Radico Khaitan Ltd Directors Report.

Dear Members,

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

Results of operations and state of Companys affairs

Standalone Consolidated
(Rs. in Crore) FY2021 FY2020 Change (%) FY2021 FY2020 Change (%)
Revenue from Operations (Gross) 10,367.36 9,417.89 10.1% 10,367.36 9,417.89 10.1%
Revenue from Operations (Net) 2,418.14 2,427.04 (0.4)% 2,418.14 2,427.04 (0.4)%
Other Income 20.07 9.19 118.5% 20.07 9.19 118.5%
Income from Operations 2,438.21 2,436.23 0.1% 2,438.21 2,436.23 0.1%
Raw Materials Consumed 1,202.42 1,248.19 (3.7)% 1,202.42 1,248.19 (3.7)%
Employee Benefit Expenses 176.34 186.08 (5.2)% 176.34 186.08 (5.2)%
Selling & Distribution Expenses 316.52 311.25 1.7% 316.52 311.25 1.7%
Depreciation 53.90 52.53 2.6% 53.90 52.53 2.6%
Finance Cost 22.02 31.61 (30.4)% 22.02 31.61 (30.4)%
Other Operating Expenses 313.92 309.72 1.4% 313.92 309.72 1.4%
Total Expenses 2,085.11 2,139.37 (2.5)% 2,085.11 2,139.37 (2.5)%
Profit Before Tax & Exceptional Item 353.10 296.85 18.9% 353.10 296.85 18.9%
Exceptional Item 0.00 (24.17) 0.00 (24.17)
Profit Before Tax 353.10 272.69 29.5% 353.10 272.69 29.5%
Current Tax 84.36 70.95 18.9% 84.36 70.95 18.9%
Previous Year Adjustments (3.89) 0.00 (3.89) 0.00
Deferred Tax 2.07 (25.76) (108.0)% 2.07 (25.76) (108.0)%
Net Profit 270.56 227.50 18.9% 270.56 227.50 18.9%
Net Income Margin (%)

11.2%

9.4%

11.2%

9.4%

Share in profit of Joint Venture 6.59 1.64 302.3%
Other Comprehensive Expenses / (Income) 0.86 2.70 (68.1)% 0.86 2.73 (68.7)%
Total Comprehensive Income 269.70 224.80 20.0% 276.30 226.41 22.0%
Total Comprehensive Income Margin (%)

11.2%

9.3%

11.2%

9.3%

Basic EPS (?) 20.26 17.05 18.8% 20.75 17.16 20.9%
Gross Profit 1,215.72 1,178.85 3.1% 1,215.72 1,178.85 3.1%
Gross Margin (%)

50.3%

48.6%

50.3%

48.6%

EBITDA 407.79 368.19 10.8% 407.79 368.19 10.8%
EBITDA Margin (%)

16.9%

15.2%

16.9%

15.2%

Paid-up Equity Share Capital (Face Value of 2 each) 26.71 26.71 0.0% 26.71 26.71 0.0%
Reserves & Surplus 1,737.19 1,493.82 16.3% 1,766.20 1,516.23 16.5%
Transfer to General Reserve - -
Proposed Dividend and tax thereon 32.06 26.71 20.0% 32.06 26.71 20.0%

PERFORMANCE REVIEW (STANDALONE)

Revenue from Operations

volume (Million cases) FY2021 FY2020 Change (%)
Prestige & Above 6.51 7.05 (7.7)%
Regular & Others 15.83 17.25 (8.2)%
Total volume 22.34 24.30 (8.0)%
Prestige & Above as % of Total

29.1%

29.0%

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

Gross Profit

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

EBITDA

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

Finance Cost

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

Total Comprehensive Income

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

PERFORMANCE REVIEW (CONSOLIDATED)

Radico Khaitan has a 36% equity stake in Radico NV Distilleries Maharashtra Limited. Consolidated financials of the Company include share in profit of this joint venture amounting to 6.59 Crore in FY2021 compared with 1.64 Crore in FY2020.

DIVIDEND

The Board of Directors has recommended a dividend of 120% i.e. 2.40 per equity share of 2 each fully paid up Capital of the Company (last year 2 per equity share of 2 each). The payment of dividend is subject to approval of the members at the forthcoming annual general meeting and shall be subject to deduction of income tax at source.

The dividend recommended is in accordance with the Companys Dividend Distribution Policy. The Dividend Distribution Policy of the Company is available on the Companys website and can be accessed at https:// www.radicokhaitan.com/wp-content/uploads/2019/03/ Dividend-Distribution-Policy.pdf

capital structure

Share Capital

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

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

Employees Stock Option Scheme

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

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

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

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Company has no subsidiary. The Company has only one joint venture, namely, Radico NV Distilleries Maharashtra Limited ("RNV"). The Company has 36% stake in the said joint venture. In terms of the Section 129(3) of the Companies Act, 2013 ("the Act"), the financial results of RNV are consolidated with the accounts of the Company and the salient features of the financial statements of RNV as set out in the prescribed form AOC-1 is appended as Annexure - A to this report.

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

CREDIT RATING

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

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

AUDITORS AND AUDITORS REPORT

Statutory Auditor

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

Audit Report

The report of the Statutory Auditors along with notes to Schedules is enclosed to this annual report. The observations made in the Auditors Report are self- explanatory and therefore do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark. Further, the auditors have not reported any fraud u/s 143(12) of the Act.

Cost Auditor

The Board, on the recommendation of the Audit Committee, has approved the appointment of Mr. R. Krishnan, Cost Accountants, as Cost Auditors, for the financial year ending March 31, 2021. In accordance with the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors has to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the ensuing annual general meeting.

Cost Records

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

Secretarial Auditor

The Company had appointed M/s TVA & Co. LLP, Company Secretaries to conduct its Secretarial Audit for the financial year ended March 31, 2021. The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The Report does not contain any qualification, reservation, disclaimer or adverse remark. The Secretarial Audit Report is annexed as Annexure B to the Boards report. The Board, on the recommendation of Audit Committee, has re- appointed M/s. TVA & Co. LLP, Company Secretaries, New Delhi, as Secretarial Auditors of the Company for financial year 2021-22.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Induction, Re-appointment, Retirements and Resignations

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

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

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

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

The Company has a Nomination & Remuneration Committee and formulated the criteria for determining the qualifications, positive attributes and independence of a Director ("the Criteria"). The policy relates to the remuneration of the Directors, key managerial personnel and other employees, as required under Section 178(3) of the Act. The Criteria includes that a person to be appointed on the Board of the Company should possess in addition to the fundamental attributes of character and integrity, appropriate qualifications, skills, experience and knowledge.

Meeting of Independent Directors

The Independent Directors of the Company met separately on January 28, 2021 without the presence of the Non- Independent Directors and the members of management. The meeting was conducted informally to enable the Independent Directors to discuss matters pertaining to the Companys affairs and put forth their combined views to the Board of Directors of the Company. In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), following matters were, inter-alia, discussed in the meeting:

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

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

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

Declaration by Independent Directors

The Companys 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 Companys Code of Conduct. The Company keeps a policy of transparency and arms length while dealing with its Independent Directors. No transaction was entered with Independent Directors during the year which could have any material pecuniary relationship with them. Apart from sitting fee, no other remuneration was paid to any of the Independent Directors.

In the opinion of the Board, the Independent Directors hold highest standard of integrity and possess the requisite qualifications, experience, expertise and proficiency.

Policy on Nomination, Remuneration and Board Diversity

The Board of Directors has framed a policy which lays down a framework in relation to the remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of the Board Members as well as diversity of the Board. Radico Khaitan recognizes the benefits and importance of having a diverse Board of Directors in terms of skill set and experience. The Company has an optimum mix of executive and non-executive, independent directors and woman director. The detail of the policy is explained in the Corporate Governance Report and full policy is also available on the Companys website at the following link: http://www.radicokhaitan.com/ investor-relations.

Annual Board Evaluation

The Board is committed to transparency in assessing the performance of Directors. In accordance with the Companies Act, 2013 and the Rules made thereunder, Schedule - IV of the Act and Regulation 4(2)(f) of the Listing Regulations, Radico Khaitan has framed a policy for the formal annual evaluation of the performance of the Board, Committees and individual Directors. The Company has put in place a robust framework for evaluation of the Board, its Committees, the Chairman, individual Directors and the governance processes that support the Boards functioning.

This framework covers specific criteria and the grounds on which all Directors in their individual capacity are evaluated. The key criteria for performance evaluation of the Board and its Committees include aspects such as composition and structure, effectiveness of board processes, information sharing and functioning. The criteria for performance evaluation of the individual Directors include aspects such as professional conduct, competency, and contribution to the Board and Committee meetings. The criteria for performance evaluation of the committees of the Board include aspects such as the composition of committees and effectiveness of committee meetings. The performance evaluation of the Independent Directors was done by the entire Board excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

Familiarisation Programme for the Board Members

A note on the familiarisation programme adopted by the Company for orientation and training of the Directors and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and the Listing Regulations is provided in the Report on Corporate Governance which forms part of the Annual Report.

Roes and responsibilities of Board Members

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

PARTICULARS OF EMPLOYEES AND REMUNERATION

In terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company on any working day of the Company up to the date of the 36th Annual General Meeting. The statement containing information as required under the provisions of Section 197(12) of the Act read with Rule 5 (1), Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - C and forms part of this Report.

BOARD COMMITTEE AND MEETINGS OF THE BOARD AND BOARD - COMMITTEES

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

All the recommendations made by the Committees of the Board, including the Audit Committee, were accepted by the Board.

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

CONVERSATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required to be disclosed pursuant to Section 134 of the Act read with the Companies (Accounts) Rules, 2014 is given as Annexure-D and forms part of this Report.

ENVIRONMENTAL PROTECTION MEASURES TAKEN BY THE COMPANY

In view of the corporate responsibility on environmental protection, the Company has adopted a number of measures for improvement in the field of environment, safety and health. Measures such as standard operating procedures, training programmes for all levels of employees regarding resource conservation, housekeeping, Green Belt development and onsite emergency plan have been taken. Sustainable living is a part of long-term business strategy and your Company continuously strives to reduce our environmental footprint, while enhancing the livelihood of people across our product value chain.

INTERNAL FINANCIAL CONTROLS

The Board of Directors of the Company has devised systems, policies, procedures and frameworks, which are currently operational within the Company for ensuring the orderly and efficient conduct of its business, which includes adherence to policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The internal financial controls have been documented, digitised and embedded in the business process. Assurance on the effectiveness of internal financial controls is obtained through management reviews, controls self-assessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

Management team has assessed the effectiveness of the Companys internal control over financial reporting as at March 31, 2021. The Statutory Auditors of the Company have audited the financial statements included in this Annual Report and issued their report on internal control over financial reporting (as defined under section 143 of the Companies Act, 2013). The Company has appointed reputed firms of Chartered Accountants to carry out Internal Audits. The audit is based on focused and risk-based internal plans, which is reviewed every year in consultation with the Audit Committee. In line with international practices, the focus of Internal Audit is oriented towards the review of internal controls and risks in operations.

RISK MANAGEMENT POLICY

Radico Khaitans 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 Khaitans 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 , cyber- attack, financial, liquidity, regulatory, reputational and other risks are reviewed by the Risk Management Committee, the Audit Committee and the Board from time to time and new risks are identified based on new business initiatives and the same are assessed, minimisation framework and controls are designed and appropriately implemented.

DEMATERIALISATION

During the year 1,44,750 shares of the Company constituting 0.11% of the issued and subscribed Share Capital of the Company, were dematerialised. As on March 31, 2021, 99.04% of the shares of the Company have been dematerialized. Your Directors would request all the members who have not yet converted their holdings into dematerialized form, to do so thereby facilitating trading of their shares. As per SEBI guidelines it is mandatory that the shares of a company are in dematerialized form for trading.

INSURANCE OF FIXED ASSETS

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

ARCHIVAL POLICY

Pursuant to the Listing Regulations and in line with Radico Khaitans 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 Companys policy on preservation of documents.

SAFETY & WELLBEING OF WOMEN

Gender equality and women safety is a very important part of Radico Khaitans 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. 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 & Well being of Women.

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

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

1. Ms. Roopali Makhija Presiding Officer
2. Ms. Jyoti Negi Member
3. Mr. Dinesh Kumar Gupta Member
4. Ms. Manu Chaudhary Member
5. Mr. Vinay Padroo Member
6. Mr. Mukesh Arora Member

VIGIL MECHANISM

Pursuant to the requirement of Section 177(9) & (10) of the Companies Act, 2013, Radico Khaitan has in place a robust vigil mechanism and has adopted a Whistle Blower Policy which allows employees of the Company to raise their concerns relating to fraud, malpractice or any other activity or event which is against the interest of the Company or society as a whole. All employees shall be protected from any adverse action for reporting any unacceptable or improper practice and/or any unethical practice, fraud or violation of any law, rule or regulation. This policy is also applicable to the Directors of the Company. All cases reported as part of whistle-blower mechanism are taken to their logical conclusion within a reasonable timeframe. Details of complaints received and the action taken are reviewed by the Audit Committee. The functioning of the Vigil Mechanism is reviewed by the Audit Committee from time to time. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www. radicokhaitan.com/ investor-relations/.

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 Companys website.

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 Companys projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companys 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 there under.

CYBER RISK

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

DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, the work performed by the Internal Auditors, Statutory Auditors and Secretarial Auditors, including the Audit of Internal Financial Controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY2021.

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 (3) (c) of the Companies Act, 2013.

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

ii) The Board has selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis;

v) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

OTHER DISCLOSURES

(i) Extract of Annual Return

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

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

(ii) Public Deposits

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

(iii) loans, Guarantees and Investments

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

(iv) Particulars of Contract or arrangements with Related Party

All transactions entered with Related Parties for the year under review were on arms length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in form AOC-2 is not required.

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

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

The Policy on Related Party Transactions as amended and approved by the Board of Directors has been uploaded on the website of the Company. The web- link of the same has been provided in the Corporate Governance Report. None of the Directors has any pecuniary relationship of transactions vis-a-vis the Company.

(v) Orders passed by courts/regulators

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

(vi) Secretarial Standards

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

(vii) Corporate Governance Report

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

(viii) General Reserve

Your Directors do not propose to transfer any amount to General Reserve and the entire amount of the profit for the year ended March 31, 2021 forms part of retained earnings.

(ix) Management Discussion and Analysis:

Management Discussion and Analysis Report, as required under the Listing Regulations is provided as a separate report and forms part of this Annual Report.

(x) Business Responsibility Report

The Business Responsibility Report for FY2021, as stipulated under Regulation 34(2)(f) of the Listing Regulations is annexed is a separate report and forms part of this Annual Report.

(xi) Change in the nature of business

There is no change in the nature of business during the year under the review.

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

There is no material change since March 31, 2021.

(xiii) Dispatch of Annual report through electronic mode

In compliance with the MCA Circulars and SEBI Circular dated May 12, 2020, notice of the AGM along 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 Companys 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 Companys Registrar and Transfer Agent, KFin Technologies Private Limited ("KFinTech") at https://evoting.karvy. com.

Acknowledgements

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