A PROJECT REPORT

ON

ANNUAL REPORT OF DABUR INDIA LIMITED.

Guide Submitted by

Ms. Radhika Bhutani Neha Gupta

Enrollment no. 01720803910

MBA 1st Semester

BHAGWAN PARSHURAM INSTITUTE OF TECHNOLOGY

(A Unit of Bhartiya Brahmin Charitable Trust)

AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

Table of contents

1. About the company 2

2. Vision of Dabur India ltd 3

3. Corporate information 5

4. Dabur at a glance 7

5. Product line of the Company 8

6. Financial analysis of the annual report 2009-2010 10

7. Corporate governance 13

8. Board of directors 15

9. Competitor Analysis 16

2

ABOUT THE COMPANY

Over its 120 years of existence, the Dabur brand has stood for goodness through a natural

lifestyle. An umbrella name for a variety of products, ranging from hair care to honey, Dabur

has consistently ranked among India’s top brands. Its brands are built on the foundation of

trust that a Dabur offering will never cause one harm.

The trust levels that this brand enjoys are phenomenally high. While Ries and Trout may ask

“What does Dabur stand for—shampoo or digestive tablets?” The answer is fairly simple, it

stands for India’s fourth largest fast moving consumer goods company that both consumers

and trade respect and trust unequivocally, and which has an annual turnover of over Rs 15

billion.

The company has kept an eye on new generations of customers with a range of products that

cater to a modern lifestyle, while managing not to alienate earlier generations of loyal

customers.

Dabur is an investor friendly brand as its financial performance shows. There is an abundance

of information for its investors and prospective information including a daily update on the

share price (something that very few Indian brands do). There’s a great sense of

responsibility for investors’ funds on view. This is a direct extension of Dabur’s philosophy

of taking care of its constituents and it adds to the sense of trust for the brand overall.

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VISION of the company

"Dedicated to the health and well being of every household"

PRINCIPLES of the company

OWNERSHIP

This is our company. We accept personal responsibility, and accountability to meet business

needs.

PASSION FOR WINNING

We all are leaders in our area of responsibility, with a deep commitment to deliver results.

We are determined to be the best at doing what matters most.

PEOPLE DEVELOPMENT

People are our most important asset. We add value through result driven training, and we

encourage & reward excellence.

CONSUMER FOCUS

We have superior understanding of consumer needs and develop products to fulfill them

better.

TEAM WORK

We work together on the principle of mutual trust & transparency in a boundary-less

organisation. We are intellectually honest in advocating proposals, including recognizing

risks.

4

INNOVATION

Continuous innovation in products & processes is the basis of our success.

INTEGRITY

We are committed to the achievement of business success with integrity. We are honest with

consumers, with business partners and with each other.

5

CORPORATE INFORMATION

BOARD OF DIRECTORS

CHAIRMAN

Dr. Anand Burman

VICE CHAIRMAN

Mr. Amit Burman

DIRECTORS

Mr. Pradip Burman

Mr. Mohit Burman

Mr. P. D. Narang

Mr. Sunil Duggal

Mr. R. C. Bhargava

Mr. P. N. Vijay

Dr. S. Narayan

Mr. Albert Wiseman Paterson

Mr. Analjit Singh

Dr. Ajay Dua

GM (FINANCE) & COMPANY SECRETARY

Mr. A. K. Jain

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AUDITORS.

Chartered Accountants

M/s G. Basu & Co

INTERNAL AUDITORS

Price Waterhouse Coopers Pvt. Ltd.

BANKERS

Punjab National Bank

Standard Chartered Bank

The Hongkong & Shanghai Banking Corporation Ltd.

The Royal Bank of Scotland

Citibank NA

HDFC Bank Ltd.

IDBI Bank Ltd.

CORPORATE OFFICE

Dabur India Limited

Dabur Tower, Kaushambi, Sahibabad,

Ghaziabad - 201 010, (U.P.), India

Tel: 0120 - 39412525, 3982000

Fax: 0120 - 4374935

Website: www.dabur.com

Email: investors@dabur.com

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DABUR AT A GLANCE

1884

 

Birth of Dabur. Established by Dr. Burman at Kolkata

1896 Setting up first manufacturing plant at Garhia

Early 1900s Production of Ayurvedic medicines

1919 Establishment of research laboratories

1936 Dabur India (Dr. S.K. Burman) Pvt. Ltd. incorporated

1949 Launched Dabur Chyawanprash in tin pack

1979 Sahibabad factory / Dabur Research Foundation

1986 Public Limited Company

1992 Joint venture with Agrolimen of Spain

1993 Cancer treatment

1994 Comes with first Public issue

1995 Joint Ventures

1996 3 separate divisions

1997 Foods Division / Project STARS

1998 Professionals to manage the Company

2000 Turnover of Rs.1,000 crores

2001 Super specialty drugs

2003 Demerges Phrmaceuticals business

2005 Acquires balsara

2008 Acquires Fem Care Pharma

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PRODUCT LINE OF DABUR

Herbal & Ayurvedic Health Care

A trusted name in natural healthcare for the past 125 years, Dabur is known for providing a

range of efficacious and timetested health care products based on the principles of Ayurveda

like Dabur Chyawanprash, Dabur Honey

Natural Personal Care

A premium personal care brand & a leader in its category, Vatika is a popular name in the

natural personal care space offering a whole range of nature-based solutions like Dabur amla,

Vatika hair oil.

Tasty Digestives

Tasty fun-filled digestives available in interesting formats like tablets and candies, Hajmola

appeals to all age groups.

Fruit-based Beverages

India's leading brand of packaged fruit juices, Réal provides the largest range of refreshing &

healthy fruit juices that are 100% natural and free of preservatives like Dabur Active,

Hommade, Lemoneez.

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Fairness Bleaches & Skin Care

A new member in the family of Dabur's key brands, Fem offers a range of fairness bleaches

and hair removing solutions.

Several skin care products like Dabur Gulabari and Dabur Uveda are offered by Dabur.

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FINANCIAL ANALYSIS

In a year which was beset with external challenges such as below average monsoons,

drought in some parts of the country, rising food inflation and sharp currency fluctuations,

Dabur continued to report strong growth in sales across its businesses and geographies. In

spite of sharp fluctuations in input costs and an overall inflationary scenario, the company

was able to manage costs well leading to a sizeable increase in operating margins during the

year.

On a consolidated basis, Revenues grew by 20.6% to Rs 3,416.7 crore while Net Profit

grew 28.1% to go up to Rs 501.3 crore. The steady growth achieved by the Company has

been enabled by sustained investments in marketing and brand building, distribution,

production, supply chain and by driving operational efficiencies across all its functions.

During the year, the Company saw robust volume-led growth across key categories like hair

care, oral care, skin care, health supplements, digestives & foods. The acquisition of Fem

Care Pharma, a leading player in the women's skin care products market, and introduction of

a host of new products and variants added to this growth and helped Dabur gain a strong

foothold in several high-growth and highly competitive categories across the consumer goods

space.

The highlights of the Company’s performance in 2009-10 on a consolidated basis are:

Consolidated Sales increased to Rs 3,416.7 crore in 2009-10 from Rs 2,834.1 crore in

2008-09, registering a growth of 20.6%

Earnings before interest, depreciation, taxes and amortization (EBIDTA) increased to

Rs 669.5 crore in 2009-10 from Rs 517.3 crore in 2008-09, registering a growth of 29.4%

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Consolidated profits after tax (PAT) went up to Rs 501.3 crore in 2009-10 from Rs

391.2 crore, increasing by 28.1%

Net profit after tax and after minority interest for the year at Rs.501.27 crore is higher

by Rs.110.06 crore as compared to Rs. 391.21 crore in the previous year

Earnings per share (EPS) went up to Rs 5.8 in 2009-10 from Rs 4.5 in 2008-2009

Return on Net worth of the company increased to 53.5% in 2009-10 from 47.7% in

2008-09

Consolidated Turnover grew by 20.28% to Rs.3430.80 crore as compared to Rs.

2852.27 crore in the previous year.

During 2009-10 Dabur completed the acquisition of Fem Care Pharma Ltd. (“Fem” or “Fem

Care”). The acquisition has added about 3.5% to the topline during 2009-10. The operations

of Fem Care Pharma Limited have been integrated with Dabur, infact the company has

shown good growth in revenues, margins and profits post the closing of the deal which was

effected on 25th June, 2009.

The Fem Care legal entity has since been merged with Dabur and the merger takes effect

retrospectively from 1st April 2009. The High Court order to this effect was passed on 2nd

June 2010.

During the year, the company test- launched a host of new brands and products, including

Dabur Uveda range of Ayurvedic skin care products. Packed with herbal extracts derived

from a blend of authentic Ayurvedic ingredients that are documented in Ayurvedic scriptures

of Bhavprakash Nighantu and proven actives, the Uveda range is well researched and proven

to enhance skin tone and texture. The other major launch of the year was the Réal Burrst

range of fruit-based beverages. Available in 4 variants, this non-carbonated light fruit

beverage range offers the benefits of refreshment and thirst quenching qualities to the

consumers. The company also introduced two new light hair oil brands – Vatika Enriched

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Almond hair oil & Dabur Amla Flower Magic hair oil to expand its presence in the light hair

oils category.

Dabur has drawn up a strategic plan for the next four years, under which the Company plans

to double its sales and profits from current levels to reach revenues of Rs 7,000 crore and

profits of Rs 1,000 crore by the fiscal year 2013-14.

FMCG portfolio includes

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CORPORATE GOVERNANCE

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 governance and has constantly avoided an arbitrary decision-making process.

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

Corporate Governance is the implementation of best management practices, compliance of

law and voluntary adherence to ethical standards which are inevitable for achieving

organisational efficiency, enhancing shareholders value and discharge of social

responsibility. The principles of good corporate governance is to ensure fairness in all

transactions within and outside the company with investors, customers, employees, partners,

competitors and the society at large. Adoption of Corporate Governance and disclosure

practices attract the best of capital and talent for any organisation and create value and wealth

on a sustainable and long term basis.

Dabur is committed to good corporate Governance and has benchmarked itself in line with

global practices. Dabur understands and respects its fiduciary role in the corporate world. It

has always endeavoured to pursue growth by adhering to highest national and international

standards of corporate governance. This attitude of Dabur has earned recognition and has

strengthened its bond of trust with stakeholders and the society at large. The company had in

fact adopted Corporate Governance and disclosure practices much before they were

mandated by legislation.

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Corporate Governance Philosophy

The Company's philosophy is to achieve business excellence and optimize longterm value for

its shareholders on a sustained basis through ethical business conduct. It envisages attainment

of the highest level of transparency, accountability and equity in all facets of its operations

and all its interactions with shareholders, employees, lenders and regulatory bodies.

The corporate governance structure in the Company assigns responsibilities and entrusts

authority among different participants in the organisation viz. The board of directors, the

senior management, employees, etc. The company`s focus revolves around values based on

transparency, integrity, professionalism and accountability. It`s initiatives towards this end

include: professionalization of the Board; fair and transparent processes and reporting

systems; and going beyond the mandated Corporate Governance Code requirements of SEBI.

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Board of Directors

Composition of the Board As on March 31, 2010, Dabur's Board consists of 12 members.

Besides the Chairman, who is a Non-Executive Promoter Director, the Board comprises of

three Executive Directors (of whom one is Promoter Director), two Non-Executive Promoter

Directors and six Non-Executive Independent Directors. The composition of the Board as on

31st March, 2010 is in confirmity with Clause 49 of the listing agreement, which stipulates

that a Company shall have an optimum combination of Executive and Non- Executive

Directors, with not less than 50 per cent of the Board comprising of Non-Executive Directors,

and where the Chairman being a Non-Executive director is also a promoter of the Company,

at least one-half of the Board should comprise of Independent Directors.

During the year, on 3rd September, 2009, Dr Ajay Dua was appointed to the Board as Non-

Executive Independent Director.

Number of Board Meetings

The Board of Directors met four times during the year: on April 29, 2009, July 27, 2009,

October 26, 2009, and January 27, 2010. The Company has held at least one Board meeting

in every three months. The maximum gap between any two meetings was less than four

months, as stipulated under Clause 49.

Directors' Attendance Record and Directorships held As mandated by Clause 49, none of the

Directors are members of more than 10 Board level committees, nor are they Chairmen of

more than five committees in which they are members.

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n COMPETITOR ANALYSIS

The key competitor’s of Dabur in the Hair Oil segment are Keo Karpin, Emami, Bajaj,

Marico, HLL which together with Dabur have about 64% of India's domestic market.

Dabur is one of India's largest player in the hair oil segment and the fourth largest producer

of FMCG. It was established in 1884, and had grown to a business level in 2003 of about 650

million dollars per year. Dabur Hair Oils have a market share of 19%.

We have tried to analyse the competition for Dabur in the Hair Care segment as follows:

Keo Karpin, a fifty-year old brand, is a pioneer in the light hair oil category. The pleasantly

perfumed hair oil has its main market in the Hindi belt and also has significant presence in

eastern and western India. Its share is 6% of the total hair oil market.

Emami has existence in hair oil market through Himani Navratan oil and Himani Oil. Emami

has taken Madhuri Dixit as brand ambassador for emami oil and Amitabh Bachchan for

Himami Navratan Oil. Overall it has a share of 4% in hair oil market.

Bajaj has two flagship oil brands - Bajaj Brahmi Amla and Bajaj Almond Drops — currently

have a value share of 19 per cent and 12 per cent in their respective oil categories as per

ORG-Marg. Besides, the company has also decided to enhance its retail presence by nearly

20 per cent from the existing 5 lakh retail outlets in an attempt to reach the rural parts.

Overall it has a market share of 4% in hair oil market.

Marico’s Parachute is premium edible grade oil, a market leader in its category. Synonymous

with pure coconut oil in the market, Parachute is positioned on the platform of purity. In fact

over time it has become the gold standard for purity. Parachute's primary target has been

women of all ages. The brand has a huge loyalty, not only in the urban sections of India but

also in the rural sector. It has a market share of 28%.

HLL has two products, Clinic Plus Hair Oil and All Clear Clinic Hair Oil. Overall it has a

3% share in hair oil market.

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The key competitor’s of Dabur in the Chyawanprash segment are Baidyanath, Zandu and

Himani, which together with Dabur have about 85% of India's domestic market.

Dabur is India's largest Ayurvedic medicine supplier and the fourth largest producer of

FMCG. Dabur Chyawanprash (herbal honey) has a market share of 61%.

We have tried to analyse the competition for Dabur in the Chyawanprash segment as

follows:

Sri Baidyanath Ayurvedic Bhawan Ltd. (Baidyanath for short) was founded in 1917 in

Calcutta, and specializes in Ayurvedic medicines, though it has recently expanded into the

FMCG sector with cosmetic and hair care products; one of its international products is

Shikakai (soap pod) Shampoo.Its Chyawanprash has a market share of 10%.

Zandu Pharmaceutical Works was incorporated in Bombay in 1919, named after an 18 th-

century Ayurvedic. The company focuses primarily on Ayurvedic products (in 1930,

pharmaceuticals were added, but the pharmaceutical division was separated off about 30

years later).

The Emami Group , founded in 1974, provides a diverse range of products, doing 110

million dollars of business annually, though only a portion is involved with Ayurvedic

products, through its Himani line; the company is mainly involved with toiletries and

cosmetics, but also provides Chyawanprash and other health products. Its market share is

12%.

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