The Board of Directors of your Company take pleasure in presenting its report on theworking of the Company for the Financial Year 2017-18.
1. FINANCIAL RESULTS ( Rs in Crores)
|Particulars ||2017-18 ||2016-17 |
|Revenue from Operations ||1964.44 ||1651.97 |
|EBITDA ||302.Q9 ||230.91 |
|Other Income ||4.46 ||13.61 |
|Less : Finance Costs ||8.59 ||15.03 |
|Less : Depreciation and Amortisation Expense ||54.34 ||51.46 |
|Profit before Tax ||243.62 ||178.03 |
|Less : Tax Expense ||82.55 ||58.08 |
|Profit after Tax ||161.07 ||119.95 |
|Other Comprehensive Income ||(0.40) ||2.29 |
|Balance brought forward from Previous year ||12.81 ||9.24 |
|Amount available for Appropriation ||173.48 ||131.48 |
|Appropriation: || || |
|Final Dividend * ||12.01 ||7.20 |
|Tax on Final Dividend * ||2.45 ||1.47 |
|Transfer to General Reserve ||125.00 ||110.00 |
|Balance carried to Balance Sheet ||34.02 ||12.81 |
|EPS-Basic (in Rs ) ||13.40 ||9.99 |
|EPS-Diluted (in Rs ) ||13.38 ||9.98 |
"Dividend Distributed during the year.
The Ind (AS) provisions were applicable on the Company w.e.f. 01.04.2017 therefore theFinancial statements for FY18 and corresponding previous year were prepared as per Ind(AS).
2. BUSINESS PERFORMANCE
The key highlights of the Company's financial performance during theFinancialYear2017-18aregivenherebelow:-
Revenue from operations increased by 18.91% to Rs 19G4.44 Crores from Rs1651.97CroresinthelastFinancialYear.
EBITDA increased by 30.82% to Rs 302.09 Crores; with EBITDA margin increasedby140 bps to15.38%.
Net Profit increased by 34.28% to Rs 161.07 Crores from Rs 119.95 Crores in thelast Financial Year.
Net Profit margins increased to 8.20%.
Total retail outlets increased from 270 to 302 during the Financial Year.
3. PERFORMANCE OVERVIEW
Your Company has been able to show strong growth on the key financial metrics for theyear despite the market scenario being uncertain and increasing competition in the year.Management believes that your Company will continue its journey of profitable growthdriven by the strong fundamentals of operating model overwhelming desire to servecustomers & end consumer streamline of indirect tax laws by introduction of GST andcontinued focus on the longterm business plan.
(B) NON-FINANCIALS - GROWTH ACROSS THE VALUE CHAIN
Consumer focus / Product Innovation
Your Company continued its relentless efforts to understand the consumer and hasdesigned its portfolio in line with their changing tastes. Structured market researchapproach along with regular market sensing exercises have kept your Company abreast withconsumer needs across different regional economic and demographic strata. Our focus onin-season launches with an optimal product portfolio has enabled us to deliver rightproduct at right price at right time.
Distribution architecture and footprint expansion
Your Company launched a strategic initiative to streamline the distributionnetwork-especially in underpenetrated markets which have given us substantial incrementalsales. This has laid the foundation for next wave of growth for Relaxo.
Your Company also moved away from a category led sales to a geography led salesorganization structure. This allowed us to offerthe full breadth of our brands to ourdistributor partners and providing scale in their business. The organization restructuringwas carried out in a quick but streamlined manner without any market level disruptions andlosing key talent.
Your Company has continued its effort to adapt its product portfolio with evolvingconsumer needs and trends enabling its impressive growth in FY18. Structured marketresearch has been the corner stone of this portfolio strategy - it has helped us to betterunderstand the customer's typical usage occasions key purchase drivers and identify anyevolving opportunity spaces for our portfolio. All this has been achieved within theguardrails of Relaxo's overall strategy of an "optimal sized" product portfoliowith high quality products.
New products are the key to sustain any growth story and our in-house design team hassupported us to maintain a strong new product portfolio over the years. As a result salescontribution from new product launches has continued to grow in FY18 across all brands -Relaxo Flite Sparxand Bahamas.
In parallel your Company has continued to invest extensively in its brands with an aimto reinforce trust drive consumer recall and sustain demand pull for our brands.
Acclaimed celebrities such as Salman Khan and Akshay Kumar continue to be brandambassadors for Bahamas and Sparx respectively while Shahid Kapoor & Shruti Haasanhave been engaged afresh for Flite.
Digital marketing: With an objective to connect with the younger generationyour Company has enhanced its digital marketing strategy to stimulate consumers throughoutthe entire purchase cycle. Widening the range of digital marketing activities we aim to(a) Enhance product exposure via greater social media campaigns (b) Influence consumerpurchase via advocacy marketing and (c) Build consideration via advertising on e-commerceportals.
Increasing smartphone penetration in the country coupled with evolving shopping habitsof the consumer who looks for ease and convenience has resulted in rapid growth ofe-commerce channels. Your Company has partnered with all major e-commerce companies forsales of its products to the emerging online consumers and has posted a decent growth inFY18. While the Indian market continues to be our focus your Company made considerableefforts to strengthen operations in international markets with a specific focus on MiddleEast Africa and Oceania. Your Company has opened branch office in Dubai to be nearer tocustomer. Given a strong brand recall and a widespread Indian diaspora your Company iswell positioned to capitalize on growth from these regions.
In FY18 your Company has achieved landmark target of opening 300th exclusiveretail outlet. Retail continues to be instrumental in increasing brand visibility andrange of products. During the year Company has opened 8 Franchise outlets (FOFO) ineastern region on experimental basis. The initial response to this concept is encouraging.
In order to maintain optimum inventory level retail division has focussed on store tostore rotation of stock and on liquidation of aged inventory resulting in reducinginventory days.
Vendor Portal was launched for online registration of new vendors to improve vendorsbase besides facilitating existing vendors to upgrade their profiles new productsoffering etc.
During the year audit was carried out on main vendors for assessment of theirinfrastructure and quality control systems maintained by them. This helped in making themmore aware about our expectations about quality in supplies. This initiative helped inrationalizing and improving vendor portfolio.
During FY18 your Company not only focused on improving the quality of products butalso in improving various packaging materials.
Global competition is becoming a marathon race toward a new age of advanced and"smart" (lean efficient cost effective flexible robotics and Al based)manufacturing. Your Company took initiatives aimed at improving productivity andoptimizing manufacturing costs by applying world class manufacturing concepts like MaynardOperation Sequence Technique (M05T) yield improvement etc. in all plants. We alsocontinued 5S journey along with safety enhancement projects for better workingenvironment.
FY18 was the year of technology advancement that has put us in the top of IT adoptionand compliance graph helping the Company to leverage technology in achieving its businessgoals.
Your Company was ready for GST rollout with backend preparation before time whichhelped in its smooth implementation. We initiated implementation of SAP HANA for retailoperations which will help in improving and standardizing processes. Company updated itsIT landscape / Applications by deploying ATP (Advance Threat Protection) solution for datasecurity.
Relaxo has been certified by British Standards Institute (B5I) for ISO 9001:2015(Quality Management System) ISO 14001:2015 (Environmental Management 5ystem) 6 OH5A518001:2007 (Occupational Health & Safety Assessment Series) till June 2020. TheQuality Environmental and Safety Policy symbolizes the organization's commitment towardsimproving product and process quality protecting mother nature and safeguarding thepeople working for and on behalf of the organization.
HR function has taken following key initiatives in FY18:
a) Recruitment: Your Company's sales and capabilities are growing at a rapid pace. Wedrove a series of initiatives to improve quality and speed in hiring sales team byintroducing new recruiters and created bench strength for the function. Your Company hascreated a pool of future leaders by hiring management trainees from top B-Schools andengineering institutes. 5everal initiatives were taken for employer branding bycommunicating company philosophy & culture through social media and guest lectures inpremium campuses.
b) Employee Stock Options Plan (ESOP): Second phase of RFL ESOP PLAN -2014 was launchedduring the year. The 2nd phase of ESOP Plan was introduced encompassing moreemployees in its ambit and accordingly options were granted to them during the year.
c) Grievance Handling: Your Company has continued to spread awareness about themechanism and facilities for grievance handling. We have a toll free helpdesk number and adedicated email wherein the employees can report their grievances which are thoroughlyinvestigated and closed as per TAT (turn around time) defined in the policy.
d) Training and Development: Your Company has continued to impart need based functionaland behavioral trainings to employees during FY18.
e) Employee Engagement: Your Company has focused on creating a congenial workplace& employee engagement by initiating family connect programs skip level interactionsessions and health & wellness camps.
4. MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion & Analysis Report forms an integral part of this Reportand gives details of the overall industry structure developments performance and stateof affairs of the Company's business internal controls and their adequacy riskmanagement systems and other material development during the Financial Year.
Board of Directors in their meeting held on 11th May 2018 have recommendeda final dividend of 150% i.e. Rs 1.50 per equity share for the Financial Year ended 31stMarch 2018. The Proposed Dividend is subject to the approval of shareholders at theAnnual General Meeting to be held on 27th September 2018.
6. TRANSFERTO RESERVE
We propose to transfer Net Profit of Rs 125.00 Crores to the General Reserve. An amountof Rs 34.02 Crores is proposed to be retained in profits loss account.
7. PUBLIC DEPOSITS
Your Company has not invited or accepted any deposits within the meaning of Sections 73G 74 of the Companies Act 2013 read together with the Companies (Acceptance of Deposits)Rules 2014 (including any statutory modification(s) or re-enactment(s) thereof for thetime being in force) from public during theyear under review.
8. BUSINESS RESPONSIBILITY REPORT (BRR)
In Compliance with the provisions of Regulation 34(2)(f) of SEBI (LODR) Regulations2015 read with Circular No CIR/CFD/CMD/10/2015 dated November 4 2015 your Company hasprepared a BRR in the prescribed format for the Financial Year ended March 312018 whichforms an integral part of this report.
9. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL &PARTICULARS OF EMPLOYEES
In accordance with 5ection 178 of the Companies Act 2013 read with rules issuedthereunder and SEBI laws the Board of Directors at their meeting held on 10thMay 2014 formulated the Nomination G Remuneration Policy of your Company. The salientaspects covered in the Nomination and Remuneration Policy covering the policy onappointment and remuneration of Directors and other matters have been outlined in theCorporate Governance Report which forms part of this report. The Nomination andRemuneration Policy is available on the website of the Company at the following linkhttp://www.relaxofootwear.com/pdf/Nomination-and- remuneration-policy.pdf.
The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force)inrespect of Directors / Employees of your Company is set out in Annexure-A to this report.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During Financial Year 2017-18 Mr. Nikhil Dua was reappointed as Whole Time Directorfor a period of three years w.e.f. 1st October 2017 by the shareholders in theAnnual General Meeting held on 21st September 2017.
Mr. Ramesh Kumar Dua Managing Director and Mr. Mukand Lai Dua Whole Time Director ofthe Company retire by rotation at the ensuing Annual General Meeting and being eligibleoffered themselves for reappointment.
Your Directors recommend their re-appointment as the Directors of the Company.
Pursuant to the provisions of Sections 195197198 and 203 read with Schedule V andother applicable provisions of the Companies Act 2013 and on the recommendations ofNomination and Remuneration Committee and the Board of Directors Mr. Ramesh Kumar Duawhose term as Managing Director shall expire on 31.03.2019 is proposed to be re-appointedas a Managing Director of the Company for a period of 5 (five) years with effect from01.04.2019 to 31.03.2024 and subject to retirement by rotation on the terms andconditions including remuneration as set out in the explanatory statement annexed to thenotice convening the ensuing AGM.
Pursuant to the provisions of Sections 195197198 and 203 read with Schedule V andother applicable provisions of the Companies Act 2013 and on the recommendations ofNomination and Remuneration Committee and the Board of Directors Mr. Mukand Lai Duawhose term as Whole Time Director shall expire on 31.03.2019 is proposed to bere-appointed as a Whole Time Director of the Company for a period of 5 (five) years witheffect from 01.04.2019 to 31.03.2024 and subject to retirement by rotation on the termsand conditions including remuneration as set out in the explanatory statement annexed tothe notice convening the ensuing AGM. He is also going to attain age of 70 years duringthe proposed tenure.
Pursuant to the provisions of Sections 195197198 and 203 read with Schedule V andother applicable provisions of the Companies Act 2013 and on the recommendations ofNomination and Remuneration Committee and the Board of Directors Mr. Deval Ganguly whoseterm as Whole Time Director shall expire on 04.11.2018 is proposed to be reappointed as aWhole Time Director of the Company for a period of 3 (three) years with effect from05.11.2018 to 04.11.2021 and subject to retirement by rotation on the terms andconditions including remuneration as set out in the explanatory statement annexed to thenotice convening the ensuing AGM.
The first term of Independent Directors Mr. Pankaj Shrimali Mr. Vivek Kumar and Mr.Kuruvila Kuriakose shall expire on 31.03.2019. They have shown their interest to continueas Independent Directors for the next term of five years. On the recommendation ofNomination and Remuneration Committee and Board of Directors recommendation has been madeto members for appointment of Mr. Pankaj Shrimali Mr. Vivek Kumar and Mr. KuruvilaKuriakose as Independent Directors of the Company for the next term of 5 (five) years witheffect from 01.04.2019 to 31.03.2024 in the ensuing AGM.
A brief resume of the Directors proposed to be re-appointed the nature of theirexpertise in specific functional areas names of companies in which they have heldDirectorships committee membership/s / chairmanship/s their shareholding etc. arefurnished in the explanatory statement to the notice of the ensuing AGM. The Board ofDirectors recommend their re-appointment at the ensuing AGM.
11. ANNUAL EVALUATION OF BOARD'S PERFORMANCE
In terms of provisions of Companies Act 2013 read with Rules issued thereunder andSEBI (LODR) Regulations 2015 the Board of Directors on recommendation of the Nominationand Remuneration Committee have evaluated the effectiveness of the Board/ Director(s) forthe Financial Year 2017-18. Directors were evaluated on their contribution at Board /Committee meetings and guidance & support to the management outside Board / Committeemeetings. During the year Company engaged renowned consultants to reset the parameters forperformance evaluation of Board Director(s) and Committees which helped in setting theguidelines for evaluation.
The Board's functioning was evaluated on various aspects including inter alia degreeof fulfillment of key responsibilities Board structure and composition role andaccountability management oversight risk management culture and communicationfrequency and effectiveness of meetings.
The committees of the Board were assessed on the basis of degree of fulfillment of keyresponsibilities adequacy of committee composition and effectiveness of meetings. TheChairman appointed for the Board meetings was also evaluated by all the Directors on thebasis of managing relations leadership competence and diligence.
The Independent Directors performance evaluation was carried out by the entire Boardexcluding the Director being evaluated. The performance evaluation of the Chairman and theNon Independent Directors was carried out by the Independent Directors who also reviewedthe performance of the Board as a whole.
The Board met five times during the Financial Year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two consecutive meetings was within the period prescribed by the CompaniesAct 2013 SEBI (LODR) Regulations 2015 and Secretarial Standard-1 (SS-1).
13. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(5) of the Companies Act 2013.
14. TRAINING OF INDEPENDENT DIRECTORS
The Company makes presentation to the new Independent Directors about the strategyoperations plants products organization structure finance human resource andfacilities. During the year Company had arranged presentations for the IndependentDirectors on business operating plans capital expenditure plans HR policies retailbusiness GST Ind (AS) merger laws and compliance process.
Further at the time of appointment of an Independent Director the Company issued aformal letter of appointment outlining his / her role function duties &responsibilities as an Independent Director. The format of the letter of appointment isavailable on our website http://www.relaxofootwear.com/terms-conditions.aspx.
15. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 with regard to Director'sResponsibility Statement it is hereby confirmed that:
a) In the preparation of the annual accounts for the year ended March 31 2018 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2018 and of the profit ofthe Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a 'going concern'basis;
e) the Directors have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The Statutory Auditors of the Company M/s B R Maheswari & Co LLP CharteredAccountants were appointed during the year for a period of five years and will hold officetill 38th Annual General Meeting subject to 5ection 139 and other applicable provisions ofCompanies Act 2013 to be held in year 2022 subject to the annual ratification by membersif required at every Annual General Meeting.
The Ministry of Corporate Affairs vide its Notification dated 7th May 2018 dispensedwith the requirement of ratification of appointment of Statutory Auditors at every AGM.Accordingly the proposal for ratification of appointment of Statutory Auditors is notforming part of the Notice convening ensuing Annual General Meeting of the Company.
The Auditor's Report for the financial year ended 31st March 2018 does not contain anyqualification reservation or adverse remarks. The observation of the Auditors on theAccounts for the year under report have been suitably explained in the Notes to Accountsand do not require any furtherdarification.
18. SECRETARIAL AUDITOR
Pursuant to the provisions of Section- 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modifications(s) or re-enactment(s) thereof for the time being in force)your Company appointed M/s Vivek Arora Company Secretaries to conduct the SecretarialAudit of the Company for the Financial Year 2017-18. The Secretarial Audit Report for theFinancial Year 2017-18 forms part of theAnnual Report as Annexure-B to this Report.
19. ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 inaccordance with 5ection 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as Annexure-C to thisreport.
20. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All Contracts / arrangements / transactions entered by the Company during the FinancialYear with related parties were in the ordinary course of the business and on the arm'slength basis and were in compliance with the applicable provisions of the Companies Act2013 ('the Act') and SEBI (LODR) Regulations 2015. During the year the Company had notentered into any contract / arrangement / transaction with related parties which could beconsidered material in accordance with the policy of the Company on materiality of RelatedParty Transactions that would have required Shareholders approval under Regulation 23 ofSEBI (LODR) Regulations 2015.
The policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at the linkhttp://www.relaxofootwear.com/pdf/Policy-for-Transactions-with- related-Parties.pdf.
Your Directors draw attention of the members to Note No. 47 to the Financial Statementswhich sets out related party disclosures.
The form AOC-2 pursuant to section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 (including any statutory modification(s) orre-enactment(s) thereof forthe time being in force) is set out as Annexure-D to thisReport.
21. MERGERS AND AMALGAMATIONS
Your Company had filed a petition with National Company Law Tribunal (NCLT) Delhi foramalgamation of M/s Marvel Polymers
Private Limited and M/s Relaxo Rubber Private Limited with your Company along with itsshareholders and creditors. During FY18 your Company has obtained necessary approvalsfrom stock exchanges NSE&B5E.
22. DETAILS OF LOANS GUARANTEES & INVESTMENTS
The details of loans guarantees and investments under 5ection 18S of the CompaniesAct 2013 read with Companies (Meeting of Board and its Powers) Rules 2014 are as follows:-
a) Details of investments made by the Company as on 31st March 2018(including investments made in previous years).
|(i) Investment in equity shares ||Rs 20.00 Lacs |
|(ii) Investment in debt instruments ||Rs 50.00 Lacs |
|b) Details of loans given by the Company ||Nil |
c) There are no guarantees issued by your Company in accordance with 5ection 185 of theCompanies Act 2013 read with the Rules issued thereunder.
23. RISK MANAGEMENT
Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. The Company has adopted a RiskManagement Policy which establishes various levels of accountability within the Company.The policy also ensures effective risk management systems to carry out risk assessment andalso to document risk mitigation plans. In addition all the key risks get continuouslydeliberated and discussed during business review meetings. Company has taken manyinitiatives to further strengthen the GRC framework at Relaxo which includes automation ofcompliance monitoring litigation management and documentation of Delegation of Authority(Operational / Financial). The Company has benn taking necessary steps to mitigateforeseeable business risks. The Company has laid down procedures to inform the AuditCommittee as well as the Board of Directors about risk assessment & managementprocedure and status. Business risk evaluation and management is an ongoing and continuousprocess within the Company.
24. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company believe that the collective development of all the stakeholders especiallythe people at the bottom of the pyramid is prerequisite for the sustainability & theholistic development of the business.
The CSR Vision of your Company is to ensure sustained human development of the mostdeprived communities by involving them & leveraging Company's strength in need-basedresult-oriented and sustainable projects.
Your Company has decided to work under two thrust areas 'Education & Skilldevelopment' and 'Health & Hygiene' primarily with the underprivileged communitiesliving in the vicinity of Relaxo locations. However being one of the most popularhousehold brand Relaxo has presence across India therefore your Company intends to workbeyond these geographical boundaries.
Presently Relaxo Foundation is running six projects in four different locations.During the reporting period the activities of the Foundation have directly impacted morethan 20000 individuals. However the indirect reach has been much more.
The rationale and strategy under both thrust areas are mentioned below-
a) Educations Skill Development
Relaxo Foundation is undertaking projects both in the rural and urban areas towardsensuring the holistic development of the underprivileged children through an integratedapproach. The short-term goal of the education program is to improve the quality ofeducation & learning outcome of the Government school students. However the long-termgoal is to create a model of school-led-individual & community-development whereinthrough school the other aspects of the community can be addressed like health genderlocal self-governance livelihood etc. so that the entire community could be uplifted.Along with school education Relaxo Foundation is also providing Vocational training toschool and college drop-out underprivileged youth.
During the year under review your Company has initiated three projects under Education& Skill Development viz. project 'Model School' in 13 Primary schools of Khanpur Blockin Haridwar District of Uttarakhand; 'Student to Scholar' program in Bahadurgarh and aretail sector specific vocational training course in Delhi.
b) Health & Hygiene
Availability accessibility and affordability of health services is a huge challengefor the socio-economically backward communities that lead to higher morbidity andmortality. Also in India the Non-Communicable Diseases are on a rise which are the lifestyle disorders and an emerging National Health challenge. Relaxo Foundation believes thatprotection from diseases not only ensure survival but can contribute significantly in theeconomic growth and prosperity of an individual family and the Nation at large.
Through Need assessment Bhiwadi emerged as the most deprived area in terms ofavailability and accessibility of health services. Therefore in the reporting periodRelaxo Foundation has initiated two extensive projects involving both curative andpreventive healthcare services. One project is 'Smile on Wheel (Comprehensive HealthCare)' addressing the general health needs of the community and the other project is'Nayan' towards preventable blindness covering the entire Tijara Block of Alwar District.
In FY18 the focus of your Company was more on developing the strategy and laying downstrong foundation for the Relaxo C5R so that the amount could be spent on impactful andsustainable projects. Along with this the Foundation adopted consultative process tofinalize the projects and did stringent due diligence process for the identification ofthe Implementing Partners. The time invested in this whole process resulted in the delayof project initiation that lead to underspent of C5R budget. However a significant amounthas been allocated and other projects are under consideration. Considering the progressyour Company is confident to increase CSR spending in the next financialyear.
Detailed report of all the on-going CSR projects is mentioned in Annexure-E.
25. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee as on March 31 2018 comprises of the following Directors:
Mr. Pankaj Shrimali (Chairman & Independent Director) Mr. Kuruvila Kuriakose(Independent Director) Mr. Vivek Kumar (Independent Director) and Mr. Nikhil Dua(Executive Director).
Further all recommendations of Audit Committee were accepted by the Board ofDirectors.
26. VIGIL MECHANISM
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177(10) of the Companies Act 2013 and5EBI Laws. The copy of the policy is available at Company's website athttp://www.relaxofootwear.com/pdf/Vigil-Mechanism-Policy.pdf.
27. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a gender neutral policy on prevention prohibition and redressal of sexualharassment at workplace.
An Internal Committee (1C) is available at each of the units and offices of the Companyas per the requirements of the law. The 1C is responsible for redressal of complaintsrelated to sexual harassment as well as to create a preventive environment across theorganization. The Company conducts sensitization / awareness sessions on a regular basisso as to create a free and fair working environment.
The 1C received one complaint of Sexual Harassment during the year under review and thesame was disposed off as per the provisions of law. It is our constant endeavour to ensurethat we provide harassment free safe and secure working environment to all employeesspecially the women. We are proud to inform that our female workforce feels happy and safewhile working at Relaxo.
28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.
29. CREDIT RATING
During the year under review ICRA has upgraded Long term rating of the Company to ICRAAA- (stable outlook) from ICRA A+ (positive outlook). During the year ICRA has reaffirmedshortterm rating of the Company as A1+ which is the highest rating for the product. ICRAhas also reaffirmed A1+ top notch rating to the Company for Commercial Paperof Rs 50.00Crores
30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed underthe Act are provided inAnnexure-Ftothis Report.
31. EMPLOYEES STOCK OPTION PLAN
During the year 223370 options were exercised by the employees after vesting.Accordingly the Company has made allotment of 223.370 equity shares on 4thNovember 2017 against the options exercised by the employees. Company launched 2ndtranche of Employee Stock Option Plan 2014 ("RFL ESOP PLAN-2014") during theyear and granted 494200 options in 2 tranches to eligible employees of the Company.
During the Financial Year 2017-18 there has been no change in the Employee StockOption Plan 2014 ("RFL ESOP PLAN-2014") of the Company. Further it is confirmedthat the ESOP Scheme of the Company is in compliance with SEBI (Share Based EmployeeBenefits) Regulations 2014.
The details as per the requirements of SEBI Guidelines are annexed and form part ofthis Report as Annexure-G.
32. CHANGE IN SHARE CAPITAL
During the year under review the Company has issued and allotted
223.370 equity shares of Rs1.00 each fully paid up on exercise of stock options by theeligible employees under the Employee Stock Option Plan 2014 (RFL ESOP PLAN -2014)thereby increasing the paid up share capital by Rs 223370/-.
33. INTERNAL FINANCIAL CONTROL SYSTEM
The Company has in place well defined and adequate Internal Financial Control frameworkwhich is independently evaluated by external agency apart from periodic evaluation byin-house Internal Audit function for necessary improvement wherever required. The Companydeploys a robust system of internal controls that facilitates the accurate and timelycompilation of financial statements and management reports which ensures regulatory andstatutory compliances along with safeguarding of investors interest by ensuring
the highest level of governance. The control system ensures that all assets aresafeguarded and protected and that the transactions are authorized recorded and reportedcorrectly. A CEO and CFO Certificate included in the Corporate Governance Report confirmsthe existence of effective internal control systems and procedures in the Company. TheAudit Committee reviews the effectiveness of the internal financial control framework inthe Company.
34. CEO AND CFO CERTIFICATION
Pursuant to the requirement of Regulation 33(2)(a) of the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the CEO and CFO certification is attachedherewith the Annual Report which confirms the existence of effective internal controlsystems and procedures in the Company. The Managing Director and the Chief FinancialOfficer also provide quarterly certification on Financial Results while placing theFinancial Results before the Board in terms of Regulation 33(2)(a) of the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015.
35. TRANSFERTO UNCLAIMED SHARES
As per the provisions of Regulation 39(4) of the Listing Regulations the unclaimedshares lying in the possession of the Company are required to be dematerialized andtransferred into a special demat account held by the Company. Accordingly unclaimedshares lying with the Company have been transferred and dematerialized in a 'UnclaimedSuspense Account' of the Company. This account is being held by the Company purely onbehalf of the shareholders entitled for these shares. It may also be noted that all thecorporate benefits accruing on these shares like bonus split etc. if any shall also becredited to the said 'Unclaimed Suspense Account' and the voting rights on these sharesshall remain frozen until the rightful owner daimsthe shares.
Shareholders who have not yet claimed their shares are requested to immediatelyapproach the Registrar & Transfer Agents of the Company by forwarding a request letterduly signed by all the joint holders furnishing self attested copies of their completepostal address along with PIN code a copy of PAN card along with proof of address and fordelivery in demat form a copy of Demat Account - Client Master Report duly certified bythe Depository Participant (DP) and a recent Demat Account Statement to enable theCompany to release the said shares to the rightful owner. The summary of 'UnclaimedSuspense Account'duringtheyearisgiven hereunder:
|S. No. ||Particulars ||No of shareholders ||No of equity shares held |
|1. ||Aggregate number of shareholders and the outstanding shares lying in the suspense account at beginning ||47 ||118110 |
|2. ||Number of shareholders along with shares held who approached the Company for transfer of shares from the suspense account during the year ||2 ||8000 |
|3. ||Number of shareholders along with shares held to whom shares were transferred from the suspense account during the year ||2 ||8000 |
|4. ||Transfer of shares to IEPF Account ||18 ||70025 |
|5. ||Aggregate number of shareholders and the outstanding shares lying in the suspense account at the end of the year. ||27 ||40085 |
The Company is committed to maintain the highest standard of Corporate Governance andadhere to the Corporate Governance requirements set out by SEBI. The Report on CorporateGovernance as stipulated under SEBI (LODR) Regulations 2015 forms an integral part of theReport. The requisite certificate from the Statutory Auditors of the Company M/s. B RMaheswari 6 Co LLP Chartered Accountants confirming compliance with the conditions ofCorporate Governance is attached to the Report of Corporate Governance as Annexure-H.
37. OTHER DISCLOSURES
(A) Dividend Policy: Your Company intends to maintain similar or better levels ofdividend payout over the next few years. However the actual dividend payout in each yearwill be subject to the investment requirements of the annual operating plan for the yearand any other strategic priorities identified by the Company. The Company has formulated aDividend Policy in accordance with SEBI (Listing obligation and Disclosure Requirements)Regulations 2015 (hereinafter "LODR Regulations") and the same is available onyour Company's website: www.relaxofootwear.com /pdf/Dividend-Policy.pdf.
(B) The Company is in compliance with the Secretarial Standards on Meetings of theBoard of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute ofCompany Secretaries of India and approved by the Central Government.
(C) The Company affirms that the annual listing fees for the year 2018-19 to bothNational Stock Exchange of India Limited (NSE) and BSE Limited (Bombay Stock Exchange) hasbeen paid.
(0) During the year pursuant to the provisions of Section-138 of the Companies Act2013 your Company has appointed Deloitte Haskins & Sells LLP (Deloitte) as InternalAuditors for FY19 in addition to existing in -house Internal Audit Department.
Your Directors express their gratitude to the Company's shareholders business partnersand suppliers for their understanding and support. The Directors also take thisopportunity to thank Banks Government and Regulatory Authorities and Stock Exchanges fortheir continued support. Finally Your Directors acknowledge the dedicated servicesrendered by all employees of the Company.
For and on behalf of the Board of Directors
| ||Ramesh Kumar Dua ||Mukand Lai Dua |
| ||Managing Director ||Whole Time Director |
|Delhi 11th May 2018 ||DIN :00157872 ||DIN :00157898 |