Mar 31, 2023
Note No. 30 : Contingent Liabilities and Commitments |
(C in Crore) |
|
Particulars |
As at March 31, 2023 |
As at March 31, 2022 |
Contingent Liabilities * Claims against the Company not acknowledged as debt in respect of: |
||
Sales Tax Matters related to Purchase tax, Input tax, Entry tax and GST |
38.49 |
1.32 |
Income Tax Matters related to Dividend Distribution tax, TDS and Transfer Pricing |
4.84 |
4.84 |
43.33 |
6.16 |
|
Others |
||
Interest on Entry tax, Haryana** |
79.35 |
70.93 |
Additional demand of Industrial Plot no. 37, Bahadurgarh, Haryana *** |
18.73 |
18.73 |
Additional demand of Industrial Plot no. 342-343, Bahadurgarh, Haryana *** |
1.51 |
1.51 |
99.59 |
91.17 |
|
Commitments |
||
Capital Commitments |
||
Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advance) |
2725 |
23.86 |
27.25 |
23.86 |
|
Others |
||
Export Obligation under Export Promotion Capital Goods (EPCG) scheme |
279.12 |
146.70 |
Unspent Corporate Social Responsibility Obligations (Refer note no.16) |
14.42 |
10.66 |
293.54 |
157.36 |
* Cash outflows related to disputed tax matters are determinable only on outcome of the pending cases at various forums/authorities. The potential undiscounted amount of total payments for taxes that the Company may be required to make if there was an adverse decision related to these disputed demands of regulators are as stated above.
** The Supreme Court of India vide order passed in November 2016, upheld the constitutional validity of entry tax and directed the Company to file fresh appeal before the High Court to decide other matters related to levy of entry tax in the state of Haryana. The matter is pending before the Punjab & Haryana High Court. However, the principal liability amounting to H46.80 crores for entry tax has been disclosed in note no.18.
*** The Company along with other plot allottees has received a demand notice from Haryana State Industrial & Infrastructure Development Corporation (''HSIIDC'') towards enhanced cost for the industrial plots allotted to the Company.
Based on the Company''s own assessment and advice given by its legal counsel, the Company has a good case in the above cases. Pending final disposal of the matters before the appropriate forum, the same has been disclosed as a contingent liability.
The lawsuits in respect of certain intellectual property rights and other laws/matter are pending in courts/forums. The proceedings are going on before appropriate authorities and the ultimate outcome of the matter cannot presently be determined. In the opinion of management the amount involved is not material.
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows.
Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability.
Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on investment.
Financial risk management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor, mitigate and minimise risks arising from financial instruments.
The Company''s financial liabilities other than derivative instruments comprise of borrowings, trade payables, lease liabilities and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations.
The Company''s financial assets include balances with banks, cash and cash equivalents, trade receivables, security deposits and other financial assets that are derived directly from its operations.
The Company holds investments carried at fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVTOCI).
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily, trade receivables, balances with banks including cash and cash equivalents and from its investing activities, derivative instruments.
Concentration of credit risk with respect to trade receivables are limited, due to the customer base being large across all regions. All trade receivables are reviewed and assessed at every reporting period. The Company has adopted a policy of only dealing with creditworthy counterparties, therefore the Company does not expect any material risk on this account.
Historical experience of collecting receivables of the Company is supported by low level of past defaults and hence the credit risk is perceived to be low.
Credit risk arising from balances with banks, including cash and cash equivalents, investment in mutual funds & perpetual bonds and derivative instruments is limited because the counterparties are banks / mutual funds with high credit ratings.
The Company has exposure in financial assets as per details given below. The Company has set counter-party limits based on multiple factors including financial position, credit rating, etc.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company''s main source of liquidity is cash and cash equivalents and the cash flows that are generated from operations. The Company''s approach to manage liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast with actual cash flows and matching the maturity profiles of the financial assets and liabilities.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market prices. Market risk comprises of foreign exchange risk, interest rate risk and other price risk, such as equity price risk and commodity price risk. Financial instruments affected by market risk includes borrowings, trade payables and Investments etc.
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities i.e. import of materials, capital items and export of finished goods (When revenue or expense is denominated in a foreign currency).
The Company uses forward exchange contracts to mitigate foreign exchange related risk exposures. The Company''s exposure to unhedged foreign currency risk as at March 31, 2023 and March 31, 2022 has been disclosed in note no. 34.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings.
As at March 31, 2023, the exposure to interest rate risk due to variable interest rate borrowings amounted to Nil. (previous year H20 crores)
The Company''s exposure to price risk arises from investment in mutual funds , bonds and equity instruments held and classified as FVTPL or FVTOCI. To manage the price risk arising from investments, the Company diversifies its portfolio of assets with banks/ mutual funds with high credit ratings.
The Company''s unquoted equity instruments are susceptible to market price risk arising from uncertainties about future value of the investment . The investment in unquoted equity instruments is not significant, hence sensitivity analysis has not been disclosed.
The key raw materials used in the manufacturing of footwear are natural / synthetic rubber, EVA , PU etc. Price volatility of these commodities depend mainly on demand - supply .fluctuation in the price of crude oil and it''s derivatives. To mitigate price risk and availability issues, the Company is taking several pro-active initiatives like continuously monitoring the price trend of key materials in global / domestic markets by subscribing to various commodity reports, development of new vendors and alternate material for better price competitiveness and quality sustainability / improvement etc.
Capital includes equity share capital and other equity attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains an optimal capital structure and maximise the shareholder''s value The Company has complied with those covenants throughout the reporting period.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions to meet requirements of the financial covenants. To maintain or adjust the capital structure, the Company may review the dividend payment to shareholders, return capital to shareholders or issue new shares.
Fair value of financial assets and liabilities is normally determined by references to the transaction price or market price. If the fair value is not reliably determinable, the Company determines the fair value using valuation techniques that are appropriate in the circumstances and for which sufficient data are available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The following section describes the valuation techniques used and key inputs for fair valuation :
a. Foreign exchange forward contracts are valued using market observable inputs such as foreign exchange spot rates and forward rates at the end of the reporting period.
b. Fair value of mutual funds are at published net asset value (NAV).
c. The fair value of perpetual bonds are determined based on prevailing yield to discount future cash flows.
d. Unquoted equity instruments where most recent information to measure fair value is insufficient, cost has been considered as best estimate of fair value.
e. The carrying amount of other financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed as per Ind AS 113 "Fair Value Measurement".
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability.
Company implements its CSR activities through partner organisations registered with Ministry of Corporate Affairs (MCA). Company has a vision of ensuring sustained human development of the most deprived communities primarily under thematic areas viz. Education, Health & Hygiene, Skill Development and Environment Conservation.
There is no transaction with related party in relation to CSR expenditure as per Ind AS 24 "Related Party Disclosures".
Nature of CSR activities
Short Term Projects : Company undertook two programs viz Remedial Education Support and Customer Service Associate Course towards skill development.
Long Term Projects : Company is continuing its focus on education by adopting 27 (previous year 32) government primary/upper primary/higher secondary schools in Khanpur and Laksar blocks of Haridwar district, Uttarakhand, with a vision of creating an equitable education opportunities for the children of rural India by improving these schools in terms of infrastructure as well as soft skills & capacity building of teachers, children, school management committee (SMC) members, parents and community at large. Under this project, Company will develop these schools in coordination with the Samagra Shiksha and School Education Department of Uttarakhand State. Company is also focusing to work in environment conservation projects and decided to implement water conservation and plantation work in Alwar district of Rajasthan . These projects will be implemented in consultation with the Watershed Development & Soil Conservation Department and Forest Department of Rajasthan.
Reasons for shortfall : Company is on track in spending the allocated funds towards the long term projects envisaged for the year. The amount of H6.35 crores (previous year H6.44 crores) has been transferred to unspent CSR account on April 27 & 28, 2023. (previous year on April 26, 2022)
Company does not hold any benami property. No proceedings have been initiated or pending against the Company for holding any benami property under Prohibition of Benami Property Transactions Act,1988 and the rules made thereunder.
Quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.
The Company is not declared wilful defaulter by any bank in accordance with the guidelines on wilful defaulters issued by the RBI.
The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013. This is determined to the extent of such parties have been identified on the basis of information available with the Company.
The Company has registered all charges or satisfaction with Registrar of Companies (ROC) within the statutory period.
The number of layers prescribed under clause (87) section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable to the Company.
During the year, no scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013.
The Company has not advanced or loaned or invested funds to any other persons (intermediaries) with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or provide any guarantee in any manner whatsoever on behalf of the Company (ultimate beneficiary).
The Company has also not received any fund from any persons with the understanding that the Company shall directly lend or invest or provide any guarantee to any other persons on behalf of the funding party.
Company does not have any transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
Company has not traded or invested in crypto currency or virtual currency during the year.
Mar 31, 2022
*Cash outflows related to disputed tax matters are determinable only on outcome of the pending cases at various forums/authorities. The potential undiscounted amount of total payments for taxes that the Company may be required to make if there was an adverse decision related to these disputed demands of regulators are as stated above.
**The Supreme Court of India vide order passed in November 2016, upheld the constitutional validity of entry tax and directed the Company to file fresh appeal before the High Court to decide other matters related to levy of entry tax in the state of Haryana. The matter is pending before the Punjab & Haryana High Court. However, the principal liability amounting to H46.80 crores for entry tax has been disclosed in note no.18.
***The Company along with other plot allottees has received a demand notice from Haryana State Industrial & Infrastructure Development Corporation (''HSIIDC'') towards enhanced cost for the industrial plots allotted to the Company.
Based on the Company''s own assessment and advice given by its legal counsel, the Company has a good case in the above cases. Pending final disposal of the matters before the appropriate forum, the same has been disclosed as a contingent liability.
The lawsuits in respect of certain intellectual property rights and other laws / matter are pending in courts / forums. The proceedings are going on before appropriate authorities and the ultimate outcome of the matter cannot presently be determined. In the opinion of management the amount involved is not material.
Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability.
Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on investment.
Note No. 32 : Disclosure on Employee Share Based Payment
Disclosure is hereby given in pursuant to Ind AS 102 "Share Based Payment".
RFL Employee Stock Option Plan 2014 (hereinafter referred to as the "ESOP 2014" / "The Plan"), was approved by the shareholders through postal ballot on August 5, 2014. The plan entitles the permanent employees, existing and future, including the Whole-Time Director (but excluding the Independent Directors and Promoter Directors) of the Company to exercise the option granted for purchase of equity shares in the Company at the exercise price i.e. the latest available closing price, prior to the date of meeting of the board / nomination & remuneration committee, in which options are granted subject to compliance with vesting conditions.
The weighted average remaining contractual life for the stock options outstanding as at March 31, 2022 is 6.23 years. (previous year 4.25 years)
The weighted average fair value of stock options granted during the year ended on March 31, 2022 is H382.15 per option. (previous year H18S.S4 per option)
Note No. 36 : Financial Risk Management
Financial risk management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor, mitigate and minimise risks arising from financial instruments.
The Company''s financial liabilities other than derivative instruments comprises of borrowings, trade payables, lease liabilities and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations.
The Company''s financial assets include balances with banks, cash and cash equivalents, trade receivables, security deposits and other financial assets that are derived directly from its operations.
The Company holds investments carried at fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVTOCI).
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily, trade receivables, balances with banks including cash and cash equivalents and from its financing activities like Investments and derivative instruments.
Concentration of credit risk with respect to trade receivables are limited, due to the customer base being large across all regions. All trade receivables are reviewed and assessed at every reporting period. The Company has adopted a policy of only dealing with creditworthy counterparties, therefore the Company does not expect any material risk on this account.
Historical experience of collecting receivables of the Company is supported by low level of past defaults and hence the credit risk is perceived to be low.
Credit risk arising from balances with banks, including cash and cash equivalents, investment in mutual funds & perpetual bonds and derivative instruments is limited because the counterparties are banks / mutual funds with high credit ratings.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company''s main source of liquidity is cash and cash equivalents and the cash flows that are generated from operations. The Company''s approach to manage liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast with actual cash flows and matching the maturity profiles of the financial assets and liabilities.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market prices. Market risk comprises of foreign exchange risk, interest rate risk and other price risk, such as equity price risk and commodity price risk. Financial instruments affected by market risk includes borrowings, trade payables and Investments etc.
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities i.e. import of materials, capital items and export of finished goods (When revenue or expense is denominated in a foreign currency).
Exposure to Foreign Exchange Risk
The Company uses forward exchange contracts to mitigate foreign exchange related risk exposures. The Company''s exposure to unhedged foreign currency risk as at March 31, 2022 and March 31, 2021 has been disclosed in note no. 34.
The Company''s unhedged foreign currency exposure denominated in QAR, Euro and AED are insignificant, hence sensitivity analysis has not been disclosed.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings.
Exposure to Interest Rate Risk
As at March 31, 2022, the exposure to interest rate risk due to variable interest rate borrowings amounted to H20 crores (previous year Nil).
The Company''s exposure to price risk arises from investment in mutual funds, bonds and equity instruments held and classified as FVTPL or FVTOCI. To manage the price risk arising from investments, the Company diversifies its portfolio of assets with banks / mutual funds with high credit ratings.
The Company''s unquoted equity instruments are susceptible to market price risk arising from uncertainties about future value of the investment. The investment in unquoted equity instruments is not significant, hence sensitivity analysis has not been disclosed.
The key raw materials used in the manufacturing of footwear are natural / synthetic rubber, EVA, PU etc. Price volatility of these commodities depend mainly on demand - supply, fluctuation in the price of crude oil and it''s derivatives. To mitigate price risk and availability issues, the Company is taking several pro-active initiatives like continuously monitoring the price trend of key materials in global / domestic markets by subscribing to various commodity reports, development of new vendors and alternate material for better price competitiveness and quality sustainability / improvement etc.
Note No. 37 : Capital Management
Capital includes equity share capital and other equity attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains an optimal capital structure and maximise the shareholder''s value. The Company has complied with those covenants throughout the reporting period.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions to meet requirements of the financial covenants. To maintain or adjust the capital structure, the Company may review the dividend payment to shareholders, return capital to shareholders or issue new shares.
Note No. 40 : Fair Value Measurements
Fair value of financial assets and liabilities is normally determined by references to the transaction price or market price. If the fair value is not reliably determinable, the company determines the fair value using valuation techniques that are appropriate in the circumstances and for which sufficient data are available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value or amortised cost for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed as per Ind AS 113 "Fair Value Measurement".
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability.
Note No. 41 : Corporate Social Responsibility (CSR)
Company implements its CSR activities through partner organisations registered with Ministry of Corporate Affairs (MCA). Company has a vision of ensuring sustained human development of the most deprived communities primarily under thematic areas viz. Education, Health & Hygiene and Skill Development.
There is no transaction with related party in relation to CSR expenditure as per Ind AS 24 "Related Party Disclosures".
Nature of CSR activities: Company decided to adopt 32 (previous year 32) government primary/ upper primary / higher secondary schools with the total project cost of H6.44 crores (previous year H5.43 crores) under long term project in Khanpur and Laksar blocks of Haridwar district, Uttarakhand, with a vision of creating an equitable education opportunities for the children of rural India by improving these schools in terms of infrastructure as well as soft skills & capacity building of teachers, children, school management committee (SMC) members, parents and community at large. Under this long term project Company will develop these schools in coordination with the Samagra Shiksha and School Education Department of Uttarakhand State.
Reason for shortfall at the end of the year: Company has not spent H6.44 crores (previous year H5.43 crores) due to schools remaining shut under the Covid-19 restrictions. The amount of H6.44 crores has been transferred to unspent CSR account on April 26, 2022 (previous year H5.43 crores on April 30, 2021)
b. Details of Benami Property held
Company does not hold any benami property. No proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and the rules made thereunder.
c. Borrowings secured against Current Assets
Quarterly returns or statements of current assets filed by the company with banks are in agreement with the books of accounts.
The Company is not declared wilful defaulter by any bank in accordance with the guidelines on wilful defaulters issued by the RBI.
e. Relationship with Struck off Companies
The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013. This is determined to the extent of such parties have been identified on the basis of information available with the Company.
f. Registration of charges or satisfaction with Registrar of Companies (ROC)
The Company has registered all charges or satisfaction with Registrar of Companies (ROC) within the statutory period.
i. Compliance with approved Scheme(s) of Arrangements
During the year, no scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013.
j. Utilisation of Borrowed Funds and Share Premium
The Company has not advanced or loaned or invested funds to any other persons (intermediaries) with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or provide any guarantee in any manner whatsoever on behalf of the Company (ultimate beneficiary).
The Company has also not received any fund from any persons with the understanding that the Company shall directly lend or invest or provide any guarantee to any other persons on behalf of the funding party.
Note No. 50 : Undisclosed Income
Company does not have any transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
Note No. 51 : Details of Crypto Currency or Virtual Currency
Company has not traded or invested in crypto currency or virtual currency during the year.
Note No. 52: Impact of Global Health Pandemic COVID -19
The Company has done assessment of recoverability and carrying values of its assets comprising of receivables, inventories, plant and equipment, intangible assets and on the basis of assessment, the Company expects to recover the carrying amount of these assets. The Company will continue to closely monitor any material changes to future economic conditions due to uncertainties linked to COVID -19.
Mar 31, 2021
Particulars |
As at March 31, 2021 |
As at March 31, 2020 |
Contingent Liabilities * Claims against the Company not acknowledged as debt in respect of |
||
Sales Tax Matters related to Purchase tax, Input tax and Entry tax |
1.32 |
1.41 |
Income Tax Matters related to Dividend Distribution tax ,TDS and Transfer Pricing |
5.48 |
4.41 |
6.80 |
5.82 |
|
Others |
||
Interest on Entry tax, Haryana** |
62.51 |
54.08 |
Additional demand for Industrial Plot at Bahadurgarh*** |
18.73 |
18.73 |
81.24 |
72.81 |
|
Commitments |
||
Capital Commitments |
||
Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advance) |
50.45 |
53.38 |
Others |
||
Export Obligation under Export Promotion Capital Goods (EPCG) scheme against duty saved of H 19.11 crores (previous year H 18.54 crores) |
103.45 |
111.24 |
*Cash outflows related to disputed tax matters are determinable only on outcome of the pending cases at various forums/authorities. The potential undiscounted amount of total payments for taxes that the Company may be required to make if there was an adverse decision related to these disputed demands of regulators are as stated above.
** In the state of Haryana, tax on entry of goods from outside the state was levied. This position has been challenged by the Company in the respective forums, on the grounds that the specific entry tax is ultra vires to the constitution. The Honâble Supreme Court of India upheld the constitutional validity of entry tax levied by few states. However, Supreme Court did not conclude certain aspects such as present levies in each state is discriminatory in nature or not, leaving them open to be decided by regular benches of the Courts but directed petitioner to file fresh appeal in the High Court. The Company filed appeal in the Punjab & Haryana High Court and matter is pending since May 31, 2017 The principal liability for entry tax in the state of Haryana has been disclosed in note no.19.
*** The Company along with other plot allottees had received a demand notice in June, 2019 from the Haryana State Industrial & Infrastructure Development Corporation (âthe HSIIDCâ) against the industrial plots allotted to them in the year 2010 seeking payment of enhanced cost at the rate of H 9,249/- per square meter and interest thereon for the plot allotted at Sector 4-B, Bahadurgarh, Haryana, on account of enhancement of compensation awarded by the Courts to the ex-landowners. The Company disputed the demand raised by the HSIIDC. The Company along with other plot allottees filed a writ petition in the High Court of Punjab & Haryana (âthe High Courtâ) and challenged the demand notice and consequent show cause notices issued by the HSIIDC. The High Court disposed of the writ petition on February 24, 2020 vide an order and directed the HSIIDC to decide upon all the objections raised by the plot allottees including the Company within a period of five months. The High Court while disposing off the petition also asked the petitioner allottees including the Company to pay H 2,500/- per square meter within a period of one month from the date of its order dated February 24 ,2020 as part payment of the demand raised by HSIIDC. The High Court has further directed that before the expiry of the said period of five months, HSIIDC shall not insist on payment of an amount more than INR 2500/- per square meter. The Company had filed a review petition before the High Court in June, 2020 against the direction contained in order dated February 24, 2020 to pay H 2,500/- per square meter to HSIIDC. The review petition was dismissed on November 18, 2020, however, the Supreme Court of India by its order dated January 12, 2021 in a special leave petition filed by the Company and other petitioners has stayed the High Court of Punjab & Haryanaâs direction asking the plot allottees to pay H 2,500/- per square meter to HSIIDC. Further, the objections of the plot allottees against the enhanced cost at the rate of H 9,249/- per square meter are yet to be decided by the HSIIDC. Pending legal dispute, the matter has been disclosed as contingent liability.
The lawsuits in respect of certain intellectual property rights and other laws / matter are pending in courts / forums. The proceedings are going on before appropriate authorities and the ultimate outcome of the matter cannot presently be determined. In the opinion of management the amount involved is not material.
(b) Defined Benefit Plan - Gratuity (Funded) : The Company pays annual contribution to Life Insurance Corporation of India (LIC) through a Trust, namely Relaxo Footwears Limited Employees Group Gratuity Scheme. Under the gratuity plan, every employee who has completed atleast five years of service, gets gratuity at the time of separation or retirement, whichever is earlier @ 15 days of last drawn salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the projected unit credit method.
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such, Company is exposed to various risks as follows.
Investment Risk - The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bonds yield. If plan liability is funded and return on plan assets is below this rate, it will create a plan deficit.
Interest Risk (Discount Rate Risk) - A decrease in the bond interest rate (discount rate) will increase the plan liability.
Mortality Risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants. For this report, Indian assured lives mortality (2012-14) ultimate table has been used . A change in mortality rate will have a bearing on the plan''s liability.
Salary Risk - The present value of the defined benefit plan liability is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
Note No. 33 : Disclosure on Employee Share Based Payment
Disclosure is hereby given in pursuant to Ind AS 102 "Share Based Payment".
RFL Employee Stock Option Plan 2014 (hereinafter referred to as the "ESOP 2014" / "The Plan"), was approved by the shareholders through postal ballot on August 5, 2014. The plan entitles the permanent employees, existing and future, including the WholeTime Director (but excluding the Independent Directors and Promoter Directors) 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.
The weighted average remaining contractual life for the stock options outstanding as at March 31, 2021 is 4.25 years. (previous year 4.90 years)
The weighted average exercise price (WAEP) for stock options outstanding as at March 31, 2021 is H 272.30 per option. (previous year H 263.79 per option)
The weighted average fair value of stock options granted during the year ended on March 31, 2021 is H 186.64 per option. (previous year H 143.31 per option)
The Black Scholes valuation model has been used for computing weighted average fair value of stock options granted during the year considering the following inputs.
Note No. 36 : Financial Risk Management
Financial risk management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor, mitigate and minimise risks arising from financial instruments.
The Company''s principal financial liabilities other than derivative instruments comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations.
The Company''s principal financial assets include cash and cash equivalents, trade receivables and security deposits that are derived directly from its operations.
The Company hold investments carried at fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVTOCI).
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily, trade receivables and from its financing activities, including cash and cash equivalents, mutual funds and derivative instruments .
Concentration of credit risk with respect to trade receivables are limited, due to the customer base being large across all regions . All trade receivables are reviewed and assessed at every reporting period. The Company has adopted a policy of only dealing with creditworthy counterparties, therefore the Company does not expect any material risk on this account.
Historical experience of collecting receivables of the Company is supported by low level of past defaults and hence the credit risk is perceived to be low.
Credit risk arising from other balances with banks,including cash and cash equivalents, mutual funds and derivative instruments is limited because the counterparties are banks / mutual funds with high credit ratings.
The Company maintains exposure in cash and cash equivalents and derivative instruments with financial institutions as per details given below. The Company has set counter-party limits based on multiple factors including financial position, credit rating, etc.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company''s main source of liquidity is cash and cash equivalents and the cash flows that are generated from operations. The Company''s approach to manage liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast with actual cash flows and matching the maturity profiles of the financial assets and liabilities.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market prices. Market risk comprises of foreign exchange risk, interest rate risk and other price risk, such as equity price risk and commodity price risk. Financial instruments affected by market risk includes lndian rupee loan, foreign currency loan, trade payables etc.
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities i.e. import of materials, capital items and export of finished goods . (When revenue or expense is denominated in a foreign currency).
Exposure to Foreign Exchange Risk
The Company uses forward exchange contracts to mitigate foreign exchange related risk exposures. The Company''s exposure to unhedged foreign currency risk as at March 31, 2021 and March 31, 2020 has been disclosed in note no. 35.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings.
Exposure to Interest Rate Risk
As at March 31,2021, the exposure to interest rate risk due to variable interest rate borrowings amounted to Nil. (previous year H 19.16 crores).
The Company''s unquoted equity instruments are susceptible to market price risk arising from uncertainties about future value of the investment . The investment in unquoted equity instruments is not significant.
The key raw materials used in the manufacturing of footwear are natural / synthetic rubber, EVA , PU etc. Price volatility of these commodities depend mainly on demand - supply fluctuation in the price of crude oil and it''s derivatives. To mitigate price risk and availability issues, the Company is taking several pro-active initiatives like continuously monitoring the price trend of key materials in global / domestic markets by subscribing to various commodity reports, development of new vendors and alternate material for better price competitiveness and quality sustainability / improvement etc.
Note No. 37 : Capital Management
Capital includes equity share capital and other equity attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains an optimal capital structure and maximise the shareholder''s value The Company has complied with those covenants throughout the reporting period.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions to meet requirements of the financial covenants. To maintain or adjust the capital structure, the Company may review the dividend payment to shareholders, return capital to shareholders or issue new shares.
The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in forced or liquidation sale.
The following methods, assumptions and valuation techniques were used to estimate the fair values.
a) The fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, trade receivables, trade payables, borrowings and other financial assets and liabilities are considered same as their carrying amount due to their short term nature.
b) Financial assets and liabilities with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty.
c) The Management assessed that fair values of above financial assets and liabilities approximate their carrying value due to amortised cost being calculated based on the effective interest rates.
d) The fair value of cross currency interest rate swaps is determined as the present value of the estimated future cash flows based on observable yield curves.
e) The fair value of forward exchange contracts and currency swaps is determined using forward exchange rates at the balance sheet date.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value or amortised cost for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed as per Ind AS 113 "Fair Value Measurement"
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: I nputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Note No. 48: Impact of Global Health Pandemic COVID -19
The Company has done assessment of recoverability and carrying values of its assets comprising of receivables, inventories, plant and equipment, intangible assets and on the basis of assessment, the Company expects to recover the carrying amount of these assets. The Company will continue to closely monitor any material changes to future economic conditions due to uncertainties linked to COVID -19.
Mar 31, 2018
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 the Company being liquidated, since the Equity Shares of the Company are fully paid-up, there would be no additional liability on the Shareholders of the Company. However, post settlement of the liabilities of the Company, the surplus, if any, would be distributed to the Shareholders in proportion to the number of Shares held by each one of them.
Equity Shares reserved under Employee Stock Option Plan
For details of Shares reserved under Employee Stock Option Plan (ESOP) refer Note 40.
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.
Aggregate number of Equity Shares issued as Bonus during the period of five years immediately preceding the reporting date
Board of Directors in their meeting held on 3rd July 2015 allotted 6,00,06,000 fully paid up Bonus Shares in the ratio of 1:1 (i.e. one Bonus Share of Rs. 1/-each to every shareholder holding one equity share of Rs.1/-each).
Nature and Purpose of Reserves
Securities Premium Reserve - Securities Premium Reserve represents the amount received in excess of par value of equity shares of the Company. The same, interalia, may be utilized by the Company to issue fully paid-up bonus shares to its members and buying back the shares in accordance with the provisions of the Companies Act, 2013.
Share Based Payment Reserve - The company has Stock Option Plan under which Options to subscribe for the Companyâs Equity Shares have been granted to the Permanent Employees, existing and future including Whole-time Director (but excluding the Independent Directors and Promoter Directors) of the Company. This Reserve is used to recognise the value of Equity-settled 5hare-Based payments provided to Employees, including Key Management Personnel, as part of their Remuneration. Refer Note 40 for further details of this plan.
General Reserve - General Reserve represents the reserve created by apportionment of profit generated during the year or transfer from other reserves either voluntarily or pursuant to statutory requirements. The same is a free reserve and available for distribution.
Retained Earnings - Retained Earnings represents the undistributed profits of the Company.
Nature of Securities
Secured byway of first Pari Passu charge on entire Current Assets, Movable Fixed Assets including Plant & Machinery, Immovable Property situated at Plot No.326, MIE, Bahadurgarh, Haryana and Personal Guarantee of Managing Director and Whole Time Director.
1. Company Information
Relaxo Footwears Limited (âthe Companyâ) is a Public Limited Company domiciled & incorporated in India and its shares are listed at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). For Companyâs principal shareholders referNote15.
The Company is a market leader in the Footwear Industry. The company has âstate of the artâ manufacturing facilities at Bahadurgarh (Haryana), Bhiwadi (Rajasthan) and Haridwar (Uttarakhand). The selling arrangements are through its Wholesale Distribution, Export, Modern Trade and Company operated Retail Network.
*Cash Outflows related to disputed tax matters are determinable only on outcome of the pending cases at various forums/authorities. The potential undiscounted amount of total payments for taxes that the Company may be required to make if there was an adverse decision related to these disputed demands of regulators as of the date reporting period ends are as stated above.
** The matter was decided in favour of the Company and Department preferred appeal before Honâble Supreme Court of India. Supreme Court of India directed petitionerto file fresh Appeal in High Court. Matter is pending at High Court since 31st May, 2017.
Note 2 Disclosure on Operating Leases
The Company has entered into operating leases for Land and Building premises. These lease arrangements range for a period between 11 months to 20 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 3 Disclosure on Employee Benefits
Disclosure is hereby given in pursuant to Ind AS19 - âEmployee Benefitsâ
(a) Defined Contribution Plan
During the year, the Company has recognised the following amounts in the Statement of Profit and Loss (Refer Note 30)
(b) Defined Benefit Plan-Gratuity (Funded): The Company pays annual contribution for Employees Croup Gratuity Scheme to Life Insurance Corporation of India (LIC) to fund its Plan. Linder the Gratuity Plan, every employee who has completed atleast five years of service gets Gratuity at the time of separation or retirement, whichever is earlier @ 15 days of last drawn salary for each completed year of service. The Present value of obligation is determined based on Actuarial Valuation using the Projected Unit Credit Method.
Changes in Defined Benefit Obligation due to 1% Increase / Decrease in Mortality Rate is negligible.
The above Sensitivity Analysis have been determined based on a method that extrapolates the Impact on Defined Benefit Obligation as a result of reasonable changes in significant assumptions occurring at the end of the reporting period if all other assumptions remain constant.
The above information is certified by Actuary. The estimates of escalation in salary take into account inflation, seniority, promotion and other relevant factors.
It includes Gratuity for KMP as it is worked out forthe Company as a whole (Refer Note 47).
Risk Exposure
Valuations are based on certain assumptions, which are dynamic in nature and vary overtime. As such Company is exposed to various risks as follows
Investment Risk-The Present value of the Defined Benefit Plan Liability is calculated using a discount rate determined by reference to Government Bonds yield. If Plan liability is funded and return on Plan Assets is belowthis rate, It will create a plan deficit.
Interest Risk (Discount Rate Risk)-A decrease in the bond interest rate (discount rate) will increase the Plan liability.
Mortality Risk-The Present value of the Defined Benefit Plan liability is calculated by reference to the best estimate of the mortality of Plan participants. Forthis report, Indian Assured Lives Mortality (2006-08) Ultimate table has been used. A change in mortality rate will have a bearing on the Planâs liability.
Salary Risk-The Present value of the Defined Benefit Plan Liability is calculated with the assumption of salary increase rate of Plan participants in future. Deviation in the rate of increase of salary in future for Plan participants from the rate of increase in salary used to determine the Present value of obligation will have a bearing on the Planâs liability.
Note 4 Employee Stock Option Plan
RFL Employee Stock Option Plan 2014 (hereinafter referred to as the âESOP 2014â / âThe Planâ), was approved by the Shareholders through Postal Ballot on 5th August, 2014. The Plan entitles the permanent employees, existing and future, including the Whole-Time Director (but excluding the Independent Directors and Promoter Directors) 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.
The weighted average remaining contractual life for the stock options outstanding as at 31st March, 2018 is 5.95 years (Previous Year 4.05 years). The weighted average exercise price for options outstanding as at 31st March, 2018 is Rs. 443.77 (Previous Year Rs. 245.46).
The weighted average Fair Value of stock options granted during the year ended on 31st March, 2018 is Rs. 327.05 per option (Previous Year Rs. 168.98 per option).
The Black Scholes valuation model has been used for computing weighted average Fair Value considering the following inputs
Note 5 Financial Risk Management
The Companyâs principal financial liabilities other than derivatives comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets includes trade and other receivables, security deposits, Cash and cash equivalents and loans that derive directly from its operations. The Company also hold Investments carried at fair value through other Comprehensive Income (FVTOCI)/ Amortised cost. The Company is exposed to credit risk, liquidity risk and market risk that are summarised as under.
Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (Primarily trade receivables).
Management of Credit Risk
Concentration of credit risk with respect to trade receivables are limited, due to the customer base being large across all regions. All trade receivables are reviewed and assessed at every reporting period.
Historical experience of collecting receivables of the Company is supported by low level of past defaults and hence the credit risk is perceived to below.
The Credit risk on cash and bank balances and derivatives is negligible because the counterparties are Banks.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Companyâs main source of liquidity is cash and cash equivalents and the Cash flows that is generated from operations.The Companyâs approach to manage liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast with actual cash flows and matching the maturity profiles of the financial assets and liabilities.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign exchange risk, interest rate risk and other price risk, such as equity price risk and commodity price risk. Financial instruments affected by market risk include Indian rupee loans, foreign currency loans and buyerâs credit.
Foreign Exchange Risk
Foreign Exchange risk is the risk that the Fair Value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (When revenue or expense is denominated in a foreign currency). The Company uses forward exchange contracts to mitigate foreign exchange related risk exposures. The Companyâs exposure to unhedged foreign currency risk as at 31st March 2018 ,31st March 2017 and 1st April 201E has been disclosed (Refer Note 42). Currency risks related to the principal amounts of the Companyâs US dollar bank loans, have been hedged using currency swaps that mature when due for repayment.
Foreign Currency Risk Sensitivity
The following table demonstrate the sensitivity analysis on Profit before tax due to change in USD exchange rate, with all other variables held constant. The impact on the Companyâs Profit Before Tax is due to changes in the Fair Value of monetary assets and liabilities.
The Companyâs unhedged foreign currency exposure denominated in Euro & AED are insignificant, hence sensitivity analysis has not been disclosed.
Interest Rate Risk
Interest rate risk is the risk that the Fair Value or future cash flows of a Financial Instrument will fluctuate because of changes in market interest rates. The Company is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings.
Exposure to Interest Rate Risk
As at 31st March, 2018, the exposure to interest rate risk due to variable interest rate borrowings amounted to Rs.127.34Crores (Previous year Rs. 118.99 Crores, 1st April 201G Rs. 145.74 Crores)
Interest Rate Risk Sensitivity
The following table demonstrate the sensitivity to a reasonably possible change in interest rate with all other variables held constant. The impact on the Companyâs Profit Before Tax is due to changes in the interest rates on variable rate portion of loans & borrowings
Price Risk Equity Price Risk
The Companyâs Unquoted Equity instruments are susceptible to market price risk arising from uncertainties about future values of the investment. The investment in Unquoted Equity instruments is not significant.
Commodity Price Risk
The key raw materials used in the manufacturing of footwear are Natural Rubber, Synthetic Rubber, EVA and PU Material. Price volatility of these commodities depend mainly on the international market conditions and fluctuation in the price of crude oil and its derivatives. To mitigate the risk, the Company has been constantly monitoring the price trend in domestic and international market.
Note 6 Capital Management
Capital includes Equity Share Capital and Other Equity attributable to the Equity holders of the Company. The Primary objective of the Companyâs Capital Management is to ensure that it maintains an Efficient Capital Structure and maximise the Shareholderâs Value.
The Company manages its Capital Structure and makes adjustments in light of changes in economic conditions and all the requirements of the financial covenants. To maintain or adjust the Capital Structure, the Company may adjust the dividend payment to Shareholders, return Capital to Shareholders or issue newshares.
No Changes were made in the objectives, policies or processes for managing Capital during the year ended 31st March, 2018.
Note 7 Events Occurring after the Balance Sheet Date
The Board of Directors has recommended dividend at the rate of Rs. 1.50 per share of face value of Rs. 1/- each aggregating to Rs. 21.7G Crores (including Dividend distribution tax of Rs. 3.71 Crores) for the year ended 31st March, 2018.
Note 8 Collaterals
The Company has hypothecated/mortgaged its Current assets, Property Plant & Equipment as collateral against its borrowing. (Refer Note 17 & 21)
Note 9 Related Party Transactions
In pursuant to Ind A5 24 âRelated Party Disclosuresâ are as under
i) Names of Related Parties and Related Party Relationship
(a) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives them Significant Influence over the Company and Key Management Personnel (KMP)
Name Designation
Mr. Ramesh Kumar Dua Managing Director
Mr. Mukand Lai Dua Whole Time Director
(b) Key Management Personnel (KMP)
Name Designation
Mr. Nikhil Dua Whole Time Director
Mr. Deval Ganguly Whole Time Director
(c) Entities where Individuals and Key Management Personnel (KMP) as defined in Note 47 (i) (a) and 47 (i) (b) above Exercise Significant Influence.
Name of Entities
Marvel Polymers Private Limited Relaxo Rubber 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)
Relaxo Foundation
Shri Mool Chand Dua Memorial Society
(d) Relatives of Individuals owning directly or indirectly, an interest in the voting power of the Company that gives them Significant Influence over the Company and Relatives of Key Management Personnel (KMP)
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. GauravDua Son of Managing Director
Ms. Sakshi Dua Daughter of Managing Director
Mr. Rahul Dua Son of Managing Director
(e) Independent Directors Name
Mr. Pankaj Shrimali Mr. Kuruvila Kuriakose Mr. Vivek Kumar Ms. Deepa Verma
(f) Employee Croup Gratuity Scheme Name of trust
Trustees Relaxo Footwears Limited Employee Croup Gratuity Scheme
Note 10 Fair Value Measurements
The Fair Value of the assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, otherthan in forced or liquidation sale.
The following methods, assumptions and valuation technique were used to estimate the Fairvalues
a) The Carrying amounts of Cash and cash equivalents, Other bank balances, Trade receivables, Trade payables, Borrowings and Other financial assets and liabilities are considered same as theirfair value due to their short term nature.
b) Financial Assets and Liabilities with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the counterparty.
c) The Management assessed that fairvalues of above financial assets and liabilities approximate their carrying value due to amortised cost being calculated based on the Effective Interest Rates.
d) The fair value of cross currency Interest rate swaps is determined as the present value of the estimated future cash flows based on observable yield curves.
e) The fairvalue of forward exchange contracts and currency swaps is determined using forward exchange rates at the Balance Sheet date.
Fair Value Hierarchy
This section explains the judgements and estimates made in determining the fairvalues of the financial instruments that are recognised and measured at fairvalue & amortised cost for which fairvalues are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed as per Ind AS 113-âFair Value Measurementâ. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Inputs otherthan quoted prices included within Level 1 that are observable forthe asset or liability, either directly or indirectly.
Level 3: Unobservable inputs forthe asset or liability.
The below table provides comparision by class of Carrying amount and Fair Value of the Companyâs Financial Instruments along with Fair Value Hierarchy.
Note 11 Corporate Social Responsibility
Company implements its CSR activities through a registered society, namely Relaxo Foundation which focuses on bringing change in the lives of underprivileged communities surrounding Relaxo Plants. The thrust area of the Relaxo Foundation is âEducation & Skill Developmentâ, and âHealth & Hygieneâ with particularfocus on women, children and youth.
Company has formed a CSR committee under Section 135 of the Companies Act 2013 for implementation of CSR policy.
Note 12 The Micro, Small and Medium Enterprises Development Act, 2006
The Information regarding Micro and Small Enterprises as defined undertheâ The Micro, Small and Medium Enterprises Development Act, 2006â (âThe Actâ) has been determined to the extent such parties have been identified on the basis of information received by the Company (Refer Note 22). 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 13 Segment Reporting
Operating Segment
Based on guiding principles given in Ind AS 108 on âOperating Segmentsâ, the Companyâs business activity falls within a Single Operating Segment namely, âFootwear and Related Productsâ, hence, the disclosure requirements relating to âOperating Segmentsâ of Ind AS 108 are not applicable.
Note 14 Authorisation for Issue of Financial Statements
The Financial Statements were authorised for issue by the Board of Directors at their meeting held on 11th May, 2018.
Note 15 Rounding off
Figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than Rs. 50,000/-.
Note 16 Regrouped, Recast and Reclassified
Previous year figures have been regrouped wherever necessary.
Note 17 Transition to Ind AS
These are the first financial statements of the Company prepared in accordance with Ind AS.
The accounting policies set out in Note 36 have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017 and in the preparation of an opening Ind AS Balance Sheet as at 1st April, 2016 (the date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with Accounting Standards notified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP) and other relevant provisions of the act.
Exemptions
Ind AS 101 allows fi rst-time adopters exemptions of certain requirements under Ind AS. The Company has applied the following exemptions:
Deemed cost for Property, Plant and Equipment, Capital work-in-progress and Intangible assets
Ind AS 101 permits a first-time adopterto elect to continue with the carrying value for all of its property, plant and equipment & capital work-in-progress as recognised in the financial statements as at the date of transition to Ind AS, measured as per IGAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for Intangible Assets & Intangible Assets under Development covered by Ind AS 38. Accordingly, the Company has elected to measure the above mentioned assets at IGAAP carrying value.
Exceptions
Estimates
On assessment of estimates made under the IGAAP financial statements, the Company has concluded that there is no necessity to revise the estimates under Ind AS, as there is no objective evidence of an error in those estimates. However, estimates that were required under Ind AS but not required under IGAAP are made by the Company forthe relevant reporting dates reflecting conditions existing as at that date.
Classification and measurement of financial assets
The Company has classified and measured the financial assets on the basis of facts and circumstances that exist atthedateoftransitiontolndA5. De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopterto apply the de-recognition provisions of Ind A5109 prospectively for transactions occurring on or after the date of transition to Ind A5. However, Ind AS 101 allows a first-time adopterto apply the de-recognition requirements in Ind AS 109 retrospectively from a date of entityâs choosing provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting forthose transactions.
The Company has elected to apply the de-recognition provisions of Ind AS109 prospectively from the date of transition to Ind AS.
An explanation of how the transition from IGAAP to Ind AS has affected the Companyâs financial position and financial performance is set out in the followingtables and notes.
Footnotes to the first time adoption of Ind AS
a) Property, Plant and Equipment
Under IGAAP, leasehold land pertaining to windmill was shown under this head. The same Is accounted for as an operating lease under Ind AS. Therefore, the net carrying amount of such leasehold land as at 31st March, 2017 amounting to 70.28 crore (1st April, 2016 7 0.31 crore) has been classified under other non current and current assets. Other non current and current assets as at 31st March, 2017 have increased by 7 0.2G crore (1st April, 2016 7 0.29 crore) and 7 0.02 crore (1st April 2016 7 0.02 crore) respectively. Further, depreciation on such leasehold land amounting to 70.02 crore was reclassified from depreciation and amortisation expense to other expenses. There is no impact on equity or profit and loss.
b) Derivatives
Under IGAAP, the premium on forward contracts was amortised as expense over the tenure of the contract. Further, the net mark to market losses on derivative financial instruments, as at the date of balance sheet, were recognised in the statement of profit and loss and the net gains, if any, were ignored. Under Ind AS, such derivative financial instruments are to be recognised at fairvalue and the changes are recognised in the statement of profit and loss. Therefore, unamortised premium on forward contracts as at 31st March, 2017 amounting to 7 0.10 crore (1st April, 2016 7 0.19 crore) under other current assets has been de-recognised and provision for mark to market loss on outstanding derivative instruments with firm commitments as at 31st March,2017amountingto 71.10 crores (1st April, 2016 7 0.68 crore) classified undershortterm provisions has been de-recognised.
Underlnd AS, non current derivative assets as at 31st March,2017 amounting to 7 0.77 crore (1st April, 2016 7 5.52 crores), current derivative assets as at 31st March,2017 amounting to 7 3.05 crores (1st April 2016 7 5.96 crores) and current derivative liabilities as at 31st March,2017 amounting to 7 2.00 crores (1st April, 2016 71.21 crores) have been recorded.
Further, the associated non current borrowings as at 31st March,2017 have increased by 7 1.13 crores (1st April, 2016 7 6.87 crores) and other financial liabilities- current borrowings as at 31st March,2017 have increased by 7 3.43 crores (1st April, 2016 7 6.89 crores).
As a result of the above adjustments, profit fortheyear ended 31st March, 2017 increased by 7 2.03 crores and total equity as at 31st March, 2017 decreased by 7 0.73 crore (1st April, 2016 7 2.76 crores).
c) Expected Credit Loss on Trade Receivables
Under IGAAP, the Company created provision for doubtful debts when loss event indicators are visible. Under Ind AS, allowances for doubtful trade receivables has been determined based on Life time Expected Credit Loss Model (ECL). As a result, trade receivables as at 31st March, 2017 decreased by 7 0.53 crore (1st April, 2016 Nil). Consequently, total equity as at 31st March, 2017 decreased by 70.53 crore (1st April, 2016 Nil) and profit for the year ended 31st March, 2017decreased by 7 0.53 crore.
d) Deferred Tax
Under ICAAP, deferred tax was recognized using the Income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind A512 requires entities to account for deferred tax using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind A512 approach has resulted in various transitional adjustments which lead to temporary differences which were not required under IGAAP. The impact on deferred tax liabilities (net) as at 31st March, 2017 is a decrease of Rs. 2.84 crores (1st April, 201G Rs. 3.75 crores). The deferred taxfortheyear ended 31st March, 2017 reduced by Rs. 0.31 crore and the impact of deferred taxon other comprehensive income (OCI) is Rs. 1.22 crores.
e) Proposed Dividend
Under IGAAP, proposed dividend is recorded as a liability in the period to which it relates irrespective of when it is declared. Under Ind AS, proposed dividend is recognised as a liability in the period in which it is declared by the Company .Therefore, the proposed dividend, including the dividend distribution tax on such dividend as at 1st April, 2016 amounting to Rs. 8.67 crores has been de-recognised. Consequently, the total equity as at 1st April, 2016 has increased by an equivalent amount.
f) Deferred Revenue
Under IGAAP, the Company created a provision toward its liability for gift schemes. Under Ind AS, the consideration received is allocated between the products sold and gift schemes. The fair value of gift schemes is deferred and recognized as revenue (along with cost of gift schemes) when the obligation is actually redeemed by the customer or at the expiry of time period of the scheme. Therefore, provision for sales promotion schemes as at 31st March, 2017 amounting to Rs. 15.39 crores (1st April, 2016 Rs. 11.21 crores) has decreased with a corresponding increase in othercurrent liabilities.
g) Revenue from Operations
Under IGAAP, certain discounts and incentives to customers were disclosed as an expense in the statement of Profit and Loss. Under Ind A5, such expenses have been netted off from revenue. Further, under IGAAP, sale of goods was presented net of excise duty. However, under Ind AS, sale of goods includes excise duty and excise duty on sale of goods is separately presented on the face of statement of Profit and Loss. As a result, revenue for the year ended 31st March, 2017 is lower by Rs. 87.87 crores, other expenses have decreased by Rs. 108.69 crores and excise duty on sale of goods amounting to Rs.20.82 crores is separately disclosed. There is no impact on total equity or Profit and Loss.
h) Remeasurement of Defined Benefit Plan
Both under IGAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under IGAAP, the entire cost, including actuarial gains and losses, are charged to Profit and Loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in employee benefits expense with a corresponding debit or credit to retained earnings through other comprehensive income (OCI). Thus, the employee benefits expense increased by Rs. 3.51 crores for the year ended 31st March, 2017 and remeasurement gains on defined benefit plan of Rs. 2.29 crores (net of tax) has been recognized in other comprehensive income (OCI). There is no impact on total equity as at 31st March 2017.
i) Share Based Payments
Under IGAAP, the cost of equity settled employee share based payment plan was recognised using the Intrinsic value method wherein the difference between market price and exercise price was nil. Under Ind AS, the cost of equity settled employee share based payment plan is recognised based on fair valuation method using an appropriate pricing model over the vesting period. Accordingly, employee benefits expense forthe year ended 31st March, 2017 increased by Rs. 1.32 crores. There is no impact on total equity since the amount i.e. Rs. 3.16 crores as at 31st March, 2017 (1st April, 2016 Rs. 2.80 crores) has been recognised within equity.
j) Other Comprehensive Income
Under IGAAP, the Company has not presented other comprehensive income (OCI) separately. Items of income and expense that are recognised in âother comprehensive incomeâ includes remeasurement of defined benefit plan. Further, IGAAP Profit is reconciled to total comprehensive income as per Ind A5.
k) Retained Earnings
Retained Earnings as at 1st April, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
I) Statement of Cash Flows
The transition from IGAAP to Ind AS has not had a material impact on the Statement of Cash Flows.
Mar 31, 2017
1 Company Information
Relaxo Footwears Limited (âthe Companyâ) is a market leader in the Footwear Industry. The company has âstate of the artâ manufacturing facilities at Bahadurgarh (Haryana), Bhiwadi (Rajasthan) and Haridwar (Uttarakhand). The selling arrangements are through its Wholesale Distribution, Export, Modern Trade and Company operated Retail Network.
The Company is a Public Limited Company domiciled & incorporated in India and its shares are listed at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Note 2 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.
The lease rentals charged during the year for cancellable/non-cancellable leases relating to rent of building premises as per the agreements and future minimum lease payments under non-cancellable operating leases are as follows:
Note 3 Disclosure on Employee Benefits
Disclosure is hereby given in pursuant to Accounting Standard (AS) 15 - âEmployee Benefitsâ
(a) Defined Contribution Plan
During the year, the Company has recognised the following amount in Statement of Profit and Loss (Refer Note 22)
(b) Defined Benefit Plan - Leave Encashment (Unfunded)
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 inflation, seniority, promotion and other relevant factors.
It includes Leave Encashment for KMP as it is worked out for the Company as a whole.
The above information is certified by Actuary. The estimates of escalation in salary take into account inflation, seniority, promotion and other relevant factors.
It includes Gratuity for KMP as it is worked out for the Company as a whole.
The weighted average remaining contractual life for the stock options outstanding as at 31st March, 2017 is 4.05 years (Previous year 4.99years). The Weighted Exercise Price for options outstanding as at 31st March, 2017 is Rs.245.46 (PreviousyearRs.218.53).
The weighted average Fair Value of stock options granted during the year ended on 31st March, 2017 is Rs. 168.98 per option (Previous year Rs. 270.14 per option).
The Black Scholes valuation model has been used for computing weighted average fair value considering the following inputs:
The Company measures the cost of ESOP using Intrinsic Value method. Had the Company used Fair Value method to determine compensation, its Profit after Tax and Earnings per Share would have changed to the amounts indicated below:
Note 4 The Micro, Small and Medium Enterprises Development Act, 2006
The Information regarding Micro and Small Enterprises as defined under theâ The Micro, Small and Medium Enterprises Development Act, 2006â (âThe Actâ) 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 5 Capital Work-in-Progress
Capital Work-in-Progress includes pre-operative expenses of Rs. 3.36 Crores (Previous year Rs. 0.56 Crore).
Note 6 Segment Reporting
The Companyâs business activity falls within a single Geographical and single Business segment, viz. âFootwear and Related Productsâ, therefore, segment information is not required to be disclosed under Accounting Standard (AS) -17, âSegment Reportingâ issued by The Institute of Chartered Accountants of India (ICAI).
Note 7 Events occurring after the Balance Sheet date
The Board of Directors has recommended a dividend at the rate off 1.00 per share of face value of Rs.1/- each aggregating to Rs. 14.46 Crores (including Corporate dividend distribution tax of Rs. 2.45 Crores) for the year ended 31st March, 2017.
Note 8 Figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than Rs.50,000/-.
Note 9 Figures for the previous year have been rearranged/regrouped wherever necessary in terms of current yearâs grouping.
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.
Mar 31, 2011
1. Contingent Liabilities not provided for :-
(Rs. in Lacs)
Particulars As on As on
31.03.2011 31.03.2010
- Outstanding Letters of Credit 699.17 31.92
- Outstanding Bank Guarantees 38.50 52.39
- Statutory Liabilities that may arise
in respect of matters in appeal. 95.50 51.32
- Surety Bonds given to Govt. Authorities 28.23 28.23
- The Company has obtained licenses under the Export Promotion Capital
Goods (EPCG) Scheme for importing capital goods at the concessional
rate of custom duty. As per the scheme, the company is obliged to
export eight times of duty saved in next 8 years. The total export
obligation is Rs. 5457.68 lacs against total duty saved of Rs. 682.21
lacs (Previous year - Rs. 3395.76 lacs against duty saved of Rs. 424.47
lacs).
- 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.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. 182.90 lacs (Previous Year - Rs.
1012.46 lacs).
3. Plant situated at A-1130 & 1130(A), Industrial Area, Phase à III,
Bhiwadi was damaged in fire on 18.10.2008. Claim of above loss has been
settled with Insurer & balance final payment of Rs. 1280.33 lacs was
received during the year in addition to Adhoc payment of Rs. 900.00
lacs received in previous year. Difference in estimated claim and
actual settlement in respect of assets provided in earlier years has
been accounted for by increasing/reducing the respective assets as the
case may be, as the Insurance policy was with reinstatement clause.
Difference in case of repairs & stocks has been accounted for in Profit
& Loss Account.
4. Capital Work in progress includes Nil (Previous year - Rs. 1.23
lacs) on account of preoperative expenses incurred during the year. It
includes Advances to Suppliers of Rs. 34.41 lacs (Previous Year - Rs.
131.28 lacs).
5. The company has changed the method of valuation of Raw
material/Packing material from First-in-First-Out (FIFO) to Weighted
Average method due to SAP (ERP) implementation during the year. The
Stores, Spares & Consumables also are being inventorised which earlier
were being treated as consumed during the year of purchase.
Consequently, the value of inventory and profit for the year are higher
by Rs. 144.95 lacs.
6. Certain balances of Sundry Debtors,Creditors and Advances from
Customers are subject to confirmation.
7. ADDITIONAL INFORMATION REQUIRED UNDER SCHEDULE VI OF THE COMPANIES
ACT ,1956
8. Provision for Income Tax includes Wealth Tax provision of Rs. 3.15
lacs (previous year Rs. 2.79 lacs ).
9. Related party relationships/transactions warranting disclosures
under AS-18 issued by "The Institute of Chartered Accountants of India"
are as under:
1) Names and relationship of the parties.
Name Relationship
Relaxo Rubber Private Limited Associate company
Marvel Polymers Private Limited Associate company
Relaxo International Associate concern
Nu wave Shoes Associate concern
Patel Oil Mills Associate concern
2) Key Management Personnel & their relatives
Key Management Personnel
Mr. Ramesh Kumar Dua Managing Director
Mr. Mukand Lal Dua Whole time Director
Mr. Nikhil Dua Whole time Director
Relatives
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
Sh. Ramesh Kumar Dua (H.U.F.) H.U.F.
Sh. Mukand Lal Dua (H.U.F.) H.U.F.
Sh. Mool Chand Dua (H.U.F.) H.U.F.
10. Segment Information: The Company has identified two reportable
segments viz. footwear & power. Segments have been indentified and
reported taking into account nature of products and services, the
differing risks and returns and the internal business reporting
systems. The accounting policies adopted for segment reporting are in
line with the accounting policy of the Company with following
additional policies for segment reporting.
Revenue and expenses have been identified to a segment on the basis of
relationship to operating activities of the segment. Revenue and
expenses which relate to enterprise as a whole and are not allocable to
a segment on reasonable basis have been disclosed as "Unallocable".
Segment assets and segment liabilities represent assets and liabilities
in respective segments. Investments, tax related assets and other
assets and liabilities that cannot be allocated to a segment on
reasonable basis have been disclosed as "Unallocable".
11. Employee Benefits
A. Defined Contribution Plan
During the year, the company has recognised the following amount in the
Profit & Loss Account.
B. 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.
12. The interest includes Rs. 9.47 lacs (Previous year - Rs. 21.13
lacs) paid to Managing Director.
13. Interest includes Rs. 188.30 lacs (Previous year - Rs. 73.85 lacs)
on account of Foreign Exchange Flucuations.
14. Extraordinary items include loss of Rs. Nil (Previous Year - Rs.
1.22 lacs) incurred due to fire.
15. Prior period adjustments include write back of provisions no
longer required Rs. 7.73 lacs (Previous Year - Rs. 7.16 lacs net)
16. 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.
17. Previous year figures have been recast/regrouped wherever
necessary to Conform to Current Year Classification.
Mar 31, 2010
1. Contingent Liabilities:-
i. Letter of credit outstanding with bank Rs. 31.92 lacs. (Previous
Year - nil).
ii. Bank Guarantees aggregating to Rs 52.39 lacs given to various
Authorities (Previous year-Rs 10.91 lacs).
iii. The company has executed surety bonds in favour of Sales Tax
Assessing Authority on behalf of suppliers
of materials aggregating Rs 28.23 lacs (Previous Year-Rs.28.23 lacs).
iv. The Company has obtained licenses under the Export Promotion
Capital Goods (EPCG) Scheme for
importing capital goods at the concessional rate of custom duty. As per
the scheme, the company is obliged to export eight times of duty saved
in next 8 years. The total export obligation is Rs. 3395.76 lacs
against total duty saved of Rs. 424.47 lacs ( Previous year -
Rs.1898.32 lacs against duty saved of Rs. 237.29 lacs).
v. Estimated amount of contracts remaining to be executed on capital
account and not provided for
amounted to Rs 1012.46 lacs (Previous Year- Rs 1041.69 lacs).
vi. Claim against the company not acknowledged as debts:-
a) The Sales Tax Department has raised a total demand of Rs 41.01 lacs
(Previous Year-Rs 41.87 lacs) in
respect of tax, interest & penalty. The company has filed appeals with
Appellate Authorities which are pending for disposal. The company is of
the view that the same will be decided in its favour, hence no
provision has been made.
b) An amount of Rs 7.32 lacs (Previous Year à Rs 7.32 lacs ) provided
in the books against Entry Tax in Rajasthan has not been paid. An
appeal has been filed before The Honble High Court & is pending for
disposal.
c) ESI Department has raised demand of Rs 10.31 lacs (Previous Year-Rs.
10.31 lacs) in respect of dispute in ESI Contribution & Interest. The
company has filed an appeal with the Appellate Authorities. The company
is of the view that the same will be decided in its favour, hence no
provision has been made.
d) 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.
2. Plant situated at A-1130 & 1130(A), Industrial Area, Phase à III,
Bhiwadi was damaged in fire on 18.10.2008. Assets destroyed in fire
amounting to Rs. 1265.60 lacs & Rs. 756.76 lacs towards cost of Gross
Block & Net Block respectively have been reduced from the Fixed Assets.
Plant was made partially operational from May 2009 and was fully
operational from February 2010. Adhoc payment of insurance claim of Rs.
900.00 lacs in respect of fixed assets & stocks was received during the
year. The balance claim for loss of assets on reinstatement basis is in
process. Therefore, difference in claim receivable provided in the
books and actual receipt will be adjusted at the time of actual
settlement by the Insurance Company.
3. Capital Work in progress includes Rs. 1.23 lacs ( Previous year-
Rs. 26.07 lacs) on account of preoperative expenses incurred during the
year.
4. Interest includes Rs. 3.34 lacs loss (previous year- Rs. 8.88 lacs
gain) on Foreign Currency derivative transactions entered during the
year by the company.
5. Certain balances of Sundry Debtors, Creditors and Advances from
Customers are subject to confirmation.
6. Provision for Income Tax includes Wealth Tax provision of Rs. 2.79
lacs (previous year Rs. 2.49 lacs ).
7. Related party relationships/transactions warranting disclosures
under AS-18 issued by "The Institute of Chartered Accountants of India"
are as under:
1) Names and relationship of the parties :-
Name Relation Ship
Relaxo Rubber Private Limited Associate Company
Marvel Polymers Private Limited Associate Company
Relaxo International Associate Concern
Nu wave Shoes Associate Concern
Patel Oil Mills Associate Concern
Gumber Dyeing & Printing Works Associate Concern
Shri Mool Chand Dua Memorial Society } Entities where Key Management
Personnel
Shrimati Ram Ditti Dua Memorial
Society } Exercise Significant influence.
2) Key Management Personnel & their relatives :-
Key Management Personnel
Mr. Ramesh Kumar Dua Managing Director
Mr. Mukand Lal Dua Whole time Director
Mr. Nikhil Dua Whole time Director
Relatives
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
Sh. Ramesh Kumar Dua (H.U.F.) H.U.F.
Sh. Mukand Lal Dua (H.U.F.) H.U.F.
Sh. Mool Chand Dua (H.U.F.) H.U.F.
8. Segment Information: The Company has identified two reportable
segments viz. footwear & power. Segments have been identified and
reported taking into account nature of products and services, the
differing risks and returns and the internal business reporting systems.
The accounting policies adopted for segment reporting are in line with
the accounting policy of the Company with following additional policies
for segment reporting.
- Revenue and expenses have been identified to a segment on the basis
of relationship to operating
activities of the segment. Revenue and expenses which relate to
enterprise as a whole and are not allocable to a segment on reasonable
basis have been disclosed as "Unallocable".
Segment assets and segment liabilities represent assets and liabilities
in respective segments. Investments, tax related assets and other
assets and liabilities that cannot be allocated to a segment on
reasonable basis have been disclosed as "Unallocable".
SECONDARY SEGMENT
The company is having its major operation in India. Therefore,
Geographical Area wise Segment Reporting is not required.
9. 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 :
The escalation clause includes escalation at various periodic levels
ranging from 0% to 15%, includes option of renewal from 1 to 5 years
and there are no restrictions imposed on lease agreements.
10. Employee Benefits
a) Defined Contribution Plan
During the year, the company has recognised the following amount in the
Profit & Loss Account.
b) 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.
11. The interest includes Rs. 21.13 lacs ( Previous year - Rs. 27.53
lacs) paid to Managing Director.
12. Capital Work in Progress includes Advances to Suppliers of
Rs.131.28 lacs ( Previous Year - Rs. 703.47 lacs )
13. Extraordinary items include loss of Rs. 1.22 lacs ( Previous Year
- Rs. 40.32 lacs ) incurred due to fire.
14. Prior period adjustments include write back of provisions no
longer required Rs. 15.23 lacs & service tax liability of earlier year
Rs. 8.07 lacs ( Previous Year - nil)
15. 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.
16. Previous year figures have been recast/regrouped wherever
necessary to Conform to Current Year Classification.
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