Mar 31, 2023
The Board of Directors of Radico Khaitan Limited ("Radico Khaitanâ or the "Companyâ) 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 COMPANYâS 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,â 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.
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.
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 ("AGMâ) 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.
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.
The Company has an Employees'' Stock Option Scheme, 2006 ("Scheme 2006â). 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 Regulationsâ).
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 2021â), 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.
Radico Khaitan has one wholly-owned subsidiary namely, Radico Spiritzs India Private Limited ("Radico Spiritzsâ) 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
The Company has one joint venture, namely, Radico NV Distilleries Maharashtra Limited ("RNVâ). The Company holds a 36% stake in the said joint venture.
In terms of the Section 129(3) of the Companies Act, 2013 (the "Actâ), 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 Regulationsâ) 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.
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
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.
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.
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.
The Company has maintained the Cost Records as specified by the Central Government under section 148(1) of the Act.
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.
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.
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 ("NRCâ), 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 "Criteriaâ). 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.
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.
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.
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.
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.
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.
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.
Your Company has adequately insured all its properties including Plant and Machineries, Building and Stocks.
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.
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 ("ICCâ) 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 |
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 .
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.
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.
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.
(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 Policyâ) 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 ("MCAâ) 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 ("SEBIâ) 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/.
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 Khaitanâ or the "Companyâ) 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 COMPANYâS 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 |
- |
- |
- |
- |
||
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.
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.
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.
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 ("AGMâ) 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.
Employeesâ Stock Option Scheme
The Company has an Employees'' Stock Option Scheme, 2006 ("Scheme 2006â). 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 2021â), 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 Spiritzsâ) 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
The Company has only one joint venture, namely, Radico NV Distilleries Maharashtra Limited ("RNVâ). The Company holds 36% stake in the said joint venture.
In terms of the Section 129(3) of the Companies Act, 2013 (the "Actâ), 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 Regulationsâ) 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.
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 AUDITORSâ 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.
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.
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.
The Company has maintained the Cost Records as specified by the Central Government under section 148(1) of the Act.
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.
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 "Criteriaâ). 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.
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.
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 |
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.
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.
DIRECTORSâ 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.
(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 Policyâ) 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 ("MCAâ) and Circular No. SEBI/ HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020 issued by the Securities and Exchange Board of India ("SEBIâ) 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.
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 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 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 for FY2021 decreased by 30.4% Y-O-Y from '' 31.61 Crore to '' 22.02 Crore.
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.
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 Companyâs Dividend Distribution Policy. The Dividend Distribution Policy of the Company is available on the Companyâs 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.
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 âSEBI ESOP Regulationsâ).
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 ("RNVâ). The Company has 36% stake in the said joint venture. In terms of the Section 129(3) of the Companies Act, 2013 ("the Actâ), 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.
The Companyâs long-term credit facility is revised by CARE Ratings. The Companyâs 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 AUDITORSâ 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.
The report of the Statutory Auditors along with notes to Schedules is enclosed to this annual report. The observations made in the Auditorsâ Report are selfexplanatory and therefore do not call for any further comments. The Auditorâs 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.
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.
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.
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 Boardâs 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 Criteriaâ). 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 Companyâs 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 Regulationsâ), 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.
The Companyâs 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 Companyâs Code of Conduct. The Company keeps a policy of transparency and armâs 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.
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 Companyâs website at the following link: http://www.radicokhaitan.com/ investor-relations.
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 Boardâs 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.
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.
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
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.
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 Companyâs 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.
Radico Khaitanâs 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 Khaitanâs 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.
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.
Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.
Pursuant to the Listing Regulations and in line with Radico Khaitanâs 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 Companyâs 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 Companyâs policy on preservation of documents.
Gender equality and women safety is a very important part of Radico Khaitanâs 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 |
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 Companyâs projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companyâs 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.
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 Companyâs 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.
directorsâ 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 Companyâs 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.
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 Boardâs report.
Annual Return can be accessed at https://www. radicokhaitan.com/wp content/uploads/2021/09/ MGT-7-Annual-Return-2021.pdf
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.
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.
All transactions entered with Related Parties for the year under review were on armâs 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.
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.
The Company has followed applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to âMeetings of the Board of Directorsâ and âGeneral Meetingsâ, 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 Companyâs 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 Companyâs Registrar and Transfer Agent, KFin Technologies Private Limited ("KFinTechâ) 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 Companyâs 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
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.
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.
Management Discussion and Analysis Report, as required under the Listing Regulations is provided as a separate report and forms part of this Annual 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.
There is no change in the nature of business during the year under the review.
There is no material change since March 31, 2021.
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 â 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 Companyâs 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 Companyâs 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 Companyâs 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 Companyâs 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 Khaitanâs long term and short term credit facilities are rated by CARE Ratings. The Companyâs 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 Companyâs 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 (âListing Regulationsâ), 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 armâs 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 Khaitanâs 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 Companyâs 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 Khaitanâs 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 Companyâs 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 Companyâs 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 Directorsâ 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 Directorsâ 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 Auditorsâ Report are self-explanatory and therefore do not call for any further comments. The Auditorâs 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 memberâs 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 Khaitanâs 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 armâs 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 Companyâs projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companyâs 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 Khaitanâs 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.
Directorsâ 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