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CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 31 Annual Report 2005

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CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 31 Annual Report 2005 Powered By Docstoc
					                                                                                                                             CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 31
    Annual Report 2005-06                                                                                                                                                                                                                                Dabur India Limited



To the Board of Directors                                                                                                                   icant estimates made by management as well as evaluating the overall financial statement presentation. We believe that
Dabur India Limited.                                                                                                                        audit provides a reasonable basis for our opinion.
                                                                                                                                                Incorporated herein are the accounts of certain subsidiaries whose accounts audited by other auditors as per law of
We have audited the accompanying consolidated Balance sheet of Dabur India Limited, New Delhi and subsidiaries as                           the country of incorporation of respective entities. We have relied on these accounts for subsequent translation of them
of March 31st, 2006 and related consolidated statement of income, stockholders equity and comprehensive income and                          as per requirement of US GAAP.
consolidated cash flow for the year then ended as prepared by Management under US GAAP.                                                         In our opinion, the consolidated financial statements referred to above read with notes thereon present fairly, the fi-
   These financial statements are the responsibility of the company's management. Our responsibility is to express an                       nancial position of Dabur India Limited and subsidiaries as of March 31, 2006, and the result of their operations, com-
opinion on this financial statement based on our audit.                                                                                     prehensive income and cash flows for the year then ended in conformity with accounting principle generally accepted
   We conducted our audit in accordance with auditing standard generally accepted in United States of America. These                        in the United States of America.
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial state-
ments are free of material misstatement. An audit includes examination on a test basis, evidence supporting the amounts                     G. Basu & Co.
and disclosures in the financial statements. An audit also includes assessing the accounting principle used and signif-                     Kolkata



 Consolidated balance sheet as of 31st March,2006                                                                                             Consolidated statement of income for the year ended 31st March,2006
 Current Assets                                                                                                               INR in Lac
 Cash and Cash equivalents                                                                        4892.75                      1387.94                                                                                                                                              INR in Lac
 Marketable securities                                                                            4096.15                      4378.09                                                                                                           2005-06                            2004-05
 Accounts Receivable,net of allowances                                                            7435.01                      7589.28        Revenue                                                                                          171996.64                          136838.94
 Inventories                                                                                     21617.30                     20312.92        Cost of revenues                                                                                  94475.19                            75993.61
 Other current assets                                                                            11609.50                     26106.05        Gross profit                                                                                      77521.45                            60845.33
 Total current assets                                                                            49650.71                     59774.28        Operating expenses
 Property,plant and equipment,net                                                                33911.52                     29530.41        Selling,general and administrative expenses                                                       41290.52                            34685.14
 Goodwill                                                                                        17566.51                       967.90        Personnel expenses                                                                                 6930.40                             4964.41
 Intangibles                                                                                       632.02                       856.27        Depreciation and amortisation                                                                      3417.85                             2830.95
 Investments                                                                                       364.31                       357.68        Financial expenses                                                                                 1638.70                             1243.59
 Other non-current assets                                                                         1916.88                      2829.81        Total operating expenses                                                                          53277.46                           43724.09
 Total assets                                                                                   104041.95                     94316.35        Operating Income                                                                                  24243.98                           17121.24
 Liabilities and stockholders' equity                                                                                                         Other income,net                                                                                     875.10                             447.21
 Current Liabilities                                                                                                                          Income before provision for taxes                                                                 25119.08                           17568.45
 Short term debt and current portion of long term debt                                            7420.77                     12890.17        Provision for taxes
 Trade accounts payable                                                                          16482.32                     17301.91        Current tax expenses                                                                               2185.80                             1509.88
 Accrued expenses and other current liabilities                                                  20300.90                     17959.66        Defered tax benefit                                                                                  598.48                            -198.54
 Total current liabilities                                                                       44203.99                     48151.74        Prior year tax adjustment
 Long term debt,excluding current portion                                                         3002.08                      2311.21        Fringe benefit tax                                                                                   463.31
 Other non-current liabilities                                                                    6837.21                      4595.06        Minority interest                                                                                    -32.51                             138.01
 Total non-current liability                                                                      9839.29                      6906.27        Net income                                                                                        21904.00                            16119.10
 Deffered Tax liabilities (net)                                                                   1171.45                       470.39        Earning per common share
 Total liabilities                                                                               55214.73                     55528.40        Basic                                                                                                  3.82                               2.81
 Minority interest                                                                                 565.76                      1858.76        Diluted                                                                                                3.79                               2.80
 Stockholders' equity                                                                                                                         Weighted Average common shares outstanding
 Common stock,Re 1/ Pre value.                                                                                                                Basic                                                                                           573149195                           572694600
 1250000000 equity sharesauthorised                                                                                                           Diluted                                                                                         577524990                           575535148
 573302784 issued and outstanding                                                                 5733.03                      2864.20        The accompaying notes are an integral part of these consolidated financial statements
 Additional paid in capital                                                                       4068.97                      6158.32
 Retained earning                                                                                38438.93                     27793.90
 Accumulated & other comprehensive income                                                           20.53                       112.77
 Total liabilities and stock holders' equity                                                    104041.95                     94316.35
 The accompaying notes are an integral part of these consolidated financial statements




 Consolidated statement of stockholders' equity and comprehensive income
                                                                                                                                                                                                                                                                                    INR in Lac
                                                                                                    Common Stock
 Particulars                                                                             No.of Shares              Amount               Additional                      Comprehensive                         Accumlated other                  Retained earings         Total stockholders'
                                                                                                                                     paid in capital                          income                            comprehensive                      (Accumulated                      equity
                                                                                                                                                                                                                  income (loss)                        earnings)
 Balance as of 01.04.2004                                                                  286249052               2862.49                 5819.38                                                                                                       19840.54                  28522.41
 Adjustment for prior period items (Refer note No.22 )                                                                                                                                                                                                        -26.60                  -26.60
 Balance as of 01.04.2004                                                                                          2862.49                  5819.38                                        0.00                                       0.00               19813.94                  28495.81
 Issue of share against exercise stock option                                                 170661                  1.71                                                                                                                                                              1.71
 Amortization of employees stock option                                                                                                      338.94                                                                                                                                  338.94
 Employees share of Profit                                                                                                                                                                                                                                     -3.25                   -3.25
 Interim Dividend                                                                                                                                                                                                                                           -2862.89                -2862.89
 Proposed Dividend                                                                                                                                                                                                                                          -4296.30                -4296.30
 Tax on Interim Dividend                                                                                                                                                                                                                                     -374.14                 -374.14
 Tax on Proposed Dividend                                                                                                                                                                                                                                    -602.56                 -602.56
 Net Income                                                                                                                                                                                                                                              16119.10                  16119.10
 Translation adjustment                                                                                                                                                                   -9.02                                   -9.02                                                -9.02
 Investment realised during year net of deferred tax (16.34)                                                                                                                            -28.31                                   -28.31                                               -28.31
 Unrealised gain on short term investment (net of deffered Tax 0.4)                                                                                                                        0.69                                       0.69                                              0.69
 Unrealised gain on long term investment (net of deffered tax 86.22)                                                                                                                   149.41                                   149.41                                               149.41
 Balance as of March 31,2005                                                                                       2864.20                 6158.32                                     112.77                                  112.77                    27793.90                  36929.19
 Adjustment for prior period items (Refer note No.38 )                                                                                                                                                                                                        96.70                    96.70
 Issue of share against exercise stock option                                                                         2.32                                                                                                                                                              2.32
 Bonus Shares                                                                                                      2866.51                 -2866.51                                                                                                                                     0.00
 Amortization of employees stock option                                                                                                      777.16                                                                                                                                  777.16
 Change resulting from purchase of additional share in subsidiaries
 Employees share of Profit                                                                                                                                                                                                                                                              0.00
 Interim Dividend                                                                                                                                                                                                                                           -4303.03                -4303.03
 Proposed Dividend                                                                                                                                                                                                                                          -5733.03                -5733.03
 Tax on Interim Dividend                                                                                                                                                                                                                                     -602.98                 -602.98
 Tax on Proposed Dividend                                                                                                                                                                                                                                    -716.63                 -716.63
 Net Income                                                                                                                                                                         21904.00                                                             21904.00                  43808.01
 Translation adjustment                                                                                                                                                               -100.10                                  -100.10                                               -100.10
 Unrealised gain on short term investment (net of deffered Tax 1.27)                                                                                                                       3.79                                       3.79                                              3.79
 Unrealised gain on long term investment (net of deffered tax)                                                                                                                             4.06                                       4.06                                              4.06
 Balance as of March 31,2006                                                                                       5733.03                 4068.97                                 21924.53                                      20.53                   38438.93                  70165.46
 The accompaying notes are an integral part of these consolidated financial statements



 As per our report of even date attached                                                                                       For Dabur India Ltd.

 For G.Basu & Co.                                                                                                              V.C.Burman                                                                                                    Chairman
 Chartered Accountants                                                                                                         P.D.Narang                                                                                                    Director
                                                                                                                               Sunil Duggal                                                                                                  Director
 S.Lahiri                                                                                                                      A.K.Jain                                                                                                      Addl.General Manager (Finance)
 Partner                                                                                                                                                                                                                                     & Company Secretary

 New Delhi
 25th April 2006
32 CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP
     Dabur India Limited                                                                                                                                                                                                         Annual Report 2005-06




 Consolidated statement of cash flow for the year ended 31st March,2006                                                                                    Weikfield International (UAE) Ltd   United Arab Emirate               38.41% by Dabur international Ltd.
                                                                                                                                                           Dabur Foods Ltd.                    India                             100%

                                                                                                                                         INR in Lac        Pasadensa Foods Ltd.                India                             100% by Dabur foods Ltd

                                                                                                  31.03.2006                       31.03.2005              Dabur Egypt Ltd.                    Egypt                             76% by Dabur overseas Ltd & 24% by Dabur
                                                                                                                                                                                                                                 International Ltd
 Cash flows from operating activities
                                                                                                                                                           African Consumercare Ltd            Nigeria                           90% by Dabur International Ltd
 Net Income                                                                                        21904.00                            16119.89
                                                                                                                                                           Asian Consumercare Pvt.Ltd          Bangladesh                        76% by Dabur International Ltd
 Adjustments to reconcile net income to net cash and
 cash equivalents provided by operating activities                                                                                                         Balsara Home Products Limited       India                             99.52%

 Depreciation and amortization                                                                      3436.80                              2830.95           Balsara Hygiene Products Limited    India                             100%

 Provision for Taxation                                                                             2185.80                              1509.88           Besta Cosmetics Limited             India                             48% by Dabur India Limited,50% by Balsara
                                                                                                                                                                                                                                 Hygiene Products Limited and 2% by Balsara
 Deferred tax benefits                                                                                598.48                             (198.54)                                                                                Home Products Limited
 Allowance for doubtful accounts                                                                                                            14.00
 Loss / (gain) on disposal of property,plant and equipment                                          (146.00)                               202.63     d)   Cash and Cash equivalents :
                                                                                                                                                           Cash equivalents include all highly liquid investments purchased with an original maturity of three months
 Loss / (gain) on disposal of investment                                                             (55.00)                             (407.38)
                                                                                                                                                           or less.
 Amortization of employees stock option plan expenses                                                 777.16                               338.94
 Minority interest                                                                                   (32.51)                               138.01     e)   Accounts Receivable
                                                                                                                                                           Allowances for doubtful account based on direct analysis of receivable against uncollected dues are pro-
 Prior period adjustment                                                                               96.70                              (26.60)          vided in account.
 Dividend Income                                                                                                                            (0.50)
                                                                                                                                                      f)   Inventories :
 Interest expenses                                                                                  1638.70                              1243.59           Finished goods are stated at the lower of cost and net realizable value. Cost is determined using first-in-first
 Changes in operating assets and liabilities                                                                                                               out / weighted average methods for raw materials, packaging materials and stores and spares. Cost includes
                                                                                                                                                           the purchase price and attributable costs. Cost in the case of work-in-process and finished goods comprise
 (Increase) / decrease in accounts Receivable                                                          54.17                             (487.91)          direct labour, material costs and production overheads. Allowance for potentially obsolete or slow mov-
 (Increase) / decrease in Inventories                                                              (1304.38)                           (5,028.47)          ing inventory is made on the basis of the management's analysis of inventory levels. Inventories worth INR
                                                                                                                                                           21250.87 lac has been encumbered with banks towards security against short-term borrowing.
 Decrease / (increase) in other non current assets                                                    912.93                               870.16
 Decrease / (increase) in other current assets                                                     (2439.45)                                          g)   Investment Securities :
                                                                                                                                                           The Group Companies follow investment policies, which are consistent with the provisions of Statements
 Increase / (decrease) in account payable                                                           (819.59)                             6476.76
                                                                                                                                                           of Financial Accounting Standard (SFAS) No. 115, "Accounting for certain Investments in Debt and Equi-
 Increase / (decrease) in other Current Liabilities                                                 2341.24                              2613.41           ty Securities".
 Increase / ( decrease) in other non current liabilities                                            2242.15                              1069.72           Short-term readily marketable securities are held at market price at period end. Investment held for long
                                                                                                                                                           term in securities where significant influence exists within the meaning of APB- 18, are valued at current
 Income tax paid                                                                                   (2240.41)                           (1,668.57)          market price and in its absence for unlisted securities at fair value. Investment held for long term not ex-
 Interest paid                                                                                     (1638.70)                           (1,222.18)          ceeding 20% of common stock of investee are classified as "available for sale securities" under non-current
                                                                                                                                                           assets which are carried at historical cost less diminution therein, if deemed of permanent nature. Unre-
 Net cash provided by operating activities                                                         27512.09                              39394.8           alized gain and losses , net of related tax effect are reported as a separate component of stock holder's equi-
 Cash flow from Investing activities                                                                                                                       ty until realized. Realized gain or losses on sale of securities are computed with reference to their weight-
                                                                                                                                                           ed average cost. Realized gains, losses and decline in value on non-readily marketable available-for-sale
 Expenditure on property,plant and equipment                                                       (7841.71)                           (7,134.77)          securities that are judged to be other than temporary, are included in the statement of income. Interest and
 Proceeds from sale of propety,land and equipment                                                                                          500.02          dividend income is recognized when earned.
 Purchase of intangibles                                                                             (11.55)                             (717.99)
                                                                                                                                                      h)   Property, Plant and Equipment:
 Purchase of Securities                                                                             (364.80)                                               Property, plant and equipment are stated at historical cost less accumulated depreciation. Depreciation is
 Purchase of Marketable securities                                                                 (4089.34)                                               calculated on the straight-line method over the estimated useful life of the respective assets. Assets under
                                                                                                                                                           capital leases and leasehold improvements are amortized over the lower of their estimated useful lives or
 Sale of marketable securities                                                                                                         143,259.86          the term of the lease.
 Sale proceed of Dabon / Green Valley                                                                  55.00                                               Expenditure for additions and improvements are capitalized, while costs for repairs and maintenance are
                                                                                                                                                           charged to operations as incurred. Advances paid for the acquisition of property, plant and equipment out-
 Sale of other securities                                                                           4377.00                                                standing at the balance sheet date and the cost of property, plant and equipment not put to use before such
 Dividend received                                                                                                                           0.50          date are disclosed as "capital work-in-progress". The cost and the accumulated depreciation for assets sold,
                                                                                                                                                           retired or otherwise disposed of are removed from the amounts disclosed in the balance sheet and the re-
 Net cash issued in investing activities                                                           (7875.40)                       (34,772.73)             sulting gain or loss is included in the Consolidated Statement of Income.
 Cash flows from financing activities                                                                                                                      Estimated cost of sale is reduced from carrying amounts of assets when the same is held for disposal. No
                                                                                                                                                           further depreciation is provided after the asset become idle whether on the ground of temporary suspen-
 Proceeds from exercise of stock option                                                                 2.32                                 1.71          sion of use or poised for sale.
 Increase of short term debts (net)                                                                (5469.40)                             3177.40           The Group Companies have determined the estimated useful lives of assets for depreciation purposes.
 Repayment of long term debts (net)                                                                   690.87                             (528.57)
 Dividend Tax                                                                                      (1319.61)                                     0         A. Assets held & used 31.3.06
 Payment of dividend                                                                              (10036.06)                           (7,761.23)          Type of assets                                             Estimated useful life for charging depreciation
 Net cash provided by financing activities                                                        (16131.88)                           (5,110.69)          Leasehold Land                                             20 Years
 Net increase in cash and cash equivalent during the year                                           3504.81                              (488.62)          Buildings                                                  10-15 Years
 Cash and cash equivalent at the beginning of the year                                              1387.94                              1876.56           Plant and Machinery                                        6-15 Years
 Cash and cash equivalent at the end of the year                                                    4892.75                              1387.94           Furniture and Fixtures                                     10-15 Years
 The accompaying notes are an integral part of these consolidated financial statements                                                                     Office Equipment                                           15 Years
                                                                                                                                                           Vehicles                                                   5 Years


Notes to consolidated financial statement for the year ended 31.3.2006                                                                                     Assets under construction relate to Uttaranchal and Jammu manufacturing units, which are expected to
                                                                                                                                                           be in full operation by Sept 2006. Property, plant & equipment aggregating INR 28241 lac are mortgaged /
(all amounts in Indian Currency in lac unless specified otherwise):                                                                                        hypothecated to bank & financial institutions towards security on loan.

1)     Business - Dabur India Ltd. (DIL) along with its subsidiaries (collectively known as group companies) is a FMCG                                i)   Intangible ( Patent & Trade mark)
       Company with its business interest spread across the Globe.                                                                                         Amortized over the useful lifetime of the asset on straight-line method subject to periodic review of utility.
       The company was incorporated on 16th September 1975 with the object of manufacturing and marketing FMCG,
       Ayurvedic & Pharmaceutical products. The pharmaceutical division of the company was demerged from the ex-                                      j)   Goodwill :
       isting entity on 1.4.2003. DIL has manufacturing facilities in six States of India. The group companies presently                                   Goodwill arises out of consolidation of subsidiaries or merger of body corporate with group companies
       have manufacturing facilities in seven countries, namely India, Bangladesh, Nepal, Dubai, Sarjah, Egypt & Nige-                                     being the excess of value of investment over proportionate stake in net assets of subsidiaries / merged en-
       ria. Major markets of the group include India, Middle East, Nepal, Bangladesh, USA, and UK.                                                         tities in terms of book values which are indicated in the consolidated balance sheet. Goodwill is not
       The growth of the company has been phenomenal since early ninety rarely shared by any other FMCG company                                            amortized but subjected to periodic impairment testing where applicable. Goodwill of business combi-
       in this subcontinent.                                                                                                                               nation working out to negative, is deducted proportionately from the fixed assets of acquired entity.

2)     Significant Accounting Policies :                                                                                                              k)   Impairment of long lived assets :
       Significant Policy for preparation of accompanying Consolidated Financial Statement (CFS) is summarized be-                                         The carrying value of long-lived assets, including intangible assets and property and equipment, are re-
       low:                                                                                                                                                viewed for impairment if an indication of impairment exists. Adjustments are recorded if the estimated
                                                                                                                                                           undiscounted net cash flows are less than the carrying value. In addition, the subsequent amortization pe-
       a)         Basis of presentation and use of estimates:                                                                                              riod for the remaining carrying value of the impaired asset is revised, if necessary.
                  The accompanying CFS include Dabur India Limited and its subsidiaries and are prepared in accordance
                  with accounting principles generally accepted in United States of America ("US GAAP"). The preparation                              l)   Employees Stock Option Scheme
                  of consolidated financial statement in conformity with US GAAP requires management to make estimates                                     Compensation expenses for stock options granted to a section of management employees are measured by
                  and assumption. These estimates and assumptions affect the reported amount of assets and liabilities, rev-                               using the intrinsic value based method of accounting under the USGAAP, as permitted by SFAS No. 123.
                  enues and expenses and disclosure of contingent assets and liabilities. Actual result could differ from these                            Under the method compensation expenses is recognized over vesting period based on difference, if any,
                  estimates. The management's estimates for charge back, rebates, discount, returns, and the useful life of                                between the market value of stock of parent company on the date of grant of the stock option and the amount
                  tangible and intangible assets and realization of deferred assets present sensitive estimate in particular.                              to be paid by the employees for exercising the option.
                                                                                                                                                      m)   Research and Development Expenses
       b)         Foreign currency translation :                                                                                                           Contributions towards scientific research expenses are charged to the statement of income in the year in
                  Functional currency of Dabur India Limited is Indian Rupee (INR) and the accompanying financial state-                                   which the contribution is made.
                  ments are reported in INR accounted for under remeasurement method. Monetary assets and liabilities of
                  overseas Group Companies are translated into INR at the appropriate year-end exchange rates. Income and                             n)   Dividends
                  expenses are translated using the monthly average exchange rates in effect during the year being reported.                               Dividends on common stock are recorded as a liability when recommended by the Board.
                  The resulting translation adjustments are recorded as a component of accumulated other comprehensive
                  income. Non-monetary assets are accounted for in terms of exchange rate ruling on the date of transaction.                          o)   Advertising cost
                                                                                                                                                           Expenditure on advertising is expensed when incurred.
       c)         Principles of consolidation:
                  The consolidated financial statements include the financial statements of DIL and its subsidiaries. An en-                          p)   Earnings per share
                  tity in which DIL has directly or indirectly, through other subsidiary undertakings, has taken a controlling                             In accordance with SFAS No. 128, "Earning per Share", basic earning per share in computed using the weight-
                  interest or is in a position to control composition of directors is classified as a subsidiary. All material inter-                      ed average number of common shares outstanding during the period. Diluted earning per share is com-
                  company accounts and transactions have been eliminated on consolidation.                                                                 puted using the weighted average number of common and diluted common equivalent shares outstand-
                  The Group Companies, which are consolidated under DIL, presently comprise of entities with the follow-                                   ing during the period.
                  ing details:-
                                                                                                                                                      q)   Revenue recognition :
                                                                                                                                                           Customers of the Group Companies consist primarily of large wholesalers and dealers network who sell
                  Name of Subsidiary:                                  Country of incorporation     Shareholding                                           directly into the retail channel. Revenue from product sales is recognized when the merchandise is sold or
                                                                                                                                                           shipped to customers and all four of the following criteria are met: (i) persuasive evidence that an arrange-
                  Dabur Nepal Pvt Ltd                                  Nepal                        97.5% by Dabur International Ltd
                                                                                                                                                           ment exists (ii) delivery of the products has occurred; (iii) the selling price is both fixed and determinable
                  Dabur overseas Ltd                                   British Virgin Island        100%                                                   and (iv) collectibility is reasonably assured.
                  Dabur International Ltd                              Isle of MAN                  100%                                                   Provisions for sales discounts, damaged product returns, exchange for expired product are established as
                                                                                                              CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 33
     Annual Report 2005-06                                                                                                                                                                                                         Dabur India Limited



             a reduction of product sales revenues at the time such revenues are recognized. Certain charge backs and           8)   Inventories :
             rebate programmes extended to customers pursuant to industry standards are recognized as a reduction                    Inventories comprises of the following :-
             from product sales revenues. Besides taxes/duties incidental to sale are recognized as a reduction from prod-
             uct sale revenue.
                                                                                                                                                                                                                                                 INR in Lac
     r)      Income Taxes :                                                                                                                                                                                                2006                      2005
             The Group Companies account for deferred taxes under the full liability method, in accordance with the
                                                                                                                                     Raw Materials                                                                       8092.69                   8068.03
             provisions of SFAS No. 109 "Accounting for Income Taxes". Deferred Tax assets and liabilities are recog-
             nized for the future tax consequences attributable to differences between carrying amounts of existing as-              Packing materials,stores & spares                                                   4820.50                   3646.80
             sets and liabilities in the financial statements and their respective tax basis. Deferred tax assets and liabil-        Stock in process                                                                    1402.38                    746.23
             ities are measured using enacted tax rates as on the date of the financial statements. The effect on deferred
             tax assets and liabilities of a change in tax rates is recognized in the statement of income in the period of           Finished goods                                                                      7301.73                   7851.86
             change. Based on management's judgment, the measurement of deferred tax assets is reduced, if necessary,                Total                                                                              21617.30                  20312.92
             by a valuation allowance for any tax benefits for which it is more likely than not that some portion of all of
             such benefits will not be realized. Income Tax for current period is estimated and provided as per rule of
             country of incorporation of respective entities under consolidation.                                               9)   Other Current assets :
                                                                                                                                     Other current assets comprise of the following :
     s)      Employees' benefit :
             Eligible employees of group companies are entitled to gratuity, superannuation and leave salary for which                                                                                                                           INR in Lac
             liabilities are accrued or payment made to appropriate agencies entrusted to provide relevant benefits on
                                                                                                                                                                                                                           2006                      2005
             behalf of group companies. Accrued liabilities are ascertained on the basis on actuarial advice / manage-
             ment estimate and when payment is made to the agencies entrusted for the purpose, the same is account-                  Fixed deposit                                                                          0.00                     22.00
             ed for as per payments made to these agencies in terms of their advice.                                                 Securty deposits with various authorities                                              0.00                     10.31
3)   Advertising and Publicity costs during the period amounted to INR 22168 lac.                                                    Advance payment of Tax                                                              5914.13                   3690.49
                                                                                                                                     Advances to suppliers                                                               2084.01                   2471.18
4)   Changes in Accounting Procedures:
                                                                                                                                     Advance to employees                                                                 292.48                    310.47
     This being the 1st financial period of presentation of account in US GAAP, accounting treatments remain in terms                Balances with excise authority                                                       434.84                    992.80
     of latest pronouncement of appropriate bodies and as such the question of disclosure on the changes in account-
     ing procedure does not arise.                                                                                                   Other advances recoverble in cash or in kind or value to be received                2884.04                   1135.51
                                                                                                                                     Advance against acquisition of equity shares of Balsara Hygience Products Ltd.         0.00                  17473.29
5)   Business Combination :
     a)    On April 1, 2005, the parent company acquired 99.52%, 100% and 100% (50% being held by Balsara Hygiene                    Total                                                                              11609.50                  26106.05
           Products Limited & 2% by Balsara Home Products Limited) of Balsara Home Products Limited, Balsara Hygiene
           Products Limited and Besta Cosmetics Limited respectively by way of acquiring equity shares of INR 10 each           10) Property, Plant & Equipment:
           numbering 12290711, 3880800 and 431800 in the respective entities. The total purchase considerations paid                Property, Plant & Equipment Comprise of the following :
           in cash for acquisition of respective investment were INR 3405.00 lac, INR 11651.00 lac and INR 1790.00 lac.
           Estimated fair value assigned to assets of new subsidiaries on the date of acquisition were as follows:
                                                                                                                                                                                                                                                 INR in Lac
                                                                                                                  INR in Lac                                                                                    2006                                 2005
                                                                 Balsara Home       Balsara Hygiene                Besta             FREEHOLD LAND                                                            781.01                               645.65
                                                                      Products             Products            Cosmetics             LEASEHOLD LAND                                                           864.94                               748.33
                                                                       Limited              Limited              Limited
                                                                                                                                     BUILDING,ROADS & CULVERT                                               15271.82                             12801.93
             Current Assets
                                                                                                                                     PLANT & MACHINERY                                                      27132.00                             23006.00
             Cash and Cash equivalents                                  126.27                  5.58                  7.75
                                                                                                                                     VEHICLES                                                                1249.40                              1145.68
             Accounts Receivable,net of allowances                      549.18                                        0.00
                                                                                                                                     FURNITURE & OFF EQUIPMENT                                               4563.55                              3828.73
             Inventories                                               1293.65                                        0.00
                                                                                                                                     COMPUTERS                                                               2872.73                              2534.56
             Other current assets                                       656.20               819.12                 106.04
                                                                                                                                     CAPITAL WORK IN PROGRESS                                                1304.70                               938.81
             Total current assets                                     2625.30                824.70                113.79
                                                                                                                                     Total Gross Block                                                      54040.14                             45649.69
             Property,plant and equipment,net                          1930.84               562.74                   5.07
                                                                                                                                     Less: Accumulated Depreciation                                         -19232.95                            -16119.28
             Investments                                                  1.12               731.94
                                                                                                                                             Negative Goodwill                                                -895.70                                 0.00
             Other non-current assets
                                                                                                                                     Net Block                                                              33911.50                             29530.41
             Total assets                                             4557.26              2119.38                 118.86
             LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                    The depreciation expenses relating to Property, Plant and Equipment for the year is 3634.48
             Current Liabilities
                                                                                                                                11) Investment:
             Short term debt and current portion of long term debt     1039.62
             Trade accounts payable                                    3673.41               112.30                  41.99           a)        Current Investment
             Accrued expenses and other current liabilities             335.15               378.50                  45.20
                                                                                                                                                                                                                                                 INR in Lac
             Total current liabilities                                5048.18                490.80                  87.19
                                                                                                                                                Cost of the investment                                                                             4089.30
             Other non-current liabilities                               46.75                                        0.00
                                                                                                                                                Gross unrealized holding gain in accumulated other comprehensive income                               6.90
             Total non-current liability                              5094.93                490.80                  87.19
                                                                                                                                                Carrying value                                                                                     4096.20
             Deffered Tax liabilities (net)                              45.54                43.75                   1.23
             Total liabilities                                                                                                       b)         Investment readily available for sale
             Stockholders' equity                                       305.00               388.08                  90.00
                                                                                                                                                (I)    Readily marketable equity securities:
             Additional paid in capital                                2766.00                                        0.00
             Retained earning                                         -3654.21              1196.75                 -59.56                                                                                                                       INR in Lac
             Total liabilities and stock holders' equity              4557.26              2119.38                 118.86                              Cost of the investment                                                                         4.80
                                                                                                                                                       Gross unrealized holding gain in accumulated other comprehensive income                      241.60
             Excess of purchase consideration over fair value of net assets, accounted for as Goodwill amount to INR                                   Carrying value                                                                               246.40
             4249.6 lac, INR 10073.54 lac and INR1840.62 lac for three respective entities.
     b)      In addition to above note, the group stake in Dabur Nepal Private Limited has been enhanced during the
             year by way of enhancing the same to 97.5% from 79.96% formerly held therein by way of acquiring addi-                             (II)   Readily marketable debt securities:
             tional 140000 number of shares of INR 10 each in INR at total sum consideration of INR 364.80 Lac.
             Pursuant to relevant enhancements share of minority interest in liability side of balance sheet reduced by                                                                                                                          INR in Lac
             INR 1293.00 lac.
                                                                                                                                                       Cost of the investment                                                                        12.50
6)   Cash & Cash Equivalent :                                                                                                                          Gross unrealized holding gain in accumulated other comprehensive income                          Nil
     Cash & cash equivalent comprises following:                                                                                                       Carrying value                                                                                12.50
                                                                                                                  INR in Lac
                                                                                                                                                (III) Not readily marketable equity securities
                                                                             2006                                    2005
     Cash in hand                                                           49.45                                    27.91                                                                                                                       INR in Lac

     Remittance in transit                                                   2.25                                   123.25                             Cost of the investment                                                                       105.00
                                                                                                                                                       Gross unrealized holding gain in accumulated other comprehensive income                          Nil
     Balance with schedule Bank                                           4621.98                                  1105.33
                                                                                                                                                       Carrying value                                                                               105.00
     Balance with non-schedule Bank                                        219.07                                   131.45
     Fixed deposit with Non-schedule Bank                                    0.00                                     0.00
     Fixed deposit account                                                   0.00                                     0.00      12) Goodwill and intangibles :
     Postal savings Bank                                                     0.00                                     0.00           I)         Component of goodwill (valued as per 2j)
     Total                                                                4892.75                                 1387.94
                                                                                                                                     a)         Goodwill arising out of consolidation of Balsara Home Products Limited, Balsara Hygiene Products Limit-
                                                                                                                                                ed and Besta Cosmetic limited due to DIL's owning 99.52% in Balsara Home, 100% in Balsara Hygiene and
     Cash equivalent represent deposits placed with Banks in the normal course of business operation.                                           48% in Besta Cosmetics. (Balsara Hygiene holding 50% and Balsara Home Products Limited holding 2%
                                                                                                                                                in Besta Cosmetics.). With effect from 1st April 2005, have been reported in business combination in para
7)   Accounts Receivable :                                                                                                                      5 above.
     The Accounts receivable is stated net of allowance for doubtful debts. The group companies maintain an allowance
     for doubtful debts on accounts receivable, based on present and prospective financial condition of the customer                 b)         On September 14, 2003, the parent company acquired 100% stake in Dabur International Limited by way
     receivable after considering historical experience and the current economic environment on case-to-case basis.                             of acquiring 100000 numbers of shares therein at a consideration of INR 2287.50 Lac. Excess of considera-
     Trade account receivable as at March 31,2006, net of allowance for doubtful account of INR 154.97 lac amounts to                           tion money over the net asset value of the investee entity amounting to INR 1178.57 lac has been account-
     INR 7435.00 lac.                                                                                                                           ed for as Goodwill.

                                                                                                                                     c)         On September 14, 2003, the parent company acquired 38.41% stake in Weikfied international Limited
                                                                                                                  INR in Lac                    by way of acquiring 615 number of shares amounting to INR 356.89 Lac. Excess of consideration mon-
                                                                         2006                                        2005                       ey over the net asset value of the investee entity amounting to INR 224.03. lac has been accounted for as
                                                                                                                                                Goodwill.
     Allowance at the beginning of the year                              25.98                                       11.98
     Allowance for Doubtful debts for the year                          273.68                                       58.08           d)         Group stake in Dabur Nepal Private Limited has been enhanced during the year as reported in business
                                                                                                                                                combination in para 5 above for this 140000 number of shares has been acquired at a consideration of INR
     Account receivable written off during the year                     145.82                                       44.08                      364.80 Lac. Consideration money falling short of proportionate worth of net Assets by INR 896 lac gave rise
                                                                                                                                                to negative goodwill of said amount, which has been used, in reducing proportionately carrying amount of
     Balance for allowance for Doubtful debts                           153.84                                       25.98
                                                                                                                                                fixed assets.
34 CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP
     Dabur India Limited                                                                                                                                                                                                                  Annual Report 2005-06




      II)      Details of other intangible assets (Patent & Trademark) :                                                                              18) Other non-current Liabilities :

                                                                                                                                         INR in Lac                                                                                                              INR in Lac
                                                                                   2006                                                      2005                                                                             2006                                    2005
                                                                                                                                                           Leave salary                                                      122.00                                1009.09
               Gross Carrying Amount                                          1112.87                                                      1095.97
                                                                                                                                                           Housing gratuity & other welfare                                  700.00                                  112.99
               Accumulated amortisation                                           480.85                                                    239.70
                                                                                                                                                           Taxation                                                         5959.78                                   16.06
               Net Carrying amount                                                632.02                                                    874.67         Dividend payable                                                    0.00                                2311.21
               Amortisation in succeeding five years                              235.79                                                    235.79         Deferred payment credit against machine                           148.40                                    0.00
                                                                                                                                                           Deposits others                                                    55.43                                    0.00
13) Other non-current assets:                                                                                                                              Total                                                            6985.61                                3449.35
    Other non-current assets include security deposits & those segment of current assets, which are not due for real-
    ization within a period of one year.                                                                                                              19) Stockholders' Equity -

                                                                                                                                         INR in Lac        a)        Common Stock -
                                                                                                                                                                     DIL has only one class of common stock i.e. Equity Share of INR 1/ each Shareholders enjoy voting power
                                                                                   2006                                                      2005                    in accordance to the number of Equity Shares held by it.
      Fixed deposit                                                               223.52                                                     62.40
                                                                                                                                                           b)        Employees stock exchange option -
      Post office savings bank for excise regis.                                    0.95                                                      0.95                   Non-cancelled component of additional paid in share net-off quantum remaining unamortized shown sep-
      Securty deposits with various authorities                               1660.41                                                      2732.21                   arately under retain additional paid-in capital.

      Advance to employees                                                         32.00                                                     34.25         c)        Dividend -
                                                                                                                                                                     During the period Interim dividend INR 4299.29 lac @ 150% and Final dividend of INR 5733.03 Lac @
      Total                                                                   1916.88                                                      2829.81                   100% have been distributed and proposed respectively.

                                                                                                                                                      20. Employees stock option
14) Borrowing :                                                                                                                                           The parent Company has an Employees Stock Option Scheme (ESOP), which provides for grant of stock options
    a)    Short Term Debt (including current portion of long term debt)                                                                                   in DIL to eligible management employees of group companies. The ESOP is administered by the Management
          Working capital and short term loan from banks comprises following:                                                                             Committee of the Board("the Committee"). The criteria for granting options are essentially on the basis of the man-
                                                                                                                                                          agement grade of the employee. Exercise price of option is the nominal value of shares.
                                                                                                                                                          Stock option activity during the year was as follows:
               Name of entity                Name of Bank                         Amount             Rate of        Nature of security
                                                                                  in INR Lac         interest                                                                                                              31st Mar 06                         31st Mar 05
                                                                                                     per anum                                              Outstanding,beginning of the year                                  1534740                              1320658
               Dabur Nepal Ltd               Nabil Bank Ltd                       823.70             11.00%         Stocks,movable properties              Granted                                                            5388423                               384743
                                                                                                                    & guarantee by                         Excercised                                                          231679                               170661
                                                                                                                    Dabur India ltd.
                                                                                                                                                           Cancelled                                                                  0                                   0
                   - Do -                    Standard Chartered Bank              533.80             11.00%         Do                                     Outstanding at the end of the year                                 6691484                              1534740
                                             Nepal Ltd
                                             Nepal SBI Bank Ltd                   546.30             11.00%         Do
                                                                                                                                                           Up to March 31,2006 the options granted are summarized as follows:
               Dabur foods ltd               Hongkong sanghai                     479.27             8.50%          Stocks,movable properties
                                             banking corporation                                                    & guarantee by                         Date of        Number of             Vesting        Vesting           Exercise     Market price     Amount INR
                                                                                                                                                           grant            options              period          Date               price       as on date      amortized
                                                                                                                    Dabur India ltd.
                                                                                                                                                                            granted             in Days                                           of grant      in 2005-06
               Dabur foods ltd               GE Capital service                   1000.03            10.50%         Movable & immovable                                                                                          (INR per         (INR per
                                                                                                                    assets                                                                                                         share)           share)
               Asian consumercare            Standard Chartered Bank              417.04             12.00%         Stocks,book debts,lease                6-Nov-02             20000                1825      5-Nov-07                 1            45.10           92820
                                             & ABN Amro Bank                                                        hold property,movable                  30-Apr-03           137500                1095     29-Apr-06                 1            37.00          868216
                                                                                                                    property,plant,equipment               30-Apr-03           262500                1826     29-Apr-08                 1            37.00          993958
                                                                                                                    & personal guarantee of                10-Oct-03           150006                1024      30-Jul-06                1            60.55         1675434
                                                                                                                    one of the director.
                                                                                                                                                           10-Oct-03          1549982                1389      30-Jul-07                1            60.55        12762716
               Weikfield                     (Standard Chartered Bank             78.21               5%            Stock ,book Debts,Lease                5-May-04             74998                1182      31-Jul-07                1            79.70          959056
                                             & ABN Amro Bank )                                                      hold property,Personal
                                                                                                                                                           23-Jul-04             7148                 729      22-Jul-06                1            69.95          129846
                                             Bank Overdraft                                                         guarantee of one director.
                                                                                                                                                           23-Jul-04            87206                1094      22-Jul-07                1            69.95         1055602
               Dabur International           (Standard Chartered Bank             380.28              5%            Stock ,book Debts,Lease                23-Jul-04           150108                1825      22-Jul-09                1            69.95         1089211
               Limited                       & ABN Amro Bank )                                                      hold property,Personal
                                                                                                                                                           26-Oct-04            34080                 551     30-Apr-06                 1            73.35          859456
                                             Bank Overdraft                                                         guarantee of one director.
                                                                                                                                                           26-Oct-04             5454                1106      6-Nov-07                 1            73.35           68523
               Dabur Egypt Ltd               Banque Du cairo barklays             122.76             14.50%         Encumbrance on inventory               26-Oct-04            71572                1282     30-Apr-08                 1            73.35          775766
               Balsara Home Ltd              Standard Chartered Bank              253.29                            Stock / Book Debt                      28-Apr-05           136056                 364     27-Apr-06                 1           116.85         7785324
                                             HDFC Bank                            222.32             8.75%          Book Debt                              28-Apr-05            95240                 364     27-Apr-06                 1           116.85         5449772
                                                                                                                                                           28-Apr-05            12218                1643     27-Oct-09                 1           116.85          154890
                                             HSBC                                 200.36             8.00%          Stock / Book Debt
                                                                                                                                                           26-Jul-05            52606                 365      26-Jul-06                1           151.45         2868935
               Short term loan                                                                                                                             26-Jul-05            30476                1826      26-Jul-10                1           151.45          332227
               Dabur India Ltd               Consortium of IDBI Bank,             1293.36            8.00%          Stock & book debts                     26-Jul-05           101746                 365      26-Jul-06                1           151.45         5548847
                                             SBC,SBI,ABN AMRO,UBI,                                                                                         26-Jul-05           111250                1826      26-Jul-10                1           151.45         1212767
                                             UTI Bank,HDFC                                                                                                 26-Jul-05            18700                 980      1-Apr-08                 1           151.45          379834
                                             & Standard Chartered
                                                                                                                                                           26-Jul-05             4572                 365      26-Jul-06                1           151.45          249340
               Dabur International           Depopsits of Directors /             1070.05            8.50%                                                 26-Jul-05             6858                1826      26-Jul-10                1           151.45           74761
               Limited                       Companies                                                                                                     26-Jul-05             3810                 365      26-Jul-06                1           151.45          207783
                                                                                                                                                           26-Jul-05             3810                1826      26-Jul-10                1           151.45           41534
15) Trade accounts payable                                                                                                                                 26-Jul-05             2500                 365      26-Jul-06                1           151.45          136341
    Trade accounts payable of INR 16482.32 lac (PY 17301.92) comprise trade creditors for goods & services which in-                                       26-Jul-05             2500                 980      1-Apr-08                 1           151.45           50780
    clude notes payable of INR 8050.56 lac (PY INR 12206.55 lac).                                                                                          26-Jul-05            18750                 370      31-Jul-06                1           151.45         1008737
                                                                                                                                                           26-Jul-05           106250                 735      31-Jul-07                1           151.45         2877530
16    Accrued expenses & other current liabilities
      Accrued expenses & other current liabilities comprise the following                                                                                  26-Jul-05             9376                 370      31-Jul-06                1           151.45          504422
                                                                                                                                                           26-Jul-05            53124                 735      31-Jul-07                1           151.45         1438738
                                                                                                                                         INR in Lac        24-Oct-05             6100                 372     31-Oct-06                 1           142.65          195792
                                                                                   2006                                                      2005          24-Oct-05             7010                1825     23-Oct-10                 1           142.65           45863
                                                                                                                                                           24-Oct-05             6100                 890      1-Apr-08                 1           142.65           81837
      Proposed dividend                                                       5733.03                                                      4296.30
                                                                                                                                                           24-Oct-05             6310                1825     23-Oct-10                 1           142.65           41283
      Corporate tax on proposed dividend                                          804.06                                                    602.56
                                                                                                                                                           24-Oct-05             1500                 372     31-Oct-06                 1           142.65           48146
      Bonus                                                                        55.05                                                    117.62         24-Oct-05             1500                 890      1-Apr-08                 1           142.65           20124
      Creditor for expenses                                                  13224.12                                                    12578.32          25-Nov-05             4500                 535    14-May-07                  1           170.55           95865
                                                                                                                                                           25-Nov-05            13876                 901    14-May-08                  1           170.55          175526
      Advance from customers                                                      273.63                                                    325.78
                                                                                                                                                           25-Nov-05            13876                1266    14-May-09                  1           170.55          124920
      Interest accrued but not due on loan                                         62.66                                                     39.08         25-Nov-05           121498                1631    14-May-10                  1           170.55          849020
      Total                                                                  20152.55                                                    17959.66          25-Nov-05             8250                 535    14-May-07                  1           170.55          175753
                                                                                                                                                           25-Nov-05             8250                 901    14-May-08                  1           170.55          104359
                                                                                                                                                           25-Nov-05             8250                1266    14-May-09                  1           170.55           74272
17) Long term debt, excluding current portion
                                                                                                                                                           25-Nov-05            85250                1631    14-May-10                  1           170.55          595721
                                                                                                                                                           25-Nov-05             4500                 535    14-May-07                  1           170.55           95865
      Name of entity                 Bank / Inst.                     Amount               Rate of         Nature of               Repayment
                                                                    in INR Lac            interest         security                Terms                   25-Nov-05            13876                 901    14-May-08                  1           170.55          175526
                                                                                                                                                           25-Nov-05            13876                1266    14-May-09                  1           170.55          124920
      Pasadensa                      GE Capital service                 1822.72           10.50%           Movable &               Quarterly
                                                                                                                                                           25-Nov-05           121498                1631    14-May-10                  1           170.55          849020
      Food Ltd.                                                                                            immovable assets
                                                                                                                                                           25-Nov-05            49500                 535    14-May-07                  1           170.55         1054518
      Asian Consumer                 Standard Chartered Bank              23.27             12%            Plant & Machinery       Quarterly               25-Nov-05           143256                 901    14-May-08                  1           170.55         1812136
      Care
                                                                                                                                                           25-Nov-05           143256                1266    14-May-09                  1           170.55         1289680
      DNPL                           Standard Chartered Bank             253.41             11%            Movable &               Quarterly               25-Nov-05          1261488                1631    14-May-10                  1           170.55         8815195
                                                                                                           immovable assets
                                                                                                                                                           25-Nov-05            75000                 901    14-May-08                  1           170.55          948723
      DIL                            Deffered payment Credit             755.22           Int.free         Fixed assets of 5/1     Yearly                  25-Nov-05            75000                1266    14-May-09                  1           170.55          675197
                                                                                                           Shahibabad                                      25-Nov-05           600000                1631    14-May-10                  1           170.55         4192760
      DIL                            Investor Protection Fund            137.88           Int.free         Nil                                             27-Jan-06             7776                 364     26-Jan-07                 1           107.05          152290
      DIL                            Security Deposits from                9.58           Int.free         Nil                                             27-Jan-06            44374                 472    14-May-07                  1           107.05          670197
                                     Dealers                                                                                                               27-Jan-06            41250                 838    14-May-08                  1           107.05          350910
                                                                                                                                                           27-Jan-06            41250                1203    14-May-09                  1           107.05          244441
                                     Total                              3002.08
                                                                                                                                                           27-Jan-06           442918                1568    14-May-10                  1           107.05         1971064
                                                                                                            CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP 35
   Annual Report 2005-06                                                                                                                                                                                                  Dabur India Limited



21) Other Income :                                                                                                                c)        Breakup of current guarantees furnished along with other particulars
    Other income comprises rent realization, dividend earning, miscellaneous receipts and capital
    profit.                                                                                                                                                                                                                                  INR in Lac
22) Related party transaction                                                                                                               Guaranteed party                        Name of party on whose              Carrying           Fair value
                                                                                                                                                                                    behalf guarantee issued              amount
     a)        Service of INR 180 lac received from Jetways Travels Private Limited and Associates in which one key man-                                                                                                 31-3-06             31-3-06
               agement personnel exercises significant influence.                                                                           Nepal Arab Bank Ltd                     Dabur Nepal Pvt.Ltd                    188.00              188.00
                                                                                                                                            Nepal Arab Bank Ltd                     Dabur Nepal Pvt.Ltd                    125.00              125.00
     b)        Rent paid INR 6 lac to two Associates entities namely Miracle Commercial Enterprises Private Limited and
               Wakarusa Laboratories Pvt Limited associateship arising due to exercise of significant influence therein by                  HDFC Ltd                                A.K.Jain                                10.00               10.00
               key management personnel.                                                                                                    HDFC Ltd                                D.K.Upadhyaya                            3.00                3.00
                                                                                                                                            HDFC Ltd                                J.P.Sharma                               8.00                8.00
     c)        Remuneration to key management personnel INR 811.34 lac.
                                                                                                                                            HDFC Ltd                                Naseem Ahmed                             5.00                5.00
     d)        Post retirement benefits to relative of key management personnel INR 125.98 lac.                                             HDFC Ltd                                R.S.Saini                                9.00                9.00
                                                                                                                                            HSBC Ltd,New Delhi                      Dabur Egypt Ltd                        291.00              291.00
     e)        Repayment of Loan INR 3.50 lac received from Welltime housing & Finance private limited and associates
               in which a key management personnel exercises significant influence.                                                         Canara Bank                             Dabur Foods Ltd                       1200.00            1200.00
                                                                                                                                            HSBC Ltd.                               Dabur Foods Ltd                       2550.00            2550.00
     Note:                                                                                                                                  ABNAmro Bank                            Dabur Oncology Plc                    1945.00            1945.00
     i)        Key management personnel include Mr. Pradeep Burman, Dr. Anand Burman, Mr. Amit Burman, Mr. Mo-                              ABNAmro Bank                            Dabur Oncology Plc                    5666.00            5666.00
               hit Burman, Mr. Chetan Burman, Mr. P. D Narang, Mr. Sunil Duggal, Mr. Sanjay Sharma, Mr. T. K gupta, Mr.                     ICICI Bank Ltd                          Pasadensa Foods Ltd                    400.00              400.00
               Arvind Kumar and Mr. S Ramakrishan all wholetime directors of group companies.                                               G.E.Capital Services India              Pasadensa Foods Ltd                    950.00              950.00
     ii)       Relatives of key management personnel include Mr. R. C Burman, Mr. A. C Burman and Ms Asha Burman.                           HSBC Ltd.                               Dabur Egypt Ltd                        211.00              211.00
                                                                                                                                            Hongkong Bank                           Dabur India Limited                    811.00              811.00
23) Income Taxes                                                                                                                            Nepal Arab Bank Ltd                     Dabur India Limited                 117806.00          117806.00
    Provision for Income Taxes includes foreign income tax provision of INR 105.5 lac for Dabur Nepal Pvt. Ltd.
    The break-up of deferred tax liability / benefit :                                                                                      Canara Bank                             Dabur India Limited                   1232.00            1232.00
                                                                                                                                            ICICI Bank Ltd                          Dabur India Limited                   5361.00            5361.00
                                                                                                                INR in Lac                  ACCL                                    Dabur India Limited                  57528.00           57528.00
                                                                                     2006                           2005                    Standard Chartered Bank,Dubai           Dabur India Limited                    420.00              420.00
     A     Deffered tax liability (Non-Current)                                                                                             HSBC Bank,Egypt                         Dabur India Limited                  27307.00           27307.00
                                                                                                                                            Standard Chartered Bank                 Dabur India Limited                   1900.00            1900.00
           Depreciation of Plant & equipment                                       1228.53                       1041.98
                                                                                                                                            HSBC                                    Dabur India Limited                    195.00              195.00
           Long term investment                                                      88.28                         86.22                    HSBC                                    Dabur India Limited                    505.00              505.00
           Total Deffered Tax liability (Non –Current)                            1316.81                       1128.20                     Standard Chartered Bank,Dubai           Dabur India Limited                  48588.00           48588.00

     B     Deffered Tax assets (Non Current)
                                                                                                                                            None of the parties favouring whom guarantee have been furnished is related party.
           VRS Payment                                                                0.00                           4.01
                                                                                                                                  ii)       Non current Loans and Advances includes INR 48.64 lac paid by the Company to Excise authorities on be-
           Long term investment                                                       0.00                        496.44
                                                                                                                                            half of Sharda Boiron Laboratories Limited, now known as SBL Limited, in respect of excise duty demand
           Technical know how fees                                                   15.56                         24.02                    of INR 68.13 Lac raised by the District Excise Officer, Ghaziabad, against the Company and Sharda Boiron
                                                                                                                                            Laboratories Limited. The Hon'ble Supreme Court of India had concurred with the order of the District Ex-
           Total Deffered Tax assets (Non Current)                                   15.56                       524.47                     cise Officer, Ghaziabad.
                                                                                                                                            The Company had filed the review petition before Division Branch of the Hon'ble Supreme Court of India,
     C     Deffered Tax liability (A - B)                                         1301.25                        603.73                     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
     D     Deffered tax liability (current)
                                                                                                                                            executed with them, the recovery proceedings have been initiated by the Company against Sharda Boiron
           Current investment                                                         1.93                           0.40                   Laboratories Limited for INR 48.64 lac by invoking the arbitration clause. The matter is pending before
                                                                                                                                            Hon'ble High Court of Delhi for the appointment of an arbitrator. The balance amount of INR 24.46 lac along
           Total Deffered tax liability (current)                                     1.93                          0.40                    with interest demanded by the Excise Authorities has been paid directly by Sharda Boiron Laboratories
                                                                                                                                            Limited to Excise Authorities. During the year 1991-92 the company has received a refund of INR 5.95 lac,
     E     Deffered Tax assets (Current)                                                                                                    pursuant to the decision of Hon'ble Supreme Court in this regard. Necessary adjustments in respect of re-
           VRS Payment                                                                0.00                           2.00                   covery / refund will be made as per the arbitration proceedings.

           Disallowance U/S 43B of Income Tax Act,1961                              131.73                        131.74     26) Concentration of customer
                                                                                                                                 The products of the groups meant for indigenous usage predominantly find outlet through dealers' networks wide-
     F     Total deffered tax Assets (Current)                                     129.80                        133.34          ly spread across the length and breadth of the country, none of the dealers controlling noteworthy percentage of
                                                                                                                                 total indigenous sale. Exports are predominantly destined to West Asia, South Asia and South East Asian coun-
     G     Total deffered tax liability (C -F)                                    1171.45                        470.39
                                                                                                                                 tries.
                                                                                                                                 Products constituting lions share of the total revenue include Chywanprash, Hajmola, Hair oil, Fruit juices, Hon-
24) Fair value of financial instruments                                                                                          ey, Shampoo, Toothpaste and other Cosmetics etc.
    The Company uses the following methods and assumptions to estimate fair value of each class of financial in-
    struments for which it is practicable to estimate fair value:                                                            27) Revenue
    Cash, cash equivalents and restricted cash - The carrying amount approximates fair value because of the short-
    term maturity (up to months) of such instruments.                                                                                                                                                                                        INR in Lac
    Accounts receivable - The carrying amount approximates fair value due to their short them nature and historical                                                                                           2006                              2005
    collectability.
    Investments - The fair value of some investments are estimated based on their quoted market prices. For other in-             Domestic sales less returns                                             152729.01                        117246.00
    vestments, for which there are no quoted market prices, a reasonable estimate of fair value could not be made with-           Export sales                                                             18816.48                         19271.69
    out incurring significant costs.                                                                                              Subsidy                                                                    172.37                             44.65
    Accounts payable - The carrying value of accounts payable approximates fair value due to the short-term nature
    of obligations.                                                                                                               Sale of scrap                                                              278.78                            276.60
    Long term debt - The fair value of debt of the Company is estimated based on quoted market prices or current rates            Total                                                                   171996.64                       136838.94
    offered to the Company for same or similar debt. The carrying value of material long-term debt approximates its
    fair value.
                                                                                                                             28) Cost of revenues
     Estimated fair values of the Company's financial instruments are as follows :
                                                                                                                                                                                                                                             INR in Lac
                                                                                                                INR in Lac                                                                                    2006                              2005
                                                                                     2006                          2005           Raw Material consumed                                                    38758.41                         30992.17
     Cash & cash equivalent                                                        4892.75                      1387.94           Packing Materials consumed                                               25891.75                         17331.74
                                                                                                                                  Purchase of Finished goods                                               15385.77                         19784.12
     Accounts receivable                                                           7435.01                      7589.28
                                                                                                                                  Increase(-) / Decrease in stock in process & finished goods                736.39                          -2165.78
     Investments for which:
                                                                                                                                  Mfg.Expenses                                                              5711.25                          4050.37
     Practicable to estimate fair value                                            4355.46                      4630.77           Misc exp / receipt                                                          18.95                            -13.52
     Non-practicable to estimate fair value                                         105.00                        105.00          Workmen & staff welfare                                                   7972.67                          6014.51
     Accounts payable                                                             16482.32                     17301.91           Total                                                                    94475.19                         75993.61

     Long term debt                                                                3002.08                      2311.21
                                                                                                                             29) Selling, general and administrative expenses

25) Other contingency & capital commitment                                                                                                                                                                                                   INR in Lac
                                                                                                                                                                                                                2006                            2005
     a)        The group Company is involved in certain claims, fiscal assessments and litigation arising in the ordinary
               course of business. Management believes that these claims taken individually, or together, will not have a         Rent                                                                        1031.21                          738.89
               material effect on the financial statement of the Company.                                                         Rates & Taxes                                                                117.81                          119.00
                                                                                                                                  Insurance                                                                    341.84                          304.40
     List of contingencies are as follows:
                                                                                                                                  Freight & forwarding charges                                                6441.06                        4339.22
                                                                                                                INR in Lac        Commission ,Discount                                                         650.09                          801.74
                                                                                     2006                          2005           Advertisement & Publicity                                                  22168.21                       20375.91
                                                                                                                                  Travel & Conveyance                                                         2098.76                        1891.14
     Claims not acknowledged as debts                                               338.62                        277.32
                                                                                                                                  Telephone                                                                    407.62                          876.31
     In respect of Guarantees furnished                                                                                           Legal & Professional Telephone,fax expenses                                  928.14                          404.17
     Current                                                                       9378.86                     14937.10           Security expenses                                                            186.55                          141.51
     Non Current                                                                   1200.00                      1200.00           General expenses                                                            5631.61                        3645.47
     Bills purchased / discounted under letters of credit                          2396.58                      3807.34           Directors fees                                                                 9.00                            6.80
                                                                                                                                  Auditors' remuneration                                                        71.55                           51.55
     Demand for taxes pending disposal of appeal(s)                                4443.98                      1665.72
                                                                                                                                  Donation                                                                     331.37                          257.90
     In respect of Capital Commitment for un-executed contract                      450.89                      1064.15           Contribution to scientific research expenses                                 720.00                          597.97
                                                                                                                                  Bad debts                                                                    145.82                           44.08
     b)        Non Current guarantee relates to guarantee furnished by Parent company for INR 1200.00 lac to GE Capi-             Provision for contingent liability                                             0.00                           89.08
               tal Services India Limited on behalf of Pasedensa Foods Limited against term loan facility obtained by lat-        Loss on sale of fixed assets                                                   9.88                            0.00
               ter from the former.                                                                                               Total                                                                     41290.52                       34685.14
36 CONSOLIDATED FINANCIAL STATEMENTS AS PER US GAAP
   Dabur India Limited                                                                                                                                                                                     Annual Report 2005-06



30) Personnel expenses                                                                                                     32) Other income

                                                                                                              INR in Lac                                                                                                                     INR in Lac
                                                                        2006                                      2005
                                                                                                                                                                                                    2006                                          2005
     Directors' remuneration                                          895.29                                    824.15
     Salaries & benefits                                             5537.11                                   4009.68          Rent Realised                                                     17.30                                           21.10
     ESOP Employees                                                   498.00                                    130.58
     Total                                                           6930.40                                  4964.41           Dividend                                                            0.48                                             0.50

                                                                                                                                Misc Receipt                                                     540.88                                         127.10
31) Financial expenses
                                                                                                                                Profit on sale of investment                                     151.84                                         407.38
                                                                                                              INR in Lac
                                                                        2006                                      2005          Royalty                                                           18.54                                              0.00
     Interest paid on
                                                                                                                                Profit / loss on sale of fixed assets                            146.06                                        -108.87
     Fixed period loan                                                389.30                                     402.33
     Others                                                           735.70                                     419.36         Total                                                            875.10                                         447.21
     Bank charges                                                     513.70                                     421.90
     Total                                                           1638.70                                   1243.59



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



     Segment reporting and related information; -
                                                                                                                                                                                                                                INR in lac (Rounded off)
                                                            FMCG                                       FOODS                                   ELIMINATIONS                                OTHERS                          Total Consolidated
                                                  05-06               04-05                  05-06                04-05                   05-06                04-05               05-06             04-05                  05-06          04-05
     REVENUE
     External Sales                              148938              118649                  18628                12656                                                             4431              5534                 171997         136839
     Inter-segment sales                                                                                                                                                                                                         0               0
     Total Revenue                               148938              118649                  18628                12656                        0                        0           4431              5534                 171997         136839
     RESULT
     Segment result                               23447                16939                  1793                  753                                                              643               673                  25883          18365
     Unallocated corporate expenses                                                                                                                                                                                              0               0
     Operating profit                             23447                16939                  1793                  753                        0                        0            643               673                  25883           18365
     Interest expense (Net)                        1054                  720                   519                  446                                                               66                78                    1639           1244
     Interest income                                                                                                                                                                                                             0               0
     Income Tax(Current + Deferred)                                                                                                                                                                                           3248           1311
     Profit from ordinary activities              22393                16219                  1274                  307                        0                        0            577               595                  20996           15809
     Other Income                                                                                                                                                                                                              875            447
     Net profit                                   22393                16219                  1274                  307                        0                        0            577               595                  21871          16257
     OTHER INFORMATION
     Segment assets                               98823                82271                 14572                11615                 (19412)                (7152)               2693              3106                  96676           89840
     Unallocated corporate assets                                                                                                                                                                                             7366           4476
     Total assets                                 98823                82271                 14572                11615                 (19412)                (7152)               2693              3106                 104042           94316
     Segment liabilities                          46680                44290                  9872                 9749                   (7968)               (2762)               1083              1159                  49667           52436
     Unallocated corporate liabilities                                                                                                                                                                                        5548           3092
     Total liabilities                            46680                44290                  9872                 9749                   (7968)               (2762)               1083              1159                  55215           55528
     Capital expenditure                          22504                 7876                     0                     0                                                               0                   0                22504            7876
     Depreciation                                  3000                 2378                   302                  319                        0                        0            116               133                    3418           2831




34) Employees post retirement benefit :                                                                                         c)        Benefit of superannuation
                                                                                                                                          DIL provides benefit of superannuation towards employees for which it has obtained comprehensive cov-
     a)        Gratuity :                                                                                                                 erage from LIC. Under this scheme the settlement obligation lies with the company although LIC admin-
                                                                                                                                          isters the fund and determines the annual contribution to be paid.
     (i)       Dabur India Ltd., Dabur Food Ltd. And Pasedensa Foods Ltd.                                                                 Payment made for the period to LIC in this connection amounts to INR 215.75 lac.
               These companies have taken comprehensive insurance coverage for payment of gratuity liability to eligi-
               ble employees from Life Insurance Corporation of India (LIC) for which annual contribution is paid. Un-     35) Reconciliation between India GAAP & US GAAP.
               der this scheme settlement obligation remains with respective company although LIC administers the fund         There are considerable differences between two, the note worthy of them being enunciated below:
               and determines annual contribution to be paid. Annual contribution made by DIL Dabur Food Ltd, Paseden-
               sa Foods Ltd. to LIC in this connection amount to INR 277.53 lac.                                                i.        Valuation of investment under US GAAP at market price as against lower of costs under market value un-
                                                                                                                                          der Indian GAAP leading to comprehensive total income.
     (ii)      Dabur International Ltd. and Weikfield International (UAE) Ltd.
               Gratuity liability has been provided based on management estimate on the assumption of all employees re-         ii.       Depreciation on properties based on assessment of actual life span of the assets under US GAAP as against
               tiring at the period end. The said liability has not been funded.                                                          charging depreciation as per statutory rate under Indian GAAP.
               Provision made towards gratuity by Dabur International Ltd. and Weikfield International (UAE) Ltd amount
               to INR 14.75 lac and INR 3.11 lac respectively.                                                                  iii.      The Company sold long-term investment in Dabon International Private limited for which it booked a loss
                                                                                                                                          of INR 1301.04 lac in Indian GAAP. These investment had already been derecognised under US GAAP in
     b)        Leave Salary :                                                                                                             2003-04 accounts confirming to principles of US GAAP.

     i)        Dabur India Ltd. and Dabur Foods Limited and Pasedensa Foods Ltd.                                                iv.       Above resulted in difference of profit of DIL Group between Indian GAAP and US GAAP by INR 485.80 lac,
               Respective companies provided benefit of leave encashment to employees through annual contribution to                      the latter being higher.
               a fund managed by LIC. Under this scheme the settlement obligation remains with the respective compa-
               nies although LIC administers the fund and determines the annual contribution to be paid.                   36) Comprehensive income has been accounted for in respect of income / loss on earned or sustained subsequent to
               Total payment made during the year on account of annual contribution to LIC in respect of Leave Salary          1st April 2004. Prior period income / loss predominantly arising out of translation adjustments forms part of re-
               amounts to INR 20.53 lac, INR 2.08 lac and INR 1.57 lac by DIL , Dabur Foods Limited and Pasedensa Foods        tained earning.
               Ltd. respectively.
                                                                                                                           37) Prior period adjustment: An income of INR 96.70 lac relating to past years tax provision written back.
     ii)       Dabur International Pvt. Ltd., Weikfield International (UAE) Ltd
               These companies estimate their liabilities towards leave salary on the assumption of all employees retir-   38) Difference between Indian GAAP vis a vis US GAAP, if not material, for any head of accounts, has been ignored.
               ing at the period end. The liabilities so created are not funded.
               Liability on account of leave salary provided during the year include :

               Dabur International Limited                                                                 INR 21.83 lac
               Weikfield International Limited                                                             INR 11.97 lac



 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
                                                                                                               Sunil Duggal                                                                         Director
 S.Lahiri                                                                                                      A.K.Jain                                                                             Addl.General Manager (Finance)
 Partner                                                                                                                                                                                            & Company Secretary

 New Delhi
 25th April 2006

				
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Description: Financial Statement Consolidated Gaap document sample