Your Directors are pleased to present the Thirty Seventh Annual Report on the businessand operations together with the Audited Financial Statements of your Company for the yearended March 31 2021.
Results of operations and state of Company's affairs
| ||Standalone ||Consolidated |
|(Rs. in Crore) ||FY2021 ||FY2020 ||Change (%) ||FY2021 ||FY2020 ||Change (%) |
|Revenue from Operations (Gross) ||10367.36 ||9417.89 ||10.1% ||10367.36 ||9417.89 ||10.1% |
|Revenue from Operations (Net) ||2418.14 ||2427.04 ||(0.4)% ||2418.14 ||2427.04 ||(0.4)% |
|Other Income ||20.07 ||9.19 ||118.5% ||20.07 ||9.19 ||118.5% |
|Income from Operations ||2438.21 ||2436.23 ||0.1% ||2438.21 ||2436.23 ||0.1% |
|Raw Materials Consumed ||1202.42 ||1248.19 ||(3.7)% ||1202.42 ||1248.19 ||(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 ||2085.11 ||2139.37 ||(2.5)% ||2085.11 ||2139.37 ||(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 (%) || |
| || |
|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 (%) || |
| || |
|Basic EPS (?) ||20.26 ||17.05 ||18.8% ||20.75 ||17.16 ||20.9% |
|Gross Profit ||1215.72 ||1178.85 ||3.1% ||1215.72 ||1178.85 ||3.1% |
|Gross Margin (%) || |
| || |
|EBITDA ||407.79 ||368.19 ||10.8% ||407.79 ||368.19 ||10.8% |
|EBITDA Margin (%) || |
| || |
|Paid-up Equity Share Capital (Face Value of ' 2 each) ||26.71 ||26.71 ||0.0% ||26.71 ||26.71 ||0.0% |
|Reserves & Surplus ||1737.19 ||1493.82 ||16.3% ||1766.20 ||1516.23 ||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 || |
Due to the pandemic induced lock downs in April 2020 our performance was impactedadversely. 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 inMay 2020 our operations rebounded very quickly and we also saw improvement in theindustry performance on a quarter-on- quarter basis. Through the second half of FY2021 wehad seen sustained improvement in various macroeconomic indicators demonstrating a strongeconomic revival. By the end of the year eight out of eleven top markets that we operatein returned to growth. Against IMFL volume decline of (8.0)% IMFL sales value decreasedby (3.3)%. In value terms Prestige & Above brands contributed to about 50.6% of totalIMFL sales value (vs. 49.5% last year). IMFL sales value accounted for 79.1% of the totalRevenue from Operations (net) of the Company compared to 81.5% last year. Non-IMFL salesvalue 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 ENAprices 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 goodssuch 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 tosupport 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
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 ventureamounting to ' 6.59 Crore in FY2021 compared with ' 1.64 Crorein FY2020.
The Board of Directors has recommended a dividend of 120% i.e. ' 2.40 perequity 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 toapproval of the members at the forthcoming annual general meeting and shall be subject todeduction of income tax at source.
The dividend recommended is in accordance with the Company's Dividend DistributionPolicy. The Dividend Distribution Policy of the Company is available on the Company'swebsite and can be accessed at https:// www.radicokhaitan.com/wp-content/uploads/2019/03/Dividend-Distribution-Policy.pdf
The Company has an authorized share capital of ' 94 Crore consisting of '34 Crores equity share capital (170000000 equity shares of ' 2 each) and '60 Crores preference share capital (6000000 preference shares of ' 100each).
As on March 31 2021 the issued subscribed and paid up share Capital of the Companyis ' 26.71 Crores divided into 133568265 fully paid up equity shares of '2 each.
Employees' Stock Option Scheme
The Company has an employee stock option scheme 2006 (Scheme 2006). During the yearthere was no material change in the scheme and the scheme is in compliance with the SEBI(Share Based Employee Benefits) Regulations 2014 (the SEBI ESOP Regulations').
During the year under review no stock options were granted to employees under theScheme 2006 and the Company has allotted 34000 equity shares on exercise of stockoptions. Each Option entitles the holder to acquire one equity share of ' 2each of the Company at the exercise price fixed at the time of grant being the marketprice as per the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock PurchaseScheme) 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 sameis 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 onejoint venture namely Radico NV Distilleries Maharashtra Limited ("RNV"). TheCompany has 36% stake in the said joint venture. In terms of the Section 129(3) of theCompanies Act 2013 ("the Act") the financial results of RNV are consolidatedwith the accounts of the Company and the salient features of the financial statements ofRNV as set out in the prescribed form AOC-1 is appended as Annexure - A to thisreport.
In accordance with the provisions of the Act and SEBI (Listing Obligation andDisclosures requirements) Regulations 2015 read with Ind AS 110 Consolidated FinancialStatement Ind AS 28 Investments in Associates and Joint Ventures and Ind AS 31 Interestsin Joint Ventures the consolidated audited financial statement forms part of the AnnualReport.
The Company's long-term credit facility is revised by CARE Ratings. TheCompany's long-term credit facilities is now rated as CARE AA- (Double A Minus) witha positive outlook.
CARE AA rated instruments are considered to have high degree of safety regarding timelyservicing of financial obligations. Such instruments carry very low credit risk. Suchinstruments carry lowest credit risk. Modifiers (+/-) reflect the comparative standingwithin the category.
AUDITORS AND AUDITORS' REPORT
As per the provisions of the Act the term of BGJC & Associates LLP CharteredAccountants as Statutory Auditors of the Company expires at the conclusion of the ensuingAnnual General Meeting. Based on the recommendations of the Audit Committee it isproposed to appoint M/s. Walker Chandiok & Co LLP Chartered Accountants as StatutoryAuditors of the Company for a term of 5 (five) consecutive years. M/s. Walker Chandiok& Co LLP Chartered Accountants have confirmed their eligibility and qualificationsrequired 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 thisannual report. The observations made in the Auditors' Report are self- explanatoryand therefore do not call for any further comments. The Auditor's Report does notcontain any qualification reservation or adverse remark. Further the auditors have notreported any fraud u/s 143(12) of the Act.
The Board on the recommendation of the Audit Committee has approved the appointmentof Mr. R. Krishnan Cost Accountants as Cost Auditors for the financial year endingMarch 31 2021. In accordance with the provisions of Section 148 of the Companies Act2013 read with the Companies (Audit and Auditors) Rules 2014 since the remunerationpayable to the Cost Auditors has to be ratified by the shareholders the Board recommendsthe same for approval by shareholders at the ensuing annual general meeting.
Maintenance of cost records has been specified by the Central Government under section148(1) of the Companies Act 2013 and the prescribed cost records have been made andmaintained by the Company.
The Company had appointed M/s TVA & Co. LLP Company Secretaries to conduct itsSecretarial Audit for the financial year ended March 31 2021. The Secretarial Auditorshave submitted their report confirming compliance by the Company of all the provisions ofapplicable corporate laws. The Report does not contain any qualification reservationdisclaimer or adverse remark. The Secretarial Audit Report is annexed as Annexure B tothe Board's report. The Board on the recommendation of Audit Committee has re-appointed M/s. TVA & Co. LLP Company Secretaries New Delhi as Secretarial Auditorsof 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 theCompany Mr. Abhishek Khaitan Managing Director of the Company retires by rotation atthe ensuing annual general meeting. The Board of Directors on the recommendation of theNomination 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 approvedre-appointment of and payment of remuneration to Mr. Abhishek Khaitan as ManagingDirectors 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 effectsfrom April 01 2019 for the remaining tenure of his appointment i.e. upto February192023.
During the year Mr. Dinesh Kumar Gupta was appointed as Vice President - Legal andCompany Secretary in the category of key managerial personnel with effect from January 282021 in place of Mr. Amit Manchanda who resigned from the services of the Company.
The Company has a Nomination & Remuneration Committee and formulated the criteriafor determining the qualifications positive attributes and independence of a Director("the Criteria"). The policy relates to the remuneration of the Directors keymanagerial personnel and other employees as required under Section 178(3) of the Act. TheCriteria includes that a person to be appointed on the Board of the Company should possessin addition to the fundamental attributes of character and integrity appropriatequalifications skills experience and knowledge.
Meeting of Independent Directors
The Independent Directors of the Company met separately on January 28 2021 without thepresence of the Non- Independent Directors and the members of management. The meeting wasconducted informally to enable the Independent Directors to discuss matters pertaining tothe Company's affairs and put forth their combined views to the Board of Directors ofthe Company. In accordance with the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") following matters were inter-aliadiscussed 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 theviews of Executive Directors and Non-Executive Directors;
3. Assess the quality quantity and timelines of flow of information between theCompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
Declaration by Independent Directors
The Company's Independent Directors have submitted requisite declarationsconfirming that they continue to meet the criteria of independence as prescribed underSection 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. TheIndependent Directors have also confirmed that they have complied with Schedule IV of theAct and the Company's Code of Conduct. The Company keeps a policy of transparency andarm's length while dealing with its Independent Directors. No transaction was enteredwith Independent Directors during the year which could have any material pecuniaryrelationship with them. Apart from sitting fee no other remuneration was paid to any ofthe Independent Directors.
In the opinion of the Board the Independent Directors hold highest standard ofintegrity 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 tothe remuneration of Directors Key Managerial Personnel and Senior Management of theCompany. This policy also lays down criteria for selection and appointment of the BoardMembers as well as diversity of the Board. Radico Khaitan recognizes the benefits andimportance 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 andwoman director. The detail of the policy is explained in the Corporate Governance Reportand full policy is also available on the Company's website at the following link:http://www.radicokhaitan.com/ investor-relations.
Annual Board Evaluation
The Board is committed to transparency in assessing the performance of Directors. Inaccordance with the Companies Act 2013 and the Rules made thereunder Schedule - IV ofthe Act and Regulation 4(2)(f) of the Listing Regulations Radico Khaitan has framed apolicy for the formal annual evaluation of the performance of the Board Committees andindividual Directors. The Company has put in place a robust framework for evaluation ofthe Board its Committees the Chairman individual Directors and the governance processesthat support the Board's functioning.
This framework covers specific criteria and the grounds on which all Directors in theirindividual capacity are evaluated. The key criteria for performance evaluation of theBoard and its Committees include aspects such as composition and structure effectivenessof board processes information sharing and functioning. The criteria for performanceevaluation of the individual Directors include aspects such as professional conductcompetency and contribution to the Board and Committee meetings. The criteria forperformance evaluation of the committees of the Board include aspects such as thecomposition of committees and effectiveness of committee meetings. The performanceevaluation of the Independent Directors was done by the entire Board excluding theDirector being evaluated. The performance evaluation of the Chairman and theNon-Independent Directors was carried out by the Independent Directors. The Board ofDirectors 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 andtraining of the Directors and the Board evaluation process undertaken in compliance withthe provisions of the Companies Act 2013 and the Listing Regulations is provided in theReport on Corporate Governance which forms part of the Annual Report.
Roes and responsibilities of Board Members
The Company has a clearly laid out policy defining the structure and role of the BoardMembers. The Company has an Executive Chairman and Managing Director presently Dr LalitKhaitan; a Managing Director currently Mr. Abhishek Khaitan and an optimum combination ofexecutive and non-executive independent directors. The duties of the Board Membersincluding Independent Directors have been elaborated in the Listing Regulations Section166 of the Companies Act 2013 and Schedule IV of the said Act. There is a clearsegregation 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 arebeing 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. Anyshareholder interested in obtaining the same may write to the Company Secretary at theRegistered Office of the Company on any working day of the Company up to the date of the36th Annual General Meeting. The statement containing information as required under theprovisions of Section 197(12) of the Act read with Rule 5 (1) Rule 5(2) and Rule 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is givenin 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 committeesviz. Audit Committee Nomination and Remuneration Committee Corporate SocialResponsibility Committee Risk Management Committee Stakeholders Relationship Committeeand Committee of Directors.
All the recommendations made by the Committees of the Board including the AuditCommittee were accepted by the Board.
The Board of Directors met four (4) times during the previous financial year. Adetailed update on the Board its composition governance of committee including detailedcharter terms and reference of various Board Committees number of Board and Committeemeetings held during financial year 2020-21 and attendance of the Directors at eachmeeting is provided in the Report on Corporate Governance which forms part of this Annualreport.
CONVERSATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo required to be disclosed pursuant to Section 134 of the Actread with the Companies (Accounts) Rules 2014 is given as Annexure-D and formspart of this Report.
ENVIRONMENTAL PROTECTION MEASURES TAKEN BY THE COMPANY
In view of the corporate responsibility on environmental protection the Company hasadopted a number of measures for improvement in the field of environment safety andhealth. Measures such as standard operating procedures training programmes for all levelsof employees regarding resource conservation housekeeping Green Belt development andonsite emergency plan have been taken. Sustainable living is a part of long-term businessstrategy and your Company continuously strives to reduce our environmental footprintwhile enhancing the livelihood of people across our product value chain.
INTERNAL FINANCIAL CONTROLS
The Board of Directors of the Company has devised systems policies procedures andframeworks which are currently operational within the Company for ensuring the orderlyand efficient conduct of its business which includes adherence to policies safeguardingits assets prevention and detection of frauds and errors accuracy and completeness ofthe accounting records and timely preparation of reliable financial information.
The internal financial controls have been documented digitised and embedded in thebusiness process. Assurance on the effectiveness of internal financial controls isobtained through management reviews controls self-assessment continuous monitoring byfunctional experts as well as testing of the internal financial control systems by theinternal auditors during the course of their audits. We believe that these systems providereasonable assurance that our internal financial controls are designed effectively and areoperating as intended.
Management team has assessed the effectiveness of the Company's internal controlover financial reporting as at March 31 2021. The Statutory Auditors of the Company haveaudited the financial statements included in this Annual Report and issued their report oninternal control over financial reporting (as defined under section 143 of the CompaniesAct 2013). The Company has appointed reputed firms of Chartered Accountants to carry outInternal Audits. The audit is based on focused and risk-based internal plans which isreviewed every year in consultation with the Audit Committee. In line with internationalpractices the focus of Internal Audit is oriented towards the review of internal controlsand risks in operations.
RISK MANAGEMENT POLICY
Radico Khaitan's business is exposed to a variety of risks which are inherent to aliquor manufacturing company in India. In this volatile uncertain and complex operatingenvironment only companies that manage their risk effectively can sustain. Riskmanagement is embedded in Radico Khaitan's corporate strategies and operatingframework and the risk framework helps the Company meet its objectives by aligningoperating controls with the corporate mission and vision. The Company has in placecomprehensive risk assessment and minimization procedures integrated across alloperations and entails the recording monitoring and controlling enterprise risks andaddressing them timely and comprehensively. The risks that the Company faces as strategicSecurity risks cyber- attack financial liquidity regulatory reputational and otherrisks are reviewed by the Risk Management Committee the Audit Committee and the Boardfrom time to time and new risks are identified based on new business initiatives and thesame are assessed minimisation framework and controls are designed and appropriatelyimplemented.
During the year 144750 shares of the Company constituting 0.11% of the issued andsubscribed 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 allthe members who have not yet converted their holdings into dematerialized form to do sothereby facilitating trading of their shares. As per SEBI guidelines it is mandatory thatthe shares of a company are in dematerialized form for trading.
INSURANCE OF FIXED ASSETS
Your Company has adequately insured all its properties including Plant and MachineryBuilding and Stocks.
Pursuant to the Listing Regulations and in line with Radico Khaitan's Policy onDetermination of Materiality of Events the Company shall disclose all such events to theStock Exchanges and such disclosures shall be hosted on the website of the Company for aperiod of 5 years and thereafter the same shall be archived so as to be available forretrieval 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 theCompany's policy on preservation of documents.
SAFETY & WELLBEING OF WOMEN
Gender equality and women safety is a very important part of Radico Khaitan'shuman resource policies. The Company has zero tolerance for sexual harassment at workplaceand has adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace 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 preventionand redressal of complaints of sexual harassment at workplace. The Company has endeavouredto encourage women professionals by creating proper policies to tackle issues relating tosafe and proper working conditions and create and maintain a healthy and conducive workenvironment that is free from discrimination. During the year under review there were nosexual harassment cases reported to the Safety & Well being of Women.
Composition of the Sexual Harassment Committee as on March 31 2021 compliance withconditions of corporate governance as stipulated under the Listing Regulations formspart of the Annual Report.
The internal financial controls have been documented digitised and embedded in thebusiness 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 2013Radico Khaitan has in place a robust vigil mechanism and has adopted a Whistle BlowerPolicy which allows employees of the Company to raise their concerns relating to fraudmalpractice or any other activity or event which is against the interest of the Company orsociety as a whole. All employees shall be protected from any adverse action for reportingany unacceptable or improper practice and/or any unethical practice fraud or violation ofany law rule or regulation. This policy is also applicable to the Directors of theCompany. All cases reported as part of whistle-blower mechanism are taken to their logicalconclusion within a reasonable timeframe. Details of complaints received and the actiontaken are reviewed by the Audit Committee. The functioning of the Vigil Mechanism isreviewed by the Audit Committee from time to time. The Vigil Mechanism Policy has beenuploaded on the website of the Company at http://www. radicokhaitan.com/investor-relations/.
CORPORATE SOCIAL RESPONSIBILITIES (CSR)
CSR at Radico Khaitan is creating sustainable programs that actively contribute to andsupport the social and economic development of the society. The Company is committed tocommunity development enhancing livelihood promoting education and health care includingpreventive health care and ensuring environmental sustainability. As part of its CSRprogrammes the Company partners with the community and addresses issues of water andsanitation education health and skill-building. Radico Khaitan also promotes andencourages responsible drinking through engaging with employees taking preventativeaction education and raising awareness and bringing communities on board to address localchallenges at their root. The CSR policy of the Company is available on the Company'swebsite.
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 |
The Company's projects are in accordance with Schedule VII of the Companies Act2013 and the Company's CSR Policy. The Report on CSR activities as required underCompanies (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 2020-21however 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 ofnext 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 thestatutory auditor to report to the Audit Committee or the Board under section 18 (12) ofthe Companies Act 2013 and rules made there under.
The failure of information Technology (IT) systems due to malicious attacks and / ornon-compliance with data privacy laws can potentially lead to financial loss businessdisruption and / or damage to the Company's reputation. Radico Khaitan has in place adata protection policy. It also maintains a cyber security infrastructure. The Companyuses standardised backup tools service and procedures to ensure that information and dataare stored at two or more diverse locations.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of Internal Financial Controls and compliance systemsestablished and maintained by the Company the work performed by the Internal AuditorsStatutory Auditors and Secretarial Auditors including the Audit of Internal FinancialControls over financial reporting by the Statutory Auditors and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate andeffective during FY2021.
To the best of knowledge and belief and according to the information and explanationsobtained 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 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
ii) The Board has selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2021 and of the profit ofthe Company for the year ended on that date;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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 theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) The Directors had devised proper systems to ensure compliance with the provisionsof 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 Companies Act 2013 the Companyhas placed a copy of the Annual Return as at March 31 2021 on its website and by virtueof amendment to Section 92(3) of the Companies Act 2013 the Company is not required toprovide extract of Annual Return (Form MGT-9) as part of the Board's report.
Annual Return can be accessed at https://www. radicokhaitan.com/wpcontent/uploads/2021/09/ MGT-7-Annual-Return-2021.pdf
(ii) Public Deposits
During the year under review your Company has neither invited nor accepted any fixeddeposits from the public within the meaning of Section 73 of the Companies Act 2013 readwith the Companies (Acceptance of Deposits) Rules 2014.
(iii) loans Guarantees and Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
(iv) Particulars of Contract or arrangements with Related Party
All transactions entered with Related Parties for the year under review were onarm's length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 are not attracted. Thus disclosure in form AOC-2is not required.
Further there are no material related party transactions during the year under reviewwith the promoters directors or key managerial personnel. The Company has developed aRelated Party Transactions framework through Standard Operating Procedures for the purposeof identification and monitoring of such transactions.
All Related Party Transactions are placed before the Audit Committee as also to theBoard for approval. Omnibus approval was obtained on a quarterly basis for transactionswhich are of repetitive nature. Transactions entered into pursuant to omnibus approval areaudited by the Legal & Compliance Department and a statement giving details of allRelated Party Transactions are placed before the Audit Committee and the Board for reviewand approval on a quarterly basis.
The Policy on Related Party Transactions as amended and approved by the Board ofDirectors has been uploaded on the website of the Company. The web- link of the same hasbeen provided in the Corporate Governance Report. None of the Directors has any pecuniaryrelationship of transactions vis-a-vis the Company.
(v) Orders passed by courts/regulators
The U.P. State Excise Department has issued a show cause notice (SCN) to us claiming anexcise duty amounting to ' 1822.77 Lakhs on the alcohol lost in the fireaccident. Based on the opinion of the legal counsel the Group has filed an appeal underRule 813 of the U.P. Excise Rule before the U.P. Commissioner of Excise seeking relieffrom the above claim by way of setting aside the above mentioned SCN considering thisloss of alcohol as an unavoidable accident of fire.
(vi) Secretarial Standards
The Company has followed applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings'respectively.
(vii) Corporate Governance Report
Report on Corporate Governance along with the certificate from Mr. Tanuj Vohra Partnerat M/s. TVA & Co. LLP Company Secretaries confirming compliance with conditions ofcorporate governance as stipulated under the Listing Regulations forms part of theAnnual Report.
(viii) General Reserve
Your Directors do not propose to transfer any amount to General Reserve and the entireamount of the profit for the year ended March 31 2021 forms part of retained earnings.
(ix) Management Discussion and Analysis:
Management Discussion and Analysis Report as required under the Listing Regulations isprovided as a separate report and forms part of this Annual Report.
(x) Business Responsibility Report
The Business Responsibility Report for FY2021 as stipulated under Regulation 34(2)(f)of the Listing Regulations is annexed is a separate report and forms part of this AnnualReport.
(xi) Change in the nature of business
There is no change in the nature of business during the year under the review.
(xii) Details of material changes from the year end.
There is no material change since March 31 2021.
(xiii) Dispatch of Annual report through electronic mode
In compliance with the MCA Circulars and SEBI Circular dated May 12 2020 notice ofthe AGM along with the Annual Report 2020-21 is being sent only through electronic mode tothose members whose email addresses are registered with the Company/ Depositories. Membersmay note that the Notice and Annual Report 2020-21 will also be available on theCompany's website (https://www.radicokhaitan.com/ investorrelations) websites of theStock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited atwww.bseindia.com and www.nseindia.com respectively and on the website of theCompany's Registrar and Transfer Agent KFin Technologies Private Limited("KFinTech") at https://evoting.karvy. com.
Your Directors acknowledge with gratitude the cooperation and assistance received fromthe Central and State Government authorities. Your Directors thank the shareholdersfinancial institutions banks/ other lenders customers vendors and other businessassociates for their confidence in the Company and its management and look forward totheir continued support. The Board wishes to place on record its appreciation for thededication and commitment of the Company's employees at all levels which hascontinued to be our major strength. We look forward to their continued support in thefuture.