1. There is no default in repayment of principal loan or interest thereon.
2. No Guarantee Bond has been furnished against any loan.
3. Cash Credits are secured by hypothecation of inventories and book debts to bankers in consortium ranking pari passu among Punjab National Bank , Standard Chartered Bank, Hongkong & Shanghai Banking Corporation Ltd, IDBI Bank Ltd, Citi Bank NA,HDFC Bank Ltd, Bank of Nova Scotia and Bank of Tokyo Mitsubishi UFJ Ltd.
ii) Lease rent credited to Profit & Loss account of the year Rs 10.01 (Previous year Rs 9.07 ).
iii) Irrevocable lease agreement relates to buildings, lease period not exceeding five years in respect of any arrangement.
iv) Figures in bracket relates to previous year.
4. A. Related Party Disclosures:
(a) Related parties where control exists:-
H & B Stores Limited Domestic Wholly Owned Subsidiary
Dermoviva Skin Essentials Inc Foreign wholly Owned Subsidiary
Asian Consumer care Pvt. Ltd., Dhaka Foreign Subsidiary
Dabur Nepal Pvt. Ltd., Nepal Foreign Subsidiary
Dabur Egypt Ltd., Egypt Foreign wholly Owned Subsidiary
Dabur (UK) Ltd., UK Foreign wholly Owned Subsidiary
Dabur International Ltd., UAE Foreign wholly Owned Subsidiary
African Consumer care Limited, Nigeria Foreign wholly Owned Subsidiary
Asian Consumer care Pakistan Pvt. Ltd., Pakistan Foreign Subsidiary
Naturelle LLC, UAE Foreign wholly Owned Subsidiary
Dabur Pakistan Pvt Ltd. Foreign wholly Owned Subsidiary
Hobi Kozmetik, Turkey Foreign wholly Owned Subsidiary
Ra Pazarlama, Turkey Foreign wholly Owned Subsidiary
Namaste Laboratories LLC, US Foreign wholly Owned Subsidiary
Hair Rejuvenation & Revitalization Nigeria Ltd. Foreign wholly Owned Subsidiary
Healing Hair Lab International LLC, USA Foreign wholly Owned Subsidiary
Urban Lab International LLC, USA Foreign wholly Owned Subsidiary
Dabur Lanka (Pvt.) Ltd, Sri Lanka Foreign wholly Owned Subsidiary
Dabur Consumer care Pvt Ltd, Sri lanka Foreign wholly Owned Subsidiary
Dabur Tunisie, Tunisia Foreign wholly Owned Subsidiary
Dabur Pars, Iran Foreign wholly Owned Subsidiary
Dabur South Africa (PTY) Ltd. Foreign wholly Owned Subsidiary
(b) Other related parties in transaction with the company:
(I) Joint Venture /Partnership : Forum 1 Aviation Private Limited
(II) Key Management Personnel : 1. Mr. P D Narang, Whole Time Director
2. Mr. Sunil Duggal, CEO cum Whole Time Director
3. Mr Lalit Malik, Chief Financial Officer (CFO)
4. Mr. A K Jain, VP (Finance) and Company Secretary
1. Dr. Anand C Burman, Chairman 2. Mr. Amit Burman, Vice Chairman
3. Mr. Mohit Burman, Director 4. Mr. Saket Burman, Director
5. Mr. P. N. Vijay, Independent Director 6. Mr. R C Bhargava, Independent Director
7. Dr. S Narayan, Independent Director 8. Dr. Ajay Dua, Independent Director
9. Mr. Sanjay Kumar Bhattacharyya, Independent Director 10. Mrs. Falguni Nayar, Independent Director
a) Sharing/Directors in Common
1. Jetways Travels Private Limited 3. Aviva Life Insurance Company Limited
2. Lite Bite Foods Private Limited 4. Universal Sompo General Insurance Company
b) Relatives of Directors
1. Mr. V C Burman 2. Mrs. Asha Burman
c) Post employment benefit plan
1. Dabur India E.PF Trust 2. Dabur Gratuity Trust
3. Dabur Superannuation Trust
*Figures in bracket relates to previous year as on 31.03.2016 Notes:
A. Item referred to in 1 above includes Purchases from Dabur Nepal Pvt. Ltd Rs 427.47 (Rs 320.05) and Dabur Lanka Pvt Ltd Rs 75.92 (Rs. 101.98)
B. Item referred to in 2 above includes Sales to Dabur International Ltd, Naturelle LLC, Dabur Nepal Pvt Ltd, Asian Consumer Care Ltd Rs 10.78, Rs 24.44, Rs 4.19, Rs 15.07 respectively (Rs 6.76, Rs 28.48, Rs 10.12, Rs. 14.13 respectively)
C. Item referred to in 3 above relates to royalty paid to Dermoviva Skin Essentials Inc. Rs Nil (Rs 0.13)
D. Item referred to in 4 above relates to joint venture expenses paid to Forum 1 Aviation Pvt Ltd Rs 3.91 (Rs 4.01)
E. Item referred to in 8 above includes two ESOP given to Dabur International Ltd. Rs 3.08 (Rs 10.48)
F. Item referred to in 9 above relates to interest received on security deposit from Forum 1 Aviation Pvt Ltd Rs 0.03 (Rs 0.03)
G. Figures in bracket relate to previous year
H. There is no provision against the outstanding balance and no expense booked during the year in respect of bad and doubtful debts due from related parties.
51. Disclosures required by INDAS 102 Share Based Payment
Under Employee Stock Option Scheme of the company, share options of the company are granted to the senior executives subject to achievement of targets as defined in ongoing vision of the company. Vesting period is 1 to 5 years. Each option carries the right to the holder to apply for one equity share of the company at par. There has been no variation in the terms of options during the year. The share options are valued at the fair value of the options as on the date of grant using Black Scholes pricing model. There is no cash settlement alternative.
23,79,340 share options were exercised on a regular basis throughout the year. The weighted average share price during the period was Rs. 280.14.
87,98,312 share options outstanding as on March 31, 2017, the exercise price is Re. 1 to Rs. 84.60. The weighted average of the remaining contractual life is 1.2 years.
Fair value of the options has been calculated using Black-Scholes Option Pricing Model. Following inputs were used to determine the fair value for options granted during the year:
The measure of volatility used is the annualized standard deviation of the continuously compounded rates of return of stock over the expected lives of different vests, prior to grant date. Volatility has been calculated based on the daily closing market price of the Companies stock on NSE over these years.
Post the closure of financial year 2016-17, the Nomination and Remuneration Committee of the Board of Directors of the company in its meeting held on 21.04.2017 has cancelled 21,29,961 stock options granted to the employees of the company and its subsidiaries relevant to the Financial year 2016-17.
5. Financial Instruments - Accounting classifications and fair value measurements
The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
1. Fair Value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to the account for the expected losses of these receivables.
The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data
Note: During the reporting period ended March 31, 2017 and March 31, 2016, there were no transfers between level 1 and level 2 fair value measurements.
53. Financial Risk Management Objectives and Policies
The Company''''s financial risk management is an integral part of how to plan and execute its business strategies.
Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price of a financial instrument. These include change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
The company manages market risk through a risk management committee engaged in, inter alia, evaluation and identification of risk factors with the object of governing/mitigating them according to Company''''s objectives and declared policies in specific context of impact thereof on various segments of financial instruments. The Board provides oversight and reviews the Risk management policy on a quarterly basis.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to balance the Company''''s position with regards to interest income and interest expense and to manage the interest rate risk, treasury performs a comprehensive interest rate risk management.
The company is not exposed to significant interest rate risk as at the respective reporting dates.
Foreign currency risk
The Company operates internationally with transactions entered into several currencies. Consequently the Company is exposed to foreign exchange risk towards honoring of export/ import commitments.
Management evaluates exchange rate exposure in this connection in terms if its established risk management policies which includes the use of derivatives like foreign exchange forward contracts to hedge risk of exposure in foreign currency.
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.
Financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in a repayment plan with the company. The company provides for overdue outstanding for more than 90 days other than institutional customers which are evaluated on a case to case basis.
The Company''''s concentration of risk with respect to trade receivables is low, as its customer''''s base is widely spread across the length and breadth of the country.
6. In pursuance of complaint lodged under whistle blower mechanism, management, by deputing an in house team of investigation and conduct of special audit, unearthed financial irregularity of around Rs.53 lakh in municipal payment documents committed by an officer of South Zone and identified pecuniary nexus of his near relatives with few C&F agents. The money has been recovered from him. The same has no impact on turnover, net profits, total assets, total liabilities and net worth. The C&F agents involved in alleged misdeed have already been terminated and the alleged officer had also been made to exit the company. The management has already taken measures to strengthen Internal Financial Controls with reference to payment to Government authorities by way of enlarging scope of internal audit and laying down procedure of abstention of periodic confirmation from all C&F agents to the effect of non-existence of their pecuniary relationship with any officer of the company or his relatives, direct or indirect, to dispense with any reoccurrence of similar eventuality. This incident and the investigation outcome has been reported by the management to the auditors and the Audit committee.
7. Amount due to Micro & Small enterprises under MSMED Act, 2006 is Rs. 19.14 (previous year Rs. 11.27). Identification of such enterprises has been made on the basis of their disclosure in correspondences, bills to the effect as mandated for them. There was neither any default nor any delay in payment made to such enterprises, credit terms were of were within period prescribed under statute.
8. Sale of Services Rs. 0.01 (previous year Rs 0.07) relates to hiring charges paid by customers for using Company''''s machines.
9. Exchange gain works out to Rs 6.49 (Previous Year Rs. 11.91) and exchange loss Rs 10.67 (Previous year Rs. 17.61) and their net impact have been debited to Profit & Loss Account.
10. a) Figures for the previous year have been rearranged/ regrouped as and when necessary in terms of current year''''s grouping.
b) Figures are rounded off to nearest rupees in crores.