Relaxo Footwears Ltd

Dear Members,

The Board of Directors ("Board") of your Company has pleasure in presenting 40^th Annual Report on the Company's business and operations together with the Audited Financial Statements for the Financial Year 2023-24:

1. Company Overviews

Incorporated in 1984, Relaxo is the largest footwear manufacturer in India, serving the nation since four decades, and is today ranked among the top 500 Most Valuable Companies with its shares listed at National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).

Relaxo is a Fortune 500 (India) Company, synonymous with quality products at affordable prices, manufacturing slippers, sandals, sports and casual shoes at 9 State of the Art manufacturing facilities at Bahadurgarh (Haryana), Bhiwadi (Rajasthan) and Haridwar (Uttarakhand).

Your Company's most popular brands - Relaxo, Sparx, Flite & Bahamas are a leader in their space.

Having a pan India distribution footprint, the Company also operates 405 Exclusive Brand Outlets (EBOs), with availability on all major e-commerce portals as well. Further, during the year, Relaxo also launched its first Consumer experience store in Delhi.

2. Financial Highlights

In compliance with the provisions of the Companies Act, 2013 ("Act") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has prepared its financial statements as per the Indian Accounting Standards (Ind AS) for the Financial Year 2023-24. The financial highlights of the Company's operations are as follows:

(Rs in Crores)

a) Financial

The key highlights of the Company's financial performance during the Financial Year 2023-24 are given below:

• Revenue from operations increased by 4.72% to H2914.06 Crores from H2782.77 Crores in the last Financial Year.

• EBITDA is at H406.59 Crores as compared to H335.78 Crores in last Financial Year.

• Net profit is at H200.47 Crores as compared to H154.47 Crores in the last Financial Year.

• Net profit margins is 6.88%.

• Relaxo's Exclusive Brand Outlets (EBOs) were 405 as on March 31, 2024.

In FY24, we observed a modest revenue growth accompanied by improvement in profitability. This was primarily driven by a considerable increase in sales of open-footwear, demonstrating the effectiveness of our strategic measures to regain our market share. Our profit margins were largely boosted by the subdued raw material prices partially offset by increased fixed expenses.

To establish a direct connect with consumers, we have focused on retailing the products at various marketplaces alongside our Company's website. Additionally, we have also implemented a loyalty program through ‘Relaxo Parivaar' Mobile application, establishing direct connect and offering incentives to retailers.

• Moderate growth despite subdued business sentiments.

• Subdued raw material prices and operational efficiencies resulted into improved margins.

b) Non-Financials

Despite the challenges of last year, your Company is on track to achieve its long-term goals.

Sales & Marketing

During the fiscal year 2024, your Company executed numerous initiatives that have resulted into notable achievements. Our team has undergone a paradigm shift and have spearheaded the implementation of DMS 2.0, which has enhanced secondary tracking precision at the distributor level. Additionally, we have implemented innovative hardware management strategies that have amplified our market presence and impact.

Also, during the year ‘Relaxo Parivaar' Mobile application, a tech-driven retail outreach program has facilitated quick and direct interactions between the Company and retailers. The application provides real-time updates on new products, pricing, and other vital information which are important for retailers. This application enabled us to build strong relationships with our retail partners and enhance our presence in the market.

Also the Company invested in digital marketing strategies which has assisted the brands to be closer to the targeted consumers. This innovative approach has allowed consumers to shop offline and online simultaneously. Thus, attracting a significant number of customers, leading to increased sales and customer satisfaction.

Our organization will continue to undertake constructive initiatives that drive growth and success.

Retail

During the year, we enhanced our payment options and digital invoicing capabilities. Our continued focus on a paperless billing experience not only ensured a safer shopping experience for our customers but also helped us in contributing towards an eco-friendly environment by saving ~ 115 trees.

We prioritized customer engagement by introducing innovative initiatives such as personalized promotions, targeted events and interactive social media campaigns. Our collaboration with local influencers and effective use of geo-targeting technologies helped us in increasing our brand visibility and attract more foot traffic to our stores.

In FY24, we remained committed to expanding our retail network. We have 405 outlets as on March 31, 2024.

Exports

Your Company has a presence in 30+ countries across six continents. This success attests your ability to effectively penetrate diverse markets with products that are renowned for superior quality, durability and value. A strong global brand presence is a testament to our commitment towards excellence and our expansion into new geographies such as LATAM and North Africa is a commendable achievement.

Furthermore, your Organization's recent milestone of achieving 3 Star Export House status is a noteworthy accolade that reflects your commitment to delivering high-quality products and services.

Procurement

The current market trend indicates a moderate demand for raw materials, leading to a balanced pricing strategy; however, during Q3 of FY24, logistic challenges arose concerning imported materials such as polymers, owing to the Red Sea issue. Nevertheless, we proactively managed the situation by maintaining adequate stock levels to fill the gap caused by delayed shipments.

The implementation of the BIS standard on footwear also posed a significant challenge, where your Company worked closely with vendors to develop BIS-compliant materials within the stipulated time to meet the government's timelines for certification. As we speak, the Company is using all BIS-compliant materials and successfully producing ISI-marked footwear.

We remain steadfast in our commitment to deliver high-quality products that meet our customers' expectations while adhering to industry standards.

Product Development

To flourish in the increasing dynamic and competitive business landscape, product development plays a pivotal role in driving innovation and determining success.

For understanding the latest trends and consumer preferences, it is essential to closely monitor the same to ensure successful product development; which is accomplished through constant market feedback from channel partners and consumers, which enables the launch of the right product at the right time.

There will be a strong emphasis on developing innovative products that stand out in the market through technological advancements, unique features and enhanced consumer's experience.

Manufacturing and Quality

The Company has demonstrated its commitment towards social responsibility by implementing green fuel technology and transitioning to PNG for boilers used across all locations. The Company has also converted existing DG sets to run in hybrid mode using CNG and diesel to reduce pollution and conserve energy; resulting into cost savings and increased productivity.

To further promote energy conservation and cost rationalization, the Company has replaced conventional motors with servo motors and installed VFDs. The Company has obtained BIS certification for all of its footwear manufacturing plants and has actively collaborated with BIS technical committees. The Company has also established a state-of-the-art facility viz. ‘Innovation Centre' to support research and development of footwear.

In its pursuit of continuous improvement in customer satisfaction, the Company has obtained various certifications,

• ISO 9001:2015 (Quality Management System)

• ISO 14001:2015 (Environmental Management System)

• ISO 45001:2018 (Occupational Health and Safety Management System)

• ISO 27001:2013 (Information Security and Management Service)

These certifications are a testament to the Company's unwavering commitment towards providing top- quality products and services to its customers.

Information Technology

In the year 2023-24, we stabilized our IT ERP system viz. S4HANA, which is widely considered to be the best-in-class technology solution available. This has enabled us to establish a robust digital foundation and make our organization well-prepared for the digital roadmap. As a result, we have been able to align our manufacturing, distribution and retail operations on a single platform, resulting into enhanced efficiency.

Furthermore, we have implemented an IT security system to safeguard all our sensitive information. We closely collaborated with industry experts to develop and deploy advanced defensive tools to ensure the data security. This has resulted in enhanced confidence of our employees, customers and various stakeholders.

Our digitization efforts have been a resounding success and we remain committed at the forefront of technology to continually improve our business operations and customer experience.

Human Resource

Throughout the year, several initiatives were implemented to enhance the human resource capabilities of the Company. The Sales Capability Programme, "Xcelerate" was launched to bolster the productivity and skill set of the sales force. This program was designed to cater the development needs of the participants and provide customized training including app-based modules, classroom sessions and personalized coaching. Additionally, the front-line sales force was trained to use sales automation and tracking systems effectively, thereby increasing their efficiency.

The Company has invested heavily in the development of its employees across all levels. To strengthen the managerial talent pipeline, the Company sourced management and graduate trainees from top- tier business schools and IITs. They underwent an intensive and structured induction program, which will help in succession planning process at various levels. These initiatives are expected to ensure that the Company is well-prepared for future in terms of talent readiness.

To retain critical talent, the Company offered Employee Stock Options under the RFL ESOP Plan 2014 to the eligible employees. This long-term incentive will motivate and encourage employees to remain with the Company and continue to contribute to its success.

4. Management Discussion and Analysis Report

Pursuant to Regulation 34(2)(e) of the Listing Regulations, a detailed Management Discussion and Analysis Report for the Financial Year under review is presented in a separate section, forming part of the Annual Report.

The state of the affairs of the business along with the financial and operational developments has been discussed in detail in the Management Discussion and Analysis Report.

5. Dividend

In line with the Dividend Distribution Policy of the Company, the Board of your Company in its meeting held on May 9, 2024 has recommended a final dividend @300% equivalent to H3.00/- (Rupees Three only) per equity share of HI/- (Rupee One Only) each for the Financial Year 2023-24 payable to those members whose names appear in the Register of members / list of beneficiaries as on August 22, 2024 i.e. the record date. The total final dividend payout will amount to H74.68 Crores (Rupees Seventy-Four Crores and Sixty-Eight Lakhs only). The payment of final dividend is subject to the approval of members in the Company's ensuing Annual General Meeting ("AGM").

Pursuant to the Finance Act, 2020 read with The Income Tax Act, 1961, the dividend paid or distributed by a Company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after deduction of tax at source at the prescribed rates. For the prescribed rates of various categories, the shareholders are requested to refer to the Finance Act, 2020 and amendments thereto.

6. Dividend Distribution Policy

As per Regulation 43A of the Listing Regulations, top 1000 listed companies are required to formulate a Dividend Distribution Policy. Accordingly, your Company had accordingly formulated the Dividend Distribution Policy, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and / or retaining profits earned by the Company.

The amended Dividend Distribution Policy is available on the website of the Company at the link https:// dxkvlfvncvqr8.cloudfront.net/media/file/pdf/download file/dividend-distribution-policv-1708068799.pdf

7. Transfer to Reserves

We have transferred H125 Crores (Rupees One Hundred and Twenty-Five Crores Only) to the general reserve from the net profits of the Company. An amount of H93.88 Crores (Rupees Ninety-Three Crores and Eighty-Eight Lacs only) is proposed to be retained in the Statement of Profit & Loss of the Company.

8. Public Deposits

Your Company has not invited or accepted any deposits within the meaning of Sections 73 and 74 of the Act read with The Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), from public during the year under review. Therefore, no amount of principal or interest was outstanding, as on the balance sheet closure date.

Further, no amount was remaining unpaid / unclaimed at the end of the year nor there has been any default in repayment of the deposits or payment of interest thereon.

Details of the deposits which are not in compliance with the requirements of Chapter V of the Act : Not Applicable

9. Compliance with Secretarial Standards

During the year under review, the Directors state that applicable Secretarial Standards issued by The Institute of Company Secretaries of India ("ICSI"), i.e., Secretarial Standard-1 ("SS-1") and Secretarial Standard-2 ("SS-2"), relating to ‘Meetings of the Board of Directors' and ‘General Meetings, respectively, have been duly complied with by the Company.

10. Subsidiary/ Joint Venture/ Associate Company

Your Company does not have any subsidiary, joint venture or associate Company, as at the end of the Financial Year under review. Further, during the year, no Company became or ceased to be Subsidiary, Joint Venture or Associate Company.

11. Changes in the nature of Business

There was no change in the nature of business of the Company during the Financial Year under review.

Authorised Share Capital:

The authorized share capital of your Company as on March 31, 2024 stood at H51,00,00,000 (Rupees Fifty-One Crores Only) divided into 51,00,00,000 (Fifty-One Crores) Equity Shares of HI/- (Rupee One Only) each.

Issued, Subscribed and Paid-up Share Capital:

As on March 31, 2024, the issued, subscribed and paid- up share capital of the Company was H24,89,38,586/- (Rupees Twenty-Four Crores Eighty-Nine Lacs Thirty-Eight Thousand Five Hundred and Eighty Six Only) consisting of equity shares of face value of H1.00/- each divided into 24,89,38,586 (Twenty Four Crores Eighty Nine Lacs Thirty Eight Thousand Five Hundred and Eighty Six) equity shares of H1/- (Rupee One Only) each.

13. Disclosure relating to Remuneration of Directors and Key Managerial Personnel (KMP)

Your Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board will be able to leverage different skills, qualifications, professional experiences, perspectives and backgrounds; which is necessary for achieving sustainable and balanced development. The Nomination and Remuneration Committee had adopted principles for identification of Key Managerial Personnel (KMPs), Senior Management Personnel (SMPs), Executive Directors and Non-Executive Directors including Independent Directors. Pursuant to Section 134(3)(e) and Section 178(3) of the Act, the Nomination and Remuneration Policy adopted by the Board also sets out the criteria for determining Qualifications, Positive Attributes and Independence while evaluating a person for appointment / re-appointment as Director or KMP or SMP with no discrimination on the grounds of gender, race or ethnicity, nationality or country of origin and also to determine the framework for remuneration of Directors, KMP, Senior Management Personnel and other Employees. The said policy was amended during the year under review by the Board in order to align with the extant applicable regulations. The detailed Nomination and Remuneration Policy is available on the website of the Company at the link https://dxkvlfvncvqr8.cloudfront.net/media/file/pdf/downloadfile/nomination-and-remuneration-policv-1708068892.pdf

14. Particulars of Employees

The information and disclosure required under Section 197(12) of the Act read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any Statutory modification(s) or re-enactment(s) thereof for the time being in force), in respect of Directors and Employees of your Company is set out in Annexure-A to this report.

15. Directors and Key Managerial Personnel

The Composition of the Board of Directors is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the Listing Regulations; with an optimum combination of Executive Director, Non-Executive Non- Independent Directors, Independent Directors and Women Directors.

Pursuant to the Section 152(6) of the Act read with the Articles of Association of the Company, Mr. Nikhil Dua, Whole Time Director (DIN: 00157919) and Mr. Gaurav Kumaar Dua, Whole Time Director (DIN: 09674786) of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. The Board has recommended his re- appointment to shareholders.

The members of the Company in their 39^th AGM held on August 24, 2023 through Video Conferencing ("VC") / Other Audio Visual Means ("OAVM") have approved the re-appointment of the following Directors: -

a) Mr. Ramesh Kumar Dua (DIN - 00157872) as Managing Director of the Company for a further period of 5 (five) years with effect from April 1, 2024, liable to retire by rotation.

b) Mr. Mukand Lal Dua (DIN - 00157898) as a Whole Time Director of the Company for a further period of 5 (five) years with effect from April 1, 2024, liable to retire by rotation.

c) Mr. Nikhil Dua (DIN - 00157919), as a Whole Time Director of the Company for a further period of 3 (three) years with effect from October 1, 2023 till September 30, 2026, liable to retire by rotation.

d) Mr. Gaurav Kumaar Dua (DIN - 09674786) as a Whole Time Director of the Company for a further period of 3 (three) years with effect from October 1, 2023 till September 30, 2026, liable to retire by rotation.

The Board of Directors in its Meeting held on MarcRs 29, 2024, on the recommendation of Nomination and Remuneration Committee subject to the approval of members through Postal Ballot have approved the Appointment of the followings:

1. Appointment of Mr. Yogesh Kapur (DIN: 00070038) as Non-Executive Independent Director of the Company; not liable to retire by rotation, to hold office for a period of 5 (five) consecutive years with effect from April 1, 2024 on such terms and conditions as set out in Explanatory Statement annexed to Postal Ballot notice dated May 9, 2024;

2. Appointment of Mr. Raj Kumar Jain (DIN: 01741527) as Non-Executive Independent Director of the Company; not liable to retire by rotation, to hold office for a period of 5 (five) consecutive years with effect from April 1, 2024 on such terms and conditions as set out in Explanatory Statement annexed to Postal Ballot notice dated May 9, 2024;

3. Appointment of Mr. Sushil Batra (DIN: 09351823) continuing Chief Financial Officer of the Company, as a Whole Time Director designated as Executive Director of the Company for a period of 3 (three) consecutive years with effect from April 1, 2024 on such terms and conditions as set out in Explanatory Statement annexed to the Postal Ballot notice dated May 9, 2024.

Further, the Board of Directors in its meeting held on May 9, 2024 on the recommendation of Nomination and Remuneration Committee of the Company has approved the Appointment of Ms. Richa Arora (DIN: 07144694) as Non-Executive Women Independent Director of the Company; not liable to retire by rotation, to hold office for a first term with effect from May 9, 2024 for a period of 5 (five) consecutive years till May 8, 2029 (both days inclusive) on such terms and conditions as set out in Explanatory Statement annexed to the Postal Ballot notice dated May 9, 2024.

A brief resume of the Director(s) proposed to be appointed / re-appointed, his/her expertise in specific functional areas, names of companies in which he/she holds directorship, Committee membership/s / Chairmanship/s and shareholding etc. as stipulated under the Secretarial Standard-2 issued by the ICSI and Regulation 36(3) of the Listing Regulations, are appended as an Annexure to the Notice of the Postal Ballot or the Notice of ensuing AGM.

As on March 31, 2024, Mr. Ramesh Kumar Dua (DIN - 00157872) - Managing Director, Mr. Mukand Lal Dua (DIN - 00157898) - Whole-Time Director, Mr. Nikhil Dua (DIN-00157919) - Whole-Time Director, Mr. Gaurav Kumaar

Dua (DIN:09674786)- Whole-Time Director, Mr. Sushil Batra (DIN - 09351823) - CFO, and Mr. Ankit Jain, Company Secretary, are the Key Managerial Personnel (KMP) of your Company.

During the year under review; below changes occurred in the Board of Directors of the Company:

1. Mr. Ramesh Kumar Dua (DIN: 00157872), being Managing Director of the Company was designated as Chairman of the Company with effect from April 1, 2024.

2. Mr. Deval Ganguly (DIN: 00152585) resigned from the position of Whole Time Director of the Company w.e.f. closure of the business hours on March 31, 2024.

3. Mr. Pankaj Shrimali (DIN: 00013142) and Mr. Vivek Kumar (DIN: 00206819) ceased from the position of Independent Director w.e.f. closure of business hours on March 31, 2024 due to completion of 2^nd term as Independent Director of the Company.

Further, no directors / KMPs other than mentioned above were appointed or resigned during the year.

Therefore, your Board is maintained with optimum combination of Executive and Non-Executive/Independent Directors. As on March 31, 2024, the Company has 1 (One) Managing Director, 4 (Four) Whole Time Directors and 5 (Five) Non-Executive Independent Directors including 1 (One) Woman Independent Director. The composition of the Board represents an optimal mix of Professionalism, Knowledge, Experience and Expertise in varied fields enabling it to discharge its responsibilities and provide effective leadership for long term vision with highest standards of the governance.

Further, none of the Directors other than Mr. Ramesh Kumar Dua, Managing Director, Mr. Mukand Lal Dua, Mr. Nikhil Dua and Mr. Gaurav Kumaar Dua, Whole time Directors of the Company are related inter-se, in terms of Section 2(77) of the Act including Rules framed there under.

16. Declaration by Independent Directors

The Company has received necessary declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Company has also received from them (Independent Directors), declaration of the compliance of Rule 6 (1) & 6 (2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, regarding online registration with the Indian Institute of Corporate Affairs ("IICA") at Manesar, for inclusion/ renewal of the name in the data-bank of the Independent

Directors. The Independent Directors have also confirmed that they have complied with the Company's Code for Independent Directors prescribed in Schedule IV of the Act.

17. Statement regarding opinion of the Board with regard to Integrity, Expertise and Experience (including the proficiency) of the Independent Directors appointed during the year

With regard to Integrity, Expertise and Experience (including the Proficiency) of the Independent Directors appointed/re-appointed during the FY24, the Board of Directors has taken on record the declarations and confirmations submitted by the Independent Directors and is of the opinion that all the Independent Directors are individuals of integrity and possess relevant expertise & experience and their continued association as Directors will be of immense benefit in the best interest of the Company. With regard to the proficiency of the Independent Directors, ascertained from the online proficiency self-assessment test conducted by the Institute (IICA), as notified under Sub-Section (1) of Section 150 of the Act, the Board of Directors has taken on record, the declarations submitted by Independent Directors that they are exempt from appearing in the test.

18. Annual Evaluation

In terms of the provisions of Section 178 of the Act read with Rules issued thereunder and Regulation 19 read with Part D of Schedule II of the Listing Regulations, the Board of Directors in consultation with Nomination and Remuneration Committee, has formulated a framework recommended by the renowned consultants containing, inter-alia, the criteria for the performance evaluation of the Entire Board of the Company, its Committees and individual directors, for FY24.

During the reporting year, customized questionnaires were circulated to all the Board members in order to enhance the effectiveness of the evaluation process. The Board evaluation process was carried out to ensure that the Board and various Committees of the Board have appropriate composition and they have been functioning collectively to achieve the business goals of the Company. Directors were evaluated on their contribution in Board / Committee meetings, guidance & support to the management outside Board / Committee meetings and other parameters as specified by the Nomination and Remuneration Committee of the Company.

The Board's functioning was evaluated on various aspects including inter alia degree of fulfillment of key responsibilities, Board structure & composition, role & accountability, management oversight, risk management, culture & communication, frequency and effectiveness of meetings.

The Committees of the Board were assessed on the basis of degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of the meetings.

The performance evaluation of Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman of the Board and of the Non-Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole.

The Board of Directors expressed their satisfaction with the evaluation process.

19. Familiarization Programme

In terms of Regulation 25(7) of the Listing Regulations, the Company familiarizes its Directors about their role and responsibilities at the time of their appointment through a formal letter of appointment. The format of the letter of appointment / re-appointment is available on our website at the link https://www.relaxofootwear.com/terms- conditions-of-independent-director

Sessions are conducted in the meetings of the Board and its various Committees on the relevant subjects such as strategy, Company's performance, financial performance, internal financial controls, risk management, plant's performance, retail, products, finance, human resource, capital expenditure, CSR, statutory and regulatory Compliances etc. All efforts are made to keep the Independent Directors aware of major developments being taken place in the industry, the Company's business model and relevant changes in the law governing the Company's business. The details of the programs/sessions conducted for familiarization of Independent Directors can be accessed on the Company's website at the link https:// dxkvlfvncvqr8.cloudfront.net/media/file/pdf/download file/familiarisation-report-2023-2024-1722251751.pdf

20. Number of Meetings of the Board

During FY24, the Board of Directors met 5 (five) times on May 10, 2023, July 24, 2023, November 1, 2023, January 31, 2024 and MarcRs 29, 2024; the details of which are provided in the Report on Corporate Governance, which forms part of this Annual Report. The intervening period between any two consecutive Board meetings was within the maximum time gap prescribed under the Act, Regulation 17 of the Listing Regulations and SS-1 issued by the ICSI.

21. Committees of the Board

During FY24, the Board had 5 (five) Committees, namely:

- Audit Committee;

- Nomination and Remuneration Committee;

- Stakeholders' Relationship Committee;

- Risk Management Committee; and

- CSR & ESG Committee.

All the recommendations made by the Committees of the Board including the Audit Committee were accepted by the Board. A detailed update on the Board, its composition, detailed charter including terms & reference of various Board Committees, number of Board & Committee meetings held during FY24 and attendance of the Directors at each meeting is provided in the report on Corporate Governance, which forms part of the Annual Report.

22. Director's Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Act, the Directors to the best of their knowledge and belief, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed, along with the proper explanation relating to material departures;

b) such accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) Internal Financial Controls have been laid down to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

23. Statutory Auditors

In terms of the provisions of Section 139 of the Act read with provisions of the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s Gupta & Dua, Chartered Accountants (ICAI Firm Registration No. -003849N) were appointed as the Statutory Auditors of the Company for a period of 5 (five) years from the conclusion of 38^th AGM till the conclusion of 43^rd AGM of the Company.

24. Auditors' Report

The Board has duly examined the Statutory Auditors' Report to the accounts of the Company, which is self- explanatory. The Auditor's Report for FY24 does not contain any qualification, reservation or adverse remarks. The observation of the Statutory Auditors on the financial statements have been suitably explained in the Notes to Accounts and does not require any further clarification.

25. Details in respect of Frauds reported by the auditors under section 143(12) other than those which are reportable to the Central Government

During the Financial Year under review, no fraud is reported by the Auditors of the Company under Section 143(12) of the Act.

26. Maintenance of Cost Records and Cost Audit

The Company does not fall under the category prescribed under sub-section (1) of Section 148 of the Act and Rules 3 and 4 of the Companies (Cost Records and Audit) Rules, 2014 (as amended from time to time) to whom the requirements of maintenance of Cost Records and the requirement of Cost Audit is applicable.

27. Internal Auditors

Pursuant to the provisions of Section 138 of the Act, the Company has appointed Mr. Rohit Khaneja as In-house Internal Auditors of the Company; also SNB India Pvt. Ltd. has been appointed as the Internal Auditors of the Company for Financial Year 2024-25 in co-sourcing model.

28. Secretarial Auditors

Pursuant to the provisions of Section 204(1) of the Act read with Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and Regulation 24A of the Listing Regulations, the Board had appointed M/s Chandrasekaran Associates to conduct the Secretarial Audit of the Company for the Financial Year 2023-24 as recommended by the Audit committee.

The Secretarial Audit Report for the Financial Year 2023-24 is annexed as Annexure-B which forms part of this report. The Secretarial Audit Report for the Financial Year ended on March 31, 2024 does not contain any qualification, reservation or adverse remarks except few e-forms which have been delayed filed by the Company with the Registrar of Companies. The Board of Directors of the Company evaluated the facts and advised to file the statutory forms in due time.

29. Annual Return

Pursuant to Section 134 and Section 92(3) of the Act read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the annual return as on March 31, 2024 will be available on the website of the Company at the link https://dxkvlfvncvqr8.cloudfront.net/media/flle/ pdf/download file/mgt--7-%E2%80%93-31-1720678228.pdf

30. Contracts and Arrangements with Related Parties

During FY24, the Company has entered into various transactions with related parties. All the Contracts / arrangements / transactions entered into by the Company with its related parties during the Financial Year under review were in the ordinary course of the business, on the arm's length basis and were undertaken in compliance with the applicable provisions of the Act and the Listing Regulations.

During the Financial Year under review, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy of the Company on materiality of Related Party Transactions that would have required Shareholders' approval under Regulation 23 of the Listing Regulations.

The updated Policy on materiality of Related Party Transactions is available on the website of the Company at the link https://dxkvlfvncvqr8.cloudfront.net/media/flle/pdf/downloadfile/policy-on-materialitv-of-related-partv- transactions-1646633287.pdf

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all the transactions between the Company and Related Parties.

The particulars of the material related party transactions are provided in Form AOC-2 as Annexure-C, which forms part of this Report. Further, disclosures as per Ind-AS 24 have been made in Note 39 of the financial statements for the year ended on March 31, 2024.

31. Details of Loans, Guarantees & Investments

In terms of Section 186 of the Act and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed under Note 4 of the Financial Statements for the financial year ended on March 31, 2024, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.

32. Risk Management

Your Company has a Risk Management Policy consistent with the provisions of the Act and Listing Regulations. Risk management process has been established across the Company and is designed to identify, assess and frame a response to threats that may affect the achievement of its objectives. Further, it is embedded across all the major functions and revolves around the objectives of the organisation.

The Board of Directors has constituted its Risk Management Committee to assist the Board in fulfilling its responsibilities relating to evaluation and mitigating of various risks exposures that potentially impact the Company.

The Board advised by the Risk Management Committee, wherever appropriate, regularly reviews the significant risks and decisions that could have a material impact on the Company. There are no risks which, in the opinion of the Board, threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Report.

As per SEBI Listing Regulations, the Risk Management Committee shall meet at least twice in a year. The details pertaining to the composition, meetings and terms of reference of the Risk Management Committee are included in the Report on Corporate Governance which forms part of the Annual Report.

33. Corporate Social Responsibility (CSR) and its Committee

Your Company has firm belief and commitment towards the collective development of all the stakeholders, especially, people at bottom of the pyramid and consider it as a pre-requisite for the sustainability of the business. Thus, CSR is not just compliance for the Company, but is an opportunity to contribute towards nation building through well-defined professional approach.

In compliance with the provisions prescribed under Section 135 of the Act, your Company had constituted a CSR & ESG Committee of the Board. The Board of Directors laid down the CSR Policy, covering the objectives, focus areas, governance structure and monitoring & reporting framework among others. The said policy was amended during the year under review by the Board in order to align with the extant applicable regulations.

The amended Corporate Social Responsibility Policy is available on the website of the Company at the link https:// dxkvlfvncvqr8.cloudfront.net/media/file/pdf/download file/corporate-social-responsibilitv-policv-1716526796.pdf

During the year, the Company has continued its work on the long term CSR projects undertaken in FY24; the details of CSR activities are given in Annexure-D to this report.

The details of the composition of the CSR & ESG Committee, CSR policy, CSR initiatives and activities undertaken during the year are given in the Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 and explained in detail in Annexure-D to this report.

The details pertaining to the composition, meetings and terms of reference of the CSR & ESG Committee are included in the Report on Corporate Governance which forms part of the Annual Report.

As per the requirement under Section 135 of the Act read with relevant Rules made thereunder, the composition of the CSR Committee & CSR Policy and Projects approved by the Board are available on the website of the Company at https:// dxkvlfvncvqr8.cloudfront.net/media/flle/pdf/download flle/corporate-social-responsibility-policy-1716526796.pdf

34. Composition of Audit Committee

In compliance with the provisions of Section 177 of the Act and Regulation 18 of the Listing Regulations, the Board of Directors of the Company had constituted the Audit Committee. The details pertaining to the composition, meetings and terms of reference of the Committee are included in the Report on Corporate Governance, which forms part of the Annual Report.

35. Vigil Mechanism

Your Company has established Vigil Mechanism/ Whistle Blower Policy for Directors and employees of the Company as required under Section 177 (9) of the Act and Regulation 22 of the Listing Regulations.

This Policy has been established with a view to provide a tool for Directors and Employees of the Company to report to the management / Board on the genuine concerns including unethical behavior, actual or suspected fraud or violation of the Code or the Policy. This Policy outlines the procedures for reporting, handling, investigating and deciding on the course of action to be taken in case inappropriate conduct is noticed or suspected.

This Policy also provides adequate safeguards against victimization of Director(s) / Employee(s) who avail the mechanism and also provides direct access to the Chairman of the Audit Committee in exceptional cases. The Audit Committee is authorized to oversee the Vigil Mechanism / Whistle Blower Policy of the Company.

The Company has not received any complaint during the year. Your Company hereby affirms that no person of the Company has been denied access to the Chairman of the Audit Committee.

The Policy is available on the website of the Company at the link https://dxkvlfvnrvqr8.rlnudfrnnt.net/media/flle/pdf/ download flle/vigil---merhanism---pnliry-1fin758n77fi.pdf

36. Business Responsibility and Sustainability Report

In terms of the amended Regulation 34 of the Listing Regulations, the Business Responsibility and Sustainability Report for FY24, describing the initiatives taken by the Company for environmental, social and governance perspective, forms part of this Annual Report.

37. Policy on Prevention of Insider Trading

In accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has in place following policies/codes which are revised from time to time according to applicable laws or as per need:

• Code for Prohibition of Insider Trading

• Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("UPSI")

• Policy and procedures for inquiry in case of leak of UPSI/ suspected leak of UPSI

• Policy on Penalties/Actions against Violation of Insider Trading Norms

All compliances related to the Code of Conduct for Prohibition of Insider Trading are being managed through a web-based portal installed by the Company. The Code, inter alia, lays down the procedures to be followed by Designated Person(s) (DP) while trading/ dealing in Company's shares and sharing UPSI. The Code includes the obligations and responsibilities of DPs, obligation to maintain the digital database and mechanism for prohibition of insider trading and handling of UPSI.

The said code is available on the website of the Company at https://dxkvlfvncvqr8.cloudfront.net/ media/file/pdf/download file/policy-on-code-of- insider-trading-1654173168.pdf

38. Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("SHWWP Act")

The Company is an equal employment opportunity employer and is committed to provide a safe and conducive work environment that enables women employees to work without fear of prejudice, gender bias and sexual harassment. The Company always believes in transparency, honesty, equality, antiracism and fairness to all stakeholders including women employees of the Company. They have right to be treated with dignity and as per the Company's framework. Harassment of any kind including sexual harassment is forbidden. The Company has ‘Zero Tolerance' approach towards any act of sexual harassment.

As required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has farmed the policy on Prevention of Sexual Harassment of Women at workplace and matters connected therewith and has also complied with the provisions related to the Constitution of Internal Committee (IC).

An IC is available at all the Plants and Offices of the Company as per the provisions of the law. The IC is responsible for redressal of complaints related to sexual harassment. The Company also conducts sessions for sensitization / awareness and also organizes the quarterly meetings to create a free and fair working environment. These matters are also being reported to the Audit Committee, if any.

No complaint was received by IC during FY24. It is our constant endeavor to ensure that we provide harassment free, safe and secure working environment to all employees.

39. Significant and Material Litigations / Orders

During the Financial Year under review, there were no significant and material orders passed by the regulator(s) or court(s) or tribunal(s) impacting the going concern status and Company's operations in future.

40. Credit Ratings

During FY24, ICRA has reaffirmed long term rating of the Company at [ICRA] AA (pronounced as ICRA Double A). The Outlook on the long-term rating was Stable.

Additionally, ICRA has also reaffirmed short term rating of the Company at [ICRA] A1+ (pronounced as ICRA A one plus) which is the highest rating for the category.

41. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The details related to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed as Annexure-E which forms part of this Report.

42. Employees Stock Option Plan

Presently, the Company has one Employee Stock Option Plan 2014 ("RFL ESOP PLAN-2014"/ "ESOP Plan"). This Plan helps to attract and retain talented employees in the Company and boost their morale. The Nomination and Remuneration Committee administers and monitors, the Company's ESOP Plan.

During the Financial Year under review, 53,300 (Fifty-Three Thousand and Three Hundred) options were granted to the employees and 1,18,500 (One Lac Eighteen Thousand and Five Hundred) options were cancelled due to resignation or retirement as per the Company's ESOP Plan.

Pursuant to the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, a disclosure with respect to ESOP Plan of the Company as on March 31, 2024, is available on the website of the Company at the link https://dxkvlfvncvqr8.cloudfront.net/media/file/pdf/ download file/esop-2023-24-1722245562.pdf

A certificate from M/s. Chandrasekaran Associates, Company Secretaries, Secretarial Auditor of the Company, with respect to the implementation of the Company's ESOP Plan would be made available to the members at the ensuing AGM. A copy of the same shall also be available for inspection at the registered office of the Company during business hours.

ESOP scheme of the Company is in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The details as per the requirements of ESOP Regulations are annexed as Annexure-F which forms part of this Report.

43. Material Changes and Commitments

There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year ended on March 31, 2024 and as on the date of this Report.

44. Internal Financial Controls

Your Company has put in place adequate Internal Financial Controls (‘IFC') with reference to the financial statements commensurate with the size, scale and complexity of operations.

IFC ensure orderly and efficient conduct of the business, including adherence to company's policies, safeguarding of assets, prevention and detection of frauds, errors, accuracy, completeness of accounting records and timely preparation of reliable financial information.

IFC framework is independently evaluated by the external agency apart from periodic evaluation by In-House Internal Audit function for necessary improvement, wherever required. Based on the results of such assessments, no reportable material weakness or significant deficiencies in the design or operation of Internal Financial Controls was observed.

Further, the Statutory Auditors of the Company also reviewed ICOFR (‘Internal Financial Controls over Financial Reporting') of the Company as on March 31, 2024 and issued their report, which forms part of the Independent Auditor's report.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening them. The Company has a strong Management Information System, which is an integral part of the control mechanism. The Company continues to strengthen its risk management and internal control capabilities by improving its policies and procedures.

The Managing Director and CFO Certificate included in the Corporate Governance Report confirms the existence of effective internal control systems and procedures in the Company. The Audit Committee reviews the effectiveness of the IFC framework of the Company.

45. Managing Director and CFO Certification

The Certificate required under Regulation 17(8) read with Part B of Schedule II of the Listing Regulations, duly signed by the Managing Director and CFO was placed before the Board is enclosed with the Annual Report.

Declaration by Managing Director under Regulation 34(3) read with Schedule V of the Listing Regulations in respect of compliance with the Company's Code of Conduct is annexed with Corporate Governance Report which forms part of this Annual Report.

46. Transfer of Unclaimed Shares / Dividend

As per the provisions of Regulation 39(4) read with Schedule VI of the Listing Regulations, the unclaimed shares lying in the possession of the Company, are required to be dematerialized and transferred into a special demat account held by the Company.

Accordingly, unclaimed shares lying with the Company have been transferred and dematerialized in an ‘Unclaimed Suspense Account' of the Company. This account is being held by the Company purely on behalf of the shareholders entitled for these equity shares.

The summary of ‘Unclaimed Suspense Account' during the year is given hereunder:

The voting rights on the equity share(s) in the suspense account shall remain freeze till the rightful owners of such equity share(s) claim their equity share(s). Any corporate benefit in terms of securities accruing from such equity shares viz. Bonus shares and split etc., shall also be credited to such demat suspense account or unclaimed suspense account, as applicable in accordance with existing provisions.

In compliance with the statutory provisions, during the Financial Year under review, the Company transferred unclaimed dividend amounting to H1,98,991.20 (Rupees One Lac Ninety-Eight Thousand Nine Hundred Ninety- One and Twenty Paisa Only) from the Final Dividend for the Financial Year 2015-16 to the Investor's Education and Protection Fund ("IEPF"). The Company has also uploaded the details of unpaid and unclaimed amounts lying with the Company as on August 24, 2023 (date of last AGM) on the website of the Company at the link https://dxkvlfvncvqr8.cloudfront.net/media/file/pdf/download file/relaxo iepf 2 validated file 31032023-1703572281.pdf

Pursuant to the provisions of Section 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, during the FY24, the Company transferred 12,227 (Twelve Thousand Two Hundred and Twenty-Seven) equity shares to demat account with IEPF for which dividend was unpaid / unclaimed for 7 (seven) consecutive years.

The shareholders whose unpaid dividend / shares are transferred to the IEPF may request the Company / Registrar and Transfer Agent as per the applicable provisions in the prescribed form, I EPF-5, for claiming the unpaid dividend / shares from IEPF. The process and online application form (Form IEPF - 5) as prescribed by the Ministry for claiming back the shares/ dividends are available on the website of MCA at www.iepf.gov.in. Mr. Ankit Jain, Company Secretary & Compliance Officer of the Company acts as the Nodal Officer as per the provisions of IEPF. The contact details of the Nodal Officer are available on the website of the Company at the link https://www. relaxofootwear.com/investor-support

47. Corporate Governance

The Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. A detailed report on Corporate Governance, pursuant to the requirements of Regulation 34 of the Listing Regulations, forms part of the Annual Report.

A certificate from M/s Gupta & Dua, Chartered Accountants, (ICAI Firm Registration No. -003849N), Statutory Auditors of the Company, confirming the compliance of the Corporate Governance, as stipulated under the Listing Regulations, is attached to the Report of Corporate Governance as Annexure-G.

48. Details of Non-Compliance with regard to Capital Market During the Last Three Years

There was no instance of non-compliance related to capital market during the last three years. No penalty / stricture was imposed on the Company by the Stock Exchange(s) or SEBI or any other statutory authority on such matters.

49. Other Disclosures

a) The Company affirms that the Annual Listing fees for the Financial Year 2024-25 to National Stock Exchange of India Ltd. and BSE Ltd. is duly paid.

b) The Board of Directors in its Meeting held on May 9, 2024, had sought the approval of members through Postal Ballot for:

S. Particulars N.

1. Adoption of amended Memorandum of Association of the Company

2. Adoption of new set of Articles of Association of the Company

3. Appointment of Mr. Yogesh Kapur (DIN: 00070038) as an Independent Director of the Company

4. Appointment of Mr. Raj Kumar Jain (DIN: 01741527) as an Independent Director of the Company

5. Appointment of Mr. Sushil Batra (DIN: 09351823) Continuing Chief Financial Officer, as an Executive Director of the Company

6. Appointment of Ms. Richa Arora (DIN: 07144694) as an Independent Director of the Company

50. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with it's status at the end of the financial year

Not Applicable

51. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof

Not Applicable.

52. Acknowledgement

We take this opportunity to thank our employees for their dedicated service and contribution to the Company.

We would like to place on record, sincere thanks and appreciation to all our customers, partners, vendors, investors, bankers and also wish to thank the government authorities and other regulatory bodies for their co- operation, support, encouragement and assistance extended to the Company during the year.