Dabur Financial Report

1. Dabur India Limited's Financial Position Analysis

The following report analyse Dabur India Limited's financial condition based on the financial statements data prepared according to International Financial Reporting Standards (IFRS) for the financial year 2012-2013.

1.1. Structure of the Assets and Liabilities

Indicator Value Change for the period analysed

in million INR % of the balance total million INR

(col.3-col.2) ± %

((col.3-col.2) : col.2)

31.03.2012 31.03.2013 at the beginning of the period analysed

(31.03.2012) at the end of the period analysed

(31.03.2013)

1 2 3 4 5 6 7

Assets

1. Non-current assets 8,588 10,905 35 38.6 +2,317 +27

2. Current assets, total 15,927 17,374 65 61.4 +1,447 +9.1

Inventories 5,286 4,997 21.6 17.7 -288 -5.5

Trade and other current receivables 2,242 2,553 9.1 9 +312 +13.9

Cash and cash equivalents 2,613 3,194 10.7 11.3 +581 +22.2

Equity and Liabilities

1. Equity 13,033 15,948 53.2 56.4 +2,915 +22.4

2. Non-current liabilities 687 747 2.8 2.6 +59 +8.6

3. Current liabilities 10,795 11,584 44 41 +789 +7.3

Assets; Equity and Liabilities 24,515 28,279 100 100 +3,764 +15.4

On 31 March, 2013, Dabur India Limited's assets structure was built in the following way: non-current assets are 38.6% and current assets are 61.4%. For the entire period reviewed, the assets were found to jump significantly to INR 28,279 million (INR +3,764 million). Assets were observed to grow simultaneously with equity. With that, the equity has grown with outrunning rates (+22.4% for the last year). An outrunning increase in equity relative to a total change in assets should be considered as a positive factor.

The total growth of Dabur India Limited's assets value is primarily connected with the growth value of the following assets (amount of change and percentage of this change relative to the total assets growth are shown below):

• Other non-current financial assets – INR 1,293 million (28.6%)

• Other current financial assets – INR 1,012 million (22.4%)

• Investment property – INR 755 million (16.7%)

• Cash and cash equivalents – INR 581 million (12.9%)

At the same time, the most significant growth was seen on the following positions in the section "Equity and Liabilities" of the company's balance sheet (the percentage from total equity and liabilities change is shown in brackets):

• Other reserves – INR 2,914 million (71.3%)

• Trade and other current payables – INR 819 million (20%)

Total assets of the company did not grow to a greater degree due to a negative change in items such as "Other current non-financial assets" in assets and "Other current financial liabilities" in the company's sources of finance, which were INR -367 million and INR -314 million respectively during the period analysed. In the chart below, you will see a correlation of the basic groups of the company's assets.

The inventories were equal to INR 4,997 million on 31 March, 2013, which is INR 289 million lower than on the first day of the period analysed (31 March, 2012).The current receivables rose significantly (by INR 311 million, or by 13.9%) during the period analysed (31.03.12–31.03.13).

1.2. Net Assets (Net Worth)

Indicator Value Change

in million INR % of the balance total million INR

(col.3-col.2), %, ((col.3 -col.2) : col.2)

at the beginning of the period analysed (31.03.2012) at the end of the period analysed (31.03.2013) 31.03.2012 31.03.2013

1 2 3 4 5 6 7

1. Net tangible assets 12,961 15,819 52.9 55.9 +2,858 +22

2. Net assets (Net worth) 13,033 15,948 53.2 56.4 +2,915 +22.4

3. Issued (share) capital 1,742 1,743 7.1 6.2 +1 +<0.1

4. Difference between net assets and Issued (share) capital (line 2 - line 3) 11,291 14,205 46.1 50.2 +2,914 +25.8

The net tangible assets amounted to INR 15,819 million on 31.03.2013. For the year, it was verified that there was an outstanding growth in the net tangible assets of INR 2,858 million, or of 22.1%. On 31 March, 2013, the intangible assets amounted to INR 129 million. This value shows the difference between the value of net tangible assets and all net worth.

The net worth (net assets) of Dabur India Limited was much higher (by 9.2 times) than the share capital at the end of the period reviewed. Such a ratio positively describes the company's financial position. Net worth is used as a measure of the company's book value (as opposed to a shareholder's value, the value based on expected earnings and other methods used to estimate the company's value). In financial analysis, amount of net worth (own equity) is one of the key indicators of property status of the company.

1.3. Financial Sustainability Analysis

1.3.1. Key ratios of the company's financial sustainability

Ratio Value Change

(col.3-col.2) Description of the ratio and its recommended value

31.03.2012 31.03.2013

1 2 3 4 5

Debt-to-equity ratio (financial leverage) 0.88 0.77 -0.11 A debt-to-equity ratio is calculated by taking the total liabilities and dividing it by shareholders' equity which is the key financial ratio and used as a standard for judging a company's financial standing.

Acceptable value: 1.5 or less (optimum 0.43-1).

Debt ratio (debt to assets ratio) 0.47 0.44 -0.03 A debt ratio is calculated by dividing total liabilities (i.e. long-term and short-term liabilities) by total assets. Debt ratio show to what extent company relies on debt to finance assets (similar to debt-to-equity ratio).

Acceptable value: no more than 0.6 (optimum 0.3-0.5).

Long-term debt to Equity 0.05 0.05 – This ratio is calculated by dividing long-term (non-current) liabilities by equity.

Non-current assets to Net worth 0.66 0.68 +0.02 This ratio is calculated by dividing long-term (non-current) liabilities by net worth (equity) and measures the extent of a company's investment in low-liquidity non-current assets. This ratio supports comparison analysis as it is less dependent on industry (structure of company's assets) than debt ratio and debt-to-equity ratio.

Normal value: no more than 1.25.

Capitalization ratio 0.05 0.04 -0.01 Calculated by dividing non-current liabilities by the sum of equity and non-current liabilities.

Fixed assets to Net worth 0.57 0.53 -0.04 This ratio indicates the extent to which the owners' cash is frozen in the form of fixed assets and non-current biological assets.

Acceptable value: 0.75 or less.

Current liability ratio 0.94 0.94 – Current liability ratio is calculated by dividing non-current liabilities by total (i.e. current and non-current) liabilities.

First, attention should be drawn to the debt-to-equity ratio and debt ratio as the ratios describing the capital structure. These ratios are analogous and show if there is not enough capital for stable future operations. Debt-to-equity ratio is calculated as a relationship of the borrowed capital (liabilities) to the equity, while debt ratio is calculated as a relationship of the liabilities to the overall capital (i.e. the sum of equity and liabilities).

The debt-to-equity was 0.77 on 31.03.2013. The debt ratio equaled 0.44 on 31 March, 2013, which is 0.03 lower than on 31 March, 2012.

The debt ratio describes the financial position of Dabur India Limited on the last day of the period analysed (31.03.2013) as a very good one, the percentage of liabilities is 43.6%. The maximum acceptable percentage of liabilities is deemed to be 60%. When sources to finance the company are planned, this percentage should be used as an upper limit of acceptable percentage of the borrowed capital.

In the chart below, the correlation of the company's equity and liabilities is demonstrated:

According to the principles for stable company development, investments with the least liquid assets (non-current assets) should first be made with