPORT ON CORPORATE GOVERNANCE

Dabur India Limited

Name
of the
Director

Status

Directorship

Annual Report 2005-06

Committee
Membership

Dabur Finance Limited

Committee
Chairmanship

Name
of the
Director

Status

Directorship

Committee
Membership

Audit Committee

Remuneration cum
compensation
committee

Dabur Ayurvedic
Specialities Ltd.
Dabur Foods Limited

Audit Committee

Audit Committee
Eicher Limited

Remuneration
Committee
Dabur Pharma Limited

Shareholders
Grievance Committee

Shareholders/Investors
Grievance Committee

Audit Committee

Eicher Motors Limited

Shareholders/Investors
Grievance Committee

Audit Committee

Dabur India Limited

Audit Committee

Reed Relay & Electronics

Limited

Audit Committee

Dabur International Ltd.

Balsara Hygiene
Products Limited

Stuart Edward Purdy ID

Remuneration cum
Compensation
Committee

Balsara Home
Products Limited
Besta Cosmetics Limited

Eagle Insurance
Company Ltd.

African Consumer Care Ltd.

Punjab Tractors Limited
Sunil Duggal

ED

Dr. S Narayan *

ID

Dabur India Limited

Dabur Foods Limited

Remuneration Committee
R C Bhargava

Balsara Hygiene Products

Limited

ID

Dabur India Limited

Audit Committee
Audit Committee
Audit Committee

Roulunds Codan India Ltd.

Grasim Industries Limited

Dabur India Limited

Audit Committee

Lord Krishna Bank Ltd.

Jodhna Medical &

Research Centre Limited
Maharaja Heritage
Resorts Limited
Shankar Packagings Limited

Optimus Outsourcing
Co. Ltd.

Audit Committee

Maruti Udyog Limited

Shareholders/Investors
Grievance Committee

Maruti Suzuki

Tourism Finance
Corporation of India Limited

Audit Committee

Automobiles India Ltd.

Omax Auto Ltd.

Fortune Park Hotels Limited

Thomson Press Ltd.

Birla Sunlife Insurance

Company Limited
Dabur India Limited

Audit Committee

Taj Asia Ltd.

Dabur International Limited

ID

Apollo Tyres Ltd.

Polaris Software Lab Ltd.

Besta Cosmetics Limited

P N Vijay

Audit Committee

ILFS Limited

Balsara Home Products

Limited

ID

Dabur India Limited

Multi Commodity
Exchange of India Ltd.

Audit Committee

HH Mah.Gaj Singh

Committee
Chairmanship

UltraTech Cement Co.Ltd.

Shareholders/Investors
Grievance Committee

* appointed as director w.e.f. 26th July, 2005

Audit committee
Shareholders/Investors
Grievance Committee

Audit Committee

DIRECTORS REPORT 13
Annual Report 2005-06

Dabur India Limited

Fixed Deposits

To,
The Members,
Your Directors have pleasure in presenting the 31st Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2006.

Financial Results

Nature of business

Financial results are presented in Table 1.

Table 1:Financial results
(Rs.crore)
Turnover (including other income)
Profit before Tax
Add: Provisions of earlier years written back
Less Provision for Taxation - Current

2004-05

1375.03

1280.22

Subsidiaries

214.36

165.02

0.29

214.65

165.02

During the year Balsara Hygiene Products Limited, Balsara Home Products Limited and Besta Cosmetics Limited became subsidiary companies of the Company. During the year in view of the restructuring in the investment portfolio
Dabur Nepal Private Limited, Dabur Overseas Limited have ceased to be direct subsidiaries and have now become indirect subsidiaries through Dabur International Limited.
As required under the provisions of Section 212 of the Companies Act, 1956, a statement of the holding company's
interest in the subsidiary companies is attached as 'Annexure 2' and form part of this report.
In terms of approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copy of
Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Report of the Auditors of the subsidiary
companies have not been attached with the Balance Sheet of the Company.
The Company will make available these documents/details upon request by any Shareholder of the Company or
Subsidiary interested in obtaining the same. The Annual accounts of the Subsidiary Companies are also available for
Inspection by the Shareholders at the Head Office of the Company and also that of its Subsidiaries. However, pursuant
to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes the financial Information of its Subsidiaries. The following information in
aggregate for each Subsidiary are also being disclosed (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for
taxation (i) profit after taxation (j) proposed dividend. The said information is given in 'Annexure 3' and form part of
this report.

18.08

13.00

4.00

4.00

Provision for taxation - Fringe Benefit

3.70

188.87

147.97

Add: Balance in Profit & Loss Account brought

forward from the previous year

125.23

81.12

Transferred from Investment Allowance Reserve

0.83

Transferred from Investment Deposit Reserve

1.82

Transferred from Capital Redemption Reserve

0.57

314.67

231.74

Profit available for appropriation

With the acquisition of Balsara Group of companies, the Company has entered in the Home Care business. Detailed discussion on the Company's nature of business is covered under the chapter Management Discussion and Analysis which
forms part of this report.
Dabur Foods Limited, a wholly owned subsidiary, has during the year extended its activities into manufacturing of
fruit juices/pulps in addition to its existing business of trading in these products. There has been no change in the nature of business of other subsidiary companies during the year.

2005-06

Provision for Taxation - Deferred

Profit after Tax

During the year the Company has not accepted any fixed deposits from the public. However, as on 31st March, 2006
the Company had unclaimed deposits of Rs.7.53 lacs due to 51 depositors. In addition to this an amount of Rs.5.57
lacs is outstanding as unclaimed towards interest accrued and due to 524 depositors. During the year, the Company has deposited a sum of Rs.1,23,768/- towards unclaimed deposits and interest in the Investors Education & Protection Fund.

Auditors' Report

Appropriation to:
General Reserve

25.20

25.15

Interim Dividend - Paid

42.99

28.63

Final Dividend - Proposed

57.33

42.96

Corporate tax on Dividend

14.07

9.77

Balance carried over to Balance Sheet

175.00

125.23

Total

314.67

231.74

The observations of Auditors in their report read with the relevant notes to accounts in Schedule P are self-explanatory
and do not require further explanation.

Employees Stock Option Plan

During the year 54,14,927 options in 8 trenches were granted to eligible employees of the Company in terms of Employees Stock Option Plan (Dabur ESOP 2000). During the year, 2,31,679 options got vested in the employees, and were
exercised by them immediately after vesting. Accordingly, the Company made the allotment of 62,500 equity shares on
30th May, 2005, 1,36,989 equity shares on 5th August, 2005 and 32,190 equity shares on 7th November, 2005 against
the options exercised by the employees.
The particulars of options issued under the said Plan as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are appended as 'Annexure 4' and form part of this report.

Dividend
An interim dividend of Re.1.50 per share (i.e. 150%) was declared and paid during the year. The Board of Directors has
recommended a final dividend of Re.1 per share (i.e.100%) to the members for their approval. The final dividend, if approved, will be paid to members within the period stipulated by the Companies Act, 1956. The Dividend Payout Ratio
for the current year (inclusive of corporate tax on dividend distribution) will be 60.57%.

Particulars of Employees
Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended are given in 'Annexure 5 and form part of this report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo

Operations and Business Performance
Kindly refer to Management Discussion & Analysis covered under Corporate Governance which forms part of this
Report.

A. Conservation of energy:

a)

Energy conservation measures taken:-

Amalgamation of Balsara Group of companies with the Company

Board of Directors have decided to amalgamate with the Company three Balsara Group of companies namely Balsara
Hygiene Products Limited, Balsara Home Products Limited and Besta Cosmetics Limited with effect from 1st April,
2006, subject to approval of shareholders and other appropriate regulatory authorities. This will help us in cost cutting
and saving infrastructure cost and to have a more efficient corporate structure. Detailed discussion on this is presented
in the Management Discussion and Analysis section of this report.

Various energy conservation techniques were initiated at large scale and successfully implemented.

Auto modulation system installed in Boiler feed system at Baddi.

Maintained / controlled the mixing of Fuel & Air ratio resulting into maximization of boiler efficiency.

Corporate Governance

Online monitoring of Boiler Efficiency through LAN resulting into improvement of Efficiency by 3%.

Auto Power Factor correction system installed.

Power Capacitor Bank of 100 KVAR installed at Alwar to maintain the Power Factor.

Strict control of Power Factor in range of 0.99 to 0.997.

It has always been the Company's endeavour to excel through better Corporate Governance and fair and transparent
practices, many of which have already been in place even before they were mandated by the law of the land. The Company complies with all the provisions of revised clause 49 of the Listing Agreement.
The Compliance Report on Corporate Governance forms part of this Annual Report. The Auditors certificate on the
compliance of Corporate Governance Code embodied in Clause 49 of the Listing Agreement is attached as Annexure 1
and form part of this Report.

Directors

b)

During the period Dr Anand Burman and Mr Amit Burman have resigned from the executive directorship of the Company, although they continue to remain non-executive members on the Board of the Company.
At the ensuing Annual General Meeting Dr Anand Burman, His Highness Maharaja Gaj Singh, Mr Sunil Duggal and
Mr P N Vijay will retire by rotation and being eligible offer themselves for reappointment in terms of provisions of Articles of Association of the Company.
The brief resume/details relating to directors who are to be appointed/re-appointed are furnished in the explanatory statement to the notice of the ensuing annual general meeting.

Additional investments and proposals, if any, being implemented for reduction of consumption of energy:Efficiency Monitoring System planned at Pant Nagar to check and control the steam generation efficiency. Commissioning is expected by May'06. This system works by controlling the ratio of fuel and air.

c)

Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact on the
cost of production of goods:The energy conservation measures taken during the year have resulted into yearly saving of approximately Rs.130 lacs and thereby lowered the cost of production by the equivalent amount. These measures
have also lead to better pollution control, reduced maintenance time and cost, improved hygienic condition and consistency in quality and improved productivity.

d)

Total energy consumption and energy consumption per unit of production as per Form A

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, the Directors confirm:
i)
ii)
iii)
iv)

That in the preparation of the annual accounts, the applicable accounting standards have been followed and no
material departures have been made from the same;
That they had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit of the Company for that period;
That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
That they had prepared the annual accounts on a going concern basis.

Change in Capital Structure and Listing of shares

The Company's shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) and are actively traded. In the year under review, the following shares were admitted for trading to NSE and BSE against the options exercised by employees pursuant to Employees Stock Option Scheme of the Company;

62,500 equity shares allotted by the Company on 30 May 2005

1,36,989 equity shares allotted on 5 August 2005
32,190 equity shares allotted on 7 November 2005
In addition, 28,66,51,392 equity shares were allotted on 27 January 2006 as bonus shares.

Auditors
M/s G. Basu & Company, Chartered Accountants, Statutory Auditors, M/s Bansal & Company, Branch Auditors of Alwar
Division and M/s Waring & Partners, Branch Auditors of London Branch of the Company retire at the conclusion of ensuing Annual General Meeting and being eligible offer themselves for reappointment as statutory auditors & branch auditors respectively.

Cost Auditor
M/s Ramanath Iyer & Company, Cost Accountants were reappointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of its Formulations and Cosmetics & Toiletries products for the financial
year 2006-07.

Consolidated Financial Statements

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2005-06. Consolidated sales grew by 23.6% to Rs.1899.57
crore as compared to Rs.1536.95 crore in the previous year. Similarly, net profit after tax and after minority interest for
the year at Rs.214.18 crore is higher by Rs.58.38 crore as compared to Rs.155.80 crore in the previous year.

Internal Control System

The Company's internal control system comprises audit and compliance by in-house Internal Audit Division supplemented by internal audit checks from Price Waterhouse Coopers Private Limited, the Internal Auditors. The internal
auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by the direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board.

Attached herewith as Annexure 6

B. Technology Absorption:
Efforts made in technology absorption as per Form B is attached herewith as Annexure 7.
C Foreign Exchange earnings and outgo:
i)
Activities and initiatives relating to exports:
The impetus on international business continued to gain momentum. This was done through sharper strategic focus & superior deployment strategies. The acquisition of Balsara business gave access to market&
product segments, which further strengthened the business. Continued attention & resource deployment
was done on Brand development with specific emphasis on "Dabur" & " Vatika" brands. Local celebrities
were used in Brand promotion in markets like Pakistan & Egypt.
As part of the strategic exercise seven 'focus' and eight "potential" markets were identified for resource
Investment.
Work continued to develop the Developed Market Health care & Oral strategies through the High end
Private label route. Towards that work continued to prepare Dabur facilities for Medicines & Health Care
Products Regulatory Agency (MHRA) as also FDA compliant manufacturing bases.
To provide focus on International Business as a growth engine, the Business has been split with 2 business heads located respectively in Dubai & India.
ii)
Development of New markets for Products & Services:
In continuation with the focus & potential markets exercise, & with a view to consolidate the opportunities
offered by Balsara integration markets in "Arabia" like Sudan, Morocco, Libya, Jordan, those in CIS like Russia, Ukraine & other markets like Ghana were developed for growths. Marketing Offices manned by Dabur
employees were set up in some of these markets with a view to get closer to the Consumer & Customer
In Pakistan avenues for local trading/manufacturing would be evaluated & actioned for a much wider
portfolio of products next year. The positive experience with the launch of Sarson Amla in Pakistan gave
further confidence in the potential of the market.
iii)
Export Plans:
Organic & inorganic growth will be pursued in the coming & future years to bolster sales growths & gain
economies of scale, thereby boosting profitability.
Health care & Oral Care through the private label route will be a thrust area with necessary R&D &
backroom inputs.
Pakistan, Bangladesh & Nigeria would take major investments & expected to grow substantially. In
addition a major thrust is being put in the Russian & select CIS markets to tap the oral care & Health Care opportunities.
Manufacturing consolidation is also planned to be completed in United Arab Emirates with a new
state of the art plant in Dubai Investment Park.
Total Foreign Exchange used during 2005-06: Rs.536.18 lacs.
Total Foreign Exchange Earned during 2005-06: Rs.2658.21 lacs.

Group for interse transfer of shares

As required under Clause 3 (e) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 persons constituting Group (within the meaning as defined in the Monopolies and Restrictive Trade
Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of

14 DIRECTORS REPORT
Dabur India Limited

Annual Report 2005-06

aforesaid SEBI Regulations, are given in the Annexure 8 attached herewith and form part of this report.

Annexure '1'

Operations Review

Auditors' Report on Corporate Governance

For detailed operational review kindly refer to Management Discussion and Analysis covered under Corporate Governance, which forms part of this Annual Report.

To,
The Members of Dabur India Limited

Environmental Review
The company has a defined environmental policy which is being followed rigorously by one and all across the organization. There were no environmental issues at any of the Dabur plants and the statutory compliance was in line with
Governmental requirements.
The Pollution Control parameters as defined by the State Pollution Control Board were totally adhered and effluent
discharge level was well within the prescribed limits. Air pollution has been tested and was in line with the requirement. Noise pollution level was contained by fixing all the generators in sound proof acoustic enclosures.

Industrial Relations
The Company has taken various steps to improve productivity across organization. Industrial relations remained harmonious across all manufacturing locations in India.

Acknowledgements
Your Directors place on record their gratitude to the Central Government, State Governments and Company's Bankers
for the assistance, co-operation and encouragement they extended to the Company. For the continuing support and unstinting efforts of Investors, Dealers, Business Associates and Employees in ensuring an excellent all around operational
performance, your directors also wish to place on record their sincere thanks and appreciation.

We have examined the compliance of conditions of corporate governance by Dabur India Limited, for the year ended on
31st March, 2006, as stipulated in clause 49 of the Listing Agreement of the said Company with the stock exchanges.
The compliance of conditions of corporate governance is the responsibility of the management. Our examination is
limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the
Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the
Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing
Agreement.
We state that no investor grievance is pending for a period exceeding one month against the Company as per the
records maintained by the Shareholders/ Investors Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For G Basu & Co
Chartered Accountants
S.LAHIRI
Partner
Membership No. 51717

For and on behalf of the Board

V C Burman
Chairman

New Delhi
25th April 2006

New Delhi
25th April, 2006

Annexure '2'
Statement pursuant to Section 212 of the Aompanies Act,1956 relating to subsidiary companies
1

Name of the Subsidiary

*Dabur
Nepal
Pvt.Ltd.

*Dabur
Overseas
Ltd.

Dabur
Foods
Ltd.

Dabur
International
Ltd.

*Dabur
Egypt
Ltd.

*Asian
Consumer
Care Pvt.Ltd.

*Pasadensa
Foods
Ltd.

*Weikfield
International
(UAE) Ltd.

*African
Consumer
Care Ltd.

Balsara
Home
Products Ltd.

Balsara
Hygiene
Products Ltd.

*Besta
Cosmetics
Ltd.

Holding Company's Interest

20,000,000 Equity
Shares of Rs.10
Each fully
Paid Up

1,000,000 Equity
Shares of Pens
Sterling 1 Each
fully Paid Up

12,290,711
equity shares of
Rs 10 each fully
paid up

3,862,100
equity shares of
Rs 10 each fully
paid up

Extent of Holding

100%

100%

94.18%

99.52%

Subsidiary Financial Year

ended on

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

31/03/2006

Net aggregate amount of

subsidiaries Profit/(Loss) not
dealt within the holding
company's accounts :
(i) For the financial Year
of the subsidiaries

Rs.12,10,18,111

Rs 5,75,60,758
AED 47,38,681

Rs.13,88,61,289

(Rs.32,77,374)

(ii) For the previous financial

year of the subsidiaries
since they become the holding
company's subsidiaries.

(Rs.14,81,28,846)

Rs.5,83,99,567
AED 48,86,993

(i) For the financial Year

of the subsidiaries

(ii) For the previous financial

year of the subsidiaries
since they become the holding
company's subsidiaries.

Net aggregate amount of

subsidiaries Profit/(Loss)
dealt within the holding
company's accounts :

* Subsidiary Undersection 4(1)(c)

Exchange Rate as on 31.03.2006
1 AED=Rs.12.147

Annexure '3'
Details of Subsidiary Companies
(Amount in Lacs)
Particulars

Dabur Foods
Ltd.

Pasadensa
Foods Ltd.

Dabur International Ltd.

499.08
NR 798.52

2,000.00

500.00

2,906.82
AED 239.30

194.47
AED 16.01

95.85
BDT 149.77

159.10
ND 440.49

234.67
USD 5.26

223.08
USD 5

1,305.00

388.08

90.00

5,980.85
NR 9569.36

-271.12

-298.65

1,508.04
AED 124.15

424.69
AED 34.96

-93.31
BDT -145.80

-136.93
ND -379.11

30.27
USD 0.68

-10.60
USD -0.24

-32.24

1,163.98

26.92

3. Total Assets

15,961.56
NR 25538.50

5,970.71

2,221.90

9,376.02
AED 771.88

1,644.94
AED 135.42

617.45
BDT 964.76

302.27
ND 836.88

820.30
USD 18.39

234.50
USD 5.26

8,945.47

1,976.15

186.74

4. Total Liabilities

15,961.56
NR 25538.50

5,970.71

2,221.90

9,376.02
AED 771.88

1,644.94
AED 135.42

617.45
BDT 964.76

302.27
ND 836.88

820.30
USD 18.39

234.50
USD 5.26

8,945.47

1,976.15

186.74

12.49
NR 19.98

500.21

3,194.28
AED 262.97

195.06
USD 4.37

80.29

731.94

19,481.76
NR 31170.82

19,253.41

727.03

7,713.93
AED 635.05

3,341.43
AED 275.08

1,443.36
BDT 2255.25

802.07
ND 2220.63

1,324.96
USD 29.70

19,156.53

171.39

121.83

7.Profit before Taxation

604.03
NR 966.45

1,370.37

1.32

570.43
AED 46.96

-31.82
AED - 2.62

-56.31
BDT -87.98

-105.43
ND -291.90

85.91
USD 1.93

-4.21
USD -0.09

1,514.56

7.56

115.35

8. Provision for Taxation

105.54
NR 168.86

160.21

-1.32

5.50
8.59

125.95

40.33

28.86

9. Profit after Taxation

498.49
NR 797.58

1,210.16

570.43
AED 46.96

-31.82
AED - 2.62

-61.80
BDT -96.56

-105.43
ND -291.9

85.91
USD 1.93

-4.21
USD -0.09

1,388.61

-32.77

86.48

10. Proposed Dividend

1.Capital
2 Reserves

5. Details of Investments
6. Turnover

Dabur Nepal
Pvt. Ltd.

Exchange Rate as on 31.03.2006

1 US $ = Rs. 44.615
1 NR=Rs.0.625
1 AED=Rs. 12.147
1BDT= Rs 0.64
1 ND=Rs.0.36119
INR= Indian Rupee (all amount in INR, unless specified otherwise)

Weikfield InterAsian Consumernational (UAE) Ltd.

care Pvt. Ltd.

African Consu- Dabur Egypt

mercare Ltd.
Ltd.

Dabur Over- Balsara Home

seas Ltd.
Products Ltd

Balsara Hygeine
Products Ltd

Besta Cosmetics
Ltd

DIRECTORS REPORT 15
Annual Report 2005-06

Dabur India Limited

Annexure '4'
Disclosure regarding Employees Stock Option Plan pursuant to the SEBI (Employees Stock Option Scheme
and Employees Stock Purchase Scheme) Guidelines, 1999 and forming part of the Directors' Report for the
year ended 31st March, 2006.
For the Year

Cumulative

54,14,927

79,75,537

1.

Number of Options granted:

2.

Pricing formula:

3.

Options vested:

2,31,679

9,52,303

4.

Options exercised:

2,31,679

9,34,803

5.

Total number of shares arising as a result of exercise of option:

2,31,679

14,36,562

Each option carries the right to the holder

to apply for equity shares of the Company at par.

6.

Options lapsed/Cancelled:

7.

Variation in terms of options:

8.

Money realized by exercise of options:

17,504

3,49,250

None

None

Rs.2,31,679/-

Rs.14,36,562/-

iii. Employees who

received the options
during the year equal
to or exceeding 1% of
the issued capital of the
Company at the time
of grant:

None

11

Diluted earning per

share (EPS) pursuant
to issuance of options
under ESOP:

Rs.3.27

12.

The Company had been using intrinsic value method of accounting ESOP expenses as prescribed by SEBI (Employees Stock Option
Scheme and Employees Stock Purchase Scheme) Guide Lines 1999,to account for stock options issued under Dabur ESOS 2000,the
Company's stock option scheme.Under this method,compensation expenses is recorded on the basis of excess of the market price
of share at the date of grant of option over exercise price of the option.
As allowed by the above referred SEBI Guidelines the company has decided to continue to apply the intrinsic value method of accounting and the disclosure required as per para 12 (l) of the Guidelines are given herein below:(Rs.in lacs)

9.

Total number of options in force:

10

Employee-wise details of options granted during the year to:

i. Senior managerial :

66,91,484

66,91,484

Net profit after tax,as reported in audited accounts

Add:Stock Option compensation expenses charged in above reported profit

685.99

Deduct:Stock option compensation expenses determined under

678.99

fair value method (black scholes model)

Mr P D Narang

Group Director - Corp.Affairs

781973

Mr Sunil Duggal

Chief Executive Officer

773559

Mr Charanjit Mohan

Executive Director-Operations

370498

Mr V S Sitaram

Executive Director-CCD

260416

Mr Nitin Ghadiyar

Executive Director-CHD

324718

Mr N Venkatakrishnan

Executive VP - Commercial

221112

Mr Jude Magima

Executive VP - CPPD

286887

Mr A Sudhakar

Executive VP - Human Resources

221112

Mr S Raghunandan

Executive VP - Sales (CCD)

280438

Mr Devender Garg

Executive VP - Marketing (CCD)

280438

Mr Rajan Varma

Chief Financial Officer

190436

Mr P D Narang

Group Director - Corp.Affairs

781973

received the options

Mr Sunil Duggal

Chief Executive Officer

773559

amounting to 5% or

Mr Charanjit Mohan

Executive Director-Operations

370498

Risk free interest rate

more of options

Mr Nitin Ghadiyar

Executive Director-CHD

324718

Expected life

personnel

ii. Employees who

18908.37

Net profit after tax,as adjusted

18915.37

Impact on profit (i.e.profit would have been lower by)

13.

Earning per share (Rs.)

Basic

Diluted

As reported

3.30

3.27

As adjusted

3.30

3.27

Impact on EPS

0.0001

Weighted average exercise price (per option)

0.0001
Re.1

Weighted average fair value of per option:

14.

(per intrinsic value method)

Rs.110.73

(per black scholes model)

Rs.110.47

The fair value of each option is estimated using the Black Scholes model after applying the following weighted average assumptions:5.84
1 to 5 years

granted during

Mr Jude Magima

Executive VP - CPPD

286887

Expected volatility (%)

2.04

that year:

Mr S Raghunandan

Executive VP - Sales (CCD)

280438

Expected Dividend (%)

250

Mr Devender Garg

Executive VP - Marketing (CCD)

280438

Price of underlying shares in the market at the time of option grant

Rs.111.73

Annexure '5'
Statement of particulars of employees pursuant to the provisions of Section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules,1975 and forming part of the Directors' Report for the year
ended 31st March,2006
Name

Designation/
Nature of Duties

Qualifications

Experience
(in yrs)

Remuneration

Date of
Appointment

Age
(in yrs)

Particulars of Last
employment

Ananthanarayan S.

Business Head - UK and Europe

M Sc,MMS

23

6,722,650

11/01/2004

47

General Manager ,Dabur International Limited

Bhaumik Asim (*)

Unit Head - Uttranchal

M Sc,M Phil.

18

2,250,728

04/25/2005

44

Factory Manager,Britannia Industries Limited

Bhujbal Dilip

Senior General Manager - S&M (Consumer Health Division)

B Sc,MBA

29

2,827,177

04/01/2002

52

General Manager,Weikfield International (UAE) Ltd

Burman Amit (*)

Director

Graduate in Business Admn.(USA)

13

335,151

12/09/1997

37

Project Manager,Dabur Nepal Private Limited

Burman Chetan (*)

Dy.General Manager - Sales & Mktg.

BBA

10

233,867

01/02/1996

34

--

Burman Mohit (*)

General Manager - Sales & Mktg.

Graduate in Business Admn.(USA)

13

269,667

12/09/1997

37

Executive Director,Dabur Finance Limited

Burman Pradip

Director

B.Sc.(Mech.Engg.),MIT (USA)

39

9,218,488

11/02/2002

63

Director,The Printers House Private Limited

Burman Vivek Chand

Chairman

B.Sc.in Business Admn.(USA)

42

8,864,000

01/07/1963

69

Managing Director,Dabur (Dr.S.K.Burman) Private Limited

Das Arabind (*)

Additional General Manager - Operations

B Tech,M Tech

22

2,361,992

05/16/2002

45

Factory Manager,Hindustan Lever Limited

10

Deshpande S.W.

Head of Manufacturing

BE,PGDM

34

4,556,596

04/01/2005

56

Executive Director - Production and Operations,Balsara Home Products Limited

11

Duggal Sunil

Chief Executive Officer

BE(H),PGDBM

25

12,202,290

05/20/1995

49

All India Sales Operations Manager,Pepsi Foods Limited

12

Garg Devendra

Executive Vice President - Marketing (Consumer Care Division)

B Sc,PGDM

18

4,113,661

12/03/1993

41

Sales Operation Manager,Pepsi Foods Limited

13

Garg Rajiv

Senior General Manager - Projects

B Sc.- Engg.

33

2,950,196

07/31/1993

57

Dy General Manager (Engg),Vam Organics Chemicals Limited

14

Ghadiyar Nitin

Executive Director - Consumer Health Division

BA (Eco & Stats),MMS

27

6,360,843

26/10/2004

48

President and CEO ,Morepen Laboratories Limited

15

Ghosh P.C.(*)

General Manager - Operations

B Sc.- Engg.

34

1,234,295

10/01/2002

54

Factory Manager,Hindustan Lever Limited

16

Governor Rusi (*)

Head - Corporate QA

B Tech,ME

33

1,103,627

18/12/2002

56

Head Development - Regional Innovation Center,Hindustan Lever Limited

17

Guha Sujit (*)

General Manager - Supply Chain

B Tech,PGDM

18

1,473,708

09/01/2005

40

Head - Supply Chain,Apollo Tyres Limited

18

Gunawant Deepika

Manager - Regulatory

BAMS ,MD (Ayurveda)

21

4,033,590

07/01/2004

45

ACGB

19

Krishnan V.

Head - Talent Management

B Sc.- Engg.,MBA

20

3,119,367

04/22/2004

42

Director - Corporate HR,Whirlpool of India Limited

20

Magima Jude

Executive Vice President - Supply Management

MA (Eco)

21

4,166,154

02/25/2002

42

General Manager - Materials,Marico Industries Limited

21

Mahmood Naeem

Sales Manager -UK

BBA

11

2,392,750

03/08/2004

34

Regional Sales Manager ,Harwin Plc

22

Mohan Charanjit

Executive Director - Operations

BE

32

7,887,426

07/26/1999

52

General Manager - Technical,Hindustan Lever Limited

23

Narang P.D.

Group Director - Corporate Affairs

B Com,CA,MIIA,CS

30

12,315,906

07/01/1983

52

Management Accountant,Dabur (Dr S K Burman) Private Limited

24

Raghunandan S.

Executive Vice President - Sales (Consumer Care Division)

BE,PGDM

17

4,301,846

06/05/2002

41

Vice President - Sales & Distribution,Home Trade

25

Sitaram V.S.(*)

Executive Director - Consumer Care Division

B Tech,PGDM

25

1,558,705

01/18/2006

48

Vice President - Strategy,Unilever UK

26

Sudhakar A.

Executive Vice President - Human Resources

MSc.,MA (Social Work),LLB,PGDPM

30

3,999,977

09/17/2001

55

Vice President - HR,Owens Brockway

27

Varma Rajan

Chief Financial Officer

B Com (Hons),CA

33

5,063,025

11/01/2000

56

Vice President & CFO,Carrier Aircon Limited

28

Venkatakrishnan N.

Executive Vice President - Commercial

B Com (Hons),CS,ICWA,CA

20

4,134,924

02/06/2003

45

Manager - Special Projects,Hindustan Lever Limited

Notes:
1
2
3
4
5

Gross remuneration shown above is subject to tax and comprises salary including arrears, allowances, rent, medical reimbursements, leave travel benefits, provident fund, superannuation fund & gratuity under LIC scheme in terms of actual expenditure incurred by the
Company and commission.
All the employees have adequate experience to discharge the responsibilities assigned to them.
None of the employees mentioned above is a relative of any director except Mr Mohit Burman & Mr Chetan Burman who are the sons of Mr V C Burman & Mr Pradip Burman respectively.
Asterisk against a name indicates that the employee was in service for part of the year.
The nature of employment is on contractual basis except in the case of directors whose terms have been approved by shareholders and relatives of directors whose terms have been approved by the Central Government.

16 AUDITORS REPORT
Dabur India Limited

Annual Report 2005-06

Annexure '6'
FORM - A
(See Rule 2)

Form of Disclosure of particulars with respect to Conservation of Energy

A.

Power and Fuel Consumption

2005-06

2004-05

1. Electricity
a) Purchased
Units

21641998

15724186

Total amount (Rs)

89451865

63388569

4.13

4.03

Rate per unit

b) Own Generation:
i)

Through diesel generator

Units

4158856

4754389

Unit per litre of diesel oil

2.79

3.13

Cost per unit

8.23

6.96

34226465

33112705

Total cost (Rs.)

ii) Through Steam Turbine/Generator
Units

Nil

Nil

Unit per litre of Fuel Oil

Innovative Packaging Concept

 LDM - Container Shape & Pkg.Change
 Vatika Soap
 Gulabari 60 ml - in PET bottle.
 Anmol Cold Cream
 Chyawanshakti
 Fit N Activ

Consistency in Quality of Products.

Better working condition.

Better R&D controls.

Improved Hygiene condition and Safety.
Improve water level & quality in ground water.
To Detect & Control heavy metals in product.

Different appearance / Aesthetic appeal /

Trend setting / Environmental friendly and

better self-life of Products.

3. In case of imported technology (imported during the last 5 years reckoned from the beginning of this financial year)
following information may be furnished:
Not applicable

Annexure '8'
Group for interse transfer of shares under clause 3(e) of Securities & Exchange Board of India (Substantial Acquisition
of Shares and Takeovers) Regulations,1997
1. Mr Ashok Chand Burman

28. Milky Investment & Trading Co.

55. Dabur Foundation

2. Mrs Sudha Burman

29. Poonmudi

56. Chunilal Medical Trust

3. A C Burman HUF

30. Chowdry Associates

57. Mateshwari Dham Trust

Total cost

4. Mr Ratan Chand Burman

31. VIC Enterprise Private Limited

58. Estate of Durga Prasad Makkar Trust

Average rate per tonne (Rs)

5. Mr Vivek Chand Burman

32. Acee Enterprises

59. Amit Laboratories Private Limited

6. Ms Sujata Burman

33. Gyan Enterprises Private Limited

60. Angel Softech Private Limited

7. Mrs Asha Burman

34. Puran Associates Private Limited

61. Barcelona Investment & Trading Co.

Cost/Unit (Rs.)
2. Coal (specify quality and where used)
Quantity (tonnes)

Nil

Nil

3. Furnace Oil
Quantity (tonnes)
Total cost
Average rate per tonne (Rs)

5561

5645

106950230

75822911

8. Mr Amit Burman

35. Ratna Commercial Ent.Pvt.Ltd.

62. Burmans Finvest Limited

19230.82

13431.39

9. Mrs Gauri Tandon

36. Ms Anisha Burman

63. Cavendish Constructions Private Ltd.

10. G C Burman HUF

37. Mrs Meera Burman

64. Miracle Commercial Private Ltd.

11. Mr Pradip Burman

38. Mrs Pooja Burman

65. Prayag Commercial Private Limited

12. Mr Chetan Burman

39. Ms Devika Burman

66. Pasadansa Foods Limited

13. Pradip Burman HUF

40. Mrs Divya Burman

67. Wakarusa Laboratories Private Ltd.

14. Mr Sidharth Burman

41. Master Adhiraj Burman

68. Welltime Gold & Investment Pvt.Ltd.

15. Mrs Indira Burman

42. Ms Diya Burman

69. Dabur Ayurvedic Specialities Ltd.

4. Others/internal generation
HSD
Quantity (Kilo ltr)

239

761

Total cost

5305338

16874078

Average rate per Kilo ltr (Rs)

22176.45

22176.15

LDO
Quantity (Kilo ltr)

B.

New Technology introduced in manufacturing & utilities

Odomos Coils at Jammu

Dust free LDM facility at Nepal

Thermic Fluid Heater for Guar Food grade

Pilot Plant for Soap making in R&D

Ultra tack filtration in Real Juices.

Water Harvesting commence.

Atomic A.Spectrophotometer
installed at DRF (FMCG).

211

356

Total cost

4822504

7910683

16. Dr Anand Burman

43. Mr Sandeep Tandon

70. B R Bee Products Pvt Ltd.

Average rate per Kilo ltr (Rs)

22820.86

22191.41

17. Mrs Minnie Burman

44. Hotels Private Limited

71. Dabur Research Foundation

18. Mr Aditya Burman

45. Dabur Exports Limited

72. Vansh Holdings Pvt Ltd.

Consumption per unit of production

19. V C Burman HUF

46. Dabur Securities Private Limited

73. Dabur Finance Ltd.

The Company is engaged in production of variety of products,hence the figures of consumption per unit of production
are not ascertainable.

20. Mrs Monica Burman

47. Flagship Trading Company

74. Dabur Pharmaceuticals Ltd.

21. Mr Mohit Burman

48. Interx Laboratories Private Limited

75. Excellent (India) Private Limited

22. Mr Gaurav Burman

49. KBC India Private Limited

76. Malhotra Trading Company Pvt.Ltd.

23. Mr Sidharth Burman (HUF)

50. Margdarshak Dabur Invest Corp

77. Moonlight Ranch Private Ltd.

24. Mr Saket Burman

51. Southern Enterprises

78. Shree Investments Limited

Annexure '7'
FORM - B
(See Rule 2)

25. Upvan Farms & Services Pvt.Ltd.

52. Western Enterprises

79. Adbur Pvt Ltd.

Form of Disclosure of particulars with respect to Technology Absorption

26. Sahiwal Inv.& Trading Company

53. Eastern Enterprises

80. Newage Capital Services Pvt Ltd.

Research & Development

27. Maneswari Trading Company

54. Dr S K Burman Charitable Trust

1. Specific area in which R & D carried out by the Company

The R&D caters to a wide range of products that the company has business interests.The activity involves not only development of new
products but also the continuous improvement in process,delivered cost and delivered quality.The areas of expertise cover herbal products,Ayurvedic products,personal care products,fruit juices and other food products,tissue culture,agro- technological research,product registration and validation.
2. Benefits derived as a result of the above R & D
As a result of above R&D efforts,the Company has developed/improved upon the following products:Honitus cough drops: Cough lozenges containing goodness of Honey & Menthol to soothe the irritating cough, sore throat & bad
breath in 3 different flavors namely Ginger,Lemon & menthol.
Mensta: A women health syrup for Menstrual Irregularities & painful menstruation (Dysmenorrhea).
Chyawanshakti:Goodness of Chywanprash with Draksha,Honey in a great tasting product.
New Rheumatil Gel: A blend of age old & time tested ayurvedic oils with potent rubifeicients,counter irritants & essential oils for effective penetration to provide quick & long lasting relief from joint pains.
New Rheumatil Tablet:Guggulu based tablets indicated for providing symptomatic relief from Joints pains,swelling,stiffness in Osteoarthritic pains & Musculoskeltal disorders.
Gokshuradi Guggulu - A classical Ayurvedic formulation which was a need gap for Ayurvedic physicians in edematous conditions of
joints and in urinary disorders.
Simhanad Guggulu - This is a classical Ayurvedic formulation,which is highly recommended for management of Rheuamtoid Arthirits.This has been developed based on the ancient knowledge from Ayurveda Texts.
Somraji Tail - Ayurvedic formulation useful in fungal skin infections.This is also a classical product and was the need gap for the practioners of Ayurveda.
Dabur Anmol Cold Ceam:A low priced product with performance levels of the market leader.
Heavy Metal Testing Facilities: DRF is working on several projects to ensure that all the herbal medicines rolling out should be complying to the standards of Govt. of India as well as of the respective countries where these drugs are being exported.Three AAS equipments have been installed one each in DRF (Sahibabad),Rudrapur (Uttaranchal factory) and in Baddi to ensure fast track analysis.
Product Registration:Dossiers prepared for 47 products covering 9 countries.
Technology Transfer:Oral care and hair oils product technology transferred to Bangladesh,Nepal and Dubai manufacturing locations
3. Future plan of action:
To continue to provide the benefits of ayurvedic healthcare system to masses by continuing R & D efforts through DRF Ayurvedic research
group in the upcoming lifestyle ailments & other niche areas.
4. Expenditure on R&D (2005-06)
a)
Capital
b)
Recurring
c)
Total
d)
Total R&D expenditure as a percentage of Total Turnover
Technology Absorption,Adoption and Innovation
1. Efforts,in brief,made towards technology
absorption,adoption and innovation

Up gradation of manufacturing

Amla Pisthi Mfg.process through
Hamilton Kettles at Katni.

Guar Gum Flakers with latest Technology.

Rs.Nil
Rs.663 lacs
Rs.663 lacs
0.48%

2. Benefits derived as a result of the above efforts

e.g.product improvement,cost reduction,
product development,import substitution etc.

Saving of Rs 3.35 Lacs / Annum from 2 Kettles.

 Improved Hygiene condition.
 Consistency in quality and improved

productivity.

S E C T I O N II

Dabur India Limited

17

ANNUAL REPOR T 2005-06

DABUR INDIA FINANCIALS

18

CONSOLIDATED FINANCIALS 25

FINANCIALS AS PER US GAAP 31

Auditors Report
To the Members of Dabur India Limited,

Rs.in lacs

We have audited the attached Balance Sheet of Dabur India Limited as at 31st March, 2006 and its Profit & Loss
Account and the Cash Flow Statement for the year ended on that date attached thereto. These financial statements
are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

Name of
Statute

Nature of the dues

We conducted our audit in accordance with auditing standards generally accepted in India. These 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 statement. 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.

Sales Tax

Classification of Hajmola Candy

-do-

Non Submission Of CST Form

-do-

Sales Tax on Stock Transfer

-do-

i.

As required by the Companies (AuditorsReport) Order 2003 issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956, we enclose herewith in the annexure a statement of the matter specified therein.
We hereby report that the report on the accounts of Alwar and London branches audited by the branch auditors were received and properly dealt with by us while preparing our report.

ii.

Period to
which the
amount
relates

Forum where
the dispute is
pending

4.88

2002-03

Dy.Commissioner (Appeal)

9.63

2002-03

-do-

28.60

1991-2002

Sales Tax Tribunal

Classification of L.D.M.

89.00

1990-93

High Court

-do-

Classification of L.D.M.

1.44

1993-94

High Court

-do-

Classification of Gulabari

0.74

1999-00

Dy.Commissioner (Appeals)

-do-

Classification of LDM

0.03

2000-01

Dy.Commissioner (Appeals)

-do-

Short payment of VAT

117.63

2001-02

Dy. Commissioner

-do-

Short payment of VAT

120.09

2002-03

Dy. Commissioner

-do-

Short payment of Entry tax

0.57

2002-03

Dy. Commissioner (Appeals)

-do-

Intt. On TOT & Surcharge

2.84

2001-02

Dy. Commissioner (Appeals)

-do-

Intt. On TOT & Surcharge

3.70

2002-03

Dy. Commissioner (Appeals)

-do-

Rejection of branch transfer

0.49

1986-87

High Court

-do-

Check Post Matter

0.45

1997-98

Dy. Commissioner (Appeals)

-do-

Rejection of branch transfer

7.20

1991-92

Dy. Commissioner (Appeals)

-do-

Demand on Excise matter u/s 21

0.43

1998-99

Dy. Commissioner Assessment

-do-

C.S.D. claim rejected.

31.90

2000-01

Tribunal

-do-

CSD claim rejected

9.86

2001-02

Tribunal

-do-

Check Post

0.14

2004-05

Dy.Commissioner Assessment

b) In the case of Profit and Loss Account, of the Profit for the year ended on that date; and

-do-

Check Post

0.37

2004-05

Tribunal

c) In the case of cash flow statement, of the cash flows for the year ended on that date.

-do-

Check Post

0.42

2004-05

Dy.Commissioner Assessment

-do-

Check Post

0.60

2004-05

Dy. Commissiner Assessment

-do-

Excise Information dispute

40.00

2000-01

High Court

-do-

Form 18A disputed

0.45

1999-00

Dy. Commissioner

-do-

Non-filing of Form-F

0.60

1998-99

Dy. Commissioner

-do-

Dispute on Taxability of Coconut Oil

4.47

2001-02

iii. We have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of audit.
iv. In our opinion, proper books of accounts, as required by law have been kept by the Company so far as appears
from our examination of books of accounts.
v.

The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of
accounts.

vi. Balance Sheet and Profit & Loss Account have been prepared in due compliances of Accounting Standards
referred to in sub section (3C) of section 211 of Companies Act, 1956.
vii. On the basis of written representations received from the directors as on 31st March, 2006 and taken on record
by the Board of Directors, we report that none of the directors of the company is disqualified for the Office of
the director within the meaning of section 274 (1) (g) of the Companies Act, 1956.
viii. In our opinion and according to the information and explanations given to us, the said accounts read with
other notes appearing in Schedule P give the information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in conformity with the accounting principles generally
accepted in India.
a)

In the case of Balance Sheet, of the State of Affairs of the company as at 31st March, 2006, and,

For G Basu & Co

Chartered Accountants

S.LAHIRI
Partner, Membership No. 51717

New Delhi
25th April 2006

Annexure to the auditors' report as referred to in para i of the said report of even date.
1 a) The Company has maintained proper records showing full particulars including quantitative details and
situation of fixed assets.
b) The fixed assets have been physically verified by the Management at reasonable intervals. No material discrepancies between book records and the physical inventories have been noticed on such verification.
c) Fixed assets disposed of during the year were not material enough to affect the going concern identity of
the company.

Amount

Income Tax :Income Tax

Demand u/s 263/143(3)

34.80

1998-99

ITAT

-do-

Demand u/s 263/143 (3)

138.87

2002-03

CIT (A) (III)

Excise Duty

Classification of Anmol Coco-nut Oil

514.60

1993-2001

Dy.Commissioner

-do-

Classification of Saunf Ka Ark/ Clove Oil

23.44

1998-2004

Commissioner- Appeals

-do-

Modvat on Cap-ital goods

0.82

1996

Dy.Commissioner

-do-

Modvat on in-puts (57H)

2.42

1998

Tribunal

c) As has been stated to us, due dates of realization of principal due of existing loans are yet to commence.

-do-

Hajmola Candy

113.07

2004-05

Commissioner Appeals/High Court

d) The company has not taken any loan, secured or unsecured from companies, firms and other parties covered in register under section 301 of the Act maintained by the company.

-do-

Classification on Animal Feed supplement

174.75

1994-2003

Commissioner-Appeals

-do-

Post manufactu-ring expenses

0.30

2002-2003

Tribunal

-do-

Post manufacuuring expenses

0.38

2004-05

Commissioner

-do-

Classification of Janma Ghunti

388.96

1994-2000

Commissioner

2 a) The inventories have been physically verified at reasonable intervals by the management.
b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.
c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks
and book records were not material and have been properly dealt with in the books of accounts.
3 a) The company has granted unsecured advances of the nature of loan aggregating Rs.3000 lacs to two body
corporates covered in register maintained under section 301 of the act. However, total number of advances
at any point of time during the year was three involving maximum due of Rs. 3500 lacs.
b) Terms and conditions of the loans are prima-facie not prejudicial to the interest of the company.

In our opinion and according to the information and explanations given to us there is an adequate internal
control system commensurate with the size of the company and the nature of its business for purchase of
inventory and fixed assets and on the sale of goods. During the course of our audit no major weakness has
been noticed in the internal controls. We have not observed any failure on the part of the company to correct major weakness in internal control system.

Excise Duty :-

-do-

Import of Honey

1.78

2000

Commissioner - Appeals

5 a) Based on audit procedures applied by us and according to the information and explanations provided by
the management, we are of the opinion that contracts or arrangements referred to in section 301 of the Act
have been entered in the register maintained under that section.

-do-

Removal of Input

5.91

2000-01

Commissioner-Appeals

-do-

MOT charges

0.23

2003

Tribunal

b) According to information and explanations given to us, the transactions of purchase and sale of goods/services made in pursuance of such contracts or arrangements have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.

-do-

Post Manufacturing expenses

67.55

2000-03

Commissioner-Appeals

-do-

Post manufacturing expenses

42.02

2000-03

Commissioner-Appeals

In our opinion and according to information and explanations given to us, the company has complied
with the provisions of section 58A and 58AA or any other relevant provision of the Act and rules framed
thereunder where applicable. Neither CLB nor RBI or National Company Law Tribunal or any other
Tribunal/court has passed any adverse order against company.

-do-

Valuation of Paclitaxel

963.99

1995-2000

Settlement Commission

-do-

Valuation of Docetaxel/Paclitaxel

498.34

1997-2003

Tribunal

In our opinion the company has an internal audit system commensurate with its size and nature
of its business.

On the basis of records produced we are of the opinion that prima facie cost records and accounts prescribed by the Central Government under section 209 (i) (d) of the Companies Act, 1956 in respect of
products of the company covered under the rules under said section have been maintained. However
we are neither required to carry out nor have carried out any detailed examination of such accounts and
records.

9 a) According to information and explanations given to us, the company is depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance , income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues to the extent applicable to it.
b) There is no disputed due on account of wealth tax, service tax and cess. Dues on account of sales tax/
income tax/ excise duty disputed by the company and not being paid, vis--vis forums where such disputes are pending are mentioned below.

Rs. in lacs
Name of
Statute

Nature of the dues

Amount

Period to
which the
amount
relates

Forum where
the dispute is
pending

Sales Tax :Sales Tax

Demand on Hajmola Candy

27.78

1996-97

Sales Tax Tribunal

-do-

-do-

25.88

1997-98

Dy. Commissioner (Appeal)

-do-

-do-

27.05

1998-99

-do-

-do-

-do-

70.35

1999-2000

-do-

-do-

Classification of Hajmola Candy

12.36

2000-01

Dy. Commissioner (Appeal)

10

Based on the audit procedures and on the information and explanations given by the management, we are
of the opinion that the company has not defaulted in repayment of dues to any financial institution, bank
or debenture holder.

11

The company has not granted any loan or advance secured by pledge of share, debenture or other security.

12

Based on our examination of the records and evaluations of the related internal controls, we are of the opinion that proper records have been maintained of the transactions and contracts relating to shares, securities, debentures and other investments dealt in by the company and timely entries have been made in the
records. We also report that the company has held the shares, securities, debentures and other investments
in its own name except for those pending transfer in Companys name.

13

The company has given guarantees for loans taken by others from banks or financial institutions. The terms
and conditions there-of are not prima facie prejudicial to the interest of the company.

14

The term loans taken by the company have been applied for the purpose for which they were raised.

15

No fund raised on short term basis has been used by the company for long term investment.

16

The company has made preferential allotment of shares under their ESOP scheme to the parties covered in
the register maintained under section 301 of the Companies Act, 1956 during the year. The price at which
these shares were issued are not prima-facie prejudicial to the interest of the company.

17

The Company has not issued any secured debenture during the year.

18

The Company has not raised any fund through public issue during the year

19

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.

20

Other clauses of the order are not applicable to the Company.

For G Basu & Co

Chartered Accountants

S.LAHIRI
Partner, Membership No. 51717

New Delhi
25th April 2006

18 FINANCIAL STATEMENTS
Dabur India Limited

Annual Report 2005-06

Balance Sheet as at 31st March,2006

Profit and Loss Account for the year ended 31st March,2006

Schedule

As at 31st
March,2006
(Rs.in lacs)

As at 31st
March,2005
(Rs.in lacs)

Income :

Sources of funds :

B) Reserves and Surplus

For the year ended

31st March,2006
(Rs.in lacs)

For the year ended

31st March,2005
(Rs.in lacs)

136,968.29

126,871.51

535.02

1,150.32

137,503.31

128,021.83

57,511.22

54,365.36

Sales Less Returns

Shareholders' funds:
A) Share Capital

Schedule

Other Income
A
B

5,733.03
39,053.84

2,864.20
44,786.87

30,943.15

Total Income
33,807.35

Expenditure :
Cost of Materials

Loan Funds:

2,689.48

4,248.86

A) Secured Loans

1,923.23

1,570.38

Manufacturing Expenses

3,745.55

2,919.46

B) Unsecured Loans

134.29

3,292.60

Payments to and Provisions for Employees

9,830.78

8,208.56

Selling and Administrative Expenses

39,394.05

39,488.95

Financial Expenses

565.87

429.57

Miscellaneous Expenditure Written Off

IB

426.24

149.33

1,904.59

1,709.92

116,067.78

111,520.01

21,435.53

16,501.82

1,808.11

1,300.00

400.00

399.83

Deferred Tax Liability

Excise Duty

EB

Total

2,057.52

4,862.98

1,671.50

1,277.51

48,515.89

39,947.84

Depreciation
Total Expenditure

Application of Funds :

Balance Being Operating Net Profit before Taxation

Fixed Assets :
(a) Gross Block

Provision For Taxation

F

(b) Less :Depreciation

34,129.37

32,672.44

14,245.69

13,511.83

(c) Net Block

Investments

Deferred Tax Assets

EB

Current Assets,Loans & Advances:

(a) Inventories

27,507.77

27,094.25
137.75

370.25

0.00

18,857.17

14,801.99

51.20

0.00

Net Profit after Taxation and Extraordinary Item

18,908.37

14,801.99

Balance Brought Forward

12,522.97

8,112.18

28.61

0.00

7.62

(5.30)

Net Profit after Taxation & before Extraordinary Items

Extraordinary Item (Profit/(Loss) on Long Term Tarde Investments

Provision for Taxation of earlier years written back

Provision for Taxation for earlier year
12,802.57

(b) Sundry Debtors

2,694.25

4,928.27

(c) Cash & Bank Balances

3,804.41

1,065.38

Less:Current Liabilities & Provisions

Fringe Benefit
19,160.61

11,560.90

(d) Loans & Advances

Deferred

19,883.68

131.74

Current

10,376.66

6,400.96

28,436.22

25,197.18

Transferred from Capital Redemption Reserve

56.93

0.00

Transferred from Investment Allowance Reserve

0.00

82.58

Transferred from Investment Deposit Reserve

0.00

182.50

31,509.26

23,173.94

Interim Dividend

4,299.29

2,862.89

Proposed Final Dividend

Appropriations

EA

5,733.03

4,296.30

Corporate Tax on Interim Dividend

602.97

374.14

Corporate Tax on Proposed Dividend

804.06

602.56

19.27

0.00

Transferred to Capital Reserve

(a) Liabilities

19,342.06

23,838.05

(b) Provisions

11,388.94

8,384.94

30,731.00

32,222.99

Transferred to General Reserve

2,550.00

2,515.08

17,500.64

12,522.97

31,509.26

23,173.94

Basic

3.30

2.58

Diluted

3.27

2.57

Basic

573,149,195

572,839,426

Diluted

577,524,999

575,809,845

Balance Carried over to Balance Sheet

Earning per share ( In Rs.) ( Face Value Re 1/- each)

Net Current Assets

Miscellaneous Expenditure

IA

(2,294.78)

(7,025.81)

3,287.48

581.04

No of Shares

(To the extent not written off or adjusted)

Notes to Accounts

Total

48,515.89

39,947.84

Notes to Accounts

Statement of Cash Flow ( Pursuant to AS-3 issued by ICAI)

Rs.Lacs
For the year ended
31st March,2006

Rs.Lacs

For the year ended

31st March,2005

A.Cash Flow from Operating Activities

For the year ended

31st March,2006
Corporate Tax On Dividend

Net Profit Before Tax And

21,435.53

16,501.82

Extraordinary Items

Cash Used(-)/(+)Generated for Operating Activities (A)

Add:

B.Cash Flow from Investing Activities

Depreciation

1,904.59

Loss on Sale of Fixed Assets

(69.33)

4.18

Miscellenous Expenditure written off

426.24

149.34

Miscellenous Expenditure written off

( Included In Director Remuneration)

369.67

195.91

Interest

Purchase Of Fixed Assets

1,709.92

Sale Of Fixed Assets

Purchases of Investment Including
Investment in Subsidiaries
Sale of Investments

565.87

Dividend Received

429.57
3,197.03

2,488.92

24,632.57

18,990.74

Cash Used(-)/(+)Generated for Investing Activities (B)

0.48

160.13

Repayment(-)/Proceeds (+) of Long Term Secured Liabilities

Profit On Sale of Investment

96.09

407.38

Repayment(-)/Proceeds(+) From Short Term Loans

Profit on Sale of Assets

69.33

0.00

Dividend Received

Operating Profit Before Working Capital Changes

Repayment (-)/Proceeds(+) from Deposits

165.90

567.51

24,466.67

18,423.23

227.56

(6,279.88)

(152,824.68)

6,067.63

143,260.48

0.48

160.13

(2,750.83)

(14,784.45)

2.31

1.71

(253.87)

(330.49)

606.72

(8.50)

(2,532.61)

(86.01)

Increase/(Decrease) in Debtors

(2,234.83)

768.42

4,552.00

(7,498.63)

(8,570.82)

(6,855.40)

(13,944.63)

(6,037.66)

Net Increase(+)/Decrease (-) in Cash and

Cash Equivalents (A+B+C)

2,740.39

(123.34)

1,075.51

(4,879.57)

Cash And Cash Equivalents Opening Balance

1,065.38

1,188.72

23,391.16

23,302.80

Cash And Cash Equivalents Closing Balance

3,804.41

1,065.38

563.68

439.34

2,186.09

1,277.09

As per our report of even date attached

For Dabur India Ltd.

For G.Basu & Co.

Chartered Accountants

V.C.Burman
P.D.Narang
Sunil Duggal
A.K.Jain

New Delhi
25th April 2006

(5,607.94)

785.73

Payment of other Advances

1,850.64

S.Lahiri
Partner

(3,324.80)

25.93

(1,241.67)

Tax Paid

20,698.77

1,215.10

Increase/(Decrease) in Inventories

Interest Paid

19,434.49

(44.97)

Cash Used(-)/+(Generated) in Financing Activities (C)

Cash Generated from Operating Activities

2,604.03

(3,151.40)

Payment Of Dividend

Increase/(Decrease) in Working Capital

3,955.31

Repayment(-)/Proceeds(+) from Other Unsecured Loans

Working Capital Changes:

Decrease/(Increase) in Trade Payables

887.60

1,205.54

C.Cash Flow from Financing Activities

Proceeds from Share Capital & Premium

Less:

For the year ended

31st March,2005

Chairman
Director
Director
Addl.General Manager (Finance)
& Company Secretary

FINANCIAL STATEMENTS 19
Annual Report 2005-06

Dabur India Limited

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
As at 31st
March,2006
(Rs.in lacs)

As at 31st
March,2005
(Rs.in lacs)

As at 31st
March,2006
(Rs.in lacs)

As at 31st
March,2005
(Rs.in lacs)

1,168.01

561.29

1,923.23

1,570.38

9.00

15.92

125.29

470.75

Commercial papers

2,000.00

External commercial borrowings -ABN Amro Bank NV

805.93

134.29

3,292.60

Schedule A - Share Capital

Short Term Loans - from Banks :

Authorised :

Secured By :

1250000000

Equity Shares of Re.1 Each

12,500.00

5,000.00

(Previous year 500000000 equity shares of Re.1 )

12,500.00

5,000.00

Equity shares of Re.1 each fully called up

5,733.03

2,864.20

(Previous year-286419713 equity shares of Re.1)

5,733.03

2,864.20

Issued and subscribed:

573302784

Notes :
1. Authorized share capital during the year increased by Rs.7500 lacs.
2. Equity shares issued & subscribed includes following issues for consideration
other than cash :A) 4548000 equity shares of Rs.10 each fully paid up were issued pursuant
to the scheme of amalgamation (without payment being recieved in cash).
B) 18202080 equity shares of Rs.10 each fully paid up were issued as bonus
shares by way of capitalisation of free reserves to shareholders in the ratio
of 4 equity shares for every share held as on 1st december,1993.
C) During the year the company has issued 286651392 equity shares of
Re.1 each shares by way of alloting one bonus share against each one
share held by a shareholder.
3 Pursuant to section 94 of Companies Act 1956,equity shares of Rs.10 were
sub-divided in equity shares of Re.1/- each on Dec 15,2000 by way of issue of
10 shares against each share formerly held by a shareholder.
4 231679 ( previous year170661) equity shares of Re.1 each were issued during
the year 2005-06 under employees stock option scheme".
5. 6691484 ( previous year 1534740) equity shares of Re.1 each are outstanding
under "employee stock option scheme" as on 31st March 2006

Hypothecation of inventories and book debts ranking pari-passu

among Punjab National Bank ,Standard Chartered Bank Ltd,
Hongkong & Shanghai Banking Corporation Ltd.,State Bank of
India,ABN Amro Bank,IDBI Bank Ltd,United Bank Of India,
Citi Bank NA and HDFC Bank Ltd
Total

Schedule D - Unsecured Loans

Security deposit from dealers and others
Other Loans :
Book overdraft of current account with banks

Total
Notes:
1. Maximum amount of commercial papers outstanding during the period
Rs.5000 (previous year Rs.2000)
2. External commercial borrowings repayble within a year Rs nil
(previous year Rs.805.93)

Schedule EA - Current Liabilities & Provisions

Schedule B- Reserves and Surplus

A.Current Liabilities :

Capital Reserve :
As per last account

1,628.36

Add :Transferred from profit & loss account

1,628.36

19.27

1,647.63

Share Premium Account

5,758.08

5,665.90

Less :Allotment of bonus shares

2,866.51

2,891.57

5,665.90

Add:Premium on issue of shares

159.88

3,051.45

92.18

1,628.36

Acceptance

4,933.26

9388.39

Amount due to SSI units (goods)

1,037.21

873.87

Creditors for goods

2,574.26

2731.76

10,594.82

10627.95

51.24

53.71

4.33

2.14

12.65

47.24

121.19

96.42

Unpaid matured public deposit

7.53

10.69

Interest accured on public deposit

5.57

5.88

Creditors for expenses and other liabilities

Advances from customers
5,758.08

Interest accrued but not due on loans

Deposits - others

Capital Redemption Reserve :

As per last account

56.93

Less :Transferred to profit & loss account

56.93

56.93

Unpaid dividend

0.00

General Reserve :
As per last account

10,061.14

Add :Transferred from profit & loss account

7,546.06

2,550.00

12,611.14

Profit and Loss Account

Investor Education & Protection Fund to be credited by :

2,515.08

17,500.64

19,342.06

10,061.14
12,522.98

B.Provisions :
For dividend (proposed) - final

Employee Stock Option Scheme Outstanding:

As per last account
Add:Addition during the year

Less:Deletion during the year

915.66

728.81

3,503.78

279.03

4,419.44

1,007.84

176.46

4,242.98

Total

92.18

39,053.84

915.66
30,943.15

5,733.03

4,296.30

For corporate tax on proposed final dividend

804.06

602.56

For staff welfare

480.00

360.00

For leave salary

18.50

208.09

Brought forward

2,917.99

2,171.59

Provision for the year

2,178.36

1,300.00

5,096.35

3,471.59

743.00

553.60

For taxation :

Schedule C - Secured Loans

Adjusted during year
Term Loans :

4,353.35

PICUP under trade tax loan scheme

755.22

1,009.09

23,838.05

Total

11,388.94

2,917.99

8,384.94

30,731.00

32,222.99

1671.50

1277.51

Secured by:
A) Loan amounting to Rs.1338.72 ( in term of original agreement)
First charge on the movable and immovable assets inlcuding plant
and machinery of the Company ( present and future) situated at
plot no.5/1 and 5/13,site IV,industrial area,Sahibabad,Ghaziabad

Schedule EB - Deferred Tax Liabilites (Net)

B) Loan amounting to Rs.125.00 ( in term of original agreement)

First charge on immovable assets ( present and future) of the
Company situated at plot No.5/1 and 5/13,site IV,
industrial area,Sahibabad,Ghaziabad

Less:Deferred tax assets :

Deferred tax liaibility :

Depreciation

VRS Payment

74.55

Other disallowances under section 43B of income tax act 1961

57.19

6.01
131.74

Total

Second charge on movable assets including plant and machinery

of the Company (present and future) located at plot no.22 site IV,
industrial area,Sahibabad,Ghaziabad

131.74

137.75

1539.76

1139.76

Schedule F-Fixed Assets

Gross Block

Depreciation Block

Net Block

As At
01.04.2005

Additions
2005-2006

Transfer/
Adjustment
2005-2006

As at
31.03.2006

Upto
01.04.2005

For the period

2005-2006

Adjustment
2005-2006

Upto
31.03.2006

As at
31.03.2006

As at
31.03.2005

Leasehold Land

748.33

6.70

755.03

35.80

8.79

44.59

710.44

712.53

Freehold Land

291.38

3.64

60.73

234.29

234.29

291.38

9,495.14

557.72

10,052.86

2,624.41

288.15

2,912.56

7,140.30

6,870.73

14,318.11

1,527.33

1,304.59

14,540.85

7,231.48

933.31

772.67

7,392.12

7,148.73

7,086.63

2,406.56

508.14

279.77

2,634.93

1,701.87

246.16

268.82

1,679.21

955.72

704.69

772.07

189.22

185.93

775.36

347.72

134.05

107.43

374.34

401.02

424.35

Furniture Fixtures

2,618.58

151.28

36.86

2,733.00

1,330.85

170.46

21.82

1,479.49

1,253.51

1,287.73

Patents

1,095.97

1,095.97

239.70

123.67

363.37

732.60

856.27

0.22

0.22

0.22

0.22

926.08

1,502.30

1,121.52

1,306.86

1,306.86

926.08

Total

32,672.44

4,446.33

2,989.40

34,129.37

13,511.83

1,904.59

1,170.74

14,245.69

19,883.69

19,160.61

Previous Year

27,450.18

9,043.48

3,821.22

32,672.44

11,955.85

1,709.92

153.94

13,511.83

19,160.61

15,494.33

Building,Roads & Culverts

Plant & Machinery
Computer
Vehicles

Livestock
Capital Work in Progress

Note:Capital work in progress includes advance against capital goods Rs.1075.84 (previous year Rs.588.47).

20 FINANCIAL STATEMENTS
Dabur India Limited

Annual Report 2005-06

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
Number

As at 31st
March,2006
(Rs.in lacs)

As at 31st
March,2005
(Rs.in lacs)
C. Share Application money pending allotment
(Subscription of 600000 equity shares of Dabur International Ltd
of Pound 1 each at a price of Rs.363 per share INC)

Schedule G - Investments
A

Current investments
Quoted-other than trade

Total

Alliance Mutual Fund

(Purchased during the year) Units 19361076.60
(Sold during the year) Units 19361076.60

ABN Mutual Fund

(Purchased during the year) Units 54525669.05
(Sold during the year) Units 71784911.1

(17,259,242.05)

0.00

1,775.00

Birla Mutual Fund

(Purchased during the year) Units 11325215.95
(Sold during the year) Units 11325215.95

0.00

0.00

CHOLA Liquid Fund - Institutional Plus-Growth

(Purchased during the year) Units 40193243.81
(Sold during the year) Units 42097339.89

6,121,645.75
(8,025,741.82)

871.00

1,080.00

DSP Mutual Fund

(Purchased during the year) Units 5619790.69
(Sold during the year) Units 5519790.69

100,000.00

1,000.00

0.00

Deutsche Bank Mutual Fund

(Purchased during the year) Units 3590135.74
(Sold during the year) Units 3590135.74

0.00

0.00

HSBC Mutual Fund

(Purchased during the year) Units 1663874.52
(Sold during the year) Units 1663874.52

0.00

0.00

JM Floter Fund- S T P Growth

(Purchased during the year) Units 14021759.21
(Sold during the year) Units 14021759.21

0.00

0.00

Kotak Mahindra Mutual Fund

(Purchased during the year) Units 22070258.03
(Sold during the year) Units 9909963.24

12,160,294.80

0.00

1,716.00

(5,069,567.91)

11 Prudential Mutual Fund

(Purchased during the year) Units 11673863.38
(Sold during the year) Units 7163385.54

4,510,477.84

12 Reliance Liquid Fund

(Purchased during the year) Units 14965422.50
(Sold during the year) Units 14965422.50

13 Sahara Mutual Fund

(Purchased during the year) Units 22583566.95
(Sold during the year) Units 30979167.65

(8,395,600.71)

0.00

0.00

Sanat Products Ltd

Dabon International Pvt Limited

(13230000 shares sold during the year)

Green Valley Products Pvt.Ltd

(65000 shares sold during the year)

500.00

0.00

0.00

27,507.77

27,094.25

23,442.97
4,091.79
4,342.80

22,712.46
4,381.79
4,617.80

3,464.00

4,383.16

Packing Materials,Stores And Spares

2,059.37

1,957.67

Stock In Process

794.39

614.82

Finished Goods

5,243.14

5,846.92

Considered Good

Less :Provision For Doubtful Debts

12,802.57

0.00

23.62

219.51

119.89

11.98

143.51

231.49

119.89

11.98

23.62

219.51

2,670.63

2,694.25

4,708.76

4,928.27

Cash And Bank Balances :

Cash In Hand

28.63

18.90

3,661.55

950.23

49.71

38.09

61.32

49.73

Postal Savings Bank Accounts(Deposited With Excise Authority)

0.95

0.95

Remittance-In-Transit & Cheques-In-Hand

2.25

Balances With Scheduled Banks

In Current Accounts ( Includes Rs.121.19 In Unpaid Dividend Account ;
Previous Year Rs.96.49)
In Fixed Deposit Accounts

0.00

0.00

( Pledged With Government Authorities Rs 10 Previous Year Rs.10)

Balance With Non Scheduled Banks

0.00

0.00

In Current Accounts
In Fixed Deposit Accounts

0.00

0.00

3,804.41

7.48

18,059.56

1,065.38
18,796.22

B. Loans and advances (unsecured,considered good,unless stated otherwise)

Loans & Advances To Subsidiaries
479,400.00

4.79

4.79

50,000.00

105.00

105.00

270,000.00

27.00

1,350.00

0.00

6.50

3,000.00

758.39

901.04

Advance Payment Of Tax

4,353.53

2,910.44

Advances to suppliers (including due from subsidiaries

Rs.142.14 previous year Rs.72.64)

1,326.52

847.15

Advances To Employees

158.16

170.53

Balance With Excise Authorities

434.39

990.91

Other advances recoverable in cash or in kind or for value to be received

345.67

Security Deposit With Various Authorities(Including Deposit

With Govt.Authorities Rs.264.54 Previous Year Rs.435.89)

Total (A+B)
161.06

Dabur Nepal Private Limited

(638520 shares sold during the year)

0.00

699.07

Dabur Foods Limited

(1000000 Shares allotted during the year)

20,000,000.00

2,000.00

1,000.00

Dabur International Limited

1,000,000.00

2,287.50

2,287.50

Balsara Hygiene Products Limited

(3862100 Shares purchased during the year)

3,862,100.00

11,650.73

0.00

Balsara Home Products Limited

(10000000 Shares allotted during the year and
2290711 shares purchased during the year)
(759300 shares held by Balsara Hygeine Products Ltd.)

12,290,711.00

3,404.55

0.00

Besta Cosmetics Limited

(431800 Shares purchased during the year)
[449000 shares held by Balsara Hygeine Products Ltd]
(19200 shares held by Balsara Home products Ltd)

431,800.00

Notes
1. In the opinion of board,the current assets,loans and advances have realizable
value at least equal to the amount at which they are stated.
2. Loans and advances
A. Debts due from director/officer of the company
B. Maximum amount due from director/office of the company
At any time during the year
3. Additional disclosure as per clause 32 of listing agreement
A. Loans and advances to subsidiaries
Dabur Foods Ltd; amount outstanding
Maximum outstanding during the year
Dabur International Ltd; amount outstanding
Maximum outstanding during the year
Balsara Home Products Ltd
Maximum outstanding during the year
B. Loans and advances to associates

580.89
10,376.66

6,400.96

28,436.22

25,197.18

0.00
0.00

0.00
0.00

300.00
300.00
2,700.00
2,700.00
0.00
500.00
0.00

0.00
0.00
0.00
0.00
0.00
0.00
0.00

Schedule IA - Miscellaneous Expenditure

(To the extent not written off or adjusted)
1,790.01

0.00

Technical knowhow fees paid

65.62

Less:Amortised during the year

18.75

84.37
46.87

18.75

65.62

Deferred employee compensation under ESOP

Opening balance

IV) Unquoted Equity Shares - Other than Trade

0.00

Raw Materials

Other Debts (Considered Good)

1,000.00

0.00

Capexil (Agencies) Limited

26.99

11,560.90

0.00

27,094.25

Sundry Debtors (Unsecured) :

Dabur Overseas Limited

(50000 shares sold during the year)

Commerce Centre Cooperative Housing Society Limited

27,534.76

Inventories

522.00

17,103.15

A. Current Assets :

0.00

III) Unquoted Equity Shares - Trade Investments in

Subsidiary Companies

2,178.00

Schedule H -Current Assets,Loans and Advances

Considered Doubtful

16 TATA Mutual Fund

(Purchased during the year) Units 4635609.87
(Sold during the year) Units 4635609.87

B. Long term investement

I) Quoted-Equity Shares- Other than Trade
1
Dabur Pharma Ltd
II) Unquoted -Equity Shares - Trade Investments

0.00

Notes :
Aggregate Book Value of Unquoted Investments
Aggregate Book Value of Quoted Investments
Aggregate Market Value of Quoted Investments (Based on 31st March 2006 Quotes)
Notes :
1 All Equity shares are fully paid up.
2 Provision for dimunition in long term trade investment pertains to investment in Dabon
International Pvt.Ltd.
3 Disclosure of shareholding in subsidiaries/step down subsidiaries is as follows:
Name of Subsidiaries
% Stake
Dabur International Ltd
100% held by Dabur India Limited
Dabur Foods Ltd.
100% held by Dabur India Limited
Pasadensa Foods Ltd
100% held by Dabur Foods Ltd
African Consumercare Ltd
90% held by Dabur International Ltd
Dabur Overseas Ltd
100% held by Dabur International Ltd
Asian Consumer Care Pvt Ltd
76% held by Dabur International Ltd
Besta Cosmetics Ltd
2.13% held by Balsara Home Products Ltd
49.89% held by Balsara Hygeine Products Ltd
47.98% held by Dabur India Ltd
Balsara Hygeine Products Ltd
99.52% held by Dabur India Ltd
Balsara Home Products Ltd
94.18% held by Dabur India Ltd
5.82% held by Balsara Hygeine Products Ltd
Dabur Egypt Ltd.
24% held by Dabur International Ltd
76% held by Dabur Overseas Ltd
Weikfield International (UAE) Ltd
38.41% held by Dabur International Ltd
Dabur Nepal Pvt.Ltd
97.5% held by Dabur International Ltd

As at 31st
March,2005
(Rs.in lacs)

Debts Outstanding For A Period Exceeding Six Months :

15 Sundram Mutual Fund

(Purchased during the year) Units 19160961.65
(Sold during the year) Units 19160961.65

17 UTI Mutual Fund

(Purchased during the year) Units 246888.06
(Sold during the year) Units 246888.06

Less provision for diminution in long term trade investment

Total

10 Principal Mutual Fund

(Purchased during the year) Units 131782808.67
(Sold during the year) Units 136852376.59

14 SCB Mutual Fund

(Purchased during the year) Units 5709112.89
(Sold during the year) Units 5709112.89

0.00

As at 31st
March,2006
(Rs.in lacs)

15.00

0.02

0.02

3.00

0.01

0.01

Dabur Employees Consumers Co-op Stores Limited

250.00

0.03

0.03

Dabur Employees Cooperative Credit Society Ltd

650.00

0.07

0.07

Co-operative Stores Limited,Super Bazar

500.00

0.05

0.05

Addition during the year

Less:Cancelled during the year

Less:Amortised related to subsidiary

Less:Amortised during the year
Total

515.42

575.33

3503.78

279.03

1.43

0.00

4017.77

854.36

91.17

685.99

3240.61
3287.48

338.94

515.42
581.04

FINANCIAL STATEMENTS 21
Annual Report 2005-06

Dabur India Limited

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
For the year ended
31st March,2006
(Rs.in lacs)

For the year ended

31st March,2005
(Rs.in lacs)

For the year ended

31st March,2006
(Rs.in lacs)

Schedule J- Sales and Other Income

Reimbursement Of Expenses

A. Sales :

Provident Fund And Certificates

Domestic Sales Less Returns

132,454.64

Export Sales

122,023.32

4,513.65

4,848.19

136,968.29

126,871.51

5.85

240.98
540.97

Provsion For Doubtful Debts

108.36

1.53

4.18

Rent Realised
( Tax Deducted At Source Rs.Nil Previous Year Rs.Nil)

13.46

19.27

Provision For Contingent Liability

Provision For Diminution In Long Term Trade Investment

196.78

187.59

Total

Dividend From Subsidiary Companies

( From Long Term Trade Investment)
( Tax Deducted At Source Rsnil Previous Year Rs.7.98)

159.63

Notes :

Other Dividend - (From Long Term

Investment Other Than Trade Investments)
( Tax Deducted At Source Rs.Nil Previous Year Rs Nil)

0.48

0.50

Royalty
( Tax Deducted At Source Rs.Nil Previous Year Rs.14.22)

26.36

254.62

Miscellaneous Receipts

84.46

76.68

10.41

Profit On Sale Of Current Investments- Other Than Trade

( Net Of Loss Of Rs.1274.05 Previous Year Rs.Nil)

96.09

396.97

Profit On Sale Of Fixed Assets

( Net Of Loss Of Rs.366.92 Previous Year Rs.Nil)
( Including Capital Profit Of Rs.19.27; Previous Year Rs.Nil)

69.33

1.Bad Debts Written Off Due From Related Parties

535.02

30.79

320.50

44.65

Total

6.07

663.00

48.06

Profit On Sale Of Long Term Investment

35.66

Donation

Export Subsidy

Sale Of Scrap

8.13

Contribution For Scientific Research Expenses

Loss On Sale Of Fixed Assets (Net Of Profit Rs Nil
Previous Year Rs.10.66)

B. Other Income :

11.55

For the year ended

31st March,2005
(Rs.in lacs)

2.Commission,Rebate & Discount Includes

Commission To Selling Agents

89.08

26.99

39,394.05

39,488.95

0.00

0.00

367.21

365.85

Schedule O- Financial Expenses

Interest Paid On :
Fixed Period Loan
Others
( Net Of Int.Received Rs.6.81; Previous Year Rs.36.48
T.D.S.Rs.Nil;Previous Year Rs.6.32)

57.34

70.21

247.73

71.31

305.07

141.52

Bank Charges

260.80

288.05

Total

565.87

429.57

18.75

18.75

1,150.32

Schedule IB- Misc.Expenditure Written Off

Notes :
1. Dividend from Current Investments

0.48

0.50

2.Dividend from Long Term Investments

0.00

159.63

Schedule K- Cost of Materials

Technical Knowhow Fees Paid

Deferred Employee Compensation Under Esop

685.99

Less:Transferred To Director Remuneration

278.50

Total

326.49
407.49

195.91

426.24

130.58
149.33

Raw Materials Consumed :

I)

Opening Stock

Ii) Add :Purchases

Iii) Less :Closing Stock

4,383.16

4,257.19

25,015.34

22,388.50

29,398.50

26,645.69

3,464.00

25,934.50

4,383.16

SCHEDULE P - Accounting Policies & Notes To Accounts

(All amounts in Indian Rupees in lacs except share capital)
22,262.53

A. ACCOUNTING POLICIES
Significant accounting policies are summarized below:

Packing Materials Consumed :

I)

Opening Stock

Ii) Add :Purchases

Iii) Less :Closing Stock

1,491.43

793.12

1.

Accounting Convention: The accounts have been prepared in accordance with the historical cost convention.

14,454.12

11,140.25

2.

15,945.55

11,933.37

Fixed Assets and Depreciation:

G Fixed assets are stated at carrying amount i.e. subject to deduction of accumulated depreciation.
G Cost includes inward freight, duties, and taxes and expenses incidental to acquisition and installation.
G Depreciation on Fixed Assets have been provided on written down value method at rates specified in Schedule XIV of the Companies Act except for Baddi, Katni, 5/1 Unit Sahibabad, Jammu, Rudrapur and Corporate
Office, Sahibabad, where depreciation have been provided on straight line methods at the rates specified in the
aforesaid Schedule.
G Patents are being amortized over the period of ten years on straight line basis.

3.

Impairment of Assets : The company identifies impairable fixed assets based on cash generating unit concept at the
year-end in term of para-5 to 13 of AS -28 issued by ICAI for the purpose of arriving at impairment loss thereon, if
any, being the difference between the book value and recoverable value of relevant assets. Impairment loss when
crystallizes is charged against revenue of the year.

4.

Investments : Current investments are held at lower of cost and NAV/Market value. Long term investments are held
at cost less diminution, if any, in carrying cost of investment other than temporary in nature.
Loss, if any, sustained by any subsidiary is not recognized.

5.

Deferred Entitlement on LTC : In terms of the opinion of the Expert Advisory Committee of the ICAI, the Company
has provided liability accruing on account of deferred entitlement towards LTC in the year in which the employees
concerned render their services.

6.

Inventories: Stocks are valued at lower of cost or net realizable value. Basis of determination of cost remain as follows:
G Raw materials, Packing materials, stores & Spares On FIFO Basis
G Work-in-process
At cost of input plus overhead upto the stage of completion.
G Finished goods
At cost of input plus appropriate Overhead.

7.

Research and Development Expenses: Contributions towards scientific research expenses are charged to the Profit & Loss Account in the year in which the contribution is made.

8.

Retirement Benefits: Liabilities in respect of retirement benefits to employees are provided for as follows:G Leave Salary of employees on the basis of payment advice from Life Insurance Corporation of India from whom
Company has taken coverage in this connection.
G Gratuity Liability on the basis of payment advice from Life Insurance Corporation of India from whom the Companys gratuity trust has taken the Group Gratuity Insurance Policy.
G Liability for superannuation fund on the basis of the premium paid to the Life Insurance Corporation of India
in respect of employees covered under Superannuation Fund Policy.
G VRS, if paid, is charged to revenue in the year of payment.

9.

Recognition of Income and expenses:

G Sales and purchases are accounted for on the basis of passing of title to the goods.
G Sales comprise of sale price of goods including excise duty and sales tax but exclude discount.
G All items of incomes and expenses have been accounted for on accrual basis.

1,728.47

Purchase Of Finished Products

14,217.08

1,491.43

16,935.43

10,441.94
22,456.43

Adjustment Of Stocks In Process And Finished Goods

Opening Stock :
Stock In Process
Finished Products

614.82

1,116.98

5,846.92

4,549.22

6,461.74

5,666.20

794.39

614.82

5,243.14

5,846.92

Closing Stock :
Stock-In-Process
Finished Products

6,037.53
Increase(-)/Decrease in stock in process & finished goods
Total

6,461.74
424.21

(795.54)

57,511.22

54,365.36

Schedule L- Mfg.& Operating Expenses

Power and Fuel

2,627.96

2,169.48

731.90

307.39

Building

51.12

88.19

Plant & Machinery

27.34

27.62

252.44

279.36

54.79

47.42

3,745.55

2,919.46

6,053.70

4,849.68

861.31

724.90

2,208.23

1,924.07

707.54

709.91

9,830.78

8,208.56

629.23

506.58

67.76

92.03

Stores & Spares Consumed

Repairs & Maintenance:

Others
Processing Charges
Total

Schedule M- Payments to & Provisions

for Employees
Salaries,Wages And Bonus
Contribution To Provident And Other Funds
Workmen And Staff Welfare
Directors' Remuneration
( Inclduing Perquisites Rs.326.03 Previous Year Rs 208.83)
Total

Schedule N - Selling & Adminstrative Expenses

Rent
Rates And Taxes
Insurance

192.53

195.97

11,173.54

10,527.22

Freight And Forwarding Charges

4,050.33

3,287.48

Commission,Discount And Rebate

1,256.61

1,236.78

Sales Tax

Advertising And Publicity

15,165.85

17,178.91

Travel & Conveyance

1,485.94

1,405.88

Legal & Professional

687.43

702.26

Telephone ,Fax Expenses

261.11

251.55

Security Expenses

146.02

136.22

General Expenses

3,114.19

3,053.69

9.00

6.85

Directors' Fees
Auditors' Remuneration:
Audit Fee
Branch Auditors' Fee

11.22

9.36

7.04

7.23

10. Income Tax & Deferred Taxation: The liability of company on account of income tax is estimated considering the provisions of the Income Tax, 1961. Deferred tax is recognized subject to the consideration of prudence, on time differences
being the difference between taxable income and accounting income that originate in one year and capable of reversal
in one or more subsequent years.
11. Contingent Liabilities: Disputed liabilities and claims against the company including claims raised by fiscal authorities (e.g. Sales Tax, Income Tax, Excise etc.), pending in appeal/court for which no reliable estimate can be made of the
amount of the obligation or which are remotely poised for crystallization are not provided for in accounts but disclosed
in notes to accounts.
However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable,
is recognized in accounts.
12. Foreign Currency Translation:
G In respect of foreign branches/offices, the company has adopted integral foreign operation approach as per revised AS 11 and accordingly revenue items have been converted at average of month end exchange rates during the year. Fixed assets have been converted at the rates prevailing on dates of purchase. Assets & Liabilities
other than fixed assets are converted at the year-end exchange rate. Exchange gain or loss arising out of above
is charged to Profit & Loss Account.
G Receivables/payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss, is accounted for in the Profit & Loss Account.
G Capital as well as revenue implication of exchange fluctuation, charged or credited to revenue, are disclosed
in notes to accounts.
13. Employee Stock Option Purchase (ESOP): Aggregate of quantum of option granted under the scheme in monetary
term has been shown as Employees Stock Option Scheme outstanding in Reserve and Surplus head of the Balance
Sheet by way of debiting deferred Employee Compensation under ESOP as per guideline to the effect issued by SEBI.
14. Miscellaneous Expenditure:
G Technical know-how fee paid to Technical Collaborators upto 31.03.2004 are being amortized equally over a

22 FINANCIAL STATEMENTS
Dabur India Limited

Annual Report 2005-06

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
G

B.
1.

2.

3.

period of six years. Subsequent expenses are charged to revenue in the year of incurrence.
Deferred Employees Compensation under ESOP are being amortized on straight line basis over vesting year.
Employee compensation in respect to option granted to subsidiary company employees is being reimbursed
by subsidiary companies to holding company.

5D

Value of raw materials,stores and spares parts consumed

Raw Material

Imported

Building constructed on leasehold land included in the value of building shown in Fixed Assets Schedule:
As at 31st March 2006
As at 31st March 2005
Cost/Revalued
6757.63
5378.72
Written Down
4781.37
3607.73

5E

6.

31.03.2005

31.03.2006

Value

Value

Value

Value

0.73

308.64

1.39

31.56

0.21

31.75

0.30

Indigenous

25745.98

99.27

21953.89

98.61

14917.41

99.79

10717.58

99.70

Total

25934.50

100.00

22262.53

100.00

14948.97

100.00

10749.33

100.00

Net Dividend remitted in foreign currency

2005-06

2004-05

2003-04 Final Dividend to 147 shareholders on 147020 shares

2.06

2004-05 Interim Dividend to 140 shareholders on 141000 shares

1.41

2004-05 Final Dividend to 128 shareholders on 129000 shares

1.94

2005-06 Interim Dividend to 110 shareholders on 111000 shares

1.66

Total

3.60

3.47

Managerial Remuneration under section 198 of the Companies Act,1956 paid or payable during the year,to the Directors:
31.03.2006

31.03.2005

158.45

286.54

Commission (as computed below)

88.64

38.80

Contribution to Provident Fund

19.73

26.92

Residential Accommodation

95.08

97.40

4.72

8.12

Salary

a) Further to para A(3) above, company has assessed recoverable value of cash generating units (CGUs) based on
value-in-use method which for each CGU worked out to much higher than corresponding book value of net
fixed assets thereby not warranting further exercise of arriving at their net-selling-price. This further confirmed
absence of exigency of making any provision against impairment loss.

Medical & Leave Travel Benefit

Contribution to Superannuation Fund

b) CGUs include Narenderpur plant, Sahibabad plant, Baddi plants, Jammu plants and Rudrapur Plant all
belonging to FMCG segments.
c) Annual discount rate considered for arriving at value-in-use of assets of each CGUs is 6.50% i.e the average
interest rate of external borrowing plus risk factor @ 2.00 % per annum.
4.

Information pursuant to AS 29 issued by ICAI:

i.
During the year, the Company has provided Rs.Nil (previous year Rs.89.08) against disputed liabilities
formerly not being accounted for on the ground of contingent liability in respect of amount reliably estimable within the meaning of relevant standards.
ii)
Existing provision referred to in a above relates to nil (Rs. 62.64), nil (Rs.26.15) and nil ( Re.0.29) towards liabilities on account of VAT, Sales Tax and Entry Tax respectively to be carried as such at the year
end in view of absence of any additional provision therefore during the year.
iii) Resulting outflows against above liabilities pending before Sales Tax DC/Tribunal/CCTs, if mature, are
expected to be in succeeding financial year.
iv) Provisions are made herein for medium risk oriented issues as a measure of abundant precaution.
v)
Company presumes remote risk possibility of further cash outflow pertaining to contingent liabilities
listed in para 4 (a) above.

5A. Expenditure in Foreign Currency

31-03-2006

31-03-2005

Professional & Consultation Fees

14.95

4.30

Interest

13.49

25.65

Salary

0.00

111.55

69.72

52.09

98.16

193.59

Raw Materials

152.95

310.75

Stores & Spares (Including of packing material)

154.84

41.02

Capital Goods

130.23

75.10

438.02

261.71

Others (Travellling,Conveyance & administration)

Royalty/Technical Consultancy
Dividend

7B

2631.85

3682.77

26.36

35.59

0.00

0.00

2658.21

3718.36

220.51

Total

707.54

709.91

31.03.2006

31.03.2005

21435.53

14801.82

26.99

0.00

Profit & Loss Account

Add:Provision for Diminution in Long term Investment
Profit after the provision for diminution in long term inv.
Add:Managerial remuneration

21462.52
707.54

Directors fees

7A

14801.82
709.72

9.00

716.54

6.85

716.57

Less:Capital Profit

19.27

0 .00

Adjusted net profit

22159.49

15518.39

88.64

38.80

Commission payable:To one non whole-time Director

Particulars Of Consumption Of Important Raw Materials (Rs.In Lacs)

Class Of Goods

Unit

Quantity

Value

Sugar And Molases

Tonnes

14915.24
(11676.65)

2610.45
(1820.66)

Vegitables Oils

Tonnes

10376.90
(6533.87)

5293.98
(3705.13)

Herbs, Jari Booti & Raw Madhu

Tonnes

5782.65
(4698.38)

7144.41
(7117.96)

Chemicals & Perfumery Compounds

Tonnes

17378.12
(13314.55)

8479.39
(5670.35)

Others Raw Materials

Assorted

2406.26
(3948.43)

Total Raw Materials

Earning in Foreign Exchange:

Export sales at FOB

31.62

317.15

Profit for the year before tax as per

5 B. CIF Value of Imports:

5C

23.77

Others (Including Rs.278.50 Previous year Rs.83.55 Under ESOP)

Computation of net profit in accordance with Section 198 and section 309 (5) of the Companies Act,1956 and calculation of Directors commission :

Contingent Liabilities:
a) Claims against the company not acknowledged as debts:
i.
In respect of civil suits filed against the company Rs. 235.13 (previous year Rs.251.71)
ii.
In respect of claims by employees Rs.0.50 (previous year Rs 0.50)
iii. In respect of letters of credit Rs. Nil (previous year Rs.1366.66)
iv. In respect of Bank Guarantees executed Rs .811.41 (previous year Rs.576.62)
v.
In respect of Sales Tax under appeal Rs.592.65 (previous year Rs.956.69))
vi. In respect of excise duty disputes pending with various judicial authorities Rs.2798.56 (previous year Rs.2131.93).
vii. In respect of Corporate Guarantees given by the Company Rs. 14759.72 (previous year Rs.14148.94)
viii. In respect of Income tax under appeal Rs.173.67 (previous year Rs.326.22)
ix. Estimated Amount of contract remaining to be executed on capital Account Rs.441.49 (previous year Rs.588.47).
b)

31.03.2005

188.52

NOTES TO ACCOUNTS

Loans and Advances include Rs.48.64 (Previous year Rs.48.64)paid by the Company to Excise authorities on behalf of Sharda Boiron Laboratories Limited, now known as SBL Limited, in respect of excise duty demand of Rs.68.13
raised by the District Excise Officer, Ghaziabad, against the Company and Sharda Boiron Laboratories Limited. The
Honble Supreme Court of India had concurred with the order of the District Excise Officer, Ghaziabad.
The Company had filed the review petition before Division Bench of the Honble Supreme Court of India, which
was also decided against the Company. Pursuant to the indemnity bond executed by M/s Sharda Boiron Laboratories Limited in favour of the Company and as per the terms and conditions of the contract executed with them, the
recovery proceedings have been initiated by the Company against Sharda Boiron Laboratories Limited for Rs.48.64
by invoking the arbitration clause. The matter is pending before Honble High Court of Delhi for the appointment
of an arbitrator. The balance amount of Rs.21.46, along with interest demanded by the Excise Authorities has been
paid directly by Sharda Boiron Laboratories Limited to Excise Authorities. During the year 1991-92 the company
had received a refund of Rs.5.95, pursuant to the decision of Honble Supreme Court in this regard. Necessary adjustments in respect of recovery/refund will be made as per the arbitration proceedings.

Packing Material,Stores & Spares

31.03.2006

25934.49
(22262.53)

Glass Containers

Pcs In Lacs

1017.76
(869.35)

2198.58
(1743.60)

Plastic Containers/Caps/Jar

Pcs In Lacs

5660.96
(3798.52)

4914.42
(3254.45)

Printed Packing Materials

Assorted

3429.28
(2319.40)

Laminates & Lamitubes

Assorted

2134.87
(1390.47)

Other Packing Materials

Assorted

1539.92
(1734.02)

Total Packing Materials

14217.07
(10441.94)

Note:Figures In Brackets Are For Previous Period.

Particulars In Respect Of Goods Manufactured

Licenced

Installed

Capacity

Production

Opening Stock

Closing Stock

Sale

Class Of Goods

Unit

Capacity

Qty

Qty

Value

Qty

Value

Qty

Value

Hair Oils

Kilo-Ltrs

20000.00
(20000.00)

13261.90
(9004.38)

416.53
(71.08)

475.02
(81.51)

717.35
(416.53)

771.14
(475.02)

12961.09
(8658.93)

26809.57
(17208.39)

Chyawanprash

Tonnes

22000.00
(20000.00)

11049.86
(11151.19)

611.47
(365.51)

665.88
(318.08)

248.21
(611.47)

262.88
(665.88)

11413.13
(10905.22)

15006.62
(13665.36)

Honey

Tonnes

6000.00
(6000.00)

4531.64
(3746.18)

126.71
(57.54)

162.28
(67.69)

142.05
(126.71)

136.19
(162.28)

4516.30
(3677.02)

7814.50
(7046.99)

Tooth Powder & Paste

Tonnes

7200.00
(7200.00)

3292.45
(1884.96)

143.63

178.03

170.13
(143.63)

176.29
(178.03)

3265.96
(1741.33)

6318.88
(3389.39)

Hajmola

Tonnes

6000.00
(6000.00)

4006.07
(3829.46)

419.15
(272.89)

423.62
(279.27)

324.94
(419.15)

506.57
(423.62)

4100.28
(3683.19)

7264.94
(6103.18)

Asava - Arishta

Kilo-Ltrs

12000.00
(12000.00)

6153.92
(5642.48)

811.67
(454.93)

316.42
(240.50)

556.11
(811.67)

250.19
(316.42)

6409.47
(5285.75)

5315.99
(4163.31)

Others

2038.74
(1667.57)

2113.42
(2038.74)

36107.81
(28754.56)

Total

4259.99
(2654.61)

4216.67
(4259.99)

104638.31
(80331.17)

Note:Figures In Brackets Are For Previous Period.

7C

Particulars Of Traded Goods

Purchases
Class Of Goods
Hair Oils

Unit
Kilo-Ltrs

Tooth Powder & Paste

Tonnes

Hajmola

Tonnes

Others
Total
Note:Figures In Brackets Are For Previous Period.

Qty
3793.95
(7828.39)
7803.91
(9883.50)
1100.84
(1541.38)

Opening Stock
Value
4061.28
(8669.11)
5946.62
(7737.74)
1123.20
(1701.55)
5804.32
(4348.02)
16935.43
(22456.43)

Qty
164.73
(470.49)
360.40
(300.19)
35.39
(23.92)

Closing Stock
Value
198.83
(517.50)
326.91
(304.52)
44.00
(32.16)
1017.21
(1040.41)
1586.95
(1894.59)

Qty
150.34
(164.73)
288.68
(360.40)
30.89
(35.39)

Sale
Value
163.18
(198.83)
256.98
(326.91)
62.29
(44.00)
606.31
(1017.21)
1026.47
(1586.95)

Qty
3808.34
(8134.16)
7875.62
(9823.30)
1105.34
(1529.92)

Value
7195.90
(15759.01)
13345.14
(16613.72)
2110.84
(3039.22)
11788.94
(11128.39)
32329.99
(46540.34)

FINANCIAL STATEMENTS 23
Annual Report 2005-06

Dabur India Limited

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
8.

9.

Particulars of small-scale industries have been furnished to the extent such parties have been identified on the basis of
information available with the Company.The name of small scale industries to whom the Company owes any sum
which is outstanding as on 31st March 2006 for more than 30 days are :4R Health Care Products

Hi Tech Packers

Plastic Packaging Industries

A N Products

Interlabels Industries P Ltd

Prakash Printers & Stationers

10.

The company's freehold land situated at Sahibabad measuring about 7.58 acres was acquired by U.P. Government under Land Acquisition Act and the State Government had allotted and given possession of about 4.72
acres of land on lease to the Company in lieu of acquired land. The company has filed a claim for compensation of Rs.572.42 before the Office of Special Land Acquisition Officer, Ghaziabad against the land so acquired.
However, keeping in view the generally accepted accounting practice, the same claim has not been considered in the books of accounts.

Abhimanyu Containers

Jainex India

Precise Laboratories Pvt Ltd

Abhinav Printing & Packagings

Jasmer Packers Pvt Ltd

Prem Industries

Adchem Industries

Jiwan Plasto Moulds Pvt Ltd

Print & Public

Agarwal Polysacks Ltd.

Jyot Overseas Pvt.Ltd.

Printex Centre

Agi Glaspac

Kamet Plastics Pvt Ltd

Print-N-Wrap

Ajanta Packaging

Krishna Industries

Process Instrumentation and Control

Ajay & Company

Krishna Printers

Protech Engg Industries Pvt Ltd.

Amita Polymers Pvt Ltd

Kush Prints Pvt.Ltd.

PSN Chemicals

Dabur Foods Ltd.

(Domestic Subsidiary)

Anipra Chemicals Pvt Ltd

Magadh Plas Pvt Ltd

Reliplast Pvt.Ltd.

Pasadensa Foods Ltd.

(Domestic Subsidiary)
[Domestic Subsidiary]

11. A.

Related party Disclosures

Related party disclosures as required under AS 18 issued by the Institute of Chartered Accountants of India are given below:

(a)

Name of related party and nature of related party relationship where control exists:
(i)

Subsidiaries

Baya Traders

Magnesium Products Pvt Ltd

Responsive Industries

Balsara Hygeine Products Ltd.

Bharat Rubber Works

Mahabir Industries

RSG Packagings Pvt.Ltd.

Balsara Home Products Ltd.

[Domestic Subsidiary]
[Domestic Subsidiary]

Bhargava Poly Packs

Mandagini Agencies

S A Packaging Pvt Ltd

Besta Cosmetics Ltd.

Burman Laboratories P Limited

Maxcare Laboratories Limited

Sai Packaging Co.

Asian Consumercare Pvt Ltd .

(Foreign Subsidiary Company)

Care Marketing Co Pvt Ltd

MC Packaging P

Satish Enterprises

Dabur Nepal Pvt. Ltd.

(Foreign Subsidiary Company)

Classic Bottle Caps Pvt.Ltd.

Mega Packages

Sea-Shell Chemicals Pvt Ltd

Dabur Egypt Ltd.

(Foreign Subsidiary Company)

Compack Enterprises India Pvt Ltd

Mega Packers

Sheel Packaging Pvt Ltd

Dabur Overseas Ltd.

(Foreign Subsidiary Company)

Continental Crowns And Closures

Merlin Printer

Shiva Trading Company

Dabur International Ltd.

(Foreign Subsidiary Company)

WeikField International (UAE)

(Foreign Subsidiary Company)

African Consumercare Limited

[Foreign Subsidiary Company]

Devendra Cottage Industries

Morisha Enterprises

Shivam Safety Industries

Dolsun Containers Pvt.Ltd.

N.K.Gossain &

Shree Nath Printers

Domino Printech India Pvt Ltd

Naturalle Health Products P Ltd

Special Air Gases

Dynamic Sticker Industries

Nav Bharat Enterprises

Speciality Valves

Echel Engg.Components

New Gaurav Printers

Sudha Rasayan

Elson Colour Containers

New Samudra Art Centres

Sunshine Polymers Pvt Ltd

Empire Multipack P Ltd

Nikita Plast (Unit III)

Svar Plastics Pvt Ltd

Everest Containers Pvt.Ltd

Niranjan Containers P Ltd

Taurus Packaging Pvt.Ltd

Faridabad Plastics

Northern Aromatics Ltd,Baddi

V P Poly Udyog

Firmenich Aromatics (India)

Om Packaging

Varahi Plastics Pvt Ltd

G S Engineering Works

Orgachemie Agencies

Vimoni (India) Pvt Ltd

Green Valley Products P Ltd

P.M.C.Machines P.Ltd.

Vipul Plastics

H B D Packaging Pvt Ltd

Pacwel Plastics Private Limited

Walia Rubber Stamps

H S Enterprises

Penguin Plasti

Windsor Packaging Pvt Ltd

[b] Other related parties in transaction with the company :

[i]

Green Valley Products Pvt. Ltd. (upto 08.11.2005]

(ii)

a)

In Current Account - Barclays Bank,London

b)

In Postal Savings Bank Account

Key management personnel

Relatives of Key

(whole time directors)

Management personnel

a) Pradip Burman

R C Burman
Chetan Burman

b) Amit Burman (upto 30.04.2005)

Particulars of Balances with Non-Scheduled Banks:

Current year:

Joint Ventures/ Joint Venture Partners

Asha Burman

c) P. D. Narang

d) Sunil Duggal

(iii) Associate entities over which Key Management Personnel are able to exercise significant influence:
Balance as on 31.03.2006

Maximum Balance during the year

61.32

141.67

0.95

0.95

1. Welltime Housing & Finance Pvt. Ltd.

2. Miracle Commercial Enterprises Pvt Ltd.
3. Wakarusa Laboratories Pvt Ltd.
4. Jetways Travels Pvt Ltd.

Previous year:
a)

In Current Account - Barclays Bank,London

b)

In Postal Savings Bank Account

Balance as on 31.03.2005

Maximum Balance during the year

49.73

114.41

0.95

0.95

[iv]

An Enterprise owned by any Director (KMP) of Dabur India Limited:

1. Welltime Housing & Finance Pvt. Ltd.

11 B. Transactions with related parties

Transaction

Subsidiary

Fellow
Subsidiaries

Associates

Key Mgt.
Personnel

Relatives Of Key
Mgt. Personnel

Total

Outstanding
As On 31.03.2006

248.68
(96.45)

5986.22
(5706.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

6234.9
(5802.45)

506.24
(93.53)

Sale of Goods

371.35
(820.36)

907.85
(718.08)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

1279.20
(1538.44)

298.30
(686.22)

Sale of Assets

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

6.47
(0.00)

0.00
(0.00)

6.47
(0.00)

0.00
(0.00)

2185.37
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

2185.37
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

180.00
(159.75)

0.00
(0.00)

0.00
(0.00)

180
(159.75)

0.00
(2.57)

4025.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

4025.00
(0.00)

3082.50
(0.00)

Rent Paid

0.00
(0.00)

0.00
(0.00)

6.00
(6.00)

0.00
(0.00)

0.00
(0.00)

6.00
(6.00)

0.00
(0.00)

Interest Recd On Loans Given

8.75
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

8.75
(0.00)

0.00
(0.00)

2178.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

2178
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

340.71
(472.65)

125.98
(169.01)

466.69
(641.66)

0.00
(0.00)

1025.00
(0.00)

0.00
(0.00)

3.50
(0.00)

0.00
(0.00)

0.00
(0.00)

1028.50
(0.00)

0.00
(0.00)

90.74
(0.00)

0.43
(0.00)

0.00
(0.00)

278.50
(195.91)

0.00
(0.00)

369.67
(0.00)

(0.00)
(0.00)

3750.00
(4614.38)

3365.00
(1883.13)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

7115
(6497.50)

7115
(6497.50)

Dividend Recd.

0.00
(159.36)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(159.36)

0.00
(0.00)

Royalty Received

0.00
(207.75)

26.36
(46.87)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

26.36
(254.62)

57.26
(171.66)

Purchases of Goods

Sale of Investments
Receiving of Services
Loans Given

Share Application Money

Remuneration/Exgratia/Pension
Repayment of Loans Given(Instl.Recd)
Emplloyee Stock Option Scheme
Guarantees & collaterals given

(Figues in brackets are of previous year]

The amounts or appropriate proportions of outstanding items pertaining to related parties at the balance sheet date and provisions for doubtful debts due from such parties at that date - nil (previous year nil)
Amounts written off or written back in the year in respect of debts due from or to related to parties nil (previous year nil).

12 Exchange loss works out to Rs 80.43 ( Previous Year Rs.58.05) net of gain which has been charged to Profit & Loss
Account.
13 Information (to the extent applicable) pursuant to AS 19 issued by ICAI:
The future minimum lease payment under non-cancelable operating lease :(i)
Not later than 1 year
(ii) Later than 1 year not later than 5 year
(iii) Later than 5 year

9.60
8.10
Nil

14 The treatment of share issue expenses has been changed during the year by way of charging the same in revenue as
against former practice of amortizing same equally over 10 years. This reduced the profit of the year by Rs. 43.87.
15 Sundry Creditors include Rs.75.13 (previous year nil) being dues to subsidiaries.

16 Earnings per Share has been computed as under:

Profit after Tax
Less Provision for Taxation for earlier year written off
Add Provision for Taxation for earlier year written back
Weighted average number of shares outstanding
Basic
Diluted
Earning per Share (face value Re.1 per share)
Basic
Diluted

2005-2006
18908.37

7.62
18915.99

2004-2005
14801.99
5.30

14796.69

573149195
577524999

572839426
575809845

3.30
3.27

2.58
2.57

24 FINANCIAL STATEMENTS
Dabur India Limited

Annual Report 2005-06

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
17 Information pursuant to AS 24 on discontinued operations:
Particulars

Hair Oil
Baddi

MSY Unit
Baddi

Daburgram Unit

March,04

Nov,2000

July,2003

FMCG

FMCG

FMCG

33.37
(33.37)

28.35
(28.35)

44.27
(44.27)

Discontinued since

Segment the operation of the

Unit relates to in financial statement

Carrying amount of total assets

Carrying amount of total liabilities

4.21
(4.21)

0.01
(0.01)

0.32
(0.32)

Profit from ordinary activities

0.00
(-5.3)

0.00
(-1.79)

0.00
(0.00)

Income Tax expenses

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(-0.01)

0.00
(0.00)

0.00
(0.00)

0.00
(-71.46)

0.00
(-0.47)

0.00
(-3.97)

0.00
(24.14)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

Gain on disposal of assets

Cash flow from discontinued operations:

Operating activities
Investing Activities
Financial Activities

Note :

19

Extraordinary items represents :

Profit on Sale of Long Term Trade Investments in Subsidiaries
Loss on sale of Long Term Trade Investments
Net profit/(loss) on Sale of Long Term Trade Investments

Rs.1325.25
Rs.1274.05
Rs.51.20

20 a. Pension to relative of deceased director Rs.31.50(previous year Rs.7.87)

b. Pension of retired director Rs.68.24 (previous year Rs.17.06)
21 Dividend paid and proposed dividend are not subject to deduction of income tax at source.
22 Figures for the previous year have been rearranged/regrouped as and where necessary in terms of current year's
grouping.
23 Additional information as required under Part IV of Schedule VI of the Companies Act 1956:
I.

Registration Details:
Registration No.

7908

State Code :

55

Balance Sheet Date:

II

31.03.2006

Capital raised during the year (Amount in Rs thousand):

Public Issue

Nil

0.00
(0.00)

Right Issue

Nil

0.00
(0.00)

Private Placement

1.

Figures in brackets are for previous year.

2.

Part of fixed assets belonging to discontinued operations under reference have been used for new plants set up in relevant premises.Such assets have been left out

Bonus Issue
III

of the purview of '3' above

286651
Nil

Position of Mobilisation of Deployment of Funds (Amount in Rs.Thousand):

Total Liabilities

7924689

Total Assets

7924689

Sources of Funds:
Paid up capital
Reserve & Surplus

18 Information pursuant to AS - 17 issued by ICAI

Current
Period

OTHERS

Previous
Period

Current
Period

Dabur India Ltd.

Previous
Period

Current
Period

133406

122541

3562

4331

136968

122541

3562

4331

136968

167150

Application of Funds:

126872
126872

Net Fixed Assets

1988368

Investments

2750777

Net Current Assets

-229478

Misc Expenditure

328748

Deferred Tax Assets

RESULT
Segment result

13429

Deferred Tax Liaiblity

Previous
Period

Inter-segment sales
133406

192323

Unsecured Loans

REVENUE

Total Revenue

3905384

Secured Loans
FMCG

External Sales

573303

21478

16405

523

527

22001

16932

IV

13174

Performance of Company (Amount in Rs.thousand):

Unallocated corporate expenses

Turnover

13696829

Operating profit

Total Expenditure

11606778

Interest expense (Net Of Interest Income)

21478

16405

523

527

22001

16932

551

415

15

15

566

430

Profit/(Loss) Before Tax

Profit/(Loss) After Tax

Interest income
Income Tax(Current + Deferred+FBT)
Profit from ordinary activities

20927

15990

508

512

2578

1700

18857

14802

Item Code No.(ITC Code)

20927

15990

508

512

18908

14802

70630

67377

844

1164

71474

68541

4354

2910

30049001

Product Description

Ayurvedic Medicines

Item Code No.(ITC Code)

Total assets

70630

67377

844

1164

75828

71451

Segment liabilities

29826

35121

149

187

29975

35308

4353

2918

34328

38226

2944

5316

1904

1710

3241

515

Unallocated corporate liabilities

29826

35121

Capital expenditure

2944

5316

Depreciation

1858

1656

Non-cash expenses other than depreciation

250%

Generic names of three Principal Products/Services of company (as per monetary terms):

51

Unallocated corporate assets

Total liabilities

3.30

Dividend Rate %

OTHER INFORMATION
Segment assets

1890837

Earning per share in Rs.

V

Exceptional Item {Profit/(loss) on

Long Lerm Trade Investment}
Net profit

214553

149
46

187
54

Secondary segment
As the company also exports,the secondary segment for the company is based on the location of customers's.Out of the total sales of
Rs.136968 (Rs.126872) ,the export sales is of Rs.4514 ( Rs.4848 ) and domestic sale is Rs.132454 ( Rs.122024)

33059001

Product Description

Hair Oils

Item Code No.(ITC Code)

33061000

Product Description

Dentifrices

Signatures to the Schedules "A" to "P" Annexed to and forming part of the Accounts.
As per our report of even date attached

For Dabur India Ltd.

For G.Basu & Co.

Chartered Accountants

V.C.Burman
P.D.Narang
Sunil Duggal
A.K.Jain

S.Lahiri
Partner
New Delhi
25th April 2006

Chairman
Director
Director
Addl.General Manager (Finance)
& Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS 25

Annual Report 2005-06

Dabur India Limited

The Board of Directors,

Dabur India Limited,

c)

In the case of the consolidated cash flow statement, of the cash flows of Dabur India Ltd. group for the year ended
on that date.

We have audited the attached consolidated balance sheet of Dabur India Limited group, as at 31st March, 2006 and also the consolidated profit and loss account and the consolidated cash flow statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Dabur India Ltd.s management and have been prepared by
the management on the basis of separate financial statements and other financial information regarding components.
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all material aspects, in accordance with an identified financial reporting frame work and 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
the management, as well as, evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of
Rs.15566.37 lacs as at 31st March, 2006, the total profit of Rs.2778.11 lacs and cash flows (net) amounting to Rs.425.05
lacs for the year ended 31st March, 2006. These financial statements and other financial information have been audited
by other auditors whose reports have been furnished to us, and our opinion is based solely on the report of other auditors.
We report that the consolidated financial statements have been prepared by the Dabur India Ltd.s management in
accordance with the requirements of AS-21 on consolidated financial statement issued by the Institute of Chartered
Accountants of India.
Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to the explanations given
to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity
with the accounting principles generally accepted in India.
a) In the case of the consolidated balance sheet, of the state of affairs of Dabur India Ltd. group as at 31st March, 2006.
b) In the case of the consolidated profit and loss account, of the profit of Dabur India Ltd. group for the year ended on
that date; and

For G Basu & Co

Chartered Accountants
S.LAHIRI
Partner
Membership No. 51717
New Delhi
25th April 2006

Profit and Loss Account for the year ended 31st March,2006
Schedule

Schedule

As at 31st
Marc,006
(Rs.in lacs)

As at 31st
March,2005
(Rs.in lacs)

Sales Less Returns

Other Income
Total Income
Cost Of Materials

(A) Share Capital

5,733.03

2,864.20

(B) Reserves And Surplus

43,972.79
49,705.82

Minority Interest

B2

546.08

920.62

191,293.68

154,615.95

80,772.30

65,942.25

3,372.14

4,280.40

5,711.24

4,050.37

Payments To And Provisions For Employees

14,495.75

10,848.34

Selling And Administrative Expenses

56,522.85

47,691.25

Financial Expenses

1,638.73

1,243.59

Miscellaneous Expenditure Written Off

IB

426.24

149.53

Balance Being Net Operating Profit Before Tax

2,692.46

2,800.01

165,631.71

137,005.74

25,661.97

17,610.21

2,185.80

1,509.88
399.83

Provision For Taxation

Current

33,528.98

Provision For Taxation

Deferred

353.04

36,393.18

Provision For Taxation

Fringe Benefit

463.31

0.00

22,659.82

15,700.50

1,522.04

Net Profit After Taxation And Before

Extraordinary Item

Loan Funds:
(A) Secured Loans

8,080.01

9,705.16

(B) Unsecured Loans

2,352.75

5,383.23

Deferred Tax Liability

EB

1,715.06

1,277.51

62,399.72

54,281.12

Total
Application Of Funds :

Add Extraordinary Item (Profit/(Loss) On Long

Term Tarde Investments

-1,274.05

0.00

Net Profit After Tax And Extraordinary Item

21,385.77

15,700.50

Minority Interest

-32.47

119.89

Net Profit After Minority Interest

21,418.24

15,580.61

Balance Brought Forward

14,092.86

8,979.40

56.93

0.00

Transferred From Capital Redemption Reserve

Fixed Assets :
(A) Gross Block

153,695.33

1,336.68

Manufacturing Expenses

Total Expenditure

Shareholders' Funds:

189,957.00

Expenditure :

Depreciation

Sources Of Funds :

For the year ended

31st March,2005
(Rs.in lacs)

Income :

Excise Duty

Balance Sheet as at 31st March 2006

For the year ended

31st March,2006
(Rs.in lacs)

Transferred From Investment Allowance Reserve

0.00

82.58

Transferred From Investment Deposit Reserve

0.00

182.50

72,148.62

48,148.63

(B) Less :Depreciation

20,903.32

18,698.43

Provision For Taxation For Earlier Year Written Back

148.53

0.00

(C) Net Block

51,245.30

29,450.20

Provision For Taxation For Earlier Year

-51.83

-26.26

Profit Available For Appropriation

35,664.73

24,798.83

Interim Divided

4,303.03

2,862.89

Proposed Dividend - Final

Investments

4,213.15

23,329.02

Deferred Tax Assets

EB

131.72

137.77

Current Assets,Loans And Advances:

(A) Inventories

Appropriation/Allocation
5,733.03

4,296.30

Corporate Tax On Interim Dividend

602.98

374.14

Corporate Tax On Proposed Dividend

804.06

602.56

0.00

3.25

21,277.84

20,312.92

(B) Sundry Debtors

7,435.01

7,589.28

(C) Cash & Bank Balances

5,117.22

1,473.29

13,301.93

11,377.22

Transferred To Capital Reserve

47,132.00

40,752.71

Transferred To Legal Reserve

(D) Loans & Advances

Less:Current Liabilities And Provisions

Employees Sharing Of Profit

Transferred To General Reserve

EA

Balance Carried Over To Balance Sheet

19.27

0.00

5.31

1.75

2,610.94

2,565.08

21,586.11

14,092.86

35,664.73

24,798.83

(A) Liabilities

30,280.64

30,443.32

' (B) Provisions

13,329.29

9,526.30

43,609.93

39,969.62

Basic

3.74

2.72

3,522.07

783.09

Diluted

3.71

2.71

3,287.48

581.04

No Of Shares
Basic

573,149,195

572,839,426

Diluted

577,524,999

575,809,845

Net Current Assets

Miscellaneous Expenditure

IA

(To The Extent Not Written Off Or Adjusted)

Notes To Accounts
Total

P
62,399.72

54,281.12

Earning Per Share ( In Rs.)

Notes To Accounts

As per our report of even date attached

For Dabur India Ltd.

For G.Basu & Co.

Chartered Accountants

V.C.Burman
P.D.Narang
Sunil Duggal
A.K.Jain

S.Lahiri
Partner
New Delhi
25th April 2006

Chairman
Director
Director
Addl.General Manager (Finance)
& Company Secretary

26 CONSOLIDATED FINANCIAL STATEMENTS

Dabur India Limited

Annual Report 2005-06

Schedules annexed to and forming part of the accounts for the year
ended 31st March,2006

Statement of Cash Flow ( Pursuant to AS-3 issued by ICAI)

Rs.Lacs
For the year ended
31st March,2006

For the year ended

31st March,2005

As At 31st
March 2006
(Rs.In Lacs)

As At 31st
March 2005
(Rs.In Lacs)

A.Cash Flow From Operating Activities

Net Profit Before Tax And Extraordinary Items

22,659.82

17,610.21

Schedule B2- Minority Interest

Add:

Share Capital

178.54

264.17

Depreciation

9.38

75.00

Loss On Sale Of Fixed Assets

2,692.46

2,800.01

Share Premium

65.85

108.87

Capital Reserve

126.91

126.91

15.15

91.55

Miscellenous Exp.Written Off

426.24

149.53

General Reserve

Miscellenous Exp.Written Off( Included In Director Remun.

777.16

195.91

Profit & Loss

Interest

1,615.15

1,243.59
5,576.87

4,497.92

28,236.69

22,108.12

964.41

546.08

1,522.04

1,090.91

Schedule C-Secured Loans

I

Less:

216.10

Term Loans :

Dividend Received

0.48

0.50

GE Capital Services

1845.99

Interest Received

10.28

0.00

Deferred Payment

253.41

82.16

PICUP Under Trade Tax Loan Scheme

755.22

1,009.09

5225.39

7,523.00

8,080.01

9,705.16

48.13

48.13

1021.92

800.00

9.58

16.06

0.00

75.00
883.44

Profit On Sale Of Investment

Profit On Sale Of Assets

96.39

407.38

211.91

0.00

II

319.06
Operating Profit Before Working Capital Changes

Short Term Loans - From Banks :

407.88

27,917.63

21,700.24

Schedule D - Unsecured Loans

Deposits :

Working Capital Changes

Increase/(Decrease) In Inventories
Increase/(Decrease) In Debtors
Decrease/(Increase) In Trade Payables

964.92

5,028.47

(102.11)

304.20

(273.66)

Companies
Security Deposit From Dealers And Others

(8,983.98)

Increase/(Decrease) In Working Capital

589.14

Cash Generated From Operating Activities

27,328.48

Interest Paid

Directors

1,604.87

Other Loans :

25,351.55

West Bengal State Industrial Development

1,222.18

Corporation Limited
Term Loan - From Banks

999.47

Book Overdraft Of Current Account With Banks

Tax Paid

2,649.11

1,668.57

Corporate Tax On Dividend

1,205.54

887.60

Cash Used(-)/(+)Generated For Operating Activities (A)

(3,651.31)

5,459.52

3,778.35

21,868.96

21,573.20

125.30

754.67

Commercial Papers

0.00

2,000.00

External Commercial Borrowings -ABNAmro Bank NV

0.00

805.93

Deferred Payment Credit

B. Cash Flow From Investing Activities

Purchase Of Fixed Assets

(7,287.80)

(7,852.75)

1,171.02

500.02

(4,826.98)

(153,206.88)

6,067.63

143,260.48

0.48

0.50

(4,875.65)

(17,298.63)

Sale Of Fixed Assets

Purchases Of Investment Including Investment In Subsidiaries
Sale Of Investments
Dividend Received
Cash Used(-)/(+)Generated For Investing Activities (B)

2.31

8,050.56

12,206.55

Amount Due To Ssi Units ( Goods)

1,037.21

874.67

Creditors For Goods

1.71

7,394.54

4,220.69

13,272.32

12,578.32

38.00

672.46

(457.43)

(2,297.61)

1,878.15

Dividend Payable

(1.76)

(266.86)

Advances From Customers

273.63

325.78

(3,024.01)

1,589.68

Interest Accrued But Not Due On Loans

62.66

39.08

(88.24)

(750.08)

Deposits - Others

55.43

47.24

121.19

96.42

Repayment (-)/Proceeds(+) From Deposits

Repayment(-)/Proceeds(+) From Other Unsecured Loans

Acceptance

Current Liabilities :

Creditors For Expenses And Other Liabilities

Repayment(-)/Proceeds (+) Of Long Term Secured Liabilities

Repayment(-)/Proceeds(+) From Short Term Loans

5383.23

Schedule EA - Current Liabilities and Provisions

C.Cash Flow From Financing Activities

Proceeds From Share Capital & Premium

148.35
2352.75

Total

Payment Of Other Advances

(8,612.56)

(6,817.40)

Investor Education And Protection Fund To Be

(13,349.39)

(4,822.23)

Credited By :

Net Increase(+)/Decrease (-) in cash & cashe equv.(A+B+C)

3,643.93

(547.66)

-Unpaid Dividend

Cash And Cash Equivalents Opening Balance

1,473.29

2,020.95

-Unpaid Matured Public Deposit

7.53

10.37

1,473.29

-Interest Accured On Public Deposit

5.57

6.20

30,280.64

30,443.32

Payment Of Dividend
Cash Used(-)/+(Generated) In Financing Activities (C)

Cash And Cash Equivalents Closing Balance

5,117.22

Schedules annexed to and forming part of the accounts for the year
ended 31st March,2006
As At 31st
March 2006
(Rs.In Lacs)

Provisions :
For Dividend (Proposed) - Final

As At 31st
March 2005
(Rs.In Lacs)

5,733.03

4,296.30

For Corporate Tax On Proposed Dividend- Final

804.06

602.56

For Leave Salary

122.00

328.94

For Housing,Bonus & Gratuity & Other Welfares

Schedule A-Share Capital

For Taxation

Authorised :
1250000000 Equity Shares Of Re.1 Each
(Previous Year 500000000 Equity Shares Of Re.1 )
Issued And Subscribed:
573302784 Equity Shares Of Re.1 Each Fully Called Up
(Previous Year- 286249052 Equity Shares Of Re.1)

12,500.00
12,500.00

5,000.00
5,000.00

5,733.03
5,733.03

2,864.20
2,864.20

Total (A + B)

Depreciation
Technical Knowhow Fees
1,799.51
5,758.08
420.71
56.93
10,450.49
34.74
14,092.86
915.66
33,528.98

13,329.29

9,526.30

43,609.93

39,969.62

Deferred Tax Liaibility :

Schedule B-Reserves and Surplus

1818.78
3051.45
456.03
0.00
12775.82
41.61
21586.11
4242.99
43,972.79

536.05
3,762.45

Schedule EB - Deferred Tax Liabilites ( Net)

Note : Authorized Share Capital During The Year Increased By Rs.7500 Lacs

Capital Reserve
Share Premium Account
Employees Housing Reserve Fund
Capital Redemption Reserve :
General Reserve :
Legal Reserve
Profit And Loss Account
Employee Stock Option Scheme Outstanding
Total

755.08
5,915.12

1715.08

1277.51

0.00

0.00
1715.08

1277.51

Less:Deferred Tax Assets :

VRS Payment

74.55

Other Disallowances Under Section 43B

57.19

6.01
131.74

131.74

137.75

Of Income Tax Act 1961

Toral

1583.34

1139.76

Schedule F - Fixed Assets

( Rupees In Lacs)
Gross Block
Name Of Asset
Freehold Land
Leasehold Land

Depreciation

Net Block

Opening
Balance

Inherited from
new subsidiary

Additions

Transfer/
Adjustment

Closing
Balance

Opening
Balance

Inherited from
new subsidiary

For the
Year

Transfer/
Adjustment

Closing
Balance

As on
31.03.2006

As on
31.03.05

645.65

192.46

3.64

60.73

781.02

0.00

0.00

0.00

0.00

0.00

781.02

645.65

748.33

0.82

115.79

0.00

864.94

35.80

0.24

9.87

0.00

45.91

819.03

712.53

Building,Roads & Culvert

12,801.93

1,452.20

1,011.25

(6.45)

15,271.83

3,635.41

174.37

498.34

(2.62)

4,310.73

10,961.09

9,166.52

Plant & Machinery

23,006.00

922.19

4,633.18

1,429.41

27,131.96

10,166.45

221.17

1,705.88

737.93

11,355.56

15,776.39

12,839.55

Vehicles

1,145.68

163.88

242.59

302.74

1,249.41

478.12

61.87

201.19

162.31

578.88

670.54

667.56

Furniture & Off Equipment

3,828.73

597.44

382.89

245.50

4,563.56

1,905.28

316.66

329.07

100.80

2,450.21

2,113.35

1,923.45

Computers

2,534.56

0.00

532.60

194.43

2,872.73

1,802.82

0.00

257.60

268.81

1,791.61

1,081.12

731.74

Patents

1,095.97

16.90

0.00

0.00

1,112.87

239.70

5.35

125.36

0.00

370.41

742.46

856.27

0.22

0.00

0.00

0.00

0.22

0.00

0.00

0.00

0.00

0.00

0.22

0.22

938.81

0.00

1,500.11

1,134.24

1,304.68

0.00

0.00

0.00

0.00

0.00

1,304.68

938.81

1,402.75

10.30

15,582.35

0.00

16,995.40

434.85

0.00

(434.85)

0.00

0.00

16,995.40

967.90

48,148.63

3,356.19

24,004.40

3,360.60

72,148.62

18,698.43

779.66

2,692.46

1,267.23

20,903.32

51,245.30

29,450.20

Live Stock
Capital Work In Progress
Goodwill
Total

Note :Capital work-in-progress includes advance agaisnt capital goods Rs.1075.84 (previous year Rs.588.47).

CONSOLIDATED FINANCIAL STATEMENTS 27

Annual Report 2005-06

Dabur India Limited

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
As At 31st
March 2006
(Rs.In Lacs)

As At 31st
March 2005
(Rs.In Lacs)

Schedule G- Investments
A

As At 31st
March 2006
(Rs.In Lacs)

As At 31st
March 2005
(Rs.In Lacs)

153.84

25.98

324.51

253.31

7,110.50

7,335.97

7,435.01

7,589.28

49.45

27.91

2.25

123.25

4,621.98

1,105.33

137.28

84.40

219.07

131.45

In Fixed Deposit Accounts

86.24

- Postal Savings Bank Accounts

0.95

0.95

5,117.22

1,473.29

33,830.07

29,375.49

1,660.41

2,742.52

Advance Payment Of Tax

5,914.13

3,690.49

Advances To Suppliers

2,084.01

2,471.18

Advances To Employees

324.48

344.72

Balance with Excise Authorities

434.84

992.80

2,884.06

1,135.51

13,301.93

11,377.22

47,132.00

40,752.71

Schedule H - Current Assets,Loans and Advances (Contd.)

CURRENT INVESTMENTS

Less :Provision For Doubtful Debts

QUOTED-OTHER THAN TRADE

1 Alliance Mutual Fund
(Purchase during the year) Units 19361076.60
(Sold during the year) Units 19361076.60

0.00

0.00

ABN Mutual Fund

(Purchased during the year) Units 54525669.05
(Sold during the year) Units 71784911.1

'Cash In Hand
- Remittance-In-Transit & Cheques-In-Hand
0.00

0.00

6,121,645.75
(8,025,741.82)

873.34

DSP Mutual Fund

(Purchased during the year) Units 5619790.69
(Sold during the year) Units 5519790.69

100,000.00

1,000.00

Deutsche Bank Mutual Fund

(Purchased during the year) Units 3590135.74
(Sold during the year) Units 3590135.74

HSBC Mutual Fund

(Purchased during the year) Units 1663874.52
(Sold during the year) Units 1663874.52

1,080.00

0.00

0.00

0.00

0.00

JM Floter Fund- S T P Growth

(Purchased during the year) Units 14021759.21
(Sold during the year) Units 14021759.21

0.00

0.00

Kotak Mahindra Mutual Fund

(Purchased during the year) Units 22070258.03
(Sold during the year) Units 9909963.24

12,160,294.80

(Deposited With Excise Authority)

B. Loans And Advances (Unsecured,Considered Good)

Security Deposit with Various Authorities
(Including Deposit with Govt.Authorities Rs.887.27
Previous Year Rs.435.89)

1,716.00

0.00

(5,069,567.91)

0.00

11 Prudential Mutual Fund

(Purchased during the year) Units 11673863.38
(Sold during the year) Units 7163385.54

4,510,477.84

500.00

12 Reliance Liquid Fund

(Purchased during the year) Units 14965422.50
(Sold during the year) Units 14965422.50

0.00

0.00

13 Sahara Mutual Fund

(Purchased during the year) Units 22583566.95
(Sold during the year) Units 30979167.65

(8,395,600.71)

0.00

1,000.00

0.00

0.00

522.00

0.00

Other advances recoverable in cash or in kind or for value to be received

Total (A+B)

Schedule IA- Miscellaneous Expenditure

17 UTI Mutual Fund

(Purchased during the year) Units 246888.06
(Sold during the year) Units 246888.06
LONG TERM INVESTEMENT
I)
Quoted-Equity Shares- Other than Trade
1 Dabur Pharma Ltd

0.00

0.00

0.00

0.00

0.00

0.00

50,000.00
270,000.00
-

105.00
27.00
0.00

105.00
1,350.00
6.50

Housing Society Limited

15.00

0.02

0.02

2 Capexil (Agencies) Limited

3.00

0.01

0.01

3 Dabur Employees Consumers Co-op Stores Limited

250.00

0.03

0.03

4 Dabur Employees Cooperative Credit Society Ltd

650.00

0.07

0.07

5 Co-operative Stores Limited,Super Bazar

500.00

0.05

0.05

6 National Saving Certificate

1.26

0.21

7 Kisan Vikas Patra

0.07

0.00

0.01

0.00

12.49

12.06

0.00

17,473.29

4,240.13

23,329.02

26.99

0.00

4,213.14

23,329.02

- Raw materials

7,753.23

8,068.03

- Packing materials,stores and spares

4,820.50

3,646.80

- Stock in process

1,402.38

746.23

- Finished goods

7,301.73

7,851.86

21,277.84

20,312.92

Considered good

324.51

253.31

Considered doubtful

153.84

25.98

478.35

279.30

Unquoted - Equity Shares other than Trade

1 Commerce Centre Cooperative

Share Application Money

TOTAL
LESS PROVISION FOR DIMINUTION IN LONG TERM INVESTMENT

Less:Amortised During The Year

18.75

Under ESOP Opening Balance

Less:Cancelled During The Year

Less:Amortised Related To Subsidiary

Total
4.79

9 5% Special Bond

65.62

Less:Amortised During The Year

4.79

8 Saraswat Coop Bank Ltd

Technical Knowhow Fees Paid

Addition During The Year

479,400.00

II)Unquoted -Equity Shares Trades Investments

1 Sanat Products Ltd
2 Dabon International Limited
3 Green Valley Products Pvt.Ltd
(65000 shares sold during the year)

(To the extent not written off or adjusted)

84.37
46.87

18.75

65.62

Deferred Employee Compensation

16 TATA Mutual Fund

(Purchased during the year) Units 4635609.87
(Sold during the year) Units 4635609.87

TOTAL

In Current Accounts

0.00

15 Sundram Mutual Fund

(Purchased during the year) Units 19160961.65
(Sold during the year) Units 19160961.65

IV)

In Fixed Deposit Accounts

- Balance With Non Scheduled Banks

10 Principal Mutual Fund

(Purchased during the year) Units 131782808.67
(Sold during the year) Units 136852376.59

III)

- Balance With Scheduled Banks

In Current Accounts

14 SCB Mutual Fund

(Purchased during the year) Units 5709112.89
(Sold during the year) Units 5709112.89

B.

Cash And Bank Balances :

1,775.00

(17,259,242.05)

Birla Mutual Fund

(Purchased during the year) Units 11325215.95
(Sold during the year) Units 11325215.95
CHOLA Liquid Fund - Institutional Plus-Growth
(Purchased during the year) Units 40193243.81
(Sold during the year) Units 42097339.89

- Other Debts (Considered Good)

0.00

1,000.00

Schedule H - Current Assets,Loans and Advances

A. Current assets :
Inventories

Sundry debtors (unsecured):

- Debts outstanding for a period exceeding six months :

515.42

575.33

3503.78

279.03

1.43

0.00

4017.77

854.36

91.17
685.99

3240.61
3287.48

338.94

515.42
581.04

28 CONSOLIDATED FINANCIAL STATEMENTS

Dabur India Limited

Annual Report 2005-06

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
For the year ended
31st March,2006
(Rs.in lacs)

For the year ended

31st March,2005
(Rs.in lacs)

For the year ended

31st March,2006
(Rs.in lacs)

For the year ended

31st March,2005
(Rs.in lacs)

Schedule J- Sales and Other Income

Donation

331.37

257.90

A. Sales :

Contribution For Scientific Research Expenses

720.00

597.97

Provsion For Doubtful Debts

145.82

44.08

9.88

65.85

108.87

Domestic Sales Less Returns

Export Sales

171,140.50

134,423.64

18,816.50

19,271.69

189,957.00

153,695.33

Loss On Sale Of Investments (Other Than Trade)

Loss On Sale Of Fixed Assets (Net Of Profit Rs.Nil,Previous Year Rs.10.66)
Provision For Contigent Liability

B. Other Income :
Export Subsidy

172.37

44.65

Rent Realised

17.30

21.10

Sale Of Scrap

278.78

276.60

0.48

0.50

18.54

530.63

170.39

96.39

396.96

10.42

211.91

Dividend From Long Term Investment Other Than Trade Investment

Royalty
Miscellaneous Receipts
Profit On Sale Of Current Investments
Profit On Sale Of Long Term Investments
Profit On Sale Of Fixed Assets
( Net Of Loss Of Rs.16.74 Previous Year Rs.Nil)
( Including Capital Profit Of Rs.19.27 Previous Year Rs.Nil)
Interest Received

89.08

26.99

56,522.85

47,691.25

Fixed Period Loan

389.33

402.33

Others

735.70

419.36

Bank Charges

513.70

421.90

1,638.73

1,243.59

Provision For Diminution In The Market Value Of

Long Term Trade Investment

Schedule O-Financial Expenses

Interest Paid On :

10.28

Schedule IB-Miscellaneous Expenditure written off

1,336.68

920.62

Technical Knowhow Fees Paid

Deferred Employee

18.75
685.99

18.95
326.49

Compensation Under Esop

Schedule K-Cost Of Materials

Less:Transferred To

Raw Materials Consumed :

I)

Opening Stock

Ii)

Add :Stock Inherited From New

278.50

407.49

195.91

130.58

Director Remuneration
7,154.31

5,912.78

138.26

Total

426.24

149.53

Subsidiaries
Iii)

Add :Purchases

Iii)

Less :Closing Stock

38,693.11

32,233.70

45,985.68

38,146.48

7,227.27

38,758.41

7,154.31

Schedule P - Accounting Policies & Notes To Accounts

30,992.17

Packing Materials Consumed :

I)

Opening Stock

Ii)

Add :Stock Inherited From New

3,009.44

2,105.61

305.85

A. ACCOUNTING POLICIES
Significant accounting policies are summarized below:

Subsidiaries
Iii)

Add :Purchases

Iii)

Less :Closing Stock

(All figures in Indian Rupees lacs except share capital)

26,831.23

18,235.57

30,146.52

20,341.18

4,254.78

Purchase Of Finished Products

25,891.74

3,009.44

15,385.77

1.

17,331.74
19,784.12

Adjustment Of Stocks In Process And Finished Goods

Opening Stock :
Stock In Process
Finished Products
Stock Inherited From New Subsidiaries

813.84

1,212.78

7,784.26

5,219.54

834.47

9,432.57

6,432.32

Stock-In-Process

1,506.17

746.23

Finished Products

7,190.02

7,851.87

8,696.19

8,598.10

Closing Stock :

Increase(-)/Decrease In Stock In

The consolidated financial statements have been prepared on the basis of AS-21, issued by ICAI read with the following basic assumptions:

736.38

(2,165.77)

80,772.30

65,942.25

Power And Fuel

3,548.77

2,740.15

Stores & Spares Consumed

1,083.63

545.60

I.

The financial statements of the parent company and its subsidiary companies have been combined on a line-byline basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions and resulting in unrealized profits or losses.
Investments of parent company in subsidiaries are eliminated against respective proportionate stake of parent company therein on the respective dates when such investments were made by way of debiting/crediting the difference
of the two in goodwill/ capital reserve except for DNPL where the same is adjusted against share premium account.
In respect of foreign subsidiaries, rise in the value of stake of parent company in terms of reporting currency upto
the date of commercial production (i.e. the date, their assets were due for capitalization) on account of exchange
fluctuation has been credited to capital reserve. Subsequent generation of reserve other than that of the nature of
capital reserve including gain/ loss arising on account of translating the transactions of the year, year-end assets and
liabilities of the foreign subsidiaries for the purpose of consolidating with parent company's assets at exchange rates
ruling on year-end-date has been recognized as reserve specifically earmarked for the purpose.

II

The consolidated financial statements are prepared by adopting uniform accounting policies for like transactions
and other events in similar circumstances and are presented to the extent possible, in the same manner as the parent company's separate financial statements unless stated otherwise.

Process And Finished Goods

Schedule L-Manufacturing and Operating Expenses

Repairs & Maintenance

Building

156.77

118.57

Plant & Machinery

202.15

120.57

Others

392.22

315.69

327.70

209.79

5,711.24

4,050.37

Processing Charges

Schedule M- Payments to & provisions for Employees

Salaries,Wages And Bonus

10,057.40

6,978.67

Contribution To Provident And Other Funds

1,110.58

818.88

Workmen And Staff Welfare

2,432.48

2,226.64

895.29

824.15

14,495.75

10,848.34

Directors' Remuneration

III. Minority interest, where lying, in the net income of consolidated subsidiaries have been adjusted against the income of the group so as to arrive at net income attributable to the parent company. Minority interest consisting of
equity attributable to them on the date such investments were made by the parent company and movement in their
equity since the date of parent subsidiary relationship has been disclosed in the consolidated financial statement
separately from liability and equity of shareholders of parent company.
IV Current assets/liabilities and income/ expenses of overseas subsidiaries have been translated in reporting currency in terms of exchange rates prevailing on year-end date and average rate respectively on the basis of non-integral
operation approach as per revised AS-11.
Fixed assets of the overseas subsidiaries have been accounted for in terms of the exchange rate prevailing at the
point of commencement of production of relevant subsidiaries pertaining to assets appearing since that point of
time and at purchase price (including cost of installation) for remaining fixed assets.
2

Accounting Convention:
The accounts have been prepared in accordance with the historical cost convention.

a.

Fixed Assets and Depreciation:

Schedule N-Selling and Adminstrative Expenses

Rent

1,031.21

738.89

Rates And Taxes

117.81

119.00

Insurance

341.84

304.40

14,306.39

11,996.24

6,405.88

4,339.22

35.18

1,383.09

1,702.74

22,168.21

20,375.91

Travel & Conveyance

2,098.76

1,891.14

Legal & Professional

928.14

876.31

Telephone ,Fax Expenses

407.62

404.17

Security Expenses

186.55

141.51

General Expenses

5,731.71

3,645.47

9.00

6.80

71.55

51.55

Sales Tax
Freight And Forwarding Charges
Cartage And Coolie
Commission,Discount And Rebate
Advertising And Publicity

Directors' Fees
Auditors' Remuneration:

Principles of consolidation:
The Consolidated Financial Statement relates to Dabur India Limited (the parent company) and Dabur Foods Ltd.
Balsara Home Products Ltd., Balsara Hygiene Products Ltd., Besta Cosmetics Ltd., (all four wholly owned subsidiary
companies incorporated in India 50% stake .in last named entity held by Balsara Hygiene Products Ltd. and 2% by
Balsara Home Products Ltd.) Dabur International Ltd., (wholly owned body corporate incorporated in Isle of MAN),
Dabur Overseas Ltd. (a subsidiary body corporate incorporated in British Virgin Island 100% stake wherein is held
by Dabur International Ltd.), Dabur Nepal Pvt. Ltd. (a subsidiary body corporate incorporated in Nepal, 97.5% stake
wherein is held by Dabur International Ltd.), Pasadensa Foods Ltd. (a wholly owned subsidiary company incorporated in India, 100% stake wherein is held by Dabur Foods Ltd.,), Dabur Egypt Ltd. (a wholly owned subsidiary body
corporate incorporated in Egypt, 76% & 24% of stake wherein are held by Dabur Overseas Ltd. and Dabur International Ltd. respectively), Asian Consumercare Pvt. Ltd. (a subsidiary body corporate incorporated in Bangladesh,
76% stake wherein is held by Dabur International Ltd.), Weikfield International (UAE) (a subsidiary body corporate incorporated in UAE, 38.41% stake wherein is held by Dabur International Ltd. which has control of composition of board of directors of the former being raison d'etre of subsidiary status) and African Consumer Care Ltd (
a subsidiary body corporate incorporated in Nigeria, 90% stake wherein is held by Dabur International Ltd).

b.

Fixed assets are stated at carrying amount subject to deduction of accumulated depreciation.

Cost includes inward freight, duties, and taxes and expenses incidental to acquisition and installation.

Depreciation has been provided at rates provided in schedule XIV of Companies Act.

In respect of the parent company, Dabur Foods Ltd & Asian Consumer care Pvt. Ltd. depreciation on fixed assets
has been provided on written down value method, except for Baddi, Katni, 5/1 Sahibabad, Jammu, Rudrapur
unit and Corporate Office of parent company, Dabur Egypt Limited, Balsara Home Products Ltd., Dabur International Limited, Dabur Nepal Pvt. Ltd, Weikfield Limited, Pasadensa Foods Ltd and African Consumercare Ltd
where the depreciation have been provided on straight line method. For Balsara Hygiene Products Ltd., depreciation on fixed asset acquired upto 31.03.1991 has been provided on written down method and subsequent
addition on straight line method. For Besta Cosmetics Ltd. fixed assets acquired upto 31.03.1994 has been provided on written down value method and subsequent addition on straight line method. Fixed Assets of Daman
factory of Balsara Home Products Ltd. has been provided on written down value method.

Patent and trade marks are amortized equally over a period of 10 years.

Moulds are depreciated 100% in the year of addition.

Impairable assets are identified at the year-end in term of para-5 to 13 of AS -28 issued by ICAI for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of rel-

CONSOLIDATED FINANCIAL STATEMENTS 29

Annual Report 2005-06

Dabur India Limited

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
b.

evant assets. Impairment loss, when crystallizes, is charged against revenue of the year.
c.

d.

e.

Investments:
Long term investments are held at cost. Provision is made against diminution in carrying cost of investment, if any,
of permanent nature as required under AS-13 issued by ICAI.
Current investments are held at lower of cost and NAV/Market value.
Deferred Entitlement on LTC:
In terms of the opinion of the Expert Advisory Committee of the ICAI, the parent company has provided liability
accruing on account of deferred entitlement towards LTC in the year in which the employees concerned render
their services.

Raw materials, Packing materials, stores & Spares :- On FIFO basis for all units except for Balsara Hygiene Products
Ltd., Balsara Home Products Ltd. and Besta Cosmetics Ltd. where the same are valued at weighted average cost.

Work-in-process :- At cost of input plus overhead upto the stage of completion.

Finished goods:- At cost of input plus appropriate Overhead

Research and Development Expenses:

Contributions towards scientific research expenses are charged to the Profit & Loss Account in the year in which
the contribution is made.

g.

Retirement Benefits:
Liabilities in respect of retirement benefits to employees are provided for as follows:

i.

j.

k.

l.

d.
e.

5.

Inventories:
Stocks are valued at lower of cost or net realizable value. Basis of determination of cost remain as follows:

f.

h.

c.

Leave salary of employees of the company on the basis of actuarial valuation/management estimate/insurer's
advice

Gratuity liability on the basis of actuarial valuation/management estimate/insurer's advice.

Liability for superannuation fund on the basis of insurer's advice

VRS, if paid, is charged to revenue on actual basis in the year of payment.

Sales and purchases are accounted for on the basis of passing of title to the goods.

Sales comprise of sale price of goods including excise duty and sales tax but exclude discount.

All items of incomes and expenses have been accounted for on accrual basis.

(i) Associates / Joint Ventures

Mr Rukma Rana, joint venture partner in Dabur Nepal Pvt Ltd
ACI Ltd. Bangladesh
Weikfield Product Co. Pvt. Ltd
Green Valley Products Pvt Ltd
(ii) Key management personnel
(Whole time directors)
a) Pradip Burman
b) Amit Burman
c) Dr. Anand Burman
d) Siddharth Burman
e) P. D. Narang
f) Sunil Duggal
g) Sanjay Sharma
h) T K Gupta
i) S. Ramakrishna
j) Mohit Burman
k) Arvind Kumar
l) Chetan Burman

Income Tax & Deferred Tax

Income Tax is estimated considering the provisions of the Statute. Deferred tax is recognized for entities where the
same is mandatorily applicable subject to the consideration of prudence, on time differences being the difference
between taxable income and accounting income that originate in one period and capable of reversal in one or more
subsequent periods. No deferred tax asset is recognized against un-absorbed depreciation and carry forward loss
under fiscal act unless there is virtual certainity of future taxable profit to realize the asset, due to restriction imposed under para 17- AS-22 issued by ICAI.

Employee Stock Option Purchase (ESOP):

Aggregate of quantum of option granted under the scheme in monetary term has been shown as Employees Stock
Option Scheme outstanding in Reserve and Surplus head of the Balance Sheet by way of debiting deferred Employee Compensation under ESOP as per guideline to the effect issued by SEBI.

Technical know-how fees paid to Technical Collaborators upto 31.03.2004 are being amortized equally over a
period of six years. Subsequent such expenses are charged to revenue in the year of incurrence.

Deferred Employees Compensation under ESOP is being amortized on straight-line basis over vesting period.
Employee compensation in respect to option granted to subsidiary company employees is being reimbursed by
subsidiary companies to holding company.

6B. Transactions with related parties (Consolidated) for the period from 01.04.2005 to 31.03.2006
Associates

Key
Management
Personnel

Relatives
Of Key
Management
Personnel

Total

Outstanding
As On
31.03.2006

0.00
[0.00)

0.00
[0.00]

0.00
[0.00]

0.00
[0.00]

0.00
[0.00]

0.00
[1565.05]

0.00
[0.00]

0.00
[0.00]

0.00
[1565.05]

0.00
[18.93)

Receiving of Services

180.00
[190.66]

0.00
[0.00]

0.00
[0.00]

180.00
[190.66]

0.00
[2.85]

Repayment of Loans Recd

0.00
[200.00]

0.00
[0.00]

0.00
[0.00]

00.00
[200.00]

0.00
[0.00]

Loans Given

00.00
(100.00)

0.00
[0.00]

0.00
[0.00]

00.00
[100.00]

0.00
[200.00]

6.00
[20.77]

0.00
[0.00)

0.00
[0.00]

6.00
[20.77)

0.00
[0.00]

Interest Recd On Loans Given

0.00
(0.00)

0.00
(0.00)

0.00
[0.00]

0.00
(0.00)

0.00
[0.00]

Remuneration/Exg./Pension

0.00
[4.28]

532.84
(638.58)

125.98
[169.01]

658.82
[811.87]

0.00
[0.00]

Repayment of Loans Given (Instl.Recd)

3.50
(0.00)

0.00
(0.00)

0.00
[0.00]

3.50
[0.00]

0.00
[0.00]

Interest Paid On Loan Recd

0.00
[4.09]

0.00
[0.00]

0.00
[0.00]

0.00
[4.09]

0.00
[0.00]

Donation Given

0.00
[0.00]

0.00
[0.00]

0.00
[0.00]

0.00
[0.00]

0.00
[0.00]

Royalty Received

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

Employee Stock Option Scheme

0.00
(0.00)

278.50
(195.91)

0.00
(0.00)

278.50
(195.91)

0.00
(0.00)

Sale of assets

0.00
(0.00)

6.47
(0.00)

0.00
(0.00)

6.47
(0.00)

0.00
(0.00)

Purchases of Goods
Sale of Goods

Rent Paid

B: NOTES TO ACCOUNTS
1.

Building constructed on leasehold land included in the value of building shown in Fixed Assets Schedule:

Cost/Revalued
Written Down

As at 31st March 2006

6757.63
4781.37

As at 31st March 2005

5378.72
3607.73

2.

None of the assets qualify for the impairment loss for the year (Previous year Rs. NIL) which was adjusted against
the profit & loss account /opening reserve.

3.

a. Further to para A(2)(b) above, recoverable value of cash generating units (CGUs] have been assessed based on
value-in-use method which for each CGUs worked out to much higher than corresponding book value of net assets
thereby not warranting further exercise of arriving at their net-selling-price. This further confirms absence of exigency of making any provision against impairment loss.
b. Beside those referred to in parent company financial statements, each plant of each subsidiary constitutes independent CGU.
c. Annual discount rate considered for arriving at value-in-use of assets pertaining to each CGU are as per interest rate of external borrowing plus risk factor at a rate of two percent per annum.

4.

Contingent Liabilities:
a)
i) Claims not acknowledged as debts:
a) In respect of civil suits filed against the company Rs.338.61 (Previous year 276.82)
b) In respect of claims by employees Rs.0.01 (previous year 0.50)
c) In respect of letters of credit Rs.2119.04 (previous year 3271.92)
ii. In respect of Bank Guarantees executed Rs.2933.96 (previous year 1988.20)
iii. In respect of Sales Tax under appeal Rs.1291.95 (previous year 1042.21)
iv. In respect of excise duty disputes pending with various judicial authorities Rs.2832.24 (previous year
Rs.2227.26)
v. In respect of Corporate Guarantees given by the Company Rs.7644.85 (previous year Rs.14148.94)
vi. In respect of Income tax under appeal Rs.319.79 (previous year Rs.401.25)
vii.Estimated Amount of contract remaining to be executed on capital Account Rs.450.89, net of Advance
(previous year Rs.1064.15)
viii. In respect of Bill Discounting of Company Rs.277.54 (Previous year Rs.535.42)
b) Information pursuant to AS 29 issued by ICAI:
a. Rs. NIL (previous year Rs.89.08) has been provided during the year against disputed liabilities in respect of
amount reliably estimable within the meaning of relevant standards.

R C Burman
Asha Burman
A.C.Burman

[iv] An Enterprise owned by any Director (KMP) of Dabur India Limited / subsidiary:
1. Welltime Housing and Finance Pvt. Ltd.
2. Prayag Commercial Private Limited

m. Miscellaneous Expenditure:

Relatives of Key Management Personnel

(iii) Associate Entities over which Key Management Personnel are able to exercise significant influence:
1. Welltime Housing and Finance Pvt.Ltd
2. Miracle Commercial Enterprises Pvt Ltd
3.Wakarusa Laboratories Pvt Ltd
4. Jetways Travels Pvt Ltd
5. Gyan Enterprises Pvt.Ltd.
6. Puran Associates Pvt. Ltd

Contingent Liabilities:
Disputed liabilities and claims including claims raised by fiscal authorities, pending in appeal/court, for which no reliable estimate can be made of the amount of obligation or which are remotely poised for crystallization are not provided in accounts but disclosed in notes to accounts. However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.
Foreign Currency Translation:
In respect of foreign branches/offices, the company has adopted integral foreign operation approach has been adopted as per revised AS11 and accordingly revenue items have been converted at average of month end exchange rates
during the year. Fixed assets have been converted at the rates prevailing on dates of purchase. Assets & Liabilities
other than fixed assets are converted at the year-end exchange rate. Exchange gain or loss arising out of above is accounted for in Profit & Loss Account.
Receivables/payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at
the year-end date and the resultant gain or loss is accounted for in the Profit & Loss Account.
Exchange Loss / Gain arising out of transactions of revenue and capital nature are separately disclosed in notes to
accounts.
Capital as well as revenue implication of exchange fluctuation, accounted for in profit and loss account, are disclosed in notes to accounts.

Other Notes to Accounts containing inter-alia explanatory material, except for quantitative particulars pertaining
to foreign subsidiaries disclosure of which is not required under respective statute, are disclosed with the accounts
of different companies under consolidation.

6A. Related party Disclosures

Related party disclosures as required under AS 18 issued by the Institute of Chartered Accountants of India are given below:
(a) Name of related party and nature of related party relationship where control exists: Nil
(b) Name of the related party and nature of related party relationship other than those referred to in (a) above in
transaction with the company.

Recognition of Income and Expenses:

Existing provisions referred to in "a" above relates to nil (Rs.62.64), nil (Rs.26.15) and nil (Rs.0.29)towards liabilities on account of VAT, Sales Tax and Entry Tax respectively to be carried as such at the year end in view of
absence of any additional provision therefor during the year.
Resulting outflows against above liabilities pending before Sales Tax DC/Tribunal/CCT's if any matured are expected to be in subsequent financial year's.
Provisions are made herein for medium risk oriented issues as a measure of abundant precaution.
Remote risk possibility of further cash outflow pertaining to contingent liabilities listed in para 4(a) above
is presumed.

Figures in brackets are of previous year

The amounts or appropriate proportions of outstanding items pertaining to related parties at the Balance Sheet date
and provisions for doubtful debts due from such parties at that date - nil (previous year nil)
Amounts written off or written back in the period in respect of debts due from or to related to parties nil (previous year nil).
7.

Earnings per share has been computed as under:

Profit after Tax and after Minority Interest

Less:Provision for taxation of earlier years written off
Add Provision for taxation of earlier years written back

2005-06

2004-05

21418.24

15580.61

51.83

26.26

0.00

0.00

21470.07

15554.35

Basic

573149155

572839426

Diluted

577524999

575809845

Basic

3.74

2.72

Diluted

3.71

2.71

Weighted average number of shares outstanding:

Earnings per share (face value Re.1 per share):

30 CONSOLIDATED FINANCIAL STATEMENTS

Dabur India Limited

Annual Report 2005-06

Schedules annexed to and forming part of the accounts for the year ended 31st March,2006
8

Information purusant to as - 17 issued by ICAI.

FMCG

FOODS

ELIMINATIONS

Current Period

Previous Period

Current Period

Previous Period

164490

133264

20573

164490

133264

24732

Current Period

OTHERS

Previous Period

Total Consolidated

Current Period

Previous Period

Current Period

Previous Period

14215

4894

6216

189957

153695

20573

14215

4894

6216

189957

153695

17390

1891

773

678

691

27301

18854

24732

17390

1891

773

678

691

27301

18854

1054

720

519

446

66

78

1639

1244

3002

1910

22660

15700

REVENUE
External Sales
Inter-segment sales
Total Revenue
RESULT
Segment result
Unallocated corporate expenses
Operating profit
Interest expense (Net Of Interest Income)
Interest income
Income Tax(Current + Deferred+FBT)
Profit from ordinary activities

23678

16670

1372

327

612

613

Exceptional Item {Profit/(loss) on Long Lerm Trade Investment}

Net profit

(1274)
23678

16670

1372

327

98823

82271

14572

11615

612

613

21386

15700

2693

3106

96676

89840

5914

3690

OTHER INFORMATION
Segment assets

(19412)

(7152)

Unallocated corporate assets

Total assets

98823

82271

14572

11615

(19412)

(7152)

2693

3106

102590

93530

Segment liabilities

46681

44290

9872

9749

(7970)

(2762)

1083

1159

49666

52436

6506

5282

Total liabilities

46681

44290

9872

9749

(7970)

(2762)

1083

1159

56172

57718

Capital expenditure

22504

7876

22504

7876

2125

2353

2692

2801

3241

515

Unallocated corporate liabilities

Depreciation

448

316

119

132

Non-cash expenses other than depreciation

SECONDARY SEGMENT
As the company also exports,the secondary segment for the company is based on the location of customers .Out of the total sales of Rs. 189957 (Rs.153695) the export sales is of Rs.18816 (Rs. 19272) and domestic sale is Rs.171141 (Rs.134423)

9.a) Pursuant to parent Company's take over of 99.52%, 100% and 100% (after considering 52% held indirectly through
Balsara Hygiene Products Ltd.and Balsara Home Products Ltd) stake in Balsara Hygiene Products Ltd, Balsara Home
Products Ltd. and Besta Comsetics Ltd. respectively, with effect from April 01, 2005, following assets and liabilities of respective entities have been incorporated in CFS.
Balsara
Hygiene
Products Ltd
1.

992.98

2737.30

13.89

Accumulated depreciation

430.24

339.12

8.82

Net Fixed Assets

562.74

2398.18

5.07

Investments

731.94

1.12

Inventories

1293.65

Sundry Debtors

549.18

5.57

126.27

7.76

Loans and Advances

819.13

656.20

106.05

Profit & Loss (Debit)

0.00

3949.64

92.13

772.90

Capital reserve

102.78

2.57

Capital redemption reserve

30.01

Share Premium

660.00

423.85

43.75

45.54

1.24

Secured Loans

1039.62

Un-secured loans

46.75

Current Liabilities

112.30

3673.40

41.99

Provisions

378.50

335.15

45.20

Liabilities

Profit & Loss

Deferred tax liabilities

4.

Income and expenses of the year are added by :

Total Income

171.39

16436.87

121.83

Total expenses

204.16

15048.26

35.35

10073.54

4249.61

1840.62

The value of investment in excess of net assets of

subsidiary accounted for as good will.

Particulars

Hair Oil
Baddi

MSY Unit
Baddi

Daburgram
Unit

March,04

Nov,2000

July,2003

FMCG

FMCG

FMCG

33.37
(33.37)

28.35
(28.35)

44.27
(44.27)

4 Carrying amount of total liabilities

4.21
(4.21)

0.01
(0.01)

0.32
(0.32)

5 Profit from ordinary activities

0
(-5.3)

0
(-1.79)

0.00
(0.00)

6 Income Tax expenses

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

7 Gain on disposal of assets

0.00
(-0.01)

0.00
(0.00)

0.00
(0.00)

Operating activities

0
(-71.46)

0
(-0.47)

0
(-3.97)

Investing Activities

0.00
(24.14)

0.00
(0.00)

0.00
(0.00)

Financial Activities

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

1 Discontinued since
2 Segment the operation of the
Unit relates to in financial statement
3 Carrying amount of total assets

Gross Fixed Assets

General Reserve

3.

Besta
Cosmetics
Ltd.

Assets

Cash & Bank

2.

Balsara
Home
Products Ltd

11. Information pursuant to AS 24 on discontinued operations (pertaining to parent company only]

To above extent,the figures of previous year are not comparable with those of current year.

Minority interest reduced by

Share of profit of minority reduced by
Value of investments falling short of proportionate net assets of subsidiary accounted for as goodwil
To above extent,figures of previous year are not comparable with those of current year.

Note:

1. Figures in brackets are for previous year.

2. Parts of fixed assets belonging to discontinued operations under reference have been used for new plants set up in relevant premises.Such assets have
been left out of the purview of '3' above

12. Extraordinary item represents loss on sale of Long Term Trade Investments amounting to Rs.1274.05.
13. Exchange loss works out to Rs.100.14 (Previous Year Rs. 57.34) net of gain which has been charged to Profit & Loss
Account.
14. Deferred payment credit Rs. 148.35 (previous year Rs. NIL) forming part of unsecured loan is covered by letter of
credit issued by HSBC on behalf of a group company to a supplier of machinery.
15. Grouping and heads of accounts of the subsidiaries have been rearranged in terms of presentation of those of parent company as and when necessary. Besides, figures for previous year have been rearranged/ regrouped as and
when necessary in terms of current year's grouping.
Signatures to the Schedules "A" to "P" Annexed to and forming part of the Accounts.

10. Pursuant to parent Company's enhancement of stake in Dabur Nepal Pvt. Ltd. from 79.96% to 97.5% (stake herein
being held during the year through Dabur International Ltd., another wholly owned subsidiary unlike direct holding in previous year) CFS for the year have been affected as follows :
Particulars

8 Cash flow from discontinued operations:

As per our report of even date attached

For Dabur India Ltd.

For G.Basu & Co.

Chartered Accountants

V.C.Burman
P.D.Narang
Sunil Duggal
A.K.Jain

Amount
946.21
87.32

S.Lahiri
Partner

581.41
New Delhi
25th April 2006

Chairman
Director
Director
Addl.General Manager (Finance)
& Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 31

Annual Report 2005-06

Dabur India Limited

To the Board of Directors

Dabur India Limited.

We have audited the accompanying consolidated Balance sheet of Dabur India Limited, New Delhi and subsidiaries as
of March 31st, 2006 and related consolidated statement of income, stockholders equity and comprehensive income and
consolidated cash flow for the year then ended as prepared by Management under US GAAP.
These financial statements are the responsibility of the company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with auditing standard generally accepted in United States of America. These
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 examination on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principle used and signif-

icant estimates made by management as well as evaluating the overall financial statement presentation. We believe that
audit provides a reasonable basis for our opinion.
Incorporated herein are the accounts of certain subsidiaries whose accounts audited by other auditors as per law of
the country of incorporation of respective entities. We have relied on these accounts for subsequent translation of them
as per requirement of US GAAP.
In our opinion, the consolidated financial statements referred to above read with notes thereon present fairly, the financial position of Dabur India Limited and subsidiaries as of March 31, 2006, and the result of their operations, comprehensive income and cash flows for the year then ended in conformity with accounting principle generally accepted
in the United States of America.
G. Basu & Co.
Kolkata

Consolidated balance sheet as of 31st March,2006

Consolidated statement of income for the year ended 31st March,2006

Current Assets

INR in Lac

Cash and Cash equivalents

4892.75

1387.94

INR in Lac

Marketable securities

4096.15

4378.09

Accounts Receivable,net of allowances

7435.01

7589.28

Inventories

21617.30

20312.92

Other current assets

11609.50

26106.05

Total current assets

49650.71

59774.28

Operating expenses

Property,plant and equipment,net

33911.52

29530.41

Selling,general and administrative expenses

Goodwill

2005-06

2004-05

171996.64

136838.94

Cost of revenues

94475.19

75993.61

Gross profit

77521.45

60845.33

41290.52

34685.14

Revenue

17566.51

967.90

Personnel expenses

6930.40

4964.41

Intangibles

632.02

856.27

Depreciation and amortisation

3417.85

2830.95

Investments

364.31

357.68

Financial expenses

1638.70

1243.59

Total operating expenses

53277.46

43724.09

Operating Income

24243.98

17121.24

Other non-current assets

Total assets

1916.88

2829.81

104041.95

94316.35

Liabilities and stockholders' equity

Other income,net

Current Liabilities

Income before provision for taxes

Short term debt and current portion of long term debt

Trade accounts payable

7420.77

12890.17

Provision for taxes

16482.32

17301.91

Current tax expenses

Accrued expenses and other current liabilities

20300.90

17959.66

Defered tax benefit

Total current liabilities

44203.99

48151.74

Prior year tax adjustment

Long term debt,excluding current portion

3002.08

2311.21

Fringe benefit tax

Other non-current liabilities

6837.21

4595.06

Minority interest

Total non-current liability

9839.29

6906.27

Net income

Deffered Tax liabilities (net)

Total liabilities
Minority interest

1171.45

470.39

55214.73

55528.40

565.76

1858.76

875.10

447.21

25119.08

17568.45

2185.80

1509.88

598.48

-198.54

463.31
-32.51

138.01

21904.00

16119.10

Basic

3.82

2.81

Diluted

3.79

2.80

Earning per common share

Stockholders' equity

Weighted Average common shares outstanding

Common stock,Re 1/ Pre value.

Basic

573149195

572694600

1250000000 equity sharesauthorised

Diluted

577524990

575535148

573302784 issued and outstanding

5733.03

2864.20

Additional paid in capital

4068.97

6158.32

38438.93

27793.90

20.53

112.77

104041.95

94316.35

Retained earning
Accumulated & other comprehensive income
Total liabilities and stock holders' equity

The accompaying notes are an integral part of these consolidated financial statements

The accompaying notes are an integral part of these consolidated financial statements

Consolidated statement of stockholders' equity and comprehensive income

INR in Lac
Common Stock
Particulars

Balance as of 01.04.2004

No.of Shares

Amount

Additional
paid in capital

286249052

2862.49

5819.38

Comprehensive
income

Accumlated other
comprehensive
income (loss)

Adjustment for prior period items (Refer note No.22 )

Balance as of 01.04.2004
Issue of share against exercise stock option

2862.49
170661

5819.38

0.00

0.00

Retained earings
(Accumulated
earnings)

Total stockholders'
equity

19840.54

28522.41

-26.60

-26.60

19813.94

28495.81

1.71

Amortization of employees stock option

1.71
338.94

338.94

Employees share of Profit

-3.25

-3.25

Interim Dividend

-2862.89

-2862.89

Proposed Dividend

-4296.30

-4296.30

-374.14

-374.14

Tax on Interim Dividend

Tax on Proposed Dividend
Net Income
Translation adjustment
Investment realised during year net of deferred tax (16.34)
Unrealised gain on short term investment (net of deffered Tax 0.4)
Unrealised gain on long term investment (net of deffered tax 86.22)
Balance as of March 31,2005

2864.20

6158.32

Bonus Shares

-602.56
16119.10

-9.02

-9.02

-9.02

-28.31

-28.31

-28.31

0.69

0.69

0.69

149.41

149.41

149.41

112.77

112.77

Adjustment for prior period items (Refer note No.38 )

Issue of share against exercise stock option

-602.56
16119.10

27793.90

36929.19

96.70

96.70

2.32
2866.51

Amortization of employees stock option

2.32
-2866.51

0.00

777.16

777.16

Change resulting from purchase of additional share in subsidiaries

Employees share of Profit

0.00

Interim Dividend

-4303.03

-4303.03

Proposed Dividend

-5733.03

-5733.03

Tax on Interim Dividend

-602.98

-602.98

Tax on Proposed Dividend

-716.63

-716.63

21904.00

43808.01

Net Income

21904.00

Translation adjustment

-100.10

-100.10

-100.10

Unrealised gain on short term investment (net of deffered Tax 1.27)

3.79

3.79

3.79

Unrealised gain on long term investment (net of deffered tax)

4.06

4.06

4.06

21924.53

20.53

Balance as of March 31,2006

5733.03

4068.97

38438.93

The accompaying notes are an integral part of these consolidated financial statements

As per our report of even date attached

For Dabur India Ltd.

For G.Basu & Co.

Chartered Accountants

V.C.Burman
P.D.Narang
Sunil Duggal
A.K.Jain

S.Lahiri
Partner
New Delhi
25th April 2006

Chairman
Director
Director
Addl.General Manager (Finance)
& Company Secretary

70165.46

32 CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP

Dabur India Limited

Annual Report 2005-06

Consolidated statement of cash flow for the year ended 31st March,2006
INR in Lac
31.03.2006

31.03.2005

21904.00

16119.89

Cash flows from operating activities

Net Income
Adjustments to reconcile net income to net cash and
cash equivalents provided by operating activities

Weikfield International (UAE) Ltd

United Arab Emirate

38.41% by Dabur international Ltd.

Dabur Foods Ltd.

India

100%

Pasadensa Foods Ltd.

India

100% by Dabur foods Ltd

Dabur Egypt Ltd.

Egypt

76% by Dabur overseas Ltd & 24% by Dabur

International Ltd

African Consumercare Ltd

Nigeria

90% by Dabur International Ltd

Asian Consumercare Pvt.Ltd

Bangladesh

76% by Dabur International Ltd

Balsara Home Products Limited

India

99.52%

Depreciation and amortization

3436.80

2830.95

Balsara Hygiene Products Limited

India

100%

Provision for Taxation

2185.80

1509.88

Besta Cosmetics Limited

India

Deferred tax benefits

598.48

(198.54)

48% by Dabur India Limited,50% by Balsara

Hygiene Products Limited and 2% by Balsara
Home Products Limited

(146.00)

202.63

Loss / (gain) on disposal of investment

(55.00)

(407.38)

Amortization of employees stock option plan expenses

777.16

338.94

Minority interest

(32.51)

138.01

96.70

(26.60)

Allowance for doubtful accounts

14.00

Loss / (gain) on disposal of property,plant and equipment

Prior period adjustment

Dividend Income

(0.50)

Interest expenses

1638.70

1243.59

54.17

(487.91)

(1304.38)

(5,028.47)

912.93

870.16

d)

Cash and Cash equivalents :

Cash equivalents include all highly liquid investments purchased with an original maturity of three months
or less.

e)

Accounts Receivable
Allowances for doubtful account based on direct analysis of receivable against uncollected dues are provided in account.

f)

Inventories :
Finished goods are stated at the lower of cost and net realizable value. Cost is determined using first-in-first
out / weighted average methods for raw materials, packaging materials and stores and spares. Cost includes
the purchase price and attributable costs. Cost in the case of work-in-process and finished goods comprise
direct labour, material costs and production overheads. Allowance for potentially obsolete or slow moving inventory is made on the basis of the management's analysis of inventory levels. Inventories worth INR
21250.87 lac has been encumbered with banks towards security against short-term borrowing.

g)

Investment Securities :
The Group Companies follow investment policies, which are consistent with the provisions of Statements
of Financial Accounting Standard (SFAS) No. 115, "Accounting for certain Investments in Debt and Equity Securities".
Short-term readily marketable securities are held at market price at period end. Investment held for long
term in securities where significant influence exists within the meaning of APB- 18, are valued at current
market price and in its absence for unlisted securities at fair value. Investment held for long term not exceeding 20% of common stock of investee are classified as "available for sale securities" under non-current
assets which are carried at historical cost less diminution therein, if deemed of permanent nature. Unrealized gain and losses , net of related tax effect are reported as a separate component of stock holder's equity until realized. Realized gain or losses on sale of securities are computed with reference to their weighted average cost. Realized gains, losses and decline in value on non-readily marketable available-for-sale
securities that are judged to be other than temporary, are included in the statement of income. Interest and
dividend income is recognized when earned.

h)

Property, Plant and Equipment:

Property, plant and equipment are stated at historical cost less accumulated depreciation. Depreciation is
calculated on the straight-line method over the estimated useful life of the respective assets. Assets under
capital leases and leasehold improvements are amortized over the lower of their estimated useful lives or
the term of the lease.
Expenditure for additions and improvements are capitalized, while costs for repairs and maintenance are
charged to operations as incurred. Advances paid for the acquisition of property, plant and equipment outstanding at the balance sheet date and the cost of property, plant and equipment not put to use before such
date are disclosed as "capital work-in-progress". The cost and the accumulated depreciation for assets sold,
retired or otherwise disposed of are removed from the amounts disclosed in the balance sheet and the resulting gain or loss is included in the Consolidated Statement of Income.
Estimated cost of sale is reduced from carrying amounts of assets when the same is held for disposal. No
further depreciation is provided after the asset become idle whether on the ground of temporary suspension of use or poised for sale.
The Group Companies have determined the estimated useful lives of assets for depreciation purposes.

Changes in operating assets and liabilities

(Increase) / decrease in accounts Receivable
(Increase) / decrease in Inventories
Decrease / (increase) in other non current assets
Decrease / (increase) in other current assets

(2439.45)

Increase / (decrease) in account payable

(819.59)

6476.76

Increase / (decrease) in other Current Liabilities

2341.24

2613.41

Increase / ( decrease) in other non current liabilities

2242.15

1069.72

Income tax paid

(2240.41)

(1,668.57)

Interest paid

(1638.70)

(1,222.18)

Net cash provided by operating activities

27512.09

39394.8

(7841.71)

(7,134.77)

Purchase of intangibles

(11.55)

(717.99)

Purchase of Securities

(364.80)

Cash flow from Investing activities

Expenditure on property,plant and equipment
Proceeds from sale of propety,land and equipment

500.02

Purchase of Marketable securities

(4089.34)

Sale of marketable securities

143,259.86

Sale proceed of Dabon / Green Valley

55.00

Sale of other securities

4377.00

Dividend received

0.50

Net cash issued in investing activities

(7875.40)

(34,772.73)

2.32

1.71

Cash flows from financing activities

Proceeds from exercise of stock option
Increase of short term debts (net)

(5469.40)

3177.40

690.87

(528.57)

(1319.61)

Payment of dividend

(10036.06)

(7,761.23)

Net cash provided by financing activities

(16131.88)

(5,110.69)

Net increase in cash and cash equivalent during the year

3504.81

Cash and cash equivalent at the beginning of the year

1387.94

Cash and cash equivalent at the end of the year

4892.75

Repayment of long term debts (net)

Dividend Tax

A. Assets held & used 31.3.06

Type of assets

Estimated useful life for charging depreciation

Leasehold Land

20 Years

(488.62)

Buildings

10-15 Years

1876.56

Plant and Machinery

6-15 Years

1387.94

Furniture and Fixtures

10-15 Years

Office Equipment

15 Years

Vehicles

5 Years

The accompaying notes are an integral part of these consolidated financial statements

Notes to consolidated financial statement for the year ended 31.3.2006

Assets under construction relate to Uttaranchal and Jammu manufacturing units, which are expected to
be in full operation by Sept 2006. Property, plant & equipment aggregating INR 28241 lac are mortgaged /
hypothecated to bank & financial institutions towards security on loan.

(all amounts in Indian Currency in lac unless specified otherwise):

1)

2)

Business - Dabur India Ltd. (DIL) along with its subsidiaries (collectively known as group companies) is a FMCG
Company with its business interest spread across the Globe.
The company was incorporated on 16th September 1975 with the object of manufacturing and marketing FMCG,
Ayurvedic & Pharmaceutical products. The pharmaceutical division of the company was demerged from the existing entity on 1.4.2003. DIL has manufacturing facilities in six States of India. The group companies presently
have manufacturing facilities in seven countries, namely India, Bangladesh, Nepal, Dubai, Sarjah, Egypt & Nigeria. Major markets of the group include India, Middle East, Nepal, Bangladesh, USA, and UK.
The growth of the company has been phenomenal since early ninety rarely shared by any other FMCG company
in this subcontinent.

i)

Intangible ( Patent & Trade mark)

Amortized over the useful lifetime of the asset on straight-line method subject to periodic review of utility.

j)

Goodwill :
Goodwill arises out of consolidation of subsidiaries or merger of body corporate with group companies
being the excess of value of investment over proportionate stake in net assets of subsidiaries / merged entities in terms of book values which are indicated in the consolidated balance sheet. Goodwill is not
amortized but subjected to periodic impairment testing where applicable. Goodwill of business combination working out to negative, is deducted proportionately from the fixed assets of acquired entity.

Significant Accounting Policies :

Significant Policy for preparation of accompanying Consolidated Financial Statement (CFS) is summarized below:

k)

Impairment of long lived assets :

The carrying value of long-lived assets, including intangible assets and property and equipment, are reviewed for impairment if an indication of impairment exists. Adjustments are recorded if the estimated
undiscounted net cash flows are less than the carrying value. In addition, the subsequent amortization period for the remaining carrying value of the impaired asset is revised, if necessary.

l)

Employees Stock Option Scheme

Compensation expenses for stock options granted to a section of management employees are measured by
using the intrinsic value based method of accounting under the USGAAP, as permitted by SFAS No. 123.
Under the method compensation expenses is recognized over vesting period based on difference, if any,
between the market value of stock of parent company on the date of grant of the stock option and the amount
to be paid by the employees for exercising the option.
Research and Development Expenses
Contributions towards scientific research expenses are charged to the statement of income in the year in
which the contribution is made.

a)

Basis of presentation and use of estimates:

The accompanying CFS include Dabur India Limited and its subsidiaries and are prepared in accordance
with accounting principles generally accepted in United States of America ("US GAAP"). The preparation
of consolidated financial statement in conformity with US GAAP requires management to make estimates
and assumption. These estimates and assumptions affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual result could differ from these
estimates. The management's estimates for charge back, rebates, discount, returns, and the useful life of
tangible and intangible assets and realization of deferred assets present sensitive estimate in particular.

m)
b)

c)

Foreign currency translation :

Functional currency of Dabur India Limited is Indian Rupee (INR) and the accompanying financial statements are reported in INR accounted for under remeasurement method. Monetary assets and liabilities of
overseas Group Companies are translated into INR at the appropriate year-end exchange rates. Income and
expenses are translated using the monthly average exchange rates in effect during the year being reported.
The resulting translation adjustments are recorded as a component of accumulated other comprehensive
income. Non-monetary assets are accounted for in terms of exchange rate ruling on the date of transaction.
Principles of consolidation:
The consolidated financial statements include the financial statements of DIL and its subsidiaries. An entity in which DIL has directly or indirectly, through other subsidiary undertakings, has taken a controlling
interest or is in a position to control composition of directors is classified as a subsidiary. All material intercompany accounts and transactions have been eliminated on consolidation.
The Group Companies, which are consolidated under DIL, presently comprise of entities with the following details:Name of Subsidiary:

Country of incorporation

Shareholding

Dabur Nepal Pvt Ltd

Nepal

97.5% by Dabur International Ltd

Dabur overseas Ltd

British Virgin Island

100%

Dabur International Ltd

Isle of MAN

100%

n)

Dividends
Dividends on common stock are recorded as a liability when recommended by the Board.

o)

Advertising cost
Expenditure on advertising is expensed when incurred.

p)

Earnings per share

In accordance with SFAS No. 128, "Earning per Share", basic earning per share in computed using the weighted average number of common shares outstanding during the period. Diluted earning per share is computed using the weighted average number of common and diluted common equivalent shares outstanding during the period.

q)

Revenue recognition :
Customers of the Group Companies consist primarily of large wholesalers and dealers network who sell
directly into the retail channel. Revenue from product sales is recognized when the merchandise is sold or
shipped to customers and all four of the following criteria are met: (i) persuasive evidence that an arrangement exists (ii) delivery of the products has occurred; (iii) the selling price is both fixed and determinable
and (iv) collectibility is reasonably assured.
Provisions for sales discounts, damaged product returns, exchange for expired product are established as

CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 33

Annual Report 2005-06

Dabur India Limited

a reduction of product sales revenues at the time such revenues are recognized. Certain charge backs and
rebate programmes extended to customers pursuant to industry standards are recognized as a reduction
from product sales revenues. Besides taxes/duties incidental to sale are recognized as a reduction from product sale revenue.
r)

s)

3)
4)

Income Taxes :
The Group Companies account for deferred taxes under the full liability method, in accordance with the
provisions of SFAS No. 109 "Accounting for Income Taxes". Deferred Tax assets and liabilities are recognized for the future tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the financial statements and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates as on the date of the financial statements. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the statement of income in the period of
change. Based on management's judgment, the measurement of deferred tax assets is reduced, if necessary,
by a valuation allowance for any tax benefits for which it is more likely than not that some portion of all of
such benefits will not be realized. Income Tax for current period is estimated and provided as per rule of
country of incorporation of respective entities under consolidation.
Employees' benefit :
Eligible employees of group companies are entitled to gratuity, superannuation and leave salary for which
liabilities are accrued or payment made to appropriate agencies entrusted to provide relevant benefits on
behalf of group companies. Accrued liabilities are ascertained on the basis on actuarial advice / management estimate and when payment is made to the agencies entrusted for the purpose, the same is accounted for as per payments made to these agencies in terms of their advice.

Advertising and Publicity costs during the period amounted to INR 22168 lac.
Changes in Accounting Procedures:
This being the 1st financial period of presentation of account in US GAAP, accounting treatments remain in terms
of latest pronouncement of appropriate bodies and as such the question of disclosure on the changes in accounting procedure does not arise.

8)

Inventories :
Inventories comprises of the following :INR in Lac
2006

2005

Raw Materials

8092.69

8068.03

Packing materials,stores & spares

4820.50

3646.80

Stock in process

1402.38

746.23

Finished goods

7301.73

7851.86

21617.30

20312.92

Total
9)

Other Current assets :

Other current assets comprise of the following :
INR in Lac
2006

2005

Fixed deposit

0.00

22.00

Securty deposits with various authorities

0.00

10.31

Advance payment of Tax

5914.13

3690.49

Advances to suppliers

2084.01

2471.18

Advance to employees

292.48

310.47

Balances with excise authority

434.84

992.80

2884.04

1135.51

0.00

17473.29

11609.50

26106.05

Other advances recoverble in cash or in kind or value to be received

Advance against acquisition of equity shares of Balsara Hygience Products Ltd.

5)

Business Combination :
a)
On April 1, 2005, the parent company acquired 99.52%, 100% and 100% (50% being held by Balsara Hygiene
Products Limited & 2% by Balsara Home Products Limited) of Balsara Home Products Limited, Balsara Hygiene
Products Limited and Besta Cosmetics Limited respectively by way of acquiring equity shares of INR 10 each
numbering 12290711, 3880800 and 431800 in the respective entities. The total purchase considerations paid
in cash for acquisition of respective investment were INR 3405.00 lac, INR 11651.00 lac and INR 1790.00 lac.
Estimated fair value assigned to assets of new subsidiaries on the date of acquisition were as follows:

Total
10) Property, Plant & Equipment:
Property, Plant & Equipment Comprise of the following :

INR in Lac
2006

2005

FREEHOLD LAND

781.01

645.65

LEASEHOLD LAND

864.94

748.33

INR in Lac
Balsara Home
Products
Limited

Balsara Hygiene
Products
Limited

Besta
Cosmetics
Limited

Current Assets
Cash and Cash equivalents

126.27

Accounts Receivable,net of allowances

549.18

0.00

1293.65

0.00

Inventories
Other current assets

5.58

7.75

656.20

819.12

106.04

Total current assets

2625.30

824.70

113.79

Property,plant and equipment,net

1930.84

562.74

5.07

1.12

731.94

4557.26

2119.38

Investments

15271.82

12801.93

PLANT & MACHINERY

27132.00

23006.00

VEHICLES

1249.40

1145.68

FURNITURE & OFF EQUIPMENT

4563.55

3828.73

COMPUTERS

2872.73

2534.56

CAPITAL WORK IN PROGRESS

1304.70

938.81

Total Gross Block

54040.14

45649.69

Less: Accumulated Depreciation

-19232.95

-16119.28

-895.70

0.00

33911.50

29530.41

Negative Goodwill

Other non-current assets

Total assets

BUILDING,ROADS & CULVERT

118.86

LIABILITIES AND STOCKHOLDERS' EQUITY

Net Block

The depreciation expenses relating to Property, Plant and Equipment for the year is 3634.48

Current Liabilities
Short term debt and current portion of long term debt

1039.62

Trade accounts payable

3673.41

Accrued expenses and other current liabilities

Total current liabilities
Other non-current liabilities
Total non-current liability
Deffered Tax liabilities (net)

11) Investment:
112.30

41.99

335.15

378.50

45.20

5048.18

490.80

87.19

46.75
5094.93

490.80

87.19

45.54

43.75

1.23

305.00

388.08

90.00

b)

6)

Cost of the investment

Gross unrealized holding gain in accumulated other comprehensive income
Carrying value
b)

Additional paid in capital

2766.00

Retained earning

-3654.21

1196.75

-59.56

Total liabilities and stock holders' equity

4557.26

2119.38

118.86

Current Investment
INR in Lac

0.00

Total liabilities
Stockholders' equity

a)

6.90
4096.20

Investment readily available for sale

(I)

0.00

4089.30

Readily marketable equity securities:

INR in Lac
Cost of the investment

Excess of purchase consideration over fair value of net assets, accounted for as Goodwill amount to INR
4249.6 lac, INR 10073.54 lac and INR1840.62 lac for three respective entities.
In addition to above note, the group stake in Dabur Nepal Private Limited has been enhanced during the
year by way of enhancing the same to 97.5% from 79.96% formerly held therein by way of acquiring additional 140000 number of shares of INR 10 each in INR at total sum consideration of INR 364.80 Lac.
Pursuant to relevant enhancements share of minority interest in liability side of balance sheet reduced by
INR 1293.00 lac.

(II)

4.80

Gross unrealized holding gain in accumulated other comprehensive income

241.60

Carrying value

246.40

Readily marketable debt securities:

INR in Lac
Cost of the investment
Gross unrealized holding gain in accumulated other comprehensive income

Cash & Cash Equivalent :

Cash & cash equivalent comprises following:

Carrying value

12.50
Nil
12.50

INR in Lac

Cash in hand
Remittance in transit

2006

2005

49.45

27.91

2.25

123.25

4621.98

1105.33

219.07

131.45

Fixed deposit with Non-schedule Bank

0.00

0.00

Fixed deposit account

0.00

0.00

Postal savings Bank

0.00

0.00

4892.75

1387.94

Balance with schedule Bank

Balance with non-schedule Bank

Total

(III) Not readily marketable equity securities

INR in Lac
Cost of the investment
Gross unrealized holding gain in accumulated other comprehensive income
Carrying value

Accounts Receivable :
The Accounts receivable is stated net of allowance for doubtful debts. The group companies maintain an allowance
for doubtful debts on accounts receivable, based on present and prospective financial condition of the customer
receivable after considering historical experience and the current economic environment on case-to-case basis.
Trade account receivable as at March 31,2006, net of allowance for doubtful account of INR 154.97 lac amounts to
INR 7435.00 lac.
INR in Lac
2006

2005

25.98

11.98

Allowance for Doubtful debts for the year

273.68

58.08

Account receivable written off during the year

145.82

44.08

Balance for allowance for Doubtful debts

153.84

25.98

Allowance at the beginning of the year

Nil
105.00

12) Goodwill and intangibles :

I)

Component of goodwill (valued as per 2j)

a)

Goodwill arising out of consolidation of Balsara Home Products Limited, Balsara Hygiene Products Limited and Besta Cosmetic limited due to DIL's owning 99.52% in Balsara Home, 100% in Balsara Hygiene and
48% in Besta Cosmetics. (Balsara Hygiene holding 50% and Balsara Home Products Limited holding 2%
in Besta Cosmetics.). With effect from 1st April 2005, have been reported in business combination in para
5 above.

b)

On September 14, 2003, the parent company acquired 100% stake in Dabur International Limited by way
of acquiring 100000 numbers of shares therein at a consideration of INR 2287.50 Lac. Excess of consideration money over the net asset value of the investee entity amounting to INR 1178.57 lac has been accounted for as Goodwill.

c)

On September 14, 2003, the parent company acquired 38.41% stake in Weikfied international Limited
by way of acquiring 615 number of shares amounting to INR 356.89 Lac. Excess of consideration money over the net asset value of the investee entity amounting to INR 224.03. lac has been accounted for as
Goodwill.

d)

Group stake in Dabur Nepal Private Limited has been enhanced during the year as reported in business
combination in para 5 above for this 140000 number of shares has been acquired at a consideration of INR
364.80 Lac. Consideration money falling short of proportionate worth of net Assets by INR 896 lac gave rise
to negative goodwill of said amount, which has been used, in reducing proportionately carrying amount of
fixed assets.

Cash equivalent represent deposits placed with Banks in the normal course of business operation.
7)

105.00

34 CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP

Dabur India Limited

II)

Annual Report 2005-06

18) Other non-current Liabilities :

Details of other intangible assets (Patent & Trademark) :

INR in Lac

INR in Lac
2006

2005

Leave salary

122.00

1009.09

Housing gratuity & other welfare

700.00

112.99

2006

2005

1112.87

1095.97

Accumulated amortisation

480.85

239.70

Net Carrying amount

632.02

874.67

Dividend payable

Amortisation in succeeding five years

235.79

235.79

Deferred payment credit against machine

Gross Carrying Amount

Taxation

Deposits others
13) Other non-current assets:
Other non-current assets include security deposits & those segment of current assets, which are not due for realization within a period of one year.
INR in Lac
2006

2005

223.52

62.40

0.95

0.95

1660.41

2732.21

32.00

34.25

1916.88

2829.81

Fixed deposit
Post office savings bank for excise regis.
Securty deposits with various authorities
Advance to employees
Total

Name of Bank

Dabur Nepal Ltd

Nabil Bank Ltd

- Do -

Amount
in INR Lac

Rate of
interest
per anum

Nature of security

823.70

11.00%

Stocks,movable properties
& guarantee by
Dabur India ltd.

2311.21

148.40

0.00

55.43

0.00

6985.61

3449.35

19) Stockholders' Equity a)

Common Stock DIL has only one class of common stock i.e. Equity Share of INR 1/ each Shareholders enjoy voting power
in accordance to the number of Equity Shares held by it.

b)

Employees stock exchange option Non-cancelled component of additional paid in share net-off quantum remaining unamortized shown separately under retain additional paid-in capital.

c)

Dividend During the period Interim dividend INR 4299.29 lac @ 150% and Final dividend of INR 5733.03 Lac @
100% have been distributed and proposed respectively.

31st Mar 06

31st Mar 05

Outstanding,beginning of the year

1534740

1320658

Granted

5388423

384743

Excercised

231679

170661

Cancelled

6691484

1534740

Standard Chartered Bank

Nepal Ltd

533.80

11.00%

Do

Outstanding at the end of the year

Nepal SBI Bank Ltd

546.30

11.00%

Do

Up to March 31,2006 the options granted are summarized as follows:

Dabur foods ltd

Hongkong sanghai
banking corporation

479.27

8.50%

Stocks,movable properties
& guarantee by
Dabur India ltd.

Dabur foods ltd

GE Capital service

1000.03

10.50%

Movable & immovable

assets

Asian consumercare

Standard Chartered Bank

& ABN Amro Bank

417.04

12.00%

Stocks,book debts,lease
hold property,movable
property,plant,equipment
& personal guarantee of
one of the director.

Weikfield

(Standard Chartered Bank

& ABN Amro Bank )
Bank Overdraft

78.21

5%

Stock ,book Debts,Lease

hold property,Personal
guarantee of one director.

Dabur International
Limited

(Standard Chartered Bank

& ABN Amro Bank )
Bank Overdraft

380.28

5%

Stock ,book Debts,Lease

hold property,Personal
guarantee of one director.

Dabur Egypt Ltd

Banque Du cairo barklays

122.76

Balsara Home Ltd

Standard Chartered Bank

253.29

HDFC Bank

222.32

8.75%

Book Debt

HSBC

200.36

8.00%

Stock / Book Debt

Dabur India Ltd

Consortium of IDBI Bank,

SBC,SBI,ABN AMRO,UBI,
UTI Bank,HDFC
& Standard Chartered

1293.36

8.00%

Stock & book debts

Dabur International
Limited

Depopsits of Directors /
Companies

1070.05

8.50%

14.50%

Encumbrance on inventory
Stock / Book Debt

Short term loan

15) Trade accounts payable

Trade accounts payable of INR 16482.32 lac (PY 17301.92) comprise trade creditors for goods & services which include notes payable of INR 8050.56 lac (PY INR 12206.55 lac).
16

16.06

0.00

20. Employees stock option

The parent Company has an Employees Stock Option Scheme (ESOP), which provides for grant of stock options
in DIL to eligible management employees of group companies. The ESOP is administered by the Management
Committee of the Board("the Committee"). The criteria for granting options are essentially on the basis of the management grade of the employee. Exercise price of option is the nominal value of shares.
Stock option activity during the year was as follows:

14) Borrowing :
a)
Short Term Debt (including current portion of long term debt)
Working capital and short term loan from banks comprises following:
Name of entity

Total

5959.78

Accrued expenses & other current liabilities

Accrued expenses & other current liabilities comprise the following
INR in Lac

Proposed dividend

2006

2005

5733.03

4296.30

804.06

602.56

55.05

117.62

13224.12

12578.32

273.63

325.78

62.66

39.08

20152.55

17959.66

Corporate tax on proposed dividend

Bonus
Creditor for expenses
Advance from customers
Interest accrued but not due on loan
Total

17) Long term debt, excluding current portion

Name of entity

Bank / Inst.

Amount
in INR Lac

Rate of
interest

Nature of
security

Repayment
Terms

Pasadensa
Food Ltd.

GE Capital service

1822.72

10.50%

Movable &
immovable assets

Quarterly

Asian Consumer
Care

Standard Chartered Bank

23.27

12%

Plant & Machinery

Quarterly

DNPL

Standard Chartered Bank

253.41

11%

Movable &
immovable assets

Quarterly

DIL

Deffered payment Credit

755.22

Int.free

Fixed assets of 5/1

Shahibabad

Yearly

DIL

Investor Protection Fund

137.88

Int.free

Nil

DIL

Security Deposits from

Dealers

9.58

Int.free

Nil

Total

3002.08

Date of
grant

6-Nov-02
30-Apr-03
30-Apr-03
10-Oct-03
10-Oct-03
5-May-04
23-Jul-04
23-Jul-04
23-Jul-04
26-Oct-04
26-Oct-04
26-Oct-04
28-Apr-05
28-Apr-05
28-Apr-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
26-Jul-05
24-Oct-05
24-Oct-05
24-Oct-05
24-Oct-05
24-Oct-05
24-Oct-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
25-Nov-05
27-Jan-06
27-Jan-06
27-Jan-06
27-Jan-06
27-Jan-06

Number of
options
granted

20000
137500
262500
150006
1549982
74998
7148
87206
150108
34080
5454
71572
136056
95240
12218
52606
30476
101746
111250
18700
4572
6858
3810
3810
2500
2500
18750
106250
9376
53124
6100
7010
6100
6310
1500
1500
4500
13876
13876
121498
8250
8250
8250
85250
4500
13876
13876
121498
49500
143256
143256
1261488
75000
75000
600000
7776
44374
41250
41250
442918

Vesting
period
in Days

1825
1095
1826
1024
1389
1182
729
1094
1825
551
1106
1282
364
364
1643
365
1826
365
1826
980
365
1826
365
1826
365
980
370
735
370
735
372
1825
890
1825
372
890
535
901
1266
1631
535
901
1266
1631
535
901
1266
1631
535
901
1266
1631
901
1266
1631
364
472
838
1203
1568

Vesting
Date

Exercise
price

5-Nov-07
29-Apr-06
29-Apr-08
30-Jul-06
30-Jul-07
31-Jul-07
22-Jul-06
22-Jul-07
22-Jul-09
30-Apr-06
6-Nov-07
30-Apr-08
27-Apr-06
27-Apr-06
27-Oct-09
26-Jul-06
26-Jul-10
26-Jul-06
26-Jul-10
1-Apr-08
26-Jul-06
26-Jul-10
26-Jul-06
26-Jul-10
26-Jul-06
1-Apr-08
31-Jul-06
31-Jul-07
31-Jul-06
31-Jul-07
31-Oct-06
23-Oct-10
1-Apr-08
23-Oct-10
31-Oct-06
1-Apr-08
14-May-07
14-May-08
14-May-09
14-May-10
14-May-07
14-May-08
14-May-09
14-May-10
14-May-07
14-May-08
14-May-09
14-May-10
14-May-07
14-May-08
14-May-09
14-May-10
14-May-08
14-May-09
14-May-10
26-Jan-07
14-May-07
14-May-08
14-May-09
14-May-10

(INR per
share)
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

Market price
as on date
of grant
(INR per
share)
45.10
37.00
37.00
60.55
60.55
79.70
69.95
69.95
69.95
73.35
73.35
73.35
116.85
116.85
116.85
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
151.45
142.65
142.65
142.65
142.65
142.65
142.65
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
170.55
107.05
107.05
107.05
107.05
107.05

Amount INR
amortized
in 2005-06

92820
868216
993958
1675434
12762716
959056
129846
1055602
1089211
859456
68523
775766
7785324
5449772
154890
2868935
332227
5548847
1212767
379834
249340
74761
207783
41534
136341
50780
1008737
2877530
504422
1438738
195792
45863
81837
41283
48146
20124
95865
175526
124920
849020
175753
104359
74272
595721
95865
175526
124920
849020
1054518
1812136
1289680
8815195
948723
675197
4192760
152290
670197
350910
244441
1971064

CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 35

Annual Report 2005-06

Dabur India Limited

21) Other Income :

Other income comprises rent realization, dividend earning, miscellaneous receipts and capital
profit.

c)

Breakup of current guarantees furnished along with other particulars

INR in Lac
Carrying
amount
31-3-06

Fair value

Dabur Nepal Pvt.Ltd

188.00

188.00

Nepal Arab Bank Ltd

Dabur Nepal Pvt.Ltd

125.00

125.00

HDFC Ltd

A.K.Jain

10.00

10.00

HDFC Ltd

D.K.Upadhyaya

3.00

3.00

HDFC Ltd

J.P.Sharma

8.00

8.00

HDFC Ltd

Naseem Ahmed

5.00

5.00

HDFC Ltd

R.S.Saini

9.00

9.00

HSBC Ltd,New Delhi

Dabur Egypt Ltd

291.00

291.00

Canara Bank

Dabur Foods Ltd

1200.00

1200.00

HSBC Ltd.

Dabur Foods Ltd

2550.00

2550.00

Note:

ABNAmro Bank

Dabur Oncology Plc

1945.00

1945.00

i)

Key management personnel include Mr. Pradeep Burman, Dr. Anand Burman, Mr. Amit Burman, Mr. Mohit Burman, Mr. Chetan Burman, Mr. P. D Narang, Mr. Sunil Duggal, Mr. Sanjay Sharma, Mr. T. K gupta, Mr.
Arvind Kumar and Mr. S Ramakrishan all wholetime directors of group companies.

ABNAmro Bank

Dabur Oncology Plc

5666.00

5666.00

ICICI Bank Ltd

Pasadensa Foods Ltd

400.00

400.00

G.E.Capital Services India

Pasadensa Foods Ltd

950.00

950.00

Relatives of key management personnel include Mr. R. C Burman, Mr. A. C Burman and Ms Asha Burman.

HSBC Ltd.

Dabur Egypt Ltd

211.00

211.00

22) Related party transaction

a)

Service of INR 180 lac received from Jetways Travels Private Limited and Associates in which one key management personnel exercises significant influence.

b)

Rent paid INR 6 lac to two Associates entities namely Miracle Commercial Enterprises Private Limited and
Wakarusa Laboratories Pvt Limited associateship arising due to exercise of significant influence therein by
key management personnel.

c)

Remuneration to key management personnel INR 811.34 lac.

d)

Post retirement benefits to relative of key management personnel INR 125.98 lac.

e)

Repayment of Loan INR 3.50 lac received from Welltime housing & Finance private limited and associates
in which a key management personnel exercises significant influence.

ii)

23) Income Taxes

Provision for Income Taxes includes foreign income tax provision of INR 105.5 lac for Dabur Nepal Pvt. Ltd.
The break-up of deferred tax liability / benefit :
INR in Lac
2006
A

2005

Deffered tax liability (Non-Current)

Depreciation of Plant & equipment

1228.53

1041.98

88.28

86.22

Long term investment

Total Deffered Tax liability (Non Current)

1316.81

1128.20

VRS Payment

0.00

4.01

Long term investment

0.00

496.44

Technical know how fees

15.56

24.02

Total Deffered Tax assets (Non Current)

15.56

524.47

1301.25

603.73

Current investment

1.93

0.40

Total Deffered tax liability (current)

1.93

0.40

0.00

2.00

Disallowance U/S 43B of Income Tax Act,1961

131.73

131.74

Total deffered tax Assets (Current)

129.80

133.34

Total deffered tax liability (C -F)

1171.45

470.39

Name of party on whose

behalf guarantee issued

Nepal Arab Bank Ltd

31-3-06

Hongkong Bank

Dabur India Limited

811.00

811.00

Nepal Arab Bank Ltd

Dabur India Limited

117806.00

117806.00

Canara Bank

Dabur India Limited

1232.00

1232.00

ICICI Bank Ltd

Dabur India Limited

5361.00

5361.00

ACCL

Dabur India Limited

57528.00

57528.00

Standard Chartered Bank,Dubai

Dabur India Limited

420.00

420.00

HSBC Bank,Egypt

Dabur India Limited

27307.00

27307.00

Standard Chartered Bank

Dabur India Limited

1900.00

1900.00

HSBC

Dabur India Limited

195.00

195.00

HSBC

Dabur India Limited

505.00

505.00

Standard Chartered Bank,Dubai

Dabur India Limited

48588.00

48588.00

Deffered Tax assets (Non Current)

Deffered Tax liability (A - B)

Deffered tax liability (current)

Guaranteed party

None of the parties favouring whom guarantee have been furnished is related party.
ii)

Deffered Tax assets (Current)

VRS Payment

24) Fair value of financial instruments

The Company uses the following methods and assumptions to estimate fair value of each class of financial instruments for which it is practicable to estimate fair value:
Cash, cash equivalents and restricted cash - The carrying amount approximates fair value because of the shortterm maturity (up to months) of such instruments.
Accounts receivable - The carrying amount approximates fair value due to their short them nature and historical
collectability.
Investments - The fair value of some investments are estimated based on their quoted market prices. For other investments, for which there are no quoted market prices, a reasonable estimate of fair value could not be made without incurring significant costs.
Accounts payable - The carrying value of accounts payable approximates fair value due to the short-term nature
of obligations.
Long term debt - The fair value of debt of the Company is estimated based on quoted market prices or current rates
offered to the Company for same or similar debt. The carrying value of material long-term debt approximates its
fair value.

Non current Loans and Advances includes INR 48.64 lac paid by the Company to Excise authorities on behalf of Sharda Boiron Laboratories Limited, now known as SBL Limited, in respect of excise duty demand
of INR 68.13 Lac raised by the District Excise Officer, Ghaziabad, against the Company and Sharda Boiron
Laboratories Limited. The Hon'ble Supreme Court of India had concurred with the order of the District Excise Officer, Ghaziabad.
The Company had filed the review petition before Division Branch of the Hon'ble Supreme Court of India,
which was also decided against the Company. Pursuant to the indemnity bond executed by M/s. Sharda
Boiron Laboratories Limited in favour of the Company and as per the terms and conditions of the contract
executed with them, the recovery proceedings have been initiated by the Company against Sharda Boiron
Laboratories Limited for INR 48.64 lac by invoking the arbitration clause. The matter is pending before
Hon'ble High Court of Delhi for the appointment of an arbitrator. The balance amount of INR 24.46 lac along
with interest demanded by the Excise Authorities has been paid directly by Sharda Boiron Laboratories
Limited to Excise Authorities. During the year 1991-92 the company has received a refund of INR 5.95 lac,
pursuant to the decision of Hon'ble Supreme Court in this regard. Necessary adjustments in respect of recovery / refund will be made as per the arbitration proceedings.

26) Concentration of customer

The products of the groups meant for indigenous usage predominantly find outlet through dealers' networks widely spread across the length and breadth of the country, none of the dealers controlling noteworthy percentage of
total indigenous sale. Exports are predominantly destined to West Asia, South Asia and South East Asian countries.
Products constituting lions share of the total revenue include Chywanprash, Hajmola, Hair oil, Fruit juices, Honey, Shampoo, Toothpaste and other Cosmetics etc.
27) Revenue
INR in Lac
Domestic sales less returns
Export sales
Subsidy
Sale of scrap
Total

2006

2005

152729.01

117246.00

18816.48

19271.69

172.37

44.65

278.78

276.60

171996.64

136838.94

28) Cost of revenues

Estimated fair values of the Company's financial instruments are as follows :
INR in Lac
INR in Lac
2006

2005

Cash & cash equivalent

4892.75

1387.94

Accounts receivable

7435.01

7589.28

Investments for which:

Practicable to estimate fair value
Non-practicable to estimate fair value
Accounts payable
Long term debt

2006
Raw Material consumed

38758.41

30992.17

Packing Materials consumed

25891.75

17331.74

Purchase of Finished goods

15385.77

19784.12

736.39

-2165.78

5711.25

4050.37

Increase(-) / Decrease in stock in process & finished goods

Mfg.Expenses

4355.46

4630.77

105.00

105.00

16482.32

17301.91

3002.08

2311.21

2005

Misc exp / receipt

Workmen & staff welfare
Total

18.95

-13.52

7972.67

6014.51

94475.19

75993.61

29) Selling, general and administrative expenses

25) Other contingency & capital commitment
a)

INR in Lac

The group Company is involved in certain claims, fiscal assessments and litigation arising in the ordinary
course of business. Management believes that these claims taken individually, or together, will not have a
material effect on the financial statement of the Company.

List of contingencies are as follows:

Rent

2005
738.89

Rates & Taxes

117.81

119.00

Insurance

341.84

304.40

6441.06

4339.22

Freight & forwarding charges

INR in Lac

2006
1031.21

Commission ,Discount
Advertisement & Publicity

650.09

801.74

22168.21

20375.91

2098.76

1891.14

407.62

876.31

2006

2005

338.62

277.32

Legal & Professional Telephone,fax expenses

928.14

404.17

Current

9378.86

14937.10

Security expenses

186.55

141.51

Non Current

1200.00

1200.00

General expenses

5631.61

3645.47

Directors fees

9.00

6.80

Claims not acknowledged as debts

In respect of Guarantees furnished

Bills purchased / discounted under letters of credit

2396.58

3807.34

Demand for taxes pending disposal of appeal(s)

4443.98

1665.72

450.89

1064.15

In respect of Capital Commitment for un-executed contract

b)

Non Current guarantee relates to guarantee furnished by Parent company for INR 1200.00 lac to GE Capital Services India Limited on behalf of Pasedensa Foods Limited against term loan facility obtained by latter from the former.

Travel & Conveyance

Telephone

Auditors' remuneration

71.55

51.55

331.37

257.90

Contribution to scientific research expenses

720.00

597.97

Bad debts

145.82

44.08

Provision for contingent liability

0.00

89.08

Loss on sale of fixed assets

9.88

0.00

41290.52

34685.14

Donation

Total

36 CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP

Dabur India Limited

Annual Report 2005-06

32) Other income

30) Personnel expenses

INR in Lac
Directors' remuneration
Salaries & benefits
ESOP Employees
Total

2006

2005

895.29

824.15

5537.11

4009.68

498.00

130.58

6930.40

4964.41

INR in Lac
2006

2005

17.30

21.10

0.48

0.50

Misc Receipt

540.88

127.10

Profit on sale of investment

151.84

407.38

18.54

0.00

Profit / loss on sale of fixed assets

146.06

-108.87

Total

875.10

447.21

Rent Realised
Dividend

31) Financial expenses

INR in Lac
2006

2005

389.30

402.33

Others

735.70

419.36

Bank charges

513.70

421.90

1638.70

1243.59

Royalty

Interest paid on
Fixed period loan

Total

33) Segment data

Since Dabur India Limited is not listed in US Stock exchange, it is not regarded as public listed enterprises. However for the purpose of providing additional information to the users, management has provided information close to the
requirement of SAF 131 for current year.

Segment reporting and related information; -

INR in lac (Rounded off)

FMCG

FOODS

ELIMINATIONS

05-06

04-05

05-06

04-05

148938

118649

18628

12656

05-06

OTHERS

04-05

Total Consolidated

05-06

04-05

05-06

04-05

4431

5534

171997

136839

REVENUE
External Sales
Inter-segment sales
Total Revenue

148938

118649

18628

12656

23447

16939

1793

753

4431

5534

171997

136839

643

673

25883

18365

RESULT
Segment result
Unallocated corporate expenses
Operating profit
Interest expense (Net)

23447

16939

1793

753

1054

720

519

446

643

673

25883

18365

66

78

1639

1244

3248

1311

20996

15809

875

447

Interest income
Income Tax(Current + Deferred)
Profit from ordinary activities

22393

16219

1274

307

577

595

Other Income
Net profit

22393

16219

1274

307

577

595

21871

16257

98823

82271

14572

11615

(19412)

(7152)

2693

3106

96676

89840

7366

4476

OTHER INFORMATION
Segment assets
Unallocated corporate assets
Total assets

98823

82271

14572

11615

(19412)

(7152)

2693

3106

104042

94316

Segment liabilities

46680

44290

9872

9749

(7968)

(2762)

1083

1159

49667

52436

5548

3092

Unallocated corporate liabilities

Total liabilities

46680

44290

9872

9749

Capital expenditure

22504

7876

3000

2378

302

319

Depreciation

(7968)

c)

34) Employees post retirement benefit :

a)

Gratuity :

(i)

Dabur India Ltd., Dabur Food Ltd. And Pasedensa Foods Ltd.
These companies have taken comprehensive insurance coverage for payment of gratuity liability to eligible employees from Life Insurance Corporation of India (LIC) for which annual contribution is paid. Under this scheme settlement obligation remains with respective company although LIC administers the fund
and determines annual contribution to be paid. Annual contribution made by DIL Dabur Food Ltd, Pasedensa Foods Ltd. to LIC in this connection amount to INR 277.53 lac.

(ii)

Leave Salary :

i)

Dabur India Ltd. and Dabur Foods Limited and Pasedensa Foods Ltd.
Respective companies provided benefit of leave encashment to employees through annual contribution to
a fund managed by LIC. Under this scheme the settlement obligation remains with the respective companies although LIC administers the fund and determines the annual contribution to be paid.
Total payment made during the year on account of annual contribution to LIC in respect of Leave Salary
amounts to INR 20.53 lac, INR 2.08 lac and INR 1.57 lac by DIL , Dabur Foods Limited and Pasedensa Foods
Ltd. respectively.

1083

1159

55215

55528

22504

7876

116

133

3418

2831

Benefit of superannuation
DIL provides benefit of superannuation towards employees for which it has obtained comprehensive coverage from LIC. Under this scheme the settlement obligation lies with the company although LIC administers the fund and determines the annual contribution to be paid.
Payment made for the period to LIC in this connection amounts to INR 215.75 lac.

35) Reconciliation between India GAAP & US GAAP.

There are considerable differences between two, the note worthy of them being enunciated below:

Dabur International Ltd. and Weikfield International (UAE) Ltd.

Gratuity liability has been provided based on management estimate on the assumption of all employees retiring at the period end. The said liability has not been funded.
Provision made towards gratuity by Dabur International Ltd. and Weikfield International (UAE) Ltd amount
to INR 14.75 lac and INR 3.11 lac respectively.

b)

(2762)

i.

Valuation of investment under US GAAP at market price as against lower of costs under market value under Indian GAAP leading to comprehensive total income.

ii.

Depreciation on properties based on assessment of actual life span of the assets under US GAAP as against
charging depreciation as per statutory rate under Indian GAAP.

iii.

The Company sold long-term investment in Dabon International Private limited for which it booked a loss
of INR 1301.04 lac in Indian GAAP. These investment had already been derecognised under US GAAP in
2003-04 accounts confirming to principles of US GAAP.

iv.

Above resulted in difference of profit of DIL Group between Indian GAAP and US GAAP by INR 485.80 lac,
the latter being higher.

36) Comprehensive income has been accounted for in respect of income / loss on earned or sustained subsequent to
1st April 2004. Prior period income / loss predominantly arising out of translation adjustments forms part of retained earning.
37) Prior period adjustment: An income of INR 96.70 lac relating to past years tax provision written back.

ii)

Dabur International Pvt. Ltd., Weikfield International (UAE) Ltd

These companies estimate their liabilities towards leave salary on the assumption of all employees retiring at the period end. The liabilities so created are not funded.
Liability on account of leave salary provided during the year include :
Dabur International Limited

INR 21.83 lac

Weikfield International Limited

INR 11.97 lac

38) Difference between Indian GAAP vis a vis US GAAP, if not material, for any head of accounts, has been ignored.

As per our report of even date attached

For Dabur India Ltd.

For G.Basu & Co.

Chartered Accountants

V.C.Burman
P.D.Narang
Sunil Duggal
A.K.Jain

S.Lahiri
Partner
New Delhi
25th April 2006

Chairman
Director
Director
Addl.General Manager (Finance)
& Company Secretary