Nestl India is a subsidiary of Nestl S.A. of Switzerland.

With seven factories and a large number of co-packers, Nestl India is a vibrant Company that provides consumers in India with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction. The Company insists on honesty, integrity and fairness in all aspects of its business and expects the same in its relationshi ps. This has earned it the trust and respect of every strata of society that it comes in contact with and is acknowledged amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'.

After nearly a century-old association with the country, today, Nestl India has presence across India with 7 manufacturing facilities and 4 branch offices spread across the region. Nestl Indias first production facility, set up in 1961 at Moga (Punjab), was followed soon after by its second plant, set u p at Choladi (Tamil Nadu), in 1967. Consequently, Nestl India set up factories in Nanjangud (Karnataka), in 1989, and Samalkha (Haryana), in 1993. This was succeeded by the commissioning of two more factories - at Ponda and Bicholim, Goa, in 1995 and 1997 respectively. The seventh factory was set up at Pantnagar, Uttarakhand, in 2006. The 4 branch offices in the country help facilitate the sales and marketing of its products. They are in Delhi, Mumbai, Chenn ai and Kolkata. The Nestl India head office is located in Gurgaon, Haryana. Brands: y Milk Products & Nutrition From shelf-stable solution to chilled dairy. Beverages Drink to an active life with Nestl Beverages. y Prepared Dishes & Cooking Aids Preparing well balanced meals is a snap with Nestl. Chocolates & Confectionery Delighting the senses with a range of tastes and textures.

Board of Directors Mr. Antonio Helio Waszyk Mr. Shobinder Duggal Mr. Christian Schmid Mr. Michael W.O. Garrett Mr. Ashok Kumar Mahindra Dr. Rakesh Mohan Mr. Ravinder Narain Dr. Swati A. Piramal Mr. Richard Sykes Chairman and Managing Director Director - Finance & Control Director - Technical Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non-Executive Director Alternate Director to Mr. Michael W.O Garrett

Balance Sheet of Nestle India Dec '05 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Dec '06 12 mths

------------------- in Rs. Cr. ------------------Dec '07 12 mths Dec '08 12 mths Dec '09 12 mths

96.42 96.42 0.00 0.00 257.72 0.00 354.14 14.30 0.00 14.30 368.44 Dec '05 12 mths

96.42 96.42 0.00 0.00 292.47 0.00 388.89 16.27 0.00 16.27 405.16 Dec '06 12 mths

96.42 96.42 0.00 0.00 322.01 0.00 418.43 2.87 0.00 2.87 421.30 Dec '07 12 mths

96.42 96.42 0.00 0.00 376.93 0.00 473.35 0.82 0.00 0.82 474.17 Dec '08 12 mths

96.42 96.42 0.00 0.00 484.85 0.00 581.27 0.00 0.00 0.00 581.27 Dec '09 12 mths

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

942.40 468.63 473.77 22.83 104.43 253.10 30.52 3.64 287.26 194.33 33.00 514.59 0.00 381.68 365.50 747.18 -232.59 0.00 368.44 50.04 36.73

1,058.27 516.48 541.79 38.24 77.77 276.22 55.76 6.53 338.51 175.12 69.82 583.45 0.00 440.82 395.28 836.10 -252.65 0.00 405.15 35.93 40.33

1,179.77 577.96 601.81 73.70 94.40 401.22 53.49 15.75 470.46 186.23 22.01 678.70 0.00 529.51 497.79 1,027.30 -348.60 0.00 421.31 63.27 43.40

1,404.85 651.85 753.00 109.17 34.90 434.91 45.59 12.66 493.16 162.67 181.03 836.86 0.00 582.44 677.32 1,259.76 -422.90 0.00 474.17 84.90 49.09

1,640.79 744.59 896.20 79.63 203.26 498.74 64.19 26.73 589.66 184.85 128.86 903.37 0.00 666.39 834.79 1,501.18 -597.81 0.00 581.28 63.07 60.29

Profit & Loss account of Nestle India Dec '05 12 months Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

------------------- in Rs. Cr. ------------------Dec '06 12 months Dec '07 12 months Dec '08 12 months Dec '09 12 months

2,643.96 168.87 2,475.09 23.67 16.73 2,515.49 1,135.80 103.91 183.29 49.06 460.53 56.78 0.00 1,989.37 Dec '05 12 months

2,944.20 125.04 2,819.16 15.33 13.42 2,847.91 1,348.21 115.56 216.16 52.65 480.14 87.55 0.00 2,300.27 Dec '06 12 months 532.31 547.64 0.44 547.20 66.28 0.00 480.92 0.00 480.92 165.43 315.10 952.06 0.00 245.86 34.48 964.16 32.68 255.00 40.33

3,647.49 146.53 3,500.96 21.24 71.01 3,593.21 1,763.54 123.94 269.44 62.14 496.22 172.54 0.00 2,887.82 Dec '07 12 months 684.15 705.39 0.85 704.54 74.74 0.00 629.80 0.00 629.80 214.80 413.81 1,124.29 0.00 318.17 52.21 964.16 42.92 330.00 43.40

4,472.04 143.39 4,328.65 29.88 31.11 4,389.64 2,153.85 159.76 314.58 73.46 736.73 81.40 0.00 3,519.78 Dec '08 12 months 839.98 869.86 1.64 868.22 92.36 0.00 775.86 0.00 775.86 238.74 534.08 1,365.92 0.00 409.77 69.64 964.16 55.39 425.00 49.09

5,232.59 90.69 5,141.90 14.26 6.30 5,162.46 2,478.94 158.87 432.38 94.05 839.22 115.98 0.00 4,119.44 Dec '09 12 months 1,028.76 1,043.02 1.40 1,041.62 111.27 0.00 930.35 0.00 930.35 261.97 655.00 1,640.50 0.00 467.62 79.47 964.16 67.94 485.00 60.29

Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

502.45 526.12 0.21 525.91 56.84 0.00 469.07 0.00 469.07 159.49 309.57 853.58 0.00 241.04 33.81 964.16 32.11 250.00 36.73

Financial Ratios of Nestle India: Liquidity Ratios: RATIOS Current Ratio Quick Ratio
0.8 0.7
0.6

2005 0.66 0.28

2006 0.67 0.31

2007 0.66 0.23

2008 0.66 0.29

2009 0.60 0.24

0.5
0.4

Current Ratio

0.3
0.2

Quick Ratio

0.1 0
2005 2006 2007 2008 2009

INTERPRETATION: To measures whether or not a company has enough resources to pay its debt over the next business cycle, we have calculated the Current Ratio, which shows a fluctuating trend of 0.66 in 2005 then 0.67 in 2006 and finally a slowdown from 0.66 in 2008 to 0.60 in 2009.Though the general rule is a company should have neither more nor less liquidity rather a company should always have sufficient liquidity. But the calculated Current Ratios show an un-sufficient liquidity. We have also calculated Quick Ratios to show a fluctuating trend and a decline at the end of the year 2009. Though, the thumb rule is that companies with a quick ratio of greater than 1.0 are sufficiently able to meet their short-term liabilities but here the company has low Quick Ratio indicating the companys liquidity position is not good enough. Leverage Ratios: RATIOS Debt Equity Ratio 2005 0.04 2006 0.04 2007 0.01 2008 0.00 2009 0.00

Interest Coverage Ratio

2,208.29

1,103.09

741.20

473.22

666.25

Debt Equity Ratio

0.045
0.04

0.035
0.03

0.025
0.02

Debt Equity Ratio

0.015 0.01
0.005

0 2005 2006 2007 2008 2009

Interest Coverage Ratio

2,500.00
2,000.00 1,500.00

1,000.00 500.00 0.00 2005 2006 2007 2008 2009

I terest overage Ratio

INTERPRETATION: To judge the long-term financial position of the firm, we have calculated Debt Equity Ratio which shows a downward trend indicating that there is conservative financing and low risk.With respect to Interest coverage ratio, the above table shows that the company has more than sufficient funds to pay of the its interest. Even though, the Interest Coverage Ratio is declining towards its end but still it can easily pay of its interest on debt.

Activity Ratios: RATIOS Fixed Assets Turnover Ratio Total Assets Turnover Ratio Inventory Turnover Ratio 2005 5.61 7.67 9.87 2006 5.77 8.02 10.28 2007 6.10 9.52 8.79 2008 3.20 10.29 11.39 2009 3.24 9.75 11.61

14

12
10

0 2005 2006 2007 2008 2009

INTERPRETATION: In order to know how efficient the firm is in producing and selling its product, we have calculated the Fixed Assets Turnover Ratio which indicates under-utilization of fixed assets.. Moving towards Total Assets Turnover Ratio which shows an upward trend. It has moved from 7.67 in 2005 to 9.75 in 2009 indicating the companys ability to use its assets to generate sales. With that of Inventory Turnover Ratio which has moved from 9.87 in 2005 to 10.28 in 2006 and 11.39 in 2008 to 11.61 in 2009 implying strong sales. Profitability Ratios: RATIOS Return On Capital Employed(%) Return On Net Worth(%) Net Profit Margin(%) 2005 127.18 87.42 12.39 2006 120.01 81.03 11.09 2007 150.33 98.90 11.73 2008 163.97 112.83 12.24 2009 160.29 112.68 12.67

I ve t r y T r a ti

T t al Assets T r a ti

Fixed Assets T r ati

v er

v er

v er

Return On Capital Employed(%)

180
160

140
120

100
80

60 40
20

Ret r O apital Empl yed(%)

0 2005 2006 2007 2008 2009

Return On Net Worth(%)

120 100
80

40
20

0 2005 2006 2007 2008 2009

Net Profit Margin(%)

13 12.5
12

11.5 Net Pr fit Margi (%) 11

10.5

10 2005 2006 2007 2008 2009

60

Ret r O Net W rth(%)

  

INTERPRETATION: The Return on capital Employed shows a considerable increase in returns.Return on Capital Employed ratio also indicates that the company is earning sufficient revenues and profits in order to make the best use of its capital assets. Return on Net Worth h as increase manifold from 87.42 om 2005 to 112.68 in 2009 indicates companys profitability by revealing the profit company has generated with the money shareholders have invested. Net profit Margin Ratio( in %) has shown a fluctuating trend though there has been increase at the end of 2008 and 2009 indicating that the company is more effective at converting revenue into actual profit.