Dabur Nepal Private Limited

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

Page

Director’s Report 1

Independent Auditor’s Report 3

Balance Sheet 4

Profit and Loss Account 5

Schedules 6

Accounting Policies and Notes to Accounts 11

Cash Flow Statment 17

 Directors’ report

This report has been prepared for the purpose of annexing the Annual Accounts of the Company with the Annual Accounts of
Dabur India Ltd., the holding company. The report is based on the performance of the Company during the period 1st April
2004 to 31st March 2005. The financial year of the Company will end on 15th July 2005 as per the Nepali Law.

Financial Results
The financial results for the Company’s working are as follows:
(Nrs in Lacs) ....
2004-05 2003-04

Turnover including other income 29830.24 28492.98

Profit after depreciation and before provisions 1615.45 2153.83

Less: Provision for housing facility 80.77 107.69

Less: Provision for Bonus 153.47 204.61
Less: Provision for Income Tax 264.53 395.93

Net Profit after Tax 1116.68 1445.60

Add: Balance in Profit & Loss account brought forward

from the previous year 5863.34 4846.69
Profit available for appropriation 6938.10 6282.74
Appropriation:
Interim Dividend 319.41 319.40
Transfer to General Reserve 100.00 100.00
Balance carried to Balance Sheet 6518.69 5863.34
6938.10 6282.74
Operations
The turnover of the company has increased by 4.69% over the previous year. The Net Profit after tax has reduced by 2.28% over
the previous year due to lower contribution margin.
During the year your company has invested Rs 24.65 crore on account of fixed assets. Out of which, major amount is spent
towards installing a new packing machine in Juice Plant in Flex Pack and increasing cold store capacity. Your company has
disposed off it’s fixed assets amounting Rs 4.51 crore during the year.
During the year, your company launched new A-3 flex pack of 1 litre and 330 ml. for Active range of juices. Your company has
also for the first time, launched fruit-vegetable juices and Coolers during the year.
Continuing its thrust on the domestic market, your company has started manufacturing Red toothpaste and gel, Chywanprash,
Vatika face-pack and Anmol Black shampoo during the year. During the year, the company’s sale from domestic market is 13%
as against 8.4% in the previous year.

Medicinal plants project:

In the Nursery business, your Company has now become self-sufficient in Pellitory Roots (Akarkara), one of the key ingredients,
which has been imported so far.
Your Company has signed a MOU with a US based Company for plantation of Mint and extraction of Mint oil, which will be sold
to the US Company. This will not only create a new area of expansion, but also act as a backward linkage for Company’s in-
house requirement of Mint oil.

Dabur Nepal Private Limited • Annual Report 2004-05 1

 Directors’ Report (Contd...)

Expansion / modernization program

During the year, your company has installed a new packing line for packing 1 litre and 330 ml fruit juices in a new Flex pack.
The new pack is a very modern and contemporary pack and will help your company to capture larger market share for its brand.

Quality & safety:

Your Company has undertaken a detailed Quality Audit in its plant covering wide areas like production, processes, manpower,
infrastructure etc. and has implemented almost all the recommendations given in the audit.
Your Company has also gone through Safety Audit, which was conducted by a professional firm from India.

Dividend
An interim dividend of Rs 40.00 per equity share was declared in March 2005.

Acknowledgment
The directors wish to place on record their appreciation for the continued support and co-operation extended by Dabur India
Ltd., Shareholders, Dealers, Customers and all the employees of the company.
They also wish to place on record their sincere appreciation for the co-operation, assistance and guidance received from
various officers of the His Majesty’s Government of Nepal and Government of India.

On behalf of the Board of Directors

Pradip Burman
Chairman

Kathmandu, Nepal
19th April 2005
(2062/01/06)

Dabur Nepal Private Limited • Annual Report 2004-05 2

 INDEPENDENT AUDITOR’S REPORT

To,
The Shareholders, Dabur Nepal Private Ltd.
We have audited the accompanying Balance Sheet of Dabur Nepal Private Limited, as of 31 March 2005, the related Profit and
Loss Account and the Cash Flow Statement for the year then ended. These financial statements are the responsibility of the
management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Nepal Standards on Auditing. Those Standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As per the requirement of the Companies Act 2053 we report that:
a) we have obtained information and explanations, which, to the best of our knowledge and belief, were necessary for
the purpose of our audit;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from
our examination of such books;
c) in our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are
in agreement with the books of account maintained by the Company;
d) in our opinion, so far as appeared from our examination of the books, the business of the Company has been
conducted satisfactorily; and
e) to the best of our knowledge and in accordance with explanations given to us and from our examination of the
books of account of the Company necessary for the purpose of our audit, we have not come across cases where the
Board of Directors or any employees of the Company have acted contrary to the provisions of law, or committed any
misappropriation or caused loss or damage to the Company.
In our opinion, the financial statements read together with the notes appended in Schedule O presents fairly, in all material
respects, the financial position of the Company as of 31 March 2005, and of the results of operations and its cash flows for the
year then ended in accordance with Nepal Accounting Standards and other accounting standards generally applicable in Nepal
and comply with the provisions of the Companies Act 2053.

Shashi Satyal
Partner
For and on behalf of
T R Upadhya & Co.
Chartered Accountants

7 April 2005
Kathmandu, Nepal

Dabur Nepal Private Limited • Annual Report 2004-05 3

 Balance Sheet As At 31 March 2005
Schedule As at 31.03.05 As at 31.03.04
Nrs. In Lacs Nrs. In Lacs

Sources Of Funds
Share Holders’ Funds A
(A) Share Capital 798.52 798.52
(B) Reserves & Surplus 7,851.06 8,649.58 7,122.66 7,921.18
Loan Funds B
(A) Secured Loans 5,765.90 5,776.22
(B) Unsecured Loans 77.00 5,842.90 77.00 5,853.22
Total 14,492.48 13,774.40
Application Of Funds
Fixed Assets C
(A) Gross Block 14,803.75 12,789.46
(B) Less: Depreciation 5,844.48 5,017.20
(C) Net Block 8,959.27 7,772.26
Investments D 19.30 -
Current Assets, Loans & Advances E
(A) Inventories 7,097.31 5,318.12
(B) Sundry Debtors 1,664.65 1,722.47
(C) Cash & Bank Balances 12.70 91.78
(D) Loans And Advances 2,555.71 2,001.66
(E) Deposits And Other Receivables 2,873.53 4,112.81
14,203.90 13,246.84
Less :Current Liabilities & Provisions F
(A) Liabilities 6,549.33 5,555.79
(B) Provisions 2,190.38 1,753.73
8,739.71 7,309.52
Net Current Assets 5,464.19 5,937.32
Deferred Expenditure G 49.72 64.82
(To The Extent Not Written Off Or Adjusted)
Total 14,492.48 13,774.40
Accounting Policies O

Schedule A to G and O forms an integral part of this Balance Sheet

As Per Our Report Of Even Date Attached For Dabur Nepal Pvt. Ltd.
Pradip Burman Chairman
Shashi Satyal R. S. Rana Managing Director
Partner A. Mehra CFO & Co. Secretary
G. Kashinath Chief Executive Officer
For T. R. Upadhya & Co.
Chartered Accountants

Kathmandu
7th April 2005

Dabur Nepal Private Limited • Annual Report 2004-05 4

 Profit and Loss Account for the year ended 31 March 2005
Schedule For the year ended For the year ended
31-03-2005 31-03-2004
Nrs. in Lacs Nrs. in Lacs
Income
Sales H 29,634.41 28,347.35
Other Income I 195.83 29,830.24 145.63 28,492.98
Expenditure
Cost Of Materials J 21,849.55 20,354.87
Excise Duty 50.58 28.82
Manufacturing Expenses K 1,377.96 23,278.09 1,347.59 21,731.28
Gross Profit 6,552.15 6,761.70
Payments & Benefits To Employees L 1,230.18 806.77
Administrative & Selling Expenses M 1,900.00 1,445.90
Financial Expenses N 663.40 940.17
Amortisation Of Miscellaneous Expenses 15.10 16.42
Depreciation 1,014.31 4,822.99 1,065.95 4,275.21
Net Profit Before Extraordinary Items 1,729.16 2,486.49
(Profit)/Loss On Sale Of Fixed Assets (12.75) 10.74
Loss On Sale Of Bonds - 120.48
Assets Not In Use /Written Off 91.77 91.77
Provision For Claims Receivable 34.69 109.67
Net Profit Before Provisions 1,615.45 2,153.82
Provision For Housing 80.77 107.69
Provision For Bonus 153.47 204.61
Net Profit Before Taxation 1,381.21 1,841.52
Provision For Taxation 264.53 395.93
Net Profit After Tax 1,116.68 1,445.59
Surplus B/F From Previous Year 5,863.34 4,846.67
Income Tax Adjustment For Previous Years 41.92 9.52
Profit Available For Appropriation 6,938.10 6,282.74
Appropriation / Allocation
General Reserve 100.00 100.00
Interim Dividend 319.41 319.40
Proposed Dividend - -
Balance Carried Over To Balance Sheet 6,518.69 5,863.34
6,938.10 6,282.74
Accounting Policies O
Schedule H to O forms an integral part of this Profit and Loss Account

As Per Our Report Of Even Date Attached For Dabur Nepal Pvt. Ltd.
Pradip Burman Chairman
Shashi Satyal R. S. Rana Managing Director
Partner A. Mehra Cfo & Co. Secretary
G. Kashinath Chief Executive Officer
For T. R. Upadhya & Co.
Chartered Accountants

Kathmandu
7th April 2005

Dabur Nepal Private Limited • Annual Report 2004-05 5

 Schedules annexed to and forming part of the balance sheet as at 31st March 2005
As at As at
31st March 2005 31st March 2004
Nrs. in Lacs Nrs. in Lacs
Schedule A - Shareholders‘ Fund
Share Capital
Authorised
1400000 Equity Shares of Rs.100 Each
(Previous Year : 1400000 Equity Shares of Rs.100 Each) 1,400.00 1,400.00
Issued
800000 Equity Shares of Rs. 100 Each
(Previous Year : 800000 Equity Shares of Rs. 100 Each) 800.00 800.00
Subscribed & Paid Up
798520 Equity Shares of Rs.100 Each Fully Paid Up
(Previous Year : 798520 Equity Shares of Rs.100 Each) 798.52 798.52
Reserves & Surplus
Share Premium Reserve 600.00 600.00
General Reserve 759.30 659.30
Profit and Loss Account 6,518.69 5,863.36
7,877.99 7,122.66
Less: Bonus Adjusted in Retained Earnings 26.93 -
7,851.06 7,122.66
Schedule B - Loan Funds
Secured Loans
Working Capital Loans
Nabil Bank Ltd. 919.34 1,513.76
Standard Chartered Bank Nepal Ltd. 3,252.38 2,996.56
Nepal SBI Bank Ltd. 1,121.16 796.70
5,292.88 5,307.02
Trust Receipt Loans
Nabil Bank Ltd. 20.06 126.84
Nepal SBI Bank Ltd. 236.13 202.65
Standard Chartered Bank Nepal Ltd. 85.38 -
341.57 329.49
(All the above loans are secured by execution of registered
mortgage by deposit of title deeds of Company’s entire land
situated at Rampur Tokani, Bara district and the entire immovable
properties, present & future, built thereon, and hypothecation &
assignment of entire current assets, present and future, ranking
Pari - Passu amongst Nabil Bank Ltd., Std. Chartered Bank Nepal
Ltd. and Nepal SBI Bank Ltd., subject to the priorities that Banks
extending term loans (except that which is covered by guarantees
of Indian banks) shall have first charge on the fixed assets and
second charge on current assets while the participating banks
extending working capital, overdraft and cash credit shall have pari-
passu first charge on the current assets and second charge on fixed
assets ; and are further secured by a corporate guarantee by the
Company’s parent company, Dabur India Ltd., New Delhi, India and
by personal guarantee by a Director of the Company.)
Other Long Term Loans
Acceptances (Against Tetrapack Machine) 131.45 139.71
5,765.90 5,776.22
Unsecured Loans
From A Director 77.00 77.00
77.00 77.00

Dabur Nepal Private Limited • Annual Report 2004-05 6

8
 Schedules annexed to and forming part of the balance sheet as at 31st March 2005 (Contd...)

Schedule C - Fixed assets

Nrs. In Lacs
Name of assets Depreciation Gross Block Depreciation Net Block
(%) As at Additions Adjustment As at As at For the year Adjustment As at As at As at
01.04.04 - - 31.03.05 31.03.04 31.03.05 31.03.05 31.03.04
Land 324.50 - - 324.50 - - - - 324.50 324.50
Land for housing colony 163.42 - - 163.42 - - - - 163.42 163.42
Building, roads & bridges 5 2,615.95 299.95 - 2,915.90 596.57 104.35 - 700.92 2,214.98 2,019.38
Worker’s quarter 5 178.01 127.57 - 305.58 27.51 10.76 - 38.27 267.31 150.50
Furniture & fixture 25 466.29 95.44 9.28 552.45 235.63 66.23 9.11 292.75 259.70 230.66
Laboratory equipment 25 96.67 4.50 - 101.17 58.23 9.72 - 67.95 33.22 38.44
Office equipment 25 429.20 27.03 0.82 455.41 193.69 63.71 0.20 257.20 198.21 235.51
Vehicles 20 306.61 208.07 74.76 439.92 137.63 40.49 48.98 129.14 310.78 168.98
Electrical installation 15 508.10 62.02 - 570.12 271.24 38.28 - 309.52 260.60 236.86
Plant & machinery 15 7,274.85 1,561.28 230.43 8,605.70 3,357.42 657.39 128.74 3,886.07 4,719.63 3,917.43
Tools & implements 15 290.47 59.17 - 349.64 139.28 23.38 - 162.66 186.98 151.19
Capital work in progress 135.39 19.94 135.39 19.94 - - - - 19.94 135.39
( including capital items in
transit )
Total 12,789.46 2,464.97 450.68 14,803.75 5,017.20 1,014.31 187.03 5,844.48 8,959.27 7,772.26

As at As at
31st March 2005 31st March 2004
Nrs. in Lacs Nrs. in Lacs
Schedule D - Investments
5% Special Bond 19.30 -
19.30 -

Schedule E - Current Assets,

Loans and Advances
Inventories
(As Taken,Valued And Certified By
The Management)
Raw Materials 3,294.07 2,359.24
Packing Materials 1,452.85 1,583.50
Stores And Spares 260.42 309.50
Stock In Process 161.87 105.73
Finished Goods 831.44 241.94
Material In Transit 1,102.97 718.21
7,103.62 5,318.12
Less: Provision For Damaged Stock 6.31 -
7,097.31 5,318.12
Sundry Debtors
(Unsecured, Considered Good)
Over Six Months 46.99 26.19
Others 1,617.66 1,696.28
1,664.65 1,722.47
Cash & Bank Balances
Cash In Hand 1.28 1.89
Balance With Banks 11.42 89.89
12.70 91.78

Dabur Nepal Private Limited • Annual Report 2004-05 7

 Schedules annexed to and forming part of the balance sheet as at 31st March 2005 (Contd...)
As at As at
31st March 2005 31st March 2004
Nrs. in Lacs Nrs. in Lacs

Schedule E - Investments (Contd...)

Loans & Advances
(Unsecured Considered Good Unless
Otherwise Stated)
Advances Recoverable in cash or kind or for
values to be recovered
Advance To Employees 177.66 176.97
Advance To Suppliers 926.74 806.05
Margin Money With Bank 42.13 26.63
Prepaid Expenses 55.08 48.30
Advance Income Tax 1,115.61 697.65
Other Advances 238.49 246.06
2,555.71 2,001.66
Deposits And Other Receivables
Security Deposit 18.61 18.61
Vat Deposit 400.72 590.52
Customduty Drawback Receivable 2,282.60 1,903.30
Local Development Tax Deposit 49.46 217.25
Bonds Receivable 110.13 19.30
Interest Accrued On Bonds 0.93 -
Custom Duty Deposit & Special Duty Deposit 6.31 1,332.78
Insurance Claim 33.18 31.05
2,901.94 4,112.81
Less: Provision For Doubtful Receivables 28.41
2,873.53 4,112.81
14,203.90 13,246.86

Schedule F - Current Liabilities & Provisions

Liabilities
Creditors For Goods 1,403.67 1,720.22
Acceptances 4,509.06 3,447.64
Interest Accrued But Not Due 50.10 13.12
Creditors For Exps. & Other Liabilities 373.44 355.43
Dividend Payable 60.80 -
Advance Against Supplies & Expenses 152.26 19.38
6,549.33 5,555.79
Provisions
Provision For Housing 673.13 592.36
Provision For Bonus 153.47 150.53
Provision For Earned Leave Salary 29.44 11.13
Provision For Taxation 1,334.33 999.70
2,190.38 1,753.73
8,739.70 7,309.52

Schedule G - Deferred Expenditure

Opening Balance 64.82 5.48
Addition During The Year - 75.76
Less: Written-Off During The Year 15.10 16.42
Closing Balance 49.72 64.82

Dabur Nepal Private Limited • Annual Report 2004-05 8

10
 Schedules annexed to and forming part of the Profit and Loss account for the year ended 31st March 2005
for the year ended for the year ended
31st March 2005 31st March 2004
Nrs. in Lacs Nrs. in Lacs

Schedule H - Sales
Sales
Domestic Sales 3,878.85 2,401.90
Export Sales 25,755.56 25,945.45
29,634.41 28,347.35

Schedule I - Other Income

Interest Received 8.09 11.28
Scrap Sales 137.42 95.58
Discount Received 0.83 -
Rent Received 2.93 1.82
Misc Income 2.15 -
Exchange Gain (Net) 44.41 36.95

195.83 145.63

Schedule J - Cost Of Materials

Cost Of Materials Consumed
Raw Material :
Opening Stock 2,359.24 3,573.65
Purchase 15,717.05 11,798.07
Less : Closing Stock 3,294.07 14,782.22 2,359.24 13,012.48
Raw Material Consumed
Packing Material :
Opening Stock 1,583.60 1,483.87
Purchase 7,582.22 7,143.92
Less : Closing Stock 1,452.85 7,712.97 1,583.50 7,044.28
Packing Material Consumed
Work In Process :
Opening Stock 105.73 139.41
Less : Closing Stock 161.87 (56.14) 105.73 33.68
Cost Of Materials Consumed 22,439.05 20,090.45
Cost Of Goods Sold
Cost Of Materials Consumed 22,439.05 20,090.45
Adjustment Of Finished Goods Stock :
Opening Stock 241.94 506.36
Less : Closing Stock 831.44 (589.50) 241.94 264.42
21,849.55 20,354.87

Schedule K - Manufacturing Expenses

Power & Fuel 729.60 704.70
Repair & Maintenance (Machinery) 62.76 18.26
Repair & Maintenance (Building) 37.51 195.39
Repair & Maintenance (Others) 38.36 26.27
Consumable Stores 358.98 322.04
Custom Duty (Others) 68.92 11.64
Laboratory Expenses 6.67 1.91
Cartage & Coolie 44.31 36.96
Other Expenses 30.85 30.42
1,377.96 1,347.60

Dabur Nepal Private Limited • Annual Report 2004-05 9

11
Schedules annexed to and forming part of the Profit and Loss account for the year ended 31st March 2005 (Contd...)

for the year ended for the year ended

31st March 2005 31st March 2004
Nrs. in Lacs Nrs. in Lacs

Schedule L - Payments & Benefits To Employees

Salaries & Allowances 648.26 443.82

Wages & Workmen Welfare 385.72 232.41

Staff Welfare Expenses 130.36 72.00
Gratuity 16.57 6.68
Directors Remmuneration 7.13 18.06
Employer’s Share To P.F. 42.14 33.80
1,230.18 806.76

Schedule M - Administrative & Selling Expenses

Postage, Telephone & Telegram 104.69 118.52
Vehicle Running Expenses 45.94 60.45
Travelling Expenses 176.07 160.67
Legal & Professional Charges 82.75 49.58
Insurance 110.85 87.79
Auditor’s Remuneration :
- Statutory Audit Fee 2.50 1.40
- Tax Audit Fee 0.40 2.90 0.75 2.15
Selling & Distribution Expenses 480.64 258.22
Advertisement 413.95 224.77
Royalty 69.34 112.42
Rent 145.66 134.98
Printing & Stationery 29.70 29.71
Guest House Expenses 0.32 2.60
Books & Periodicals 0.88 8.13
Entertainment Expenses 15.27 14.06
Donation & Subscription 26.84 42.75
General Charges 7.28 10.93
Watch & Ward Expenses 57.56 37.14
Business Development Expenses 44.17 71.60
Other Administrative Expenses 85.19 19.43
1,900.00 1,445.90

Schedule N - Financial Expenses

Interest
Interest On :
Term Loan - 239.43
Working Capital Loan 553.85 570.04
553.85 809.47
Bank Charges 109.55 130.70
663.40 940.17

Dabur Nepal Private Limited • Annual Report 2004-05 10

12
 Schedules annexed to and forming part of accounts as at 31st March 2005

Schedule O - Significant Accounting Policies & Notes to Accounts

Significant Accounting Policies

a) Basis of accounting
Financial statements are prepared under the historical cost convention, in accordance with Accounting Standards applicable
in Nepal and the requirements of Company Act, 2053.
The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis
except in case of significant uncertainties relating to income.

b) Fixed Assets
Fixed assets are recorded at cost less accumulated depreciation. The Company capitalizes all direct costs relating to the
acquisition and installation of fixed assets.

c) Depreciation
Depreciation is provided on written down value on all fixed assets (except land) at the rates prescribed by the Income Tax
Act 2058.

d) Investments
Long term investments are valued at cost. Current investments are valued at lower of cost or fair value as on the date of
the Balance Sheet. The Company provides for diminution in value of investments, other than temporary in nature, in the
financial statements.

e) Inventories
Inventories are valued at lower of cost or net realizable value using the following basis for determining costs:
Raw materials, Packing materials and Stores and spares On FIFO basis
Work in process At cost including proportionate factory overheads
Finished stock At costs including proportionate appropriate overheads

f) Retirement Benefits
Retirement benefits to employees comprise payments to gratuity fund, provident fund and leave salary. All contributions
to the provident fund are charged to profit & loss account as incurred and such contributions are paid to the approved
provident fund trust managed by trustees comprising employees.
Liabilities in respect of retirement benefits to employees are provided for as follows:
• Liabilities in respect of staff gratuity on actuarial valuation method.
• Liabilities in respect of accumulated leave salary on actuarial basis.

g) Borrowing Cost
Borrowing costs that are attributable to acquisition of qualifying assets are capitalized as part of the cost of such assets.
All other borrowing costs are charged to revenue.

h) Revenue Recognition
Sales are recognized on dispatch to customers and are recorded net of Value Added Tax. Export sales do not attract any
Value Added Taxes.

Dabur Nepal Private Limited • Annual Report 2004-05 11

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

i) Staff Housing and Bonus

Amount towards Staff Housing and Bonus have been provided as required under Labour Act and Bonus Act respectively.

j) Foreign Currency Transactions

Foreign currency transactions are accounted at exchange rates prevailing on the date of the transactions. All foreign
currency assets and liabilities, if any, as at the Balance Sheet date are restated at the applicable exchange rates prevailing
at that date.
All exchange differences in respect of foreign currency transactions are dealt with in the Profit & Loss Account except
those relating to acquisition of fixed assets, which are adjusted in the cost of the assets.

k) Deferred Expenditure
License fees and other costs associated with implementing an ERP are amortized over a period of five years.

2. Notes to Accounts
a) Change in accounting estimates
With effect from 1 April 2004, the Company has changed the basis of valuation of staff earned leave liability to actuarial
valuation from the accrual basis followed upto previous year. With this change, the staff earned leave liability as at 31
March 2005 is Rs 12.19 lacs against the liability of Rs 29.43 lacs recorded in the books as per the basis of valuation followed
up to the previous year. The excess provision of Rs 17.24 lacs will continue to be reflected in the books till the liability as
per actuarial valuation reaches such levels.

b) Contingent Liabilities
There are contingent liabilities in respect of:
(Nrs. in Lacs)

As at As at
31 March 2005 31 March 2004

Unexpired Letters of Credit 2,094.22 2,462.49

Unexpired Bank Guarantees 1,802.37 1,817.43
Bill Discounted 856.67 379.48
Disputes regarding income tax - 1.69
liabilities for additional demand -
pending before Hon’b Supreme Court
Dividend tax in appeal - 78.65
Capital commitments on account of 59.59 111.64
construction contracts net of advances
Income Tax in appeal for 58-59 and 59-60 120.05 -
TOTAL 4932.90 4,851.38
c) Acceptances
Acceptances denote liabilities for suppliers’ bills accepted/discounted.

d) Royalty
As per the Joint Venture Agreement, Royalty payable to Dabur India Ltd for the year is Rs 69.34 lacs (previous year Rs
112.42 lacs).

Dabur Nepal Private Limited • Annual Report 2004-05 12

 Schedules annexed to and forming part of accounts as at 31st March 2005

e) Custom Duty Drawback Receivable

Custom duty paid on import of raw materials (including special taxes and local development taxes) is recoverable against
export pursuant to statutory enactment and accordingly the Company has made necessary applications to the appropriate
authorities for its refund as per the rules and waiting for final refund order.
Rs 2,282.60 lacs (previous year Rs 1,903.30 lacs) is receivable against customs duty drawback excluding special taxes and
local development taxes) from HMG/Nepal on the date of the Balance Sheet of which Rs 1,640.61 lacs is outstanding for
more than a year.

f) Staff Housing Fund

The Company has spent Rs 163.42(Previous year Rs 163.42 lacs) on purchase of land for the staff housing colony and Rs
305.58 lacs (Previous year Rs 178.01 lacs) on construction of worker’s quarters up to 31 March 2005 out of the total
provision of Rs 673.17 lacs (previous year Rs 592.36 lacs.)

g) Inter company balances

Debtors and loans and advances include Rs 177.84 lacs (Previous year Rs 276.23 lacs) recoverable from companies where
the directors are interested. Of the above, Rs 136.92 lacs (Previous year Rs 574.51lacs) is recoverable from M/s Machapuchre
Herbals Pvt Ltd and M/s Machapuchre Enterprises. The Company considers these balances to be recoverable and accordingly
no provision for non-recovery has been made.

h) Income Tax Rebate on Investment allowances

The Company has received an investment allowance of Rs 32.47 lacs in the current year for additional investment made in
the expansion of its manufacturing facilities in 2055-56 to 2057-58. The investment allowance has been netted off against
the current year’s tax provision of Rs 264.68 lacs
Further a claim of Rs 17.11 lacs has been lodged with the Inland Revenue Department against interest on the above
investment allowance.

i) Physical Verification of Fixed Assets

The Company has appointed consultant to undertake physical verification of fixed assets. Suitable accounting adjustments
will be made on receipt of the report from the consultant.

j) Previous year figures/Rounding off

Previous year’s figures have been regrouped / rearranged wherever necessary to facilitate comparison. Figures are
rounded off to the nearest of Rupees lacs.

Dabur Nepal Private Limited • Annual Report 2004-05 13

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

3) QUANTITATIVE DETAILS OF MAJOR PRODUCTS

1. PRODUCTION
Unit 2004-05 2003 - 04
Qty Qty
Lal Dant Manjan Cases 384,997 444,358
Binaca Tooth Powder Cases - 267
Dabur Red Tooth Paste Cases 6,795
Vatika Hair Oil Cases 298,034 95,437
Vatika Fairness Pack Cases 6,133
Vatika Shampoo Cases 93,997 350,095
Anmol Shampoo Cases 8,272 3,191
Amla Hair Oil Cases 151,580 307,098
Special Hair Oil Cases 5,784 6,267
Anmol Coconut oil Cases 921
Anmol Sarson Cases 36,070
Baby Olive Oil Cases 1,864 2,045
Hajmola Tablet Cases 256,744 246,556
Hajmola Candy Cases 11,514 13,351
Real Fruit Juice Cases 2,708,155 1,266,261
Glucose D&C Powder Cases 32,128 70,658
Chywanprash Cases 14,947 249
Honey Cases 8,044 -
Pachan Churan MT 421.13 217.30
Dantmukta MT 2,175.63 2,654.00
DCP Mishan MT 239.85 137.98
MCS MT 6.81 -
Sles 30% Bulk MT 40.28 -
Vatika Shampoo - Bulk MT 7.00 -
Vatika Hair Oil Bulk MT 14.81 -
Stevia Powder MT 1.60 -
Pet Bottles & Caps TH 3,168 -
Honey- Bulk MT - 674

Dabur Nepal Private Limited • Annual Report 2004-05 14

 Schedules annexed to and forming part of accounts as at 31st March 2005

2. SALES
2004-05 2003-04
Unit Qty Nrs in Lacs Qty Nrs in Lacs
Lal Dant Manjan Cases 384,704 3,873.10 341,859 3,533.75
Binanca Tooth Powder Cases - - 2,802 24.89
Dabur Red Tooth Paste Cases 6,016 129.64
Vatika Hair Oil Cases 299,594 2,983.48 343,752 3,189.77
Vatika Fairness Pack Cases 5,759 6.82 8,500 15.40
Vatika Shampoo Cases 92,482 834.41 316,009 2,728.30
Anmol Shine Shampoo Cases 7,603 153.39 2,332 48.23
Amla Hair Oil Cases 152,381 1,507.53 205,085 1,884.80
Special Hair Oil Cases 6,084 129.79 6,286 83.81
Anmol Coconut Oil Cases 516 10.43 506 10.64
Anmol Sarson Cases 35,691 43.18 - -
Baby Olive Oil Cases 1,866 30.30 2,805 44.87
Hajmola Tablet Cases 253,646 2,759.83 265,067 2,960.34
Hajmola Candy Cases 11,482 127.34 10,041 106.96
Real Fruit Juice Cases 2,686,010 11,673.10 1,800,324 7,836.29
Glucose C & D Powder Cases 31,789 399.61 59,253 668.33
Chywanprash Cases 6,761 194.70 - -
Honey Cases 7,010 139.68
Pachan Churan MT 429 591.81 316 392.38
Dantmukta MT 2,129 2,690.80 2,356 2,985.18
DCP Mishran MT 242 1,014.70 258 1,227.14
Taxin Resin MT - - 14 143.05
MCS MT 2.00 166.40 - -
Sles 30% - Bulk MT 41.20 20.09 - -
Vatika Shampoo-bulk MT 7.00 8.43 - -
Vatika Hair Oil - bulk MT 14.81 14.92 - -
Stevia Powder MT 1.60 1.92 0.00 0.32
Pet Bottles & Caps TH 3,168.31 61.1 6,218 150.07
Tooth Brush& others TH 417.12 22.2 102.4 14.83
Nursery - Sapplings 19.46 8.38
Wax Foundation sheet 6.49 -
Others 19.81 7.57
Honey-bulk MT - - 179 282.05
29,634.41 28,347.35

Dabur Nepal Private Limited • Annual Report 2004-05 15

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

3. CLOSING STOCK
2004-05 2003 - 04
Unit Qty Nrs in Lacs Qty Nrs. in Lacs
Lal Dant Manjan Cases 2,671 25.26 2,378 17.48
Binaca Tooth Powder Cases - - - -
Dabur Red Tooth Paste Cases 779 8.62 - -
Vatika Hair Oil Cases 960 9.13 2,520 19.49
Vatika Fairness Pack Cases 374 1.97 - -
Vatika Shampoo Cases 3,224 23.29 1,709 10.48
Anmol Shine Shampoo Cases 1,528 17.99 859 7.19
Amla Hair Oil Cases 350 3.20 1,151 10.47
Special Hair Oil Cases 206 1.61 506 5.14
Anmol Coconut Oil Cases 405 8.41 - -
Anmol Sarson Cases 379 3.40 - -
Baby Olive Oil Cases 40 0.80 42 0.58
Hajmola Tablet Cases 4,583 30.47 1,485 12.00
Hajmola Candy Cases 616 5.85 584 5.07
Real Fruit Juice Cases 24,055 95.58 1,910 7.70
Glucose C & D Powder Cases 1,071 9.53 732 7.01
Chywanprash Cases 8,186 143.68 - -
Honey Cases 1,034 22.84 - -
Pachan Curan MT 3.83 3.85 12 11.02
Dantmukta MT 47.50 45.73 1 1.10
DCP Mishran MT 0.22 0.45 2 4.70
Taxin Resin MT - - 16 121.53
MCS MT 4.81 369.79 - -
Honey-Bulk MT 1 0.99
831.44 241.95

Dabur Nepal Private Limited • Annual Report 2004-05 16

 Cash Flow Statement for the year ended 31st March 2005
for the year ended for the year ended
31st March 2005 31st March 2004
Nrs. in Lacs Nrs. in Lacs
A. Cash Flow From Operating Activities
Net Profit As Per P/L Account 1,381.21 1,841.53
Add :
Depreciation 1,014.31 1,065.95
Amortisation Of Deferred Expenses 15.10 16.42
Interest 553.85 809.47
Fixed Assets Written Off 91.77 91.77
Loss On Sale Of Assets - 10.74
Loss On Sale Of Bonds - 120.48
1,675.03 2,114.83
Less :
Profit On Sale Of Fixed Assets (12.75) -
Interest Received (8.09) (11.28)
Rent Received (2.93) (23.77) (1.82) (13.10)
Operating Profit Before Working Capital Changes 3,032.47 3,943.26
Working Capital Changes
(Increase)/Decrease In Inventories (1,779.19) 618.69
(Increase)/Decrease In Debtors 57.83 398.56
(Increase)/Decrease In Loans & Advances (136.11) (178.58)
(Increase)/Decrease In Deposits & Receivables 1,239.28 723.17
(Decrease)/Increase In Liabilities 892.56 2,425.27
(Decrease)/Increase In Provisions 145.19 78.02
Increase In Working Capital 419.56 4,065.13
Cash Generated From Operation 3,452.03 8,008.39
Interest Paid (516.87) (1,002.48)
Advance Tax Paid (417.96) (306.74)
Income Tax Adjusted For Previous Years (41.92) (9.52)
Net Cash Generated From Operating Activities (A) 2,475.28 6,689.65
B. Cash Flow From Investing Activities
Purchase Of Fixed Assets (2,329.58) (1,032.10)
Deferred Revenue Expenses - (75.76)
Purchase Of Investments (19.30)
Sale Of Fixed Assets 49.23 460.98
Sales Of Investments - 419.78
Rent Received 2.93 1.82
Cash Outflow From Investing Activities (2,296.72) (225.28)
C. Cash Flow From Financing Activities
Payment Of Working Capital Loans (2.06) (1,373.42)
Repayment Of Term Loans To Banks - (607.88)
Repayment Of Unsecured Loans To Banks (4,000.00)
Deferred Financing From Supplier (8.26) (49.36)
Payment Of Dividend (242.64) (364.23)
Tax On Dividend (12.77) (19.01)
Interest Received 8.09 11.28
Cash Flow Financing Activities (257.64) (6,402.62)
Net Increase In Cash Inflow (79.08) 61.75
Opening Cash & Bank Balances 91.78 30.03
Closing Cash & Bank Balances 12.70 91.78

Schedule A To O Forms An Integral Part Of This Cash Flow Statement

As Per Our Report Of Even Date Attached For Dabur Nepal Pvt. Ltd.
Pradip Burman Chairman
Shashi Satyal R. S. Rana Managing Director
Partner A. Mehra Cfo & Co. Secretary
G. Kashinath Chief Executive Officer
For T. R. Upadhya & Co.
Chartered Accountants
Kathmandu
7th April 2005

Dabur Nepal Private Limited • Annual Report 2004-05 17