dabur foods limited audited balance sheet and

Dabur Foods Limited

Audited Balance Sheet and Profit & Loss Accounts for the year ended 31st March 2005

Contents

Page

Director’s Report 1

Auditor’s Report 4

Balance Sheet 7

Profit and Loss Account 8

Schedules 9

Accounting Policies and Notes to Accounts 15

Statment of Cash Flow 21

Dabur Foods Limited • Annual Report 2004-053

DIRECTOR’S REPORT

To,

The Members, Dabur Foods Ltd.

Your Directors have pleasure in presenting the 8th Annual Report on the business and operations of the Company together withthe audited statement of accounts for the year ended 31st March, 2005.

BUSINESS PERFORMANCE AND FINANCIAL RESULTS:Your Company registered another year of fantastic performance in 2004-05 by growing sales by 51% and tripling profit. Thebusiness crossed the landmark of Rs.100 crs sales mark. The business recorded a turnover of Rs.130.14 crores and profit aftertax of Rs.5.25 crores. The key highlights of performance are:

• Real Juice strengthened market leadership position and also crossed the Rs 100 crs balance sheet sales mark.

• Strong growth from new product launches and exports.

• The line extensions of Hommade also continued to drive the growth.

The primary growth drivers of your business were its two fruit juice brands ––“Real” and”“Real Activ”. Real grew by 40 per centand Real Activ recorded an even more impressive growth of 43% during 2004-05. During the year your Company repositionedits offerings to put in place a well-segmented product strategy. Your Company now has three distinct brands across the freshfruit juice category. Activ’s new identity, which has now become distinct from the Real brand, has been brought out in its newcontemporary and trendy packaging. The Activ range now has five flavours including the two new additions – Mixed FruitCucumber Spinach Juice and Mixed Fruit Beetroot Carrot Juice.

Expanding it’s portfolio, your company launched a new innovative brand to tap an emerging consumer need. While Realcontinues to be the offering in the medium segment with growth thrust provided by continuously launching new flavours, theeconomy end of the portfolio consists of “Coolers”. These drinks are based on traditional Indian formulations, which have acooling effect on the body. They were launched in 3 flavours — Watermelon, Pomegranate and Aam Panna.

The Hommade brand grew by 41% in 2004-05. This brand offers a range of cooking pastes, tomato puree, coconut milk and hasrecently test marketed a soup concentrate.

Besides the retails channel, the product is extensively distributed in the food services channel, dominating this channel bymaking it available in the best hotels, restaurants, airlines and several institutions like business houses to Indian army. In thecurrent year, a separate brand called Nature’s Best has been created for institutional sales and it consists of products likeketchup and corn powder. There was impressive growth in sales of honey to institutions, which is done in special 1 kg packs

Dabur Foods’ multi-fruit processing facility at Siliguri, West Bengal under the name of its wholly owned subsidiary – PasadensaFoods Limited became fully operational during the year. The plant produces pulp and concentrates and has brought the Companya step closer to achieving full backward integration and realising the resultant cost efficiencies. The plant meets the stringentrequirements of the Codex Alimentarius Commission Guidelines, the Recommended International Code of Practices and theGeneral Principles of Food Hygiene.

In 2004-05, Dabur Foods acquired a new facility near Jaipur for manufacturing fruit juices. The plant currently has manufacturingfacilities for 200 ml packs. This facility will be upgraded to manufacture 1 litre and 200 ml packs of ‘Real’ brand of fruit juice andalso the ‘Coolers’ range of products. With this acquisition, the Company will be able to de-risk its business by considerablyreducing its reliance on the Nepal plant.

FINANCIAL RESULTSParticulars Amt. (Rs. in‘lacs)

Turnover 13014.72

Profit before Tax 570.26

Less: Provision for Tax- current 44.71

Profit after Tax 525.55

Loss Brought Forward (2006.83)

Balance carried over to Balance Sheet (1481.28)

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DIRECTOR‘S RESPONSIBILITY STATEMENT :Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors’ ResponsibilityStatement, it is hereby confirmed:

i) that in the preparation of the annual accounts for the financial year ended 31st March, 2005, the applicable accountingstandards had been followed along with proper explanation relating to material departures;

ii) that the directors had selected such accounting policies and applied them consistently and made judgements and estimatesthat were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for the year under review;

iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.

iv) that the directors had prepared the accounts for the financial year ended 31st March, 2005 on a ‘going concern’ basis.

AUDIT COMMITTEE:The Audit Committee comprises of Mr. V C Burman, Mr. Amit Burman and Mr. P D Narang, all non-executive Directors with Mr.V C Burman as its chairman. The role, terms of reference and the authority and powers of the Audit Committee are in conformitywith the requirements of the Companies Act, 1956.

REMUNERATION COMMITTEE:The remuneration Committee comprises of Mr. Charanjit Mohan, Mr. Sunil Duggal and Mr. P D Narang, all non-executiveindependent Directors. The role, terms of reference and the authority and powers of the Remuneration Committee are inconformity with the requirements of the Companies Act, 1956.

DIRECTORS:In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Amit Burmanand Mr. P D Narang, Directors retire by rotation and being eligible offer themselves for re-appointment.

AUDITORS:M/s. Jhalani & Company, Chartered Accountants, New Delhi, Statutory Auditors of the Company will retire at the ensuing AnnualGeneral Meeting and being eligible, offer themselves for reappointment.

ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION:The Company had no production /manufacturing unit during the year under review, hence the requirement relating toconservation of energy and Technology Absorption are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGOING:Your company has expanded it’s exports portfolio and presence. In addition to exporting branded product under Real brandname your company also achieved a significant business in bulk pulp exports in the year 2004-05. The branded businessexpanded into Saudi Arabia and Yemen. The bulk pulp exports was taken with a view to build expertise, and learning to build abase to export produce out of its subsidiary -Pasadensa Foods facility. In the current year, your company exported mango &guava pulp to countries in the Middle East.

Given the strong foundation laid in export, your company will work towards expanding it presence to other countries in theAsian and European markets in both the branded and bulk pulps exports.

The Company had the following Foreign Exchange earnings and outgo during the year.

Outgoings by way of import of Raw materials. Rs.93.38 Lac

Earnings on account of exports Rs.513.47 lac

2

DIRECTOR’S REPORT (Contd...)


FIXED DEPOSITS:The Company has not accepted Fixed Deposits pursuant to section 58A of the Companies Act, 1956.

SUBSIDIARIES:As required by the provisions of section 212 of the Companies Act, 1956, the audited accounts together with Directors Reportand Auditors Report of the subsidiary Company are appended and forms part of the Annual Report. The statement pursuant toSection 212 of the Act is attached and forms part of this report.

PARTICULARS OF EMPLOYEES :During the year under review no employee of the Company was in receipt of remuneration exceeding the limits as laid downunder section 217 (2A) of the Companies Act, 1956. Therefore, the information as required under section 217(2A) of the Act,read with the Companies (Particulars of Employees) Rules, 1975 is not being given.

ACKNOWLEDGEMENT:Your Directors would like to express their grateful appreciation for the continued support and co-operation received from theCustomers, Dealers, Bankers, Government authorities and shareholders. They also wish to place on record their appreciationfor the dedication and hard work put in by the employees of the Company at all levels.

For and on behalf of the BoardGhaziabad Amit BurmanAmit BurmanAmit BurmanAmit BurmanAmit Burman P D NarangP D NarangP D NarangP D NarangP D Narang

22nd April, 2005 Director Director

Annexure 1 to director’s report

Statement Pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies

(Figures in Rupees)

1 Name of Subsidiary Pasadensa Foods Ltd

2 Holding Company’s Interest 50,00,000 Equity Shares of

Rs. 10 each fully Paid-up

3 Extent of Holding 100%

4 Subsidiary Financial Year Ended 31st March, 2005

5 Net aggregate amount of subsidiaries Profit/(Loss)

not dealt within the holding company’s accounts :(I) For the financial year of the subsidiaries Rs. (2,87,76,260)(II) For the previous financial year of the subsidiary Rs. (16,20,597)

since they become the holding company’s subsidiary

6 Net aggregate amount of subsidiaries Profit/(Loss)dealt within the holding company’s accounts :(I) For the financial year of the subsidiaries Rs. 31,79,474(II) For the previous financial year of the subsidiary Rs. 15,53,425

since they become the holding company’s subsidiary

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DIRECTOR’S REPORT (Contd...)


AUDITOR’S REPORT

To

The Members, Dabur Foods Ltd.

We have audited the attached Balance Sheet of Dabur Foods Limited as at 31st March,2005 and also the Profit and Loss Accountof the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of thecompany’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

(1) We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

(2) As required by Companies (Auditor’s Report) Order,2003 [as amended by the Companies (Auditor’s Report) (Amendment)Order, 2004] issued by the Government of India in terms of sub-section (4A) of section 227 of the Companies Act,1956, weenclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

(3) Further to our comments in the Annexure referred to above, we report that:

(a) We have obtained all the information and explanations, which, to the best of our knowledge and belief were necessaryfor the purpose of our audit;

(b) In our opinion, proper books of account have been kept as required by law so far as appears from our examinationof those books;

(c) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement withthe books of account;

(d) In our opinion, the profit and loss account, balance sheet and the cash flow statement comply with the AccountingStandards specified by the Institute of Chartered Accountants of India, referred to in Section 211 (3C) of the CompaniesAct, 1956,to the extent applicable.

(e) On the basis of representation received from the directors as on 31st March 2005, and taken on records by the Boardof Directors, we report that none of the directors is disqualified as on 31st March 2005 from being appointed as adirector in terms of clause

(g) of sub-section (1) of section 274 of the Companies Act 1956.

(f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts givethe information required by the Companies Act, 1956 in the manner so required and also give a true and fair view inconformity with the accounting principals generally accepted in India.

(i) in the case of balance sheet, of the state of affairs as at 31st March,2005;

(ii) in the case of the profit & loss account , of the Profit for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

FOR JHALANI & CO.Chartered Accountants

V.K. JhalaniV.K. JhalaniV.K. JhalaniV.K. JhalaniV.K. JhalaniPartner(Membership No.:82691)

Ghaziabad22nd April, 2005

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Annexure to paragraph (2) of our report of even date on the account ofDabur Foods Limited, for the year ended 31st March 2005

1. (a). The Company is maintaining proper records showing full particulars including quantitative details and situation offixed assets.

(b). The management has carried out a physical verification of most of its fixed assets during the year. In our opinion, thefrequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets.The discrepancies noticed on such verification were not material and have been properly dealt with in the books ofaccount.

(c). In our opinion and according to the information and explanations given to us, a substantial part of fixed assets hasnot been disposed off by the Company during the year.

2. (a). During the year, the inventories have been physically verified by the management except for inventory lying withthird parties which have been confirmed by the parties. In our opinion, the frequency of verification is reasonable.

(b). In our opinion and according to the information and explanation given to us, the procedures of physical verificationof stocks followed by the management are reasonable and adequate in relation to the size of the Company and thenature of its business.

(c). On the basis of our examination of the record of inventories, we are of the opinion that, the Company is maintainingproper records of inventories. The discrepancies noticed on physical verification of inventories as compared to bookrecords were not material and have been properly dealt with in the books of account.

3. (a). According to the information and explanations given to us, the company has granted unsecured loans to one companycovered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involvedduring the year is Rs.875 Lacs and the amount outstanding at the year end is Rs.800 Lacs.

(b). According to the information and explanation given to us, the rate of interest and the other terms & conditions areprima facie not prejudicial to the interest of the company.

(c). According to the information and explanation given to us the loan granted is in the nature of the demand loan andthere is no stipulation regarding repayment of loan. The interest on has been regularly received.

(d). In view of comments made in subclause ( c ) above, the clause pertaining to the overdue amount being more thanRupees one lac is not applicable.

(e). The company has taken unsecured loans from three companies covered in the register maintained under section 301of the Companies Act, 1956. The maximum amount involved during the year is Rs.850 lacs and the amount outstandingat the year end is Rs.800 lacs.

(f) According to the information and explanation given to us, the rate of interest and the other terms & conditions areprima facie not prejudicial to the interest of the company.

(g) According to the information and explanation given to us the loan taken is in the nature of demand loan and there isno stipulation regarding repayment of loan. The interest on the aforesaid loan has been regularly paid.

4. In our opinion and according to the information and explanations given to us, there are adequate internal controlprocedures commensurate with the size of the Company and the nature of its business with regard to the purchaseof inventories and fixed assets and with regard to sale of goods. Further, on the basis of our examination andaccording to the information and explanations given to us, we have neither come across nor have been informed ofany instance of major weaknesses in the aforesaid internal control procedures.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts orarrangements that need to be entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information & explanations given to us aforesaid contract or arrangementsexceeding the aggregate amount of Rupees five lacs in respect of each party made during the year, have been madeat prices, which as informed to us by the management are not comparable as these are of specialized nature.

6. The Company has not accepted any deposit within the meaning of section 58A, 58AA or any other relevant provisionsof the Companies Act, 1956 and the rules framed there under.

7. Company’s internal audit is handled by the internal auditors appointed by the holding company and in our opinion,the same is commensurate with the size and nature of its business.

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8. The company is not required to maintain cost records u/s 209(1) (d) of the Companies Act, 1956. Accordingly paragraph4(viii) of the order is not applicable.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, theCompany has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance,Income Tax, Custom Duty, Service Tax, Cess with the appropriate authorities. The provisions of other statute mentionedin the clause are not applicable to the company for the year under audit.

(b) According to the information and explanations given to us and the records of the Company examined by us, there areno disputed dues of Income Tax/Wealth tax/Service tax/Custom duty/excise duty/cess. The details of disputed dues ofsales tax are as follows:

Name of the Nature of the Forum where the Amount Period to whichStatute Dues demand is Pending (Rs. in lacs) amount relates

Delhi Sales Tax Sales tax Dy.Commissioner of Sales 85.52 2003-2004Tax(Appeals) –Delhi

10. At the end of the financial year March 31, 2005, the company has accumulated losses of Rs.1481.13 lacs and the sameis more than the fifty percent of the net worth of the company. Further, the Company has not incurred any cash lossesduring the financial year ended March 31, 2005 and in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, theCompany during the year has not defaulted in repayment of dues to financial institutions and banks.

12. As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debenturesand other securities, paragraph 4 (xii) of the Order is not applicable.

13. The provisions of any special statute as specified under paragraph 4 (xiii) of the Order are not applicable to theCompany.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) ofthe Order is not applicable.

15. In our opinion and according to the information and explanations given to us, the Company has not given anyguarantees during the year for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us, the term loans during the year havebeen applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of theCompany, we report that short term funds have not been used to finance long term investments.

18. As the Company has not made any preferential allotment of shares during the year, paragraph 4 (xviii) of the Order isnot applicable.

19. During the year, since the Company has not issued any debentures, paragraph 4 (xix) of the Order is not applicable.

20. During the year, since the Company has not raised any money by way of public issue, paragraph 4 (xx) of the Order isnot applicable.

21. Based upon the audit procedures performed and information and explanations given by the management, we reportthat no fraud on or by the Company has been noticed or reported during the course of our audit for the year endedMarch 31, 2005.

FOR JHALANI & CO.JHALANI & CO.JHALANI & CO.JHALANI & CO.JHALANI & CO.Chartered Accountants

V.K. JhalaniV.K. JhalaniV.K. JhalaniV.K. JhalaniV.K. JhalaniPartner(Membership No.:82691)


6

Annexure to Auditors Report (Contd...)


Balance sheet as at 31st March, 2005

As at 31st As at 31st

March 2005 March 2004

Schedule (Rs. In lac) (Rs. In lac)

Sources of funds :

Shareholders’ funds:A) share capital A 1,000.00 1,000.00 1,000.00 1,000.00

Loan funds:A) secured loans B 1,637.34 625.00B) unsecured loans C 1,727.79 1,836.46

3,365.13 2,461.46

TotalTotalTotalTotalTotal 4,365.134,365.134,365.134,365.134,365.13 3,461.463,461.463,461.463,461.463,461.46

Application of funds :

Fixed assets :(A) gross block E 7.52 7.39(B) less : depreciation 3.00 1.52(C) net block 4.52 5.87

Investments F 500.21 - 505.21

Current assets, loans and advances: GA) inventories 1,177.52 504.14B) sundry debtors 971.89 484.83C) cash & bank balances 202.54 455.12D) loans & advances 1,217.51 100.61

3,569.46 1,544.70

Less: current liabilities and provisions DA) liabilities 1,120.25 573.32B) provisions 70.09 27.83

1,190.34 601.15Net current assets 2,379.12 943.55Miscellaneous expenditure H - -(to the extent not written off or adjusted) Profit & loss 1,481.28 2,006.83Notes to accounts N

TotalTotalTotalTotalTotal 4,365.134,365.134,365.134,365.134,365.13 3,461.463,461.463,461.463,461.463,461.46

As per our report of even date attached For Dabur Foods Ltd.Dabur Foods Ltd.Dabur Foods Ltd.Dabur Foods Ltd.Dabur Foods Ltd.For Jhalani & Co.Jhalani & Co.Jhalani & Co.Jhalani & Co.Jhalani & Co.Chartered Accountants Amit BurmanAmit BurmanAmit BurmanAmit BurmanAmit Burman Director

P. D. NarangP. D. NarangP. D. NarangP. D. NarangP. D. Narang DirectorV.K. JhalaniV.K. JhalaniV.K. JhalaniV.K. JhalaniV.K. Jhalani Neeraj AggarwalNeeraj AggarwalNeeraj AggarwalNeeraj AggarwalNeeraj Aggarwal Manager Finanace&Partner Company Secretary


7


Profit and 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. In lac) (Rs. In lac)

Income : ISales less returns 12,969.97 8,579.80Other income 44.75 145.35

Total income 13,014.72 8,725.15

Expenditure :Cost of materials J 7,508.47 5,207.93 Payments to and provisions for employees K 404.04 384.56Selling and administrative expenses L 4,316.23 2,659.97Financial expenses M 214.24 198.49Miscellaneous expenditure written off 0.00 114.70Depreciation 1.48 0.98

Total expenditure 12,444.46 8,566.63

Balance being net profit before taxation 570.26 158.52Less provision for taxation - current 44.71 12.25Net profit after taxation 525.55 146.27Loss brought forward -2,006.83 -2,153.10

Balance carried over to balance sheet -1,481.28 -2,006.83Earning per share - basic & diluted (fig.in rs.) 5.26 1.46




8


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

Schedule A - Share Capital

As at 31st As at 31stMarch 2005 March 2004

(Rs.in lac) (Rs.in lac)

Authorised :

20000000 Equity shares of Rs.10 each 2,000.00 1,000.00(previous year 10000000 equity shares of Rs.10 each)

2,000.00 1,000.00

Issued, subscribed and paid up:

10000000 Equity shares of Rs.10 each fully paid up 1,000.00 1,000.00(all the shares have been held by holdingcompany, Dabur India Limited and its nominees) -

1,000.00 1,000.00

Schedule B - Secured Loans

from Hong-Kong & Shanghai Bank, New Delhi

I) short term loans 1,284.25 625.00

Ii) cash credit account 182.47 -

Iii) packing credit account 170.62 -

secured by :All these loans are secured by way of first charge agst.Hypothecation of revolving stocks, other movable assetsand present and future book debts. (the above loans areguaranteed by holding company, Dabur India Limited)

1,637.34 625.00

Schedule C - Unsecured loans

Loan from body corporates 800.00 1,050.00

Security deposit from dealers and others 0.14 2.51

Temporary loans from canara bank 875.00 775.00(guaranteed by holding company, Dabur India Limited)

Book overdraft with current account with banks 52.65 8.95

1,727.79 1,836.46

Notes:

1. Maximum amount of loan from canara bank outstanding during the year Rs.1200, repayble with in one year Rs.875

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Schedule D - Current Liabilities and Provisions



A. Current liabilities : sundry creditors

a) amount due to ssi units 0.80 1.57

b) creditors for goods 324.63 42.21

c) creditors for expenses and other liabilities 732.85 467.87

1,058.28 511.65

amount due to holding company - 26.47

advances from customers 58.56 33.32

interest accrued but not due on loans 3.41 1.88

1,120.25 573.32

B. Provisions :

for taxation 56.96 12.25

for leave salary 10.49 12.18

for leave travel concession 2.64 3.40

1,190.34 601.15

Schedule E - Fixed Assets

(Rs. in lac)NAME OF ASSETS GROSS BLOCK DEPRECIATION NET BLOCK

As on Additions Adjustment As on As on For the year Adjustment As on As on As on

1-Apr-04 2004-05 31-Mar-05 1-Apr-04 2004-05 31-Mar-05 31-Mar-05 31-Mar-04

Electrical Appliances 0.85 - 0.10 0.75 0.33 0.08 - 0.41 0.34 0.52

Furniture & Fixtures 0.21 0.23 - 0.44 0.13 0.03 - 0.16 0.28 0.08

Computers 0.30 0.30 0.25 0.02 0.27 0.03 0.05

Vehicles 6.03 6.03 0.81 1.35 2.16 3.87 5.22

TOTAL 7.39 0.23 0.10 7.52 1.52 1.48 0.00 3.00 4.52 5.87

As on 31.03.2004 1.36 6.03 0.00 7.39 0.54 0.98 0.00 1.52 5.87

Schedules annexed to and forming part of the balance sheet as at 31st March 2005 (Contd...)

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Schedule - F Investments (At Cost)

Long Term InvestmentA) Govt. Securities

(National Saving Certificates Viii Series) 0.20 0.20(Lodged With Sales Tax Department)

B) Trade Investment In Subsidiary Company

Unquoted

Pasadensa Foods Ltd 500.01 500.01(5000000 Equity Shares Of Rs.10/- Each Fully Paid Up, At Cost )(Book Value Of Unquoted Investment Is Rs.195.88Previous Year Rs.483.65)

Share Application Money Pending Allotment - 5.00

(With Pasadensa Foods Ltd) 500.21 505.21


Schedule G - Current Assets, Loans and Advances

A. Current assets :

Stock-in-trade :(as taken, valued and certified by the management)- raw materials with processors 68.78 13.57

- packing materials with processors 37.55 33.39

- finished goods 1,071.19 457.18

1,177.52 504.14Sundry debtors (unsecured)- debts outstanding for a period exceeding six months :

Considered good - 31.79

Considered doubtful 5.89 -

5.89 31.79

Less : provision for doubtful debts 5.89 -

- 31.79

- other debts (considered good) 971.89 453.04

- other debts (considered doubtful) 8.11 -

980.00 484.83

Less : provision for doubtful debts 8.11 -

971.89 484.83Cash and bank balances :

- cash in hand at head office and other offices 0.70 0.31

- balance with scheduled banks

In current accounts 100.24 144.03

In cash credit account - 289.60

In fixed deposit accounts ( lodged with the sales tax deptt) 3.65 3.65

- remittance-in-transit & cheques-in-hand 97.95 17.53

202.54 455.12

2,351.95 1,444.09

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



B. Loans and advances(unsecured and considered good)

Security deposit with various authorities 8.51 6.24

Advances to pasadensa foods ltd. (subsidiary co.) 800.00 -

Advances to suppliers 316.38 71.43

Advances to employees 13.69 13.29

Duty entitlment benefit receivable 4.68 -

Advance income tax 69.68 3.85

Other advances - recoverable in cash or in kind 4.57 1,217.51 5.80 100.61

Or for value to be received

Total (a+b) 3,569.46 1,544.70

Schedule H - Miscellaneous expenditure

(to the extent not written off or adjusted)

Deferred advertisement & publicity - 114.70

Less: amortised during the year - 114.70

- -

Schedules annexed to and forming part of the Profit and Loss account for the year ended 31st March 2005

Schedule - I Sales and other income

For the year ended For the year ended 31st March 2005 31st March 2005

(Rs.in lac) ( Rs.in lac)

A. Sales :

domestic sales less returns 12,400.32 8,347.06

export sales 569.65 232.74

12,969.97 8,579.80

B. Other income :

premium on transfer of loan - 132.00

miscellaneous receipts 12.28 13.18

interest received 32.47 0.17

(tax deducted at source Rs. 6.64 previous year nil) 44.75 145.35

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Schedules annexed to and forming part of the Profit and Loss account for the year ended 31st March 2005

Schedule J - Cost Of Materials



Raw Materials Consumed :

(i) Opening Stock 13.57 28.12

(ii) Add : Purchases 1,033.10 247.72

1,046.67 275.84

(iii) Less : Closing Stock 68.78 13.57

977.89 262.27

Packing Materials Consumed :

(i) Opening Stock 33.39 53.64

(ii) Add : Purchases 195.35 57.85

228.74 111.49

(iii) Less : Closing Stock 37.55 33.39

191.19 78.10

Purchase Of Finished Products 6,791.04 4,727.94

Processing Charges 162.36 79.58

Adjustment Of Stocks

Opening Stock :

Stock In Process 17.85 0.28

Finished Products 439.33 516.94

457.18 517.22

Closing Stock :

Stock-In-Process With Processors - 17.85

Finished Products 1,071.19 439.33

1,071.19 457.18

Increase(-)/Decrease In Stock (614.01) 60.04

7,508.47 5,207.93

Schedule K - Payments To AndProvisions For Employees

Salaries, Wages And Bonus 365.60 340.74

Contribution To Provident,Superannuation,Grauity & 34.57 35.61

Other Funds

Staff Welfare 3.87 8.21

404.04404.04404.04404.04404.04 384.56 384.56 384.56 384.56 384.56

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Schedule L - Selling And Adminstrative Expenses



Rent 39.31 9.94

Rates And Taxes 4.03 2.32

Insurance 13.10 7.13

Sales Tax 1,315.29 895.63

Freight And Forwarding Charges 834.47 396.90

Commission, Discount And Rebate 120.95 92.64

Advertising And Publicity 1,510.78 904.10

Breakage/Leakage Claims 217.64 179.28

Travel & Conveyance 109.50 104.30

Legal & Professional 22.37 15.44

Telephone , Fax Expenses 2.24 1.79

General Expenses 46.36 25.97

Bad Debts 20.22 21.77

Auditors’ Remuneration:

- Audit Fee 1.33 1.16

- Tax Audit Fees 0.22 0.22

- Other Matters 0.79 0.58

Reimbursement Of Expenses 0.63 2.97 0.80 2.76

Contribution For Scientific Research Expenses 57.00 -

4,316.23 2,659.97

Schedule M - Financial Expenses

Interest Paid On :

Fixed Period Loan 204.60 176.34

Others 0.12 12.39

204.72 188.73

Bank Charges 9.52 9.76

214.24 198.49

14

Schedules annexed to and forming part of the Profit and Loss account for the year ended 31st March 2005 (Contd...)


Schedule N - Notes Forming Part Of The Accounts For The Year Ended 31st March,2005

A. ACCOUNTING POLICIES

Significant accounting policies are summarized below:

1. Accounting ConventionThe financial statements are prepared under the historical cost convention in accordance with applicable mandatoryAccounting Standards and relevant provisions of the Companies Act, 1956.

2. Use of estimates• The preparation of the financial statement in conformity with generally accepted accounting policies requires

management to make estimates and assumptions that effect the reported balances of assets & liabilities anddisclosure relating to contingent assets & liabilities as at the date of the financial statements and reportedamounts of income & expenses during the period.

• Management assesses using external and internal sources whether there is an indication that asset may beimpaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expectedto arise from the continuing use of the assets and its eventual disposal. The impairment loss to be expensed isdetermined as the excess of the carrying amount over the higher of the asset’s net sales price or present valueas determined above.

• Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonablyestimated. Actual results could differ from those estimates.

3. InvestmentsLong term investments are stated at cost. A provision for diminution is made to recognize a decline other thantemporary in the nature of value of investment.

4. SalesSales are recognized net of returns when goods are supplied in accordance with terms of sale. Sales comprise of saleprice of goods including sales tax. Breakage and leakage claims from customers are charged as expenses uponapproval.

5. Fixed Assets and Depreciation• Fixed assets are stated at cost less depreciation. Cost includes inward freight, duties and taxes and expenses

incidental to acquisition.• Depreciation on Fixed Assets has been provided on written down value method at rates specified in Schedule

XIV of the Companies Act.

6. InventoriesInventories, other than goods in transit, are valued at cost (on FIFO basis) or estimated net realizable value, whicheveris lower, after providing for cost of obsolescence and other anticipated losses, where considered necessary.

7. Deferred Entitlement on LTC :As per the opinion of the Expert Advisory Committee of the ICAI, the Company has provided liability accruing onaccount of deferred entitlement towards LTC in the period in which the employees concerned render their serviceseven though no expenditure has been incurred on performance of journeys.

8. Foreign Currency Transactions• Transactions in foreign exchange, other than those covered by forward contracts, are accounted for at the

exchange rates prevailing on the date of transactions. Assets and Liabilities, if any, remaining unsettled at theend of the year, other than those covered by forwards contracts, are translated at the closing rates. Realizedgains and losses on Foreign Exchange transactions are recognized in the Profit and Loss account.

• In respect of transactions covered by the forward contracts, the difference between the contract rate and thespot rate on the date of the transaction is charged to the Profit and Loss account over the period of contract.

(Rs. In lac)

15

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


9. Retirement benefits• Liability of Gratuity to employees is determined on the basis of contribution made to Life Insurance Corporation

of India from whom the company has taken the Group Gratuity Insurance policy.• Liability for leave encashment benefit determined on the basis of contribution made to Life Insurance Corporation

of India from whom the company has taken the Leave Encashment policy• Contributions to defined contribution schemes such as Provident Fund and Family Pension Fund are charged to

profit & Loss Account as incurred.

10. Borrowing CostBorrowing cost that are attributable to acquisition of qualifying assets are capitalized as part of the cost of suchassets. All other borrowing costs are charged to revenue.

11. Taxes on income• Deferred tax amount is recognized subject to the consideration of the prudence on the tax effect of timing

difference between the taxable income and accounting income computed for the current accounting year andreversal of earlier year timing difference.

• Deferred Tax assets are recognized and carried forward to the extent there is a reasonable certainty exceptarising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there isvirtual certainty that sufficient future taxable income will be available against such deferred tax assets.

12. Cash flow statementCash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects oftransactions of a non-cash nature and any deferrals of accruals of past or future cash receipts or payments. The cashflows from regular revenue generating; investing and financing activities of the company are segregated.

B. NOTES TO ACCOUNTS1. The company has provided Rs 2.64 (previous period Rs 3.40) as liability accruing on account of deferred entitlement

towards LTC. (Refer Para 6 of Accounting Policies).

2. Contingent Liabilities (Disclosed in terms of AS-29 issued by ICAI which becomes mandatory with effect from 01.04.2004)

• Bank Guarantees issued by banks on behalf of the company Rs.3.20 (previous year Rs.12.05).

• In respect of Letters of Credit Rs. 572.66 (previous year Rs. 732.30).

• Sales Tax

A demand of Rs.85.52 has been issued against the company due to dispute over taxability of the food products. Thecompany has filed an appeal before the DC (Appeals), Delhi and the same is pending for hearing. The company hasbeen legally advised that no provision is necessary as the probability of crystallization of the liability is very remote.

• Estimated Amount of contract remaining to be executed on capital Account Rs.300 net of advance (Previous yearRs.Nil)

3. The company has entered into an agreement with Dabur India Ltd., its holding company, for exclusive rights to usetrademarks Real, Hommade and Lemoneez in the domestic market.

4 Balances of Sundry Creditors and Debtors are subject to confirmation.

5. Particulars of consumption of Important Raw Materials

2004-20052004-20052004-20052004-20052004-2005 2003-20042003-20042003-20042003-20042003-2004

Class of Goods Class of Goods Class of Goods Class of Goods Class of Goods Qty.(In MT)Qty.(In MT)Qty.(In MT)Qty.(In MT)Qty.(In MT) ValueValueValueValueValue Qty.(In MT)Qty.(In MT)Qty.(In MT)Qty.(In MT)Qty.(In MT) ValueValueValueValueValue

Mango 1967.60 203.27 1393.10 82.14

Mango Pulp 1767.00 322.19 -

Others 452.43 180.13

977.89977.89977.89977.89977.89 262.27262.27262.27262.27262.27

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

(Rs. In lac)

16


6. Value of Raw and Packing materials consumedRaw Material Packing Material

2004-2005 2003-2004 2004-2005 2003-2004Val ue % Value % Value % Value %

Imported 89.21 9.12 52.92 20.18 - - - -

Indigenous 888.68 90.88 209.35 79.82 191.19 100.00 78.10 100.00

Total 977.89 100.00 262.27 100.00 191.19 100.00 78.10 100.00

7. Particulars of Traded/Manufactured Goods

Classes of Goods Fruit Juices Vegetable Pastes Others Total

PurchasesPurchasesPurchasesPurchasesPurchases Qty 22089.83 367.76(17086.37) (185.71)

Value 5710.29 242.52 851.28 6804.09(4486.78) (106.64) (134.52) (4727.94)

Opening StockOpening StockOpening StockOpening StockOpening Stock Qty 849.96 52.76(1335.83) (56.14)

Value 358.10 29.47 51.76 439.33(417.76) (38.36) (60.82) (516.94)

Closing StockClosing StockClosing StockClosing StockClosing Stock Qty 2160.41 47.61(849.96) (52.76)

Value 714.82 30.64 344.27 1089.73

(358.10) (29.47) (51.76) (439.33)

SalesSalesSalesSalesSales Qty 20779.39 372.91(17572.23) (189.09)

Value 10765.2 330.43 1874.35 12969.98

(7648.08) (218.74) (712.99) (8579.81)

(Previous year figures given in bracket. Fruit juices unit in Kilo Liters & Vegetable Pastes in M Ton)

31.03.2005 31.03.20048. CIF Value of Imports (Purchases)

Raw Materials 93.38 43.70

9. Earnings in Foreign Exchange

On account of exports at FOB 513.47 21.31

10. Segment Reporting:

The company has primarily engaged in the business of fruit juices and vegetable pastes, which are governed by the sameset of risk and return and therefore the entire business is covered under one Food segment. The said treatment is inaccordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS 17).

11. Deferred Taxation:

As per Accounting Standard 22, accounting for tax on income, no provision has been made for deferred taxes in view ofcarry forward loss as per Income Tax Act, 1961, and after considering the effect of timing difference, still there was lossand hence no deferred tax assets/liabilities has been created.

12. In the opinion of management, fall in the value of long term investment in Pasadensa Foods Limited, (wholly ownedsubsidiary of the company) is of temporary nature. Hence provision for diminution in the value of investment is notdeemed necessary.


(Rs. In lac)

17


13. Managerial Remuneration under section 198 of the Companies Act, 1956 paid or payable during the year, to the Manager:

31.03.2005 31.03.2004

Basic Salary 6.02 5.45

Contribution to Pension, PF & other Funds 1.92 1.74

Other Allowances 12.95 11.46

20.89 18.65

The above remuneration has been approved by the Central Government, hence the computation of remuneration u/s 349of The Companies Act, 1956 has not been given.

14. Total outstanding dues to small scale industries have been determined to the extent such parties have been identified onthe basis of information available with the Company. The list of small scale industries to whom the Company owes anysum as on March 31, 2005 are:

• Sheel Packaging Pvt. Ltd • Dayanamic Sticker Industries

• Northern Aeromatic Ltd • Sun Control System Ltd

• Jainex India

15. Earning per share

31.03.2005 31.03.2004

Earning

Profit after tax 525.55 146.27

Shares

Weighted Average No. of Shares 10000000 10000000

E.P.S.(Basic & Diluted) 5.26 1.46

16. Related Party Transactions:

Particulars Holding Subsidiary Fellow Associate Key Mgt. Total OutstadingCompany Subsidiary Personnel as on31.03.05

Purchases of Goods 49.37 - 6143.81 - - S6193.18 (33.97)S(58.98) - (4257.50) - S- (4316.48) (26.46)

Sale of GoodsSS - - 394.46 - 394.46 9.90SS- - (297.74) - - (297.74) (9.24)

Receipt of Loan givenS - 75.00 - - - 75 NilSS- (0) - - - (0) (Nil)

Finance (incl. Loan & equity - 875.00 - - - 875 800.00Contributions in cash or kind) - (1705.00) - - (1705.00) (505.00)Remuneration Paid - - - - 20.89 20.89 Nil

- - - - (18.65) (18.65) (Nil)Interest recd on Loan - 31.79 - - - 31.79 NilS

- (15.53) - - - (15.53) (Nil)Corporate Guarantees 3750.00 - - - - 3750 3750.00given by Holding Company (2887.00) S- - - - (2887.00) (2887.00)

Note:Note:Note:Note:Note:Names of related parties and description of relationship:Dabur India Limited - Holding CompanyDabur Nepal Pvt. Limited - Fellow SubsidiaryPasadensa Foods Limited - Subsidiary CompanyMr. Sanjay Sharma - Key Management Personnel

(Rs. In lac)

18



17. Auditors Remuneration includes31-03-2005 31-03-2004

Audit Fee 1.33 1.16Tax Audit Fees 0.22 0.22Reimbursement of Expenses 0.79 0.58Other Matters 0.63 0.80

2.97 2.76

18. Foreign Exchange loss of Rs.4.08 (net of gain) has been charged to Profit & Loss Account.

19. The company has not received any claim for interest from any supplier under the

“Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertaking Act, 1933”.

20. Previous year figures have been regrouped and rearranged wherever considered necessary.

21. Additional information as required under Part IV of Schedule VI of the Companies Act, 1956:

I. Registration Details

Registration No. 83594

State Code 55

Balance Sheet Date 31.03.2005

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

Public Issue NIL

Right Issue NIL

Bonus Issue NIL

Private Placement NIL

Promoters/Subscribers NIL

III. Position of Mobilization and Deployment of Funds (Amount in Rs.thousand)

Total Liabilities 555547

Total Assets 555547

Sources of Funds

Paid up Capital 100000

Share Application Money NIL

Reserves and Surplus NIL

Secured Loans 163734

Unsecured Loans 172779

Application of Funds

Net Fixed Assets 452

Investments 50021

Net Current Assets 237912

Misc. Expenditure 0.00

Accumulated Losses 148128

(Rs. In lac)

19



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

Turnover 1301472

Total Expenditure 1244446

Profit Before Tax 57026

Profit After Tax 52555

Earning per share in Rupee 5.26

Dividend Rate NIL

V. Generic names of Principal Products/Services of Company

(As per Monetary terms)

Item Code No. (ITC Code) 220240

Product Description Fruit Juice

Item Code No. (ITC Code) 220110

Product Description Vegetable Pastes

22. Schedules A to N form an integral part of accounts.

As per our report of even date attached




20

(Rs. In lac)



Cash Flow Statement For The Year Ended 31st March 2005



A. Cash Flow From Operating Activities

Net Profit Before Tax And Extraordinary Items 570.25 158.52

Add:

Depreciation 1.48 0.98

Miscellenous Exp. Written Off - 114.70

Interest 214.24 198.49

215.72 314.17

785.97 472.69Less:

Interest Received 32.47 -

32.47 -

Operating Profit Before Working Capital Changes 753.50 472.69Working Capital Changes

Increase/(Decrease) In Inventories 673.38 (94.84)

Increase/(Decrease) In Debtors 461.82 (210.22)

Decrease/(Increase) In Trade Payables (272.76) (223.39)

Increase/(Decrease) In Working Capital 862.44 (528.45)

Cash Used(-)/(+)Generated For Operating Activities (A) (108.94) 1,001.15

B. Cash Flow From Investing Activities

Sale/(Purchase) Of Investments 5.00 (505.01)

Interest Received 32.47 -

Purchase Of Fixed Assets (0.23) (6.03)

Sale Of Fixed Assets 0.10 -

Cash Used(-)/(+)Generated For Investing Activities (B) 37.34 (511.04)

C. Cash Flow From Financing Activities

Interest Paid (212.72) (198.77)

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

Repayment(-)/Proceeds(+) From Short Term Loans 1012.34 425.00

Proceeds From Deposits (2.37) (34.52)

Repayment(-)/Proceeds(+) From Other Unsecured Loans (150.00) (575.00)

Payment Of Other Advances (871.94) 0.23

Cash Used(-)/+(Generated) In Financing Activities © (224.69) (184.29)

Net Increase(+)/Decrease (-) In Cash AndCash Equivalents (A+B+C) (296.29) 305.82

Cash And Cash Equivalents Opening Balance 446.18 339.13

Cash And Cash Equivalents Closing Balance

Cash In Hand 0.70 0.31

Bank Balances (Including Cheques In Hand) 201.84 454.82

Less: Book Overdraft 52 .65 149.89 8.95 446.18

21

dabur foods limited audited balance sheet and

Documents