Dabur Report
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ABOUT THE COMPANY Name of the company
:Dabur India Limited
Sector classification
: Fast Moving Consumer Good
Corporate Office: Kaushambi Ghaziabad - 201010 Uttar Pradesh, India Tel: +91 (0120) 3982000 (30 Lines) +91 (0120) 3001000 (30 Lines) Registered Office: 8/3, Asaf Ali Road, New Delhi – 110 002 Tel: +91 (011) 23253488 Type of organisation
:Public Limited
Board members
:
Dabur has an illustrious Board of Directors who are committed to take the company onto newer levels of human endeavour in the service of mankind. The Board comprises of: Chairman:- Dr. Anand Burman Vice Chairman:- amit Burman Whole time director: Mr. P D. Narang Mr. Sunil Duggal Mr. Pradip Burman
Non whole time director: His Highness Maharaja, Gaj Singh Dabur India Limited
Page 1
Mr. P.N. Vijay Mr. R C. Bhargava Dr. S Naryana Partnerships and Production: Strategic partnerships with leading multinational food and health care companies to introduce innovations in products and services. Manufacturing facilities spread across 3 overseas locations to optimise production by utilising local resources and the most modern technology available. Geographical reach
:
Org history: Dabur India Limited
Page 2
The story of Dabur began with a small, but visionary endeavour by Dr. S. K. Burman, a physician tucked away in Bengal. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. With missionary zeal and fervour, Dr. Burman undertook the task of preparing natural cures for the killer diseases of those days, like cholera, malaria and plague. Soon the news of his medicines traveled, and he came to be known as the trusted 'Daktar' or Doctor who came up with effective cures. And that is how his venture Dabur got its name derived from the Devanagri rendition of Daktar Burman. Dr. Burman set up Dabur in 1884 to produce and dispense Ayurvedic medicines. Reaching out to a wide mass of people who had no access to proper treatment. Dr. S. K. Burman's commitment and ceaseless efforts resulted in the company growing from a fledgling medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and reliability. Highlights
1986 - Starts experimental and clinical studies on herbal and Ayurvedic formulations, conducting more than 200 validation studies to ensure the quality of ingredients as well as finished products.
1988 - Keeping consumer preferences in mind, develops Hajmola Candy - a candy variant of Hajmola digestive tablets that gives a tangy, sweet-sour taste.
1990 - A modern analytical laboratory equipped with HPLC, HPTLC, GLC set up
199s1 - To break into cancer research, DRF sets up an oncology screening laboratory.
1993 - Strengthens the value of Chyawanprash as an immunity builder after conducting more than 12 clinical trials to validate traditional claims of its immunomodulation properties.
1994 - First organisation in the world to isolate the anticancer drug, Paclitaxel, from the leaves of Himalayan Yew Tree using a unique eco-friendly process that doesn't harm the tree. This facilitated manufacture of cheaper anticancer medicines.
1995 - Taking a lead in beauty care, DRF develops Vatika Hair Oil, a value-added coconut based hair oil that improves on plain coconut oil.
1996 - Bringing the taste of traditional Indian kitchens to modern households, DRF develops ethnic cooking pastes branded and marketed as the Hommade range.
1997 - Catering to health conscious people looking for natural nourishment, DRF develops preservatives-free fruit juices, launched as Real Juices.
1998 - Develops New Livfit for hepatitis B & E virus infections
1999 - Continues with oncology research by developing 2 more plant-based anticancer
Dabur India Limited
Page 3
drugs.
PRODUCT PORTFOLIO Dabur Health Care Product Range: Dabur's Health Care range brings for you a wide selection of herbal products, to provide complete care for varying individual needs. We derive our products from the time-tested heritage of Ayurveda, backed by the most modern scientific test and trials. That ensure unfailing quality and safety in anything you pick
Dabur ChyawanprashDabur ChyawanshaktiGlucose D-
Hajmola Hajmola Candy Pudin Hara (Liquid and Pearls) Pudin Hara G Dabur Hingoli -
Shilajit Gold Nature Care Sat Isabgol Shilajit Shankha Pushpi Sarbyna Strong
-
Dabur Lal tailDabur Janma Ghunti-
Dabur Personal Care Product Range Dabur India Limited
Page 4
Dabur presents its range of herbal personal care products, created to make you look and feel good deep down. Bringing together the gentle touch of nature and Ayurveda’s wisdom. Backed by the unfailing quality of Dabur Products.
Amla Hair Oil Amla Lite Hair Oil Vatika Hair Oil Anmol Sarson Amla -
Gulabari Vatika Fairness Face Pack Vatika Saffron Glow Soap with Sandal -
Dabur India Limited
- Vatika Henna Conditioning Shampoo - Vatika Anti-Dandruff Shampoo - Vatika Root Strengthening Shampoo
-
Dabur Red Toothpaste Babool Toothpaste Meswak Toothpaste Promise Toothpaste Dabur Lal Dant Manjan
Page 5
- Dabur Binaca Toothbrush
Stresscom Antistress immune modulator
Broncorid For the management of stable asthma and breathlessness. Madhuvaani Efficacy of Sitopladichurna with goodness of honey Trifgol Isabgol based natural fibre laxative.
Lipistat Hypolipidaemic and Cardioprotective.
Rheumatil gel Quickly absorbed and relieves joint pain
Rheumatil oil unlimited mobility without any pain
Rheumatil tab Ensures easy mobility without pain and inflammation
Dabur India Limited
Page 6
Mensta Complete Control 30 days a month.
Dabur Foods Product Range
Tastes like eating a fruit
100% Natural Fruit Juice
Pure natural Honey
Hommade - a range of culinary ingredients giving you 'The taste of Indian Kitchen'.
Lemoneez is a Natural Lemon Juice
Capsico - a fiery red-pepper sauce.
MARKETING STRATEGIES AND SALES
We intend to significantly accelerate profitable growth. To do this, we will: Focus on growing our core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology Be the preferred company to meet the health and personal grooming needs of our target consumers with safe, efficacious, natural solutions by synthesizing our deep knowledge of ayurveda and herbs with modern science Dabur India Limited
Page 7
Provide our consumers with innovative products within easy reach Build a platform to enable Dabur to become a global ayurvedic leader Be a professionally managed employer of choice, attracting, developing and retaining quality personnel Be responsible citizens with a commitment to environmental protection Provide superior returns, relative to our peer group, to our shareholder
CUSTOMER SATISFACTION
Rapid economic growth, expanding populations and rising incomes have opened up a wide vista of opportunities in emerging consumer markets. Emerging-market multinationals (EMMs) have left no stone unturned when identifying new markets. They are proactive in using their local knowledge and creating those markets themselves. “ We work very closely with consumer to improve product portfolio mix and ensure that we offer the right product in the right geographies”
HUMAN RESOURCES MANAGEMENT
Good corporate governance and transparency in actions of the management is key to a strong bond of trust with the Company’s stakeholders. Dabur understands the importance of good Dabur India Limited
Page 8
governance and has constantly avoided an arbitrary decision-making process. Our initiatives towards this end include: Professionalisation of the board Lean and active Board(reduced from 16 to 10 members) Less number of promoters on the Board More professionals and independent Directors for better management Governed through Board committees for Audit, Remuneration, Shareholder Grievances, Compensation and Nominations
Meets all Corporate Governance Code requirements of SEBI SUPPLY CHAIN MANAGEMENT
Ddabur India Limited supplied that product through Mr. Graeme A. Fraser as the head of Sourcing, buying & Merchandising for the specialty retail venture. Mr. Fraser will be responsible for all aspects of H&B Stores Ltd's supply chain activities, including the development of the vendor base, overall administration of procurement processes and Marketing. Mr. Fraser is originally from New Zealand and lived in Asia for some 8 years.
FINANCIAL STATEMENT
Profit loss account Mar ' 08
Dabur India Limited
Mar ' 07
Mar ' 06
Mar ' 05
Page 9
Income: Operating income
2,093.63
1,745.14
1,345.50
1,231.10
Expenses Material consumed
1,023.94
778.27
582.43
546.73
Manufacturing expenses
54.02
39.24
27.10
22.45
Personnel expenses
149.69
118.66
98.31
82.09
Selling expenses
337.69
403.42
316.46
322.30
Adminstrative expenses
138.93
100.90
80.24
76.22
-
-
-
-
1,704.27
1,440.48
1,104.55
1,049.78
389.36
304.66
240.95
181.31
7.38
3.14
1.05
2.93
396.74
307.80
242.01
184.24
Financial expenses
8.55
4.43
5.73
4.66
Depreciation
25.75
21.98
19.05
17.10
Other write offs
5.67
6.49
4.26
1.49
Adjusted PBT
356.78
274.90
212.97
160.99
Tax charges
48.40
32.15
25.78
17.00
Adjusted PAT
308.37
242.76
187.19
143.99
Non recurring items
8.40
9.32
1.90
4.03
Other non cash adjustments
-0.86
-0.13
0.21
-0.05
Reported net profit
315.92
251.94
189.29
147.97
Earnigs before appropriation
545.07
426.95
314.52
229.09
Equity dividend
129.60
122.13
100.32
71.59
-
-
-
-
Dividend tax
22.03
17.13
14.07
9.77
Retained earnings
393.44
287.70
200.13
147.73
Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT
Preference dividend
Dabur India Limited
Page 10
Balance sheet Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Sources of funds Owner's fund Equity share capital
86.40
86.29
57.33
28.64
Share application money
-
-
-
-
Preference share capital
-
-
-
-
441.92
316.90
390.54
309.43
Reserves & surplus
Loan funds Secured loans
16.45
19.28
19.23
15.70
Unsecured loans
0.24
0.26
1.25
32.77
545.01
422.73
468.35
386.54
Total
Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments
467.93
404.30
328.23
317.46
-
-
-
-
189.77
168.97
142.46
135.12
278.17
235.33
185.77
182.35
16.26
3.71
13.07
9.26
270.37
145.35
275.08
270.94
Net current assets Current assets, loans & advances
576.82
397.78
285.68
253.35
Less : current liabilities & provisions
610.57
379.27
324.12
335.16
Total net current assets
-33.75
18.52
-38.44
-81.81
Miscellaneous expenses not written
13.95
19.82
32.87
5.81
Dabur India Limited
Page 11
Total
545.01
422.73
468.35
386.54
Notes: Book value of unquoted investments
67.99
65.99
234.43
227.12
Market value of quoted investments
205.19
80.82
43.43
46.18
Contingent liabilities
171.24
153.25
190.02
175.62
Number of equity sharesoutstanding (Lacs)
8640.23
8628.84
5733.03
2864.20
Cash flow
(Rs crore Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Profit before tax
365.18
284.22
214.36
165.02
Net cashflow-operating activity
313.29
234.43
194.34
206.99
Net cash used in investing activity
-179.77
-60.57
-27.51
-60.38
Netcash used in fin. activity
-119.30
-168.06
-139.45
-60.38
Net inc/dec in cash and equivlnt
14.22
5.79
27.39
-1.23
Cash and equivalnt begin of year
54.04
44.45
10.65
11.89
Cash and equivalnt end of year
68.26
50.25
38.04
10.65
Ratios Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Per share ratios Adjusted EPS (Rs)
3.57
2.81
3.27
5.03
Adjusted cash EPS (Rs)
3.93
3.14
3.67
5.68
Reported EPS (Rs)
3.67
2.92
3.30
5.17
Reported cash EPS (Rs)
4.03
3.25
3.70
5.82
Dividend per share
1.50
1.75
2.50
2.50
Operating profit per share (Rs)
4.51
3.53
4.20
6.33
Book value (excl rev res) per share (Rs)
5.95
4.44
7.24
11.60
Dabur India Limited
Page 12
Book value (incl rev res) per share (Rs.)
5.95
4.44
7.24
11.60
Net operating income per share (Rs)
24.23
20.22
23.47
42.98
Free reserves per share (Rs)
4.33
2.80
5.21
9.69
Profitability ratios Operating margin (%)
18.59
17.45
17.90
14.72
Gross profit margin (%)
17.36
16.19
16.49
13.33
Net profit margin (%)
15.07
14.41
14.04
11.99
Adjusted cash margin (%)
16.17
15.51
15.63
13.17
Adjusted return on net worth (%)
59.95
63.32
45.10
43.33
Reported return on net worth (%)
61.58
65.75
45.56
44.54
Return on long term funds (%)
68.43
68.63
48.02
47.57
Leverage ratios Long term debt / Equity
0.01
0.01
0.01
0.02
Total debt/equity
0.03
0.04
0.04
0.14
Owners fund as % of total source
96.93
95.37
95.62
87.46
Fixed assets turnover ratio
4.67
4.50
4.24
4.02
Liquidity ratios Current ratio
0.94
1.05
0.88
0.75
Current ratio (inc. st loans)
0.91
0.96
0.81
0.66
Quick ratio
0.57
0.63
0.52
0.36
Inventory turnover ratio
12.52
13.44
14.44
11.74
Payout ratios Dividend payout ratio (net profit)
47.86
55.24
60.49
54.96
Dividend payout ratio (cash profit)
43.54
49.63
53.85
48.83
Earning retention ratio
50.83
42.64
38.89
43.50
Cash earnings retention ratio
55.38
48.66
45.66
49.96
Coverage ratios
Dabur India Limited
Page 13
Adjusted cash flow time total debt
0.04
0.07
0.09
0.29
Financial charges coverage ratio
46.43
69.48
42.26
39.53
Fin. charges cov.ratio (post tax)
41.75
64.33
38.09
36.75
Component ratios Material cost component (% earnings)
49.05
45.86
42.97
45.05
Selling cost Component
16.12
23.11
23.52
26.18
Exports as percent of total sales
4.49
3.96
1.97
3.02
Import comp. in raw mat. consumed
0.97
1.22
0.72
1.38
Long term assets / total Assets
0.48
0.48
0.61
0.64
Bonus component in equity capital (%)
87.46
87.58
81.74
63.55
Capital structure From Year
To Year
Class Of Share
Authorized Capital
Issued Capital
Paid Up Shares (Nos)
Paid Up Face l Value
2007
2008
Equity Share
145.00
86.40
864022973
1
2006
2007
Equity Share
125.00
86.29
862883808
1
2005
2006
Equity Share
125.00
57.33
573302784
1
2004
2005
Equity Share
50.00
28.64
286419713
1
2003
2004
Equity Share
50.00
28.62
286249052
1
2002
2003
Equity Share
50.00
28.57
285749934
1
2001
2002
Equity Share
50.00
28.56
285593520
1
2000
2001
Equity Share
50.00
28.52
285214830
1
1999
2000
Equity Share
50.00
28.52
28521483
10
1998
1999
Equity Share
50.00
28.51
28508950
10
1997
1998
Equity Share
50.00
28.51
28508950
10
1996
1997
Equity Share
50.00
28.51
28508950
10
1995
1996
Equity Share
50.00
28.51
28508950
10
Dabur India Limited
Page 14
1994
1995
Equity Share
50.00
28.51
28508950
10
1993
1994
Equity Share
30.00
28.51
28508950
10
1992
1993
Equity Share
5.25
4.55
4550520
10
1991
1992
Equity Share
5.25
4.55
4550520
10
RESEARCH AND DEVELOPMENT Dabur's main asset is its knowledge base and the backup of research initiatives through modern science. Dabur deals mainly with traditional Ayurvedic products, we take care to conduct rigorous trials and authentication of processes so that our consumers get the best. Dabur Research Foundation (DRF), set up in 1979 as an independent research organisation, spearheads the R&D activity of the Company. DRF is well equipped with the most modern research facilities and more than 125 highly qualified scientists from diverse fields like Ayurvedic doctors, chemists and phytochemists, botanists, agronomists, clinical pharmacologists, microbiologists, food technologists, biotechnologists, oil technologists, oncologists, and so on. We have been involved in developing products for consumer applications as well as highly specialised areas of genomics, proteomics and bio-informatics. Through the ceaseless quest of our scientists in frontier areas, Dabur has been able to mark a presence even in critical aspects of health care like cancer therapy. Our Research Areas Dabur Research Foundation is not only limited to conducting tests and trials, but carries out research in over 10 diverse areas: •
Ayurvedic Research - relating traditional knowledge with modern science
•
Pharmaceutical Research - developing and testing drugs
•
Phytopharmaceuticals - getting better resources from nature
•
Biotechnology - scientific techniques for preservation
•
Agronomy -- scientific regeneration and propagation
•
Personal Care Products - developing natural solutions
•
Analytical - studying and testing active chemicals
•
Synthetic Chemistry - developing new molecules and intermediates
•
Oncology Research and Molecular Biology - researching new anti-cancer remedies
•
New Drug & Peptide Research - developing new drugs and delivery systems
•
Food Research - developing healthy and natural foods
•
Clinical Research - studies and tests for total safety of drugs
Dabur India Limited
Page 15
FUTURE PLAN Having completed its biggest restructuring exercise in recent times, Dabur India has charted a more focused, flexible and resource-led path for sustained growth for its FMCG business. Catalyst examines the fine print. 1)
Dabur plans to set up a major manufacturing facility in Pakistan by March 2008. The company expects revenues of Rs 750 million in the first year of operations in Pakistan. The project is aimed at tapping the high potential Pakistan and Afghanistan markets for cosmetic, ayurvedic medicines and health food . 2) Dabur India plans to set up a chain of 300-400 retail outlets, based on the health and beauty platform, across the country over the next few years. Dabur India is estimated to earmark an investment of Rs 2 billion for its retail foray. It is expected that the company would roll out the first few stores by the end of the calendar year.
INFORMATION TECHNOLOGY PERFORMANCE
In Dabur India Limited knowledge and technology are key resources which have helped the Company achieve higher levels of excellence and efficiency. Towards this overall goal of technology-driven performance, Dabur is utilizing Information Technology in a big way. This will help in integrating a vast distribution system spread all over India and across the world. It will also cut down costs and increase profitability. Our major IT Initiatives: Migration from Baan and Mfg ERP Systems to centralized SAP ERP system from 1st April 2006 for all business units. Implementation of a country wide new WAN Infrastructure for running centralized ERP system. Setting up of new Data Centre at KCO Head Office. Extension of Reach System to distributors for capturing Secondary Sales Data. Roll out of IT services to new plants and CFAs. Future Challenges: Forward Integration of SAP with Distributors and Stockists. Backward Integration of SAP with Suppliers. Dabur India Limited
Page 16
Implementation of new POS system at Stockist point and integration with SAP-ERP. Implementation of SAP HR and payroll. SAP Roll-out to DNPL and other new businesses.
Dabur India Limited
Page 17
:Dabur India Limited
Sector classification
: Fast Moving Consumer Good
Corporate Office: Kaushambi Ghaziabad - 201010 Uttar Pradesh, India Tel: +91 (0120) 3982000 (30 Lines) +91 (0120) 3001000 (30 Lines) Registered Office: 8/3, Asaf Ali Road, New Delhi – 110 002 Tel: +91 (011) 23253488 Type of organisation
:Public Limited
Board members
:
Dabur has an illustrious Board of Directors who are committed to take the company onto newer levels of human endeavour in the service of mankind. The Board comprises of: Chairman:- Dr. Anand Burman Vice Chairman:- amit Burman Whole time director: Mr. P D. Narang Mr. Sunil Duggal Mr. Pradip Burman
Non whole time director: His Highness Maharaja, Gaj Singh Dabur India Limited
Page 1
Mr. P.N. Vijay Mr. R C. Bhargava Dr. S Naryana Partnerships and Production: Strategic partnerships with leading multinational food and health care companies to introduce innovations in products and services. Manufacturing facilities spread across 3 overseas locations to optimise production by utilising local resources and the most modern technology available. Geographical reach
:
Org history: Dabur India Limited
Page 2
The story of Dabur began with a small, but visionary endeavour by Dr. S. K. Burman, a physician tucked away in Bengal. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. With missionary zeal and fervour, Dr. Burman undertook the task of preparing natural cures for the killer diseases of those days, like cholera, malaria and plague. Soon the news of his medicines traveled, and he came to be known as the trusted 'Daktar' or Doctor who came up with effective cures. And that is how his venture Dabur got its name derived from the Devanagri rendition of Daktar Burman. Dr. Burman set up Dabur in 1884 to produce and dispense Ayurvedic medicines. Reaching out to a wide mass of people who had no access to proper treatment. Dr. S. K. Burman's commitment and ceaseless efforts resulted in the company growing from a fledgling medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and reliability. Highlights
1986 - Starts experimental and clinical studies on herbal and Ayurvedic formulations, conducting more than 200 validation studies to ensure the quality of ingredients as well as finished products.
1988 - Keeping consumer preferences in mind, develops Hajmola Candy - a candy variant of Hajmola digestive tablets that gives a tangy, sweet-sour taste.
1990 - A modern analytical laboratory equipped with HPLC, HPTLC, GLC set up
199s1 - To break into cancer research, DRF sets up an oncology screening laboratory.
1993 - Strengthens the value of Chyawanprash as an immunity builder after conducting more than 12 clinical trials to validate traditional claims of its immunomodulation properties.
1994 - First organisation in the world to isolate the anticancer drug, Paclitaxel, from the leaves of Himalayan Yew Tree using a unique eco-friendly process that doesn't harm the tree. This facilitated manufacture of cheaper anticancer medicines.
1995 - Taking a lead in beauty care, DRF develops Vatika Hair Oil, a value-added coconut based hair oil that improves on plain coconut oil.
1996 - Bringing the taste of traditional Indian kitchens to modern households, DRF develops ethnic cooking pastes branded and marketed as the Hommade range.
1997 - Catering to health conscious people looking for natural nourishment, DRF develops preservatives-free fruit juices, launched as Real Juices.
1998 - Develops New Livfit for hepatitis B & E virus infections
1999 - Continues with oncology research by developing 2 more plant-based anticancer
Dabur India Limited
Page 3
drugs.
PRODUCT PORTFOLIO Dabur Health Care Product Range: Dabur's Health Care range brings for you a wide selection of herbal products, to provide complete care for varying individual needs. We derive our products from the time-tested heritage of Ayurveda, backed by the most modern scientific test and trials. That ensure unfailing quality and safety in anything you pick
Dabur ChyawanprashDabur ChyawanshaktiGlucose D-
Hajmola Hajmola Candy Pudin Hara (Liquid and Pearls) Pudin Hara G Dabur Hingoli -
Shilajit Gold Nature Care Sat Isabgol Shilajit Shankha Pushpi Sarbyna Strong
-
Dabur Lal tailDabur Janma Ghunti-
Dabur Personal Care Product Range Dabur India Limited
Page 4
Dabur presents its range of herbal personal care products, created to make you look and feel good deep down. Bringing together the gentle touch of nature and Ayurveda’s wisdom. Backed by the unfailing quality of Dabur Products.
Amla Hair Oil Amla Lite Hair Oil Vatika Hair Oil Anmol Sarson Amla -
Gulabari Vatika Fairness Face Pack Vatika Saffron Glow Soap with Sandal -
Dabur India Limited
- Vatika Henna Conditioning Shampoo - Vatika Anti-Dandruff Shampoo - Vatika Root Strengthening Shampoo
-
Dabur Red Toothpaste Babool Toothpaste Meswak Toothpaste Promise Toothpaste Dabur Lal Dant Manjan
Page 5
- Dabur Binaca Toothbrush
Stresscom Antistress immune modulator
Broncorid For the management of stable asthma and breathlessness. Madhuvaani Efficacy of Sitopladichurna with goodness of honey Trifgol Isabgol based natural fibre laxative.
Lipistat Hypolipidaemic and Cardioprotective.
Rheumatil gel Quickly absorbed and relieves joint pain
Rheumatil oil unlimited mobility without any pain
Rheumatil tab Ensures easy mobility without pain and inflammation
Dabur India Limited
Page 6
Mensta Complete Control 30 days a month.
Dabur Foods Product Range
Tastes like eating a fruit
100% Natural Fruit Juice
Pure natural Honey
Hommade - a range of culinary ingredients giving you 'The taste of Indian Kitchen'.
Lemoneez is a Natural Lemon Juice
Capsico - a fiery red-pepper sauce.
MARKETING STRATEGIES AND SALES
We intend to significantly accelerate profitable growth. To do this, we will: Focus on growing our core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology Be the preferred company to meet the health and personal grooming needs of our target consumers with safe, efficacious, natural solutions by synthesizing our deep knowledge of ayurveda and herbs with modern science Dabur India Limited
Page 7
Provide our consumers with innovative products within easy reach Build a platform to enable Dabur to become a global ayurvedic leader Be a professionally managed employer of choice, attracting, developing and retaining quality personnel Be responsible citizens with a commitment to environmental protection Provide superior returns, relative to our peer group, to our shareholder
CUSTOMER SATISFACTION
Rapid economic growth, expanding populations and rising incomes have opened up a wide vista of opportunities in emerging consumer markets. Emerging-market multinationals (EMMs) have left no stone unturned when identifying new markets. They are proactive in using their local knowledge and creating those markets themselves. “ We work very closely with consumer to improve product portfolio mix and ensure that we offer the right product in the right geographies”
HUMAN RESOURCES MANAGEMENT
Good corporate governance and transparency in actions of the management is key to a strong bond of trust with the Company’s stakeholders. Dabur understands the importance of good Dabur India Limited
Page 8
governance and has constantly avoided an arbitrary decision-making process. Our initiatives towards this end include: Professionalisation of the board Lean and active Board(reduced from 16 to 10 members) Less number of promoters on the Board More professionals and independent Directors for better management Governed through Board committees for Audit, Remuneration, Shareholder Grievances, Compensation and Nominations
Meets all Corporate Governance Code requirements of SEBI SUPPLY CHAIN MANAGEMENT
Ddabur India Limited supplied that product through Mr. Graeme A. Fraser as the head of Sourcing, buying & Merchandising for the specialty retail venture. Mr. Fraser will be responsible for all aspects of H&B Stores Ltd's supply chain activities, including the development of the vendor base, overall administration of procurement processes and Marketing. Mr. Fraser is originally from New Zealand and lived in Asia for some 8 years.
FINANCIAL STATEMENT
Profit loss account Mar ' 08
Dabur India Limited
Mar ' 07
Mar ' 06
Mar ' 05
Page 9
Income: Operating income
2,093.63
1,745.14
1,345.50
1,231.10
Expenses Material consumed
1,023.94
778.27
582.43
546.73
Manufacturing expenses
54.02
39.24
27.10
22.45
Personnel expenses
149.69
118.66
98.31
82.09
Selling expenses
337.69
403.42
316.46
322.30
Adminstrative expenses
138.93
100.90
80.24
76.22
-
-
-
-
1,704.27
1,440.48
1,104.55
1,049.78
389.36
304.66
240.95
181.31
7.38
3.14
1.05
2.93
396.74
307.80
242.01
184.24
Financial expenses
8.55
4.43
5.73
4.66
Depreciation
25.75
21.98
19.05
17.10
Other write offs
5.67
6.49
4.26
1.49
Adjusted PBT
356.78
274.90
212.97
160.99
Tax charges
48.40
32.15
25.78
17.00
Adjusted PAT
308.37
242.76
187.19
143.99
Non recurring items
8.40
9.32
1.90
4.03
Other non cash adjustments
-0.86
-0.13
0.21
-0.05
Reported net profit
315.92
251.94
189.29
147.97
Earnigs before appropriation
545.07
426.95
314.52
229.09
Equity dividend
129.60
122.13
100.32
71.59
-
-
-
-
Dividend tax
22.03
17.13
14.07
9.77
Retained earnings
393.44
287.70
200.13
147.73
Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT
Preference dividend
Dabur India Limited
Page 10
Balance sheet Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Sources of funds Owner's fund Equity share capital
86.40
86.29
57.33
28.64
Share application money
-
-
-
-
Preference share capital
-
-
-
-
441.92
316.90
390.54
309.43
Reserves & surplus
Loan funds Secured loans
16.45
19.28
19.23
15.70
Unsecured loans
0.24
0.26
1.25
32.77
545.01
422.73
468.35
386.54
Total
Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments
467.93
404.30
328.23
317.46
-
-
-
-
189.77
168.97
142.46
135.12
278.17
235.33
185.77
182.35
16.26
3.71
13.07
9.26
270.37
145.35
275.08
270.94
Net current assets Current assets, loans & advances
576.82
397.78
285.68
253.35
Less : current liabilities & provisions
610.57
379.27
324.12
335.16
Total net current assets
-33.75
18.52
-38.44
-81.81
Miscellaneous expenses not written
13.95
19.82
32.87
5.81
Dabur India Limited
Page 11
Total
545.01
422.73
468.35
386.54
Notes: Book value of unquoted investments
67.99
65.99
234.43
227.12
Market value of quoted investments
205.19
80.82
43.43
46.18
Contingent liabilities
171.24
153.25
190.02
175.62
Number of equity sharesoutstanding (Lacs)
8640.23
8628.84
5733.03
2864.20
Cash flow
(Rs crore Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Profit before tax
365.18
284.22
214.36
165.02
Net cashflow-operating activity
313.29
234.43
194.34
206.99
Net cash used in investing activity
-179.77
-60.57
-27.51
-60.38
Netcash used in fin. activity
-119.30
-168.06
-139.45
-60.38
Net inc/dec in cash and equivlnt
14.22
5.79
27.39
-1.23
Cash and equivalnt begin of year
54.04
44.45
10.65
11.89
Cash and equivalnt end of year
68.26
50.25
38.04
10.65
Ratios Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Per share ratios Adjusted EPS (Rs)
3.57
2.81
3.27
5.03
Adjusted cash EPS (Rs)
3.93
3.14
3.67
5.68
Reported EPS (Rs)
3.67
2.92
3.30
5.17
Reported cash EPS (Rs)
4.03
3.25
3.70
5.82
Dividend per share
1.50
1.75
2.50
2.50
Operating profit per share (Rs)
4.51
3.53
4.20
6.33
Book value (excl rev res) per share (Rs)
5.95
4.44
7.24
11.60
Dabur India Limited
Page 12
Book value (incl rev res) per share (Rs.)
5.95
4.44
7.24
11.60
Net operating income per share (Rs)
24.23
20.22
23.47
42.98
Free reserves per share (Rs)
4.33
2.80
5.21
9.69
Profitability ratios Operating margin (%)
18.59
17.45
17.90
14.72
Gross profit margin (%)
17.36
16.19
16.49
13.33
Net profit margin (%)
15.07
14.41
14.04
11.99
Adjusted cash margin (%)
16.17
15.51
15.63
13.17
Adjusted return on net worth (%)
59.95
63.32
45.10
43.33
Reported return on net worth (%)
61.58
65.75
45.56
44.54
Return on long term funds (%)
68.43
68.63
48.02
47.57
Leverage ratios Long term debt / Equity
0.01
0.01
0.01
0.02
Total debt/equity
0.03
0.04
0.04
0.14
Owners fund as % of total source
96.93
95.37
95.62
87.46
Fixed assets turnover ratio
4.67
4.50
4.24
4.02
Liquidity ratios Current ratio
0.94
1.05
0.88
0.75
Current ratio (inc. st loans)
0.91
0.96
0.81
0.66
Quick ratio
0.57
0.63
0.52
0.36
Inventory turnover ratio
12.52
13.44
14.44
11.74
Payout ratios Dividend payout ratio (net profit)
47.86
55.24
60.49
54.96
Dividend payout ratio (cash profit)
43.54
49.63
53.85
48.83
Earning retention ratio
50.83
42.64
38.89
43.50
Cash earnings retention ratio
55.38
48.66
45.66
49.96
Coverage ratios
Dabur India Limited
Page 13
Adjusted cash flow time total debt
0.04
0.07
0.09
0.29
Financial charges coverage ratio
46.43
69.48
42.26
39.53
Fin. charges cov.ratio (post tax)
41.75
64.33
38.09
36.75
Component ratios Material cost component (% earnings)
49.05
45.86
42.97
45.05
Selling cost Component
16.12
23.11
23.52
26.18
Exports as percent of total sales
4.49
3.96
1.97
3.02
Import comp. in raw mat. consumed
0.97
1.22
0.72
1.38
Long term assets / total Assets
0.48
0.48
0.61
0.64
Bonus component in equity capital (%)
87.46
87.58
81.74
63.55
Capital structure From Year
To Year
Class Of Share
Authorized Capital
Issued Capital
Paid Up Shares (Nos)
Paid Up Face l Value
2007
2008
Equity Share
145.00
86.40
864022973
1
2006
2007
Equity Share
125.00
86.29
862883808
1
2005
2006
Equity Share
125.00
57.33
573302784
1
2004
2005
Equity Share
50.00
28.64
286419713
1
2003
2004
Equity Share
50.00
28.62
286249052
1
2002
2003
Equity Share
50.00
28.57
285749934
1
2001
2002
Equity Share
50.00
28.56
285593520
1
2000
2001
Equity Share
50.00
28.52
285214830
1
1999
2000
Equity Share
50.00
28.52
28521483
10
1998
1999
Equity Share
50.00
28.51
28508950
10
1997
1998
Equity Share
50.00
28.51
28508950
10
1996
1997
Equity Share
50.00
28.51
28508950
10
1995
1996
Equity Share
50.00
28.51
28508950
10
Dabur India Limited
Page 14
1994
1995
Equity Share
50.00
28.51
28508950
10
1993
1994
Equity Share
30.00
28.51
28508950
10
1992
1993
Equity Share
5.25
4.55
4550520
10
1991
1992
Equity Share
5.25
4.55
4550520
10
RESEARCH AND DEVELOPMENT Dabur's main asset is its knowledge base and the backup of research initiatives through modern science. Dabur deals mainly with traditional Ayurvedic products, we take care to conduct rigorous trials and authentication of processes so that our consumers get the best. Dabur Research Foundation (DRF), set up in 1979 as an independent research organisation, spearheads the R&D activity of the Company. DRF is well equipped with the most modern research facilities and more than 125 highly qualified scientists from diverse fields like Ayurvedic doctors, chemists and phytochemists, botanists, agronomists, clinical pharmacologists, microbiologists, food technologists, biotechnologists, oil technologists, oncologists, and so on. We have been involved in developing products for consumer applications as well as highly specialised areas of genomics, proteomics and bio-informatics. Through the ceaseless quest of our scientists in frontier areas, Dabur has been able to mark a presence even in critical aspects of health care like cancer therapy. Our Research Areas Dabur Research Foundation is not only limited to conducting tests and trials, but carries out research in over 10 diverse areas: •
Ayurvedic Research - relating traditional knowledge with modern science
•
Pharmaceutical Research - developing and testing drugs
•
Phytopharmaceuticals - getting better resources from nature
•
Biotechnology - scientific techniques for preservation
•
Agronomy -- scientific regeneration and propagation
•
Personal Care Products - developing natural solutions
•
Analytical - studying and testing active chemicals
•
Synthetic Chemistry - developing new molecules and intermediates
•
Oncology Research and Molecular Biology - researching new anti-cancer remedies
•
New Drug & Peptide Research - developing new drugs and delivery systems
•
Food Research - developing healthy and natural foods
•
Clinical Research - studies and tests for total safety of drugs
Dabur India Limited
Page 15
FUTURE PLAN Having completed its biggest restructuring exercise in recent times, Dabur India has charted a more focused, flexible and resource-led path for sustained growth for its FMCG business. Catalyst examines the fine print. 1)
Dabur plans to set up a major manufacturing facility in Pakistan by March 2008. The company expects revenues of Rs 750 million in the first year of operations in Pakistan. The project is aimed at tapping the high potential Pakistan and Afghanistan markets for cosmetic, ayurvedic medicines and health food . 2) Dabur India plans to set up a chain of 300-400 retail outlets, based on the health and beauty platform, across the country over the next few years. Dabur India is estimated to earmark an investment of Rs 2 billion for its retail foray. It is expected that the company would roll out the first few stores by the end of the calendar year.
INFORMATION TECHNOLOGY PERFORMANCE
In Dabur India Limited knowledge and technology are key resources which have helped the Company achieve higher levels of excellence and efficiency. Towards this overall goal of technology-driven performance, Dabur is utilizing Information Technology in a big way. This will help in integrating a vast distribution system spread all over India and across the world. It will also cut down costs and increase profitability. Our major IT Initiatives: Migration from Baan and Mfg ERP Systems to centralized SAP ERP system from 1st April 2006 for all business units. Implementation of a country wide new WAN Infrastructure for running centralized ERP system. Setting up of new Data Centre at KCO Head Office. Extension of Reach System to distributors for capturing Secondary Sales Data. Roll out of IT services to new plants and CFAs. Future Challenges: Forward Integration of SAP with Distributors and Stockists. Backward Integration of SAP with Suppliers. Dabur India Limited
Page 16
Implementation of new POS system at Stockist point and integration with SAP-ERP. Implementation of SAP HR and payroll. SAP Roll-out to DNPL and other new businesses.
Dabur India Limited
Page 17
