Dabur_AR_2K4-5_Cov.

ai 5/23/05 9:46:07 AM

4mm
Bleed

CM

MY

CY

CMY

K
Dabur_AR_2K4-5_Cov2&3.ai 5/23/05 10:07:00 AM
Contents

Board of Directors 03

Chairman’s Message 04

Performance Highlights 06

Five Year Financials (Profit & Loss Account) 07

Five Year Financials (Balance Sheet) 08

Management Discussion and Analysis 09

Report on Corporate Governance 24

Directors’ Report 48

Auditors’ Report 64

Financials 68

Consolidated Financials 94
 Board of Directors
Mr V C Burman Chairman
Dr Anand Burman Vice-Chairman
Mr Pradip Burman Director
Mr Amit Burman Director
Mr P D Narang Director
Mr Sunil Duggal Director
His Highness Maharaja Gaj Singh Director
Mr R C Bhargava Director
Mr P N Vijay Director
Mr Stuart Edward Purdy Director

Addl. GM (Finance) & Company Secretary

Mr A K Jain

Auditors
M/s G. Basu & Co.
Chartered Accountants

Internal Auditors
Price Waterhouse Coopers Pvt. Ltd.

Bankers
Punjab National Bank
Corporate Office Standard Chartered Bank
Dabur India Limited, HSBC Ltd.
Dabur Towers, State Bank of India
Kaushambi, Sahibabad, ABN Amro Bank NV
Ghaziabad–201010, UP, India. Citibank NA
Tel: +91–120–3982000, 3001000 United Bank of India
Fax: +91–120–2779048 HDFC Bank Ltd.
www. dabur.com IDBI Bank Ltd.
investors@dabur.com

Registered Office
8/3, Asaf Ali Road,
New Delhi–110002, India.
Tel: +91–11–23253488, 23276739

Annual Report 2004-05 3

Chairman’s Message
Dear Shareholders,
2004-05 has been a very good year for the economy and for
your Company. Despite a less than average monsoon and
lacklustre agricultural performance, the quick estimates of
the Central Statistical Organisation show a GDP growth of
6.9 per cent. In fact, as per the economists, India’s GDP
growth in 2004-05 will be closer to 7.2 per cent when the
final data is computed. This is a very creditable achievement
on two counts. First, it has occurred inspite of relatively poor
agricultural growth; and second, it comes on the back of an
8.5 per cent increase in GDP in the previous year.
I am delighted to say that your Company has leveraged this
overall growth impetus to post excellent results and increase
long-term shareholder value. Let me share with you some
key achievements.
• Revenue from consolidated operations increased by
15.6 per cent to Rs.1536.9 crore in 2004-05.
• Operating profit (EBIDTA) grew by 29.6 per cent to
Rs. 218.0 crore in 2004-05. The EBIDTA to total income
margin increased from 12.6 per cent in 2003-04 to
14.2 per cent in 2004-05.
• Profit after tax (PAT) rose by 46.3 per cent to Rs. 155.8
crore; and the PAT to total income margin increased
from 8 per cent in 2003-04 to 10.1 per cent in
2004-05.
• Return on capital employed (ROCE) grew from
29.2 per cent last year to 31.5 per cent in 2004-05.
• Return on net worth (RONW) rose from 38.1 per cent
in the previous year to 43.5 per cent in 2004-05.
If I were to summarise your Company’s performance during
the year under review, it would be “Pursuit of Profitable
Growth”.
Let me now touch upon some of the key developments
that occurred during 2004-05.
4 Dabur India Limited
There has been a subtle yet significant transformation in
the identity of our flagship brand, ‘Dabur’. We have
leveraged the traditional equity of the Banyan tree to evolve
to a new brand that projects a more contemporary image
— one that we believe is in line with contemporary lifestyle.
Without moving away from our focus on organic growth,
we have seized an excellent inorganic growth opportunity
through the acquisition of Balsara’s hygiene and home
products business. In your Company’s largest acquisition
till date, Dabur bought the entire promoters’ stake of three
Balsara companies through an all-cash deal of Rs.140 crore.
With this acquisition, your Company will be able to position
itself in all price segments in the herbal oral care market.
Moreover, it will enable Dabur to gain entry in the
household care segment, where Balsara has well
entrenched brands. This acquisition is expected to add
approximately Rs.200 crore to your Company’s revenues.
Dabur’s Consumer Care Division (CCD), which deals with
the FMCG business, has performed well during the year.
The thrust on new products, improved packaging, focused
marketing efforts and greater emphasis on developing
south Indian market — these are some of the factors which
have contributed to the growth. Vatika has been
acknowledged as one of India’s Super brands, and Dabur
Chyawanprash has won the Brand Re-launch of the Year
Award in October 2004. During the year, sales of Dabur’s
flagship brand, Dabur Amla Hair Oil, crossed the Rs 200
crore mark. Your Company recorded gains in market share
in almost all categories that it operates in.
During the course of the year, your Company has
undertaken a major organisational restructuring of its
Consumer Healthcare Division (CHD), whose portfolio
consists of grantha based products on the Ayurveda
platform. The Consumer Healthcare Business has been
identified as one of the growth drivers of your Company’s
business going forward. The increasing preference for
holistic health remedies as offered in Ayurveda is leading
to a sustained growth in the Natural/Herbal segments. Your
company plans to lead this growth.
Until a few years ago, the foods business — which operates
through your Company’s wholly owned subsidiary, Dabur
Foods Limited — was considered an attractive but small part
of the group’s overall product portfolio. Through sustained
management attention, this business has grown by 51.2
per cent to Rs. 129.7 crore becoming 8.4 per cent of
consolidated revenues. The fruit juice brands ‘Real’ and
‘Real Activ’ now occupy prominent shelf space in stores of
all major urban centres.
Your Company’s international business has also done well
during the year. Overseas sales grew by 43.4 per cent to
Rs. 183.6 crore in 2004-05 and account for almost 12 per
cent of total sales, up from 9.6 per cent last year. Dabur’s
products are doing well in the Middle-East, Bangladesh,
Pakistan, CIS countries and in Africa. Going forward, you
will see an even greater focus on international operations.
After all, Dabur is one of India’s best recognised brands
and given the size of the Indian diaspora as well as lifestyle
commonalities in South Asia, the business is poised for
sustained growth and increased market presence in these
markets. Besides this, the Company is also developing entry
strategies for the USA and UK nutritional supplements
market.
I must also share with you some key operational facts. In
the space of just four months, your Company successfully
commissioned its largest and most modern manufacturing
facility at Rudrapur, Uttaranchal. The Jammu plant which
was commissioned in November 2003 is now fully
operational. Dabur Foods has bought a new facility near
Jaipur for manufacturing fruit juices. Moreover, the Balsara
acquisition has given your Company three more
manufacturing facilities at Silvassa, Baddi and Kanpur.
This was a year when various input prices were on the rise.
Despite that, your Company successfully managed to put a
cap on its costs, which was achieved by our continued focus
on supply chain efficiencies and optimal purchasing and
stocking of raw materials.
If you were to look at the last three years, you will see a
distinctive pattern emerging regarding your Company’s
businesses. It has involved, being a focused FMCG player
in the herbal specialist and natural platform; de-merging
the pharmaceutical business into a separate entity;
designing and implementing a powerful brand architecture
and backing it up with advertising, marketing and selling
resources; creating a coordinated and efficient
organisational system that could leverage synergies while
delivering higher growth and profits; building progressively
larger international business; and augmenting organic
growth with strategic acquisitions. All these initiatives have
been systematically executed over the last three years.
The result has been steadily improving performance and
greater shareholder value.
Your Company is continuing to pursue profitable growth
aggressively. Firmly anchored in the traditional wisdom of
the past and seizing the opportunities in the present, your
Company is poised to excel in the years ahead.
Let me end by thanking all our customers, vendors,
distributors, scientists and employees for contributing to
the success of your Company. And a special thanks to you,
shareholders, for your faith and support.
Yours sincerely,
V.C. Burman
Chairman
April 28, 2005
Annual Report 2004-05 5
Performance Highlights

6 Dabur India Limited • Financial Highlights

Five Year Financials (Profit & Loss Account)

Annual Report 2004-05 7

Five Year Financials (Balance Sheet)

8 Dabur India Limited • Financial Highlights

Management Discussion and Analysis
INDUSTRY STRUCTURE AND DEVELOPMENTS
The year 2004-05 has been a year of sustained growth for the economy as well as for your Company.
The year saw a revival in the FMCG sector which emerged from a phase of sluggish demand to
report strong growth in most consumer categories.

In 2003-04, we had seen that while the Indian economy grew by a remarkable 8.5 per cent, the
FMCG sector continued to remain sluggish. In last year’s Annual Report, we had pointed out that
one good year was not sufficient to improve consumer confidence and improve the fortunes of
the FMCG sector. We felt that it needed a few consecutive high growth years to sustain economic
development and increase demand for FMCG products. With the economy growing by 6.9 per cent
in 2004-05, we have witnessed two successive years of impressive income growth — with per
capita income increasing by 7.1 per cent in 2003-04 and by 5.2 per cent in 2004-05. This growth in
incomes has contributed substantially to a sharp turnaround in the FMCG sector (see Chart A).

opportunities offered by an improved market environment.

Through a structured implementation of strategic initiatives

Source: ORG MARG, based on sales value
over the last couple of years, Dabur had geared itself for
the challenges thrown up during the year. The Company
had already positioned itself on the herbal specialist
platform to create a niche within the FMCG space. Even
before 2004-05, a robust brand architecture with five
umbrella brands was put in place with a well-calibrated mix
of products under each brand. On the distribution side,
the process of streamlining of the sales organisation had
begun a couple of years ago. This was further consolidated
during 2004-05, which helped the Company penetrate much
deeper into semi-urban and rural markets and tap into the
demand growth in these areas.

On the costs side, there has been a growing concern of

escalating input cost — especially of oils, packaging
It is important to realise that this year’s revival in the FMCG
materials and transportation. Chart B shows that WPI-based
sector has been largely volume driven, with improved off-
inflation increased from 4.8 per cent at the beginning of
take in urban as well as rural areas. The volume growth
2004-05 to levels above 8 per cent during September 2004,
has also been accompanied by a degree of price
and remained above 5 per cent for most of the year.
stabilisation, especially after a couple of years of fierce price
Competitive pressures prevented all FMCG companies from
competition in some FMCG segments. Companies have had
passing on these cost increases to customers. Therefore,
to reposition brands, create niches for their products and
for the industry as a whole, margins were under some
improve distribution systems to make the best out of the
pressure.

Annual Report 2004-05 9


Chart B: Inflation (WPI)
To mitigate the cost push effects, Dabur has developed an
optimal mix of manufacturing facilities at different locations
to reap maximum benefits from fiscal concessions and
economies of scale. In addition, further efficiencies in the
supply chain right from procurement to production helped
to cap input costs. These operational factors coupled with
good sales growth helped the Company generate
impressive profits and return to investors. The highlights
of Dabur India Limited’s performance in 2004-05 are:
• Revenue from operations increased by 10.5 per cent
from Rs.1147.9 crore for 2003-04 to Rs.1268.7 crore in
2004-05
• Operating profit (EBIDTA) increased by 36 per cent from
Rs.138.2 crore in 2003-04 to Rs.187.9 crore in 2004-05
• Interest outgo decreased by 38 per cent from Rs.6.9
crore in 2003-04 to Rs. 4.3 crore in 2004-05.
• Profit after tax (PAT) increased by 46.3 per cent from
Rs.101.2 crore in 2003-04 to Rs.148 crore in 2004-05.
• Return on capital employed (ROCE) increased from 34.9
per cent in 2003-04 to 38.7 per cent in 2004-05
• Return on net worth (RONW) increased from 38.6 per
cent in 2003-04 to 44.5 per cent in 2004-05
To enhance the perception of Dabur as a contemporary
organisation — one that is in tune with customer needs—
10 Dabur India Limited • Management Discussion & Analysis
the Company launched the new identity of its flagship brand
“Dabur” during 2004-05. While leveraging Dabur’s 100 year
old brand equity by retaining the essence of the banyan
tree, the new brand identity projects a more modern image
in consonance with today’s lifestyle.
The new visual identity expresses a brand that is dynamic,
proactive and progressive. These characteristics are not
limited to perception building exercises but are integral to
Dabur’s pursuit of profitable growth.
The Company’s growth in 2004-05 was fuelled by launching
new products, entering new categories, spreading its
geographical reach and growing its relatively smaller
product portfolios like foods. While the parent company
Dabur India Limited (DIL), continues to be the driving entity
operating in the herbal specialist space in India, the food
business is undertaken by DIL’s subsidiary company Dabur
Foods Limited (DFL). The international business is carried
out by the Dubai based subsidiary, Dabur International
Limited. Going forward, it is important to look at Dabur’s
business on a consolidated basis, as the future business
plans will involve Dabur India Limited and all its subsidiaries,
working as a cohesive unit. The highlights of the Company’s
consolidated financial performance are:
• Consolidated Net Sales from operations increased by
15.6 per cent from Rs.1329.6 crore in 2003-04 to
Rs.1536.9 crore in 2004-05
• Consolidated Profits after tax (PAT), after accounting
for minority interests, increased by 46.3 per cent from
Rs.106.5 crore in 2003-04 to Rs.155.8 crore in 2004-05
We have always maintained that while organic growth is
the focus area, we would be always open to value
enhancing inorganic growth opportunities. The Company
had accumulated significant cash reserves over a period
of time which needed to be invested judiciously; Dabur
was, therefore, on the lookout for good acquisition
opportunities.
In 2004-05, the Company found a good value proposition
and undertook its largest acquisition till date, by acquiring
Balsara’s hygiene and home products business in an all-cash
deal. The Board of Directors of Dabur India Limited approved
of this deal in its Board meeting held on 27 January, 2005,
and the acquisition of shares took place on 1 April, 2005,
after obtaining shareholders’ approval.
As part of the deal, Dabur has acquired the entire promoters’
stake in three Balsara companies: 99.4 per cent in Balsara
Hygiene Products; 100 per cent in Balsara Home Products;
and 97.9 per cent of the shareholding in Besta Cosmetics
Limited. The cost of all three taken together has been Rs.140
crore.
The acquisition was largely funded through internal accruals
- out of the Rs.140 crore investment, only Rs.20 crore was
funded through debt.
The Balsara acquisition would add sales turnover of
approximately Rs.200 crore to Dabur and brings with it three
manufacturing facilities located at Silvassa, Kanpur and
Baddi. It operates in three business segments, with unique
positioning in each:
• Oral Care
Care: With its clove oil based Promise toothpaste,
Balsara was a pioneer in herbal oral care products in
India. Balsara also has a strong presence in the value
segment with Babool toothpaste and in the premium
segment with Meswak toothpaste.
Taken together, the Balsara oral care brands hold
around 4.5 per cent share of the toothpaste market.
• Household Care: In this segment, too, Balsara has
entrenched brands. Odonil is almost a generic name
in the air freshener segment; Odomos has a dominant
share in the personal application based insect
repellents market; Sanifresh is the second highest
selling toilet cleaner in India; Odopic, which is a
dishwashing and surface cleaner has strong brand
equity in western India. The category market size is
estimated to be Rs.2,000 crore, and has extremely
attractive growth opportunities given its current low
market penetration levels.
• Contract Manufacturing
Manufacturing: This includes the private label
and herbal extracts and complexes business catering
mainly to the international market.
There were several reasons for Dabur to believe in the value
proposition that Balsara business offers. First, its oral care
business fits well with Dabur’s herbal positioning and will
allow the Company to offer a range of strong products
across different price points in this segment. Second, the
household care products will allow Dabur to expand into a
new product category that has very low penetration levels
and high growth potential.
Third, the combined entity can reap greater benefits from
economies of scale and scope in terms of advertisement
expenses, synergies in marketing, sales and distribution
and greater utilisation of backend services. Fourth, in terms
of geographies, Balsara’s strength in the West and the South
complements Dabur’s strength in the North and East India.
Given these factors, Balsara has a strong strategic fit with
Dabur, and we believe that the acquisition will generate
positive gains for the Balsara business as well as the
consolidated entity and will prove to be a value enhancing
initiative.
In the following sections we look at the developments in
Dabur’s different businesses in India and abroad.
SEGMENT-WISE AND PRODUCT-WISE
PERFORMANCE
Domestic FMCG Business
In India, the Company’s business is carried out by three
divisions — Consumer Care Division (CCD), Consumer
Healthcare Division (CHD) and the wholly owned subsidiary
Dabur Foods Limited. On a consolidated basis CCD
contributes 82 per cent, CHD contributes 8 per cent and
DFL contributes 10 per cent to the Company’s domestic
revenues. While CCD remains the leading division and a
focus area, during 2004-05 the Company undertook several
initiatives to consciously grow the smaller divisions — CHD
and Foods. These divisions, with relatively smaller sales
bases, are seen as key drivers of future growth.
Annual Report 2004-05 11
Consumer Care Division
The FMCG business of the Company is housed in this division
and offers a wide range of products in hair care, oral care,
health supplements, digestives and candies, and baby and
skin care. Chart C gives the relative contribution of these
categories to total sales of the Consumer Care Division.
Chart C : Category Contributions
CCD’s net sales increased by 8.9 per cent from Rs.1,001.2
crore in 2003-04 to Rs.1089.9 crore in 2004-05. A number of
new products in various categories have been launched in
the last couple of years. Many of these products had the
first full year of marketing during 2004-05 and were the
prime drivers of growth. Sales of new products accounted
for over Rs.75 crore in 2004-05, which was around 8 per
cent of the total sales of the division.
The CCD brands continued to get support from aggressive
advertisement campaigns. While celebrity film stars like
Amitabh Bachchan and Rani Mukherji continue to endorse
Dabur’s brands, the company signed on cricketer Virendra
Sehwag to be an ambassador for select brands. During 2004-
05, the company rolled out a focused plan to develop its
south Indian markets, where it had been comparatively
weak. A core group under a new marketing head has been
set up to push this initiative. The Company is supporting
12 Dabur India Limited • Management Discussion & Analysis
this exercise by developing new products and packaging
which are customised to the distinct tastes and needs of
the South Indian consumer. The ‘South India’ initiative has
begun to pay dividends as sales in the region grew by 23.6
per cent during 2004-05, and its contribution to CCD sales
increased from 7.1 per cent in 2003-04 to 8.2 per cent in
2004-05.
Hair Care
Hair Care, which is the largest category in Dabur’s CCD
portfolio with a 38 per cent share, registered a growth of
11 per cent during 2004-05. From a market perspective,
the two groups of products in this category — hair oil and
shampoos — witnessed diametrically opposite market
movements. While in hair oils the market grew faster in
value terms compared to volumes, in shampoos, the value
growth was far less than that of volume. This development
in shampoos was a direct fall-out of fierce price based
competition in the first half of 2004-05. In the latter half,
there has been an element of price stabilisation with all
FMCG companies repositioning their products in new price
segments and consolidating their presence.
In hair oils, Dabur Amla hair oil grew by 15.9 per cent during
2004-05 in value terms, and net sales crossed Rs.200 crore.
During the year, the brand communication for this product
was transformed from being a purely functional one, to a
more evolved and trendy message. Vatika hair oil registered
double digit growth, with sales value increasing by 13.1
per cent in 2004-05. The product increased its market share
in the hair oil category from 6.9 per cent in 2003-04 to 7.6
per cent in 2004-05. Dabur continued to promote this brand
with its concept of “Vatika Women”. The Superbrand Council
of India acknowledged the strength of the Vatika
brand and it was adjudged as one of the 101 super brands
in India.
There has been a concerted effort to develop the Anmol
brand on the economy platform across product categories.
Under this, your Company had made an entry into the large
mustard oil market with its branded hair oil offering
Anmol Sarson Amla Hair oil. In its first full year in the market
during 2004-05, the product has shown good growth
prospects.
In line with the price rationalization that happened in the
shampoo category, the Company repositioned some of its
offerings and reduced prices in products such as Vatika
Henna Cream Shampoo. As a result, while Dabur’s
shampoos registered a 14 per cent growth in volume terms,
its value growth was restricted to 0.4 per cent in 2004-05.
The newly launched Dabur Anmol shampoo range enabled
the Company to gain entry into the economy segment of
the shampoo market.
Health Supplements
This category recorded a growth of 2.4 per cent for 2004-05.
Growth was impacted in the second half of the year largely
due to the country experiencing a delayed and shortened
winter thus adversely affecting off-take of the flagship
product in this category – Chyawanprash, which experienced
marginal decline in sales. The Chyawanprash market as a
whole declined by 5.7 per cent during 2004-05. The
Company is in the process of rolling out strategies to expand
the usage of Chyawanprash.
The brand “Dabur Chyawanprash” bagged the “Brand Re-
launch of the Year” award at the first Indian Marketing
Awards (IMA) held in October 2004.
The growth driver in this category was Dabur Honey, which
grew by 24.6 per cent in value terms. This brand has been
seeing strong growth due to focused marketing and
advertising support and increasing usage of honey in food
preparations. Sales of Dabur glucose remained stagnant
during 2004-05. An aggressive consumer promotion has
been initiated for this brand supplemented by a new
advertisement campaign.
In order to drive growth in Health Supplements category,
your Company has planned to introduce a unique and
differentiated product in Herbal Nutritional Supplements
category. This product is being test marketed in some select
markets. The Nutritional Supplements category is a large
consumer category in which Dabur’s healthcare and herbal
equity fits very well and it offers significant growth potential.
Oral Care
Sales of Dabur’s Oral Care products increased by 10.1 per
cent. This growth has been driven by wide acceptance of
the Dabur Red Toothpaste franchise, which was in the
second year of its launch. Sales of Dabur Red Toothpaste
increased by over 100 per cent and reached Rs.49.7 crore
in 2004-05.
In toothpowders, where Dabur has been a dominant
player, sales were under stress due to a 7.0 per cent
decline in the entire category. During the second half of
the year, Dabur aggressively pushed this product with a
new advertisement campaign featuring Virendra Sehwag.
This helped the company strengthen its position within
the category and increase its market share from 30.1 per
cent in 2003-04 to 31.7 per cent in 2004-05. However in
the near term, it is the toothpastes that are poised for
good growth.
With the Balsara acquisition, Dabur has strengthened its
position in toothpastes, and now has a robust set of
offerings across different price points. While Babool will
be positioned in the economy segment, Dabur Red
toothpaste will be positioned in the mid-priced segment
and Meswak in the premium segment. Another Balsara
product Promise toothpaste, which is in the same price
band as Dabur Red Toothpaste, will be positioned under
the white toothpaste platform, and its international brand
equity will be leveraged for exports.
Digestives and Confectionery
During 2004-05, this category recorded a growth of 2 per
cent. While Hajmola tablets registered a 9.1 per cent growth
in 2004-05 with the roll out of a new packaging and
advertisement campaign, sales of Hajmola candy decreased
by 3.3 per cent in 2004-05. The Company has taken steps to
revive the sales of Hajmola candies, which includes re-launch
of the product in a smooth format with a more contemporary
packaging. The re-launch was done in West Bengal and
Maharashtra, and will be extended nationally in the first half
of 2005-06.
Annual Report 2004-05 13
The focus on newer formats of Hajmola continued with
launch of an improved ‘goli’ format of Hajmola Anardana. A
further extension of the Hajmola brand has been planned
with the launch of Hajmola Yumstick, which is a paste in a
stick format and comes in two ethnic flavours — imli
(tamarind) and aam (mango). Sales of Pudin Hara liquid
recorded good growth but due to decline in the Pudin Hara
pearls, the overall brand remained stagnant.
Skin Care/Baby Oils
This is the smallest category in CCD’s portfolio in terms of
size of sales, but in terms of growth this has been one of
the leaders, with sales increasing by 13.1 per cent during
2004-05. Most of this growth was fuelled by expansions in
skin care products.
Within skin care, Gulabari grew by 21.7 per cent in 2004-05.
The fairness platform has also paid rich dividends as seen
in the 50 per cent growth in Vatika Fairness Face Pack. The
Company has made further inroads into skin care area
through test marketing of Dabur Anmol Cold Cream and a
test launch in West Bengal of Vatika soap with saffron and
honey. Herbal soaps is another area where the equity of
Vatika brand can travel seamlessly to command a niche
position, therefore the Company has decided to make a
calibrated entry into this category.
In baby care, Dabur Lal Tail registered a growth of 9.5 per
cent in 2004-05. The high quality of this product was further
endorsed by the fact that it was the only baby oil that passed
FDA scrutiny in the test which was conducted on all leading
brands of baby oils in Maharashtra.
Consumer Healthcare Business
Consumer Health Division
The Consumer Healthcare Division (CHD) portfolio comprises
of pure grantha based products on the Ayurveda platform,
which can be broadly classified into OTC products, branded
ethical and generics including Asavs and Classicals. This
business includes popular products such as the OTC Asav
14 Dabur India Limited • Management Discussion & Analysis
tonic brands of Dashmularishta and Ashokarishta and
advertised brands such as Dabur Shilajit, Naturecare,
Shankhpushpi, Honitus and Ring Ring among others. During
2004-05, this division’s sales increased by 12.4 per cent
from Rs. 95.9 crore to Rs.107.8 crore, thus breaking the
Rs.100 crore barrier for the first time. This growth has been
fuelled by strong performance of brands like Shilajit,
Shankhapushp Syrup, Nature Care and Ring Ring. This
business is woven around the Ayurveda segment and
therefore, given the strong Ayurvedic origins of Dabur’s
equity, constitutes a major focus area for the Company.
The Consumer Healthcare activity has been identified as
one of the growth drivers of your Company’s business going
forward. The increasing preference for holistic health
remedies as offered in Ayurveda is leading to a sustained
growth in the Natural/Herbal segments. Your company
plans to lead this growth.
In order to develop this division in a focused manner, the
Company undertook a major organisational restructuring.
This included the appointment of senior professionals with
wide experience in the FMCG and Healthcare industry.
Concurrent with these structural changes, the division has
formulated and will implement a synergised business
roadmap during 2005-06.
This strategy stresses on taking quantum jumps in growth
and is centred around two distinct groups of products that
are at two different ends of the divisions product portfolio
— the classical grantha based business and the OTC route.
On the branded ethical side, the strategy focuses on
marketing Grantha based products, which are safety and
efficacy driven. Your Company undertakes extensive clinical
trials for most of its products so that the products are tried
and tested before actual use. Your company has a strong
research and development infrastructure comprising about
20 dedicated scientists who are working on developing
and strengthening the Ayurvedic platform scientifically.
Apart from this, the Company is associated with the Dabur
Dhanwantary Foundation in Chandigarh and several other
regional hospitals for promoting education and R & D in the
field of Ayurveda.
Building a world class OTC capability is central to the
development of this division. The aggressive OTC strategy
is based on connecting customers with Ayurveda using
various elements of the media, doctors and pharmacy
promotions. The idea is to strengthen relationships with
Ayurveda market stakeholders — in other words, not just
penetrate the market but also redefine and grow it. This
initiative is being supported by aggressive advertising of
several products like Honitus and Nature Care.
In 2004-05, Dabur Dashmularishta became the first branded
ethical Asav (tonic) to be advertised on television. Marketing
activities continue to focus on increasing endorsement from
healthcare professional (BAMS and Vaids who prescribe
Ayurvedic medicines), developing pharmacy selling,
increasing the effective coverage in urban pharmacy
supported by focused media thrust. On the distribution side,
territories have been restructured and additional manpower
deployed wherever necessary. To build effective coverage,
your Company has strengthened the number of retail sales
force personnel and also stockist networks.
In 2004-05 CHD acquired the brand Honitus from de-merged
Dabur Pharmaceuticals Limited. This cough syrup, which has
an Ayurvedic base, was earlier sold through the prescription
route. Now this is being sold over the counter (OTC). Dabur’s
Consumer Healthcare business continues to be open to
further opportunities for acquisitions and partnerships in
India and abroad and is strategically poised for good growth.
Foods Business
Dabur Foods Limited
Dabur India Limited’s wholly owned subsidiary, Dabur Foods
Limited (DFL) operates on the naturals platform with a
product portfolio consisting mainly of fruit juices, cooking
pastes, sauces and items for institutional food purchases.
The business’ sales grew by 51.2 per cent from Rs.85.8 crore
in 2003-04 to Rs.129.7 crore in 2004-05.
The primary growth driver in this business were its two fruit
juice brands –“Real” and “Real Activ” which, taken together,
recorded an impressive growth of 38.5 per cent. During the
year the Company repositioned its offerings to put in place
a well segmented product strategy. The Company, now has
three distinct brands across the fruit juice category : Real,
Real Activ and Coolers.
The Activ range of juices, which have no added sugar, cater
to the health conscious young adults in the premium segment.
Activ’s new identity, which has now become distinct from the
Real brand, has been brought out in its new contemporary
and trendy packaging. The Activ range now has five flavours
including the two new additions – Mixed Fruit Cucumber
Spinach Juice and Mixed Fruit Beetroot Carrot Juice. In order
to target the 18 to 35 age group the smaller packs of Activ
have been enlarged from 200 ML to 330 ML, which is a more
appropriate quantity for a person of this age group to derive
nutritional value from a single drink.
Real continues to be DFL’s offering for the medium segment
with growth thrust provided by continuously launching new
flavours.
The economy end of the portfolio consists of “Coolers”.
These drinks are based on traditional Indian formulations,
which have a cooling effect on the body. They were launched
in 2004-05 in 3 flavours — Watermelon, Pomegranate and
Aam Panna. The Company intends to aggressively promote
this brand and also introduce new flavours in 2005-06.
The Hommade brand grew by 31 per cent in 2004-05 with
good growth in Coconut Milk and Tomato Puree. Apart from
these, the brand also offers a range of cooking pastes, and
has recently test marketed a soup concentrate, which shall
be launched nationally during 2005-06.
Institutional sales contribute around 25 per cent of Dabur
Foods’ turnover. The company intends to bring in more
products in this distribution system. A separate brand called
Nature’s Best has been created for institutional sales and it
consists of products like ketchup and corn powder. There
was impressive growth in sales of honey to institutions,
which is done in special one kg packs.
Annual Report 2004-05 15
International Business care products. Dabur International’s subsidiary in
Bangladesh—Asian Consumer Care Private Limited –
During 2003-04, the Company started giving greater impetus
recorded sales of Rs.10 crore in 2004-05, its first full year of
to the international business. The entire international
operations. Operations in the Nigerian plant began during
operations was reorganised and an umbrella organisation
2004-05 and will be scaled up in the next financial year.
called Dabur International Limited was created to provide
focus and structure to the international initiatives. This entity There was also renewed growth in the Russian and CIS
has an independent team and operates out of Dubai. markets. Sales in Pakistan registered a 100% growth.
Overseas sales grew by 43.4% per cent from Rs.128 crore Dabur has formulated structured strategies for its foray into
in 2003-04 to Rs.183.6 crore in 2004-05. The overseas the international market. Based on market assessment, the
impetus has been maintained and the share of overseas in Company has identified 20 focus countries where it is
Dabur’ total sales increased from 9.6 per cent in 2003-04 to evaluating the need for having a manufacturing facility or
11.9 per cent in 2004-05. The data of relative domestic and marketing presence. One of these countries is Pakistan.
overseas sales and net profit for the consolidated entity is Given similar taste patterns as India, this is a good market
given in Table 1. for Dabur, but the need to establish a presence there as a

Domestic Overseas local venture is being carefully evaluated. There are another

2004-05 2003-04 2004-05 2003-04 set of countries, which are termed as opportunity markets,
where Dabur will forge alliances based on opportunies.
Sales 1353.4 1201.5 183.6 128.0
% of total 88.1 90.4 11.9 9.6 In its first concerted endeavour to extend Dabur’s products
to the mainstream international markets in developed
Net Profit 151.7 100.6 5.3 8.7
countries, your Company is exploring opportunities to enter
% of total 96.6 92.0 3.4 8.0 into a marketing alliance with some of the well established
retail chains in the UK. There is a large market for herbal based
Table 1: Relative share of sales and profits of domestic therapeutic products amongst the mainstream population in
and overseas businesses developed markets, dealing primarily with lifestyle ailments.
The Company continues to leverage the herbal specialist The focus of this initiative would be to cater to this market in
platform in the overseas markets and offers products in UK through OTC products. For this purpose, Dabur needs to
different geographies based on local tastes and demands. have the selected products and production processes certified
During 2004-05, the Company also made investments in with the Medicines and Healthcare Products Regulatory
global brand building which have brought down the net Agency (MHRA)—the executive approving agency of the UK
profit as compared to last year. However the profitability government. The Company has already initiated this process.
of the business is expected to improve with increasing Entry strategies are also being developed to enter the USA
volumes and better utilization of the infrastructure which
supplements market.
has been put in place.
Dabur’s shareholding in Dabur Nepal has been increased
Dabur’s products are gaining ground in the Middle-East,
from 80 per cent to 97.5 per cent by acquiring additional
which witnessed around 24.4 per cent growth in net sales
17.5 per cent shareholding from the minority partners based
during 2004-05 on the back of a major brand building
in Nepal. The shares were acquired by Dabur International
exercise. In Egypt, the turnover almost doubled in 2004-05
with a view to reduce minority shareholding and retain
with significant growth in the Company’s oral care and hair
maximum profits under the consolidated Dabur umbrella.

16 Dabur India Limited • Management Discussion & Analysis

OPERATIONS
Manufacturing
India
In 2004-05, Dabur successfully commissioned its largest and
state-of-the-art manufacturing facility at Rudrapur, Uttaranchal.
Set up in a record time of four months, the plant is now fully
operational and is being used to manufacture Chyawanprash,
Hajmola tablets, Amla hair oil, Vatika hair oil, Lal Tail and Janam
Ghunti. While the Rudrapur facility enjoys similar fiscal benefits
as the Jammu and Baddi plants, the Company remains focused
on leveraging higher operational efficiencies and superior
quality levels from this plant.
As part of our long-standing commitment to environmental
safety and protection, an ultra-modern effluent treatment
plan and an elaborate environmental management system
has been commissioned in Rudrapur. Your Company
believes that with its superior technology, modern
manufacturing processes and exacting quality control
procedures this plant will go a long way in further
strengthening Dabur’s market position.
Dabur’s plant in Jammu, commissioned in November 2003,
is also fully operational and is being utilized for
manufacturing hair oils, shampoos, Gulabari, Kewra water
and intermediaries. This plant features a modern and
compact shop floor design, lean organization structure,
improved system processes and stringent quality control
norms. Higher batch sizes and larger scales of production
at this facility have contributed to major improvements in
product quality, consistency and productivity.
During 2004-05, Dabur added a toothpaste and Nutritional
Supplements manufacturing capacity at its Baddi plant. The
Company has also set-up a fully operational effluent
treatment plant at this facility.The total capital expenditure
incurred by the Company on these facilities and other
requirements amounted to Rs.56.1 Crore. This has enabled
the Company to enhance manufacturing capacity
significantly besides upgrading technology.
As a result of the Balsara acquisition, Dabur has added three
more manufacturing facilities to its fold, located at Silvassa,
Baddi and Kanpur. While the Silvassa and Kanpur facilities
are primarily engaged in manufacturing household range
of products and the private label business, the Baddi plant
produces oral care products, including fluoride based
toothpaste. This plant was set up in 2004-05 and enjoys tax
benefits as are available to new units in Himachal Pradesh.
Dabur Foods’ multi-fruit processing facility at Siliguri, West
Bengal, became fully operational during the year. The plant
produces pulp and concentrates and has brought the
Company a step closer to achieving full backward integration
and realising the resultant cost efficiencies.
The location of this plant is a major source of its competitive
strength. It is located at the heart of a major fruit-producing
and trading area, thus, giving it access to a variety of fruits
including litchi, guava, mango and tomato at competitive
prices. Moreover, it is in close proximity to the Dabur Foods’
juice plant located in Nepal, thereby reducing time and cost
of transportation. The plant meets the stringent
requirements of the Codex Alimentarius Commission
Guidelines, the Recommended International Code of
Practices and the General Principles of Food Hygiene.
In 2004-05, Dabur Foods acquired a new facility near Jaipur
for manufacturing fruit juices. The plant currently has
manufacturing facilities for 200 ml packs. This plant will be
upgraded to manufacture 1 litre and 200 ml packs of ‘Real’
brand of fruit juice and the ‘Coolers’ range of products.
Operations at the Nepal plant have been meeting all
requirements and have not been impacted by domestic
disturbances.
Overseas
Dabur International has manufacturing facilities at Dubai,
Sharjah and in three of its step-down subsidiaries — Asian
Consumer Care Private Limited in Bangladesh, Dabur Egypt
Limited in Egypt and African Consumer Care Limited in
Nigeria. During the course of the year, the plant at Nigeria
Annual Report 2004-05 17
became operational. Production at the Bangladesh plant had
begun in 2003-04. This was stabilised, and 2004-05 was the
first full year of operations here.
Quality
Dabur remains resolute in its commitment to enhance quality
levels across its product portfolio. In this regard, over the last
few years, the Company has maintained a sharp focus on
upgrading technology and improving manufacturing
processes at all its plants. As part of its quality assurance
programme, it undertakes regular factory quality audits by
trained quality auditors, ensures compliance with ISO 9000
procedure and implementation of established standard
operating procedures across its manufacturing bases.
Through significant technological up-gradation, the
manufacturing process of Hajmola Anardana Goli has been
made free from human touch, thus, bringing in
improvement in hygiene. The production process of
Hajomla candy has also been upgraded to convert the
product into depositor form, thus giving it a smoother finish.
The Honitus and Nature Care product lines at the Baddi
plant have been set-up to meet appropriate standards of
safety, quality, performance and effectiveness as set by
Medicines and Healthcare Products Regulatory Agency
(MHRA) — the executive agency of the Department of
Health, Government of UK. Apart from this, the plants
manufacturing Chyawanprash, Glucose and Honey have
received Hazard Analysis and Critical Control Point
(HACCP) certifications.
Supply Chain
In the current inflationary backdrop, supply chain
efficiencies have assumed even greater importance. Our
initiatives over the last couple of years in supply chain
management have stood us in good stead and during
2004-05, Dabur continued to realize procurement
efficiencies and reduce its input costs in spite of inflationary
pressures. In fact, Dabur is one of the few companies in
the FMCG industry which has reduced its input costs
18 Dabur India Limited • Management Discussion & Analysis
consistently over the last few years by focusing on high
degree of skills in the area of procurement and materials
management. Through usage of innovative procurement
strategies and modern forecasting and research tools, the
Company’s material cost as percentage of sales came down
from 43.7 percent in 2003-04 to 42.9 per cent in 2004-05.
During the year the Company successfully deployed the
‘Spend Visibility’ programme in collaboration with ‘Ariba’
(earlier FreeMarkets) to further strengthen its procurement
efficiencies. This program has significantly enhanced the
quality of information and visibility in sourcing priorities of
the Company.
The Company is also intent upon creating a backward-
integration platform for herbal inputs, especially those on
the endangered list. To this end, Dabur has made a foray
into contract farming for selected herbs as part of the Agro-
biotechnology initiative. Under this initiative, a number of
backward integration programmes have been set up in
Andhra Pradesh, Tamil Nadu, Haryana, Uttar Pradesh,
Himachal Pradesh, Uttaranchal , Jammu and Kashmir and
Nepal to develop sustainable cultivation of these
engendered species through contract farming and buy back
arrangements. Dabur enters into contract farming
agreements with farmers through a local coordinator. The
Company also organizes quality-planting material with
promising genetic potential to farmers on no-profit-no-loss
basis and provides additional technical support. In all about
2500 acres of land and 29 medicinal herbs have been
covered under this programme, which contributes to
environment and adds to the income of farmers in addition
to providing a sustainable source of herbal inputs to
the Company.
Research and Development
R&D has been the cornerstone of Dabur’s success. The
Research and development activities are undertaken by
Dabur Research Foundation (DRF). DRF is engaged in a wide
spectrum of research on Ayurvedic and herbal products,
organic substances, Phytochemicals (plant derived
medicines), tissue culture, foods, cosmetics, oral care and
other personal care products. In 2004-05, the research
capabilities of DRF were further braced up with the setting-
up of new world-class laboratories and induction of well-
known scientists in the field.
The depth and knowledge of DRF’s research capabilities is
particularly reflected in its success in the area of new
product development. In the year under review, your
Company introduced Dabur Red Toothpaste Gel, Anmol Cold
Cream – a moisturiser with saffron and almonds, Anmol
range of herbal shampoos, Vatika Honey and Saffron soap,
the Coolers range and new fruit and vegetable flavours in
the Real Activ range of juices. The Company has also
developed a differentiated product in the herbal nutritional
supplements category which is being launched-all on
innovation-backed platforms. Given their unique properties,
Dabur believes that these products will create a niche for
themselves in their respective markets.
Improving speed-to-market on newly researched products
has been a key focus area of research at DRF. In the past,
commercial production of many researched products was
hampered due to limited focus on devising innovative
production processes. However, with this focus,
improvements have been made in transferring new
products out of the laboratory to commercial production in
a much shorter span of time. In the last few years, Dabur
has given a major thrust to clinical trials and generating
claims support data. To this end, Dabur had entered into a
strong partnership with the Dhanwantri Ayurvedic Hospital—
now called Dabur Dhanwantri Hospital — in Chandigarh.
This initiative gained further momentum during the period
under review. The Company is working proactively to upgrade
OPD and operation theatre in the hospital as well as to improve
facilities at the training institute. Dabur is also in active
collaboration with Wardha College, Poddar Institute, All India
Institute of Medical Sciences (AIIMS) and Benaras Hindu
University to conduct clinical research and claim support tests.
Till date, the Company has conducted more than 115 clinical
trials with 40 medical institutes across the country.
Going forward, your Company also expects to leverage the
perfumery, flavours and home care product capabilities of
the Balsara R&D centre based in Thane, Mumbai.
Human Resources
Dabur takes great pride in the commitment, competence
and vigour shown by its workforce in all realms of business.
The Company continues to take new initiatives to further
align its HR policies to meet the growing needs of its
business.
To this end, Dabur has introduced a uniform and structured
induction process across all its locations in India. Using
the intranet, post-induction programs have been made
available at all recruitment locations of the Company.
Dabur has also been pursing the Young Manager
Development Program (YMDP) to attract and nurture fresh
talent in the Company. Under this programme, in 2004-05,
the Company recruited 18 candidates from leading
management schools in India.
Under YMDP, each candidate is mentored by a member of
the senior management and is put through a one year cross-
functional training programme. The Company has adopted
the Balanced Scorecard for performance evaluation and
strategy deployment. All four aspects of the scorecard —
financial perspective, customer perspective, internal
business process and innovation and learning — have been
formally communicated across the management and
individual Key Performance Indicators (KPIs) identified
thereon. Annual appraisals, down to the level of area sales
managers, are based on the parameters identified as KPIs.
This has ensured that balance across multiple dimensions
of performance is maintained and that good
accomplishment in one area is not offset by poor execution
elsewhere.
Dabur has also set-up Assessment and Development
Centres to provide employees equitable growth
opportunities and a platform to realise their potential. These
Annual Report 2004-05 19
centres employ scientific processes to assess the growth Table 2 : Abridged Profit & Loss Account (Rs. crore)
potential of each individual. Based on this assessment,
Dabur India Dabur India Growth
employees are placed where their potential is best utilised. 2004-05 2003-04 (%)
For senior management, this programme is conducted by a
1 Net Sales 1,268.7 1,148.0 10.5
reputed professional organisation.
2 Other Income 11.5 11.0 4.1
People development continues to be a key focus area at
3 Total Revenue 1,280.2 1,159.0 10.5
Dabur. The Company organises regular Management
4 Total Expenditure 1,092.3 1,020.8 7.0
Development Programmes (MDPs) in the form of
workshops and training sessions for both the senior and 5 EBIDTA 187.9 138.2 36.0
junior management. A training module has been prepared 6 Depreciation 17.1 15.8 8.6
for the Company’s frontline salesmen, including those on 7 Amortisation 1.5 2.1 -29.0
the rolls of its stockists. Based on this module, the Company
8 Interest 4.3 6.9 -37.7
plans to hold day-long workshops at various locations for
9 PBIT 169.3 120.3 40.7
over 2,000 frontline salesmen and is currently engaged in
‘training the trainers’ programme for this purpose. 10 PBT 165.0 113.4 45.5
11 Current tax 13.0 8.8 48.6
Recruitment costs have been brought down through the
introduction of a structured employee referral programme 12 Deferred tax 4.0 3.5 14.6
and creation of centralised employment database with 13 PAT 148.0 101.2 46.3
access control capabilities. 14 EPS 5.2 3.5

As Dabur builds on the synergies with Balsara, it will have 15 EPS (Diluted) 5.1 3.5

to deal with the challenges of integrating the two
As can be seen in Table 2, Dabur India continues to pursue
workforces. The Company is well-placed to manage this
its path of high profitable growth. With the renewed
integration process. While the immediate integration focus
strength of its brands, your Company recorded a 10.5 per
will remain on key functional areas required to maintain
cent growth in net sales, from Rs.1,148 crore in 2003-04 to
continuity in the different businesses, in the medium term
Rs.1,268.7 crore in 2004-05. This healthy top-line growth,
the Company will endeavour to fully-integrate the value
accompanied by efficiencies in manufacturing and supply
systems and knowledge based capabilities of the two
chain, contributed to a 36 per cent growth in operating
organisations.
profits (EBIDTA) from Rs.138.2 crore in 2003-04 to Rs.187.9
crore in 2004-05.
FINANCIAL PERFORMANCE Driven by much tighter working capital management,
The abridged financials of Dabur India Limited (DIL) for the interest outgo decreased by 37.7 per cent from Rs.6.9 crore
year 2004-05 including revenue, expenditure and profits, in 2003-04 to Rs.4.3 crore in 2004-05. The company also
are presented in Table 2. continues to operate with negative working capital. These
factors have contributed to an impressive 46.3 per cent
It may be noted that Dabur’s financial results as on 31 March
growth in profit after tax (PAT) from Rs.101.2 crore in 2003-
2005 do not account for the Balsara acquisition, which come
04 to Rs.148 crore in 2004-05. As can be seen in Table 3, all
into effect from 1 April 2005.
profitability ratios of the Company have gone up in the
year under review.

20 Dabur India Limited • Management Discussion & Analysis

Table 3: DIL’s Profitability Ratios (%) Table 4 : Consolidated, Abridged Profit & Loss Account
(Rs. crore)

2004-05 2003-04


Dabur Dabur Growth
EBDITA/Sales 14.8 12.0 Consolidated Consolidated (%)
PBT/Sales 13.0 9.9 2004-05 2003-04
1 Net Sales 1,537.0 1,329.6 15.6
PAT/Sales 11.7 8.8 2 Other Income 9.2 9.1 1.5
ROCE 38.7 34.9 3 Total Revenue 1,546.2 1,338.6 15.5
4 Total Expenditure 1,328.1 1,170.4 13.5
RONW 44.5 38.6 5 EBIDTA 218.0 168.3 29.6
6 Depreciation 28.0 24.9 12.5
There has been a significant improvement in operating
7 Amortisation 1.5 3.9 -61.5
margin (EBDITA/Sales), which grew from 12.0 per cent in
8 Interest 12.4 15.3 -18.6
2003-04 to 14.8 per cent in 2004-05. Net profit margin (PAT/ 9 PBIT 188.5 139.4 35.2
Sales) has also grown from 8.8 per cent 2003-04 to 11.7 10 PBT 176.1 124.2 41.8
per cent 2004-05. The improved margins have been 11 Current tax 15.1 11.4 33.0
primarily driven by two factors. First, due to improvements 12 Deferred tax 4.0 3.5 14.6
in supply chain and manufacturing, the costs have been 13 PAT 157.0 109.3 43.6
driven down substantially. Second, with the commissioning 14 Minority interest (1.2) (2.8) -57.0
15 PAT after 155.8 106.5 46.3
of the Jammu, Baddi and Rudrapur plants—all located in
minority interest
excise free zones— the Company has been able to benefit
16 EPS 5.4 3.7

from the fiscal concessions offered at these locations. 17 EPS (Diluted) 5.4 3.7
Your Company has also found success in reducing its
Driven by impressive growth of the Foods and International
working capital cycle significantly over the last couple of
businesses, the net sales of the Company on a consolidated
years. The net working capital which was at negative 5 days
basis registered a growth of 15.6 per cent from Rs.1329.6
of sales in 2003-04 came down further to negative 20 days
crore in 2003-04 to Rs.1537 crore in 2004-05. The
of sales during 2004-05. Consequently, the ROCE has
consolidated net profit (PAT after minority interest) also
increased from 34.9 per cent in 2003-04 to 38.7 per cent in
posted a strong growth of 46.3 per cent increasing from
2004-05.
Rs.106.5 crore in 2003-04 to Rs.155.8 crore in 2004-05.
The strong bottom line has also pushed up the RONW from As presented in Table 5, all profitability ratios calculated on a
38.6 per cent in 2003-04 to 44.5 per cent in 2004-05. consolidated basis have shown a marked improvement in
2004-05.
The Company has declared total dividend of 250 per cent
which translates into dividend payout ratio of 48.3 per cent. Table 5: Dabur Consolidated, Profitability Ratios (%)
The dividend payout ratio has been maintained inspite of 2004-05 2003-04
significant investments made in manufacturing facilities as EBDITA/Sales 14.2 12.7
well as the Balsara acquisition.
PBT/Sales 11.5 9.3
PAT/Sales (after minority interest) 10.1 8.0
Consolidated Financials
ROCE 31.5 29.2
Table 4 gives the abridged financials of Dabur on a
RONW 43.5 38.1
consolidated basis.

Annual Report 2004-05 21

The highlights of the consolidated performance are as
follows:
• Operating profits (EBIDTA) increased by 29.6 per cent
from Rs.168.3 crore in 2003-04 to Rs.218.0 crore in 2004-
05. Operating margin (EBDITA/sales) also grew from 12.7
per cent in 2003-04 to 14.2 per cent in 2004-05.
• The interest coverage ratio (ratio of profit before interest
and tax to interest payments) has increased from 9.1
times in 2003-04 to 14.8 times in 2004-05.
• Net profit margin (PAT/Sales) increased from 8 per cent
in 2003-04 to 10.1 per cent in 2004-05.
• Return on Capital Employed has gone up from 29.2 per
cent in 2003-04 to 31.5 per cent in 2004-05.
• Return on Net Worth increased from 38.1 per cent in
2003-04 to 43.5 per cent in 2004-05.
RISKS AND CONCERNS
Uncertainties in business offer opportunities and downside
risks. Consequently, your Company recognises the
importance of a well structured system to identify and
manage the different elements of risk. Dabur has
introduced a risk-based control system and appointed risk
officers across all Company locations. The basis of this
process driven risk management system is the risk register
that not only lists a comprehensive set of risks across 15
functional domains but also states control tools under
process owners that are there to minimise each risk. The
inherent risks across operational, strategic and tactical
issues are mapped in terms of likelihood of occurrence
and materiality. Some key areas where risks have been
identified and mitigation tools put in place are:
• Brand Equity risks –These risks are inherent to any
FMCG Company like Dabur, which has a long-term
market standing and high brand equity. They are linked
to issues related to media, PR and competition. The
market space is also filled with counterfeits and spurious
products, which are a threat to the Company’s brand
equity and revenue. There are also inherent risks
22 Dabur India Limited • Management Discussion & Analysis
associated with new products that are constantly being
introduced by Dabur. However Dabur has put in place
necessary systems to mitigate these risks which is
reflected in the high success rate of its new product
initiatives and sustained revenue growth.
• Finance and Treasury risks – apart from regular risks
like authorisation risks, reporting risks and exposure
risks, Dabur, with an increasing international presence,
is continuously exposed to risks associated with foreign
exchange fluctuations. Like any other Company, Dabur
is also exposed to risks attached to economic and
political uncertainty.
• Supply chain and procurement risks – These are risks
associated with the market dynamics of the Company’s
inputs, where the Company needs to take positions.
There are systems in place that enhance transparency
and scientific decision making in procurement and
production planning. Many of the Company’s inputs’are
in the nature of herbs and plant extracts, some of which
are endangered. Your Company has put in place a
system of backward linkages where contract farming
of such inputs is promoted.
• Other set of risks deal with development and retention
of human resources, compliance and regulatory
activities, data security and recovery systems across
the company’s IT infrastructure and issues related to
quality and research and development. The Company
is putting in place a Business Continuity Plan and a
Disaster Recovery Plan to mitigate risks in the event of
unforeseen exigencies.
The enterprise-wide risk management system analyses and
deals with these risks based on the overall objective with a
focus on identifying, assessing and subsequently
developing controls to minimise risks. The framework so
designed ensures adherence to the rules, regulations and
internal policies of the company. A Chief Risk officer has
been appointed, who is responsible for the entire risk
governance of the Company.
INTERNAL CONTROL SYSTEMS AND
THEIR ADEQUACY
Dabur has a robust internal audit and control system. The
internal control system at Dabur is a process, overseen by
the Board of Directors, management and other personnel,
that 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 Company’s 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. In the year under
review, Dabur has introduced 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. The Internal Audit Department
reports to the Audit Committee and recommends control
measures from time to time. To read the report of the Audit
Committee on internal control and adequacy, refer to the
section on Corporate Governance of the Annual Report.
OPPORTUNITIES, THREATS AND
OUTLOOK
Dabur is cautiously optimistic about its prospects in 2005-
06. We believe that, if the Indian economy continues to
grow by over 6.5 per cent, demand for FMCG products is
bound to increase. However, a bulk of this demand growth
will be from smaller towns and rural centres. This also points
to the fact that growth will largely be volume driven. The
major concern for 2005-06 is to do with prices of inputs. It
is widely accepted that with output prices under pressure
and input costs being higher, the sector will face margin
pressures.
With the possibility of Foreign Direct Investment being
allowed in the retail sector and consequent entry of large
international retail chains, the FMCG industry will see some
structural changes happening which could result in a strong
growth momentum. Your Company is gearing up to
capitalize on this opportunity by putting in place a
specialized sales structure dedicated to modern retail
channels.
The challenge for your Company in the next financial year
is to be able to accelerate growth and maintain margins.
We believe that by leveraging our herbal specialist brand
equity, offering a wider product portfolio, and strategically
positioning our products in different market segments, we
will largely de-risk ourselves from pricing pressures and
segmental contractions, if any. On the production side,
the location of our plants deriving fiscal benefits, coupled
with procurement and supply chain efficiencies, we will
be able to maintain good margins.
CAUTIONARY STATEMENT
Statements in this management discussion and analysis
describing the Company’s 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 Company’s 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.
Annual Report 2004-05 23
Report on Corporate Governance

In India, the Securities and Exchange Board of India (SEBI) stipulates corporate governance
standards for listed companies through the Clause 49 of the listing agreement of the stock
exchanges. SEBI, through circulars dated 29th October, 2004 and 29th March, 2005, has revised
the existing Clause 49 and has mandated listed companies to comply with the revised Clause 49
by 31st December, 2005.

As a Company, which is committed to ensuring good corporate governance practices in all its
dealings, Dabur has moved beyond merely meeting mandated regulations and made concerted
efforts to imbibe global standards of corporate governance. In this pursuit, Dabur has already
put in place systems and procedures and is fully compliant with the revised Clause 49 well before
it becomes mandatory.

This chapter, along with the chapters on Management Discussion and Analysis and Additional
Shareholders Information, reports Dabur’s compliance with existing as well as the revised Clause
49 and highlights the additional initiatives taken in line with international best practices.

COMPANY’S PHILOSOPHY ON promoter Director, the Board comprises of five executive

CORPORATE GOVERNANCE
Dabur’s 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 Dabur’s
Board of Directors, management and employees and critical
to the company’s 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.
Directors (of whom three are promoter Directors), and four
non-executive independent Directors. The composition of the
Board is in conformity with Clause 49 of the listing agreement,
which stipulates that 50 per cent of the Board should comprise
of non-executive Directors, and if the Chairman is non-
executive, one-third of the Board should be independent.
Number of Board Meetings
The Board of Directors met 6 times during the year on 5th
May, 2004, 26th July, 2004, 27th September, 2004,
27th October, 2004, 27th January, 2005 and 28th March, 2005.
The maximum gap between any two meetings was less than
3 months.

BOARD OF DIRECTORS
Composition of the Board
As on 31st March, 2005 the Dabur’s Board consists of 10
members. Apart from the Chairman, who is a non-executive
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

24 Dabur India Limited • Report on Corporate Governance

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

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

Name of the Directors Category # Attendance Particulars No. of other Directorships and committee
memberships/chairmanships
Number of Last Other Committee Committee
Board Meetings AGM Directorships Memberships Chairmanships
Held Attended
V C Burman
PD/NED 6 6 Yes 3 0 1
Pradip Burman
PD/ED 6 6 Yes 4 1 0
Dr Anand Burman

PD/NED 6 5 Yes 5 1 1
Amit Burman
PD/ED 6 5 No 8 3 1
P D Narang
ED 6 6 Yes 11 1 2
Sunil Duggal
ED 6 6 Yes 2 1 0
HH Maharaja Gaj Singh
ID 6 0 No 6 0 0
P N Vijay
ID 6 6 Yes 3 2 2

Ajay Bahl ID 6 0 No 0 0 0

R C Bhargava
ID 1 1 No 11 6 2
Stuart E Purdy
ID 6 4 No 0 0 0
# PD – Promoter Director; NED – Non-Executive Director; ID – Independent Non-Executive Director; ED – Executive Director

Ceased to be a member from 27th January, 2005; Appointed as a member from 27th January, 2005;
Ceased to be an Executive Director from 1st April, 2005; Will cease
to be an Executive Director from 1st May, 2005

Shareholding of Non Executive Directors Directors on Dabur’s Board:

Name of Director Status No of shares • Apart from receiving Director’s remuneration, do not
held have any material pecuniary relationships or
V C Burman PD / NED 5000 transactions with the company, its promoters, its
Directors, its senior management or its holding
Dr Anand Burman PD / NED 37000
company, its subsidiaries and associates which may
Amit Burman PD / ED 0 affect independence of the Director.
HH Maharaja Gaj Singh ID 2000 • Are not related to promoters or persons occupying
Ajay Bahl ID 0 management positions at the board level or at one
level below the board.
R C Bhargava ID 0
• Have not been an executive of the company in the
Stuart E Purdy ID 0 immediately preceding three financial years.
P N Vijay ID 0 • Are not partners or executives or were not partners or
Details of other Board Directorships is separately mentioned an executives during the preceding three years of the:
in Annexure 1. ▲ Statutory audit firm or the internal audit firm that is
As mandated by the revised Clause 49, the independent associated with the Company.

Annual Report 2004-05 25

 ▲ 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.
Information Supplied to the Board
The Board has complete access to all information with the
Company. Inter-alia, the following information is regularly
provided to the Board as a part of the agenda papers well
in advance of the Board meetings or is tabled in the course
of the Board meeting:
• Annual operating plans & budgets and any update
thereof.
• Capital budgets and any updates thereof.
• Quarterly results for the Company and operating
divisions and business segments.
• Minutes of the meetings of the audit committee and
other committees of the Board.
• Information on recruitment and remuneration of senior
officers just below the level of Board, including the
appointment or removal of Chief Financial Officer and
Company Secretary.
• Materially important show cause, demand, prosecution
notices and penalty notices.
• Fatal or serious accidents, dangerous occurrences, any
material effluent or pollution problems.
• Any material default in financial obligations to and by
the company, or substantial non-payment for goods
sold by the Company.
• Any issue, which involves possible public or product
liability claims of substantial nature, including any
judgement or order which, may have passed strictures
26 Dabur India Limited • Report on Corporate Governance
on the conduct of the Company or taken an adverse
view regarding another enterprise that can have
negative implications on the Company.
• Details of any joint venture or collaboration agreement.
• Transactions that involve substantial payment towards
goodwill, brand equity or intellectual property.
• Significant labour problems and their proposed
solutions. Any significant development in human
resources/industrial relations front like signing of wage
agreement, implementation of voluntary retirement
scheme, etc.
• Sale of material nature of investments, subsidiaries,
assets, which is not in the normal course of business.
• Quarterly details of foreign exchange exposures and
the steps taken by management to limit the risks of
adverse exchange rate movement, if material.
• Non-compliance of any regulatory, statutory nature or
listing requirements and shareholders service such as
non-payment of dividend, delay in share transfer, etc.
• Details of investment of surplus funds available with
the company.
• Minutes of the Board Meetings of the subsidiary
companies.
• Statement showing significant transactions &
arrangements entered into by the subsidiary
companies.
The Board has established procedures to enable the Board
to periodically review compliance reports of all laws
applicable to the Company, prepared by the company as
well as steps taken by the company to rectify instances of
non-compliances.
Responsibilities of the Chairman and CEO
The current policy of the Company is to have a Chairman –
Mr V C Burman and a Chief Executive Officer (CEO)–
Mr Sunil Duggal. There are clear demarcations of
responsibility and authority between the two.
• The Chairman is responsible for formulating the recommendations of the Nomination Committee.
corporate strategy along with the Board of Directors
The skill profile of independent Board members will be
and ensuring that the implementation is in accordance
driven by the key tasks defined by the Board, which are
with the values and vision of the Company. He is also
broadly based on:
responsible for reviewing and approving the Board
Agenda. • Independent corporate governance

• The CEO is responsible for implementation of corporate • Guiding strategy and enhancing shareholders value
strategy, brand equity planning, external contacts, and • Monitoring performance, management development
other management matters. He is also responsible for & compensation
achieving the annual business plan. • Control & compliance

The constitution of the Board will be as follows:

Board Membership Criteria
• Non-executive chairman
The Nomination Committee works with the entire board to
determine the appropriate characteristics, skills and • Family nominee director/s
experience for the Board as a whole as well as its individual • Executive member/s
members. The selection of Board members is based on • Independent directors and non executive members –
constituting 50 per cent of the Board

The viz matrix gives the detailed skill set required for becoming a Board member as specified by the BOD.
Key Skill Area
Strategy/Business Leadership
Corporate Strategy Consultant
Sales and Marketing experience
Corporate law
Finance
Trade Policy & Economics
Administration & Government
Relations
Ayurvedic specialist
Essential Desirable
2-3 years experience as a CEO, FMCG experience
preferably of an MNC in India
Consultant/Academician with experience Basic understanding of Finance
in FMCG Industry and business strategy.
At least 10 years experience in sales and marketing Experience with FMCG
Good understanding of commercial processes or other consumer products
2-3 years as head of sales or marketing
Expert knowledge of Corporate Law Experience in trade/consumer related laws
At least 5 years as a CFO or as head of a FMCG experience
merchant banking operation
Expert Knowledge of Trade & Economic Policies FMCG experience
Retired Beaurocrat Basic understanding of
Finance and Business.
Ayurvedic doctor with a minimum of 20 years Basic understanding of finance
experience as a practitioner/researcher and business

Other Directors could be based on Company’s priority at a particular time, viz:

• Knowledge of export markets that Dabur is focusing on–

• Commodity procurement expert

Annual Report 2004-05 27

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

Table 2: Remuneration of Directors

Name of the Director Sitting Fees Salary & Perquisites Superannuation Stock Option Commission Total

V C Burman 1,50,000 –

– –

38,80,000 40,30,000

Pradip Burman
– 86,37,775 7,05,001 –
–
93,42,776

Dr. Anand Burman
– 1,22,45,834 8,39,180 –
–
1,30,85,014

Amit Burman
– 32,40,966 2,56,500
–
34,97,466

P D Narang
– 1,05,78,720 7,57,336 99,15,426 –
2,12,51,482

Sunil Duggal
–
96,21,425 6,03,985
96,75,115 –

1,99,00,525

HH Gaj Singh – –
–

–
–

P N Vijay 2,85,000 –

– –

– 2,85,000

Ajay Bahl 30,000 – – – – 30,000

R C Bhargava
15,000
–
–
–
–
15,000

Stuart E Purdy 1,95,000 –
–

–
–
1,95,000

Total
6,75,000 4,43,04,719 31,62,002 1,95,90,541 38,80,000 7,16,32,262


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

During 2004-05 the Company did not advance any loans to three executive Directors namely Mr Pradip Burman,
any of its Directors. Mr P D Narang, and Mr Sunil Duggal is 3 months.

Mr P D Narang and Mr Sunil Duggal were issued 99960 and
94299 Stock Options respectively during the year having a
vesting period spread from 1 to 5 years and exercisable
over a period of 3 years after vesting. The Options are
exercisable at par.
Pursuant to the approval of shareholders in the Annual
General Meeting held on 9th September, 1998 and
subsequently on 5th September, 2002, in addition to the
above remuneration certain Directors are entitled to
severance fee as contained in the resolution passed in the
aforesaid meeting on cessation of their employment and
Directorship with the company. The notice period for the
Two employees are relatives of Directors of Dabur. Mr Mohit
Burman, son of Mr V C Burman (Chairman), joined the
Company on 12th September, 1997 and is currently, General
Manager, Sales and Marketing. Gross remuneration paid
to him for 2004-05 was Rs. 35,92,400 as per approval of the
shareholders and the Government. Mr Chetan Burman, son
of Mr Pradip Burman (Executive Director), joined the
Company on 1st February, 1996, and is currently Deputy
General Manager, Sales and Marketing. Gross remuneration
paid to him for 2004-05 was Rs. 31,72,956 as per approval
of the shareholders and the Government. Both of them
have resigned from their respective position and are being
relieved from their duties on 30th April, 2005.

28 Dabur India Limited • Report on Corporate Governance

Code of Conduct Details on the role and composition of these committees,
including the number of meetings held during the financial
Dabur’s Board has laid down a code of conduct for all Board
year and the related attendance, are provided below:
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
a) Audit Committee
management personnel have affirmed compliance with the As on 31st March, 2005, the Audit Committee comprises three
Code of Conduct. A declaration signed by the Chief independent Directors. They are Mr P N Vijay (Chairman), Mr.
Executive Officer (CEO) to this effect is enclosed at the end Stuart Purdy and Mr R C Bhargava. The Audit Committee held
of this report. four meetings during 2004-05 on 5th May, 2004, 23rd July,
2005, 26th October, 2004 and 24th January, 2005. The time
Risk Management gap between any two meetings was less than four months.
Dabur has established robust risk assessment and The details of the audit committee are given in Table 3:
minimization procedures, which are reviewed by the Board Table 3: Attendance record of Dabur’s Audit Committee
periodically. At Dabur we have a structure in place to identify Name of Members Status No. of Meetings
and mitigate the various risks faced by the company from (Category) Held Attended
time to time. At every Board meeting, the risk register is
Mr P N Vijay (ID) Chairman 4 4
reviewed by the Board, new risks are identified, the same
Mr Stuart E Purdy (ID) Member 4 4
are then assessed, controls are designed, put in place and

enforced through the process owner and a fixed timeline Mr Ajay Bahl (ID) Co-Chairman 4 0
is set for achieving the same. Mr R C Bhargava (ID) Member 0 0

The Company has adopted COSO framework for internal 

control. Under this framework risks are identified as per
each process flow and control systems instituted to ensure
that the risks in each business process is mitigated. The
Chief Risk Officer (CRO) is responsible for the overall risk
governance in the Company and reports directly to the
Management Committee (MANCOM), which consists of
various functional heads. The Audit Committee of the Board
provides oversight and reviews the risk management policy
annually.
Ceased to be a member from 27th January, 2005; Appointed as a member
from 27th January, 2005
The Director responsible for the finance function, the head
of internal audit and the representative of the statutory
auditors, internal auditors and cost auditors are permanent
invitees to the audit committee. The company secretary is
the secretary to the committee
All members of the Audit Committee including the
Chairman (Mr P N Vijay), have accounting and financial
management expertise. The Chairman of the Audit

COMMITTEES OF THE BOARD
Dabur has five Board level committees – Audit Committee,
Remuneration Committee, Compensation Committee,
Nomination Committee and Shareholders/Investors
Grievance & Share Transfer Committee.
All decisions pertaining to the constitution of committees,
appointment of members and fixing of terms of service for
committee members is taken by the Board of Directors.
Committee attended the Annual General Meeting (AGM)
held on 6th July, 2004 to answer shareholder queries.
The functions of the Audit Committee include the following:
• Oversight of the Company’s 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,

Annual Report 2004-05 29

 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 Director’s
Responsibility Statement to be included in the
Board’s 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
30 Dabur India Limited • Report on Corporate Governance
suspected fraud or irregularity or a failure of internal
control systems of a material nature and reporting the
matter to the Board.
• Discussion with statutory auditors before the audit
commences, about the nature and scope of audit as
well as post-audit discussion to ascertain any area of
concern.
• To look into the reasons for substantial defaults in the
payment to the depositors, debenture holders,
shareholders (in case of non payment of declared
dividends) and creditors.
• To review the functioning of the Whistle Blower
mechanism, in case the same is existing.
• Carrying out any other function as is mentioned in the
terms of reference of the Audit Committee.
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.
• 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 arm’s length
basis along with management’s justification for the
same.
Audit Committee Report for the year ended
31st March, 2005
To the shareholders of Dabur India Limited:
Each member of the audit committee is an independent
Director, according to the definition laid down in the Clause
49 of the Listing Agreement with the relevant stock
exchanges.
The Management is responsible for the Company’s internal
controls and financial reporting process. The independent
auditors are responsible for performing an independent
audit of the Company’s financial statements in accordance
with the Indian GAAP (generally accepted accounting
principles) and for issuing a report thereon. The Committee
is also responsible for overseeing the processes related to
the financial reporting and information dissemination.
In this regard the Committee discussed with the Company’s
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 Company’s internal controls and the
overall quality of financial reporting. The Management
presented to the Committee, the company’s financial
statements and also affirmed that the company’s 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 Company’s financial
statements are fairly presented in conformity with Indian
GAAP in all material aspects.
The Committee has also reviewed the internal controls put
in place to ensure that the accounts of the Company are
properly maintained and that the accounting transactions
are in accordance with prevailing laws and regulations. In
conducting such reviews, the Committee found no material
discrepancy or weakness in the Internal Control Systems
of the Company.
The Committee has recommended to the board the re-
appointment and fees of M/s G Basu & Co., Chartered
Accountants as statutory auditors of the Company. The
committee also approved the re-appointment of M/s Bansal
& Co., Chartered Accountants and M/s Waring & Partners,
Chartered Accountants as Branch Auditors for Alwar Division
and London Branch respectively to carry out audit of the
accounts of the respective division/branch for the financial
year 2004-05. In addition the Committee also recommended
and approved the appointment of Price Waterhouse
Coopers Private Limited as the internal auditors for the
period 1st April, 2004 to 31st March, 2006.
In conclusion, the Committee is sufficiently satisfied that it
has complied with the responsibilities as outlined in the Audit
Committee’s responsibility statement.
Signed
New Delhi P N Vijay
April 27, 2005 Chairperson, Audit Committee
Annual Report 2004-05 31
b) Remuneration Committee Remuneration policy

As of 31st March, 2005, the Remuneration Committee The remuneration paid to the non-executive Directors of
comprises Mr R C Bhargava (Chairman), Mr P N Vijay and the Company is decided by the Board of Directors on the
HH Maharaja Gaj Singh, all of whom are independent recommendations of the Remuneration Committee.The
Directors. The Remuneration Committee held two meetings existing remuneration policy of the Company is directed
during 2004-05 on 20th July, 2004 and 27th October, 2004. towards rewarding performance, based on review of
Table 4 gives the details. achievements on a periodical basis. The remuneration
policy is in consonance with the existing industry practice.
Table 4: Attendance details of Dabur’s Remuneration As per the shareholders’ approval obtained at the Annual
Committee General Meeting of the Company held on 5th September,
Name of Members Status No. of Meetings
2002, commission is paid at the rate not exceeding one
(Category) Held Attended
per cent of the net profits per annum of the Company,

Mr R C Bhargava (ID) Chairman 0 0 calculated in accordance with the provisions of Sections
Mr Ajay Bahl (ID) Chairman 2 2 198, 349 and 350 of the Companies Act, 1956.
Mr P N Vijay (ID) Member 2 2 1. Non-Executive Chairman
HH Mah. Gaj Singh (ID) Member 2 0
Besides sitting fees, the non-executive Chairman is also
  entitled to commission out of profits of the Company
Ceased to be a member from 27th January, 2005; Appointed as a member

from 27th January, 2005
W.e.f. 27th January, Mr R C Bhargava has been appointed
as the Chairman of the remuneration committee.
Remuneration Committee of the Company recommends
to the Board the compensation terms of executive Directors
and its responsibilities include:
• Framing and implementing on behalf of the Board and
on behalf of the shareholders, a credible and
transparent policy on remuneration of executive
Directors including ESOP, pension rights and any
compensation payment.
• Considering, approving and recommending to the
Board the changes in designation and increase in salary
of the executive Directors.
• Ensuring that remuneration policy is good enough to
attract, retain and motivate the Directors.
as approved by the Board and within the overall limits
prescribed by the Companies Act, 1956.
2. Independent Directors
Non-Executive independent Directors are paid sitting
fees for attending the meetings of the Board of Directors
and committees thereof within the prescribed limits.
This has been increased recently.
3. Executive Directors
Remuneration of the Executive Directors consists of a
fixed component and a variable performance incentive.
The Remuneration Committee makes annual appraisal
of the performance of the Executive Directors based
on a detailed performance evaluation and recommends
the compensation payable to them, within the
parameters approved by the shareholders, to the Board
for their approval.

• Bringing about objectivity in determining the c) Compensation Committee

remuneration package while striking a balance Dabur’s Compensation Committee comprises two
between the interest of the Company and the independent Directors — Mr P N Vijay (Chairman) and
shareholders. Mr Stuart E Purdy. The Compensation Committee met four

32 Dabur India Limited • Report on Corporate Governance

times during the year on 5th May, 2004, 23rd July, 2004,
26th October, 2004 and 24th January, 2005. Table 5 gives
the details.
Table 5: Attendance details of Dabur’s Compensation
Committee
Name of Members Status No. of Meetings
(Category) Held Attended
Mr P N Vijay (ID) Member 4 4
Mr Stuart E Purdy (ID) Member 4 4
Mr Ajay Bahl (ID) Member 4 0

Ceased to be a member from 27th January, 2005
The Compensation committee has the overall responsibility
for approving and evaluating the executive Directors and
senior management compensation plans, policies and
programs of the Company. The functions of the Committee
include:
• To frame the ESPS/ESOS and recommend the same to
the Board/Shareholders for their approval and to
implement the Scheme approved by the Shareholders.
• To suggest to Board/Shareholders changes in the ESPS/
ESOS.
• To decide the terms and conditions of Employees Share
Purchase Scheme (ESPS) and Employees Stock Option
Scheme (ESOS) which inter-alia include the following:
▲ 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.
Compensation Committee Report For The Year
Ended 31st March, 2005
To the Shareholders of Dabur India Limited:
The compensation committee comprises of 2 independent
directors. The main responsibility of the Compensation
Committee is to incentivize and reward executive
performance that will lead to long-term enhancement of
shareholder performance.
The Committee reviewed and approved the stock options
payable to all Executive Directors, within the overall limits
approved by shareholders. The committee also reviewed
and approved the stock options of all MANCOM members
for the year 2004-05. In addition, the committee reviewed
the grant of sign-on and regular stock options to various
other employees of the Company during the year.
The Committee was also provided information on appraisal
systems, the outcome of performance assessment programs,
compensation policies for employees and the information
to decide on grant of options to various employees
Signed
New Delhi Stuart E Purdy
April 28, 2005 Member, Compensation Committee
Annual Report 2004-05 33
d) Nomination Committee Table 7: Attendance Details of Dabur’s Shareholders/
Investor Grievance & Share Transfer Committee
Dabur’s Nomination Committee consists of Mr. V C Burman,
Name of Members Status No. of Meetings
non-executive promoter Director, Mr. Pradip Burman,
(Category) Held Attended
executive promoter Director, Mr. Stuart E. Purdy,
Mr P N Vijay (ID) Chairman 3 3
independent Director and HH Maharaja Gaj Singh,
independent Director. The Nomination Committee met Mr V C Burman (PD/NED) Member 3 3

once during the year on 24th January, 2005. Table 6 gives Mr P D Narang (ED) Member 3 3
the details. Mr A K Jain, Additional General Manager (Finance) &
Table 6: Attendance details of Dabur’s Nomination Company Secretary, is the Compliance Officer.
Committee
The Committee supervises the mechanism for redressal of
Name of Members Status No. of Meetings
investor grievances and ensures cordial investor relations.
(Category) Held Attended
Apart from looking into redressal of shareholders’ and
Mr V C Burman (PD/NED) Member 1 1 investors’ complaints like transfer of shares, non-receipt of
annual reports, non-receipt of dividend and allied matters.
Mr Pradip Burman (PD/ED) Member 1 0
The committee performs the following functions:
Mr Stuart E Purdy (ID) Member 1 1
• Transfer/Transmission of shares/Debentures.
HH Mah Gaj Singh (ID) Member 1 0 • Split-up/Sub-division and Consolidation of shares,
The functions of the Nomination Committee include: debentures, letters of rights, renewals, letters of
allotment, call notices.
• To identify and recommend candidates to the Board
• Issue of new and duplicate share/debentures
of Directors for appointment as members of the Board.
certificates.
• To engage the services of consultants and seek their
• Registration of Power of Attorneys, Probate Letters of
help in the process of identifying candidates for
transmission or similar other documents.
appointments to the Board.
• Grant extension of time for making allotment/First Call/
• To decide the remuneration of consultants engaged Second and Final Call Payments.
by the Committee.
• To open/close Bank Account(s) of the Company for
depositing share/debenture application, allotment and
e) Shareholders/Investor Grievance & call monies, authorize operation of such account(s) and
Share Transfer Committee issue instructions to the Bank from time to time in this
The Committee consists of three members, Mr P N Vijay regard.
(Chairman), Mr V C Burman and Mr. P D Narang. The • To look into the redressing of shareholder and investors
Committee met three times in the year under review on complaints like transfer of shares, non-receipt of balance
23rd July, 2004, 26th October, 2004 and 24th January, 2005. sheet, non-receipt of declared dividends etc.
Table 7 gives the details. • Any allied matter(s) out of and incidental to these
functions and not herein above specifically provided
for.

34 Dabur India Limited • Report on Corporate Governance

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

Table 8: Nature of complaints received and attended to during 2004-05

Nature of Complaint Pending as on Received during Answered during Pending as on
1 April, 2004 the year the year 31 March, 2005
1. Transfer / Transmission / Duplicate Nil Nil Nil Nil
2. Non-receipt of Dividend Nil 1 1 Nil
3. Dematerialisation / Rematerialisation of shares Nil Nil Nil Nil
4. Complaints received from:
- Securities and Exchange Board of India 1 36 37 Nil
- Stock Exchanges 1 12 13 Nil
- Registrar of Companies/Dept. of Company Affairs Nil Nil Nil Nil
5. Others Nil Nil
Nil Nil
Total 2 49 51 Nil
There were no complaints which were pending as on 31st March, 2005.

In order to provide efficient services to investors and for
speedy redressal of the complaints, the Board of Directors
has delegated the power of approving transfer and
transmission of shares and other matters like split up/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) & Company Secretary, and Mr R B Sachan, Senior
Executive – Secretarial, subject to a maximum of 5000 shares
per case.
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 Company’s disclosure
committee. At Dabur India the job responsibilities of the
IRO are clearly defined as under:
1. Building Investor Confidence in the firm.
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. Being a part of the company’s 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 company’s performance and also
highlight the Company’s forward looking strategy.
2. Webcasting - Dabur’s presentations are webcast.
Webcasts are left up on corporate Web sites for upto
1 month.
3. Investor Meetings both in India and Outside – Dabur
India holds frequent investor meetings outside India
for the benefit of FII’s (Foreign Institutional Investors)
to enable them understand the Operations at Dabur
better.

Annual Report 2004-05 35

Subsidiary Companies
The revised Clause 49 defines a ‘material non-listed
Indian subsidiary’ as an unlisted subsidiary, incorporated
in India, whose turnover or net worth (i.e. paid up capital
and free reserves) exceeds 20% of the consolidated
turnover or net worth respectively, of the listed holding
company and its subsidiaries in the immediately
preceding accounting year:
Dabur does not have a material non-listed Indian
subsidiary.
MANAGEMENT
Management Discussion and Analysis
Annual Report has a detailed Chapter on Management
Discussion and Analysis.
Disclosures
Disclosures on materially significant related party transactions
i.e. transactions of the Company of material nature, with its
promoters, the Directors or the Management, their
subsidiaries or relatives, etc. that may have potential conflict
with the interests of the Company at large:
Dealings in Company’s shares on the part of persons in
management have been reported to Board periodically. The
material, financial and commercial transactions where
persons in management have personal interest exclusively
relate to transactions involving Key Management Personnel
forming part of the disclosure on related parties referred to
in Note13 in Schedule P to Annual Accounts which was
reported to Board of Directors.
Related Party Transactions
Significant related party transactions are summarised
herein below:-
1. Subsidiaries:
• Goods worth Rs.57.06 crore were purchased from Dabur
Nepal Pvt. Ltd. (DNPL) at market prices.
36 Dabur India Limited • Report on Corporate Governance
• Goods worth Rs. 2.92 crore were sold to DNPL at market
prices.
• Goods worth Rs.3.87 crore were sold to Dabur
International Limited.
• Collateral and guarantees given by the Company to
Banks and financial institutions on behalf of DNPL
amount to Rs.8.64 crore and on behalf of Dabur Foods
Limited amount to Rs.37.50 crore.
• Dividend amounting to Rs.1.59 crore was received by
the Company, from DNPL.
2. Fellow Subsidiaries
(subsidiary of a subsidiary):
• Goods worth Rs.3.84 crore were sold to Weikfield
International (UAE) LLC.
• Goods worth Rs.3.67 crore were sold to Asian
Consumercare Peivate Limited.
• Collateral and guarantees have been given on behalf
of Dabur Egypt Limited amounting to Rs.2.83 crore and
on behalf of Pasadena Foods Limited amounting to
Rs.16.00 crore.
3. Associates:
• Services for amount Rs.1.60 crore by Jetways Travels Pvt.
Ltd. (Travel Agency). Such services were rendered at
market rates.
• A contribution amounting to Rs.5.41 crore was given
to Dabur Research Foundation for scientific research.
4. Relatives of Key Management Personnel:
• There were no relatives of key management personnel
who were paid remuneration / pension of Rs. one crore
or more during the year.
Disclosure of accounting treatment in preparation
of financial statements
Dabur has followed the guidelines of accounting standards
laid down by the Institute of Chartered Accountants of India
(ICAI) in preparation of its financial statements.
Details of non-compliance by the Company
Dabur has complied with all the requirements of regulatory
authorities. No penalties/strictures were imposed on the
Company by stock exchanges or SEBI or any statutory
authority on any matter related to capital market during
the last three years.
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.
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 Company’s 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.
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
The above mechanism has been appropriately
communicated within the Company across all levels and
has been displayed on the Company’s intranet as well as
on company’s 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 Company’s 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, Mr V C Burman, Mr P D Narang, and
Mr Stuart E Purdy would retire this year and being eligible,
offer themselves for re-appointment in accordance with
the provisions of the Companies Act, 1956. Their brief CVs
are given below:
Mr V C Burman: Mr V C Burman is the promoter Director of
the Dabur Group and currently holds the chairman’s
position on the Board of Directors.
Annual Report 2004-05 37
Mr P D Narang: Mr P D Narang is a B.Com, FCA, MIIA, ACS, Table 9: Publications of the financial results during
AICWA. He started his career at Dabur as a Management 2004-05
Accountant and has been with the company ever since. He Description Date
is currently the Group Director for Corporate Affairs for the Unaudited Financial Results for the 26th July, 2004
Dabur group quarter ended on 30th June, 2004
Mr Stuart E Purdy: A Fellow of the Chartered Insurance Audited Financial Results for the quarter/ 27th October, 2004
Institute and a Chartered Insurer, Mr Purdy is the managing half year ended on 30th September, 2004
Director, Aviva Life Insurance India. He has held a number Unaudited Financial Results for 27th January, 2005
of positions within the UK and International business units the quarter/nine months ended
of the Aviva Group. He currently has no shareholding in on 31st December, 2004
Dabur India.
The quarterly, half yearly and annual financial statements
Appointment of New Director are promptly and prominently displayed on the Company’s
web site i.e. www.dabur.com. The Company also displays
Mr R C Bhargava: Has been appointed as an Independent the official news releases and presentations made to
director in place of Ajay Bahl w.e.f 27th January, 2005. He institutional investors and to analysts on this website.
has a MA in Developmental Economics from Williams Further, the Company has also been complying with SEBI
College, USA and a MS in Mathematics from Allahabad regulations for filing of its financial results under the EDIFAR
University, India. He has served in the Indian Administrative system. These are available on the SEBI web-site
Service and has held the post of Joint Secretary in the www.sebiedifar.nic.in.
Ministry of Energy and in the Cabinet Secretariat. He has
also served as the Director (Commercial) at BHEL. He retired General Body Meetings
in 1997 after serving 12 years as the CEO of MUL. At present
Table 10 gives the details of the last five General Meetings.
he is the President and CEO of RCB Consulting Pvt. Ltd., a
firm engaged in management and human resource Table 10: Location and time of the last 5 General
consultancy. He brings into the Board a rich experience from Meetings
his various stints in the government and manufacturing Financial Cate- Location of the Date Time
concern. He currently has no shareholding in Dabur India Year gory* meeting
2000-01 AGM Air Force Auditorium 18/09/01 11.00 AM
Ltd.
Subroto Park,
New Delhi - 110010
Means of Communication with 2001-02 AGM Air Force Auditorium 05/09/02 11.00 AM
Subroto Park,
Shareholders New Delhi - 110010
2002-03 AGM Air Force Auditorium 02/08/03 9.30 AM
Half yearly financial information, including summary of Subroto Park,
significant events, for the half-year ended 30 September, New Delhi - 110010
2004 was sent to the households of all shareholders. The 2003-04 EGM Air Force Auditorium 02/08/03 2.00 PM
Subroto Park,
quarterly and half yearly financial results are published in New Delhi - 110010
The Economic Times and Navbharat Times newspapers. 2003-04 AGM Air Force Auditorium 06/07/04 11.00 AM
Table 9 gives details of the publications of the financial Subroto Park,
New Delhi - 110010
results in the year under review.
*AGM - Annual General Meeting, EGM - Extraordinary General Meeting

38 Dabur India Limited • Report on Corporate Governance

The following Special Resolutions were taken up in the last Postal Ballot
three AGMs, and were passed with requisite majority.
During the year under review, in pursuance to Section 192A
2002-03 of the Companies Act, 1956 and Companies (Passing of
the Resolution by Postal Ballot) Rules, 2001, postal ballot
• Appointment of Mr Amit Burman as an Additional
was conducted seeking approval of the shareholders for-
Director and also as Whole-time Director of the
• Investment(s) in and loan(s) to Balsara Hygiene
Company.
Products Limited, Balsara Home Products Limited and
• Appointment of Mr Pradip Burman as Whole-time
Besta Cosmetics Limited.
Director of the Company
• Loan(s) to and/or provide guarantee(s)/ security (ies)
• Reappointment of Mr P D Narang as Whole-time for and to make further investment(s) in subsidiary
Director of the Company. companies.
• Payment of Commission to Non-Whole time Directors
The result of postal ballot was published in Pioneer Delhi
of the Company subject to the stipulation that such
and Rashtriya Sahara Hindi on 8th March, 2005.
commission shall not exceed 1% of the net profits of
the Company. Mr V K Jhalani, Chartered Accountant was appointed as the
Scrutinizer for conducting the postal ballot process. He
• Payment of retirement benefits to Directors and their
reported the vote count on 5th March, 2005. The results of
relatives.
the ballot are given below:
• Amendments in Articles of Association of the Company
to include the viz: Table 11A: Result of the Postal Ballot (Special resolution 1)
Particulars No. of Votes Per cent
▲ The words ‘or Committees thereof’ inserted after
No. of postal ballot forms recd. 1395
the words ‘meetings of the Board’ in line 3 of Article
In Favour 224705632 99.20
95 of the Articles of Association of the Company.
Against 1741753 00.77
▲ The new Article 57A with marginal notes as
Invalid Ballots 62004 00.03
‘Buy-back of shares’ inserted after the existing
Total Receipts 226509389 100.00
Article 57.
Table 11B: Result of the Postal Ballot (Special resolution 2)
2003-04 Particulars No. of Votes Per cent
• Special Resolution passed through postal ballot to de- No. of postal ballot forms recd. 1395
list the Company’s equity share from The Delhi Stock In Favour 224757802 99.23
Exchange Association Ltd., The Uttar Pradesh Stock Against 1687583 00.74
Exchange Association Ltd. The Calcutta Stock Exchange Invalid Ballots 63579 00.03
Association Ltd. The Ludhiana Stock Exchange Total Receipts 226508964 100.00
Association Ltd., Magadh Stock Exchange Association,
The Chairman after receiving the Scrutinizer’s Report
Bangalore Stock Exchange Ltd., The Jaipur Stock
announced that the Special Resolution at Item No.1 of the
Exchange Ltd., and The Stock Exchange, Ahmedabad.
Postal Ballot Notice and Special Resolution at Item No.2 of
2004-05 the Postal Ballot Notice were duly passed with the requisite
majority and directed that the resolutions be recorded in
• Keeping of records at the place other than registered
the minute book recording the proceedings of general
office of the Company.
meetings of the members.

Annual Report 2004-05 39

COMPLIANCE c) Remuneration Committee
Dabur has a wholly independent remuneration committee
Mandatory requirements
that comprises of three members.
Dabur is fully compliant with the applicable mandatory
requirements of the revised Clause 49. d) Half-yearly Declaration
Table 12: Compliance report Dabur prepared a half-yearly report of financial performance
Particulars Clause of Compliance
in the year under review including a section on
listing status Management Discussion and Analysis. The half-yearly report
agreement was sent to all shareholders.
I. Board of Directors 49 I Yes
(A) Composition of Board 49 (IA) Yes e) Audit Qualifications
(B) Non-executive Directors 49 (IB) Yes
Compensation & Disclosures With reference to Auditors’ qualification the management’s
(C) Other provisions as to Board 49 (IC) Yes clarification is as under:-
and Committees
The Company’s investment in the joint venture M/s Dabon
(D) Code of Conduct 49 (ID) Yes
International Private Limited, has not been accounted for
II. Audit Committee 49 (II) Yes
(A) Qualified & Independent 49 (IIA) Yes in accordance with AS – 27 as the same is being held for
Audit Committee disposal in the foreseeable future. Consequently no
(B) Meeting of Audit Committee 49 (IIB) Yes provision is deemed necessary for diminution in the value
(C) Powers of Audit Committee 49 (IIC) Yes of the investment as per AS – 13.
(D) Role of Audit Committee 49 II(D) Yes
(E) Review of Information by 49 (IIE) Yes f) Mechanism for evaluation of non-executive
Audit Committee Directors
III. Subsidiary companies 49 (III) Yes
IV. Disclosures 49 (IV) Yes The performance evaluation of non-executive directors is
(A) Basis of related party 49 (IV A) Yes done through a peer-to-peer performance evaluation of
transactions the Board of Directors. The Directors are marked on a scale
(B) Board Disclosures 49 (IV B) Yes of 1 to 5, with respect three broad parameters namely—
(C) Proceeds from public, 49 (IV C) NA
rights, preference issues etc
guiding strategy, monitoring reference and statutory
(D) Remuneration of Directors 49 (IV D) Yes compliance & Corporate Governance.
(E) Management 49 (IV E) Yes
g) Whistle Blower Policy
(F) Shareholders 49 (IV F) Yes
V. CEO/CFO Certification 49 (V) Yes Dabur has whistle-blower policy in place. The details with
VI. Report on Corporate Governance 49 (VI) Yes regard to the functioning of the whistle-blower policy have
VII. Compliance 49 (VII) Yes been mentioned earlier in this report.

Adoption of non-mandatory requirements

ADDITIONAL SHAREHOLDER
a) Maintenance of the Chairman’s office
INFORMATION
The company maintains the office of the non-executive
Chairman and provides for reimbursement of expenses Annual General Meeting
incurred in performance of his duties. Date: 15 July, 2005
b) Tenure of Independent Directors Time: 11:00 am
No specific tenure has been specified for the independent Venue: Air Force Auditorium, Subroto Park,
Directors. New Delhi - 110010

40 Dabur India Limited • Report on Corporate Governance

Financial Calendar
Financial year: 1st April to 31st March
For the year ended 31st March, 2005, results were
announced on:
• 26th July, 2004: First Quarter
• 27th October, 2004: Half Yearly
• 27th January, 2005: Third Quarter
• 28th April, 2005: Fourth Quarter and Annual
For the year ending 31st March, 2006, results will be
announced in:
• End July 2005 First Quarter
• End October 2005: Half Yearly
• End January 2006: Third Quarter
• End April 2006: Fourth Quarter and Annual
Book Closure
Dividend Payment
An interim dividend of Re.1 per equity share was paid on
8th November, 2004 final dividend of Rs. 1.50 per equity
share will be paid on 20th July, 2005 subject to approval by
the shareholders at the Annual General Meeting.
Listing
At present, the equity shares of the Company are listed on
Mumbai Stock Exchange (BSE), and the National Stock Exchange
(NSE). During the year the Company’s shares were delisted from
The Calcutta Stock Exchange Association Limited w.e.f.
24th January, 05. The annual listing fees for the financial year
2004-05 to NSE and BSE has been paid.
Table 1: Dabur’s Stock Exchange codes
ISIN No: INE016A01026
Mumbai Stock Code: 500096
National Stock Code: DABUR

The dates of book closure are from 1st July, 2005 to 15th Bloomberg Code: DABUR IB
July, 2005 inclusive of both days. Reuters Code: DABU.BO

Stock Market Data

Table 2 and Chart A gives details

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

Annual Report 2004-05 41

 Chart A: Dabur’s Share Performance Versus BSE Sensex:

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

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

Table 3: Shareholding pattern by size

Number of equity Physical Form Dematerialisation Form Total No. of % of share Total No. % of share
shares held No. of share No. of No. of share No of shares shareholders holders of shares holding
holders shares holders
Up to 5000 5831 4169181 40613 13589281 46444 99.11 17758462 6.20
5001 - 10000 5 40188 177 1394456 182 0.39 1434644 0.50
10001 and above 1 25000 234 267199607 235 0.50 267224607 93.30
Total 5837 4234369 41024 282183344 46861 100.00 286417713 100.00

Table 4: Shareholding Pattern by ownership

Particulars As on 31st March, 2005 As on 31st March, 2004
No. of share % of share No. of share % of share No. of share % of share No. of % of share
holders holders held holding holders holders share held holding
Directors, promoters 31 0.07 224174178 78.27 34 0.07 224208733 78.33
and family members
FIIs 32 0.07 17740997 6.19 14 0.03 10216217 3.57
Mutual Funds 37 0.08 3011414 1.05 32 0.07 6076872 2.12
Fin.Institutions/Banks 9 0.02 11995874 4.19 9 0.02 16983896 5.93
NRIs 1959 4.18 2819833 0.99 1944 4.17 2485696 0.87
Corporates 957 2.04 4524985 1.58 1238 2.65 4011732 1.40
Individuals 43836 93.54 22152432 7.73 43397 92.99 22265906 7.78
Total 46861 100.00 286419713
100.00 46668 100.00 286249052 100.00

42 Dabur India Limited • Report on Corporate Governance

Dematerlisation of Shares and Liquidity
Trading in equity shares of the Company in dematerialized
form became mandatory from 31st May, 1999. To facilitate
trading in demat form, in India, there are two depositories
i.e. National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL). Dabur
has entered into agreement with both these depositories.
Shareholders can open their accounts with any of the
Depository Participant registered with these depositories.
• As on 31st March, 2005, over 98.52 per cent shares of
the Company were held in dematerialized form.
• The equity shares of the Company are frequently traded
at Mumbai and National Stock Exchange.
Outstanding GDRs/ADRs/Warrants/
Options
The Company has 15,25,740 outstanding Options as on
31st March, 2005.
Details of Public Funding Obtained in the
last three years
Dabur has not obtained any public funding in the last three
years.
Share Transfer System
All share transfer and other communications regarding share
certificates, change of address, dividends, etc. should be
addressed to Registrar and Transfer Agents.
Shareholders/Investor Grievance and Share Transfer
Committee is authorised to approve transfer of shares in
the physical segment. With effect from January 2004.
Mr A K Jain and Mr R B Sachan, have been delegated the
responsibility of approving transfer and transmission of
shares and other related matters. Such transfers now take
place on fortnightly basis. All share transfers are completed
within statutory time limit from the date of receipt, provided
documents meet the stipulated requirement of statutory
provisions in all respects.
Company’s Registered Office Address:
8/3, Asaf Ali Road,
Delhi-110002
Ph: 011-23253488, 011-23276739

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 below-
MCS Limited
Unit: Dabur India Limited
Sri Venkatesh Bhawan,
W-40 Okhla Industrial Area Phase – II, New Delhi – 110020
Phone: 011-26384909 – 11, Fax: 011-26384907

Annual Report 2004-05 43

PLANT LOCATIONS Narendrapur
9, Netaji Subhash Chandra Bose Road, Narendrapur 743 508
Sahibabad Distt. 24 Parganas, West Bengal
Unit – I and II Tel: 033-24772324, Fax: 033-24772621
22, Site IV, Industrial Area, Sahibabad, Ghaziabad (U.P.)
Tel: 0120 – 3982000, 3001000, Fax: 0120 – 2779048 Alwar
Unit - III SPC 162, Matsya Industrial Area,
Plot No. 5/1, Site – IV, Sahibabad – 201 010, Ghaziabad (U.P.) Tel: Alwar 301 030, Rajasthan
0120 – 3982000, 3001000, Fax: 0120 – 2779048 Tel: 0144-2881217, Fax: 0144-2881302

Baddi Katni
10.4, Mile Stone, Village Padia, Katni, Madhya Pradesh
Chyawanprash Unit
Tel: 07622-262317, Fax: 07622-262297
220-221, HPSIDC Industrial Area, Baddi 173 205,
Distt Solan, HP, Jammu
Tel: 01795-245273, Fax : 01795-244090
Lane No. 3, Phase II, SIDCO Ind. Complex,
Hajmola Unit Bari Brahmna, Jammu
109, HPSIDC Industrial Area, Baddi 173 205, Tel: 01923-220123, Fax: 01923-220123
Distt Solan, HP,
Tel: 01795-245273, Fax : 01795-244090 Uttaranchal
Red Toothpaste Unit Plot No.4, Sector-2, Integrated Industrial Estate, Rudrapur
Village Billanwali Lavana, Baddi 173 205, Dist. Udham Singh Nagar, Uttaranchal
Distt Solan, HP, Tel: 05944-239231, Fax: 05944-242480
Tel: 01795-245273, Fax : 01795-244090
Address for Correspondence
Amla/Honey Unit
Village Billanwali Lavana, Baddi 173 205,
For share transfer / dematerialisation of shares, payment of
Distt Solan, HP,
dividend and any other query relating to the shares
Tel: 01795-245273, Fax : 01795-244090
MCS Limited, Sri Venkatesh Bhawan,
Glucose Unit
W-40, Okhla Industrial Area, Phase – II, New Delhi – 110020
Plot No. 12, Industrial Area, Baddi 173 205,
Tel: 011-26384909-11, Fax: 011-26384907
Distt Solan, HP,
Tel: 01795-245273, Fax : 01795-244090 For queries of Media, Analysts, FIIs, Institutions, Mutual Funds,
Banks and others
Shampoo Unit
Village Billianwali, Baddi 173 205, Mrs Gagan Ahluwalia/Mr Sharad Goel
Distt Solan, HP, Dabur India Limited,
Tel: 01795-245273, Fax : 01795-244090 Punjabi Bhawan,10 Rouse Avenue, New Delhi – 110002
Tel: 011-23221167-70; Fax: 011-23222051
Honitus/Nature Care Unit email: corpcomm@dabur.com
109, HPSIDC Industrial Area,
Baddi 173 205, Distt Solan, HP For investors assistance
Tel: 01795-245273, Fax : 01795-244090 Mr. A K Jain,
Fit ‘N’ Activ Unit Additional General Manager (Fin.) & Company Secretary,
221, HPSIDC Industrial Area, Baddi 173 205, Dabur India Limited,
Distt Solan, HP Punjabi Bhawan,10 Rouse Avenue, New Delhi – 110 002
Tel: 01795-245273, Fax : 01795-244090 Tel: 011-23221167-70; Fax: 011-23222051

44 Dabur India Limited • Report on Corporate Governance

CERTIFICATION BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF THE
COMPANY
We, Sunil Duggal, Chief Executive Officer and Rajan Varma, Chief Financial Officer, of Dabur India Limited, to the best of
our knowledge and belief certify that:

1. We have reviewed the Balance Sheet and Profit and Loss Account of the Company for the year ended 31st March, 2005
and all its schedule and notes on accounts, as well as the Cash Flow Statement.

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 Company’s 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 company’s code of conduct.

4. The Company’s other certifying officers and we are responsible for establishing and maintaining internal controls and
procedures for the Company, and we have evaluated the effectiveness of the Company’s internal controls and
procedures.

5. The Company’s other certifying officers and we have disclosed, based on our most recent evaluation, wherever
applicable, to the company’s auditors and thru them to the audit committee of the Company’s Board of Directors:

a. All significant deficiencies in the design or operation of internal controls, which we are aware and have taken
steps to rectify these deficiencies;

b. Significant changes in internal control during the year;

c. Any fraud, which we have become aware of and that involves Management or other employees who have a
significant role in the Company’s internal control systems;

d. Significant changes in accounting policies during the year.

We further declare that all board members and senior management have affirmed compliance with the code of conduct
for the current year.

Signed Signed

Rajan Varma Sunil Duggal

New Delhi, CFO, CEO,
April 28, 2005 Dabur India Limited Dabur India Limited

Annual Report 2004-05 45

ANNEXURE 1 - DETAILS OF OTHER DIRECTORSHIPS HELD

Name of the Director Status Directorship Committee Committee

Membership Chairmanship

V C Burman PD/NED Dabur India Limited Shareholders/Investors

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




Audit Committee









Audit Committee Shareholders/Investors
Grievance Committee


















Audit Committee













Audit Committee







Remuneration Committee Audit Committee
Remuneration Committee







Shareholders/Investors
Grievance Committee











Audit Committee



Audit Committee Remuneration
Committee


















Remuneration Committee

46 Dabur India Limited • Report on Corporate Governance

Name of the Director Status Directorship Committee Committee
Membership Chairmanship

HH Mah. Gaj Singh ID Dabur India Limited Remuneration Committee

Nomination Committee

Jodhna Medical & Research
Centre Limited


Maharaja Heritage Resorts Limited


Shankar Packagings Limited


Tourism Finance Corporation
of India Limited


Fortune Park Hotels Limited


Birla Sunlife Insurance Compnay Limited


P N Vijay ID Dabur India Limited Remuneration Committee Shareholders/Investors
Compensation Committee Grievance Committee
Audit Committee
Eicher Limited Shareholders/Investors Audit Committee
Grievance Committee
Reed Relay & Electronics Limited


Eicher Motors Limited Shareholders/Investors Audit Committee
Grievance Committee
Stuart Edward Purdy ID Dabur India Limited Audit Committee


Compensation Committee


Nomination Committee

Ajay Bahl  ID Dabur India Limited Audit Committee Remuneration
Compensation Committee Committee


R C Bhargava  ID Dabur India Limited Audit Committee Remuneration
Committee
ILFS Limited
Audit Committee
Polaris Software Lab Ltd. Audit Committee

Machino Basell India Ltd.


Roulunds Codan India Ltd. Audit Committee

Grasim Industries Limited Audit Committee

Lord Krishna Bank Ltd.


Optimus Outsourcing Co. Ltd. Audit Committee

Maruti Udyog Limited Shareholders/Investors
Grievance Committee

Omax Auto Ltd.


Thomson Press Ltd.


UltraTech Cement Co.Ltd. Shareholders/Investors Audit
Grievance Committee Committee


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

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

Annual Report 2004-05 47

Directors’ Report
To, the period stipulated by the Companies Act, 1956. The
The Members Dividend Payout Ratio for the current year (inclusive of
corporate tax on dividend distribution) will be 54.98 per cent.
Your Directors have pleasure in presenting the 30th Annual
Report on the business and operations of the Company Operations and Business Performance
together with the Audited Accounts for the year ended
Kindly refer to Management Discussion & Analysis covered
31st March, 2005.
under Corporate Governance and forms part of this Annual
Financial Results (Rs. crores) Report.

Corporate Governance
2004-05 2003-04
It has always been the Company’s endeavour to excel
Turnover (including other income) 1280.22 1159.02
through better Corporate Governance and fair and transparent
Profit before Tax 165.02 113.44
–
practices, many of which have already been in place even
Add : Provisions of earlier years 0.20
written back before they were mandated by the law of the land. The
165.02 113.64 Company complies with the revised clause 49 of the Listing
Less – Provision for Taxation – Current 13.00 8.75 Agreement, although the same has been deferred for
– Provision for Taxation – Deferred 4.00 3.49 implementation by SEBI till 31st December, 2005.
– Provision for taxation for earlier year 0.05 0.26
Profit after Tax 147.97 101.14 The Board of Directors of the Company had also evolved
Add: – Balance in Profit & Loss Account and adopted a Code of Conduct based on the principles of
b/f from the previous year 81.12 66.12 Good Corporate Governance and best management
– Transferred from Debenture practices being followed globally. The Code is available on
Redemption Reserve – 2.50 the website of the Company www.dabur.com
– Transferred from Investment
Allowance Reserve 0.83 – The Compliance Report on Corporate Governance forms
– Transferred from Investment part of the Annual Report. The Auditors certificate on the
Deposit Reserve 1.82 – compliance of Corporate Governance Code embodied in
Profit available for appropriation 231.74 169.76 Clause 49 of the Listing Agreement is attached as Annexure
Appropriation to : 1 and forms part of this Report.
General Reserve 25.15 22.50
Capital Reserve – 1.56
Directors
Interim Dividend – Paid 28.63 17.17 During the period Mr. Ajay Bahl has resigned from the
Final Dividend – Proposed 42.96 40.07 Board of the Company. The Board places on record its
Corporate tax on Dividend 9.77 7.34
gratitude for the services rendered by Mr. Bahl during his
Balance carried over to Balance Sheet 125.23 81.12
tenure as member of the Board.
Total 231.74 169.76
Mr. R. C. Bhargava was inducted as an additional director
Dividend with effect from 27th January, 2005 and holds office upto
An interim dividend of Re.1 per share (i.e. 100 per cent) was ensuing annual general meeting of the Company. The
declared and paid during the year. The Board of Directors Company has received notice from a member pursuant to
has recommended a final dividend of Rs. 1.50 per share Section 257 of the Companies Act, 1956, signifying his
(i.e.150 per cent) to the members for their approval. The intention to propose the candidature of Mr R C Bhargava
final dividend, if approved, will be paid to members within for the office of director.

48 Dabur India Limited • Financials

At the ensuing annual general meeting Mr V C Burman,
Mr P D Narang and Mr Stuart E Purdy, 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.
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) 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;
ii) That they had selected such accounting policies, applied
them consistently, 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;
iii) 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;
iv) That they had prepared the annual accounts on a going
concern basis.
Listing of shares
The Company’s share continues to remain listed with National
Stock Exchange and The Stock Exchange, Mumbai, where
the share is actively traded and records healthy volume on
daily basis.. The additional 40,102 equity shares allotted by the
Company on 5th May, 2004 and 1,30,559 allotted on 8th
November, 2004 to the employees against the options
exercised by them pursuant to Employees Stock Option
Scheme of the Company were also admitted for trading, both
in NSE and BSE, during the year.
Pursuant to the special resolution passed by way of postal
ballot by the shareholders on 2nd August, 2003, the shares
of the Company were delisted from The Calcutta Stock
Exchange Association Limited as the trading volumes at
this stock exchange has been negligible for many years.
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 and
branch auditors respectively.
Cost Auditors
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 2005-06.
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 2004-05. From the Consolidated Profit and Loss
Account, it may be observed that the sales grew by
15.6 per cent to Rs.1537 crore as compared to Rs.1329.6
crore in the previous year. Similarly, profit after tax and
after minority interest for the year was Rs.155.8 crore, higher
by Rs.49.3 crore as compared to Rs.106.5 crore recorded
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
Annual Report 2004-05 49
and compliance is ensured by the direct reporting of
Internal Audit Division and Internal Auditors to the Audit
Committee of the Board.
Fixed Deposits
During the year the Company has not accepted any fixed
deposits from the public. However, as on 31st March, 2005
the Company had unclaimed deposits of Rs.10.69 lacs payable
to 74 depositors. In addition to this an amount of Rs.4.41
lacs is outstanding as unclaimed towards interest accrued
and payable to 539 depositors. During the year, the Company
has deposited a sum of Rs. 63,245 towards unclaimed deposits
and interest in the Investors Education and Protection Fund.
Periodic reminders have been sent to all the deposit holders
requesting them to claim their deposit/interest.
Subsidiaries
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 forms 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 investor of the
Company or its Subsidiaries.
The Annual accounts of the Subsidiaries are also available
for inspection by the investors at the Head Office of the
Company and also at the respective offices 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 for each Subsidiary
is also being disclosed in ‘Annexure 3’ of the Directors
Report : (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.
50 Dabur India Limited • Financials
Auditors’ Report
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 3,84,743 stock options in two tranches
were granted to eligible employees of the Company in
terms of Employees Stock Option Plan (Dabur ESOP 2000).
During the year, 1,70,661 stock options got vested in the
employees, and were exercised by them immediately after
vesting. Accordingly, the Company made the allotment of
40,102 equity shares on 5th May, 2004 and 1,30,559 equity
shares on 8th November, 2004 against these options
exercised by the employees.
The particulars of stock 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 forms part of this report.
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’ of the Directors Report.
Conservation of Energy, Technology Absorption,
Foreign Exchange Earnings and outgo
A. Conservation of Energy :
a) Energy conservation measures taken :
• Installation of Energy saver of 36 & 27 KVA on
single phase circuits in worker dormitories.
• Installed small tray driers (12 & 24 Tray) for small
batches of Ayurvedic Tablets to save on electric
consumption.
• Rescheduling of production shifts to minimize
operation of heavy loads during peak tariff hours
(5pm - 10 pm).
 • Replacement of Dual Media Filter with Disc Filtration
system in RO Plant for conservation of water.
• Pilot rain water harvesting system commissioned
to replenish underground water level.
• Automatic power factor management to operate
at a PF greater than 0.95.
• Improvement in the Heat transfer system in
plant.
• Improvement in efficiency of compressed air
generation by introducing LP / HP valves.
• Increase in energy conversion efficiency of fuel
in boiler by regular oxygen level monitoring.
• Replacement of Thermodynamic type steam traps
with Float type steam traps to reduce steam loss.
• Installation of continuous sealer in place of
impulse sealer for energy efficient productivity.
• Separate bore well for reducing power cost in
transferring water to distance plants.
• Modification of water distribution layout to
eliminate the wastage on account of overflow
of water.
• Storage and reuse of reactor mechanical seal
cooling water for Vacuum Pump.
• Strict control of power factor to maintain approx.
0.99
• Installation of Climatizers to control the humidity
and temperature both in Churna section instead
of separate A C and Dehumidifier units.
B. Technology Absorption :
• Employees Training Program conducted for the
awareness of energy conservation.
C Foreign Exchange earnings and outgo :
b) Additional investments and proposals, if any, being
implemented for reduction of consumption of
energy :
• Condensate recovery system from areas having
high steam consumption.
• Installation of ES-25 Energy Saver System in areas
having single phase circuits.
• De-superheater for heat recovery from chillers
and hot water generation.
• Replacement of low efficiency lights with CFL
lights having low consumption.
• Reduction of Air conditioner tonnage in line with
production volume.
• Use of non IBR boiler for Softgel Plant.
• Replacement of 100 hp compressor with 30 hp
compressor to optimize compressor utilization.
• Automatic pumping in effluent treatment plant
tanks.
• Use of after cooler in reciprocating air
compressors to increase the efficiency of
compressed air generation.
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. 27 lacs and thereby lowered the cost of production
by the equivalent amount.
d) Total energy consumption and energy consumption
per unit of production as per Form A;
The details in respect of above are attached herewith
as Annexure 6.
The details of efforts made in technology absorption as
required in Form B are attached herewith as Annexure 7.
i) Activities relating to exports;
During 2003-04, the Company started giving greater
impetus to the international business. The entire
international operations was reorganised and an
Annual Report 2004-05 51
 umbrella organisation called Dabur International
Limited was created to provide focus and structure
to the international initiatives. This entity has an
independent team and operates out of Dubai.
Overseas sales grew by 43.4 per cent from Rs.128
crores in 2003-04 to Rs.183.6 crore in 2004-05. The
overseas impetus has been maintained and the share
of overseas in Dabur total sales increased from 9.6
per cent in 2003-04 to 11.9 per cent in 2004-05.
Dabur’s products are gaining ground in the Middle-
East, which witnessed around 24 per cent growth in
net sales during 2004-05 on the back of a major
brand building exercise. In Egypt, the turnover
almost doubled in 2004-05 with significant growth
in the Company’s oral care and hair care products.
Dabur International’s subsidiary in Bangladesh—Asian
Consumer Care Private Limited – recorded sales of
Rs.10 crores in 2004-05, its first full year of
operations. Operations in the Nigerian plant began
during 2004-05 and will be scaled up in the next
financial year. There was also renewed growth in
the Russian and CIS markets. Sales in Pakistan showed
a 100 per cent growth.
ii) Initiatives taken to increase exports;
The Company continues to leverage the herbal specialist
platform in the overseas markets and offers products in
different geographies based on local tastes and
demands. During 2004-05, the Company also made
investments in global brand building which have
brought down the net profit as compared to last year.
However the profitability of the business is expected to
improve with increasing volumes and better utilization
of the infrastructure which has been put in place.
iii) Development of new export markets for products
and services; and
Dabur has formulated structured strategies for its
foray into the international market. Based on market
assessment, the Company has identified 20 focus
52 Dabur India Limited • Financials
countries where it is evaluating the need for having
a manufacturing facility or a marketing presence.
One such focus country is Pakistan. Given similar
taste patterns to India, this is a good market for
Dabur, but the need to establish a presence there
as a local venture is being carefully evaluated. There
are another set of countries, which are termed
opportunity markets, where Dabur would like to
forge alliances as and when opportunities arise.
iv) Export plans
In its first concerted endeavour to extend Dabur’s
products to the mainstream international markets in
developed countries, the Company is exploring
opportunities to enter into a marketing alliance with
some of the well established retail chains in the UK.
There is a large market for herbal based therapeutic
products amongst the mainstream population in
developed markets, dealing primarily with lifestyle
ailments. The focus of this initiative would be to cater
to this market in UK through OTC products. For this
purpose Dabur needs to have the selected products
and production processes certified with the Medicines
and Healthcare Products Regulatory Agency (MHRA) -
the executive approving agency of the UK
government . The Company has already initiated this
process. Entry strategies are also being developed to
enter the USA supplements market.
Total Foreign Exchange :
Used during 2004-05: Rs. 620.46 lac.
Earned during 2004-05 : Rs. 3,718.36 lac.
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 aforesaid SEBI Regulations, are given
in the Annexure 8 attached herewith and forming part of
this Report.
Environment and Pollution Control
Kindly refer to Management Discussion and Analysis
covered under Corporate Governance, which forms part of
this Annual Report.
Human Resource Development
Your Company takes great pride in the commitment,
competence and vigour shown by its workforce in all realms
of business. The Company continues to take new initiatives
to further align its HR policies to meet the growing needs
of its business.
People development continues to be a key focus area at
Dabur. The Company organises regular Management
Development Programmes (MDPs) in the form of
workshops and training sessions for both the senior and
junior management. A training module has been prepared
for the Company’s frontline salesmen, including those on
the rolls of its stockists. Based on this module, the Company
plans to hold day-long workshops at various locations for
over 2000 frontline salesmen and is currently engaged in
‘training the trainers’ programme for this purpose.
As Dabur builds on the synergies with Balsara, it will have to
deal with the challenges of integrating the two workforces.
Dabur is geared up and well-placed to manage this integration
process. While the immediate integration focus will remain
on key functional areas required to maintain continuity in
the different businesses, in the medium term the Company
will endeavour to fully-integrate the value systems and
knowledge based capabilities of the two organisations.
Industrial Relations
The industrial relations in all the units and branches of the
Company remained cordial and peaceful throughout the
year. The Company has not lost even a single man-day in
any of its manufacturing units.
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 records their sincere thanks and appreciation.
For and on behalf of the Board
V. C. Burman
Chairman
New Delhi
28th April, 2005
Annual Report 2004-05 53
Annexures to Directors’ Report
Annexure ‘1’
Auditors’ Report on Corporate Governance
To, Governance as stipulated in the above mentioned Listing
The Members of Dabur India Limited Agreement.
We state that no investor grievance is pending for a period
We have examined the compliance of conditions of
exceeding one month against the Company as per the
corporate governance by Dabur India Limited, for the year
records maintained by the Shareholders/Investors Grievance
ended on 31st March, 2005, as stipulated in clause 49 of
Committee.
the Listing Agreement of the said Company with the stock
exchanges. We further state that such compliance is neither an
assurance as to the future viability of the Company nor the
The compliance of conditions of corporate governance is
efficiency or effectiveness with which the management
the responsibility of the management. Our examination is
has conducted the affairs of the Company.
limited to procedures and implementation thereof, adopted
by the Company for ensuring the compliance of the
For G. BASU & CO.
conditions of the Corporate Governance. It is neither an
Chartered Accountants
audit nor an expression of opinion on the financial
statements of the Company. S. Lahiri
Partner
In our opinion and to the best of our information and
according to the explanations given to us, we certify that New Delhi
the Company has complied with the conditions of Corporate 28th April, 2005

~ •~ •~

54 Dabur India Limited • Financials

 Annexure ‘2’
Statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies

1. Name of the Dabur Nepal Dabur Overses Dabur Foods Dabur Dabur Egypt Asian Pasadensa Weikfield African
Subsidiary Pvt. Ltd. Ltd. Ltd. International Limited* Consumer Foods International Consumer
Ltd. Care Pvt. Ltd.* Limited* (UAE) LLC* Care Limited*
2. Holding Company’s 6,38,520 Equity 50,000 Equity 10,000,000 Equity 1,000,000 Equity
Interest Shares of Shares of Shares of Shares of Sterling – – – – –
NRs.100 each USD 10 each Rs. 10 each Pence 1 each
fully paid up fully paid up fully paid up fully paid up

3. Extent of Holding (%) 79.96 100 100 100 – – – – –

4. Subsidiary Financial
Year ended on 31/03/2005 31/03/2005 31/03/2005 31/03/2005 31/03/2005 31/03/2005 31/03/2005 31/03/2005 31/03/2005

5. Net aggregate
amount of subsidiaries
Profit/(Loss) not
dealt within the holding
company’s accounts :
(i) For the financial Year NRs. 6,37,52,046 (USD 9,169) INR 5,70,25,090 AED 35,96,583 – – – – –
of the subsidiaries INR 3,98,45,029 (INR 4,01,144) INR 4,29,79,167

(ii) For the previous NRs.52,58,38,085 USD 4,325 (INR 20,35,55,688) AED 12,90,410 – – – – –
financial year of the INR 32,86,48,803 INR 1,89,219 INR 1,54,20,400
subsidiaries since they
became the holding
company’s subsidiaries.
6. Net aggregate amount of
subsidiaries Profit/(Loss)
dealt within the holding
company’s accounts :
(i) For the financial Year INR 1,59,63,000 – – – – – – – –
of the subsidiaries
(ii) For the previous financial INR 15,57,48,392 INR 1,73,51,150 – – – – – – –
year of the subsidiaries since
they became the holding
company’s subsidiaries.

*Subsidiary Under Section 4(1)(c)

Exchange Rate as on 31.03.2005
1 USD = INR 43.75
1 Nepalese Rupee (NRs) = INR 0.625
1 Arab Emirates Dirham (AED) = INR 11.95
INR - Indian Rupee

A.K. Jain
New Delhi V.C. Burman P.D. Narang P.N. Vijay Addl. General Manager (Finance)
28th April, 2005 Chairman Director Director & Company Secretary

Annual Report 2004-05

55
 Annexure ‘3’

56
Details of Subsidiary Companies
(Amount in lac)
Particulars Dabur Nepal Dabur Dabur Foods Dabur Dabur Egypt Asian Pasadensa Weikfield African
Private Overseas Limited International Limited Consumer Foods International Consumer
Limited Limited Limited Care Private Limited (UAE) LLC Care Limited
Limited

1. Capital 499.08 218.75 1,000.00 717.00 230.13 107.83 500.00 191.32 148.80
NRs. 798.52 USD 5 AED 60 USD 5.26 BDT 149.77 AED 16.01 NGN 440.49

Dabur India Limited • Financials

2 Reserves 4,906.91 -2.12 -1,481.12 1,292.94 -47.85 5.31 -298.65 452.17 -28.53
NRs. 7,851.06 USD -.048 AED 108.20 USD -1.09 BDT 7.38 AED 37.84 NGN -84.45
3. Total Assets 9,057.80 216.63 2,884.02 4,193.01 182.27 113.14 2,346.01 2,234.91 187.33
NRs. 14,492.48 USD 4.952 AED 350.88 USD 4.17 BDT 157.15 AED 187.02 NGN 554.56
4. Total Liabilities 9,057.80 216.63 2,884.02 4,193.01 182.27 113.14 2,346.01 2,234.91 187.33
NRs. 14,492.48 USD 4.952 AED 350.88 USD 4.17 BDT 157.15 AED 187.02 NGN 554.56
5. Details of Investments 12.06 174.91 500.21 988.84 — — — — —
NRs. 19.30 USD 3.99 AED 82.75 — — — —
6. Turnover 18,521.51 — 12,969.97 5,385.15 898.94 840.88 283.55 3,406.70 256.46
NRs. 29,634.41 — AED 450.64 USD 20.55 BDT 1,167.88 AED 285.08 NGN 759.21
7. Profit before Taxation 863.26 -4.01 570.25 429.79 34.96 40.18 -287.76 -35.43 -28.53
NRs. 1,381.21 USD -0.09 AED 359.66 USD 0.80 BDT 28.93 AED - 2.96 NGN -84.45
8. Provision for Taxation 165.33 — 44.55 — — — — — —
NRs. 264.53 — — — — — —
9. Profit after Taxation 697.93 -4.01 525.70 429.79 34.96 40.18 -287.76 -35.43 -28.53
NRs. 1,116.68 USD -0.09 AED 359.66 USD 0.80 BDT 28.93 AED - 2.96 NGN -84.45
10. Proposed Dividend — — — — — — — — —

Exchange Rate as on 31.03.2005

1 USD = INR 43.75
1 Nepalese Rupee (NRs) = INR 0.625
1 Arab Emirates Dirham (AED) = INR 11.95
1 Bangladesh Taka (BDT) = INR 0.72
1 Nigerian Niera (NGN) = INR 0.3378
INR - Indian Rupee (All amount in INR, unless specified otherwise)
 Annexure ‘4’
Disclosure regarding Employees Stock Option Plan pursuant to the 12. The Company had been using intrinsic value method of accounting
SEBI (Employees Stock Option Scheme and Employees Stock ESOP expenses as prescribed by SEBI (Employees Stock Option
Purchase Scheme) Guidelines, 1999 and forming part of the Scheme and Employees Stock Purchase Scheme) Guidelines 1999,
Directors’ Report for the year ended 31st March, 2005.
to account for stock options issued under Dabur ESOS 2000, the
For the Year Cumulative Company’s stock option scheme. Under this method,
1. Number of Options granted : 3,84,743 25,60,610 compensation expenses is recorded on the basis of excess of the
market price of share at the date of grant of option over exercise
2. Pricing formula : Each option carries the right to
price of the option.
the holder to apply for equity
shares of the Company at par. As allowed by the above referred SEBI Guidelines, the Company
3. Options vested : 1,70,661 7,20,624 has decided to continue to apply the intrinsic value method of
accounting and the disclosure required as per para 12 (l) of the
4. Options exercised : 1,70,661 7,03,124
Guidelines are given herein below :
5. Total number of shares
arising as a result of (Rs. in lacs)
exercise of option : 1,70,661 12,04,883 Net profit after tax, as reported in
6. Options lapsed/cancelled : None 3,31,746 audited accounts 14797.00
7. Variation in terms of options : None None Add : Stock Option compensation
8. Money realized by expenses charged in above
exercise of options : Rs.1,70,661 Rs.12,04,883 reported profit 326.49
9. Total number of Deduct : Stock option compensation
options in force : 15,25,740 15,25,740 expenses determined under fair value 327.43
method (black scholes model)
10 Employee-wise details of options granted during the year to :
Net profit after tax, as adjusted 14796.06
i. Senior managerial personnel :
Impact on profit (i.e. profit would
P D Narang Group Director – Corp. Affairs 99,960 have been lower by) 0.94
Sunil Duggal Chief Executive Officer 94,299
Earning per share (Rs.) Basic Diluted
Charanjit Mohan ED–Operations 15,834
– As reported 5.17 5.14
N Venkatakrishnan VP – Commercial 14,845
– As adjusted 5.17 5.14
Jude Magima VP – CPPD 20,431
– Impact on EPS 0.0003 0.0003
A Sudhakar VP – Human Resources 14,845
S Raghunandan VP – Sales (CCD) 17,704 13. Weighted average exercise price
Devender Garg VP – Marketing (CCD) 17,704 (per option) Re. 1
Rajan Varma Chief Financial Officer 4,289 Weighted average fair value of
per option :
ii. Employees who received the options amounting to 5% or
more of options granted during the year : (per intrinsic value method) Rs. 58.99
(per black scholes model) Rs. 59.27
P D Narang Group Director – Corp. Affairs 99,960
Sunil Duggal Chief Executive Officer 94,299 14. The fair value of each option is estimated using the Black Scholes
Jude Magima VP – CPPD 20,431 model after applying the following weighted average
assumptions :
iii. Employees who received the options during the year equal
to or exceeding 1% of the issued capital of the Company at – Risk free interest rate (%) 4.91
the time of grant : – Expected life 1 to 5 years
None
– Expected volatility (%) 2.08
11. Diluted earning per share (EPS) pursuant to issuance of options – Expected Dividend (%) 250
under ESOP :
– Price of underlying shares in the
Rs. 5.14 market at the time of option grant Rs. 59.99

Annual Report 2004-05 57

 Annexure ‘5’

58
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, 1956 and forming part of the Directors’ Report for the year ended 31st March, 2005
Name Designation/ Qualifications Exp. Remu- Date of Age Particulars of Last
Nature of Duties in neration Appointment in employment
year year

1 Burman Amit Director Graduate in Business Admn. (USA) 12 3,497,466 12/9/97 36 Project Manager, Dabur Nepal Private Limited
2 Burman (Dr.) Anand Vice Chairman M.Sc., Ph.D (USA) 25 13,085,014 13/10/86 53 Director, Dabur (Dr. S.K. Burman) Private Limited
3 Burman Chetan Dy. General Manager - Sales & Mktg. BBA 9 3,172,956 1/2/96 33 —
4 Burman Mohit General Manager - Sales & Mktg. Graduate in Business Admn. (USA) 12 3,592,400 12/9/97 36 Executive Director, Dabur Finance Limited
5 Burman Pradip Director B.Sc. (Mech.Engg.), MIT (USA) 38 9,342,776 1/5/02 62 Director, The Printers House Private Limited

Dabur India Limited • Financials

6 Burman Vivek Chand Chairman B.Sc. in Business Admn. (USA) 42 3,880,000 1/7/63 69 Managing Director, Dabur (Dr. S.K. Burman) Private Limited
7 Bhujbal Dilip Senior General Manager - S&M - CHD B Sc, MBA 28 2,628,655 1/4/02 51 General Manager, Weikfield International (UAE) Ltd.
8 Das Arabind Additional General Manager - Operations B. Tech, M. Tech 21 2,553,507 16/5/02 44 Factory Manager, Hindustan Lever Limited
9 Duggal Sunil Chief Executive Officer BE(H), PGDBM 24 1,99,00,525 20/5/95 48 All India Sales Operations Manager, Pepsi Foods Limited
10 Garg Devendra Vice President - Marketing B. Sc., PGDM 17 3,788,614 3/12/93 40 Sales Operation Manager, Pepsi Foods Limited
11 Garg Rajiv Senior General Manager - Projects B. Sc.. - Engg. 32 2,697,294 31/7/93 56 Dy General Manager (Engg), Vam Organics Chemicals Ltd.
12 Ghadiyar Nitin(*) Executive Director - CHD B. A. (Eco & Stats), MMS 26 2,458,533 26/10/04 47 President & CEO, Morepen Laboratories Ltd.
13 Ghosh P.C. General Manager - Operations B. Sc. - Engg. 33 2,421,391 1/10/02 53 Factory Manager, Hindustan Lever Limited
14 Governor Rusi Head - Corporate QA B. Tech, ME 32 2,481,150 18/12/02 55 Head Development - Regional Innovation Center, HLL
15 Gunwant Deepika Manager-Regulatory BAMS, MD Ayurveda 20 3,411,240 1/7/04 44 ACGB
16 Krishnan V(*) Head - Talent Management B. Sc. - Engg., MBA 19 2,276,552 22/4/04 41 General Manager - Corporate HR, Whirlpool of India Limited
17 Magima Jude Vice President - Supply Management M.A. (Eco) 20 3,849,105 25/2/02 41 General Manager - Materials, Marico Industries Limited
18 Martin Andrew Marketing Manager — 16 4,385,880 24/7/02 41 —
19 Mohan Charanjit Executive Director - Operations B.E. 31 8,444,791 26/7/99 51 General Manager - Technical, Hindustan Lever Limited
20 Narang P.D. Group Director - Corporate Affairs B. Com., FCA, MIIA, ACS, AICWA 29 2,12,51,482 1/7/83 51 Management Accountant, Dabur (Dr. S K Burman) Pvt. Ltd.
21 Raghunandan S. Vice President - Sales BE, PGDM 16 4,176,852 5/6/02 40 Vice President - Sales & Distribution, Home Trade
22 Sudhakar A. Vice President - Human Resources MSc., MA (Social Work), LLB, PGDPM 29 3,958,011 17/9/01 54 Vice President - HR, Owens Brockway
23 Varma Rajan Chief Financial Officer B. Com. (Hons), CA 32 4,870,011 1/11/00 55 Vice President & CFO, Carrier Aircon Limited
24 Venkatakrishnan N Vice President - Commercial B. Com. (Hons), CS, ICWA, CA 19 4,036,263 6/2/03 44 Manager - Special Projects, Hindustan Lever Limited

Notes :
1 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.
2 All the employees have adequate experience to discharge the responsibilities assigned to them.
3 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.
4 Asterisk against a name indicates that the employee was in service for part of the year.
5 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.

For and on behalf of the Board

New Delhi (V C Burman)

28th April, 2005 Chairman
 Annexure ‘6’
FORM - A 2. Coal (specify quality and where used)
Form of Disclosure of particulars with respect Quantity (tonnes) Nil Nil
to Conservation of Energy
Total cost
A. Power and Fuel Consumption
Average rate per tonne (Rs.)
2004-05 2003-04
3. Furnace Oil
1. Electricity

a) Purchased Quantity (tonnes) 5645 4925.94

Units 15724186 16680089 Total cost 75822911 64218920

Total amount (Rs.) 63388569 67143585 Average rate per tonne (Rs.) 13431.39 13036.89

Rate per unit 4.03 4.03

4. Others/internal generation
b) Own Generation:
HSD
i) Through diesel
Quantity (Kilo ltr.) 761 262.22
generator
Total cost 16874078 4814507
Units 4754389 2247673
Unit per litre of Average rate per Kilo ltr (Rs.) 22176.15 18360.91

diesel oil 3.13 3.30 LDO

Cost per unit 6.96 5.71 Quantity (Kilo ltr.) 356 316.41
Total cost (Rs.) 33112705 12837238 Total cost 7910683 5140676
ii) Through Steam Average rate per Kilo ltr (Rs.) 22191.41 16246.93
Turbine/Generator
B. Consumption per unit of production
Units Nil Nil
Unit per litre of The Company is engaged in production of variety of products,

Fuel Oil hence the figures of consumption per unit of production are

Cost/Unit (Rs.) not ascertainable.

~ •~ •~

Annual Report 2004-05 59


FORM - B
Form of Disclosure of particulars with respect
to Technology Absorption
Research & Development
1. Specific area in which R & D carried out by the
Company
Herbal and Ayurvedic Products development, Fruit Juices
and other Foods Products, Personal Care Products,
Analytical Development, Clinical Experimental Research,
Product Registration and Validation, Tissue Culture &
Agro-technological Research.
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:-
Dabur Vatika Honey & Saffron Soap : A bathing soap
containing goodness of honey, saffron & conditioners.
Dabur Red Gel Toothpaste : A clear transparent gel
toothpaste that leverages the ingredients used in Dabur
Lal Dant Manjan in a modern day gel format.
Dabur Anmol Silky Black Shampoo : A low priced
shampoo incorporating Amla and other extracts.
Anmol Fairness cold cream : A product incorporating
standardized herbal extract, Vit.E & Saffron in a good
3. Future plan of action :
cream base.
Dabur Herbal Toothpaste : A chalk based herbal
toothpaste containing traditionally known herbs for
strong teeth & healthy gums.
4. Expenditure on R & D (2004-05)
Hajmola Fun2 : A center filled candy, with
differentiating taste inside and out side.
Coolers : Fruit drinks with traditional cooling effect.
Fruit and Vegetable juices : Vegetable and fruit juices
with higher vegetable juice content and nutritional
benefits.
60 Dabur India Limited • Financials
Annexure ‘7’
Hajmola Chuski : A fruit based hajmola paste, with
differentiating taste.
Fun2 mint candy : A liquid center filled candy with
ayurvedic center and mint taste outside.
Fit N Activ : A unique blend of Milk, Badam, and Malt
in chocolate flavour enriched with memory booster
herbs likes Shankhpuspi, Jyotishmati, Malkangani,
Satavari, Yastimadhu and Draksha.
Anardana Goli : A blend of tasty digestive spices in
sweet and sour digestive Imli based goli.
Bronchorid Syrup : A time-tested remedy for chronic
bronchial asthma with immuno-enhancing properties.
Lipistat Capsule : A cardio-tonic herbal blend containing
Arjuna and pushkar mool enriched with Guggulu having
hypolipidaemic properties.
Shilajit Gold Capsule : A unique blend of herbs and
minerals enriched with the power of Gold and Kesar
known for providing energy, vigour and stamina.
Madhurakshak : Anti diabetic preparation with a unique
blend of herbs and minerals which contains time tested
herbs like Gurmar, Vijaysar, Methi, Sudh Shilajit etc. Which
lower the blood glucose level and maintain vigour &
vitality.
To continue the R&D efforts through DRF in the areas
listed above with a view to strengthen the technological
base and look for products in new and niche areas.
a) Capital Nil
b) Recurring Rs. 540.97 lac
c) Total Rs. 540.97 lac
d) Total R & D expenditure as a
percentage of Total Turnover 0.42%
Technology Absorption, Adoption and
Innovation
1. Efforts, in brief,
made towards
technology absorption,
adoption and innovation
Installation of Energy Saver –
P-20 of 36 kva and 27
kva at D’mitories.
Replaced imported
motor with Indigenous
main drive motor of RO
plant capacity 22.5 kw
Installed 12 and 24 Tray
Drier for small size Ayurvedic
product batches which
were earlier processed
in 96 & 48 TDs.
Incorporation of Blades
in place of rotary cutter for
six track sachet packing
machine at Jammu
Incorporation of new six
track sachet machine • Lesser wastage
at Jammu • Lesser air consumption
• Operator’s ease
2. Benefits derived as a result
of the above efforts Adopted large tilting – Automatic unloading of product
e.g. product improvement, type Frying kattle in to improve hygiene conditions
cost reduction, product place of existing small
development, import Stationary one Consistent quality due to
substitution etc. increase in batch size.
“Cost reduction” (by way of Less effluent generation
saving 25% power consumption High speed packing lines – Increased productivity
at AHO.
– Cost reduction (cost of imported New Process Technology – Energy saving with less material
motor was three times higher for Hajmola manufacturing. handling.
and service and spares not easily
New type and Higher volume – Cycle time reduction with better
available).
boiling pans. yield
– Cost reduction (power cost of
Bigger batch sizes for – Consistent batch in lesser cycle
19 Ay. products has halved.)
AHO & VHO. time.
Artisan well – Water source searched without
any pumps though power
saving.
– Monthly savings of Rs. 25000
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 :
• Consistent output Not applicable
~ •~ •~
Annual Report 2004-05 61
 Annexure ‘8’
Group for interse transfer of shares under clause 3(e) 27. Maneswari Trading Company
of Securities & Exchange Board of India (Substantial
28. Milky Investment & Trading Company
Acquisition of Shares and Takeovers) Regulations, 1997
29. Poonmudi
1. Mr. Ashok Chand Burman
30. Chowdry Associates
2. Mrs. Sudha Burman
31. VIC Enterprises Private Limited
3. Mr. A C Burman HUF
32. Acee Enterprises
4. Mr. Ratan Chand Burman
33. Gyan Enterprises Private Limited
5. Mr. Vivek Chand Burman
34. Puran Associates Private Limited
6. Ms. Sujata Burman
35. Ratna Commercial Enterprises Private Ltd.
7. Mrs. Asha Burman
36. Ms. Anisha Burman
8. Mr. Amit Burman
37. Mrs. Meera Burman
9. Mrs. Gauri Tandon
38. Mrs. Pooja Burman
10. Mr. G C Burman HUF
39. Ms. Devika Burman
11. Mr. Pradip Burman
40. Mrs. Divya Burman
12. Mr. Chetan Burman
41. Master Adhiraj Burman
13. Mr. Pradip Burman HUF
14. Mr. Sidharth Burman 42. Ms. Diya Burman

15. Mrs. Indira Burman 43. Mr. Sandeep Tandon

16. Dr. Anand Burman 44. Dabur Invest Corp

17. Mrs. Minnie Burman 45. Southern Enterprises

18. Mr. Aditya Burman 46. Western Enterprises

19. Mr. V C Burman HUF 47. Eastern Enterprises

20. Mrs. Monica Burman 48. Dr. S K Burman Charitable Trust

21. Mr. Mohit Burman 49. Dabur Foundation

22. Mr. Gaurav Burman 50. Chunilal Medical Trust

23. Mr. Sidharth Burman (HUF) 51. Mateshwari Dham Trust

24. Mr. Saket Burman 52. Estate of Durga Prasad Makkar Trust

25. Upvan Farms & Services Private Limited 53. Amit Laboratories Private Limited

26. Sahiwal Inv. & Trading Company 54. Angel Softech Private Limited

62 Dabur India Limited • Financials

55. Barcelona Investment & Trading Company
56. Burmans Finvest Limited
57. Cavendish Hotels Private Limited
58. Dabur Exports Limited
59. Dabur Securities Private Limited
60. Excellent Farms Private Limited
61. Flagship Trading Company
62. Interx Laboratories Private Limited
63. KBC India Private Limited
64. Margdarshak Constructions Private Limited
65. Miracle Commercial Private Ltd.
66. Prayag Commercial Private Limited
67. Trojan Developers Private Ltd.
68. Pasadansa Foods Limited
~ •~ •~
69. Wakarusa Laboratories Private Ltd.
70. Welltime Gold & Investment Private Ltd.
71. Dabur Ayurvedic Specialities Ltd.
72. B R Bee Products Pvt. Ltd.
73. Dabur Research Foundation
74. Super Hoze Industries Pvt. Ltd.
75. Vansh Holdings Pvt. Ltd.
76. Dabur Finance Ltd.
77. Dabur Pharmaceuticals Ltd.
78. Excellent (India) Private Limited
79. Malhotra Trading Company Private Limited
80. Moonlight Ranch Private Ltd.
81. Shree Investments Limited
82. Adbur Pvt. Ltd.
83. Newage Capital Services Pvt. Ltd.
Annual Report 2004-05 63
Auditors’ Report
To,
The Members of Dabur India Limited,
We have audited the attached Balance Sheet of Dabur
India Limited as at 31st March, 2005 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 Company’s Management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
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.
i. As required by the Companies (Auditors’ Report) 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.
ii. 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.
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.
64 Dabur India Limited • Financials
v. The Balance Sheet and Profit and Loss Account dealt
with by this report are in agreement with the books of
accounts.
vi. Subject to Note No. B (4) in Schedule “P”, 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, 2005 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 subject to
note No.B (4) in Schedule “P” and 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, 2005, and,
b) In the case of Profit and Loss Account, of the Profit
for the year ended on that date, and
c) In the case of cash flow statement, of the cash
flows for the year ended on that date.
For G. Basu & Co.
Chartered Accountants
S. Lahiri
Partner
Membership No. 51717
New Delhi
28th April, 2005
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 in respect of
all its locations except in Kolkata and Daburgram
where fixed asset register have been compiled on
the basis of additions since 1975 for want of
adequate information prior to that period.
b) The fixed assets have been physically verified by
the Management at all locations 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.
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 interest free unsecured
advances of the nature of loan aggregating
Rs. 158.64 lacs to four 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 six involving maximum
due of Rs. 354.91 lacs.
b) Terms and conditions of the loans are prima facie
not prejudicial to the interest of the Company.
c) As has been stated to us, due dates of realisation of
principal due of existing loans are yet to commence.
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.
4. 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.
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.
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.
6. 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.
7. In our opinion the Company has an internal audit system
commensurate with its size and nature of its business.
8. 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 (1) (d)
of the Companies Act, 1956 in respect of products of
the company covered under the rules under said
Annual Report 2004-05 65
 Section have been maintained. However we are tax, wealth tax, service tax, customs duty, excise
neither required to carry out nor have carried out any duty, cess and other statutory dues to the extent
detailed examination of such accounts and records. applicable to it.

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
Sales Tax :
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-à-vis forums where such
disputes are pending are mentioned below :
(Rs. lac)

Name of Nature of the dues Amount Period to Forum where the

Statute which the dispute is pending
amount relates
Sales Tax Demand on Hajmola Candy 27.78 1996-97 Sales Tax Tribunal
-do- -do- 25.88 1997-98 Dy. Commissioner Appeal – Sales Tax
-do- -do- 27.05 1998-99 -do-
-do- -do- 70.35 1999-2000 -do-
-do- Sales Tax on Stock transfer 71.57 1993-94 Commissioner Commercial Tax
-do- -do- 28.60 1991-92 Sales Tax Tribunal
-do- Sales Tax on Export Sale 7.65 2000-01 Dy. Commissioner Appeal– Sales Tax
Sales Tax Sales Tax on Stock transfer 0.45 1997-98 Dy. Commissioner Appeal
-do- -do- 31.90 2000-01 -do-
-do- -do- 9.86 2001-02 -do
Sales Tax Form 18A dispute 0.45 1999-00 -do-
-do- Non filing of Form- F 0.60 1998-99 -do-
-do- Classification of Hajmola Candy 455.73 2000-01 -do-
-do- Sales Enhance & tax on Coconut Oil 14.30 2001-02 -do-
-do- Rejection of tax paid sales, classification
of poultry feed & coconut oil 132.75 2002-03 -do-
-do- Rejection of branch transfer 0.50 1986-87 Deptt. Filed Appeal in High Court
-do- CSD Claim Rejected 4.97 1988-89 High Court
-do- Check Post Matter 1.54 2004-05 Dy. Commissioner Appeal
-do- Excise Information Dispute 42.69 2000-01 -do-
-do- Check Post Matter 2.08 2003-04 -do-
-do- Classification of LDM 22.86 1992-93 High Court
-do- Classification of LDM 1.44 1993-94 High Court
-do- Exemption Forms from Regd. Dealer 1.08 1998-99 Appeal Tribunal
-do- Classification of Gulabari 0.74 1999-00 Dy. Commissioner Appeal
-do- Classification of LDM 0.03 2000-01 -do-
-do- Short payment of VAT 21.19 1998-99 -do-
-do- Short payment of VAT 41.45 2000-01 -do-
-do- Entry Tax of Car 0.30 -do-
Income Tax :
Income Tax Demand u/s 263/143(3) 34.80 1998-99 CIT (A)-III, Delhi
-do- Demand u/s 143 (3) 200.28 2001-02 CIT (A)-III, Delhi
-do- Departmental Appeal u/s 256(2) 91.13 1997-98 ITAT- Delhi

66 Dabur India Limited • Financials

Excise Duty : (Rs. lac)
Name of Nature of the dues Amount Period to Forum where the
Statute which the dispute is pending
amount relates

Excise Duty Classification of Anmol Coconut Oil 514.60 1993-2001 Dy. Commissioner Excise.
-do- Classification of Saunf Ka Ark/Clove Oil 16.34 1998-2002 Tribunal - Excise
-do- Modvat on Capital goods 0.82 1996 Dy. Commissioner Excise
-do- Modvat on inputs (57H) 2.42 1998 Tribunal - Excise
-do- Classification of Mahchandnadi tail/
Erand oil/Stimulax 49.49 1998-2002 Tribunal - Excise
-do- Fine on Seizure of Paclitaxel 0.50 2001 Tribunal-Excise
-do- Modvat on Inputs 0.95 1996-1998 Commissioner - Appeal - Excise
-do- MOT charges 0.23 2003 Commissioner Appeal - Excise
-do- Classification on Animal Feed 174.75 1994-2003 Tribunal-Excise
Supplement
-do- Post manufacturing expenses 0.30 2002-2003 Commissioner - Appeals - Excise
-do- Classification of Janma Ghunti 388.96 1994-2000 Commissioner - Excise
-do- Import of Honey 1.78 2000 Commissioner - Appeals - Excise

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 Company’s name.
13. The Company has given guarantees for loans taken by
others from banks or financial institutions. The terms
and conditions thereof are not prima facie prejudicial
to the interest of the company.
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
to the parties and companies 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. 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.
18. Other clauses of the order are not applicable to the
Company.
For G. Basu & Co.
Chartered Accountants
S. Lahiri
Partner
Membership No. 51717

14. The term loans taken by the Company have been New Delhi
applied for the purpose for which they were raised. 28th April, 2005

Annual Report 2004-05 67

Balance Sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
Schedule (Rs. lac) (Rs. lac)
Sources of Funds :
Shareholders’ Funds :
A) Share Capital A 2,864.20 2,862.49
B) Reserves and Surplus B 30,943.15 24,003.32
33,807.35 26,865.81

Loan Funds :
A) Secured Loans C 1,570.38 1,909.37
B) Unsecured Loans D 3,292.60 2,071.91
4,862.98 3,981.28
Deferred Tax Liability EB 1,277.51 796.95
Total 39,947.84 31,644.04

Application of Funds :
Fixed Assets :
(A) Gross Block F 32,672.44 27,450.18
(B) Less : Depreciation 13,511.83 11,955.85
(C) Net Block 19,160.61 15,494.33
Investments G 27,094.25 17,122.67
Deferred Tax Assets EB 137.75 57.01

Current Assets, Loans and Advances : H

(A) Inventories 12,802.57 10,951.93
(B) Sundry Debtors 4,928.27 4,207.22
(C) Cash & Bank Balances 1,065.38 1,188.72
(D) Loans & Advances 6,400.96 5,584.34
25,197.18 21,932.21
Less : Current Liabilities and Provisions : EA
(A) Liabilities 23,838.05 16,452.07
(B) Provisions 8,384.94 7,169.81
32,222.99 23,621.88
Net Current Assets (7,025.81) (1,689.67)
Miscellaneous Expenditure IA 581.04 659.70
(To the extent not written off or adjusted)
Notes to Accounts P
Total 39,947.84 31,644.04

As per our report of even date attached For Dabur India Ltd.
For G. Basu & Co. V. C. Burman Chairman
Chartered Accountants
P. D. Narang Director
S. Lahiri P. N. Vijay Director
Partner
A. K. Jain Addl. GM (Fin.) &
New Delhi Company Secretary
28th April, 2005

68 Dabur India Limited • Financials

Profit & Loss Account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
Schedule (Rs. lac) (Rs. lac)
Income :
Sales less returns J 126,871.51 114,797.73
Other Income 1,150.32 1,104.59
Total Income 128,021.83 115,902.32
Expenditure :
Cost of Materials K 54,365.36 50,319.20
Excise Duty 4,248.86 6,539.58
Manufacturing Expenses L 2,919.46 2,548.52
Payments to and Provisions for Employees M 8,208.56 7,558.56
Selling and Administrative Expenses N 39,488.95 35,117.32
Financial Expenses O 429.57 689.77
Miscellaneous Expenditure Written Off IB 149.33 210.38
Depreciation 1,709.92 1,574.96
Total Expenditure 111,520.01 104,558.29
Balance being Net Profit before Taxation 16,501.82 11,344.03
Provision for Taxation – Current 1,300.00 875.00
– Deferred 399.83 348.65
Net Profit after Taxation 14,801.99 10,120.38
Balance brought forward 8,112.18 6,611.56
Provision for Taxation of earlier years written back — 19.95
Provision for Taxation for earlier year (5.30) (25.72)
Transferred from Debenture Redemption Reserve — 250.00
Transferred from Investment Allowance Reserve 82.58 —
Transferred from Investment Deposit Reserve 182.50 —
23,173.95 16,976.17
Appropriations
Interim Dividend 2,862.89 1,717.49
Proposed Dividend - Final 4,296.30 4,007.49
Corporate Tax on Interim Dividend 374.14 220.05
Corporate tax on Proposed Dividend 602.56 513.46
Transferred to Capital Reserve — 155.50
Transferred to General Reserve 2,515.08 2,250.00
Balance carried over to Balance Sheet 12,522.98 8,112.18
23,173.95 16,976.17
Earning Per Share (in Rs.) (Face Value Re. 1/- each)
Basic 5.17 3.54
Diluted 5.14 3.52
No. of Shares
Basic 286,336,927 285,987,220
Diluted 287,819,156 286,984,379
Notes to Accounts P

As per our report of even date attached For Dabur India Ltd.
For G. Basu & Co. V. C. Burman Chairman
Chartered Accountants
P. D. Narang Director
S. Lahiri P. N. Vijay Director
Partner
A. K. Jain Addl. GM (Fin.) &
New Delhi Company Secretary
28th April, 2005

Annual Report 2004-05 69

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

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
A. Cash flow from operating activities
Net profit before tax and extraordinary items 16,501.82 11,344.03
Add :
Depreciation 1,709.92 1,574.96
Loss on sale of fixed assets 4.18 —
Miscellaneous exp. written off 149.34 210.38
Misc. expense written off (included in director remuneration) 195.91 83.55
Interest 429.57 689.77
2,488.92 2,558.66
18,990.74 13,902.69
Less :
Dividend received 160.13 270.40
Profit on sale of investment 407.38 126.19
Profit on sale of assets — 165.56
567.51 562.15
Operating profit before working capital changes 18,423.23 13,340.54
Working capital changes
Increase/(decrease) in inventories 1,850.64 (1,998.22)
Increase/(decrease) in debtors 768.42 (4,984.78)
Decrease/(increase) in trade payables (7,498.63) (1,650.07)
Increase/(decrease) in working capital (4,879.57) (8,633.07)
Cash generated from operating activities 23,302.80 21,973.61
Interest paid 439.34 689.77
Tax paid 1,277.09 881.04
Corporate tax on dividend 887.60 547.95
2,604.03 2,118.76
Cash used (-)/(+) generated for operating activities (a) 20,698.77 19,854.85
B. Cash flow from investing activities
Purchase of fixed assets (5,607.94) (2,522.70)
Sale of fixed assets 227.56 509.61
Purchases of investment including investment in subsidiaries (152,824.68) (81,951.34)
Sale of investments 143,260.48 69,677.85
Dividend received 160.13 270.40
Cash used (-)/(+) generated for investing activities (b) (14,784.45) (14,016.18)
C. Cash flow from financing activities
Proceeds from share capital & premium 1.71 4.99
Repayment(-)/proceeds (+) of long term secured liabilities (330.49) (493.49)
Repayment(-)/proceeds (+) from short term loans (8.50) (61.14)
Repayment (-)/proceeds (+) from deposits 25.93 (1,990.92)
Repayment(-)/proceeds (+) from other unsecured loans 1,215.10 (1,464.44)
Payment of other advances (86.01) 1,549.30
Payment of dividend (6,855.40) (4,289.24)
Cash used (-)/+ (generated) in financing activities (c) (6,037.66) (6,744.94)
Net increase (+)/decrease (-) in cash and
cash equivalents (a+b+c) (123.34) (906.27)
Cash and cash equivalents opening balance 1,188.72 2,094.99
Cash and cash equivalents closing balance 1,065.38 1,188.72

70 Dabur India Limited • Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule A - Share Capital

Authorised :
500000000 Equity shares of Re.1 each 5,000.00 5,000.00
(Previous year 500000000 equity shares of Re. 1)
5,000.00 5,000.00
Issued and subscribed :
286419713 Equity shares of Re.1 each fully called up 2,864.20 2,862.49
(Previous year- 286249052 equity shares of Re. 1)
2,864.20 2,862.49

Notes :
1. 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 received 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.
2. Pursuant to Section 94 of Companies Act, 1956, equity shares of Rs. 10 were sub-divided in equity shares of Re. 1/- each on
15th December, 2000 by way of issue of 10 shares against each share formerly held by a shareholder.
3. 170661 (previous year 499118) equity shares of Re. 1 each were issued during the year 2004-05 under Employees Stock Option
Scheme.
4. 1534740 ( previous year 1320658) equity shares of Re. 1 each are outstanding under Employee, Stock Option Scheme as on
31st March, 2005.

Annual Report 2004-05 71

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule B - Reserves and Surplus

Capital reserve :
As per last account 1,628.36 1,472.86
Add : Transferred from profit & loss account — 155.50
1,628.36 1,628.36
Share premium account : 5,665.90 5,378.18
Add: Premium on issue of shares 92.18 287.72
5,758.08 5,665.90
Capital redemption reserve :
As per last account 56.93 56.93
General reserve :
As per last account 7,546.06 23,914.06
Less : Assets transfer under demerger — 18,618.00
7,546.06 5,296.06
Add : Transferred from profit & loss account 2,515.08 2,250.00
10,061.14 7,546.06
Debenture redemption reserve :
As per last account — 250.00
Less : Transferred to profit & loss account — 250.00
— —
Investment allowance reserve :
As per last account 82.58 82.58
Less : Transferred to profit & loss account 82.58 —
— 82.58
Investment deposit reserve :
As per last account 182.50 182.50
Less : Transferred to profit & loss account 182.50 —
— 182.50
Profit and loss account 12,522.98 8,112.18
Employee stock option scheme outstanding :
As per last account 728.81 302.91
Add : Addition during the year 279.03 454.81
1,007.84 757.72
Less : Deletion during the year 92.18 28.91
915.66 728.81
Total 30,943.15 24,003.32

72 Dabur India Limited • Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule C - Secured Loans

Term loans :
PICUP under trade tax loan scheme 1,009.09 1,339.58
Secured by :
A) Loan amounting to Rs. 1338.72 (in term of original agreement) :
First charge on the movable and immovable assets including plant
and machinery of the Company (present and future) situated
at Plot No. 5/1 and 5/13, Site IV Industrial Area, Sahibabad, Ghaziabad.
B) Loan amounting to Rs. 125.00 ( in term of original agreement) :
First charge on immovable assets propery (present and future)
of the Company situated at Plot No. 5/1 and 5/13, Site IV Industrial
Area, Sahibabad, Ghaziabad.
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.
Short term loans - from banks : 561.29 569.79
Secured by :
Hypothecation of inventories and book debts ranking pari-passu among
Punjab National Bank, Standard Chartered Bank 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 1,570.38 1,909.37

Schedule D - Unsecured Loans

Security deposit from dealers and others 15.92 10.32
Other loans :
– Book overdraft of current account with banks 470.75 445.45
– Commercial papers 2,000.00 —
– External commercial borrowings - ABN Ambro Bank NV 805.93 1,616.14
Total 3,292.60 2,071.91
Notes :
1. Maximum amount of commercial papers outstanding during the year Rs. 2,000 (Previous year Rs. 2,000).
2. External commercial borrowings repayable within a year Rs. 805.93 (Previous year Rs. 810.21).

Annual Report 2004-05 73

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule EA - Current Liabilities and Provisions

A. Current liabilities :
Acceptance 9,388.39 3,949.75
Amount due to SSI units (goods) 873.87 752.97
Creditors for goods 2,731.76 2,478.98
Creditors for expenses and other liabilities 10,627.95 9,032.46
Advances from customers 53.71 101.08
Interest accrued but not due on loans 2.14 11.91
Deposits - others 47.24 23.81
Investor education and protection fund to be credited by :
– Unpaid dividend 96.42 81.44
– Unpaid matured public deposits 10.69 13.47
– Interest accrued on public deposits 5.88 6.20
23,838.05 16,452.07
B. Provisions :
For dividend (proposed) - final 4,296.30 4,007.49
For corporate tax on proposed dividend 602.56 513.46
For staff welfare 360.00 240.00
For leave salary 208.09 237.27
For taxation :
Brought forward 2,171.59 2,020.83
Provision for the year 1,300.00 875.00
3,471.59 2,895.83
Adjusted during year 553.60 724.24
2,917.99 2,171.59
8,384.94 7,169.81
Total 32,222.99 23,621.88

Schedule EB - Deferred Tax Liabilities (Net)

Deferred tax liability :
Depreciation 1,277.51 796.95
Less: Deferred tax assets :
VRS payment 6.01 3.20
Other disallowances under Section 43B of Income Tax Act 1961 131.74 53.81
137.75 57.01
Total 1,139.76 739.94

74 Dabur India Limited • Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

Schedule F - Fixed Assets (Rs. lac)

Gross Block Depreciation Net Block

Opening Transfer/ Closing Opening For the Transfer/ Closing As at As at

Balance Additions Adjustment Balance Balance Year Adjustment Balance 31.03.2005 31.03.2004
Leasehold land 345.54 402.79 — 748.33 28.18 7.62 — 35.80 712.53 317.36
Freehold land 295.01 — 3.63 291.38 — — — — 291.38 295.01
Building, roads
& culverts 8,443.53 1,141.09 89.48 9,495.14 2,347.83 276.58 — 2,624.41 6,870.73 6,095.70
Plant & machinery 11,962.41 2,547.29 191.59 14,318.11 6,474.66 852.33 95.51 7,231.48 7,086.63 5,487.75
Computers 2,244.95 173.79 12.18 2,406.56 1,487.38 224.66 10.17 1,701.87 704.69 757.57
Vehicles 688.67 166.55 83.15 772.07 272.70 121.65 46.63 347.72 424.35 415.97
Furniture & fixtures 2,506.08 118.15 5.65 2,618.58 1,153.38 179.10 1.63 1,330.85 1,287.73 1,352.70
Patents 330.00 765.97 — 1,095.97 191.72 47.98 — 239.70 856.27 138.28
Livestock 0.22 — — 0.22 — — — — 0.22 0.22
Capital
work-in-progress 633.77 3,727.85 3,435.54 926.08 — — — — 926.08 633.77
Total 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

Previous year 32,198.35 2,751.81 7,499.98 27,450.18 11,732.71 1,574.96 1,351.82 11,955.85 15,494.33 20,465.64

Notes :
1. Capital work-in-progress includes advance against capital goods Rs. 588.47 (previous year Rs. 744.05).
2. Transfer/adjustment pertaining to gross block and depreciation includes Rs. Nil (previous year Rs. 6,761.50) and
Rs. Nil (previous year Rs. 1,186.50) towards fixed assets transferred to Dabur Pharma Ltd. on 01/04/2003 under the scheme of
demerger of Pharmaceutical Division of the Company.

As at As at
Number 31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule G - Investments
A. Current Investments
Quoted - other than trade
1. ABN Mutual Fund 17,259,242.05 1,775.00 —
(Purchased during the year) units 69843390.51
(Sold during the year) units 52584148.45
2. BOB Mutual Fund — — —
(Purchased during the year) units 42938677.92
(Sold during the year) units 42938677.92
3. HSBC Mutual Fund
(Purchased during the year) units 52767457.41 — — —
(Sold during the year) units 52767457.41
4. IL&FS Mutual Fund — — —
(Purchased during the year) units 1014955.921
(Sold during the year) units 1014955.921
5. ING Mutual Fund
(Purchased during the year) units 39930565.84 — — —
(Sold during the year) units 39930565.84

Annual Report 2004-05 75

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
Number 31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule G - Investments (Contd.)

6. Kotak Mahindra Mutual Fund — — —
(Purchased during the year) units 73253963.87
(Sold during the year) units 73253963.87
7. Principal Mutual Fund 5,069,567.91 522.00 —
(Purchased during the year) units 101158868.92
(Sold during the year) units 106228436.83
8. Prudential Mutual Fund — — —
(Purchased during the year) units 107930727.5
(Sold during the year) units 107930727.5
9. SBI Mutual Fund — — —
(Purchased during the year) units 38469836.38
(Sold during the year) units 38469836.38
10. Tata Mutual Fund — — —
(Purchased during the year) units 70796465.02
(Sold during the year) units 70796465.02
11. Grindlays Cash Fund-IP - Growth — — 63.78
(Purchased during the year) units 122735723.5 (547,994.13)
(Sold during the year) units 123283717.63
12. JM Floater Fund- STP Growth — — 2,472.50
(Purchased during the year) units 102924244.7 (24,233,189.80)
(Sold during the year) units 127157434.5
13. Templeton Floating Rate Income Fund - ST — — 1,589.39
(Purchased during the year) units 34760989.72 (14,147,123.18)
(Sold during the year) units 48908112.9
14. DSP ML Floating Rate Fund - Growth — — 434.00
(Purchased during the year) units 40081583.09 (4,177,218.30)
(Sold during the year) units 44258801.38
15. Birla Floating Rate Fund - STP Growth — — 163.70
(Purchased during the year) units 67891849.74 (1,579,389.60)
(Sold during the year) units 69471239.34
16. Chola Liquid Fund - Institutional Plus - Growth 8,025,741.82 1,080.00 276.00
(Purchased during the year) units 14023014.13 (2,152,599.24)
(Sold during the year) units 8149871.544
17. Reliance Liquid Fund — — 2,843.00
(Purchased During the year) units 49299232.11 (25,469,444.43)
(Sold during the year) units 74768676.54
18. HDFC FRIF STF - Growth — — 1,166.00
(Purchased during the year) units 5256621.16 (10,997,312.87)
(Sold during the year) units 16253934.03
19. LIC Mutual Fund — — 2,500.00
(Purchased during the year) units 10000000 (25,000,000.00)
(Sold during the year) units 35000000

76 Dabur India Limited • Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
Number 31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule G - Investments (Contd.)

20. Alliance Mutual Fund — — —
(Purchased during the year) units 22496407.96
(Sold during the year) units 22496407.96
21. Deutsche Bank Mutual Fund — — —
(Purchased during the year) units 15101844.48
(Sold during the year) units 15101844.48
22. Sahara Mutual Fund 8,395,600.71 1,000.00 —
(Purchased during the year) units 36089067.35
(Sold during the year) units 27693466.64
23. Sundaram Finance Mutual Fund — — —
(Purchased during the year) units 10000000
(Sold during the year) units 10000000
24. UTI Mutual Fund — — —
(Purchased during the year) units 73753.988
(Sold during the year) units 73753.988
B. Long term investments
I) Quoted-Equity Shares- Other than Trade
1. Dabur Pharma Ltd. 479,400.00 4.79 4.99
(20000 equity shares sold during the year) (499,400.00)
II) Unquoted - Equity Shares Trade Investments
1. Sanat Products Ltd. 50,000.00 105.00 105.00
2. Dabon International Private Limited 13,500,000.00 1,350.00 1,350.00
3. Green Valley Products Pvt. Ltd. 65,000.00 6.50 6.50
III) Unquoted - Equity Shares Trade Investments in
Subsidiary Companies
1. Dabur Overseas Limited 50,000.00 161.06 161.06
2. Dabur Nepal Private Limited 638,520.00 699.07 699.07
3. Dabur Foods Limited 10,000,000.00 1,000.00 1,000.00
4. Dabur International Limited 1,000,000.00 2,287.50 2,287.50
IV
IV)) Unquoted - Equity Shares other than Trade
1. Commerce Centre Co-operative
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 Co-operative Credit Society Ltd. 650.00 0.07 0.07
5. Co-operative Stores Limited, Super Bazar 500.00 0.05 0.05
C. Advance against acquisition for fully paid 3857300 Equity 17,103.15 —
Shares of Rs.10 each of Balsara Hygience Products Ltd.,
2290711 Equity Shares of Balsara Home Products Ltd.,
431800 Equity Shares of Besta Cosmetics Ltd.
Total 27,094.25 17,122.67
Notes :
Aggregate book value of unquoted Investments 22,712.46 5,614.30
Aggregate book value of quoted Investments 4,381.79 11,508.37
Aggregate market value of quoted Investments 4,617.80 11,553.02

Annual Report 2004-05 77

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule H - Current Assets, Loans and Advances

A. Current Assets :
Inventories
– Raw materials 4,383.16 4,257.19
– Packing materials, stores and spares 1,957.67 1,028.55
– Stock in process 614.82 1,116.98
– Finished goods 5,846.92 4,549.21
12,802.57 10,951.93
Sundry Debtors (unsecured) :
– Debts outstanding for a period exceeding six months :
Considered good 219.51 146.46
Considered doubtful 11.98 11.98
231.49 158.44
Less : Provision for doubtful debts 11.98 11.98
219.51 146.46
– Other debts (considered good) 4,708.76 4,060.76
4,928.27 4,207.22
Cash and bank balances :
– Cash in hand 18.90 18.34
– Remittance-in-transit & cheques-in-hand 7.48 7.86
– Balances with scheduled banks
In current accounts (includes Rs. 96.49 in unpaid dividend account ; 950.23 1,108.00
previous year Rs. 81.44)
In fixed deposit accounts 38.09 18.94
(Pledged with Govt. authorities Rs. 10; previous year Rs. 10)
– Balance with non scheduled banks
In current accounts 49.73 34.63
– Postal savings bank accounts (deposited with excise authority) 0.95 0.95
1,065.38 1,188.72
18,796.22 16,347.87
B. Loans and advances (unsecured, considered good)
Loans & advances to subsidiaries 72.64 26.46
Loans & advances to others — 114.63
Security deposit with various authorities (including deposit 901.04 950.51
With Govt. Authorities Rs. 435.89; previous year Rs. 501.73)
Advance payment of tax 2,910.44 2,179.83
Advances to suppliers 774.51 525.89
Advances to employees 170.53 236.33
Balance with excise authorities 990.91 655.40
Other advances recoverable in cash or in kind or for value to be 580.89 895.29
received 6,400.96 5,584.34
Total (A+B) 25,197.18 21,932.21

78 Dabur India Limited • Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule H – Current Assets, Loans

and Advances (Contd.)
Notes : Loans and Advances
1. Maximum amount due from director/officer of the company — 84.58
at any time during the year
Additional disclosure as per clause 32 of listing agreement
A) Loans and advances to subsidiaries :
1. Dabur Foods Ltd. Amount outstanding — 26.46
Maximum outstanding during the year 49.82 1,200.00
2. Dabur Nepal Pvt. Ltd. Amount outstanding 68.58 —
Maximum outstanding during the year 68.58 —
3. Dabur International Ltd. Amount outstanding 0.72 —
Maximum outstanding during the year 32.83 —
4. Asian Consumer Care Pvt. Ltd. Amount outstanding 3.34 —
Maximum outstanding during the year 3.34 —
B) Loans and Advances to Associates :
1. Sanat Products Ltd. Amount outstanding — 113.34
Maximum outstanding during the year 113.34 298.41

Schedule IA - Miscellaneous Expenditure

(To the extent not written off or adjusted)
Technical know-how fees paid 84.37 103.12
Less : Amortised during the year 18.75 18.75
65.62 84.37
Deferred employee compensation under ESOP
Opening balance 575.33 136.91
Addition during the year 279.03 715.00
Less : Cancelled during the year — 1.40
854.36 850.51
Less : Amortised during the year 338.94 275.18
515.42 575.33
Total 581.04 659.70

Annual Report 2004-05 79

Schedules annexed to and forming part of the profit & loss account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule J - Sales and Other Income

A. Sales :
Domestic sales less returns 122,023.32 111,113.44
Export sales 4,848.19 3,684.29
126,871.51 114,797.73
B. Other income :
Export subsidy 44.65 66.21
Rent realised 19.27 44.86
(Tax deducted at source Rs. Nil; previous year Rs. 2.47)
Sale of scrap 187.59 131.70
Dividend from subsidiary companies (trade Investment) 159.63 186.78
(Tax deducted at source Rs.7.98; previous year Rs. 7.98)
Other dividend - (other than trade investment) 0.50 83.62
(Tax deducted at source Rs. Nil; previous year Rs. Nil)
Royalty 254.62 191.52
(Tax deducted at source Rs.14.22; previous year Rs. 9.96)
Miscellaneous receipts 76.68 108.15
Profit on sale of investments 407.38 126.19
(Net of loss of Rs. Nil; previous year Rs. 84.50)
(Net of loss of Rs. Nil; previous year Rs. 16.20)
Profit on sale of fixed assets — 165.56
(Net of loss of Rs. Nil; previous year Rs. 6.11)
(Including capital profit of Rs. Nil; previous year Rs. 155.50)
Total 1,150.32 1,104.59

Schedule K - Cost of Materials

Raw Materials Consumed :
i) Opening stock 4,257.19 3,302.16
ii) Add : Purchases 22,388.50 15,222.64
26,645.69 18,524.80
iii) Less : Closing stock 4,383.16 4,257.19
22,262.53 14,267.61
Packing materials consumed :
i) Opening stock 793.12 1,061.85
ii) Add : Purchases 11,140.25 6,941.37
11,933.37 8,003.22
iii) Less : Closing stock 1,491.43 793.12
10,441.94 7,210.10
Purchase of finished products 22,456.43 26,263.97
Adjustment of stocks in process and finished goods :
Opening stock :
Stock in Process 1,116.98 1,222.44
Finished products 4,549.22 7,021.28
5,666.20 8,243.72
Closing stock :
Stock-in-process 614.82 1,116.98
Finished products 5,846.92 4,549.22
6,461.74 5,666.20
Increase(-)/decrease in stock in process and finished goods (795.54) 2,577.52
Total 54,365.36 50,319.20

80 Dabur India Limited • Financials

Schedules annexed to and forming part of the profit & loss account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule L - Manufacturing & Operating Expenses

Power and fuel 2,169.48 1,712.14
Stores & spares consumed 307.39 472.83
Repairs & maintenance
— Building 88.19 53.13
— Plant & machinery 27.62 19.62
— Others 279.36 204.82
Processing charges 47.42 85.98
Total 2,919.46 2,548.52

Schedule M - Payments to and Provisions

for Employees
Salaries, wages and bonus 4,849.68 4,257.13
Contribution to provident and other funds 724.90 845.24
Workmen and staff welfare 1,924.07 1,927.91
Directors’ remuneration 709.91 528.28
(Including perquisites Rs. 326.03; previous year Rs. 208.83)
Total 8,208.56 7,558.56

Schedule N - Selling & Administrative Expenses

Rent 506.58 436.74
Rates and taxes 92.03 85.69
Insurance 195.97 137.27
Sales tax 10,527.22 8,482.15
Freight and forwarding charges 3,287.48 2,715.25
Commission, discount and rebate 1,236.78 1,744.24
Advertising and publicity 17,178.91 15,495.41
Travel & conveyance 1,405.88 1,337.55
Legal & professional 702.26 1,079.56
Telephone, fax expenses 251.55 306.70
Security expenses 136.22 112.85
General expenses 3,053.69 2,524.91
Directors’ fees 6.85 1.93
Auditors’ remuneration :
– Audit fee 9.36 7.02
– Branch auditors’ fee 7.23 2.97
– Reimbursement of expenses 8.13 11.29
– Provident fund and certificates 6.07 5.80
30.79 27.08
Donation 240.98 81.71
Contribution for scientific research expenses 540.97 455.67
Bad debts 1.53 92.61
Loss on sale of fixed assets 4.18 —
(Net of profit Rs. 10.66; previous period Nil)
Provision for contingent liability 89.08 —
Total 39,488.95 35,117.32

Annual Report 2004-05 81

Schedules annexed to and forming part of the profit & loss account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule O - Financial Expenses
Interest paid on :
Fixed period loan 70.21 304.66
Others 71.31 56.45
(Net of Interest received Rs. 36.48; previous year Rs. 68.50 141.52 361.11
T.D.S. Rs. 6.32; previous year Rs. 9.86)
Bank charges 288.05 328.66
Total 429.57 689.77

Schedule IB - Misc. Expenditure

Written Off
Technical knowhow fees paid 18.75 18.75
Deferred employee compensation under ESOP 326.49 275.18
Less : Transferred to directors’ remuneration 195.91 83.55
130.58 191.63
Total 149.33 210.38

82 Dabur India Limited • Financials

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005

Schedule P - Accounting Policies and Notes to Accounts

A. ACCOUNTING POLICIES

Significant accounting policies are summarized below :

1. Accounting Convention :

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

2. Fixed Assets and Depreciation :

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

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

• 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, Jammu, 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.

3. Impairment of Assets :

The company identifies impairable 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 :

Long term investments are held at cost. Provision will be made as and when deemed necessary under AS-13 issued by ICAI.

Current investments are held at lower of cost and NAV/Market value.

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 :

• Raw materials, packing materials, stores & spares On FIFO Basis

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

• 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.
• Gratuity Liability on the basis of payment advice from Life Insurance Corporation of India from whom the Company’s
gratuity trust has taken the Group Gratuity Insurance Policy.

Annual Report 2004-05 83

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005

• 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.

9. Recognition of Income and Expenses :

• 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.
• Exports Sales are accounted for on the basis of date of bill of lading.
• All items of incomes and expenses have been accounted for on accrual basis.

10. Income Tax & Deferred Taxation

The liability of company on account of income tax is estimated considering the provision of the Income Tax Act, 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 :

• 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.
• 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 charged to the Profit & Loss Account.
• Capital as well as revenue implication of exchange fluctuation, charged 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 :

• Share issue expenses are being amortized equally over a period of ten years.
• Technical know-how fee paid to Technical Collaborators are being amortized equally over a period of six years.
• Strategic Management Consultancy Expenses are being amortized equally over a period of five years.
• 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.

84 Dabur India Limited • Financials

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005
(Rs. lac)
B. NOTES TO ACCOUNTS

1. Building constructed on leasehold land included in the value of building shown in Fixed Assets Schedule:
As at As at
31 st March, 2005
31st 31st March, 2004
(Rs. lac) (Rs. lac)
Cost/Revalued 5378.72 5375.68
Written Down 3607.73 3759.93

2. 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 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 Bench 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 Rs.48.64 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 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 Hon’ble Supreme Court in this
regard. Necessary adjustments in respect of recovery/refund will be made as per the arbitration proceedings.
3. 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 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 confirmed absence of exigency of making any
provision against impairment loss.
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 per cent i.e. the average
interest rate of external borrowing plus risk factor @ 2.00 per cent per annum.
4. The company’s investment in the joint venture, M/s. Dabon International Private Ltd., has not been accounted for in accordance
with AS-27 as the same is being held for disposal in the foreseeable future. Consequently, no provision is deemed necessary
for diminution in the value of investment under AS-13.
5. Contingent Liabilities :
Claims against the company not acknowledged as debts :
i. In respect of civil suits filed against the company Rs. 251.71 (Previous year Rs.267.05)
ii. In respect of claims by employees Rs.0.50 (Previous year Rs. 0.50)
iii. In respect of letters of credit Rs. 1,366.66 (Previous year Rs.1,395.13)
iv. In respect of Bank Guarantees executed Rs .576.62 (Previous year Rs. 641.88)
v. In respect of Sales Tax under appeal Rs.956.69 (Previous year Rs. 399.40)
vi. In respect of excise duty disputes pending with various judicial authorities Rs.1,151.14 (Previous year Rs.,2,895.83).
vii. In respect of Corporate Guarantees given by the Company Rs. 14,148.94 (Previous year Rs.13,891.74)
viii. In respect of Income tax under appeal Rs.326.22 (Previous year Rs.461.23)
ix. Estimated Amount of contract remaining to be executed on capital account Rs.726.91 net of advance. (Previous year Rs.1,286.45)

Annual Report 2004-05 85

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005
(Rs. lac)

31-03-2005 31-03-2004
6A. Expenditure in Foreign Currency
– Professional & Consultation Fees 4.30 13.65
– Interest 25.65 38.40
– Salary 111.55 79.31
– Others (Travelling, conveyance & administration) 52.09 384.49
193.59 515.85
6B. CIF Value of Imports
– Raw Materials 310.75 240.23
– Stores & Spares (Including of packing material) 41.02 20.25
– Capital Goods 75.10 1.23
426.87 261.71
6C. Earning in Foreign Exchange
– Export sales at FOB 3,682.77 2,891.19
– Royalty/Technical Consultancy 35.59 34.96
– Dividend — 27.15
3,718.36 2,953.30
6D. Value of raw materials, stores and spares parts consumed
Raw Material Packing Material, Stores & Spares
31.03.2005 31.03.2004 31.03.2005 31.03.2004
Value % Value % Value % Value %
Imported 308.64 1.39 598.69 2.82 31.75 0.30 28.27 3.81
Indigenous 21953.89 98.61 20610.26 97.18 10717.58 99.70 713.32 96.19
Total 22262.53 100.00 21208.95 100.00 10749.33 100.00 741.59 100.00

6E. Net Dividend remitted in foreign currency 2004-05 2003-04

2002-03 Final Dividend to 2119 shareholders on 8367588 shares — 75.31
2003-04 Interim Dividend to 2055 shareholders on 10801724 shares — 64.81
2003-04 Final Dividend to 1977 shareholders on 12088945 shares 120.89 —
2004-05 Interim Dividend to 1993 shareholders on 14175778 shares 141.76 —
262.65 140.12
7A. Particulars of Consumption of important raw materials
Class of Goods Unit Quantity Value
Sugar and Molases Tonnes 11676.65 1820.66
(12169.21) (1598.76)
Others 20441.87
(14079.96)
22262.53
(15678.72)
7 B. Particulars in respect of goods manufactured
Licenced Installed Production Opening Stock Closing Stock Sale
Class of Goods Unit Capacity Capacity Qty. Qty. Value Qty. Value Qty. Value
Chyawanprash Tonnes 20000.000 11151.193 365.505 237.51 611.474 461.35 10905.219 13665.36
(20000.000) (11282.728) (523.129) (445.80) (365.505) (237.51) (11440.348) (14062.21)
Hair Oils Kilo-Ltrs 12000.000 7973.263 57.074 66.21 251.375 279.28 7778.959 15379.06
(6000.000) (5999.917) (70.737) (81.23) (57.074) (66.21) (6013.584) (11468.29)
Vatika Hair Oils Kilo-Ltrs 1031.119 14.009 15.29 165.156 195.75 879.970 1829.33
(72.454) (0.065) (0.08) (14.009) (15.29) (58.510) (104.64)
Others 2335.60 3323.63 49457.41
(5285.50) (2335.60) (38374.32)
2654.61 4259.99 80331.17
Total (5812.61) (2654.61) (64009.46)
Note : figures in brackets are for previous years

86 Dabur India Limited • Financials

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005
(Rs. lac)
7C. Particulars of Traded Goods
Purchases Opening Stock Closing Stock Sale
Class of Goods Unit Qty. Value Qty. Value Qty. Value Qty. Value
Hair Oils Kilo-Ltrs 4823.663 5167.14 257.297 279.10 129.182 157.04 4951.773 9397.69
(4970.978) (5752.65) (163.431) (205.50) (257.297) (279.10) (4877.112) (9204.51)
Ayurvedic Tonnes 8840.707 6757.49 246.524 241.86 360.398 326.91 8726.833 14435.92
Tooth Powder (9018.767) (6661.99) (345.859) (367.00) (246.524) (241.86) (9118.092) (15192.06)
Vatika Hair Oils Kilo-Ltrs 3004.732 3501.97 213.195 238.40 35.543 41.79 3182.384 6361.33
(3787.264) (4164.00) (84.753) (106.03) (213.195) (238.40) (3658.826) (6986.01)
Others 7029.83 1135.23 1061.21 16345.40
(9685.33) (1682.20) (1135.23) (19405.68)
22456.43 1894.59 1586.95 46540.34
Total (26263.97) (2360.73) (1894.59) (50788.27)
Note: Figures in brackets are for previous year

8. Managerial Remuneration under Section 198 of the Companies Act, 1956 paid or payable during the year, to the Directors :
31.03.2005 31.03.2004
Salary 286.54 239.43
Commission (as computed below) 38.80 29.30
Contribution to Provident Fund 26.92 22.57
Residential Accommodation 97.40 71.72
Medical & Leave Travel Benefit 8.12 9.94
Contribution to Superannuation Fund 31.62 28.22
Others (Including Rs.195.90; previous year Rs.83.55
Under Stock Option Scheme) 220.51 127.10
709.91 528.28
Computation of net profit in accordance with Section 198
and Section 309 (5) of the Companies Act, 1956 and
calculation of Director’s commission :
Profit for the year before taxation as per
Profit & Loss Account 14801.82 11344.03
Add : Managerial remuneration 709.72 528.28
Directors fees 6.85 1.93
716.57 530.21
Less : Capital Profit — 155.50
Adjusted net profit 15518.39 11718.74
Commission payable :
To one non whole-time Director 38.80 29.30

Annual Report 2004-05 87

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005

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, 2005 for more than 30 days are :
4R Health Care Products
A N Products
Abhimanyu Containers
Abhinav Printing & Packagings
Adchem Industr.
Agarwal Polysacks Ltd.
Agi Glaspac
Ajanta Packaging
Ajay & Company
Amita Polymers Pvt. Ltd.
Anipra Chemicals Pvt. Ltd.
Baya Traders
Bharat Rubber Works
Bhargava Poly Packs
Burman Laboratories P. Limited
Care Marketing Co. Pvt. Ltd
Classic Bottle Caps Pvt.ltd.
Compack Enterprises India Pvt. Ltd.
Continental Crowns And Closures
Devendra Cottage Industries
Dolsun Containers Pvt. Ltd.
Domino Printech India Pvt. Ltd.
Dynamic Sticker Industries
Echel Engg. Components
Elson Colour Containers
Empire Multipack P. Ltd.
Everest Containers Pvt..Ltd.
Faridabad Plastics
Firmenich Aromatics (India)
G S Engineering Works
Green Valley Products P. Ltd.
H B D Packaging Pvt. Ltd.
H S Enterprises
Hi Tech Packers
Interlabels Industries P. Ltd.
Jainex India
Jasmer Packers Pvt. Ltd.
Jiwan Plasto Moulds Pvt. Ltd.
Jyot Overseas Pvt. Ltd.
Kamet Plastics Pvt. Ltd.
Krishna Industries
Krishna Printers
Kush Prints Pvt. Ltd.
Magadh Plas Pvt. Ltd.
Magnesium Products Pvt. Ltd.
Mahabir Industries
Mandagini Agencies
Maxcare Laboratories Limited
Mc Packaging P.
Mega Packages
Mega Packers
Merlin Printer
Morisha Enterp
N.K. Gossain &
Naturalle Health Products P. Ltd.
Nav Bharat Enterprises
New Gaurav Printers
New Samudra Art Centres
Nikita Plast (Unit III)
Niranjan Containers P. Ltd.
Northern Aromatics Ltd, Badd
Om Packaging
Orgachemie Agencies
P.M.C. Machines P. Ltd.
Pacwel Plastics Private Limited
Penguin Plasti
Plastic Packaging Industries
Prakash Printers & Stationers
Precise Laboratories Pvt. Ltd.
Prem Industries
Print & Public
Printex Centre
Print-n-wrap
Process Instrumentation and Control
Protech Engg. Industries Pvt.
PSN Chemicals
Reliplast Pvt. Ltd.
Responsive Industries
Rsg Packagings Pvt. Ltd.
S A Packaging Pvt. Ltd.
Sai Packaging Co.
Satish Enterprises
Sea-shell Chemicals Pvt. Ltd.
Sheel Packaging Pvt. Ltd.
Shiva Trading Company
Shivam Safety Industries
Shree Nath Printers
Special Air Gases
Speciality Valves
Sudha Rasayan
Sunshine Polymers Pvt. Ltd.
Svar Plastics Pvt. Ltd.
Taurus Packaging Pvt. Ltd
V P Poly Udyog
Varahi Plastics Pvt. Ltd.
Vimoni (India) Pvt. Ltd.
Vipul Plastics
Walia Rubber Stamps
Windsor Packaging Pvt. Ltd.

10. Particulars of Balances with Non-Scheduled Banks :

Current year: Balance as on Maximum Balance
31.03.2005 during the year
(Rs. lac) (Rs. lac)
a) In Current Account
Barclays Bank, London 49.73 114.41
b) In Postal Savings Bank Account 0.95 0.95
Previous year:
Balance as on Maximum Balance
31.03.2004 during the year
(Rs. lac) (Rs. lac)
a) In Current Account
Barclays Bank, London 34.63 43378.98
b) In Postal Savings Bank Account 0.95 0.95

88 Dabur India Limited • Financials

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005
(Rs. lac)
11. 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.
12. Figures for the previous year have been rearranged/regrouped as and where necessary in terms of current year’s grouping.
13A.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
Dabur Foods Ltd. (Domestic Subsidiary)
Pasadensa Foods Ltd. (Domestic Subsidiary)
Asian Consumercare Pvt Ltd. (Foreign Subsidiary Company)
Dabur Nepal Pvt. Ltd. (Foreign Subsidiary Company)
Dabur Egypt Ltd. (Foreign Subsidiary Company)
Dabur Overseas Ltd. (Foreign Subsidiary Company)
Dabur International Ltd. (Foreign Subsidiary Company)
Weikfield International (UAE) (Foreign Subsidiary Company)
African Consumercare Limited (Foreign Subsidiary Company)
(b) Other related parties in transaction with the company :
(i) Joint Ventures/ Joint Venture Partners
Dabon International Pvt. Ltd
Mr. Rukma Rana, joint venture partner in Dabur Nepal Pvt. Ltd.
Green Valley Products Pvt. Ltd.
(ii) Key management personnel Relatives of Key
(whole time directors) Management Personnel
a) Pradip Burman R.C. Burman
Chetan Burman
b) Dr. Anand Burman A.C. Burman
c) Amit Burman Asha Burman
d) P. D. Narang –
e) Sunil Duggal –
(iii) Associate Entities over which Key Management Personnel are able to exercise significant influence:
1. Welltime Housing and Finance Ltd.
2. Miracle Commercial Enterprises Pvt. Ltd.
3. Wakarusa Laboratories Pvt. Ltd.
4. Jetways Travels Pvt. Ltd.
(iv) An Enterprise owned by any Director (KMP) of Dabur India Limited :
1. Welltime Housing and Finance Ltd.

Annual Report 2004-05 89

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005
(Rs. lac)
13B. Transactions with related parties

Transaction Subsidiary Fellow Associates Key Relatives of Total Out-

Subsidiaries Management Key standing
Personnel Management as on
Personnel 31.3.2005
Purchases of goods 5802.45 — — — — 5755.01 93.53

[6629.48] [–] [1882.15] [–] [–] [8511.63] [248.52]
Sale of goods 1112.32 426.12 — — — 1538.44 686.22

[357.40] [108.48] [101.37] [–] [–] [567.25] [78.04]
Receiving of services — — 159.75 — — 159.75 2.57

[–] [–] [7199.55] [–] [–] [7199.55] [864.04]
Repayment of loans
received — — — — — — —

[–] [–] [17729.28] [–] [–] [17729.28] —
Loans received — — — — — — —

[–]
[–] [16188.40] [–] [–] [16188.40] [–]
Rent Paid — — [6.00] 24.16 — 30.16 —

[–] [–] [6.00] [10.35] [–] [16.35] [–]
Interest received on
loans given — — — — — — —

[–] [–] [36.62] [–] [–] [36.62] —
Remuneration/Exg.
Pension — — — 668.56 169.01 837.57 —


[–] [–] [–] [498.98] [127.80] [626.78] [–]
Repayment of loans
given (instl. received) — — — — — — —

[–] [–] [185.07] [–] [–] [185.07] [113.34]
Interest paid on
loan received — — — — — — —

[–] [–] [198.22] [–] [–] [198.22] [–]
Guarantees &
collaterals given 4614.38 1883.13 — — — 6497.50 6497.50

[4251.38] [1864.38] [–] [–] [–] [6115.76] [6115.76]
Dividend received 159.36 — — — — — —

[186.78] [–] [–] [–] [–] [186.78] [–]
Donation given — — — — — — —

[–] [–] [455.67] [–] [–] [455.67] [–]
Royalty received 207.75 46.87 — — — 254.62 171.66

[187.32] [4.19] [–] [–] [–] [191.51] [207.61]
[Figures in brackets are of previous year]

14. Sale includes Rs. 753.52 (previous year Rs. Nil) on account of Processing Charges received.
15. Exchange loss works out to Rs 58.05 (previous Year Rs.13.57) net of gain which has been charged to Profit & Loss Account.
16. Information (to the extent applicable) pursuant to AS 19 issued by ICAI.
The future minimum lease payment under non-cancellable operating lease :
(i) Not later than 1 year 9.15
(ii) Later than 1 year not later than 5 year 17.72
(iii) Later than 5 year Nil

90 Dabur India Limited • Financials

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005
(Rs. lac)
17. Information pursuant to AS 29 issued by ICAI :
a. Pursuant to application of AS 29, the Company has provided 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. This led to reduction of profit and rise in liability by said amount each.
b. Additional provision referred to in “a” above relates to Rs. 62.64, Rs.26.15 and 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 carrying amount therefor
at the beginning of the year.
c. Resulting outflows against above liabilities pending before Sales Tax DC/Tribunal/CCT’s, if mature, are expected to be in
succeeding financial year.
d. Provisions have been made herein for medium risk oriented issues as a measure of abundant precaution.
e. Company presumes remote risk possibility of further cash outflow pertaining to contingent liabilities listed in para 5
above.
18. Earnings per Share has been computed as under :
2004-2005 2003-2004
Profit after Tax 14801.99 10120.38

Less : Provision for taxation for earlier year written off 5.30 25.72
Add : Provision for taxation of earlier year written back — 19.95
14796.69 10114.61
Weighted average number of shares outstanding
Basic 28,63,36,927 28,59,87,220
Diluted 28,78,19,156 28,69,84,379
Earning per Share (face value Re. 1 per share)
Basic 5.17 3.54
Diluted 5.14 3.52
19. Information Pursuant to AS-17 issued by ICAI
FMCG OTHERS Dabur India Ltd.
Current Previous Current Previous Current Previous
Year Year Year Year Year Year
REVENUE
External Sales 122541 111649 4331 3149 126872 114798
Total Revenue 122541 111649 4331 3149 126872 114798
RESULT
Segment result 16405 11891 527 143 16932 12034
Operating profit 16405 11891 527 143 16932 12034
Interest expense
(Net of Interest Income) 415 671 15 19 430 690
Income Tax (Current + Deferred) — — — — 1700 1224
Net profit 15990 11220 512 124 14802 10120
OTHER INFORMATION
Segment assets 67377 51711 1164 659 68541 52369
Unallocated corporate assets — — — — 2910 2180
Total assets 67377 51711 1164 659 71452 54549
Segment liabilities 35121 26098 187 74 35308 26172
Unallocated corporate liabilities — — — — 2918 2172
Total liabilities 35121 26098 187 74 38226 28343
Capital expenditure 5316 2008 — — 5316 2008
Depreciation 1657 1520 54 55 1710 1575
Non-cash expenses other than
depreciation — — — — 581 660
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. 126,872 (Rs.114,798), the export sales is of Rs. 4,848 (Rs. 3,684) and domestic sale is Rs. 122,024 (Rs. 111,114).

Annual Report 2004-05 91

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005
(Rs. lac)
20. Information pursuant to AS 24 on discontinued operations :

Particulars Hair Oil MSY Unit Daburgram
Baddi Baddi Unit

1 Discontinued since March, 2004 November, 2000 July, 2003

2 Segment the operation of the Unit relates to in financial statement FMCG FMCG FMCG

3 Carrying amount of total assets 33.37 28.35 44.27

(61.48) (31.13) (44.27)
4 Carrying amount of total liabilities 4.21 0.01 0.32


(74.24) (0.48) (0.32)
5 Profit from ordinary activities -5.3 -1.79 —


(1316.47) (-7.40) (-22.82)
6 Income Tax expenses — — —


(102.68) (–) (–)
7 Gain on disposal of assets -0.1 — —


(+0.02) (–) (–)
8 Cash flow from discontinued operations :

Operating activities -71.46 -0.47 -3.97

+(1350.07) +(2.88) (11.62)

Investing activities 24.14 — —


-(0.85) (–) (–)

Financial activities — — —


(–) (–) (–)

Note :
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 of the purview of ‘3’ above.

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. V. C. Burman Chairman
Chartered Accountants
P. D. Narang Director
S. Lahiri P. N. Vijay Director
Partner
A. K. Jain Addl. GM (Fin.) &
New Delhi Company Secretary
28th April, 2005

92 Dabur India Limited • Financials

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005

21. 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 ................................................................................................................................. 31.03.2005

II. Capital raised during the year (Amount in Rs. Thousand)

Public Issue .............................................................................................................................................. Nil
Right Issue ............................................................................................................................................... Nil
Bonus Issue ............................................................................................................................................. Nil
Private Placement .................................................................................................................................... 71
171

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

Total Liabilities ......................................................................................................................................... 7217083
Total Assets .............................................................................................................................................. 7217083
Sources of Funds :
Paid up capital ......................................................................................................................................... 286420
Reserve & Surplus .................................................................................................................................... 3094315
Secured Loans ......................................................................................................................................... 157038
Unsecured Loans ..................................................................................................................................... 329260
Deferred tax Liability ................................................................................................................................ 127751
Application of Funds :
Net Fixed Assets ....................................................................................................................................... 1916061
Investments ............................................................................................................................................. 2709425
Net Current Assets ................................................................................................................................... 702581
-702581
Misc Expenditure ..................................................................................................................................... 58104
Deferred Tax Assets .................................................................................................................................. 13775

IV. Performance of Company (Amount in Rs. Thousand)

Turnover ................................................................................................................................................... 12687151
Total Expenditure ..................................................................................................................................... 11152001
Profit/(Loss) Before Tax ........................................................................................................................... 1650182
Profit/(Loss) After Tax .............................................................................................................................. 1480199
Earning per Share in Rs. .......................................................................................................................... 5.17
Dividend Rate % ....................................................................................................................................... 250

V. Generic Names of three Principal Products/Services of Company (as per monetary terms)
Item Code No. (ITC Code) ........................................................................................................................ 30049001
Product Description ................................................................................................................................. Ayurvedic Medicines
Item Code No. (ITC Code) ........................................................................................................................ 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. V. C. Burman Chairman
Chartered Accountants
P. D. Narang Director
S. Lahiri P. N. Vijay Director
Partner
A. K. Jain Addl. GM (Fin.) &
New Delhi Company Secretary
28th April, 2005

Annual Report 2004-05 93

Auditor’s Report on consolidated financial statements
The Board of Directors,
Dabur India Limited,
We have audited the attached consolidated balance sheet
of Dabur India Limited group, as at 31st March, 2005 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 framework
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. 3,584.93 lacs as at 31st March, 2005, the total profit
of Rs. 556.61 lacs and cash flows (net) amounting to Rs.
257.27 lacs for the year ended 31st March, 2005. These
financial statements and other financial information have
94 Dabur India Limited • Consolidated Financials
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 subject to Note No. B (4),
Schedule - P, 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, 2005.
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
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.
For G. Basu & Co.
Chartered Accountants
S.Lahiri
Partner
Membership No. 51517
New Delhi
28th April, 2005
Balance Sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
Schedule (Rs. lac) (Rs. lac)
Sources of Funds :
Shareholders’ Funds :
(A) Share Capital A 2,864.20 2,862.49
(B) Reserves and Surplus B 33,528.98 25,746.45
Minority Interest B2 1,522.04 1,435.79
Loan Funds :
(A) Secured Loans C 9,705.16 8,370.69
(B) Unsecured Loans D 5,383.23 4,080.75
Deferred Tax Liability EB 1,277.51 796.95
Total 54,281.12 43,293.12
Application of Funds :
Fixed Assets :
(A) Gross Block F 48,148.63 41,212.67
(B) Less : Depreciation 18,698.43 16,206.32
(C) Net Block 29,450.20 25,006.35
Investments G 23,329.02 12,975.24
Deferred Tax Assets EB 137.77 57.01
Current Assets, Loans and Advances : H
(A) Inventories 20,312.92 15,284.45
(B) Sundry Debtors 7,589.28 7,115.37
(C) Cash and Bank balances 1,473.29 2,020.95
(D) Loans and Advances 11,377.22 9,563.36
40,752.71 33,984.13
Less : Current Liabilities and Provisions EA
(A) Liabilities 30,443.32 21,367.03
(B) Provisions 9,526.30 8,022.48
39,969.62 29,389.51
Net Current Assets 783.09 4,594.62
Miscellaneous Expenditure IA 581.04 659.90
(To the extent not written off or adjusted)
Notes to Accounts P

Total 54,281.12 43,293.12

As per our report of even date attached For Dabur India Ltd.
For G. Basu & Co. V. C. Burman Chairman
Chartered Accountants
P. D. Narang Director
S. Lahiri P. N. Vijay Director
Partner
A. K. Jain Addl. GM (Fin.) &
New Delhi Company Secretary
28th April, 2005

Annual Report 2004-05 95

Profit & Loss Account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
Schedule (Rs. lac) (Rs. lac)
Income : J
Sales Less Returns 153,695.33 132,956.05
Other Income 920.62 907.14
Total Income
154,615.95 133,863.19
Expenditure :
Cost of Materials K 65,942.25 58,146.81
Excise Duty 4,280.40 6,540.31
Manufacturing Expenses L 4,050.37 3,469.81
Payments to and Provisions for Employees M 10,848.34 9,155.46
Selling and Administrative Expenses N 47,691.25 39,726.00
Financial Expenses O 1,243.59 1,528.17
Miscellaneous Expenditure Written Off IB 149.53 391.88
Depreciation 2,800.01 2,489.27
Total Expenditure
137,005.74 121,447.71
Balance being Net Profit Before Tax 17,610.21 12,415.48
Provision for Taxation – Current 1,509.88 1,135.18
– Deferred 399.83 348.65
Net Profit After Tax
15,700.50 10,931.65
Minority Interest 119.89 279.30
Net Profit after Minority Interest
15,580.61 10,652.35
Balance brought forward 8,979.40 7,019.22
Transferred from Debenture Redemption Reserve — 250.00
Transferred from Investment Allowance Reserve 82.58 —
Transferred from Investment Deposit Reserve 182.50 —
Provision for taxation for earlier Year Written Back — 19.95
Provision for taxation for earlier Year -26.26 -31.67
Profit Available for Appropriation
24,798.83 17,909.85
Appropriation/Allocation
Interim Dividend 2,862.89 1,717.49
Proposed Dividend - Final 4,296.30 4,007.49
Corporate Tax on Interim Dividend 374.14 220.05
Corporate Tax on Proposed Dividend 602.56 513.46
Employees Sharing of Profit 3.25 —
Transferred to Capital Reserve — 155.50
Transferred to Legal Reserve 1.75 3.96
Transferred to General Reserve 2,565.08 2,312.50
Balance Carried Over to Balance Sheet
14,092.86 8,979.40

24,798.83 17,909.85
Earning Per Share (in Rs.)
Basic 5.43 3.72
Diluted 5.40 3.71
No. of Shares
Basic 286,336,927 285,987,220
Diluted 287,819,156 286,984,379
Notes to Accounts P

As per our report of even date attached For Dabur India Ltd.
For G. Basu & Co. V. C. Burman Chairman
Chartered Accountants
P. D. Narang Director
S. Lahiri P. N. Vijay Director
Partner
A. K. Jain Addl. GM (Fin.) &
New Delhi Company Secretary
28th April, 2005

96 Dabur India Limited • Consolidated Financials

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

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
A. Cash Flow from Operating Activities
Net Profit Before Tax and Extra ordinary Items 17,610.21 12,415.48
Add :
Depreciation 2,800.01 2,489.27
Loss on Sale of Fixed Assets 108.87 —
Miscellenous Exp. Written off 149.53 391.88
Miscellenous Exp. Written off (Included in Director Remun.) 195.91 83.55
Interest 1,243.59 1,528.17
4,497.92 4,492.87
22,108.12 16,908.35
Less :
Dividend Received 0.50 83.62
Profit on Sale of Investment 407.38 50.89
Profit on Sale of Assets — 104.12
407.88 238.63
Operating Profit Before Working Capital Changes 21,700.24 16,669.72
Working Capital Changes :
Increase/(Decrease) in Inventories 5,028.47 (2,020.50)
Increase/(Decrease) in Debtors 304.20 (4,039.20)
Decrease/(Increase) in Trade Payables (8,983.98) (4,503.66)
Increase/(Decrease) in Working Capital (3,651.31) (10,563.36)
Cash Generated from Operating Activities 25,351.55 27,233.09
Interest Paid 1,222.18 1,528.17
Tax Paid 1,668.57 881.04
Corporate Tax on Dividend 887.60 547.95
3,778.35 2,957.16
Cash Used(-)/(+)Generated 21,573.20 24,275.92
for Operating Activities (A)
B. Cash Flow from Investing Activities
Purchase of Fixed Assets (7,852.75) (6,443.66)
Sale of Fixed Assets 500.02 6,547.78
Purchases of investment including investment in subsidiaries (153,206.88) (80,339.17)
Sale of Investments 143,260.48 69,938.84
Dividend Received 0.50 83.62
Cash Used(-)/(+)Generated (17,298.63) (10,212.59)
for Investing Activities (B)
C. Cash Flow from Financing Activities
Proceeds from share capital and premium 1.71 4.99
Repayment(-)/Proceeds (+) of long term secured liabilities (457.43) 660.98
Repayment(-)/Proceeds(+) from short term loans 1,878.15 (344.19)
Repayment (-)/Proceeds(+) from deposits (266.86) (2,135.03)
Repayment(-)/Proceeds(+) from other unsecured loans 1,589.68 (4,632.15)
Payment of other advances (750.08) 2,285.65
Payment of dividend (6,817.40) (4,666.94)
Cash Used(-)/+(Generated) in (4,822.23) (8,826.69)
Financing Activities (C)
Net Increase(+)/Decrease (-) in Cash and
Cash equivalents (A+B+C) (547.66) 5,236.64
Cash and cash equivalents Opening balance 2,020.95 2,566.30
Cash and cash equivalents Closing balance 1,473.29 2,020.95

Annual Report 2004-05 97

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule A - Share Capital
Authorised :

500000000 Equity Shares of Re.1 each 5,000.00 5,000.00
(Previous year - 500000000 equity shares of Re. 1 )
5,000.00 5,000.00
Issued and Subscribed :
286419713 Equity Shares of Re.1 each fully called up 2,864.20 2,862.49
(Previous year - 286249052 equity shares of Re. 1)
2,864.20 2,862.49

Schedule B - Reserves and Surplus

Capital reserve 1,799.51 1,794.05
Share premium account 5,758.08 5,665.90
Employees housing reserve/fund 420.71 370.23
Capital redemption reserve 56.93 56.93
General reserve 10,450.49 7,853.04
(Net of debit against exchange fluctuation

reserve Rs. 28.54; Previous year Rs. 19.52)

Legal reserve 34.74 33.00
Investment allowance reserve — 82.58
Investment deposit reserve — 182.50
Profit and loss account 14,092.86 8,979.41
Employee stock option scheme outstanding 915.66 728.81
Total 33,528.98 25,746.45

Schedule B2 - Minority Interest

Share capital 264.17 249.29
Share premium 75.00 75.00
Capital reserve 126.91 126.91
General reserve 91.55 82.41
Profit and loss 964.41 902.18
Total 1,522.04 1,435.79

Schedule C - Secured Loans

I. Term Loans :
GE Capital Services 1,090.91 1,200.00
Hongkong and Shanghai Bank Ltd., Egypt — 7.97
Deferred payment 82.16 178.29
Picup under trade tax loan scheme 1,009.09 1,339.58
II. Short Term Loans - from Banks : 7,523.00 5,644.85
Total 9,705.16 8,370.69

98 Dabur India Limited • Consolidated Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule D - Unsecured Loans
Deposits :
Directors 48.13 55.55
Public — 33.00
Companies 800.00 1,050.00
Security deposit from dealers and others 16.06 12.83
Other Loans :
West Bengal State Industrial Development Corporation Ltd. 75.00 —
Term Loan - from banks 883.44 785.65
Book Overdraft of current account with banks 754.67 527.58
Commercial papers 2,000.00 —
External commercial borrowings -ABN Amro Bank Nv 805.93 1,616.14
Total 5,383.23 4,080.75
Schedule EA - Current Liabilities & Provisions
A. Current Liabilities :
Acceptance 12,206.55 6,013.55
Amount due to SSI units (Good) 874.67 754.54
Creditors for goods 4,220.69 3,648.72
Creditors for expenses and other liabilities 12,578.32 10,651.56
Dividend payable 38.00 —
Advances from customers 325.78 156.07
Interest accrued but not due on loans 39.08 17.67
Deposits - others 47.24 23.81
Investor education and protection fund to be credited by :
– Unpaid dividend 96.42 81.44
– Unpaid matured public deposits 10.37 13.47
– Interest accured on public deposits 6.20 6.20
30,443.32 21,367.02
B. Provisions :
For dividend (proposed) - final 4,296.30 4,007.49
For corporate tax on proposed dividend - final 602.56 513.46
For leave salary 328.94 295.09
For housing, bonus & gratuity & other welfares 536.05 397.78
For taxation 3,762.45 2,808.66
9,526.30 8,022.48
Total 39,969.62 29,389.51
Schedule EB - Deferred Tax Liabilities (Net)
Deferred Tax Liaibility :
Depreciation 1,277.51 796.95
Less : Deferred Tax Assets :
VRS payment 6.01 3.20
Other disallowances under Section 43B of 131.74 53.81
Income Tax Act, 1961 137.75 57.01
Total 1,139.76 739.94

Annual Report 2004-05 99

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

Schedule F - Fixed Assets

Gross Block Depreciation Net Block

Name of Asset Opening Additions Transfer/ Closing Opening For the Transfer/ Closing As on As on
Balance Adjustment Balance Balance Year Adjustment Balance 31.03.05 31.03.04
Goodwill 1,402.75 — — 1,402.75 154.30 280.55 — 434.85 967.90 1,248.45
Freehold Land 649.27 — 3.62 645.65 — — — — 645.65 649.27
Leasehold Land 345.54 402.79 — 748.33 28.18 7.62 — 35.80 712.53 317.36
Building, Roads & Culvert 11,305.35 1,643.44 146.86 12,801.93 3,212.84 422.57 — 3,635.41 9,166.52 8,092.51
Plant & Machinery 19,249.39 4,340.29 583.68 23,006.00 8,975.27 1,387.43 196.25 10,166.45 12,839.55 10,274.12
Vehicles 958.93 324.23 137.48 1,145.68 403.40 159.86 85.14 478.12 667.56 555.53
Furniture & Office equip. 3,558.09 300.96 30.32 3,828.73 1,655.65 265.97 16.34 1,905.28 1,923.45 1,902.44
Computers 2,345.48 203.91 14.83 2,534.56 1,584.96 228.03 10.17 1,802.82 731.74 760.52
Patents 330.00 765.97 — 1,095.97 191.72 47.98 — 239.70 856.27 138.28
Live Stock 0.22 — — 0.22 — — — — 0.22 0.22
Capital Work-in-Progress 1,067.65 3,740.59 3,869.43 938.81 — — — — 938.81 1,067.65
Total 41,212.67 11,722.18 4,786.22 48,148.63 16,206.32 2,800.01 307.90 18,698.43 29,450.20 25,006.35
Notes :
1. Capital work-in-progress includes advance against capital goods Rs. 588.47 (Previous Year Rs. 1,177.94)
2. Transfer/Adjustment pertaining to Gross Block and Depreciation includes Rs. NIL (Previous year - Rs. 6,761.50) and Rs. NIL (Previous year-
Rs. 1,786.50) towards fixed assets transferred from Dabur India Ltd. to Dabur Pharma Ltd. on 01/04/2003 under the scheme of demerger
of pharmaceutical division of the holding company.

As at As at
Number 31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule G - Investments
A. Current Investments
Quoted - Other than Trade
1. ABN Mutual Fund 17,259,242.05 1,775.00 —
(Purchased during the year) Units 69843390.51
(Sold during the year) Units 52584148.45
2. BOB Mutual Fund — — —
(Purchased during the year) Units 42938677.92
(Sold during the year) Units 42938677.92
3. HSBC Mutual Fund
(Purchased during the year) Units 52767457.41 — — —
(Sold during the year) Units 52767457.41
4. IL & FS Mutual Fund — — —
(Purchased during the year) Units 1014955.921
(Sold during the year) Units 1014955.921
5. ING Mutual Fund
(Purchased during the year) Units 39930565.84 — — —
(Sold during the year) Units 39930565.84
6. Kotak Mahindra Mutual Fund — — —
(Purchased during the year) Units 73253963.87
(Sold during the year) Units 73253963.87
7. Principal Mutual Fund 5,069,567.91 522.00 —
(Purchased during the year) Units 101158868.92
(Sold during the year) Units 106228436.83

1 0 0 Dabur India Limited • Consolidated Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
Number 31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule G - Investments (Contd.)
8. Prudential Mutual Fund — — —
(Purchased during the year) Units 107930727.5
(Sold during the year) Units 107930727.5
9. SBI Mutual Fund - — — —
(Purchased during the year) Units 38469836.38
(Sold during the year) Units 38469836.38
10. TATA Mutual Fund — — —
(Purchased during the year) Units 70796465.02
(Sold during the year) Units 70796465.02
11. Grindlays Cash Fund - I P- Growth — — 63.78
(Purchased during the year) Units 122735723.5 (547,994.13)
(Sold during the year) Units 123283717.63
12. JM Floater Fund - S T P Growth — — 2,472.50
(Purchased during the year) Units 102924244.7 (24,233,189.80)
(Sold during the year) Units 127157434.5
13. Templeton Floating Rate Income Fund - ST — — 1,589.39
(Purchased during the year Units 34760989.72 (14,147,123.18)
(Sold during the year) Units 48908112.9
14. DSP ML Floating Rate Fund - Growth — — 434.00
(Purchased during the year) Units 40081583.09 (4,177,218.30)
(Sold during the year) Units 44258801.38
15. BIRLA Floating Rate Fund - S T P Growth — — 163.70
(Purchased during the year) Units 67891849.74 (1,579,389.60)
(Sold during the year) Units 69471239.34
16. CHOLA Liquid Fund - Institutional Plus - Growth 8,025,741.82 1,080.00 276.00
(Purchased during the year) Units 14023014.13 (2,152,599.24)
(Sold during the year) Units 8149871.544
17. RELIANCE Liquid Fund — — 2,843.00
(Purchased during the year) Units 49299232.11 (25,469,444.43)
(Sold during the year) Units 74768676.54
18. HDFC FRIF STF - Growth — — 1,166.00
(Purchased during the year) Units 5256621.16 (10,997,312.87)
(Sold during the year) Units 16253934.03
19. LIC Mutual Fund — — 2,500.00
(Purchased during the year) Units 10000000 (25,000,000.00)
(Sold during the year) Units 35000000
20. Alliance Mutual Fund — — —
(Purchased during the year) Units 22496407.96
(Sold during the year) Units 22496407.96
21. Deutsche Bank Mutual Fund — — —
(Purchased during the year) Units 15101844.48
(Sold during the year) Units 15101844.48

Annual Report 2004-05 101

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
Number 31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule G - Investments (Contd.)
22. Sahara Mutual Fund 8,395,600.71 1,000.00 —
(Purchased during the year) Units 36089067.35
(Sold during the year) Units 27693466.64
23. Sundaram Finance Mutual Fund — — —
(Purchased during the year) Units 10000000
(Sold during the year) Units 10000000
24. UTI Mutual Fund - — — —
(Purchase during the year) Units 73753.988
(Sold during the year) Units 73753.988
B. LONG-TERM INVESTMENT
I ) Quoted - Equity Shares - Other than Trade
1. Dabur Pharma Ltd. 479,400.00 4.79 4.99
(20000 Equity shares sold during the year) (499,400.00)
II) Unquoted - Equity Shares Trade Investments
1. Sanat Products Ltd 50,000.00 105.00 105.00
2. Dabon International Pvt. Ltd. 13,500,000.00 1,350.00 1,350.00
3. Green Valley Products Pvt. Ltd 65,000.00 6.50 6.50
III) Unquoted - Equity Shares Other than Trade
1. Commerce Centre Co-operative
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 Ltd. 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 Bazaar 500.00 0.05 0.05
6. 5% Special Bond — 12.06 —
7. VIII Series National Saving Certificate — 0.20 0.20
C. Advance against acquisition for fully paid 3857300 — 17,473.29 —
Equity Shares of Rs.10 Each of Balsara Hygience Products
Limited, 2290711 Equity Shares of Balsara Home
Products Limited, 431800 Equity Shares of Besta
Cosmetics Ltd. and fully paid 140000 Equity Shares
of NR 10 each of Dabur Nepal Pvt. Ltd.
Total 23,329.02 12,975.24
Notes :
Aggregate Book Value of Unquoted Investments 18,947.23 1,461.88
Aggregate Book Value of Quoted Investments 4,381.79 11,513.36
Aggregate Market Value of Quoted Investments 4,617.80 11,553.02

1 0 2 Dabur India Limited • Consolidated Financials

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005
As At As At
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule H - Current Assets, Loans and Advances
A. Current Assets :
Inventories :
– Raw Materials 8,068.03 6,339.12
– Packing Materials, Stores and Spares 3,646.80 2,516.26
– Stock in Process 746.23 1,206.75
– Finished Goods 7,851.86 5,222.32
20,312.92 15,284.45
Sundry Debtors (Unsecured) :
– Debts outstanding for a period exceeding six months :
Considered Good 253.31 248.14
Considered Doubtful 25.98 11.98
279.29 260.12
Less : Provision for Doubtful Debts 25.98 11.98
253.31 248.14
– Other Debts (Considered Good) 7,335.97 6,867.23
7,589.28 7,115.37
Cash and Bank Balances :
– Cash in hand 27.91 35.03
– Remittance-in-transit and cheques-in-hand 123.25 25.39

– Balance with Scheduled Banks

in Current Accounts 1,105.33 1,658.85
in Fixed Deposit Accounts 84.40 143.44

– Balance With Non-Scheduled Banks

in Current Accounts 131.45 119.77

in Fixed Deposit Accounts — 37.52

– Postal Savings Bank Accounts 0.95 0.95

(Deposited with Excise Authority)
1,473.29 2,020.95
29,375.49 24,420.77
B. Loans and Advances (Unsecured, Considered Good)
Loans and Advances to others — 114.63
Security Deposit with various authorities (including deposit 2,742.52 3,555.57
with Govt. authorities Rs. 501.73 Previous year Rs. 1,107.49)
Advance Payment of Tax 3,690.49 2,626.71
Advances to Suppliers 2,471.18 1,196.05
Advances to Employees 344.72 411.84
Balance with Excise Authorities 992.80 655.40
Other Advances recoverable in cash or in kind or for value to 1,135.51 1,003.16
be received
11,377.22 9,563.36
Total (A + B) 40,752.71 33,984.13

Annual Report 2004-05 103

Schedules annexed to and forming part of the balance sheet as at 31st March, 2005

As at As at
31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule IA - Miscellaneous Expenditure
(To the extent not written off or adjusted)

Technical knowhow fees paid 84.57 108.11

Less : Amortised during the year 18.95 23.54
65.62 84.57

Deferred Employee Compensation under ESOP
Opening Balance 575.33 136.91
Addition during the year 279.03 715.00
Less : Cancelled during the year — 1.40

854.36 850.51
Less : Amortised during the year 338.94 275.18
515.42 575.33
Deferred Advertisement and Publicity 114.66
Less : Amortised during the year 114.66
Preliminary Expenses 22.64
Add : Addition during the year 39.41
Less : Amortised during the year 62.05
Total 581.04 659.90

Schedules annexed to and forming part of the profit & loss account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)
Schedule J - Sales and Other Income
A. Sales :
Domestic sales less returns 134,423.64 119,460.50
Export sales 19,271.69 13,495.50
Total 153,695.33 132,956.00
B. Other Income :
Export subsidy 44.65 66.21
Rent realised 21.10 46.00
Sale of scrap 276.60 194.12
Other dividend - (Other than trade investment) 0.50 83.62
Royalty — 34.96
Miscellaneous receipts 170.39 327.22
Profit on sale of investments 407.38 50.89
Profit on sale of fixed assets — 104.12
Total 920.62 907.14

1 0 4 Dabur India Limited • Consolidated Financials

Schedules annexed to and forming part of the profit & loss account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule K - Cost of Materials

Raw Materials Consumed :

I) Opening Stock 5,912.78 5,814.66
Ii) Add : Purchases 32,233.70 21,252.38
38,146.48 27,067.04
III) Less : Closing Stock 7,154.31 5,912.78
30,992.17 21,154.26
Packing Materials Consumed :
I) Opening Stock 2,105.61 2,317.64
II) Add : Purchases 18,235.57 12,371.53
20,341.17 14,689.17
III) Less : Closing Stock 3,009.44 2,105.61
17,331.74 12,583.56
Purchase of Finished Products 19,784.12 21,327.60
Adjustment of stocks in process & finished goods
Opening Stock :
Stock in process 1,212.78 1,348.79
Finished products 5,219.54 8,164.92
6,432.32 9,513.71
Closing Stock :
Stock-in-process 746.23 1,212.78
Finished products 7,851.87 5,219.54
8,598.10 6,432.32
Increase(-)/Decrease in stock in process & finished goods (2,165.78) 3,081.39
Total 65,942.25 58,146.81

Schedule L - Mfg. & Operating Expenses

Power And Fuel 2,740.15 2,176.55
Stores and Spares Consumed 545.60 552.20
Repairs and Maintenance
--- Building 118.57 180.91
--- Plant and Machinery 120.57 48.54
--- Others 315.69 346.05
Processing Charges 209.79 165.56
Total 4,050.37 3,469.81

Schedule M - Payments to and Provisions

for Employees
Salaries, wages and bonus 6,978.67 5,466.14
Contributions to provident and other funds 818.88 910.23
Workmen and staff welfare 2,226.64 2,189.42
Directors’ remuneration 824.15 589.67
Total 10,848.34 9,155.46

Annual Report 2004-05 105

Schedules annexed to and forming part of the profit & loss account for the year ended 31st March, 2005

For the year ended For the year ended

31st March, 2005 31st March, 2004
(Rs. lac) (Rs. lac)

Schedule N - Selling & Admn. Expenses
Rent 738.89 574.65
Rates and Taxes 119.00 96.53
Insurance 304.40 209.51
Sales Tax 11,996.24 9,395.82
Freight and forwarding charges 4,339.22 3,396.42
Commission, Discount and Rebate 1,702.74 1,880.10
Advertising and Publicity 20,375.91 17,151.81
Travel and conveyance 1,891.14 1,698.16
Legal and professional 876.31 1,164.86
Telephone, fax expenses 404.17 406.42
Security expenses 141.51 115.27
General expenses 3,645.47 2,915.21
Directors' Fees 6.80 1.88
Auditors' Remuneration : 51.55 40.88
Donation 257.90 108.43
Contribution for scientific research expenses 597.97 455.67
Bad Debts 44.08 114.38
Loss on sale of fixed assets 108.87 —
(Net of profit Rs. 10.66; previous period Nil)
Provision for Contigent Liability 89.08 —
Total 47,691.25 39,726.00

Schedule O - Financial Expenses

Interest paid on :
Fixed period loan 402.33 802.70
Others 419.36 283.32
Bank charges 421.90 442.15
Total 1,243.59 1,528.17

Schedule IB - Misc. Expenditure Written off

Technical knowhow fees paid 18.95 23.54

Deferred employee compensation under ESOP 326.49 275.18
Less : Transferred to Director Remuneration 195.01 83.55
130.58 191.63
Deferred Advertisement and Publicity — 114.66
Preliminary Expenses — 62.05
Total 149.53 391.88

1 0 6 Dabur India Limited • Consolidated Financials

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005

Schedule P - Accounting Policies and Notes to Accounts

A. ACCOUNTING POLICIES
Significant accounting policies are summarized below :
1. Principles of consolidation :
The Consolidated Financial Statement relates to Dabur India Limited (the parent company) and Dabur Foods Ltd. (wholly
owned subsidiary company incorporated in India), Dabur Overseas Ltd., Dabur International Ltd., (both wholly owned body
corporates incorporated in British Virgin Island and Isle of MAN respectively), Dabur Nepal Pvt. Ltd. (a subsidiary body
corporate incorporated in Nepal, the extent of holding of parent company being 79.96%), 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.), 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 company
incorporated in Nigeria, 90% stake wherein is held by Dabur International Ltd).
– The consolidated financial statements have been prepared on the basis of AS-21, issued by ICAI read with the following
basic assumptions :
I. The financial statements of the parent company and its subsidiary companies have been combined on a line-by-line
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 crediting the difference of the two in terms
of aggregate in capital reserve except for DNPL where the same is adjusted against share premium account and for
Dabur International Limited and WeikField International (U.A.E) Ltd. the same have been debited to goodwill .
In respect of foreign subsidiaries, rise in the value of stake of parent company in terms of reported 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.
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 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 :
• Fixed assets are stated at recoverable value for assets impaired as per AS 28 issued by ICAI and at cost for other assets.
• Cost includes inward freight, duties, and taxes and expenses incidental to acquisition and installation.
• 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 at rates specified in schedule XIV of the companies Act, except for Baddi,
Katni, 5/1 Sahibabad, Jammu, Rudrapur unit and Corporate Office of parent Company, Dabur Egypt Limited, Dabur
International Ltd., Dabur Nepal Pvt. Ltd., Weikfield Ltd., Pasadensa Foods Ltd. and African Consumercare Ltd. where the
depreciation have been provided on straight line method at the rates specified in aforesaid Schedule.
b. 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 relevant assets.
Impairment loss, when crystallizes, is charged against revenue of the year.
c. Investments :
Long-term investments are held at cost. Provision will be made as and when deemed necessary under AS-13 issued by ICAI.
Current investments are held at lower of cost and NAV/Market value.

Annual Report 2004-05 107

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005

d. 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.
e. Inventories :
Stocks are valued at lower of cost or net realizable value. Basis of determination of cost remain as follows :
• Raw materials, Packing materials, stores and spares On FIFO Basis
• Work-in-process At cost of input plus overhead upto the stage of completion.
• Finished goods At cost of input plus appropriate Overhead
f. Research and Development Expenses :
Contributions towards scientific research expenses are charged to the Profit and 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 :
• 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.
h. Recognition of Income and Expenses :
• 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.
• Exports Sales are accounted for on the basis of date of bill of lading.
• All items of incomes and expenses have been accounted for on accrual basis.
i. Income Tax and 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. In
case of Dabur Foods Limited and Pasadensa Foods Limited, considering carry forward loss in the books of both companies,
no deferred tax asset (net) has been recognized due to restriction to the effect imposed under para 17, AS-22 issued by ICAI.
j. 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 on accounts. However, present obligation as a result of past event with possibility of
outflow of resources, when reliably estimable, is recognized in accounts.
k. Foreign Currency Translation :
In respect of foreign branches/offices, the company has adopted integral foreign operation approach has been adopted 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 and 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 and 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 charged to the Profit and Loss Account. As regards payables in respect of fixed
assets, refer to item (b) above. Exchange Loss/Gain arising out of transactions of revenue nature are separately disclosed in
notes to accounts.
Capital as well as revenue implication of exchange fluctuation, charged to revenue, are disclosed in notes to accounts.
l. 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.
m. Miscellaneous Expenditure :
• Technical know-how fees paid to Technical Collaborators are being amortized equally over a period of six years.
• Deferred Employees Compensation under ESOP are 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.

1 0 8 Dabur India Limited • Consolidated Financials

Schedules annexed to and forming part of the accounts for the period ended 31st March, 2005
(Rs. lac)
B. NOTES TO ACCOUNTS
1. Building constructed on leasehold land included in the value of building shown in Fixed Assets Schedule :
As at As at
31st March, 2005 31st March, 2004
Cost/Revalued 5,378.72 5,375.68
Written Down 3,607.73 3,759.93
2 None of the assets qualify for the impairment loss for the year (Previous year Rs. NIL) which was adjusted against the profit
and 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 vale 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 constitute 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 of subsidiary concerned plus risk factor at a rate of two per cent per annum.
4. The Company’s investment in the joint venture, M/s. Dabon International Pvt. Ltd., has not been accounted for in accordance
with AS-27 as the same is being held for disposal in the foreseeable future. Consequently, no provision is deemed necessary
for diminution in the value of investment under AS-13.
5 . Contingent Liabilities :
i. Claims not acknowledged as debts :
a) In respect of civil suits filed against the Company Rs. 276.82 (Previous year Rs.267.05).
b) In respect of claims by employees Rs. 0.50 (Previous year Rs.0.50).
c) In respect of letters of credit Rs. 3,271.92 (Previous year Rs.3,881.94).
ii. In respect of Bank Guarantees executed Rs .1,988.20 (Previous year Rs.1,916.20).
iii. In respect of Sales Tax under appeal Rs. 1,042.21 (Previous year Rs.399.40).
iv. In respect of excise duty disputes pending with various judicial authorities Rs.1,151.14 (Previous year Rs.2,895.83).
v. In respect of Corporate Guarantees given by the Company Rs. 14,148.94 (Previous year Rs.13,891.74).
vi. In respect of Income tax under appeal Rs. 401.25 (Previous year Rs.462.29).
vii. Estimated Amount of contract remaining to be executed on capital account Rs.1,064.15 net of advance (Previous year
Rs.1,660.21).
vii. In respect of Bill Discounting of Company Rs. 535.42 (Previous year Rs. 4,142.80).
viii. In respect of Dividend Tax Rs. NIL (Previous year Rs. 49.16).
6. The 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.
7A. 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 exist : 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.
(i) Joint Ventures / Joint Ventures partners
Dabon International Pvt. Ltd.
Mr. Rukma Rana, joint venture partner in Dabur Nepal Pvt. Ltd.
Green Valley Products Pvt. Ltd.
(ii) Key Management Personnel Relatives of Key
(Whole-time Directors) Management Personnel
1) Pradip Burman R. C. Burman
Chetan Burman
2) Dr. Anand Burman A. C. Burman
3) Amit Burman Asha Burman
4) P. D. Narang —
5) Sunil Duggal —
6) Sanjay Sharma —
7) T . K. Gupta —
8) Arvind Kumar —
9) S. Ramakrishnan —

Annual Report 2004-05 109

Schedules annexed to and forming part of the accounts for the period ended 31st March, 2005
(Rs. lac)
(iii) Associate Entities over which Key Management Personnel are able to exercise significant influence :
1. Jetways Travels Pvt. Ltd.
2. Miracle Commercial Enterprises Pvt. Ltd.
3. Wakarusa Laboratories Pvt. Ltd.
4. Luna Trading Co. P. Ltd.
5. ACI, Bangladesh
6. Gyan Enterprises P. Ltd.
7. Puran Associates P. Ltd.
8. Ratna Commercial Enterprises P. Ltd.
7B. Transactions with ratelated parties (Consolidated) for the period from 01.04.2004 to 31.03.2005

Associates Key Relatives Total Outstanding

Management of Key
As on


Personnel Management
31.03.2005



Personnel

Purchases of Goods — — — — —

[1882.15] [–] [–] [1882.15] [54.10]
Sale of Goods 1565.05 — — 1565.05 18.93

[101.37] [–] [–] [101.37] [12.37]
Receiving of Services 190.66 — — 190.66 2.85

[7475.95] [–] [–] [7475.95] [896.89]
Repayment of Loans received 200.00 — — 200.00 —

[17729.28] [–] [–] [17729.28] [–]
Loans received 100.00 — — 100.00 200.00

[16188.40] [–] [–] [16188.40] [600.00]
Rent Paid 20.77 24.00 — 44.77 —

[6.00] [10.35] [–] [16.35] [–]
Interest recd. on Loans given — — — — —

[36.62] [–] [–] [36.62] [–]
Remuneration/Exg./Pension 4.28 826.49 169.01 999.78 —

[–] [517.63] [127.80] [645.43] [–]
Repayment of Loans given (instl. recd.) — — — — —

[185.07] [–] [–] [185.07] [113.34]
Interest Paid on Loan received 4.09 — — — —

[258.34] [–] [–] [258.34] [–]
Donation given — — — — —

[455.67] [–] [–] [455.67] [–]
Royalty received — — — — —

[34.96] [–] [–] [34.96] [34.96]
Note : Figures in brackets are of previous year.
8. Information pursuant to AS-29 issued by ICAI :
a. Pursuant to application of AS -29, Rs. 89.08 has been provided 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. This led to reduction of profit and rise in liability by said amount each.
b. Additional provision referred to in “a” above relates to Rs. 62.64, Rs. 26.15 and 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 carrying amount
therefor at the beginning of the year.
c. Resulting outflows against above liabilities pending before Sales Tax DC/Tribunal/CCT’s if any matured are expected to
be in succeeding financial year.
d. Provisions have been made herein for medium risk oriented issues as a measure of abundant precaution.
e. Remote risk possibility of further cash outflow pertaining to contingent liabilities listed in para 4 above is presumed.

1 1 0 Dabur India Limited • Consolidated Financials

 9. Information pursuant to AS-17 issued by ICAI
(Rs. lac)
FMCG Foods Eliminations Others Total Consolidated
Schedules

Current Previous Current Previous Current Previous Current Previous Current Previous
Year Year Year Year Year Year Year Year Year Year
REVENUE
External sales 133264 119244 14215 8498 — — 6216 5214 153695 132956
Inter segment sales — — — — — — — — — —
Total Revenue 133264 119244 14215 8498 — — 6216 5214 153695 132956
RESULT
Segment result 17390 12873 773 502 — — 691 569 18854 13944
Unallocated corporate expenses — — — — — — — — — —
Operating profit 17390 12873 773 502 — — 691 569 18854 13944
Interest expense 720 1027 446 373 — — 79 129 1244 1528
(Net of interest income)
Income Tax (Current + Deferred) — — — — — — — — 1910 1484
Net profit 16670 11846 327 129 — — 613 440 15700 10932
OTHER INFORMATION
Segment assets 77845 58816 9231 9094 (7152) (4538) 9918 5967 89841 69338
Unallocated corporate assets — — — — — — — — 3690 2627
Total assets 77845 58816 9231 9094 (7152) (4538) 9918 5967 93532 71965
Segment liabilities 41767 29911 8390 7435 (2762) (533) 5041 2960 52436 39772
Unallocated corporate liabilities — — — — — — — — 3762 2809
Total liabilities 41767 29911 8390 7435 (2762) (533) 5041 2960 56198 42581
Capital expenditure 7876 3813 — — 1803 — — — 7876 5616
Depreciation 2149 1901 206 268 — — 445 320 2800 2489
Non-cash expenses
annexed to and forming part of the accounts for the period ended 31st March, 2005

other than depreciation — — — — — — — — 581 660

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.153695
(Rs.132956), the export sales is of Rs. 19272 (Rs.13496) and domestic sale is Rs. 134423 (Rs. 119460).

Annual Report 2004-05

111
(Rs. lac)
Schedules annexed to and forming part of the accounts for the period ended 31st March, 2005

(Rs. lac)
10. Earnings per share has been computed as under :
2004-05 2003-04
Profit after Tax and after Minority Interest 15580.61 10652.35
Less : Provision for taxation of earlier years written off 26.26 31.67
Add : Provision for taxation of earlier years written back — 19.95
15554.35 10640.63
Weighted average number of shares outstanding
Basic 28,63,36,927 28,59,87,220
Diluted 28,78,19,156 28,69,84,379
Earnings per share (face value Re.1 per share)
Basic 5.43 3.72
Diluted 5.40 3.71
11. Information pursuant to AS-24 on discontinued operations (pertaining to parent company only)

Particulars Hair Oil MSY Unit Daburgram


Baddi Baddi Unit
1. Discontinued since March, 2004 November, 2000 July, 2003
2. Segment the operation of the FMCG FMCG FMCG

Unit relates to in financial statement


3. Carrying amount of total assets 33.37 28.35 44.27


(61.48) (31.13) (44.27)
4. Carrying amount of total liabilities 4.21 0.01 0.32


(74.24) (0.48) (0.32)
5. Profit from ordinary activities -5.3 -1.79 —


(1316.47) (-7.40) (-22.82)
6. Income Tax expenses — — —


(102.68) (–) (–)
7. Gain on disposal of assets -0.1 — —


+(0.02) (–) (–)
8. Cash flow from discontinued operations :



Operating activities -71.46 -0.47 -3.97


+(1350.07) +(2.88) (11.62)

Investing Activities 24.14 — —


-(0.85) (–) (–)

Financial Activities — — —


(–) (–) (–)
Notes :
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 of the purview of ‘3’ above
12. Grouping and heads of accounts of the subsidiaries have been rearranged in terms of presentation of those of parent company as and
when necessary .
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. V. C. Burman Chairman
Chartered Accountants
P. D. Narang Director
S. Lahiri P. N. Vijay Director
Partner
A. K. Jain Addl. GM (Fin.) &
New Delhi Company Secretary
28th April, 2005

1 1 2 Dabur India Limited • Consolidated Financials

Dabur_AR_2K4-5_Cov2&3.ai 5/23/05 10:07:00 AM
 Dabur_AR_2K4-5_Cov.ai 5/23/05 9:46:07 AM

4mm
Bleed

CM

MY

CY

CMY