Radico Khaitan Ltd
Directors Reports
Dear Members,
The Board of Directors of Radico Khaitan Limited ("Radico
Khaitan" or the "Company") is delighted to present the Thirty-Ninth Annual
Report on the business and operations together with the Audited Standalone and
Consolidated Financial Statements of the Company for the year ended March 31, 2023.
RESULTS OF OPERATIONS AND STATE OF COMPANY'S AFFAIRS
( ` in Crore)
|
|
Standalone |
|
Consolidated |
|
|
FY2023 |
FY2022 |
Change (%) |
FY2023 |
FY2022 Change (%) |
| Revenue from Operations (Gross) |
12,743.9 |
12,470.5 |
2.2% |
12,743.9 |
12,470.5 |
2.2% |
Revenue from Operations (Net) |
3,142.8 |
2,868.0 |
9.6% |
3,142.8 |
2,868.0 |
9.6% |
| Other Income |
9.4 |
11.0 |
(14.6)% |
9.4 |
7.4 |
27.2% |
Income from Operations |
3,152.2 |
2,879.0 |
9.5% |
3,152.2 |
2,875.4 |
9.6% |
| Raw Materials Consumed |
1,827.9 |
1,577.4 |
15.9% |
1,827.9 |
1,577.4 |
15.9% |
| Employee Benefit Expenses |
168.9 |
141.3 |
19.6% |
168.9 |
141.3 |
19.6% |
| Selling & Distribution Expenses |
329.0 |
313.7 |
4.9% |
329.0 |
313.7 |
4.9% |
| Depreciation |
70.9 |
64.9 |
9.3% |
70.9 |
64.9 |
9.3% |
| Finance Cost |
22.1 |
13.1 |
68.8% |
22.1 |
13.1 |
68.8% |
| Other Operating Expenses |
458.5 |
433.4 |
5.8% |
458.6 |
433.4 |
5.8% |
Total Expenses |
2,877.4 |
2,543.8 |
13.1% |
2,877.5 |
2,543.8 |
13.1% |
Profit Before Tax |
274.8 |
335.3 |
(18.0)% |
274.7 |
331.6 |
(17.2)% |
| Current Tax |
68.9 |
87.2 |
(21.0)% |
68.9 |
87.2 |
(21.0)% |
| Previous Year Adjustments |
0.0 |
(0.6) |
|
0.0 |
(0.6) |
|
| Deferred Tax |
1.5 |
(3.5) |
|
1.5 |
(3.5) |
|
Net Profit |
204.4 |
252.2 |
(18.9)% |
204.4 |
248.5 |
(17.8)% |
| Net Income Margin (%) |
6.5% |
8.8% |
|
6.5% |
8.7% |
|
| Share in profit of Joint Venture |
- |
- |
|
16.0 |
14.7 |
8.8% |
Other Comprehensive Expenses /
(Income) |
1.9 |
(0.3) |
|
2.0 |
(0.3) |
|
Total Comprehensive Income |
202.6 |
252.5 |
(19.8)% |
218.4 |
263.6 |
(17.1)% |
| Total Comprehensive Income |
6.4% |
8.8% |
|
6.9% |
9.2% |
|
| Margin (%) |
|
|
|
|
|
|
| Basic EPS (`) |
15.3 |
18.9 |
(19.0)% |
16.5 |
19.7 |
(16.3)% |
Gross Profit |
1,314.9 |
1,290.6 |
1.9% |
1,314.9 |
1,290.6 |
1.9% |
Gross Margin (%) |
41.8% |
45.0% |
|
41.8% |
45.0% |
|
EBITDA |
358.2 |
402.7 |
(11.1)% |
358.2 |
402.7 |
(11.1)% |
EBITDA Margin (%) |
11.4% |
14.0% |
|
11.4% |
14.0% |
|
| Paid-up Equity Share Capital |
26.7 |
26.7 |
0.0% |
26.7 |
26.7 |
0.0% |
| (Face Value of ` 2 each) |
|
|
|
|
|
|
| Reserves & Surplus |
2,125.3 |
1,960.1 |
8.4% |
2,181.2 |
2,000.1 |
9.1% |
| Transfer to General Reserve |
- |
- |
|
- |
- |
|
| Proposed Dividend |
40.1 |
40.1 |
- |
40.1 |
40.1 |
- |
PERFORMANCE REVIEW |
|
|
|
Revenue from Operations |
|
|
|
Volume (Million Cases) |
FY2023 |
FY2022 |
Change (%) |
| Prestige & Above |
9.35 |
7.81 |
19.8% |
| Regular & Others |
15.62 |
18.02 |
(13.3)% |
Total Own Volume |
24.97 |
25.83 |
(3.3)% |
| Prestige & Above as % of Total |
37.5% |
30.2% |
|
| Royalty Brands |
3.26 |
0.53 |
|
Total Volume |
28.24 |
26.35 |
7.1% |
Revenue Break up (` in Crore) |
FY2023 |
FY2022 |
Change (%) |
| IMFL (A) |
2,501.4 |
2,308.4 |
8.4% |
| Prestige & Above |
1,496.2 |
1,207.7 |
23.9% |
| Regular & Others |
978.0 |
1,091.9 |
(10.4)% |
| Others |
27.3 |
8.8 |
|
| Non IMFL (B) |
641.4 |
559.7 |
14.6% |
Revenue from Operations (Net) (A+B) |
3,142.8 |
2,868.0 |
9.6% |
| Prestige & Above as % of Total IMFL
Revenue |
59.8% |
52.3% |
|
| IMFL as % of Total Revenue |
79.6% |
80.5% |
|
The Company has delivered another year of strong IMFL volume growth led
by Prestige & Above category which increased by 19.8%. This was driven by our core
brands such as Magic Moments vodka, which crossed 5 million cases sale during FY2023,
Morpheus Premium brandy and 1965 Spirit of Victory Premium rum, both of which crossed a
million-case mark. Magic Moments is now the seventh largest vodka brand globally.
Driven by our premiumization focus, during the year, we have delivered
stronger growth in the top end of the Prestige & Above brands. Luxury portfolio
consisting of Rampur Indian Single Malt and Jaisalmer Indian Craft Gin has grown by 110%
in FY2023; Semi-Luxury consisting of Royal Ranthambore whisky, Morpheus Blue super premium
brandy and Magic Moments Dazzle vodka has grown 73%; and Super Premium segment consisting
of Morpheus super premium brandy and Magic Moments Verve vodka has grown 53%.
Prestige & Above brands have shown 150% volume growth compared to
the pre-pandemic levels. This has led to a sustainable improvement in the realization per
case, which increased from ` 773 in FY2019 to ` 991 in FY2023.
Gross Profit
Gross Margin declined from 45.0% in FY2022 to 41.8% in FY2023.
Continued commodity inflation resulted in gross margins compression, particularly in the
non-IMFL business where we have recently received price increases. Given a favorable
product mix change, the impact of cost push on the gross margin of the IMFL business was
mitigated to a large extent. Although we have experienced stabilizing trend in certain
commodities towards the end of the fiscal year, overall commodity scenario remains
volatile.
EBITDA
EBITDA decreased by 11.1% y-o-y with margins of 11.4% due to the
decline in gross margins.
Finance Cost
Finance Cost for FY2023 increased by 68.8% y-o-y from
` 13.10 Crore to ` 22.12 Crore.
Total Comprehensive Income
Total Comprehensive Income decreased by 19.8% compared to last year to
` 203 Crore.
New Launches
During the year, Radico Khaitan launched a few brands. These brands
will create a unique positioning for themselves in a fashion similar to many of our
previous premium launches.
Sangam World Malt Whisky: Sangam, a name derived from the Hindi
word for "confluence," evokes the image of two powerful rivers merging to form
something greater than the sum of their parts. It was launched in the USA at a retail
price of $64.99 to $69.99 for a 70cl bottle. It will also be launched in the EU, UK,
Singapore, Australia, and Travel Retail with shipments starting from June 2023.
Rampur Indian Single Malt Jugalbandi: In September 2022, Radico
Khaitan launched another expression of Rampur Indian Single Malt, Jugalbandi, a series of
eight Indian single malt cask-strength whiskies. The first two expressions of the
Jugalbandi series were unveiled at the Whisky Live Show in Paris and have been rolled out
to the USA, Singapore, Australia and select travel retail destinations.
Magic Moments Vodka Cocktail: With the increase in the experimental
and experiential approach of consumers, the RTD category has seen exponential growth in
global consumption in the last couple of years. To capitalise upon the growing trend and
Radico Khaitan's market positioning in the vodka industry in India, the Company has
introduced its low alcohol RTD cocktail mixes under the umbrella of the Magic Moments
called Magic Moments Vodka Cocktails. It is made with a vodka base with 4.8% alcohol
content and comes in a can packaging. It is priced ranging from ` 200-250 and is available
in three flavours - Cosmopolitan, Cola, and Mojito.
1965 Spirit of Victory Lemon Dash Premium Rum:
It is a premium variant of 1965 Spirit of Victory dark rum and will
help the Company tap into a new spirit category of white rum. Price ranging from ` 800 to
` 1000 per bottle, it is introduced in 3 states – Uttar Pradesh, Jharkhand and
Orissa in FY2023.
Capital Expenditure: During Q4 FY2023, we successfully commissioned
the dual feed plant at Rampur and started the bottling operations at Sitapur. The
distillery operations of Sitapur are expected to start commercial operations from Q2
FY2024. As we continue to drive our premiumization journey, the availability of additional
grain-based ENA will strengthen our value proposition. The bottling plant at Sitapur
positions us strongly to capitalize on the future growth opportunities in the branded
business.
PERFORMANCE REVIEW (CONSOLIDATED)
Radico Khaitan has a 36% equity stake in Radico NV Distilleries
Maharashtra Limited. Consolidated financials of the Company include share in profit of
this joint venture amounting to ` 16.0 Crore in FY2023 compared with ` 14.7 Crore in
FY2022.
DIVIDEND
The Board of Directors has recommended a final dividend of 150% i.e., `
3 per equity share of ` 2 each fully paid-up Share Capital of the Company (last year
` 3 per equity share of ` 2 each). The payment of dividend is subject
to the approval of the members at the forthcoming Annual General Meeting ("AGM")
and shall be subject to deduction of income tax at source.
The dividend recommended is in accordance with the Company's
Dividend Distribution Policy. The Dividend Distribution Policy of the Company is available
on the Company's website and the same can be accessed at
https://www.radicokhaitan.com/wp-content/
uploads/2019/03/Dividend-Distribution-Policy.pdf.
CAPITAL STRUCTURE
Share Capital
As on March 31, 2023, the Company has Authorized Share Capital of ` 94
Crore consisting of ` 34 Crore Equity Share Capital comprising 17,00,00,000 equity shares
of ` 2 each and ` 60 Crore Preference Share Capital comprising 60,00,000 preference shares
of
` 100 each. The Issued, Subscribed and Paid-up Share Capital of the
Company is ` 26.73 Crore divided into 13,36,73,765 fully paid-up equity shares of ` 2
each.
During the year, the Company has not issued and allotted equity shares
and there has been no change in the share capital of the Company.
Employees' Stock Option Scheme
The Company has an Employees' Stock Option Scheme, 2006
("Scheme 2006"). During the year, there was no material change in the Scheme.
The Scheme 2006 is in compliance with the SEBI (Share Based Employee Benefits)
Regulations, 2014 ("SEBI ESOP Regulations").
During the year under review, no Stock Options were granted and no
equity shares were allotted under the Scheme 2006.
The particulars of the Scheme as required by SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 ("SEBI ESOP Regulations 2021"),
have been placed on the website of the Company and web link of the same is
https://www.radicokhaitan.com/wp-content/uploads/2023/07/ESOP-Disclosure-Annual-Report-2023.pdf
In terms of Regulation 13 of SEBI ESOP Regulations 2021, a Certificate
received from M/s. TVA & Co. LLP, Company Secretaries, Secretarial Auditors, would be
placed before the shareholders at the ensuing AGM.
SUBSIDIARIES, JOINT VENTURES AND
ASSOCIATE COMPANIES
Subsidiaries
Radico Khaitan has one wholly-owned subsidiary namely, Radico Spiritzs
India Private Limited ("Radico Spiritzs") and seven step down subsidiaries
through Radico Spiritzs. Radico Spiritzs holds 100% Equity Shares in the following step
down wholly-owned subsidiaries of the Company:
1. Accomreal Builders Private Limited
2. Binayah Builders Private Limited
3. Compaqt Era Builders Private Limited
4. Destihomz Buildwell Private Limited
5. Equibuild Realtors Private Limited
6. Firstcode Reality Private Limited
7. Proprent Era Estates Private Limited
Joint Venture
The Company has one joint venture, namely, Radico NV Distilleries
Maharashtra Limited ("RNV"). The Company holds a 36% stake in the said joint
venture.
In terms of the Section 129(3) of the Companies Act, 2013 (the
"Act"), the financial results of RNV and wholly-owned subsidiary including step
down subsidiaries are consolidated with the accounts of the Company and the salient
features of the financial statements of RNV and subsidiaries are set out in the prescribed
form AOC-1 and the same is appended as Annexure – A to this report.
In accordance with the provisions of the Act and SEBI (Listing
Obligations and Disclosures Requirements) Regulations, 2015 ("Listing
Regulations") read with Ind AS 110 - Consolidated Financial Statements, Ind AS 28 -
Investments in Associates and Joint Ventures and Ind AS
31 - Interests in Joint Ventures, the consolidated Audited Financial
Statements form part of this Annual Report.
CREDIT RATING
The Company's long-term bank facilities are rated as CARE AA-
(Double A Minus) with a positive outlook and short-term bank facilities are rated CARE A1+
(A One Plus).
CARE AA rated instruments are considered to have a high degree of
safety regarding timely servicing of financial obligations. Such instruments carry very
low credit risk. CARE A1 rated instruments are considered to have a very strong degree of
safety regarding timely payment of financial obligations. Such instruments carry the
lowest credit risk. Modifiers (+/-) reflect the comparative standing within the category.
AUDITORS AND AUDITORS' REPORT
Statutory Auditor
In terms of the provisions of Section 139 of the Act and the Rules made
thereunder, the Shareholders of the Company had, at the 37th AGM, approved the
appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, as Statutory
Auditors of the Company for a term of 5 years i.e. from conclusion of the 37th
AGM till the conclusion of the 42nd AGM of the Company to be held in the year
2026.
Audit Report
The report of the Statutory Auditors for FY2023 along with Notes and
Schedules thereto is enclosed to this Annual Report. The observations made in the
Auditors' Report are self-explanatory and therefore, do not call for any further
comments. The Auditor's Report does not contain any qualification, reservation, or
adverse remark. Further, the Auditors have not reported any fraud under section 143(12) of
the Act.
Cost Auditor
The Board, on the recommendation of the Audit Committee, has approved
the appointment of Mr. R. Krishnan, Cost Accountants, as Cost Auditors, to audit the Cost
Records of the Company for the financial year ending March 31, 2024. In accordance with
the provisions of Section 148 of the Act read with the Companies (Audit and Auditors)
Rules, 2014, the remuneration payable to the Cost Auditors shall be ratified by the
shareholders. Therefore, the Board recommends the remuneration payable to the Cost
Auditors for FY2024 for approval by shareholders at the ensuing AGM.
Cost Records
The Company has maintained the Cost Records as specified by the Central
Government under section 148(1) of the Act.
Secretarial Auditor
The Board has, at its meeting held on May 30, 2022, on recommendation
of the Audit Committee, appointed M/s TVA & Co. LLP, Company Secretaries, to conduct
Secretarial Audit of the Company for the financial year ended March 31, 2023. The
Secretarial Auditors have submitted their report, confirming compliance by the Company of
all the provisions of applicable corporate laws. The Report does not contain any
qualification, reservation, disclaimer or adverse remark. The Secretarial Audit Report is
annexed as Annexure-B to this report. The Board, on the recommendation of Audit
Committee, has re-appointed M/s. TVA & Co. LLP, Company Secretaries, as Secretarial
Auditors of the Company for the financial year ending March 31, 2024.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. Sarvesh Srivastava as Chairman,
Dr. Raghupati Singhania and Mr. Tushar Jain as members. Brief terms of reference, meetings
and attendance of the Audit Committee are included in the Corporate Governance Report
forming part of this Annual Report. During the period under review, all the
recommendations made by the Audit Committee were accepted by the Board of Directors of the
Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Induction, Re-appointment, Retirements and Resignations
In accordance with the provisions of the Act and the Articles of
Association of the Company, Mr. Abhishek Khaitan (DIN: 00772865), Managing Director of the
Company, is liable to retire by rotation at the ensuing AGM and being eligible, o_ered
himself for re-appointment. The Board of Directors has, on the recommendation of the
Nomination, Remuneration and Compensation Committee ("NRC"), recommended the
re-appointment of Mr. Abhishek Khaitan at the ensuing AGM.
During FY2023, Dr. Lalit Khaitan (DIN: 00238222) and Mr. Abhishek
Khaitan (DIN: 00772865) were reappointed as Chairman & Managing Director and Managing
Director, respectively, for a term of five years e_ective from February 20, 2023 and Mr.
Krishan Pal Singh (DIN: 00178560) was re-appointed as Whole-time Director for a term of
three years e_ective from February 20, 2023.
The members had, at the 35th AGM of the Company held on
September 26, 2019, approved the appointment of Ms. Sushmita Singha (DIN: 02284266),
e_ective from April 01, 2019 and Mr. Tushar Jain (DIN: 00053023) and Mr. Sharad Jaipuria
(DIN: 00017049), e_ective from August 08, 2019, as Independent Directors on the Board of
the Company for a first term of 5 (five) years.
The tenure of the Ms. Sushmita Singha will be expiring on March 31,
2024 and Mr. Tushar Jain and Mr. Sharad Jaipuria will be expiring on August 07, 2024.
Therefore, the Board, on recommendation of NRC, proposes the
re-appointments of Ms. Sushmita Singha, Mr. Tushar Jain and Mr. Sharad Jaipuria as
Independent Directors, for a second term of five years, e_ective from April 01, 2024 and
August 08, 2024 respectively, for the approval of the members at the ensuing AGM. Brief
resumes of the Directors seeking re-appointments along with the disclosures specified
under Regulation 36(3) of the Listing Regulations are provided in the Notice of the 39th
AGM.
During the year under review, except as stated above, there was no
change in the Directors or Key Managerial Personnel of the Company.
The Company has a Nomination, Remuneration and Compensation Committee
and it has formulated the criteria for determining the qualifications, positive attributes
and independence of a Director (the "Criteria"). The Criteria includes that a
person to be appointed to the Board of the Company should possess in addition to the
fundamental attributes of character and integrity, appropriate qualifications, skills,
experience and knowledge.
Meeting of Independent Directors
The Company's Independent Directors met once during FY2023 on May
30, 2022 without the presence of the Non-Independent Directors and members of the
management. The meeting was conducted to enable the Independent Directors to discuss
matters pertaining to the Company's a_airs and put forth their combined views to the
Board of Directors of the Company.
In accordance with the Listing Regulations, following matters were,
inter-alia, discussed at the meeting:
1. Review of the performance of Non-Independent Directors and the Board
as a whole;
2. Review of the performance of the Chairperson of the Company,
considering the views of Executive Directors and Non-Executive Directors; and
3. Assessment of the quality, quantity and timelines of the flow of
information between the Company management and the Board that is necessary for the Board
to perform their duties e_ectively and reasonably.
Declaration by Independent Directors
The Company's Independent Directors have submitted requisite
declarations confirming that they continue to meet the criteria of independence as
prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing
Regulations and are not disqualified from continuing as Independent Directors. The
Independent Directors have also confirmed that they have complied with Schedule IV of the
Act and the Company's Code of Conduct for Directors and Senior Management and that
they have registered themselves as an Independent Director in the data bank maintained
with the Indian Institute of Corporate A_airs. Based on the disclosures received, the
Board is of the opinion that all the Independent Directors fulfill the conditions
specified in the Act and Listing Regulations and are independent of the management.
The Company follows a policy of transparency and dealing at arm's
length with its Independent Directors. No transaction was entered into with Independent
Directors during the year which could have any material pecuniary relationship with them.
Apart from sitting fees, no other remuneration was paid to any of the Independent
Director.
In the opinion of the Board, the Independent Directors hold the highest
standard of integrity and possess the requisite qualifications, experience, expertise and
proficiency.
Policy on Nomination, Remuneration and Board Diversity
The Board of Directors has framed a Policy which lays down a framework
in relation to the remuneration of Directors, Key Managerial Personnels and Senior
Management of the Company. This Policy also lays down criteria for selection and
appointment of the Board Members as well as diversity of the Board. Radico Khaitan
recognizes the benefits and importance of having a diverse Board of Directors in terms of
skill set and experience. The Company has an optimum mix of executive and non-executive
directors, independent directors and woman director. The details of the policy are
explained in the Report on Corporate Governance and the full policy is available on the
Company's website at the link:
https://www.radicokhaitan.com/wp-content/uploads/2019/03/RKL-Policy-on-Nomination-Remuneration-and-Diversity-2020.pdf
Performance Evaluation
The Board is committed to the transparency in assessing the performance
of Directors. In accordance with the Act and the Rules made thereunder and Regulation
4(2)(f) of the Listing Regulations, Radico Khaitan has framed a policy for the formal
annual evaluation of the performance of the Board, Committees and individual Directors.
The Company has put in place a robust framework for evaluation of the
Board, its Committees, the Chairman, individual Directors and the governance processes
that support the Board's functioning. This framework covers specific criteria and the
grounds on which all Directors in their individual capacity are evaluated. The key
criteria for performance evaluation of the Board and its Committees include aspects such
as composition and structure, e_ectiveness of board processes, information sharing and
functioning. The criteria for performance evaluation of the individual Directors include
aspects such as professional conduct, competency, and contribution to the Board and
Committee meetings. The criteria for performance evaluation of the committees of the Board
include aspects such as the composition of committees and e_ectiveness of committee
meetings. The performance evaluation of the individual Directors and Independent Directors
was done by the entire Board excluding the Director being evaluated. The performance
evaluation of the Chairman and the Non-Independent Directors was carried out by the
Independent Directors. The Board of Directors expressed their satisfaction with the
evaluation process.
Familiarisation Programme for the Board Members
A note on the Familiarisation Programme adopted by the Company for
orientation and training of the Directors and the Board evaluation process undertaken in
compliance with the provisions of the Act and the Listing Regulations is provided in the
Report on Corporate Governance forming part of this Annual Report.
Roles and Responsibilities of Board Members
The Company has laid out the Policy defining the structure and role of
the Board Members. The Company has an Executive Chairman and Managing Director, Dr. Lalit
Khaitan; a Managing Director, Mr. Abhishek Khaitan and an optimum combination of executive
and non-executive Independent Directors. The duties of the Board Members including
Independent Directors have been elaborated in accordance with the Listing Regulations,
Section 166 and Schedule IV of the Act. There is a clear segregation of responsibility and
authority amongst the Board Members.
PARTICULARS OF EMPLOYEES AND REMUNERATION
In terms of the first proviso to Section 136 of the Act, the Annual
Report including Financial Statements are being sent to the shareholders excluding the
information required under Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in obtaining
the same may write to the Company Secretary at investor@radico.co.in or visit at the
Registered O_ce of the Company on any working day up to the date of the 39th
Annual General Meeting. The statement containing information as required under the
provisions of Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure – C
and forms part of this Report.
MEETINGS OF THE BOARD AND BOARD
COMMITTEES
In compliance with the statutory requirements, the Company has
formulated the Board committees viz. Audit Committee, Nomination, Remuneration and
Compensation Committee, Sustainability and Corporate Social Responsibility (CSR)
Committee, Risk Management Committee, Stakeholders' Relationship Committee, Committee
of Directors, Environment, Social and Governance Committee and Committee of Independent
Directors.
All the recommendations made by the Committees of the Board, including
the Audit Committee, were accepted by the Board.
The Board of Directors met four times during the previous financial
year. A detailed update on the Board, its composition, governance of committee including
detailed charter and terms of reference of various Board Committees, number of Board and
Committee meetings held during FY2023 and attendance of the Directors at each meeting is
provided in the Report on Corporate Governance, which forms part of this Annual report.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo required to be disclosed pursuant to Section 134
of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given as Annexure-D
forming part of this Report.
ENVIRONMENTAL PROTECTION MEASURES
TAKEN BY THE COMPANY
In view of the corporate responsibility on environmental protection,
the Company has adopted a number of measures for improvement in the field of environment,
safety and health. Measures such as standard operating procedures, training programmes for
all levels of employees regarding resource conservation, housekeeping, Green Belt
development and onsite emergency plan have been taken. Sustainable living is a part of
long-term business strategy and your Company continuously strives to reduce our
environmental footprint, while enhancing the livelihood of people across our product value
chain.
INTERNAL FINANCIAL CONTROLS
The Board of Directors of the Company has devised systems, policies,
procedures and frameworks, which are currently operational within the Company for ensuring
the orderly and e_cient conduct of its business, which includes adherence to the policies,
safeguarding its assets, prevention and detection of frauds and errors, accuracy and
completeness of the accounting records and timely preparation of reliable financial
information.
The internal financial controls have been documented, digitised and
embedded in the business processes. Assurance on the e_ectiveness of internal financial
controls is obtained through management reviews, controls self-assessment, continuous
monitoring by functional experts as well as testing of the internal financial control
systems by the internal auditors during their audits. We believe that these systems
provide reasonable assurance that our internal financial controls are designed e_ectively
and are operating as intended.
Management team has assessed the e_ectiveness of the Company's
internal control over financial reporting as at March 31, 2023. The Statutory Auditors of
the Company have audited the financial statements included in this Annual Report and
issued their report on internal control over financial reporting as defined under section
143 of the Act. The Company has appointed reputed firms of Chartered Accountants, SCV
& Co. LLP, to carry out Internal Audits. The audit is based on focused and risk-based
internal plans, which is reviewed every year in consultation with the Audit Committee. In
line with international practices, the focus of Internal Audit is oriented towards the
review of internal controls and risks in operations.
RISK MANAGEMENT POLICY
Radico Khaitan's business is exposed to a variety of risks which
are inherent to a liquor manufacturing company in India. In this volatile, uncertain and
complex operating environment, only companies that manage their risk e_ectively can
sustain. Risk management is embedded in Radico Khaitan's corporate strategies and
operating framework, and the risk framework helps the Company to meet its objectives by
aligning operating controls with the corporate mission and vision. The Company's risk
management framework supports an efficient and risk-conscious business strategy,
delivering minimum disruption to business and creating value for our stakeholders. The
Company has in place comprehensive risk assessment and minimization procedures, integrated
across all operations and entails the recording, monitoring and controlling enterprise
risks and addressing them timely and comprehensively. The risks that the Company faces are
reviewed by the Risk Management Committee, the Audit Committee and the Board from time to
time and new risks are identified based on new business initiatives and the same are
assessed. Risk minimisation framework and controls are designed and appropriately
implemented.
DEMATERIALISATION
During the year, 1,65,395 shares constituting 0.12 % of the issued and
subscribed Share Capital of the Company, were dematerialised. As on March 31, 2023, 99.31%
of the shares of the Company have been dematerialized. Your Directors would request all
the members, who have not yet converted their holdings into dematerialized form, to do so
and thereby facilitate trading of their shares.
INSURANCE OF FIXED ASSETS
Your Company has adequately insured all its properties including Plant
and Machineries, Building and Stocks.
ARCHIVAL POLICY
Pursuant to the Listing Regulations and in line with Radico
Khaitan's Policy on Determination of Materiality of Events, the Company shall
disclose all material events to the Stock Exchanges and such disclosures shall be hosted
on the website of the Company for a period of 5 years and thereafter the same shall be
archived so as to be available for retrieval for a further period of three years by
storing the same on suitable media. Thereafter the said information, documents, records
may be stored as per the Company's policy on preservation of documents.
SAFETY & WELLBEING OF WOMEN
The Company promotes a work environment that ensures every employee is
treated with dignity and a_ord equitable treatment irrespective of his gender, race,
social class, caste, religion, place of origin, disability or economic status. Gender
equality and women safety is a very important part of Radico Khaitan's human resource
policies. The Company has zero tolerance for sexual harassment at workplace and it has
adopted a Policy for the prevention, prohibition and redressal of sexual harassment at
workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules framed
thereunder. The Company is committed to provide a safe and conducive work environment to
all employees and associates that is free from any discrimination.
As per the requirement of the POSH Act and Rules made thereunder, the
Company has constituted an Internal Complaint Committee ("ICC") to redress the
complaints received regarding sexual harassment. During the year under review, no cases
were reported to the ICC. Composition of the ICC as on March 31, 2023 is given as below.
| 1. Ms. Roopali Makhija |
Presiding O_cer |
| 2. Ms. Jyoti Negi |
Member |
| 3. Mr. Dinesh Kumar Gupta |
Member |
| 4. Ms. Manu Chaudhary |
Member |
| 5. Mr. Vinay Padroo |
Member |
| 6. Mr. Mukesh Arora |
Member |
| 7. Ms. Tara Sharma (Social Activist) |
Member |
VIGIL MECHANISM
Pursuant to the requirement of Section 177(9) and (10) of the Act and
Regulation 22 of the Listing Regulations, Radico Khaitan has in place a robust vigil
mechanism and it has adopted a Whistle Blower Policy which allows employees of the Company
to raise their concerns relating to fraud, malpractice or any other activity or event
which is against the interest of the Company or society. All employees shall be protected
from any adverse action for reporting any unacceptable or improper practice and/or any
unethical practice, fraud or violation of any law, rule, or regulation. This Policy is
also applicable to the Directors of the Company. All cases reported as part of
whistle-blower mechanism are taken to their logical conclusion within a reasonable
timeframe. Details of complaints, received and the actions taken have been reviewed by the
Audit Committee. The functioning of the Vigil Mechanism is reviewed by the Audit Committee
from time to time. The Vigil Mechanism Policy has been uploaded on the website of the
Company at https://www.radicokhaitan.
com/wp-content/uploads/2019/03/Whistle-Blower-Policy-Vigil-Mechanism.pdf .
SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company believes in the long term sustainability by creating value
for its stakeholders and for society. The Company is committed to pursue responsible
growth and recognizes its responsibility towards the society where it operates as a good
corporate citizen. CSR at Radico Khaitan is creating sustainable programs that actively
contribute to and support the social and economic development of the society. The Company
is committed to community development, women empowerment, enhancing livelihood, promoting
education and health care including preventive health care and ensuring environmental
sustainability. As a part of its CSR programmes, the Company partners with the community
and addresses issues of water, sanitation, education, healthcare and skill-building.
Radico Khaitan also promotes and encourages responsible drinking through various
campaigns, taking preventative actions, education and raising awareness and bringing
communities on board to address local challenges at their root. The CSR policy of the
Company is available on the Company's website.
Composition of the Sustainability and CSR Committee as on March 31,
2023, is given as below.
| 1. Dr. Lalit Khaitan |
Chairman |
| 2. Mr. Abhishek Khaitan |
Member |
| 3. Mr. Krishan Pal Singh |
Member |
| 4. Ms. Sushmita Singha |
Member |
The Company's CSR Projects and activities are in accordance with
Schedule VII of the Act and the Company's CSR Policy. The Report on CSR activities as
required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is
provided as Annexure - E forming part of this Report.
Radico Khaitan has CSR obligation to spend ` 640.62 Lakhs during
FY2023. The Company has spent ` 201.73 Lakhs during the year and the provision of ` 439.25
Lakhs has been created for Ongoing CSR Projects, Radico - Art of Living Bhujal Shakti
Project, Sri Sri Centre of Professional Excellence – Radico Skill Centre at Rampur
and sustainability commitments at Sitapur.
The Board has approved the unspent amount allocated towards Ongoing
Projects and the same has been transferred to Unspent CSR Account within 30 days of the
end of the financial year for use within a period of three financial years for the above
mentioned Ongoing Projects from the date of such transfer.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which was
required to be reported by the Statutory Auditors to the Audit Committee or the Board
under Section 143(12) of the Act and rules made thereunder.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of Internal Financial Controls and compliance
systems established and maintained by the Company, the work performed by the Internal
Auditors, Statutory Auditors and Secretarial Auditors, including the Audit of Internal
Financial Controls over financial reporting by the Statutory Auditors and the reviews
performed by Management and the relevant Board Committees, including the Audit Committee,
the Board is of the opinion that the Company's Internal Financial Controls were
adequate and effective during FY2023.
To the best of knowledge and belief and according to the information
and explanations obtained by them, your Directors make the following statement in terms of
Section 134(3)(c) and 134(5) of the Act:
(i) In the preparation of the Annual Accounts for the year ended March
31, 2023, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
(ii) The Board has selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of a_airs of the Company as at March 31, 2023 and
the profit of the Company for the year ended on that date;
iii) The Directors have taken proper and su_cient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) The annual accounts have been prepared on a going concern basis;
v) The Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating e_ectively; and
vi) The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are adequate and operating
e_ectively.
OTHER DISCLOSURES
(i) Extract of Annual Return
Pursuant to Section 92(3) and Section 134(3) of the Act, the Company
has placed a copy of the
Annual Return as at March 31, 2023 on its website and the same can be
accessed at https://www. radicokhaitan.com/wp-content/uploads/2023/08/
MGT-7-Annual-Return-2022-23.pdf
(ii) Public Deposits
During the year under review, the Company has neither invited nor
accepted any fixed deposits from the public within the meaning of Section 73 of the Act,
read with the Companies (Acceptance of Deposits) Rules, 2014.
(iii) Loans, Guarantees and Investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act are given in the notes to Financial Statements.
(iv) Particulars of Contract or Arrangements with Related Parties
All transactions entered with Related Parties for the year under review
were on arm's length basis and in the ordinary course of business and were approved
by the Audit Committee. Further, during the year, the Company had not entered into any
material Related Party Transactions. Accordingly, the disclosure of Related Party
Transactions under Section 188(1) of the Act in Form AOC-2 is not applicable.
The Board of Directors of the Company had laid down the criteria for
granting the omnibus approval by the Audit Committee for the transactions which are
repetitive in nature and in line with the Policy on Materiality of and dealing with
Related Party Transactions ("RPT Policy") adopted by the Company. Audit
Committee grants Omnibus approval for the Related Party Transactions which are of
repetitive nature. A statement giving details of all Related Party Transactions are placed
before the Audit Committee for review on a quarterly basis.
The RPT Policy as amended and approved by the Board of Directors has
been uploaded on the website of the Company. The web-link of the same has been provided in
the Corporate Governance Report. None of the Directors has any pecuniary relationship of
transactions vis-?-vis the Company.
(v) Orders Passed by Courts/Regulators
During the year, no significant and material orders passed by the
Regulators/Courts/Tribunals which may impact the going concern status and Company's
operations in future.
(vi) Secretarial Standards
The Company has followed applicable Secretarial Standards issued by the
Institute of Company Secretaries of India, i.e., SS-1 and SS-2, on ‘Meetings of the
Board of Directors' and ‘General Meetings', respectively.
(vii) Corporate Governance Report
The Company is in compliance with the requirements of Corporate
Governance as stipulated under the Listing Regulations. The Corporate Governance Report
including a certificate from M/s. TVA & Co. LLP, Company Secretaries, regarding
compliance of the conditions of Corporate Governance is annexed herewith and forming part
of the Annual Report.
(viii)General Reserve
Your Directors do not propose to transfer any amount to General Reserve
and the entire amount of the profit for the year ended March 31, 2023 forms part of
retained earnings.
(ix) Management Discussion and Analysis
Management Discussion and Analysis Report, as required under the
Listing Regulations is provided as a separate report and forms part of this Annual Report.
(x) Business Responsibility and Sustainability Report
The Business Responsibility and Sustainability Report for FY2023,
detailing various initiatives taken by the Company on the Environmental, Social and
Governance front is annexed as a separate report and forms part of this Annual Report.
(xi) Change in the Nature of Business
There is no change in the nature of business during the year under
review.
(xii) Details of Material Changes from the end of FY2023
There have been no material changes and commitment, a_ecting the
financial position of the Company which occurred between the end of the FY2023 till the
date of this Report, other than those already mentioned in this Report.
(xiii) Application made or proceedings pending under the Insolvency and
Bankruptcy Code, 2016 along with their status as at the end of the year.
During the year, the Company has neither made any application nor any
proceedings are pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).
(xiv) 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
During the year, no one time settlement was made with respect to any
amount of loan raised by the Company from any banks or financial institution.
(xv) Dispatch of Annual Report through electronic mode
In compliance with the Circular No. 20/2020 dated May 05, 2020,
Circular No. 10/2022 dated December 28, 2022 other relevant Circulars issued by the
Ministry of Corporate A_airs ("MCA") and Circular No. SEBI/
HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020, SEBI/HO/CFD/PoD-2/P/CIR/2023/4 dated January
05, 2023 and other relevant circulars issued by the Securities and Exchange Board of India
("SEBI") and all other Circulars issued by MCA and SEBI in this regard, the
notice of the AGM along with the Annual Report for FY2023 are being sent only through
electronic mode to those members whose email addresses are registered with the Company/
Depositories. Members may note that the Notice and Annual Report for FY2023 will also be
available on the Company's website (http://
www.radicokhaitan.com/investor-relations/), websites of the Stock Exchanges, i.e., BSE
Limited and National Stock Exchange of India Limited at www.bseindia.com and
www.nseindia.com, respectively, and on the website of the Company's Registrar and
Transfer Agent, KFin Technologies Limited at https://evoting.kfintech.com/.
Acknowledgements
Your Directors take this opportunity to express their sincere
appreciation to all the employees for their commitment and contribution to the success of
the Company. Their enthusiasm and hard work have enabled the Company to be at the
forefront of the industry. We also take this opportunity to thank all our valued customers
who have appreciated and cherished our products.
The Board would like to convey their sincere gratitude to the investors
and bankers for their continued support during the year. Your Directors further take this
opportunity to acknowledge the support and assistance extended by the Regulatory
Authorities such as the SEBI, Stock Exchanges and other Central
& State Government authorities and agencies, and Registrars. The
Board also appreciates the support and co-operation your Company has been receiving from
its supply chain partners and others associated with the Company as its business partners.
We look forward to their continued support in the future.
|
For & on behalf of the Board |
|
Dr. Lalit Khaitan |
| Place: New Delhi |
Chairman & Managing Director |
| Date: August 03, 2023 |
DIN – 00238222 |
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