Dear Members,
The Board of Directors of Radico Khaitan Limited ("Radico
Khaitan" or the "Company") is pleased to present the 40th 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, 2024.
RESULTS OF OPERATIONS AND STATE OF COMPANY'S AFFAIRS
(Rs in Crore)
|
Standalone |
Consolidated |
|
FY2024 |
FY2023 |
Change (%) |
FY2024 |
FY2023 Ch |
ange (%) |
| Revenue from Operations (Gross) |
15,483.9 |
12,743.9 |
21.5% |
15,483.9 |
12,743.9 |
21.5% |
| Revenue from Operations (Net) |
4,118.5 |
3,142.8 |
31.0% |
4,118.5 |
3,142.8 |
31.0% |
| Other Income |
8.9 |
9.4 |
(5.6)% |
8.9 |
9.4 |
(5.7)% |
| Income from Operations |
4,127.4 |
3,152.2 |
30.9% |
4,127.4 |
3,152.2 |
30.9% |
| Raw Materials Consumed |
2,366.5 |
1,827.9 |
29.5% |
2,366.5 |
1,827.9 |
29.5% |
| Employee Benefit Expenses |
195.8 |
168.9 |
15.9% |
195.8 |
168.9 |
15.9% |
| Selling & Distribution Expenses |
432.6 |
329.0 |
31.5% |
432.6 |
329.0 |
31.5% |
| Depreciation |
113.8 |
70.9 |
60.5% |
113.8 |
70.9 |
60.5% |
| Finance Cost |
59.1 |
22.1 |
167.4% |
59.1 |
22.1 |
167.4% |
| Other Operating Expenses |
617.6 |
458.5 |
34.7% |
617.6 |
458.6 |
34.7% |
| Total Expenses |
3,785.4 |
2,877.4 |
31.6% |
3,785.4 |
2,877.5 |
31.6% |
| Profit Before Tax |
342.0 |
274.8 |
24.5% |
342.0 |
274.7 |
24.5% |
| Current Tax |
72.4 |
68.9 |
5.1% |
72.4 |
68.9 |
5.1% |
| Previous Year Adjustments |
0.0 |
0.0 |
|
0.0 |
0.0 |
|
| Deferred Tax |
13.9 |
1.5 |
|
13.9 |
1.5 |
|
| Net Profit |
255.8 |
204.4 |
25.1% |
255.7 |
204.4 |
25.1% |
| Net Income Margin (%) |
6.2% |
6.5% |
|
6.2% |
6.5% |
|
| Share in profit of Joint Venture |
- |
- |
|
6.4 |
16.0 |
|
| Other Comprehensive Expenses / (Income) |
(0.9) |
1.9 |
|
(0.9) |
2.0 |
|
| Total Comprehensive Income |
256.7 |
202.6 |
26.7% |
263.1 |
218.4 |
20.5% |
| Total Comprehensive Income Margin (%) |
6.2% |
6.4% |
|
6.4% |
6.9% |
|
| Basic EPS (Rs) |
19.1 |
15.3 |
25.1% |
19.6 |
16.5 |
19.0% |
| Gross Profit |
1,752.0 |
1,314.9 |
33.2% |
1,752.0 |
1,314.9 |
33.2% |
| Gross Margin (%) |
42.5% |
41.8% |
|
42.5% |
41.8% |
|
| EBITDA |
507.3 |
358.2 |
41.6% |
507.3 |
358.2 |
41.6% |
| EBITDA Margin (%) |
12.3% |
11.4% |
|
12.3% |
11.4% |
|
| Paid-up Equity Share Capital (Face Value of Rs 2 each) |
26.7 |
26.7 |
0.0% |
26.7 |
26.7 |
0.0% |
| Reserves & Surplus |
2,350.6 |
2,125.3 |
10.6% |
2,412.9 |
2,181.2 |
10.6% |
| Transfer to General Reserve |
|
- |
|
|
- |
|
| Proposed Dividend |
40.1 |
40.1 |
0.0% |
40.1 |
40.1 |
0.0% |
PERFORMANCE REVIEW Revenue from Operations
| Volume (Million Cases) |
FY2024 |
FY2023 |
Change (%) |
| Prestige & Above |
11.26 |
9.35 |
20.3% |
| Regular & Others |
13.42 |
15.62 |
(14.1)% |
| Total Own Volume |
24.68 |
24.97 |
(1.2)% |
| Prestige & Above as % of Total |
45.6% |
37.5% |
|
| Royalty Brands |
4.05 |
3.26 |
|
| Total Volume |
28.73 |
28.24 |
1.7% |
| Revenue Break up (Rs in Crore) |
FY2024 |
FY2023 |
Change (%) |
| IMFL (A) |
2821.5 |
2,501.4 |
12.8% |
| Prestige & Above |
1932.4 |
1,496.2 |
29.2% |
| Regular & Others |
850.9 |
978.0 |
(13.0)% |
| Others |
38.2 |
27.3 |
|
| Non IMFL (B) |
1,297.1 |
641.4 |
102.2% |
| Revenue from Operations (Net) (A+B) |
4,118.5 |
3,142.8 |
31.0% |
| Prestige & Above as % of Total IMFL Revenue |
68.5% |
59.8% |
|
| IMFL as % of Total Revenue |
68.5% |
79.6% |
|
The Company has delivered another year of strong IMFL volume growth led
by Prestige & Above category which increased by 20.3%. This was driven by our core
brands such as Magic Moments vodka which recorded 6.3 Million cases sales during the year
and crossed sales value of Rs 1,000 Crore. Morpheus Super Premium Brandy and 1965 Spirit
of Victory premium rum crossed a million-case sale for the second consecutive year.
Volumes of Royal Ranthambore more than doubled. After Dark and 8PM Premium Black also
continued their strong growth traction.
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 61% in
FY2024; Semi-Luxury consisting of Royal Ranthambore whisky, Morpheus Blue super premium
brandy and Magic Moments Dazzle vodka has grown by 52%; and Super Premium segment
consisting of Morpheus super premium brandy and Magic Moments Verve vodka has grown by
12%.
Prestige & Above category volume has grown more than 130% since
FY2019. This has led to a sustainable improvement in the realization per case, which
increased from Rs 773 in FY2019 to Rs 1,128 in FY2024.
Gross Profit
Gross Margin increased from 41.8% in FY2023 to 42.5% in FY2024. During
FY2024, while the prices of certain packaging materials have been stable, cost of grain,
ENA and glass has been volatile. This has led to a significant pressure on our gross
margins. However, with our product premium mix and price increases, we have been able to
offset the pressure of raw material prices to a large extent.
EBITDA
EBITDA increased by 41.6% y-o-y with margins of 12.3% due to the
expansion in gross margins.
Finance Cost
Finance Cost for FY2024 increased by 167.4% y-o-y from Rs 22.1 Crore to
Rs 59.1 Crore.
Total Comprehensive Income increased by 26.7% y-o-y to Rs 257
Crore.
Capital Expenditure: During Q3 FY2024, we successfully commissioned
the new 350 KLPD grain ENA distillery at Sitapur. The plant is now running at optimum
capacity and achieved key operating parameters. The commissioning of the Sitapur plant not
only secures long term ENA supplies but also positions us strongly to capitalise on the
future growth opportunities in the branded business with enhanced bottling capacities.
Together with the Rampur campus, the ENA production from the Sitapur plant will be able to
support the branded business growth for the next 6-8 years.
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 Rs 6.4 Crore in FY2024 compared with Rs 16.0 Crore in
FY2023.
DIVIDEND
The Board of Directors has recommended a final dividend of 150% i.e.,
Rs 3 per equity share of Rs 2 each fully paid-up Share Capital of the Company (last year
Rs 3 per equity share of Rs 2 each). The payment of dividend is subject to the approval of
the members at the forthcoming Annual General Meeting ("AGM") and shall be
subject to deduction of income tax at source.
The dividend recommended is in accordance with the Company's Dividend
Distribution Policy. The Dividend Distribution Policy of the Company is available on the
Company's website and the same can be accessed at
https://www.radicokhaitan.com/wp-content/
uploads/2019/03/Dividend-Distribution-Policy.pdf.
CAPITAL STRUCTURE
Share Capital
As on March 31, 2024, the Company has Authorized Share Capital of Rs 94
Crore consisting of Rs 34 Crore Equity Share Capital comprising 17,00,00,000 equity shares
of Rs 2 each and Rs 60 Crore Preference Share Capital comprising 60,00,000 preference
shares of Rs 100 each. The Issued, Subscribed and Paid-up Share
Capital of the Company is Rs 26.74 Crore divided into 13,37,15,325
fully paid-up equity shares of Rs 2 each.
During the year, the Company has allotted 41,560 Equity Shares of Rs 2
each to its eligible employees pursuant to the exercise of Stock Options granted under
Employees' Stock Option Scheme, 2006, which leads to increase in the issued, subscribed
and paid up share capital of the Company.
Except as mentioned above, there has been no other changes in the
Equity Share Capital of the Company during the FY2024.
Employees' Stock Option Scheme
The Company has an Employees' Stock Option Scheme, 2006 ("Scheme
2006"). During the year, there was no material change in the Scheme. The Scheme 2006
is in compliance with the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 and SEBI (Share Based Employee Benefits) Regulations,
2014 ("SEBI ESOP Regulations").
During the year under review, the Company has granted 2,15,000 Options
to the Eligible Employees under Scheme 2006 on June 07, 2023 at an Exercise Price of Rs
1,015.37 per option. Each Option entitles the holder to acquire one equity share of Rs 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.
During the year, the Company has allotted 33,838 Equity Shares on
August 03, 2023 and 7,722 Equity Shares on March 13, 2024 pursuant to exercise of Stock
Options under the Scheme 2006.
The particulars of the Scheme as required by SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 ("SEBI ESOP Regulations 2021"),
have been placed on the website of the Company and web link of the same is
https://www.radicokhaitan. com/wp-content/uploads/2024/07/ESOP-Disclosure-
Annual-Report-2024.pdf
In terms of Regulation 13 of SEBI ESOP Regulations 2021, a Certificate
received from M/s. TVA & Co. LLP, Company Secretaries, Secretarial Auditors,
confirming the Compliances with said Regulations, would be placed before the shareholders
at the ensuing AGM.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Subsidiaries
Radico Khaitan has one wholly-owned subsidiary namely, Radico Spiritzs
India Private Limited ("Radico
Spiritzs") and seven step down subsidiaries through Radico
Spiritzs. Radico Spiritzs holds 100% Equity Shares in the following step down wholly-owned
subsidiaries of the Company:
1. Accomreal Builders Private Limited
2. Binayah Builders Private Limited
3. Compaqt Era Builders Private Limited
4. Destihomz Buildwell Private Limited
5. Equibuild Realtors Private Limited
6. Firstcode Reality Private Limited
7. Proprent Era Estates Private Limited
Joint Venture
The Company has one joint venture, namely, Radico NV Distilleries
Maharashtra Limited ("RNV"). The Company holds a 36% stake in the said joint
venture.
In terms of the Section 129(3) of the Companies Act, 2013 (the
"Act"), the financial results of RNV, wholly- owned subsidiary and step down
subsidiaries are consolidated with the accounts of the Company and the salient features of
the financial statements of RNV and subsidiaries are set out in the prescribed form AOC-1
and the same is appended as Annexure - A to this report.
In accordance with the provisions of the Act and SEBI (Listing
Obligations and Disclosures Requirements) Regulations, 2015 ("Listing
Regulations") read with Ind AS 110 - Consolidated Financial Statements, Ind AS 28 -
Investments in Associates and Joint Ventures and Ind AS 31 - Interests in Joint Ventures,
the consolidated Audited Financial Statements form part of this Annual Report.
CREDIT RATING
The Company's long-term bank facilities are rated as CARE AA- (Double A
Minus) with a positive outlook and short-term bank facilities are rated CARE A1 + (A One
Plus).
CARE AA rated instruments are considered to have a high degree of
safety regarding timely servicing of financial obligations. Such instruments carry very
low credit risk. CARE A1 rated instruments are considered to have a very strong degree of
safety regarding timely payment of financial obligations. Such instruments carry the
lowest credit risk. Modifiers (+/-) reflect the comparative standing within the category.
AUDITORS AND AUDITORS' REPORT
Statutory Auditor
In terms of the provisions of Section 139 of the Act and the Rules made
thereunder, the Shareholders of the Company had, at the 37th AGM, approved the
appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, as Statutory
Auditors of the Company for a term of 5 years i.e. from conclusion of the 37th
AGM till the conclusion of the 42nd AGM of the Company to be held in the year
2026.
Audit Report
The report of the Statutory Auditors for FY2024 along with Notes and
Schedules thereto is enclosed to this Annual Report. The observations made in the
Auditors' Report are self-explanatory and therefore, do not call for any further comments.
The Auditor's Report does not contain any qualification, reservation, or adverse remark.
Further, the Auditors have not reported any fraud under section 143(12) of the Act.
Cost Auditor
The Board, on the recommendation of the Audit Committee, at its meeting
held on May 14, 2024 has approved the appointment of Mr. R. Krishnan, Cost Accountant, as
Cost Auditor, to audit the Cost Records of the Company for the financial year ending March
31, 2025. 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 Auditor
shall be ratified by the shareholders. The Board recommends the remuneration payable to
the Cost Auditor for FY2025 for approval by shareholders at the ensuing AGM.
Cost Records
The Company has maintained the Cost Records as specified by the Central
Government under section 148(1) of the Act.
Secretarial Auditor
The Board has, at its meeting held on May 25, 2023, 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, 2024. 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, at its meeting held on May 14, 2024, has re- appointed M/s. TVA & Co. LLP,
Company Secretaries, as Secretarial Auditors of the Company for the financial year ending
March 31, 2025.
AUDIT COMMITTEE
As on 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.
Due to retirement of Mr. Sarvesh Srivastava, the Audit Committee,
effective from May 30, 2024, will comprise of Mr. Tushar Jain as Chairman, Dr. Raghupati
Singhania and Mr. Pushp Jain as members.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Induction, Re-appointment, Retirements and Resignations
In accordance with the provisions of the Act and Articles of
Association of the Company, Mr. Abhishek Khaitan (DIN: 00772865), Managing Director of the
Company, is liable to retire by rotation at the ensuing AGM and being eligible, offered
himself for re-appointment. The Board of Directors has, on the recommendation of the
Nomination, Remuneration and Compensation Committee ("NRC Committee"),
recommended the re-appointment of Mr. Abhishek Khaitan at the ensuing AGM.
The shareholders, at their 39th AGM held on September 28,
2023, approved the re-appointment of Ms. Sushmita Singha (DIN: 02284266), Mr. Tushar Jain
(DIN: 00053023) and Mr. Sharad Jaipuria (DIN: 00017049) as Independent Directors of the
Company effective from April 01, 2024, August 08, 2024 and August 08, 2024 respectively,
for a second term of five years.
The second term as an Independent Director of Mr. Sarvesh Srivastava
(DIN: 06869261) expires on May 29, 2024. Consequently Mr. Srivastava will cease to be
Independent Director of Radico Khaitan effective from May 29, 2024.
Mr. Krishan Pal Singh (DIN: 00178560), Whole-time Director, has
resigned from the Board of Directors of the Company citing personal reasons. The Board has
accepted his resignation. Consequently Mr. Singh will cease to be Director and Whole-time
Director of Radico Khaitan effective from July 01, 2024.
The Board has, at its meeting held on May 14, 2024 on recommendation of
Nomination, Remuneration and Compensation Committee, appointed Mr. Pushp Jain (DIN:
00033289) as an Additional Director in the category of Non-executive Independent Director
and Mr. Amar Singh (DIN: 10616954) as Whole-time Director of the Company, effective from
May 30, 2024 and July 02, 2024 respectively, for a term of five years. The said
appointments shall be subject to the approval of the shareholders at the ensuing AGM.
Brief resumes of the Directors seeking appointments/ re-appointments
along with the disclosures specified under Regulation 36(3) of the Listing Regulations are
provided in the Notice of the 40th AGM.
During the year under review, except as stated above, there was no
change in the Directors or Key Managerial Personnel of the Company.
The Company has a Nomination, Remuneration and Compensation Committee
and it has formulated the criteria for determining the qualifications, positive attributes
and independence of a Director (the "Criteria"). The Criteria includes that a
person to be appointed to the Board of the Company should possess in addition to the
fundamental attributes of character and integrity, appropriate qualifications, skills,
experience and knowledge.
Meeting of Independent Directors
The Company's Independent Directors met once during FY2024 on May 25,
2023 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 Director.
The Company has put in place a robust framework for evaluation of the
Board, its Committees, the Chairman, individual Directors and the governance processes
that support the Board's functioning. This framework covers specific criteria and the
grounds on which all Directors in their individual capacity are evaluated.
The key criteria for performance evaluation of the Board and its
Committees include aspects such as composition and structure, effectiveness of board
processes, information sharing and functioning. The criteria for performance evaluation of
the individual Directors include aspects such as professional conduct, competency, and
contribution to the Board and Committee meetings. The criteria for performance evaluation
of the committees of the Board include aspects such as the composition of committees and
effectiveness of committee meetings. The performance evaluation of the individual
Directors and Independent Directors was done by the entire Board excluding the Director
being evaluated. The performance evaluation of the Chairman and the Non-Independent
Directors was carried out by the Independent Directors. The Board of Directors expressed
their satisfaction with the evaluation process.
Familiarisation Programme for the Board Members
A note on the Familiarisation Programme adopted by the Company for
orientation and training of the Directors and the Board evaluation process undertaken in
compliance with the provisions of the Act and the Listing Regulations is provided in the
Report on Corporate Governance forming part of this Annual Report.
Roles and Responsibilities of Board Members
The Company has laid out the Policy defining the structure and role of
the Board Members. The Company has an Executive Chairman and Managing Director, Dr. Lalit
Khaitan; a Managing Director, Mr. Abhishek Khaitan and an optimum combination of executive
and non-executive Independent Directors. The duties of the Board Members including
Independent Directors have been elaborated in accordance with the Listing Regulations,
Section 166 and Schedule IV of the Act. There is a clear segregation of responsibility and
authority amongst the Board Members.
PARTICULARS OF EMPLOYEES AND REMUNERATION
In terms of the first proviso to Section 136 of the Act, the Annual
Report including Financial Statements are being sent to the shareholders excluding the
information required under Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in obtaining
the same may write to the Company Secretary at investor@radico.co.in or visit at the
Registered Office of the Company on any working day up to the date of the 40th
Annual General Meeting. The statement containing information as required under the
provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - C and
forms part of this Report.
MEETINGS OF THE BOARD AND BOARD COMMITTEES
In compliance with the statutory requirements, the Company has
formulated the Board committees viz. Audit Committee, Nomination, Remuneration and
Compensation Committee, Sustainability and Corporate Social Responsibility (CSR)
Committee, Risk Management Committee, Stakeholders' Relationship Committee, Committee of
Directors, Environment, Social and Governance Committee and Committee of Independent
Directors.
All the recommendations made by the Committees of the Board, including
the Audit Committee, were accepted by the Board.
The Board of Directors met four times during the previous financial
year. A detailed update on the Board, its composition, governance of committee including
detailed charter and terms of reference of various Board Committees, number of Board and
Committee meetings held during FY2024 and attendance of the Directors at each meeting is
provided in the Report on Corporate Governance, which forms part of this Annual report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo required to be disclosed pursuant to Section 134
of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given as Annexure-D
forming part of this Report.
ENVIRONMENTAL PROTECTION MEASURES TAKEN BY THE COMPANY
The Company is committed to corporate responsibility for environmental
protection and has implemented several measures to enhance safety, health, and
environmental stewardship. These measures include creating standard operating procedures,
providing resource conservation training for all employees, maintaining good housekeeping
practices, developing green belt areas, and preparing for onsite emergencies. Sustainable
living is an integral part of the long-term business strategy, and the Company continually
works to minimize its environmental impact while improving the lives of people throughout
its product value chain.
INTERNAL FINANCIAL CONTROLS
The Board of Directors of the Company has devised systems, policies,
procedures and frameworks, which are currently operational within the Company for ensuring
the orderly and efficient conduct of its business, which includes adherence to the
policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy
and completeness of the accounting records and timely preparation of reliable financial
information.
The internal financial controls have been documented, digitised and
embedded in the business processes. Assurance on the effectiveness of internal financial
controls is obtained through management reviews, controls self-assessment, continuous
monitoring by functional experts as well as testing of the internal financial control
systems by the internal auditors during their audits. We believe that these systems
provide reasonable assurance that our internal financial controls are designed effectively
and are operating as intended.
Management team has assessed the effectiveness of the Company's
internal control over financial reporting as at March 31, 2024. 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. For FY2024, the Company had 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. For FY2025, the
Board has also appointed M/s Ernst & Young LLP along with M/s SCV & Co. LLP as
Joint Internal Auditors.
RISK MANAGEMENT POLICY
Radico Khaitan's business is exposed to a variety of risks which are
inherent to a liquor manufacturing company in India. In this volatile, uncertain and
complex operating environment, only companies that manage their risk effectively can
sustain. Risk management is embedded in Radico Khaitan's corporate strategies and
operating framework, and the risk framework helps the Company to meet its objectives by
aligning operating controls with the corporate mission and vision. The Company's risk
management framework supports an efficient and risk-conscious business strategy,
delivering minimum disruption to business and creating value for our stakeholders. The
Company has in place comprehensive risk assessment and minimization procedures, integrated
across all operations and entails the recording, monitoring and controlling enterprise
risks and addressing them timely and comprehensively. The risks that the Company faces are
reviewed by the Risk Management Committee, the Audit Committee and the Board from time to
time and new risks are identified based on new business initiatives and the same are
assessed. Risk minimisation framework and controls are designed and appropriately
implemented.
DEMATERIALISATION
During the year, 2,15,855 shares constituting 0.16% of the issued and
subscribed Share Capital of the Company, were dematerialised. As on March 31, 2024, 99.47%
of the shares of the Company were dematerialized. Your Directors would request the
members, who have not yet converted their holdings into dematerialized form, to do so and
thereby facilitate trading of their shares.
INSURANCE OF FIXED ASSETS
Your Company has adequately insured all its properties including Plant
and Machineries, Building and Stocks.
ARCHIVAL POLICY
Pursuant to the Listing Regulations and in line with Radico Khaitan's
Policy on Determination of Materiality of Events, the Company shall disclose all material
events to the Stock Exchanges and such disclosures shall be hosted on the website of the
Company for a period of five years and thereafter the same shall be archived so as to be
available for retrieval for a further period of three years by storing the same on
suitable media. Thereafter the said information, documents, records may be stored as per
the Company's policy on preservation of documents.
SAFETY & WELLBEING OF WOMEN
The Company promotes a work environment that ensures every employee is
treated with dignity and afford equitable treatment irrespective of his gender, race,
social class, caste, religion, place of origin, disability or economic status. Gender
equality and women safety is a very important part of Radico Khaitan's human resource
policies. The Company has zero tolerance for sexual harassment at workplace and it has
adopted a Policy for the prevention, prohibition and redressal of sexual harassment at
workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules framed
thereunder. The Company is committed to provide a safe and conducive work environment to
all employees and associates that is free from any discrimination.
As per the requirement of the POSH Act and Rules made thereunder, the
Company has constituted an Internal Complaint Committee ("ICC") to redress the
complaints received regarding sexual harassment. During the year under review, no cases
were reported to the ICC. Composition of the ICC as on March 31, 2024 is given as below.
| 1. Ms. Roopali Makhija |
Presiding Officer |
| 2. Ms. Jyoti Negi |
Member |
| 3. Ms. Anuja Singh Parihar |
Member |
| 4. Mr. Dinesh Kumar Gupta |
Member |
| 5. Mr. Vinay Padroo |
Member |
| 6. Mr. Mukesh Arora |
Member |
| 7. Ms. Tara Sharma (Social Activist) |
Member |
VIGIL MECHANISM
In compliance with Section 177(9) and (10) of the Act and Regulation 22
of the Listing Regulations, Radico Khaitan has established a strong vigil mechanism and
adopted a Whistle Blower Policy. This policy enables employees to report concerns related
to fraud, malpractice, or any activity contrary to the Company's interests or societal
welfare. The policy ensures protection for employees who report unacceptable or unethical
practices, fraud, or legal violations, shielding them from retaliation. 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, if any, have been
reviewed by the Audit Committee. The functioning of the Vigil Mechanism is reviewed by the
Audit Committee from time to time. The Vigil Mechanism Policy has been uploaded on the
website of the Company at https://www.radicokhaitan.com/wp-
content/uploads/2019/03/Whistle-Blower-Policy-Vigil- Mechanism.pdf.
SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company believes in the long term sustainability by creating value
for its stakeholders and for society. The Company is committed to pursue responsible
growth and recognizes its responsibility towards the society where it operates as a good
corporate citizen. CSR at Radico Khaitan is creating sustainable programs that actively
contribute to and support the social and economic development of the society. The Company
is committed to community development, women empowerment, enhancing livelihood, promoting
education and health care including preventive health care and ensuring environmental
sustainability. As a part of its CSR programmes, the Company partners with the community
and addresses issues of water, sanitation, education, healthcare and skill-building.
Radico Khaitan also promotes and encourages responsible drinking through various
campaigns, taking preventative actions, education and raising awareness and bringing
communities on board to address local challenges at their root. The CSR policy of the
Company is available on the Company's website.
Composition of the Sustainability and CSR Committee as on March 31,
2024, 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.
The CSR Committee and the Board of Radico Khaitan had approved in
aggregate Rs 1,100 Lakhs to be spent during FY2024 towards CSR, which includes Rs 642.75
Lakhs towards the CSR Obligation for FY2024 and Rs 457.25 Lakhs towards Ongoing CSR
Projects pertaining to FY2022 and FY2023. During FY2024, the Company has spent Rs 420.96
Lakhs towards CSR Obligation of FY2024 and Rs 139.27 Lakhs towards Ongoing Projects. The
provision of Rs 223 Lakhs has been created for Ongoing CSR Project.
The Board has approved the unspent amount allocated towards Ongoing
Project and the same has been transferred to Unspent CSR Account within 30 days of the end
of the financial year for use within a period of three financial years for the above
mentioned Ongoing Projects from the date of such transfer.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which was
required to be reported by the Statutory Auditors to the Audit Committee or the Board
under Section 143(12) of the Act and rules made thereunder.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of Internal Financial Controls and compliance
systems established and maintained by the Company, the work performed by the Internal
Auditors, Statutory Auditors and Secretarial Auditors, including the Audit of Internal
Financial Controls over financial reporting by the Statutory Auditors and the reviews
performed by Management and the relevant Board Committees, including the Audit Committee,
the Board is of the opinion that the Company's Internal Financial Controls were adequate
and effective during FY2024.
To the best of knowledge and belief and according to the information
and explanations obtained by them, your Directors make the following statements 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, 2024, 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, 2024 and
the profit of the Company for the year ended on that date;
iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) The annual accounts have been prepared on a going concern basis;
v) The Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively; and
vi) The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are adequate and operating
effectively.
OTHER DISCLOSURES
(i) Extract of Annual Return
Pursuant to Section 92(3) and Section 134(3) of the Act, the Company
has placed a copy of the Annual Return as at March 31, 2024 on its website and the same
can be accessed at
https://www.radicokhaitan.com/wp-content/uploads/2024/07/MGT-7-Annual-Return-2023-24.pdf
(ii) Public Deposits
During the year under review, the Company has neither invited nor
accepted any fixed deposits from the public within the meaning of Section 73 of the Act,
read with the Companies (Acceptance of Deposits) Rules, 2014.
(iii) Loans, Guarantees and Investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act are given in the notes to Financial Statements.
(iv) Particulars of Contract or Arrangements with Related Parties
All transactions entered with Related Parties for the year under review
were on arm's length basis and in the ordinary course of business and were approved by the
Audit Committee. Further, during the year, the Company had not entered into any material
Related Party Transactions. Accordingly, the disclosure of Related Party Transactions
under Section 188(1) of the Act in Form AOC-2 is not applicable.
The Board of Directors of the Company had laid down the criteria for
granting the omnibus approval by the Audit Committee for the transactions which are
repetitive in nature and in line with the Policy on Materiality of and dealing with
Related Party Transactions ("RPT Policy") adopted by the Company. Audit
Committee grants Omnibus approval for the Related Party Transactions which are of
repetitive nature. A statement giving details of all Related Party Transactions are placed
before the Audit Committee for review on a quarterly basis.
The RPT Policy as amended and approved by the Board of Directors has
been uploaded on the website of the Company. The web-link of the same has been provided in
the Corporate Governance Report. None of the Directors has any pecuniary relationship of
transactions vis-a-vis the Company.
(v) Orders Passed by Courts/Regulators
During the year, no significant and material orders passed by the
Regulators/Courts/Tribunals which may impact the going concern status and Company's
operations in future.
(vi) Secretarial Standards
The Company has followed applicable Secretarial Standards issued by the
Institute of Company Secretaries of India, i.e., SS-1 and SS-2, on 'Meetings of the Board
of Directors' and 'General Meetings', respectively.
(vii) Corporate Governance Report
The Company is in compliance with the requirements of Corporate
Governance as stipulated under the Listing Regulations. The Corporate Governance Report
including a certificate from M/s. TVA & Co. LLP, Company Secretaries, regarding
compliance of the conditions of Corporate Governance is annexed herewith and forming part
of the Annual Report.
(viii) General Reserve
Your Directors do not propose to transfer any amount to General Reserve
and the entire amount of the profit for the year ended March 31, 2024 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 FY2024,
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 FY2024
There have been no material changes and commitment, affecting the
financial position of the Company which occurred between the end of the FY2024 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.
(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. 09/2023 dated
September 25, 2023 other relevant Circulars issued by the Ministry of
Corporate Affairs ("MCA") and Circular No. SEBI/ HO/CFD/CMD1/CIR/P/2020/79 dated
May 12, 2020, SEBI/HO/CFD/CFD-PoD-2/P/ CIR/2023/167 dated October 07, 2023 and other
relevant circulars issued by the Securities and Exchange Board of India ("SEBI")
and all other Circulars issued by MCA and SEBI in this regard, the notice of the AGM along
with the Annual Report for FY2024 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 FY2024 will also be available on the Company's
website (http:// www.radicokhaitan. com/investor-relations/), websites of the Stock
Exchanges, i.e., BSE Limited and National Stock Exchange of India Limited at
www.bseindia.com and www.nseindia.com, respectively, and on the website of the Company's
Registrar and Transfer Agent, KFin Technologies Limited at https:// evoting.kfintech.com/.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to express their sincere
appreciation to all the employees for their commitment and contribution to the success of
the Company. Their enthusiasm and hard work have enabled the Company to be at the
forefront of the industry. We also take this opportunity to thank all our valued customers
who have appreciated and cherished our products.
The Board extends heartfelt thanks to the investors and bankers for
their ongoing support throughout the year. The directors also acknowledge the guidance and
assistance from regulatory authorities, including SEBI, Stock Exchanges, and other Central
and State Government agencies. In addition, the Board appreciates the support and
collaboration from supply chain partners and other business associates. We look forward to
their continued partnership and support in the future.
|
For & on behalf of the Board |
|
Dr. Lalit Khaitan |
| Place: New Delhi |
Chairman & Managing Director |
| Date: May 14, 2024 |
DIN - 00238222 |
|