dabur foods ltdmerged Management discussions

DABUR FOODS LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS PERFORMANCE AND FINANCIAL RESULTS: Your Company registered another year of good performance in 2005-06 whereby sales grew by 48% and profit became more than two times. This is the second year in a row that the business has grown over 48% in sales growth. The business recorded a turnover of Rs.192.53 crores and profit after tax of Rs.12.1 crores. In line with the strategic path laid down, the following are the key highlights of performance: * Beverage portfolio growth at 50% driven by its segmentation strategy under Real. * Strong growth from new product launches and exports. * The line extensions of Hommade also continued to drive the growth. The primary growth driver of the business was its fruit beverage portfolio. The segmentation strategy put into place to differentiate the 3 brands has been successfully implemented. Real, Activ and Coolers are now differentiated in terms of appeal, benefit, variants and packaging. Real continued to grow by over 35%. The major success of the year was Real Activ which doubled its sales over last year. The extension to the innovative fruit and vegetable variants has been widely accepted by the Indian consumers. Both these brand have firmly strengthen Dabur Foods leadership in the fruit juices market. Coolers - The range of drinks based on traditional Indian formulations, which have a cooling effect on the body - grew by 58%. It added 3 new flavours - Muskmelon, Lemon Barley and Jamun. The Hommade brand grew by 28 per cent in 2005-06. Besides the retails channel, the product is extensively distributed in the food services channel. In view of the growing size of this channel a dedicated structure was created to service the customer. Your company continued to dominate this channel by making it available in the best hotels, restaurants, airlines and several institutions like to Indian army. Dabur Foods multi-fruit processing wholly owned subsidiary at Siliguri, West Bengal under the name - Pasadensa Foods Limited produced 1809 tonnes of fruit pulp and concentrates. The plant established processing capability for a number of fruits such as Mango, Pineapple, Papaya, tomato, litchi & guava. In 2005-06, Dabur Foods commercialized its newly acquired facility near Jaipur for manufacturing fruit juices. The plant currently manufactures 1 litre and 200 ml packs of Real brand of fruit juice and also the Coolers range of products. With this acquisition, the Company will be able to de-risk its business by considerably reducing its reliance on the Nepal plant and also services its requirements for exports. FINANCIAL RESULTS: Particulars Amt. (Rs. in lacs) Turnover 19253.41 Profit before Tax 1370.39 Less: Provision for Tax- Current + FBT 160.21 Profit after Tax 1210.18 Loss Brought Forward (1481.28) Balance carried over to Balance Sheet (271.10) For and on behalf of the Board Ghaziabad Amit Burman 14th April, 2006 Chairman cum Managing Director