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Radico Khaitan Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2023

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

1,8279

1,5774

15.9%

1,8279

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

93%

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 Margin (%)

6.4%

8.8%

6.9%

9.2%

Basic EPS (?)

15.3

18.9

(19.0)%

16.5

19.7

(163)%

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 (Face Value of '' 2 each)

26.7

26.7

0.0%

26.7

26.7

0.0%

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

781

19.8%

Regular & Others

15.62

18.02

(133)%

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

1,2077

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, offered 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 effective from February 20, 2023 and Mr. Krishan Pal Singh (DIN: 00178560) was re-appointed as Wholetime Director for a term of three years effective 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), effective from April 01, 2019 and Mr. Tushar Jain (DIN: 00053023) and Mr. Sharad Jaipuria (DIN: 00017049), effective 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, effective 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 affairs 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 effectively 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 Affairs. 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, effectiveness 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 effectiveness 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 [email protected] or visit at the Registered Office 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 efficient 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 effectiveness 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 effectively and are operating as intended.

Management team has assessed the effectiveness 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 effectively 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 afford 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 Officer

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 affairs 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 sufficient 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 effectively; 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 effectively.

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-a-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, affecting 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 financial 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 Affairs ("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


Mar 31, 2022

The Board of Directors of Radico Khaitan Limited ("Radico Khaitan” or the "Company”) is pleased to present the Thirty-Eight Annual Report on the business and operations together with the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2022.

RESULTS OF OPERATIONS AND STATE OF COMPANY’S AFFAIRS

('' in Crore)

Standalone

Consolidated

1

FY2022

FY2021]

Change(%) |

FY2022

FY2021J

Change (%)

Revenue from Operations (Gross)

12,470.5

10,504.0

18.7%

12,470.5

10,504.0

18.7%

Revenue from Operations (Net)

2,868.0

2,398.8

19.6%

2,868.0

2,398.8

19.6%

Other Income

11.0

20.1

(45.1)%

7.4

14.0

(46.8)%

Income from Operations

2,879.0

2,418.9

19.0%

2,875.4

2,412.8

19.2%

Raw Materials Consumed

1,5774

1,202.4

31.2%

1,5774

1,202.4

31.2%

Employee Benefit Expenses

141.3

124.0

13.9%

141.3

124.0

13.9%

Selling & Distribution Expenses

313.7

2972

5.6%

313.7

2972

5.6%

Depreciation

64.9

53.9

20.4%

64.9

53.9

20.4%

Finance Cost

13.1

22.0

(40.5)%

13.1

22.0

(40.5)%

Other Operating Expenses

433.4

366.2

18.4%

433.4

366.2

18.4%

Total Expenses

2,543.8

2,065.8

23.1%

2,543.8

2,065.8

23.1%

Profit Before Tax

335.3

353.1

(5.1)%

331.6

347.0

(4.4)%

Current Tax

87.2

84.4

3.4%

87.2

84.4

3.4%

Previous Year Adjustments

(0.6)

(3.9)

(83.4)%

(0.6)

(3.9)

(83.4)%

Deferred Tax

(3.5)

2.1

(266.7)%

(3.5)

2.1

(266.7)%

Net Profit

252.2

270.6

(6.8)%

248.5

264.5

(6.0)%

Net Income Margin (%)

8.8%

11.3%

8.7%

11.0%

Share in profit of Joint Venture

14.7

12.7

15.6%

Other Comprehensive Expenses / (Income)

(0.3)

0.9

(138.0)%

(0.3)

0.9

(138.2)%

Total Comprehensive Income

252.5

269.7

(6.4)%

263.6

276.3

(4.6)%

Total Comprehensive Income Margin (%)

8.8%

11.2%

9.2%

11.5%

Basic EPS (?)

18.9

20.3

(6.9)%

19.7

20.8

(5.1)%

Gross Profit

1,290.6

1,196.4

7.9%

1,290.6

1,196.4

7.9%

Gross Margin (%)

45.0%

49.9%

45.0%

49.9%

EBITDA

402.6

407.8

(1.3)%

402.6

407.8

(1.3)%

EBITDA Margin (%)

14.0%

170%

14.0%

170%

Paid-up Equity Share Capital (Face Value of '' 2 each)

26.7

26.7

0.1%

26.7

26.7

0.1%

Reserves & Surplus

1,960.1

1,737.2

12.8%

1971.1

1,766.2

11.6%

Transfer to General Reserve

-

-

-

-

Proposed Dividend

40.1

32.1

25.1%

40.1

32.1

25.1%

PERFORMANCE REVIEW (STANDALONE)

Revenue from Operations

Volume (Million Cases)

FY2022

FY20211

Change (%)

Prestige & Above

8.11

6.51

24.5%

Regular & Others

18.25

15.83

15.3%

Total Volume

26.35

22.34

17.9%

Prestige & Above as % of Total

308%

291%

Revenue Break up ('' Crore)

FY2022

FY2021

Change (%)

IMFL (A)

2,306.9

1,893.7

21.8%

Prestige & Above

1,214.7

957.4

26.9%

Regular & Others

1,092.1

936.3

16.6%

Non IMFL (B)

561.1

505.1

11.1%

Revenue from Operations (Net) (A B)

2,868.0

2,398.8

19.6%

Prestige & Above as % of Total IMFL Revenue

52.7%

50.6%

IMFL as % of Total Revenue

80.4%

78.9%

The strong performance of the Prestige & Above category has supported Radico Khaitan''s double-digit IMFL volume growth during the year This highlights the strength of our brands, consumer resonance and the resilient business model. In seven of the top eleven markets, Radico Khaitan has outperformed the industry The Company has continued to strengthen its core brands through targeted marketing investments and has also launched selected new premium brands. This strategy has not only allowed achieving the desired growth profile, but it has also enabled the Company to diversify and strengthen its brand portfolio for the future.

The Company has continued to outperform the industry for the sixth consecutive year. With total volumes of 26.4 million cases in FY2022, Radico Khaitan reported a 179% y-o-y growth vs. industry growth of 13.3%. Revenue from Operations (Net) grew by 19.6%. Against IMFL volume growth of 179% during the year, IMFL sales value increased by 21.8%.

Gross Profit

Gross Margin declined from 49.9% in FY2021 to 45.0% in FY2022. Continued commodity inflation had a strong bearing on our gross margins, particularly in the non-IMFL business. Given a favourable product mix change, gross margin of the IMFL business was less impacted.

EBITDA

EBITDA decreased by 1.3% Y-O-Y with margins of 14.0%. Despite a 490 bps decline in Gross Margin, EBITDA margin compression was 300 bps due to the benefits of scale and operating leverage.

Finance Cost

Finance Cost for FY2022 decreased by 40.5% Y-O-Y from '' 22.0 Crore to '' 13.1 Crore.

Total Comprehensive Income

Total Comprehensive Income decreased by 6.4% compared to last year to '' 252.5 Crore.

New Launches

During the year, Radico Khaitan announced the launch of two super premium brands - Royal Ranthambore Heritage Collection-Royal Crafted Whisky and two variants of Magic Moments Dazzle Vodka. Both these brands have been developed after a comprehensive two-year consumer/market research on the blend, packaging, as well as the positioning.

• Royal Ranthambore is one of the finest blends ever created in India at this premium positioning where no other Indian company has ever launched its brand. It is a unique whisky, with six Blended Malt Scotches, one Scotch Grain from Malted Barley and Oak Infused Grain Neutral Spirit, reserved for a specific time to assimilate the blend.

• Magic Moments Dazzle is aimed at capturing the global trend of the premium, natural flavoured vodkas. It undergoes 7-stage filtration process and is available in two variants - Gold and Silver. Gold is an ultra-premium vodka whereas Silver is creamy-vanilla flavoured which is first of its kind in India.

These brands are now available across 7 states in India and continue to gain consumer confidence. We are focusing on placement and expanding the width of distribution for these brands.

Capital Expenditure

During FY2022, the Company has undertaken two capex projects: '' 185 Crore for the conversion of the existing 140 KLPD molasses plant in Rampur to dualfeed and a greenfield project of '' 555 Crore spread over 100 acres to establish a 330 KLPD grain based distillery along with bottling facilities for IMFL and country liquor and a malt maturation facility. This will be funded 50% through internal accrual and rest from borrowing.

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 '' 14.7 Crore in FY2022 compared with '' 12.7 Crore in FY2021.

COVID-19 AND ITS IMPACT

The second wave of the COVID-19 pandemic, which was more severe than the first wave, posed extreme challenges in terms of handling the operations and the workforce. COVID protocols set up in FY2021 were further strengthened and operations were streamlined with a high focus on the health and well-being of the employees.

Even with the restrictions imposed by local authorities, and disruption in supply chain for certain raw materials, we managed to continue our operations efficiently. After peaking in May 2021, COVID cases started receding in June 2021 and situation started to normalise to a large extent by the second half of the month. In July, as restrictions were lifted and normalcy resumed, month-on-month sales volumes started to improve significantly.

The business has adequate liquidity and product demand to sustain operations. As determined by management, the COVID-19 pandemic and lockdown had no substantial impact.

DIVIDEND

The Board of Directors has recommended a final dividend of 150% i.e. '' 3 per equity share of '' 2 each fully paid up Capital of the Company (last year '' 2.40 per equity share of '' 2 each). The payment of dividend is subject to 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, 2022, the Company has authorized share capital of '' 94 Crore consisting of '' 34 Crores Equity Share Capital comprising 17,00,00,000 equity shares of '' 2 each and '' 60 Crores 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 Crores divided into 13,36,73,765 fully paid up equity shares of '' 2 each.

During the year, 105,500 equity shares were issued and allotted upon exercise of Stock Options by the eligible employees.

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 (the ''SEBI ESOP Regulations).

During the year under review, the Company has allotted 105,500 equity shares upon exercise of Stock Options by the eligible employees, as per the Scheme 2006. Each Option entitles the holder to acquire one equity share of '' 2 each of the Company.

A total of 220,000 Stock Options were granted during the year to the eligible employees of the Company as per the Scheme 2006. Out of these 220,000 Stock Options, 180,000 Stock Options were granted on November 2, 2021 at an Exercise price of '' 928.05 and 40,000 Stock Options were granted on March 8, 2022 at an Exercise price of '' 723.14.

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/2022/09/ESOP-Disclosure-Annual-Report-2022.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 ANDASSOCIATE COMPANIESSubsidiaries

During the year, the Company has acquired 100% equity shares in Radico Spiritzs India Private Limited ("Radico Spiritzs”) and by virtue of the same Radico Spiritzs has become a wholly-owned Subsidiary of the Company. Radico Spiritzs has further acquired 100% Equity Shares of the following companies and thereby they become step down wholly-owned subsidiaries of the Company:

1. Accomreal Builders Private Limited

2. Compaqt Era Builders Private Limited

3. Destihomz Buildwell Private Limited

4. Equibuild Realtors Private Limited

5. Proprent Era Estates Private Limited

6. Binayah Builders Private Limited 7 Firstcode Reality Private Limited

Joint Venture

The Company has only one joint venture, namely, Radico NV Distilleries Maharashtra Limited ("RNV”). The Company holds 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 subsidiaries are consolidated with the accounts of the Company and the salient features of the financial statements of RNV and wholly-owned 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 Obligation and Disclosures requirements) Regulations, 2015 ("Listing Regulations”) read with Ind AS 110 - Consolidated Financial Statement, 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 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 very strong degree of safety regarding timely payment of financial obligations. Such instruments carry 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 have 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 the FY2022 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 u/s 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, for the financial year ending March 31, 2023. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors has to be ratified by the shareholders, the Board recommends the same 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 had, at its meeting held on June 01, 2021, appointed M/s TVA & Co. LLP, Company Secretaries, to conduct its Secretarial Audit for the financial year ended March 31, 2022. 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 financial year ended March 31, 2023.

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. 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. Krishan Pal Singh (DIN: 00178560), Whole-time Director of the Company, is liable to retire by rotation at the ensuing AGM and being eligible, offered himself for re-appointment. The Board of Directors, on the recommendation of the Nomination and Remuneration Committee (NRC), has recommended the re-appointment of Mr. Krishan Pal Singh at the ensuing AGM.

The members had, at the 33rd AGM of the Company held on September 29, 2017, approved the re-appointments and payment of remunerations to Dr. Lalit Khaitan as Chairman & Managing Director, Mr. Abhishek Khaitan as Managing Director and Mr. Krishan Pal Singh as Wholetime Director, for a period of five years effective from February 20, 2018. The tenure of these appointments will be expiring on February 19, 2023. The Board recommends the re-appointments of Dr. Lalit Khaitan as Chairman & Managing Director and Mr. Abhishek Khaitan as Managing Director for a term of five years effective from February 20, 2023 and Mr. Krishan Pal Singh as Whole-time Director for a term of three years effective from February 20, 2023, 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 Corporate Governance Report forming part to this Annual Report.

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 Committee and formulated the criteria for determining the qualifications, positive attributes and independence of a Director (the "Criteria”). The policy relates to the remuneration of the Directors, key managerial personnel and other employees, as required under Section 178(3) of the Act. The Criteria includes that a person to be appointed on 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 the FY2022 on June 01, 2021 without the presence of the Non-Independent Directors and the members of management. The meeting was conducted to enable the Independent Directors to discuss matters pertaining to the Company''s affairs and put forth their combined views to the Board of Directors of the Company.

In accordance with Listing Obligations, following matters were, inter-alia, discussed in 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, taking into account the views of Executive Directors and Non-Executive Directors; and

3. Assess the quality, quantity and timelines of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

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 and that they have registered themselves as an Independent Director in the data bank maintained with the Indian Institute of Corporate Affairs. 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 arm''s length while dealing with its Independent Directors. No transaction was entered 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 and the Board''s diversity 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 is explained in the Corporate Governance Report and full policy is also 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 transparency in assessing the performance of Directors. In accordance with the Act and the Rules made thereunder, Schedule IV of the Act 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, effectiveness 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 effectiveness 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 a clearly laid out 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 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 Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5 (2) and (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 the Registered Office of the Company on any working day of the Company up to the date of the 38th Annual General Meeting. The statement containing information as required under the provisions of Section 197(12) of the Act read with Rule 5 (1), Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - C and forms part of this Report.

BOARD COMMITTEE AND MEETINGS OF THE BOARD AND BOARD - COMMITTEES

In compliance with the statutory requirements, the Company has mandatory committees viz. Audit Committee, Nomination and Remuneration Committee, Sustainability and Corporate Social Responsibility (CSR) Committee, Risk Management Committee, Stakeholders Relationship Committee and Committee of 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 (4) times during the previous financial year. A detailed update on the Board, its composition, governance of committee including detailed charter, terms and reference of various Board Committees, number of Board and Committee meetings held during financial year 202122 and attendance of the Directors at each meeting

Company has appointed reputed firms of Chartered Accountants 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 effectively can sustain. Risk management is embedded in Radico Khaitan''s corporate strategies and operating framework, and the risk framework helps the Company 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, minimisation framework and controls are designed and appropriately implemented.

DEMATERIALISATION

During the year, 302,964 shares constituting 0.23% of the issued and subscribed Share Capital of the Company, were dematerialised. As on March 31, 2022, 99.19% 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 Machinery, 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

is provided in the Report on Corporate Governance, which forms part of this Annual report.

CONVERSATION 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 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 efficient conduct of its business, which includes adherence to 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, digitized and embedded in the business process. Assurance on the effectiveness 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 the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

Management team has assessed the effectiveness of the Company''s internal control over financial reporting as at March 31, 2022. 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 Companies Act, 2013). The

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 is promoting a work environment that ensures every employee is treated with dignity and afforded equitable treatment irrespective of their 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 thereunder. The Company is committed to provide a safe and conducive work environment to all of its employees and associates that is free from any discrimination. During the year under review, no cases were reported to the Internal Complaint Committee (ICC).

As per the requirement of the POSH Act and Rules made thereunder, the Company has an ICC to redress the complaints received regarding sexual harassment. Composition of the ICC as on March 31, 2022 is given as below.

1.

Ms. Roopali Makhija

Presiding Officer

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 Listing Regulation, Radico Khaitan has in place a robust vigil mechanism and 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 as a whole. 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 has 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.

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 as a whole 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 and sanitation, education, health 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, 2022 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 had a CSR obligation to spend '' 536.5 Lakhs in FY2022. However, the Company had spent '' 416.2 Lakhs during the year. Provision of '' 120.2 Lakhs has been created for an ongoing project, Radico - Art of Living Bhujal Shakti Project.

The Board has approved the unspent amount allocated towards ongoing project and 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 project from the date of such transfer.

REPORTING OF FRAUDS

There was no instance of a 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 FY2022.

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) of the Act:

(i) In the preparation of the Annual Accounts for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(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 affairs of the Company as at March 31, 2022 and of the profit of the Company for the year ended on that date;

iii) The Directors have taken proper and sufficient 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 effectively; and

vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

OTHER DISCLOSURES

(i) Extract of Annual Return

Pursuant to Section 92(3) and Section 134(3) (a) of the Act, the Company has placed a copy of the Annual Return as at March 31, 2022 on its website and the same can be accessed at https://www.radicokhaitan.com/wp-content/ uploads/2022/0 9/Form_MGT-7-Annual-Return-2022.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, in line with the Policy on Materiality of and dealing with Related Party Transactions ("RPT Policy”) adopted by the Company. Omnibus approval was obtained 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. All Related Party Transactions are placed before the Audit Committee for approval.

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-a-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 compliace with the requirements of Corporate Governance as stipulated in the Listing Regulations. In terms of Regulation 27 of 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, 2022 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 Report

The Business Responsibility Report for FY2022, as stipulated under Regulation 34(2)(f) of the Listing Regulations, 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 the review.

(xii) Details of material changes from the end of FY2022

There have been no material changes and commitment, affecting the financial position of the Company which occurred between the end of the FY2022 till the date of this Report, other than those already mentioned in this Report.

(xiii) Dispatch of Annual Report through electronic mode

In compliance with the MCA Circular No. 20/2020 dated May 05, 2020 issued by the Ministry of Corporate Affairs ("MCA”) and Circular No. SEBI/ HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020 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 FY2022 is 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 FY2022 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 has 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 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 10, 2022 DIN - 00238222


Mar 31, 2021

Your Directors are pleased to present the Thirty Seventh Annual Report on the business and operations together with the Audited Financial Statements of your Company for the year ended March 31, 2021.

Results of operations and state of Company’s affairs

Standalone

Consolidated

('' in Crore)

FY2021

FY2020

Change (%)

FY2021

FY2020

Change (%)

Revenue from Operations (Gross)

10,367.36

9,417.89

10.1%

10,367.36

9,417.89

10.1%

Revenue from Operations (Net)

2,418.14

2,427.04

(0.4)%

2,418.14

2,427.04

(0.4)%

Other Income

20.07

9.19

118.5%

20.07

9.19

118.5%

Income from Operations

2,438.21

2,436.23

0.1%

2,438.21

2,436.23

0.1%

Raw Materials Consumed

1,202.42

1,248.19

(3.7)%

1,202.42

1,248.19

(3.7)%

Employee Benefit Expenses

176.34

186.08

(5.2)%

176.34

186.08

(5.2)%

Selling & Distribution Expenses

316.52

311.25

1.7%

316.52

311.25

1.7%

Depreciation

53.90

52.53

2.6%

53.90

52.53

2.6%

Finance Cost

22.02

31.61

(30.4)%

22.02

31.61

(30.4)%

Other Operating Expenses

313.92

309.72

1.4%

313.92

309.72

1.4%

Total Expenses

2,085.11

2,139.37

(2.5)%

2,085.11

2,139.37

(2.5)%

Profit Before Tax & Exceptional Item

353.10

296.85

18.9%

353.10

296.85

18.9%

Exceptional Item

0.00

(24.17)

0.00

(24.17)

Profit Before Tax

353.10

272.69

29.5%

353.10

272.69

29.5%

Current Tax

84.36

70.95

18.9%

84.36

70.95

18.9%

Previous Year Adjustments

(3.89)

0.00

(3.89)

0.00

Deferred Tax

2.07

(25.76)

(108.0)%

2.07

(25.76)

(108.0)%

Net Profit

270.56

227.50

18.9%

270.56

227.50

18.9%

Net Income Margin (%)

11.2%

9.4%

11.2%

9.4%

Share in profit of Joint Venture

6.59

1.64

302.3%

Other Comprehensive Expenses / (Income)

0.86

2.70

(68.1)%

0.86

2.73

(68.7)%

Total Comprehensive Income

269.70

224.80

20.0%

276.30

226.41

22.0%

Total Comprehensive Income Margin (%)

11.2%

9.3%

11.2%

9.3%

Basic EPS (?)

20.26

17.05

18.8%

20.75

17.16

20.9%

Gross Profit

1,215.72

1,178.85

3.1%

1,215.72

1,178.85

3.1%

Gross Margin (%)

50.3%

48.6%

50.3%

48.6%

EBITDA

407.79

368.19

10.8%

407.79

368.19

10.8%

EBITDA Margin (%)

16.9%

15.2%

16.9%

15.2%

Paid-up Equity Share Capital (Face Value of '' 2 each)

26.71

26.71

0.0%

26.71

26.71

0.0%

Reserves & Surplus

1,737.19

1,493.82

16.3%

1,766.20

1,516.23

16.5%

Transfer to General Reserve

-

-

Proposed Dividend and tax thereon

32.06

26.71

20.0%

32.06

26.71

20.0%

performance review (standalone)

Revenue from Operations

volume (Million cases)

FY2021

FY2020

Change (%)

Prestige & Above

6.51

7.05

(7.7)%

Regular & Others

15.83

17.25

(8.2)%

Total volume

22.34

24.30

(8.0)%

Prestige & Above as % of Total

29.1%

29.0%

Due to the pandemic induced lock downs in April 2020, our performance was impacted adversely. As a result, total volumes declined (8.0%) Y-O-Y and Revenue from Operations (Net) degrew by (0.4)%. Immediately after the nationwide lockdowns started to ease out in May 2020, our operations rebounded very quickly and we also saw improvement in the industry performance on a quarter-on-quarter basis. Through the second half of FY2021, we had seen sustained improvement in various macroeconomic indicators demonstrating a strong economic revival. By the end of the year, eight out of eleven top markets that we operate in returned to growth. Against IMFL volume decline of (8.0)%, IMFL sales value decreased by (3.3)%. In value terms, Prestige & Above brands contributed to about 50.6% of total IMFL sales value (vs. 49.5% last year). IMFL sales value accounted for 79.1% of the total Revenue from Operations (net) of the Company compared to 81.5% last year. Non-IMFL sales value growth was 12.6% during the year.

Gross Profit

Gross Margin expanded from 48.6% in FY2020 to 50.3% in FY2021. On Y-O-Y basis, ENA prices declined about 4%. Raw material prices overall have been benign during FY2021. However, towards the end of the year we saw some inflationary pressures on the dry goods such as packing materials.

EBITDA

EBITDA increased by 10.8% Y-O-Y with margins of 16.9% (increased by 169 bps Y-O-Y). During FY2021, Advertising & Sales Promotion (A&SP) expenses were '' 139.63 Crore (flat Y-O-Y). The Company continues to invest behind brand building to support strategic growth and market share expansion initiatives.

Finance Cost

Finance Cost for FY2021 decreased by 30.4% Y-O-Y from '' 31.61 Crore to '' 22.02 Crore.

Total Comprehensive Income

Total Comprehensive Income increased by 20.0% compared to last year to '' 269.70 Crore.

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 '' 6.59 Crore in FY2021 compared with '' 1.64 Crore in FY2020.

DIvIDEND

The Board of Directors has recommended a dividend of 120% i.e. '' 2.40 per equity share of '' 2 each fully paid up Capital of the Company (last year '' 2 per equity share of '' 2 each). The payment of dividend is subject to approval of the members at the forthcoming annual general meeting 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 can be accessed at https:// www.radicokhaitan.com/wp-content/uploads/2019/03/ Dividend-Distribution-Policv.pdf

capital structure

Share Capital

The Company has an authorized share capital of '' 94 Crore consisting of '' 34 Crores equity share capital (17,00,00,000 equity shares of '' 2 each) and '' 60 Crores preference share capital (60,00,000 preference shares of '' 100 each).

As on March 31, 2021, the issued, subscribed and paid up share Capital of the Company is '' 26.71 Crores divided into 13,35,68,265 fully paid up equity shares of '' 2 each.

Employees’ Stock Option Scheme

The Company has an employee stock option scheme 2006 (Scheme 2006). During the year, there was no material change in the scheme and the scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (the ‘SEBI ESOP Regulations’).

During the year under review, no stock options were granted to employees under the Scheme 2006 and the Company has allotted 34,000 equity shares on exercise of stock options. Each Option entitles the holder to acquire one equity share of '' 2 each of the Company at the exercise price fixed at the time of grant, being the market price as per the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

The particulars of the options as required by SEBI (Share Based Employee Benefits) Regulations, 2014 have been placed on the website of the company and web link of the same is https://www.radicokhaitan.com/wp-content/ uploads/2021/09/ESOP-Disclosure-Annual-Report-2021.pdf

subsidiaries, joint ventures and AssOcIATE cOMPANIEs

During the year under review, the Company has no subsidiary. The Company has only one joint venture, namely, Radico NV Distilleries Maharashtra Limited ("RNV”). The Company has 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 are consolidated with the accounts of the Company and the salient features of the financial statements of RNV as set out in the prescribed form AOC-1 is appended as Annexure - A to this report.

In accordance with the provisions of the Act and SEBI (Listing Obligation and Disclosures requirements) Regulations, 2015 read with Ind AS 110 Consolidated Financial Statement, Ind AS 28 Investments in Associates and Joint Ventures and Ind AS 31 Interests in Joint Ventures, the consolidated audited financial statement forms part of the Annual Report.

CREDIT RATING

The Company’s long-term credit facility is revised by CARE Ratings. The Company’s long-term credit facilities is now rated as CARE AA- (Double A Minus) with a positive outlook.

CARE AA rated instruments are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. Such instruments carry lowest credit risk. Modifiers ( /-) reflect the comparative standing within the category.

AUDITORS AND AUDITORS’ REPORT

Statutory Auditor

As per the provisions of the Act, the term of BGJC & Associates LLP, Chartered Accountants as Statutory Auditors of the Company expires at the conclusion of the ensuing Annual General Meeting. Based on the recommendations of the Audit Committee, it is proposed to appoint M/s. Walker Chandiok & Co LLP, Chartered Accountants as Statutory Auditors of the Company, for a term of 5 (five) consecutive years. M/s. Walker Chandiok & Co LLP, Chartered Accountants, have confirmed their eligibility and qualifications required under the Act for holding the office as Statutory Auditors of the Company.

Audit Report

The report of the Statutory Auditors along with notes to Schedules is enclosed to this annual report. The observations made in the Auditors’ Report are selfexplanatory 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 u/s 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, for the financial year ending March 31, 2021. In accordance with the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors has to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the ensuing annual general meeting.

Cost Records

Maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 and the prescribed cost records have been made and maintained by the Company.

secretarial Auditor

The Company had appointed M/s TVA & Co. LLP, Company Secretaries to conduct its Secretarial Audit for the financial year ended March 31, 2021. 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 the Board’s report. The Board, on the recommendation of Audit Committee, has reappointed M/s. TVA & Co. LLP, Company Secretaries, New Delhi, as Secretarial Auditors of the Company for financial year 2021-22.

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, Managing Director of the Company, retires by rotation at the ensuing annual general meeting. The Board of Directors, on the recommendation of the Nomination and Remuneration Committee (NRC), has recommended re-appointment of Mr. Abhishek Khaitan.

The members had, at the 33rd AGM of the Company held on September 29, 2017, approved re-appointment of and payment of remuneration to Mr. Abhishek Khaitan as Managing Directors for the Company for a period of five years effective from February 28, 2018.

Hence, the Board of Directors have recommended the payment of remuneration to Mr. Abhishek Khaitan, as per Regulation 17(6)(e) of SEBI Listing Regulations, with effects from April 01, 2019 for the remaining tenure of his appointment i.e. upto February 19,2023.

During the year, Mr. Dinesh Kumar Gupta was appointed as Vice President - Legal and Company Secretary in the category of key managerial personnel with effect from January 28, 2021 in place of Mr. Amit Manchanda who resigned from the services of the Company.

The Company has a Nomination & Remuneration Committee and formulated the criteria for determining the qualifications, positive attributes and independence of a Director ("the Criteria”). The policy relates to the remuneration of the Directors, key managerial personnel and other employees, as required under Section 178(3) of the Act. The Criteria includes that a person to be appointed on 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 Independent Directors of the Company met separately on January 28, 2021 without the presence of the NonIndependent Directors and the members of management. The meeting was conducted informally to enable the Independent Directors to discuss matters pertaining to the Company’s affairs and put forth their combined views to the Board of Directors of the Company. In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations”), following matters were, inter-alia, discussed in 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, taking into account the views of Executive Directors and Non-Executive Directors;

3. Assess the quality, quantity and timelines of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

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. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company’s Code of Conduct. The Company keeps a policy of transparency and arm’s length while dealing with its Independent Directors. No transaction was entered with Independent Directors during the year which could have any material pecuniary relationship with them. Apart from sitting fee, no other remuneration was paid to any of the Independent Directors.

In the opinion of the Board, the Independent Directors hold 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 Personnel 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, independent directors and woman director. The detail of the policy is explained in the Corporate Governance Report and full policy is also available on the Company’s website at the following link: http://www.radicokhaitan.com/ investor-relations.

Annual Board Evaluation

The Board is committed to transparency in assessing the performance of Directors. In accordance with the Companies Act, 2013 and the Rules made thereunder, Schedule - IV of the Act 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, effectiveness 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 effectiveness of committee meetings. The performance evaluation of the 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 Companies Act, 2013 and the Listing Regulations is provided in the Report on Corporate Governance which forms part of the Annual Report.

roles and responsibilities of Board Members

The Company has a clearly laid out policy defining the structure and role of the Board Members. The Company has an Executive Chairman and Managing Director, presently Dr Lalit Khaitan; a Managing Director, currently 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 the Listing Regulations, Section 166 of the Companies Act, 2013 and Schedule IV of the said 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 Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5 (2) and (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 the Registered Office of the Company on any working day of the Company up to the date of the 36th Annual General Meeting. The statement containing information as required under the provisions of Section 197(12) of the Act read with Rule 5 (1), Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - C and forms part of this Report.

BOARD COMMITTEE AND MEETINGS OF THE BOARD AND BOARD - COMMITTEES

In compliance with the statutory requirements, the Company has mandatory committees viz. Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management

Committee, Stakeholders Relationship Committee and Committee of 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 (4) times during the previous financial year. A detailed update on the Board, its composition, governance of committee including detailed charter, terms and reference of various Board Committees, number of Board and Committee meetings held during financial year 2020-21 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance, which forms part of this Annual report.

CONVERSATION 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 the Companies (Accounts) Rules, 2014 is given as Annexure-D and forms 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 efficient conduct of its business, which includes adherence to 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 process. Assurance on the effectiveness 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 the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

Management team has assessed the effectiveness of the Company’s internal control over financial reporting as at March 31, 2021. 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 Companies Act, 2013). The Company has appointed reputed firms of Chartered Accountants 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 effectively can sustain. Risk management is embedded in Radico Khaitan’s corporate strategies and operating framework, and the risk framework helps the Company meet its objectives by aligning operating controls with the corporate mission and vision. 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 as strategic, Security risks , cyberattack, financial, liquidity, regulatory, reputational and other risks 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, minimisation framework and controls are designed and appropriately implemented.

DEMATERIALIsATION

During the year 1,44,750 shares of the Company constituting 0.11% of the issued and subscribed Share Capital of the Company, were dematerialised. As on March 31, 2021, 99.04% 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 thereby facilitating trading of their shares. As per SEBI guidelines it is mandatory that the shares of a company are in dematerialized form for trading.

INsURANcE OF FIXED AssETs

Your Company has adequately insured all its properties including Plant and Machinery, 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 such 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

CORPORATE SOCIAL RESPONSIBILITIES (CSR)

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, enhancing livelihood, promoting education and health care including preventive health care and ensuring environmental sustainability. As part of its CSR programmes, the Company partners with the community and addresses issues of water and sanitation, education, health and skill-building. Radico Khaitan also promotes and encourages responsible drinking through engaging with employees, taking preventative action, 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 CSR Committee as on March 31, 2021

Composition of the CSR Committee as on March 31, 2021

1.

Dr. Lalit Khaitan

2.

Mr. Abhishek Khaitan

3.

Mr. K.P. Singh

4.

Ms. Sushmita Singha

by storing the same on suitable media. Thereafter the said information, documents, records may be destroyed as per the Company’s policy on preservation of documents.

SAFETY & WELLBEING OF WOMEN

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 has adopted a policy on 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 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company has endeavoured to encourage women professionals by creating proper policies to tackle issues relating to safe and proper working conditions and create and maintain a healthy and conducive work environment that is free from discrimination. During the year under review, there were no sexual harassment cases reported to the Safety & Wellbeing of Women.

Composition of the Sexual Harassment Committee as on March 31, 2021 compliance with conditions of corporate governance, as stipulated under the Listing Regulations, forms part of the Annual Report.

The internal financial controls have been documented, digitised and embedded in the business process. Assurance on the

1.

Ms. Roopali Makhija

Presiding Officer

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

VIGIL MECHANISM

Pursuant to the requirement of Section 177(9) & (10) of the Companies Act, 2013, Radico Khaitan has in place a robust vigil mechanism and 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 as a whole. 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 action taken are 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 http://www. radicokhaitan.com/ investor-relations/.

The Company’s projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company’s CSR Policy. The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure - E forming part of this Report.

The company had the obligation to spend '' 457.02 lakhs in the Financial Year 2020-21 however the company has spent '' 528.08 which is excess by '' 71.06 Lakhs.

The Board has approved the adjustment excess amount spent against the obligations of next 3 years as per the Section 135 of the Companies Act, 2013.

reporting of frauds

There was no instance of a fraud during the year under review which required the statutory auditor to report to the Audit Committee or the Board under section 18 (12) of the Companies Act, 2013 and rules made thereunder.

cyber RISK

The failure of information Technology (IT) systems due to malicious attacks and / or non-compliance with data privacy laws can potentially lead to financial loss, business disruption and / or damage to the Company’s reputation. Radico Khaitan has in place a data protection policy. It also maintains a cyber security infrastructure. The Company uses standardised backup tools, service and procedures to ensure that information and data are stored at two or more diverse locations.

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 FY2021.

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) of the Companies Act, 2013.

i) In the preparation of the Annual Accounts for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

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 affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;

iii) The Directors have taken proper and sufficient 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 effectively; and

vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

OTHER DISCLOSURES

(i) Extract of Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Company has placed a copy of the Annual Return as at March 31, 2021 on its website and by virtue of amendment to Section 92(3) of the Companies Act, 2013, the Company is not required to provide extract of Annual Return (Form MGT-9) as part of the Board’s report.

Annual Return can be accessed at https://www. radicokhaitan.com/wp content/uploads/2021/09/ MGT-7-Annual-Return-2021.pdf

(ii) Public Deposits

During the year under review, your Company has neither invited nor accepted any fixed deposits

from the public within the meaning of Section 73 of the Companies Act, 2013, 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 Companies Act, 2013 are given in the notes to Financial Statements.

(iv) Particulars of Contract or arrangements with Related Party

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 that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in form AOC-2 is not required.

Further, there are no material related party transactions during the year under review with the promoters, directors or key managerial personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Legal & Compliance Department and a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

The Policy on Related Party Transactions 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-a-vis the Company.

(v) Orders passed by courts/regulators

The U.P. State Excise Department has issued a show cause notice (SCN) to us claiming an excise duty amounting to '' 1,822.77 Lakhs on the alcohol lost in the fire accident. Based on the opinion of the legal counsel, the Group has filed an appeal under Rule 813 of the U.P. Excise Rule before the U.P. Commissioner of Excise seeking relief from the above claim by way of setting aside the above mentioned SCN, considering this loss of alcohol as an unavoidable accident of fire.

(vi) Secretarial Standards

The Company has followed applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively.

with the Annual Report 2020-21 is 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 2020-21 will also be available on the Company’s website (https://www.radicokhaitan.com/ investorrelations), 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 Private Limited ("KFinTech”) at https://evoting.karvy. com.

Acknowledgements

Your Directors acknowledge with gratitude the cooperation and assistance received from the Central and State Government authorities. Your Directors thank the shareholders, financial institutions, banks/ other lenders, customers, vendors and other business associates for their confidence in the Company and its management and look forward to their continued support. The Board wishes to place on record its appreciation for the dedication and commitment of the Company’s employees at all levels, which has continued to be our major strength. 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: July 28, 2021 DIN - 00238222

(vii) Corporate Governance Report

Report on Corporate Governance along with the certificate from Mr. Tanuj Vohra, Partner at M/s. TVA & Co. LLP, Company Secretaries, confirming compliance with conditions of corporate governance, as stipulated under the Listing Regulations, forms 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, 2021 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 Report

The Business Responsibility Report for FY2021, as stipulated under Regulation 34(2)(f) of the Listing Regulations is annexed is 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 the review.

(xii) Details of material changes from the year end.

There is no material change since March 31, 2021.

(xiii) Dispatch of Annual report through electronic mode

In compliance with the MCA Circulars and SEBI Circular dated May 12, 2020, notice of the AGM along


Mar 31, 2018

Directors'' Report

Dear Members,

It is our pleasure to present the Thirty Fourth Annual Report on the business and operations together with the Audited Financial Statements of your Company for the year ended March 31, 2018.

Summary of Standalone Financial Performance: (Figures Rs. in Crore)

2018

2017

Revenue from Operations (Gross)

6,270.36

4,867.95

Other Income

26.67

19.65

Revenue from Operations (Net of Excise Duty)

1,822.77

1,679.90

Earnings before Interest, Tax, Depreciation & Amortization and

267.43

210.08

Other Income (EBITDA)

Profit before Tax

187.28

108.85

Profit after Tax from continuing business

123.45

80.07

Total Comprehensive Income

121.94

79.28

Other Equity brought forward from last year

1,003.28

936..51

Proposed Dividend and tax thereon

16.07

12.81

Other Equity carried forward

1,115.46

1,003.28

Operations Review:

First half of the fiscal year 2018 was impacted by a number of industry challenges such as the implementation of GST and the national highway liquor ban. In its order in August 2017, the Honorable Supreme Court clarified that the highway liquor ban does not apply within city limits, granting relief to the liquor industry The impact of this ban was normalized by the end of Q3 FY2018. Despite the challenges during first half of FY2018, Radico Khaitan reported a strong all-round performance. The Company''s total IMFL volumes increased by 6.8% compared to the last year, primarily driven by growth across both the Prestige & Above category brands as well as Regular & Others category Given the recent price increases, the Company also focused on the growth in Regular category brands. As a percentage of total IMFL volumes, Prestige & Above brands contributed 26% in FY2018.

Revenue from Operations during FY2018 grew by 8.5% compared to last year. During the same period, Gross Margin increased by 261 bps y-o-y to 47.8%. This improvement was driven by a combination of price increases, higher export volumes, softening of input raw material cost and ongoing cost optimization initiatives undertaken by the Company EBITDA increased by 27.3% y-o-y with margins of 14.7% (up 217 bps Y-o-Y). This increase in EBITDA was driven by significantly improved Gross Margins. Finance cost for the year declined by 15.1% y-o-y from Rs. 80.38 Crore to Rs. 68.24 Crore.

Capital Structure and Liquidity:

Share Capital

As of March 31, 2018, Radico Khaitan had an authorized equity share capital of Rs. 34 Crore, divided into 17,00,00,000 equity shares of Rs. 2 each. The Company also had an authorized preference share capital of Rs. 60 Crore, divided into 60,00,000 preference shares of Rs. 100 each. As of March 31, 2018, the Company had issued, subscribed and paid-up equity share capital of Rs. 26.66 Crore divided into 13,33,07,265 equity shares of Rs. 2 each.

During the year, the Company allotted 2,68,500 equity shares on exercise of stock options under the ESOP scheme 2006 to the eligible employees.

During the year under review, the Company granted no stock options under the Employees Stock Option Scheme 2006.

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 31,2018 forms part of retained earnings.

Term Loan and Working Capital

During the year, net debt reduced by Rs. 215.27 Crore which is in line with the Company''s ongoing deleveraging strategy As of March 31, 2018, Total Debt was Rs. 592.05 Crore, Cash & Cash Equivalents were Rs. 22.35 Crore resulting in Net Debt of Rs. 569.70 Crore (vs. Rs. 784.97

Crore as of March 31, 2017). Total Debt consists of Rs. 487.80 Crore of Working Capital loans and Rs. 104.25 Crore of Long Term loans. During FY2017-18, the Company reduced the Long-Term ECBs from $25.2 million to $7.8 million. Net Debt reduction was Rs. 215.27 Crore. The Company is expected to become Long Term debt free by the end FY2018-19.

As on March 31, 2018, the Company had a conservative leverage with Debt/Equity ratio of 0.52x (0.78x as on March 2017) and Net Debt/EBITDA of 2.13x (vs. 3.74x as on March 2017).

Capital Market Ratings:

Radico Khaitan''s long-term and short-term credit facilities are rated by CARE Ratings. The Company''s long-term credit facilities are rated CARE A (Single A; stable outlook) and short-term credit facilities are rated CARE A1 (A One).

CARE A rated instruments are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk. CARE A1 rated instruments are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

Directors:

During the year under review, there was no change in Board of Directors.

Board Meetings:

During FY2018, the Board of Directors met four times on 23rd May 2017, 26th July 2017, 24th October 2017 and 24th January 2018. The gap between any two consecutive meetings of the Board of Directors of the Company was not more than 120 days. The details regarding composition, number of Board Meetings held and attendance of the directors during FY2018 are set out in the Corporate Governance Report which forms part of this Annual Report.

Meeting of Independent Directors:

The Independent Directors of the Company met separately on 24th January 2018 without the presence of the Non-Independent Directors and the members of management. The meeting was conducted informally to enable the Independent Directors to discuss matters pertaining to the Company''s affairs and put forth their combined views to the Board of Directors of the Company. In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (-Listing Regulations-), following matters were, inter-alia, discussed in the meeting:

01. Review of the performance of Non-Independent Directors and the Board as a whole;

02. Review of the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors;

03. Assess the quality, quantity and timelines of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties

Declaration by Independent Directors:

The Company has received declarations under Section 149 (6) of the Companies Act, 2013 from all Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the Listing Regulations. The Company keeps a policy of transparency and arm''s length while dealing with its Independent Directors. No transaction was entered with Independent Directors in the year which could have any material pecuniary relationship with them. Apart from sitting fee no other remuneration was given to any of the Independent Directors.

Board Evaluation:

In accordance with the Companies Act, 2013 and Rules made there under, Schedule - IV of the Act 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 in place a comprehensive and structured questionnaire for evaluation of the Board and its Committees, Board composition and its structure, effectiveness, functioning and information availability. This questionnaire also 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 like structure and composition, effectiveness of processes and meetings and other measures. The criteria for performance evaluation of the individual Directors include aspects like professional conduct, competency, contribution to the Board and Committee meetings and other measures. The performance evaluation of the 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.

Policy on Nomination, Remuneration and Board Diversity:

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members as well as diversity of the Board. We at Radico Khaitan recognize 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 nonexecutive, independent directors and woman director. The detail of the policy is explained in the Corporate Governance Report and full policy is also available on the company''s website on the link given below: http:// www.radicokhaitan.com / investorcenter.html

Roles and Responsibilities of Board Members:

The Company has a clearly laid out policy defining the structure and role of the Board Members. The Company has an Executive Chairman and Managing Director

- presently Dr Lalit Khaitan, a Managing Director

- currently Mr. Abhishek Khaitan and an optimum combination of Executive and Non-Executive Promoter/ Independent Directors. The duties of the Board Members including Independent Directors have been elaborated in the Listing Regulations, Section 166 of the Companies

Name of the Brand

Monde Selection Quality

Awards 2017-18

Rampur Indian Single Malt Whisky

Grand Gold

Regal Talons Deluxe Rare Generation Whisky

Gold

Magic Moments Remix Grapefruit and Watermelon Premium Flavoured Vodka

Gold

1965 Spirit of Victory Rum

Gold

Magic Moments Plain Vodka

Gold

Morpheus XO Premium Brandy

Gold

Magic Moments Remix Cucumber & Wild Green Lemon Premium Flavoured Vodka

Gold

Pluton Bay Rare Exotic Rum

Silver

Act, 2013 and Schedule IV of the said Act. There is a clear segregation of responsibility and authority amongst the Board Members.

Risk Management Policy:

In this volatile, uncertain and complex operating environment, only companies that manage their risk effectively can sustain. Risk management is embedded in Radico Khaitan''s corporate strategies and operating framework. 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 are reviewed by 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, minimization framework and controls are designed and appropriately implemented.

Insurance of Fixed Assets:

Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.

Awards and Recognition:

During the year, Radico Khaitan received a number of awards for its leading brands. These awards are a testament to the Company''s innovation and quality of products. The Company''s Rampur Single Malt whisky received the Double Gold at San Francisco World Wine & Spirits Awards 2017 and was Ranked #5 amongst the Top 20 Whiskies of 2017 in Whisky Advocate Magazine USA. In the Monde Selection Quality Awards 2018, Magic Moments Remix Flavored Vodka Peach and Morpheus

Brandy received the International High Quality Trophy This Trophy is awarded for products which have reached a high quality level, i.e. Grand Gold or Gold, over three consecutive years

Employee Stock Option Scheme:

Radico Khaitan''s employee stock option scheme was implemented to provide the employees with an opportunity to share in the growth of the Company and to reinforce long term commitment. The Compensation Committee, at its meetings held on 18.8.2017 granted 1,05,000 stock options, on 24.10.2017 granted 40,000 stock options, on 6.12.2017 granted 91,000 stock options and on 24.12018 granted 32,500 stock options, to the eligible employees, as per the Employees Stock Option Scheme 2006. The particulars of the options as required by SEBI (Share Based Employee Benefits) Regulations, 2014 are appended as Annexure - A and forms part of this report.

Dividend:

The Company has a dividend policy that balances the dual objective of appropriately rewarding its shareholders and retaining capital to support future growth. Your Directors are pleased to recommend a dividend of Rs.1.00 per equity share or 50% on face value of Rs.2.00 each for the year ended March 31, 2018. The total dividend payout for the financial year will be Rs. 16.07 Crore including a dividend distribution tax of Rs. 2.74 Crore. This higher dividend payout is to demonstrate our commitment towards our shareholders. The dividend is subject to approval of shareholders at the Annual General Meeting and will be paid to the shareholders whose names appear in the Register of Members as on the date of book closure.

Dematerialization:

During the year 8,10,487 shares of the Company constituting 0.61% of the issued and subscribed Share Capital of the Company, were dematerialized. Around 98.54% of the shares of the Company have now been dematerialized as on March 31, 2018. Your Directors would request all the members who have not yet converted their holdings into dematerialized form, to do so thereby facilitating trading of their shares. As per SEBI guidelines it is mandatory that the shares of a company are in dematerialized form for trading.

Financial Year

Date of Declaration of Dividend

Total Dividend

Unclaimed Dividend as on 31-3-2018

Due Date of Transfer to IEPF account

FY2002

16.07.2002

38,579,176.00

730,556.00

22.08.2009

FY2003

19.07.2003

34,721,258.40

914,312.00

24.08.2010

FY2004

17.07.2004

38,579,176.00

973,284.00

22.08.2011

FY2005

16.11.2005

42,437,093.60

983,341.00

21.12.2012

FY2006

25.09.2006

48,223,970.00

1,135,840.00

30.10.2013

FY2007

26.09.2007

51,231,109.50

922,432.00

05.11.2014

FY2008

30.09.2008

51,231,109.50

1,065,509.00

16.10.2015

FY2009

15.09.2009

30,738,665.70

699,978.00

07.10.2016

FY2010

09.09.2010

79,300,632.60

1,620,668.00

26.10.2017

Public Deposits:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (acceptance of Deposits) Rules, 2014.

Subsidiaries and Joint Ventures:

During the year under review, the Company has no subsidiary company. Radico Khaitan has one joint venture, namely, Radico NV Distilleries Maharashtra Limited (Radico NV). The Company has 36% stake in the said joint venture. In terms of the Section 129 (3), financial results of Radico NV are consolidated with the accounts of the Company.

In terms of the section 129 (3) of the Companies Act, 2013, the salient features of the financial statement of the joint venture company is set out in the prescribed form AOC

- 1 and is attached herewith as a separate Annexure - B.

Transfer to Investor Education & Protection Fund:

Section 124 of the Companies Act, 2013 mandates that a company should transfer dividend, that has been unclaimed for a period of seven years, from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). To ensure maximum disbursement of unclaimed dividend, the Company sends reminders to the concerned investors, before transfer of dividend to IEPF. Unclaimed dividend has been transferred to IEPF as per below table:

Transfer of Shares Underlying Unpaid Dividend:

The Board of Directors of the Company, in its meeting held on 24th October 2017, transmitted 4,41,502 equity shares of the Company into the Demat account of the IEPF Authority held with NSDL (DPID/ Client ID IN300708/10656671) in terms of the provisions of section 124(6) of the Companies Act, 2013 and the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time. These equity shares were the shares of such 1,391 shareholders whose unclaimed/ unpaid dividend (pertaining to financial years 2009-10 had been transferred into IEPF and who had not encashed their dividends for 7 (seven) subsequent financial years. Individual reminders were sent to concerned shareholders advising them to encash their dividend and the complete list of such shareholders whose shares were due for transfer to the IEPF was also placed in the Unclaimed Dividend section of the Investor Center on the website of the Company at http://www.radicokhaitan. com / investorcenter.html

Concerned shareholders may still claim the shares or apply for refund to the IEPF Authority by making an application in the prescribed form. The voting rights on shares transferred to the IEPF Authority shall remain frozen until the rightful owner claims the shares. The shares held in such Demat account shall not be transferred or dealt with in any manner whatsoever except for the purposes of transferring the shares back to the claimant as and when he approaches the Authority. All benefits accruing on such shares e.g., bonus shares, split, consolidation, fraction shares etc., except right issue shall also be credited to such Demat account. Any further dividend received on such shares shall be credited to the IEPF Fund.

Key Managerial Personnel:

There has been no change in Key Managerial Personnel during the year under review.

Remuneration of the Directors and Employees:

Your Company''s approach is to have performance-based compensation culture to attract and retain high quality talent. The remuneration policy, therefore, is market-led and takes into account the competitive nature of the business so as to attract and retain quality talent and leverage performance significantly. The remuneration payable to each executive Director is based on the remuneration structure as determined by the Board and is revised from time to time depending upon individual contribution, the Company''s performance and the provisions of the Companies Act, 2013. The policy is available on the Company website at http://radicokhaitan. com / investorcenter.html

Particulars of Employees:

In accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel Rules) 2014, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. During FY2017-18, 3(Three) persons employed throughout the year, were in receipt of remuneration of more than Rs. 102 lakhs per annum or more and l(One) person employed part of the year received salary more than 8.50 lakhs. During FY2017-18, the Company had a total of 1,141 employees.

The annexure under rule 5(2) and 5(3) of the Companies (Appointed and Remuneration of Managerial Personnel Rules) 2014 is not being sent along with this Annual Report to the members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection by Members at the registered Office of the Company, 21 days before the 34th Annual General Meeting and up to the date of the ensuing Annual General meeting during the business hours on working days.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by themselves or along with his spouse and dependent children) more than two percent of the equity shares of the Company. The information required under Section 197 (12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors'' Report for the year ended March 31, 2018 is given in Annexure - C to this Report.

Audit Report:

The observations made in the Auditors Report as enclosed with this Report are self-explanatory and therefore do not call for any further comments under Section 134 of the Companies Act, 2013.

Statutory Auditor:

M/s. BGJC & Associates LLP, Chartered Accountants are the Statutory Auditors of the Company for a period of five years with effect from 11.7.2016. M/s. BGJC & Associates LLP have confirmed to the Company that they are not disqualified under section 141 of the Companies Act, 2013, or any other applicable provisions for the time being in force and are eligible for being appointed as statutory auditors of the Company. M/s. BGJC & Associates LLP have also confirmed to the Company that, their appointment is within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors along with notes to Schedules is enclosed to this 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.

Cost Auditor:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Industrial Alcohol every year.

The Board of Directors, on the recommendation of audit committee, has appointed Mr. R. Krishnan, Cost Accountants, as cost auditor to audit the cost accounts of the Company for the financial year 2018-19 at a remuneration of Rs. 1 Lakh plus applicable government taxes (e.g. GST) and reimbursement of out of pocket expenses. As required under the Companies Act, 2013, a resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed Mr. Tanuj Vohra, Partner at M/s. TVA & Co. LLP, Company Secretaries, a firm of Company Secretaries in Practice (C.P. No. 5253) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - D and forms an integral part of this Report. There is no secretarial audit qualification for the year under review.

Particulars of Loans, Guarantees or Investment by the Company under Section 186 of the Companies Act, 2013:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

Vigil Mechanism:

Pursuant to the requirement of section 177 (9) & (10) of the Companies Act, 2013, Radico Khaitan has adopted a Vigil Mechanism and has a Whistle Blower Policy which allows employees of the Company can raise their concerns relating to fraud, malpractice or any other activity or event which is against the interest of the Company or society as a whole. Details of complaints received and the action taken are 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 www.radicokhaitan.com.

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 such 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 destroyed as per the Company''s policy on preservation of documents.

Related Party Transactions:

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 that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the promoters, directors or key managerial personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Legal & Compliance Department and a statement giving details of all Related Party Transactions are placed before the Audit Committee and Board for review and approval on a quarterly basis.

The policy on Related Party Transactions 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-a-vis the Company.

Environmental Protection Measures Taken by the Company:

In view of the corporate responsibility on environmental protection, the Company has adopted 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.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

As per Section 134 (3) (m) read with the Companies (Accounts Rules) 2014, the relevant information and data is given in Annexure - E and forms part of this Report.

Corporate Social Responsibilities (CSR):

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, enhancing livelihood, promoting education and health care including preventive health care and ensuring environmental sustainability. As part of its CSR programmes, the Company partners with the community and addresses issues of water and sanitation, education, health and skill-building. Radico Khaitan also promotes and encourages responsible drinking through engaging with employees, taking preventative action, 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 CSR Committee

1.

Dr. Lalit Khaitan

Chairman

2.

Mr. K. P. Singh

Member

3.

Mr. Ashutosh Patra

Member

4.

Ms. Shailja Devi

Member

The Company''s projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company''s CSR Policy. The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure - F forming part of this Report.

The Company is in the process of identifying bigger projects in healthcare and education so the unspent amount of Rs. 131.23 Lakhs will be spent together with the current year''s eligible spend.

Significant and Material Orders Passed by the Regulators or Courts:

There has been no significant and material order passed by the Regulators or Courts that would impact the going concern status of the Company and its future operations.

Safety & Wellbeing of Women:

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 has adopted a policy on 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 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. During the year under review, there were no sexual harassment cases reported to the Company.

Directors'' Responsibility Statement:

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) of the Companies Act, 2013.

01. that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

02. the Directors had selected such accounting policies and applied them 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 and loss of the Company for that period;

03. that the Directors have taken proper and sufficient 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.

04. the annual accounts have been prepared on a going concern basis;

05. that 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 effectively; and

06. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Business Responsibility Report:

The Business Responsibility Report for FY2017-18, as stipulated under Regulation 34(2)(f) of the Listing Regulations is annexed as a separate report and forms part of this Annual Report.

Extract of Annual Return:

Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return is provided in Annexure - G.

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.

Corporate Governance Report:

Report on Corporate Governance along with the certificate from Mr. Tanuj Vohra, Partner at M/s. TVA & Co. LLP, Company Secretaries, confirming compliance with conditions of corporate governance, as stipulated under the Listing Regulations, forms part of the Annual Report.

Internal Financial Controls:

Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitized and embedded in the business process.

Assurance on the effectiveness 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 the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

Audit Committee:

As on date, the Audit Committee comprises of three (3) Independent, Non-executive Directors. The members of the Audit Committee are Mr. Sarvesh Srivastava (Chairman of the Committee), Dr. Raghupati Singhania and Mr. Ashutosh Patra. All Members of the Audit Committee are qualified in finance and bring in expertise in the fields of finance, taxation, economics, industry and risk.

The Audit Committee invites the Chairman & Managing Director, Managing Director, Chief Financial Officer, Company Secretary, Statutory Auditor(s) and Internal Auditor and Cost Auditors to attend the meetings of the Audit Committee. The Company Secretary acts as Secretary to the Committee. The minutes of each Audit Committee meeting are placed and discussed at the next meeting of the Board.

Statement on compliance of Secretarial Standards:

The Radico Khaitan Limited has complied with all the applicable Secretarial Standards during Financial year 2017-18 and have a team of different auditors to assist and audit all the Secretarial Compliances applicable to the company.

Acknowledgements:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities such as SEBI, Stock Exchanges and other Central & State Government authorities and agencies, Registrars for their guidance and support. 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 trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth.

Your Directors place on record their deep appreciation to employees at all levels for their efforts, dedication and commitment. Their enthusiasm and hard work has 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 our products

For & on behalf of the Board

Sd/-

Dr. Lalit Khaitan

Place: New Delhi Chairman & Managing Director

Date: May 03, 2018 DIN – 00238222


Mar 31, 2017

Dear Members,

The is our pleasure to present the Thirty Third Annual Report on the business and operations together with the Audited Financial Statements of your Company for the year ended March 31, 2017.

Summary of Financial Performance:

(Figures Rs. in Crore)

FY2017

FY2016

Revenue from Operations (Gross)

4,867.95

4,271.09

Other Income

19.65

38.87

Revenue from Operations (Net of Excise Duty)

1,679.90

1,651.82

Earnings before Interest, Tax, Depreciation & Amortization and Other Income (EBITDA)

210.79

186.12

Profit before Tax

109.68

98.72

Profit after Tax from continuing business

80.61

73.45

Total Comprehensive Income

79.28

71.84

Other Equity brought forward from last year

936..51

877.35

Profit available for appropriation

-

165.66

Transfer to General Reserve

-

50.00

Proposed Dividend and tax thereon

12.81

12.81

Other Equity carried forward

1003.28

936.51

Operations Review:

FY2017 was a volatile year marked by a number of industry related issues and uncertainties. In addition to the increase in duties & taxes and higher raw material costs without corresponding price increases, industry faced the challenges due to demonetization, state level prohibitions and national highway liquor ban. These uncontrollable events in succession led to the slowdown in the industry growth, particularly in the regular category volumes. The Company’s total IMFL volumes increased by 0.4% in comparison to the last year, primarily driven by robust performance of the Prestige & Above category brands which grew by 7.9% y-o-y. As a percentage of total IMFL volumes, Prestige & Above brands contributed 26.0% compared to 24.2% in FY2016. Net Sales during FY2017 increased by 1.7% in comparison to FY2016.

Despite subdued sales, we delivered a strong operating performance with EBITDA increasing by 13.3% y-o-y with margins of 12.5%. This increase in EBITDA was after absorbing a 6.9% y-o-y increase in the ENA costs during the year. However, given a favourable monsoon forecast ENA prices are expected to stabilise in the near term. EBITDA of Rs. 210.8 Crore during FY2017 included a non-cash profit of Rs. 0.8 Crore on account of foreign exchange fluctuation related to ECBs (compared to a non-cash charge of Rs. 19.8 Crore in FY2016). Finance cost during the year declined by 5.2% to Rs. 80.4 Crore on account of repayment of borrowings and reduction in interest rates.

Capital Structure and Liquidity:

Share Capital

As of March 31, 2017, Radico Khaitan had an authorized equity share capital of Rs. 34 Crore, divided into 17,00,00,000 equity shares of Rs. 2 each. The Company also had an authorized preference share capital of Rs. 60 Crore, divided into 60,00,000 preference shares of Rs. 100 each. During the year under review, there was no change in the Company’s issued, subscribed and paid-up equity share capital. As of 31st March, 2017, the Company had issued, subscribed and paid-up equity share capital of Rs. 26.60 Crore divided into 13,30,38,765 equity shares of Rs. 2 each.

During the year under review, the Company granted 100,000 stock options under the Employees Stock Option Scheme 2006. These shares well vest with employees in next four years.

General Reserve

No amount has been transferred to the General Reserve out of the Company’s profit of Rs. 79.28 Crore for the financial year ended March 31, 2017.

Term Loan and Working Capital

During the year, net debt reduced by Rs. 162 Crore which is in line with the Company’s ongoing deleveraging strategy. As of March 31, 2017, Total Debt was Rs. 799.0 Crore while Cash & Cash Equivalents were Rs. 14.1 Crore resulting in Net Debt of Rs. 785.0 Crore (vs. Rs. 947.0 Crore as on March 31, 2016). Total Debt consists of Rs. 550.9 Crore of Working Capital loans and Rs. 248.1 Crore of Long Term loans. During FY2017,the Company reduced the Long Term ECBs from $41.4 million to $25.2 million. Working Capital loans increased during the same period due to seasonality impact.

As on March 31, 2017, Company had a conservative leverage with Debt/Equity ratio of 0.78x (1.00x as on March 2016) and Net Debt/EBITDA of 3.72x (vs. 5.09x as on March 2016).

Capital Market Ratings:

Radico Khaitan’s long term and short term credit facilities are rated by CARE Ratings. The Company’s long term credit facilities are rated CARE A (Single A; stable outlook) and short term credit facilities are rated CARE A1 (A One).

CARE A rated instruments are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk. CARE A1 rated instruments are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

Directors:

During the year under review, there was no change in directors.

Board Meetings:

During FY2017, the Board of Directors met five times on 10th May 2016, 25th May 2016, 17th August 2016, 4th November 2016 and 10th February 2017. The gap between any two consecutive meetings of the Board of Directors of the Company was not more than 120 days. The details regarding composition, number of Board Meetings held and attendance of the directors during FY2017 are set out in the Corporate Governance Report as annexed with this report.

Meeting of Independent Directors:

The Independent Directors of the Company met separately on 10th February 2017 without the presence of the Non-Independent Directors and the members of management. The meeting was conducted informally to enable the Independent Directors to discuss matters pertaining to the Company’s affairs and put forth their combined views to the Board of Directors of the Company. In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), following matters were, inter-alia, discussed in 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, taking into account the views of Executive Directors and Non-Executive Directors;

3) Assess the quality, quantity and timelines of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Declaration by Independent Directors:

The Company has received declarations under Section 149 (6) of the Companies Act, 2013 from all Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the Listing Regulations. The Company keeps a policy of transparency and arm’s length while dealing with its Independent Directors. No transaction was entered with Independent Directors in the year which could have any material pecuniary relationship with them. Apart from sitting fee no other remuneration was given to any of the Independent Directors.

Board Evaluation:

In accordance with the Companies Act, 2013 and Rules made thereunder, Schedule - IV of the Act and SEBI 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 in place a comprehensive and structured questionnaire for evaluation of the Board and its Committees, Board composition and its structure, effectiveness, functioning and information availability. This questionnaire also covers specific criteria and the grounds on which all Directors in their individual capacity are evaluated.

The performance evaluation of the 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.

Policy on Nomination, Remuneration and Board Diversity:

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members as well as diversity of the Board. We at Radico Khaitan recognize 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, independent directors and woman director. The detail of the policy is explained in the Corporate Governance Report.

Roles and Responsibilities of Board Members:

The Company has a clearly laid out policy defining the structure and role of the Board Members. The Company has an Executive Chairman and Managing Director - presently Dr. Lalit Khaitan, a Managing Director - currently Mr. Abhishek Khaitan and an optimum combination of Executive and Non-Executive Promoter/Independent Directors. The duties of the Board Members including Independent Directors have been elaborated in the Listing Regulations, Section 166 of the Companies Act, 2013 and Schedule IV of the said Act. There is a clear segregation of responsibility and authority amongst the Board Members.

Risk Management Policy:

In this volatile, uncertain and complex operating environment, only companies that manage their risk effectively can sustain. Risk management is embedded in Radico Khaitan’s corporate strategies and operating framework. 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 are reviewed by 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, minimisation framework and controls are designed and appropriately implemented.

Insurance of Fixed Assets:

Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.

Awards and Recognition:

During the year, Radico Khaitan received numerous awards for its leading brands. These awards are a testament to the Company’s innovation and quality of products. In the Monde Selection Quality Awards 2017, Magic Moments Remix Flavoured Vodka Peach and Morpheus Brandy received the International High Quality Trophy. This Trophy is awarded for products which have reached a high quality level, i.e. Grand Gold or Gold, over three consecutive years.

Award Details:

Name of the Brand

Monde Selection Quality Awards 2017

Magic Moments Remix Lemongrass & Ginger Flavoured Vodka

Grand Gold

Magic Moments Remix Peach Flavoured Vodka

Grand Gold

Regal Talon Rare Generation Whisky

Gold

Rampur Indian Single Malt Whisky

Gold

Morpheus Brandy

Gold

Magic Moments Vodka

Gold

Magic Moments Remix Green Apple Flavoured Vodka

Gold

Magic Moments Remix Orange Flavoured Vodka

Gold

Magic Moments Remix Lemon Flavoured Vodka

Gold

Magic Moments Remix Chocolate Flavoured Vodka

Gold

Magic Moments Remix Raspberry Flavoured Vodka

Gold

M2 Verve Super Premium Vodka

Gold

M2 Verve Magic Moments Green Apple Premium Flavoured Vodka

Gold

M2 Verve Magic Moments Orange Premium Flavoured Vodka

Gold

Pluton Bay Rum

Silver

Magic Moments Electra Appletini

Silver

Magic Moments Electra Agent Orange

Silver

Magic Moments Electra Mojito

Silver

Magic Moments Electra Cosmopolitan

Bronze


Employee Stock Option Scheme:

Radico Khaitan’s employee stock option scheme was implemented to provide the employees with an opportunity to share in the growth of the Company and to reinforce long term commitment. The Compensation Committee, at its meetings held on 02.03.2017, granted 1,00,000 stock options, to the eligible employees, as per the Employees Stock Option Scheme 2006. The particulars of the options as required by SEBI (employee stock option scheme and employee purchase scheme) Guidelines, 1999 are appended as Annexure - A and forms part of this report.

Dividend:

The Company has a dividend policy that balances the dual objective of appropriately rewarding its shareholders and retaining capital to support future growth. Your Directors are pleased to recommend a dividend of Rs. 0.80 per equity share or 40% on face value of Rs. 2.00 each for the year ended March 31, 2017. The total dividend payout for the financial year will be Rs. 12.81 Crore including a dividend distribution tax of Rs. 2.17 Crore. This consistent dividend payout is to demonstrate our commitment towards our shareholders. The dividend is subject to approval of shareholders at the Annual General Meeting on 29th September 2017 and will be paid to the shareholders whose names appear in the Register of Members as on the date of book closure, i.e. 23.9.2017 to 29.9.2017.

Dematerialisation:

During the year 79,870 shares of the Company constituting 0.06% of the issued and subscribed Share Capital of the Company, were dematerialised. Around 98.13% of the shares of the Company have now been dematerialized as on March 31, 2017. Your Directors would request all the members who have not yet converted their holdings into dematerialized form, to do so thereby facilitating trading of their shares. As per SEBI guidelines it is mandatory that the shares of a company are in dematerialized form for trading.

Public Deposits:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (acceptance of Deposits) Rules, 2014.

Subsidiaries and Joint Ventures:

During the year under review, the Company has no subsidiary company. Radico Khaitan has one joint venture, namely, Radico NV Distilleries Maharashtra Limited. The Company has 36% stake in the said JV. In terms of the Section129 (3) financial results of Radico NV are consolidated with the accounts of the Company.

Those Shareholders who are interested in obtaining a copy of the audited annual accounts of the Joint Venture company may write to the Company.

In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the Joint Venture Company is set out in the prescribed form AOC - 1 is attached herewith as a separate Annexure - A-II.

Transfer to Investor Education & Protection Fund:

Section 124 of the Companies Act, 2013 mandates that company should transfer dividend, that has been unclaimed for a period of seven years, from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). To ensure maximum disbursement of unclaimed dividend, the Company sends reminders to the concerned investors, before transfer of dividend to IEPF. Unclaimed dividend has been transferred to IEPF as per below table:

(Amount in Rs.)

Financial Year

Date of Declaration of Dividend

Total Dividend

Unclaimed Dividend as on 31-3-2016

Due Date of Transfer to IEPF account

FY2002

16.07.2002

38,579,176.00

730,556.00

22.08.2009

FY2003

19.07.2003

34,721,258.40

914,312.00

24.08.2010

FY2004

17.07.2004

38,579,176.00

973,284.00

22.08.2011

FY2005

16.11.2005

42,437,093.60

983,341.00

21.12.2012

FY2006

25.09.2006

48,223,970.00

1,135,840.00

30.10.2013

FY2007

26.09.2007

51,231,109.50

922,432.00

05.11.2014

FY2008

30.09.2008

51,231,109.50

1,065,509.00

16.10.2015

FY2009

15.09.2009

30,738,665.70

699,978.00

07.10.2016


Key Managerial Personnel:

There has been no change in Key Managerial Personnel during the year under review.

Remuneration of the Directors and Employees:

Your Company’s approach is to have performance based compensation culture to attract and retain high quality talent. The remuneration policy, therefore, is market-led and takes into account the competitive circumstance of the business so as to attract and retain quality talent and leverage performance significantly.

The remuneration payable to each executive Director is based on the remuneration structure as determined by the Board, and is revised from time to time depending upon individual contribution, the Company’s performance and the provisions of the Companies Act, 2013.

Particulars of Employees:

In accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel Rules) 2014, the names and other particulars of employees are to be set out in the Directors’ Report, as an addendum thereto. During FY2017, 2 (two) persons employed throughout the year, were in receipt of remuneration of Rs. 120 lakh per annum or more and 2 (two) persons employed part of the year received salary more than the prescribed limit. During FY2017, the Company had a total of 1124 employees, as per Annexure B.

The above annexure is not being sent along with this Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the registered Office of the Company, 21 days before the 33rd Annual general meeting and up to the date of the ensuing Annual General meeting during the business hours on working days.

None of the employees listed in the said annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

The information required under Section 197 (12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors’ Report for the year ended March 31, 2017 is given in Annexure - B to this Report.

The Business Responsibility Reporting as required by Section 134 (5) of the Companies Act, 2013 is not applicable to your Company for the financial year ending March 31, 2017.

Audit Report:

The observations made in the Auditors Report as enclosed with this Report are self-explanatory and therefore do not call for any further comments under Section 134 of the Companies Act, 2013.

Statutory Auditor:

M/s. BGJC & Associates LLP, Chartered Accountants are the Statutory Auditors of the Company for a period of five years with effect from 11.7.2016. M/s. BGJC & Associates LLP have confirmed to the Company that they are not disqualified under section 141 of the Companies Act, 2013, or any other applicable provisions for the time being in force and are eligible for being appointed as statutory auditors of the Company. M/s. BGJC & Associates LLP have also confirmed to the Company that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors along with notes to Schedules is enclosed to this 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.

Cost Auditor:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Industrial Alcohol every year.

The Board of Directors, on the recommendation of audit committee, has appointed Mr. S.N. Balasubramanian, Cost Accountants, as cost auditor to audit the cost accounts of the Company for the financial year 2018 at a remuneration of Rs. 1 lac plus service tax as applicable and reimbursement of out of pocket expenses. As required under the Companies Act, 2013, a resolution seeking member’s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s. TVA & Co. LLP, a firm of Company Secretaries in Practice (C.P. No. 5253) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - C and forms an integral part of this Report. There is no secretarial audit qualification for the year under review.

Particulars of Loans, Guarantees or Investment by the Company under Section 186 of the Companies Act, 2013:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

Vigil Mechanism:

Pursuant to the requirement of section 177 (9) & (10) of the Companies Act, 2013, Radico Khaitan has adopted a Vigil Mechanism, which allows employees of the Company can raise their concerns relating to fraud, malpractice or any other activity or event which is against the interest of the Company or society as a whole. Details of complaints received and the action taken are 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 www.radicokhaitan.com.

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 such 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 destroyed as per the policy on preservation of documents.

Related Party Transactions:

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 that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, directors or Key Managerial Personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Legal & Compliance Department and a statement giving details of all Related Party Transactions are placed before the Audit Committee and Board for review and approval on a quarterly basis.

The policy on Related Party Transactions 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-a-vis the Company.

Environmental Protection Measures Taken by the Company:

In view of the corporate responsibility on Environmental Protection, the Company has adopted a number of measures to improve in the field of environment, safety and health. Measures like 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 millions of people across our product value chain.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

As per Section 134 (3) (m) read with the Companies (Accounts Rules) 2014, the relevant information and data is given at Annexure - D.

Corporate Social Responsibilities (CSR):

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 eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and ensuring environmental sustainability. As part of its CSR programmes, the Company partners with the community and addresses issues of water and sanitation, education, health and skill-building. Radico Khaitan also promotes and encourages responsible drinking through engaging with employees, taking preventative action, education & raising awareness and bringing communities on board to address local challenges at their root.

Composition of the Committee:

1.

Dr. Lalit Khaitan

Chairman

2.

Mr. K.P. Singh

Member

3.

Mr. Ashutosh Patra

Member

4.

Ms. Shailja Devi

Member

The Company’s projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company’s CSR policy. The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure - E forming part of this Report.

The Company is in the process of identifying bigger projects in Healthcare & Education so the unspent amount will be spent together with the current year eligible spend.

Significant and Material Orders Passed by the Regulators or Courts:

There has been no significant and material order passed by the Regulators or Courts that would impact the going concern status of the Company and its future operations.

Safety & Wellbeing of Women:

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 has adopted a Policy on 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 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. During the year under review, there were no sexual harassment cases reported to the Company.

Directors’ Responsibility Statement:

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) of the Companies Act, 2013.

i) that in the preparation of the Annual Accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) the board had selected such accounting policies and applied them 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 as at March 31, 2017 and of the profit of the Company for the year ended on that date;

iii) that the Directors have taken proper and sufficient 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) that 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 effectively; and

vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Extract of Annual Return:

Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return is provided in Annexure - F.

Management Discussion and Analysis:

Management Discussion and Analysis Report, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and forms part of this report.

Corporate Governance Report:

Report on Corporate Governance along with the certificate of M/s. TVA & Co. LLP, Secretarial Auditor., confirming compliance of conditions of Corporate Governance, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, forms part of the Annual Report.

Internal Financial Controls:

Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitised and embedded in the business process.

Assurance on the effectiveness 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 the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

Audit Committee:

As on date, the Audit Committee comprises of three (3) Independent, Non-executive Directors. The members of the Audit Committee are Mr. Sarvesh Srivastava (Chairman of the Committee), Dr. Raghupati Singhania and Mr. Ashutosh Patra. All Members of the Audit Committee are financially literate and bring in expertise in the fields of finance, taxation, economics, industry and risk.

The Audit Committee invites the Chairman & Managing Director, Managing Director, Chief Financial Officer and the Company Secretary, Statutory Auditor(s) and Internal Auditor and Cost Auditors to attend the meetings of the Audit Committee. The Company Secretary acts as Secretary to the Committee. The minutes of each Audit Committee meeting are placed and discussed at the next meeting of the Board.

Acknowledgements:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities such as SEBI, Stock Exchanges and other Central & State Government authorities and agencies, Registrars for their guidance and support. 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 trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth.

Your Directors place on record their deep appreciation to employees at all levels for their efforts, dedication and commitment. Their enthusiasm and hard work has 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 our products.

For & on behalf of the Board

Sd/-

Place: New Delhi Dr. Lalit Khaitan

Date: 26.07.2017 Chairman & Managing Director

DIN - 00238222


Mar 31, 2015

Dear Members,

THE Directors take great pleasure in presenting their 31st Annual Report on the business and operations together with the audited financial statement of the Company for the year ended March 31,2015.

Summary of Financial Performance:

(Rs. in Crore)

2014-15 2013-14

Net Sales (including sales from 1,846.46 1,857.22 arrangements with other Distilleries / Bottling units)

Gross Profit (before depreciation and tax) 125.44 145.16

Profit before tax 87.13 106.41

Profit after tax 67.64 71.25

Prior period adjustments 0.00 0.00

Surplus brought forward from last year 98.61 89.81

Profit available for appropriation 166.25 161.07

Transfer to General Reserve 50.00 50.00

Proposed Dividend and tax thereon 12.81 12.45

Balance carried forward 88.49 98.61

Operations Review:

FY2015 was a very challenging year for the spirits industry in India. The immediate past current dynamics of the spirit industry and the operating environment have largely been unfavourable for the business growth. During the year, input costs, in particular ENA prices, which have already been on an upward trend over the last couple of years, are believed to have peaked. We believe that these were shortterm challenges and Radico Khaitan is very well positioned for the anticipated upturn in the industry. Despite these industry challenges, the Company was able to report sustained performance during the year. Sales remained relatively flat at Rs.1,846,5 Crore compared to the same period last year. Prestige & Above category brands registered a volume growth of 8.8% y-o-y in FY2015 to reach 40.43 million cases. Prestige & Above category brands as a percentage of total IMFL sales increased from 18,3% in FY2014 to 20.7% in FY2015. However, overall IMFL volume was 194.88 million cases in FY2015, representing a y-o-y decline of 4.3%. Net EBITDA margin was under pressure, standing at 9.8% in FY2015 as compared to 11.2% in FY2014, mainly on account of higher input costs during the year (6% ENA cost increase and 6% glass bottle cost increase). The Company's leverage profile has witnessed improvement with a 6% reduction in total debt on y-o-y basis, FY2015 total debt standi ng at Rs.849.3 Crore.

Radico Khaitan's Magic Moments vodka continued to be the market leader in the fast growing premium vodka segment. The Company launched Verve super premium vodka in FY 2012 and its different flavours in FY 2014. Radico Khaitan's latest offering is triple distilled and triple filtered 8% Vodka infused ready to drink (RTD) product Electra in three fierce yet sublime premium flavour (Agent Orange, Appletini & Cosmopolitan).

Capital Structure and Liquidity:

Share Capital

During the year under review, the Company has not issued any new shares on the exercise of stock options granted under the Employees Stock Option Scheme 2006. The outstanding, issued and paid-up equity shares stood at 133,038,765 shares, same as of March 31,2014.

General Reserve

An amount of Rs. 50 Crore has been transferred to the General Reserve out of Radico Khaitan's profit of Rs. 67.6 Crore for the financial year ended March 31,2015.

Term Loan and Working Capital

As of March 31, 2015, the Company had total debt of Rs, 849.3 Crore, Cash and Cash Equivalents were Rs. 10.3 Crore resulting in Net Debt of Rs. 838.9 Crore. Total Debt consists of Rs. 412,4 Crore of Working Capital loans and Rs, 436.9 Crore of Long Term loans, including Long Term loans maturing within 12 months of the balance sheet date. As of March 31,2015, Radico had a conservative leverage with Debt/Equity ratio of 1,0x.

Capital Market Ratings:

The Company continued to enjoy investment grade credit rating from Credit Analysis & Research Ltd (CARE) which has re-affirmed the rating of "CARE A " assigned for the long term facilities. CARE A or A1 rating is considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk,

CARE has also re-affirmed the rating of "CARE A1 " assigned for the short term facilities, which is considered to have very strong degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

Directors:

During the year the company appointed Mr. Sarvesh Srivastava as Independent Director and Mrs. Shailja Saraf as a Non Executive Non Independent Director (Women Director) of the Company with effect from 30th May 2014. During the year Mr. Mahendra Kumar Doogar resigned as Director of the Company with the effect from 30th May 2014,

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Abhishek Khaitan, Managing Director retires by rotation at the forthcoming Annual General meeting and being eligible offers himself for re-appointment.

Board Meetings:

During FY2014-15, the Board of Directors met 4 (four) times on 30thMay 2014, .12th August, 2014,11th November 2014 and 10th February 2015. The period between any two consecutive meetings of the Board of Directors of the Company was not more than 120 days. The details regarding composition, number of Board Meetings held and attendance of the directors during FY 2014-15 are set out in the Corporate Governance Report.

Meeting of Independent Directors

A meeting of Independent Directors was held on 10.02.2015 to:

1) Review the performance of Non-independent Directors and the Board as a whole;

2) Review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-executive Directors;

3) Assess the quality, quantity and timelines of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties

Training of Independent Directors

Every new Independent director of the Board attends an orientation prog ram conducted by senior executives of the Company. This program is intended to familiarise the new Board members about the Company's strategy, products and offerings, operations and facilities, economic environment organisation structure, human resource, finance, technology, quality and risk management.

A majority of the independent directors of Radico Khaitan have been associated with the Company for over 3 years and have in depth understanding of the Company's business model, strategy and business environment. Radico Khaitan firmly believes that a Board, which is well informed /familiarised with the Company, can contribute significantly to effectively discharge its role of trusteeship in a manner that fulfils stakeholders' expectations.

In pursuit of this, the Directors are updated on a continuing basis on developments in the corporate and industry scenario including those pertaining to regulatory and economic environment, to enable them to take well informed and timely decisions. The Independent directors attended interactive session from time to time to understand the dynamics of industry.

Statement on declaration given by independent directors under sub-section (6) of section 149;

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Company keeps a policy of transparency and arm's length while dealing with its Independent Directors. No transaction was entered with Independent directors in the year which could have any material pecuniary relationship with them. Apart from sitting fee no other remuneration was given to any of the Independent Directors.

Board Evaluation:

Clause 49 of the Listing Agreement requires that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be performed by the Board of its own performance, various committees of the Board and that of the individual directors. Pursuant to these requirements, a comprehensive and structured questionnaire was prepared after taking into consideration the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the 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.

Policy on Nomination, Remuneration and Board Diversity u/s 178 sub Section 1:

The Board of Directors (the "Board") on the recommendation of the Nomination and Remuneration Committee (the "Committee") has approved and adopted the Nomination, Remuneration and Board Diversity Policy (the "Policy") in compliance with the provisions of Section 178 of the Companies Act, 2013 and rules made thereunder, and Clause 49 of the Listing Agreements with the stock exchanges. The policy and its objectives are available on the Company s website www.radicokhaitan.com

Risk Management Policy:

Risk management is embedded in the operating framework of Radico Khaitan Ltd. The Company believes that managing risks goes hand in hand with maximising returns. To this effect, there is a robust process in place to identify key risks across the Company and prioritise relevant action plans to mitigate these risks. Risk Management Framework is reviewed periodically by the Board and the Audit Committee which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks.

During the year, a Risk Management Policy has been approved by Audit Committee. The objective of this policy is to have a well defined approach to risk. The Policy lays broad guidelines for the appropriate authority so as to be able to do timely identification, assessment, and prioritisation of risks affecting the Company in the short and foreseeable future. The Company has appointed Independent Consultant to make a report on key risks and its addressal system so as to make sure that risks are adequately compensated or mitigated. The Internal Audit function is responsible to assist the Audit Committee on an independent basis with a full status of the risk assessments and management.

Awards and Recognition:

During the year Radico Khaitan received numerous awards for its leading brands at various international events. These awards are testament to the Company's understanding of the customer preference as well as the superior quality of its products. Some of the awards received during the year were:

Award Details

Name of Brands Monde Selection Award in 2015

Magic Moments Vodka Gold

Magic Moments Remix Green Apple Flavoured Vodka Gold

Magic Moments Remix Lemongrass & Grand Gold Ginger Flavoured Vodka

Morpheus Brandy Gold

Magic Moments Remix Orange Flavoured Vodka Gold

Magic Moments Remix Lemon Flavoured Vodka Gold

Magic Moments Remix Chocolate Flavoured Vodka Gold

Magic Moments Remix Raspberry Flavoured Vodka Gold

M2 Verve Magic Moments Super Premium Vodka Gold

M2 Verve Magic Moments Green Apple Gold Premium Flavoured Vodka

M2 Verve Magic Moments Orange Gold Premium Flavoured Vodka

Magic Moments Remix Peach Flavoured Vodka Grand Gold

Name of Brands International High quality Trophy Award in 2015 from Monde Selection for having achieved Gold for 3 consecutive years

Magic Moments Vodka Gold

Magic Moments Remix Green Apple Flavoured Vodka

Magic Moments Remix Lemongrass & Gold Ginger Flavoured Vodka

Morpheus Brandy

Magic Moments Remix Orange Flavoured Vodka Gold

Magic Moments Remix Lemon Flavoured Vodka Gold

Magic Moments Remix Chocolate Flavoured Vodka Gold

Magic Moments Remix Raspberry Flavoured Vodka Gold

M2 Verve Magic Moments Super Premium Vodka Gold

M2 Verve Magic Moments Green Apple Gold Premium Flavoured Vodka

M2 Verve Magic Moments Orange - Premium Flavoured Vodka

Magic Moments Remix Peach Flavoured Vodka -

Employee Stock Option Scheme: [ESOP Scheme]

To provide the employees with an opportunity to share in the growth of the Company and to reinforce long term commitment, Radico Khaitan implemented the Employees ESOP Scheme in 2006. However, during the year under review, the Company has not issued any new shares on the exercise of stock options under the Employees Stock Option Scheme 2006. The particulars of the options as required by SEBI (Employees Stock Option Scheme and Employees Purchase Scheme) guidelines, 1999 are appended as annexure 'A' and forms part of this report.

Dividend:

The Company has a dividend policy that balances the dual objective of appropriately rewarding its shareholders and retaining capital to support future growth, Despite a challenging year, your Directors are pleased to recommend a dividend of Rs. 0.80 per equity share or 40% on face value of Rs. 2.00 each for the year ended March 31,2015. The total dividend payout for the financial year will be Rs. 12.81 Crore including a dividend distribution tax of Rs. 2.17 Crore. This consistent dividend payout is to demonstrate our commitment towards our shareholders. The dividend is subject to approval of shareholders at the Annual General Meeting on 30.09.2015 and will be paid to the shareholders whose names appear in the Register of Members as on 25th September 2015.

Dematerialisation:

During the year 150,885 shares of the Company constituting 0.11% of the issued and subscribed Share Capital of the Company, were dematerialised. Around 98.01% of the shares of the Company have now been dematerialized as on March 31,2015. Your Directors would request all the members who have not yet converted their holdings into dematerialized form, to do so thereby facilitating trading of their shares. As per SEBI guidelines it is now mandatory that the shares of a company are in dematerialized form for trading.

Public Deposits:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (acceptance of Deposits) Rules, 2014.

Subsidiaries and Joint Ventures:

During the year under review, the Company has no subsidiary company. Further, during the year, Radico Global Limited, Dubai ceased to be the associate of the Company. The company is having only one joint venture in the name of Radico N.V. Distilleries Maharashtra Limited. In the joint venture company hold 36% of shareholding.

Transfer to Investor Education & Protection Fund:

Section 124 of the Companies Act, 2013 (Section 205A of the Companies Act, 1956) mandates that companies transfer dividend, that has been unclaimed for a period of seven years, from the unpaid dividend account to the Investor Education and Protection Fund (IEPF), To ensure maximum disbursement of unclaimed dividend, the Company sends reminders to the concerned investors, before transfer of dividend to IEPF. Unclaimed dividend has been transferred to IEPF as per below table:

Financial Date of Declaration Total Dividend Year of Dividend (Rs.)

FY 2002 17.07.2002 38,579,176.0

FY 2003 19.07.2003 34,721,258.4

FY 2004 17.07.2004 38,579,176.0

FY 2005 16.11.2005 42,437,093.6

FY 2006 25.09.2006 48,223,970.0

FY 2007 26.09.2007 48,223,970.0

Financial Unclaimed Dividend Due Date of Transfer Year as on 31-3-2015 (Rs.) to IEPF account (Rs.)

FY 2002 730,556.0 22.08.2009

FY 2003 914,312.0 24.08.2010

FY 2004 973,284.0 22.08.2011

FY 2005 983,341.0 21.12.2012

FY 2006 11,35,840.0 30.10.2013

FY 2007 922,432.0 05.11.2014

Key Managerial Personnel:

During the year under review, the Company has appointed & reconfirmed following persons as Key Managerial Personnel;

No. Name of the person Designation

1. Mr. Abhishek Khaitan Managing Director & Chief Executive Officer

2. Mr. K.P, Singh Whole Time Director

3. Mr. Dilip K. Banthiya Chief Financial Officer

4. Mr, Amit Manchanda Group Head - Legal & Company Secretary

Remuneration of the Directors and Employees:

The remuneration payable to each non-executive director is based on the remuneration structure as determined by the Board, and is revised from time to time depending upon individual contribution, the Company's performance and the provisions of the Companies Act, 2013,

The compensation policy of Radico Khaitan is aimed to attract, retain, reward and motivate talented individuals critical for achieving the long term strategic goals of the Company, Your Company's approach is to have performance based compensation culture. The compensation system should also take into account factors such as roles, skills, competencies, experience and grade to differentiate pay appropriately on the basis of contribution, skill and availability of talent on account of competitive market forces. Details pertaining to remuneration as required under Section 197 (12) of the Companies Act, 2013 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure B with this report.

Particulars of Employees:

In accordance with the provisions of Section 134, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. During FY2015, 8 persons employed throughout the year, were in receipt of remuneration of Rs.60 lacs per annum or more amounting to Rs. 14.24 crores. During FY2015, the Company had 1150 employees.

The above annexure is not being sent along with this Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the registered Office of the Company, 21 days before the 31th Annual general meeting and up to the date of the ensuing Annual General meeting during the business hours on working days.

None of the employees listed in the said annexure is a relative of any director of the Company, None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company,

The Business Responsibility Reporting as required by Clause 55 of the Listing Agreement within the Stock Exchanges is not applicable to your Company for the financial year ending March 31,2015.

Audit Report for the Year Ended FY 2015:

The observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments under Section 134of the Companies Act, 2013.

Statutory Auditors:

M/s. V. Sankar Aiyar & Co., Chartered Accountants, (Firm Registration No. 109208W) who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the financial year 2015-16. As required under the provisions of Section 139 of the Companies act, 2013, Radico Khaitan has obtained written confirmation from M/s. V. Sankar Aiyar & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section.

Cost Auditor:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Industrial Alcohol every year.

The Board of Directors, on the recommendation of audit committee, has appointed Mr. S.N. Balasubramanian Cost Accountants, as cost auditor to audit the cost accounts of the Company for the financial year 2015-16 at a remuneration of Rs.1 lac plus service tax as applicable and reimbursement of out of pocket expenses. As required under the Companies Act, 2013, a resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

The cost audit report for FY2015 was filed with the Ministry of Corporate Affairs on May 1,2015.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s.Tanuj Vohra & Associates, a firm of Company Secretaries in Practice (C.P. No. 5253) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure-C and forms an integral part of this Report.

There is no secretarial audit qualification for the year under review.

Internal Control Systems and their Adequacy:

Your Company has effective internal control and risk-mitigation systems, which are constantly assessed and strengthened with new and revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is performed by M/s. Grant Thornton. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the internal Audit function reports to the Chairman of the Audit Committee.

Particulars of Loans, Guarantees or Investment by the Company:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

Vigil Mechanism;

Pursuant to the requirement of section 177 (9) a (10) of the Companies Act, 2013, Radico Khaitan has adopted a Vigil Mechanism, 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 as a whole. Details of complaints received and the action taken are 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 http: //www. radicokhaitan. com/data pdf/whistle Mechanism Whistte Blower Policy. pdf

Related Party Transactions:

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 that the provisions of Section 188 of the Companies Act, 2013 are not attracted, and disclosure in Form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, directors or Key Managerial Personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which were of repetitive nature. Transactions entered into pursuant to omnibus approval were regularly audited and a statement giving details of all Related Party Transactions were placed before the Audit Committee and Board for review and approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company at www.radicokhaitan.com. None of the directors has any pecuniary relationship of transactions vis- a-vis the Company.

Environmental Protection Measures Taken by the Company:

In view of the Corporate Responsibility on Environmental Protection, the Company has adopted a number of measures to improve in the field of environment, safety and health. Measures like 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 millions of people across our product value chain.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

As required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014, the relevant information and data is given at "Annexure" - D.

i) the steps taken or impact on conservation of energy;

ii) the steps taken by the company for utilising alternate sources of energy;

iii) the capital investment on energy conservation equipment;

The Company has continued its efforts to improve energy usage efficiencies and endeavours to identify and evaluate the risks associated with the future energy expansion. The Company has always been at the forefront of new technology absorption and continues to enhance its position in the rapidly evolving technology driven business. Furthermore, your Company views foreign exchange as a priority and engages with the overseas markets in a fair and careful manner to seek growth for the business.

Corporate Social Responsibilities (CSR):

At Radico, Corporate Social Responsibility has been an intrinsic part of the long-term sustainability plan. Your Company believes that the holistic development of the society and community is strongly linked to the conducive business environment required for the Company's growth. Radico Khaitan believes in the concept of 'Social Inclusive Growth' and continues its efforts for the same. Your Company understands its responsibility as a corporate citizen towards the community at large and has taken series of corporate social initiatives. As a part of its initiative under the Corporate Social Responsibility (CSR) drive, the Company has undertaken projects in the area of rural development and promoting health care. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company's CSR policy. The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure-E forming part of this Report.

As per the CSR Policy, the Company looks forward to spent CSR amount across the country, wherever the Company has its plant operations. The difference between amount required to be spent and amount spent stands at Rs.71.86 lacs for which the Company was not able to identify suitable avenues in few states and also due to extensive time spent on identifying social concerns/locations, which is expected to be covered in the current year.

There are no material changes and commitments, if any, affecting the financial position of the Company.

Significant and Material Orders Passed by the Regulators or Courts:

There has been no significant and material order passed by the Regulators or Courts that would impact the going concern status of the Company and its future operations.

Directors' Responsibility Statement:

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) of the Companies Act, 2013.

I) that in the preparation of the Annual Accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) 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 affairs of the Company as at March 31,2015 and of the profit of the Company for the year ended on that date;

iii) that the Directors have taken proper and sufficient 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) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were opera ting effectively; and

vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Extract of Annual Return:

Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return is provided in Annexure-F

Management Discussion and Analysis for FY2015:

Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchanges enclosed and forms part of this report.

Corporate Governance Report for FY2015:

Report on Corporate Governance along with the certificate of statutory Auditors, M/s. V, Sankar Aiyar & Co., confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Acknowledgements:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities such as SEBI, Stock Exchanges and other Central & State Government authorities and agencies, Registrars for their guidance and support. Your Directors place on record their deep appreciation to employees at all levels for their efforts, dedication and commitment. Their enthusiasm and hard work has 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 our products.

For & on behalf of the Board Sd/- Dr. Lalit Khaitan Place: New Delhi Chairman & Managing Director Date: 10.08.2015 DIN - 00238222


Mar 31, 2014

Dear Members,

The Directors are pleased to present their 30th Annual Report together with the audited financial statement of the Company for the year ended 31st March 2014.

Financial Results: (Rs. in Crore)

2013-14 2012-13

Sales (including sales from arrangements with other Distilleries / Bottling units) 4,337.41 3,768.42

Gross Profit (before depreciation and tax) 145.16 144.59

Profit before tax 106.40 109.28

Profit after tax 71.25 77.28

Prior period adjustments 0.00 0.00

Surplus brought forward from last year 89.81 74.97

Profit available for appropriation 161.07 152.25

Transfer to General Reserve 50.00 50.00

Proposed Dividend and tax thereon 12.45 12.44

Balance carried forward 98.61 89.81

Operations Review:

FY2014 was a very challenging year for the overall economy. Despite these short term challenges, your Company was able to sustain growth and profitability. Radico Khaitan has a long standing, successful strategy of premiumization which is evident from the performance of Prestige & Above category brands which registered a strong growth of 20.7% y-o-y in FY2014 to reach 37.17 lakh cases. Overall IMFL volume was 203.60 lakh cases, representing a growth of 7.1%. Furthermore, Prestige & Above category brands as a percentage of total IMFL sales increased from 16.2% in FY2013 to 18.3% in FY2014. Prestige & Above brands sales revenue accounted for 37% of total IMFL sales in FY2014 compared to 35% in FY2013. Net Sales was Rs.1,857.2 Crore an increase of 8.2% compared to the same period last year driven by a robust performance of Prestige & Above brands. EBITDA increased by 10.7% to Rs.212.6 Crore and margins improved by 26 basis points to 11.4% compared to FY2013.

Radico Khaitan''s Magic Moments vodka continued to be the market leader in the fast growing premium vodka segment. Encouraged by the success of Magic Moments, the Company launched Verve super premium vodka in October 2012. In FY2014, this was followed by the launch of Verve Magic Moments Green Apple and Verve Magic Moments Orange flavoured premium vodka in North India and select states in West India. Within few months of its launch, the new variants of Verve vodka received the Gold award at the coveted Monde Selection Quality awards 2014. During the year, the Company also launched Morpheus Blue, an upgraded version of the super premium Morpheus Brandy to further strengthen its premium product offerings.

Capital Structure and Liquidity:

Share Capital

During the year, the Company issued 138,385 shares on the exercise of stock options granted under the Employees Stock Option Scheme 2006. As a result of this, the outstanding, issued and paid-up equity shares increased from 132,900,380 shares as of March 31, 2013 to 133,038,765 shares as of March 31, 2014.

General Reserve

An amount of Rs. 50 Crore has been transferred to the General Reserve out of Radico Khaitan''s profit of Rs. 71.3 Crore for the financial year ended March 31, 2014.

Term Loan and Working Capital

As of March 31, 2014, the Company had total debt of Rs. 903.8 Crore, Cash and Cash Equivalents were Rs. 15.3 Crore resulting in Net Debt of Rs. 888.5 Crore. Total Debt consists of Rs. 405.6 Crore of Working Capital loans and Rs. 498.3 Crore of Long Term loans, including Long Term loans maturing within 12 months of the balance sheet date. As of March 31, 2014, Radico had a conservative leverage with Debt/Equity ratio of 1.1x.

Capital Market Ratings:

The Company continued to enjoy credit rating from Credit Analysis & Research Ltd (CARE) which has reaffirmed the rating of "CARE A "assigned for the long term facilities. CARE A rating is considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

CARE has re-affirmed the rating of "CARE A1 "assigned for the short term facilities, which is considered to have very strong degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

Future Outlook and Strategy:

The ongoing developments in the Indian spirits industry and changing consumer preferences are expected to result in a structural shift from volume based growth to value driven business model. According to Euromonitor, IMFL volume is expected to reach 2,979 million liters or 331 million cases. During the 2014-18 period IMFL sales value is expected to grow at a CAGR of 7.9%. Key drivers of this growth are changing preference of customers due to rising per capita income, higher aspiration level, favourable demographic profile, increasing urbanization and better penetration. As a result of inclusion of higher number of youngsters in the working population, all the major spirits manufacturers are focused on launching new value added products to capitalize on this opportunity. Innovative packaging and consumer preferred variants are new trends to generate mass appeal. This structural change may also result in further consolidation of the industry to achieve operational efficiencies and strengthening of market position for the larger and established companies.

With this changing environment, Radico Khaitan''s longstanding and successful premiumization strategy will improve the Company''s revenue and profitability in the near term. The Company continues to make investment in developing new products and variants. Our investments in brand building over the past couple of years have resulted in a large consumer base outside India. Going forward the Company expects to increase profitability in exports business through focus on premium brands and newer geographies.

Awards and Recognition:

During the year Radico Khaitan received numerous awards for its leading brands at various international events. These awards are testament to the Company''s understanding of the customer preference as well as the superior quality of its products. Some of the awards received during the year were:

Indspirit 2014 ''Popular Product of the Year'' Award: Magic Moments vodka

Monde Selection (International Institute for Quality Selection) 2014 awards:

- Grand Gold Award: Magic Moments Remix Lemon Grass & Ginger flavoured vodka

- Gold Award: Verve Magic Moments Super Premium vodka

- Gold Award: Verve Magic Moments Green Apple Premium flavoured vodka

- Gold Award: Verve Magic Moments Orange Premium flavoured vodka

- Gold Award: Magic Moments Vodka

- Gold Award: Magic Moments vodka (5 flavours)

- Gold Award: Morpheus XO Blended Premium brandy

In addition, senior management of the Company received the following awards:

- Dr. Lalit Khaitan received the ''Legend of the Industry'' award at Spiritz 2014, in addition to Radico Khaitan receiving the ''Brand Premiumisation Award'' and ''Excellence in Marketing Award''

- Mr. Abhishek Khaitan received the Indspirit 2014 ''Young Entrepreneur of the Year'' Award

Employee Stock Option Scheme:

To provide the employees with an opportunity to share in the growth of the Company and to reinforce long term commitment, Radico Khaitan implemented the Employees ESOP Scheme in 2006.

The Compensation Committee, at its meetings held on 5.08.2013, 21.10.2013 and 12.02.2014 allotted 45,300, 52,460 and 40,625 equity shares, respectively to the eligible employees, as per the Employees Stock Option Scheme 2006.

The particulars of the options as required by SEBI (employee stock option scheme and employee purchase scheme) guidelines, 1999 are appended as Annexure ''A'' and forms part of this report.

Dividend:

The Company has a dividend policy that balances the dual objective of appropriately rewarding its shareholders and retaining capital to support future growth. Your Directors are pleased to recommend a dividend of Rs. 0.80 per equity share or 40% on face value of Rs. 2.00 each for the year ended March 31, 2014. The total dividend payout for the financial year will be Rs. 12.5 Crore including a dividend distribution tax of Rs. 1.8 Crore. This consistent dividend payout is to demonstrate our commitment to enhancing value to our shareholders. The dividend is subject to approval of shareholders at the Annual General Meeting on 30th September 2014 and will be paid to the shareholders whose names appear in the Register of Members as on the date of book closure, i.e. 24.9.2014.

Dematerialisation:

Around 97.89% of the shares of the Company have now been dematerialized. Your Directors would request all the members who have not yet converted their holdings into dematerialized form, to do so thereby facilitating trading of their shares. As per SEBI guidelines it is now mandatory that the shares of a company are in dematerialized form for trading.

Public Deposits:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public.

Subsidiaries and Joint Ventures:

During the year under review, the Company has no subsidiary company.

Radico NV Distilleries Maharashtra Ltd (RNVDML), a Joint Venture (JV) of the Company has developed a state-of-the-art 120 KLPD molasses based distillery in Aurangabad, Maharashtra. It also has 50 KLPD grain based plant.

The commercial production in JV started in December 2008. RNVDML is the largest manufacturer of alcohol in the state of Maharashtra and is currently operating at optimal capacity levels. In FY2014, RNVDML received Private Sector Investment (PSI) subsidy from Government of Maharashtra of Rs. 39.8 Crore and expected subsidy to be received in FY2015 is Rs. 45 Crore.

During the year, the JV contributed Gross Sales of Rs. 367.8 Crore, an increase of 7.9% compared to same period last year. Net Sales of the JV increased by 4.2% compared to FY 2013 and stood at Rs. 250.0 Crore. Profit Before Tax during the period was at Rs. 14.9 Crore, indicating a growth of 41.4% compared to same period last year.

During FY 2014, the JV modified its distillation plant to reduce the consumption of steam in production of alcohol. RNVDML has also installed a evaporation plant with molasses alcohol plant which has the effect of reducing generation of effluent by about 80% and has made the plant a zero discharge plant.

Transfer to Investor Education & Protection Fund:

As per the Companies Act, 1956, dividends that are unclaimed for a period of seven years, statutorily get transferred to the Investor Education and Protection Fund (IEPF) administered by the Central Government and thereafter cannot be claimed by investors. To ensure maximum disbursement of unclaimed dividend, the Company sends reminders to the concerned investors, before transfer of dividend to IEPF. Pursuant to Section 205A of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 1999, unclaimed dividend has been transferred to IEPF as per below table:

Financial Year Date of Declaration Total Dividend Unclaimed Dividend Due Date of of Dividend as on 31-3-2014 Transfer to IEPF account

FY 2002 16.07.2002 38579176.00 730556.00 22.08.2009

FY 2003 19.07.2003 34721258.40 914312.00 24.08.2010

FY 2004 17.07.2004 38579176.00 973284.00 22.08.2011

FY 2005 16.11.2005 42437093.60 983341.00 21.12.2012

FY 2006 25.09.2006 48223970.00 1135840.00 30.10.2013

Directors:

Mr. K.P. Singh shall retire by rotation and being eligible, offers himself for reappointment at the forthcoming Annual General Meeting (AGM). Dr. Raghupati Singhania, Mr. K.S. Mehta, Mr. Ashutosh Patra and Mr. Sarvesh Srivastava, all independent directors of the Company are proposed to be reappointed / appointed at the ensuring Annual General Meeting of the Company for a period of 5 years. Brief profiles of the proposed appointees together with other disclosures in terms of Clause 49 of the Listing agreement are part of the Corporate Governance Report.

Auditors:

M/s. V. Sankar Aiyar & Co., Chartered Accountants, the auditors of your company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The Company has received letters from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 (1) of the Companies Act, 2013, and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act.

Audit Report for the Year Ended 2013-14:

The observations made in the Auditors Report are self explanatory and therefore do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

Cost Auditor:

During the year under review, your Directors had with the approval of the central government, appointed Mr. S.N. Balasubramanian, cost auditor, to carry out the cost audit in respect of the distillery units of the Company for the year 2013-2014. The cost audit for the year 2013-2014 shall be completed within stipulated time as prescribed in the Companies Act, 1956 read with Cost Audit (Report) Rules, 2011.

Environmental Protection Measures Taken by the Company:

In view of the Corporate Responsibility on Environmental Protection company has adopted number of measures to make improvement in the fields of environment, safety and health. Measures like standard operating procedures, training programmes for all levels of employees regarding resource conservation, housekeeping, Green Belt development, onsite emergency plan etc. have been taken.

During the year, Radico Khaitan installed and commissioned integrated evaporators in the grain spirits plant, which converts the entire thin slop into wet cake that can be sold as cattle fodder. This has helped in bringing down the effluent discharge from grain plant to zero. The Company also installed and commissioned integrated evaporators in the molasses distillation plant resulting in reduction of spent wash generation by approximately 45%. After the effluent is passed through the RO plant, additional 45% effluent volume is reduced and only about 25% of the total effluent is left for bio-composting. Radico Khaitan has also increased the bio-composting area by 7 acres to consume more effluent in bio-composting and has reduced fresh water consumption by recycling process condensate and lees from distillation plants to fermentation.

Corporate Social Responsibilities (CSRs):

As your Company continues to serve its consumers, it does not overlook its responsibility towards society. It has been an integral part of the Company''s strategy to design and implement CSR programmes in the context of your Company''s businesses and encompasses much more than social outreach programs. Your Company understands its responsibility as a corporate citizen towards the community at large and has taken series of corporate social activities. The activities such as organizing eye camps, overall management of two primary schools, distribution of blankets and woollen clothes, maintenance of village roads and tree plantation, distribution of food packets to flood affected areas were undertaken in the financial year 2013-14. Your Company endeavours to raise the bar every year on the CSR front. The Company''s social responsibility strategy also includes community initiatives which aim at empowering individuals through developmental initiatives such as education and livelihood support. A CSR policy in accordance with the provisions of the Companies Act, 2013 is approved by the Board in its meeting held on 30.5.2014.

Directors'' Responsibility Statement:

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956 (Act), your Directors confirm that:

i) In preparation of the Annual accounts Accounting standards have been followed, along with proper explanation relating to material departures, wherever applicable.

ii) The Directors have selected such accounting policies and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company, as at the end of the accounting year and of the profit of the Company for that period.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

Particulars of Employees:

In accordance with the provisions of Section 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and accounts, as therein set out, are being sent to all members of the Company excluding the aforesaid information about the employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, the relevant information and data is given at "Annexure" - B.

Management Discussion and Analysis for FY2014:

Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchanges enclosed and forms part of this report.

Corporate Governance Report for 2013-14:

Report on Corporate Governance along with the certificate of statutory Auditors, M/s. V. Sankar Aiyar & Co., confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Acknowledgements:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities such as SEBI, Stock Exchanges and other Central & State Government authorities and agencies, Registrars for their guidance and support. Your Directors place on record their deep appreciation to employees at all levels for their efforts, dedication and commitment. Their enthusiasm and hard work has 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 our products.

For & on behalf of the Board

Sd/-

Place: New Delhi Dr. Lalit Khaitan

Date : 12.08.2014 Chairman & Managing Director

DIN - 00238222


Mar 31, 2013

The Directors are pleased to present their 29th Annual Report together with the audited statement of accounts of the Company for the year ended 31 st March, 2013.

Financial Results:

(Rs. in million)

2012-13 2011-12

Sales (including sales from arrangements with other Distilleries/ Bottling units) 37,684.17 30,107.19

Gross Profit (before depreciation and tax) 1,445.94 1,322.98

Profit before tax 1,092.82 994.59

Profit after tax 772.82 636.60

Prior period adjustments 0.00 0.00

Surplus brought forward from last year 749.68 536.47

Profit available for appropriation 1,522.50 1,173.07

Transfer to General Reserve 500.00 300.00

Proposed Dividend and tax thereon 124.40 123.39

Balance carried forward 898.11 749.68

Operations Review:

Your Company continues to remain focused on enhancing its premium portfolio. This is evident from the performance of Prestige & Above category brands which registered a strong growth of 19.2% y-o-y in FY2013. Furthermore, Prestige & Above category brands as a percentage of total IMFL sales increased from 14.6% in FY2012 to 16.2% in FY2013. Prestige & Above brands sales revenue accounted for 35% of total IMFL sales in FY2013 compared to 31% in FY2012. During the year, Radico Khaitan launched Florence, a super premium brandy and Verve, super premium vodka. Building on the continuing success of these brand launches across categories, a flavoured edition of Verve vodka was launched in March 2013. The newly introduced brands in the premium categories such as After Dark whisky, Florence brandy, Morpheus brandy and Verve vodka continue to gain positive traction with consumers and are in line with management''s expectations. In FY2013, the industry faced rising of state level excise duties and sustained inflation in input costs resulting in margin pressure. During the second half of the year, your Company received price increases in certain south Indian states such as Karnataka and Andhra Pradesh, the effect of which will be fully reflected in the performance of FY2014.

Future Strategy and Growth:

According to Euromonitor International, the IMFL demand in India is expected to grow at a CAGR of 6.4% between 2013-17 in terms of volume and at 10.8% in value. This growth is expected to be primarily driven by rising disposable incomes and affluence, growth in middle class households, favourable demographics, changing social attitude towards liquor consumption amongst urban upper middle class families and gradual shift towards IMFL from country liquor. Single malt scotch, blended scotch and vodka are expected to lead the growth with 2013-17 CAGR of 17.7%, 15.2% and 11.1%, respectively. The increasing urbanization in India and young adults reaching eligible drinking age will be the primary drivers for the growth in these categories.

The recent corporate developments in the sector are expected to change the industry dynamics significantly, resulting in a further increase in premiumization. The increasing presence of MNCs in India will ensure greater transparency and operational efficiency. This will also change the competitive landscape.

Your Company is optimally placed to capitalize on the arising opportunities supported by its strong distribution network and its continued focus on premiumizatiom strategy. Your Company''s longstanding and successful premiumization strategy will improve the Company''s revenue and profitability in the near term. The Company is primarily focused on increasing volumes of premium brands, price increases across key markets, penetration in south Indian markets and improvement in operational efficiencies.

Exports and International Business:

The Company has a strong export base in more than 30 countries. Overall export volumes in FY2013 were in line with FY2012. Radico Khaitan is focused on enhancing its base in newer geographies such as the US, UK and Canada with more premium products. The Company''s investments in brand building over the past couple of years have resulted in a large consumer base outside India. Going forward the Company expects to increase profitability in exports business through focus on premium brands and newer geographies.

Awards and Recognition:

Radico continued to win a number of awards at the Monde Selection (International Institute for Quality Selection). This is a testimony to the Company''s continued focus on quality and customer satisfaction. Monde Selection (International Institute for Quality Selection) 2013 include:

- Magic Moments Remix Lemon Grass & Ginger and Lemon flavoured vodka: Grand Gold Award

- Magic Moments vodka (5 flavours): Gold Awards

- Morpheus brandy: Gold Award

- Verve vodka: Gold Award

- After Dark whisky: Silver Award

Employee Stock Option Scheme:

Radico Khaitan views the grant of employee stock options as a mechanism to provide the employees with an opportunity to share in the growth of the Company and to reinforce long term commitment. In this context, the Company implemented the Employees ESOP Scheme in 2006.

The particulars of the options as required by SEBI (employee stock option scheme and employee purchase scheme) guidelines, 1999 are appended as Annexure ''A'' and forms part of this report.

Dividend:

Your Directors are pleased to recommend a dividend of Rs. 0.80 per equity share or 40% on face value of Rs. 2.00 each for the year ended March 31, 2013. The total dividend payout for the financial year will be Rs.12.44 Crores including a dividend distribution tax of Rs. 1.81 Crores. This consistent dividend payout is to demonstrate our commitment to enhancing value to our shareholders. The dividend is subject to approval of shareholders attheAnnual General Meeting on 30th September 2013 and will be paid to the shareholders whose names appear in the Register of Members as on the date of book closure, i.e. 24th September 2013.

Dematerialisation:

Around 97.76% of the shares of the Company have now been dematerialized. Your Directors would request all the members who have not yet converted their holdings into dematerialized form, to do so thereby facilitating trading of their shares. As per SEBI guidelines it is now mandatory that the shares of a company are in dematerialized form for trading.

Public Deposits:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public.

Subsidiary Companies:

During the year under review, the Company incorporated a Company in Mauritius with the intention to make it a subsidiary for investment in Angola. However, due to some changes in local level at Angola, the shares were not subscribed.

Transfer to Investor Education & Protection Fund:

Pursuant to Section 205A of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 1999, unclaimed dividend for the financial year ended 31 st December 1996, 31 st December 1997, 31st December 1998, 31st December 1999, 31st December 2000, 31st March 2002, 31st March 2003, 31st March 2004 and 31st March 2005 have been transferred to the Investors Education and Protection Fund established by Central Government under Sub Section (1) of Section 205 (C) during August 2004, July 2005, August 2006, July 2007, July 2008, July 2009, August 2010, August 2011 and August 2012, respectively. Further, unclaimed dividend for the financial year ended 31.3.2006 will be transferred to the said fund within the stipulated time as prescribed in the Companies Act, 1956 read with rules made thereunder.

Directors:

Mr. Ashutosh Patra and Mr. K.P. Singh shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for reappointment. Brief profiles of the proposed appointees together with other disclosures in terms of Clause 49 of the Listing agreement are part of the Corporate Governance Report.

Dr. Lalit Khaitan, Chairman & Managing Director, whose term ended on 19.2.2013 was reappointed as a Chairman & Managing Director for a term of 5 (five) years with effect from 20.2.2013. The shareholders'' approval is sought in the ensuing Annual General Meeting for the aforesaid reappointment.

Mr. Abhishek Khaitan, Managing Director, whose term ended on 19.2.2013 was reappointed as a Managing Director for a term of 5 (five) years with effect from 20.2.2013. The shareholders'' approval is sought in the ensuing Annual General Meeting for the aforesaid reappointment.

Mr. K.P. Singh, Whole Time Director, whose term ended on 19.2.2013 was reappointed as a Whole Time Director for a term of 5 (five) years with effect from 20.2.2013, liable to retire by rotation. The shareholders'' approval is sought in the ensuing Annual General Meeting for the aforesaid reappointment.

Auditors:

M/s. V. Sankar Aiyar & Co., Chartered Accountants, the auditors of your Company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Audit Report for the Year Ended 2012-13:

The observations made in the Auditors Report are self explanatory and therefore do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

Cost Auditor:

During the year under review, your Directors had with the approval of the central government, appointed Mr. S.N. Balasubramanian, cost auditor, to carry out the cost audit in respect of the distillery units of the Company for the year 2012- 2013. The cost auditfortheyear 2012-2013 shall be completed within stipulated time as prescribed in the Companies Act, 1956 read with Cost Audit (Report) Rules, 2011.

Environmental Protection Measures Taken by the Company:

In view of the Corporate Responsibility on Environmental Protection company has adopted number of measures to improve in the fields of environment, safety and health. Measures like standard operating procedures, training programmes for all levels of employees regarding resource conservation, housekeeping, Green Belt development, onsite emergency plan etc. have been taken.

Corporate Social Responsibilities (CSRs):

At Radico Khaitan, Corporate Social Responsibility (CSR) encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business. Your Company understands its responsibility as a corporate citizen towards the community at large and has taken series of corporate social activities. The activities like organizing of twelve eye camps, overall management of two primary schools, distributions of blankets and woollen clothes to the needy, maintenance of village roads and tree plantations were undertaken in the financial year 2012-13.

Your Company is always willing and committed to give back to the society through all measures possible.

Directors'' Responsibility Statement:

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i) Accounting standards have been followed, along with proper explanation relating to material departures, wherever applicable.

ii) The Directors have 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 affairs of the Company, as at the end of the accounting year and of the profit of the Company for that period.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

Particulars of Employees:

In accordance with the provisions of Section 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, as amended the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and accounts, as therein set out, are being sent to all members of the Company excluding the aforesaid information about the employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, the relevant information and data is given at "Annexure" - B.

Management Discussion and Analysis:

Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchanges enclosed and forms part of this report.

Corporate Governance Report for 2012-13:

Report on Corporate Governance along with the certificate of statutory Auditors, M/s. V. Sankar Aiyar & Co., confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Acknowledgements:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities such as SEBI, Stock Exchanges and other Central & State Government authorities and agencies, Registrars for their guidance and support. Your Directors place on record their deep appreciation to employees at all levels for their efforts, dedication and commitment. Their enthusiasm and hard work has 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 our products.

For & on behalf of the Board

Sd/-

Place: New Delhi Dr. Lalit Khaitan

Date: 5th August 2013 Chairman & Managing Director


Mar 31, 2012

The Directors are pleased to present their 28th Annual Report together with the audited statement of accounts of the Company for the year ended 31st March, 2012.

FINANCIAL RESULTS:

(Rs. in Million)

2011-2012 2010-2011

Sales (including sales from arrangements with other Distilleries / Bottling units) 30,107.19 24,778.54

Gross Profit (before depreciation and tax) 1,322.98 1,265.97

Profit before tax 994.59 994.51

Profit after tax 636.60 728.01

Prior period adjustments 0 00 0.00

Surplus brought forward from last year 536.47 333.74

Profit available for appropriation 1173.07 1,028.23

Transfer to General Reserve 300.00 383.71

Proposed Dividend and tax thereon 123.39 107.86

Balance carried forward 749.68 536.47

OPERATIONS REVIEW:

During the year, your Company continued to consolidate and strengthen its position as one of the leading players in the spirits industry in India. Our premium brands, Magic Moments and Morpheus maintained their growth momentum with strong year over year growth rates of 17.5% and 57.1%, respectively. The Company's flagship brand, 8PM also recorded a remarkable volume of 4.6 million cases with a growth rate of 13.4% year over year. Old Admiral brandy crossed the 3 million cases mark during the year representing a corresponding growth of 10.8%. However, Contessa rum, the leading rum for the Canteen Stores Department ("CSD"), recorded a marginal volume decline due the recent destocking policy of the CSD. Overall, IMFL volumes growth was 9.9% driven by mainline brands which grew by 11.1%. FY2012 export sales registered a growth of 92.4% compared to the previous year and accounted for 15.6% of Net Sales. The Company's exports are growing in line with expectations and act as a natural hedge for its foreign currency debt.

Sugar production upto the end of March 2012 in the current sugar season was 23.2 million tons, an increase of 13% compared to previous year. This growth was primarily driven by an increase in the area under sugarcane production to 50.9 lakh acres in 2011-2012, as compared to 49.4 lakh acres in 2010-2011. The total production for the current sugar season is expected to be 26.0 million tons. Higher sugar production during the 2011-2012 season is likely to result in increased molasses production.

CAPITAL PROJECTS:

During the year under review, your Company made important capital investments to increase capacities at its owned plants. This included the setting-up of additional molasses storage capacities, self bottle printing machines, a new bottling hall and tetra pack machines. The Company also made a strategic investment by acquiring select brands from the Yezdi Group. All of these involved a total capital expenditure of Rs. 840 million. These strategic initiatives will enable the Company to be optimally positioned to capitalize on the growing demand in the spirits industry.

FUTURE STRATEGY & GROWTH:

According to Euromonitor International, the Indian alcoholic drinks industry volume is forecasted to grow at a 2011-2016 CAGR of 10%. This was higher than the growth rates registered across the rest of the Asia Pacific countries. Premium products remained the growth driver in 2011. Rising disposable incomes coupled with increasing social acceptance of drinking in India are key reasons for this demand growth.

Your Company's continued focus on premiumization is clearly reflected in the increasing share of premium brands in the overall sales volumes. Premium brand revenues increased from 28% of total IMFL sales in FY2011 to 31% in FY2012.

Your Company's new launches After Dark whisky and Morpheus brandy continue to grow at a fast pace and are receiving favourable feedback from both the end consumers as well as trade channels. In FY2012, both of these brands were registered with the Canteen Stores Department (CSD) and delivered encouraging sales volumes. This will further strengthen Radico Khaitan's presence in the CSD.

Magic Moments vodka crossed the 2 million cases mark during the year and continued to show strong volume growth. This brand is well positioned to capitalize on the growth in vodka consumption and popularity as the youth in India continue to shift from brown spirits to white spirits, particularly vodka. The flagship, 8PM whisky brand is performing in line with our strategy and is expected to achieve desired growth in the current year.

During the year, your Company acquired Royal Lancer and Elkays whisky brands from Mysore based Yezdi Group and also took on long term lease their entire bottling capacity. Both these brands are selling more than 0.5 million cases primarily in Karnataka and Andhra Pradesh. These volumes are expected to be strengthened by Radico Khaitan's distribution network. This is a strategic acquisition and is expected to reinforce the Company's presence in Karnataka, Andhra Pradesh and other South Indian states. Radico Khaitan is also planning to install tetra pack machines at Yezdi Distilleries, Mysore, which will increase the bottling capacity further to meet production requirements in the state of Karnataka.

Your Directors are confident that the Company has the most effective strategies in place to capitalize on market growth, capture market share and consolidate its leadership position,

CAPITAL STRUCTURE:

On July 25, 2011, the Company redeemed all of its remaining $50 million, 3.5% Foreign Currency Convertible Bonds ("FCCB") that were issued in July and August 2006. The total redemption of $44.22 million (inclusive of a redemption premium of $10.31 million) was funded using proceeds from a new 7-year maturity External Commercial Borrowing ("ECB") with a moratorium period of 2 years. The repayment for the ECBs will start in FY2014.

EMPLOYEE STOCK OPTION SCHEME:

Radico Khaitan views the grant of employee stock options as a mechanism to provide the employees with an opportunity to share in the growth of the Company and to reinforce long term commitment. In this context, the Company implemented the Employees ESOP Scheme in 2006.

The Compensation Committee, at its meetings held on 27.4,2011, 2.8.2011 and 9.11.2011 allotted 16,000, 73,750 and 55,925 equity shares, respectively to the eligible employees, as per the Employees Stock Option Scheme 2006.

The particulars of the options as required by SEBI (employee stock option scheme and employee purchase scheme) guidelines, 1999 are appended as Annexure A' and forms part of this report.

DIVIDEND:

Your Directors are pleased to recommend a dividend of 40% on the paid-up capital of the Company. This equates to Rs. 0.80 per equity share of Rs.2/- each (face value) to be appropriated from the profits of FY2012 subject to the approval of the shareholders at the upcoming Annual General Meeting. This increased dividend is to demonstrate our commitment to enhancing value to our shareholders.

DEMATERIALISATION:

More than 97.62% of the shares of the Company have now been dematerialized. Your Directors would request all the members who have not yet converted their holdings into dematerialized form, to do so thereby facilitating trading of their shares. As per SEBI guidelines it is now mandatory that the shares of a company to be in dematerialized form for trading.

PUBLIC DEPOSITS:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public.

SUBSIDIARY COMPANIES:

During the year under review, the Company has no subsidiary company. However, in the meeting held on 7.2.2012 your Board of Directors have approved the setting up of a Wholly Owned Subsidiary (WOS) in Mauritius for investment in Angola.

TRANSFER TO INVESTORS EDUCATION & PROTECTION FUND:

Pursuant to Section 205A of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 1999, unclaimed dividend for the financial year ended 31st December, 1996, 31st December 1997, 31st December 1998, 31st December 1999, 31st December 2000, 31st March 2002, 31st March 2003 and 31st March 2004 have been transferred to the Investors Education and Protection Fund established by Central Government under Sub Section (1) of Section 205 (C) during August, 2004, July 2005, August 2006, July 2007, July 2008, July 2009, August 2010 and August 2011, respectively. Further, unclaimed dividend for the financial year ended 31.3.2005 will be transferred to the said fund with in the stipulated time as prescribed in the Companies Act, 1956 read with rules made there under.

DIRECTORS:

Dr. Raghupati Singhania and Mr. K.S. Mehta shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for reappointment.

AUDITORS:

M/s. V. Sankar Aiyar & Co., Chartered Accountants, the auditors of your company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDIT REPORT FOR THE YEAR ENDED 2011-12:

The observations made in the Auditors Report are self explanatory and therefore do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

COST AUDITOR:

During the year under review, your Directors had with the approval of the central government, appointed Mr. S.N. Balasubramanian, cost auditor, to carry out the cost audit in respect of the distillery units of the Company for the year 2011 - 2012. The cost audit for the year 2011-2012 shall be completed within stipulated time as prescribed in the Companies Act, 1956 read with Cost Audit (Report) Rules, 2011.

ENVIRONMENTAL PROTECTION MEASURES TAKEN BY THE COMPANY:

In view of the Corporate Responsibility on Environmental Protection company has adopted number of measures to improve in the fields of environment, safety and health. Measures like standard operating procedures, training programmes for all levels of employees regarding resource conservation, housekeeping, Green Belt development, onsite emergency plan etc. have been taken.

CORPORATE SOCIAL RESPONSIBILITIES (CSR):

1. Nine Eye check up camps organized by the Company through K.D. Dalmia Eye Hospital at 4 places (Ajitpur, Chamrava, Nagar Palika Parisad and Bhot Village) approx.2000 patient got benefited of these camps.

2. Arrangement was made at various units of the company for health check of employees.

3. Academic Excellence Awards were given to the District Topers for every education session.

4. Two primary schools are run by the Company at Panwaria Village and Balmiki Mandir near City Ramlila Ground, Kosi Mandir Road, Rampur.

5. 2000 Blankets were distributed to the poor people of nearby areas of Rampur in the Winter Season.

6. Financial help was provided at Ajitpur Village for a concrete road in the interior of Ajitpur Village and also one Pulia (over-bridge) was constructed.

7. Three line tree plantations were done in and around 2km of the factory boundary wall on the Judges Road.

8. 5000 food packets distributed to villagers in flood affected area with District Administration.

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956 (Act), your Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures, wherever applicable.

ii) The Directors have 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 affairs of the Company, as at the end of the accounting year and of the profit of the Company for that period.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

PARTICULARS OF EMPLOYEES:

In accordance with the provisions of Section 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and accounts, as therein set out, are being sent to all members of the Company excluding the aforesaid information about the employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, the relevant information and data is given at "Annexure" - B.

MANAGEMENT DISCUSSION AND ANALYSIS FOR FY2012:

Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchanges enclosed and forms part of this report.

CORPORATE GOVERNANCE REPORT FOR FY2012:

Report on Corporate Governance along with the certificate of statutory Auditors, M/s. V. Sankar Aiyar & Co., confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities such as SEBI, Stock Exchanges and other Central & State Government authorities and agencies, Registrars for their support. Your Directors also place on record their appreciation for the dedicated services rendered by the employees at various levels and look forward to their continued support in the future as well. We also take this opportunity to thank all our valued customers who have appreciated our products.

For & on behalf of the Board

Sd/-

Place : New Delhi Dr. Lalit Khaitan

Date : 31.7.2012 Chairman & Managing Director


Mar 31, 2011

Dear Members,

The Directors are pleased to present their 27th Annual Report together with the audited statement of accounts of the Company for the year ended 31st March, 2011.

FINANCIAL RESULTS:

(Rs. in Million)

2010-2011 2009-2010

Sales (including sales from arrangements with other Distilleries / bottling units) 25.272.64 21163.19

Gross Profit (before depreciation and tax) 1,265.97 755.44

Profit before tax 994.51 499.39

Profit after tax 728.01 415.39

Prior period adjustments 0 0

Surplus brought forward from last year 333.74 260.63

Profit available for appropriation 1028.23 676.02

Transfer to General Reserve 383.71 250.00

Proposed Dividend and tax thereon 107.86 92.28

Balance carried forward 536.47 333.74

OPERATIONS REVIEW:

During the year, your Company continued to consolidate and strengthen its position as one of the leading players in the spirits industry in India. Magic Moments continued its stellar performance with 33.2% growth as compared to last year. The 8PM whisky brand achieved a remarkable volume of 4 million cases during the year. Morpheus brandy which was launched in the last year continued to perform well and achieved a volume of 230,000 cases during the year. During Q3 FY2011, your Company test marketed its premium whisky brand, After Dark. The brand has been appreciated by the consumers for its taste and unique packaging. The brand would be made available on a nationwide basis in 2011. Overall, the mainline brands continued to perform strongly, in line with our premiumization strategy.

The 2010-11 sugar season in India was expected to be strong with total sugar production of 24.2 million tonnes. There was a significant off-take of molasses due to the ongoing ethanol blending program which resulted in the molasses price remaining steady during the year.

Glass prices increased approximately by 17% during FY2011 compared to the previous year. Increased raw material costs have resulted in key spirits manufacturers considering price increases.

CAPITAL PROJECTS:

During the year, your Company invested Rs. 407.9 million on various projects to ensure optimal positioning for the future. Capital expenditure consisted of primarily enhancing IMFL bottling capacity, bottle printing capacity and routine maintenance expenses.

FUTURE STRATEGY & GROWTH:

According to Euromonitor International, the Indian alcoholic drinks industry volume is forecasted to grow from 2010-15 at a CAGR of 10%. As one of the fastest growing emerging markets, India's impressive growth trajectory is supportive of acceleration of the premiumization trend.

Your Company's focus has been on premiumization of its portfolio over the past few years. The Company recently launched After Dark whisky in the premium category in FY2011. The brand was initially launched on a test marketing basis and would be made available on a pan India basis in current year.

Morpheus brandy is expected to further consolidate its leadership position in the market and continue to grow at a fast pace. It is expected to create a niche market for itself due to its unique price point in the brandy segment.

Magic Moments continues to gain market share and is well positioned to capitalize on growth in vodka consumption and popularity. The rejuvenated 8PM whisky brand is expected to perform in line with our strategy.

In April 2011, your Company signed an agreement with Suntory of Japan, one of the world's largest premium spirits companies. Under the agreement, your Company intends to market and distribute some of Suntory's super premium brands in India including Yamazaki 12YO single malt and Hibiki 17YO blended whisky. This agreement will further strengthen the Company's international brand division.

Your Directors are confident that the Company has the most effective strategies in place to capitalize on market growth, capture market share and consolidate its leadership position.

CAPITAL STRUCTURE:

Your Company had raised US$ 50 million through an issue of FCCBs on 26th July 2006 (US$ 40 million) and 25th August 2006 (US$ 10 million on exercise of green shoe option). The FCCBs were convertible into equity shares of the Company at the option of the bondholder at a conversion price of Rs.159.20 per shares (original conversion price being Rs.172.50 reset on 6th August 2008 pursuant to clause 6.4 of the subscription agreement). The FCCBs carried a coupon rate of 3.50% per annum with a maturity of five years and one day from the date of issue and were listed on the Singapore stock exchange.

On 25th July 2011, your Company redeemed all of its remaining US$ 33.91 million, 3.5% FCCBs by making final redemption payment of US$ 44.22 million (inclusive of premium) in accordance with the terms and conditions of the issue. Your Company is therefore not required to allot any equity shares arising out of a potential conversion of these remaining FCCBs.

Your Company has funded the total amount paid of US$ 44.22 million from a new External Commercial Borrowing (ECB) of seven year maturity.

EMPLOYEE STOCK OPTION SCHEME:

The employee stock option is a mechanism which provides our employees with opportunity to share in the growth of the Company and to foster long term commitment. To enable our employees to participate in the success of the Company, Radico Employees ESOP Scheme was implemented in 2006.

The Compensation Committee, at its meeting held on 31.08.2010 and 01.02.2011, granted 62,500 and 2,60,000 equity stock options respectively to the eligible employees, as per the Employees Stock Option Scheme 2006. These options shall be vested with the eligible employees in four equal tranches.

The particulars of the options as required by SEBI (Employee Stock Option Scheme and Employee Purchase Scheme) guidelines, 1999 are appended as Annexure 'A' and forms part of this report.

DIVIDEND:

Your Directors are pleased to recommend a dividend @ 35% on the paid-up capital of the Company i.e. Rs.0.70 per equity share of Rs.2/- each (face value) to be appropriated from the profits of FY2011 subject to the approval of the shareholders at the ensuing Annual General Meeting.

DEMATERIALISATION:

More than 97.45% of the shares of the Company have now been dematerialized. As SEBI has made it compulsory for the shares of the Company to be in dematerialized form for trading, your Directors would request all the shareholders who have not got their holdings dematerialized to do so to enable easy trading of shares.

PUBLIC DEPOSITS:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public.

SUBSIDIARY COMPANIES:

During the year under review, the Company has no Subsidiary Company.

TRANSFER TO INVESTORS EDUCATION & PROTECTION FUND:

Pursuant to Section 205A of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 1999, unclaimed dividend for the financial year ended 31st December, 1996, 31st December 1997, 31st December 1998, 31st December 1999, 31st December 2000, 31st March 2002 and 31st March 2003 have been transferred to the Investors Education and Protection Fund established by Central Government under Sub Section (1) of Section 205 (C) during August, 2004, July 2005, August 2006, July 2007, July 2008, July 2009 and August 2010 respectively. Further, unclaimed dividend for the financial year ended 31.03.2004 will be transferred to the said fund with in the stipulated time as prescribed under the Companies Act, 1956 read with rules made thereunder.

DIRECTORS:

Mr. K.P. Singh and Mr. Mahendra Kumar Doogar shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re- appointment.

AUDITORS:

M/s. V. Sankar Aiyar & Co., Chartered Accountants, the auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDIT REPORT FOR THE YEAR ENDED 2010-11:

The observations made in the Auditors Report are self explanatory and therefore do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

COST AUDITOR:

During the year under review, your Directors had with the approval of the central government, appointed Mr. S.N. Balasubramanian, cost auditor, to carry out the cost audit in respect of the distillery units of the Company for the year 2010-2011. The cost audit for the year 2010-2011 shall be completed within stipulated time as prescribed in the Companies Act, 1956 read with Cost Audit (Report) Rules, 2001.

AWARDS AND RECOGNITION:

Your Company continued to win a number of awards at the Monde Selection (International Institute for Quality Selection) in Belguim for the fourth consecutive year. This reflects your company's continued focus on quality and customer satisfaction.

Magic Moments Remix/Lemon Grass and Ginger flavored vodka received the Grand Gold Award. The Company also received Gold Awards for three brands in the Magic Moments Remix range and a Bronze for Magic Moments Remix Green Apple flavor vodka.

Morpheus Brandy won the Gold Award for the second consecutive year. After Dark premium whisky received a Silver Award in the first year of its launch.

ENVIRONMENTAL PROTECTION MEASURES TAKEN BY THE COMPANY:

In view of the Corporate Responsibility on Environmental Protection, your Company has adopted number of measures in the field of Environment, safety and Health. Measures like Standard Operating Procedures. Training programmes for all levels of employees regarding resource conservation, housekeeping, Green Belt development, onsite emergency plan etc. have been taken.

CORPORATE SOCIAL RESPONSIBILITIES (CSRS):

1. Three Eye camps organised wherein approximately 1200 patients were provided treatment.

2. Blood donation camps organised in Delhi and 30 units blood donated by the employees.

3. Organised free medical check up of employees of all levels.

4. Academic excellence awards distributed to district toppers at Rampur ( First three ) for 12th & 10th Standard of Hindi and English medium students.

5. Medicine and other help to Nehru Kusth Ashram.

6. Woolen pullovers and other amenities provided to Orphan House Rampur.

7. 700 Blankets distributed to the poor in the winter season.

8. Sponsored Veteran Cricket tournament of the state level at Rampur.

9. Two primary schools are being given financial aid in village Panwaria and one Valmiki Mandir in the town.

10. Street lights and RCC road construction in Panwaria village.

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956 (Act), your Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures, wherever applicable.

ii) The Directors have 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 affairs of the Company, as at the end of the accounting year and of the profit of the Company for that period.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts has been prepared on a going concern basis.

PARTICULARS OF EMPLOYEES:

In accordance with the provisions of Section 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975,

the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and accounts, as therein set out, are being sent to all members of the Company excluding the aforesaid information about the employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, the relevant information and data is given at "ANNEXURE" - B.

MANAGEMENT DISCUSSION AND ANALYSIS FOR THE YEAR 2010-2011:

Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchanges enclosed and forms part of this report.

CORPORATE GOVERNANCE REPORT FOR THE YEAR 2010-2011:

Report on Corporate Governance along with the certificate of statutory Auditors, M/s. V. Sankar Aiyar & Co., confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities like SEBI, Stock Exchanges and other Central & State Government authorities / agencies, Registrars for their support. Your Directors also place on record their appreciation for the dedicated services rendered by the employees at various levels and look forward to their continued support in the future as well. We also take this opportunity to thank all the valued customers who have appreciated our products and have patronized them.

For & on behalf of the Board

Sd/- Place : New Delhi Dr. Lalit Khaitan Date : 02.08.2011 Chairman & Managing Director


Mar 31, 2010

The Directors are pleased to present their 26th Annual Report together with the audited statement of accounts of the company for the year ended 31st March, 2010.

FINANCIAL RESULTS:

(Rs. in Million)

2009-2010 2008-2009

Sales (including sales from arrangements

with other Distilleries / bottling units) 21163.19 15752.45

Gross Profit (before depreciation and tax) 755.44 354.88

Profit before tax 499.39 123.66

Profit after tax 415.39 65.36

Prior period adjustments 0 0

Surplus brought forward from last year 260.63 236.30 Profit available for appropriation 676.02 301.66

Transfer to General Reserve 250.00 5.00

Proposed Dividend and tax thereon 92.28 36.03

Balance carried forward 333.74 260.63

OPERATIONS REVIEW:

The Company operates in one core business segment, i.e., manufacturing, sales & distribution of Indian Made Foreign Liquor (IMFL). The year of 2009-10 was a year of return on growth path for the Company after the two consolidation years of 2007-08 and 2008-09 in all the business segments. The Company carries a boutique of Branded portfolio catering all the major segments of market i.e. Whisky, Rum, Brandy & Vodka. The overall strategy has been to focus on growth of its mainline brands and development of New Brands through in-house research & innovation. Your company closed the year with Sales volume of close to 14.6 million cases, where sales of all the key brands grew significantly over the last fiscal.

Companys policy of premiumization of branded portfolio is now paying well as is evident from growth in sale volume of our Magic Moments Vodka. Magic Moments saw a volume growth of 39% over last year and closed the year with sale volume of 1.42 mn c/s. Launch of our new "Morpheus" Super Premium Brandy was also a success with brand witnessing sale of 80K case in the launch year itself. We expect good growth in the current year.

Company was able to get the price increase from the trade and thus improved its sale realization per c/s and also the operating margins through a mix of improvement in saliency of premium brand as well as the price increases.

Molasses prices after going through the roof in the first quarter of 2009-10 started falling and are now in comfort Zone. Due to the improvement in the acreage, yield as well as hike in the minimum support prices of Sugarcane by the state Govt, we hope that it should result in higher Molasses Production in the country in the Sugar Year 2010-11, which would further ease off pressure on Molasses Prices and enable us to improve our margins.

CAPITAL PROJECTS

During the year your Company has incurred Rs.275 Million on the various capital projects for capacity addition to take care of future, it includes putting additional Printing Machines at bottle Printing Unit, capacity expansion at Pet bottle plant and Malt spirit Maturation facility .

Your Joint Venture Company, Radico NV Distilleries Maharashtra Ltd. has successfully commissioned another 12 million litres of quality Grain ENA Distillery in Maharashtra in February 2010 This distillery is meeting our Alcohol requirement of Contract bottling units in the Western & Southern states. Now your Company has two of its own distilleries in major sugar producing belts of Uttar Pradesh and Maharashtra, having total Molasses ENA, Grain ENA & Malt Spirits manufacturing capacity of 151 million litres of Alcohol.

FUTURE STRATEGY & GROWTH

Indian Made Foreign Liquor (IMFL) industry is growing steadily over the last decade with many enablers working in its favour on the back of improved demography, increasing social acceptance, favorable bias towards Spirits and consistent growth in GDP. The IMFL has grown at a CAGR of over 10% in volumes and over 12% in value term during the period CY03-09 which is expected to be maintained or even -escalate over the next few years.

The Alcoholic Beverage industry in India comprises of five key segments, that is, beer, wine, IMFL, bottled in origin alcoholic products and country liquor. IMFL consists of whisky, rum, brandy and white spirits (gin and vodka). IMFL space is one of the fastest growing and lucrative markets in the world. Another important trend witnessed in this segment is the premiumisation in brandy, whisky and vodka.

In June 10, Company introduced another whisky brand, "After Dark" Whisky, in the Premium segment and initial response is quite encouraging. Product offers a perfect mix of quality blend & packaging and is targeted towards young population. Our Product portfolio now offers brands in each flavour to the consumers in the semi premium / premium segments of the market.

Your Company has been successful in launch of three brands each in Vodka, Brandy and whisky categories in span of last 4 years in the semi premium/premium category and we believe that with growing IMFL market in these categories, the operating performance should improve substantially in coming years. Company is proud to have four millionaire brands in its portfolio, which have been developed inhouse over last 12 years.

With the Launch of "After Dark" and "Eagles Dare" whiskies in the Premium segment, we have completed our product offerings for now. Our full concentration from now is to expand our volumes by focusing on growth of premium brands and consolidating our portfolio in regular segment.

8 PM Whisky volume growth has not been in line with our expectations and we are fully conscious of this fact. We have conducted detailed market research for the brand and as per the study, we have entered the 8 PM Whisky Brand in Key states with new packaging. We have also widened our distribution reach to the consumers. We are very hopeful that we shall close the year with good growth in brand volumes.

Last year, company entered into bottling contracts with two new bottlers in TamilNadu and gained good volumes in Tamil Nadu. It also allowed entry of our Morpheus brandy into the Tamil Nadu market, which is one of the major market for Brandy consumers.

Management is fully confident that with right strategies in place for the premium brand launches, their placement at right price points and also a fully functional manufacturing & distribution infrastructure in place, the future is certainly bright for the Company.

QUALIFIED INSTITUTIONAL PLACEMENT (QIPs)

During the year your Company raised long term funds of USD 75 millions equivalent to Rs.341.79 crores from QIBs by way of Qualified Institutional Placements (QIPs) in terms of Chapter VIII of the SEBI (Issue of Capital & Disclosure Requirements) Regulations 2009. Pursuant to that 2,89,19,000 equity shares having face value of Rs.2/- each at a premium of Rs.116.19 per equity share, were issued and allotted to the investors on 22.03.2010. The funds thus raised have been used for repayment of loans as per the terms of the issue and the amount remaining unutilised are held in mutual funds.

FUNDING THROUGH ISSUE OF FCCBs / CCPs / GDRs / ADRs:

The company has raised USD 50 million through an issue of FCCBs on 26th July 2006 (USD 40 million) and 25th August 2006 (USD 10 million on exercise of green shoe option). The FCCBs are convertible into equity shares of the company at the option of the bondholder at a conversion price of Rs.159.20 per shares (original conversion price being Rs.172.50 reset on 6th August 2008 pursuant to clause 6.4 of the subscription agreement). The FCCBs carry a coupon rate of 3.50% per annum with a maturity of five years and one day from the date of issue and are listed on the Singapore stock exchange. The balance outstanding FCCBs of US$ 33.91 million unless previously converted, redeemed or cancelled are liable to be redeemed on the maturity date at a premium of 30.3961% of the principal amount.

EMPLOYEE STOCK OPTION SCHEME:

From time to time Company has been taking steps to reward performance & retention of the employees who are hardworking, dedicated and committed towards the growth of organization. To enable the employees to have a sense of participation in the Company, Radico Employees ESOP Scheme was implemented in the year 2006.

The Compensation Committee, at its meeting held on 18.6.2009 and 21.7.2009, granted 5,30,000 and 2,07,500 equity stock options respectively to the eligible employees, as per the Employees Stock Option Scheme 2006. These options shall be vested with the concerned employees in Four equal tranches.

The particulars of the option as required by SEBI (employee stock option scheme and employee purchase scheme) guidelines, 1999 are appended as Annexure A and forms part of this report.

DIVIDEND:

Your directors are pleased to recommend a dividend @ 30% on the paid-up capital of the Company i.e. Rs.0.60 per equity share of Rs.2/- each (face value) to be appropriated from the profits of the year 2009-10 subject to the approval of the shareholders at the ensuing Annual General Meeting.

DEMATERIALISATION:

More than 96.53% of the shares of the Company have now been dematerialized. Your Directors would request all the members who have not yet got their holdings dematerialized to do so to enable easy trading of the shares, as SEBI has made it compulsory for the shares of the Company to be in dematerialized form for trading.

PUBLIC DEPOSITS:

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public.

SUBSIDIARY COMPANIES:

During the year under review, the Company has no subsidiary Company.

TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND:

Pursuant to Section 205A of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 1999, unclaimed dividend for the financial year ended 31st December, 1996, 31st December 1997, 31st December 1998, 31st December 1999, 31st December 2000 and 31st March 2002 have been transferred to the Investors Education and Protection Fund established by Central Government under Sub Section (1) of Section 205 (C) during August, 2004, July 2005, August 2006, July 2007, July 2008 and July 2009 respectively. Further, unclaimed dividend for the financial year ended 31.3.2003 will be transferred to the said fund with in the stipulated time as prescribed in the Companies Act, 1956 read with rules made thereunder.

DIRECTORS:

Mr. Ashutosh Patra and Mr. K.S. Mehta shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. Both Mr. Ashutosh Patra and Mr. K.S. Mehta do not hold any shares in the company.

During the year Mr. Mahendra Kumar Doogar has joined as Additional Director of the Company. His detailed profile is provided in point no.6 of the explanatory statement to the notice of the Annual General Meeting.

AUDITORS:

M/s. V. Sankar Aiyar & Co., Chartered Accountants, the auditors of the company, retire at the conclusion of the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

AUDIT REPORT FOR THE YEAR ENDED 2009-10:

The managerial remuneration paid to the Chairman & Managing Director, Managing Director and Whole Time Director in the year 2008-09 is pending for the approval of the Central Government.

Other observations made in the Auditors Report are self explanatory and therefore do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

COST AUDITOR:

During the year under review, your directors had with the approval of the central government, appointed Mr. S.N. Balasubramanian, cost auditor, to carry out the cost audit in respect of the distillery units of the Company for the year 2009- 2010. The cost audit for the year 2009-2010 shall be completed within stipulated time as prescribed in the Companies Act, 1956 read with Cost Audit (Report) Rules, 2001.

AWARDS AND RECOGNITION:

Radico has received a series of awards and recognitions for achievements in the business and operations.

MORPHEUS BRANDY which entered the Monde Selection award competition for the first time post its launch last year has won the prestigious Monde Gold for its unparallel quality in its segment.

MAGIC MOMENTS VODKA has been granted the Gold Medal i.e. INTERNATIONAL HIGH QUALITY TROPHY 2010 at the MONDE SELECTION and is winning accolades for 3 consecutive years.

Remix Chocolate Flavored Vodka has won accolades in the International arena by winning the Silver Medal at the prestigious International Spirits Challenge 2010 held in UK.

Magic Moments Green Apple winning SILVER in the Flavoured category at Vodka Masters awards held at UK.

ENVIRONMENTAL PROTECTION MEASURES TAKEN BY THE COMPANY:

In view of the Corporate Responsibility on Environmental Protection company has adopted number of measures to improve in the field of environment, safety and Health.

Measures like Standard operating Procedures, Training programmers for all levels of employees regarding resource conservation, house keeping, Green Belt development, onsite emergency plan etc. have been taken.

CORPORATE SOCIAL RESPONSIBILITIES (CSRs):

Events organized by Radico, Rampur, in the year 2009-10 under Corporate Social Reponsibilities:

1. Initiatives for blanket distribution for poor populations at Rampur during winter (around 2 thousand in numbers)

2. Fire wood distribution during winter season

3. Two education centers are running for basic education of poor children in Rampur backward areas.

4. Medicine distribution to Leprosy ashram every month.

5. Up to Rs. 100000.00 (Rs. One Lac Only ) as donation to different schools for their buildings & others as required by the school management.

6. Adoption of Ajitpur village near Rampur for providing roads, lights etc.

7. Frequent blood donation camp thrice in a year in the factory premises and donated blood provided to the needy person in the Rampur Distt.

8. Helping local administration in the event of any natural calamities by providing ambulance, food packets and other relative items & services.

9. Providing trophies & cash amount to the topper of Rampur Distt. Students of class X & XII every year (CBSE, ICSE Board & U.P. Board).

10. Providing eye camps for needy persons of Rampur & surroundings for free operation & other related treatment.

DIRECTORS RESPONSIBILITY STATEMENT:

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956 (Act), your Directors confirm that:

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures, wherever applicable.

(ii) The Directors have 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 affairs of the Company, as at the end of the accounting year and of the profit of the Company for that period.

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The Directors have prepared the annual accounts on a going concern basis.

Particulars of Employees:

In accordance with the provisions of Section 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors Report, as an addendum thereto. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and accounts, as therein set out, are being sent to all members of the /Company excluding the aforesaid information about the employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, the relevant information and data is given at ANNEXURE - B.

MANAGEMENT DISCUSSION AND ANALYSIS FOR THE YEAR 2009-2010:

Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchanges is enclosed and forms part of this report.

CORPORATE GOVERNANCE REPORT FOR THE YEAR 2009-2010:

Report on Corporate Governance along with the certificate of statutory Auditors, M/s. V. Sankar Aiyar & Co., confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation to the investors and bankers for their continued support during the year. Your Directors extend their sincere gratitude to all the Regulatory Authorities like SEBI, Stock Exchanges and other Central & State Government authorities / agencies, Registrars for their support.

Your Directors also place on record their appreciation for the dedicated services rendered by the employees at various levies and look forward to their continued support in the future as well. We also take this opportunity to thank all the valued customers who have appreciated our products and have patronized them.

For & on behalf of the Board

Sd/- Place : New Delhi Dr. Lalit Khaitan

Date : 27.07.2010 Chairman & Managing Director

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