Through this agreement, RLL got the opportunity to manufacture and market a line of renowned brands under the USL umbrella in Rajasthan. Under that lease, RLL has the rights to procure raw materials, process the same at a designated (owned or tie-up) unit, bottle the finished goods in the IMFL cases, and sell to the specified authorities. The obligations include taking care of all the taxation, excise duty, and other miscellaneous expenses. The agreed royalty payment to the Franchisor (USL) by the Franchisee (RLL) was also clearly specified and agreed upon in the lease. To achieve our objective RLL registered Job work or principal-to-principal agreements with various bottlers who possessed excise licenses to manufacture IMFL in Rajasthan.
RLL Entered into an agreement with AMAF in principal to-principal model wherein AMAF was holding an excise license to manufacture the IMFL. Being the licensee, all the rights of purchasing, manufacturing, and selling of IMFL were held with AMAF only. However, all the cost implications were on the part of RLL. Sales and purchases were retained by the AMAF and profits had to be transferred to RLL on year end. However, the AMAF would be getting theirJob work charges in the form of Bottling Charges in whole processing. This model was followed for the F.Y. 2017-18.
However, from the financial year 2018-19, RLL went into a Complete Sub-Lease Agreement with AMAF wherein the excise license of AMAF got Sub-leased to RLL along with the premises of AMAF. From there on AMAF is only getting fixed Lease Rent against the premises and sub-lease of license. RLL manages all the activities including the purchases, sales, and manufacturing activities. The Sub-lease agreement with AMAF was executed for 15 years
since the inception of the operations of RBBPL, have been in a sub-lease arrangement model wherein the whole show is managed by RLL only. All the purchases, sales, manufacturing, and other necessary activities are in the books of RLL. This agreement was executed in the F.Y……..
Like the first-year agreement with AMAF, RLL entered into an agreement with RKL in a principal-to-principal model, wherein RKL holds an excise license to manufacture the IMFL. Being the licensee, all the rights of purchasing, manufacturing, and selling of IMFL were held with RKL only. However, all the cost implications were on the part of RLL. Sales and purchases were retained by the AMAF RKL and profits were supposed to be transferred to RLL on year end. However, the RKL should be getting their Job work charges in the form of Bottling Charges in whole processing. The model started during the F.Y. 2017-18 and has continued for all these years. Hence, all the sales and purchases are in the books of RLL only due to being the brand owner of franchised brands.
First Floor, 7/22 D Tilak Nagar Kanpur – 208001, UP
402 Dev Corpora, Cadbury Junction. Thane (West) Mumbai -400602, Maharashtra
Jaipur 4h Floor,Raghukul Tower, Khatipura Mod Sirsi Road, Jaipur-302021, Rajasthan