The Board of Directors ("Board") of your Company has pleasurein presenting 38th Annual Report on the Company's business and operations togetherwith the Audited Financial Statements for the Financial Year 2021-22.
1. Company Overview
Incorporated in 1984 Relaxo is the largest footwear manufacturer inIndia serving the nation since four decades and is today ranked among the top 200 MostValuable Companies with its shares listed at BSE Limited (BSE) and National Stock Exchangeof India Limited (NSE).
Relaxo is a Fortune 500 (India) company synonymous with qualityproducts at affordable prices manufacturing slippers sandals and sports & casualshoes at 8 State of the Art manufacturing facilities at Bahadurgarh Bhiwadi and Haridwar.
Your Company's most popular brands Relaxo Sparx Flite& Bahamas are a leader in their space.
Having a pan India distribution footprint Relaxo also operates 394strong network of Exclusive Brand Outlets with availability on all major e-commerceportals as well.
2. Financial Results
In compliance with the provisions of the Companies Act 2013("Act") and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 ("Listing Regulations") the Company has prepared its financial statementsas per the Indian Accounting Standards (IND AS) for the Financial Year 2021-22. Thefinancial highlights of the Company's operations are as follows:
(Rs. in Crore)
|Particulars ||2021-22 ||2020-21 |
|Revenue from Operations ||2653.27 ||2359.15 |
|EBITDA ||415.75 ||495.49 |
|Other Income ||23.72 ||22.77 |
|Less: Finance Costs ||15.33 ||17.08 |
|Less: Depreciation and Amortisation Expense ||113.54 ||110.02 |
|Profit before Tax ||310.60 ||391.16 |
|Less: Tax Expense ||77.92 ||99.60 |
|Profit after Tax ||232.68 ||291.56 |
|Other Comprehensive Income ||0.31 ||1.45 |
|Balance brought forward from Previous year ||45.55 ||52.54 |
|Amount available for Appropriation ||278.54 ||345.55 |
|Appropriation: || || |
| Final Dividend ||62.11 ||- |
| Transfer to General Reserve ||150.00 ||300.00 |
|Balance carried to Balance Sheet ||66.43 ||45.55 |
|EPS-Basic (in C) ||9.36 ||11.74 |
|EPS-Diluted (in C) ||9.35 ||11.72 |
3. Business Performance
The key highlights of the Company's financial performance duringthe Financial Year 2021-22 are given below:
Revenue from operations increased by 12.47% to H2653.27 Crorefrom H2359.15 Crore in the last Financial Year
EBITDA is at H415.75 Crore as compared to H495.49 Crore in last Financial Year.
Net profit is at H232.68 Crore as compared to H291.56 Crore in the lastFinancial Year.
Net profit margins is 8.77 %.
Relaxo Exclusive Brand Outlets (EBOs) were at 394 as on March 31 2022.
The year saw second wave of Covid-19 pandemic during the month ofApril-2021 which was very dreadful and impactful causing irreparable loss of human livesthroughout the country. The lockdown imposed by the Government extended from mid ofApril-2021 till end of May-2021 and additionally for a brief period in the month ofJanuary-2022 impacted the operations of your Company.
However your Company reacted swiftly and adapted its operations to thechanged environment. The modified ways of working gradual ease in restrictions and analready established position of strength helped your Company to tide over the largercrisis. As the economy started to gather itself demand for basic footwear picked up andthe long established resilient infrastructure placed your Company in a position ofadvantage over its peers. All this while your Company was particularly sensitive to thesafety of its employees and customers and adopted the best practices in vogue.
With its business operations functional by June 2021 your Companyrealigned its strategies to counter Covid-19 impact and consolidate its position ofleadership.
Financial year 2021-22 has seen unprecedented challenges posed by thepandemic abnormally high raw material costs and a rising geo-political crisis. Despitethis in a strategic move your Company has absorbed a part of input cost to unburden theconsumer maintaining its brand equity and topline with a marginal impact on profits inthe current year.
Despite periodic lockdowns due to Covid-19 your Company has stayedresilient over the year.
Sales & Marketing
With Covid-19 impacting the usual your Company also re-aligned itsmarketing strategies to the new environment. Even as start of this financial year wasmarred by a vicious spate of covid-19 your Company continued with its marketinginitiatives with an eye on the future.
Universal product portfolio adopted across all business verticals for greatersynergy.
Continued in - market branding & merchandising activities for visibility.
New campaigns launched with a refreshed sharper positioning for our leadingbrands Sparx and Flite.
In line with the changing media habits of its consumers your Companyincreasingly harnessed the digital landscape with engaging brand campaigns on socialmedia.
Strategic initiatives towards Exclusive Brand Outlets (EBO)revamp to personify our brand imagery and serve as a platform for consumer interface.
Implementation of structured marketing campaigns for key exportmarkets.
Initiated DMS 2.0 (Distributor Management System) for effectivechannel management and reseller engagement strategies.
Increasing penetration of internet and digitization has propellede-commerce activities to higher levels across the nation.
During the year your Company has continued to strengthen its brandpresence with a refreshed appeal across all leading market places with resultant growthencouraging sustained investments for the future.
Retail sector was most affected with periodic lockdowns marketuncertainty and dampened consumer sentiment particularly during the first half of theyear.
During the year your Company continued with its preventive measuresfor a safe shopping experience for its customers undertook an extensive in-store brandingrefresh exercise and implemented a regimented placement planogram for effective productshowcasing.
Despite an inhibitive business environment during FY22 yourCompany's retail network stands at 394 as on March 31 2022.
Despite the looming shadow of the ongoing pandemic exports of yourCompany have shown considerable growth crossing H100.00 Crore revenue owing to continuousstrengthening of distribution channels a sharper product portfolio and strategicmarketing investments.
In recognition Council for Leather Exports has awarded your Companyfor excellence in export performance for FY 2019-20 & FY 2020-21 in non-leatherfootwear category.
The continuing global pandemic resulted in material scarcity due todemand supply gaps and transit delays pushing up raw material prices to unprecedentedlevels. However proactive planning and scheduling helped your Company to efficientlymanage its supply chain and mitigate disruptions in production. Cost reductionpossibilities were also explored and implemented by introducing new alternate materialsafter extensive research and trials.
To stay relevant to evolving consumer preferences new productdevelopment and innovation is a key determinant of success.
Banking on long standing experience in market sensing and researchyour Company successfully managed to realign its product portfolio with customer relevantofferings.
Manufacturing and Quality
Having covered 5S and Safety journey over last few years your Companyhas now embarked upon TPM pillars like JH Jishu Hozen (Autonomous maintenance). Asa socially responsible Corporate your Company has adopted green fuel technology andswitched over to PNG for all boilers used across manufacturing locations. Your Company hastaken various steps for energy conservation and cost rationalization replacingconventional motors installing VFD's etc.
In its journey towards continuous improvement in customer satisfactionyour Company has maintained following certifications : ISO 9001:2015 (Quality ManagementSystem) ISO 14002:2015 (Environmental Management System) ISO 45001:2018 (OccupationalHealth and Safety Management System) Information Technology
During the year your Company has upgraded adequate systems for seamlesstransition into remote working if the need may arise for hybrid working. Your Companyimproved upon its IT security posture by maintaining ISO 27001:2013 certification andimplemented robust security solution like DLP (Data Leak Protection) and CASB (CloudAccess Security Broker) to provide data protection and secure IT environment.
As a part of customer relationship management (CRM) initiatives yourCompany has initiated Distribution Management Solution (DMS) digitizing channelmanagement processes for better efficiencies. Your Company strengthened thesupplier-Relaxo bonding with the implementation of SAP-ARIBA sourcing. A digitizedcontract repository system was implemented during the year.
During the year your Company initiated succession planning & riskmitigation programme for critical senior leadership positions and undertook strategicinitiatives for structured job evaluation career development for high potential managersand creation of a talent pool.
As a part of employee welfare your Company supported employee familiesadversely affected by Covid not only providing them medical support but financial aidduring 2nd wave of Covid-19.
Continuing with retaining and attracting talent pool your Companylaunched 3rd phase of RFL ESOP Plan 2014 covering 111 employees under the scheme.
4. Management Discussion and Analysis Report
Pursuant to Regulation 34(2)(e) of the Listing Regulations a detailedManagement Discussion and Analysis Report for the Financial Year under review is presentedin a separate section forming part of this Annual Report.
The state of the affairs of the business along with the financial andoperational developments has been discussed in detail in the Management Discussion andAnalysis Report.
In line with the Dividend Distribution Policy of the Company the Boardof your Company in its meeting held on May 11 2022 has recommended a final dividend @250% equivalent to H2.50 (Rupees Two and Fifty Paisa Only) per equity share of H1/- (RupeeOne Only) each for the Financial Year 2021-22 payable to those members whose name appearin the Register of members / list of beneficiaries as on August 18 2022 i.e. the cut-offdate. The total final dividend payout will amount to H62.23 Crore (Rupees Sixty Two CroreTwenty Three Lacs Only). The payment of final dividend is subject to the approval ofmembers in the Company's ensuing Annual General Meeting ("AGM").
The Register of Members and Share Transfer Books will remain closedfrom August 19 2022 (Friday) to August 24 2022 (Wednesday) (both days inclusive) for thepurpose of payment of final dividend for the Financial Year 2021-22 if declared at theensuing AGM.
Pursuant to the Finance Act 2020 read with the Income-tax Act 1961the dividend paid or distributed by a company shall be taxable in the hands of theshareholders w.e.f. April 1 2020. Accordingly in compliance with the said provisionsyour Company shall make the payment of dividend after deduction of tax at source at theprescribed rates. For the prescribed rates for various categories the shareholders arerequested to refer to the Finance Act 2020 and amendments thereto.
6. Dividend Distribution Policy
As per Regulation 43A of the Listing Regulations top 1000 listedcompanies are required to formulate a Dividend Distribution Policy. Accordingly yourCompany has adopted the Dividend Distribution Policy which sets out the parameters andcircumstances to be considered by the Board in determining the distribution of dividend toits shareholders and / or retaining profits earned by the Company. The said Policy isavailable on the website of the Company at the link https://www.relaxofootwear.com/media/file/pdf/download_file/dividend-distribution-policy-1607581017.pdf.
7. Transfer to Reserves
We have transferred H150.00 Crore (Rupees One Hundred and Fifty CroreOnly) to the general reserve from net profits. An amount of H66.43 Crore (Rupees Sixty SixCrore and Forty Three Lacs Only) is proposed to be retained in the Statement of Profit& Loss of the Company.
8. Public Deposits
Your Company has not invited or accepted any deposits within themeaning of Sections 73 and 74 of the Act read 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 the year under review. Therefore no amount ofprincipal or interest was outstanding as on the balance sheet closure date.
9. Compliance with Secretarial Standards
During the year under review the Directors state that applicableSecretarial Standards issued by the Institute of Company Secretaries of India("ICSI") i.e. Secretarial Standard-1 ("SS-1") and SecretarialStandard-2 ("SS-2") relating to Meetings of the Board of Directors'and General Meetings' respectively have been duly complied by the Company.
10. Subsidiary/ Joint Venture/ Associate Company
Your Company does not have any subsidiary joint venture or associatecompany during the Financial Year under review.
11. Changes in Nature of Business
There was no change in the nature of business of the Company during theFinancial Year under review.
12. Share Capital
Authorised Share Capital:
The Authorized share capital of your Company as on March 31 2022 stoodat H510000000 (Rupees Fifty One Crores Only) divided into 510000000 (Fifty OneCrores) Equity Shares of H1/- (Rupee One Only) each.
Issued Subscribed and Paid-up Share Capital:
During the Financial Year 2021-22 the Board of Directors at itsmeeting held on November 01 2021 issued and allotted 483945 (Four Lac Eighty threeThousand Nine Hundred and Forty Five) equity shares of H1/- (Rupee One Only) each fullypaid up on exercise of stock options by the eligible employees under the Employee StockOption Plan 2014 (RFL ESOP PLAN-2014).
As on March 31 2022 the issued subscribed and paid-up share capitalof the Company was H248926046/- (Rupees Twenty Four Crores Eighty Nine Lacs Twenty sixThousand and Forty six Only) divided into 248926046 (Twenty Four Crores Eighty NineLacs Twenty six Thousand and Forty six) equity shares of H1/- (Rupee One Only) each.
13. Disclosure Relating to Remuneration of Directors and Key ManagerialPersonnel (KMP)
Your Company believes that building a diverse and inclusive culture isintegral to its success. A diverse Board will be able to leverage different skillsqualifications professional experiences perspectives and backgrounds which is necessaryfor achieving sustainable and balanced development. The Nomination and RemunerationCommittee had adopted principles for identification of Key Managerial Personnel SeniorManagement including the Executive Directors. Pursuant to Section 134(3)(e) and Section178(3) of the Act the Nomination and Remuneration Policy adopted by the Board also setsout the criteria for determining qualifications positive attributes and independencewhile evaluating a person for appointment / re-appointment as Director or as KMP with nodiscrimination on the grounds of gender race or ethnicity nationality or country oforigin and to also determine the framework for remuneration of Directors KMP SeniorManagement Personnel and other employees. No change has been made in the Nomination andRemuneration Policy during the Financial Year under review. The detailed Nomination andRemuneration Policy is available on the website of the Company at the linkhttps://www.relaxofootwear.com/media/file/pdf/download_file/nomination--and--remuneration--policy-1607581216.pdf.
14. Particulars of Employees
The information and disclosure required under Section 197(12) of theAct read with Rule 5(1) 5(2) and 5(3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 (including any statutory modification(s) orre-enactment(s) thereof for the time being in force) in respect of Directors andEmployees of your Company is set out in Annexure - A to this report.
15. Directors and Key Managerial Personnel
Pursuant to the Section 152(6) of the Act read with the Articles ofAssociation of the Company Mr. Nikhil Dua Whole Time Director (DIN: 00157919) of theCompany will retire by rotation at the ensuing Annual General Meeting and being eligibleoffered himself for re-appointment. The Board has recommended his re-appointment toshareholders.
A brief resume of the Director proposed to be re-appointed hisexpertise in specific functional areas names of companies in which he holdsdirectorships Committee membership/s / Chairmanship/s shareholding etc. as stipulatedunder Secretarial Standard-2 issued by ICSI and Regulation 36(3) of the ListingRegulations is appended as an Annexure to the Notice of the ensuing AGM.
The members in the 37th AGM held on August 26 2021 through VideoConferencing ("VC") / Other Audio Visual Means ("OAVM") have approvedthe re-appointment of Mr. Deval Ganguly (DIN: 00152585) as a Whole-Time Director of theCompany for a period of three (3) years w.e.f. November 5 2021.
As on March 31 2022 Mr. Ramesh Kumar Dua (DIN-00157872)Managing Director Mr. Mukand Lal Dua (DIN-00157898) Whole-Time Director Mr. Nikhil Dua(DIN-00157919) Whole-Time Director Mr. Deval Ganguly (DIN-00152585) Whole-TimeDirector Mr. Sushil Batra Chief Financial Officer (CFO) and Mr. Vikas Kumar Tak CompanySecretary are the Key Managerial Personnel (KMP) of your Company.
Additionally Mr. Pankaj Shrimali (DIN: 00013142) being Non-executiveIndependent Director of the Company was designated as Chairperson of the Company witheffect from April 1 2022 in compliance with Part 'E' of Schedule II of the ListingRegulations.
16. Declaration by Independent Directors
The Company has received necessary declarations from all theIndependent Directors of the Company confirming that they meet the criteria ofIndependence as prescribed under Section 149(6) of the Act and Regulation 25 (8) read withRegulation 16 of Listing Regulations (as per the amendment in SEBI (Listing Obligationsand Disclosure Requirements) (Third Amendment) Regulations 2021). The Company has alsoreceived from them declaration of compliance of Rule 6 (1) & (2) of the Companies(Appointment and Qualifications of Directors) Rules 2014 regarding online registrationwith the Indian Institute of Corporate Affairs ("IICA") at Manesar forinclusion/ renewal of name in the databank of Independent Directors. The IndependentDirectors have also confirmed that they have complied with the Company's Code ofConduct for Independent Directors prescribed in Schedule IV of the Act. Accordingly allthe Independent Directors of the Company during FY 2021-22 had registered their names ondata bank of IICA.
17. Statement regarding opinion of the Board with regard to integrityexpertise and experience (including the proficiency) of the Independent Directorsappointed during the year
With regard to integrity expertise and experience (including theproficiency) of the Independent Directors appointed/ re-appointed during the FinancialYear 2021- 22 the Board of Directors has taken on record the declarations andconfirmations submitted by the Independent Directors and is of the opinion that all theIndependent Directors are persons of integrity and possess relevant expertise andexperience and their continued association as Directors will be of immense benefit and inthe best interest of the Company. With regard to proficiency of the Independent Directorsascertained from the online proficiency self-assessment test conducted by the Instituteas notified under Sub-Section (1) of Section 150 of the Act the Board of Directors hastaken on record the declarations submitted by Independent Directors that they are exemptfrom appearing in the test.
None of the Directors other than Mr. Ramesh Kumar Dua ManagingDirector Mr. Mukand Lal Dua and Mr. Nikhil Dua Whole time Directors of the Company arerelated inter-se in terms of Section 2(77) of the Act including Rules framed there under.
18. Annual Evaluation
In terms of the provisions of section 178 of the Act read with Rulesissued thereunder and Regulation 19 read with Part D of Schedule II of the ListingRegulations the Board of Directors in consultation with Nomination and RemunerationCommittee has formulated a framework recommended by the renowned consultants containinginter-alia the criteria for performance evaluation of the entire Board of the Companyits Committees and individual directors for the Financial Year 2021-22.
During the reporting year customized questionnaires were circulated toall the Board members in order to enhance the effectiveness of the Evaluation Process. TheBoard Evaluation process was carried out to ensure that the Board and various Committeesof the Board have appropriate composition and they have been functioning collectively toachieve the business goals of the Company. Directors were evaluated on their contributionat Board / Committee meetings and guidance & support to the management outside Board /Committee meetings and other parameters as specified by the Nomination and RemunerationCommittee of the Company.
The Board's functioning was evaluated on various aspectsincluding inter alia degree of fulfillment of key responsibilities Board structure andcomposition role and accountability management oversight risk management culture andcommunication frequency and effectiveness of meetings.
The Committees of the Board were assessed on the basis of degree offulfillment of key responsibilities adequacy of Committee composition and effectivenessof meetings. The Company did not have a regular Chairman during the year however theChairman appointed for the Board meetings was also evaluated by all the Directors on thebasis of managing relations leadership competence and diligence.
The performance evaluation of Independent Directors was carried out bythe entire Board excluding the Director being evaluated. The performance evaluation ofthe Chairman appointed for the Board meeting and the Non-Independent Directors was carriedout by the Independent Directors who also reviewed the performance of the Board as awhole.
The Board of Directors expressed their satisfaction with the evaluationprocess.
19. Familiarization Programme
In terms of Regulation 25(7) of the Listing Regulations the Companyfamiliarizes its Directors about their role and responsibilities at the time of theirappointment through a formal letter of appointment. The format of the letter ofappointment / re-appointment is available on our website at the linkhttps://www.relaxofootwear.com/terms-conditions-of-independent-director.
Sessions are conducted at the meetings of the Board and its variousCommittees on the relevant subjects such as strategy Company performance financialperformance internal financial controls risk management plants retail productsfinance human resource capital expenditure CSR Compliances etc. All efforts are madeto keep Independent Directors aware of major developments taking place in the industrythe Company's business model and relevant changes in the law governing theCompany's business. The details of the programs/sessions conducted forfamiliarization of Independent Directors can be accessed on the Company website at thelink https://www. relaxofootwear.com/other-disclosures.
20. Number of Meetings of the Board
During the Financial Year 2021-22 the Board of Directors met four (4)times on May 20 2021 July 31 2021 November 1 2021 and January 29 2022 the detailsof which are provided in the Report on Corporate Governance which forms part of theAnnual Report. The intervening period between any two consecutive Board meetings waswithin the maximum time gap prescribed under the Act Regulation 17 of the ListingRegulations and SS-1 issued by ICSI.
21. Committees of the Board
During the Financial Year 2021-2022 the Board had five (5) Committeesnamely the Audit Committee the Nomination and Remuneration Committee theStakeholders' Relationship Committee the Risk Management Committee and the CorporateSocial Responsibility Committee.
All the recommendations made by the Committees of the Board includingthe Audit Committee were accepted by the Board. A detailed update on the Board itscomposition detailed charter including terms and reference of various Board Committeesnumber of Board and Committee meetings held during the Financial Year 2021-22 andattendance of the Directors at each meeting is provided in the report on CorporateGovernance which forms part of the Annual Report.
22. Director's Responsibility Statement
Pursuant to Section 134(3)(c) and 134(5) of the Act the Directors tothe best of their knowledge and belief confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with the proper explanation relating to material departures;
b) such accounting policies have been selected and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the Financial Year and of theprofit of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) Internal Financial Controls have been laid down to be followed by the Company andthat such Internal Financial Controls are adequate and were operating effectively; and
f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
23. Statutory Auditors
Under Section 139 of the Companies Act 2013 and the rules madethereunder it is mandatory to rotate the Statutory Auditors on completion of the maximumterm permitted under the said section. M/s B R Maheswari & Co. LLP CharteredAccountants (ICAI Firm Registration No. 001035N/N500050) shall be completing theirtenure as the Company's Statutory Auditors and shall hold office till the conclusionof ensuing 38th AGM of the Company.
On the recommendation of the Audit Committee the Board in its meetingheld on May 11 2022 subject to the approval of the shareholders has recommended theappointment of M/s Gupta & Dua Chartered Accountants (ICAI firm registration number003849N) as the Statutory Auditors of the Company. M/s Gupta & Dua CharteredAccountants will hold office for a term of five consecutive years i.e. from the conclusionof ensuing 38th AGM till the conclusion of 43rd AGM. Accordingly the appointment of M/sGupta & Dua Chartered Accountants as the Company's Statutory Auditors is placedfor approval of the members.
The Company has received a certificate from M/s Gupta & DuaChartered Accountants to the effect that their appointment if made shall be inaccordance with the provisions of Section 141 of the Companies Act 2013. The first yearof audit will be of the financial statements for the year ending March 31 2023 whichwill include the audit of the quarterly financial statements for the year.
24. Auditors' Report
The Board has duly examined the Statutory Auditors' Report to theaccounts which is self-explanatory. The Auditor's Report for the Financial Yearended March 31 2022 does not contain any qualification reservation or adverse remarks.The observation of the Statutory Auditors on the financial statements have been suitablyexplained in the Notes to Accounts and do not require any further clarification.
25. Details in respect of frauds reported by auditors under section143(12) other than those which are reportable to the Central Government
During the Financial Year under review no fraud is reported by theAuditors of the Company under Section 143(12) of the Act.
26. Maintenance of Cost Records and Cost Audit
The Company does not fall under the category prescribed undersub-section (1) of Section 148 of the Act and Rules 3 and 4 of the Companies (Cost Recordsand Audit) Rules 2014 (as amended from time to time) to whom the requirements ofmaintenance of Cost Records and the requirement of Cost Audit is applicable.
27. Internal Auditor
Pursuant to the provisions of Section 138 of the Act the Company hasappointed Deloitte Touche Tohmatsu India LLP as the Internal Auditor of the Company forFinancial Year 2022-23 in co-sourcing model along with in-house Internal Auditor.
28. Secretarial Auditor
Pursuant to the provisions of Section 204(1) of the Act read with Rule9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(including any statutory modification(s) or re-enactment(s) thereof for the time being inforce) and Regulation 24A of the Listing Regulations the Board had appointed M/sChandrasekaran Associates to conduct the Secretarial Audit of the Company for theFinancial Year 2021-22 as recommended by Audit committee. M/s Chandrasekaran Associateshave also confirmed that they are eligible for the said appointment. The SecretarialAuditors have submitted their report confirming compliance by the Company of all theprovisions of applicable corporate laws. The Secretarial Audit Report for the FinancialYear ended March 31 2022 does not contain any qualification reservation or adverseremarks. The Secretarial Audit Report for the Financial Year 2021-22 is annexed as Annexure-Bwhich forms part of this report.
29. Annual Return
Pursuant to Section 134 and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 the annual return as onMarch 31 2022 will be available on the website of the Company at the linkhttps://www.relaxofootwear.com/annual-return.
30. Contracts and Arrangements with Related Parties
During the Financial Year 2021-22 the Company has entered into varioustransactions with related parties. All the Contracts / arrangements / transactions enteredinto by the Company with its related parties during the Financial Year under review werein the ordinary course of the business on the arm's length basis and were undertakenin compliance with the applicable provisions of the Act and the Listing Regulations.
During the Financial Year under review the Company had not enteredinto 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 Regulation23 of the Listing Regulations.
The updated Policy on materiality of Related Party Transactions isavailable on the website of the Company at the link -https://www.relaxofootwear.com/media/file/pdf/download_file/policy-on-materiality-of-related-party-transactions-1646633287.pdf. ThePolicy intends to ensure that proper reporting approval and disclosure processes are inplace for all transactions between the Company and Related Parties.
The particulars of the material related party transactions are providedin Form AOC-2 as Annexure-C which forms part of this Report. Further disclosuresas per Ind-AS 24 have been made in note 39 of the financial statements for the year endedMarch 31 2022.
31. Details of Loans Guarantees & Investments
The details of loans guarantees and investments under Section 186 ofthe Act read with Companies (Meeting of Board and its Powers) Rules 2014 (including anystatutory modification(s) or re-enactment(s) thereof for the time being in force) are asfollows:-
a) Details of investments made by the Company as on March 31 2022(including investments made in previous years)
|(i) Investment in equity shares : ||C0.20 Crore |
|(ii) Investment in debt instruments : ||C24.78 Crore |
|b) Details of loans given by the Company ||: Nil |
|c) There are no guarantees issued by your Company in accordance with Section 186 of the Act read with the Rules issued thereunder. || |
The details of Investments made under Section 186 of the Act are alsoprovided in the note 4 forming part of the financial statements of Financial Year 2021-22.
32. Risk Management
Risk management is integral to your Company's strategy and to theachievement of long-term goals. Our success as an organization depends on our ability toidentify and exploit the opportunities generated by our business and the markets weoperate in. In doing this we take an embedded approach to risk management which puts riskand opportunity assessment at the core of the Board's agenda.
Your Company has a Risk Management Committee which has been entrustedwith the responsibility to assist the Board in (a) Overseeing and approving theCompany's enterprise wide risk management framework; and (b) Overseeing that all therisks that the organization faces such as strategic financial credit market liquiditysecurity property IT legal regulatory reputational and other risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks.
The Board advised by the Risk Management Committee where everappropriate regularly reviews the significant risks and decisions that could have amaterial impact on the company. These reviews consider the level of risk that the companyis prepared to take in pursuit of the business strategy and the effectiveness of themanagement controls in place to mitigate the risk exposure.
As per SEBI (LODR) (Second Amendment) Regulations 2021 the RiskManagement Committee shall meet at least twice in a year. The details pertaining to thecomposition meetings and terms of reference of the Risk Management Committee are includedin the Report on Corporate Governance which forms part of the Annual Report.
33. Corporate Social Responsibility (CSR) and its Committee
Your Company has firm belief and commitment towards the collectivedevelopment of all the stakeholders especially people at bottom of the pyramid andconsider it as a prerequisite for the sustainability of the business. Thus CSR is notjust compliance for the Company but is an opportunity to contribute towards nationbuilding through well-defined professional approach. In compliance with the provisionsprescribed under Section 135 of the Act your Company had constituted a CSR Committee ofthe Board. The Board of Directors laid down the CSR Policy covering the objectives focusareas governance structure and monitoring & reporting framework among others. ThePolicy is available on the website of the Company at the link https://www.relaxofootwear.com/media/file/pdf/download_file/corporate-social-responsibility-policy-1628254446.pdf. During the Financial Year 2021-22the Company decided to expand "Parivartan Model School Program" as its CSRproject for the Financial Year 2021-22 adopting 32 additional schools in the Khanpur andLaksar Block of Haridwar District Uttrakhand. During the year the Company has continuedits work on the long term project undertaken in FY 2020-21 the details of activities aregiven in Annexure-D to this report.
The details of the composition of the CSR Committee CSR policy CSRinitiatives and activities undertaken during the year are given in the Annual Report onCSR activities as required under the Companies (Corporate Social Responsibility Policy)Rules 2014 and explained in detail in Annexure-D to this report.
The details pertaining to the composition meetings and terms ofreference of the CSR Committee are included in the Report on Corporate Governance whichforms part of the Annual Report. As per requirement under Section 135 of the Act read withrelevant Rules made thereunder the composition of the CSR Committee and CSR Policy andProjects approved by the Board are available on the website of the Company athttps://www.relaxofootwear.com/investor-relations.
34. Composition of Audit Committee
In compliance with the provisions of Section 177 of the Act andRegulation 18 of the Listing Regulations the Board of Directors of the Company hadconstituted the Audit Committee. The details pertaining to the composition meetings andterms of reference of the Committee are included in the Report on Corporate Governancewhich forms part of the Annual Report.
35. Vigil Mechanism
Your Company as required under Section 177 (9) of the Act andRegulation 22 of the Listing Regulations has established Vigil Mechanism/ Whistle BlowerPolicy for Directors and employees of the Company.
This Policy has been established with a view to provide a tool toDirectors and employees of the Company to report to the management on the genuine concernsincluding unethical behavior actual or suspected fraud or violation of the Code or thePolicy. This Policy outlines the procedures for reporting handling investigating anddeciding on the course of action to be taken in case inappropriate conduct is noticed orsuspected.
This Policy also provides for adequate safeguards against victimizationof director(s)/employee(s) who avail the mechanism and also provides for direct access tothe Chairman of the Audit Committee in exceptional cases. The Audit Committee isauthorized to oversee the Vigil Mechanism/ Whistle Blower Policy in the Company. TheCompany has not received any complaint during the year. Your Company hereby afirms that noperson of the Company has been denied access to the Audit Committee.
The Policy is available on the website of the Company at the linkhttps://www.relaxofootwear.com/media/file/pdf/download_file/vigil---mechanism---policy-1607580776.pdf.
36. Business Responsibility Report
SEBI vide its Notification no. SEBI/LAD-NRO/GN/2021/22 dated 5 May2021 has discontinued the requirement of submitting a business responsibility reportafter the Financial Year 202122 and thereafter with effect from the Financial Year2022-23 the top 1000 listed entities based on market capitalization shall submit abusiness responsibility and sustainability report in the format as specified by the SEBI.
Your Company has initiated the work on business responsibility andsustainability report by capturing the base year data and has employed reputed consultantfor guidance on the subject. For the Financial Year 2021-22 your Company has continuedwith the mandatory business responsibility reporting which forms part of the AnnualReport.
37. Policy on Prevention of Insider Trading
Your Company has adopted a Code for Prohibition of Insider Trading witha view to regulate trading in shares of the Company by Designated Persons (DP) and theirimmediate relatives. The said Code is available on the website of the Company athttps://www.relaxofootwear.com/media/file/pdf/download_file/policy-for-prevention-of-insider-trading-1607581125.pdf.
The Code inter alia lays down the procedures to be followed by DPswhile trading/ dealing in Company's shares and sharing Unpublished Price SensitiveInformation ("UPSI"). The Code includes the obligations and responsibilities ofDPs obligation to maintain the digital database mechanism for prevention of insidertrading and handling of UPSI.
38. Disclosure Under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 ("SHWWP Act")
At Relaxo all employees are of equal value. There is no discriminationbetween individuals at any point on the basis of race colour gender religion politicalopinion national extraction social origin sexual orientation or age.
The Company is an equal employment opportunity employer and iscommitted to provide a safe and conducive work environment that enables women employees towork without fear of prejudice gender bias and sexual harassment.
The Company believes that all women employees of the Company have theright to be treated with dignity and as per the Company's compliance framework.Harassment of any kind including sexual harassment is forbidden. The Company hasZero Tolerance' approach towards any act of sexual harassment.
As required under the SHWWP Act the Company has a Policy on Preventionof sexual harassment of women at workplace and matters connected therewith and has alsocomplied with the provisions relating to the Constitution of Internal Complaint Committee("ICC").
An ICC is available at each of the units and offices of the Company asper the requirements of the SHWWP Act. The ICC is responsible for redressal of complaintsrelated to sexual harassment as well as to create a preventive environment across theorganization. The Company also conducts sensitization/awareness sessions and quarterlymeetings on a regular basis so as to create a free and fair working environment.
No complaint was received during Financial Year 2021-22. It is ourconstant endeavor to ensure that we provide harassment free safe and secure workingenvironment to all employees especially women.
39. Significant and Material Litigations / Orders
During the Financial Year under review there were no significant andmaterial orders passed by the regulators or courts or tribunals impacting the goingconcern status and Company's operations in future.
40. Capital Market Ratings
During the Financial Year 2021-22 ICRA has retained long term ratingof the Company at [ICRA] AA (pronounced as ICRA Double A). The Outlook on the long-termrating has been revised to Positive from Stable.
Additionally ICRA has also retained short term rating of the Companyat [ICRA] A1+ (pronounced as ICRA A one plus) which is the highest rating for thecategory.
41. Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
The details relating to conservation of energy technology absorptionforeign exchange earnings and outgo as required under Section 134(3) of the Act read withRule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure-E whichforms part of this Report.
42. Employees Stock Option Plan
Presently the Company has one Employee Stock Option Plan 2014("RFL ESOP PLAN-2014"/ "ESOP Plan"). This Plan helps to attract andretain talented employees in the Company and boost their morale. The Nomination andRemuneration Committee administers and monitors the Company's ESOP Plan.
During the Financial Year 2021-22 483945 (Four Lac Eighty ThreeThousand Nine Hundred and Forty Five) options were exercised by the employees of theCompany. Accordingly the Company has on November 01 2021 made allotment of 483945(Four Lac Eighty Three Thousand Nine Hundred and Forty Five) equity shares against theoptions exercised by the employees. During the Financial Year under review the Companyhas vested 462340 (Four Lac Sixty Two Thousand Three Hundred and Forty) options to theemployees and cancelled 26200 (Twenty Six Thousand and Two Hundred) options due toresignation as per the Company's ESOP Plan. During the year the Company rolled outthird phase of RFL ESOP Plan 2014 and granted 358000 options to 111 employees.
Pursuant to the provisions of SEBI (Share Based Employee Benefits)Regulations 2014 (the ESOP Regulations) (replaced by SEBI (Share Based Employee Benefitsand Sweat Equity) Regulations 2021 a disclosure with respect to ESOP Plan of the Companyas on March 31 2022 is available on the website of the Company at the linkhttps://www.relaxofootwear.com/other-disclosures
A certificate from M/s Chandrasekaran Associates Company SecretariesSecretarial Auditor of the Company with respect to the implementation of theCompany's ESOP Plan would be made available to the members at the ensuing AGM. A copyof the same will also be available for inspection at the registered office of the Companyduring business hours.
During the year RFL ESOP Plan 2014 was amended to the extent byrelaxing certain norms for retiring employees which is beneficial for the employees andis not detrimental to the interest of the employees. Further it is confirmed that ESOPscheme of the Company is in compliance with SEBI (Share Based Employee Benefits and SweatEquity) Regulations 2021.
The details as per the requirements of ESOP Regulations are annexed as Annexure-Fwhich forms part of this Report.
43. Material Changes and Commitments
There are no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the Financial Year endedon March 31 2022 of the Company and as on the date of this Report.
44. Internal Controls
Sound internal control systems are a prerequisite for building andenhancing shareholder value in the long run. The Company has a sound system of internalcontrols commensurate with the size of the Company and the nature of its business toensure that all assets are safeguarded and protected against loss from unauthorized use ordisposition and that transactions are authorized and recorded correctly and adequately.The Company's internal controls are supplemented by internal audits review bymanagement and documented policies guidelines and procedures. The internal control isdesigned to ensure that financial and other records are reliable for preparing financialinformation and for maintaining accountability of assets.
The Audit Committee of the Board of Directors actively reviews theadequacy and effectiveness of internal control systems and suggests improvement forstrengthening them. The Company has a strong Management Information System which is anintegral part of the control mechanism. The Company continues to strengthen its riskmanagement and internal control capabilities by improving its policies and procedures andintroducing advanced risk management tools.
The Managing Director and CFO Certificate included in the CorporateGovernance Report confirms the existence of effective internal control systems andprocedures in the Company. The Audit Committee reviews the effectiveness of the InternalFinancial Control framework in the Company.
45. Managing Director and CFO Certification
The Certificate required under Regulation 17(8) of the ListingRegulations duly signed by the Managing Director and CFO was placed before the Board. Thesame is annexed with Corporate Governance Report which forms part of this Annual Report.
Declaration by Managing Director under Regulation 34(3) read withSchedule V of the Listing Regulations in respect of compliance with the Company'sCode of Conduct is enclosed with this Annual Report.
46. Transfer of Unclaimed Shares / Dividend
As per the provisions of Regulation 39(4) read with Schedule VI of theListing Regulations the unclaimed shares lying in the possession of the Company arerequired to be dematerialized and transferred into a special demat account held by theCompany.
Accordingly unclaimed shares lying with the Company have beentransferred and dematerialized in an Unclaimed Suspense Account' of theCompany. This account is being held by the Company purely on behalf of the shareholdersentitled for these equity shares.
The summary of Unclaimed Suspense Account' during the yearis given 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 as on April 1 2021 ||31 ||82195 |
|2 Number of shares transferred to suspense account during the year ||- ||- |
|3 Number of shareholders who approached the company for shares and to whom shares were transferred from the suspense account during the year ||- ||- |
|4. Transfer of shares to IEPF Account ||- ||- |
|5. Aggregate number of shareholders and the outstanding shares lying in the suspense account as on March 31 2022 ||31 ||82195 |
The voting rights on the equity share(s) in the suspense account shallremain frozen till the rightful owners of such equity share(s) claim the equity share(s).Any corporate benefits in terms of securities accruing on such equity shares viz. bonusshares split etc. shall also be credited to such demat suspense account or unclaimedsuspense account as applicable in accordance with existing provisions.
In compliance with the statutory provisions during the Financial Yearunder review the Company transferred unclaimed dividend amounting to H159289 /- (RupeesOne Lac Fifty Nine Thousand Two Hundred Eighty Nine Only) from the Final Dividend for theFinancial Year 2013-14 to the Investor's Education and Protection Fund("IEPF"). The Company has also uploaded the details of unpaid and unclaimedamounts lying with the Company as on August 26 2021 (date of last AGM) on the website ofthe Company at the link https://www.relaxofootwear.com/unpaid-dividend-data.
Pursuant to the provisions of Section 124 and 125 of the Act read withthe Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 as amended during the Financial Year 2021-22 the Companytransferred 2142 (Two Thousand One Hundred and Forty Two) equity shares to demat accountwith IEPF for which dividend was unpaid / unclaimed for seven consecutive years.
The shareholders whose unpaid dividend / shares are transferred to theIEPF can request the Company / Registrar and Transfer Agent as per the applicableprovisions in the prescribed form IEPF-5 for claiming the unpaid dividend / shares fromIEPF. The process and online application form (Form IEPF 5) as prescribed by theMinistry for claiming back the shares/ dividends are available on the website of MCA atwww.iepf.gov.in. Mr. Vikas Kumar Tak Company Secretary & Compliance Officer acts asthe Nodal Officer of the Company as per the provisions of IEPF. The contact details ofNodal Officer is available on the website of the Company at the linkhttps://www.relaxofootwear.com/ investor-support.
47. Corporate Governance
The Company is committed to maintain the highest standard of CorporateGovernance and adhere to the Corporate Governance requirements set out by SEBI. A detailedreport on Corporate Governance pursuant to the requirements of Regulation 34 of theListing Regulations forms part of the Annual Report.
A certificate from M/s B R Maheswari & Co. LLP CharteredAccountants (ICAI Firm Registration No. 001035N / N500050) Statutory Auditors of theCompany confirming the compliance of the Company with the conditions of
Corporate Governance as stipulated under the Listing Regulations isattached to the Report of Corporate Governance as Annexure-G.
48. Details of Non-Compliance with regard to Capital Markets During theLast Three Years
There have been no instances of non-compliances by the Company withregard to Capital Markets during the last three years.
49. Other Disclosures
The Company afirms that the annual listing fees for the Financial Year2022-23 to National Stock Exchange of India Ltd. and BSE Ltd. is duly paid.
There is no proceeding pending under the Insolvency and BankruptcyCode 2016.
There was no instance of onetime settlement with any Bank or FinancialInstitution.
We take this opportunity to thank our employees for their dedicatedservice and contribution to the Company.
We would like to place on record sincere thanks and appreciation to allour clients partners vendors investors bankers and other business associates for theircontinued support and encouragement during the year.