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Notes to Accounts of Relaxo Footwears Ltd.

Mar 31, 2016

Note 1. Disclosure on Operating Leases

The company has entered into operating leases for building premises. These lease arrangements range for a period between 11 months to 9 years, which include both cancellable and non-cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.

Note 2. The Micro, Small and Medium Enterprises Development Act, 2006

The Information regarding Micro and Small Enterprises as defined under the" The Micro, Small and Medium Enterprises Development Act, 2006" ("The Act") has been determined to the extent such parties have been identified on the basis of information received by the Company. The impact of interest, if any, that may be payable to Micro and Small Enterprises in accordance with the provisions of the Act is not expected to be material, hence not provided in the Books of Accounts. Further, Company has not received such claim for interest from any Vendor as at the Balance Sheet Date.

Note 3. Segment Reporting

The Company''s business activity falls within a single Geographical and single Business segment, viz. "Footwear and Related Products", therefore, segment information is not required to be disclosed under Accounting Standard (AS) -17, "Segment Reporting" issued by The Institute of Chartered Accountants of India (ICAI).

Note 4. Change in Accounting Policy

The Company had the accounting policy of not amortising leasehold land (except for leasehold land of Wind Mill) till previous year. During the year. Company has changed the accounting policy with retrospective effect for amortisation of leasehold land, which will give a uniform basis of amortisation of leasehold land. Had the Company not changed the accounting policy, the Profit After Tax for the year and quarter ended 31st March, 2016 would have been higher by Rs. 85.23 lacs.

Note 5. Figures for the previous year have been rearranged/regrouped wherever necessary in terms of current year''s grouping.


Mar 31, 2015

Note 1

Share Capital

Rights, Preferences and Restrictions attached to Equity Shares

The Company has only one class of equity shares having a face value of Rs. 1/- each. Each holder of Equity Shares is entitled to one vote per share. The Dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the company in proportion to their number of Equity Shares after distribution of all preferential amounts.

In terms of "RFL Employee Stock Option Plan 2014",the Company has reserved issuance of 900090 options to Employees, exercisable into 900090 Equity Shares of face value of Rs. 1/- each in one or more tranches on such terms and in such manner as the Board may decide in accordance with provisions of Law or guidelines issued by relevant authorities. (Refer Note 34)

The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Annual Listing Fee has been paid for the year.

Note 2 Details of Securities

Secured by way of first Pari Passu charge on Inventories, Book Debts, Specific Immovable Properties of the Company and Personal Guarantee of Managing Director and Whole Time Directors.

Note 3 Company Information

Relaxo Footwears Limited (the Company) is a Public Limited Company registered in India and is listed at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is one of the leading players in the Footwear Industry engaged in manufacturing and trading of Footwear and related Products. The company has ''state of the art'' manufacturing facilities at Bahadurgarh (Haryana), Bhiwadi (Rajasthan) and Haridwar (Uttarakhand). The selling arrangements are through its Wholesale, Export, Modern Trade and Company operated Retail Network.

Note 4 Contingent Liabilities and Commitments

(Rs. in lacs)

As at As at Particulars 31st March,2015 31st March,2014

Contingent Liabilities

Claims against the company not acknowledged as debt

Sales Tax Matters 38.10 38.10

Income Tax Matters 48.27 39.19

86.37 77.29

Guarantees

Surety Bonds given to Government Authorities 5.50 5.50

Others

Interest on Entry Tax, Haryana - The matter has been decided in 1431.49 1170.33 favour

of the Company, although the department has preferred appeal before Hon''ble Supreme Court of India

Interest on Entry Tax, Rajasthan 2.83 3.56 - Under dispute and Company''s appeal is pending before Hon''ble Supreme Court of India

1434.32 1173.89

Commitments

Capital Commitments

Estimated amount of contracts 554.15 1130.55 remaining to be executed on capital account and not provided for

Others*

Total Export obligation against total duty saved 12727.92 9005.60 of Rs. 1590.99 lacs (Previous year Rs. 1125.70 lacs)

Cash outflows for the above are determinable only on pronouncement of judgements pending at various forums/ authorities.

*The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at the concessional / Zero rate of customs duty. As per the scheme, the company is obliged to export eight times of duty saved in 8 years.

The lawsuits in respect of certain Intellectual Property Rights and Trademarks are pending in Courts. The proceedings are going on before appropriate authorities and the ultimate outcome of the matter cannot presently be determined. No provision for any liability that may result has been made.

Note 5 Related Party Disclosures

In pursuant to Accounting Standard (AS) -18, "Related Party Disclosures" are as under:

A. Key Management Personnel (KMP)

Name Designation

Mr. Ramesh Kumar Dua Managing Director

Mr. Mukand Lai Dua Whole Time Director

Mr. Nikhil Dua Whole Time Director

Mr. Deval Ganguly Whole Time Director

B. Associate Company

Relaxo Rubber Private Limited

C. Entities Where Key Management Personnel Exercise Significant Influence

Marvel Polymers Private Limited Patel Oil Mills

Sh. Ramesh Kumar Dua (H.U.F)

Sh. Mukand Lai Dua (H.U.F)

Sh. Mool Chand Dua (H.U.F)

Shri Mool Chand Dua Memorial Society

Shrimati Ram Ditti Dua Memorial Society

D. Relatives of Key Management Personnel

Name Relationship

Ms. Usha Dua Wife of Whole Time Director

Ms. Lalita Dua Wife of Managing Director

Mr. Ritesh Dua Son of Whole Time Director

Mr. Nitin Dua Son of Whole Time Director

Mr. Gaurav Dua Son of Managing Director

Ms. Sakshi Dua Daughter of Managing Director

Mr. Rahul Dua Son of Managing Director

Ms. Garima Dua Wife of Whole Time Director

Ms. Shashi Mehra Sister of Managing Director

Ms. Aalya Dua Daughter of Whole time Director

Note 6 Disclosure on Operating Leases

The company has operating leases for premises. These lease arrangements range for a period between 11 months to 9 years, which include both cancelable and non-cancelable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.

Note 7 Disclosure on Employee Benefits

Disclosure is hereby given in pursuant to Accounting Standard (AS) 15 - "Employee Benefits"

Note 8 Employee Stock Option Plan*

RFL Employee Stock Option Plan 2014 (hereinafter referred to as the "ESOP 2014"/ "Plan"), was approved by the Shareholders through Postal Ballot on 5th August, 2014. The Plan entitles to the Permanent Employees, existing and future, including the Whole-Time Director (but excluding the Independent Director) of the Company to exercise the option granted for purchase of Equity Shares in the Company at the Exercise Price i.e. the Market Price of the Equity Shares as on date of grant, subject to compliance with Vesting conditions.

Particulars Details

Name of the Plan RFL Employee Stock Option Plan 2014

Method used to account for the employee share-based plan Intrinsic Value Method

No. of Options reserved 900090

Persons Entitled Whole-Time Director and Employees

Options Grant Date 9th August, 2014

Market Price per option on the date of grant (In Rs.) 401.15

Vesting Period 1 -4 years from Grant Date

Exercise Period Maximum 4 years from the date of vesting of Options

Exercise Price per option(In Rs.) 401.15

Lock-in-Period No Lock-in-Period after Exercise

Vesting Schedule

-10% of total no. of options 31 st August, 2015

-25% of total no. of options 31st August, 2016

- 65% of total no. of options 31 st August, 2017

* Refer Note 1

Note 9 Depreciation

Pursuant to enactment of Companies Act, 2013 and its applicability for accounting period commencing from 1 st April, 2014, the Company has reviewed & revised the estimated useful lives of its certain fixed assets based on technical study and other fixed assets in accordance with the provisions of Schedule II of the Act. Consequent to change of useful life, an amount of Rs. 457.18 lacs (net of deferred tax of Rs. 235.41 lacs) representing carrying value of those assets whose useful life had expired as on 1 st April, 2014 has been adjusted against the opening balance in General Reserve. Had the Company, continued with the previously assessed useful lives, depreciation charged for the year ended 31 st March, 2015 would have been lower by Rs. 382.35 lacs.

Note 10 Segment Reporting

The Company''s business activity falls within a single significant primary business segment, viz. "Footwear and Related Products", therefore no separate segment information is disclosed under Accounting Standard (AS) - 17, "Segment Reporting" issued by The Institute of Chartered Accountants of India (ICAI).

Note 11 Figures for the previous year have been rearranged/regrouped wherever necessary in terms of current year''s grouping.


Mar 31, 2014

1.1 Company Information

Relaxo Footwears Limited (the Company) is a Public Limited Company registered in India and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The company is one of the leading players in the Footwear Industry engaged in manufacturing and trading of footwear and other articles. The company has ''state of the art'' manufacturing facilities at Bahadurgarh (Haryana), Bhiwadi (Rajasthan) & Haridwar (Uttarakhand). The selling arrangements are through its wholesale, export and retail network.

Cash outflows for the above are determinable only on pronouncement of judgements pending at various forums/ authorities.

*The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at the concessional/Zero rate of custom duty. As per the scheme, the company is obliged to export eight times of duty saved in next 8 years.

The lawsuits in respect of certain Intellectual Property Rights and Trademarks are pending in Courts. The proceedings are going on before appropriate authorities and the ultimate outcome of the matter cannot presently be determined. No provision for any liability that may result has been made.

C. Entities Where Key Management Personnel Exercise significant Infuence

Marvel Polymers Private Limited

Nuwave Shoes

Patel Oil Mills

Sh. Ramesh Kumar Dua ( H.U.F)

Sh. Mukand Lal Dua ( H.U.F)

Sh. Mool Chand Dua ( H.U.F)

Shri Mool Chand Dua Memorial Society

Shrimati Ram Ditti Dua Memorial Society

D. Relatives of Key Management Personnel

Name Relationship

Ms. Usha Dua Wife of Whole Time Director

Ms. Lalita Dua Wife of Managing Director

Mr. Ritesh Dua Son of Whole Time Director

Mr. Nitin Dua Son of Whole Time Director

Mr. Gaurav Dua Son of Managing Director

Ms. Sakshi Dua Daughter of Managing Director

Mr. Rahul Dua Son of Managing Director

Ms. Garima Dua Wife of Whole Time Director

Ms. Shashi Mehra Sister of Managing Director

Ms. Aalya Dua Daughter of Whole time Director

Perquisites includes Employer''s Provident Fund Contribution relating to KMP''s Previous year figures are given in brackets

Note 2 Disclosure on Operating Leases

The company has operating leases for premises. These lease arrangements range for a period between 11 months to 9 years, which include both cancelable and non-cancelable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.

The lease rentals charged during the year for cancelable/ non-cancelable leases relating to rent of building premises as per the agreements and maximum obligation on long term non-cancelable operating leases are as follows:

Note 3 Disclosure on Employee benefits

Disclosure is hereby given in pursuant to Accounting Standard (AS) 15 - "Employee benefits"

A. Defined Contribution Plan

During the year, the Company has recognised the following amount in the Statement of Profit and Loss (Refer Note no. 23)

B. Defined benefit Plan

The present value of obligation is determined based on actuarial valuation, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The above information is certified by Actuary. The estimates of escalation in salary take into account infation, seniority, promotion & other relevant factors.

Included in above is the charge for Key Managerial Personnel for Gratuity and Leave Encashment as these are provided for the Company as a whole.

Note 4 Segment Reporting

The Company''s business activity falls within a single significant primary business segment, viz. "Footwear and Related Products", therefore no separate segment information is disclosed under Accounting Standard (AS) - 17, "Segment Reporting" issued by The Institute of Chartered Accountants of India (ICAI).

Note 5 Figures for the previous year have been rearranged/ regrouped wherever necessary in terms of current year''s grouping.


Mar 31, 2013

1. Contingent Liabilities and Commitments :

(i) Contingent Liabilities

(Rs. in Lacs)

Particulars As at As at 31.03.2013 31.03.2012

(a) Claims against the 221.49 72.69 company, not acknowledged as debts

(b) Surety Bonds given 5.50 7.50 to Govt. Authorities

(c) Interest on Entry Tax 672.67 415.20 under dispute and appeal is pending before Hon''ble Supreme Court of India

(d) The lawsuits in respect of certain Intellectual Property Rights & Trademarks are pending in Courts. The proceedings are going on before appropriate authorities and the ultimate outcome of the matter cannot presently be determined. No provision for any liability that may result has been made.

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.1595.11 lacs (Previous Year- Rs.1780.29 lacs).

(b) The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at the concessional/Zero rate of custom duty. As per the scheme, the company is obliged to export eight/ six times of duty saved in next 8/6 years. The total export obligation is Rs.5547.84 lacs against total duty saved of Rs.693.48 lacs (Previous year Rs.609.94 lacs against duty saved of Rs.79.99 lacs)

2. Capital Work in progress includes Rs.Nil (Previous year Rs.102.51 lacs) on account of preoperative expenses incurred during the year.

3. Certain balances of Sundry Debtors, Creditors and Advances from Customers are subject to confirmation.

4. Wealth Tax provision of Rs. 4.07 lacs (previous year Rs. 4.40 lacs) is included in Rates and Taxes.

5 . The interest includes Rs.32.24 lacs (Previous year Rs.23.92 lacs) paid to Managing Director.

6. The segment reporting as per AS-17 issued by ''The Institute of Chartered Accountants of India'' is not applicable.

7. Extraordinary items - Rs.Nil (Previous Year Rs.3.83 lacs).

8. Previous year figures have been regrouped/reclassified wherever necessary to conform to current presentation.


Mar 31, 2012

The company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company in proportion to their number of equity shares after distribution of all preferential amounts.

The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Annual Listing fee has been paid for the year.

Details of Securities for Term Loans

* State Bank of India

1st Pari Passu charge over entire Fixed Assets both present & future & equitable mortgage of factory Land & Building at Plot No.326 MIE Bahadurgarh,Plot No.327 MIE Bahadurgarh,Plot No.A-1130/1130A Industrial Area-Ill, Bhiwadi,Plot No.83-92 Sector 5 HE SIDCUL,Ranipur,Distt Haridwar,Plot No.342-343,Sector 17,Footwear Park,Bahadurgarh & Wind Mills in Distt Jodhpur. Personal Guarantees of Managing Director & Whole Time Directors.

** HDFC Bank

Exclusive 1st charge on movable & immovable property at Plot No. 328 MIE Bahadurgarh, Haryana & Freehold Industrial Plot No. 7, Block No. F, MCIE, Udyog Nagar, Delhi of a firmin which directors are partners. Personal Guarantees of Managing Director& Whole Time Director.

*** Standard Chartered Bank

Exclusive 1st charge on Land & Building at Plot No. 30 Mooja Hasanpur, Tikri Border, Bahadurgarh, Haryana in the name of relatives of Directors.

Exclusive 1st charge on movable & immovable assets at Plot No. 37, Sector 4B, Industrial Estate, Bahadurgarh, Haryana. Personal Guarantees of Managing Director & Whole Time Director.

**** Related Parties/Others

The Unsecured Loans from promoters and/or their relatives shall be repaid only with the prior approval of lending banks. These are long term borrowings & have been inducted for future capital expansion and are always subordinate to the loans of banks.

The Short term borrowings have been availed from State Bank of India, Standard Chartered Bank, HDFC Bank Limited & ING Vysya Bank Limited.

- 1st Pari Passu Charge - Hypothecation charge over entire stocks & book debts / receivables.

- Personal Guarantees of Managing Director and Whole Time Directors.

- Additional exclusive 1st charge of property situated at Plot no. 7, Block no. F, Udyog Nagar, Delhi to HDFC Bank Limited. The property belongs to the firm where the Directors are partners.

- Additional exclusive 1st charge of the property situated at Plot no. 47, MIE Bahadurgarh to Standard Chartered Bank, that belongs to Directors and relatives.

* The company has not received intimation from vendors regarding their status under the Micro, Small & medium enterprises Development Act 2006, hence disclosures relating to amounts unpaid as at the year end together with interest paid/payable under the Act have not been given.

* Includes Goods in transit of Rs.66.00 lacs (previous year -Rs.230.54 lacs) in raw material, Rs.0.40 lacs (previous year - Rs.1.16 lacs) in packing material, Rs.12.14 lacs ( previous year - Rs. Nil) in stock in trade, Rs.1.87 lacs (previous year - Nil) in Fuel and Rs.1.83 lacs (previous year - Nil) in Store, Spare and Tools.

1. Contingent Liabilities and Commitments

(i) Contingent Liabilities

(Rs. in Lacs) Particulars As at As at

31.03.2012 31.03.2011

(a) Claims against 72.69 95.50 the company, not acknowledged as debts

(b) Surety Bonds given 7.50 28.23 to Govt. Authorities

(c) The lawsuits in respect of certain Intellectual Property Rights & Trademarks are pending in Courts. The proceedings are at the preliminary stage and the ultimate outcome of the matter cannot presently be determined. No provision for any liability that may result has been made.

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.1780.29 lacs (Previous Year- Rs.182.90 lacs).

(b)The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at the concessional/ Zero rate of custom duty. As per the scheme, the company is obliged to export eight/six times of duty saved in next 8/6 years. The total export obligation is Rs.609.94 lacs against total duty saved of Rs.79.99 lacs ( Previous year Rs.5457.68 lacs against duty saved of Rs.682.21 lacs)

2. Capital Work in progress includesRs.102.51 lacs (Previous yearRs. Nil) on account of preoperative expenses incurred during the year.

3. Certain balances of Sundry Debtors, Creditors and Advances from Customers are subject to confirmation.

4. Wealth Tax provision of Rs.4.40 lacs (previous year Rs.3.15 lacs ) is included in Rates and Taxes.

The above includes Employer Contribution to Provident and Pension Fund on account of Contractual Labour amounting to Rs.236.68 lacs (Previous Year Rs.184.09 lacs) and Employer Contribution to ESIC Scheme on account of Contractual Labour amounting to Rs.166.86 lacs (Previous Year Rs.93.83 lacs)

A. Defined Benefit Plan

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

* Included in Legal & Professional expenses (refer Note No. 26)

5. The segment reporting as per AS-17 issued by 'The Institute of Chartered Accountants of India' is not applicable.

6. Extraordinary items include loss of Rs.3.83 lacs (Previous Year - Rs.Nil) incurred due to fire.

7. Prior period adjustments include write back of provisions no longer required Rs. Nil (Previous Year - Rs.7.73 lacs).

8. Previous year figures have been regrouped /reclassified wherever necessary to conform to current presentation.

 
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